* FY pretax profit falls 43 pct to $168 million
* Gross written premiums rise 7 pct to $2.34 billion
* Stock jumps 6.3 pct (Adds CEO, analyst quotes, share movement)
By Noor Zainab Hussain
Feb 8 (Reuters) - The promise of double-digit premium growth took the edge off a fall in annual profits at Lloyd’s of London insurer Beazley, sending its shares up by more than 6 percent on Thursday.
The company, which provides marine, casualty and property insurance and reinsurance, said its pretax profit fell 43 percent to $168 million, for the year to Dec. 31. Gross written premiums rose 7 percent to $2.34 billion.
Insurance industry premiums, pressured by tough competition, are now rising after the industry faced record bills from hurricanes, earthquakes and wildfire of over $135 billion last year.
“Beazley achieved an underwriting profit in 2017, a year in which hurricanes, earthquakes and wildfires generated heavy claims for the insurance industry ... Looking ahead, we see potential for double digit (premium) growth in 2018,” Chief Executive Officer Andrew Horton said.
By the end of 2017, Beazley had paid out over $110 million in cash advances and claims settlements, it said.
“The events of late 2017 have since spurred material price rises,” the underwriter said.
Analysts had expected pretax profit of $163 million and gross written premium growth of 5 percent, according to company supplied consensus estimates.
“An improving rate outlook, felt across a the breadth of the portfolio, is delivering further growth opportunities for Beazley,” Peel Hunt analyst Andreas Van Embden, who rates Beazley as “Reduce”, said.
The company’s reinsurance renewal prices rose 3 percent for its non-U.S. business and 8 percent for the U.S. business in January. Beazley’s property division achieved price increases of 6 percent.
“Looking ahead, we are budgeting for growth in all of our divisions in 2018, the first time this has been the case for over 10 years,” Horton said.
Fierce competition has resulted in insurance rates either stagnating or falling over the past few years.
Some reinsurers had been expecting double-digit price rises across the board when the Jan. 1 renewals came around after last year’s catastrophe losses. But global property reinsurance prices rose less than expected, with strong competition limiting increases to single-digit percentages.
If the industry gets another big bill from catastrophes this year, the market will get the rate increase it craves, Horton told Reuters.
“There is still a view that some property pricing, property reinsurance pricing is not quite right yet. It is still too low for the risk people are running,” he said.
“We’re not expecting in 2018 for us to ramp up the amount of exposure we take on ... but we’re expecting just to benefit from the rate increase.”
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Amrutha Gayathri and Jane Merriman