TIDMBEZ
RNS Number : 9755V
Beazley PLC
09 November 2017
Press
Release
Beazley plc trading statement for the nine months ended 30
September 2017
London, 9 November 2017
Overview
-- Gross premiums written increased by 6% to $1,762m (2016: $1,666m)
-- Premium rates on renewal business decreased by 1%
-- Year to date investment return of 2.4%
Andrew Horton, Chief Executive Officer, said:
"The third quarter of 2017 was defined by the high frequency and
severity of natural catastrophes. Beazley is in the catastrophe
insurance business and paying natural catastrophe claims is part of
what we do. Our focus is currently on providing the support and
resources necessary to help our policyholders recover as quickly as
possible.
These events will naturally affect our full year results but our
diverse underwriting portfolio continues to serve us well. We also
expect to see rate increases across some lines of business in the
coming months."
30 September 30 September % increase
2017 2016
------------------------- ------------- ------------- -----------
Gross premiums written
($m) 1,762 1,666 6
------------------------- ------------- ------------- -----------
Investments and
cash ($m) 4,829 4,506 7
------------------------- ------------- ------------- -----------
Year to date investment
return 2.4% 2.0%
------------------------- ------------- ------------- -----------
Rate decrease (1%) (2%)
------------------------- ------------- ------------- -----------
Premiums
Gross premiums written for the nine months ended 30 September
2017 increased by 6% year on year to $1,762m. This has been
facilitated by our diverse portfolio, which allows us to grow in
areas in which we see opportunities and pull back in areas where
profitable underwriting is becoming harder to achieve.
Specialty lines, our largest division, achieved strong premium
growth of 12% year on year, writing $925m in the first nine months
of 2017.
In our political, accident and contingency division, the
non-renewal of a large client has reduced premium income from our
US admitted gap medical product by $15m. Our decision to cease
writing business in Australia also had a negative impact on premium
of approximately $10m during the period.
Our reinsurance division experienced a decrease in premium of
11% year on year as we actively reduced the business written by
this division in light of continued rate decreases.
Despite the challenging market conditions faced by many areas of
the marine division, growth of 11% has been achieved. This is
largely a result of increased business volume within the US marine
liability account.
Our performance to the end of September 2017 by business
division is:
Gross premiums Gross premiums written % increase / Q3 2017 Rate change
written (decrease)
30 September 2016
30 September 2017
$m $m % %
----------------------- ---------------------- ----------------------- ---------------------- --------------------
Marine 205 184 11% (4%)
Political, accident &
contingency* 175 197 (11%) (4%)
Property 281 263 7% (1%)
Reinsurance 176 198 (11%) (2%)
Specialty lines 925 824 12% -
----------------------- ---------------------- ----------------------- ---------------------- --------------------
OVERALL 1,762 1,666 6% (1%)
----------------------- ---------------------- ----------------------- ---------------------- --------------------
* This division was previously life, accident and health (LAH)
and political risk and contingency (PCG)
Rates on renewal business decreased by 1% across the portfolio
as a whole. This is reflective of the rating environment for the
first 9 months of 2017, where rates continued to be challenged in
areas such as terrorism, energy and war.
With the high claim activity in the last three months we expect
to benefit from positive rate momentum on catastrophe exposed
business going into the fourth quarter.
Business update
On 12 July 2017, we secured the approval from the Irish
regulatory authorities for our European insurance company based in
Dublin. Beazley Insurance dac will provide access to the European
insurance markets to complement our well-established Lloyd's market
and US platforms.
Claims update
We have updated our view of the natural catastrophe events in
the second half of 2017 to include the California wildfires and
expect claims in the region of $200-300m net of reinsurance with an
impact, at the midpoint of these losses, of $175m on profit before
tax.
Our expectation is that our combined ratio for the full year
2017 will be around 100%.
Investments
As at the end of September our portfolio allocation was as
follows:
30 September 2017 30 September 2016
Assets Allocation Assets Allocation
$m % $m %
Cash and cash
equivalents 496 10.3 502 11.1
Sovereign,
quasi-sovereign
and supranational 1,231 25.5 1,098 24.3
Corporate
debt
* Investment grade
* High yield
2,148 44.5 2,107 46.7
Senior secured 108 2.2 182 4.0
loans
100 2.1 88 2.0
Asset backed
securities
2 - - -
Derivative
asset 7 0.1 (5) -
------- ----------- -------- -----------
Core portfolio 4,092 84.7 3,972 88.1
------- ----------- -------- -----------
Equity linked
funds 211 4.4 115 2.6
Hedge funds 349 7.2 290 6.4
Illiquid credit
assets 177 3.7 129 2.9
------- ----------- -------- -----------
Overall portfolio 4,829 100.0 4,506 100.0
------- ----------- -------- -----------
Total investment return for the nine months to 30 September 2017
was $116.4m, or 3.2% annualised (30 September 2016: $89.0m, 2.6%
annualised). 2017 returns continue to exceed our expectations as
equity markets rally and corporate credit spreads decline.
The weighted average duration of our fixed income portfolio was
2.0 years at 30 September 2017 (30 September 2016: 1.9 years).
ENDS
For further information, please contact:
Beazley plc
Christine Oldridge
+44 (0) 207 6747758
Note to editors:
Beazley plc (BEZ), is the parent company of specialist insurance
businesses with operations in Europe, North America, Latin America
and Asia. Beazley manages six Lloyd's syndicates and, in 2016,
underwrote gross premiums worldwide of $2,195.6 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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