Past service development
Net past service development saw a
net release of $(144.5)m in 2024 (2023: net release of $(109.8)m),
which represented (2.9)% (2023: (2.5)%) of insurance revenue less
allocation of reinsurance premiums. The largest releases were
from:
• Property Risks
$68.4m (2023: $78.0m); and
• Cyber Risks $63.0m
(2023: strengthening $9.9m).
Property and Cyber Risks both
experienced favourable attritional claims experience throughout the
year, supplemented by the release of Cyber catastrophe loads and
benign movements on existing Property catastrophes. Property has
benefited from particularly benign attritional experience in the US
market, and Cyber releases reflect ongoing positive experience on
international risks.
Specialty Risks released $37.7m (2023: $8.1m), due to sustained
favourable attritional claims experience on books where underwriter
action has been taken in previous years. This is partially offset
by strengthening on specific events on several older underwriting
years together with deteriorations in US health and medical covers
partially attributed to ongoing social inflation.
Digital released $31.1m (2023:
$28.0m), driven by favourable attritional claims
experience on the cyber business.
In MAP risks, reserves have been
strengthened due to ongoing geopolitical uncertainty. Despite this,
MAP has still delivered an undiscounted COR of 83.2% and remains a
highly profitable part of our business.
Prior year claims adjustment
|
|
2024
|
2023
|
|
Net
|
$m
|
$m
|
|
Cyber Risks
|
(63.0)
|
9.9
|
|
Digital
|
(31.1)
|
(28.0)
|
|
MAP Risks
|
55.7
|
(5.6)
|
|
Property Risks
|
(68.4)
|
(78.0)
|
|
Specialty Risks
|
(37.7)
|
(8.1)
|
|
Total
|
(144.5)
|
(109.8)
|
|
Release as a percentage of insurance
revenue less allocation of reinsurance premiums
|
(2.9)%
|
(2.5)%
|
Total expenditure
The expense ratio, which under IFRS
17 only includes expenses directly attributed to insurance
activities, increased marginally to 31.7%
for 2024 (2023: 31.6%).
For 2024, non-directly attributable expenses of $388.6m
(2023: $365.8m) fall outside the insurance result. Taking these
items together, total expenses for 2024 totalled $1,946.7m (2023:
$1,728.4m).
We continue to focus on our total
expense base, allowing for additional expenses where aligned to
underlying business growth or to enhancement to our business model.
Together with the focus on our expense base, the reduction in the
total expense ratio to 39.6% (2023: 40.1%) reflects the costs
incurred in the prior year as a result of the modernisation of our
underwriting and finance platforms as well as enhancing our digital
trading capabilities.
Foreign exchange
The majority of Beazley's business
is transacted in US dollars (80.9%), which is the currency we have
reported in since 2010 and the currency in which we aim to hold the
Company's net assets. Changes in the US dollar exchange rate with
sterling, the Canadian dollar and the euro do have an impact as we
receive premiums in those currencies and a material number of our
staff receive their salary in sterling. Beazley's foreign exchange
movement, taken through the statement of profit or loss in 2024,
was a $(9.1)m loss (2023: $4.5m gain).
Investment performance
Beazley's investment portfolio
generated a return of $574.4m, or 5.2% in 2024 (2023: a return of
$480.2m, or 4.9%). Our financial assets grew to $11.5bn as at 31
December 2024 (2023: $10.5bn). Returns were again driven by strong
performance from our equity, credit and hedge fund exposures; and
by the level of risk-free yield available in the market, where the
interest rate risk on our assets closely matches our
liabilities.
US GDP growth was surprisingly
strong, shaking off high short- term interest rates to register
approximately 3% for 2024, led by services and consumption. US
Government bond yields were volatile, rising early in the year
before falling through Q3, and rising again in Q4 as financial
market participants began to digest a possible Republican
presidential victory and the Federal Reserve indicated a slower
than expected pace of future cuts. The shape of the yield
curve changed, pivoting around the two-year mark where yields were
little changed; yield on shorter maturities fell, whilst longer
maturities rose. Despite this volatility, and with most of our
exposures at the short end, the portfolio performed
well.
Equity markets again delivered a
strong return. Our equity portfolio, which continues to be focused
on US markets, and selected to align with our responsible
investment commitments, returned in excess of 23%.
Performance was strong throughout the year, buoyed in Q4 by
the US elections. Our corporate exposures performed strongly as
well, with both high yield and investment grade spreads tightening.
High-yield spreads came close to the historic low of 240bps, before
finishing the year just below 300bps. Our hedge fund portfolio also
delivered a solid return, with low volatility and correlation to
other asset classes. We continue to build on our impact portfolio,
where our commitments have increased to $60m
in funds that have measurable social or environmental
benefits. We expect to hit our target of $100m in committed capital
in 2025.
We made an allocation to securitised
credit for the first time in many years in 2024, selecting an
external manager to invest in the highest quality tranches (AAA-AA)
of collateralised loan obligations (CLOs). The portfolio was
initiated in the second half of the year, and has been ramped to
its target.
The yield of our fixed income
portfolio at 31 December 2024 was 4.6%, with a
duration of 1.6 years. This level of yield is a positive
starting point for investment returns in 2025. However, there are
plenty of risks: economic growth is diverging; remaining solid in
the US, but slowing elsewhere. Geopolitical risks are elevated, and
markets will likely have to weather a shift in US foreign and
domestic policy under the new administration. Our investment
portfolio remains diversified and well positioned for a range of
market outcomes.
The table below details the
breakdown of our portfolio by asset class:
|
|
31 Dec 2024
|
31 Dec 2023
|
|
|
$m
|
%
|
$m
|
%
|
|
Cash and cash
equivalents
|
882.1
|
7.7
|
812.3
|
7.8
|
|
Fixed and floating rate debt
securities
|
|
|
|
|
|
- Government issued
|
4,289.1
|
37.3
|
4,469.1
|
42.6
|
|
- Corporate bonds
|
|
|
|
|
|
- Investment grade
|
3,862.3
|
33.6
|
3,578.3
|
34.1
|
|
- High yield
|
662.4
|
5.8
|
489.0
|
4.7
|
|
- Securitised
|
|
|
|
|
|
- Collateralised loan
obligations
|
480.0
|
4.2
|
-
|
-
|
|
Syndicate loans
|
29.5
|
0.3
|
34.1
|
0.3
|
|
Derivative financial
assets
|
11.2
|
0.1
|
10.0
|
0.1
|
|
Core portfolio
|
10,216.6
|
89.0
|
9,392.8
|
89.6
|
|
Equity funds
|
348.7
|
3.0
|
282.7
|
2.7
|
|
Hedge funds
|
752.0
|
6.5
|
582.2
|
5.6
|
|
Illiquid credit assets
|
175.4
|
1.5
|
220.1
|
2.1
|
|
Total capital growth assets
|
1,276.1
|
11.0
|
1,085.0
|
10.4
|
|
Total
|
11,492.7
|
100.0
|
10,477.8
|
100.0
|
|
|
|
|
|
|
Comparison of return by major asset
class:
|
|
31 Dec 2024
|
31 Dec 2023
|
|
|
$m
|
%
|
$m
|
%
|
|
Core portfolio
|
457.9
|
4.7
|
392.7
|
4.5
|
|
Capital growth assets
|
116.5
|
9.9
|
87.5
|
8.8
|
|
Overall return
|
574.4
|
5.2
|
480.2
|
4.9
|
Tax
Beazley is liable to corporation tax
in a number of jurisdictions, notably the UK, the US and Ireland.
Beazley's effective tax rate is thus a composite tax rate mainly
driven by the Irish, UK and US tax rates. The weighted average of
18.6% (2023: 17.6%) is higher than last year due to this year's
composition of profit and losses across the Group, including the
impact of the Pillar 2 minimum tax on profits arising in
Ireland.
The effective tax rate has increased
in 2024 to 20.6% (2023: 18.1%).
Balance sheet management
|
|
2024
|
2023
|
Movement
|
|
|
$m
|
$m
|
%
|
|
Intangible assets
|
198.0
|
165.3
|
20
|
|
Insurance contract
assets
|
20.2
|
101.5
|
(80)
|
|
Reinsurance contract
assets
|
2,666.6
|
2,426.7
|
10
|
|
Other assets
|
1,041.5
|
494.1
|
111
|
|
Financial assets at fair value and
cash and cash equivalents
|
11,492.7
|
10,477.8
|
10
|
|
Total assets
|
15,419.0
|
13,665.4
|
13
|
|
Insurance contract
liabilities
|
8,814.3
|
7,992.2
|
10
|
|
Reinsurance contract
liabilities
|
297.1
|
333.5
|
(11)
|
|
Financial liabilities
|
576.0
|
554.6
|
4
|
|
Other liabilities
|
1,124.8
|
903.0
|
25
|
|
Total liabilities
|
10,812.2
|
9,783.3
|
11
|
|
Net assets
|
4,606.8
|
3,882.1
|
19
|
|
Net assets per share
(cents)
|
731.4c
|
585.8c
|
25
|
|
Net tangible assets per share
(cents)
|
699.9c
|
560.9c
|
25
|
|
Net assets per share
(pence)
|
570.5p
|
468.6p
|
22
|
|
Net tangible assets per share
(pence)
|
545.9p
|
448.7p
|
22
|
|
Number of
shares1
|
629.9m
|
662.7m
|
(5)
|
1Excludes shares held in the
employee share trust and treasury shares.
Intangible assets
Intangible assets consist of
goodwill on acquisitions of $62.0m (2023: $62.0m), purchased
syndicate capacity of $31.3m (2023: $31.3m), US admitted licences
of $9.3m (2023: $9.3m) and capitalised expenditure on IT projects
of $95.4m (2023: $62.7m).
Net
reinsurance contract assets
Net reinsurance contract assets
represent recoveries from reinsurers, and comprise of the asset for
remaining coverage (ARC) and the asset for incurred claims (AIC).
At 31 December 2024, the ARC was in a net asset position of $139.7m
(2023: $321.9m net liability) as the future premium payable to the
reinsurers was lower than the expected claim recoveries. The AIC
was in a net asset position of $2,229.8m at 31 December 2024 (2023:
$2,415.1m net asset).
The Group's exposure to reinsurers
is managed through:
• minimising risk
through selection of reinsurers who meet strict financial criteria
e.g. minimum net assets, minimum 'A' rating by S&P (these
criteria vary by type of business, eg short vs medium
tail);
• timely calculation
and issuance of reinsurance collection notes from our ceded
reinsurance team; and
• regular monitoring of
the outstanding debtor position by our Reinsurance Security
Committee and Credit Control Committee.
Net
insurance contract liabilities
Net insurance contract liabilities
of $8,794.1m (2023: $7,890.7m) consist of two main elements, being
the liability for remaining coverage (LRC) and the liability for
incurred claims (LIC).
The LIC and LRC balance is made up
of a reserve for expected claims and a risk adjustment. In
addition, the LRC contains a contractual service margin, provision
for onerous contracts and premium debtors. At 31 December 2024, the
LRC balance was $1,194.4m (2023: $755.4m). Our LIC has increased
by 6.5% to
$7,599.7m (2023: $7,135.3m).
CSM
Sustainability
The Contractual Service Margin (CSM)
reflects the expected profit of contracts within the
asset/liability for remaining coverage. We have calculated the CSM
sustainability as the closing CSM divided by the opening CSM, and
thus a value of 1 and above shows that the expected profit within
the LRC/ARC is higher than the previous valuation. For more
information on CSM Sustainability, including the calculation,
please refer to the APM section.
As at 31 December 2024, the gross
CSM sustainability score was 1.40 (2023: 1.01)
while the net CSM sustainability score was 1.15 (2023: 1.17). This
is a pleasing result and shows the strength of the expected profit
contained on the balance sheet has increased on a gross basis, with
a marginal decrease on a net basis following an increase in the
purchase of cyber reinsurance during 2024. This puts us in good
stead as we move in to 2025.
Discounting impacts
During 2024, the net finance expense
was $55.9m (2023: $153.4m), which was broken down into a $292.1m
(2023: $294.7m) unwind of discounting recognised on existing
business, partially offset by $236.2m (2023: $141.3m) of income
from changes in financial assumptions.
Financial liabilities
Financial liabilities comprise
borrowings and derivative financial liabilities. The Group utilises
two long-term debt facilities:
• In November 2016,
Beazley Insurance dac issued $250.0m of 5.875% subordinated Tier 2
notes due in 2026.
• In September 2019,
Beazley Insurance dac issued $300.0m of 5.5% subordinated Tier 2
notes due in 2029.
The Group has a syndicated
short-term banking facility led by Lloyds Banking Group plc. This
provides potential borrowings of up to $450.0m which may be
advanced as cash. Of this, $225.0m has been drawn as letters of
credit to support underwriting at Lloyd's at 31 December 2024
(2023: $225.0m). The cost of the facility is based on a commitment
fee of 0.4725% per annum, and any amounts drawn are charged at a
margin of 1.5% per
annum above this fee.
The cash element of the facility
will expire on 25 May 2026, whilst letters of credit issued under
the facility can be used to provide support for the 2023, 2024 and
2025 underwriting years. In 2024, $225.0m has been placed as a
letter of credit as Funds at Lloyd's (FAL).
Other assets
Other assets of $681.4m are analysed
separately in the notes to the financial statements. The items
included comprise:
• amounts due from
syndicates 5623, 623 and 4321;
• prepayments and
accrued income; and
• other
receivables.
