Beazley Plc · LSE:BEZ
Beazley — Investor Day (May 2022)
64 slides from Beazley's investor day presentation, May 2022
Slide 1: Capital Markets Day
Capital Markets Day beazley_
Slide 2: Agenda
Agenda _beazley_ 03 06 08 il 14 16 19 33 M4 50 56 Why invest in Beazley North American distribution Retail and wholesale underwriting Platform strategy Product strategy Outcomes Cyber Risks Property Risks MAP Risks Specialty Risks Beazley Digital
Slide 3: Why Invest in Beazley?
Why Invest in Beazley?
Slide 4: Long-term growth strategy while maintaining RoC, by focusing on cycle management
Long-term growth strategy while maintaining RoC, by focusing on cycle management Platform strategy * Wholesale —- London, Singapore and Miami * Domestic—US and European companies Diversification across * Products * Platforms * Geographies
Slide 5: We are specialists
We are specialists — Adding value and innovating where things are new, changing, volatile or complex — Leading the market not following — We have a team of outstanding experts Opportunity in high growth markets — technology, healthcare, environmental, political risk, events and cyber. Track record o
Slide 6: North American Distribution
North American Distribution beazley
Slide 7: Distribution in North America
Distribution in North America E&S insurer(s) Admitted Wholesale insurer(s) broker E&S* Reinsurance insurer(s) broker client *E&S: Excess and Surplus lines
Slide 8: Retail and wholesale underwriting
Retail and wholesale underwriting beazley_
Slide 9: Retail and wholesale have distinct characteristics
Retail and wholesale have distinct characteristics 2020 2.9 Admitted 7.7E&S $61bn Admitted $270bn BE&S 2017 2018 2019 2020 2021 US Commercial insurance market growth, size and volatility @ Admitted mE&S London | 2016 2017 2018 2019 Beazley US commercial insurance growth 2020
Slide 10: Attributes of wholesale
Attributes of wholesale Advantages Disadvantages Concentration of business * Distance from client Concentration of talent * Distribution cost Concentration of footprint * Access to risk Strength of specialty - segmentation, g new products, customisation x0 Cycle ee? Oa ie Market cycle management - z
Slide 11: Platform Strategy
Platform Strategy beazley_
Slide 12: Global platform strategy
Global platform strategy Domestic Wholesal Domestic North America Alt Europe 38% 57% 5% 3 g | 2 a 3 <¢ wl a a 85% 15% 31% | 69% Expected Growth _ _ End of the beginning Maturing Mature Still long-term prospect for above Will grow at same 7 years since major investment rate as market Multi-decade jou
Slide 13: US platform strategy
US platform strategy a Barrier to entry London Admitted Specialty Specialty a <x = 29% | 21% 1% | 4% 0% A&E / SME D&O E&S US platform combined Specialty i Specialty 2 S 2% 18% u—_—_ Opportunity
Slide 14: Product Strategy
Product Strategy beazley_
Slide 15: Segment average COR 2017-projected 2022
• • • • • • • Segment Segment Average • COR 2017- projected 2022 • Large Cap 100 • Commercial • Regional 98 Primary Specialty 89 Multiline 101 Reinsurance 15
Slide 16: Outcomes
Outcomes beazley_
Slide 17: Peer group vs Beazley Group % Return on Capital 2014 - 2021
Peer group vs Beazley Group % Return on Capital 2014 - 2021 20 15 10 : I | ° = 2014 2015 2016 2017 2018 2019 2020 = HY2021* 5 mPeer Group RoC =mBeazley Roc Source: Beazley and Ernst & Young peer group report based on published report and accounts and half year financials __beazley.
