Slide 1: Results for the year ended 31 December 2018
Results for the year ended 31 December 2018 Generic title white Thursday, 7th February 2019
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 2018 4-8 Financials Performance 10 Investments 11-12 Reserves 13-15 Capital 16 Underwriting review 17-21 Specialty lines/Cyber and Executive risk (CyEx) 22 Outlook for 2019 23 Appendix 25-31 3
Slide 4: Overview of 2018
Generic title white Overview of 2018
Slide 5: Strong top line with growth across all divisions
Strong top line with growth across all divisions • Profit before income tax of $76.4m (2017: $168.0m) • Return on equity of 5% (2017: 9%) • Gross premiums written increased by 12% to $2,615.3m (2017: $2,343.8m) • Combined ratio of 98% (2017: 99%) • Rate increase of 3% on renewal portfolio (2017: red
Slide 6: Business update
Business update • Passed the milestone of $1bn of premiums written in the US • Growth opportunities outside the US • 34 underwriters hired outside the US • Key products on both Irish company and Lloyd’s Brussels paper in Europe • Growth in Canada • Management changes: • Neil Maidment was succeeded b
Slide 7: Premium growth and expense control
Premium Cover growth and expense control Gross premiums written ($m) Combined ratio (%) 3,000 125% 2,500 99% 98% 100% 89% 87% 89% 2,000 75% 58% 59% 1,500 49% 48% 48% 2,615.3 2,195.6 2,343.8 50% 1,000 2,021.8 2,080.9 500 25% 40% 39% 41% 41% 39% 0 0% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 C
Slide 8: Shareholder return (%)
Excellent total shareholder return - TSR 26.1% per annum since 31.12.09 900% 850% 800% 750% 700% Shareholder return (%) 650% 600% 550% 500% 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 De
Slide 9: Financials
Generic title white Financials
Slide 10: Growth and profit in challenging conditions
Growth and profit in challenging conditions Year ended Year ended % Increase/ 31 December 2018 31 December 2017 (decrease) Gross premiums written ($m) 2,615.3 2,343.8 12% Net premiums written ($m) 2,248.5 1,978.8 14% Net earned premiums ($m) 2,084.6 1,869.4 12% Profit before income tax ($m) 76.4 168
Slide 11: Portfolio resilient in difficult investment conditions
Portfolio resilient in difficult investment conditions 31 December 2018 31 December 2017 Cash and Cash Illiquid Credit Assets, 3.7% Equivalents Illiquid Credit Assets, 3.7% 6.7% Hedge Funds, 6.7% Hedge Funds, 7.7% Equity Linked funds, 1.7% Cash and Cash Senior Secured Loans, 2.6% Equity Linked funds
Slide 12: Portfolio delivered 0.8% return
Portfolio delivered 0.8% return 5.0% 140.0 120.0 4.0% 58.9 100.0 Investment Return ($m) Annualised Investment Return 3.0% 80.0 30.4 36.2 60.0 2.0% 14.1 40.0 79.4 62.7 1.0% 46.8 33.1 20.0 43.3 43.5 8.0 0.0 0.0% 2013 2014 2015 2016 2017 2018 1st half 2nd half Return 12
Slide 13: Reserve releases: below average releases in catastrophe classes
Below average releases in catastrophe classes – strengthening in property 15.0% 225.0 14.0% 210.0 13.0% 195.0 12.0% 180.0 11.0% 165.0 10.0% 150.0 Reserve releases ($m) 135.0 9.0% 120.0 8.0% 105.0 7.0% 90.0 6.0% 75.0 5.0% 60.0 4.0% 45.0 3.0% 30.0 2.0% 15.0 1.0% 0.0 0.0% 2013 2014 2015 2016 2017 2018
Slide 14: Reserve releases excluding the 2017 catastrophes
Reserve releases excluding the 2017 catastrophes 15.0% 225.0 14.0% 210.0 13.0% 195.0 12.0% 180.0 11.0% 165.0 10.0% 150.0 Reserve releases ($m) 135.0 9.0% 120.0 8.0% 105.0 7.0% 90.0 6.0% 75.0 5.0% 60.0 4.0% 45.0 3.0% 30.0 2.0% 15.0 1.0% 0.0 0.0% 2013 2014 2015 2016 2017 2018 -15.0 -1.0% -30.0 -2.0% -
Slide 15: Whole account reserve strength in the range and increasing
Whole account reserve strength in the range and increasing 15
Slide 16: Updated capital position remains strong
