Beazley sports London Market’s top hurricane stamina for 2023 season
Beazley and Conduit Re are best positioned amongst London Market names to withstand the impact of a major Atlantic hurricane in 2023, one key equity brokerage is advising its investor clients.
Lancashire and Hiscox, in turn, are looking overweight on Atlantic hurricane risks after running up exposures and don’t have the capital that Beazley still holds in part following a prior capital increase in November 2022.
Beazley may have “significantly increased” exposures to cat-exposed property lines by as much as 40 to 50%, Berenberg estimates, but it also has a bigger balance sheet following the equity raise, keeping its exposure to tangible equity ratio down near 8.9%. Beazley further benefits from scale and diversification versus peers, Berenberg argued for investors.
Conduit Re gets the high hurricane resiliency markets just for its structurally lower lean towards nat cat, evidenced by the lowest probable maximum losses (PML) versus peers.
Lancashire remains “the most geared to Atlantic storms” amongst London Market majors when measuring PMLs to tangible capital, now headed towards 16.5% for the end-2023 equity estimate. That comes even though the group had to slow book growth after the more significant expansion in 2021-22.
Hiscox has also “materially and organically increased its exposure” by an estimated 66%, Berenberg estimated. That put Hiscox ahead of Beazley as a percent of tangible capital at 13.1%.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
