Beazley reports 12% rise for gross written premiums in 2019 half year results

Beazley reported “ strong premium growth” and margins in many lines of business that looked “healthier than they have in some years” as the firm published its 2019 six months results.

The specialist insurer said gross written premiums had increased 12 percent to $1.48 billion for the first six months in 2019 up from $1.32 billion for the sixth month period ended 30 June 2018. This growth was supported by rate rises averaging 5 percent across the firm’s whole portfolio.

Net written premiums grew 11 percent to $1.22 billion from $1.1 billion for the first half years of 2019 and 2018 respectively, however, the combined ratio rose from 95 percent to 100 percent.

The company also reported profit before tax had grown 189 percent to $166.4 million in 2019 up from $57.5 million for the first six months of 2018.

Andrew Horton, chief executive, said: "Beazley achieved strong premium growth of 12 percent in the first half of the year. Claims concentrated largely in our marine and reinsurance divisions drove our combined ratio to 100 percent, but premium rates have adjusted accordingly and margins in many lines of business now look healthier than they have in some years. We expect to achieve double digit growth over the full year, while continuing to reserve prudently.

"Our investment return was 3.3 percent for the first half of 2019, with nearly all asset classes performing strongly. Investment returns are expected to be lower in the second half of the year."

In the company's interim statement it said the pretax profit was “buoyed by a strong investment return” but it added that the insurer’s underwriting result was “impacted by reserve strengthening in our shorter tail classes as well as continuing to open our medium tail classes at a higher loss ratio”.

“The scale of claims we have seen has limited our scope for reserve releases, which were $3.4 million in the first half of the year (2018: $48.1 million). With cumulative rate rises of 8 percent across our business in the past two years and double digit rate rises in many lines of business, we see an opportunity for prudent profitable growth that should make larger releases possible in years to come.

“The past nine months have seen a material change in sentiment in our market as heavy claims in numerous lines of business have driven prices higher. In September last year, our 2019 business plan envisaged rate rises well below what we have actually seen in the first half of the year. We accordingly see opportunities for growth in lines of business such as marine and aviation, as well as property, where margins now look healthier than they have been for some years. Within the Lloyd's market, upward pressure on rates has been boosted by the market-wide initiative to remediate lines of business that had underperformed for several years.

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