Trading statement for 9 months ended 30 Sept 17
Press
Release
Beazley plc trading statement for the nine months ended 30 September 2017
London, 9 November 2017
Overview
· Gross premiums written increased by 6% to $1,762m (2016: $1,666m)
· Premium rates on renewal business decreased by 1%
· Year to date investment return of 2.4%
Andrew Horton, Chief Executive Officer, said:
"The third quarter of 2017 was defined by the high frequency and severity of natural catastrophes. Beazley is in the catastrophe insurance business and paying natural catastrophe claims is part of what we do. Our focus is currently on providing the support and resources necessary to help our policyholders recover as quickly as possible.
These events will naturally affect our full year results but our diverse underwriting portfolio continues to serve us well. We also expect to see rate increases across some lines of business in the coming months."
|
|
30 September 2017 |
30 September 2016 |
% increase |
|
Gross premiums written ($m) |
1,762 |
1,666 |
6 |
|
|
|
|
|
|
Investments and cash ($m) |
4,829 |
4,506 |
7 |
|
|
|
|
|
|
Year to date investment return |
2.4% |
2.0% |
|
|
|
|
|
|
|
Rate decrease |
(1%) |
(2%) |
|
Premiums
Gross premiums written for the nine months ended 30 September 2017 increased by 6% year on year to $1,762m. This has been facilitated by our diverse portfolio, which allows us to grow in areas in which we see opportunities and pull back in areas where profitable underwriting is becoming harder to achieve.
Specialty lines, our largest division, achieved strong premium growth of 12% year on year, writing $925m in the first nine months of 2017.
In our political, accident and contingency division, the non-renewal of a large client has reduced premium income from our US admitted gap medical product by $15m. Our decision to cease writing business in Australia also had a negative impact on premium of approximately $10m during the period.
Our reinsurance division experienced a decrease in premium of 11% year on year as we actively reduced the business written by this division in light of continued rate decreases.
Despite the challenging market conditions faced by many areas of the marine division, growth of 11% has been achieved. This is largely a result of increased business volume within the US marine liability account.
Our performance to the end of September 2017 by business division is:
|
|
Gross premiums written
30 September 2017
|
Gross premiums written
30 September 2016
|
% increase / (decrease) |
Q3 2017 Rate change |
|
|
$m |
$m |
% |
% |
|
|
|
|
|
|
|
Marine |
205 |
184 |
11% |
(4%) |
|
Political, accident & contingency* |
175 |
197 |
(11%) |
(4%) |
|
Property |
281 |
263 |
7% |
(1%) |
|
Reinsurance |
176 |
198 |
(11%) |
(2%) |
|
Specialty lines
|
925 |
824 |
12% |
- |
|
OVERALL |
1,762 |
1,666 |
6% |
(1%) |
* This division was previously life, accident and health (LAH) and political risk and contingency (PCG)
Rates on renewal business decreased by 1% across the portfolio as a whole. This is reflective of the rating environment for the first 9 months of 2017, where rates continued to be challenged in areas such as terrorism, energy and war.
With the high claim activity in the last three months we expect to benefit from positive rate momentum on catastrophe exposed business going into the fourth quarter.
Business update
On 12 July 2017, we secured the approval from the Irish regulatory authorities for our European insurance company based in Dublin. Beazley Insurance dac will provide access to the European insurance markets to complement our well-established Lloyd's market and US platforms.
Claims update
We have updated our view of the natural catastrophe events in the second half of 2017 to include the California wildfires and expect claims in the region of $200-300m net of reinsurance with an impact, at the midpoint of these losses, of $175m on profit before tax.
Our expectation is that our combined ratio for the full year 2017 will be around 100%.
Investments
As at the end of September our portfolio allocation was as follows:
|
|
30 September 2017 |
30 September 2016 |
||
|
|
Assets |
Allocation |
Assets |
Allocation |
|
|
$m |
% |
$m |
% |
|
Cash and cash equivalents |
496 |
10.3 |
502 |
11.1 |
|
Sovereign, quasi-sovereign and supranational |
1,231 |
25.5 |
1,098 |
24.3 |
|
Corporate debt - Investment grade - High yield
Senior secured loans
Asset backed securities
Derivative asset |
2,148
108
100
2
7 |
44.5
2.2
2.1
-
0.1 |
2,107
182
88
-
(5) |
46.7
4.0
2.0
-
- |
|
Core portfolio |
4,092 |
84.7 |
3,972 |
88.1 |
|
Equity linked funds |
211 |
4.4 |
115 |
2.6 |
|
Hedge funds |
349 |
7.2 |
290 |
6.4 |
|
Illiquid credit assets |
177 |
3.7 |
129 |
2.9 |
|
Overall portfolio |
4,829 |
100.0 |
4,506 |
100.0 |
Total investment return for the nine months to 30 September 2017 was $116.4m, or 3.2% annualised (30 September 2016: $89.0m, 2.6% annualised). 2017 returns continue to exceed our expectations as equity markets rally and corporate credit spreads decline.
The weighted average duration of our fixed income portfolio was 2.0 years at 30 September 2017 (30 September 2016: 1.9 years).
ENDS
For further information, please contact:
Beazley plc
Christine Oldridge
+44 (0) 207 6747758
Note to editors:
Beazley plc (BEZ), is the parent company of specialist insurance businesses with operations in Europe, North America, Latin America and Asia. Beazley manages six Lloyd's syndicates and, in 2016, underwrote gross premiums worldwide of $2,195.6 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
This information is provided by RNS
Latest directors dealings
- 12 hours ago Savannah Energy
- 13 hours ago Buccaneer Energy PLC
- 14 hours ago Savannah Energy
- 14 hours ago Carclo
- 14 hours ago Schroder Japan Growth Fund