REG - Beazley PLC - Beazley plc results for year end 31 December 2024
04/03/2025 07:15
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RNS Number : 2073Z Beazley PLC 04 March 2025
Press Release
Beazley delivers record profit of $1.42bn and announces $500m share buyback
London, 4 March 2025
Beazley plc results for period ended 31 December 2024
• Profit before tax increased to $1,423.5m (2023: $1,254.4m)
• Insurance written premiums increased to $6,164.1m (2023: $5,601.4m)
• Net insurance written premiums increased to $5,152.3m (2023: $4,696.2m)
• Undiscounted combined ratio of 79% (2023: 74%)
• Discounted combined ratio of 75% (2023: 71%)
• Return on equity of 27% (2023: 30%)
• Initial estimate of Californian Wildfires in the region of $80m
• Mid-single digit gross IWP growth guidance for FY 2025
• Mid-80s undiscounted combined ratio guidance for FY 2025
• $500m share buyback programme to be launched
• Ordinary dividend rebased by 76% to 25p.
Year ended Year ended %
31 December 2024 31 December 2023 movement
Insurance Written Premiums ($m) 6,164.1 5,601.4 10%
Net Insurance Written Premiums ($m) 5,152.3 4,696.2 10%
Insurance Service Result ($m) 1,236.0 1,251.0 (1)%
Profit before tax ($m) 1,423.5 1,254.4 13%
Earnings per share (pence) 137.0 124.8 10%
Net assets per share (pence) 570.5 468.6 22%
Net tangible assets per share (pence) 545.9 448.7 22%
Adrian Cox, Chief Executive Officer, said:
"Our record profit of $1.4bn, along with a 79% undiscounted combined ratio and
strong premium growth is a testament to the strength of our expertise. I am
delighted with what our company has achieved amidst a challenging claims
environment, including an active hurricane season.
This robust performance enables a share buyback of $500m as well as an
ordinary dividend rebase to 25p, which is a 76% increase. We remain well
capitalised to take advantage of growth opportunities in an evolving market
and sustain our strong financial performance over the long term."
A webcast will be held at 10:00am GMT on Tuesday, 4 March 2025.
Webcast Link:
https://brrmedia.news/BEZ_YER24 (https://brrmedia.news/BEZ_YER24)
ENDS
For further information:
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Sarah Booth
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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 seven Lloyd's syndicates and, in 2024, underwrote gross premiums
worldwide of $6,164.1million. 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
Statement of the Chair
2024 produced more evidence that we are living in a period of change, where
risk is rapidly increasing and businesses look to specialist insurers for
support, as they manage an often challenging environment.
The global IT outage in July 2024 reminded us of the potential for
interconnected technology to cause mass disruption. We also have more
experience as to how climate risk is changing in the face of extreme weather
events. This was seen in the extension of the geographic locations impacted by
North Atlantic hurricanes or the intensity of the flooding experienced in the
Valencia region of Spain during 2024. The year also saw more than 4 billion
people take part in elections, in which digital media dominated much of the
debate, bringing increased risk and more uncertain outcomes.
In this environment, I am proud that Beazley has played its part as a leading,
global specialty insurer to add real value to businesses around the world. We
provided them with effective risk transfer and management to reduce and
mitigate threats or, in the worst case scenario, provided them with financial
support to get back on their feet.
Businesses need global, specialty insurance expertise
In our Risk & Resilience research with 3,500 senior managers of risk
across the world, they tell us that in recent years their businesses have
consistently felt risk is rising while their resilience is diminishing.
Beazley's purpose is to help all our stakeholders explore, create and build.
It is clear that, as a specialty insurer, we are an increasingly vital asset
to businesses. This goes beyond simply transferring risk to our balance sheet,
to supporting economic progress by delivering risk management advice and
protection. The result is growing demand for our insurance and reinsurance
products. This offers an opportunity for us to leverage demand-led growth to
extend our brand of specialty insurance to an expanding global pool of insured
risks.
We aim to offer continuity of cover for our clients, create innovative
products and services for our broker partners, and ensure we deliver strong
profitability for our shareholders.
Our approach to underwriting combines active management of the insurance cycle
with providing a diverse set of insurance products. Focused selection of risks
means we were able to deliver our strongest ever full-year result for 2024,
achieving a profit before tax of $1,423.5m (2023: $1,254.4m) despite an active
external loss environment.
We are committed to managing our capital by investing in future profitable
growth and capital distribution. Following the 2023 results, we announced a
$325m share buyback, which was concluded in September 2024. I am delighted to
say that the strong result in 2024 allows us to launch a share buyback of
$500m. Furthermore, we believe the strength of our results supports a one-off
rebasing of the ordinary dividend by 76% to 25p.
Board evolution, strengthening expertise
During 2024, we saw further maturation of the Board. First, we have a strong
group of Non-Executive Directors from whom we are able to draw on their market
and corporate experience to guide our decision-making. During 2024, specific
mention goes to Pierre-Olivier Desaulle who became our new Senior Independent
Non-Executive Director, following Christine LaSala's retirement.
Second, we were pleased that Carolyn Johnson, who brings a wealth of
experience in the North American market, joined the plc Board and became Chair
of our North American business.
Third, we are actively "future proofing" our Group structure by invigorating
our three platforms as they become increasingly important to our ability to
access risk globally. We have strengthened our leadership and governance in
North America, Europe and in London Wholesale, ensuring ongoing access to
business across these platforms, enabling continued strong relationships with
our brokers and insureds. Just as important is effective engagement with our
regulators in each geography as we continue to strengthen our risk management
infrastructure to ensure it is effective now and in the future.
Confidence in the future
I am proud of the entire team at Beazley. A pride that is rightly demonstrated
by our ranking as the 5(th) best business globally for sustainable growth by
TIME magazine. This ranking includes the measurement of growth, profits and
sustainability, a combination which clearly reflects our value and historic,
long-term success, and allows us to anticipate the opportunities ahead for
your Company.
Achieving this excellent result for 2024 was due to the hard work by Beazley's
talented team, guided by our experienced Board of Directors. I would like to
thank them all for their continued efforts, which demonstrate our values of
"Being Bold, Doing the Right Thing and Striving for Better".
As we look ahead, we remain focused on delivering on our promises to you, our
investors, and to all our stakeholders, which includes our broker partners and
clients, together with our outstanding team at Beazley. I am grateful for the
ongoing support of all of you and I am confident in our shared future.
Group Chief Executive Officer's statement
The power of expertise
Resilient business model delivers in 2024
2024 saw Beazley deliver our highest ever profit before tax of $1,423.5m
(2023: $1,254.4m) for the full year and I am proud of the work of our team
across the Company in achieving this strong outcome.
This result was delivered in a year with a significant global IT outage, an
active hurricane season and ongoing geopolitical volatility, illustrating the
resilience of our business. We achieved an undiscounted Combined Ratio (COR)
of 79.0% (2023: 74.0%) and, during the year, were able to improve our COR
guidance to the market given the positive performance of our business. We saw
ongoing demand-led growth for our specialty insurance products, achieving
10.0% Insurance Written Premium (IWP) growth* for 2024 (2023: 6.8%), even as
the rating environment continued to stabilise.
Our comprehensive understanding of our underwriting landscape means we were
able to give early information and reassurance to our investors about our
exposure to the global IT outage and hurricanes Helene and Milton. These
events, whilst causing significant market losses and devastating for those in
the front line, remained within our risk appetite and are testimony to the
strength of our underwriting capabilities and the quality of our risk
selection. The January 2025 California Wildfires were another significant
market event and one which further demonstrates the increasingly volatile,
complex and changing risk environment we are operating in. Our initial
estimate of exposure to this event is around $80m.
Product-led approach underpinned by platform strength
The robustness of our business model ensures we continue to achieve strong
results as market conditions change. This is built on a strategic framework
which champions underwriting agility through product, sector and geographic
diversification to actively manage the cycle. We have a product suite designed
to access pools of risk that are growing, driven by increasing demand from our
clients and broker partners, particularly where the risks they face are
complex, volatile or changing.
Our three platforms in North America and Europe, and global Wholesale are
enabling us to be close to our clients and brokers, strengthening
relationships and ensuring we are able to understand the risks they face. We
are investing for the long term into these entities, expanding our teams,
capabilities and local knowledge in each market. Our presence across the three
platforms allows us to deliver our specialty proposition, where it is most
valuable. In October, Bethany Greenwood, Group Head of Specialty Risks, took
over as Chair of our Wholesale Committee. We have executive management
oversight on all three of our platforms, with Fred Kleiterp heading up Europe
and Lou Ann Layton overseeing our business in North America. Today the premium
written on our three platforms is split: Wholesale (Lloyd's) 49%, North
America 43% and Europe 8%.
In North America, our Excess & Surplus (E&S) lines carrier saw
continued growth in its first full year in business, as brokers sought more
expertise and help with increasingly complex risks that this specialist
marketplace is ideally suited to deal with. This is further proof of our
commitment to the North American marketplace, with our team of more than 1,000
colleagues, based in 15 offices across the continental US and Canada, writing
IWP of more than $2bn.
Our European business made great strides forward in 2024 and we now have a
team of 200 colleagues across fourcountry clusters, with country managers
appointed in France, Germany, Spain and the UK. The continued investment we
are making is driving growing awareness of our capabilities and subsequent
demand for the specialist lines of business in which we concentrate, such as
cyber and management liability.
The Wholesale platform remains a leader at Lloyd's. In this subscription
market, where multiple insurers participate in risk sharing, we believe
automatic-follow solutions, where a market leader's underwriting is
automatically followed, bring welcome efficiency. Beazley was an early mover
in the follow market for facilities and consortia via Smart Tracker syndicate
5623. During 2024, we took an additional step into the follow market in a new
partnership with Ki, where we are learning more about follow-only algorithmic
underwriting for open market business. Lloyd's is traditionally a subscription
marketplace where risk is syndicated between lead and follow underwriters,
providing capacity for complex and large risks. In recent years, we have seen
the emergence of "Follow" underwriting models, providing automatic dedicated
follow capacity for facilitised, digital or algorithmically traded portfolios.
Leadership and innovation
Developing an effective market for cyber catastrophe reinsurance is vital if
we are to create a cyber insurance market capable of meeting demand from
business. Having launched the market's first cyber catastrophe bond in 2023,
we followed this with a further bond at the start of this year. With three
tranches issued during the course of 2024, cyber catastrophe bonds now provide
$510m of cover. In October 2024, we issued the market's largest and first
cyber industry loss warranty (ILW), providing $290m of cover should industry
losses exceed $9bn. Together with traditional reinsurance, we have $1bn of
cyber catastrophe reinsurance in place, providing powerful protection for our
business and demonstrating the innovation needed to drive this market forward.
In June, Beazley Security was launched, bringing together our in-house Cyber
Services team and our wholly owned cyber security company Lodestone. Beazley
Security is a key component in our Full Spectrum Cyber offering, which
incorporates integrated risk management services and cyber insurance. Our
experience shows that not only are our clients better able to pre-empt,
respond and adapt to cyber threats, but by keeping them one step ahead we are
also effectively managing our own underwriting outcome, as demonstrated by our
Cyber Risks combined ratio of 64.4% (2023: 68.3%).
Talent and expertise
During 2024, we continued to strengthen our senior team, with the appointment
of Liz Ashford as our Chief People and Sustainability Officer and Barbara
Plucnar Jensen as our Group Chief Financial Officer.
I was also delighted that Paul Bantick stepped up to become Group Chief
Underwriting Officer, following Bob Quane's retirement. Paul is an outstanding
insurance leader, who has driven the growth of our Cyber Risks business and
the ongoing development and maturation of the global cyber insurance market.
Alessandro Lezzi succeeded Paul as Group Head of Cyber Risks from the start of
2025, and joins the Executive Committee. Alessandro has a strong track record
at Beazley, having built out our International Cyber business.
I am pleased to note that our in-house talent, together with our ability to
attract outstanding new colleagues to Beazley, means we are able to appoint
high-calibre people to positions throughout the business.
We work hard to retain and develop our people, and our incentive schemes,
including profit-related pay for all of our underwriters and long-term
incentive and Save-As-You-Earn schemes, allow everyone to share in the
Company's success.
Expertise is at the heart of handling complex claims that arise from specialty
underwriting, and this is demonstrated by our multi-award winning claims team,
which in January 2025 was awarded the Outstanding Service Quality mark by
Gracechurch for the 9(th) year in a row.
Sustainability
Our sustainability strategy reflects the range of work we are engaged in
across the sustainability landscape. Our three point framework - responsibly
managing our business, supporting our clients in the transition and delivering
success by doing the right thing - ensures that sustainability is an integral
part of what we do every day in a way that is right for our business and meets
the needs of all stakeholders.
Whilst we are actively tracking our progress ourselves, it is pleasing to be
recognised for the success of our efforts. This year, we were ranked the 5(th)
best business globally, and the highest in the UK, for sustainable growth by
TIME magazine, a measure which assesses growth compared with peers,
profitability and commitment to sustainability.
Outlook
I am excited to once again deliver a record profit. This level of success,
even as 2024 offered a challenging risk landscape and a moderating rating
environment, is testament to the talent and hard work of the entire Beazley
team as well as the support of our broker partners and the ongoing commitment
of our investors. I am grateful to all of you and look forward to what we
will achieve together in 2025.
There is significant long-term opportunity for our business in this era of
accelerating risk, which means our clients need our expertise and strong
underwriting capabilities. And, as we demonstrated again in 2024, Beazley is a
market leader that can deliver against that opportunity as we move forward.
We do operate in a cyclical market and one where conditions can change
quickly. The industry continues to navigate an active claims environment,
including recent natural catastrophe activity which could result in the
pricing outlook evolving. However our central expectation at this time is that
prices will continue to soften this year, and we are forecasting mid-single
digit growth for 2025. Accounting for the provision already made in respect of
the January 2025 Wildfires, we expect to deliver a mid-80s undiscounted
combined ratio.
*Beazley Staff Underwriting Limited's participation in syndicate 623 at
Lloyd's, is now fully consolidated within the Group accounts on a line-by-line
basis due to an increase in materiality. Excluding the impact of this
consolidation of premium, growth for the year would have been 8.5% on a gross
basis and 8.2% on a net basis.
Group Chief Underwriting Officer's report
Long-term outperformance
I am proud to have taken the role of Group Chief Underwriting Officer and to
be leading such an outstanding underwriting team, which I have had the
privilege of working with for the past two decades.
In 2024, the team once again delivered an excellent insurance service result
of $1,236.0m (2023: $1,251.0m) and IWP growth of 10.0%. Against a backdrop
of significant loss events and a moderating rating environment, the result
speaks to the active cycle management and focus on risk selection that we have
embedded at Beazley.
Our underwriting is focused on delivering long-term outperformance, which we
achieve by actively managing the insurance market cycle, building
diversification across a broad suite of products and geographies, and
effective, careful risk selection. This is combined with a passion for
innovation and a focus on commerciality that puts the needs of our broker
partners and clients at its heart. Combined with our award winning claims
team, we deliver what I believe is the best end to end underwriting and claims
experience in the Specialty market.
I am delighted that this talented team has built a strong succession pipeline,
which sees Alessandro Lezzi step up to succeed me as Group Head of Cyber
Risks. We have worked together for nearly two decades at the forefront of
developing and growing the global cyber insurance market and I am excited to
see how Alessandro will take the team even further. James Wright has been
appointed Head of Digital Underwriting and, under his experienced leadership,
his team will be extending digital technology and distribution across our
underwriting operations.
Insurance written premiums
2024 2023
$m $m
Cyber Risks 1,275.9 1,184.3
Digital 246.6 227.5
MAP Risks 950.3 964.3
Property Risks 1,703.2 1,351.9
Specialty Risks 1,988.1 1,873.4
Total 6,164.1 5,601.4
Net insurance written premiums
2024 2023
$m $m
Cyber Risks 860.5 912.9
Digital 207.0 202.4
MAP Risks 859.3 851.6
Property Risks 1,454.9 1,157.3
Specialty Risks 1,770.6 1,572.0
Total 5,152.3 4,696.2
Active cycle management
We continually assess the evolving geopolitical, environmental and
technological landscape, and evaluate economic and insurance market conditions
to determine opportunities and risks.
During 2024, this approach saw us continue to lean into the Property market,
which saw strong growth of 26.0%. The teams' expertise and market insights
have enabled the division to achieve these growth levels despite a reduction
in rate increases to 1.3%, down from the very notable increase of 22.4% seen
in 2023.
