IMS for the three months ended 31 March 2016

RNS Number : 2886X

Beazley PLC

05 May 2016

 

Press

Release

Beazley plc trading statement for the three months ended 31 March 2016

London, 5 May 2016

Overview

·      Premiums grew by 7% to $583m (2015: $546m)

·      Premium rates on renewal business decreased by 1%

·      Year to date investment return of 0.7%

Andrew Horton, Chief Executive Officer, said: 

"The continued expansion of our underwriting teams, including a London based small business team focusing on healthcare professional liability business, helped us to grow our top line by 7% in the first quarter of the year, despite the continued competitive market conditions which have characterised recent periods.

We are delighted that our shareholders approved the scheme of arrangement to revise our structure and the group is now run from the UK." 

	31 March 2016	31 March 2015	% increase
Gross premiums written ($m)	583	546	7
Investments and cash ($m)	4,329	4,289	1
Year to date investment return	0.7%	1.0%
Rate decrease	(1%)	(1%)

Premiums

Gross premiums written for the three months ended 31 March 2016 grew by 7% to $583m when compared to the equivalent period of 2015.

Specialty lines, our largest division, achieved premium growth of 15% year on year, writing $261m in the first three months of 2016. The acquisition of the portfolio underwritten by our new healthcare small business team contributed a one-off $30m of gross premiums in the first quarter.  Our life, accident and health division has also experienced growth in the US and Australia thus far in 2016.

Our performance to the end of March 2016 by business division is:

	Gross premiums written 31 March 2016	Gross premiums written 31 March 2015	% increase / (decrease)	Q1 2016 Rate change
	$m	$m	%	%
Life, accident & health	48	36	33	(3)
Marine	74	80	(7)	(5)
Political risk & contingency	30	33	(9)	(4)
Property	81	83	(2)	(2)
Reinsurance	89	88	1	(5)
Specialty lines	261	226	15	2
OVERALL	583	546	7	(1)

Rates on renewal business decreased by 1% across the portfolio as a whole.  The rating environment remains highly competitive, particularly in relation to large risk and catastrophe exposed lines of business.  Speciality lines saw rates on renewal business increase by 2% overall in the first quarter of the year, with the main rate increases coming from our technology lines of business and our small business teams.

Business update

We continue to be an attractive employer and have grown our underwriting teams in most geographies in addition to adding the new underwriting team mentioned above to our London office. 

Our shareholders approved a scheme of arrangement in March. This was executed in April, resulting in the movement of our domicile to the UK.  As communicated previously, this re-organisation will have no material effect on the strategy or financial performance of the group.

Claims update

The level of claims notifications during the first quarter of the year continued to be encouraging and the group expects the combined ratio for the first half of 2016 to be better than average if this claims trend continues until 30 June.

Investments

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

	31 March 2016		31 March 2015
	Assets	Allocation	Assets	Allocation
	$m	%	$m	%
Cash and cash equivalents	474	10.9	394	9.2
Sovereign, quasi-sovereign and supranational	1,433	33.1	1,729	40.3
Corporate debt -     Investment grade -     Non-investment grade Senior secured loans Asset backed securities	1,722 76 86 7	39.7 1.8 2.0 0.2	1,077 74 106 350	25.1 1.7 2.5 8.2
Core portfolio	3,798	87.7	3,730	87.0
Equity linked funds	97	2.2	139	3.2
Hedge funds	331	7.7	360	8.4
Illiquid credit assets	103	2.4	60	1.4
Overall portfolio	4,329	100.0	4,289	100.0

Investment income for the three months to 31 March 2016 was $29.6m, or 0.7% (2015 full year investment return: $57.6m, 1.3%). This is a good outcome in the context of low yields and volatile financial markets. The return was driven by falling yields on our fixed income investments and the continued good performance of the hedge fund portfolio.

The weighted average duration of our fixed income portfolio was 1.5 years at 31 March 2016 (31 December 2015: 1.7 years). 

 

ENDS

For further information, please contact:

Beazley plc

Christine Oldridge

[phone]

Note to editors:

Beazley plc (BEZ), 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 2015, underwrote gross premiums worldwide of $2,080.9 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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