Beazley Plc Trading Statement Q3 2019
Beazley announced today its results for the first nine months of 2019.
Overview:
- Gross premiums written increased by 12% to $2,192m (Q3 2018: $1,958m)
- Premium rates on renewal business increased by 6%
- Strong investment return of $215m (Q3 2018: $26m)
| 30 September 2019 | 30 September 2018 | % increase | |
| Gross premiums written ($m) | 2,192 | 1,958 | 12 |
| Investments and cash ($m) | 5,657 | 5,012 | 13 |
| Year to date investment return | 4.0% | 0.5% | |
| Rate increase | 6% | 3% |
Premiums
Gross premiums written for the nine months ended 30 September 2019 increased by 12% year on year to $2,192m. Growth has been achieved in most of Beazley's divisions.
The property division saw a slight decrease in premium as a result of the decision to cease writing construction and engineering business in 2019. With this business excluded, growth in the property division was 7%.
Beazley's new specialty lines division saw premium growth of 24% to $662m, including our market facilities business which contributed $34m. Underlying growth for the division excluding market facilities was 18%. They also saw an increase in business written through their international financial lines platform, growing 59% year on year.
The newly created cyber & executive risk division achieved premium growth of 16%. A strong performance across the US platform aided in the growth of this division, alongside rate rises of 4%.
Political, accident & contingency achieved premium growth of 11% year on year, writing $204m in the nine months to 30 September 2019 driven by their personal accident direct and life teams.
The reinsurance and marine division both saw small increases in premium of 2% and 5% respectively. Both divisions have seen rate increases in 2019 which has facilitated this growth.
| Gross premiums written 30 September 2019 ($m) | Gross premiums written 30 September 2018 ($m) | % increase/ (decrease) | Q3 2019 Rate change (%) | |
| Cyber & executive risk | 567 | 490 | 16 | 4 |
| Marine | 231 | 221 | 5 | 8 |
| Political, accident & contingency | 204 | 183 | 11 | 0 |
| Property | 337 | 340 | (1) | 11 |
| Reinsurance | 191 | 188 | 2 | 5 |
| Specialty lines | 662 | 536 | 24 | 5 |
| Overall | 2,192 | 1,958 | 12 | 6 |
Claims update
Beazley have recently concluded a nine month claims review, and the initial estimate of the costs of typhoons Faxai and Hagibis and hurricane Dorian is approximately $80m net of reinsurance and reinstatements premiums. Beazley have seen an increase in claims within the directors & officers, employment practice liability and healthcare liability books and whilst they expect to deliver overall reserve releases from their specialty lines and cyber & executive risk divisions, they anticipate that these will be at a lower level than in previous years. As a result Beazley are expecting a full year combined ratio of between 100% and 102% assuming normalised claims levels for the remainder of the year.
Andrew Horton, Chief Executive Officer, said:
"We continue to see strong, double digit premium growth across our business as a whole, driven by organic growth and rate rises across many lines of business.
We have continued to experience heightened claims activity with our exposure to catastrophes in Q3 estimated to be $80m net of reinsurance and reinstatement premium.
We have been anticipating a more difficult claims environment in areas such as directors & officers, employment practice liability and healthcare liability in recent years. As such we have been adjusting our underwriting for several years in these areas and began opening at a higher reserve position at the start of 2018.
Our investment team has delivered another strong performance in Q3, bringing our year to date net investment income to $215m or 4.0%."