Updated capital position remains strong • Group capital requirement Year ended Year ended 31 December 2018 31 December 2017 $m $m Lloyd’s economic capital requirement (ECR) 1,594.5 1,517.2 Capital for US insurance company 173.4 96.5 1,767.9 1,613.7 • Our funding is made up of our own equity (on a So
Slide 17: Underwriting review
Generic title white Underwriting review
Slide 18: Underwriting review – 2018 achievements
Underwriting review – 2018 achievements • Combined ratio of 98% • Growth in gross premiums written of 12% to $2,615.3m All divisions grew, with 3 divisions achieving double digit growth 20% growth in locally underwritten US premium - surpassing $1bn in premium for the year Property grew exposu
Slide 19: Underwriting review
Underwriting review Year ended Year ended % Increase 31 December 2018 31 December 2017 Gross premiums written ($m) 2,615.3 2,343.8 12% Net premiums written ($m) 2,248.5 1,978.8 14% Net earned premiums ($m) 2,084.6 1,869.4 12% Expense ratio 39% 41% Claims ratio 59% 58% Combined ratio 98% 99% Rate cha
Slide 20: Cumulative rate changes since 2008
Cumulative rate changes since 2008 120% 115% 110% 105% Rate Change(%) 100% 95% 90% 85% 80% 75% 70% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Underwriting Year Marine Property Specialty Lines Reinsurance PAC All divisions 20
Slide 21: 2019 underwriting outlook
2019 underwriting outlook • We see good opportunities for high single digit growth in 2019 Locally underwritten US premium across SL, property and marine Growth opportunities outside the US across core product suite Growth at Lloyd’s • Specialty lines separated into two new divisions (cyber &
Slide 22: Specialty lines/cyber & executive risk (CyEx)
Specialty lines/cyber & executive risk (CyEx) • New SL will be 55-60% of the old SL division’s premiums • Good growth prospects in both SL and CyEx in 2019 • CyEx has most of the short tail cyber business and so a lower combined ratio • First figures at half year 2019 22
Slide 23: Outlook for 2019
Outlook for 2019 • Rate increases and higher investment yields are encouraging • All Beazley’s pre-Brexit preparation is on track • Pleased to welcome new executive committee members Sally Lake (finance director) Lou Ann Layton (head of broker relations) Jerry Sullivan (head of US management c
Slide 24: Any questions?
Questions? Any questions?
Slide 25: Appendix
Generic title white Appendix
Slide 26: Specialty lines incurred claims remain in line with expectations
Specialty lines incurred claims remain in line with expectations 26
Slide 27: US managed gross premium growth
US managed gross premium growth 1,200.0 1,000.0 US gross premiums ($m) 800.0 600.0 400.0 200.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Technology, Media and Business Services Architects and Engineers professional indemnity Professional Liability Healthcare and Lawye
Slide 28: TMB gross premium written growth
TMB gross premium written growth 450.0 400.0 350.0 300.0 GWP ($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 Tech E&O BBR InfoSec Vector 28
Slide 29: Cumulative rate changes since 2001
Cumulative rate changes since 2001 250% 200% Cumulative rate change (%) 150% 100% 50% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Underwriting Year Marine Property Reinsurance Specialty lines PAC All divisions 29
Slide 30: 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 Year Lines of Business Diversified Portfolio 30
Slide 31: Performance by division
Performance by division Year ended 31 December 2018 Specialty Marine PAC Property Reinsurance lines Gross premiums written ($m) 284.8 238.7 415.4 207.4 1,469.0 Net premiums written ($m) 255.0 212.7 360.2 137.3 1,283.3 Net earned premiums ($m) 249.5 194.3 344.1 139.5 1,157.2 Result from operating act