Quarter 3 trading update for Beazley, Hiscox and Lancashire

The last few days has seen Beazley, Hiscox and Lancashire Holdings all release their Q3 trading statements. Each update provided a positive view of their year to date and forecasts for the remaining quarter of this year. Looking ahead to 2025, they remain confidence regarding the rating environment remaining attractive, with an expectation of rate increases in certain lines of business rather whilst maintaining current levels of risk exposure. A summary for each carrier is provided below.

Beazley

Beazley’s statement reported that insurance written premium had risen by 7% to $4,625m. As previously indicated, the rate change for the year was flat (2023: +5%). The group’s combined net exposure to the recent Hurricanes, Helene and Milton, is between $125m and $175m, the impacts of which are not affecting the combined ratio guidance for the full year which remains at around 80% (assuming average catastrophe activity for the remainder of the year). This is clearly reassuring for third-party capital and gives further confidence on their full year outlook.

The key elements of their statement are

• Insurance written premiums (IWP) increased by 7% to $4.63 billion from $4.33 billion year-over-year.

• Property premium growth surged 24% to $1.40 billion, driven by strength in the excess & surplus (E&S) market.

• Specialty risks grew to $1.39 billion, with "moderate" growth expected due to subdued capital markets.

• Cyber insurance reached $924 million, maintaining a stable outlook despite rising ransomware claim severity and competition in Europe.

• Investment income rose to $513 million, or 4.7% year-to-date, compared to $202 million in 2023.

Beazley is on track to meet gross consensus estimates (the average of forecasts for company revenues and earnings by analysts) but may slightly underperform net expectations due to quarterly volatility. Beazley continues to anticipate high single-digit gross IWP growth and plans to review its capital position for potential shareholder distributions at the end of the year. Looking to 2025, Beazley expects slightly lower growth rates, attributing this to evolving market conditions and the company's disciplined approach to capital allocation.

Adrian Cox, Chief Executive Officer, said: "I am extremely proud of how our business has navigated the volatile claims environment we have seen so far this year. Our commitment to disciplined underwriting and our risk selection expertise mean that, despite an active hurricane season and a global cyber event, we expect to deliver an undiscounted combined ratio of around 80% for the full year, consistent with our guidance at our interim results in August."

Their full statement can be found here: https://beazley2023tf.q4web.com/news/news-details/2024/Trading-Statement/default.aspx

Hiscox

Hiscox main headline was that it expects a “very attractive” 1 January renewal after the London-listed carrier reported an acceleration in growth in its “big ticket” businesses during the third quarter. This was confirmed by its net premium growth which accelerated in the third quarter in both its London Market and Hiscox Re & ILS divisions.

Hiscox’s Q3 2024 trading update reports strong overall performance, with notable growth in its retail, reinsurance, and ILS segments despite challenges in its London Market business.

In Hiscox Retail, premiums increased by 4.4% to $1.9 billion, driven by demand in the UK and Europe. This segment benefited from expanding partnerships in Europe, particularly with digital MGAs, which strengthened small business outreach. In the U.S., Hiscox experienced steady growth, particularly through digital channels, though the broker segment’s performance improved at a slower pace.

Hiscox London Market saw a 2.9% decline in premiums, reflecting a strategic pullback in certain lines, such as directors and officers (D&O) and cyber insurance, due to rate pressures. Nevertheless, rate increases averaged 3% year-to-date across the London Market, marking significant growth since 2018. Crisis management lines within this segment, including kidnap, ransom, and terrorism insurance, were standout growth areas with an 18% premium increase.

For Hiscox Re & ILS, net premiums rose 12% year-over-year, supported by favourable market conditions and a strong investor pipeline in ILS assets, with total assets under management reaching $1.5 billion. The reinsurance segment was largely resilient in the face of recent catastrophe events, as Hiscox reported that claims were within expectations, though Hurricane Milton in October was projected to incur a $75 million net loss.

CEO Aki Hussain highlighted a consistent focus on sustainable, high-quality growth across Hiscox’s global markets and reinsurance segments, reflecting the firm’s strategic emphasis on selective capital deployment and less volatile returns.

The full statement can be found here hiscoxgroup.com/sites/group/files/2024-11/Investis Hiscox Q3 IMS 0900 AU_OA.mp3

Lancashire Holdings

Lancashire’s Q3 trading statement reported that its gross premium had increased by 9% to $1.7bn with insurance revenue increasing by 16.8% to $1.3bn. With regards to recent major weather events which they underwrite, including Hurricanes Helene and Debby, the Calgary hailstorm, Storm Boris and Hurricane Milton, their loss estimates are expected to fall between $110m and $140m.

The key elements of their statement are

• Insurance revenue rose by 16.8% to $1.298 billion, attributed to both new premiums and earnings recognized from prior years.

• The reinsurance segment in property and specialty lines, increased by 12.4% year-on-year, reaching $941.2 million. The insurance division also grew by 5.1%, driven largely by business through Lancashire’s U.S. and Australia channels.

• Net losses from recent weather events, including hurricanes Milton and Helene and the Calgary hailstorm, are estimated at $110 million to $140 million, with additional large risk event losses totaling $72.8 million.

• CEO Alex Maloney expects the year-end combined ratio to be at the higher end of Lancashire's target range, because of elevated catastrophe losses.

• The investment portfolio achieved a 5% return, supported by higher yields and tightening credit spreads, with strong contributions from bank loans and private investment funds.

There is no change to their long-term strategy, with disciplined growth remaining important to balance returns over the longer term. This approach to growth will allow Lancashire to mitigate the weaker years through portfolio optimisation and they expect this to enhance returns over 

the cycle. Further they continue to reiterate that their business has strengthened and is more resilient, with a strong capital base allowing them to confidently forecast delivery on their long term strategy. They continue to remain disciplined in their underwriting, while taking advantage of the market conditions.

The full statement can be found here : https://www.lancashiregroup.com/en/investors/results-reports-and-presentations.html

Summary

There is confidence and similarly confident messages from all three carriers who have all increased their insurance premiums, are confident that their reserving strategies in dealing with major weather events are within their risk tolerance and are all forecasting a strong end to the year. In addition, their combined outlook for 2025 is positive where they feel the rating environment and disciplined approach to underwriting will provide some excellent opportunities for capital deployment.