Beazley has announced its financial results for the nine months ended 30 September.
The specialist insurance group has reported a robust financial performance, with written premiums up 9% to $4.325 billion, up from $3.978 billion in the same period last year. The company also recorded a 26% increase in net written premiums, which now stand at $3.532 billion, up from $2.8 billion last year.
The property sector of Beazley’s portfolio also saw a significant increase, with premiums up 63% and rate increases of 24%. Renewal business also experienced an upturn, albeit at a more subdued pace, with premium rates increasing by 5%, in contrast to the 17% increase seen in the third quarter of 2022.
Beazley’s investment income has also seen a positive shift and now stands at $202 million, or 2.1%, for the year to date, reversing a loss of $99 million, or 3.6%, in the same period last year.
The company has guided to a combined ratio in the low 80s on an undiscounted basis for the full year 2023. The company’s growth on a net basis is expected to remain in the mid-20s, in line with growth to date.
Beazley’s performance by segment
In the cyber risk segment, despite a moderate rate reduction in 2023, current pricing levels are considered sufficient, particularly against the backdrop of the significant rate increases that have occurred since 2019. While the US mid-market shows promise for growth, competition has intensified, particularly in the SME segment, leading to a more moderate growth rate in the US. However, the firm has seen significant growth in other regions where market penetration is lower.
Beazley’s expertise in Marine, Aviation and Political Risk (MAP) has resulted in a 7% increase in rates. Although there is a notable reduction in premiums written as a result of syndicate 5623 now underwriting portfolio business, which is largely backed by third party capital, net premium growth remains unaffected.
Property risks were a highlight for Beazley, benefiting from exceptional market conditions and achieving 63% year-on-year growth in this sector. These favourable conditions are expected to continue until 2024.
The Specialty Risks sector continues to be competitive, with the Directors and Officers (D&O) market impacting performance. Beazley is maintaining a strict underwriting approach in areas where rate adequacy is not met.
On the claims side, Beazley has experienced better than expected results in the year to date, with total natural catastrophe related claims falling within reserved margins. Cyber risks have not seen an increase in claims frequency, despite an increase in ransomware attacks. The ongoing conflict in the Middle East is being monitored, but at this stage Beazley says it does not anticipate any impact on the full year results.
On the capital front, Beazley aims to maintain a Solvency II ratio in excess of 170% of the Solvency Capital Requirement. Capital levels will be adjusted in line with growth opportunities, market conditions and the regulatory framework, with the aim of maximising returns to investors.
“The insurance business is cyclical and market conditions evolve rapidly. We have chosen to exercise underwriting discipline, which means that growth to date is lower than we had planned at the beginning of the year. However, our agile underwriting and the strength of our platform strategy means that we have delivered profitable growth to date and our claims experience is better than expected,” said Beazley CEO Adrian Cox.
Elsewhere for the insurance group, Beazley also recently announced that its long-standing finance director Sally Lake has informed the board of her intention to leave the company in 2023.