Slide 18: Wholesale Profitability and Volatility 2011-2020
Wholesale Profitability and Volatility 2011-2020 2 & 3 g a g 3 Most volatile Correlation +47% ERS Cae Aegis Hamilt , MD Chaucer 1084 © Atrium e ° Liberty, @ Brit 2987 Arch 1985 antares e Munich Re , earch CNA Hardy Beazley|3623 ORES Open e Uoyd's TMHCC Renaissance Re e e © Beazley 2623 Canopius 4444
Slide 19: Cyber
Cyber Paul Bantick beazley_
Slide 20: Our products
Our products Beazley Breach Response A unique, comprehensive, services-based solution to cyber breaches. Information security & privacy Coverage for large scale businesses confronting significant data security and privacy exposures. MediaTech Our MediaTech policy form is streamlined and comprehensiv
Slide 21: Cyber platform split
Cyber platform split Domestic Wholesal Domestic North America i Europe 61% 32% 7% oO ne} rw 2 $ g | 3 | 8 2 a | 8 x Ww a [aa] a 29% | 71% 1% 94% 6%
Slide 22: Beazley's Cyber Risks ecosystem
Beazley’s Cyber Risks ecosystem * Our vision for Beazley’s cyber ecosystem model is to enable our clients to bolster their cyber resilience and define an appropriate strategy by leveraging Beazley’s best-in class tools, including sharpened cyber intelligence and underwriting tools, cutting edge thre
Slide 23: Core components of the cyber ecosystem
Core components of the cyber ecosystem | imasis aoe a & Threat Intelligence k Management Services Phishing Training, Email Templates Incident Response
Slide 24: Cyber services ecosystem and future revenue streams
Cyber services ecosystem and future revenue streams * Lodestone + — Incident response * Forensics + — Risk management services + Virtual SOC/MDR * Beazley Cyber Services + Digital platform + Attack surface monitoring, managed detection and response + Risk advisory + Data and risk insights * Other ke
Slide 25: Changing threat landscape — impact of our response so far
Changing threat landscape — impact of our response so far e 25% ransomware frequency reduction per policy e 65% ransomware frequency reduction per premium Freq. change since 1 Oct 20 (per premium) -50% -51% -60% -65% Freq. change since 1 Oct 20 (per policy count) -20% -15% -20% -25% beazley_
Slide 26: Increased premium, reduced exposure
Increased premium, reduced exposure Gwp (USD$m) “2016 2017 2018 2019 2020 2021 2022 Forecast mTech EXO =BBR m@InfoSec =Vector == Policy Count
Slide 27: Cyber exposure management
Cyber exposure management Attritional * Data breach + Ransomware * Malicious employee Systemic * Cloud outage * Supply chain attacks (Ransomware) * Payment networks _beazley_ Management of Systemic * Focused team * Risk appetite and realistic disaster scenarios * Holding of CAT margin * Black swan s
Slide 28: Diversification is key to mitigating systemic risk
Diversification is key to mitigating systemic risk GNWP by Industry GNWP by Region Maximum Gross Line: $50m Maximum Net Line: Sub $15m Average Line Size: $1.7m
Slide 29: Mitigating systemic risk continued
Mitigating systemic risk continued * Accumulation of risk has always been an important consideration, we take a diligent, multi-faceted approach to the problem * Consciously diversify book, understand the many & evolving ways that accumulations can occur * Limit underwriting management, especially o
Slide 30: Cat Load
Cat Load Budget attritional losses Actual attritional losses
Slide 31: Market Benchmarking
Market Benchmarking Inception to date loss ratios 2015 2016 2017 2018 2019 2020 2021 2015-2021 2018-2020 Market data provided bya third party business partner @ Beazley @ Market
Slide 32: Market Benchmarking
Market Benchmarking Rate change 90% 80% 70% 60% 50% 40% bre HH 30% 3 e 20% 10% i UE = —__+ -10% 2045 2016 2017 2018 @ Beazley Market data provided bya third party business partner 2019 2020 @ Market 2021 2022 Loss ratios are inception to date case-incurred reported loss ratios on an underwriting yea
Slide 33: Q&A
Q&A beazley_
Slide 34: Property
Property Bob Quane beazley_
Slide 35: Property Risks Timeline
Property Risks Timeline Commercial Property Team Treaty Munich Team Property and Treaty combined to established established form Property Risks 1992 2008 2022 1986 2004 2009 Treaty Team was established BUSA High Value Homeowners Acquisition of First State Management Team was established Crow, ins be
Slide 36: Property Risks
Property Risks Property Treaty * Open Market (UK / RoW) * Property Catastrophe * North American Commercial Property : : * Treaty Other (inc Risk, Clash + Jewellery, Fine Art & Specie and and Miscellaneous classes) Private Clients * Delegated & Package * US High Value Homeowners
Slide 37: Property platform strategy
Property platform strategy Domestic Domestic North America Wholesale Europe 35% 62% 3% 3 2 2| 8 2 & | $ Ww a a 0% 100% 2% 31% 69%
Slide 38: Property open market / Property reinsurance
Property open market Property reinsurance 38
Slide 39: Gross Written Premium Growth
Gross Written Premium Growth 240% 220% 200% 180% 160% 140% —GWP Rate Adjusted 120% 100% 80% 60% 2017 2018 2019 2020 2021 Exposure reduction since 2017 reflecting risk reward as unmodelled peril losses increase.