Our assessment of market conditions continued to make us cautious in classes
impacted by social inflation, where we maintain our robust approach to
managing the cycle.
Our ability to move with agility as market conditions evolve ensures we are
able to remain relevant to our clients and brokers over the long-term whilst
ensuring the profitability of our business.
Underwriting innovation
Product diversity is further enhanced by innovation, which sees us identify
new and emerging categories of risk and create solutions for them. For
example, our Safeguard product, which helps organisations protect their people
from or mitigates the impacts of sexual abuse incidents, reached its 10-year
milestone in 2024. It is designed to help organisations take preventative
action and avoid incidents and, having identified the need more than a decade
ago, we have pioneered and led this relatively new class of insurance which
helps protect institutions and society from harm.
In addition to traditional insurance indemnification, clients increasingly
want help in managing the full spectrum of risks they face to avoid any gaps
in cover. At the same time, our broker partners are telling us they are
seeking higher capacity limits for their clients as the risk landscape becomes
increasingly complex. To meet these needs, we use our leading market position
to lead consortium arrangements, and two notable examples in 2024 were Beazley
FLEX and Beazley Quantum.
Beazley FLEX addresses the full range of crime, professional and cyber risks
that financial institutions face and brings together our financial
institutions and cyber experts to lead the consortium.
Beazley Quantum provides comprehensive cover for large corporates with up to a
$100m limit, bringing much needed additional capacity to large businesses
which are in the front line of the cyber threat.
In both instances, the consortium offers access to our market, leading Full
Spectrum Cyber capabilities, which combine all of Beazley's cyber risk
management and underwriting capabilities into the market's only end-to-end
cyber solution that brings together cyber insurance and security.
During the year, we looked closely at the new business opportunities and
efficiency gains that follow underwriting can deliver, through ongoing success
with Smart Tracker syndicate 5623 and with the start of a new partnership with
Ki algorithmic underwriting.
As we moved through the year, we began to see the real benefits that AI will
bring to our underwriting and claims teams, and we also continued to look
closely to identify new risks, including the threat of AI-washing or the risk
that companies overstate the benefits the technology will bring to their
operations. We expect to see improved understanding of the risks and the
opportunities of AI continue to come through in 2025.
Despite a challenging and volatile claims environment, our success in 2024 is
based on our fundamental values, focus on underwriting excellence and
effective risk management of our business, which is driving real value for our
brokers and clients.
Cyber Risks
Our strong COR of 64.4% in a year of moderating pricing demonstrates both our
cyber expertise and that the rate environment remains adequate. We experienced
competition in the international markets during the year as they entered the
next phase of maturity. However, the three major IT outages experienced during
2024 provided a reminder of the scale of risk that cyber threats from malign
or non-malicious sources pose to businesses. In the US, this experience
resulted in a reduction in the intensity of competitive rating pressures.
Cyber Risks retained its leadership role in the global cyber insurance market
in 2024, with the creation of new cyber reinsurance capacity, in the form of
additional catastrophe bonds and the launch of the market's largest cyber ILW.
These innovations, together with our probabilistic modelling approach for
cyber, ensure that Beazley has strong protection across its cyber business.
The most significant achievement of the year was the creation of Full Spectrum
Cyber and, as part of it, Beazley Security, our wholly owned cyber security
firm. Together they deliver the market's first end-to-end cyber security and
insurance protection solution, ensuring clients have effective cyber insurance
coupled with pre-emptive and responsive cyber security intelligence.
Beazley also played its part in building a robust modelling framework for
cyber catastrophes during 2024, following a year-long collaboration with
Munich Re and Gallagher Re on the modelling of cyber accumulation risk from
significant malware events. The published white paper is freely available to
anyone interested in cyber modelling. Please see our website for further
information.
Looking ahead, we anticipate continuing demand-led growth in our international
segment. The mid to small end of the market in the US will see ongoing
opportunity as businesses seek to protect themselves from the ever-changing
cyber threat.
Digital
Digital trading is accelerating as we continue to invest, and our broker
partners are also doing the same, to increase the use of technology across the
underwriting and claims process. During 2024, this continued to drive an
increase in submissions via our digital trading platforms in all geographies.
At the same time, we also saw an increase in competition across all lines of
our specialist insurance offering, which serves small businesses.
As digital trading of cyber risks continued to expand, we increased our line
size available digitally, focusing on the US and Germany, and resulting in
growing submissions.
We expect to see the continued roll out of technology across our three
platforms and right through our underwriting divisions as digital solutions
increasingly become business as usual for Beazley.
MAP Risks
MAP achieved a COR of 80.9%, based on a continued positive rating environment,
of which ongoing geopolitical uncertainty is a key driver.
This has been particularly true of the political risk and political violence
segment, where demand remains consistently strong and where we remain
steadfast in our support of our clients, but always exercise caution given the
level of unpredictability.
Ongoing volatility is resulting in businesses identifying gaps in cover and
seeking comprehensive solutions. In particular, we are experiencing growing
demand for our Deadly Weapons Protection product, which offers risk management
and prevention expertise, alongside indemnity and recovery advice, to protect
clients from the worst impacts of attacks involving deadly weapons.
During the year, the marine market has had to navigate a number of challenges,
including the Baltimore Bridge disaster, the ongoing conflicts in Ukraine and
the Middle East, and more specifically the targeting of vessels trading
through the Red Sea. The Market's success over the preceding years has
encouraged competition to enter, particularly in Hull & Cargo, where we
are seeing rates falling away, while the experience of the bridge collapse is
generating a somewhat more stable rating environment for marine liability.
Our renewables business took off in 2024, growing its relevance and presence
with brokers. This is part of a long-term investment we are making into this
growth energy business as part of our commitment to supporting clients in the
transition, which includes investigating insurance solutions for the
development of nuclear fusion.
During the last 12 months, we have also grown our position within the
Lead/Follow underwriting arena in Lloyd's. As the market leader with Smart
Tracker syndicate 5623, we act as a lead insurer on facilities and support
over 30 consortia arrangements, with both mechanisms bringing much needed
efficiencies and additional capacity to the market.
There is no indication that geopolitical uncertainty is receding and we have
increased our reserves to reflect this. Looking ahead, we believe we will see
ongoing demand for our products and services, which we will be building out
into the European markets during the year ahead.
Property Risks
Property Risks saw strong momentum during the year, growing IWP by 26.0%. Rate
increases persisted but, as anticipated, at a lower level than in the previous
year, at 1.3% (2023: 22.4%). Demand for our expertise continued, particularly
in North America, where we have worked over recent years to better understand
the impact of a changing climate on property risks. As a result of our onshore
E&S carrier we have increased proximity to our brokers and clients,
leading to an enhanced new business pipeline.
2024 brought yet more experience of extreme weather, notably an active
Atlantic hurricane season, reminding the market of the importance of a
sustainable approach to underwriting which is focused on risk quality and rate
adequacy.
Individual regional markets that saw significant impacts from natural
catastrophe activity, such as the Southeastern US, Canada and Europe, are all
now experiencing stronger rating increases.
As the climate continues to change we have seen an increase in the frequency
and severity of catastrophic events and demand for specialist property
insurance.
As we move into 2025, we see further opportunity for organic growth of our
specialist products and services that support our clients and brokers to
navigate this volatile risk landscape. We will continue our long-term
investment in property underwriting including additional capabilities, notably
in Europe and Asia.
Specialty Risks
Specialty Risks COR of 79.2% reflects strong underwriting skill and how our
highly diversified book, spread over more than 25 lines of business in
multiple geographies with varying insured sizes, continues to deliver success.
As a result, we achieved 6.1% IWP growth, driven by the maturation of our
niche lines of business, which are becoming meaningful contributors to our
overall proposition.
Highly specialised lines of insurance, such as Environmental Liability, our
Programmes business and Safeguard, contributed positively. In Directors &
Officers (D&O), we are now seeing early signs that rates are stabilising
and are narrowing to flat, although we maintain a laser-like focus on rate
adequacy.
Effectively managing the cycle also means that we are constantly assessing
where social inflation is undermining the long-term viability of insurance
and, where needed we will take the difficult decision to reduce or pull back
altogether.
We are actively watching capital markets activity with signs of a pickup in
activity in 2025. More capital markets and mergers & acquisitions
(M&A) activity creates demand for insurance products such as D&O and
Environmental Liability during the course of transactions and we stand ready
to support the market.
Our clients face complex problems that often involve litigation and our focus
is on providing them with speciality products, risk management advice and
stable capacity so that they can get on with the task of running a successful
business and we are optimistic of the opportunities to deliver that in 2025.
Performance by Division
2024
Cyber Digital MAP Property Specialty
Risks Risks Risks Risks
Insurance written premiums ($m) 1,275.9 246.6 950.3 1,703.2 1,988.1
Net insurance written premiums ($m) 860.5 207.0 859.3 1,454.9 1,770.6
Segment result ($m) 355.4 57.1 182.6 391.2 476.5
Claims ratio 39.4% 28.7% 44.2% 41.9% 47.5%
Expense ratio 25.0% 45.6% 36.7% 31.0% 31.7%
Combined ratio 64.4% 74.3% 80.9% 72.9% 79.2%
Undiscounted combined ratio 68.1% 77.3% 83.2% 74.6% 87.1%
Rate change (5.5)% (3.2)% 1.3% 1.3% 1.4%
Performance by Division
2023
Cyber Digital MAP Property Risks Specialty Risks
Risks Risks
Insurance written premiums ($m) 1,184.3 227.5 964.3 1,351.9 1,873.4
Net insurance written premiums ($m) 912.9 202.4 851.6 1,157.3 1,572.0
Segment result ($m) 307.4 59.4 158.2 354.7 415.3
Claims ratio 42.2% 23.4% 40.6% 35.4% 41.9%
Expense ratio 26.1% 44.9% 37.9% 29.8% 30.8%
Combined ratio 68.3% 68.3% 78.5% 65.2% 72.7%
Undiscounted combined ratio 72.3% 69.7% 79.3% 66.7% 78.4%
Rate change (5.1)% 0.5% 5.6% 22.4% (0.9)%
Group Chief Financial Officer's statement
The value of a specialty insurer
I am very pleased to have joined Beazley as Group Chief Financial Officer in
what has been an incredibly successful year for our Company, marked by such
strong financial results.
Our record pre-tax profit of $1,423.5m (2023: $1,254.4m) was delivered,
despite an active claims environment and experiencing moderating rates.
However, given the significant rate increases across many areas of our book in
recent years, we remain confident on pricing adequacy at an overall Group
level. The delivery of an undiscounted combined ratio (COR) of 79.0% (2023:
74.0% undiscounted) is demonstrative of our ability to effectively manage the
cyclical nature of our business whilst maintaining strong results. Our
investments also made an important contribution to our overall performance,
with an income of $574.4m (2023: $480.2m), which represents a return of 5.2%
(2023: 4.9%).
Consistent financial performance through the cycle
The return on equity for the year was 26.6% (2023: 30.0%). As a specialty
insurer, the risks we underwrite are volatile, complex and changing. However,
we aim to deliver a consistent financial performance by exercising
underwriting discipline to ensure rate adequacy as well as deploying capital
across our diversified portfolio in areas which allow us to deliver a strong
return.
Whilst the nature of our business is cyclical, predictability of our results
is important to us and we target a cross-cycle return on equity (ROE) of 15%.
Our average return on equity across the last 10 years is 15.5%, with a
five-year average of 17.7%. This has been achieved despite COVID losses in
2020, an extraordinary year in terms of losses and the only year in the
Company's history which did not generate a profit. This demonstrates the
very strong underwriting discipline which ensures sustainability of our
financial performance through the cycle.
Effective capital utilisation
When deciding on the appropriate level of capital, we consider several
criteria: firstly, we aim to maintain a solvency ratio in excess of 170% of
solvency capital requirement (SCR). We also seek to absorb volatility to
ensure financial resilience should a 1-in-250 event occur as well as assessing
the impact of interest rate movements. Finally, we consider the opportunities
for growth, which encompass the business plan for the following year as well
as the opportunities for growth in the medium term (subsequent 1-2 years)
whilst ensuring we can swiftly take advantage of rising unforeseen
opportunities.
In the past, our primary focus has been on organic growth, particularly in
recent years given the extraordinary market conditions across many lines of
our business. However,
we are open to opportunities for organic and/or acquisitive growth where it
aligns with our strategy and competence.
The growth in our company in recent years combined with the current market
conditions may foster more relevant prospects in this space, allowing us to
explore suitable acquisition opportunities like those we have executed in the
past, continuously demonstrating a desire to balance prudence and maximise
returns for investors.
We deploy capital where we can generate most value, and are committed to
return any surplus capital to our shareholders. We have grown significantly in
recent years, and to reflect this growth and our confidence in the
sustainability of our results, we have decided to rebase our ordinary dividend
by 76% to 25.0p to be paid on 2 May 2025. We will also commence a share
buyback of $500m.
Capital Structure
Our aim is to continue to deliver value to our shareholders while navigating
the dynamic market landscape. Looking ahead, we remain committed to
maintaining a strong capital discipline. We make decisions to support value
creation. Whilst ensuring consistency and predictability in our results, we
intend to continue to leverage our strong financial foundation to drive
sustainable growth.
Given the global business and structure of Beazley, the Group and subsidiaries
need to adhere to several regulatory requirements. Capital is required to
support underwriting at Lloyd's, in the US and through our European branches,
and is subject to prudential regulation by local regulators (the Prudential
Regulation Authority, Lloyd's, the Central Bank of Ireland (CBI), and the US
state level supervisors). Beazley is subject to the capital adequacy
requirements of the European Union (EU) Solvency II regime.
The capitalisation ensures we achieve adequate ratings from A.M. Best and
Fitch for Beazley Insurance Company, Inc. (BICI), Beazley America Insurance
Company Inc. (BAIC), Beazley Excess and Surplus Insurance Company, Inc (BESI),
and Beazley Insurance dac (BIDAC) in order to be able to conduct business
freely with our preferred client base.
As of 31 December 2024, our Solvency II coverage is estimated at 264% (31
December 2023: 219%, net of announced share buybacks and dividends). The
capital requirement (SCR) is established using our Solvency II approved
internal model approved by the CBI and reflects the business we expect to
write through to the end of 2025 as per our business plan, which is targeting
gross growth of mid single digits.
The projected year-end Group Solvency II ratio of 264% takes into account the
ordinary dividend of 25.0p and share buyback of $500m.
2024 Estimate* 2023
$m $m
Eligible Tier 1 capital 4,291.3 3,980.9
Eligible Tier 2 capital 564.9 520.8
Total Solvency II eligible own funds 4,856.2 4,501.7
Capital requirement 1,837.1 2,058.2
Group Solvency II ratio 264% 219%
*The final 2024 ratio is subject to review and audit and will be published in
Group 2024 Solvency and Financial Condition Report (SFCR).
Our funding comes from a mixture of Tier 1 basic own funds and $564.9m of Tier
2 own funds. This is predominantly $552.2m of Tier 2 subordinated debt
($550.0m after capitalised borrowing costs and fair value adjustments).
Both Tier 2 subordinated debt issuances in 2016 and 2019 are issued by BIDAC,
which maintains an Insurer Financial Strength (IFS) rating of "A+" by Fitch.
Scenario sensitivity analysis
The table below shows the impact on the Group's estimated Solvency II ratio as
of 31 December 2024 in the event of the scenarios shown. The impact on the
Group's Solvency II ratio could arise from movements in both the Group's SCR
and own funds.
Both Tier 2 subordinated debt issuances in 2016 and 2019 are issued by BIDAC,
which maintains an Insurer Financial Strength (IFS) rating of "A+" by Fitch.
Scenario Impact on Solvency II ratio
Cyber 1-in-250 Cyber scenario* (29)%
Nat Cat 1-in-250 Combined scenario (31)%
50 bps decrease in interest rates** (12)%
*Based on Cyber Probabilistic Model
**This considers the impact on the SCR in isolation to the impact on eligible
own funds
Group Performance
Result
We are proud to have delivered an outstanding profit before tax of $1,423.5m
(2023: $1,254.4m). This was achieved through a combination of strong
performance on both the insurance and investment results. An insurance service
result of $1,236.0m (2023: $1,251.0m), driven by an undiscounted combined
ratio of 79.0% (2023: 74.0%), together with net investment income of $574.4m
(2023: $480.2m), which represents an investment return of 5.2% (2023: 4.9%),
delivering record profits for a second year in a row.
