Beazley shares soar as underwriter's profits almost double
Patrick
2024-08-19 17:26
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Beazley shares soared on Thursday as the group upgraded its annual guidance after first-half profits nearly doubled.
The Lloyd's of London underwriter's shares surged 11 per cent to £7.07 on Thursday morning, making them the top FTSE 100 performer and taking gains since the year started to around 37 per cent.
Beazley's pre-tax profits jumped by 99 per cent to a record $728.9million for the six months ending June, on the back of solid property risks premium growth and fewer catastrophe losses.
Jump: Lloyd's of London underwriter Beazley saw its shares surge on Thursday morning
This followed its insurance risk premiums climbing by approximately $200million to $3.1billion, which it credited to an 'agile and disciplined approach to underwriting'.
Growth was boosted by its property business, where premiums increased by a quarter to over $1billion amid a strong focus on the US excess and surplus market.
Profitability further benefited from a strong insurance service result of $558million, a 63 per cent rise on the $342million recorded in the equivalent period last year, and investment returns growing by about three-quarters to $251.7million.
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Adrian Cox, chief executive of Beazley, said: 'Expertise in underwriting and Kampus Terbaik active risk selection are key drivers of this strong result, even as the rating environment is moderating.'
Following the performance, Beazley expects its undiscounted combined ratio - the difference between written premiums and payouts - to total around 80 per cent for the full year.
A combined ratio above 100 per cent indicates an underwriting loss, while a lower figure denotes profitability.
Beazley shrugs off cyber meltdown
Beazley is thought to hold a global cyber insurance market share of around 8 per cent - leaving some investors concerned it would be exposed to last month's global IT outage.
However, the group calmed fears on Thursday as it said the event had 'no impact on our view of the outlook for the remainder of 2024'.
Read More
London Stock Exchange hit by global IT outage
A faulty update to antivirus software designed by cybersecurity business Crowdstrike led to about 8.5 million Windows systems around the world going into meltdown on 19 July.
Banks, airlines, media organisations, and the London Stock Exchange were among those whose services were affected by the failure.
Adrian Cox said: 'When faced with the world's largest ever IT outage, Beazley's approach to underwriting cyber risk was tested and proved to be highly resilient.'
Cox told Reuters he expects the massive IT outage last month to have an impact on demand for cyber insurance, particularly outside the US, where the market is still smaller and the penetration of cyber insurance is lower.
'I think in terms of insurer behaviour, there's long been discussion about systemic risk. This is the latest in a number of such sort of single points of failure issues that have happened this year,' Cox said.
'I think that needs to be absorbed by the cyber market, and I think it could have an impact on pricing,' he said, adding that the market got more competitive in the first half, and he expects prices to 'flatten out a little bit'.
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The Lloyd's of London underwriter's shares surged 11 per cent to £7.07 on Thursday morning, making them the top FTSE 100 performer and taking gains since the year started to around 37 per cent.Beazley's pre-tax profits jumped by 99 per cent to a record $728.9million for the six months ending June, on the back of solid property risks premium growth and fewer catastrophe losses.
Jump: Lloyd's of London underwriter Beazley saw its shares surge on Thursday morning
This followed its insurance risk premiums climbing by approximately $200million to $3.1billion, which it credited to an 'agile and disciplined approach to underwriting'.
Growth was boosted by its property business, where premiums increased by a quarter to over $1billion amid a strong focus on the US excess and surplus market.
Profitability further benefited from a strong insurance service result of $558million, a 63 per cent rise on the $342million recorded in the equivalent period last year, and investment returns growing by about three-quarters to $251.7million.
RELATED ARTICLES
Previous
1
Next
Beazley shares rebound as Lloyd's of London insurer shrugs... The FTSE 100 shares up most this year as stock market keeps... Beazley shares rise as group unveils plans to dish out more... IT meltdown wreaks havoc on markets: CrowdStrike falls as...
Share this article
Share
13 shares
Adrian Cox, chief executive of Beazley, said: 'Expertise in underwriting and Kampus Terbaik active risk selection are key drivers of this strong result, even as the rating environment is moderating.'
Following the performance, Beazley expects its undiscounted combined ratio - the difference between written premiums and payouts - to total around 80 per cent for the full year.
A combined ratio above 100 per cent indicates an underwriting loss, while a lower figure denotes profitability.
Beazley shrugs off cyber meltdown
Beazley is thought to hold a global cyber insurance market share of around 8 per cent - leaving some investors concerned it would be exposed to last month's global IT outage.
However, the group calmed fears on Thursday as it said the event had 'no impact on our view of the outlook for the remainder of 2024'.
Read More
London Stock Exchange hit by global IT outage
A faulty update to antivirus software designed by cybersecurity business Crowdstrike led to about 8.5 million Windows systems around the world going into meltdown on 19 July.
Banks, airlines, media organisations, and the London Stock Exchange were among those whose services were affected by the failure.
Adrian Cox said: 'When faced with the world's largest ever IT outage, Beazley's approach to underwriting cyber risk was tested and proved to be highly resilient.'
Cox told Reuters he expects the massive IT outage last month to have an impact on demand for cyber insurance, particularly outside the US, where the market is still smaller and the penetration of cyber insurance is lower.
'I think in terms of insurer behaviour, there's long been discussion about systemic risk. This is the latest in a number of such sort of single points of failure issues that have happened this year,' Cox said.
'I think that needs to be absorbed by the cyber market, and I think it could have an impact on pricing,' he said, adding that the market got more competitive in the first half, and he expects prices to 'flatten out a little bit'.
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AJ Bell
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Easy investing and ready-made portfolios
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Hargreaves Lansdown
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interactive investor
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Flat-fee investing from £4.99 per month
Learn More
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Saxo
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Get £200 back in trading fees
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Trading 212
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Free dealing and no account fee
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Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
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