Beazley shares gained 8.2% to 516.5p in early morning trading on Friday after the company reported its best HY ratio combined since 2015 of 87% as a result of high underwriting performance.
However, Beazley announced a pre-tax profit decrease to $22.3 million for HY1 2022, compared to $167.3 million in HY1 2021, on the back of investment losses of $193 million across the financial term.
The insurance firm highlighted a 1% return on equity against 15% year-on-year, alongside a 26% gross premiums written increase to $2.5 million from $2 million supported by a buoyant rating environment, with a premium rate change of 18% seen on average across the company.
Beazley confirmed a rate increase on renewal portfolio of 18% against 20% in the previous year.
The group also noted prior year reserve releases of $92.6 million compared to $95.7 million, along with a reserve surplus at 5.9% above actuarial estimates from 6.6%.
“We have maintained the momentum of the second half of 2021 with gross premiums increasing by 26% alongside better than expected claims experience,” said Beazley CEO Adrian Cox.
“A challenging investment environment has impacted profit; however I’m delighted that we have achieved our best combined ratio at a half year since 2015.”
Underwriting team structure
Beazley reported several changes to its underwriting team structure, with four new underwriting divisions created.
The new sectors include cyber risks, led by Paul Bantick, MAP risks, headed by Tim Turner, property risks under the guidance of Richard Montminy, and specialty risks under the management of Bethany Greenwood.
Beazley commented the divisions would be interconnected to operate at scale with the goal of delivering innovation and generating efficiencies to benefit the firm’s clients and brokers.
The group also set up a new digital division under the leadership of Ian Fantozzi, consolidating all the digital business written across Beazley into one segment.
FY 2022 guidance
Beazley commented it would continued to deliver in line with its goals for the remainder of 2022 and beyond, with an expected FY combined ratio in the high 80s, assuming an average claims experience for HY2.
“We continue to manage actively for inflation and recession and our estimate for the war in Ukraine remains unchanged,” said Cox.
“Given the positive experience in the first half of this year we are in a position to update our combined ratio guidance to high 80s for 2022 assuming average claims experience for the second half of the year.”
