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May 18, 2020

Beazley completes new capital raising

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Beazley announced yesterday to the LSE (click here for the full announcement) that it intended to raise some £247 million (approximately $300 million) through an extra placement of shares. Today 19 May, Beazley confirmed the successful raising of the extra capital through the take up of shares at 315p, a discount of just under 5% compared to yesterday's closing price.

Extracts from yesterdays' announcement as follows:

Reasons for the Placing

"As a result of the elevated claim numbers in recent years, the Company has seen rates rise steadily across its core markets. As previously announced in its trading statement for the three months ended 31 March 2020 (the "Trading Update"), rate changes for the three months ended 31 March 2020 were particularly encouraging, with an average rate increase of eight per cent., with three divisions achieving double digit increases. This strong momentum is expected to continue. Certain markets, such as property and marine, have now experienced two consecutive years of rising rates and present attractive near term opportunities. Beazley continues to maintain its strong underwriting discipline with a focus on risk quality and selection."

"The Board has considered the optimal capital structure for the Group and believes that it is an appropriate time for the Company to raise equity in order to position the business for future growth opportunities as well as providing further strength to the balance sheet in light of the continued uncertainty from COVID-19. The net proceeds from the Placing and Subscription, along with an increased banking facility, demonstrate Beazley's continued commitment to maintaining a strong balance sheet that can support the Company's growth ambitions and withstand a range of stress scenarios."

This move echoes that of Hiscox which raised £375m in early May.