Beazley records GWP growth of 12% in H1 2020; investments return $83.2m

Written by Adam Cadle

23/07/2020

Beazley achieved strong growth of 12% in H1 2020 with premiums increasing to $1,663.9m (2019: $1,483.6m).

Investments returned $83.2m, or 1.4%, in the first half of 2020 (30 June 2019: $170.3m , 3.3%). “This return is consistent with expectations at the beginning of the year and hides the dramatic financial market volatility we have seen in the interim,” Beazley said.

Falling risk-free yields in the first quarter generated significant capital gains on the insurance company’s fixed income exposures, but these were offset by the losses arising from risk assets.

“Risk assets have recovered much of their losses in the second quarter, while risk-free yields remained low, so the earlier fixed income gains have driven the year to date return,” the insurer said.

“Looking ahead, available fixed income yields are very low and likely to remain so in the medium term. More volatile asset classes, including equities, look increasingly expensive in the context of unprecedented economic weakness. We see elevated risks of further market volatility and expect returns to be modest in the remainder of the year. As such our investment strategy remains cautious in the current environment.”

The group has taken a number of underwriting actions which should reduce this impact, it said. The group's investment portfolio at 31 December 2019 was heavily weighted toward government issued and investment grade corporate debt, however the group took further action throughout the first quarter of 2020 to reduce its exposures to equities and to lengthen the duration of the investment portfolio as a whole. The group expects this action will help reduce the impact of the current market volatility on the group.

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