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."

Premiums

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

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:

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 Europe, North America, Latin 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