Insights
Beazley 3Q24 trading statement
Posted 06/11/2024 – Insights
Beazley plc has released its trading statement for 3Q24 ending 30th September 2024
Main highlights
- Insurance written premium increased by 7% to $4,625m (Q3 2023: $4,325m)
- Net insurance written premium increased by 7% to $3,792m (Q3 2023: $3,532m)
- Undiscounted combined ratio guidance at around 80% assuming average catastrophe activity for remainder of 2024
- Investment return of 4.7% equivalent to $513m (Q3 2023: 2.1%, $202m)
- Rate change for the year is flat as expected (Q3 2023: +5%)
- Initial view of net exposure to Hurricanes Helene and Milton combined is between $125m-$175m
Adrian Cox, Chief Executive Officer, said:
“I am extremely proud of how our business has navigated the volatile claims environment we have seen so far this year. Our commitment to disciplined underwriting and our risk selection expertise mean that, despite an active hurricane season and a global cyber event, we expect to deliver an undiscounted combined ratio of around 80% for the full year, consistent with our guidance at our interim results in August.”
The group’s divisional income and rate changes year to date are as follows:
Commentary by division
- Cyber Risks – rates have remained flat over Q3. Beazley experienced some increased competition for business in Europe and an uptick in severity on ransomware claims. These headwinds, however, have not impacted Beazley’s outlook for the year and the long term view of opportunities.
- MAP Risks – with the restructuring of the MAP division, where more business is now being written by third party capital, the volume of business for the group has decreased. On a total managed basis, the division continues to grow as the demand for specialist products increases
- Property Risks – Beazley continues to grow its property division with a number of opportunities flowing into the E&S market.
- Specialty Risks – Underwriters are maintaining discipline in the division with significant competition for business. As a result of this cautious underwriting position only moderate growth is expected by year end.
Claims
- Beazley’s group view net of reinsurance is for a combined impact of Hurricanes Helene and Milton in the range of $125m to $175m.
Alpha comment
This is a promising set of results from Beazley where they continue to give guidance of an undiscounted combined ratio at around 80% for the full year. If the full year develops as expected, this would generate a strong underwriting profit for 2024. This, together with a strong investment return, is likely to drive Beazley to a good overall result for the 2024 year. The Property Risks division has seen its income double since 2022, yet losses from Hurricanes Milton and Helene look to be more manageable than Hurricane Ian in 2022, where the initial estimate was $120m at 3Q22. Following the CrowdStrike event in July, Cyber Risks rates have stabilised which is encouraging and recent ransomware activity has not changed Beazley’s confidence in the cyber market.
