TIDMBEZ
RNS Number : 7913E
Beazley PLC
11 May 2017
Press
Release
Beazley plc trading statement for the three months ended 31
March 2017
London, 11 May 2017
Overview
-- Gross premiums written reduced by 2% to $573m (2016: $583m)
-- Premium rates on renewal business decreased by 1%
-- Year to date investment return of 0.9%
Andrew Horton, Chief Executive Officer, said:
"In February we announced the acquisition of Creechurch
Underwriters in Canada, expanding our specialty lines presence in
that country. This forms part of our longer term strategy to
develop our non-US specialty lines business, in parallel with our
continuing growth in the US.
Our first quarter premium and investment income numbers
represent a solid start to 2017."
31 March 31 March %(decrease)/
2017 2016 increase
------------------------- --------- --------- -------------
Gross premiums written
($m) 573 583 (2)
------------------------- --------- --------- -------------
Investments and
cash ($m) 4,551 4,329 5
------------------------- --------- --------- -------------
Year to date investment
return 0.9% 0.7%
------------------------- --------- --------- -------------
Rate decrease (1%) (1%)
------------------------- --------- --------- -------------
Premiums
Gross premiums written for the three months ended 31 March 2017
reduced by 2% to $573m when compared to the equivalent period of
2016.
Specialty lines, our largest division, achieved premium growth
of 6% year on year, writing $277m in the first three months of
2017. In Q1 2016, the division had a one-off premium related to the
acquisition of an international healthcare portfolio and, that
aside, continues to achieve double digit growth. Excluding the
impact of this one-off premium, the group's gross premiums written
have increased 5% year on year at constant exchange rates.
Our performance to the end of March 2017 by business division
is:
Gross premiums Gross premiums % increase / Q1 2017 Rate change
written written (decrease)
31 March 2017 31 March 2016
$m $m % %
Marine 69 74 (7) (3)
Political, accident &
contingency* 59 78 (24) (4)
Property 84 81 4 (1)
Reinsurance 84 89 (6) (2)
Specialty lines 277 261 6 1
---------------------- ---------------------- ---------------------- ---------------------- --------------------
OVERALL 573 583 (2) (1)
---------------------- ---------------------- ---------------------- ---------------------- --------------------
* This division was previously life, accident and health (LAH)
and political risk and contingency (PCG)
In political, accident and contingency, premium income from our
US admitted gap medical product decreased by $15m following a
regulatory change which resulted in the non-renewal of one large
client in January 2017.
Rates on renewal business decreased by 1% across the portfolio
as a whole. The rating environment remains very challenging,
particularly in areas such as terrorism, war and catastrophe
exposed lines. Specialty lines saw rates on renewal business
increase by 1% overall in the first quarter of the year, with the
main rate increases coming from our private enterprise
business.
Business update
From 1 January 2017 we have decided to bring our life, accident
and health (LAH) and political risks and contingency (PCG)
divisions together to create a larger combined trading division,
political, accident and contingency (PAC). By bringing these
trading divisions together we are hoping to build upon the
synergies between these two lines of business and to enhance
natural cross-selling opportunities.
In February we acquired Creechurch Underwriters, a specialist
managing general agent based in Canada. Since its founding,
Creechurch has built a strong reputation for providing tailored
insurance programmes to small and medium enterprises in a range of
industries and professions. This acquisition is the foundation for
Beazley Canada, which we plan to develop in the coming years.
We continue to make good progress with our application to obtain
approval from the Central Bank of Ireland for Beazley Re dac to
become a European insurance company.
Claims update
In the absence of any major natural catastrophe losses before 30
June 2017, we expect our combined ratio for the first half of the
year to be broadly in line with our long term average.
Investments
As at the end of March our portfolio allocation was as
follows:
31 March 2017 31 March 2016
Assets Allocation Assets Allocation
$m % $m %
Cash and cash
equivalents 472 10.3 474 10.9
Sovereign,
quasi-sovereign
and supranational 1,042 22.9 1,433 33.1
Corporate
debt
* Investment grade
* Non-investment grade 2,266 49.8 1,722 39.7
88 1.9 76 1.8
Senior secured
loans
Asset backed 94 2.1 86 2.0
securities
5 0.1 7 0.2
Derivative
asset 3 0.1 - -
------- ----------- -------- -----------
Core portfolio 3,970 87.2 3,798 87.7
------- ----------- -------- -----------
Equity linked
funds 118 2.6 97 2.2
Hedge funds 320 7.0 331 7.7
Illiquid credit
assets 143 3.2 103 2.4
------- ----------- -------- -----------
Overall portfolio 4,551 100.0 4,329 100.0
------- ----------- -------- -----------
Investment income for the three months to 31 March 2017 was
$42.5m, or 0.9% (2016 full year investment return: $93.1m, 2.0%).
This outcome is ahead of our expectations as declining corporate
credit spreads and rising equity markets have generated capital
gains on our investments in this period.
The weighted average duration of our fixed income portfolio was
1.9 years at 31 March 2017 (31 December 2016: 1.2 years).
ENDS
For further information, please contact:
Beazley plc
Christine Oldridge
+44 (0) 207 6747758
Note to editors:
Beazley plc (BEZ), is the parent company of specialist insurance
businesses with operations in Europe, North America, Latin America,
Asia, the Middle East and Australia. Beazley manages six Lloyd's
syndicates and, in 2016, underwrote gross premiums worldwide of
$2,195.6 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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