Specialist re/insurer and Lloyd’s player Beazley managed a 7% first quarter increase in written premium to $1.48 billion on the back of 26% growth in the still-hot property segment.
“We are confident of delivering our gross growth guidance for the year of high single digits,” CEO Adrian Cox said following what he called “a solid start” to the year.
Property led with 26% growth in premium to $451 million in Q1 written premium on a 7% gain in rate.
Growth comes as Beazley launched its new E&S carrier in the US at the start of 2024 to both take a closer shot at the market and pick up business to date written via Lloyd’s.
That brings a shift in the Beazley business mix as the group retains a higher proportion of its property business, and conversely a smaller proportion on marine, aviation and political risks (MAP), which now cedes to third party capital at a higher rate.
Cyber is the Q1 outlier by headline reading – down 10% year on year to $253 million, but with management blaming timing issues and assuring the segment is on track for moderate growth in 2024, with an increased focused on the catch-up market of Europe.
A partnership distribution model designed to extend Beazley’s global reach brings delayed recognition of premium, Cox explained for analysts during the Q1 earnings call.
Beazley did “a reasonable amount” of that business Q1 and sees “moderate growth” in the underlying trend, “which is what we expect by year-end,” Cox told the call.
Specialty risk premium of $455 million rose 6% year on year on a 1% rate gain. Cox argued for analysts that the mild reading hid major variance as Beazley balanced caution in D&O and social-inflation affected lines with larger gains elsewhere.
“We are continuing to derisk the D&O business,” Cox told analysts. But the broader segment still has “plenty of opportunity.”
“There’s plenty of business that we write that isn’t D&O and isn’t exposed to social inflation,” Cox said.
Beazley’s segment for marine, aviation and political risks (MAP) showed Q1 written premium of $261 million, flat against the prior year period on a 2% rate gain.
On a reduction in reinsurance cession, net insurance written premiums rose at a faster 11% pace.
That process of risking-up via the gross-to-net ratio may be at or near an end, Cox suggested.
“We bought little less quota share reinsurance this year,” Cox said of cessions. “I don’t expect us to continue to reduce going forward.”
The latest gross-to-net readings “will probably persist through the rest of the year.”
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