Beazley’s Financial Triumph in 2024
Specialist insurer Beazley has achieved a landmark profit before tax of $1.423 billion for the full year 2024, marking a 13% increase from the previous year’s $1.254 billion. The growth was underpinned by a 10% rise in insurance written premiums, reaching $6.164 million, driven by expansion across most divisions.
Across the group, Beazley posted an insurance service result of $1.236 billion in 2024, slightly below 2023’s $1.251 billion. Notably, the net insurance finance expense improved, decreasing from –$153.4 million in 2023 to –$55.9 million in 2024, bolstered by a rise in net investment income to $574.4 million from $480.2 million. Consequently, the net insurance and financial result rose by 11% to $1.754 billion, compared to $1.577 billion the previous year.
During the year, other income surged to $106 million from $78.5 million, while operating expenses increased to $388.6 million from $365.8 million. Beazley also reported minor foreign exchange losses, contrasting with gains in 2023, and finance costs slightly decreased to $39.3 million.
Profitability and Claims
With these dynamics, Beazley posted a record profit before tax of $1.423 billion for 2024 and a profit after tax of $1.13 billion, up from $1.026 billion in 2023. The insurer’s claims ratio increased to 43.1% in 2024 from 39.4% in 2023, while the expense ratio remained stable at 31.7%, resulting in a combined ratio of 74.8%, above 2023’s 71% but still robust.
Hurricanes Helene and Milton characterized an active second half of 2024 in terms of claims.
Reinsurance Strategy and Outlook
Beazley’s strategic reinsurance allocation decreased by 32.1% to $764.9 million as it pursued less proportional reinsurance within its Cyber Risks and Specialty Risks divisions compared to the previous year. Consequently, amounts recoverable from reinsurers for incurred claims fell to $255.8 million from $528.5 million in 2023. The reinsurers’ share of directly attributable expenses increased to $4.4 million from $3.6 million in 2023.
Beazley’s CEO, Adrian Cox, remarked, “Our record profit of $1.4bn, along with a 79% undiscounted combined ratio and robust premium growth, underscores the strength of our expertise. I am thrilled with our company’s achievements amidst a challenging claims environment, including an active hurricane season.”
This outstanding performance facilitates a share buyback of $500m and an ordinary dividend rebase to 25p, a 76% increase. Beazley remains well-capitalized to seize growth opportunities in an evolving market and sustain its strong financial performance over the long term.
Division-Specific Performance
Despite the challenges, Beazley pegged its net losses from the January 2025 Los Angeles, California wildfires at around $80 million. In terms of premiums, all divisions, except MAP Risks, experienced year-on-year growth in 2024. Cyber Risks premiums rose to $1.276 billion from $1.184 billion, Digital premiums increased to $246.6 million from $227.5 million, Property Risks surged 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 to $950.3 million from $964.3 million in 2023.
Regarding net insurance written premiums, the Cyber Risks division saw a decrease to $860.5 million from $912.9 million in 2023, while Digital net premiums grew to $207 million from $202.4 million. MAP Risks increased to $859.3 million from $851.6 million, Property Risks increased to $1.454 billion from $1.157 billion, and Specialty Risks net premiums totaled $1.77 billion, up from $1.572 billion in 2023.
Segment results were robust in 2024, led by Specialty Risks at $476.5 million, a 15% rise year-on-year. In Property Risks, the result increased by 11% to $391.2 million, by 15% within MAP Risks to $182.6 million, and by 16% to $355.4 million in Cyber Risks. Digital, however, saw a nearly 4% decline to $57.1 million.
Rate Changes and Future Prospects
During 2024, Cyber Risks and Digital experienced average rate changes of –5.5% and –3.2%, respectively, while MAP Risks, Property Risks, and Specialty Risks saw positive rate changes of 1.3%, 1.3%, and 1.4%, respectively. However, due to steeper declines in Cyber Risks and Digital, Beazley reported an average rate decrease of –0.5% for 2024, compared with a gain of 4.3% in 2023.
CEO Adrian Cox added, “I am excited to once again deliver a record profit. This success, even as 2024 presented a challenging risk landscape and a moderating rating environment, is a testament to the talent and hard work of the entire Beazley team, as well as the support of our broker partners and the ongoing commitment of our investors. I am grateful to all of you and look forward to what we will achieve together in 2025.”
Looking ahead, there are significant long-term opportunities for Beazley in this era of increasing risk, as clients require their expertise and strong underwriting capabilities. As demonstrated in 2024, Beazley is a market leader poised to capitalize on these opportunities moving forward.
While the industry operates in a cyclical market where conditions can change rapidly, recent natural catastrophe activity could influence pricing outlooks. However, Beazley’s central expectation is for prices to continue softening this year, with a forecasted mid-single-digit growth for 2025. Taking into account the provision already made for the January 2025 wildfires, Beazley anticipates delivering a mid-80s undiscounted combined ratio.
