Interim Management Statement

RNS Number : 0266D

Beazley PLC

10 May 2012

 



Press

Release

Beazley plc interim management statement for the 3 months ended 31 March 2012.

Dublin, 10 May 2012

Overview

·      Premium rates on renewal business increased by 2%

·      Premiums increased by 9% to $465m (2011: $426m)

·      Estimate of 2011 catastrophe losses, including Thailand, remains unchanged

·      Investment yield of 0.5%

Andrew Horton, Chief Executive Officer, said: 

"The first quarter of the year has seen a number of positive developments, with premium volume and rates up in line with our business plan. After the exceptional events of 2011 - for which our original loss estimates remain unchanged - claims activity has been benign."

	31 Mar 2012	31 Mar 2011	% increase
Gross premiums written ($m)	465	426	9%
Investments and cash ($m)	4,027	3,969	1%
Investment return - annualised (%)	1.9%	0.9%	-
Rate increase/(decrease)	2%	(1%)	-

Premiums

The first three months of 2012 saw increased premiums when compared with the equivalent period of 2011, this was driven by planned growth in life accident and health, political risks and contingency and specialty lines. The increase in the marine division is driven by additional premium in our energy business.

Below is an extract of our performance to the end of March 2012 by business division:

	Gross premiums written 31 Mar 2012	Gross premiums written 31 Mar 2011	% increase / (decrease)	Q1 2012 Rate change
	$m	$m	%	%
Life, accident and health	29	20	45	(1)
Marine	75	62	21	(2)
Political risk and contingency	29	24	21	-
Property	84	80	5	4
Reinsurance	76	78	(3)	3
Specialty lines	172	162	6	2
OVERALL	465	426	9	2

Rate change on renewals is 2% across the portfolio and is in line with our expectations.  Following the 2011 natural catastrophes which affected property and reinsurance, premium rates on renewals have increased by 4% and 3% respectively in these two divisions.  Premium growth in the property division is attributable to this positive rate change.  The reinsurance team achieved strong rate increases in the quarter.

Business update

During the quarter we launched a number of new products in the specialty lines division, specifically in healthcare, directors and officers and technology classes of business.  These include Beazley Breach Response for small businesses and Beazley Global Breach Solutions both of which provide coverage for data breaches and also Beazley Bridge - providing international D&O cover for US domiciled businesses.

On 12 April more than 190 French brokers attended a Beazley reception in Paris as part of re-launching our French presence and products.  We have identified France as a priority growth market in Europe for 2012 and beyond.

Claims update

We are pleased to report that there has been no adverse development in any of our large loss estimates, including Thailand, from those published in our annual report.

The overall level of claims notification since our last results were reported has been lower than average and loss development is as expected. We continue to maintain our reserve strength across the portfolio.

Based on experience to date we expect the target combined ratio for the year to be in line with our historical performance.

Investments

Investment income for the three months to 31 March 2012 was $19.3m, a return of 0.5%. Our expectation for the full year return is in the region of 1.25%.

As at the end of March our portfolio allocation and returns by major asset class was as follows:

	31 Mar 2012			31 Mar 2011
	Assets	Investment return	Annualised return	Assets	Investment return	Annualised return
	$m	$m	%	$m	$m	%
Core portfolio	3,621	13.0	1.5	3,547	1.5	0.2
Capital growth assets	406	6.3	6.1	422	7.0	6.5
Overall return	4,027	19.3	1.9	3,969	8.5	0.9

The weighted average duration of the core portfolio was 18 months at 31 March 2012 (31 March 2011: 13 months) and the weighted average yield to maturity of our overall portfolio was 0.9% (31 March 2011: 0.8%).

Solvency II

The Lloyd's Solvency II 'Dry Run Oversight Panel' (DROP) has assigned  Beazley a green rating which means that they believe that we will be ready for Solvency II provided that we continue to successfully execute on the remainder of our Solvency II programme. 

Capital management

Beazley continues to manage its capital actively as demonstrated by the offer announced today to purchase up to £35m of the group's subordinated debt issuance.

Our $225m letter of credit facility remains undrawn and we have maintained our target capital buffer during the quarter.

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 2011, underwrote gross premiums worldwide of $1,712.5 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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