Consolidated statement of profit or loss for the year ended 31
December 2024
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Insurance revenue
|
5,678.1
|
5,442.4
|
|
Insurance service
expenses
|
(3,933.0)
|
(3,592.6)
|
|
Allocation of reinsurance
premium
|
(764.9)
|
(1,127.3)
|
|
Amounts recoverable from reinsurers
for incurred claims
|
255.8
|
528.5
|
|
Insurance service result
|
1,236.0
|
1,251.0
|
|
|
|
|
|
Net investment income
|
574.4
|
480.2
|
|
Net finance expense from insurance
contracts issued
|
(89.1)
|
(169.3)
|
|
Net finance income from reinsurance
contracts held
|
33.2
|
15.9
|
|
Net insurance and financial result
|
1,754.5
|
1,577.8
|
|
|
|
|
|
Other income
|
106.0
|
78.5
|
|
Operating expenses
|
(388.6)
|
(365.8)
|
|
Foreign exchange
(losses)/gains
|
(9.1)
|
4.5
|
|
Results from operating activities
|
1,462.8
|
1,295.0
|
|
|
|
|
|
Finance costs
|
(39.3)
|
(40.6)
|
|
Profit before tax
|
1,423.5
|
1,254.4
|
|
|
|
|
|
Tax expense
|
(293.2)
|
(227.6)
|
|
Profit after tax for the year
|
1,130.3
|
1,026.8
|
|
|
|
|
|
Earnings per share (cents per share):
|
|
|
|
Basic
|
175.1
|
154.7
|
|
Diluted
|
170.4
|
151.4
|
|
Earnings per share (pence per share):
|
|
|
|
Basic
|
137.0
|
124.8
|
|
Diluted
|
133.3
|
122.1
|
Consolidated statement of comprehensive income for the year
ended 31 December 2024
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Profit after tax for the
year
|
1,130.3
|
1,026.8
|
|
|
|
|
|
Items that will never be
reclassified to profit or loss:
|
|
|
|
Loss on remeasurement of retirement
benefit obligations
|
(0.6)
|
(0.1)
|
|
Tax (expense)/credit on defined
benefit obligation
|
(0.2)
|
0.7
|
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
Foreign exchange translation
gains
|
1.2
|
5.7
|
|
|
|
|
|
Total other comprehensive
income
|
0.4
|
6.3
|
|
|
|
|
|
Total comprehensive income recognised
|
1,130.7
|
1,033.1
|
Consolidated statement of changes in equity for the year ended
31 December 2024
|
|
Share
capital
|
Share
premium
|
Foreign
currency translation reserve
|
Other
reserves
|
Retained
earnings
|
Total
|
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
Balance as at 01 January 2023
|
46.6
|
9.7
|
(109.8)
|
(7.6)
|
3,015.1
|
2,954.0
|
|
|
Total comprehensive
income
|
-
|
-
|
5.7
|
-
|
1,027.4
|
1,033.1
|
|
|
Dividend paid
|
-
|
-
|
-
|
-
|
(107.7)
|
(107.7)
|
|
|
Issue of shares
|
0.1
|
0.9
|
-
|
-
|
-
|
1.0
|
|
|
Equity settled share-based
payments
|
-
|
-
|
-
|
36.2
|
-
|
36.2
|
|
|
Acquisition of own shares held in
trust
|
-
|
-
|
-
|
(33.6)
|
-
|
(33.6)
|
|
|
Tax on share option
vestings
|
-
|
-
|
-
|
0.7
|
(1.6)
|
(0.9)
|
|
|
Transfer of shares to
employees
|
-
|
-
|
-
|
(8.5)
|
8.5
|
-
|
|
|
Balance at 31 December 2023
|
46.7
|
10.6
|
(104.1)
|
(12.8)
|
3,941.7
|
3,882.1
|
|
|
Total comprehensive
income
|
-
|
-
|
1.2
|
-
|
1,129.5
|
1,130.7
|
|
|
Dividend paid
|
-
|
-
|
-
|
-
|
(120.5)
|
(120.5)
|
|
|
Share
buyback1
|
(2.4)
|
-
|
-
|
2.4
|
(330.0)
|
(330.0)
|
|
|
Issue of shares
|
0.3
|
7.3
|
-
|
-
|
-
|
7.6
|
|
|
Equity settled
share-based payments
|
-
|
-
|
-
|
40.5
|
-
|
40.5
|
|
|
Acquisition of own shares held in
trust
|
-
|
-
|
-
|
(14.0)
|
-
|
(14.0)
|
|
|
Tax on share option
vestings2
|
-
|
-
|
-
|
7.1
|
3.3
|
10.4
|
|
|
Transfer of shares to
employees
|
-
|
-
|
-
|
(11.4)
|
11.4
|
-
|
|
|
Balance at 31 December 2024
|
44.6
|
17.9
|
(102.9)
|
11.8
|
4,635.4
|
4,606.8
|
|
1 Refer to Note 14 for further
details of the share buyback
2 The aggregate amount of tax
recognised directly through equity is a credit of $10.4m (2023:
expense of 0.9m), comprised of $7.1m of deferred tax credit (2023:
0.9m deferred tax expense) and $3.3m of current tax credit (2023:
nil).
Consolidated statement of financial position as at 31 December
2024
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Intangible assets
|
198.0
|
165.3
|
|
Plant and equipment
|
28.9
|
15.9
|
|
Right-of-use assets
|
49.8
|
59.4
|
|
Deferred tax asset
|
191.8
|
46.9
|
|
Retirement benefit asset
|
4.0
|
4.5
|
|
Insurance contract
assets
|
20.2
|
101.5
|
|
Reinsurance contract
assets
|
2,666.6
|
2,426.7
|
|
Financial assets at fair
value
|
10,610.6
|
9,665.5
|
|
Other assets
|
681.4
|
354.2
|
|
Current tax asset
|
85.6
|
13.2
|
|
Cash and cash
equivalents
|
882.1
|
812.3
|
|
Total assets
|
15,419.0
|
13,665.4
|
|
Share capital
|
44.6
|
46.7
|
|
Share premium
|
17.9
|
10.6
|
|
Foreign currency translation
reserve
|
(102.9)
|
(104.1)
|
|
Other reserves
|
11.8
|
(12.8)
|
|
Retained earnings
|
4,635.4
|
3,941.7
|
|
Total equity
|
4,606.8
|
3,882.1
|
|
Deferred tax liability
|
387.2
|
202.2
|
|
Financial liabilities
|
576.0
|
554.6
|
|
Lease liabilities
|
66.9
|
76.6
|
|
Insurance contract
liabilities
|
8,814.3
|
7,992.2
|
|
Reinsurance contract
liabilities
|
297.1
|
333.5
|
|
Current tax liability
|
27.9
|
13.7
|
|
Other liabilities
|
642.8
|
610.5
|
|
Total liabilities
|
10,812.2
|
9,783.3
|
|
Total equity and liabilities
|
15,419.0
|
13,665.4
|
Consolidated statement of cash flows for the year ended
31 December 2024
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Cash flows from operating
activities:
|
|
|
|
Profit before tax
|
1,423.5
|
1,254.4
|
|
|
|
|
|
Adjustments for non-cash
items:
|
|
|
|
Interest and dividends receivable
on financial assets
|
(313.2)
|
(215.3)
|
|
Finance costs payable
|
39.3
|
40.6
|
|
Net fair value gains on financial
assets
|
(227.3)
|
(325.2)
|
|
Other non-cash
items1
|
99.2
|
45.7
|
|
|
|
|
|
Changes in operational assets and
liabilities:
|
|
|
|
Increase in net insurance and
reinsurance contract liabilities
|
627.1
|
545.9
|
|
Increase in other
liabilities
|
32.3
|
86.5
|
|
Increase in other assets
|
(327.2)
|
(150.0)
|
|
Purchases of investments
|
(8,598.9)
|
(7,115.9)
|
|
Proceeds from sale of
investments
|
7,870.0
|
6,129.8
|
|
Repayment of syndicate
loans
|
7.7
|
-
|
|
Interest and dividends received on
financial assets
|
303.6
|
207.4
|
|
|
|
|
|
Tax paid
|
(301.2)
|
(110.7)
|
|
Net cash inflows from operating activities
|
634.9
|
393.2
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
Purchase of plant and
equipment
|
(17.8)
|
(4.3)
|
|
Expenditure on software development
and other intangible assets
|
(45.0)
|
(50.9)
|
|
Net cash outflows from investing activities
|
(62.8)
|
(55.2)
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
Acquisition of own shares in
trust
|
(14.0)
|
(33.6)
|
|
Principal paid on lease
liabilities
|
(11.8)
|
(8.9)
|
|
Interest paid on lease
liabilities
|
(2.9)
|
(3.1)
|
|
Share buyback
|
(330.0)
|
-
|
|
Other finance costs paid
|
(36.4)
|
(37.5)
|
|
Dividend paid
|
(120.5)
|
(107.7)
|
|
Net cash inflows from financing activities
|
(515.6)
|
(190.8)
|
|
|
|
|
|
Net increase in cash and cash
equivalents
|
56.5
|
147.2
|
|
Opening cash and cash
equivalents
|
812.3
|
652.5
|
|
Effect of exchange rate changes on
cash and cash equivalents
|
13.3
|
12.6
|
|
Closing cash and cash equivalents
|
882.1
|
812.3
|
1
Other non-cash items includes amounts relating to
depreciation, amortisation and foreign exchange
differences.
1
General information
1a
Nature of operations
Beazley plc (registered number
09763575) is a public company incorporated in England and Wales.
The Company's registered address is 22 Bishopsgate, London, EC2N
4BQ, United Kingdom. The principal activity of the Company and its
subsidiaries ("the Group") is to participate as a specialist
insurer which transacts primarily in commercial lines of business
through its subsidiaries and Lloyd's syndicates. The Group's
consolidated financial statements for the year ended 31 December
2024 comprise the parent company, its subsidiaries and the Group's
interest in associates.
1b
Basis of preparation
The financial information set out
within this release does not constitute statutory accounts for the
years ended 31 December 2024 or 2023 but is derived from those
accounts. Statutory accounts for 2023 have been delivered to the
registrar of companies, and those for 2024 will be delivered in due
course. The Group's external auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
The Group's consolidated financial
statements have been prepared in accordance with UK adopted
International Accounting Standards (IAS) and the requirements of
Companies Act 2006. These are prepared on the historical cost
basis, with the exception of financial assets and derivative
financial instruments which are stated at their fair value, and the
defined benefit pension asset which is measured at the fair value
of plan assets less the present value of the defined benefit
pension obligation. All amounts are presented in US dollars and
millions unless stated otherwise.
1c
Amendments to existing standards
In the current year, the Group has
applied several amendments to International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards
Board (IASB) and endorsed by the UK Endorsement Board (UKEB) that
are mandatorily effective for accounting periods beginning on or
after 01 January 2024. None of these amendments have had a material
impact on the Group on adoption:
• Amendment to IAS 1 -
Classification of Liabilities as Current or Non-current and
Non-current Liabilities with Covenants.
• Amendments to IFRS 16
- Lease Liability in a Sale and Leaseback.
• Amendments to IAS 7
and IFRS 7 - Disclosures: Supplier Finance Arrangements.
The IASB has issued the following
new standards which are not yet effective at the reporting date.
Once endorsed by the UKEB, these will be applied from their
effective date of 01 January 2027:
• IFRS 18 -
Presentation and Disclosure in Financial Statements. The Group is
currently working to assess the impact of the new standard;
however, this is expected to be material to the presentation of the
financial statements and notes.
• IFRS 19 -
Subsidiaries without Public Accountability: Disclosures. As the
Group's equity instruments are publicly traded, it is not eligible
to elect to apply IFRS 19. No impact is therefore
expected.
In addition, the following minor
amendments to existing standards have been issued but are not yet
effective at the reporting date. None of these are expected to
materially impact the Group on their adoption:
• Amendment to IAS 21 -
Lack of Exchangeability (endorsed, effective date 01 January
2025).
• Amendments to IFRS 9
and IFRS 7 - Classification and Measurement of Financial
Instruments (not yet endorsed, effective date 01 January
2026).
• Annual Improvements
to IFRS Accounting Standards - Volume 11 (not yet endorsed,
effective date 01 January 2026).
• Amendments to IFRS 10
and IAS 28 - Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture (not yet endorsed, effective date
postponed indefinitely).
1d
Going concern
The consolidated financial
statements of Beazley plc have been prepared on a going concern
basis. In adopting the going concern basis, the Board has reviewed
the Group's current and forecast solvency and liquidity positions
for the 12 months from the date that the financial statements are
authorised for issue. The Group's business activities, together
with the factors likely to affect its future development,
performance, and position, are set out in the strategic report
contained in this Annual Report & Accounts. In addition, the
risk report and financial review includes the Group's risk
management objectives and the Group's objectives, policies and
processes for managing its capital.
In assessing the Group's going
concern position as at 31 December 2024, the Directors have
considered a number of factors, including:
• the current statement
of financial position and in particular the adequacy of the
estimate of the liability for incurred claims;
• the Group's strategic
and financial plan, taking account of possible changes in trading
performance and funding retention;
• the Group's capital
forecast, which takes into account the capital requirements of
major subsidiaries and their current external credit rating and
outlook;
• the Group's liquidity
at both a Group and material Subsidiary level;
• stress testing and
scenario analysis assessing the impact of natural and cyber
catastrophe events on the Group's capital and liquidity positions
and reverse stress test scenarios designed to render the business
model unviable; and
• other qualitative
factors, such as the market environment, the Group's ability to
raise additional capital and/or liquidity, and climate
change.
As a result of the assessment, no
material uncertainty in relation to going concern has been
identified. As at its most recent regulatory submission, the
Group's capital ratios and its total capital resources are
comfortably in excess of regulatory solvency requirements, and
internal stress testing indicates that the Group can withstand
severe economic and competitive stresses.
Based on the going concern
assessment performed, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence over a period of 12 months from the date of this report
being authorised for issue, and therefore believe that the Group is
well placed to manage its business risks successfully. Accordingly,
they continue to adopt the going concern basis in preparing the
consolidated financial statements.
1e
Key estimates
Measurement of insurance contract liabilities - Future cash
flows
The Group has estimated the amount,
timing and probability of future cash flows. Estimates are formed
by applying assumptions about past events, current conditions and
forecasts of future conditions. These have been outlined
below:
• Future expected
premium cash flows are based on data entered into underwriting
systems. These have a level of estimate embedded for certain
contracts, with payment/settlement patterns used to determine
timing.
• Gross and reinsured
claims payments are determined using an approach whereby cash flows
are set at a year of account and reserving class level based on the
latest quarterly reserving exercise.
• Expenses are deemed
to be within the contract boundary, and therefore included in the
cash flows, when these are directly attributable to fulfilling
insurance contracts.
• Lapses/cancellations
are projected by applying assumptions determined through
statistical measures based on the Group's experience. These vary by
product type, policy duration and sales trends.
For carrying values of insurance
contracts by measurement component (including future cash flows),
refer to Note 17.
Measurement of insurance contract liabilities - Discount
rates
The discount rates applied to
expected future cash flows in measuring insurance contract
liabilities have been determined using the bottom-up approach. This
method takes the risk-free rates and adjusts for an illiquidity
premium.
• Risk-free rates are
derived using government yield curves denominated in the same
currency as the product being measured, which are sourced from
Moody's. These are based on quarter-start and quarter-end
rates.
• The Group's
illiquidity premium is also sourced from Moody's and adjusted to
reflect the Group's own asset portfolio. This represents the
differences in the liquidity characteristics between the financial
assets used to derive the risk-free yield and the insurance
contract liability characteristics. The illiquidity premium applied
by management is a flat percentage which varies by currency. For
the USD discount rate, which is the dominant currency of the Group,
as at 31 December 2024 this was 0.3% (2023: 0.4%).
|
31 December 2024
|
1 year
|
3 year
|
5 year
|
|
USD
|
4.5%
|
4.6%
|
4.7%
|
|
CAD
|
3.4%
|
3.3%
|
3.4%
|
|
GBP
|
4.6%
|
4.6%
|
4.6%
|
|
EUR
|
2.4%
|
2.3%
|
2.5%
|
|
31 December 2023
|
1 year
|
3 year
|
5 year
|
|
USD
|
5.1%
|
4.5%
|
4.3%
|
|
CAD
|
5.3%
|
4.4%
|
4.1%
|
|
GBP
|
4.9%
|
4.0%
|
3.8%
|
|
EUR
|
3.5%
|
2.7%
|
2.6%
|
Measurement of insurance contract liabilities - Risk
adjustment
Estimation of the risk adjustment
for non-financial risk is based on various inputs and assumptions,
particularly relating to non-financial risk components of the SCR
from the Solvency II internal model which captures all material
exposure elements for the Group. IFRS 17 does not prescribe a
specific methodology for the calculation of the risk adjustment for
non-financial risk and the Group has elected to use a CoC approach.
