Beazley plc trading statement for the three months ended 31 March 2019

Andrew Horton, Chief Executive Officer, said: "Beazley started 2019 very positively from a premium growth perspective. However, our marine, property and reinsurance businesses continued to be impacted by higher than normal levels of claims..."

Overview

·      Gross premiums written increased by 16% to $731m (2018: $631m)

·      Premium rates on renewal business increased by 3%

·      Investment return of 2% year to date

Andrew Horton, Chief Executive Officer, said: 

"Beazley started 2019 very positively from a premium growth perspective. However, our marine, property and reinsurance businesses continued to be impacted by higher than normal levels of claims."

Premiums

Gross premiums written for the three months ended 31 March 2019 increased by 16% year on year to $731m. This strong start to the year in an improving rating environment should enable the business to reach double digit growth again in 2019.

From 1 January 2019 our specialty lines division was split into two new divisions, cyber and executive risks and specialty lines. Our new specialty lines division delivered strong premium growth led by our specialty lines international team and our specialty treaty business.

Our cyber and executive risk division saw premiums rise by 19% driven by the growth of cyber business written through our US insurance company. The political, accident and contingency division has also started the year strongly with a number of one-off large risks bound in the first quarter.

Rate change on our short tail businesses was encouraging with the marine division achieving the highest overall rate change at 7%.

Our performance to the end of March 2019 by business division is:

*From 1 January 2019, our specialty lines division has been split into two divisions. One remains under the title of specialty lines, while the other has been named cyber and executive risk. The 2018 gross premiums written have been split to allow comparability with the 2019 figures.

Business update

We are delighted to have welcomed Nicola Hodson and John Reizenstein as non-executive directors of Beazley plc. Both bring a wealth of experience and unique skillsets which will aid Beazley in our next phase of development.

We are pleased to announce that Richard Montminy will join Beazley later this month as the head of our property division, taking over from Mark Bernacki.

Our business is well prepared for all of the perceived eventualities of the Brexit outcome. We have begun transacting business successfully through Lloyd's Brussels and our European Insurance company has written $13m of premium in the first 3 months of 2019.

Claims update

The more active claims environment that we witnessed in 2018 has continued and we have strengthened the reserves in some areas of our short tail business notably in relation to typhoon Jebi, the Woolsey fire and a portfolio of US trucking business within the marine account.

These increases are likely to offset the reserve release from our specialty lines and CyEx businesses in the first half of 2019.

Investments

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

The year to date investment return to 31 March 2019 was $98m, or 2%. This return reflects the particularly supportive investment conditions in the period, as risk assets recovered strongly following the correction at the end of last year, while risk free yields in the US declined, generating capital gains on our fixed income investments.

The weighted average duration of our fixed income portfolio was 1.9 years at 31 March 2019 (31 March 2018: 1.4 years).