Specialty insurer Beazley has booked a pre-tax first-half gain of $158.7m, up from $150.2m in the same period last year, on gross written premiums of $1.15bn, up from $1.12bn in the corresponding period last year.
Beazley said that, despite its continued success in generating strong underwriting profits, conditions for many of its underwriters remain exceptionally difficult. Premium rates for our business as a whole decreased by 2% but there were steep declines for war (8%), energy (9%) and terrorism (11%). “Our underwriters continue to succeed in writing profitable business against the backdrop of ever more challenging conditions, particularly in the marine market, but they are having to walk away from underpriced business with increasing frequency”, the company said.
The cumulative rate change for marine for H1 2017 was at 76% (2008 = 100), a decline of 3pp since 2016, which was itself down 6pp on 2015. Gross premiums written in marine for the half were $145.6m, generating a segmental gain of $10.9m out of the company’s $169.6m gain before finance costs and tax ($131.7m after finance costs and tax).
This compared with GPW in marine of $134.0m in H1 2016, generating a segmental gain of $9.4m out of $157.5m pre finance costs and tax ($128.8m after finance costs and tax). In the marine loss development table, Beazley observed that the 2008 underwriting year saw a deterioration following adverse development on a specific claim within the energy book. Conversely, the 2010 year saw a release as a result of a favourable settlement. Catastrophe margin had been released from the 2015 underwriting year.
However adverse claims experience across hull, aviation and UK marine in the 2016 underwriting year has resulted in an increase. Claims releases in marine for the first half were minus $3.3m net, compared with +$0.6m for H1 2016. The deterioration was mainly due to a $5.6m deterioration for the 2015 underwriting year. https://otp.tools.investis.com/clients/uk/beazley/rns/regulatorystory.aspx?newsid=893600&cid=30