Specialty business buoys Beazley in Q1 against 'challenging' backdrop
Gross written premiums (GWP) at Beazley shrank slightly in the first quarter as the company bemoaned a “very challenging” rating environment but there was good news on its specialty book which both grew and enjoyed rate increases.
The company’s overall GWP reduced by 2 percent to $573 million in the first quarter when compared to the equivalent period of 2016. It noted that rates on renewal business decreased by 1 percent across the portfolio as a whole stressing that the rating environment remains very challenging, particularly in areas such as terrorism, war and catastrophe exposed lines.
In specialty lines, however, its largest division, the company achieved premium growth of 6 percent year on year, writing $277 million in the first three months of 2017. It noted that in Q1 2016, the division had a one-off premium related to the acquisition of an international healthcare portfolio and, that aside, continues to achieve double digit growth.
“Excluding the impact of this one-off premium, the group’s gross premiums written have increased 5 percent year on year at constant exchange rates,” it said.
In terms of rates generally, the company said: “Rates on renewal business decreased by 1 percent across the portfolio as a whole. The rating environment remains very challenging, particularly in areas such as terrorism, war and catastrophe exposed lines. Specialty lines saw rates on renewal business increase by 1 percent overall in the first quarter of the year, with the main rate increases coming from our private enterprise business.”
It also noted a couple of important strategic decisions the company has taken.
From 1 January 2017 it brought its life, accident and health (LAH) and political risks and contingency (PCG) divisions together to create a larger combined trading division, political, accident and contingency (PAC).
“By bringing these trading divisions together we are hoping to build upon the synergies between these two lines of business and to enhance natural cross-selling opportunities,” it said.
And in February it acquired Creechurch Underwriters, a specialist managing general agent based in Canada. “This acquisition is the foundation for Beazley Canada, which we plan to develop in the coming years,” it said.
It also noted that it continues to make good progress with our application to obtain approval from the Central Bank of Ireland for Beazley Re dac to become a European insurance company.
Andrew Horton, chief executive, said: “In February we announced the acquisition of Creechurch Underwriters in Canada, expanding our specialty lines presence in that country. This forms part of our longer term strategy to develop our non-US specialty lines business, in parallel with our continuing growth in the US.
“Our first quarter premium and investment income numbers represent a solid start to 2017.”
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