Beazley Improves Combined Ratio Outlook, Prioritizes Profitability Over Premium Growth

Beazley plc (LON: BEZ) has updated its 2025 guidance, projecting flat to low single-digit growth in Insurance Written Premiums (IWP) while upgrading its undiscounted combined ratio to the low 80s.

This reflects a strategic emphasis on underwriting discipline amid evolving market conditions.

Headline Numbers:

• Insurance Written Premiums (IWP): $4,670m (up 1% year-on-year)
• Net Insurance Written Premiums: $3,927m (up 4% year-on-year)
• Investment Income: $458m (3.9% year-to-date return)

Despite a modest increase in premiums, Beazley's focus on profitability is evident. The company is prioritizing margin over volume, leading to a revised IWP growth outlook. A $500m capital deployment into a new Bermuda platform signals future growth ambitions in alternative risk transfer markets.

The company's strategic shift towards profitability is further underscored by its willingness to forego premium growth in certain segments where pricing is deemed inadequate. Share buyback programs in 2024 and 2025 demonstrate Beazley's commitment to returning capital to shareholders when it cannot be deployed for profitable growth.

Driver Breakdown:

• Underwriting Discipline: Prioritizing profitability over volume in a dynamic market.
• Strategic Expansion: Investing in a Bermuda platform to tap into alternative risk transfer.
• Portfolio Management: Actively managing exposures across different risk categories.

CEO Adrian Cox stated, “Market conditions are evolving at pace across several of our lines and we've maintained the same disciplined approach we set out at the half year. The benefit of this discipline is clear in our upgraded combined ratio guidance, as we continue to prioritise profitability over volume.”

Cyber Risks saw an 8% decrease in IWP, impacted by rate reductions in North America. MAP Risks showed the strongest growth, with a 6% increase driven by strong demand. Property Risks grew by 2% in a challenging rate environment, while Specialty Risks growth slowed as expected.

Beazley's investment portfolio generated a $458m return, or 3.9%, benefiting from improved macroeconomic conditions and easing trade tensions. The average yield of fixed income investments is 4.0% with a duration of 1.7 years.

The insurance finance expense was $169m after nine months. The change in financial assumptions on the IFIE produced an income, offset by an expense from decreasing yield curves and the unwind of discounting credit.