Beazley posts drop in first-half profit

Lloyd’s of London insurer Beazley posted a drop in first-half pre-tax profit as premium rates declined, although the figure was still better than expected, and the company said Brexit was unlikely to have a material impact.

For the period ended 30 June, pre-tax profit fell to $150.2m from $154.5m. RBC Capital Markets had been expecting profit of $139.4m while consensus estimates were for $143m.

Gross written premiums increased 2% to $1.12bn and the company had a combined ratio of 90% versus 86% at 30 June 2015.

Meanwhile, return on equity was 19% compared to 20% in the same period last year.

Chief executive officer Andrew Horton said: “Our business in the US continued to grow strongly in the first half of the year, partially offset by continued premium rate declines for much of the large risk business we underwrite in London.

“The global attractiveness of Beazley to talented underwriters with entrepreneurial flair was very clear. We welcomed 36 new underwriters in the first half across a wide range of disciplines, including healthcare, environmental, marine, and fine art and specie."

Beazley said the UK’s vote to leave the European Union was unlikely to be greatly disruptive to the company, although the long-term macroeconomic repercussions are hard to predict.

It pointed out that the US is its largest market, with around 80% of its business last year transacted in US dollars. “Our underwriting capital and overall asset allocation broadly reflects this currency split so the recent weakening of sterling has not affected our capacity to underwrite.”

At 0923 BST, Beazley shares were up 1.4% to 392.30p.