Specialist insurer Beazley has posted a pre-tax profit for 2019 of $267.7 million, up from $76.4 million in 2018, and reported a 6% rate increase.
Beazley’s pre-tax profit jump was bolstered by a strong investment return of $263.7 million, up from $41.1 million in 2018.
The firm’s combined ratio of 100% – up from 98% the previous year – was impacted by intensifying claims across several lines of business and reduced reserve releases from prior years.
Beazley’s Chief Executive Officer, Andrew Horton, explained that despite this higher CR, the company is optimistic that the remedial action taken across several lines of business in recent years, alongside the expected continued premium rate increase, “will favour us as we move into 2020.”
Rates across Bezley’s portfolio rose by 6% in 2019, on top of rises averaging 3% in 2018. This masked far steeper rises in lines such as 31% for directors’ & officers’; 15% for hospital professional liability; 27% for aviation; and 18% for large risk property.
Overall gross premiums written increased by 15% to $3 billion, against $2.6 billion in 2018, with three of the firm’s six divisions achieving double digit growth.
Natural catastrophes took a smaller toll than in 2018, but nevertheless had a material impact with Beazley’s estimated costs of Typhoons Faxai and Hagibis and Hurricane Dorian totalling approximately $80 million net of reinsurance and reinstatement premiums.
“During 2019 we also split what had previously been by far our largest division – specialty lines – into two,” Horton added.
“Both of the new divisions, one of which continues to be called specialty lines and the other cyber & executive risk, underwrite classes of business that were negatively affected by increased jury awards and settlements in 2019.”
“However, many lines of business were unaffected and continued to show strong growth and profitability.”
Beazley’s property-focused reinsurance division generated a combined ratio of 154% in 2019, a jump from 103% in 2018, while gross premiums written stood at $206 million compared to $207 million in 2018.