This is determined by comparing the required return by each class
of business within the internal model. Our overall cross cycle
return on capital target is 15%. Projected capital amounts are
derived from the annual business plan, with adjustments made to factor in
emerging risks and uncertainties.
The risk adjustment therefore differs between
portfolios depending on the inherent risk associated with each.
Diversification is considered between business types (to allow for
negative/positive correlation between risks) and between years (to
allow for the different kind of risk written across
years).
The risk adjustment calculations as
defined above are performed on a net basis, and the resulting risk
adjustment percentage is then applied separately to insurance
contracts issued and reinsurance contracts held.
The reserve confidence level
determined by the actuarial department is considered as part of a
quarterly reserve review exercise. These meetings are attended by
senior management, senior underwriters, and representatives from
actuarial, claims and finance. The reserve confidence level was
deemed to be at the 84th percentile for the 2024 year end as per
output from the latest governed reserve review (2023: 85th
percentile) at the balance sheet date. This is in line with the
preference that the Group maintains a reserve confidence level in
the 80th to 90th percentile range. The carrying values of insurance
contracts by measurement component (including risk adjustment) are
disclosed in Note 17(a).
Valuation of level 3 financial assets
The Group holds syndicate loans,
illiquid assets and a share of its collateralised loan obligations
at level 3 within the fair value hierarchy. This means that fair
values are estimated using model valuations which incorporate both
observable and unobservable market inputs and assumptions. For
further details on the methodologies, inputs and assumptions used
by the Group, in addition to carrying values of level 3 financial
assets, refer to Note 13.
2
Segmental reporting
2a
Reporting segments
Segmental information is presented
based on the Group's management and internal reporting structures
which represent the level at which financial information is
reported, performance is analysed and resources are allocated by
the Group's Executive Committee, being the chief operating
decision-maker as defined by IFRS 8.
Segment results include items
directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Foreign exchange gains/losses,
other operating expenses and other income are allocated to each
segment in proportion to their respective percentage of total
insurance revenue. The reporting segments do not cross-sell
business to each other.
Finance costs and taxation have not
been allocated to operating segments as these items are determined
at a consolidated level and do not relate to operating
performance.
An overview of the Group's segments
is set out below.
Cyber Risks
This segment underwrites cyber and
technology risks.
Digital
This segment underwrites a variety
of marine, contingency and SME liability risks through digital
channels such as e-trading platforms and broker portals.
MAP Risks
This segment underwrites marine,
portfolio underwriting and political and contingency
business.
Property
Risks
This segment underwrites first-party
property risks and reinsurance business.
Specialty
Risks
This segment underwrites a wide
range of liability classes, including employment practices risks
and directors and officers, as well as healthcare, lawyers and
international financial institutions.
2b
Segmental information
|
|
Year
ended 31 December 2024
|
|
|
Cyber
Risks
|
Digital
|
MAP
Risks
|
Property
Risks
|
Specialty
Risks
|
Total
|
|
2024
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Insurance revenue
|
1,156.7
|
234.7
|
917.4
|
1,518.1
|
1,851.2
|
5,678.1
|
|
Insurance service
expenses
|
(784.8)
|
(160.0)
|
(716.8)
|
(919.6)
|
(1,351.8)
|
(3,933.0)
|
|
Current year claims
|
(641.8)
|
(104.0)
|
(383.9)
|
(678.4)
|
(977.5)
|
(2,785.6)
|
|
Adjustments to prior year claims
|
85.0
|
37.7
|
(29.7)
|
158.4
|
149.8
|
401.2
|
|
Reversal of/(loss on) onerous contracts
|
2.6
|
0.3
|
2.9
|
0.2
|
(0.9)
|
5.1
|
|
Insurance acquisition cash flows amortisation and other
directly attributable expenses
|
(230.6)
|
(94.0)
|
(306.1)
|
(399.8)
|
(523.2)
|
(1,553.7)
|
|
Allocation of reinsurance
premium
|
(231.1)
|
(28.5)
|
(81.1)
|
(225.4)
|
(198.8)
|
(764.9)
|
|
Amounts recoverable from reinsurers
for incurred claims
|
189.1
|
6.8
|
40.0
|
(22.4)
|
42.3
|
255.8
|
|
Current year claims
|
212.0
|
13.5
|
67.2
|
68.5
|
155.7
|
516.9
|
|
Adjustments to prior year claims
|
(22.0)
|
(6.6)
|
(26.0)
|
(90.0)
|
(112.1)
|
(256.7)
|
|
Share of expenses and other amounts
|
(0.9)
|
(0.1)
|
(1.2)
|
(0.9)
|
(1.3)
|
(4.4)
|
|
Insurance service result
|
329.9
|
53.0
|
159.5
|
350.7
|
342.9
|
1,236.0
|
|
|
|
|
|
|
|
|
|
Net investment income
|
108.2
|
17.7
|
72.3
|
112.8
|
263.4
|
574.4
|
|
Net finance expense from insurance
contracts issued
|
(29.6)
|
(1.5)
|
(5.8)
|
(4.5)
|
(47.7)
|
(89.1)
|
|
Net finance income from reinsurance
contracts held
|
6.3
|
-
|
3.8
|
10.2
|
12.9
|
33.2
|
|
Net insurance and financial result
|
414.8
|
69.2
|
229.8
|
469.2
|
571.5
|
1,754.5
|
|
|
|
|
|
|
|
|
|
Other income
|
21.6
|
4.4
|
17.1
|
28.3
|
34.6
|
106.0
|
|
Other operating expenses
|
(79.2)
|
(16.1)
|
(62.8)
|
(103.9)
|
(126.6)
|
(388.6)
|
|
Foreign exchange losses
|
(1.8)
|
(0.4)
|
(1.5)
|
(2.4)
|
(3.0)
|
(9.1)
|
|
Segment result
|
355.4
|
57.1
|
182.6
|
391.2
|
476.5
|
1,462.8
|
|
Finance costs
|
|
|
|
|
|
(39.3)
|
|
Profit before tax
|
|
|
|
|
|
1,423.5
|
|
Tax expense
|
|
|
|
|
|
(293.2)
|
|
Profit after tax
|
|
|
|
|
|
1,130.3
|
|
|
|
|
|
|
|
|
|
Claims ratio
|
39.4%
|
28.7%
|
44.2%
|
41.9%
|
47.5%
|
43.1%
|
|
Expense ratio
|
25.0%
|
45.6%
|
36.7%
|
31.0%
|
31.7%
|
31.7%
|
|
Combined ratio
|
64.4%
|
74.3%
|
80.9%
|
72.9%
|
79.2%
|
74.8%
|
The calculation bases for the
claims, expense and combined ratios are disclosed within the APMs
section.
|
|
Year
ended 31 December 2023
|
|
|
Cyber
Risks
|
Digital
|
MAP
Risks
|
Property
Risks
|
Specialty
Risks
|
Total
|
|
2023
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Insurance revenue
|
1,174.9
|
224.7
|
1,015.4
|
1,145.2
|
1,882.2
|
5,442.4
|
|
Insurance service
expenses
|
(802.1)
|
(144.0)
|
(635.5)
|
(643.9)
|
(1,367.1)
|
(3,592.6)
|
|
Current year claims
|
(565.2)
|
(90.5)
|
(430.8)
|
(470.1)
|
(940.1)
|
(2,496.7)
|
|
Adjustments to prior year claims
|
(8.9)
|
33.7
|
88.6
|
108.1
|
39.8
|
261.3
|
|
(Loss on)/reversal of onerous contracts
|
(2.6)
|
2.6
|
1.4
|
(0.1)
|
0.5
|
1.8
|
|
Insurance acquisition cash flows amortisation and other
directly attributable expenses
|
(225.4)
|
(89.8)
|
(294.7)
|
(281.8)
|
(467.3)
|
(1,359.0)
|
|
Allocation of reinsurance
premium
|
(308.5)
|
(24.3)
|
(236.1)
|
(198.5)
|
(359.9)
|
(1,127.3)
|
|
Amounts recoverable from reinsurers
for incurred claims
|
210.1
|
7.1
|
23.9
|
26.4
|
261.0
|
528.5
|
|
Current year claims
|
211.8
|
13.0
|
107.6
|
57.0
|
294.2
|
683.6
|
|
Adjustments to prior year claims
|
(1.0)
|
(5.7)
|
(83.0)
|
(30.1)
|
(31.7)
|
(151.5)
|
|
Share of expenses and other amounts
|
(0.7)
|
(0.2)
|
(0.7)
|
(0.5)
|
(1.5)
|
(3.6)
|
|
Insurance service result
|
274.4
|
63.5
|
167.7
|
329.2
|
416.2
|
1,251.0
|
|
|
|
|
|
|
|
|
|
Net investment income
|
86.6
|
14.8
|
53.5
|
75.2
|
250.1
|
480.2
|
|
Net finance expense from insurance
contracts issued
|
(17.5)
|
(2.9)
|
(12.6)
|
(10.9)
|
(125.4)
|
(169.3)
|
|
Net finance (expense)/income from
reinsurance contracts held
|
(1.3)
|
0.5
|
2.1
|
(13.7)
|
28.3
|
15.9
|
|
Net
insurance and financial result
|
342.2
|
75.9
|
210.7
|
379.8
|
569.2
|
1,577.8
|
|
|
|
|
|
|
|
|
|
Other income
|
16.9
|
3.2
|
14.8
|
16.5
|
27.1
|
78.5
|
|
Other operating expenses
|
(52.7)
|
(19.9)
|
(68.1)
|
(42.5)
|
(182.6)
|
(365.8)
|
|
Foreign exchange gains
|
1.0
|
0.2
|
0.8
|
0.9
|
1.6
|
4.5
|
|
Segment result
|
307.4
|
59.4
|
158.2
|
354.7
|
415.3
|
1,295.0
|
|
Finance costs
|
|
|
|
|
|
(40.6)
|
|
Profit before tax
|
|
|
|
|
|
1,254.4
|
|
Tax expense
|
|
|
|
|
|
(227.6)
|
|
Profit after tax
|
|
|
|
|
|
1,026.8
|
|
|
|
|
|
|
|
|
|
Claims ratio
|
42.2%
|
23.4%
|
40.6%
|
35.4%
|
41.9%
|
39.4%
|
|
Expense ratio
|
26.1%
|
44.9%
|
37.9%
|
29.8%
|
30.8%
|
31.6%
|
|
Combined ratio
|
68.3%
|
68.3%
|
78.5%
|
65.2%
|
72.7%
|
71.0%
|
|
|
|
|
|
|
|
|
3
Insurance revenue
Insurance revenue represents the
total changes in the liability for remaining coverage that relate
to services for which the Group expects to receive consideration.
This includes the difference between the claims and other expenses
expected at the beginning of the year versus those actually
incurred (per Note 4), after the loss component
allocation.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Amounts relating to changes in the
liability for remaining coverage:
|
|
|
|
Expected incurred claims and other
expenses after loss component allocation
|
3,223.6
|
3,015.7
|
|
Change in risk adjustment for
non-financial risk for the risk expired after loss component
allocation
|
271.5
|
316.8
|
|
CSM recognised in profit or loss
for services provided
|
807.3
|
691.4
|
|
Other amounts including experience
adjustments
|
366.5
|
503.7
|
|
Insurance acquisition cash flows
recovery
|
1,009.2
|
914.8
|
|
Total insurance revenue
|
5,678.1
|
5,442.4
|
4
Insurance service expenses
The table below shows the insurance
service expenses recognised on groups of insurance contracts issued
by the Group. These are recognised in the consolidated statement of
profit or loss as they are incurred.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Incurred claims and other directly
attributable expenses
|
3,330.1
|
2,911.6
|
|
Changes that relate to past service
- adjustments to the LIC
|
(401.2)
|
(232.0)
|
|
Losses on onerous contracts and
reversal of those losses
|
(5.1)
|
(1.8)
|
|
Insurance acquisition cash flows
amortisation
|
1,009.2
|
914.8
|
|
Total insurance service expense
|
3,933.0
|
3,592.6
|
5
Net expenses from reinsurance contracts held
The table below shows the net
expenses from reinsurance contracts held, comprising the allocation
of reinsurance premium and amounts recoverable from reinsurers for
incurred claims.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Amounts relating to changes in the
remaining coverage:
|
|
|
|
- Expected claims and other
expenses recovery
|
(494.5)
|
(740.5)
|
|
- Changes in the risk adjustment
recognised for the risk expired
|
(54.0)
|
(105.2)
|
|
- CSM recognised for the services
received
|
(173.1)
|
(290.8)
|
|
- Other amounts including
experience adjustments
|
(43.3)
|
9.2
|
|
Allocation of reinsurance premium
|
(764.9)
|
(1,127.3)
|
|
Effect of changes in the risk of
reinsurers non-performance
|
(1.8)
|
4.2
|
|
Claims recovered
|
516.9
|
680.1
|
|
Other incurred directly
attributable expenses
|
(4.4)
|
(3.6)
|
|
Changes that relate to past service
- adjustments to incurred claims recovery
|
(254.9)
|
(152.2)
|
|
Amounts recoverable from reinsurers for incurred
claims
|
255.8
|
528.5
|
|
Total net expenses from reinsurance contracts
held
|
(509.1)
|
(598.8)
|
6
Net financial result
Finance income/expense from
insurance contracts issued and reinsurance contracts held
represents the interest accreted and the effect of changes in
discount rates and other financial assumptions. The net financial
result comprises the Group's net investment income and its net
insurance finance expense.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Interest and dividends on financial
assets at fair value
|
313.2
|
215.3
|
|
Interest on cash and cash
equivalents at amortised cost
|
43.5
|
16.8
|
|
Net realised fair value
gains/(losses) on financial assets at FVTPL
|
131.8
|
(69.2)
|
|
Net unrealised fair value gains on
financial assets at FVTPL
|
95.5
|
325.2
|
|
Investment income from financial
assets
|
584.0
|
488.1
|
|
Investment management
expenses
|
(9.6)
|
(7.9)
|
|
Net investment income
|
574.4
|
480.2
|
|
Interest accreted
|
(372.5)
|
(379.1)
|
|
Effect of changes in financial
assumptions
|
283.4
|
209.8
|
|
Net finance expense from insurance
contracts issued
|
(89.1)
|
(169.3)
|
|
Interest accreted
|
80.4
|
84.4
|
|
Effect of changes in financial
assumptions
|
(47.2)
|
(68.5)
|
|
Net finance income from reinsurance
contracts held
|
33.2
|
15.9
|
|
Net insurance finance expense
|
(55.9)
|
(153.4)
|
|
Net
financial result
|
518.5
|
326.8
|
Investment income by category of financial
asset
The tables below show the Group's
investment income, split by category of financial asset. "Other
financial assets" includes cash and cash equivalents and derivative
financial instruments.
|
|
Debt
securities and syndicate loans
|
Capital
growth
assets
|
Other
financial
assets
|
Total
|
|
2024
|
$m
|
$m
|
$m
|
$m
|
|
Interest and dividends
received
|
308.8
|
4.4
|
43.5
|
356.7
|
|
Net realised gains
|
39.6
|
87.6
|
4.6
|
131.8
|
|
Net unrealised fair value
gains/(losses)
|
84.2
|
28.4
|
(17.1)
|
95.5
|
|
Total investment income from financial
assets
|
432.6
|
120.4
|
31.0
|
584.0
|
|
|
Debt
securities and syndicate loans
|
Capital
growth
assets
|
Other
financial
assets
|
Total
|
|
2023
|
$m
|
$m
|
$m
|
$m
|
|
Interest and dividends
received
|
208.4
|
3.7
|
20.0
|
232.1
|
|
Net realised
(losses)/gains
|
(117.8)
|
52.6
|
(4.0)
|
(69.2)
|
|
Net unrealised fair value
gains
|
291.2
|
34.0
|
-
|
325.2
|
|
Total investment income from financial
assets
|
381.8
|
90.3
|
16.0
|
488.1
|
7
Other income
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Commissions received by Beazley
service companies
|
17.0
|
42.8
|
|
Profit commissions and other income
received from syndicates
|
68.3
|
29.9
|
|
Managing agent fees from
third-party syndicates
|
11.3
|
3.6
|
|
Other income
|
9.4
|
2.2
|
|
Total other income
|
106.0
|
78.5
|
Commissions received by Beazley service
companies
Commissions are received from
non-Group syndicates by Group service companies writing business on
their behalf. These are recognised as the services are provided,
and therefore the performance obligations of the contracts are met.
