Slide 1: Results for the year ended 31 December 2019
Results for the year ended 31 December 2019 Generic title white Thursday, 6th February 2020 Navigating Change
Slide 2: Disclaimer notice
Disclaimer notice Certain statements made in this presentation, both oral and written, are or may constitute “forward looking statements” with respect to the operation, performance and financial condition of the Company and/or the Group. These forward looking statements are not based on historical f
Slide 3: Contents
Contents Pages Overview of 2019 4 Financials 9 Performance 10 Investments 11 Reserves 13 Capital 15 Underwriting review 16 Outlook for 2020 20 Appendix 22 3
Slide 4: Overview of 2019
Generic title white Overview of 2019
Slide 5: Strong investment return and achieved $3bn of premium
Strong investment return and achieved $3bn of premium • Profit before income tax of $267.7m (2018: $76.4m) • Return on equity of 15% (2018: 5%) • Gross premiums written increased by 15% to $3,003.9m (2018: $2,615.3m) • Combined ratio of 100% (2018: 98%) • Rate increase of 6% on renewal portfolio (20
Slide 6: Business update
Business update • $3bn of gross premiums written during 2019 • Management changes: • Anthony Hobkinson succeeded by Beth Diamond as head of claims • Mike Donovan to retire in June 2020 • Continental European growth of 17%; US growth of 13% • Strategic initiatives: Beazley Digital • E-trading platf
Slide 7: Cover growth and expense control
Premium Cover growth and expense control Gross premiums written ($m) Combined ratio (%) 3,500 125% 3,000 99% 100% 100% 98% 87% 89% 2,500 75% 2,000 58% 59% 62% 48% 48% 1,500 3,003.9 50% 2,615.3 2,195.6 2,343.8 1,000 2,080.9 25% 500 39% 41% 41% 39% 38% 0 0% 2015 2016 2017 2018 2019 2015 2016 2017 2018
Slide 8: Excellent total shareholder return
Excellent total shareholder return - TSR 23.3% per annum since 31.12.09 1000% 900% 800% 700% Shareholder return (%) 600% 500% 400% 300% 200% 100% 0% 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 2009 2010 2011 2012
Slide 9: Financials
Generic title white Financials
Slide 10: Strong growth and profit
Strong growth and profit Year ended Year ended % Increase 31 December 2019 31 December 2018 Gross premiums written ($m) 3,003.9 2,615.3 15% Net premiums written ($m) 2,503.5 2,248.5 11% Net earned premiums ($m) 2,347.0 2,084.6 13% Profit before income tax ($m) 267.7 76.4 250% Claims ratio 62% 59% Ex
Slide 11: Strong return on stable investment portfolio
Strong return on stable investment portfolio 31 December 2019 31 December 2018 Illiquid Credit Assets, 3.7% Cash and Cash Equivalents, Illiquid Credit Assets, 3.7% Cash and Cash Equivalents, 4.8% 6.7% Hedge Funds, 6.0% Hedge Funds , 6.7% Equity Linked funds, 2.8% Equity Linked funds, 1.7% Derivative
Slide 12: Portfolio delivered 4.8% return
Portfolio delivered 4.8% return 300.0 6.0% 250.0 5.0% 93.4 Annualised Investment Return 200.0 Investment Return ($m) 4.0% 150.0 3.0% 58.9 100.0 2.0% 170.3 30.4 36.2 50.0 14.1 1.0% 79.4 62.7 46.8 43.5 33.1 8.0 0.0 0.0% 2014 2015 2016 2017 2018 2019 1st half 2nd half Return 12
Slide 13: Overall small reserve release
Overall small reserve release 220.0 15.0% 210.0 $203.9m 14.0% 200.0 190.0 13.0% $180.7m 180.0 $176.3m 12.0% 170.0 $115.0m $158.1m 160.0 11.0% 150.0 10.0% 140.0 130.0 9.0% Reserve Releases $m 120.0 8.0% 110.0 100.0 7.0% % of NEP 90.0 6.0% 80.0 70.0 $9.5m 5.0% 60.0 4.0% 50.0 40.0 3.0% 30.0 2.0% 20.0 1
Slide 14: Whole account reserve strength in the range
Whole account reserve strength in the range Surplus in net held reserves 10.0% 8.2% 8.2% 8.2% 7.9% 7.5% 7.4% 7.4% 7.1% % above actuarial estimate 6.9% 6.7% 6.7% 6.8% 6.4% 6.6% 6.1% 5.6% 5.0% 5.0% 0.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Financial year
Slide 15: Updated capital position remains strong
Updated capital position remains strong • Group capital requirement Year ended Year ended 31 December 2019 31 December 2018 $m $m Lloyd’s economic capital requirement (ECR) 1,828.4 1,594.5 Capital for US insurance companies 203.9 173.4 2,032.3 1,767.9 • Our funding is made up of our own equity (on a
Slide 16: Underwriting review
Generic title white Underwriting review
Slide 17: Underwriting review – 2019 achievements
Underwriting review – 2019 achievements • Combined ratio of 100% against backdrop of elevated claims environment • Growth in gross premiums written of 15% to $3,003.9m Growth in 5 out of 6 divisions Double digit growth in specialty lines, cyber & executive risk and political, accident & continge
Slide 18: Cumulative rate changes since 2015
Cumulative rate changes since 2015 120% 115% 110% 105% Rate change (%) 100% 95% 90% 85% 80% 2015 2016 2017 2018 2019 Underwriting Year Marine Property Specialty Lines CyEx Reinsurance PAC All divisions 18
Slide 19: 2020 underwriting outlook
2020 underwriting outlook • Expect low double digit growth in 2020 • Expect continued lower than average reserve releases in 2020 • Expect rate increases to continue on average across portfolio • Continue to see growth across all platforms 19
Slide 20: Outlook for 2020
Outlook for 2020 • Preparation complete for operating in post Brexit environment • Continue to invest in and leverage digital technology through strategic initiatives • Continue our organic growth and hiring of top talent • Running yield on investments 2.1% at end of 2019 • Continue to support Lloyd
Slide 21: Any questions?
Questions? Any questions?
Slide 22: Appendix
Generic title white Appendix
Slide 23: Cyber gross premiums written growth
Cyber gross premiums written growth 500.0 450.0 400.0 350.0 300.0 GWP ($m) 250.0 200.0 150.0 100.0 50.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Vector InfoSec BBR Tech E&O 23
Slide 24: Cumulative rate changes since 2008
Cumulative rate changes since 2008 125% 120% 115% 110% 105% 100% 95% 90% 85% 80% 75% 70% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Marine Property Specialty Lines CyEx Reinsurance PAC All divisions 24
Slide 25: Portfolio management achieves consistent combined ratio through market cycles
Portfolio management achieves consistent combined ratio through market cycles 160 140 120 Combined ratio (%) 100 80 60 40 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Year Lines of Business Diversified Portfolio 25
Slide 26: Performance by division
Performance by division Year ended 31 December 2019 Cyber & Specialty Marine PAC Property Reinsurance executive risk lines Gross premiums written ($m) 823.0 306.4 272.7 428.7 206.0 967.1 Net premiums written ($m) 712.2 222.1 245.8 365.6 123.0 834.8 Net earned premiums ($m) 644.5 222.2 237.4 361.8 12