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REG - Beazley PLC -Trading Statement

12 May, 2023
RNS Number : 1816Z
Beazley PLC
12 May 2023
 

Beazley confident of delivering strong growth and profitability in 2023

 

London, 12 May 2023

 

Beazley plc trading statement for the three months ended 31 March 2023

 

 

Overview (on an IFRS 4 basis)

·      Gross premiums written increased by 12% to $1,372m (Q1 2022: $1,229m)

 

·      Net premiums written increased 24% to $1,069m (Q1 2022: $859m)

 

·      Premium rates on renewal business increased by 10% (Q1 2022: 17%)

 

·      Net income from investments of $104m as at 31 March 2023 (Q1 2022: loss of $92m)

 

·      Combined ratio guidance remains unchanged at high 80s for 2023 full year

 

·      We remain confident in our growth guidance of mid teens gross premium written and mid 20s net premium written for 2023 full year

 

 

Adrian Cox, Chief Executive Officer, said: 

 

"The first quarter saw us deliver good headline growth in line with our expectations, underpinned by growth in property, where we are taking advantage of the excellent and continuing market conditions.

 

Our diversified business, together with our ability to adapt according to the underwriting pricing cycles, allow us to adjust as opportunities and challenges emerge. 

 

We are positive in terms of our outlook for the first half and are confident of delivering our full year guidance."

 

 


31 March 2023

31 March 2022

% increase/

(decrease)

Gross premiums written ($m)

1,372

1,229

12





Net premiums written ($m)

1,069

859

24





Investments and cash ($m)

9,080

7,785

17





Year to date investment return

1.2%

(1.2%)






Rate increase

10%

17%


 

 

Premiums

 

Our performance to the end of March 2023 by business division is:

 

 


Gross premiums written

 

31 March 2023

 

Gross premiums written

 

31 March 2022

 

% increase/

(decrease)

Year to date Rate change


$m

$m

%

%






Cyber Risks

280

225

24

4

Digital

57

54

6

2

MAP Risks

260

271

(4)

8

Property Risks

347

223

56

29

Specialty Risks

428

456

(6)

-

OVERALL

1,372

1,229

12

10

 

 

Cyber Risks performed well with 24% growth in Q1, particularly reflecting strong growth in Europe despite more modest rate increases as well as the market adjusting to updated war exclusions.  This growth also includes some favourable prior year premium adjustments.

 

We have taken advantage of the significant opportunity in the property (re)insurance market(s) which we had been anticipating.  Property Risks grew by 56% in Q1, with both exposure growth and high double digit rate increases in evidence.

 

In MAP Risks, gross premium has reduced due to the portfolio underwriting business now being written by third party capital backed syndicate 5623.  This has the effect of reducing year on year gross premium growth in the division by 22 percentage points for the first three months. Net premium growth is not materially affected.

 

Consistent with our cycle management approach and given the more attractive current market conditions in our other classes of business, we have reduced our risk appetite in Specialty Risks, which remains impacted by a number of headwinds including a very competitive rating environment in D&O and ongoing social inflation within our healthcare book.  In addition, the volatility within the financial markets has resulted in a continued lack of IPO and M&A activity, which are drivers of demand for a number of our Specialty Risks products. We will continue to build out the areas where we are seeing growth, such as environmental liability, to further diversify the mix within our Specialty Risks portfolio. 

 

 

Claims update

 

Despite the active catastrophe environment in the first three months of the year, the level of claims is within the margins we hold, and we are able to reiterate our high 80s combined ratio guidance assuming claims experience is as expected for the remainder of the year.

 

 

Investments

 

Our portfolio allocation was as follows:

 

 

31 March 2023

31 March 2022

 

Assets

Allocation

Assets

Allocation

 

$m

%

$m

%

Cash and cash equivalents

714

7.9

573

7.3

Fixed and floating rate debt securities





-     Government, quasi-government and supranational

4,629

51.0

4,099

52.7

-     Corporate bonds





-     Investment grade

2,369

26.1

1,777

22.8

-     High yield

356

3.9

378

4.9

Syndicate loans

33

0.4

38

0.5

Derivative financial assets

12

0.1

41

0.5

Core portfolio

8,113

89.4

6,906

88.7

Equity funds

204

2.2

127

1.6

Hedge funds

530

5.8

443

5.7

Illiquid credit assets

233

2.6

309

4.0

Capital growth assets

967

10.6

879

11.3

Total

9,080

100.0

7,785

100.0

 

 

Our investments returned $104m, or 1.2%, in the first quarter amidst significant financial market volatility. US Treasury yields moved in a wide range, reflecting uncertainty on interest rates as well as stresses in the banking sector, which emerged late in the quarter.

 

Yields moved lower overall during this period, generating some capital gains, but the much improved level of yields now prevailing (4.6% on our fixed income portfolio at 31 March 2023) drove our return in the quarter.

 

 

Conference call

 

Dial in details for analysts:


United Kingdom (Local): +44 20 3936 2999
United Kingdom (Toll-Free): +44 808 189 0158
Access code:  700708

 

Webcast Link for all other participants:

https://www.investis-live.com/beazley/643d6d7169b6910d00052a6b/cdsw

 

ENDS

 

 

 

For further information:

Investors and analysts

Sarah Booth

 

+44 (0) 207 6747582

 

 

Media

 

Sam Whiteley

 

+44 (0) 207 6747484

 

 

Note to editors:

Beazley plc (BEZ.L), is the parent company of specialist insurance businesses with operations in EuropeNorth AmericaLatin America and Asia. Beazley manages seven Lloyd's syndicates and, in 2022, underwrote gross premiums worldwide of $5,268.7 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's European insurance company, Beazley Insurance dac, is regulated by the Central Bank of Ireland and is A rated by A.M. Best and A+ by Fitch.

 

Beazley is a market leader in many of its chosen lines, which include professional indemnity, cyber liability, property, marine, reinsurance, accident and life, and political risks and contingency business.

 

For more information please go to: www.beazley.com

 

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