Commission is payable to the Group by syndicate 623 due to Group
service companies writing business on behalf of the syndicate.
While the commercial purpose of the contract is to pass business to
syndicate 623, the remuneration is triggered by incurring expenses,
irrespective of volume of business gained. Fees are recognised as
the services are provided, and therefore the performance
obligations of the contracts are met. In addition, the Group
charges syndicates 5623 and 4321 for a portion of the
profit-related remuneration paid to its underwriting staff. Payment
is therefore triggered by the underlying profitability of the
syndicate.
Profit commissions and other income received from
syndicates
This primarily relates to profit
commissions received from syndicates in the year. The underlying
agreements are in place between the third-party capital syndicates
managed by the Group and their managing agent, Beazley Furlonge
Limited. Under these agreements, the transaction price represents a
fixed percentage on profit by year of account. As such, the
profitability of the syndicates is a performance criterion. No
other variable consideration (for example: discounts, rebates,
refunds, incentives) is attached. The value of each transaction
price is derived at the reporting date from the actual profits made
by the syndicates, and therefore represents the most likely amount
of consideration at the reporting date.
8
Operating expenses
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Staff costs
|
656.8
|
527.6
|
|
Other administrative
expenses
|
504.4
|
401.2
|
|
Total administrative expenses
|
1,161.2
|
928.8
|
|
Recharged to third party
syndicates
|
(129.9)
|
(115.5)
|
|
Expenses reclassified within the
insurance service result
|
(642.7)
|
(447.5)
|
|
Total operating expenses
|
388.6
|
365.8
|
Included within other administrative
expenses is depreciation of $16.5m (2023: $17.1m) and amortisation
of $11.1m (2023: $16.2m)
Net
staff costs
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Wages and salaries
|
302.2
|
259.8
|
|
Short-term incentive
payments
|
235.3
|
167.5
|
|
Social security
|
53.8
|
45.3
|
|
Share-based remuneration
|
40.1
|
33.8
|
|
Costs relating to defined
contribution pension schemes
|
25.4
|
21.2
|
|
Staff costs
|
656.8
|
527.6
|
|
Recharged to third-party
syndicates
|
(98.8)
|
(78.2)
|
|
Net staff costs
|
558.0
|
449.4
|
Average number of employees
A breakdown by category of employee
is disclosed below.
|
|
2024
|
2023
|
|
|
|
|
|
Directors
|
11
|
11
|
|
Senior managers
|
157
|
145
|
|
Other employees
|
2,324
|
1,988
|
|
Total average number of employees
|
2,492
|
2,144
|
9
Finance costs
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Interest expense on financial
liabilities
|
31.6
|
31.6
|
|
Interest expense on lease
liabilities
|
2.9
|
3.1
|
|
Interest and charges related to
letters of credit
|
4.8
|
5.9
|
|
Total finance costs
|
39.3
|
40.6
|
10
Tax expense
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Current tax expense
|
|
|
|
Current tax expense
|
219.3
|
121.8
|
|
Prior year adjustment
|
14.2
|
1.5
|
|
Pillar Two tax expense*
|
13.1
|
-
|
|
|
246.6
|
123.3
|
|
Deferred tax expense
|
|
|
|
Origination and reversal of
temporary differences
|
50.8
|
97.3
|
|
Difference between current and
deferred tax rates
|
-
|
6.8
|
|
Prior year adjustments
|
(4.2)
|
0.2
|
|
|
46.6
|
104.3
|
|
Tax
expense
|
293.2
|
227.6
|
* Pillar Two tax expense relates to
Qualified Domestic Minimum Top-Up Tax in Ireland.
Reconciliation of tax expense
The Group makes the majority of its
profit in Ireland, the UK and the US. The weighted average of
statutory tax rates based on the profits earned in each country in
which the Group operates is 18.6% (2023: 17.6%), whereas the tax
charged for the year ended 31 December 2024 as a percentage of
profit before tax is 20.6% (2023: 18.1%). The reasons for the
difference are explained below:
|
|
2024
|
2024
|
2023
|
2023
|
|
|
$m
|
%
|
$m
|
%
|
|
Profit before tax
|
1,423.5
|
|
1,254.4
|
|
|
Tax calculated at the weighted
average of statutory tax rate
|
264.6
|
18.6
|
221.4
|
17.6
|
|
|
|
|
|
|
|
Effects of:
|
|
|
|
|
|
- non-deductible/(non-taxable)
expenses
|
1.9
|
0.1
|
(2.0)
|
(0.2)
|
|
- losses not previously
recognised
|
-
|
-
|
(1.2)
|
(0.1)
|
|
- tax charge/(relief) on
remuneration
|
1.4
|
0.1
|
0.9
|
0.1
|
|
- under/(over) provided in prior
years
|
10.1
|
0.7
|
1.7
|
0.1
|
|
- difference between current and
deferred tax rates
|
-
|
-
|
6.8
|
0.6
|
|
- effect of tax rates in foreign
jurisdictions
|
2.1
|
0.2
|
-
|
-
|
|
- Pillar Two tax expense
|
13.1
|
0.9
|
-
|
-
|
|
Tax
expense for the year
|
293.2
|
20.6
|
227.6
|
18.1
|
Global minimum tax rate
The Organisation for Economic
Co-Operation and Development Pillar Two framework seeks to ensure
that large multi-national enterprises pay a minimum corporate
income tax rate of 15% on the income arising in each jurisdiction
where they operate. In 2023, the UK enacted legislation to
implement these new rules in respect of accounting periods
beginning on or after 31 December 2023.
The Group mainly operates in
jurisdictions with a statutory tax rate above 15%. The main impact
for the Group is in Ireland
where the tax rate is 12.5%. This is
due to Beazley Insurance dac, a wholly owned subsidiary acting as
an internal group
reinsurer and writing business
directly in Europe, being based in Ireland. In December 2023,
Ireland enacted a Qualified
Domestic Minimum Top-Up Tax such
that in-scope businesses pay at least a 15% effective tax rate on
their profits. The impact
of the top-up tax on the current tax
charge is set out in the above disclosure.
11
Earnings per share
|
|
2024
|
2023
|
|
Profit after tax ($m)
|
1,130.3
|
1,026.8
|
|
Weighted average number of shares
in issue (m)1
|
645.5
|
663.8
|
|
Adjusted weighted average number of
shares in issue (m)
|
663.3
|
678.3
|
|
Basic (cents)
|
175.1c
|
154.7c
|
|
Diluted (cents)
|
170.4c
|
151.4c
|
|
|
|
|
|
Basic (pence)
|
137.0p
|
124.8p
|
|
Diluted (pence)
|
133.3p
|
122.1p
|
1Decreased in the year due to the share buyback programme.
Refer to Note 14 for further details.
Basic earnings per share (EPS) is
calculated by dividing profit after tax of $1,130.3m (2023:
$1,026.8m) by the weighted average number of shares in issue during
the year of 645.5m (2023: 663.8m).
Diluted earnings per share is
calculated by dividing profit after tax of $1,130.3m (2023:
$1,026.8m) by the adjusted weighted average number of shares of
663.3m (2023: 678.3m) in issue. This assumes conversion of dilutive
potential ordinary shares, being shares from equity settled
employee compensation schemes. Share options with performance
conditions attaching to them have been excluded from the weighted
average number of shares to the extent that these conditions have
not been met at the reporting date.
Note that both calculations exclude
the shares held in the Employee Share Options Plan of 9.1m (31
December 2023: 9.8m) until such time as they vest unconditionally
with the employees.
12
Dividends per share
On 3 March 2025 the Board approved
the payment of an interim dividend of 25.0p per share covering the
whole of 2024 (2023: 14.2p per share) which will be paid on 2 May
2025 to Beazley plc shareholders registered on 21 March 2025. The
Group expects the total amount to be paid in respect of the interim
dividend to be approximately £157.5m (2023: £94.2m). These financial statements do
not provide for the interim dividend as a liability.
13
Financial assets and liabilities
13a
Carrying values of financial assets and
liabilities
Financial assets - carrying values
Set out below are the carrying
values of the Group's 'financial assets at fair value' per the
statement of financial position. These amounts exclude the
following financial assets which are carried at amortised cost and
presented separately:
• Cash and cash
equivalents; and
• Amounts due from
managed syndicates and other receivables.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Debt securities:
|
|
|
|
- Government issued
|
4,289.1
|
4,469.1
|
|
- Corporate bonds
|
|
|
|
- Investment
grade
|
3,862.3
|
3,578.3
|
|
-
High-yield
|
662.4
|
489.0
|
|
- Securitised
|
|
|
|
- Collateralised loan
obligations
|
480.0
|
0.0
|
|
Syndicate loans
|
29.5
|
34.1
|
|
Total debt securities and syndicate
loans
|
9,323.3
|
8,570.5
|
|
Equity funds
|
348.7
|
282.7
|
|
Hedge funds
|
752.0
|
582.2
|
|
Illiquid assets
|
175.4
|
220.1
|
|
Total capital growth
assets
|
1,276.1
|
1,085.0
|
|
Total financial investments at fair value through statement of
profit or loss
|
10,599.4
|
9,655.5
|
|
Derivative financial
assets
|
11.2
|
10.0
|
|
Total financial assets at fair value
|
10,610.6
|
9,665.5
|
Investment grade corporate bonds are
rated BBB-/Baa3 or higher by at least one major rating agency,
high-yield corporate bonds have lower credit ratings, while
collateralised loan obligations have a wider credit spread. Our
collateralised loan obligation holdings are in the highest rated
AAA/AA tranches. Equity funds are investment vehicles which invest
in equity securities and provide diversified exposure to global
equity markets. Hedge funds are investment vehicles pursuing
alternative investment strategies, structured to have minimal
correlation to traditional asset classes. Illiquid assets are
investment vehicles that predominantly target private lending
opportunities, often with longer investment horizons. The fair
value of these assets at 31 December 2024 excludes an unfunded
commitment of $33.6m (2023: $32.0m).
Financial liabilities -
carrying values
Set out below are the carrying
values of the Group's 'financial liabilities' per the statement of
financial position. These amounts exclude lease liabilities and
other payables which are carried at amortised cost.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Tier 2 subordinated debt
(2026)
|
249.7
|
249.5
|
|
Tier 2 subordinated debt
(2029)
|
299.0
|
298.8
|
|
Derivative financial
liabilities
|
27.3
|
6.3
|
|
Total financial liabilities
|
576.0
|
554.6
|
The Group has given a fixed and
floating charge over certain of its investments and other assets to
secure obligations to Lloyd's in respect of its corporate member
subsidiary.
13b
Valuation hierarchy
All assets and liabilities for which
fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy described as follows.
If the inputs used to measure the fair value of an asset or a
liability could be categorised in different levels of the fair
value hierarchy, then the fair value measurement is categorised in
its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire
measurement.
Fair value is the price at which an
orderly transaction to sell an asset or to transfer a liability
would take place between market participants at the measurement
date. Fair value is a market-based measure and in the absence of
observable market prices in an active market, it is measured using
the assumptions that market participants would use when pricing the
asset or liability.
The best evidence of the fair value
of a financial instrument at initial recognition is the transaction
price, i.e. the fair value of the consideration given or received,
unless the fair value of that instrument is evidenced by comparison
with other observable current market transactions in the same
instrument (i.e. without modification or repackaging) or based on a
valuation technique whose variables include only data from
observable markets. When the transaction price provides the best
evidence of fair value at initial recognition, the financial
instrument is initially measured at the transaction price and any
difference between this price and the value initially obtained from
a valuation model is subsequently recognised in profit or loss
depending on the individual facts and circumstances of the
transaction but before the valuation is supported wholly by
observable market data or the transaction is closed out.
Level 1 - Valuations based on quoted
prices in active markets for identical instruments. An active
market is a market in which transactions for the instrument occur
with sufficient frequency and volume on an ongoing basis such that
quoted prices reflect prices at which an orderly transaction would
take place between market participants at the measurement
date.
Level 2 - Valuations based on quoted
prices in markets that are not active, or based on pricing models
for which significant inputs can be corroborated by observable
market data, directly or indirectly (e.g. interest rates and
exchange rates). Level 2 inputs include:
• Quoted prices for
similar assets and liabilities in active markets;
• Quoted prices for
identical or similar assets and liabilities in markets that are not
active, the prices are not current, or price quotations vary
substantially either over time or among market makers, or in which
little information is released publicly;
• Inputs other than
quoted prices that are observable for the asset or liability (for
example, interest rates and yield curves observable at commonly
quoted intervals, implied volatilities and credit spreads);
and
• Market corroborated
inputs.
Included within level 2 are
government bonds and treasury bills, equity funds and corporate
bonds which are not actively traded, hedge funds, collateralised
loan obligations and senior secured loans.
Level 3 - Valuations based on inputs
that are unobservable or for which there is limited market activity
against which to measure fair value. The availability of financial
data can vary for different financial assets and is affected by a
wide variety of factors, including the type of financial
instrument, whether it is new and not yet established in the
marketplace, and other characteristics specific to each
transaction. To the extent that valuation is based on models or
inputs that are unobservable in the market, the determination of
fair value requires more judgement. Accordingly, the degree of
judgement exercised by management in determining fair value is
greatest for instruments classified in level 3. The Group uses
prices and inputs that are current as of the measurement date for
valuation of these instruments.
