Investing.com -- Shares in Beazley plc (LON:BEZG) rallied sharply today after the company reported a better-than-expected first-half results and upgraded its full-year outlook.

At 4:53 am (0853 GMT), Beazley was trading 13.7% higher at ￡724.

The specialist insurance group announced a 28% return on equity (ROE) for the first six months of the year, well ahead of analyst expectations.

“The strength of the earnings beat, coupled with higher solvency, is set to increase expectations for year-end distributions,” said analysts at UBS Global Research in a note.

Additionally, Beazley raised its full-year combined ratio guidance to around 80% from low-80s previously.

“We are surprised by the underwriting strength in today's update. All segments, except Specialty, appear to have contributed to the strength,” said analysts at RBC Capital Markets in a note.

The brokerage has maintained its Outperform rating on Beazley shares and increased its price target to GBp 1,000.

“While we had expected a good half following the reiteration of its FY combined ratio on 23 Jul, we are surprised by the underwriting strength in today's update,” RBC added.

Despite the strong performance, RBC cautioned that the upgrade to the full-year outlook is unusual given the approach of hurricane season.

A key highlight for investors was Beazley’s decision to upgrade its full-year undiscounted combined ratio guidance from the low 80s to around 80%. UBS believes this improvement is likely to translate into higher earnings going forward.

In addition to the strong financial performance, investors were also encouraged by the company’s increased reserve confidence, which rose from the 85th to the 88th percentile.

The company also announced a share buyback of $325m, which is on track to be completed by the end of the year.

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