Beazley PLC

Earnings Release • Nov 7, 2013

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RNS Number : 4309S

Beazley PLC

07 November 2013

Press

Release

Beazley plc interim management statement for the 9 months ended 30 September 2013.

Dublin, 7 November 2013

Overview

·      Premium rates on renewal business increased by 1%

·      Premiums increased by 5% to $1,543m (2012: $1,470m)

·      Annualised investment yield of 0.8%

Andrew Horton, Chief Executive Officer, said: 

"Our underwriters have maintained the momentum achieved during the first half of the year with gross written premiums growing by 5%.  Premium rates rose modestly across our portfolio as a whole, but more strongly for specialty lines and property, our two largest divisions, where rate rises averaged 3%."

	30 Sep 2013	30 Sep 2012	% increase
Gross premiums written ($m)	1,543	1,470	5%
Investments and cash ($m)	4,354	4,350	-
Investment return - annualised (%)	0.8%	2.1%	-
Rate increase	1%	3%	-

Premiums

Gross premiums written for the nine months ended 30 September increased by 5% when compared with the equivalent period of 2012. The most significant growth was seen in the reinsurance and the political risks and contingency divisions. Growth in the existing political book and the new political and contingency business through our US offices contributed to this result.

Below is an extract of our performance to the end of September 2013 by business division:

	Gross premiums written 30 Sep 2013	Gross premiums written 30 Sep 2012	% increase / (decrease)	Q3 2013 Rate change
	$m	$m	%	%
Life, accident & health	81	72	13	(1)
Marine	256	251	2	(3)
Political risk & contingency	103	89	16	-
Property	293	297	(1)	3
Reinsurance	214	177	21	(3)
Specialty lines	596	584	2	3
OVERALL	1,543	1,470	5	1

Rate change on renewals is 1% across the portfolio.  We continue to see rate increases on property and specialty lines renewal business.  Further rate reductions have occurred in the marine division due to pressure in the hull and war books.  We have seen a year to date reduction of 3% on renewals in the reinsurance division, caused by a softening in the overall market.

Business update

Our business is on track to deliver its 2013 objectives, with continued investment into our Beazley breach response product, as well as our other new product initiatives. During September we launched Beazley Flight, the most comprehensive emergency evacuation cover on the market, offering specialist services in the event of a claim.

The aviation book is developing in line with our plan, and we are on target to write $25m in our first year.

Claims update

Overall, claims have developed favourably during 2013 and we have only moderate exposure to the floods in Europe during May, the hailstorms in Germany and the floods in Calgary during July. Provided that this experience continues until the year end, we expect to achieve a strong combined ratio, in the mid-eighties.

Investments

Investment income for the nine months to 30 September 2013 was $25.1m, an annualised return of 0.8% (2012: 2.1%). Following the mark to market losses made in the first half we are on track to make an annualised investment return of 1.0% in 2013.

As at the end of September our portfolio allocation was as follows:

	30 Sep 2013		30 Sep 2012
	Assets	Allocation	Assets	Allocation
	$m	%	$m	%
Cash and cash equivalents	613	14.1	776	17.9
Fixed income: sovereign and supranational	2,103	48.3	2,174	50.0
Investment grade credit	1,058	24.3	675	15.5
Other credit	97	2.2	296	6.8
Core portfolio	3,871	88.9	3,922	90.2
Capital growth assets	483	11.1	428	9.8
Overall portfolio	4,354	100.0	4,350	100.0

The weighted average duration of the core portfolio was 22 months at 30 September 2013 (30 September 2012: 22 months) and the weighted average yield to maturity of our core portfolio was 1.3% (30 September 2012: 1.0%).

Capital management

We remain committed to active capital management and we will provide a further update at the year end.

ENDS

For further information, please contact:

Beazley plc

Sian Coope

+353 (0)1 854 4700

Note to editors:

Beazley plc (BEZ.L), is the parent company of specialist insurance businesses with operations in Europe, the US, Asia and Australia.  Beazley manages five Lloyd's syndicates and, in 2012, underwrote gross premiums worldwide of $1,895.9 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

The company news service from the London Stock Exchange

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