Beazley doubles pre-tax profit in first half

Beazley group released its results for the six months to the end of June on 8 August.

The company has reported a strong profit, at £729m this is very close to double that of the same six-month period in 2023 ($366m). Premium income is up 7%, although across the segments written by the company, rating levels are essentially flat. The group has reported a cumulative rate improvement of 85% since 2019. The combined ratio (see foot of the page for an explanation of combined ratio) improved by 7 percentage points, to an excellent 81%. Beazley has improved the forecast for the full year’s combined ratio to “around 80%” (previous guidance was “in the low 80s”). In both cases, the guidance assumes normal catastrophe losses.

There was a reorganisation of the business in 2023, with the formation of a company in the USA to write excess and surplus lines business. This company has now started underwriting and is gaining traction, especially with buyers that prefer US based insurers.

Although the Crowdstrike incident falls outside the reporting period, Beazley has taken the opportunity to update on impact this has had on the business. The event was the most significant cyber outage the world has experienced to date. Beazley models exposures of this nature and many more severe ones. The incident has produced some claims activity, although not as many claims to Beazley as earlier systemic cyber events. Crowdstrike was not a malicious attack and the patches to repair systems were quickly. This has mitigated loss activity. There is no change to expected loss ratios for the year given the claims arising out of the Crowdstrike incident.

Elsewhere, Beazley remains very excited by the opportunities in property insurance, with rates still increasing and flows of business out of admitted markets into excess and surplus lines markets continuing unabated.

CEO Adrian Cox emphasised that the claims environment is not benign, but businesses such as Beazley which are able to analyse and understand the exposures, including the changing nature of these exposures, are able to navigate the market profitably.

The full results are available here and the analysts presentation slides here.

Members of Lloyd’s advised by Argenta Private Capital Limited participate on three entities managed by Beazley Furlonge, Beazley’s Lloyd’s managing agent; Syndicate 623, a large composite syndicate with particular specialisms in cyber, specialty lines and direct property; Syndicate 5623, a syndicate designed to track Lloyd’s underwriting result with lower than average expenses, and; Syndicate 6107, which writes cyber business emanating from Syndicate 623 and its parallel partner Syndicate 2623.

Beazley plans to release updated forecasts for the syndicates with third party capital on Friday 16^th August. It will provide details of the plans for 2025 underwriting for the three syndicates in early September.

Note on combined ratio: The combined ratio is a measure of insurance company performance, where claims and expenses are expressed as a proportion of premium income. At 100%, an insurer is breaking even from its underwriting operations, and at combined ratios below 100%, the insurer is making an underwriting profit. Under newer accounting standard IFRS 17, companies are required to report combined ratios on a discounted basis (in other words including the impact of the time value of money). Beazley continues to report undiscounted combined ratio alongside the discounted ratio. As syndicates are required to report on an undiscounted basis, this is the version of the combined ratios we report here.