Beazley records fixed income returns close to zero in H1 2021

Written by Adam Cadle

26/07/2021

Low bond yields created difficult conditions for Beazley in H1 2021, as the return for the fixed income part of the insurer’s portfolio was close to zero.

The fixed income segment of the portfolio includes more than 87% of investments. However, the capital growth investments which form the remainder of the insurer’s portfolio performed strongly, led by equities, which returned nearly 14%, and hedge funds, with a return of over 6% in this six month period.

Beazley said it was also able to add value through tactical adjustments to the portfolio, including higher exposure to equities for selected periods and extended use of inflation-protected securities as markets discounted higher inflation expectations. Overall, investments returns $83.6m, or 1.2% in H1 2021 (H1 2020: $83.2m, 1.4%).

“Overall we believe this is a good investment outcome in the context of market conditions, and our appetite for investment risk, and the return is ahead of our earlier expectations,” Beazley said.

“However, this is still a modest outcome by historic standards and the current low level of yields means that the outlook for investment returns remains challenging.”

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