Specialist insurer Beazley has reported profit of $167.3 million for the first half of 2021 against a loss of $13.8 million in the prior year period, as the firm achieved good rate increases across all classes, platforms and territories.
For the first half of the year, Beazley has reported solid growth with gross premiums written (GPW) increasing by 22%, year-on-year, to more than $2 billion.
Net earned premiums, which totalled $1.39 billion for H1 2021, increased by 14% when compared with the same period last year.
Beazley notes that owing to efforts to improve its underwriting in recent years to address underperformance, the company has benefitted from stronger than expected rate increases in certain areas.
“We achieved good rate increases across all classes, platforms and territories, with most significant hardening in cyber in response to ransomware,” explains the company.
In Cyber & Executive Risk, GPW increased by 31% to $548.8 million, shaped by ongoing rate increases of 44% across the portfolio.
In the carrier’s Reinsurance book, the significant rate increases in the first quarter of 2021 subsided somewhat in Q2 2021 as soft conditions in the primary admitted marketplace led to lower demand at the Florida renewals when compared with 2020.
In total, rates in the Reinsurance book were up by 12% during the period, as GPW increased by 7% to $161.5 million. Additionally, Beazley notes that attritional loss activity is improving in line with expectations as it rebalances the portfolio towards its core offering of higher excess reinsurance.
Beazley’s Political, Accident and Contingency division achieved overall GPW growth of 3% in the first half of 2021 to $154.8 million, driven by Life, Accident and Health lines of business and rate increases of 6%.
In the Specialty Lines segment, strong rate increases were also achieved during the first half of 2021, as GPW jumped by 29% year-on-year to $610.7 million and rate increases averaged 13%.
Roughly 18 months ago Beazley established its Market Facilities division, which is on course to hit its target this year with 12% rate increase and H1 2021 GPW of $88.8 million.
In its property book, Beazley has reported good underlying growth with GPW increasing by 18%, year-on-year, to $276.6 million, with average rate increases of roughly 10%.
Despite this positive result in property, Beazley notes the impacts of the storms in the US in Q1 2021, which added an estimated $70 million loss, net of reinsurance, to the book split between its property and reinsurance segments.
Adrian Cox, Chief Executive Officer (CEO), commented: “Beazley’s gross premiums written increased by 22% to $2,035.3m with all divisions achieving rate rises in the first six months of 2021. Reserve releases across all divisions supported a half year combined ratio of 94% and the investment return achieved was also strong at 1.2% year to date.
“I am excited about the growth opportunities ahead. Our capital base remains strong and we are well placed to support an ambitious growth plan at similar levels to 2021. The board remains committed to a dividend payment and will consider this at year end after taking into account the 2021 results as a whole.”
Previously, Beazley estimated first party claim losses related to the COVID-19 pandemic of $340 million, net of reinsurance, for 2020. Additionally, the insurer said that if the world failed to return to some form of normality in H2 2021, it estimated a further $50 million of claims, net of reinsurance, to the end of 2021.
Given the company’s experience so far this year, coupled with continued easing of restrictions around the world, Beazley says it remains comfortable with its estimates, and in particular the extra $50 million has not been incurred to date.
On the asset side of the balance sheet, Beazley has reported that its investments returned $83.6 million, or 1.2% in the first half of 2021.