Beazley has released a new report which shows a good outlook for profitable growth in the short and medium term.
The report noted that the outlook for growth in 2022 has improved in comparison to six months ago.
Its margin has returned to the business as the combined ratio is now trending towards the low-90’s level, which is more in line with Beazley’s long-term average.
The report showed that Beazley’s exposure to more complex speciality lines, including cyber which makes up 63% of group premiums, means that the company should not be considered just a “cycle play” by the market.
These products and markets are evolving as the world becomes more complex, and they benefit from product expansion and higher penetration, which structurally drive demand. In addition, Beazley will also drive growth by expanding its platform internationally across key speciality insurance hubs.
Commenting on specific specialty lines, the CEO of Beazley said that healthcare, life sciences and environmental liability insurance, as well as directors and officers (D&O), cyber and tech, are well placed to benefit from structurally growing demand and pricing.
Beazley’s marine and property segments are also benefitting from rate momentum over the last few years.
Although the momentum across these lines has been slowing down, Beazley believes that the risks are adequately priced for and hence are comfortable in growing these lines.
Nat-cat exposed property reinsurance is still an area where the industry needs to do more to better capture the risk from climate change.
Beazley has said that it has already begun to incorporate forward- looking climate change assumptions into its modelling and pricing.
Since October 2020, Beazley has revamped its risk management and underwriting capabilities, which means that Beazley is nine months ahead of peers in getting profitability back on track.
The report showed that the company has maintained the integrity of its cover, while increasing prices as it has found that demand has become inelastic to pricing.
Given the progress made year to date in getting profitability back on track, the CEO said that there could be opportunities to start growing exposures again in the near future and the 15% premium threshold for cyber could be revised upwards to reflect the strong pricing.