Insights

Beazley 2020 Annual Results

Posted 05.02.2021 – Quick takes

Beazley plc, the owner of Beazley Furlonge Ltd, (managing agent of syndicates 623, 6107 & 5623) has announced its 2020 calendar year results.

Andrew Horton, Chief Executive Officer, commented:

“Beazley’s gross premiums written increased by 19% to $3,563.8m, supported by rate rises across most of our divisions. We also achieved a strong investment income in the face of volatile conditions.
I am very positive about the year ahead. We have the capital strength to support our growth plans and look forward to a continued favourable rate environment and expansion of our specialist products globally. I am confident we can return to paying dividends during the course of 2021″.

Click here to read the full report.

Alpha comment

Whilst a financial loss is disappointing, these results are better than anticipated, helped by a strong investment return. The stock market concurs, with the share price increasing by c. 16% today. On the underwriting side, a Group combined ratio of 109% reflects the challenges of COVID-19. This was most keenly felt in the Political, Accident and Contingency (PAC) division, where the high number of cancelled events in the contingency book drove a 212% combined ratio. The Property unit, whilst taking corrective action in both 2019 and 2020, was also hit hard by the pandemic and reported a combined ratio of 120%. An increase in ransomware claims in Cyber and a high frequency of mid-sized catastrophe losses (including Hurricane Laura and the mid-west Derecho) in Reinsurance contributed to an underwriting loss. The new Market Facilities unit, which houses SPA 5623, continues to build scale. Beazley’s biggest division, Specialty Lines, conversely produced a combined ratio of 94% and the Marine unit benefitted from strong rate hardening to deliver a combined ratio of 90%. A Group prior year reserve release of $93m is back towards more normal levels after a dip last year, with six of the seven divisions enjoying releases (only PAC disappointed). Overall premium was up markedly and every division experienced rate rises (on average +15% on renewal business vs. +6% in 2019). With rates still improving and opportunities for selective growth ahead, Beazley announced a positive outlook for 2021: assuming an average claims experience, they expect to deliver a low-90s combined ratio.

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