Lloyd’s underwriter Beazley (BEZ) pushed profits ahead in the six months to June but mainly as a result of a 27 per cent jump in investment income (see table). Overcapacity and a dearth of major catastrophes meant downward pressure on premiums continued.
In fact, since 2008 only premiums on property and specialty lines have shown any increase. Premium rates in the reported period declined by 2 per cent, but within this terrorism fell 11 per cent, war 8 per cent and energy 9 per cent.
However, Beazley has been focusing on its specialty lines such as professional liability and cyber insurance, where most of the business is written in the US. Premiums here increased by 9 per cent. It is also expanding its presence in Canada, buying Creechurch International Underwriters, while more underwriters have been hired in Europe, Singapore and Miami, the latter two being regional hubs for Asian and Latin American business respectively. While continental Europe accounts for just 5 per cent of total business, Beazley has set up a reinsurance company in Dublin.
Maintaining a disciplined approach to writing new business meant that Beazley’s combined ratio (of claims and expenses to premium income) was maintained at a profitable 90 per cent.
Analysts at Numis expect net tangible assets of 224p at the December year-end, from 212p a year earlier.
| BEAZLEY (BEZ) | ||||
| ORD PRICE: | 513p | MARKET VALUE: | £ 2.7bn | |
| TOUCH: | 513-513.5p | 12-MONTH HIGH: | 517p | LOW: 344p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 286p | COMBINED RATIO: | 90% | |
| Half-year to | Net premiums | Pre-tax | Investment Income | Dividend |
| 30 Jun | ($m) | profit ($m) | ($m) | per share (p) |
| 2016 | 930 | 150 | 62.7 | 3.5 |
| 2017 | 936 | 159 | 79.4 | 3.7 |
| % change | +1 | +6 | +27 | +6 |
| Ex-div: | 03 Aug | |||
| Payment: | 31 Aug | |||
| £1=$1.297 Capacity owned 82 per cent. | ||||