Valuation approach - level 2
instruments
a) For the Group's level 2 debt
securities and securitised instruments, our fund administrator
obtains the prices used in the valuation from independent pricing
vendors. The independent pricing vendors derive an evaluated price
from observable market inputs. These inputs are verified in their
pricing assumptions such as weighted average life, discount
margins, default rates, and recovery and prepayments assumptions
for mortgage securities.
b) For our hedge funds, the pricing
and valuation of each fund is undertaken by administrators in
accordance with each underlying fund's valuation policy. Individual
fund prices are communicated by the administrators to all investors
via the monthly investor statements. The fair value of the hedge
fund portfolios are calculated by reference to the underlying net
asset values of each of the individual funds. Our hedge funds are
managed by Falcon Money Management Holdings Limited, an associate
of the Group.
c) Subordinated debt fair value is
based on quoted market prices.
Valuation approach - level 3
instruments
a) Our illiquid fund investments are
generally closed ended limited partnerships or open ended funds.
The Group relies on a third-party fund manager to manage these
investments and provide valuations. Note that while the funds
report with full transparency on their underlying investments, the
investments themselves are predominantly in private and unquoted
instruments. The valuation techniques used by the fund managers to
establish the fair values therefore require a degree of estimation.
For example, these may incorporate discounted cash flow models or a
more market-based approach, whilst the main inputs might include
discount rates, fundamental pricing multiples, recent transaction
prices, or comparable market information to create a benchmark
multiple.
b) Syndicate loans are non-tradeable
instruments provided by our Group syndicates to the Central Fund at
Lloyd's in respect of the 2019 (repaid by Lloyd's during the year)
and 2020 underwriting years. These are valued internally using
discounted cash flow models provided by Lloyd's to the market,
designed to appropriately reflect the credit and illiquidity risk
of the instruments. Valuation outputs are then validated using a
control model, with the following inputs and assumptions. Note that
these internally valued instruments are deemed by management to be
inherently more subjective than external valuations.
• Cash flows comprise
the notional cost of the loans, annual interest income, and the
final repayment of the loans at the end of the five-year term. The
weighted average interest rate applicable across all syndicate
loans is 3.8% (2023: 3.8%).
• A discount rate of
8.3% (2023: 7.0%) is applied. This is calculated using a
combination of the long-term treasury bond risk-free rate, the
industry/geographic average regression beta, and a selected risk
premium.
c) Certain collateralised loan
obligation securities have been classified within level 3. These
represent instruments which were issued late in 2024 and have been
priced at par, predominantly as these had not settled at the
balance sheet date. As this is deemed to be an unobservable input
these have been classified within level 3. We expect these
instruments to move into level 2 in the near term as these begin to
be priced by our pricing vendors using models with observable
market inputs.
There were no changes in the
valuation techniques during the year compared with those described
in the Group's 2023 Annual Report and Accounts.
13c
Fair values of financial assets and liabilities
The following table shows the fair
values of financial assets and financial liabilities, including
their levels in the fair value hierarchy. The fair value of the
Group's subordinated debt excludes any accrued interest to allow
comparability with the carrying value in the Group's financial
statements. The Group's cash and cash equivalents, other
receivables, lease liabilities, and other payables have been
excluded from these tables. These instruments are measured at
amortised cost and their carrying values are deemed to be
reasonable approximations of fair values at the reporting
date.
|
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
2024
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets carried at fair value
|
|
|
|
|
|
Fixed and floating rate debt
securities
|
|
|
|
|
|
- Government issued
|
3,235.9
|
1,053.2
|
-
|
4,289.1
|
|
- Corporate bonds
|
|
|
|
|
|
- Investment
grade
|
1,819.5
|
2,042.8
|
-
|
3,862.3
|
|
-
High-yield
|
662.4
|
-
|
-
|
662.4
|
|
- Securitised
|
|
|
|
|
|
- Collateralised loan
obligations
|
-
|
395.4
|
84.6
|
480.0
|
|
Syndicate loans
|
-
|
-
|
29.5
|
29.5
|
|
Equity funds
|
348.7
|
-
|
-
|
348.7
|
|
Hedge funds
|
-
|
752.0
|
-
|
752.0
|
|
Illiquid assets
|
-
|
-
|
175.4
|
175.4
|
|
Derivative financial
assets
|
11.2
|
-
|
-
|
11.2
|
|
Total financial assets carried at fair value
|
6,077.7
|
4,243.4
|
289.5
|
10,610.6
|
|
Financial liabilities carried at fair value
|
|
|
|
|
|
Derivative financial
liabilities
|
27.3
|
-
|
-
|
27.3
|
|
Total financial liabilities carried at fair
value
|
27.3
|
-
|
-
|
27.3
|
|
Fair value of financial liabilities carried at amortised
cost
|
|
|
|
|
|
Tier 2 subordinated debt
(2026)
|
-
|
250.6
|
-
|
250.6
|
|
Tier 2 subordinated debt
(2029)
|
-
|
294.0
|
-
|
294.0
|
|
Total fair value of financial liabilities carried at amortised
cost
|
-
|
544.6
|
-
|
544.6
|
|
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
2023
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets carried at fair value
|
|
|
|
|
|
Fixed and floating rate debt
securities
|
|
|
|
|
|
- Government issued
|
3,291.9
|
1,177.2
|
-
|
4,469.1
|
|
- Corporate bonds
|
|
|
|
|
|
- Investment
grade
|
1,596.7
|
1,981.6
|
-
|
3,578.3
|
|
-
High-yield
|
488.1
|
0.9
|
-
|
489.0
|
|
Syndicate loans
|
-
|
-
|
34.1
|
34.1
|
|
Equity funds
|
282.7
|
-
|
-
|
282.7
|
|
Hedge funds
|
-
|
582.2
|
-
|
582.2
|
|
Illiquid assets
|
-
|
-
|
220.1
|
220.1
|
|
Derivative financial
assets
|
10.0
|
-
|
-
|
10.0
|
|
Total financial assets carried at fair value
|
5,669.4
|
3,741.9
|
254.2
|
9,665.5
|
|
Financial liabilities carried at fair value
|
|
|
|
|
|
Derivative financial
liabilities
|
6.3
|
-
|
-
|
6.3
|
|
Total financial liabilities carried at fair
value
|
6.3
|
-
|
-
|
6.3
|
|
Fair value of financial liabilities carried at amortised
cost
|
|
|
|
|
|
Tier 2 subordinated debt
(2026)
|
-
|
241.7
|
-
|
241.7
|
|
Tier 2 subordinated debt
(2029)
|
-
|
271.9
|
-
|
271.9
|
|
Total fair value of financial liabilities carried at amortised
cost
|
-
|
513.6
|
-
|
513.6
|
13d
Transfers
The Group determines whether
transfers have occurred between levels in the fair value hierarchy
by assessing categorisation at the end of the reporting period. The
following transfers between levels 1 & 2 for the period ended
31 December 2024 reflect the level of trading activities including
frequency and volume derived from market data obtained from an
independent external valuation tool. There were no transfers into
or out of level 3 in the year to 31 December 2024 (2023: no
transfers).
|
|
Level
1
|
Level
2
|
|
31 December 2024 vs
31 December 2023 transfer from level 2 to level 1
|
$m
|
$m
|
|
- Corporate Bonds - Investment
grade
|
666.3
|
(666.3)
|
|
|
Level
1
|
Level
2
|
|
31 December 2024 vs
31 December 2023 transfer from level 1 to level
2
|
$m
|
$m
|
|
- Corporate Bonds - Investment
grade
|
(624.9)
|
624.9
|
The values shown in the transfer
tables above are translated using spot foreign exchange rates as at
31 December 2024.
13e
Level 3 investment reconciliations
The table below shows a
reconciliation from the opening balances to the closing balances of
level 3 fair values. All realised and unrealised gains/(losses) are
recognised through net investment income in the statement of profit
or loss (refer to Note 6).
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Opening position as at 01
January
|
254.2
|
255.4
|
|
Purchases
|
118.7
|
21.8
|
|
Sales
|
(69.2)
|
(37.4)
|
|
Repayment of syndicate
loans
|
(7.7)
|
-
|
|
Realised gain
|
18.6
|
20.2
|
|
Unrealised loss
|
(25.6)
|
(6.6)
|
|
Foreign exchange gain
|
0.5
|
0.8
|
|
Closing position as at 31 December
|
289.5
|
254.2
|
13f
Unconsolidated structured entities
A structured entity is defined as an
entity that has been designed so that voting or similar rights are
not the dominant factor in deciding who controls the entity, such
as when any voting rights relate to administrative tasks only, or
when the relevant activities are directed by means of contractual
arrangements.
As part of its standard investment
activities the Group holds fixed interest investments in high yield
bond funds and collateralised loan obligation instruments, as
well as capital growth investments in equity funds, hedge funds and
illiquid assets which in accordance with IFRS 12 are classified as
unconsolidated structured entities. The Group does not sponsor any
of the unconsolidated structured entities. The assets classified as
unconsolidated structured entities are held at fair value on the
statement of financial position. As at 31 December the investments
comprising the Group's unconsolidated structured entities are as
follows:
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Collateralised loan
obligations
|
480.0
|
-
|
|
High-yield bond funds
|
662.4
|
489.0
|
|
Equity funds
|
348.7
|
282.7
|
|
Hedge funds
|
752.0
|
582.2
|
|
Illiquid assets
|
175.4
|
220.1
|
|
Investments through unconsolidated structured
entities
|
2,418.5
|
1,574.0
|
Most of our unconsolidated
structured entity exposures fall within our capital growth assets.
The capital growth assets are held in investee funds managed by
asset managers who apply various investment strategies to
accomplish their respective investment objectives. The Group's
investments in investee funds are subject to the terms and
conditions of the respective investee fund's offering documentation
and are susceptible to market price risk arising from uncertainties
about future values of those investee funds. Investment decisions
are made after extensive due diligence on the underlying fund, its
strategy and the overall quality of the underlying fund's manager
and assets.
The right to sell or request
redemption of investments in high-yield bond funds, collateralised
loan obligations, equity funds and hedge funds ranges in frequency
from daily to semi-annually. The Group did not sponsor any of the
respective structured entities. The Group's maximum exposure to
loss from its interests in investee funds is equal to the total
fair value of its investments in investee funds and unfunded
commitments.
13g
Currency exposures
The currency exposures of our
financial assets held are detailed below:
|
|
UK
£
|
CAD
$
|
EUR
€
|
Other1
|
Sub
total
|
US
$
|
Total
|
|
2024
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets at
FVTPL:
|
|
|
|
|
|
|
|
|
- Fixed and floating rate
debt
securities
|
653.8
|
428.0
|
-
|
-
|
1,081.8
|
8,212.0
|
9,293.8
|
|
- Syndicate loans
|
29.5
|
-
|
-
|
-
|
29.5
|
-
|
29.5
|
|
- Equity linked funds
|
-
|
-
|
-
|
-
|
-
|
348.7
|
348.7
|
|
- Hedge funds
|
-
|
-
|
-
|
-
|
-
|
752.0
|
752.0
|
|
- Illiquid assets
|
13.5
|
-
|
36.0
|
-
|
49.5
|
125.9
|
175.4
|
|
- Derivative financial
assets
|
-
|
-
|
-
|
-
|
-
|
11.2
|
11.2
|
|
Cash and cash
equivalents
|
110.6
|
41.6
|
80.9
|
16.3
|
249.4
|
632.7
|
882.1
|
|
Amounts due from managed syndicates
and other receivables
|
216.7
|
12.8
|
69.9
|
-
|
299.4
|
298.8
|
598.2
|
|
Total
|
1,024.1
|
482.4
|
186.8
|
16.3
|
1,709.6
|
10,381.3
|
12,090.9
|
1
Primarily comprises Swiss franc.
|
|
UK
£
|
CAD
$
|
EUR
€
|
Other1
|
Sub
total
|
US
$
|
Total
|
|
2023
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Financial assets at
FVTPL:
|
|
|
|
|
|
|
|
|
- Fixed and floating rate
debt
securities
|
789.6
|
432.5
|
-
|
-
|
1,222.1
|
7,314.3
|
8,536.4
|
|
- Syndicate loans
|
34.1
|
-
|
-
|
-
|
34.1
|
-
|
34.1
|
|
- Equity linked funds
|
-
|
-
|
-
|
-
|
-
|
282.7
|
282.7
|
|
- Hedge funds
|
-
|
-
|
-
|
-
|
-
|
582.2
|
582.2
|
|
- Illiquid assets
|
6.4
|
-
|
45.9
|
-
|
52.3
|
167.8
|
220.1
|
|
- Derivative financial
assets
|
-
|
-
|
-
|
-
|
-
|
10.0
|
10.0
|
|
Cash and cash
equivalents
|
125.8
|
51.5
|
93.5
|
12.3
|
283.1
|
529.2
|
812.3
|
|
Amounts due from managed syndicates
and other receivables
|
27.6
|
9.4
|
51.4
|
-
|
88.4
|
209.1
|
297.5
|
|
Total
|
983.5
|
493.4
|
190.8
|
12.3
|
1,679.9
|
9,095.3
|
10,775.3
|
1 Primarily comprises Swiss franc.
14
Share capital
|
|
2024
|
2023
|
|
No.
of
shares
(m)
|
$m
|
No.
of
shares
(m)
|
$m
|
|
Ordinary shares of 5p each
|
|
|
|
|
|
Issued and fully paid
|
639.0
|
44.6
|
672.5
|
46.7
|
|
Balance at 01 January
|
672.5
|
46.7
|
671.2
|
46.6
|
|
Issue of shares to satisfy employee
share schemes
|
3.8
|
0.3
|
1.3
|
0.1
|
|
Share buyback
|
(37.3)
|
(2.4)
|
-
|
-
|
|
Balance at 31 December
|
639.0
|
44.6
|
672.5
|
46.7
|
There are no limits to the
authorised share capital of the Company.
On 07 March 2024, Beazley plc
announced to the market its intention to return surplus capital to
its shareholders through a share repurchase programme ("the
buyback"). The buyback completed on 30 September 2024, with 37.3m
ordinary shares repurchased for a total consideration of $327.8m.
At 31 December 2024, there were 639.0m ordinary shares in
issue.
The purchase price of shares and
directly attributable transaction costs of $2.2m (such as stamp
duty, commissions, legal costs and registrar fees) are recognised
through retained earnings. On their cancellation, the nominal value
of the ordinary shares is deducted from share capital and the
equivalent amount is recognised within the capital redemption
reserve.
