Beazley on Tuesday reduced guidance for full-year growth to flat to low single digits but issued improved combined ratio guidance to the low 80s as the insurer announced nine-month results.
Markets for property and directors and officers coverages are still very competitive, and the U.S. cyber market is now “unprofitable,” pressuring growth, said CEO Adrian Cox, according to a transcript of the insurer’s earnings call Tuesday.
Net insurance written premium increased 4% to $3.93 billion as premium rates on renewal business decreased by 4%, according to Beazley’s earnings statement.
Investment income decreased 10.7% to $458 million compared with $513 a year ago.
Property premiums saw a year-to-date rate decline of 7%. In cyber, the drop was 6%, while specialty risks saw a 1% premium increase.
Beazley also said it would invest $500 million to build out a new Bermuda platform.
The business will have four main elements, according to Mr. Cox: captives, insurance and reinsurance; alternative risk transfer, including parametric products; an ILS business focusing on cyber reinsurance and insurance; and specialty insurance and reinsurance.
The first two, captives and alternative risk transfer, “are fast-growing markets in which we participate, but currently do not have teams focused on them, and this will allow us to do just that,” Mr. Cox said.
The ILS market will also get enhanced focus.
“We do believe that the ILS market for cyber and potentially cyber and property together is going to be a blooming market over the next few years, and we want to be ready for that,” Mr. Cox said in response to analyst questions, according to the transcript.