Forecasts & Results
Beazley publishes 2021 Interim results
Posted 26/07/2021 – Quick takes
Beazley plc released its group interim results on Friday, reporting a profit for 1H21 of $167.3m vs. a loss of $(13.8)m in 1H20 and a corresponding combined ratio of 94% vs. 107%. However, when taking into account prior year releases of $95.7m and a net investment income of $83.6m, the pure (calendar) year must have been loss making in the first half.
Beazley said that its total COVID-19 losses were stable at c$340m net of reinsurance and that it had not yet incurred the additional $50m that it had flagged as a potential for additional COVID losses in 2021.
Adrian Cox, CEO, said: “Beazley’s gross premiums written increased by 22% to $2,035.3m with all divisions achieving rate rises in the first six months of 2021. Reserve releases across all divisions supported a half year combined ratio of 94% and the investment return achieved was also strong at 1.2% year to date. I am excited about the growth opportunities ahead. Our capital base remains strong and we are well placed to support an ambitious growth plan at similar levels to 2021.”
Beazley also gave an update on the progress of its cyber ‘re-underwriting’ strategy, as it seeks to tackle ransomware claims. During 1H21, the combined ratio for Beazley’s cyber and executive risk division (which includes US D&O, employment liability, global M&A, cyber & technology) increased by c9ppts to 98%. However, Beazley has adjusted its underwriting approach on cyber and invested in a suite of analytical tools and preventative services to help cut down exposure. Cox said the efforts on the cyber portfolio would bear fruit in the next 12 months with recent cyber claims frequency 20% lower by policy count and down by 50% when compared to premiums. Across the cyber and executive risks division, rates were up 44% during 1H21.
We welcome the continued progress on rate as well as some remediation of the cyber book. However, the pure underwriting performance still leaves room for further improvement as COVID washes through the system.