Press
Release
Beazley plc interim management statement for the 9 months ended 30 September 2013.
Dublin, 7 November 2013
Overview
· Premium rates on renewal business increased by 1%
· Premiums increased by 5% to $1,543m (2012: $1,470m)
· Annualised investment yield of 0.8%
Andrew Horton, Chief Executive Officer, said:
"Our underwriters have maintained the momentum achieved during the first half of the year with gross written premiums growing by 5%. Premium rates rose modestly across our portfolio as a whole, but more strongly for specialty lines and property, our two largest divisions, where rate rises averaged 3%."
|
30 Sep 2013
|
30 Sep 2012
|
% increase
|
Gross premiums written ($m)
|
1,543
|
1,470
|
5%
|
|
|
|
|
Investments and cash ($m)
|
4,354
|
4,350
|
-
|
|
|
|
|
Investment return - annualised (%)
|
0.8%
|
2.1%
|
-
|
|
|
|
|
Rate increase
|
1%
|
3%
|
-
|
Premiums
Gross premiums written for the nine months ended 30 September increased by 5% when compared with the equivalent period of 2012. The most significant growth was seen in the reinsurance and the political risks and contingency divisions. Growth in the existing political book and the new political and contingency business through our US offices contributed to this result.
Below is an extract of our performance to the end of September 2013 by business division:
|
Gross premiums written
30 Sep 2013
|
Gross premiums written
30 Sep 2012
|
% increase / (decrease)
|
Q3 2013 Rate change
|
|
|
$m
|
$m
|
%
|
%
|
|
|
|
|
|
|
|
Life, accident & health
|
81
|
72
|
13
|
(1)
|
|
Marine
|
256
|
251
|
2
|
(3)
|
|
Political risk & contingency
|
103
|
89
|
16
|
-
|
|
Property
|
293
|
297
|
(1)
|
3
|
|
Reinsurance
|
214
|
177
|
21
|
(3)
|
|
Specialty lines
|
596
|
584
|
2
|
3
|
|
OVERALL
|
1,543
|
1,470
|
5
|
1
|
|
Rate change on renewals is 1% across the portfolio. We continue to see rate increases on property and specialty lines renewal business. Further rate reductions have occurred in the marine division due to pressure in the hull and war books. We have seen a year to date reduction of 3% on renewals in the reinsurance division, caused by a softening in the overall market.
Business update
Our business is on track to deliver its 2013 objectives, with continued investment into our Beazley breach response product, as well as our other new product initiatives. During September we launched Beazley Flight, the most comprehensive emergency evacuation cover on the market, offering specialist services in the event of a claim.
The aviation book is developing in line with our plan, and we are on target to write $25m in our first year.
Claims update
Overall, claims have developed favourably during 2013 and we have only moderate exposure to the floods in Europe during May, the hailstorms in Germany and the floods in Calgary during July. Provided that this experience continues until the year end, we expect to achieve a strong combined ratio, in the mid-eighties.
Investments
Investment income for the nine months to 30 September 2013 was $25.1m, an annualised return of 0.8% (2012: 2.1%). Following the mark to market losses made in the first half we are on track to make an annualised investment return of 1.0% in 2013.
As at the end of September our portfolio allocation was as follows:
|
30 Sep 2013
|
30 Sep 2012
|
|
Assets
|
Allocation
|
Assets
|
Allocation
|
|
$m
|
%
|
$m
|
%
|
Cash and cash equivalents
|
613
|
14.1
|
776
|
17.9
|
Fixed income: sovereign and supranational
|
2,103
|
48.3
|
2,174
|
50.0
|
Investment grade credit
|
1,058
|
24.3
|
675
|
15.5
|
Other credit
|
97
|
2.2
|
296
|
6.8
|
Core portfolio
|
3,871
|
88.9
|
3,922
|
90.2
|
Capital growth assets
|
483
|
11.1
|
428
|
9.8
|
Overall portfolio
|
4,354
|
100.0
|
4,350
|
100.0
|
The weighted average duration of the core portfolio was 22 months at 30 September 2013 (30 September 2012: 22 months) and the weighted average yield to maturity of our core portfolio was 1.3% (30 September 2012: 1.0%).
Capital management
We remain committed to active capital management and we will provide a further update at the year end.
ENDS
For further information, please contact:
Beazley plc
Sian Coope
+353 (0)1 854 4700
Note to editors:
Beazley plc (BEZ.L), is the parent company of specialist insurance businesses with operations in Europe, the US, Asia and Australia. Beazley manages five Lloyd's syndicates and, in 2012, underwrote gross premiums worldwide of $1,895.9 million. All Lloyd's syndicates are rated A by A.M. Best.
Beazley's underwriters in the United States focus on writing a range of specialist insurance products. In the admitted market, coverage is provided by Beazley Insurance Company, Inc., an A.M. Best A rated carrier licensed in all 50 states. In the surplus lines market, coverage is provided by the Beazley syndicates at Lloyd's.
Beazley is a market leader in many of its chosen lines, which include professional indemnity, property, marine, reinsurance, accident and life, and political risks and contingency business.
For more information please go to: www.beazley.com