Specialist insurer Beazley has reported a 16% increase in gross premiums written over the first nine months of 2020, supported by average rate increases of 14% on renewal business.
Premiums came to £2,534 million at 9M 2020, up from £2,192 million for the same period last year, with growth across most divisions.
Beazley attributed the increase to a combination of rate increases, adding exposure in a number of areas, and taking underwriting remediation action on certain areas of business.
“We continue to actively engage in cycle management, ensuring we maintain a balanced portfolio whilst fully capitalising on the opportunities,” Beazley explained.
“Rates are increasing in most of our classes and in many areas are now at levels where the risk reward ratio warrants writing materially more business.”
This is particularly true in directors’ and officers’ liability, despite the heightened risk environment, and most marine classes of business where the company is significantly growing its market share.
Off-setting this, Beazley continues to restrict appetite where there is particular exposure to the impacts of social inflation, pandemic claims or a recession.
The main areas impacted by this are employment practices liability and some professional and healthcare liability classes.
Whilst benefiting strongly from rate rises, reinsurance was also steady year on year driven by more selective underwriting.
“We have seen strong, double-digit premium growth across our business as a whole so far this year, driven primarily by rate rises across all divisions,” said CEO Andrew Horton.
“Pricing conditions are positive and we have the expertise and the capital in place to take advantage of these market conditions. We have great confidence in our ability to deliver mid-teens growth next year and strong shareholder returns in 2021 and beyond.”
Beazley reported Q3 catastrophe losses of $80 million, net of reinsurance, largely owing to the impact of Hurricanes Laura and Sally and the wildfires in California.
However, its COVID-19 first party loss estimate remain unchanged at $340 million, with the potential for a further $50 million of claims at the end of 2021.
The recent business interruption ruling on the FCA’s court case is not expected to have a material impact on Beazley’s insurance business.
Beazley’s investment income for the year stood at $124 million as at September 30th, compared with $215 million for the first nine months of 2019.
