Beazley (BEZ) pre-tax profits beat market expectations during the first half thanks to a surge in investment income. However, heightened claims within the marine and reinsurance divisions, largely due to losses relating to US wildfires and typhoon Jebi, pushed up the group’s combined ratio – of claims as a proportion of premium income – to an unprofitable 100 per cent.
The good news was that rates continued to harden, up an average 5 per cent during the period, pushing up gross written premiums by 12 per cent. The speciality lines, cyber and executive risk and political, accident and contingency divisions – which together accounted for 65 per cent of premiums – grew by double digits. Property premiums fell by 5 per cent following the Lloyd's of London insurer’s withdrawal from construction and engineering business in October. Rates have also been helped by initiatives across the Lloyd’s market to scale back serially underperforming business lines.
“Margins in many lines of business now look healthier than they have for some years,” said chief executive Andrew Horton. Management expects to report double-digit premium growth over the full year.
Analysts at Numis forecast net tangible assets of 228p a share at the December 2019 year-end, up from 196p at the same time last year.
| BEAZLEY (BEZ) | ||||
| ORD PRICE: | 564p | MARKET VALUE: | £2.98bn | |
| TOUCH: | 563.5-564p | 12-MONTH HIGH: | 605p | LOW: 487p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 293p | COMBINED RATIO: | 100% | |
| Half-year to 30 Jun | Net premiums ($bn) | Pre-tax profit ($m) | Investment income ($m) | Dividend per share (p) |
| 2018 | 1.11 | 57.5 | 8.0 | 3.9 |
| 2019 | 1.23 | 166 | 170 | 4.1 |
| % change | +11 | +189 | +2025 | +5 |
| Ex-div: | 01 Aug | |||
| Payment: | 29 Aug | |||
| £1=$1.23 | ||||
