Interim Management Statement

Beazley Group PLC
21 April 2008


Press

Release


Beazley Group plc Interim management statement for the 3 months ended 31st March
2008

London, 21 April 2008


Trading update


The group continues to deliver competitive results and performance is within
expected business plans.



+-----------------------------------+-----------+-----------+----------+
|                                   |           |           |          |
|                                   |           |           |          |
|                                   |31 Mar 2008|31 Mar 2007|% increase|
|                                   |           |           |          |
|                                   |           |           |          |
+-----------------------------------+-----------+-----------+----------+
|Gross premiums written (£m)        |      201.2|      205.0|       (2)|
+-----------------------------------+-----------+-----------+----------+
|Net premiums written (£m)          |      123.6|      125.6|       (2)|
+-----------------------------------+-----------+-----------+----------+
|                                   |           |           |          |
+-----------------------------------+-----------+-----------+----------+
|Investments and cash (£m)          |    1,544.6|    1,326.5|        16|
+-----------------------------------+-----------+-----------+----------+
|Investment return (%) - annualised |       0.5%|       5.3%|         -|
+-----------------------------------+-----------+-----------+----------+
|                                   |           |           |          |
+-----------------------------------+-----------+-----------+----------+
|Rate (decrease)/ increase          |       (6%)|         3%|         -|
+-----------------------------------+-----------+-----------+----------+
|                                   |           |           |          |
+-----------------------------------+-----------+-----------+----------+
|                                   |           |           |          |
+-----------------------------------+-----------+-----------+----------+



Premiums written


During the three month period to 31 March 2008, premiums were consistent with
last year at £201.2m, and in line with expectations. Gross premiums written by
our underwriters at Lloyd's decreased from £192.7m to £171.0m, while our locally
underwritten US business increased from $28.6m to $71.4m. (An element of the US
premium is underwritten for the account of third party capital providers at
Lloyd's and therefore is excluded from the group's figures in the table above.)



Claims management


Claims activity has been in line with expectation. Against the backdrop of
increased market commentary about sub-prime mortgages and related issues, we set
up an internal working party during 2007 tasked with monitoring the risks to and
opportunities for Beazley.  As was demonstrated in the late 1990s, Beazley has
limited appetite for professional liability risks within the financial
institution sector.  This has remained the case. Whilst the number of sub-prime
related lawsuits (as reported recently by Advisen) has now exceeded 250, we
provide D&O coverage for four of these entities and other types of coverage for
a further seven.  We currently expect that our exposure will remain within our
reserves and we do not anticipate a change to our reserving philosophy.



US operations


Our US based operations generated $71.4m of gross premiums written during the
first quarter, of which $32.0m was written for the account of our Lloyd's
syndicates and $39.4m was admitted business written for the account of our
insurance company. We continue to target $250m of premium from our US operations
for the whole of 2008, compared to $175.2m written for the year ended 31
December 2007.



Market conditions and events


The premiums charged for business we renewed fell by 6% across all lines in the
first quarter of 2008. As stated in our annual report, these reductions should
be noted in the context of the previous years' cyclical highs. We are seeing the
most severe rate decreases in our commercial property business where rate
decreases on renewal business were 15%. Our largest business, specialty lines,
has experienced decreases of only 7%. We remain positive about the quality of
the business we are seeing and at this stage have no reason to believe the
market decreases will affect our ability to deliver solid results.



Investment performance


Asset growth remains on track, with group cash and investments having increased
from £1,490.6m at the end of 2007 to £1,544.6m at the end of March 2008.
Investment income during the first quarter of 2008 was impacted by the mark to
market effects of the continued stress in credit markets, resulting in sharp
declines in bid prices for both corporate and asset-backed securities; and by
weak equity markets.  Although we do not believe the prices of these bonds
reflect their ultimate ability to pay off, short term the effect of these price
declines has been to almost completely offset coupon and other investment
income.  The strategy in terms of asset mix and duration is unchanged since the
end of December.  With our managers, we continue to closely monitor events in
the credit markets and maintain a short duration, mainly fixed income,
investment portfolio, while looking for opportunities to enhance returns over
the medium term.



Capital and dividends


The group's capital position remains strong. We are keen to release any excess
capital from the group to shareholders - the final dividend of 4.0p together
with the special dividend of 4.0p per share will be paid on 9 May 2008. This
will result in a total payment of £27.9m.


The share buyback programme that commenced in November 2007 has continued. To
date 10.5m shares representing 2.85% of our share capital have been repurchased
for £16.5m, at an average price of 156.8p per share.



Outlook


Beazley Group Chief Executive Andrew Beazley said:


'Challenging investment market conditions in the first quarter underline the
need for focused and profitable underwriting. From an underwriting perspective
the first quarter has developed as we expected. Our Lloyd's business has become
more competitive and has contracted to a limited extent while the business of
our US operations continues to grow. In this softening market, the diversity of
our business and the experience of our underwriters should continue to serve us
well.'



ENDS





For further information, please contact:

Beazley Group plc

Andrew Beazley

T: [phone]

Andrew Horton

T: [phone]


Finsbury

Simon Moyse

T: [phone]



Note to editors:

Beazley Group, plc (BEZ.L), based in London, is the parent company of global,
specialist insurance businesses with operations in the UK, US, France, Singapore
and Hong Kong.  Beazley manages two Lloyd's syndicates (Syndicate 2623 and
Syndicate 623) with aggregate underwriting capacity in 2008 of £814m (US$1.6bn).
Both syndicates are rated A by A.M. Best. In the US, Beazley's underwriters
focus on writing specialist insurance products in the admitted market, backed by
Beazley Insurance Company, Inc., an admitted carrier in all 50 states; and
surplus lines risks, backed by the Beazley syndicates at Lloyd's. Beazley
Insurance Company, Inc. is rated A by A.M. Best.


Beazley is a market leader in many of its chosen lines, which include
professional indemnity, commercial property, marine, reinsurance, and personal
lines.


For more information please go to: www.beazley.com





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