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Beazley PLC shares jumped on Friday after the insurer posted a jump in interim revenue and a strong combined ratio, due to a good rating environment and a better-than-expected claims experience.
Shares were trading 10% higher at 525.50 pence each on Friday morning in London.
London-based Beazley has specialist insurance businesses around the world and manages seven syndicates at Lloyd's of London. Among its insurance lines are professional indemnity, cyber liability, marine, and political risk.
It posted a pretax profit for the six months ended June 30 of $22.3 million, a sharp 87% decline from $167.3 million a year before.
Beazley cited investment losses of $193.0 million as the reason for this decline.
Gross written premiums for the period increased 26% year-on-year to $2.55 billion from $2.04 billion, due to a ‘buoyant’ rating environment, which supported a premium rate change of 18% on average across the business.
Beazley said that its ‘high underwriting performance’ in the period, led to a combined ratio of 87%, down from 94% a year prior. A combined ratio below 100% indicates a profit on insurance underwriting, so the lower the better. Beazley said it was its best combined ratio in seven years.
Revenue rose 11% to $1.64 billion from $1.48 billion.
Beazley did not declare an interim dividend; however, it said it would consider paying a dividend at the end of the year.
Looking ahead, the company warned of uncertainty, due to a ‘complex risk environment, where unpredictability is a dominant feature.’
Nonetheless, Beazley guided for a full-year combined ratio in the high 80s, assuming an average claims experience for the second half of the year.
‘We have maintained the momentum of the second half of 2021 with gross premiums increasing by 26% alongside better than expected claims experience. A challenging investment environment has impacted profit; however I'm delighted that we have achieved our best combined ratio at a half year since 2015,’ Chief Executive Adrian Cox said.
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