Beazley plc (LON:BEZ) has announced its trading statement for the three months ended 31 March 2025
Overview
· Insurance written premiums increased by 2% to $1,511m (Q1 2024: $1,483m)
· Net insurance written premiums increased by 1% $1,249m (Q1 2024: $1,239m)
· Premium rates on renewal business decreased by 4% (Q1 2024: 1% increase)
· Investment income of $136m or 1.2% year-to-date (Q1 2024: investment income of $126m or 1.2%)
· Gross IWP growth guidance for the year remains at mid-single digits
· Combined ratio guidance for the year remains at mid-80s on an undiscounted basis
Adrian Cox, Beazley plc Chief Executive Officer, said:
“I am proud of the performance during the quarter. As expected, markets softened in the first three months of the year and we maintained our focus on strong underwriting discipline whilst navigating those conditions.
Our guidance for the year of mid-single digits growth and an undiscounted combined ratio of mid-80s is unchanged. The strength of our diversified product set and platform strategy means we are well positioned to take advantage of any opportunities which may arise, as pricing dynamics evolve in this active claims environment.”
| 31 March 2025 | 31 March 2024 | % increase | |
| Insurance written premiums ($m) | 1,511 | 1,483 | 2% |
| Net insurance written premiums ($m) | 1,249 | 1,239 | 1% |
| Investments and cash ($m) | 11,757 | 10,827 | 9% |
| Year to date investment return | 1.2% | 1.2% | |
| Rate (decrease)/increase | (4)% | 1% |
Premiums
Our performance to the end of March 2025 by business division is as follows:
| Insurance written premiums 31 March 2025 | Insurance written premiums 31 March 2024 | % increase/(decrease) | Year to date rate change | |
| $m | $m | % | % | |
| Cyber Risks | 247 | 253 | (2)% | (8)% |
| Digital | 63 | 63 | 0% | (4)% |
| MAP Risks | 258 | 261 | (1)% | (2)% |
| Property Risks | 482 | 451 | 7% | (6)% |
| Specialty Risks | 461 | 455 | 1% | 0% |
| OVERALL | 1,511 | 1,483 | 2% | (4)% |
The performance in Q1 is impacted by prior year premium estimate updates across a number of our lines. The growth in the quarter is not reflective of our year-end expectations, and we maintain our growth guidance of mid-single digits for the year.
In Cyber Risks, the market remains competitive. We continue to focus on our strong value proposition and underwriting discipline and deploying capital where we see the best risk-reward dynamics. Rate adequacy is strongest outside of North America and we are seeing good growth in Europe. Our view of the long-term opportunities available within Cyber Risks is unchanged.
Geopolitical uncertainty is expected to drive demand within MAP Risks. The Q1 result for MAP is particularly impacted by premium estimate updates and we anticipate strong growth within the division by year-end.
Property Risks continues to deliver growth with rates remaining adequate despite the 6% rate reduction in the first quarter.
Capital markets activity has remained subdued at the start of the year, which impacts growth on certain products within Specialty Risks. We continue to expect growth to be flat to moderate within this division.
Claims
Exposure to California wildfire losses remains around $80m as reported during the 2024 year-end results.
There is no direct claims exposure as a result of the trade tariffs imposed in our political risk, trade credit or specialty book. Increases in tariffs are not insured perils under our policies and we do not cover business interruption losses following these events.
Potential inflationary impacts are embedded within our underwriting and claims processes and are reviewed on an ongoing basis. We currently do not anticipate a significant direct impact on our business.
Insurance finance income and expense (IFIE)
In the first quarter, the change in financial assumptions on the IFIE produced an income. This has been more than offset by both an expense resulting from decreasing yield curves as well as the unwind of discounting credit, resulting in an insurance finance expense of $68m.
Investments
Our portfolio allocation was as follows:
| 31 March 2025 | 31 March 2024 | |||
| Assets | Allocation | Assets | Allocation | |
| $m | % | $m | % | |
| Cash and cash equivalents | 947 | 8.1 | 1,016 | 9.4 |
| Fixed and floating rate debt securities | ||||
| – Government issued | 4,418 | 37.6 | 4,289 | 39.6 |
| – Corporate bonds | ||||
| – Investment grade | 3,800 | 32.3 | 3,683 | 34.0 |
| – High yield | 685 | 5.8 | 625 | 5.8 |
| – Securitised | ||||
| – Collateralised loan obligations | 519 | 4.4 | – | – |
| Syndicate loans | 30 | 0.3 | 36 | 0.3 |
| Derivative financial assets | 26 | 0.2 | 5 | – |
| Core portfolio | 10,425 | 88.7 | 9,654 | 89.1 |
| Equity funds | 375 | 3.2 | 393 | 3.6 |
| Hedge funds | 779 | 6.6 | 580 | 5.4 |
| Illiquid credit assets | 178 | 1.5 | 200 | 1.9 |
| Capital growth assets | 1,332 | 11.3 | 1,173 | 10.9 |
| Total | 11,757 | 100.0 | 10,827 | 100.0 |
Our investment portfolio returned 1.2%, or $136m in the first quarter. Elevated uncertainty driven largely by the trade policy announcements from the US administration in February and March has led to increased volatility and declines in equities, and to a lesser extent, corporate bonds.
Short-dated US risk free yields fell, supporting asset values. Looking ahead, it is likely that financial market volatility will remain for some time. Our investment portfolio is well diversified and allocated relatively conservatively, hence able to withstand the current market environment.
As at 31 March, the average yield of our fixed income investments is 4.4% with an average duration of 1.6 years.
