Beazley Share Chat (BEZ)

My suspicion is that this is entirely due to market sentiment towards insurers especially after very high profile ransomware attacks. HSX also suffered like this, even though BEZ did more. so nothing particularly specific.
What ****es me off, they don't price the risk properly especially in relatively new areas like Cyber. This spike should be obvious after Covid, and they should have priced the risk appropriately. Combined Ratio is all about one how efficient you run your business two how well you price the risk.

I'm nervous about a new capital raise, I just cannot see why this keeps on dropping when the rates on a lot of their classes are dramatically rising. This should not be going down, so someone knows something I don't. Cyber is problematic, but rates are up 30% or so, this should now be ok. Having said this their most profitable account used to be marine and now their lead underwriter, Clive Washbourn has set up a new business to compete with them, and he should win that battle.

This is a good price level, for mid to long term investing..

Bought in here at 299 a couple of days back...will top up at 270 should it get there.

I suspect it must a fund reducing or shorts loading. However, given where the company is heading with $27m USD profit in the first quarter, it appears that they've turned around a corner compared to HSX which is yet to make a profit. Not just this share, but i think the specialist insurance sector is overdue a re-rate. Travel and hospitality shares have risen a lot and most of them are loss making and yet to make a profit. Also, this company is surely a M&A target.

For 2020 Beazley reported net claims of $1,958m so a share of the Colonial loss is pretty small beer. Good news is that it will increase the demand for cyber cover, persuade the insurance market to increase premiums and encourage more companies to improve their defences against cyber attacks. Beazley reported appreciable increases in renewals in the first quarter 2021. All-in-all high profile cases such as Colonial seem to be good for Beazley.

That's correct. Here's the link to the article.
https://www.cnbc.com/2021/05/13/colonial-pipeline-paid-ransom-to-hackers-source-says.html

I read somewhere yesterday that a $5m ransom was paid. Not sure about accuracy, as I glanced at it.

https://www.reuters.com/business/energy/colonial-pipeline-has-cyber-insurance-policy-sources-2021-05-13/

Looks like BEZ is one of the insurers, capped by $15mio...

Looks like Beazley was amongst the insurers of Colonial Pipeline, who have been subject to a ransomeware attack. Might have help take the shine off the update?

I haven’t seen much evidence of institutional selling but hedge funds AQR and Marshall Wace have been on the shorting list in recent months. Over the last month the SP has been pushing down steadily in good days and bad. When sentiment is gloomy and a sector becomes unfashionable it’s easier for them to control matters ... the update wasn’t terrible but probably requires consistently better updates to turn the tide. One for the patient investor, I think.

Does anyone have any idea who is buying and who is selling the £2m trade in the last UT of the day, every day for months, with no RNS of anyone increasing or decreasing holdings.
I just don't get it.

I don't think a specialty insurer normally updates on dividend at this time of year. This is normally a quiet quarter for Cat activity, hence would not be prudent to speculate on dividend at this point. The all important updates will likely be half year and of course yearly. Q4 is the big one for Cat activity - bad hurricane season and dividends won't be there, low level of activity and we will be collecting. Nature of the industry. I like the fact there is an element of non-correlation with the wider market in terms of factors driving performance.

The investment department shoulders must be feeling very heavy! Hopefully the underwriting performance will improve during 2021.

Agreed, the trading update is excellent. No news on the divi though unless I missed something?

It's a shame the release coinsided with a wider fall in the market or this would have bounced.

Great trading update; happy days

"We have had a positive start to the year with good rate momentum that is well ahead of our expectations as well as continued strong targeted growth. We expect favourable market conditions to continue and are well positioned to take advantage of them given our capital surplus remains within our preferred range."

Looks undervalued and has taken a position.

Have we any idea whether Beazley will be exposed to the cyber attack on the US pipeline shutdown?

And I cannot work out wo sells £1m or £2m, occasionally £5m every day on this share?

There is still a five year tail on claims made business before you really know your actual number. Having said that AFB have some stop loss reinsurances, at least for cyber, so these will firm up the position a lot earlier.

Expect it to retest £3.90 - £4 next week.

LRE
HSX

BEZ is a star attraction here too

Edit: just seen the HSX update. 13% rate increase in Lloyds which bodes well for BEZ.

BEZ Q1 trading update on 13 May 2021.

The market definitely ties these two share together as peers in the specialty insurance market.

I actually think that BEZ is in a much better place than HSX. BEZ is expecting to return to profit this year, HSX not till 2023.

The most interesting aspect will be what sort of rate increases Hiscox are pushing through. I expect they will have managed big increases (10-15% on average) on cyber, PI and Management Liability renewals. If BEZ can replicate that then we will be in a strong position.

Hiscox Q1 Statement tomorrow. Be interested to see how they fair from a segment perspective.

Swanny, thanks for the reply. I guess it must be hard to forecast loss ratios when a lot of liability claims are not reported for a while after they happen. Plus a lot of their policies (PI, management liability etc) are issued on a claims made basis rather than claims occurring.

Nice rise today on the back of the broker upgrade. I still think this is undervalued