IMS for 3 months ended 31 March 2014

RNS Number : 5281G

Beazley PLC

08 May 2014

 



Press

Release

Beazley plc interim management statement for the 3 months ended 31 March 2014.

Dublin, 8 May 2014

Overview

·      Overall premium rates on renewal business unchanged

·      Gross written premium of $516m (2013: $518m)

·      Annualised investment yield of 2.1%

Andrew Horton, Chief Executive Officer, said: 

"We were able to achieve rate increases in specialty lines, our largest business, and maintain flat rate overall in spite of increased competitive pressures, particularly in relation to short tail, catastrophe exposed, classes.

We also achieved a good top line performance with gross written premiums in the first quarter flat compared to Q1 2013 and we still expect to achieve moderate full year growth."

	31 Mar 2014	31 Mar 2013	% increase/(decrease)
Gross premiums written ($m)	516	518	-
Investments and cash ($m)	4,280	4,219	1%
Investment return - annualised (%)	2.1%	2.6%	(0.5 %)
Rate increase	-	2%	(2%)

Premiums

Our largest division, specialty lines, wrote $190m in Q1 2014 which represents growth of 3% relative to the same period in the previous year.  The premium drop of 22% in our life, accident and health ("LAH") division was driven by the phasing of a significant renewal which happened in the second quarter. Our reinsurance division, which is operating in an increasingly competitive market with falling rates, wrote an increased portion of its business at the start of the year which has resulted in 3% growth compared to Q1 2013.

Below is an extract of our performance to the end of March 2014 by business division:

	Gross premiums written 31 Mar 2014	Gross premiums written 31 Mar 2013	% increase	Q1 2014 Rate change
	$m	$m	%	%
Life, accident and health	28	36	(22)	(2)
Marine	89	93	(4)	(3)
Political risk and contingency	35	29	21	(3)
Property	80	84	(5)	1
Reinsurance	94	91	3	(7)
Specialty lines	190	185	3	3
OVERALL	516	518	-	-

Rates on renewal business were flat across the portfolio as a whole. Our two largest divisions, specialty lines and property, experienced rate increases of 3% and 1% respectively. As expected, we continue to experience pressure on rates on short-tail, catastrophe exposed classes of business. 

Business update

While Latin America has not historically been a major source of business for Beazley, our recently appointed head of business development in Latin America, Ricardo Ortega, is assisting us in creating opportunities for the company through the Lloyd's Brazil platform.  In conjunction with Paul Felfle, our reinsurance underwriter focused on Latin America, Ricardo led Beazley participation at the third Reinsurance Conference in Rio de Janeiro.

We continue to look for opportunities to expand profitably into new areas and in January 2014 we announced the appointment of Denis Bensoussan to establish a satellite insurance capability within the company. We have also broadened our US healthcare capabilities with the establishment of a life sciences team in Chicago, focusing on areas such as clinical trials and certain biotech and non-invasive medical products liability exposures.

Claims update

The level of claims notifications during the first quarter of 2013 is in line with our expectations.

Investments

Investment income for the three months to 31 March 2014 was $22.3m.

As at the end of March our portfolio allocation was as follows:

	31 Mar 2014		31 Mar 2013
	Assets	Allocation	Assets	Allocation
	$m	%	$m	%
Cash and cash equivalents	389	9.1	308	7.3
Fixed income: sovereign and supranational	1,918	44.8	2,017	47.8
Investment grade credit	1,359	31.8	1,311	31.1
Other credit	101	2.3	96	2.3
Core portfolio	3,767	88.0	3,732	88.5
Capital growth assets	513	12.0	487	11.5
Overall investments	4,280	100.0	4,219	100.0

The annualised investment return for the period was 2.1% (2013: 2.6%). The weighted average duration of the core portfolio was 19 months at 31 March 2014 (31 December 2013: 21 months). Our current target is to achieve a 2% investment yield for the full year.

ENDS

For further information, please contact:

Beazley plc

Sian Coope

 [phone]

Note to editors:Beazley plc (BEZ.L), is the parent company of specialist insurance businesses with operations in Europe, the US, Asia and Australia.  Beazley manages five Lloyd's syndicates and, in 2013, underwrote gross premiums worldwide of $1,970.2 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

 

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