Beazley bullish on ‘high 80s’ combined ratio for 2022 as GWP grows 22% YTD

London-listed specialist insurer  Beazley improved its underwriting profitability with solid top line growth over the year to date, despite investment and nat cat losses, and is bullish to hit “high 80s” combined ratio for full year 2022.

The company's chief executive Adrian Cox (pictured) stated that although the overall rates have moderated, the company is seeing increased demand across many lines of business supporting its growth ambitions.

Beazley achieved 22 percent gross premiums written growth year to date to reach $3.98 billion from $3.27 billion reported in the prior year period. It noted that the growth was seen across all divisions, with cyber risk seeing the largest increase.

Beazley said premium rates on renewal business increased by 17 percent in the third quarter, compared with 23 percent in Q3 2021.

It reported cyber risk rate increases of 51%, albeit with some moderation in Q3. "We have been taking advantage of new business opportunities and have put more exposure on the book this year, as planned, resulting in premium growth of 66%. We expect continued growth into 2023 and beyond," Beazley said in its earnings statement.

The carrier saw increases of 16 percent in digital, 10 percent in property risk and 3 percent in specialty risks year to date.

The total natural catastrophes so far this year have been “within the margins held in our reserves”, including an initial Hurricane Ian estimate of around $120m net of reinsurance.

The insurer suffered a mark to market investment loss of $289 million or 3.6 percent in the first nine months of 2022, including $96 million or 1.2 percent in the third quarter.

Beazley said the loss was a result of “unprecedented” increase in interest rates in the first nine months of the year.

Commenting on the results, Cox said: “We have had a strong underwriting performance over the quarter with all divisions continuing to grow.

“Whilst mark to market losses have occurred due to rising yields in our fixed income portfolio, rising yields also mean we anticipate significant future investment returns.”

He added: “We remain confident of our guidance of high 80s combined ratio assuming claims experience is as expected for the remainder of the year.”

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