Insights
Beazley 1H24 trading statement
Posted 12/08/2024 – Insights
Beazley plc has released its trading statement for 1H24 ending 30th June 2024
Main highlights
- Insurance written premium increased by 7% to $3,123.3m (2023: $2,921.1m)
- Net insurance written premium increased by 10% to $2,586.5m (2023: $2,349.6m)
- Undiscounted combined ratio of 81% (2023: 88%)
- Investment annual return rate of 4.8% equivalent to $251.7m (2023: 3.0%, $143.9m)
- Profit before tax increased by 99% to $728.9m (2023: $366.4m)
- FY undiscounted COR guidance of around 80%
Adrian Cox, Chief Executive Officer, said:
“I am pleased to report a record first half profit of $728.9m. Expertise in underwriting and active risk selection are key drivers of this strong result, even as the rating environment is moderating. Property grew 25% in the first half, demonstrating the success of our strategy to grow in this increasingly specialist class, focusing on the US E&S market. We continue to innovate in cyber, launching one of the market’s most comprehensive, integrated cyber security and insurance offerings with Full Spectrum Cyber and Beazley Security. When faced with the world’s largest ever IT outage, Beazley’s approach to underwriting cyber risk was tested and proved to be highly resilient. We see opportunities in the remainder of the year and are confident in delivering on our high single digit growth guidance. We are also pleased to confirm that we have improved our undiscounted combined ratio guidance for the full year to around 80%.”
The group’s premium income and cumulative rate changes by division are as follows:
Commentary by division
- Cyber Risks – Beazley saw attractive opportunities within the international market contributing significantly to the 7% premium increase. Rate reductions from the US are stabilising.
- Digital Risks – Beazley continues to invest into the division to streamline its small business products. The 14% growth was mainly driven by specialty in Europe and is despite rate reductions.
- MAP Risks – The slight reduction of 3% in premium income is driven by the planned platform changes internally. Rate adequacy for the division remains strong regardless of the uncertain geopolitical landscape.
- Property Risks – Although competitors are returning to the market, Beazley is yet to see an influx in capacity. Beazley’s new US E&S carrier has received positive feedback assisting the 25% growth.
- Specialty Risks – Beazley is actively managing its D&O portfolio where rate reductions are beginning to plateau. To help balance the D&O reduction, niche products such as environmental liability are growing.
Claims
- Other than the specialty risks division where Beazley is experiencing some claims inflation, claims are within expectations.
- Reserve confidence level at the 88th percentile (2023: 89th percentile).
Alpha comment
This is a very positive first half result from Beazley. The group has significantly increased its profit before tax and its reduced undiscounted combined ratio guidance is highly promising. Alpha members support Beazley via syndicates 623, 5623 and SPA 6107. They all have sizeable cyber exposures and Adrian Cox’s comments on the CrowdStrike incident are particularly encouraging, where Beazley’s losses seem to be manageable and do not appear to have derailed the overall target combined ratio, which has now improved from “low-80s” to “around 80%”.
