Re/insurer Beazley has reported a rise in turnover and a dramatically improved combined ratio in its marine division for H1 2021, leading to an operating profit in the division of $43.1m, up from $8.1m for the same period last year.
|$m||H1 2021||H1 2020|
|Gross premiums written||194.1||176.3|
|Net premiums written||162.9||153.8|
|Results from operating activities||43.1||8.1|
Beazley CEO Adrian Cox said that Beazley’s marine book, following significant restructuring over the past two years, had made “a strong start to the year, benefiting from solid rate increases averaging 10%”.
Cox said that, as the cycle turned, Beazley was able “to deploy significant capital to support the opportunity in the marine market”. Gross premiums written increased year on year by 10% to $194.1m (H1 2020: $176.3m). “While growth and rate were most favourable in Hull, Cargo and Aviation, it is pleasing to see all areas gained ground. Our overall claims experience was benign in the first half of the year”, said Cox.
|Full company: $m||H1 2021||H1 2020|
Overall, Cox said that the company had achieved strong premium growth during H1, with a 22% growth in gross premiums.
“Having taken continued underwriting action over the last three years in order to address underperformance, changing exposures particularly in respect of social inflation, preparation for an expected economic downturn, and then in response to the onset of the pandemic, we have benefited from stronger than expected rate increases in certain areas, without being over-exposed to those recession-prone liability lines in which pricing has not caught up with the scale of the expected future losses”, said Cox. He noted that the most significant hardening was in cyber in response to ransomware.
For Covid-19 Beazley had estimated 2020 losses (first-party claims) to be $340m net of reinsurance. However, that estimate assumes a resumption to some form of normality in the second half of 2021. “Were this not to be the case, we also estimated a potential further $50m of claims net of reinsurance to the end of 2021”, said Cox, adding that “given the experience we have had on first party Covid-19 claims to date, along with the continued easing of lockdown restrictions globally, we remain comfortable with our estimates, and in particular the additional $50m net of reinsurance has not been incurred to date.”