Insights
Beazley plc raises c£350m via share placement
Posted 16/11/2022 – Quick takes
- On 14th November, Beazley plc announced a capital raise via the accelerated issuance of new shares. The resultant placement raised approximately £350m via the issue of c61m new shares at 575p per share, a c8% discount to the prevailing share price.
- Beazley stated that the capital raise was to support organic growth and provide growth capital to “fund attractive underwriting opportunities.”
- The board considered a capital raise appropriate to “to fuel Beazley’s growth plans while maintaining a strong balance sheet that can withstand a range of stress scenarios.”
- Beazley said that these growth opportunities are particularly prevalent in cyber and specialty classes where the group expects to deliver “outsized returns.”
- Beazley also stated that rate changes for the nine-month period ended 30 September 2022 were particularly encouraging, with an average rate increase of 17% including double digit increases for the cyber, specialty and property divisions.
- The Company expects this rate momentum to continue, particularly within the property classes where a significant dislocation is emerging.
Alpha comment
The comments on rate momentum are clearly encouraging for both those who support the Beazley Lloyd’s syndicates and those who have been waiting for rates to improve in the property treaty class in particular. The impact of Hurricane Ian and the volatility of Sterling versus the US Dollar have also made predicting capital requirements at Lloyd’s difficult, so it makes sense that Beazley has chosen to strengthen its balance sheet in order to be able to take advantage of what is an increasingly hard market across most risk classes.
