Beazley delivers record profit as CR falls to 71% and property rates rise 22%

Beazley’s profit before tax jumped 115% last year to a record $1.25bn, with the insurance service result, or underwriting profit, up 52% to the same amount. Insurance written premiums (IWP) rose 7% to $5.6bn, with net written insurance premiums (NWIP) up 24% to $4.7bn. The global insurer’s combined ratio was down again to a hugely impressive 71% from 79% last year. IWP rose to $1.35bn from $823m for property risks and to $1.16bn from $603m on a NWIP basis. Beazley said this “standout year” was helped by rate increases of 22%. “This success resulted from hard work over the prior two years, as we stepped back from growth during a period where market conditions were unfavourable. This meant that throughout 2023 we have been able to take up the opportunity in the property market and were rewarded with strong growth in both insurance and reinsurance (treaty) with the property market in the US the significant driver,” it said. “Beyond substantial rate increases, we have tightened terms and conditions and raised attachment points. Importantly, we have ensured that property values have increased to reflect higher inflation,” added Beazley. Its cyber risks team increased IWP a touch to $1.18bn from $1.16bn in 2022. NWIP rose to $913m from $840m. Overall cyber rates were down 5% across the year. Beazley said the cyber “rating spike” from the previous two years stabilised as competition mounted, particularly in the US market. So the insurer said its cyber growth predominantly came from international business, particularly in Europe. It added that the cyber market began to mature last year and address the challenges of systemic cyber risk. “We took a leading position in this with the robust approach we have championed, thus succeeding in bringing much-needed clarity to the existing war exclusions. As we enter 2024, we are seeing broad market consensus,” it said. Beazley’s specialty risks business saw its IWP fall to $1.87bn in 2023 from $1.92bn. NWIP was up to $1.57bn from $1.36bn. Specialty risk rates were down 1% overall as a softening D&O market took effect. “2023 saw the Specialty Risks team continue the diversification of our book by growing strongly across niche specialist lines while managing through a softening market in D&O. This hard work has paid off, leaving the book relatively flat overall,” said Beazley. “The headwinds in D&O – pricing pressure and high competition – saw us actively pull back from risks we considered unsustainably priced and as a result, D&O reduced from 35% of the division’s total IWP to less than 30%. We remain committed to our position in the D&O market, supporting our clients, but have made tough decisions to pull back when pricing is not adequate. We are actively investing in our other product lines where the reward better reflects the risk,” it added. Beazley CEO Adrian Cox said he is “delighted” with the record $1.25bn profit, which enables the firm to launch a share buyback programme of up to $325m. “The strength of Beazley’s expertise-led underwriting and claims management was the driver of the excellent combined ratio we achieved in 2023. We believe that with increased demand for insurance that the accelerating risk environment is creating, as well as an adequate rating environment, we are well positioned to continue successfully growing our business, and I remain confident that Beazley will see strong, long-term performance.”

Beazley delivers record profit as CR falls to 71% and property rates rise 22%

Insurer pulls back from D&O but remains ‘committed’

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