(Alliance News) - Beazley PLC on Thursday said its underwriting performance landed in line with expectations, with premiums also climbing, though investment losses meant profit fell.
Beazley shares traded 7.6% lower at 631.00 pence each in London on Thursday morning, the worst large-cap performer.
The insurer said gross premiums written in 2022 rose 14% to USD5.27 billion from USD4.62 billion in 2021. Net premiums written, which deducts premiums ceded to reinsurers, grew at a slower pace. Net premiums were 10% higher at USD3.88 billion from USD3.51 billion.
Its pretax profit, however, fell 48% to USD191.0 million from USD369.2 million.
A USD179.7 million investment loss, swinging from a gain of USD116.4 million, was largely the cause of profit drop.
Its underwriting performance improved, however. Its combined ratio came in at 89%, better than the 93% achieved in 2021.
The insurer in November said it expected a combined ratio in the "high 80s". A ratio below 100% indicates an insurer is making underwriting profit, so the lower, the better.
Beazley said it saw its "strongest year-end underwriting performance since 2016".
Beazley left its estimate for Hurricane Ian-related losses at USD120 million, net of reinsurance.
"2022 proved to be a year of several market events, including Hurricane Ian and the war in Ukraine. Despite this our claims ratio for 2022 reduced to 54% [from 58% in 2021]," the company added, however.
Beazley lifted its annual dividend by 4.7% to 13.5 pence per share from 12.9p.
Last year proved to be a stronger one for the company's Cyber Risks division. Gross premiums written for the unit surged 42% on-year to USD1.16 billion from USD814.3 million.
"New business was strong across all geographies, with our business outside of our core US client base growing exponentially. In the US, we are seeing strong demand from the mid-market segment which is driving ongoing growth. Outside of the US, demand came from Europe, Asia, Australia and beyond and we expect this trend to continue as business becomes increasingly aware of and keen to protect itself from the cyber threat. The substantial rate increases we have seen over the last two years, did begin to moderate during 2022, but they remained at very significant levels, reflecting the scale of the challenge that cyber poses," Beazley said.
For 2023, Beazley once again expects a combined ratio in the "high-80s". It expects "mid-teens" gross written premiums growth and net premiums to rise "in the mid 20s".
By Eric Cunha, Alliance News news editor
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Beazley (BEZ)