Steady as it goes for Beazley H1 results

Insurer Beazley has announced that it made a profit of $158.7 million for the first half of 2017, a six percent increase on the $150.2 million it made in the first six months of 2016.

“Beazley delivered another good performance in the first half, against a backdrop of continuing competition,” said Beazley’s CEO Andrew Horton. “Our US operations performed strongly and our newly authorised Dublin based insurance company will support our growth plans in Europe, where we see opportunities to distribute our specialty products.”

Gross written premiums for the period rose 2 per cent, from $1.124 billion to $1.149 billion, whilst its combined ratio for the first six months of the year remained steady at 90 percent.

The company also reported an increase in investment income. It reported a total of $79.4 million in this area in the first half of 2017, up on the $62.7 million it made in the same period of 2016.

In a statement on its investment results Beazley said: “Investments have been volatile in this period, largely as a result of political uncertainty in the US. Overall however, US sovereign yields are little changed from the beginning of the year whilst credit spreads have continued to narrow and equity markets have risen strongly, reflecting underlying optimism about global economic prospects. As a result, our return in the year to date is higher than we had anticipated, helped by the shift from sovereign to corporate bond investments that we made in 2016 as well as modest additions to our equity exposures in 2016 and 2017. However, 'risk' assets have been rallying for an extended period and are increasingly vulnerable to disappointing economic news.”

According to Beazley, with market conditions for large, catastrophe exposed risks continuing to deteriorate, its specialty lines division, which is less focused on such risks, has been growing as a proportion of its underwriting portfolio. Specialty lines is itself a very diversified book, comprising professional liability, management liability, and environmental business - as well as its cyber insurance practice.

Commenting on the immediate future Beazley said that for as long as current market conditions prevail it expects growth opportunities for its London underwriters, who often specialise in catastrophe exposed risks, to be limited. By contrast, Beazley continues to see attractive growth opportunities across its specialty lines portfolio.

“Demand continues for high quality cyber insurance, a market in which Beazley is very well known,” the company said in a statement. “Regulations concerning the handling of data breaches are tightening: the long awaited General Data Protection Regulation will come into force across the European Union next spring. Also, illustrations of why companies need to have protection continue, most recently with the internationally coordinated WannaCry malware attacks.

“Together these trends continue to drive demand for cyber insurance among businesses of all sizes. Beazley is well equipped to meet this demand. Our Beazley Breach Response product is adapted to the needs of small and mid-sized businesses and Vector, our partnership with Munich Re, helps the world's largest companies build the substantial towers of insurance they are now seeking.”

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