Improving rates and a surge in investment income meant Beazley (BEZ) reported pre-tax profits almost a fifth ahead of consensus market expectations for 2019. That meant that while heightened claims across some business lines and lower reserve releases caused a rise in the combined ratio, that metric still came in at the bottom end of the range previously guided to by management. That is expected to fall to the mid-90s in 2020 and low-90s over the medium term, if the rate rises experienced over the past two years continue.
The Lloyd’s of London insurer reported a 6 per cent rise in rates last year, which fed through to 15 per cent growth in gross written premiums. Cyber and executive risk was the stand out performer in terms of premium growth, despite competition intensifying in the cyber market. Property also returned to profitability as rates rose by 10 per cent for the mid-sized excess and surplus lines risk written locally in the US and by 18 per cent for London-written large risks business.
Analysts at Numis forecast net tangible assets of 246p a share at the December 2020 year-end, rising to 285p the same time the following year.
| BEAZLEY (BEZ) | ||||
| ORD PRICE: | 581p | MARKET VALUE: | £ 3.08bn | |
| TOUCH: | 581-589p | 12-MONTH HIGH: | 634p | LOW: 486p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 307¢ | COMBINED RATIO: | 100% | |
| Year to 31 Dec | Net premums ($bn) | Pre-tax profit ($m) | Investment income ($m) | Dividend per share (p) |
| 2015 | 1.71 | 284 | 57.6 | 9.9 |
| 2016 | 1.85 | 293 | 93.1 | 10.5 |
| 2017 | 1.98 | 168 | 138 | 11.1 |
| 2018 | 2.25 | 76.4 | 41.1 | 11.7 |
| 2019 | 2.50 | 268 | 264 | 12.3 |
| % change | +11 | +251 | +542 | +5 |
| Ex-div: | 29 Feb | |||
| Payment: | 30 Mar | |||
| £1=$1.30 Excludes special dividends of 11.8p (2014), 18.4p (2015) and 10p (2016) | ||||
