Net written premiums saw double digit growth
By Kenneth Araullo
Beazley has disclosed its financial position for the nine-month period ending September 30.
The specialist insurance group underlined the strong financial performance with insurance written premiums rising 9% to $4.325 billion, reflecting an upward trajectory from the $3.978 billion reported in the same period last year. Additionally, the company has seen a 26% increase in net written premiums, which now stand at $3.532 billion, up from $2.8 billion last year.
The property insurance area of Beasley’s portfolio also saw a significant jump, with premiums increasing by 63%, and rates increasing by 24%. The renewal business also grew, albeit at a more slow pace, with premium rates increasing by 5%, in contrast to the 17% increase seen in the third quarter of 2022.
Beasley’s investment income has also seen a positive turnaround, coming in at $202 million or 2.1% year to date, reversing a loss of $99 million or 3.6% in the comparable period last year.
The company has guided that the combined ratio on an undiscounted basis will remain in the low 80s for the full year of 2023. The company’s growth on a net basis is estimated to be in the mid-20s, which is in line with the growth experienced. date.
Beasley’s performance in all segments
In the cyber risk segment, despite a moderate rate reduction in 2023, the current pricing level is considered adequate, especially against the backdrop of significant rate increases that have occurred since 2019. While the US mid-market shows promise for growth, competition has increased especially in the SME sector, leading to more moderate growth rates in the US. However, the company has seen substantial growth in other areas where market penetration rates are lower.
The expertise of Beasley’s marine, aviation and political (MAP) risk division has translated into a 7% increase in rates. Although there has been a significant reduction in insurance written premiums due to Syndicate 5623 now underwriting the portfolio business, which is mostly supported by third party capital, net premium growth remains unaffected.
Property risk has been a highlight for Beazley, which has benefited from exceptional market conditions and achieved 63% year-on-year growth in this sector. These favorable conditions are projected to extend through 2024.
The specialty risk sector faces continued competition, impacting performance in the directors and officers (D&O) market. Beasley is maintaining a strict underwriting approach in areas where rate adequacy is not met.
With respect to claims, Beasley experienced better-than-expected results year-over-year, with total natural disaster-related claims falling within reserve margins. Despite the increase in ransomware attacks, the frequency of claims for cyber risks has not seen an increase. The ongoing Middle Eastern conflict is being monitored, but so far, Beasley said he does not expect it to have any impact on full-year results.
On the capital front, Beasley aims to maintain a Solvency II ratio that exceeds 170% of the Solvency Capital Requirement. Capital levels are to be adjusted taking into account growth opportunities, the market environment, the regulatory framework and the intention to maximize investor returns.
“The insurance business is cyclical and market conditions are rapidly evolving. We have chosen to follow underwriting discipline, which means growth to date has been less than we had planned at the beginning of the year. However, our agile underwriting and the strength of our platform strategy means we have delivered profitable growth to date and our claims experience is better than anticipated,” said Adrian Cox, CEO of Beazley.
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