Listed Lloyd's insurer, Beazley plc, has today released an interim management statement for the period ended 20 September 2013. It reports premium volumes up around 5% on the same premium last year and gave guidance on a expected full year combined ratio in the "mid-eighties".

The full report is below

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 at

30 Sep 2013

Gross premiums written at  

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.