1. Cover
Results for the six months ended
30 June 2013
Tuesday, 23 July 2013
1

2. Disclaimer notice
Certain statements in the presentation, are or may
constitute “forward looking statements”. Such forward
looking statements involve risks, uncertainties and
other factors which may cause the actual results,
performance or achievements of the company, or
industry results, to be materially different from any
future results, performance or achievements expressed
by such forward looking statements. The information
and opinions contained in this presentation are
provided as at the date of this presentation and are
subject to change without notice. There is no intention,
nor is any duty or obligation assumed to supplement,
amend, update or revise any of the information
contained in this presentation.
2

3. Contents
Pages
Overview
Business update
5
6
Financials
Performance
Investments
Reserves
Capital position
8
9-10
11-12
13
In Focus Property
14-19
Underwriting review and outlook
20-22
Appendix
24-34
3

4. Generic title white
Overview

5. Overview – Strong underwriting performance in an increasingly competitive market
• Profit before income tax of $82.3m (2012 profit: $112.9m)
• Gross written premiums increased 5% to $1,066.7m (2012: $1,013.1m)
• Combined ratio 89% (2012: 91%)
• Rate change on renewal business 1% (2012: 3%)
• Prior year reserve releases of $60.8m (2012: $47.6m)
• Investment return of $0.3m (2012: $36.1m)
• Annualised return on equity of 12% (2012: 18%)
• Interim dividend up 7% to 2.9p
5

6. Business update
• Continue to achieve rate increases in specialty lines
• Changes made to property group to enhance performance
• Aviation business progressing well
• European floods are covered in our reserves (maximum loss would be $30m retention)
• Challenging investment markets in Q2
6

7. Generic title white
Financials

8. Six months financial performance
6 months ended
30 June 2013
6 months ended
30 June 2012
% increase
1,066.7
1,013.1
5%
Net written premiums ($m)
758.0
650.8
16%
Net earned premiums ($m)
758.8
703.3
8%
82.3
112.9
(27%)
Earnings per share (pence)
9.3
12.5
Dividend per share (pence)
2.9
2.7
Net assets per share (pence)
152.0
142.2
Net tangible assets per share (pence)
138.0
126.0
Gross written premiums ($m)
Profit before tax ($m)
8

9. Portfolio delivers a nil return during H1 2013
100.0
7.0%
80.0
6.0%
5.0%
46.9
60.0
46.5
40.0
3.0%
16.8
43.5
20.0
2.0%
29.0
36.1
1.0%
22.5
21.3
0.3
8.5
0.0
0.0%
-1.0%
-20.0
-2.0%
-40.0
(62.8)
-3.0%
-4.0%
-60.0
-5.0%
-80.0
-6.0%
2008
2009
2010
2nd half
2011
1st half
2012
2013
Return
9
Annualised Investment Return
Investment Return
($m)
4.0%

10. Conservative portfolio maintained
Jun-13
Other
Credit, 2.3%
Capital Growth
Assets, 11.4%
Dec-12
Other
Credit, 2.0%
Cash and Cash
Equivalents, 14
.7%
Capital Growth
Assets, 9.7%
Cash and Cash
Equivalents, 14.
7%
Investment
Grade
Credit, 23.9%
Sovereign and
Supranational,
47.7%
Sovereign and
Supranational, 4
8.8%
10

11. Prior year reserve releases remain stable
16.0%
210
14.0%
190
170
12.0%
150
10.0%
130
110
8.0%
90
6.0%
70
50
4.0%
30
2.0%
10
-10
2008
Specialty lines
2009
2010
Political risks and contingency
2011
Life accident and health
2012
Marine
2012 HY
Property
2013 HY
Reinsurance
0.0%
% of NEP
11

12. Whole account reserve strength within our target range
% above actuarial estimate
Preferred upper end
8.2%
7.5%
6.7%
6.1%
2003
2004
6.4%
2005
7.9%
7.4%
7.4%
6.9%
6.7%
2006
2007
2008
2009
Financial year
2010
2011
2012
7.1%
2013 (HY)
12

13. Strong capital position
Sources of funds
2013 HY
2012 FY
1,157.6
1,204.5
Subordinated debt ($m)
133.5
184.3
Retail bond ($m)
114.0
122.3
1,405.1
1,511.1
Lloyd’s underwriting ($m)
876.0
876.0
US Insurance Company ($m)
107.7
107.7
983.7
983.7
421.4
527.4
(236.1)
(267.1)
Available for underwriting surplus ($m)
185.3
260.3
Un-utilised banking facility ($m)
225.0
225.0
Shareholders funds ($m)
Uses of funds
Surplus ($m)
Unavailable surplus ($m)
13

14. Generic title white
In Focus – Property

15. Covering:
Key themes
• Team Structure
•
•
Continuity in leadership
• Product Mix
Increased margins
Performance
• • Growth where appropriate
•
•
Favourable trading conditions
15

16. Property Group
“To become and be recognised as the highest performing specialist property insurer”
Team/Location
Products
Access
Large Risks
London
and Singapore
• Commercial Property
Lloyd’s broker
Construction
& Engineering
Team/Location
London, Singapore, US
Risk
Size
Middle market
US
• Commercial Property
• Homeowners
US wholesale
broker
Products
Large risks in London
and Singapore
Smaller risks in US
Access
Lloyd’s brokers
(London & Singapore)
Small business
London
• Homeowners
• Commercial Property
• Jewellers’ Block
Lloyd’s broker
US wholesale and
retail brokers (US)
16