Premiums
Insurance written premiums increased by 10.0% in 2024 to $6,164.1m (2023:
$5,601.4m). The Group participates in
the underwriting of syndicate 623 on behalf of the staff underwriting
incentive scheme, with the return generated from this participation previously
recognised as "other income". From the 2024 year of account onwards, this
participation has been fully consolidated into the Group accounts on a line by
line basis given the increase in the relative materiality of the return
generated. This recognition is effective from the year end 2024 onwards and
contributes to the overall 10% growth achieved on insurance premium written in
2024. Excluding the impact of this, insurance written premiums grew by 8.5% in
2024. Rates on renewal business on average decreased by 0.5% across the
portfolio (2023: increased by 4.3%); however, we remain confident in the level
of rate adequacy we are seeing from an overall Group perspective, particularly
against a backdrop of extraordinary rate increases within Property Risks and
Cyber Risks in recent years.
Our net insurance written premiums increased by 9.7% in 2024 to $5,152.3m
(2023: $4,696.2m). Excluding the impact of consolidating the internal Staff
Underwriting Scheme, net insurance written premium grew by 8.2%. The alignment
in gross and net growth follows an increase in reinsurance spend in the second
half of the year, following an opportunity identified to further manage our
cyber catastrophe exposure by placing additional cyber catastrophe bonds as
well as an ILW. We are committed to actively encouraging the development of
the alternative risk transfer market for cyber, which will support the
structural growth expected in the cyber insurance market in the coming years.
Statement of profit or loss
2024 2023
$m $m
Insurance service result 1,236.0 1,251.0
Net investment income 574.4 480.2
Net insurance finance expense (55.9) (153.4)
Net insurance and financial result 1,754.5 1,577.8
Other income 106.0 78.5
Operating expenses (388.6) (365.8)
Foreign exchange (losses)/gains (9.1) 4.5
Finance costs (39.3) (40.6)
Profit before tax 1,423.5 1,254.4
Income tax expense (293.2) (227.6)
Profit after tax 1,130.3 1,026.8
Claims ratio 43.1% 39.4%
Expense ratio 31.7% 31.6%
Combined ratio 74.8% 71.0%
Rate (decrease)/increase (0.5)% 4.3%
Investment return 5.2% 4.9%
Insurance service result
The Group achieved an insurance service result of $1,236.0m (2023: $1,251.0m).
Insurance revenue of $5,678.1m (2023: $5,442.4m), a 4.3% increase, reflecting
the continued growth of the business during 2024.
During the second half of 2024, a number of natural catastrophes occurred,
including Hurricanes Helene and Milton, following a reasonably benign
hurricane season in 2023. The claims environment remains elevated overall and
in the second half of the year we saw more normalised claims experience
compared with the better than expected experience in 2023. This resulted in a
claims ratio of 43.1% (2023: 39.4%). The expense ratio remained consistent
with prior year at 31.7% (2023: 31.6%) as we continued to focus on managing
our expenses during the year, whilst continuing to invest with our technology
modernisation programme.
The allocation of reinsurance premium decreased by 32.1% to $764.9m (2023:
$1,127.3m) following a period of actively purchasing less proportional
reinsurance within our Cyber Risks and Specialty Risks divisions year on year.
Amounts recoverable from reinsurers for incurred claims decreased to $255.8m
(2023: $528.5m). As prior year gross claims estimates have decreased, together
with the reduction in reinsurance coverage purchased, the amounts recoverable
from reinsurers has also reduced. Reinsurers' share of directly attributable
expenses has increased to $4.4m (2023: $3.6m).
Combined ratio
The combined ratio of an insurance company is a measure of its performance
from transacting (re)insurance contracts. Under IFRS 17, this represents the
ratio of its insurance service expense less directly attributable expenses and
amounts recoverable from reinsurers for incurred claims, to the total
insurance revenue less allocation of reinsurance premium. This is all on a
discounted basis and excludes operating expenses which are non-directly
attributable and excluded from the insurance service result.
A combined ratio under 100% indicates a profit on the insurance service
result. Beazley has continued to deliver underwriting profitability with a
combined ratio of 74.8% in 2024 (2023: 71.0%). For further information, please
see the APMs section.
Other income
Other income increased by 35% to $106.0m (2023: $78.5m), primarily driven by
increased income received from third-party syndicates from a one-off
adjustment to realign the recognition of the operation of an internal Staff
Underwriting Scheme for the 2023 year of account and prior.
Reserve confidence level
Beazley has a consistent reserving philosophy, with initial reserves being set
to include a risk adjustment that may be released over time as and when any
uncertainty reduces.
We maintain a preferred confidence level of between 80th and 90th percentile.
This percentile indicates the strength of reserves held across both the best
estimate and risk adjustment for non-financial risk. IFRS 17 outlines the key
principles in order to calculate the risk adjustment for non-financial risk.
There are two principles that are particularly important, and thus worth
highlighting. First, the level needs to be consistent with how Beazley
considers the risk at the point of underwriting. The second principle states
that the risk adjustment level should make the firm neutral to running off the
obligations or selling them.
At the end of 2024, our confidence level was at the 84th percentile (2023:
85th percentile).
Past service development
Net past service development saw a net release of $(144.5)m in 2024 (2023: net
release of $(109.8)m), which represented (2.9)% (2023: (2.5)%) of insurance
revenue less allocation of reinsurance premiums. The largest releases were
from:
• Property Risks $68.4m (2023: $78.0m); and
• Cyber Risks $63.0m (2023: strengthening $9.9m).
Property and Cyber Risks both experienced favourable attritional claims
experience throughout the year, supplemented by the release of Cyber
catastrophe loads and benign movements on existing Property catastrophes.
Property has benefited from particularly benign attritional experience in the
US market, and Cyber releases reflect ongoing positive experience on
international risks.
Specialty Risks released $37.7m (2023: $8.1m), due to sustained favourable
attritional claims experience on books where underwriter action has been taken
in previous years. This is partially offset by strengthening on specific
events on several older underwriting years together with deteriorations in US
health and medical covers partially attributed to ongoing social inflation.
Digital released $31.1m (2023: $28.0m), driven by favourable attritional
claims experience on the cyber business.
In MAP risks, reserves have been strengthened due to ongoing geopolitical
uncertainty. Despite this, MAP has still delivered an undiscounted COR of
83.2% and remains a highly profitable part of our business.
Prior year claims adjustment
2024 2023
Net $m $m
Cyber Risks (63.0) 9.9
Digital (31.1) (28.0)
MAP Risks 55.7 (5.6)
Property Risks (68.4) (78.0)
Specialty Risks (37.7) (8.1)
Total (144.5) (109.8)
Release as a percentage of insurance revenue less allocation of reinsurance (2.9)% (2.5)%
premiums
Total expenditure
The expense ratio, which under IFRS 17 only includes expenses directly
attributed to insurance activities, increased marginally to 31.7% for 2024
(2023: 31.6%). For 2024, non-directly attributable expenses of $388.6m (2023:
$365.8m) fall outside the insurance result. Taking these items together, total
expenses for 2024 totalled $1,946.7m (2023: $1,728.4m).
We continue to focus on our total expense base, allowing for additional
expenses where aligned to underlying business growth or to enhancement to our
business model. Together with the focus on our expense base, the reduction in
the total expense ratio to 39.6% (2023: 40.1%) reflects the costs incurred in
the prior year as a result of the modernisation of our underwriting and
finance platforms as well as enhancing our digital trading capabilities.
Foreign exchange
The majority of Beazley's business is transacted in US dollars (80.9%), which
is the currency we have reported in since 2010 and the currency in which we
aim to hold the Company's net assets. Changes in the US dollar exchange rate
with sterling, the Canadian dollar and the euro do have an impact as we
receive premiums in those currencies and a material number of our staff
receive their salary in sterling. Beazley's foreign exchange movement, taken
through the statement of profit or loss in 2024, was a $(9.1)m loss (2023:
$4.5m gain).
Investment performance
Beazley's investment portfolio generated a return of $574.4m, or 5.2% in 2024
(2023: a return of $480.2m, or 4.9%). Our financial assets grew to $11.5bn as
at 31 December 2024 (2023: $10.5bn). Returns were again driven by strong
performance from our equity, credit and hedge fund exposures; and by the level
of risk-free yield available in the market, where the interest rate risk on
our assets closely matches our liabilities.
US GDP growth was surprisingly strong, shaking off high short- term interest
rates to register approximately 3% for 2024, led by services and consumption.
US Government bond yields were volatile, rising early in the year before
falling through Q3, and rising again in Q4 as financial market participants
began to digest a possible Republican presidential victory and the Federal
Reserve indicated a slower than expected pace of future cuts. The shape of the
yield curve changed, pivoting around the two-year mark where yields were
little changed; yield on shorter maturities fell, whilst longer maturities
rose. Despite this volatility, and with most of our exposures at the short
end, the portfolio performed well.
Equity markets again delivered a strong return. Our equity portfolio, which
continues to be focused on US markets, and selected to align with our
responsible investment commitments, returned in excess of 23%. Performance was
strong throughout the year, buoyed in Q4 by the US elections. Our corporate
exposures performed strongly as well, with both high yield and investment
grade spreads tightening. High-yield spreads came close to the historic low of
240bps, before finishing the year just below 300bps. Our hedge fund portfolio
also delivered a solid return, with low volatility and correlation to other
asset classes. We continue to build on our impact portfolio, where our
commitments have increased to $60m in funds that have measurable social or
environmental benefits. We expect to hit our target of $100m in committed
capital in 2025.
We made an allocation to securitised credit for the first time in many years
in 2024, selecting an external manager to invest in the highest quality
tranches (AAA-AA) of collateralised loan obligations (CLOs). The portfolio was
initiated in the second half of the year, and has been ramped to its target.
The yield of our fixed income portfolio at 31 December 2024 was 4.6%, with a
duration of 1.6 years. This level of yield is a positive starting point for
investment returns in 2025. However, there are plenty of risks: economic
growth is diverging; remaining solid in the US, but slowing elsewhere.
Geopolitical risks are elevated, and markets will likely have to weather a
shift in US foreign and domestic policy under the new administration. Our
investment portfolio remains diversified and well positioned for a range of
market outcomes.
The table below details the breakdown of our portfolio by asset class:
31 Dec 2024 31 Dec 2023
$m % $m %
Cash and cash equivalents 882.1 7.7 812.3 7.8
Fixed and floating rate debt securities
- Government issued 4,289.1 37.3 4,469.1 42.6
- Corporate bonds
- Investment grade 3,862.3 33.6 3,578.3 34.1
- High yield 662.4 5.8 489.0 4.7
- Securitised
- Collateralised loan obligations 480.0 4.2 - -
Syndicate loans 29.5 0.3 34.1 0.3
Derivative financial assets 11.2 0.1 10.0 0.1
Core portfolio 10,216.6 89.0 9,392.8 89.6
Equity funds 348.7 3.0 282.7 2.7
Hedge funds 752.0 6.5 582.2 5.6
Illiquid credit assets 175.4 1.5 220.1 2.1
Total capital growth assets 1,276.1 11.0 1,085.0 10.4
Total 11,492.7 100.0 10,477.8 100.0
Comparison of return by major asset class:
31 Dec 2024 31 Dec 2023
$m % $m %
Core portfolio 457.9 4.7 392.7 4.5
Capital growth assets 116.5 9.9 87.5 8.8
Overall return 574.4 5.2 480.2 4.9
Tax
Beazley is liable to corporation tax in a number of jurisdictions, notably the
UK, the US and Ireland. Beazley's effective tax rate is thus a composite tax
rate mainly driven by the Irish, UK and US tax rates. The weighted average of
18.6% (2023: 17.6%) is higher than last year due to this year's composition of
profit and losses across the Group, including the impact of the Pillar 2
minimum tax on profits arising in Ireland.
The effective tax rate has increased in 2024 to 20.6% (2023: 18.1%).
Balance sheet management
2024 2023 Movement
$m $m %
Intangible assets 198.0 165.3 20
Insurance contract assets 20.2 101.5 (80)
Reinsurance contract assets 2,666.6 2,426.7 10
Other assets 1,041.5 494.1 111
Financial assets at fair value and cash and cash equivalents 11,492.7 10,477.8 10
Total assets 15,419.0 13,665.4 13
Insurance contract liabilities 8,814.3 7,992.2 10
Reinsurance contract liabilities 297.1 333.5 (11)
Financial liabilities 576.0 554.6 4
Other liabilities 1,124.8 903.0 25
Total liabilities 10,812.2 9,783.3 11
Net assets 4,606.8 3,882.1 19
Net assets per share (cents) 731.4c 585.8c 25
Net tangible assets per share (cents) 699.9c 560.9c 25
Net assets per share (pence) 570.5p 468.6p 22
Net tangible assets per share (pence) 545.9p 448.7p 22
Number of shares(1) 629.9m 662.7m (5)
(1Excludes shares held in the employee share trust and treasury shares.)
Intangible assets
Intangible assets consist of goodwill on acquisitions of $62.0m (2023:
$62.0m), purchased syndicate capacity of $31.3m (2023: $31.3m), US admitted
licences of $9.3m (2023: $9.3m) and capitalised expenditure on IT projects
of $95.4m (2023: $62.7m).
Net reinsurance contract assets
Net reinsurance contract assets represent recoveries from reinsurers, and
comprise of the asset for remaining coverage (ARC) and the asset for incurred
claims (AIC). At 31 December 2024, the ARC was in a net asset position of
$139.7m (2023: $321.9m net liability) as the future premium payable to the
reinsurers was lower than the expected claim recoveries. The AIC was in a net
asset position of $2,229.8m at 31 December 2024 (2023: $2,415.1m net asset).
The Group's exposure to reinsurers is managed through:
• minimising risk through selection of reinsurers who meet strict
financial criteria e.g. minimum net assets, minimum 'A' rating by S&P
(these criteria vary by type of business, eg short vs medium tail);
• timely calculation and issuance of reinsurance collection notes from
our ceded reinsurance team; and
• regular monitoring of the outstanding debtor position by our
Reinsurance Security Committee and Credit Control Committee.
Net insurance contract liabilities
Net insurance contract liabilities of $8,794.1m (2023: $7,890.7m) consist of
two main elements, being the liability for remaining coverage (LRC) and the
liability for incurred claims (LIC).
The LIC and LRC balance is made up of a reserve for expected claims and a risk
adjustment. In addition, the LRC contains a contractual service margin,
provision for onerous contracts and premium debtors. At 31 December 2024, the
LRC balance was $1,194.4m (2023: $755.4m). Our LIC has increased by 6.5% to
$7,599.7m (2023: $7,135.3m).
CSM Sustainability
The Contractual Service Margin (CSM) reflects the expected profit of contracts
within the asset/liability for remaining coverage. We have calculated the CSM
sustainability as the closing CSM divided by the opening CSM, and thus a value
of 1 and above shows that the expected profit within the LRC/ARC is higher
than the previous valuation. For more information on CSM Sustainability,
including the calculation, please refer to the APM section.
As at 31 December 2024, the gross CSM sustainability score was 1.40 (2023:
1.01) while the net CSM sustainability score was 1.15 (2023: 1.17). This is a
pleasing result and shows the strength of the expected profit contained on the
balance sheet has increased on a gross basis, with a marginal decrease on a
net basis following an increase in the purchase of cyber reinsurance during
2024. This puts us in good stead as we move in to 2025.
Discounting impacts
During 2024, the net finance expense was $55.9m (2023: $153.4m), which was
broken down into a $292.1m (2023: $294.7m) unwind of discounting recognised on
existing business, partially offset by $236.2m (2023: $141.3m) of income from
changes in financial assumptions.
Financial liabilities
Financial liabilities comprise borrowings and derivative financial
liabilities. The Group utilises two long-term debt facilities:
• In November 2016, Beazley Insurance dac issued $250.0m of 5.875%
subordinated Tier 2 notes due in 2026.
• In September 2019, Beazley Insurance dac issued $300.0m of 5.5%
subordinated Tier 2 notes due in 2029.
The Group has a syndicated short-term banking facility led by Lloyds Banking
Group plc. This provides potential borrowings of up to $450.0m which may be
advanced as cash. Of this, $225.0m has been drawn as letters of credit to
support underwriting at Lloyd's at 31 December 2024 (2023: $225.0m). The cost
of the facility is based on a commitment fee of 0.4725% per annum, and any
amounts drawn are charged at a margin of 1.5% per annum above this fee.
The cash element of the facility will expire on 25 May 2026, whilst letters of
credit issued under the facility can be used to provide support for the 2023,
2024 and 2025 underwriting years. In 2024, $225.0m has been placed as a letter
of credit as Funds at Lloyd's (FAL).