Slide 40: Natural catastrophe risk appetite
Natural catastrophe risk appetite 40% 35% 30% 25% 20% 15% 10% 5% 0% Risk appetite as % NEP 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 As % of NEP, modeled loss 1:250 decreasing. Similar change on gross basis. In absolute terms, 1:250 growing modestly, but 1:10 has been shrinking sin
Slide 41: Key areas of focus
Key areas of focus Embed Climate Risk into our underwriting / analysis Property insurance and reinsurance is becoming more specialist Underwriting ESG risk assessment Proper pricing adequacy including non-modelled perils Enhanced modelling for wildfire and inland flooding. Incorporate into CAT model
Slide 42: MAP Risks
MAP Risks Tim Turner beazley_
Slide 43: MAP Risks Timeline
MAP Risks Timeline PCG team established PCG and Accident & Life combined and the PAC Team was established Beazley acquired Momentum Underwriting and Accident & Life Team ESG syndicate in a Box 4321 established offering additional capacity to businesses performing well against ESG metrics Marine, PAC
Slide 44: MAP Risks product lines
• Hull & War • Political Risk • Smart Tracker writing Lloyd’s • Contingency market facilities on a follow • Energy basis • Cargo • Personal Accident • ESG syndicate offering • Liability • Life additional capacity to • Terrorism businesses performing well • Aviation against ESG metrics • Space 44
Slide 45: MAP platform split
MAP platform split Domestic Wholesal Domestic North America i Europe 4% 94% 2% oO ne} rw 5s | 8 2 a | 8 x Ww a [aa] a 76% | 24% 2% 40% 60%
Slide 46: Gross Written Premium Growth
Gross Written Premium Growth 240% 220% 200% 180% 160% 140% —®GWP 120% 100% Rate Adjusted 80% 60% 2017 2018 2019 2020 2021 2017/2018 represented the lowest point of the market cycle Due to outperformance, we were able to increase budget mid-year on some remediated classes of business
Slide 47: MAP market share v share of market loss — Lloyd's
MAP market share v share of market loss — Lloyd's War Marine Liability 10% 4% 2% ” 3% ~ 6% 2% 1% Se ee ee 2015 «2016 «= 2017, 20l8 2019 2021 0% 2015 201 ©2017 += ote «= 2019 ©2020-2024 m= Merket Shere <teeLoss Share =e=Merket Share <aeLoss Share Contingency 25% 20% 15% 10% 5% zor 202 ots, 2H 2152020
Slide 48: MAP market share v share of market loss - Lloyd's
MAP market share v share of market loss - - Lloyd's Cargo Hull 6% ~ 10% * a ~ - 6% 1% w 0% Ch 2015 2016 2017 2018 2019 20202024 0% 2015 «862016 «= 2017S 208 = 2019) 20202021 we Market Share mmeloss Share —™ Market Share =m=LossShare 4% Energy % 0% 2015 2016 2017 2018 2019 2020 2021 —mMatket Shae =mL
Slide 49: Areas of focus and drivers of growth
Areas of focus and drivers of growth ¢ Optimising favourable rating environment * Introducing telematics into underwriting process for Hull & Aviation to enhance underwriting capabilities « Extending underwriting efficiency exercise (completed for Lloyd’s part of the business) to remaining offices *
Slide 50: Competitive advantage through expertise, innovation and leadership
Competitive advantage through expertise, innovation and leadership ¢ Marine has a mature product set, but our leading market position brings development opportunities both through thought leadership and our ability to understand and price risks appropriately. * Cover for Dymon’s rover, a commercial
Slide 51: Specialty Risks
Specialty Risks Bethany Greenwood beazley_
Slide 52: Specialty Risks
