The cost of buying insurance protection against the risk of natural disasters has leapt by about 10 per cent since the beginning of the year as the industry braces itself for a heavy season of hurricanes and floods.

Andrew Horton, the new chief executive of Beazley, the Lloyd’s of London insurer, told The Times that he was aiming to take on more exposure to catastrophe risk because the returns have become more attractive.

Beazley is known for its expertise in the property and casualty insurance market. It is expected to increase its exposure to catastrophes, including earthquakes and natural storms, to about $510 million (£348 million) over the full year.

Mr Horton said that about half of Beazley’s business came from commercial property insurance, while the other half consisted of professional indemnity insurance, particularly for lawyers. Beazley also offers specialist cover, including for the jewellery market, high-end individual properties and against particular risks such as terrorism or business interruption.

The devastation caused by Hurricanes Ike and Gustav cost the worldwide insurance industry about $25 billion in claims last year. Payouts totalling £1.4 billion against the two hurricanes helped to drive a slide in pretax profits at Lloyd’s of London from £3.85 billion to £1.9 billion in 2008.

Catastrophes, most of which were not covered by insurance, caused global damage totalling $225 billion in 2008, according to Swiss Re, the reinsurer.

Lloyd’s said last month that the insurance industry had suffered its third worst year of claims in 15 years last year. This, combined with an early surge in earthquake and storm damage this year, has helped to push premiums sharply higher.

Beazley has just completed the acquisition of First State, a commercial property specialist, that will give it further inroads into the potentially lucrative American market. Mr Horton revealed that the company, which took $270 million in premiums from its American operations last year, planned to increase that to about $1 billion over the next few years.

He said that would span both commercial property and professional indemnity, where he said that claims for losses against individual executives were likely to rise, particularly in the light of the near-collapse of several banks and the onset of a recession.

Beazley is one of four Lloyd’s insurers to tap its existing investors for cash this year, raising £150 million from a rights issue this month.

It also joined the ranks of companies quitting Britain for tax purposes, unveiling plans in February to relocate to Dublin. Mr Horton expected other insurers to follow Beazley out of the UK. He said that the 12.5 per cent rate of corporation tax rate in Ireland was attractive, but that the move would also help to spur the insurer’s launch into Europe.

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