Beazley Q1 growth in line with guidance
London, 29 April 2024
Beazley plc trading statement for the three months ended 31 March 2024
Overview
· Insurance written premiums increased by 7% to $1,483m (Q1 2023: $1,384m)
· Net insurance written premiums increased by 11% to $1,239m (Q1 2023: $1,118m)
· Premium rates on renewal business increased by 1% (Q1 2023: 10%)
· Investment income of $126m or 1.2% year to date (Q1 2023: income of $104m or 1.2%)
· Combined ratio guidance for the year remains at low 80s on an undiscounted basis
· Gross IWP growth guidance for the year remains at high single digits
Adrian Cox, Chief Executive Officer, said:
"It has been a solid start to the year where we have demonstrated our ability to continue to grow whilst exercising underwriting discipline. We are confident of delivering our gross growth guidance for the year of high single digits.
We remain optimistic about the outlook for our business in 2024 and beyond, focussing on continued, targeted growth and active capital management as the rate environment normalises."
| | 31 March 2024 | 31 March 2023 | % increase |
| Insurance written premiums ($m) | 1,483 | 1,384 | 7% |
| | | | |
| Net insurance written premiums ($m) | 1,239 | 1,118 | 11% |
| | | | |
| Investments and cash ($m) | 10,827 | 9,080 | 19% |
| | | | |
| Year to date investment return | 1.2% | 1.2% | |
| | | | |
| Rate increase | 1% | 10% | |
Premiums
We launched our new E&S carrier on 1 January 2024 and have been writing business on this platform as planned. Following this, the mix of business within the Group changes slightly this year. The Group retains a higher proportion of Property business, and conversely a smaller proportion on MAP, as this now cedes to third party capital at a higher rate. Overall Group premium levels remain the same.
Our performance to the end of March 2024 by business division is as follows:
| | Insurance written premiums
31 March 2024
| Insurance written premiums
31 March 2023
| % increase/ (decrease) | Year to date rate change |
| | $m | $m | % | % |
| | | | | |
| Cyber Risks | 253 | 280 | (10%) | (5%) |
| Digital | 63 | 57 | 11% | (3%) |
| MAP Risks | 261 | 261 | 0% | 2% |
| Property Risks | 451 | 357 | 26% | 7% |
| Specialty Risks | 455 | 429 | 6% | 1% |
| OVERALL | 1,483 | 1,384 | 7% | 1% |
In Cyber Risks, the reduction in insurance written premium shown in the first quarter is predominantly driven by different premium recognition patterns as a result of us using more distribution partnerships.
We remain confident in the short and long term growth opportunities in this class and that underlying rates which, despite the continued softening, remain adequate. We are expecting moderate growth in 2024.
The geopolitical environment continues to drive demand for the product set within MAP Risks and we remain confident about the long term growth prospects.
We continue to see exciting opportunities for Property Risks as business increasingly moves into the E&S market. We are well placed to take advantage of this as demonstrated by 26% growth in the first quarter.
In Specialty Risks the D&O market remains very competitive and we remain focussed on robust underwriting discipline and cycle management. This includes taking opportunities in smaller, niche areas within the division which is reflected in the moderate growth seen in the first three months of the year.
Claims
Overall, claims experience for the first quarter is as expected. Total natural catastrophe activity so far this year has been within the margins we hold in our reserves for such events.
Investments
Our portfolio allocation was as follows:
|
| 31 March 2024 | 31 March 2023 | ||
|
| Assets | Allocation | Assets | Allocation |
|
| $m | % | $m | % |
| Cash and cash equivalents | 1,016 | 9.4 | 714 | 7.9 |
| Fixed and floating rate debt securities | | | | |
| - Government issued | 4,289 | 39.6 | 4,629 | 51.0 |
| - Corporate bonds | | | | |
| - Investment grade | 3,683 | 34.0 | 2,369 | 26.1 |
| - High yield | 625 | 5.8 | 356 | 3.9 |
| Syndicate loans | 36 | 0.3 | 33 | 0.4 |
| Derivative financial assets | 5 | - | 12 | 0.1 |
| Core portfolio | 9,654 | 89.1 | 8,113 | 89.4 |
| Equity funds | 393 | 3.6 | 204 | 2.2 |
| Hedge funds | 580 | 5.4 | 530 | 5.8 |
| Illiquid credit assets | 200 | 1.9 | 233 | 2.6 |
| Capital growth assets | 1,173 | 10.9 | 967 | 10.6 |
| Total | 10,827 | 100.0 | 9,080 | 100.0 |
Our investment portfolio returned $126m, or 1.2%, in the first quarter. Financial markets were buoyed by resilient US economic data, with our equity, credit and hedge fund investments all producing strong returns.
Risk-free yields rose, as rate cut expectations subsided, resulting in more modest returns from our fixed income investments. However, the current yield of our fixed income portfolio (5.1% at the end of March) leaves it well placed to make a good contribution to our returns going forward.
Conference call for analysts and investors will be held at 8am GMT on Monday 29 April
Dial in details for analysts:
UK-Wide: +44 (0) 33 0551 0200
Webcast Link for all other participants:
https://brrmedia.news/BEZ_Q124
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 six Lloyd's syndicates and, in 2023, underwrote gross premiums worldwide of $5,601.4million. 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 and its subsidiary, Beazley America Insurance Company, Inc. In the surplus lines market, coverage is provided by the Beazley syndicates at Lloyd's, and from 1 January 2024, also from Beazley Excess and Surplus Insurance, Inc.
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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