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Beazley PLC on Wednesday lowered its premium growth guidance pointing to ‘new risks and decreasing predictability’ from the impact of new technology and climate change. The Lloyds of London insurer cut its premium growth guidance to a ‘low-to-mid single digits’ percentage. It had previously expected a ‘mid-single digits’ rise. Beazley still expects an undiscounted combined ratio in the ‘mid-80s’, compared to 79.0% in 2024. A combined ratio below 100 means a profit on underwriting, so a higher ratio means lower profitability. Chief Executive Officer Adrian Cox said: ‘Our depth of experience in operating within a cyclical environment means we know when to take risk, and when to pull back. This phase is no exception.’ Analysts at RBC Capital Markets said in a research note: ‘We expect the shares to react negatively today to lowered top-line guidance, noting that consensus also has mid-single digit growth in FY26/27, which will need to be reconsidered.’ Shares in Beazley were down 7.1% to 847.50 pence each in London on Wednesday morning. It was the worst FTSE 100 performer. The index itself was up 0.3%. Pretax profit fell 31% to $502.5 million in the first half of 2025 from $728.9 million a year prior. Insurance written premiums increased 2.0% to $3.19 billion from $3.12 billion, but missed consensus of $3.25 billion. Earnings per share fell 24% to 52.5 pence from 68.7p, while net assets per share improved 11% to 560.0p from 504.7p. No interim dividend was declared for the first half, unchanged from a year prior. Operating expenses increased 40% to $224.7 million on-year, hurting the bottom line. ‘We are very proud of our overall performance. Growth of 2.0% reflects our disciplined approach and is fully aligned with our strategy of prioritising rate adequacy and long-term profitability over short-term income. This commitment to delivering strong profit through the market cycle is demonstrated by our 84.9% undiscounted combined ratio,’ CEO Cox added. The undiscounted combined ratio worsened from 80.7% a year earlier. Without removing the impact of discounting, the combined ratio worsened to 80.3% from 76.7%. Beazley said the claims environment is ‘active’ in respect to both frequency and severity, and uncertainty is ‘elevated’. CEO Cox noted: ‘The first half of 2025 confirms that geopolitical uncertainty remains, technology is transforming business and the effects of climate change are ever present, all of which are creating new risks and decreasing predictability.’ Beazley noted climate related natural catastrophes such as the wildfires in California, heightened cyber threats including a wave of ransomware attacks, which, further compounded by the continued rise of social inflation in North America, is driving ‘greater complexity and cost’ across multiple lines in the specialty insurance sector. In this context, rate discipline is essential,‘ the firm added. Beazley said it would stay ’resolutely focused on profitability, underpinned by deep underwriting expertise.‘ Cox said Beazley wants to ensure that its business model has the ’flexibility‘ to adapt to a changing risk environment. ‘We are therefore looking at new ways to enhance our diversified platform and product set, such as additions to optimise our platform strategy, or by adding relevant capabilities which support our diversified product offering.’ Cox said the firm intends to update the market further on plans at its capital markets day in the fourth quarter. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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