Beazley plc saw lower first-quarter premiums in cyber as the group implements its excess and surplus operation and remains wary of lines affected by social inflation.
The group anticipates growth in cyber going forward while also looking to growth in marine, aviation and political risk amid uncertain conditions, said Chief Executive Officer Adrian Cox in a conference call.
First-quarter insurance written premiums rose to $1.48 billion from $1.38 billion a year ago, as the group completed the last phase of its quota share reinsurance spend, Cox said. Net insurance written premiums rose 11% to $1.24 billion.
IWP in the quarter fell 10% for cyberrisks as rates fell 5%, the company said in a statement.
Cox said the lower cyber premiums are due in part to higher premiums a year ago and more partnership business since then. He added Beazley is working with its distribution partners worldwide to grow the cyber business and anticipates moderate growth in the line going forward.
The company continues to focus on cyber business in Europe but is seeing more competition there, he said.
Premiums rose 26% for property risks and 11% for digital risks while remaining flat for marine, aviation and political risks. Investment income rose to $126 million from $104 million, keeping the group on target for the year.
For 2024, Beazley is anticipating premium growth in the high single digits and rate increases in the low single digits, Cox said.
The combined ratio guidance for the year remains in the low 80s on an undiscounted basis.
On the claims side, Cox said nothing has happened that would prompt changes in guidance for the year.
In the marine, aviation and political risk segment, Cox said the geopolitical environment continues to drive demand and the group remains confident about the long-term growth prospects.
As Beazley moved its MAP business away from the Lloyd’s platform, it resulted in the flat numbers on the group level, Cox said. Rising political uncertainty and better economic prospects give Beazley confidence in the growth prospects for MAP, he said.
Beazley launched a new excess and surplus carrier on Jan. 1 and have been writing business on this platform as planned, Cox said.
Following this, the mix of business within the group changes slightly this year as it retains a higher proportion of property business, and a smaller proportion on MAP, as this now cedes to third-party capital at a higher rate. Overall, group premium levels remain the same.
The group continues to see opportunities for property risks as business increasingly moves into the E&S market following the change in its strategy toward third-party capital, Cox said. “We are well-placed to take advantage of this as demonstrated by 26% growth in the first quarter.”
Rate changes in property continue to be good, particularly in North America, he said. Cox noted Beazley will have a clearer view of the property business at half-year results when U.S. contracts are renewed.
In specialty risks, the directors and officers market remains competitive and Beazley continues to derisk that line while growing in smaller, niche areas that have lower exposure to social inflation, such as environmental cover outside the United States, Cox said.
Beazley is derisking its D&O book and is bearish on some general liability, excess casualty and automobile areas that are exposed to social inflation, he said. Lines that look good within specialty include mergers and acquisitions, environmental and non-U.S. areas.
Ki, Brit Ltd.’s digital Lloyd’s platform, recently said Beazley plc’s Syndicate 2623/623 will offer additional follow capacity through its digital platform beginning April 2. The capacity through the partnership with Beazley will be available across Ki’s open market classes of business in the property, casualty and specialty divisions, allowing more efficiency for brokers to complete placements in Lloyd’s, Ki said at the time.
Lloyd’s and underwriting entities of Beazley plc have current Best’s Financial Strength Ratings of A (Excellent).