15
Deferred tax
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Deferred tax asset
|
191.8
|
46.9
|
|
Deferred tax liability
|
(387.2)
|
(202.2)
|
|
Net
deferred tax liability
|
(195.4)
|
(155.3)
|
An overview of the nature of the
deferred tax assets/(liabilities) is set out below.
|
|
Balance
01 Jan 24
|
Recognised in total comprehensive income
|
Recognised in equity
|
FX
translation differences
|
Balance
31 Dec 24
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
Plant and equipment
|
(1.1)
|
(1.8)
|
-
|
-
|
(2.9)
|
|
Intangible assets
|
(1.3)
|
(6.3)
|
-
|
-
|
(7.6)
|
|
Underwriting profits
|
(94.2)
|
(11.8)
|
-
|
-
|
(106.0)
|
|
Deferred acquisition
costs
|
-
|
-
|
-
|
-
|
-
|
|
Tax losses carried
forward
|
9.7
|
(9.7)
|
-
|
-
|
-
|
|
Share-based payments
|
9.0
|
0.4
|
7.1
|
-
|
16.5
|
|
Unrealised gains/(losses) on
investments
|
(1.2)
|
11.3
|
-
|
-
|
10.1
|
|
IFRS 17 adjustments
|
(87.1)
|
(44.2)
|
-
|
-
|
(131.3)
|
|
Other
|
10.9
|
15.3
|
-
|
(0.4)
|
25.8
|
|
Net
deferred tax (liability)/asset
|
(155.3)
|
(46.8)
|
7.1
|
(0.4)
|
(195.4)
|
|
|
Balance
01 Jan
23
|
Recognised in total comprehensive income
|
Recognised in equity
|
FX
translation differences
|
Balance
31 Dec 23
|
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
Plant and equipment
|
(0.8)
|
(0.3)
|
-
|
-
|
(1.1)
|
|
|
Intangible assets
|
(1.8)
|
0.5
|
-
|
-
|
(1.3)
|
|
|
Underwriting profits
|
7.4
|
(101.6)
|
-
|
-
|
(94.2)
|
|
|
Deferred acquisition
costs
|
1.7
|
(1.7)
|
-
|
-
|
-
|
|
|
Tax losses carried
forward
|
4.0
|
5.7
|
-
|
-
|
9.7
|
|
|
Share-based payments
|
8.4
|
1.5
|
(0.9)
|
-
|
9.0
|
|
|
Unrealised gains/(losses) on
investments
|
9.9
|
(11.1)
|
-
|
-
|
(1.2)
|
|
|
IFRS 17 adjustments
|
(83.7)
|
(3.4)
|
-
|
-
|
(87.1)
|
|
|
Other
|
6.5
|
6.8
|
-
|
(2.4)
|
10.9
|
|
|
Net
deferred tax liability
|
(48.4)
|
(103.6)
|
(0.9)
|
(2.4)
|
(155.3)
|
|
Geographical analysis
Deferred tax assets and deferred tax liabilities relating to the
same tax authority are presented net in the Group's balance sheet.
A geographical analysis has been included below.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
UK
|
(245.1)
|
(152.8)
|
|
US
|
191.8
|
46.7
|
|
Ireland
|
(98.5)
|
(38.7)
|
|
Other¹
|
(43.6)
|
(10.5)
|
|
Net
deferred tax (liability)
|
(195.4)
|
(155.3)
|
1 Includes Canada, France, Germany, Spain and
Switzerland.
Under IFRS 17, the timing of the
recognition of the Group's profits differs significantly from the
basis on which corporate taxes are levied in the tax jurisdictions
where the Group operates. None of the Group's material
profit-making entities pay corporate taxes based on IFRS 17 profits
and therefore significant temporary differences arise. In some
jurisdictions, such as the UK and Ireland, profits are recognised
earlier under IFRS 17 and thus a deferred tax liability is
recognised. The Group expects this to unwind over time as profits
are recognised (offset by new profits on an IFRS 17 basis). In the
US, profits are recognised more slowly on an IFRS 17 basis than
under the US Stat basis on which tax is determined, with the Group
recognising a deferred tax asset of $148.2m (2023: $23.2m). The
Group is of the view that sufficient future profits will arise on
an IFRS 17 basis to realise this deferred tax asset.
The Group has no deferred tax assets
relating to trading losses (2023: $9.7m). The Group also has no
unrecognised trading losses as at 31 December 2024 (2023: nil) and
has unrecognised capital losses of $2.5m (2023: $4.0m).
The Group has applied the temporary
mandatory exemption from accounting for deferred taxes under the
Pillar Two rules.
Therefore, no deferred taxes have
been recognised in relation to these rules as at 31 December
2024.
16
Subordinated liabilities
In November 2016, the Group issued
$250m of subordinated Tier 2 notes due in 2026. Annual interest, at
a fixed rate of 5.875%, is payable in May and November each year.
In September 2019, the Group issued $300m of subordinated Tier 2
notes due in 2029. Annual interest, at a fixed rate of 5.5% is
payable in March and September each year.
The subordinated liabilities are
subject to a covenant that requires the Group to notify the lender
of any default (late payment of principal by 7 days or late payment
of interest by 14 days) on an annual basis or where otherwise
requested. Compliance with the covenant is tested annually until
the maturity of the subordinated liabilities. The Group has no
indication that it will have difficulty complying with this
covenant.
The carrying amounts of the
subordinated liabilities are as follows. The total fair value of
the Group's subordinated liabilities is $544.6m (2023:
$513.6m).
|
|
Tier 2
subordinated debt (2029)
|
Tier 2
subordinated debt (2026)
|
Total
|
|
|
$m
|
$m
|
$m
|
|
Opening balance at 01 January
2023
|
298.6
|
249.4
|
548.0
|
|
Amortisation of capitalised
borrowing costs
|
0.2
|
0.1
|
0.3
|
|
Closing balance at 31 December 2023
|
298.8
|
249.5
|
548.3
|
|
Amortisation of capitalised
borrowing costs
|
0.2
|
0.2
|
0.4
|
|
Closing balance at 31 December 2024
|
299.0
|
249.7
|
548.7
|
The annual interest expense on the
Group's subordinated liabilities is included in Note 9.
17
Insurance and reinsurance contracts
17a
Reconciliations by measurement component
This section shows how the net
carrying amounts of insurance contracts issued and reinsurance
contracts held by the Group have changed during the year, as a
result of changes in cash flows and amounts recognised in profit or
loss.
i)
Insurance contracts issued
The tables below set out the
estimated present value of future cash flows, the risk adjustment
for non-financial risk and the CSM for insurance contracts
issued.
|
|
Present
value of future cash flows
|
Risk
adjustment for non-financial risk
|
CSM
|
Total
|
|
31 December 2024
|
$m
|
$m
|
$m
|
$m
|
|
Opening insurance contract
assets
|
103.8
|
(1.2)
|
(1.1)
|
101.5
|
|
Opening insurance contract
liabilities
|
(6,874.5)
|
(774.8)
|
(342.9)
|
(7,992.2)
|
|
Net insurance contract liabilities at 01 January
2024
|
(6,770.7)
|
(776.0)
|
(344.0)
|
(7,890.7)
|
|
|
|
|
|
|
|
CSM recognised in profit or loss
for services provided
|
-
|
-
|
807.3
|
807.3
|
|
Changes in the risk adjustment for
non-financial risk for risk expired
|
-
|
271.5
|
-
|
271.5
|
|
Experience adjustments
|
494.2
|
(234.2)
|
-
|
260.0
|
|
Total changes relating to current
service
|
494.2
|
37.3
|
807.3
|
1,338.8
|
|
|
|
|
|
|
|
Changes in estimates that adjust
the CSM
|
163.8
|
5.1
|
(168.9)
|
-
|
|
Changes in estimates that result in
onerous contract losses or reversal of such losses
|
0.8
|
(0.1)
|
9.7
|
10.4
|
|
Contracts initially recognised in
the period
|
1,079.8
|
(268.7)
|
(816.4)
|
(5.3)
|
|
Total changes relating to future
service
|
1,244.4
|
(263.7)
|
(975.6)
|
5.1
|
|
|
|
|
|
|
|
Total changes relating to past
service - adjustments to the LIC
|
205.0
|
196.2
|
-
|
401.2
|
|
|
|
|
|
|
|
Recognised in insurance service result
|
1,943.6
|
(30.2)
|
(168.3)
|
1,745.1
|
|
|
|
|
|
|
|
Finance (expenses)/income from
insurance contracts issued
|
(112.1)
|
(7.8)
|
30.8
|
(89.1)
|
|
Foreign exchange gains
|
27.9
|
1.2
|
1.0
|
30.1
|
|
Other amounts recognised in total comprehensive
income
|
(84.2)
|
(6.6)
|
31.8
|
(59.0)
|
|
|
|
|
|
|
|
Premiums received net of insurance
acquisition cash flows
|
(5,148.1)
|
-
|
-
|
(5,148.1)
|
|
Claims and other directly
attributable expenses paid
|
2,558.6
|
-
|
-
|
2,558.6
|
|
Total cash flows
|
(2,589.5)
|
-
|
-
|
(2,589.5)
|
|
|
|
|
|
|
|
Closing insurance contract
assets
|
24.5
|
(3.9)
|
(0.4)
|
20.2
|
|
Closing insurance contract
liabilities
|
(7,525.3)
|
(808.9)
|
(480.1)
|
(8,814.3)
|
|
Net
insurance contract liabilities at 31 December
2024
|
(7,500.8)
|
(812.8)
|
(480.5)
|
(8,794.1)
|
|
|
Present
value of future cash flows
|
Risk
adjustment for non-financial risk
|
CSM
|
Total
|
|
31 December 2023
|
$m
|
$m
|
$m
|
$m
|
|
Opening insurance contract
assets
|
123.5
|
(12.9)
|
(26.5)
|
84.1
|
|
Opening insurance contract
liabilities
|
(6,324.0)
|
(711.3)
|
(314.5)
|
(7,349.8)
|
|
Net insurance contract liabilities at 01 January
2023
|
(6,200.5)
|
(724.2)
|
(341.0)
|
(7,265.7)
|
|
|
|
|
|
|
|
CSM recognised in profit or loss
for services provided
|
-
|
-
|
691.4
|
691.4
|
|
Changes in the risk adjustment for
non-financial risk for risk expired
|
-
|
316.8
|
-
|
316.8
|
|
Experience adjustments
|
893.3
|
(285.5)
|
-
|
607.8
|
|
Total changes relating to current
service
|
893.3
|
31.3
|
691.4
|
1,616.0
|
|
|
|
|
|
|
|
Changes in estimates that adjust
the CSM
|
135.0
|
(19.1)
|
(115.9)
|
-
|
|
Changes in estimates that result in
onerous contract losses or reversal of such losses
|
6.0
|
(1.1)
|
7.5
|
12.4
|
|
Contracts initially recognised in
the period
|
870.2
|
(264.2)
|
(616.6)
|
(10.6)
|
|
Total changes relating to future
service
|
1,011.2
|
(284.4)
|
(725.0)
|
1.8
|
|
|
|
|
|
|
|
Total changes relating to past
service - adjustments to the LIC
|
16.2
|
215.8
|
-
|
232.0
|
|
|
|
|
|
|
|
Recognised in insurance service result
|
1,920.7
|
(37.3)
|
(33.6)
|
1,849.8
|
|
|
|
|
|
|
|
Finance income/(expenses) from
insurance contracts issued
|
(190.2)
|
(13.9)
|
34.8
|
(169.3)
|
|
Foreign exchange
gains/(losses)
|
1.9
|
(0.6)
|
(4.2)
|
(2.9)
|
|
Other amounts recognised in total comprehensive
income
|
(188.3)
|
(14.5)
|
30.6
|
(172.2)
|
|
|
|
|
|
|
|
Premiums received net of insurance
acquisition cash flows
|
(4,526.4)
|
-
|
-
|
(4,526.4)
|
|
Claims and other directly
attributable expenses paid
|
2,223.8
|
-
|
-
|
2,223.8
|
|
Total cash flows
|
(2,302.6)
|
-
|
-
|
(2,302.6)
|
|
|
|
|
|
|
|
Closing insurance contract
assets
|
103.8
|
(1.2)
|
(1.1)
|
101.5
|
|
Closing insurance contract
liabilities
|
(6,874.5)
|
(774.8)
|
(342.9)
|
(7,992.2)
|
|
Net
insurance contract liabilities at 31 December
2023
|
(6,770.7)
|
(776.0)
|
(344.0)
|
(7,890.7)
|
ii) Reinsurance contracts held
The tables below set out the
estimates of the present value of future cash flows, risk
adjustment for non-financial risk and CSM for reinsurance contracts
held.
|
|
Present
value of future cash flows
|
Risk
adjustment for non-financial risk
|
CSM
|
Total
|
|
31 December 2024
|
$m
|
$m
|
$m
|
$m
|
|
Opening reinsurance contract
assets
|
2,143.4
|
166.2
|
117.1
|
2,426.7
|
|
Opening reinsurance contract
liabilities
|
(404.4)
|
58.4
|
12.5
|
(333.5)
|
|
Net reinsurance contract assets at 01 January
2024
|
1,739.0
|
224.6
|
129.6
|
2,093.2
|
|
|
|
|
|
|
|
CSM recognised in profit or loss
for the services provided
|
-
|
-
|
(173.1)
|
(173.1)
|
|
Changes in the risk adjustment for
non-financial risk for the risk expired
|
-
|
(54.0)
|
-
|
(54.0)
|
|
Experience adjustments
|
(71.3)
|
46.0
|
-
|
(25.3)
|
|
Total changes relating to current
service
|
(71.3)
|
(8.0)
|
(173.1)
|
(252.4)
|
|
|
|
|
|
|
|
Changes in estimates that adjust
the CSM
|
159.0
|
(42.0)
|
(117.0)
|
-
|
|
Contracts initially recognised in
the period
|
(498.9)
|
96.6
|
402.3
|
-
|
|
Total changes relating to future
service
|
(339.9)
|
54.6
|
285.3
|
-
|
|
|
|
|
|
|
|
Adjustments to incurred claims
recovery
|
(157.8)
|
(97.1)
|
-
|
(254.9)
|
|
Effect of changes in the risk of
reinsurers' non-performance
|
(1.8)
|
-
|
-
|
(1.8)
|
|
Total changes relating to past
service
|
(159.6)
|
(97.1)
|
-
|
(256.7)
|
|
|
|
|
|
|
|
Recognised in insurance service result
|
(570.8)
|
(50.5)
|
112.2
|
(509.1)
|
|
|
|
|
|
|
|
Finance income/(expenses) from
reinsurance contracts held
|
38.6
|
1.7
|
(7.1)
|
33.2
|
|
Foreign exchange losses
|
(2.8)
|
(0.4)
|
(0.1)
|
(3.3)
|
|
Other amounts recognised in total comprehensive
income
|
35.8
|
1.3
|
(7.2)
|
29.9
|
|
|
|
|
|
|
|
Premiums paid net of ceding
commissions and other directly attributable expenses
paid
|
1,254.7
|
-
|
-
|
1,254.7
|
|
Recoveries from
reinsurance
|
(499.2)
|
-
|
-
|
(499.2)
|
|
Total cash flows
|
755.5
|
-
|
-
|
755.5
|
|
|
|
|
|
|
|
Closing reinsurance contract
assets
|
2,309.7
|
160.4
|
196.5
|
2,666.6
|
|
Closing reinsurance contract
liabilities
|
(350.2)
|
15.0
|
38.1
|
(297.1)
|
|
Net
reinsurance contract assets at 31 December 2024
|
1,959.5
|
175.4
|
234.6
|
2,369.5
|
|
|
Present
value of future cash flows
|
Risk
adjustment for non-financial risk
|
CSM
|
Total
|
|
31 December 2023
|
$m
|
$m
|
$m
|
$m
|
|
Opening reinsurance contract
assets
|
1,853.3
|
184.6
|
137.4
|
2,175.3
|
|
Opening reinsurance contract
liabilities
|
(193.8)
|
12.7
|
19.9
|
(161.2)
|
|
Net reinsurance contract assets at 01 January
2023
|
1,659.5
|
197.3
|
157.3
|
2,014.1
|
|
|
|
|
|
|
|
CSM recognised in profit or loss
for the services provided
|
-
|
-
|
(290.8)
|
(290.8)
|
|
Changes in the risk adjustment for
non-financial risk for the risk expired
|
-
|
(105.2)
|
-
|
(105.2)
|
|
Experience adjustments
|
(139.0)
|
84.2
|
-
|
(54.8)
|
|
Total changes relating to current
service
|
(139.0)
|
(21.0)
|
(290.8)
|
(450.8)
|
|
|
|
|
|
|
|
Changes in estimates that adjust
the CSM
|
91.6
|
(16.1)
|
(75.5)
|
-
|
|
Contracts initially recognised in
the period
|
(436.3)
|
84.2
|
352.1
|
-
|
|
Total changes relating to future
service
|
(344.7)
|
68.1
|
276.6
|
-
|
|
|
|
|
|
|
|
Adjustments to incurred claims
recovery
|
(110.9)
|
(41.3)
|
-
|
(152.2)
|
|
Effect of changes in the risk of
reinsurers' non-performance
|
4.2
|
-
|
-
|
4.2
|
|
Total changes relating to past
service
|
(106.7)
|
(41.3)
|
-
|
(148.0)
|
|
|
|
|
|
|
|
Recognised in insurance service result
|
(590.4)
|
5.8
|
(14.2)
|
(598.8)
|
|
|
|
|
|
|
|
Finance income/(expense) from
reinsurance contracts held
|
24.0
|
5.7
|
(13.8)
|
15.9
|
|
Foreign exchange
(losses)/gains
|
(20.6)
|
15.8
|
0.3
|
(4.5)
|
|
Other amounts recognised in total comprehensive
income
|
3.4
|
21.5
|
(13.5)
|
11.4
|
|
|
|
|
|
|
|
Premiums paid net of ceding
commissions and other directly attributable expenses
paid
|
1,080.4
|
-
|
-
|
1,080.4
|
|
Recoveries from
reinsurance
|
(413.9)
|
-
|
-
|
(413.9)
|
|
Total cash flows
|
666.5
|
-
|
-
|
666.5
|
|
|
|
|
|
|
|
Closing reinsurance contract
assets
|
2,143.4
|
166.2
|
117.1
|
2,426.7
|
|
Closing reinsurance contract
liabilities
|
(404.4)
|
58.4
|
12.5
|
(333.5)
|
|
Net
reinsurance contract assets at 31 December 2023
|
1,739.0
|
224.6
|
129.6
|
2,093.2
|
17b
Analysis of the liability for remaining coverage and the liability
for incurred claims
i)
Insurance contracts issued
The tables below analyse insurance
contract assets and liabilities between the LRC and the LIC for
insurance contracts issued.
