Beazley Ireland Holdings has reported gross premiums written up 12% year on year to $2,615.3m (2017: $2,343.8m). However, profit before income tax declined by 55% to $78.0m (2017: $171.5m) due to a decline in investment returns. The combined ratio for 2018 was 98% (2017: 99%) having been affected by severe natural catastrophe claims for the second year in succession.
These results were previously incorporated into the consolidated results of Beazley plc, the ultimate parent company of Beazley Ireland Holdings plc, which were released on February 7th 2019
Beazley said that the marine division started to benefit from an improved rating environment, most prominent in areas such as aviation and cargo, which allowed the division as a whole to achieve premium growth of 6% to $284.8m (2017: $267.6m) and an improved combined ratio for 2018 of 94% (2017: 98%).
The segment result was $20.5m for 2018 (2017, $19.6m), out of $99.5m for the group as a whole (before tax and finance costs)(2017 equivalent figure, $192.6m).
The company expanded its presence in the US during 2018, with the division starting to write marine business out of the Houston office.
The catastrophe loss activity during 2017 had a positive effect on the rating environment, with overall rates increasing by 3% in 2018 across the portfolio (2017: decrease of 1%). Most lines of business saw increases in rates compared to 2017, with marine increasing by 3%, property increasing by 10%, reinsurance rates increasing by 6% and specialty lines increasing 1%. However, rates on renewals in our political, accident & contingency division decreased by 1%.
Marine makes up about 11% of the company’s business as measured by premium income.
The cumulative rate renewal change in marine improved slightly from 2017 to 2018 at 79%, compared with 77% the previous year (2008 = 100%). Premium retention rates in marine in 2018 were 89%, compared with 87% the previous year. Overall retention rates were 82%, down from 84% in 2017.
Marine prior-year adjustments were $12.5m for 2018, below the five-year average of $22.1m, but up from the figure of $10.7m in 2017.
There were reserve releases in the energy book in the 2009 underwriting year following the improvement of a specific claim. The 2010 and 2014 underwriting years were impacted by specific claims in energy and hull respectively. The 2018 underwriting year has been opened higher than previous years to allow for the recent increased claims activity.
Group-wide, Beazley said that “as we enter 2019 we continue to see opportunities for high single digit premium growth. Further development of our business written onshore in the US and of our international specialty lines platform will support this.”