Other assets
Other assets of $681.4m are analysed separately in the notes to the financial
statements. The items included comprise:
• amounts due from syndicates 5623, 623 and 4321;
• prepayments and accrued income; and
• other receivables.
Consolidated statement of profit or loss for the year ended 31 December 2024
2024 2023
$m $m
Insurance revenue 5,678.1 5,442.4
Insurance service expenses (3,933.0) (3,592.6)
Allocation of reinsurance premium (764.9) (1,127.3)
Amounts recoverable from reinsurers for incurred claims 255.8 528.5
Insurance service result 1,236.0 1,251.0
Net investment income 574.4 480.2
Net finance expense from insurance contracts issued (89.1) (169.3)
Net finance income from reinsurance contracts held 33.2 15.9
Net insurance and financial result 1,754.5 1,577.8
Other income 106.0 78.5
Operating expenses (388.6) (365.8)
Foreign exchange (losses)/gains (9.1) 4.5
Results from operating activities 1,462.8 1,295.0
Finance costs (39.3) (40.6)
Profit before tax 1,423.5 1,254.4
Tax expense (293.2) (227.6)
Profit after tax for the year 1,130.3 1,026.8
Earnings per share (cents per share):
Basic 175.1 154.7
Diluted 170.4 151.4
Earnings per share (pence per share):
Basic 137.0 124.8
Diluted 133.3 122.1
Consolidated statement of comprehensive income for the year ended 31 December
2024
2024 2023
$m $m
Profit after tax for the year 1,130.3 1,026.8
Items that will never be reclassified to profit or loss:
Loss on remeasurement of retirement benefit obligations (0.6) (0.1)
Tax (expense)/credit on defined benefit obligation (0.2) 0.7
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation gains 1.2 5.7
Total other comprehensive income 0.4 6.3
Total comprehensive income recognised 1,130.7 1,033.1
Consolidated statement of changes in equity for the year ended 31 December
2024
Share Share Foreign currency translation reserve Other Retained Total
capital premium reserves earnings
$m $m $m $m $m $m
Balance as at 01 January 2023 46.6 9.7 (109.8) (7.6) 3,015.1 2,954.0
Total comprehensive income - - 5.7 - 1,027.4 1,033.1
Dividend paid - - - - (107.7) (107.7)
Issue of shares 0.1 0.9 - - - 1.0
Equity settled share-based payments - - - 36.2 - 36.2
Acquisition of own shares held in trust - - - (33.6) - (33.6)
Tax on share option vestings - - - 0.7 (1.6) (0.9)
Transfer of shares to employees - - - (8.5) 8.5 -
Balance at 31 December 2023 46.7 10.6 (104.1) (12.8) 3,941.7 3,882.1
Total comprehensive income - - 1.2 - 1,129.5 1,130.7
Dividend paid - - - - (120.5) (120.5)
Share buyback(1) (2.4) - - 2.4 (330.0) (330.0)
Issue of shares 0.3 7.3 - - - 7.6
Equity settled share-based payments - - - 40.5 - 40.5
Acquisition of own shares held in trust - - - (14.0) - (14.0)
Tax on share option vestings(2) - - - 7.1 3.3 10.4
Transfer of shares to employees - - - (11.4) 11.4 -
Balance at 31 December 2024 44.6 17.9 (102.9) 11.8 4,635.4 4,606.8
(1 Refer to Note 14 for further details of the share buyback)
(2 The aggregate amount of tax recognised directly through equity is a credit
of $10.4m (2023: expense of 0.9m), comprised of $7.1m of deferred tax credit
(2023: 0.9m deferred tax expense) and $3.3m of current tax credit (2023:
nil).)
Consolidated statement of financial position as at 31 December 2024
2024 2023
$m $m
Intangible assets 198.0 165.3
Plant and equipment 28.9 15.9
Right-of-use assets 49.8 59.4
Deferred tax asset 191.8 46.9
Retirement benefit asset 4.0 4.5
Insurance contract assets 20.2 101.5
Reinsurance contract assets 2,666.6 2,426.7
Financial assets at fair value 10,610.6 9,665.5
Other assets 681.4 354.2
Current tax asset 85.6 13.2
Cash and cash equivalents 882.1 812.3
Total assets 15,419.0 13,665.4
Share capital 44.6 46.7
Share premium 17.9 10.6
Foreign currency translation reserve (102.9) (104.1)
Other reserves 11.8 (12.8)
Retained earnings 4,635.4 3,941.7
Total equity 4,606.8 3,882.1
Deferred tax liability 387.2 202.2
Financial liabilities 576.0 554.6
Lease liabilities 66.9 76.6
Insurance contract liabilities 8,814.3 7,992.2
Reinsurance contract liabilities 297.1 333.5
Current tax liability 27.9 13.7
Other liabilities 642.8 610.5
Total liabilities 10,812.2 9,783.3
Total equity and liabilities 15,419.0 13,665.4
Consolidated statement of cash flows for the year ended 31 December 2024
2024 2023
$m $m
Cash flows from operating activities:
Profit before tax 1,423.5 1,254.4
Adjustments for non-cash items:
Interest and dividends receivable on financial assets (313.2) (215.3)
Finance costs payable 39.3 40.6
Net fair value gains on financial assets (227.3) (325.2)
Other non-cash items(1) 99.2 45.7
Changes in operational assets and liabilities:
Increase in net insurance and reinsurance contract liabilities 627.1 545.9
Increase in other liabilities 32.3 86.5
Increase in other assets (327.2) (150.0)
Purchases of investments (8,598.9) (7,115.9)
Proceeds from sale of investments 7,870.0 6,129.8
Repayment of syndicate loans 7.7 -
Interest and dividends received on financial assets 303.6 207.4
Tax paid (301.2) (110.7)
Net cash inflows from operating activities 634.9 393.2
Cash flows from investing activities:
Purchase of plant and equipment (17.8) (4.3)
Expenditure on software development and other intangible assets (45.0) (50.9)
Net cash outflows from investing activities (62.8) (55.2)
Cash flows from financing activities:
Acquisition of own shares in trust (14.0) (33.6)
Principal paid on lease liabilities (11.8) (8.9)
Interest paid on lease liabilities (2.9) (3.1)
Share buyback (330.0) -
Other finance costs paid (36.4) (37.5)
Dividend paid (120.5) (107.7)
Net cash inflows from financing activities (515.6) (190.8)
Net increase in cash and cash equivalents 56.5 147.2
Opening cash and cash equivalents 812.3 652.5
Effect of exchange rate changes on cash and cash equivalents 13.3 12.6
Closing cash and cash equivalents 882.1 812.3
(1 ) Other non-cash items includes amounts relating to
depreciation, amortisation and foreign exchange differences.
( )
( )
( )
( )
(
)
1 General information
1a Nature of operations
Beazley plc (registered number 09763575) is a public company incorporated in
England and Wales. The Company's registered address is 22 Bishopsgate, London,
EC2N 4BQ, United Kingdom. The principal activity of the Company and its
subsidiaries ("the Group") is to participate as a specialist insurer which
transacts primarily in commercial lines of business through its subsidiaries
and Lloyd's syndicates. The Group's consolidated financial statements for the
year ended 31 December 2024 comprise the parent company, its subsidiaries and
the Group's interest in associates.
1b Basis of preparation
The financial information set out within this release does not constitute
statutory accounts for the years ended 31 December 2024 or 2023 but is derived
from those accounts. Statutory accounts for 2023 have been delivered to the
registrar of companies, and those for 2024 will be delivered in due course.
The Group's external auditor has reported on those accounts; their reports
were (i) unqualified, (ii) did not include a reference to any matters to which
the auditor drew attention by way of emphasis without qualifying their report
and (iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The Group's consolidated financial statements have been prepared in accordance
with UK adopted International Accounting Standards (IAS) and the requirements
of Companies Act 2006. These are prepared on the historical cost basis, with
the exception of financial assets and derivative financial instruments which
are stated at their fair value, and the defined benefit pension asset which is
measured at the fair value of plan assets less the present value of the
defined benefit pension obligation. All amounts are presented in US dollars
and millions unless stated otherwise.
1c Amendments to existing standards
In the current year, the Group has applied several amendments to International
Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board (IASB) and endorsed by the UK Endorsement Board (UKEB) that
are mandatorily effective for accounting periods beginning on or after 01
January 2024. None of these amendments have had a material impact on the Group
on adoption:
• Amendment to IAS 1 - Classification of Liabilities as Current or
Non-current and Non-current Liabilities with Covenants.
• Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback.
• Amendments to IAS 7 and IFRS 7 - Disclosures: Supplier Finance
Arrangements.
The IASB has issued the following new standards which are not yet effective at
the reporting date. Once endorsed by the UKEB, these will be applied from
their effective date of 01 January 2027:
• IFRS 18 - Presentation and Disclosure in Financial Statements. The
Group is currently working to assess the impact of the new standard; however,
this is expected to be material to the presentation of the financial
statements and notes.
• IFRS 19 - Subsidiaries without Public Accountability: Disclosures. As
the Group's equity instruments are publicly traded, it is not eligible to
elect to apply IFRS 19. No impact is therefore expected.
In addition, the following minor amendments to existing standards have been
issued but are not yet effective at the reporting date. None of these are
expected to materially impact the Group on their adoption:
• Amendment to IAS 21 - Lack of Exchangeability (endorsed, effective
date 01 January 2025).
• Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of
Financial Instruments (not yet endorsed, effective date 01 January 2026).
• Annual Improvements to IFRS Accounting Standards - Volume 11 (not yet
endorsed, effective date 01 January 2026).
• Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture (not yet endorsed,
effective date postponed indefinitely).
1d Going concern
The consolidated financial statements of Beazley plc have been prepared on a
going concern basis. In adopting the going concern basis, the Board has
reviewed the Group's current and forecast solvency and liquidity positions for
the 12 months from the date that the financial statements are authorised for
issue. The Group's business activities, together with the factors likely to
affect its future development, performance, and position, are set out in the
strategic report contained in this Annual Report & Accounts. In addition,
the risk report and financial review includes the Group's risk management
objectives and the Group's objectives, policies and processes for managing its
capital.
In assessing the Group's going concern position as at 31 December 2024, the
Directors have considered a number of factors, including:
• the current statement of financial position and in particular the
adequacy of the estimate of the liability for incurred claims;
• the Group's strategic and financial plan, taking account of possible
changes in trading performance and funding retention;
• the Group's capital forecast, which takes into account the capital
requirements of major subsidiaries and their current external credit rating
and outlook;
• the Group's liquidity at both a Group and material Subsidiary level;
• stress testing and scenario analysis assessing the impact of natural
and cyber catastrophe events on the Group's capital and liquidity positions
and reverse stress test scenarios designed to render the business model
unviable; and
• other qualitative factors, such as the market environment, the Group's
ability to raise additional capital and/or liquidity, and climate change.
As a result of the assessment, no material uncertainty in relation to going
concern has been identified. As at its most recent regulatory submission, the
Group's capital ratios and its total capital resources are comfortably in
excess of regulatory solvency requirements, and internal stress testing
indicates that the Group can withstand severe economic and competitive
stresses.
Based on the going concern assessment performed, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence over a period of 12 months from the date of this report
being authorised for issue, and therefore believe that the Group is well
placed to manage its business risks successfully. Accordingly, they continue
to adopt the going concern basis in preparing the consolidated financial
statements.
1e Key estimates
Measurement of insurance contract liabilities - Future cash flows
The Group has estimated the amount, timing and probability of future cash
flows. Estimates are formed by applying assumptions about past events, current
conditions and forecasts of future conditions. These have been outlined below:
• Future expected premium cash flows are based on data entered into
underwriting systems. These have a level of estimate embedded for certain
contracts, with payment/settlement patterns used to determine timing.
• Gross and reinsured claims payments are determined using an approach
whereby cash flows are set at a year of account and reserving class level
based on the latest quarterly reserving exercise.
• Expenses are deemed to be within the contract boundary, and therefore
included in the cash flows, when these are directly attributable to fulfilling
insurance contracts.
• Lapses/cancellations are projected by applying assumptions determined
through statistical measures based on the Group's experience. These vary by
product type, policy duration and sales trends.
For carrying values of insurance contracts by measurement component (including
future cash flows), refer to Note 17.
Measurement of insurance contract liabilities - Discount rates
The discount rates applied to expected future cash flows in measuring
insurance contract liabilities have been determined using the bottom-up
approach. This method takes the risk-free rates and adjusts for an illiquidity
premium.
• Risk-free rates are derived using government yield curves denominated
in the same currency as the product being measured, which are sourced from
Moody's. These are based on quarter-start and quarter-end rates.
• The Group's illiquidity premium is also sourced from Moody's and
adjusted to reflect the Group's own asset portfolio. This represents the
differences in the liquidity characteristics between the financial assets used
to derive the risk-free yield and the insurance contract liability
characteristics. The illiquidity premium applied by management is a flat
percentage which varies by currency. For the USD discount rate, which is the
dominant currency of the Group, as at 31 December 2024 this was 0.3% (2023:
0.4%).
31 December 2024 1 year 3 year 5 year
USD 4.5% 4.6% 4.7%
CAD 3.4% 3.3% 3.4%
GBP 4.6% 4.6% 4.6%
EUR 2.4% 2.3% 2.5%
31 December 2023 1 year 3 year 5 year
USD 5.1% 4.5% 4.3%
CAD 5.3% 4.4% 4.1%
GBP 4.9% 4.0% 3.8%
EUR 3.5% 2.7% 2.6%
Measurement of insurance contract liabilities - Risk adjustment
Estimation of the risk adjustment for non-financial risk is based on various
inputs and assumptions, particularly relating to non-financial risk components
of the SCR from the Solvency II internal model which captures all material
exposure elements for the Group. IFRS 17 does not prescribe a specific
methodology for the calculation of the risk adjustment for non-financial risk
and the Group has elected to use a CoC approach. This is determined by
comparing the required return by each class of business within the internal
model. Our overall cross cycle return on capital target is 15%. Projected
capital amounts are derived from the annual business plan, with adjustments
made to factor in emerging risks and uncertainties. The risk adjustment
therefore differs between portfolios depending on the inherent risk associated
with each. Diversification is considered between business types (to allow for
negative/positive correlation between risks) and between years (to allow for
the different kind of risk written across years).
The risk adjustment calculations as defined above are performed on a net
basis, and the resulting risk adjustment percentage is then applied separately
to insurance contracts issued and reinsurance contracts held.
The reserve confidence level determined by the actuarial department is
considered as part of a quarterly reserve review exercise. These meetings are
attended by senior management, senior underwriters, and representatives from
actuarial, claims and finance. The reserve confidence level was deemed to be
at the 84th percentile for the 2024 year end as per output from the latest
governed reserve review (2023: 85th percentile) at the balance sheet date.
This is in line with the preference that the Group maintains a reserve
confidence level in the 80th to 90th percentile range. The carrying values of
insurance contracts by measurement component (including risk adjustment) are
disclosed in Note 17(a).
Valuation of level 3 financial assets
The Group holds syndicate loans, illiquid assets and a share of its
collateralised loan obligations at level 3 within the fair value hierarchy.
This means that fair values are estimated using model valuations which
incorporate both observable and unobservable market inputs and assumptions.
For further details on the methodologies, inputs and assumptions used by the
Group, in addition to carrying values of level 3 financial assets, refer to
Note 13.
2 Segmental reporting
2a Reporting segments
Segmental information is presented based on the Group's management and
internal reporting structures which represent the level at which financial
information is reported, performance is analysed and resources are allocated
by the Group's Executive Committee, being the chief operating decision-maker
as defined by IFRS 8.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Foreign exchange
gains/losses, other operating expenses and other income are allocated to each
segment in proportion to their respective percentage of total insurance
revenue. The reporting segments do not cross-sell business to each other.
Finance costs and taxation have not been allocated to operating segments as
these items are determined at a consolidated level and do not relate to
operating performance.
An overview of the Group's segments is set out below.
Cyber Risks
This segment underwrites cyber and technology risks.
Digital
This segment underwrites a variety of marine, contingency and SME liability
risks through digital channels such as e-trading platforms and broker portals.
MAP Risks
This segment underwrites marine, portfolio underwriting and political and
contingency business.
Property Risks
This segment underwrites first-party property risks and reinsurance business.
Specialty Risks
This segment underwrites a wide range of liability classes, including
employment practices risks and directors and officers, as well as healthcare,
lawyers and international financial institutions.