|
|
LRC
|
LIC
|
Total
|
|
|
Excluding
loss component
|
Loss
component
|
|
31 December 2024
|
$m
|
$m
|
$m
|
$m
|
|
Opening insurance contract
assets
|
101.7
|
-
|
(0.2)
|
101.5
|
|
Opening insurance contract
liabilities
|
(848.8)
|
(8.3)
|
(7,135.1)
|
(7,992.2)
|
|
Net insurance contract liabilities at 01 January
2024
|
(747.1)
|
(8.3)
|
(7,135.3)
|
(7,890.7)
|
|
|
|
|
|
|
|
Insurance revenue
|
5,678.1
|
-
|
-
|
5,678.1
|
|
Insurance service
expenses:
|
|
|
|
|
|
- Incurred claims and other
directly attributable expenses
|
(80.8)
|
-
|
(3,249.3)
|
(3,330.1)
|
|
- Changes that relate to past
service - adjustments to the LIC
|
-
|
-
|
401.2
|
401.2
|
|
- Losses on onerous contracts and
reversal of those losses
|
-
|
5.1
|
-
|
5.1
|
|
- Insurance acquisition cash flows
amortisation
|
(1,009.2)
|
-
|
-
|
(1,009.2)
|
|
Recognised in insurance service result
|
4,588.1
|
5.1
|
(2,848.1)
|
1,745.1
|
|
|
|
|
|
|
|
Finance income/(expenses) from
insurance contracts issued
|
96.7
|
-
|
(185.8)
|
(89.1)
|
|
Foreign exchange gains
|
19.2
|
-
|
10.9
|
30.1
|
|
Other amounts recognised in total comprehensive
income
|
115.9
|
-
|
(174.9)
|
(59.0)
|
|
|
|
|
|
|
|
Premiums received net of insurance
acquisition cash flows
|
(5,148.1)
|
-
|
-
|
(5,148.1)
|
|
Claims and other directly
attributable expenses paid
|
-
|
-
|
2,558.6
|
2,558.6
|
|
Total cash flows
|
(5,148.1)
|
-
|
2,558.6
|
(2,589.5)
|
|
|
|
|
|
|
|
Closing insurance contract
assets
|
52.4
|
-
|
(32.2)
|
20.2
|
|
Closing insurance contract
liabilities
|
(1,243.6)
|
(3.2)
|
(7,567.5)
|
(8,814.3)
|
|
Net
insurance contract liabilities at 31 December
2024
|
(1,191.2)
|
(3.2)
|
(7,599.7)
|
(8,794.1)
|
|
|
LRC
|
LIC
|
Total
|
|
|
Excluding
loss component
|
Loss
component
|
|
31 December 2023
|
$m
|
$m
|
$m
|
$m
|
|
Opening insurance contract
assets
|
87.2
|
-
|
(3.1)
|
84.1
|
|
Opening insurance contract
liabilities
|
(824.7)
|
(10.1)
|
(6,515.0)
|
(7,349.8)
|
|
Net insurance contract liabilities at 01 January
2023
|
(737.5)
|
(10.1)
|
(6,518.1)
|
(7,265.7)
|
|
|
|
|
|
|
|
Insurance revenue
|
5,442.4
|
-
|
-
|
5,442.4
|
|
Insurance service
expenses:
|
|
|
|
|
|
- Incurred claims and other
directly attributable expenses
|
(86.3)
|
-
|
(2,825.3)
|
(2,911.6)
|
|
- Changes that relate to past
service - adjustments to the LIC
|
-
|
-
|
232.0
|
232.0
|
|
- Losses on onerous contracts and
reversal of those losses
|
-
|
1.8
|
-
|
1.8
|
|
- Insurance acquisition cash flows
amortisation
|
(914.8)
|
-
|
-
|
(914.8)
|
|
Recognised in insurance service result
|
4,441.3
|
1.8
|
(2,593.3)
|
1,849.8
|
|
|
|
|
|
|
|
Finance income from insurance
contracts issued
|
70.8
|
-
|
(240.1)
|
(169.3)
|
|
Foreign exchange
gains/(losses)
|
4.7
|
-
|
(7.6)
|
(2.9)
|
|
Other amounts recognised in total comprehensive
income
|
75.5
|
-
|
(247.7)
|
(172.2)
|
|
|
|
|
|
|
|
Premiums received net of insurance
acquisition cash flows
|
(4,526.4)
|
-
|
-
|
(4,526.4)
|
|
Claims and other directly
attributable expenses paid
|
-
|
-
|
2,223.8
|
2,223.8
|
|
Total cash flows
|
(4,526.4)
|
-
|
2,223.8
|
(2,302.6)
|
|
|
|
|
|
|
|
Closing insurance contract
assets
|
101.7
|
-
|
(0.2)
|
101.5
|
|
Closing insurance contract
liabilities
|
(848.8)
|
(8.3)
|
(7,135.1)
|
(7,992.2)
|
|
Net
insurance contract liabilities at 31 December
2023
|
(747.1)
|
(8.3)
|
(7,135.3)
|
(7,890.7)
|
ii) Reinsurance contracts held
The tables below analyse reinsurance
contract assets and liabilities between the asset for remaining
coverage (ARC) and asset for incurred claims (AIC) for reinsurance
contracts held.
|
|
ARC¹
|
AIC
|
Total
|
|
31 December 2024
|
$m
|
$m
|
$m
|
|
Opening reinsurance contract
assets
|
758.4
|
1,668.3
|
2,426.7
|
|
Opening reinsurance contract
liabilities
|
(1,080.3)
|
746.8
|
(333.5)
|
|
Net reinsurance contract assets/(liabilities) at 01 January
2024
|
(321.9)
|
2,415.1
|
2,093.2
|
|
|
|
|
|
|
Allocation of reinsurance
premium
|
(764.9)
|
-
|
(764.9)
|
|
Amounts recoverable from reinsurers
for incurred claims:
|
|
|
|
|
- Effect of changes in the risk of
reinsurers' non-performance
|
-
|
(1.8)
|
(1.8)
|
|
- Claims recovered
|
-
|
516.9
|
516.9
|
|
- Other incurred directly
attributable expenses
|
-
|
(4.4)
|
(4.4)
|
|
- Changes that relate to past
service - adjustments to incurred claims recovery
|
-
|
(254.9)
|
(254.9)
|
|
Net expenses from reinsurance contracts held
|
(764.9)
|
255.8
|
(509.1)
|
|
|
|
|
|
|
Finance (expenses)/income from
reinsurance contracts held
|
(27.3)
|
60.5
|
33.2
|
|
Foreign exchange losses
|
(0.9)
|
(2.4)
|
(3.3)
|
|
Other amounts recognised in total comprehensive
income
|
(28.2)
|
58.1
|
29.9
|
|
|
|
|
|
|
Premiums paid net of ceding
commissions and other directly attributable expenses
paid
|
1,254.7
|
-
|
1,254.7
|
|
Recoveries from
reinsurance
|
-
|
(499.2)
|
(499.2)
|
|
Total cash flows
|
1,254.7
|
(499.2)
|
755.5
|
|
|
|
|
|
|
Closing reinsurance contract
assets
|
573.8
|
2,092.8
|
2,666.6
|
|
Closing reinsurance contract
liabilities
|
(434.1)
|
137.0
|
(297.1)
|
|
Net
reinsurance contract assets at 31 December 2024
|
139.7
|
2,229.8
|
2,369.5
|
1
Includes loss recovery component of $0.9m at 01
January 2024 and $0.2m at 31 December 2024.
|
|
ARC2
|
AIC
|
Total
|
|
31 December
20231
|
$m
|
$m
|
$m
|
|
Opening reinsurance contract
assets
|
24.9
|
2,150.4
|
2,175.3
|
|
Opening reinsurance contract
liabilities
|
(254.7)
|
93.5
|
(161.2)
|
|
Net
reinsurance contract assets/(liabilities) at 01 January
2023
|
(229.8)
|
2,243.9
|
2,014.1
|
|
|
|
|
|
|
Allocation of reinsurance
premium
|
(1,127.3)
|
-
|
(1,127.3)
|
|
Amounts recoverable from reinsurers
for incurred claims:
|
|
|
|
|
- Effect of changes in the risk of
reinsurers' non-performance
|
-
|
4.2
|
4.2
|
|
- Claims recovered
|
-
|
680.1
|
680.1
|
|
- Other incurred directly
attributable expenses
|
-
|
(3.6)
|
(3.6)
|
|
- Changes that relate to past
service - adjustments to incurred claims recovery
|
-
|
(152.2)
|
(152.2)
|
|
Net
expenses from reinsurance contracts held
|
(1,127.3)
|
528.5
|
(598.8)
|
|
|
|
|
|
|
Finance (expenses)/income from
reinsurance contracts held
|
(40.9)
|
56.8
|
15.9
|
|
Foreign exchange losses
|
(4.3)
|
(0.2)
|
(4.5)
|
|
Other amounts recognised in total comprehensive
income
|
(45.2)
|
56.6
|
11.4
|
|
|
|
|
|
|
Premiums paid net of ceding
commissions and other directly attributable expenses
paid
|
1,080.4
|
-
|
1,080.4
|
|
Recoveries from
reinsurance
|
-
|
(413.9)
|
(413.9)
|
|
Total cash flows
|
1,080.4
|
(413.9)
|
666.5
|
|
|
|
|
|
|
Closing reinsurance contract
assets
|
758.4
|
1,668.3
|
2,426.7
|
|
Closing reinsurance contract
liabilities
|
(1,080.3)
|
746.8
|
(333.5)
|
|
Net
reinsurance contract assets/(liabilities) at 31 December
2023
|
(321.9)
|
2,415.1
|
2,093.2
|
1
A presentational error was identified in the
version of this disclosure included in the 2023 Annual Report and
Accounts. The disclosure above has been restated to correct these
errors. There was no impact to the carrying value of any item in
the statement of financial position, amounts recognised through the
income statement or the opening and closing balances in this
disclosure. Certain amounts had been incorrectly classified between
the asset for incurred claims and the asset for remaining coverage.
Specifically: an allocation of reinsurance premium of $763.5m had
been classified as a movement in the AIC when it should have been
included in the ARC; movement in the ARC of $1.3m for the effect of
changes in the risk of reinsurers non-performance, $767.1m for
claims recovered and $0.5m for other directly attributable expenses
should have been included as movements relating to amounts
recoverable from reinsurers in the AIC; and $1.8m relating to
foreign exchange is consequently required to be recognised as a
movement in AIC, not the ARC.
2
Includes loss recovery component of $3.8m at 01
January 2023 and $0.9m at 31 December 2023.
17c
New business
i)
Impact of insurance contracts issued in the year
The following tables show the impact
of new insurance contracts issued in the period. These are broken
down by contracts which were/were not deemed to be onerous on
initial recognition.
|
|
Non-onerous contracts originated
|
Onerous
contracts originated
|
Total
|
|
Year ended 31 December
2024
|
$m
|
$m
|
$m
|
|
Estimated present value of future
cash outflows:
|
|
|
|
|
- Insurance acquisition cash
flows
|
(949.7)
|
(20.7)
|
(970.4)
|
|
- Claims and other directly
attributable expenses
|
(2,864.4)
|
(61.5)
|
(2,925.9)
|
|
Estimated present value of future
cash inflows
|
4,890.2
|
85.9
|
4,976.1
|
|
Risk adjustment for non-financial
risk
|
(259.7)
|
(9.0)
|
(268.7)
|
|
Contractual service
margin
|
(816.4)
|
-
|
(816.4)
|
|
Net
increase in insurance contract liabilities
|
-
|
(5.3)
|
(5.3)
|
|
|
Non-onerous contracts originated
|
Onerous
contracts originated
|
Total
|
|
Year ended 31 December
2023
|
$m
|
$m
|
$m
|
|
Estimated present value of future
cash outflows:
|
|
|
|
|
- Insurance acquisition cash
flows
|
(759.3)
|
(68.1)
|
(827.4)
|
|
- Claims and other directly
attributable expenses
|
(2,489.8)
|
(176.7)
|
(2,666.5)
|
|
Estimated present value of future
cash inflows
|
4,115.0
|
249.1
|
4,364.1
|
|
Risk adjustment for non-financial
risk
|
(249.3)
|
(14.9)
|
(264.2)
|
|
Contractual service
margin
|
(616.6)
|
-
|
(616.6)
|
|
Net
increase in insurance contract liabilities
|
-
|
(10.6)
|
(10.6)
|
ii) Impact of reinsurance contracts held in the
year
The following table shows the impact
of new reinsurance contracts initially recognised in the period
which were not deemed to originate with a loss recovery component.
