Last checked at 9 May 2013 07:00
Press
Release
Beazley plc interim management statement for the 3 months ended 31 March 2013.
Dublin, 9 May 2013
Overview
·; Premium rates on renewal business increased by 2%
·; Premiums increased by 11% to $518m (2012: $465m)
·; Annualised investment yield of 2.6%
Andrew Horton, Chief Executive Officer, said:
"We have made a positive start to 2013 with an 11% increase in premium and rates rising across most of our business."
31 Mar 2013 | 31 Mar 2012 | % increase | |
Gross premiums written ($m) | 518 | 465 | 11 |
Investments and cash ($m) | 4,219 | 4,027 | 5 |
Investment return - annualised (%) | 2.6% | 1.9% | - |
Rate increase | 2% | 2% | - |
Premiums
Gross premiums written for the three months ended 31 March increased by 11% when compared with the equivalent period of 2012. Premiums increased in our marine division by 24%, due to growth in the marine liability book and as a result of the new aviation team that started writing business in Q4 2012. Premiums in the reinsurance division saw growth of 20%, largely due to the catastrophe book; and in specialty lines the 8% increase was driven by growth in management liability and in technology and media business.
Below is an extract of our performance to the end of March 2013 by business division:
Gross premiums written
31 Mar 2013 | Gross premiums written
31 Mar 2012 | % increase | Q1 2013 Rate change | |
$m | $m | % | % | |
Life, accident and health | 36 | 29 | 24 | (2) |
Marine | 93 | 75 | 24 | (1) |
Political risk and contingency | 29 | 29 | - | 1 |
Property | 84 | 84 | - | 3 |
Reinsurance | 91 | 76 | 20 | 2 |
Specialty lines | 185 | 172 | 8 | 4 |
OVERALL | 518 | 465 | 11 | 2 |
Rates increased by 2% across the portfolio. The most notable rate increase (4%) is in specialty lines.
Business update
In specialty lines our Beazley Breach Response product has been launched in the UK, France and Italy.
We have made further investment in the reinsurance team with the appointment of a senior underwriter in London as deputy underwriter of the division; the appointment of an underwriter in Singapore; and the recruitment of an experienced individual, based in Miami, to generate business originating out of South America.
Claims update
The level of claims notifications during the first quarter of 2013 is in line with our expectations. We are pleased to announce that there has been no deterioration in our superstorm Sandy loss estimates.
Investments
Investment income for the three months to 31 March 2013 was $26.3m.
As at the end of March our portfolio allocation was as follows:
31 Mar 2013 | 31 Mar 2012
| |||
Assets | Allocation | Assets | Allocation | |
$m | % | $m | % | |
Cash and cash equivalents | 617 | 14.6 | 681 | 16.9 |
Fixed income: sovereign and supranational | 1,708 | 40.5 | 1,867 | 46.4 |
Investment grade credit | 1,311 | 31.1 | 1,047 | 26.0 |
Other credit | 96 | 2.3 | 26 | 0.7 |
Core portfolio | 3,732 | 88.5 | 3,621 | 90.0 |
Capital growth assets | 487 | 11.5 | 406 | 10.0 |
Overall return | 4,219 | 100.0 | 4,027 | 100.00 |
The annualised investment return for the period was 2.6% (2012: 1.9%). The weighted average duration of the core portfolio was 25 months at 31 March 2013 (31 March 2012: 18 months) and the weighted average yield to maturity was 1.0% (31 March 2012: 0.9%).
Capital management
Beazley acquired £26m of its subordinated debt issued in 2006 through its offer in February, leaving £76m of this debt in issue. Our current debt financing needs are met by the remaining subordinated debt and the retail bond issued in 2012 and therefore we did not proceed with the second retail bond issuance we announced in February, despite a strong appetite for such an issuance.
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