TIDMBEZ
RNS Number : 5797N
Beazley PLC
10 May 2018
Press
Release
Beazley plc trading statement for the three months ended 31
March 2018
London, 10 May 2018
Overview
-- Gross premiums written increased by 10% to $631m (2017: $573m)
-- Premium rates on renewal business increased by 3%
-- Year to date investment return of zero
Andrew Horton, Chief Executive Officer, said:
"Beazley made a strong start to 2018 with premium growth of 10%
on average across the portfolio. We have also seen rate increases
across many lines of business as the market recalibrates its
pricing in the wake of the high catastrophe activity seen in late
2017.
While our investment return is lower than we would have hoped at
this stage, US interest rates are now materially higher which will
benefit the business going forward."
31 March 31 March % increase
2018 2017
Gross premiums written
($m) 631 573 10
--------- --------- -----------
Investments and cash ($m) 4,845 4,551 6
--------- --------- -----------
Year to date investment
return - 0.9%
--------- --------- -----------
Rate increase/(decrease) 3% (1%)
--------- --------- -----------
Premiums
Gross premiums written for the three months ended 31 March 2018
increased by 10% year on year to $631m.
Our property team have benefitted from the improved underwriting
conditions seen in the wake of the high catastrophe frequency
experienced at the end of 2017. As such, premiums have increased
29% year on year to $108m.
Our reinsurance division also benefited from improved
underwriting conditions with rates increasing 7% across the
portfolio, driving an increase in premium of 7% to $90m.
Specialty lines, our largest division, saw premium increase to
$295m, a 6% increase. This was driven by a 17% increase in business
written within the US.
Our political, accident and contingency division has achieved
good growth across a number of areas which has enabled it to
increase premiums by 14% year on year despite rate pressures in
some areas, in particular terrorism.
Our performance to the end of March 2018 by business division
is:
Gross premiums written Gross premiums written % increase Q1 2018 Rate change
31 March 2018 31 March 2017
$m $m % %
--------------------------------- ----------------------- ----------------------- ----------- --------------------
Marine 71 69 3% 2%
Political, accident &
contingency 67 59 14% (3%)
Property 108 84 29% 8%
Reinsurance 90 84 7% 7%
Specialty lines 295 277 6% -
--------------------------------- ----------------------- ----------------------- ----------- --------------------
OVERALL 631 573 10% 3%
--------------------------------- ----------------------- ----------------------- ----------- --------------------
Business update
At the AGM it was announced that after 28 years at Beazley Neil
Maidment would be retiring. As such, Neil will step down from the
board as of 31 December 2018. Adrian Cox, who has been head of
specialty lines since 2008, will succeed Neil as chief underwriting
officer.
Also at the AGM, David Roberts formally became the chairman of
the Beazley plc board.
Claims update
There have been no major catastrophe events in 2018 and our
previous guidance, of a full year combined ratio in the low
nineties with below average reserve releases following the natural
catastrophes of 2017, is unchanged.
Investments
As at the end of March our portfolio allocation was as
follows:
31 March 2018 31 March 2017
Assets Allocation Assets Allocation
$m % $m %
Cash and cash
equivalents 548 11.3 472 10.3
Sovereign, quasi-sovereign
and supranational 1,282 26.5 1,042 22.9
Corporate debt
* Investment grade
2,117 43.7 2,266 49.8
58 1.2 88 1.9
* High yield
123 2.5 94 2.1
Senior secured
loans - - 5 0.1
Asset backed
securities 17 0.3 3 0.1
Derivative asset
------- ----------- ------- -----------
Core portfolio 4,145 85.5 3,970 87.2
------- ----------- ------- -----------
Equity linked
funds 151 3.1 118 2.6
Hedge funds 381 7.9 320 7.0
Illiquid credit
assets 168 3.5 143 3.2
------- ----------- ------- -----------
Overall portfolio 4,845 100.0 4,551 100.0
------- ----------- ------- -----------
As at 31 March 2018 we have made a net investment loss of $1.1m,
or 0% (31 March 2017: $42.5m gain, 0.9%). Rising US bond yields,
widening credit spreads on corporate debt and volatile equity
markets combined to create a difficult environment for our
investments in this period, resulting in a small loss overall.
However, fixed income yields have risen significantly in recent
months and this is a positive sign for future investment
returns.
The weighted average duration of our fixed income portfolio was
1.4 years at 31 March 2018 (31 March 2017: 1.9 years).
ENDS
For further information, please contact:
Beazley plc
Christine Oldridge
+44 (0) 207 6747758
Note to editors:
Beazley plc (BEZ.L), is the parent company of specialist
insurance businesses with operations in Europe, United States,
Canada, Latin America and Asia. Beazley manages seven Lloyd's
syndicates and, in 2017, underwrote gross premiums worldwide of
$2,343.8 million. All Lloyd's syndicates are rated A by A.M.
Best.
Beazley's underwriters in the United States focus on writing a
range of specialist insurance products. In the admitted market,
coverage is provided by Beazley Insurance Company, Inc., an A.M.
Best A rated carrier licensed in all 50 states. In the surplus
lines market, coverage is provided by the Beazley syndicates at
Lloyd's.
Beazley is a market leader in many of its chosen lines, which
include professional indemnity, property, marine, reinsurance,
accident and life, and political risks and contingency
business.
For more information please go to: www.beazley.com
This information is provided by RNS
The company news service from the London Stock Exchange
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