Beazley increased its annual pre-tax profit by more than 8% to $284m in 2015, the London market re/insurer has announced.
It also increased its gross premium written by a more modest 3% to reach $2.08bn for 2015.
Beazley also revealed that it plans to shift its domicile to the UK, following a shareholder vote set for its annual general meeting in March.
Prior year reserve releases were up by 12%, reaching $176.3m.
Beazley’s CEO Andrew Horton said the result reflected a benign claims environment in recent years.
The firm also improved its combined ratio, which dropped to 87% from 89% the previous year.
“Beazley reported an excellent set of results for 2015, nicely above both our and the market’s expectations,” said Eamonn Flanagan, Shore Capital’s insurance-focused stocks analyst.
“The figures reflect Beazley's ability to innovate, the careful husbandry of its assets, smart underwriting and a well reserved book of business,” said Flanagan. “These are all complemented by a focus on capital discipline, as evidenced by a further special dividend.”
On the investment side, net income dropped 30% to $57.6m, with the investment portfolio return falling by $0.6 points to 1.3%.
Flanagan noted that the insurer’s payment of an 18.4p special dividend in 2015 was “well ahead of our 12p forecast, with the market on 11p.
“Adding this to the 9.9p ordinary dividend paid in 2015 amounts to 16.6% of the 2015 opening net assets...a very impressive outcome, in our view.”
Pricing reduced by 2% on average in four out of Beazley’s five business lines, falling in line with the previous year’s renewal, but in specialty lines, the re/insurer’s biggest focus, rates rose 2%.
However, that conceals falls within specialty of 17% in energy, 6% in marine hull and 7% in reinsurance, noted Beazley.
In cyber business, Beazley’s flagship product, chief underwriter Neil Maidment said “strong growth” had been made in 2015.
“But we’re also seeing strong growth in other specialty areas such as medical and environmental products, too,” added Maidment.
Specialty rates were stronger within the small-and-medium-sized enterprises (SME) and “medium-tail liability” business which Beazley targets, suggested Maidment.
"Beazley increased both premiums and profits in 2015, delivering excellent returns for shareholders despite low investment returns and declining premium rates," said Horton.
"We see the recent
“That’s the good thing about M&A – it’s an opportunity to recruit others,” he added.