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Nov 08, 2019

Beazley Plc Trading Statement Q3 2019

Image for 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: $26m)
30 September 201930 September 2018% increase
Gross premiums written ($m)2,1921,95812
Investments and cash ($m)5,6575,01213
Year to date investment return4.0%0.5%
Rate increase6%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 risk567490164
Marine23122158
Political, accident & contingency204183110
Property337340(1)11
Reinsurance19118825
Specialty lines662536245
Overall2,1921,958126

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%."