IMS for the three months ended 31 March 2015

RNS Number : 4082M

Beazley PLC

07 May 2015

 

Press

Release

Beazley plc interim management statement for the three months ended 31 March 2015

Dublin, 07 May 2015

Overview

·      Premiums grew by 6% to $546m (2014: $516m)

·      Premium rates on renewal business decreased by 1%

·      Year to date investment yield of 1.0% (2014 full year investment return: 1.9%)

Andrew Horton, Chief Executive Officer, said: 

"We managed to offset the impact of the very competitive trading conditions in many of our lines with growth in specialty lines, particularly our cyber related business and life, accident and health where we have been investing.  Gross premiums written by our underwriters based in the US grew to $147.9m which represents growth of 36% in this business compared to the first quarter of 2014.

"At the end of March 2015, we announced a partnership with Korean Re, a top ten global reinsurer, to develop business together and to establish a special purpose syndicate at Lloyd's, syndicate 6050."

	31 March 2015	31 March 2014	% increase/decrease
Gross premiums written ($m)	546	516	6
Investments and cash ($m)	4,289	4,280	-
Year to date investment return	1.0%	0.5%
Rate (decrease)/increase	(1%)	-

Premiums

Gross premiums written for the three months ended 31 March 2015 grew by 6% to $546m when compared to the equivalent period of 2014. Our largest division, specialty lines, wrote $226m in the period which represents growth of 19% relative to the first three months of 2014.  Our life, accident and health division achieved growth of 28% compared to the first quarter of 2014, primarily driven by growth in business written through our US admitted carrier Beazley Insurance Company, Inc.  The growth achieved in these teams helped offset the impact of the competitive trading environment which continues to be experienced across most lines of business. 

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

	Gross premiums written 31 March 2015	Gross premiums written 31 March 2014	% increase / (decrease)	Q1 2015 Rate change
	$m	$m	%	%
Life, accident & health	36	28	29	(5)
Marine	80	89	(10)	(4)
Political risk & contingency	33	35	(6)	(5)
Property	83	80	4	(1)
Reinsurance	88	94	(6)	(7)
Specialty lines	226	190	19	4
OVERALL	546	516	6	(1)

Rates on renewal business decreased by 1% across the portfolio as a whole.  While specialty lines, our largest division, experienced rate increases of 4% on average, the rating environment remains highly competitive across all our other lines of business.  Rate increases in specialty lines came mainly from parts of our large risk professions portfolio and our technology account.

Business update

We continue to invest in underwriting talent, and in March 2015 we announced that we have appointed Ron Beauregard to head the company's US E&S property team.

At the end of March, Beazley and Korean Re announced a partnership to develop business together and to establish a special purpose syndicate at Lloyd's, syndicate 6050. Under the agreement, syndicate 6050 will write a whole account quota share of Beazley syndicates 623 and 2623 and Beazley will take a quota share of Korean Re's commercial lines book. This equates to a reinsurance swap of approximately $20m in gross premium between Beazley's managed syndicates and Korean Re.

Claims update

The level of claims notifications during the first quarter of 2015 is in line with our expectations.

Investments

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

	31 March 2015		31 March 2014
	Assets	Allocation	Assets	Allocation
	$m	%	$m	%
Cash and cash equivalents	394	9.2	389	9.1
Fixed and floating rate debt securities	3,336	77.8	3,374	78.8
Derivative financial instruments	-	-	4	0.1
Core portfolio	3,730	87.0	3,767	88.0
Equity linked funds	139	3.2	135	3.1
Hedge funds (uncorrelated strategies)	360	8.4	378	8.9
Illiquid credit assets	60	1.4	-	-
Overall portfolio	4,289	100.0	4,280	100.0

Investment income for the three months to 31 March 2015 was $42.5m, representing a year to date investment return of 1.0% (2014 full year investment return: 1.9%) helped by good returns from risk assets and a downward shift in the US rate curve since year end.

The weighted average duration of our core portfolio is 1.6 years at 31 March 2015 (31 December 2014: 1.8 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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