2b Segmental information
Year ended 31 December 2024
Cyber Risks Digital MAP Risks Property Risks Specialty Risks Total
2024 $m $m $m $m $m $m
Insurance revenue 1,156.7 234.7 917.4 1,518.1 1,851.2 5,678.1
Insurance service expenses (784.8) (160.0) (716.8) (919.6) (1,351.8) (3,933.0)
Current year claims (641.8) (104.0) (383.9) (678.4) (977.5) (2,785.6)
Adjustments to prior year claims 85.0 37.7 (29.7) 158.4 149.8 401.2
Reversal of/(loss on) onerous contracts 2.6 0.3 2.9 0.2 (0.9) 5.1
Insurance acquisition cash flows amortisation and other directly (230.6) (94.0) (306.1) (399.8) (523.2) (1,553.7)
attributable expenses
Allocation of reinsurance premium (231.1) (28.5) (81.1) (225.4) (198.8) (764.9)
Amounts recoverable from reinsurers for incurred claims 189.1 6.8 40.0 (22.4) 42.3 255.8
Current year claims 212.0 13.5 67.2 68.5 155.7 516.9
Adjustments to prior year claims (22.0) (6.6) (26.0) (90.0) (112.1) (256.7)
Share of expenses and other amounts (0.9) (0.1) (1.2) (0.9) (1.3) (4.4)
Insurance service result 329.9 53.0 159.5 350.7 342.9 1,236.0
Net investment income 108.2 17.7 72.3 112.8 263.4 574.4
Net finance expense from insurance contracts issued (29.6) (1.5) (5.8) (4.5) (47.7) (89.1)
Net finance income from reinsurance contracts held 6.3 - 3.8 10.2 12.9 33.2
Net insurance and financial result 414.8 69.2 229.8 469.2 571.5 1,754.5
Other income 21.6 4.4 17.1 28.3 34.6 106.0
Other operating expenses (79.2) (16.1) (62.8) (103.9) (126.6) (388.6)
Foreign exchange losses (1.8) (0.4) (1.5) (2.4) (3.0) (9.1)
Segment result 355.4 57.1 182.6 391.2 476.5 1,462.8
Finance costs (39.3)
Profit before tax 1,423.5
Tax expense (293.2)
Profit after tax 1,130.3
Claims ratio 39.4% 28.7% 44.2% 41.9% 47.5% 43.1%
Expense ratio 25.0% 45.6% 36.7% 31.0% 31.7% 31.7%
Combined ratio 64.4% 74.3% 80.9% 72.9% 79.2% 74.8%
The calculation bases for the claims, expense and combined ratios are
disclosed within the APMs section.
Year ended 31 December 2023
Cyber Risks Digital MAP Risks Property Risks Specialty Risks Total
2023 $m $m $m $m $m $m
Insurance revenue 1,174.9 224.7 1,015.4 1,145.2 1,882.2 5,442.4
Insurance service expenses (802.1) (144.0) (635.5) (643.9) (1,367.1) (3,592.6)
Current year claims (565.2) (90.5) (430.8) (470.1) (940.1) (2,496.7)
Adjustments to prior year claims (8.9) 33.7 88.6 108.1 39.8 261.3
(Loss on)/reversal of onerous contracts (2.6) 2.6 1.4 (0.1) 0.5 1.8
Insurance acquisition cash flows amortisation and other directly attributable (225.4) (89.8) (294.7) (281.8) (467.3) (1,359.0)
expenses
Allocation of reinsurance premium (308.5) (24.3) (236.1) (198.5) (359.9) (1,127.3)
Amounts recoverable from reinsurers for incurred claims 210.1 7.1 23.9 26.4 261.0 528.5
Current year claims 211.8 13.0 107.6 57.0 294.2 683.6
Adjustments to prior year claims (1.0) (5.7) (83.0) (30.1) (31.7) (151.5)
Share of expenses and other amounts (0.7) (0.2) (0.7) (0.5) (1.5) (3.6)
Insurance service result 274.4 63.5 167.7 329.2 416.2 1,251.0
Net investment income 86.6 14.8 53.5 75.2 250.1 480.2
Net finance expense from insurance contracts issued (17.5) (2.9) (12.6) (10.9) (125.4) (169.3)
Net finance (expense)/income from reinsurance contracts held (1.3) 0.5 2.1 (13.7) 28.3 15.9
Net insurance and financial result 342.2 75.9 210.7 379.8 569.2 1,577.8
Other income 16.9 3.2 14.8 16.5 27.1 78.5
Other operating expenses (52.7) (19.9) (68.1) (42.5) (182.6) (365.8)
Foreign exchange gains 1.0 0.2 0.8 0.9 1.6 4.5
Segment result 307.4 59.4 158.2 354.7 415.3 1,295.0
Finance costs (40.6)
Profit before tax 1,254.4
Tax expense (227.6)
Profit after tax 1,026.8
Claims ratio 42.2% 23.4% 40.6% 35.4% 41.9% 39.4%
Expense ratio 26.1% 44.9% 37.9% 29.8% 30.8% 31.6%
Combined ratio 68.3% 68.3% 78.5% 65.2% 72.7% 71.0%
3 Insurance revenue
Insurance revenue represents the total changes in the liability for remaining
coverage that relate to services for which the Group expects to receive
consideration. This includes the difference between the claims and other
expenses expected at the beginning of the year versus those actually incurred
(per Note 4), after the loss component allocation.
2024 2023
$m $m
Amounts relating to changes in the liability for remaining coverage:
Expected incurred claims and other expenses after loss component allocation 3,223.6 3,015.7
Change in risk adjustment for non-financial risk for the risk expired after 271.5 316.8
loss component allocation
CSM recognised in profit or loss for services provided 807.3 691.4
Other amounts including experience adjustments 366.5 503.7
Insurance acquisition cash flows recovery 1,009.2 914.8
Total insurance revenue 5,678.1 5,442.4
4 Insurance service expenses
The table below shows the insurance service expenses recognised on groups of
insurance contracts issued by the Group. These are recognised in the
consolidated statement of profit or loss as they are incurred.
2024 2023
$m $m
Incurred claims and other directly attributable expenses 3,330.1 2,911.6
Changes that relate to past service - adjustments to the LIC (401.2) (232.0)
Losses on onerous contracts and reversal of those losses (5.1) (1.8)
Insurance acquisition cash flows amortisation 1,009.2 914.8
Total insurance service expense 3,933.0 3,592.6
5 Net expenses from reinsurance contracts held
The table below shows the net expenses from reinsurance contracts held,
comprising the allocation of reinsurance premium and amounts recoverable from
reinsurers for incurred claims.
2024 2023
$m $m
Amounts relating to changes in the remaining coverage:
- Expected claims and other expenses recovery (494.5) (740.5)
- Changes in the risk adjustment recognised for the risk expired (54.0) (105.2)
- CSM recognised for the services received (173.1) (290.8)
- Other amounts including experience adjustments (43.3) 9.2
Allocation of reinsurance premium (764.9) (1,127.3)
Effect of changes in the risk of reinsurers non-performance (1.8) 4.2
Claims recovered 516.9 680.1
Other incurred directly attributable expenses (4.4) (3.6)
Changes that relate to past service - adjustments to incurred claims recovery (254.9) (152.2)
Amounts recoverable from reinsurers for incurred claims 255.8 528.5
Total net expenses from reinsurance contracts held (509.1) (598.8)
6 Net financial result
Finance income/expense from insurance contracts issued and reinsurance
contracts held represents the interest accreted and the effect of changes in
discount rates and other financial assumptions. The net financial result
comprises the Group's net investment income and its net insurance finance
expense.
2024 2023
$m $m
Interest and dividends on financial assets at fair value 313.2 215.3
Interest on cash and cash equivalents at amortised cost 43.5 16.8
Net realised fair value gains/(losses) on financial assets at FVTPL 131.8 (69.2)
Net unrealised fair value gains on financial assets at FVTPL 95.5 325.2
Investment income from financial assets 584.0 488.1
Investment management expenses (9.6) (7.9)
Net investment income 574.4 480.2
Interest accreted (372.5) (379.1)
Effect of changes in financial assumptions 283.4 209.8
Net finance expense from insurance contracts issued (89.1) (169.3)
Interest accreted 80.4 84.4
Effect of changes in financial assumptions (47.2) (68.5)
Net finance income from reinsurance contracts held 33.2 15.9
Net insurance finance expense (55.9) (153.4)
Net financial result 518.5 326.8
Investment income by category of financial asset
The tables below show the Group's investment income, split by category of
financial asset. "Other financial assets" includes cash and cash equivalents
and derivative financial instruments.
Debt securities and syndicate loans Capital Other Total
growth assets financial assets
2024 $m $m $m $m
Interest and dividends received 308.8 4.4 43.5 356.7
Net realised gains 39.6 87.6 4.6 131.8
Net unrealised fair value gains/(losses) 84.2 28.4 (17.1) 95.5
Total investment income from financial assets 432.6 120.4 31.0 584.0
Debt securities and syndicate loans Capital Other Total
growth assets financial assets
2023 $m $m $m $m
Interest and dividends received 208.4 3.7 20.0 232.1
Net realised (losses)/gains (117.8) 52.6 (4.0) (69.2)
Net unrealised fair value gains 291.2 34.0 - 325.2
Total investment income from financial assets 381.8 90.3 16.0 488.1
7 Other income
2024 2023
$m $m
Commissions received by Beazley service companies 17.0 42.8
Profit commissions and other income received from syndicates 68.3 29.9
Managing agent fees from third-party syndicates 11.3 3.6
Other income 9.4 2.2
Total other income 106.0 78.5
Commissions received by Beazley service companies
Commissions are received from non-Group syndicates by Group service companies
writing business on their behalf. These are recognised as the services are
provided, and therefore the performance obligations of the contracts are met.
Commission is payable to the Group by syndicate 623 due to Group service
companies writing business on behalf of the syndicate. While the commercial
purpose of the contract is to pass business to syndicate 623, the remuneration
is triggered by incurring expenses, irrespective of volume of business gained.
Fees are recognised as the services are provided, and therefore the
performance obligations of the contracts are met. In addition, the Group
charges syndicates 5623 and 4321 for a portion of the profit-related
remuneration paid to its underwriting staff. Payment is therefore triggered by
the underlying profitability of the syndicate.
Profit commissions and other income received from syndicates
This primarily relates to profit commissions received from syndicates in the
year. The underlying agreements are in place between the third-party capital
syndicates managed by the Group and their managing agent, Beazley Furlonge
Limited. Under these agreements, the transaction price represents a fixed
percentage on profit by year of account. As such, the profitability of the
syndicates is a performance criterion. No other variable consideration (for
example: discounts, rebates, refunds, incentives) is attached. The value of
each transaction price is derived at the reporting date from the actual
profits made by the syndicates, and therefore represents the most likely
amount of consideration at the reporting date.
8 Operating expenses
2024 2023
$m $m
Staff costs 656.8 527.6
Other administrative expenses 504.4 401.2
Total administrative expenses 1,161.2 928.8
Recharged to third party syndicates (129.9) (115.5)
Expenses reclassified within the insurance service result (642.7) (447.5)
Total operating expenses 388.6 365.8
Included within other administrative expenses is depreciation of $16.5m (2023:
$17.1m) and amortisation of $11.1m (2023: $16.2m)
Net staff costs
2024 2023
$m $m
Wages and salaries 302.2 259.8
Short-term incentive payments 235.3 167.5
Social security 53.8 45.3
Share-based remuneration 40.1 33.8
Costs relating to defined contribution pension schemes 25.4 21.2
Staff costs 656.8 527.6
Recharged to third-party syndicates (98.8) (78.2)
Net staff costs 558.0 449.4
Average number of employees
A breakdown by category of employee is disclosed below.
2024 2023
Directors 11 11
Senior managers 157 145
Other employees 2,324 1,988
Total average number of employees 2,492 2,144
9 Finance costs
2024
2023
$m $m
Interest expense on financial liabilities 31.6 31.6
Interest expense on lease liabilities 2.9 3.1
Interest and charges related to letters of credit 4.8 5.9
Total finance costs 39.3 40.6
10 Tax expense
2024 2023
$m $m
Current tax expense
Current tax expense 219.3 121.8
Prior year adjustment 14.2 1.5
Pillar Two tax expense* 13.1 -
246.6 123.3
Deferred tax expense
Origination and reversal of temporary differences 50.8 97.3
Difference between current and deferred tax rates - 6.8
Prior year adjustments (4.2) 0.2
46.6 104.3
Tax expense 293.2 227.6
* Pillar Two tax expense relates to Qualified Domestic Minimum Top-Up Tax in
Ireland.
Reconciliation of tax expense
The Group makes the majority of its profit in Ireland, the UK and the US. The
weighted average of statutory tax rates based on the profits earned in each
country in which the Group operates is 18.6% (2023: 17.6%), whereas the tax
charged for the year ended 31 December 2024 as a percentage of profit before
tax is 20.6% (2023: 18.1%). The reasons for the difference are explained
below:
2024 2024 2023 2023
$m % $m %
Profit before tax 1,423.5 1,254.4
Tax calculated at the weighted average of statutory tax rate 264.6 18.6 221.4 17.6
Effects of:
- non-deductible/(non-taxable) expenses 1.9 0.1 (2.0) (0.2)
- losses not previously recognised - - (1.2) (0.1)
- tax charge/(relief) on remuneration 1.4 0.1 0.9 0.1
- under/(over) provided in prior years 10.1 0.7 1.7 0.1
- difference between current and deferred tax rates - - 6.8 0.6
- effect of tax rates in foreign jurisdictions 2.1 0.2 - -
- Pillar Two tax expense 13.1 0.9 - -
Tax expense for the year 293.2 20.6 227.6 18.1
Global minimum tax rate
The Organisation for Economic Co-Operation and Development Pillar Two
framework seeks to ensure that large multi-national enterprises pay a minimum
corporate income tax rate of 15% on the income arising in each jurisdiction
where they operate. In 2023, the UK enacted legislation to implement these new
rules in respect of accounting periods beginning on or after 31 December 2023.
The Group mainly operates in jurisdictions with a statutory tax rate above
15%. The main impact for the Group is in Ireland
where the tax rate is 12.5%. This is due to Beazley Insurance dac, a wholly
owned subsidiary acting as an internal group
reinsurer and writing business directly in Europe, being based in Ireland. In
December 2023, Ireland enacted a Qualified
Domestic Minimum Top-Up Tax such that in-scope businesses pay at least a 15%
effective tax rate on their profits. The impact
of the top-up tax on the current tax charge is set out in the above
disclosure.
11 Earnings per share
2024 2023
Profit after tax ($m) 1,130.3 1,026.8
Weighted average number of shares in issue (m)(1) 645.5 663.8
Adjusted weighted average number of shares in issue (m) 663.3 678.3
Basic (cents) 175.1c 154.7c
Diluted (cents) 170.4c 151.4c
Basic (pence) 137.0p 124.8p
Diluted (pence) 133.3p 122.1p
(1)Decreased in the year due to the share buyback programme. Refer to Note 14
for further details.
Basic earnings per share (EPS) is calculated by dividing profit after tax of
$1,130.3m (2023: $1,026.8m) by the weighted average number of shares in issue
during the year of 645.5m (2023: 663.8m).
Diluted earnings per share is calculated by dividing profit after tax of
$1,130.3m (2023: $1,026.8m) by the adjusted weighted average number of shares
of 663.3m (2023: 678.3m) in issue. This assumes conversion of dilutive
potential ordinary shares, being shares from equity settled employee
compensation schemes. Share options with performance conditions attaching to
them have been excluded from the weighted average number of shares to the
extent that these conditions have not been met at the reporting date.
Note that both calculations exclude the shares held in the Employee Share
Options Plan of 9.1m (31 December 2023: 9.8m) until such time as they vest
unconditionally with the employees.
12 Dividends per share
On 3 March 2025 the Board approved the payment of an interim dividend of 25.0p
per share covering the whole of 2024 (2023: 14.2p per share) which will be
paid on 2 May 2025 to Beazley plc shareholders registered on 21 March 2025.
The Group expects the total amount to be paid in respect of the interim
dividend to be approximately £157.5m (2023: £94.2m). These financial
statements do not provide for the interim dividend as a liability.
13 Financial assets and liabilities
13a Carrying values of financial assets and liabilities
Financial assets - carrying values
Set out below are the carrying values of the Group's 'financial assets at fair
value' per the statement of financial position. These amounts exclude the
following financial assets which are carried at amortised cost and presented
separately:
• Cash and cash equivalents; and
• Amounts due from managed syndicates and other receivables.