17. Where we underwrite
Where our business
comes from
Split by team
Europe
Worldwide
USA
Large Property
Medium Market Property
Small Business
Construction and Engineering
17

18. GWP $m
Property Group – 5 year summary
18

19. Favourable market conditions
150.0%
100.0%
50.0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 HY
Rate changes of Beazley Property Group
19

20. Underwriting review and outlook
20

21. Cumulative rate change since 2001
250%
Rate Change
200%
150%
100%
50%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 HY
Underwriting Year
Life, accident & health
Marine
Political risks & contingency
Property
Reinsurance
Specialty lines
All divisions
21

22. Outlook
• Increasing competitive headwinds
• New capital entering the reinsurance market
• Entrants to US surplus lines markets
• Broker led initiatives increasing capacity in London
• Beazley’s balanced portfolio is well positioned for these headwinds and thanks to
specialty lines, we are planning to achieve flat rates in 2014
• We have growth areas that will continue into 2014
• We expect to earn a 2% yield on the investment portfolio going forward
22

23. Questions?
Any questions?

24. Generic title white
Appendix

25. US interest rates
3.50%
US Government Bond Yields
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
30/06/2011
30/09/2011
30/12/2011
30/03/2012
30/06/2012
US 10 Year Index
30/09/2012
30/12/2012
US 5 Year Index
30/03/2013
30/06/2013
US 2 Year Index
25

26. Specialty lines incurred claims remain in line with expectations
Development Year
Net incurred loss ratio at each development year
6
5
4
3
2
ULR
140%
120%
113%
Net incurred loss ratio
100%
84%
80%
74%
62%
56%
60%
41%
42%
41%
62%
46%
45%
47%
40%
26%
20%
5%
0%
19931996
Net ultimate premium $m
79
19972000
2001
109
53
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
430
465
427
441
420
429
Underwriting Year
94
268
322
340
354
26

27. US originated business $208m for HY 2013
GWP by Product
150
140
130
120
110
100
90
80
$m
70
60
50
40
30
20
10
0
2008
Architects and Engineers
High Value Homeowners
2009
2010
2011
Technology and Media
Professional Liability
Other Property
Commercial Property
2012
2013 HY
Healthcare and Lawyers
Political risks & contingency
27

28. Diversified portfolio achieves consistent combined ratio through market cycles
160
%
140 %
120 %
100 %
80 %
60 %
40 %
2008
2009
2010
2011
2012
2013HY
Year
28

29. Life, accident & health
6 months ended 30 June
2013
2012
Gross premiums written ($m)
56.4
49.7
Net premiums written ($m)
39.0
45.3
Net earned premiums ($m)
45.4
43.7
Claims ratio
76%
60%
Rate change on renewals
(1%)
(1%)
Percentage of business led
78%
79%
•
Reserves strengthened on our
Australian business
•
US admitted open for business
29

30. Marine
6 months ended 30 June
2013
2012
Gross premiums written ($m)
197.1
184.6
Net premiums written ($m)
165.2
156.8
Net earned premiums ($m)
131.5
135.9
Claims ratio
43%
47%
Rate change on renewals
(2%)
-
44%
7% growth in gross premiums
with aviation team delivering
against plan
•
Developing marine liability
account
•
Percentage of business led
•
Prior year reserve releases of
$17.0m (2012: $8.9m)
46%
30

31. Political risks and contingency
6 months ended 30 June
2013
Gross premiums written ($m)
2012
63.3
71.9
•
•
Net premiums written ($m)
46.0
46.3
Prior year reserve releases of
$10.2m (2012: $13.8m)
58.2
Net earned premiums ($m)
Reduction in gross premiums due to
increased competition in political
risks
49.8
Claims ratio
33%
22%
Rate change on renewals
(1%)
(1%)
Percentage of business led
74%
70%
31

32. Property
6 months ended 30 June
2013
2012
Gross premiums written ($m)
199.0
201.5
Net premiums written ($m)
130.1
98.7
Net earned premiums ($m)
150.2
130.2
52%
50%
3%
7%
71%
68%
Claims ratio
Rate change on renewals
Percentage of business led
•
33% growth in net premiums
written as a result of consolidation
in reinsurance purchased
•
Expense ratio improved to 39%
(2012: 51%)
32

33. Reinsurance
6 months ended 30 June
2013
2012
Gross premiums written ($m)
170.3
139.8
Net premiums written ($m)
121.1
96.7
Net earned premiums ($m)
70.8
59.6
24%
(1%)
5%
Percentage of business led
41%
Prior year reserve releases of
$14.9m (2012: $1.6m)
•
Increased competition in this
market due to new capital
entering
51%
Rate change on renewals
22% increase in gross premiums
with growth across the account
•
Claims ratio
•
39%
33

34. Specialty lines
6 months ended 30 June
2013
2012
Gross premiums written ($m)
380.6
365.6
Net premiums written ($m)
256.6
195.1
Net earned premiums ($m)
314.6
284.1
Rate change on renewals
Percentage of business led
62%
63%
4%
Prior year reserve releases of
$17.9m (2012: $19.6m)
3%
95%
Continue to grow premiums in
the technology and media
product range
•
Claims ratio
•
94%
34