Specialist insurer Beazley has announced premium growth of 12% to $2.2 billion for the first nine months of the year, while overall, the firm has reported rate increases of 6%.
Beazley has announced gross premiums written (GPW) growth for the nine month period in all lines excluding property, which, fell by 1% to $337 million as a result of the insurer’s decision to cease writing construction and engineering business.
The firm’s new specialty lines division and new cyber & executive risk unit both delivered solid premium growth in the period, expanding by 24% to $662 million and 16% to $567 million year-on-year, respectively.
Growth in cyber was driven by a strong performance in Beazley’s US platform as well as rate increases of 4%. While in specialty lines, the insurer experienced an increase in business written through its international lines platform.
Reinsurance recorded premium growth of 2% to $191 million and marine grew by 5% to $231 million. Beazley states that both divisions experienced growth as a result of rate rises in the period.
In political, accident & contingency Beazley has reported premium growth of 11% to $204 million, compared with the $183 million recorded a year earlier.
Beazley’s Chief Executive Officer (CEO), Andrew Horton, commented: “We continue to see strong, double digit premium growth across our business as a whole, driven by organic growth and rate rises across many lines of business.
“We have continued to experience heightened claims activity with our exposure to catastrophes in Q3 estimated to be $80m net of reinsurance and reinstatement premium.
“We have been anticipating a more difficult claims environment in areas such as directors & officers, employment practice liability and healthcare liability in recent years. As such we have been adjusting our underwriting for several years in these areas and began opening at a higher reserve position at the start of 2018.
“Our investment team has delivered another strong performance in Q3, bringing our year to date net investment income to $215m or 4.0%.”
The vast majority of insurers and reinsurers third-quarter and nine month 2019 results have been impacted by catastrophe events, most notably hurricane Dorian and typhoon Faxai, and this is no different for Beazley.
The firm states that it’s just completed its nine month claims review, and provides an initial loss estimate for the combined impacts of Dorian, Faxai and also typhoon Hagibis of $80 million, net of reinsurance and reinstatement premiums.
Interestingly, this is one of the first re/insurers to include Hagibis within their loss estimates, with the majority of others noting that this will be included in their Q4 and full-year results.
Beazley also warns of an increase in claims within its directors & officers, employment liability and healthcare liability books, adding that while it anticipates delivering overall reserve releases from its specialty lines and cyber & executive risk units, this is likely to be lower than in previous years.
In light of this, the firm is expecting to produce a combined ratio of between 100% and 102%, assuming a normalised claims experience for the final months of the year.
Overall, the specialist insurer recorded rate rises of 6% in the third-quarter of 2019, driven by an 11% rise in property rates in the period, assisted by 8% rate increases in marine, 5% in both reinsurance and specialty lines, and 4% rate rises in cyber & executive risk.
Year-to-date, Beazley’s investment return to the end of September reached $215 million, or 5.3% annualised.