Strong growth in the US underwriting business helped to lift interim profits at Lloyd's insurer Beazley (BEZ), and also offset the effects of competitive pressure at the group's Lloyd's underwriting business, where it generates two-thirds of its gross premiums. Overall, the group managed to improve its combined ratio of total costs to premium income from 90 per cent to a highly profitable 86 per cent.
Managed premiums in the US rose by 25 per cent to $297m (£191m), where the group benefited from more favourable conditions for smaller risk business. In the UK, rates continued to fall for catastrophe-exposed lines such as large commercial property, energy and reinsurance, and the group continued to reduce the size of its book, fuelled by new capacity from other operators.
Claims continued to be fairly benign, although the second half of the year could see this change as it will include the north Atlantic hurricane season. Prior year claim settlements were also subdued, and allowed the group to release $74.5m from reserves, little changed from a year earlier. Investment income on the £4.4bn portfolio was down slightly from a year earlier at $43.5m.
Numis kept its full-year forecasts unchanged at pre-tax profits of $248m and EPS of 26.9p (from $262m and 27.9p in 2014).
| BEAZLEY (BEZ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 323p | MARKET VALUE: | £1.68bn | |
| TOUCH: | 320.8-323p | 12-MONTH HIGH: | 323p | LOW: 226p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 258¢ | COMBINED RATIO: | 86% | |
| Half-year to 30 Jun | Net premiums ($bn) | Pre-tax profit (m) | Investment income ($m) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 889 | 133 | 46.8 | 3.1 |
| 2015 | 879 | 155 | 43.5 | 3.3 |
| % change | -1 | +16 | -7 | +6 |
Ex-div: 6 Aug Payment: 4 Sep £1=$1.553 Capacity owned 82% | ||||
