(Reuters) - British insurer Beazley's shares hit a record high on Tuesday after it beat annual pretax profit expectations and estimated its losses from the Los Angeles wildfires would be much lower than its peers.

Lloyd's of London insurer also launched a $500 million share buyback.

Last year was tough for insurers as large-scale hurricanes in the United States weighed on earnings, while devastating Los Angeles wildfires kicked off 2025 on a sour note.

CEO Adrian Cox told Reuters he does not expect the impact from the wildfires to affect Beazley much, but said the rising dangers of climate change will put pressure on the industry and insurers will need to be "very careful" about how they underwrite that.

Beazley on Tuesday gave an initial estimate of an $80 million impact from the California wildfires, well below peers which have estimated hits of $100 million-$170 million, including Lancashire, which expects up to $165 million in losses from the destruction to LA.

Shares of Beazley rose as much as 3.2% to an all-time high of 923 pence.

Analysts estimate insured losses from the wildfires could reach as high as $20 billion, potentially making it the costliest disaster in California's history.

Insurers, however, have also profited from higher premiums over the past few years due to inflation and losses stemming from the pandemic, wars and natural disasters, although prices declined in the latter half of 2024.

"Our central estimation is that they will go down a little bit again this year," CEO Cox told Reuters.

Beazley reported profit before tax of $1.42 billion in the year ended December 2024, up 13% from a year earlier and 9% ahead of consensus, according to Panmure Liberum.