Beazley reveals Q3 financials

Beazley reveals Q3 financials | Insurance Business New Zealand

Insurance News

Beazley reveals Q3 financials

Net written premiums saw a double-digit upswing

Insurance News

By
Kenneth Araullo

Beazley has unveiled its financials for the nine-month period ending Sept. 30.

The specialist insurance group underscored robust financial performance with insurance written premiums climbing by 9% to US$4.325 billion, reflecting an upward trajectory from the US$3.978 billion reported in the same period last year. Furthermore, the company has seen a 26% increase in net written premiums, which now stand at US$3.532 billion, up from US$2.8 billion in the previous year.

The property insurance sector of Beazley’s portfolio also witnessed a significant jump, with premiums up by 63%, and rate increases hitting 24%. Renewal business also enjoyed an uptick, albeit at a more subdued pace, with premium rates rising by 5%, a contrast to the 17% surge seen in the third quarter of 2022.

Beazley’s investment income has also seen a positive shift, now at US$202 million or 2.1% year to date, reversing from a loss of US$99 million or 3.6% in the comparable period last year.

The company has guided that the combined ratio on an undiscounted basis remains in the low 80s for the full year of 2023. The firm’s growth, on a net basis, is projected to remain in the mid-20s, in line with the growth experienced to date.

Beazley’s performance across segments

In the cyber risk segment, despite a moderate rate decrease in 2023, the current pricing levels are considered sufficient, particularly against the backdrop of the significant rate rises that have occurred since 2019. While the US mid-market shows promise for growth, competition has intensified, particularly in the SME space, leading to a more moderate growth rate in the US. However, the company has seen substantial growth in other regions where market penetration rates are lower.

The expertise of Beazley’s marine, aviation, and political (MAP) risks division has translated into a 7% increase in rates. Although there is a noted reduction in insurance written premiums due to syndicate 5623 now underwriting the portfolio business, which is backed mostly by third-party capital, net premium growth remains unaffected.

Property risks have been a highlight for Beazley, benefiting from extraordinary market conditions and achieving a 63% year-on-year growth in this sector. These favourable conditions are anticipated to extend into 2024.

The specialty risks sector faces continued competition, with the directors and officers (D&O) market impacting performance. Beazley is upholding a strict underwriting approach in areas where rate adequacy is not met.

Regarding claims, Beazley has experienced better-than-anticipated outcomes year to date, with total natural catastrophe-related claims falling within the reserved margins. Cyber risks have not seen an increase in claim frequency, despite a rise in ransomware attacks. The ongoing Middle Eastern conflict is monitored, but as of now, Beazley said that it does not foresee any impact on the full year results.

On the capital front, Beazley aims to maintain a Solvency II ratio that exceeds 170% of the Solvency Capital Requirement. Capital levels are to be adjusted in line with growth opportunities, market environments, regulatory frameworks, and with the intent of maximising investor returns.

“The insurance business is cyclical and market conditions are evolving quickly. We have chosen to exercise underwriting discipline, meaning growth to date is less than we had planned at the start of the year. However, our agile underwriting and the strength of our platform strategy means we have delivered profitable growth to date and our claims experience is better than anticipated,” Beazley CEO Adrian Cox said.

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