Beazley shares rise as underwriter of Lloyd’s of London is boosted by ‘excellent and sustained’ property market conditions
- Beazley reported that the level of gross written premiums increased by 12%
- Premiums in the company’s real estate risk division rose 56% to $347 million
Beazley has maintained annual earnings expectations after the insurer posted a healthy increase in written premiums in the first quarter of the year.
Lloyd’s of London’s gross written premiums rose 12 percent to $1.37 billion in the first three months of the year.
This was supported by premiums in the company’s real estate risk division rising 56 percent to $347 million, while rising 24 percent in the cyber risk segment on the back of strong growth across Europe.
Beazley told investors that this offset weaker rate hikes and cost effects from the war in Ukraine.
Performance: Lloyd’s of London insurer Beazley reported that its level of gross written premiums increased 12 percent to $1.37 billion in the first three months of the year
Beazley recently undertook a £350 million equity placement to help fund its reach into the cyber sector, which tends to have higher written premiums.
Beazley still expects gross premium written volume to grow at a rate of mid-teens this year, while net premiums are expected to grow by their mid-twenties.
It also reiterated its ‘high 80s’ guidance for full-year combined ratio – a key measure of insurer profitability. Any number below 100 percent indicates profit.
Beazley chief executive Adrian Cox said: ‘In the first quarter we delivered good growth in line with our expectations, supported by growth in real estate, where we benefit from the excellent and sustained market conditions.
“Our diversified business, along with our ability to adapt to underwriting pricing cycles, allows us to adapt as opportunities and challenges arise.
“We are positive about our outlook for the first half of the year and are confident that we can deliver on our expectations for the full year.”
In March, the London-listed company announced that profits had nearly halved last year to $160.8m (£134.6m) due to losses on fixed income investments due to interest rate hikes.
Central banks have made several rate hikes in response to high inflation, largely caused by skyrocketing energy prices that drove up inflation in the wake of Russia’s invasion of Ukraine.
This caused significant accounting mark-to-market losses in Beazley’s fixed income portfolio, resulting in an investment loss of $179.7 million.
Beazley shares were up 4.8 percent Friday morning at 597.5 pence, making them the biggest gainers on the FTSE 100 Index. In the past two years, they are up about 82 percent.