Specialty Risks * — Specialty Risks is a new division formed from the merger of Specialty Lines & part of our CyEx division (US Executive Risk and M&A). + The benefits include: Bringing US and non-US Executive Risk and E&0O into the same division Increasing cross selling opportunities Creation of 2,
Slide 53: Specialty Risks by product
Specialty Risks by product MBA (US & non-US) D&O (US) Employment Practices Liability (Us) Crime (US) 2021 Portfolio Mix Transaction Liability, 5% US Executive Risk, 32% E&O / Professional Indemnity (US) Environmental (US & non-US) Professional Lines, 15% 1. Gross of Reinsurance and Acquisition Costs
Slide 54: Specialty Risks platform split
Specialty Risks platform split Domestic Wholesal Domestic North America i Europe 39% 55% 6% oO ne} rw 5 | 3 2 as x Ww a [aa] a 39% | 61% 5% 98% 2%
Slide 55: Specialty Risks market share v share of market loss — Lloyd's
Specialty Risks market share v share of market loss — Lloyd's International D&O International Financial Institutions a a a Matket Shore pelos Share \ - _ . . . Healthcare
Slide 56: Areas of focus
Areas of focus New liabilities emerging consistently giving natural product opportunity ( + New Products: Virtual Care, Life Sciences, Safeguard 7 * Core products in different distribution segments (e.g., Beazley Product Solutions, Treaty) * Cross Sell: e.g., M&A and Environmental; Crime and D&O. Pl
Slide 57: Beazley Digital
Beazley Digital lan Fantozzi beazley_
Slide 58: What is Beazley Digital?
What is Beazley Digital? * End to end business unit with underwriting, sales, operation and technology within one P&L. * Empowered and autonomous cross functional teams organised around our distribution channels. * Focus on small specialist business including Cyber, ML, Tech E&O, PI, Med Mal & Healt
Slide 59: What does our digital underwriting business look like?
What does our digital underwriting business look like? Product engine & Clear Quote Automated billing 22 a ok Ke é2 Sales] lemony oN Managers Voice 2) Email eS ® _ Digital Support Team Sn) Portfolio Underwriters Claims & response services & Software Engineers & Data Analysts Pay Issue Renew C=»
Slide 60: Digital platform split
Digital platform split Domestic Wholesal Domestic North America i Europe 87% 0% 13% 3 8 P=) & S © £ Q S & Q xe} io} & = 2 x Ww a [aa] a 68% 32% 40% | 60%
Slide 61: What is our opportunity?
What is our opportunity? Meeting digital demand Leveraging data Mutual benefit * Distributing Beazley specialist * Internal data and external data * Beazley Digital - A highly _ profitable, high growth business products via several digital Glewilowittoneiremmats * Risk selection and portfolio manage
Slide 62: Our vision: Provide digital access to Beazley's specialist insurance expertise
Our vision: ‘Provide digital access to Beazley’s specialist insurance expertise, focus on simplicity and service.’ Minimum Touch efficiency. Fully digitise all products within the division to improve speed of response and achieve cost Access to specialists Broker queries and tasks allocated to most
Slide 63: 2022 outlook and beyond
2022 outlook and beyond * Budgeted GWP ~$200m in 2022 * Targeting premium growth ~20% year on year * Proving the efficiency of automation by close management of headcount as we grow revenue * Leveraging data internally and externally * Continuously developing our products and services in close coope
Slide 64: Q&A
Q&A beazley_