Beazley PLC (LON:BEZ) has estimated that it will take US$170mln of losses resulting from the coronavirus pandemic, net of reinsurance.
The Lloyds of London insurer, where shareholders last month overwhelmingly approved the payment of a second interim dividend, said "it is too early to say" how claims liability will develop as the impact of the pandemic is fully realised over the next one to two years.
This week the UK insurance industry and the UK government-backed terrorism reinsurance fund Pool Re agreed to work together to develop insurance cover for pandemics.
A number of underwriting actions have been taken, the FTSE 250-listed group said in an update, including changes to risk appetite, which "should reduce this impact".
The group said a 1%, or US$55mln loss was taken from investments in the first quarter.
Some US$840m of gross premiums were written in the three months to March 31, up 13% on the same period a year ago as premium rates on renewal business increased by 8%, with some lines up and some down.
Marine, specialty lines and cyber & executive risk divisions saw strong growth of around 23%, while the political, accident and contingency division saw growth of 6%.
Premiums fell 11% and 15%, respectively, at catastrophe-exposed divisions, property and reinsurance, with a strong first quarter for property impacting on growth but the portfolio expected to grow for the full year.
"Rate changes in the market were particularly encouraging with an average rate increase of 8% and with three divisions achieving double-digit increases," Beazley said in its update.
Shares in the company fell more than 3% to 350p on Wednesday morning, and are down 38% in the year to date.
Analysts at UBS said US$170m of claims exposure is "in-line with our thinking", noting that the company has reinsurance protections on its event cancellation book and that the frequency of notifications is slowing.
"We expect limited further creep here," the analysts said, with business interruption "the key uncertainty", although Beazley's US focus helps, with most policies written on standard US wordings which exclude infectious disease.