7th Nov 2013 10:29
LONDON (Alliance News) - Beazley PLC Thursday said the value of its gross premiums written increased has increased year-on-year over the first nine months of the year and expects good underwriting profitability in the full-year, so long as the claims environment remains favourable.
Shares in Beazley were up 3.4% at 235.79 pence Thursday morning.
The specialist insurer with operations in Europe, the US, Asia and Australia and the manager of five Lloyd's of London syndicates, also said it is on track to deliver its 2013 objectives, with continued investment into several of its new products.
Beazley said it expects a combined ratio, a measure of underwriting profitability, in the mid-80s for the full-year, so long as the favourable claims environment continues. Given that its combined ratio was 91% for the full-year 2012, this would indicate higher profitability, as a lower combined ratio means less premium is being paid out in claims. Beazley's combined ratio has averaged at 92% over the past five years, according to its 2012 full-year report.
"We have only moderate exposure to the floods in Europe during May, the hailstorms in Germany and the floods in Calgary during July," Beazley said in a statement.
Gross premiums written totalled USD1.54 billion in the first nine months of the year, a 5.0% increase on the GBP1.47 billion written over the corresponding period last year, buoyed by growth in the reinsurance and the political risk & contingency divisions.
Reinsurance gross premiums written increased to USD214 million against USD177 million last year, while the political risk & contingency division rose 16% to USD103 million.
The aviation book is developing in line with plans, on target to write USD25 million in its first year.
"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%," Andrew Horton, chief executive, said in a statement.
Of Beazley's six divisions, only one failed to see an increase in the gross premiums written - Property - which declined 1% to USD293 million, though the division saw rate increases to the tune of 3%. Reinsurance saw rate reclines of 3%, caused by a softening in the overall market.
Beazley said it made USD25.1 million for the first nine months of the year, representing an annualised return of 0.8% compared with the 2.1% reported at this stage in 2012. The insurer said it is on track to make an an annualised investment return of 1.0% in 2013. Investment income for the year ended December 31, 2012, was USD82.6 million, or an annualised return of 2.0%, compared with USD39.3 million or 1.0% over the same period in 2011.
Beazley said it would give a further update on the way it manages its capital at the year end, though it remains committed to active capital management.
Around 48% of Beazley's investments are tied up in fixed income assets.
By Samuel Agini; [email protected]; @samuelagini
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