Beazley Q1 2024 trading update

Beazley provides report on first quarter performance

Adrian Cox, CEO of Beazley, presented an update on the 2024 first quarter performance. He confirmed that Beazley reported insurance written premiums of $1.48 billion for the first quarter of 2024, up 7% from the previous year, driven by a 26% increase in property premiums following the launch of a new division. He anticipates continued strength in its property segment premium growth due to increasingly complex risks driving demand through its core Excess & Surplus (“E&S” – see jargon buster below) channels. There are expectations for further opportunities in the current year, supported by positive rate changes. While increased competition has emerged in the property market, Beazley remains confident in its comparative advantage, focusing on specialist insurers in excess and surplus lines. As we reported on last year, the company has established an E&S carrier in the US to capture local business directly. The shift towards E&S channels persists as property risks become more intricate, influenced by factors such as inflation, exposure growth, and climate change.

However, their cyber portfolio contracted by 10% due to changes in premium recognition and distribution patterns. Despite this, Beazley remains confident in the growth potential of cyber insurance and anticipates moderate growth in 2024. Other factors affecting the market include a competitive D&O market and geopolitical influences on specialty and MAP (Marine, Aviation, Political) risks. Investment income stood at $126 million showing an improved position from last year with a yield of 4.6%. Claims experience during the quarter was within expected levels, and Beazley maintains its guidance for a low-80s combined ratio and high single-digit gross insurance written premium growth for 2024.

Cox expressed confidence in the company's ability to deliver on growth targets amidst changing market conditions.

The Argenta view on the trading statement is that whilst it is positive, it is early on in the development of the 2024 year of account and follows closely behind the full year 2023 report. In that sense, it does not provide in depth analysis but from what Adrian Cox said, it is currently in line with its forecasts. His own statement was relatively short and provided brief overviews of the key business classes where he emphasised, as mentioned above, that Beazley is on target at this stage to deliver on its targets.

Jargon buster – insurance in the USA is highly regulated. Insurers need to be licenced by the insurance commissioner of a state to operate as an admitted insurer. There is little flexibility for an admitted insurer to change rates, policy wordings or to non-renew business. Also admitted insurers contribute to a guarantee fund to cover the bankruptcy of a competitor. Many risks are unable to find cover in the admitted market and need to seek alternatives in what is called the excess and surplus lines market. This is still highly regulated, but offers insurers greater freedom of policy form, price and deductible. Lloyd’s syndicates are the largest insurers of excess and surplus lines business in the USA. Beazley formed a new E&S insurer under project Go West, where members of Syndicate 623 were compensated for the transfer of the renewal book of Beazley USA business with an increase in other lines including marine, aviation and political risks.