Chief Executive Officer's Statement

Beazley achieved its goals in 2023. We successfully deployed capital across the business to capture opportunities and our insurance written premiums (IWP) now stands at $5,601.4m (2022: $5,246.3m). Our net IWP growth of 24% gives a strong indication of the Company's trajectory during 2023 and I am pleased we've achieved this despite several headwinds. Property Risks has had a particularly successful year with premiums increasing by 64%, taking IWP to $1,351.9m (2022 $823.2m). The key strengths that have led to this positive result are our expertise-led, specialty underwriting and our knowledge based, client focused claims service. I would also like to thank our trading partners, our brokers and our clients across the world for their support of our business.

Access to high quality risk is delivered via our straightforward and clear three platform strategy which brings together Wholesale via Lloyd’s and insurance companies in North America and Europe. In 2023 this strategy was further enhanced with the establishment of our dedicated Excess and Surplus (E&S) carrier in the US, which will open up access to business that is currently often only available to onshore carriers.

We moved at speed to be at the forefront of the market as property insurers adjusted to the impact that climate change is bringing and which we believe will create a long term opportunity for Beazley, particularly in North America. We were able to do this because of the hard work done on risk selection, property valuations and, importantly, in building a climate risk framework. This framework seeks to engage with clients to understand, not just the impact of climate risk today, but how it is evolving and changing.

This work is part of an ongoing journey to assess a risk that is not following a linear path of development and to also seek out the opportunities that the energy transition will bring.

To meet growing demand from clients for cyber insurance we believe it is vital for the industry to have access to a deep pool of capital which will allow it to hedge accumulation risk. We were therefore pleased, in January 2023, to be the first insurance company to launch a cyber catastrophe bond and to go further as the year turned with the launch of our first publicly traded cyber catastrophe bond. We are also seeing that broad market consensus is being achieved around the complex subject of cyber war, bringing clarity of purpose to the cover which is to the benefit of all.

It is clear to us all that the geopolitical certainties that persisted for much of the last 80 years have shifted and we are in a challenging phase while new structures and norms take hold. Our expertise in understanding global trade flows, transportation and political uncertainty is actively helping support clients as they navigate through.

We are able to deliver consistent profitability because we operate a robust and effective approach to managing the insurance cycle. In 2023 this was demonstrated by our strong commitment to the Property Risks segment, where a change in the rating environment offered significant opportunity. In contrast, the directors and officers (D&O) market is suffering from excessive competition and so we took the decision to stand back. This is never easy and I want to commend our Specialty Risks team for their professionalism and committed underwriting discipline, noting that this has allowed them space to creatively explore new and growing niches in the liability market.

I want to thank our outstanding team across disciplines and geographies whose hard work and flexibility this year has helped deliver our record profit. Their commitment to living our values of Being Bold, Striving for Better and Doing the Right Thing, whilst working alongside our broker partners and supporting clients, is a key differentiator for Beazley and one that ensures strong retention across the business.

While the contribution of the entire team underpins our success, I would like to specifically mention some important changes that have happened in our senior team during the year. Brenna Westinghouse was promoted to Head of Strategy and, in January 2024, we welcomed Liz Ashford as Chief People Officer and Head of ESG. 

Being a Responsible Business is important to us and, in 2023, we reviewed our approach to further embedding ESG at Beazley. This work will inform our next round of three year target setting which is focused on maintaining the diversity of our workforce where we already see significant progress (45% senior women and 27% People of Colour) and in reducing our contribution to carbon emissions which today are 47% lower compared to 2019 levels when normalised per FTE.

I am pleased that our ESG Consortium, two years since founding, is building positive momentum and from 1 January 2024 has moved fully to syndicate 5623. It is also exploring how it can offer capacity via our North American and European insurance companies, as client demand for ESG solutions continues to develop.

2023 saw a leap forward in the capability of Artificial Intelligence (AI) and in particular, Generative AI. We believe that this technology will enable the simplification of manual processes, improve decision making and ultimately improve product and service offerings to brokers and clients. We are continuing to expand our use of AI, including piloting Generative AI in several areas of our business, to help improve speed, accuracy and to reduce risk.

AI is opening up exciting new horizons where our expert teams will increasingly be able to make faster and more effective decisions that will enrich their work by reducing administrative burdens. It will also improve our ability to grow, as the technology takes up the operational strain that an expanding business has historically created.

Recent years have seen many external challenges from pandemic to war and the impact of climate change. At Beazley we have been adapting to change, ensuring our underwriting contemplates the evolving risk landscape, increasing our own resilience and responding to customer needs. As we look ahead, we continue to operate with one eye on emerging threats and opportunities, be that AI technology or changes in the legal environment, while the other is firmly set on ensuring access for clients and brokers to our specialty products and services. Our expectation for 2024 is for high single digit gross IWP growth and an undiscounted combined ratio in line with our initial guidance for 2023 of low 80s.

We believe that by continuing to focus on what we do best, underwriting and managing specialty insurance risk, we will fulfil our purpose of enabling our stakeholders to explore, create and build and that this approach will deliver the ongoing profitability that our investors rightly expect of us.