2024 2023
$m $m
Debt securities:
- Government issued 4,289.1 4,469.1
- Corporate bonds
- Investment grade 3,862.3 3,578.3
- High-yield 662.4 489.0
- Securitised
- Collateralised loan obligations 480.0 0.0
Syndicate loans 29.5 34.1
Total debt securities and syndicate loans 9,323.3 8,570.5
Equity funds 348.7 282.7
Hedge funds 752.0 582.2
Illiquid assets 175.4 220.1
Total capital growth assets 1,276.1 1,085.0
Total financial investments at fair value through statement of profit or loss 10,599.4 9,655.5
Derivative financial assets 11.2 10.0
Total financial assets at fair value 10,610.6 9,665.5
Investment grade corporate bonds are rated BBB-/Baa3 or higher by at least one
major rating agency, high-yield corporate bonds have lower credit ratings,
while collateralised loan obligations have a wider credit spread. Our
collateralised loan obligation holdings are in the highest rated AAA/AA
tranches. Equity funds are investment vehicles which invest in equity
securities and provide diversified exposure to global equity markets. Hedge
funds are investment vehicles pursuing alternative investment strategies,
structured to have minimal correlation to traditional asset classes. Illiquid
assets are investment vehicles that predominantly target private lending
opportunities, often with longer investment horizons. The fair value of these
assets at 31 December 2024 excludes an unfunded commitment of $33.6m (2023:
$32.0m).
Financial liabilities - carrying values
Set out below are the carrying values of the Group's 'financial liabilities'
per the statement of financial position. These amounts exclude lease
liabilities and other payables which are carried at amortised cost.
2024 2023
$m $m
Tier 2 subordinated debt (2026) 249.7 249.5
Tier 2 subordinated debt (2029) 299.0 298.8
Derivative financial liabilities 27.3 6.3
Total financial liabilities 576.0 554.6
The Group has given a fixed and floating charge over certain of its
investments and other assets to secure obligations to Lloyd's in respect of
its corporate member subsidiary.
13b Valuation hierarchy
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorised within the fair value hierarchy
described as follows. If the inputs used to measure the fair value of an asset
or a liability could be categorised in different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in
the same level of the fair value hierarchy as the lowest level input that is
significant to the entire measurement.
Fair value is the price at which an orderly transaction to sell an asset or to
transfer a liability would take place between market participants at the
measurement date. Fair value is a market-based measure and in the absence of
observable market prices in an active market, it is measured using the
assumptions that market participants would use when pricing the asset or
liability.
The best evidence of the fair value of a financial instrument at initial
recognition is the transaction price, i.e. the fair value of the consideration
given or received, unless the fair value of that instrument is evidenced by
comparison with other observable current market transactions in the same
instrument (i.e. without modification or repackaging) or based on a valuation
technique whose variables include only data from observable markets. When the
transaction price provides the best evidence of fair value at initial
recognition, the financial instrument is initially measured at the transaction
price and any difference between this price and the value initially obtained
from a valuation model is subsequently recognised in profit or loss depending
on the individual facts and circumstances of the transaction but before the
valuation is supported wholly by observable market data or the transaction is
closed out.
Level 1 - Valuations based on quoted prices in active markets for identical
instruments. An active market is a market in which transactions for the
instrument occur with sufficient frequency and volume on an ongoing basis such
that quoted prices reflect prices at which an orderly transaction would take
place between market participants at the measurement date.
Level 2 - Valuations based on quoted prices in markets that are not active, or
based on pricing models for which significant inputs can be corroborated by
observable market data, directly or indirectly (e.g. interest rates and
exchange rates). Level 2 inputs include:
• Quoted prices for similar assets and liabilities in active markets;
• Quoted prices for identical or similar assets and liabilities in
markets that are not active, the prices are not current, or price quotations
vary substantially either over time or among market makers, or in which little
information is released publicly;
• Inputs other than quoted prices that are observable for the asset or
liability (for example, interest rates and yield curves observable at commonly
quoted intervals, implied volatilities and credit spreads); and
• Market corroborated inputs.
Included within level 2 are government bonds and treasury bills, equity funds
and corporate bonds which are not actively traded, hedge funds, collateralised
loan obligations and senior secured loans.
Level 3 - Valuations based on inputs that are unobservable or for which there
is limited market activity against which to measure fair value. The
availability of financial data can vary for different financial assets and is
affected by a wide variety of factors, including the type of financial
instrument, whether it is new and not yet established in the marketplace, and
other characteristics specific to each transaction. To the extent that
valuation is based on models or inputs that are unobservable in the market,
the determination of fair value requires more judgement. Accordingly, the
degree of judgement exercised by management in determining fair value is
greatest for instruments classified in level 3. The Group uses prices and
inputs that are current as of the measurement date for valuation of these
instruments.
Valuation approach - level 2 instruments
a) For the Group's level 2 debt securities and securitised instruments, our
fund administrator obtains the prices used in the valuation from independent
pricing vendors. The independent pricing vendors derive an evaluated price
from observable market inputs. These inputs are verified in their pricing
assumptions such as weighted average life, discount margins, default rates,
and recovery and prepayments assumptions for mortgage securities.
b) For our hedge funds, the pricing and valuation of each fund is undertaken
by administrators in accordance with each underlying fund's valuation policy.
Individual fund prices are communicated by the administrators to all investors
via the monthly investor statements. The fair value of the hedge fund
portfolios are calculated by reference to the underlying net asset values of
each of the individual funds. Our hedge funds are managed by Falcon Money
Management Holdings Limited, an associate of the Group.
c) Subordinated debt fair value is based on quoted market prices.
Valuation approach - level 3 instruments
a) Our illiquid fund investments are generally closed ended limited
partnerships or open ended funds. The Group relies on a third-party fund
manager to manage these investments and provide valuations. Note that while
the funds report with full transparency on their underlying investments, the
investments themselves are predominantly in private and unquoted instruments.
The valuation techniques used by the fund managers to establish the fair
values therefore require a degree of estimation. For example, these may
incorporate discounted cash flow models or a more market-based approach,
whilst the main inputs might include discount rates, fundamental pricing
multiples, recent transaction prices, or comparable market information to
create a benchmark multiple.
b) Syndicate loans are non-tradeable instruments provided by our Group
syndicates to the Central Fund at Lloyd's in respect of the 2019 (repaid by
Lloyd's during the year) and 2020 underwriting years. These are valued
internally using discounted cash flow models provided by Lloyd's to the
market, designed to appropriately reflect the credit and illiquidity risk of
the instruments. Valuation outputs are then validated using a control model,
with the following inputs and assumptions. Note that these internally valued
instruments are deemed by management to be inherently more subjective than
external valuations.
• Cash flows comprise the notional cost of the loans, annual interest
income, and the final repayment of the loans at the end of the five-year term.
The weighted average interest rate applicable across all syndicate loans is
3.8% (2023: 3.8%).
• A discount rate of 8.3% (2023: 7.0%) is applied. This is calculated
using a combination of the long-term treasury bond risk-free rate, the
industry/geographic average regression beta, and a selected risk premium.
c) Certain collateralised loan obligation securities have been classified
within level 3. These represent instruments which were issued late in 2024 and
have been priced at par, predominantly as these had not settled at the balance
sheet date. As this is deemed to be an unobservable input these have been
classified within level 3. We expect these instruments to move into level 2 in
the near term as these begin to be priced by our pricing vendors using models
with observable market inputs.
There were no changes in the valuation techniques during the year compared
with those described in the Group's 2023 Annual Report and Accounts.
13c Fair values of financial assets and liabilities
The following table shows the fair values of financial assets and financial
liabilities, including their levels in the fair value hierarchy. The fair
value of the Group's subordinated debt excludes any accrued interest to allow
comparability with the carrying value in the Group's financial statements. The
Group's cash and cash equivalents, other receivables, lease liabilities, and
other payables have been excluded from these tables. These instruments are
measured at amortised cost and their carrying values are deemed to be
reasonable approximations of fair values at the reporting date.
Level 1 Level 2 Level 3 Total
2024 $m $m $m $m
Financial assets carried at fair value
Fixed and floating rate debt securities
- Government issued 3,235.9 1,053.2 - 4,289.1
- Corporate bonds
- Investment grade 1,819.5 2,042.8 - 3,862.3
- High-yield 662.4 - - 662.4
- Securitised
- Collateralised loan obligations - 395.4 84.6 480.0
Syndicate loans - - 29.5 29.5
Equity funds 348.7 - - 348.7
Hedge funds - 752.0 - 752.0
Illiquid assets - - 175.4 175.4
Derivative financial assets 11.2 - - 11.2
Total financial assets carried at fair value 6,077.7 4,243.4 289.5 10,610.6
Financial liabilities carried at fair value
Derivative financial liabilities 27.3 - - 27.3
Total financial liabilities carried at fair value 27.3 - - 27.3
Fair value of financial liabilities carried at amortised cost
Tier 2 subordinated debt (2026) - 250.6 - 250.6
Tier 2 subordinated debt (2029) - 294.0 - 294.0
Total fair value of financial liabilities carried at amortised cost - 544.6 - 544.6
Level 1 Level 2 Level 3 Total
2023 $m $m $m $m
Financial assets carried at fair value
Fixed and floating rate debt securities
- Government issued 3,291.9 1,177.2 - 4,469.1
- Corporate bonds
- Investment grade 1,596.7 1,981.6 - 3,578.3
- High-yield 488.1 0.9 - 489.0
Syndicate loans - - 34.1 34.1
Equity funds 282.7 - - 282.7
Hedge funds - 582.2 - 582.2
Illiquid assets - - 220.1 220.1
Derivative financial assets 10.0 - - 10.0
Total financial assets carried at fair value 5,669.4 3,741.9 254.2 9,665.5
Financial liabilities carried at fair value
Derivative financial liabilities 6.3 - - 6.3
Total financial liabilities carried at fair value 6.3 - - 6.3
Fair value of financial liabilities carried at amortised cost
Tier 2 subordinated debt (2026) - 241.7 - 241.7
Tier 2 subordinated debt (2029) - 271.9 - 271.9
Total fair value of financial liabilities carried at amortised cost - 513.6 - 513.6
13d Transfers
The Group determines whether transfers have occurred between levels in the
fair value hierarchy by assessing categorisation at the end of the reporting
period. The following transfers between levels 1 & 2 for the period ended
31 December 2024 reflect the level of trading activities including frequency
and volume derived from market data obtained from an independent external
valuation tool. There were no transfers into or out of level 3 in the year to
31 December 2024 (2023: no transfers).
Level 1 Level 2
31 December 2024 vs 31 December 2023 transfer from level 2 to level 1 $m $m
- Corporate Bonds - Investment grade 666.3 (666.3)
Level 1 Level 2
31 December 2024 vs 31 December 2023 transfer from level 1 to level 2 $m $m
- Corporate Bonds - Investment grade (624.9) 624.9
The values shown in the transfer tables above are translated using spot
foreign exchange rates as at 31 December 2024.
13e Level 3 investment reconciliations
The table below shows a reconciliation from the opening balances to the
closing balances of level 3 fair values. All realised and unrealised
gains/(losses) are recognised through net investment income in the statement
of profit or loss (refer to Note 6).
2024 2023
$m $m
Opening position as at 01 January 254.2 255.4
Purchases 118.7 21.8
Sales (69.2) (37.4)
Repayment of syndicate loans (7.7) -
Realised gain 18.6 20.2
Unrealised loss (25.6) (6.6)
Foreign exchange gain 0.5 0.8
Closing position as at 31 December 289.5 254.2
13f Unconsolidated structured entities
A structured entity is defined as an entity that has been designed so that
voting or similar rights are not the dominant factor in deciding who controls
the entity, such as when any voting rights relate to administrative tasks
only, or when the relevant activities are directed by means of contractual
arrangements.
As part of its standard investment activities the Group holds fixed interest
investments in high yield bond funds and collateralised loan obligation
instruments, as well as capital growth investments in equity funds, hedge
funds and illiquid assets which in accordance with IFRS 12 are classified as
unconsolidated structured entities. The Group does not sponsor any of the
unconsolidated structured entities. The assets classified as unconsolidated
structured entities are held at fair value on the statement of financial
position. As at 31 December the investments comprising the Group's
unconsolidated structured entities are as follows:
2024 2023
$m $m
Collateralised loan obligations 480.0 -
High-yield bond funds 662.4 489.0
Equity funds 348.7 282.7
Hedge funds 752.0 582.2
Illiquid assets 175.4 220.1
Investments through unconsolidated structured entities 2,418.5 1,574.0
Most of our unconsolidated structured entity exposures fall within our capital
growth assets. The capital growth assets are held in investee funds managed by
asset managers who apply various investment strategies to accomplish their
respective investment objectives. The Group's investments in investee funds
are subject to the terms and conditions of the respective investee fund's
offering documentation and are susceptible to market price risk arising from
uncertainties about future values of those investee funds. Investment
decisions are made after extensive due diligence on the underlying fund, its
strategy and the overall quality of the underlying fund's manager and assets.
The right to sell or request redemption of investments in high-yield bond
funds, collateralised loan obligations, equity funds and hedge funds ranges in
frequency from daily to semi-annually. The Group did not sponsor any of the
respective structured entities. The Group's maximum exposure to loss from its
interests in investee funds is equal to the total fair value of its
investments in investee funds and unfunded commitments.
13g Currency exposures
The currency exposures of our financial assets held are detailed below:
UK £ CAD $ EUR € Other(1) Sub total US $ Total
2024 $m $m $m $m $m $m $m
Financial assets at FVTPL:
- Fixed and floating rate debt 653.8 428.0 - - 1,081.8 8,212.0 9,293.8
securities
- Syndicate loans 29.5 - - - 29.5 - 29.5
- Equity linked funds - - - - - 348.7 348.7
- Hedge funds - - - - - 752.0 752.0
- Illiquid assets 13.5 - 36.0 - 49.5 125.9 175.4
- Derivative financial assets - - - - - 11.2 11.2
Cash and cash equivalents 110.6 41.6 80.9 16.3 249.4 632.7 882.1
Amounts due from managed syndicates and other receivables 216.7 12.8 69.9 - 299.4 298.8 598.2
Total 1,024.1 482.4 186.8 16.3 1,709.6 10,381.3 12,090.9
(1) Primarily comprises Swiss franc.
UK £ CAD $ EUR € Other(1) Sub total US $ Total
2023 $m $m $m $m $m $m $m
Financial assets at FVTPL:
- Fixed and floating rate debt 789.6 432.5 - - 1,222.1 7,314.3 8,536.4
securities
- Syndicate loans 34.1 - - - 34.1 - 34.1
- Equity linked funds - - - - - 282.7 282.7
- Hedge funds - - - - - 582.2 582.2
- Illiquid assets 6.4 - 45.9 - 52.3 167.8 220.1
- Derivative financial assets - - - - - 10.0 10.0
Cash and cash equivalents 125.8 51.5 93.5 12.3 283.1 529.2 812.3
Amounts due from managed syndicates and other receivables 27.6 9.4 51.4 - 88.4 209.1 297.5
Total 983.5 493.4 190.8 12.3 1,679.9 9,095.3 10,775.3
(1) Primarily comprises Swiss franc.
14 Share capital
2024 2023
No. of $m No. of $m
shares (m) shares (m)
Ordinary shares of 5p each
Issued and fully paid 639.0 44.6 672.5 46.7
Balance at 01 January 672.5 46.7 671.2 46.6
Issue of shares to satisfy employee share schemes 3.8 0.3 1.3 0.1
Share buyback (37.3) (2.4) - -
Balance at 31 December 639.0 44.6 672.5 46.7
There are no limits to the authorised share capital of the Company.
On 07 March 2024, Beazley plc announced to the market its intention to return
surplus capital to its shareholders through a share repurchase programme ("the
buyback"). The buyback completed on 30 September 2024, with 37.3m ordinary
shares repurchased for a total consideration of $327.8m. At 31 December 2024,
there were 639.0m ordinary shares in issue.
The purchase price of shares and directly attributable transaction costs of
$2.2m (such as stamp duty, commissions, legal costs and registrar fees) are
recognised through retained earnings. On their cancellation, the nominal value
of the ordinary shares is deducted from share capital and the equivalent
amount is recognised within the capital redemption reserve.
15 Deferred tax
2024 2023
$m $m
Deferred tax asset 191.8 46.9
Deferred tax liability (387.2) (202.2)
Net deferred tax liability (195.4) (155.3)
An overview of the nature of the deferred tax assets/(liabilities) is set out
below.
