Stocks decline for Beazley following profit drop
Beazley Reports Mixed Results Amidst Market Challenges
In a recent announcement, insurance giant Beazley revealed a two percent increase in insurance written premiums, pushing the figure up to $3.2bn. However, the company's profit before tax for the first half of 2025 dropped significantly to $502.5 million, compared to $728.9 million in the same period of 2024.
The decline in profit was primarily due to several factors. Beazley experienced a slower growth in gross written premiums, with an increase of only 2.0% in H1 2025, down from 6.9% in H1 2024. The insurer also faced challenges in underwriting, reflected in an increase in the combined ratio, which rose to 84.9% from 80.7% in the previous year. This indicates a decrease in underwriting efficiency.
Despite the decline in profit, Beazley's investment portfolio generated $308.5 million, up from $251.7 million in H1 2024. However, this increase was not enough to offset the decline in underwriting performance.
CEO Adrian Cox emphasized the company's focus on accessing the right opportunities, backed by the strength of its people, platforms, and product set. He also mentioned that cycles in the insurance market are moving faster due to improved data, with the hard market not lasting as long and the soft market not persisting either.
In a cautiously optimistic outlook for the remainder of 2025, Beazley plans to maintain profitability through disciplined underwriting and selective risk-taking. The company's earnings remain vulnerable to potential volatility from catastrophe losses and market fluctuations. However, Beazley's strong balance sheet and strategic approach are expected to support its performance throughout the year.
Beazley's investment portfolio returned 2.7% in the first half of 2025, attributed to higher fixed income yields, investment-grade and high-yield credit, and collateralized loan obligations. Despite the softer rate environment, Beazley believes there's still plenty of room for growth in the cyber market.
The company has also noted an active claims environment in respect to both frequency and severity, and uncertainty is elevated. Beazley has downgraded its topline growth outlook for the year.
In other developments, Beazley has repurchased $235m of the $500m share buyback allocation announced at the beginning of March. The insurer has also reported a sharp drop in profit, with earnings per share for the period at 52.5p and net asset per share of 560p, up 11 percent year on year.
Beazley reiterated its combined ratio target for the year to be in the mid-80s. Across the portfolio, rates fell 3.9 percent. The undiscounted combined ratio for Beazley stood at 84.9 percent, compared to 80.7 percent in the prior-year period. Notable softening was observed in cyber and property, where rates fell 6.8 percent and seven percent respectively.
Beazley has had to contend with climate-related natural catastrophes such as the wildfires in California, alongside heightened cyber threats including a wave of ransomware attacks which particularly impacted retailers in the UK and Europe in the first half of 2025. Despite these challenges, the company delivered an annualized return on equity of 18.2 percent.
