Beazley’s pre-tax profit fell by more than half to £76.4 million ($139 million) last year, squeezed by storm and wildfire claims and a decline in investment returns.

After-tax profit fell to £68.2 million ($124.4 million) from £130 million ($237 million) in 2017.

But the specialty insurer is upbeat about this year, citing a hardening market that has lifted rates on the renewal portfolio by 3%.

“Although market conditions were challenging, depressing our earnings, we entered [the year] with positive premium rate momentum and higher interest rates that should deliver stronger returns going forward,” CEO Andrew Horton said.

Gross written premium grew 12% to £2.62 billion ($4.8 billion) last year and net written premium increased 14% to £2.2 billion ($4 billion).

The insurer paid out about £110 million ($200.7 million) to clients affected by natural catastrophes.

The combined operating ratio improved one percentage point to 98%.