“Exceptional” property market sees Beazley grow premiums 63%

While Beazley’s CEO said earlier this year that underwriting property risks is a “moving feast” because of climate change, the re/insurance company has not shied away, writing 63% more in property premiums so far this year in what it calls “exceptional” market conditions.

While Beazley has expanded in property risks considerably, CEO Adrian Cox recognised that elsewhere market conditions have not been so attractive for the company.

Cox explained, “We have taken advantage of the opportunities in the property market this year with our Property Risks division growing 63% as rates increased by 24%. In the Cyber Risks division we continue to experience sustained, demand led growth. We remain committed to disciplined underwriting and have delivered a level performance in Specialty Risks despite significant dislocation in the D&O market.

“The insurance business is cyclical and market conditions are evolving quickly. We have chosen to exercise underwriting discipline meaning growth to date is less than we had planned at the start of the year. However, our agile underwriting and the strength of our platform strategy means we have delivered profitable growth to date and our claims experience is better than anticipated.

“With sustained discipline and agility in our underwriting I look forward to reporting a strong profit at year end.”

Property risk rates are up 24% for Beazley, the company said this morning, with this attracting it to deploy significantly more capital into the property line of insurance business.

Analysts are already commenting this morning that growth across Beazley is lower than anticipated, but the very high growth in property and a combined ratio reported to be in the low 80’s for the year so far, suggest strong profitability given the hard property market and rate increases secured.

The company reported that, “Conditions in the property market have been exceptional so far this year and we have achieved significant growth in the division of 63% year on year.”

Adding that, “We anticipate favourable conditions to continue in to 2024.”

While it said that “claims experience year to date is better than expected,” and that “Total natural catastrophes so far this year have been within the margins held in our reserves for such events.”

All of which suggests strong property underwriting profits to come for the full-year, as well as a chance of sharing those with investors in some of the Beazley market facilities structures.

The company also noted the effect of its so-called Smart Tracker syndicate 5623, which saw its MAP division premiums decline due to the business being written backed by third-party capital.

Finally, Beazley also reported some more growth in cyber underwriting, adding 4% in premiums although rates declined 4% at the same time.

Importantly though, on cyber risks Beazley said, “given the extraordinary rate rises since 2019, pricing remains adequate in this area,” further explaining that “The majority of our growth during the year has been outside of the US where penetration rates are lower and the medium term growth prospects are significant.”

Beazley also noted that, “despite an increase in ransomware attacks we are not seeing an uptick in claims frequency.”

All notable given the company is expected to come to market with its first full cyber catastrophe bond in the near future.