Beazley plc, the owner of Beazley Furlonge Ltd, (including syndicates 623, 6107 & 5623) has announced its 2018 calendar year results.
A summary of the key ratios is set out below:
|Gross written premium||$2,615m||$2,344m||12%|
|Profit before tax||$76m||$168m||(55%)|
Andrew Horton, Chief Executive Officer, said:
“Beazley saw strong growth in 2018 with gross premiums written rising 12%. Our US business has been growing extremely well and we underwrote more than a billion dollars of premium locally for the first time in the US last year. Although market conditions were challenging, depressing our earnings, we entered 2019 with positive premium rate momentum and higher interest rates that should deliver stronger returns going forward.”
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Alpha comment: despite premium growth and a small improvement in the combined ratio, the above figures show a reduced profit, driven by falling reserves releases and investment returns. Given the well above average heavy hurricane activity suffered in 2017 and the positive rating movements in the meantime, and the reduced hurricane activity for 2018, we might have expected 2018 to have produced better results by comparison. That said, Beazley tend to be very conservative in their reserving of losses. Although the property and reinsurance divisions benefited most from the improving rate environment, these were the two divisions to produce loss making combined ratios for 2018, at 125% and 103%, respectively. We would expect these two areas to be the focus of any remedial action to get group combined ratio back towards the low 90s. The newly promoted Chief Underwriting Officer, Adrian Cox, has an early opportunity to make his mark.