Before-tax profits were 4% higher than analyst estimates, providing a 17% return of equity, while underlying profit was £147 million (excluding foreign exchange on non monetary assets). Beazley's combined ratio remained flat at 90% while investment return climbed to 2.7%.
Looking at Beazley’s earnings, Tom Dorner, an analyst at Oriel Securities, said the insurer has “delivered a good set of results, demonstrated by an impressive underlying ROE of 25%. This sets the tone for 2009 results from the Lloyd's insurers and should remind the market that the sector can deliver very strong returns.”
Two acquisitions that Beazley made over the past two years are seen as instrumental to an increase in gross written premiums, up 27% to £1.1 billion.
The company acquired London-based Momentum Underwriting Management, an underwriting agency that underwrote £43.2 million in gross premiums. Beazley also acquired US-based First State Management Group, an underwriting manager specializing in surplus lines commercial property insurance, which underwrote gross premiums of $93.9 million last year.
Said Beazley CEO Andrew Horton, “We took a number of steps in 2009 to ensure that, as profitable growth opportunities emerge in future, we will be ready to grasp them. In particular, our £150 million rights issue reinforced our underwriting capabilities at Lloyd’s and funded the successful acquisition of First State Management Group.”