Beazley PLC posted a 48% drop in pre-tax profit to $191 million for 2022, as it reported an investment loss of $179.7 million, compared to a profit of $116.4 million in 2021.
The company’s total expense ratio improved to 89% from 93% in 2021. I
It booked a 14% increase in gross premium income to $5.3 billion after renewal rates increased an average of 14% across the portfolio following a 24% increase in 2021.
All five underwriting divisions posted growth in premiums last year, led by cyber up 42% to $1.16 billion and boosted by average rate increases of 40%. Beazley said cyber speed increases moderated in 2022, from average increases of 88% in 2021, and the company expects lower prices to continue through this year. Beazley said cyber business outside its core US customer base saw “exponential”; growth in 2022.
“Across Europe and around the world, we’re seeing large companies looking for better cyber protection, and we expect that demand to continue,” said Adrian Cox, CEO of Beazley.
Beazley’s MAP risk division, which combines marine with Beazley’s political, casualty and contingency division and portfolio underwriting, recorded 23% growth in gross premiums to $1.11 billion in 2022. Beazley said claims booked to the division from exposure to the war in Ukraine decreased MAP profit , which fell 45% to $91.6 million.
Mr. Cox said Beazley will use $404 million in new capital raised in November to “lean into the opportunity” coming out of the real estate market and target cyber growth.
Beazley’s gross property premiums rose 6% last year to $859.8 million. Although real estate performance was dampened by $120 million in losses from Hurricane Ian, its total cost improved to 98% from 106% in 2021.
Specialty risks remained Beazley’s biggest unit after gross premiums rose 2% to $1.94 billion, with interest rates up 2%.
Mr. Cox said Beazley “retired” from D&O risks in 2022 amid increased competition. “This is a caution we will maintain in 2023, although we believe the market is likely to stabilize, with supply and demand coming more into line,” he said.
Going forward, Beazley expects to record higher net premium growth than gross premium growth this year following the transition from a portfolio underwriting syndicate to a stand-alone one and a reduction in reinsurance coverage for cyber and specialty risks.