Beazley can be tempted by fast-improving property insurance market

London-listed specialist insurer  Beazley may be ready to jump at opportunities in property insurance and reinsurance which have ripened considerably faster than the group had expected, CEO Adrian Cox (Pictured) has said.

“The opportunity has emerged faster than we originally thought, which is a good thing, and is something we will look to capitalise on,” Cox told his company’s Q3 earnings call.

That opportunity fits his long-standing view that the industry will adjust to the dictates of climate change and create a role for specialty insurance in the property space.

Market sentiment “has moved materially” for property insurance and reinsurance, Cox said. “And we believe that market conditions for the rest of the year and into 2023 are more favourable than we had thought they would be” when the group last spoke to the market this past summer.

“And that will be reflected in our business plan,” Cox said of the plan for 2023.

Revenue guidance for 2023 may be revised up in turn. Beazley had loosely spoken to top line gains in 2023 in the mid-teens. A hard property market could raise that bar.

“I think given the shift we've seen in the property market, there is probably some upside to that moving into next year, if only because rates will be stronger in insurance and reinsurance,” Cox told analysts participating in the call. “There is definitely upside to the mid-teens.”

The opportunity in reinsurance “is probably first,” ahead of the opportunity in primary insurance, Cox said.

Beazley will clearly pay more for its own reinsurance protection in 2023, but the increase in reinsurance rates should serve the broader industry well, Cox argued.

“We do expect to pay more for our reinsurance next year,” Cox said.  He believes that “strong relationships” with a long-standing panel will mean “our programmes will retain their integrity in 2023.”

“While we are planning for the reinsurance world to be a challenging environment next year, properly priced reinsurance and a disciplined reinsurance market is a positive for the industry overall,” Cox said. “It should encourage disciplined behaviour.”

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.