Balance 01 Jan 24 Recognised in total comprehensive income Recognised in equity FX translation differences Balance 31 Dec 24
$m $m $m $m $m
Plant and equipment (1.1) (1.8) - - (2.9)
Intangible assets (1.3) (6.3) - - (7.6)
Underwriting profits (94.2) (11.8) - - (106.0)
Deferred acquisition costs - - - - -
Tax losses carried forward 9.7 (9.7) - - -
Share-based payments 9.0 0.4 7.1 - 16.5
Unrealised gains/(losses) on investments (1.2) 11.3 - - 10.1
IFRS 17 adjustments (87.1) (44.2) - - (131.3)
Other 10.9 15.3 - (0.4) 25.8
Net deferred tax (liability)/asset (155.3) (46.8) 7.1 (0.4) (195.4)
Balance 01 Jan 23 Recognised in total comprehensive income Recognised in equity FX translation differences Balance 31 Dec 23
$m $m $m $m $m
Plant and equipment (0.8) (0.3) - - (1.1)
Intangible assets (1.8) 0.5 - - (1.3)
Underwriting profits 7.4 (101.6) - - (94.2)
Deferred acquisition costs 1.7 (1.7) - - -
Tax losses carried forward 4.0 5.7 - - 9.7
Share-based payments 8.4 1.5 (0.9) - 9.0
Unrealised gains/(losses) on investments 9.9 (11.1) - - (1.2)
IFRS 17 adjustments (83.7) (3.4) - - (87.1)
Other 6.5 6.8 - (2.4) 10.9
Net deferred tax liability (48.4) (103.6) (0.9) (2.4) (155.3)
Geographical analysis
Deferred tax assets and deferred tax liabilities relating to the same tax
authority are presented net in the Group's balance sheet. A geographical
analysis has been included below.
2024 2023
$m $m
UK (245.1) (152.8)
US 191.8 46.7
Ireland (98.5) (38.7)
Other¹ (43.6) (10.5)
Net deferred tax (liability) (195.4) (155.3)
(1) Includes Canada, France, Germany, Spain and Switzerland.
Under IFRS 17, the timing of the recognition of the Group's profits differs
significantly from the basis on which corporate taxes are levied in the tax
jurisdictions where the Group operates. None of the Group's material
profit-making entities pay corporate taxes based on IFRS 17 profits and
therefore significant temporary differences arise. In some jurisdictions, such
as the UK and Ireland, profits are recognised earlier under IFRS 17 and thus a
deferred tax liability is recognised. The Group expects this to unwind over
time as profits are recognised (offset by new profits on an IFRS 17 basis). In
the US, profits are recognised more slowly on an IFRS 17 basis than under the
US Stat basis on which tax is determined, with the Group recognising a
deferred tax asset of $148.2m (2023: $23.2m). The Group is of the view that
sufficient future profits will arise on an IFRS 17 basis to realise this
deferred tax asset.
The Group has no deferred tax assets relating to trading losses (2023: $9.7m).
The Group also has no unrecognised trading losses as at 31 December 2024
(2023: nil) and has unrecognised capital losses of $2.5m (2023: $4.0m).
The Group has applied the temporary mandatory exemption from accounting for
deferred taxes under the Pillar Two rules.
Therefore, no deferred taxes have been recognised in relation to these rules
as at 31 December 2024.
16 Subordinated liabilities
In November 2016, the Group issued $250m of subordinated Tier 2 notes due in
2026. Annual interest, at a fixed rate of 5.875%, is payable in May and
November each year. In September 2019, the Group issued $300m of subordinated
Tier 2 notes due in 2029. Annual interest, at a fixed rate of 5.5% is payable
in March and September each year.
The subordinated liabilities are subject to a covenant that requires the Group
to notify the lender of any default (late payment of principal by 7 days or
late payment of interest by 14 days) on an annual basis or where otherwise
requested. Compliance with the covenant is tested annually until the maturity
of the subordinated liabilities. The Group has no indication that it will have
difficulty complying with this covenant.
The carrying amounts of the subordinated liabilities are as follows. The total
fair value of the Group's subordinated liabilities is $544.6m (2023: $513.6m).
Tier 2 subordinated debt (2029) Tier 2 subordinated debt (2026) Total
$m $m $m
Opening balance at 01 January 2023 298.6 249.4 548.0
Amortisation of capitalised borrowing costs 0.2 0.1 0.3
Closing balance at 31 December 2023 298.8 249.5 548.3
Amortisation of capitalised borrowing costs 0.2 0.2 0.4
Closing balance at 31 December 2024 299.0 249.7 548.7
The annual interest expense on the Group's subordinated liabilities is
included in Note 9.
17 Insurance and reinsurance contracts
17a Reconciliations by measurement component
This section shows how the net carrying amounts of insurance contracts issued
and reinsurance contracts held by the Group have changed during the year, as a
result of changes in cash flows and amounts recognised in profit or loss.
i) Insurance contracts issued
The tables below set out the estimated present value of future cash flows, the
risk adjustment for non-financial risk and the CSM for insurance contracts
issued.
Present value of future cash flows Risk adjustment for non-financial risk CSM Total
31 December 2024 $m $m $m $m
Opening insurance contract assets 103.8 (1.2) (1.1) 101.5
Opening insurance contract liabilities (6,874.5) (774.8) (342.9) (7,992.2)
Net insurance contract liabilities at 01 January 2024 (6,770.7) (776.0) (344.0) (7,890.7)
CSM recognised in profit or loss for services provided - - 807.3 807.3
Changes in the risk adjustment for non-financial risk for risk expired - 271.5 - 271.5
Experience adjustments 494.2 (234.2) - 260.0
Total changes relating to current service 494.2 37.3 807.3 1,338.8
Changes in estimates that adjust the CSM 163.8 5.1 (168.9) -
Changes in estimates that result in onerous contract losses or reversal of 0.8 (0.1) 9.7 10.4
such losses
Contracts initially recognised in the period 1,079.8 (268.7) (816.4) (5.3)
Total changes relating to future service 1,244.4 (263.7) (975.6) 5.1
Total changes relating to past service - adjustments to the LIC 205.0 196.2 - 401.2
Recognised in insurance service result 1,943.6 (30.2) (168.3) 1,745.1
Finance (expenses)/income from insurance contracts issued (112.1) (7.8) 30.8 (89.1)
Foreign exchange gains 27.9 1.2 1.0 30.1
Other amounts recognised in total comprehensive income (84.2) (6.6) 31.8 (59.0)
Premiums received net of insurance acquisition cash flows (5,148.1) - - (5,148.1)
Claims and other directly attributable expenses paid 2,558.6 - - 2,558.6
Total cash flows (2,589.5) - - (2,589.5)
Closing insurance contract assets 24.5 (3.9) (0.4) 20.2
Closing insurance contract liabilities (7,525.3) (808.9) (480.1) (8,814.3)
Net insurance contract liabilities at 31 December 2024 (7,500.8) (812.8) (480.5) (8,794.1)
Present value of future cash flows Risk adjustment for non-financial risk CSM Total
31 December 2023 $m $m $m $m
Opening insurance contract assets 123.5 (12.9) (26.5) 84.1
Opening insurance contract liabilities (6,324.0) (711.3) (314.5) (7,349.8)
Net insurance contract liabilities at 01 January 2023 (6,200.5) (724.2) (341.0) (7,265.7)
CSM recognised in profit or loss for services provided - - 691.4 691.4
Changes in the risk adjustment for non-financial risk for risk expired - 316.8 - 316.8
Experience adjustments 893.3 (285.5) - 607.8
Total changes relating to current service 893.3 31.3 691.4 1,616.0
Changes in estimates that adjust the CSM 135.0 (19.1) (115.9) -
Changes in estimates that result in onerous contract losses or reversal of 6.0 (1.1) 7.5 12.4
such losses
Contracts initially recognised in the period 870.2 (264.2) (616.6) (10.6)
Total changes relating to future service 1,011.2 (284.4) (725.0) 1.8
Total changes relating to past service - adjustments to the LIC 16.2 215.8 - 232.0
Recognised in insurance service result 1,920.7 (37.3) (33.6) 1,849.8
Finance income/(expenses) from insurance contracts issued (190.2) (13.9) 34.8 (169.3)
Foreign exchange gains/(losses) 1.9 (0.6) (4.2) (2.9)
Other amounts recognised in total comprehensive income (188.3) (14.5) 30.6 (172.2)
Premiums received net of insurance acquisition cash flows (4,526.4) - - (4,526.4)
Claims and other directly attributable expenses paid 2,223.8 - - 2,223.8
Total cash flows (2,302.6) - - (2,302.6)
Closing insurance contract assets 103.8 (1.2) (1.1) 101.5
Closing insurance contract liabilities (6,874.5) (774.8) (342.9) (7,992.2)
Net insurance contract liabilities at 31 December 2023 (6,770.7) (776.0) (344.0) (7,890.7)
ii) Reinsurance contracts held
The tables below set out the estimates of the present value of future cash
flows, risk adjustment for non-financial risk and CSM for reinsurance
contracts held.
Present value of future cash flows Risk adjustment for non-financial risk CSM Total
31 December 2024 $m $m $m $m
Opening reinsurance contract assets 2,143.4 166.2 117.1 2,426.7
Opening reinsurance contract liabilities (404.4) 58.4 12.5 (333.5)
Net reinsurance contract assets at 01 January 2024 1,739.0 224.6 129.6 2,093.2
CSM recognised in profit or loss for the services provided - - (173.1) (173.1)
Changes in the risk adjustment for non-financial risk for the risk expired - (54.0) - (54.0)
Experience adjustments (71.3) 46.0 - (25.3)
Total changes relating to current service (71.3) (8.0) (173.1) (252.4)
Changes in estimates that adjust the CSM 159.0 (42.0) (117.0) -
Contracts initially recognised in the period (498.9) 96.6 402.3 -
Total changes relating to future service (339.9) 54.6 285.3 -
Adjustments to incurred claims recovery (157.8) (97.1) - (254.9)
Effect of changes in the risk of reinsurers' non-performance (1.8) - - (1.8)
Total changes relating to past service (159.6) (97.1) - (256.7)
Recognised in insurance service result (570.8) (50.5) 112.2 (509.1)
Finance income/(expenses) from reinsurance contracts held 38.6 1.7 (7.1) 33.2
Foreign exchange losses (2.8) (0.4) (0.1) (3.3)
Other amounts recognised in total comprehensive income 35.8 1.3 (7.2) 29.9
Premiums paid net of ceding commissions and other directly attributable 1,254.7 - - 1,254.7
expenses paid
Recoveries from reinsurance (499.2) - - (499.2)
Total cash flows 755.5 - - 755.5
Closing reinsurance contract assets 2,309.7 160.4 196.5 2,666.6
Closing reinsurance contract liabilities (350.2) 15.0 38.1 (297.1)
Net reinsurance contract assets at 31 December 2024 1,959.5 175.4 234.6 2,369.5
Present value of future cash flows Risk adjustment for non-financial risk CSM Total
31 December 2023 $m $m $m $m
Opening reinsurance contract assets 1,853.3 184.6 137.4 2,175.3
Opening reinsurance contract liabilities (193.8) 12.7 19.9 (161.2)
Net reinsurance contract assets at 01 January 2023 1,659.5 197.3 157.3 2,014.1
CSM recognised in profit or loss for the services provided - - (290.8) (290.8)
Changes in the risk adjustment for non-financial risk for the risk expired - (105.2) - (105.2)
Experience adjustments (139.0) 84.2 - (54.8)
Total changes relating to current service (139.0) (21.0) (290.8) (450.8)
Changes in estimates that adjust the CSM 91.6 (16.1) (75.5) -
Contracts initially recognised in the period (436.3) 84.2 352.1 -
Total changes relating to future service (344.7) 68.1 276.6 -
Adjustments to incurred claims recovery (110.9) (41.3) - (152.2)
Effect of changes in the risk of reinsurers' non-performance 4.2 - - 4.2
Total changes relating to past service (106.7) (41.3) - (148.0)
Recognised in insurance service result (590.4) 5.8 (14.2) (598.8)
Finance income/(expense) from reinsurance contracts held 24.0 5.7 (13.8) 15.9
Foreign exchange (losses)/gains (20.6) 15.8 0.3 (4.5)
Other amounts recognised in total comprehensive income 3.4 21.5 (13.5) 11.4
Premiums paid net of ceding commissions and other directly attributable 1,080.4 - - 1,080.4
expenses paid
Recoveries from reinsurance (413.9) - - (413.9)
Total cash flows 666.5 - - 666.5
Closing reinsurance contract assets 2,143.4 166.2 117.1 2,426.7
Closing reinsurance contract liabilities (404.4) 58.4 12.5 (333.5)
Net reinsurance contract assets at 31 December 2023 1,739.0 224.6 129.6 2,093.2
17b Analysis of the liability for remaining coverage and the liability for
incurred claims
i) Insurance contracts issued
The tables below analyse insurance contract assets and liabilities between the
LRC and the LIC for insurance contracts issued.
LRC LIC Total
Excluding loss component Loss component
31 December 2024 $m $m $m $m
Opening insurance contract assets 101.7 - (0.2) 101.5
Opening insurance contract liabilities (848.8) (8.3) (7,135.1) (7,992.2)
Net insurance contract liabilities at 01 January 2024 (747.1) (8.3) (7,135.3) (7,890.7)
Insurance revenue 5,678.1 - - 5,678.1
Insurance service expenses:
- Incurred claims and other directly attributable expenses (80.8) - (3,249.3) (3,330.1)
- Changes that relate to past service - adjustments to the LIC - - 401.2 401.2
- Losses on onerous contracts and reversal of those losses - 5.1 - 5.1
- Insurance acquisition cash flows amortisation (1,009.2) - - (1,009.2)
Recognised in insurance service result 4,588.1 5.1 (2,848.1) 1,745.1
Finance income/(expenses) from insurance contracts issued 96.7 - (185.8) (89.1)
Foreign exchange gains 19.2 - 10.9 30.1
Other amounts recognised in total comprehensive income 115.9 - (174.9) (59.0)
Premiums received net of insurance acquisition cash flows (5,148.1) - - (5,148.1)
Claims and other directly attributable expenses paid - - 2,558.6 2,558.6
Total cash flows (5,148.1) - 2,558.6 (2,589.5)
Closing insurance contract assets 52.4 - (32.2) 20.2
Closing insurance contract liabilities (1,243.6) (3.2) (7,567.5) (8,814.3)
Net insurance contract liabilities at 31 December 2024 (1,191.2) (3.2) (7,599.7) (8,794.1)
LRC LIC Total
Excluding loss component Loss component
31 December 2023 $m $m $m $m
Opening insurance contract assets 87.2 - (3.1) 84.1
Opening insurance contract liabilities (824.7) (10.1) (6,515.0) (7,349.8)
Net insurance contract liabilities at 01 January 2023 (737.5) (10.1) (6,518.1) (7,265.7)
Insurance revenue 5,442.4 - - 5,442.4
Insurance service expenses:
- Incurred claims and other directly attributable expenses (86.3) - (2,825.3) (2,911.6)
- Changes that relate to past service - adjustments to the LIC - - 232.0 232.0
- Losses on onerous contracts and reversal of those losses - 1.8 - 1.8
- Insurance acquisition cash flows amortisation (914.8) - - (914.8)
Recognised in insurance service result 4,441.3 1.8 (2,593.3) 1,849.8
Finance income from insurance contracts issued 70.8 - (240.1) (169.3)
Foreign exchange gains/(losses) 4.7 - (7.6) (2.9)
Other amounts recognised in total comprehensive income 75.5 - (247.7) (172.2)
Premiums received net of insurance acquisition cash flows (4,526.4) - - (4,526.4)
Claims and other directly attributable expenses paid - - 2,223.8 2,223.8
Total cash flows (4,526.4) - 2,223.8 (2,302.6)
Closing insurance contract assets 101.7 - (0.2) 101.5
Closing insurance contract liabilities (848.8) (8.3) (7,135.1) (7,992.2)
Net insurance contract liabilities at 31 December 2023 (747.1) (8.3) (7,135.3) (7,890.7)
ii) Reinsurance contracts held
The tables below analyse reinsurance contract assets and liabilities between
the asset for remaining coverage (ARC) and asset for incurred claims (AIC) for
reinsurance contracts held.