Contracts originating with a loss recovery
component were $0.3m (2023:
$0.3m).
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Estimated present value of future
cash outflows
|
(1,035.3)
|
(1,253.5)
|
|
Estimated present value of future
cash inflows
|
536.4
|
817.2
|
|
Risk adjustment for non-financial
risk
|
96.6
|
84.2
|
|
Contractual service
margin
|
402.3
|
352.1
|
|
Net
increase in reinsurance contract assets
|
-
|
-
|
17d
Future CSM release
The tables below show when the Group
expects to release the closing CSM to the profit or loss in
appropriate future time bands. It is presented for both insurance
contracts issued and reinsurance contracts held.
|
|
2024
|
2023
|
|
Insurance contracts
issued
|
$m
|
$m
|
|
Number of years until expected to
be recognised
|
|
|
|
1
|
421.7
|
299.0
|
|
2
|
20.1
|
14.7
|
|
3
|
13.6
|
10.5
|
|
4
|
8.7
|
7.6
|
|
5
|
5.5
|
5.1
|
|
6-10
|
10.9
|
7.1
|
|
Total
|
480.5
|
344.0
|
|
|
2024
|
2023
|
|
Reinsurance contracts
held
|
$m
|
$m
|
|
Number of years until expected to
be recognised
|
|
|
|
1
|
151.7
|
118.7
|
|
2
|
49.7
|
3.7
|
|
3
|
26.2
|
2.6
|
|
4
|
2.5
|
1.8
|
|
5
|
1.4
|
1.2
|
|
6-10
|
3.1
|
1.6
|
|
Total
|
234.6
|
129.6
|
17e
Claims development
The following tables show the
estimates of cumulative ultimate claims for each successive
underwriting year from six years prior to the reporting date,
reconciled back to LIC. This information has been provided on a
gross of reinsurance basis and separately for reinsurance contracts
held. Claims development information has only been disclosed from
the 2019 underwriting year onward (being five years before the end
of the annual reporting period in which IFRS 17 was first applied
by the Group). In the below tables, historic periods have been
revalued using current exchange rates. The cumulative estimate of
claims and recoveries comprise expected claims, reinsurance
recovery cash flows and directly attributable expenses. It does not
include the risk adjustment, premiums or acquisition
costs.
|
|
|
Underwriting year
|
|
Insurance contracts
issued
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
Total
|
|
2024
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
At end of underwriting
year
|
1,711.5
|
2,309.2
|
2,696.2
|
3,122.6
|
3,110.9
|
3,403.8
|
|
|
1 year later
|
2,207.2
|
2,696.9
|
2,968.1
|
3,036.1
|
3,215.1
|
|
|
|
2 years later
|
2,240.9
|
2,804.3
|
2,787.7
|
2,912.8
|
|
|
|
|
3 years later
|
2,237.1
|
2,652.0
|
2,620.0
|
|
|
|
|
|
4 years later
|
2,228.1
|
2,582.6
|
|
|
|
|
|
|
5 years later
|
2,258.2
|
|
|
|
|
|
|
|
Cumulative gross estimate of
claims
|
2,258.2
|
2,582.6
|
2,620.0
|
2,912.8
|
3,215.1
|
3,403.8
|
16,992.5
|
|
Cumulative payments to
date
|
(1,871.3)
|
(1,982.9)
|
(1,615.0)
|
(1,405.8)
|
(1,105.7)
|
(254.1)
|
(8,234.8)
|
|
Carrying amount relating to 2018
and prior underwriting years
|
|
|
|
|
|
|
752.1
|
|
Less liability for remaining
coverage claims only
|
|
|
|
|
|
|
(1,923.7)
|
|
Impact of discounting
(LIC)
|
|
|
|
|
|
|
(666.6)
|
|
LIC risk adjustment for
non-financial risk
|
|
|
|
|
|
|
680.2
|
|
Gross discounted LIC
|
|
|
|
|
|
|
7,599.7
|
|
|
|
Underwriting year
|
|
Reinsurance contracts
held
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
Total
|
|
2024
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
At end of underwriting
year
|
(290.6)
|
(455.6)
|
(699.3)
|
(932.5)
|
(519.8)
|
(472.9)
|
|
|
1 year later
|
(412.4)
|
(635.6)
|
(708.1)
|
(882.8)
|
(553.1)
|
|
|
|
2 years later
|
(377.0)
|
(701.1)
|
(707.8)
|
(841.2)
|
|
|
|
|
3 years later
|
(396.1)
|
(578.1)
|
(647.6)
|
|
|
|
|
|
4 years later
|
(424.9)
|
(586.9)
|
|
|
|
|
|
|
5 years later
|
(468.0)
|
|
|
|
|
|
|
|
Cumulative gross estimate of claims
recoveries
|
(468.0)
|
(586.9)
|
(647.6)
|
(841.2)
|
(553.1)
|
(472.9)
|
(3,569.7)
|
|
Cumulative payments to
date
|
315.3
|
411.6
|
253.8
|
159.3
|
55.2
|
9.5
|
1,204.7
|
|
Carrying amount relating to 2018
and prior underwriting years
|
|
|
|
|
|
|
(305.2)
|
|
Less asset for remaining coverage
claims only
|
|
|
|
|
|
|
394.3
|
|
Impact of discounting
(AIC)
|
|
|
|
|
|
|
186.9
|
|
AIC risk adjustment for
non-financial risk
|
|
|
|
|
|
|
(140.8)
|
|
Reinsurance discounted AIC
|
|
|
|
|
|
|
(2,229.8)
|
18
Subsequent events
The Group is exposed to the
California Wildfires which occurred in January 2025. Our initial
estimates expect a net claims impact of around $80m
(unaudited).
On 3 March 2025, the Board of
Beazley plc approved a share buyback of its ordinary shares for up
to a maximum aggregate consideration of $500m which is expected to
commence on 5 March 2024. The buyback will reduce the Group's net
asset value by approximately $500m.
For details of dividends declared
after the end of the reporting period please refer to Note
12.
Alternative performance measures (APMs)
Beazley plc uses APMs to help
explain its financial performance and position. These measures are
not defined under IFRS. The Group is of the view that the use of
these measures enhances the usefulness of our financial reporting
and allows for improved comparison with industry peers.
Information on APMs used by the
Group is set out below. Unless otherwise stated, amounts are
disclosed in millions of dollars ($m).
Insurance written premiums & net insurance written
premiums
Insurance written premiums ($m) is
calculated by deducting the reinstatement premiums and profit
commissions from the gross premiums written. Net insurance written
premiums ($m) is calculated by adding insurance ceded premiums to
this result. These APMs represent management's view of premiums
written in each period. The primary difference between insurance
written premiums and insurance revenue relates to the deferral and
earning of income over the period in which coverage is
provided.
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Insurance written
premiums1
|
6,164.1
|
5,601.4
|
|
Earnings adjustment
|
(486.0)
|
(159.0)
|
|
Insurance revenue
|
5,678.1
|
5,442.4
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Insurance ceded
premiums1
|
(1,011.8)
|
(905.2)
|
|
Earnings adjustment
|
246.9
|
(222.1)
|
|
Allocation of reinsurance premiums
|
(764.9)
|
(1,127.3)
|
|
|
2024
|
2023
|
|
|
$m
|
$m
|
|
Insurance written
premiums1
|
6,164.1
|
5,601.4
|
|
Add insurance ceded
premiums
|
(1,011.8)
|
(905.2)
|
|
Net
insurance written premiums
|
5,152.3
|
4,696.2
|
1Beazley Staff Underwriting Limited's participation in
syndicate 623 at Lloyd's, is now fully consolidated within the
Group accounts on a line by line basis due to an increase in
materiality. Excluding the impact of this consolidation of premium,
growth for the year would have been 8.5% on a gross basis and 8.2%
on a net basis.
Contractual Service Margin (CSM) sustainability
index
The CSM reflects the expected profit
of contracts within the liability for remaining coverage. The
sustainability index ratio is calculated by dividing the closing
CSM at 31 December by the opening CSM at 1 January. A ratio of 1
and above shows that the expected profit within the LRC is higher
than the previous valuation.
|
|
Gross
|
Net
|
Gross
|
Net
|
|
|
2024
|
2024
|
2023
|
2023
|
|
Closing CSM
|
480.5
|
245.9
|
344.0
|
214.4
|
|
Divided by opening CSM
|
344.0
|
214.4
|
341.0
|
183.7
|
|
CSM
sustainability index
|
1.40
|
1.15
|
1.01
|
1.17
|
Claims, expense & combined ratios
Claims ratio (%) is calculated as
insurance service expenses less directly attributable expenses, net
of reinsurance recoveries, divided by insurance revenue net of
reinsurance ceded revenue. Expense ratio (%) is calculated as the
sum of insurance acquisition cash flows amortisation and other
directly attributable expenses, divided by insurance revenue net of
reinsurance ceded revenue. Combined ratio (%) is calculated as
insurance service expenses net of reinsurance recoveries, divided
by the insurance revenue net of reinsurance ceded revenue. This is
also the sum of the claims and expense ratios. The combined ratio
below is shown both before and after the impact of
discounting.
|
|
2024
|
2023
|
|
Insurance service expenses
($m)
|
3,933.0
|
3,592.6
|
|
Less directly attributable expenses
($m)1
|
(1,558.1)
|
(1,362.6)
|
|
Amounts recoverable from reinsurers
for incurred claims ($m)
|
(255.8)
|
(528.5)
|
|
Net claims ($m)
|
2,119.1
|
1,701.5
|
|
Insurance revenue ($m)
|
5,678.1
|
5,442.4
|
|
Allocation of reinsurance premium
($m)
|
(764.9)
|
(1,127.3)
|
|
Divided by net insurance revenue
($m)
|
4,913.2
|
4,315.1
|
|
Claims ratio
|
43.1%
|
39.4%
|
|
Directly attributable expenses
($m)1
|
1,558.1
|
1,362.6
|
|
Divided by net insurance revenue
($m)
|
4,913.2
|
4,315.1
|
|
Expense ratio
|
31.7%
|
31.6%
|
|
Combined ratio
|
74.8%
|
71.0%
|
|
Removal of impact of
discounting
|
4.2%
|
3.0%
|
|
Combined ratio (undiscounted)
|
79.0%
|
74.0%
|
1
Directly attributable expenses are comprised of
insurance acquisition cash flows amortisation, other directly
attributable expenses, and reinsurers' share of expenses and other
amounts per Note 2.
Net
assets per share & net tangible assets per
share
Net assets per share ("NAVps") is
the ratio (in pence and cents) calculated by dividing the net
assets or total equity of the Group by the number of shares in
issue at the end of the period, excluding those held by the
employee benefits trust. Net tangible assets per share excludes
intangible assets from net assets in the above
calculation.
|
|
2024
|
2023
|
|
Net assets ($m)
|
4,606.8
|
3,882.1
|
|
Less intangible assets
($m)
|
(198.0)
|
(165.3)
|
|
Net tangible assets ($m)
|
4,408.8
|
3,716.8
|
|
Divided by the shares in issue at
the period end (millions)1:
|
629.9
|
662.7
|
|
Net assets per share (cents)
|
731.4
|
585.8
|
|
Net tangible assets per share (cents)
|
699.9
|
560.9
|
|
Converted at spot rate:
|
0.78
|
0.80
|
|
Net assets per share (pence)
|
570.5
|
468.6
|
|
Net
tangible assets per share (pence)
|
545.9
|
448.7
|
1
Shares in issue at the period end exclude those
held by the employee benefits trust of 9.1m (2023:
9.8m).
Net
assets per share growth
Net assets per share growth (%) is
calculated as the NAVps at the end of the reporting period
("closing"), less the NAVps five years prior to the start of the
reporting period ("opening"), divided by the NAVps at opening. The
NAVps has been calculated on an IFRS 17 basis for the 2022 and
subsequent periods, and on an IFRS 4 basis for the 2021 and prior
periods.
|
|
2024
|
2023
|
|
Net assets per share (cents) at
opening
|
309.6
|
280.4
|
|
Net assets per share (cents) at
closing
|
731.4
|
585.8
|
|
Movement
|
421.8
|
305.4
|
|
Net assets per share growth (%)
|
136%
|
109%
|
|
|
|
|
Return on equity ("ROE")
Return on equity (%) is calculated
by dividing the consolidated profit after tax by the average equity
for the period (using an average of the opening and closing equity
positions).
|
|
2024
|
2023
|
|
Profit after tax ($m)
|
1,130.3
|
1,026.8
|
|
Divided by average total equity
($m)
|
4,244.5
|
3,418.6
|
|
Return on equity
|
26.6%
|
30.0%
|
Average return on equity
Average return on equity (%) is
calculated as the straight average of the ROE over a period of five
and ten years years from the end of the reporting period. The ROE
has been calculated on an IFRS 17 basis for the 2022 and subsequent
periods, and on an IFRS 4 basis for the 2021 and prior
periods.
|
|
2024
|
2023
|
|
31 December 2014
|
-%
|
17.0%
|
|
31 December 2015
|
19.0%
|
19.0%
|
|
31 December 2016
|
18.0%
|
18.0%
|
|
31 December 2017
|
9.0%
|
9.0%
|
|
31 December 2018
|
5.0%
|
5.0%
|
|
31 December 2019
|
15.0%
|
15.0%
|
|
31 December 2020
|
(3.0)%
|
(3.0)%
|
|
31 December 2021
|
16.0%
|
16.0%
|
|
31 December 2022
|
19.0%
|
19.0%
|
|
31 December 2023
|
30.0%
|
30.0%
|
|
31 December 2024
|
26.6%
|
-%
|
|
Average ROE over 5 years
|
17.7%
|
15.4%
|
|
Average ROE over 10 years
|
15.5%
|
14.5%
|
Investment return
Investment return (%) is calculated
by dividing the net investment income by the average financial
assets at fair value and cash and cash equivalents held by the
Group over the period.
|
|
2024
|
2023
|
|
Net investment income
($m)
|
574.4
|
480.2
|
|
Opening invested assets:
|
|
|
|
Financial assets at fair value
($m)
|
9,665.5
|
8,345.6
|
|
Cash and cash equivalents
($m)
|
812.3
|
652.5
|
|
Invested assets at the beginning of the period
($m)
|
10,477.8
|
8,998.1
|
|
Closing invested assets:
|
|
|
|
Financial assets at fair value
($m)
|
10,610.6
|
9,665.5
|
|
Cash and cash equivalents
($m)
|
882.1
|
812.3
|
|
Invested assets at the end of the period:
($m)
|
11,492.7
|
10,477.8
|
|
Divided by average invested assets ($m)
|
10,985.3
|
9,738.0
|
|
Investment return
|
5.2%
|
4.9%
|