REG - Beazley PLC - Trading Statement

BeazleyAnnouncement

06/11/2024 07:00

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RNS Number : 1475L  Beazley PLC  06 November 2024

Beazley on track to deliver Full Year guidance

 

London, 6 November 2024

 

Beazley plc trading statement for the nine months ended 30 September 2024

 

 

Overview

·      Insurance written premiums increased by 7% to $4,625m (Q3 2023:
$4,325m)

 

·      Net insurance written premiums increased by 7% to $3,792m (Q3
2023: $3,532m)

 

·      Premium rates on renewal business are flat as expected (Q3 2023:
5%)

 

·      Investment income of $513m or 4.7% year-to-date (Q3 2023:
investment income of $202m or 2.1%)

 

·      Initial view of net exposure to Hurricanes Helene and Milton
combined is between $125m-$175m

 

·      Gross IWP growth guidance for the year remains at high single
digits

 

·      Combined ratio guidance for the year remains at around 80% on an
undiscounted basis, assuming average catastrophe activity for the reminder of
the year

 

 

 

Adrian Cox, Chief Executive Officer, said:

 

 

"I am extremely proud of how our business has navigated the volatile claims
environment we have seen so far this year.  Our commitment to disciplined
underwriting and our risk selection expertise mean that, despite an active
hurricane season and a global cyber event, we expect to deliver an
undiscounted combined ratio of around 80% for the full year, consistent with
our guidance at our interim results in August."

 

 

 

                                      30 September 2024  30 September 2023  % increase
 Insurance written premiums ($m)      4,625              4,325              7%

 Net insurance written premiums ($m)  3,792              3,532              7%

 Investments and cash ($m)            11,433             9,983              15%

 Year to date investment return       4.7%               2.1%

 Rate increase                        0%                 5%

Premiums

 

Our performance to the end of September 2024 by business division is as
follows:

 

                  Insurance written premiums  Insurance written premiums  % increase/  Year to date rate change

                                                                          (decrease)

                  30 September 2024           30 September 2023

                  $m                          $m                          %            %

 Cyber Risks      924                         872                         6%           (6%)
 Digital          190                         169                         12%          (3%)
 MAP Risks        719                         754                         (5%)         2%
 Property Risks   1,401                       1,128                       24%          2%
 Specialty Risks  1,391                       1,402                       (1%)         1%
 OVERALL          4,625                       4,325                       7%           0%

 

In Cyber Risks, rates have remained stable over the last quarter. As
previously highlighted, competition in Europe is increasing and the market is
experiencing an uptick in severity on ransomware claims, however this has not
impacted our outlook for this year or our view of the long-term opportunities
available.

 

Following a restructure of our platforms at the start of 2024, a higher
proportion of MAP Risks, written on a managed basis, is supported by third
party capital providers, resulting in a year-on-year reduction at the Group
level.  On a total managed basis, the division continues to grow overall with
continued demand for the specialist product set within MAP Risks.

 

Property Risks continues to be a significant growth driver this year, and has
performed in-line with expectations, benefiting from the ongoing flow of
business into the E&S market.

 

Capital market activity remains relatively subdued resulting in lower demand,
surplus capacity and very competitive pricing in the insurance market for a
number of our products within the Specialty Risks division. Our commitment to
disciplined underwriting means we anticipate very moderate growth by year end
as indicated in Q1.

 

Claims

 

Analysis on natural catastrophe exposure remains ongoing however our current
view, net of reinsurance, of the combined impact of Hurricanes Helene and
Milton is within a range of $125m to $175m. Taking this range into account, as
well as claims experience across the group year-to-date, we maintain our
undiscounted combined operating ratio guidance of around 80% for 2024. This is
based on average catastrophe experience for the remainder of the year.

Capital

 

We aim to maintain a Solvency II ratio in excess of 170%. As we remain
committed to active capital management, the level of capital will continue to
be driven by opportunities for growth, market environment, adequate prudence,
and a desire to maximise returns for investors.

 

Looking ahead to 2025, whilst we are yet to conclude our business planning
process, we are expecting market conditions which would typically result in
slightly lower growth than we have seen this year.

 

Capital which cannot be profitably deployed will be returned to shareholders -
as we have demonstrated through our successful share buyback programme,
launched in 2024. The capital position will be reviewed at year-end to
determine the level of excess capital and, if appropriate, the mechanism of
any special distribution.

 

 

Investments

Our portfolio allocation was as follows:

 

                                            30 September 2024      30 September 2023
                                            Assets     Allocation  Assets     Allocation
                                            $m         %           $m         %
 Cash and cash equivalents                  1,075      9.4         856        8.5
 Fixed and floating rate debt securities
 -     Government issued                    4,392      38.4        4,053      40.6
 -     Corporate bonds
 -     Investment grade                     3,769      33.0        3,538      35.4
 -     High yield                           660        5.8         434        4.4
 -     Securitised
 -     Collateralised loan obligations      255        2.2         0          0.0
 Syndicate loans                            29         0.3         33         0.3
 Derivative financial assets                13         0.1         15         0.2
 Core portfolio                             10,193     89.2        8,929      89.4
 Equity funds                               314        2.7         267        2.7
 Hedge funds                                721        6.3         556        5.6
 Illiquid credit assets                     205        1.8         231        2.3
 Capital growth assets                      1,240      10.8        1,054      10.6
 Total                                      11,433     100.0       9,983      100.0

 

Favourable financial market conditions have driven an investment portfolio
return of $513m, or 4.7%, after nine months of the year.  The portfolio has
benefited from increased exposures to equities and high yield credit for much
of this period.

 

Our equity portfolio has gained more than 20% in this period, while credit
exposures have also produced good returns.

 

As at 30 September, the average yield of our fixed income investments of 4.3%
continues to support a good outlook for investment returns.

 

 

A conference call for analysts and investors will be held at 8am GMT on
Wednesday 6 November

 

Dial in details for analysts:

UK-Wide: +44 (0) 33 0551 0200

 

Webcast Link for all other participants:

 

https://brrmedia.news/BEZ_Q3_24 (https://brrmedia.news/BEZ_Q3_24)

ENDS

 

For further information:

Investors and analysts

Sarah Booth

 

+44 (0) 207 6747582

 

 

Media

 

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 six Lloyd's syndicates and, in 2023, underwrote gross premiums
worldwide of $5,601.4million. 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 (http://www.beazley.com/)

 

 

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