Record-Breaking Profit and Growth in Premiums
Specialized insurance provider Beazley has announced a record-breaking profit before tax of $1.423 billion for the full year of 2024, representing a 13% increase compared to the previous year’s $1.254 billion. This surge in profits was driven by a 10% rise in insurance written premiums, reaching $6.164 million, supported by growth across most divisions.
In 2024, Beazley achieved a group-wide insurance service result of $1.236 billion, slightly below 2023’s $1.251 billion. However, the net insurance finance expense decreased significantly from -$153.4 million in 2023 to -$55.9 million in 2024. Meanwhile, net investment income saw an increase, climbing to $574.4 million from $480.2 million. As a result, the net insurance and financial result for 2024 rose to $1.754 billion, an 11% increase compared to 2023’s $1.577 billion.
Other Income and Operating Expenses
During the year, other income increased to $106 million from $78.5 million, while operating expenses grew to $388.6 million from $365.8 million. Beazley also experienced minor foreign exchange losses compared to the gains in 2023, and finance costs slightly decreased to $39.3 million.
Consequently, Beazley recorded a record profit after tax of $1.13 billion, up from $1.026 billion in 2023. Despite a higher claims ratio of 43.1% in 2024 compared to 39.4% in 2023, the expense ratio remained nearly unchanged at 31.7%, resulting in a combined ratio of 74.8%, still robust despite being higher than 2023’s 71%.
Impact of Natural Disasters and Reinsurance Adjustments
The latter half of 2024 was marked by significant natural disasters like Hurricanes Helene and Milton. During this period, Beazley strategically reduced its reinsurance premium allocation by 32.1% to $764.9 million, particularly within its Cyber Risks and Specialty Risks divisions. This led to a decrease in amounts recoverable from reinsurers for incurred claims, down to $255.8 million from $528.5 million in 2023.
With a decrease in prior year gross claims estimates and reduced reinsurance coverage, amounts recoverable from reinsurers have naturally decreased. However, reinsurers’ share of directly attributable expenses increased to $4.4 million in 2024, up from $3.6 million in 2023.
CEO’s Remarks and Future Outlook
Adrian Cox, the CEO, expressed, “Our record profit of $1.4bn, coupled with a 79% undiscounted combined ratio and robust premium growth, highlights the strength of our expertise. I’m thrilled with our achievements despite a challenging claims climate and active hurricane season.”
He further stated, “This strong performance supports a $500m share buyback and a 76% increase in the ordinary dividend rebase to 25p. We remain well-capitalized to seize growth opportunities in a dynamic market and maintain robust financial performance over the long term.”
Performance Across Divisions
Except for MAP Risks, all divisions experienced year-on-year premium growth in 2024. Cyber Risks premiums climbed to $1.276 billion from $1.184 billion, Digital premiums rose to $246.6 million from $227.5 million, Property Risks increased to $1.703 billion from $1.351 billion, and Specialty Risks premiums grew to $1.988 billion from $1.873 billion. Conversely, MAP Risks premiums declined slightly to $950.3 million from $964.3 million in 2023.
Net insurance written premiums saw varied results: Cyber Risks declined to $860.5 million from $912.9 million in 2023, while Digital net premiums increased to $207 million from $202.4 million. MAP Risks rose to $859.3 million from $851.6 million, Property Risks increased to $1.454 billion from $1.157 billion, and Specialty Risks net premiums reached $1.77 billion, up from $1.572 billion in 2023.
Outlook for 2025
Looking ahead, Beazley projects mid-single-digit growth for 2025, accounting for the $80 million provision for the January 2025 Los Angeles wildfires. Despite a challenging risk landscape and a moderating pricing environment, CEO Adrian Cox remains optimistic about leveraging Beazley’s expertise and underwriting capabilities to capitalize on long-term opportunities.
