Lloyd’s of London syndicate manager has increased prices as cyber and property have showed the fastest growth in premiums.
“At a time of sticky inflation, investors will always be on the look-out for companies that have the sort of pricing power that helps them to defend, or even boost, profits, and non-life insurer Beazley’s first-quarter update unveils an average increase in premium rates on renewals of some 10%,” says AJ Bell investment director Russ Mould.
“Improved investment returns, helped by higher yields on government bonds and no change in catastrophe claims expectations mean that the FTSE 100 firm continues to expect a healthy increase in profits this year.
“Beazley manages seven Lloyd’s of London syndicates which specialise in areas such as cybercrime and executive risk, marine, political risk, catastrophe and property.
“Heavy losses for less disciplined, and less skilful, underwriters mean capacity has come out of the market to strengthen the hand of those who remain. Beazley even raised over $400 million in fresh cash from investors late in 2022 so it could rake in additional premiums for business to take advantage of the firm pricing environment.
“This plan is already bearing fruit. Gross premiums written rose by 12% year-on-year in the first quarter to $1.4 billion, boosted by price increases and strong demand in the areas of property and cybercrime in particular. The latter did well despite ongoing debate over war exclusions for cybercrime, where interpretation of what is meant by ‘war’ and ‘armed conflict’ is a hot issue when it comes to whether cover can be offered or not.
“The Q1 out-turn beat analysts’ forecasts and underpins expectations of a 15% increase in gross premiums written to $6.1 billion for the full year. This is in line with management’s guidance for a ‘mid-teens’ growth rate.”