Specialist insurer and reinsurer Beazley revealed a 15% hike in annual profit, helped by a recovery in the financial markets and a significant recovery in its investment portfolio.

Profit before income tax rose to £100.7m for year ended 31 December 2009 from £87.2m the year before. Beazley's investment portfolio yielded returns of £56.1m compared with a loss of £25.8m in 2008.

The insurer said gross written premiums increased to £1.12bn from £875.7m and average rates increased 3% in the year, compared with the 6% decrease seen in 2008.

The group said rates for catastrophe exposed business have declined but remain "relatively high." However it expects professional indemnity rates to rise modestly in 2010.

"We expect rates to rise modestly in 2010, driven by recession-related losses in some areas, low investment income and inflationary threats."

Beazley has recommended a second interim dividend of 4.7p, taking the full year total to 7p, up 6% from 2008.

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