ARC¹ AIC Total
31 December 2024 $m $m $m
Opening reinsurance contract assets 758.4 1,668.3 2,426.7
Opening reinsurance contract liabilities (1,080.3) 746.8 (333.5)
Net reinsurance contract assets/(liabilities) at 01 January 2024 (321.9) 2,415.1 2,093.2
Allocation of reinsurance premium (764.9) - (764.9)
Amounts recoverable from reinsurers for incurred claims:
- Effect of changes in the risk of reinsurers' non-performance - (1.8) (1.8)
- Claims recovered - 516.9 516.9
- Other incurred directly attributable expenses - (4.4) (4.4)
- Changes that relate to past service - adjustments to incurred claims - (254.9) (254.9)
recovery
Net expenses from reinsurance contracts held (764.9) 255.8 (509.1)
Finance (expenses)/income from reinsurance contracts held (27.3) 60.5 33.2
Foreign exchange losses (0.9) (2.4) (3.3)
Other amounts recognised in total comprehensive income (28.2) 58.1 29.9
Premiums paid net of ceding commissions and other directly attributable 1,254.7 - 1,254.7
expenses paid
Recoveries from reinsurance - (499.2) (499.2)
Total cash flows 1,254.7 (499.2) 755.5
Closing reinsurance contract assets 573.8 2,092.8 2,666.6
Closing reinsurance contract liabilities (434.1) 137.0 (297.1)
Net reinsurance contract assets at 31 December 2024 139.7 2,229.8 2,369.5
(1 ) Includes loss recovery component of $0.9m at 01 January 2024
and $0.2m at 31 December 2024.
(
)
( )
( )
ARC(2) AIC Total
31 December 2023(1) $m $m $m
Opening reinsurance contract assets 24.9 2,150.4 2,175.3
Opening reinsurance contract liabilities (254.7) 93.5 (161.2)
Net reinsurance contract assets/(liabilities) at 01 January 2023 (229.8) 2,243.9 2,014.1
Allocation of reinsurance premium (1,127.3) - (1,127.3)
Amounts recoverable from reinsurers for incurred claims:
- Effect of changes in the risk of reinsurers' non-performance - 4.2 4.2
- Claims recovered - 680.1 680.1
- Other incurred directly attributable expenses - (3.6) (3.6)
- Changes that relate to past service - adjustments to incurred claims - (152.2) (152.2)
recovery
Net expenses from reinsurance contracts held (1,127.3) 528.5 (598.8)
Finance (expenses)/income from reinsurance contracts held (40.9) 56.8 15.9
Foreign exchange losses (4.3) (0.2) (4.5)
Other amounts recognised in total comprehensive income (45.2) 56.6 11.4
Premiums paid net of ceding commissions and other directly attributable 1,080.4 - 1,080.4
expenses paid
Recoveries from reinsurance - (413.9) (413.9)
Total cash flows 1,080.4 (413.9) 666.5
Closing reinsurance contract assets 758.4 1,668.3 2,426.7
Closing reinsurance contract liabilities (1,080.3) 746.8 (333.5)
Net reinsurance contract assets/(liabilities) at 31 December 2023 (321.9) 2,415.1 2,093.2
(1 ) A presentational error was identified in the version of this
disclosure included in the 2023 Annual Report and Accounts. The disclosure
above has been restated to correct these errors. There was no impact to the
carrying value of any item in the statement of financial position, amounts
recognised through the income statement or the opening and closing balances in
this disclosure. Certain amounts had been incorrectly classified between the
asset for incurred claims and the asset for remaining coverage. Specifically:
an allocation of reinsurance premium of $763.5m had been classified as a
movement in the AIC when it should have been included in the ARC; movement in
the ARC of $1.3m for the effect of changes in the risk of reinsurers
non-performance, $767.1m for claims recovered and $0.5m for other directly
attributable expenses should have been included as movements relating to
amounts recoverable from reinsurers in the AIC; and $1.8m relating to foreign
exchange is consequently required to be recognised as a movement in AIC, not
the ARC.
(2 ) Includes loss recovery component of $3.8m at 01 January 2023
and $0.9m at 31 December 2023.
( )
17c New business
i) Impact of insurance contracts issued in the year
( )
The following tables show the impact of new insurance contracts issued in the
period. These are broken down by contracts which were/were not deemed to be
onerous on initial recognition.
( )
Non-onerous contracts originated Onerous contracts originated Total
Year ended 31 December 2024 $m $m $m
Estimated present value of future cash outflows:
- Insurance acquisition cash flows (949.7) (20.7) (970.4)
- Claims and other directly attributable expenses (2,864.4) (61.5) (2,925.9)
Estimated present value of future cash inflows 4,890.2 85.9 4,976.1
Risk adjustment for non-financial risk (259.7) (9.0) (268.7)
Contractual service margin (816.4) - (816.4)
Net increase in insurance contract liabilities - (5.3) (5.3)
Non-onerous contracts originated Onerous contracts originated Total
Year ended 31 December 2023 $m $m $m
Estimated present value of future cash outflows:
- Insurance acquisition cash flows (759.3) (68.1) (827.4)
- Claims and other directly attributable expenses (2,489.8) (176.7) (2,666.5)
Estimated present value of future cash inflows 4,115.0 249.1 4,364.1
Risk adjustment for non-financial risk (249.3) (14.9) (264.2)
Contractual service margin (616.6) - (616.6)
Net increase in insurance contract liabilities - (10.6) (10.6)
ii) Impact of reinsurance contracts held in the year
The following table shows the impact of new reinsurance contracts initially
recognised in the period which were not deemed to originate with a loss
recovery component. Contracts originating with a loss recovery component were
$0.3m (2023: $0.3m).
2024 2023
$m $m
Estimated present value of future cash outflows (1,035.3) (1,253.5)
Estimated present value of future cash inflows 536.4 817.2
Risk adjustment for non-financial risk 96.6 84.2
Contractual service margin 402.3 352.1
Net increase in reinsurance contract assets - -
17d Future CSM release
The tables below show when the Group expects to release the closing CSM to the
profit or loss in appropriate future time bands. It is presented for both
insurance contracts issued and reinsurance contracts held.
2024 2023
Insurance contracts issued $m $m
Number of years until expected to be recognised
1 421.7 299.0
2 20.1 14.7
3 13.6 10.5
4 8.7 7.6
5 5.5 5.1
6-10 10.9 7.1
Total 480.5 344.0
2024 2023
Reinsurance contracts held $m $m
Number of years until expected to be recognised
1 151.7 118.7
2 49.7 3.7
3 26.2 2.6
4 2.5 1.8
5 1.4 1.2
6-10 3.1 1.6
Total 234.6 129.6
17e Claims development
The following tables show the estimates of cumulative ultimate claims for each
successive underwriting year from six years prior to the reporting date,
reconciled back to LIC. This information has been provided on a gross of
reinsurance basis and separately for reinsurance contracts held. Claims
development information has only been disclosed from the 2019 underwriting
year onward (being five years before the end of the annual reporting period in
which IFRS 17 was first applied by the Group). In the below tables, historic
periods have been revalued using current exchange rates. The cumulative
estimate of claims and recoveries comprise expected claims, reinsurance
recovery cash flows and directly attributable expenses. It does not include
the risk adjustment, premiums or acquisition costs.
Underwriting year
Insurance contracts issued 2019 2020 2021 2022 2023 2024 Total
2024 $m $m $m $m $m $m $m
At end of underwriting year 1,711.5 2,309.2 2,696.2 3,122.6 3,110.9 3,403.8
1 year later 2,207.2 2,696.9 2,968.1 3,036.1 3,215.1
2 years later 2,240.9 2,804.3 2,787.7 2,912.8
3 years later 2,237.1 2,652.0 2,620.0
4 years later 2,228.1 2,582.6
5 years later 2,258.2
Cumulative gross estimate of claims 2,258.2 2,582.6 2,620.0 2,912.8 3,215.1 3,403.8 16,992.5
Cumulative payments to date (1,871.3) (1,982.9) (1,615.0) (1,405.8) (1,105.7) (254.1) (8,234.8)
Carrying amount relating to 2018 and prior underwriting years 752.1
Less liability for remaining coverage claims only (1,923.7)
Impact of discounting (LIC) (666.6)
LIC risk adjustment for non-financial risk 680.2
Gross discounted LIC 7,599.7
Underwriting year
Reinsurance contracts held 2019 2020 2021 2022 2023 2024 Total
2024 $m $m $m $m $m $m $m
At end of underwriting year (290.6) (455.6) (699.3) (932.5) (519.8) (472.9)
1 year later (412.4) (635.6) (708.1) (882.8) (553.1)
2 years later (377.0) (701.1) (707.8) (841.2)
3 years later (396.1) (578.1) (647.6)
4 years later (424.9) (586.9)
5 years later (468.0)
Cumulative gross estimate of claims recoveries (468.0) (586.9) (647.6) (841.2) (553.1) (472.9) (3,569.7)
Cumulative payments to date 315.3 411.6 253.8 159.3 55.2 9.5 1,204.7
Carrying amount relating to 2018 and prior underwriting years (305.2)
Less asset for remaining coverage claims only 394.3
Impact of discounting (AIC) 186.9
AIC risk adjustment for non-financial risk (140.8)
Reinsurance discounted AIC (2,229.8)
18 Subsequent events
The Group is exposed to the California Wildfires which occurred in January
2025. Our initial estimates expect a net claims impact of around $80m
(unaudited).
On 3 March 2025, the Board of Beazley plc approved a share buyback of its
ordinary shares for up to a maximum aggregate consideration of $500m which is
expected to commence on 5 March 2024. The buyback will reduce the Group's net
asset value by approximately $500m.
For details of dividends declared after the end of the reporting period please
refer to Note 12.
Alternative performance measures (APMs)
Beazley plc uses APMs to help explain its financial performance and position.
These measures are not defined under IFRS. The Group is of the view that the
use of these measures enhances the usefulness of our financial reporting and
allows for improved comparison with industry peers.
Information on APMs used by the Group is set out below. Unless otherwise
stated, amounts are disclosed in millions of dollars ($m).
Insurance written premiums & net insurance written premiums
Insurance written premiums ($m) is calculated by deducting the reinstatement
premiums and profit commissions from the gross premiums written. Net insurance
written premiums ($m) is calculated by adding insurance ceded premiums to this
result. These APMs represent management's view of premiums written in each
period. The primary difference between insurance written premiums and
insurance revenue relates to the deferral and earning of income over the
period in which coverage is provided.
2024 2023
$m $m
Insurance written premiums(1) 6,164.1 5,601.4
Earnings adjustment (486.0) (159.0)
Insurance revenue 5,678.1 5,442.4
2024 2023
$m $m
Insurance ceded premiums(1) (1,011.8) (905.2)
Earnings adjustment 246.9 (222.1)
Allocation of reinsurance premiums (764.9) (1,127.3)
2024 2023
$m $m
Insurance written premiums(1) 6,164.1 5,601.4
Add insurance ceded premiums (1,011.8) (905.2)
Net insurance written premiums 5,152.3 4,696.2
(1)Beazley Staff Underwriting Limited's participation in syndicate 623 at
Lloyd's, is now fully consolidated within the Group accounts on a line by line
basis due to an increase in materiality. Excluding the impact of this
consolidation of premium, growth for the year would have been 8.5% on a gross
basis and 8.2% on a net basis.
Contractual Service Margin (CSM) sustainability index
The CSM reflects the expected profit of contracts within the liability for
remaining coverage. The sustainability index ratio is calculated by dividing
the closing CSM at 31 December by the opening CSM at 1 January. A ratio of 1
and above shows that the expected profit within the LRC is higher than the
previous valuation.
Gross Net Gross Net
2024 2024 2023 2023
Closing CSM 480.5 245.9 344.0 214.4
Divided by opening CSM 344.0 214.4 341.0 183.7
CSM sustainability index 1.40 1.15 1.01 1.17
Claims, expense & combined ratios
Claims ratio (%) is calculated as insurance service expenses less directly
attributable expenses, net of reinsurance recoveries, divided by insurance
revenue net of reinsurance ceded revenue. Expense ratio (%) is calculated as
the sum of insurance acquisition cash flows amortisation and other directly
attributable expenses, divided by insurance revenue net of reinsurance ceded
revenue. Combined ratio (%) is calculated as insurance service expenses net of
reinsurance recoveries, divided by the insurance revenue net of reinsurance
ceded revenue. This is also the sum of the claims and expense ratios. The
combined ratio below is shown both before and after the impact of discounting.
2024
2023
Insurance service expenses ($m) 3,933.0 3,592.6
Less directly attributable expenses ($m)(1) (1,558.1) (1,362.6)
Amounts recoverable from reinsurers for incurred claims ($m) (255.8) (528.5)
Net claims ($m) 2,119.1 1,701.5
Insurance revenue ($m) 5,678.1 5,442.4
Allocation of reinsurance premium ($m) (764.9) (1,127.3)
Divided by net insurance revenue ($m) 4,913.2 4,315.1
Claims ratio 43.1% 39.4%
Directly attributable expenses ($m)(1) 1,558.1 1,362.6
Divided by net insurance revenue ($m) 4,913.2 4,315.1
Expense ratio 31.7% 31.6%
Combined ratio 74.8% 71.0%
Removal of impact of discounting 4.2% 3.0%
Combined ratio (undiscounted) 79.0% 74.0%
(1 ) Directly attributable expenses are comprised of insurance
acquisition cash flows amortisation, other directly attributable expenses, and
reinsurers' share of expenses and other amounts per Note 2.
( )
Net assets per share & net tangible assets per share
Net assets per share ("NAVps") is the ratio (in pence and cents) calculated by
dividing the net assets or total equity of the Group by the number of shares
in issue at the end of the period, excluding those held by the employee
benefits trust. Net tangible assets per share excludes intangible assets from
net assets in the above calculation.
( )
2023
2024
Net assets ($m) 4,606.8 3,882.1
Less intangible assets ($m) (198.0) (165.3)
Net tangible assets ($m) 4,408.8 3,716.8
Divided by the shares in issue at the period end (millions)(1): 629.9 662.7
Net assets per share (cents) 731.4 585.8
Net tangible assets per share (cents) 699.9 560.9
Converted at spot rate: 0.78 0.80
Net assets per share (pence) 570.5 468.6
Net tangible assets per share (pence) 545.9 448.7
(1 ) Shares in issue at the period end exclude those held by the
employee benefits trust of 9.1m (2023: 9.8m).
( )
( )
Net assets per share growth
Net assets per share growth (%) is calculated as the NAVps at the end of the
reporting period ("closing"), less the NAVps five years prior to the start of
the reporting period ("opening"), divided by the NAVps at opening. The NAVps
has been calculated on an IFRS 17 basis for the 2022 and subsequent periods,
and on an IFRS 4 basis for the 2021 and prior periods.
( )
2024
2023
Net assets per share (cents) at opening 309.6 280.4
Net assets per share (cents) at closing 731.4 585.8
Movement 421.8 305.4
Net assets per share growth (%) 136% 109%
Return on equity ("ROE")
Return on equity (%) is calculated by dividing the consolidated profit after
tax by the average equity for the period (using an average of the opening and
closing equity positions).
2024
2023
Profit after tax ($m) 1,130.3 1,026.8
Divided by average total equity ($m) 4,244.5 3,418.6
Return on equity 26.6% 30.0%
Average return on equity
Average return on equity (%) is calculated as the straight average of the ROE
over a period of five and ten years years from the end of the reporting
period. The ROE has been calculated on an IFRS 17 basis for the 2022 and
subsequent periods, and on an IFRS 4 basis for the 2021 and prior periods.
2024 2023
31 December 2014 -% 17.0%
31 December 2015 19.0% 19.0%
31 December 2016 18.0% 18.0%
31 December 2017 9.0% 9.0%
31 December 2018 5.0% 5.0%
31 December 2019 15.0% 15.0%
31 December 2020 (3.0)% (3.0)%
31 December 2021 16.0% 16.0%
31 December 2022 19.0% 19.0%
31 December 2023 30.0% 30.0%
31 December 2024 26.6% -%
Average ROE over 5 years 17.7% 15.4%
Average ROE over 10 years 15.5% 14.5%
Investment return
Investment return (%) is calculated by dividing the net investment income by
the average financial assets at fair value and cash and cash equivalents held
by the Group over the period.
2024 2023
Net investment income ($m) 574.4 480.2
Opening invested assets:
Financial assets at fair value ($m) 9,665.5 8,345.6
Cash and cash equivalents ($m) 812.3 652.5
Invested assets at the beginning of the period ($m) 10,477.8 8,998.1
Closing invested assets:
Financial assets at fair value ($m) 10,610.6 9,665.5
Cash and cash equivalents ($m) 882.1 812.3
Invested assets at the end of the period: ($m) 11,492.7 10,477.8
Divided by average invested assets ($m) 10,985.3 9,738.0
Investment return 5.2% 4.9%
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