IMS for the nine months ended 30 September 2015

RNS Number : 4589F

Beazley PLC

12 November 2015

 

Press

Release

Beazley plc trading statement for the nine months ended 30 September 2015

Dublin, 12 November 2015

Overview

·      Premiums grew by 6% to $1,638m (2014: $1,546m)

·      Premium rates on renewal business decreased by 2%

·      Claims experience continues to be favourable

·      Year to date investment yield of 1.1% (2014 full year investment return: 1.9%)

Andrew Horton, Chief Executive Officer, said: 

"We are pleased to have achieved premium growth of 6% to date this year by identifying attractive opportunities in a market that continues to be highly competitive for many lines of business.  In particular, we have continued to see strong growth in our US specialty lines business, serving the professional liability and management liability needs of mid-sized and small organisations."

	30 September 2015	30 September 2014	% increase/decrease
Gross premiums written ($m)	1,638	1,546	6
Investments and cash ($m)	4,425	4,410	-
Year to date investment return	1.1%	1.4%	-
Rate decrease	2%	1%	-

Premiums

Gross premiums written for the nine months ended 30 September 2015 rose by 6% compared to the equivalent period of 2014 (9% at constant exchange rates).  This growth was driven by specialty lines, our largest division, which grew by 19% to write premiums of $748m (2014: $627m).  This growth in specialty lines continued to help us to offset the highly competitive market conditions for other lines. We continued to experience strong growth in our locally underwritten US business, with premiums written increasing 22% compared to the first nine months of 2014.

Our performance to the end of September 2015 by business division is:

	Gross premiums written 30 Sept 2015	Gross premiums written 30 Sept 2014	% increase / (decrease)	Q3 2015 Rate change
	$m	$m	%	%
Life, accident & health	103	110	(6)	(2)
Marine	216	254	(15)	(9)
Political risk & contingency	94	89	6	(5)
Property	282	269	5	(4)
Reinsurance	195	197	(1)	(8)
Specialty lines	748	627	19	2
OVERALL	1,638	1,546	6	(2)

The overall renewal rate reduction for the first nine months of the year was 2%.  Premium rates on renewal business for specialty lines increased by 2% in the period which helped offset the rate reductions seen in our five other divisions.  For short tail, catastrophe-exposed business, the influx of capital and low incidence of major insured natural catastrophe losses continue to drive a highly competitive trading environment.

Business update

We have continued to invest in our underwriting teams, including an expansion of our Beazley Breach Response services and the creation of a new team to focus on the media industry.  We have also expanded our product offerings to the healthcare industry and in the data breach market.

As we announced in September, we have joined forces with other Lloyd's syndicates managed by Aspen and Brit Global Specialty to launch the International Cyber Consortium.  The consortium will focus on providing robust data breach cover to businesses domiciled outside the United States with revenues in excess of $5 billion.

Claims update

During 2015, prior year claims have developed favourably and catastrophe claims have continued below normalised levels. Provided that this experience continues until the end of the year, we expect to achieve a combined ratio better than our long term average.

Investments

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

	30 Sept 2015		30 Sept 2014
	Assets	Allocation	Assets	Allocation
	$m	%	$m	%
Cash and cash equivalents	451	10.2	313	7.1
Sovereign, quasi-sovereign and supranational	1,972	44.6	1,909	43.3
Asset backed securities Corporate debt -     Investment grade -     Non-investment grade Derivative financial instruments	60 1,194 191 3	1.3 27.0 4.3 0.1	409 1,073 163 5	9.3 24.3 3.7 0.1
Core portfolio	3,871	87.5	3,872	87.8
Equity linked funds	137	3.1	138	3.1
Hedge funds (uncorrelated strategies)	332	7.5	362	8.2
Illiquid credit assets	85	1.9	38	0.9
Overall portfolio	4,425	100.0	4,410	100.0

Investment income for the nine months to 30 Sept 2015 was $50.3m, representing a year to date investment return of 1.1% (2014 full year investment return: 1.9%). In the third quarter, the investment return was small, but positive, at 0.1% reflecting widening credit spreads on our corporate debt exposures and a significant correction in global equity markets.  Investment returns are likely to remain volatile in the final quarter of 2015.  The weighted average duration of our fixed income portfolio was 1.4 years at 30 September 2015 (30 June 2015: 1.4 years). 

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, Latin America, Asia, the Middle East and Australia.  Beazley manages six Lloyd's syndicates and, in 2014, underwrote gross premiums worldwide of $2,021.8 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

 

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