Q2 Analyst Seminar Wednesday 28 th May, 2014
Agenda Introduction – Andrew Horton (Chief Executive Officer) Beazley Operations – Ian Fantozzi (Chief Operating Officer) Life, Accident & Health – Christian Tolle (Head of LAH) Marine & Aviation - Clive Washbourn (Head of Marine) Q&A
Beazley Operations Ian Fantozzi Chief Operating Officer
Our operations • Supporting over 900 staff, across 25 offices globally • Building a target operating model with 3 core platforms Lloyd’s US Rest of World 7,000 policies in 2013 21,000 policies in 2013 16,000 policies in 2013 Unirisx IT system BeazleyPro IT system Synergy IT system 90 users supported 350 users supported 550 users supported • These platforms are underpinned by… • Global shared services - IT, projects, data management, real estate, outsourcing, procurement, talent management, and underwriting support & claims support. • Global technology solutions - Beazley Intelligence data analytics, group claims system, and group customer relationship management system.
Experienced operations team • The importance of talent development goes beyond our trading teams Name Ian Penny Ben James Munira Douglas Adam Fantozzi Malik Spencer Wright Hirji Colosky Cragg Role Chief Head of Global Head US Head of Head of US Head of UK/RoW Operating Talent of IT IT Commercial Operations Head of Officer Management Management Operations Beazley years 10 10 9 10 6 8 7 service • Our experience helps us to maximise value from investment • Since 2009 we have we successfully delivered more large projects each year • Over the same period we have been able to keep our project budget flat 20 15 10 5 0 2009 2010 2011 2012 2013 Large projects delivered (typically $250k+) 5
Supporting profitable growth • Focusing on maximising operational scalability • Getting our products to market as efficiently as possible • Applying consistent, high operational standards across all teams & locations • Gaining economies of scale through our target operating model Offshoring/ Standardising Centralising Outsourcing Removing duplication Applying our skills effectively Making best use of locations Consolidating to 3 platforms Sharing support resources Outsourcing for scale
European e-trading platform Enabling product and service innovation • Supporting product innovation • Fostering product innovation – using our ‘B-Hive’ • Reducing product launch time – dedicated product support • Leading on service innovation • Developing technology to support the broker back-office • Increasing use of online rating & policy fulfilment solutions • Investing in technology and services where we see growth opportunity • Implementing functionality to support US packaged products and US programmes • Building out breach response servicing infrastructure • Leveraging our new ‘thin client’ infrastructure • Rolling out business applications on mobile devices • Facilitating broker relations through mobile access to CRM system
Operations summary • Well advanced in building a cost effective and scalable infrastructure • Experienced operations team that has been able to continuously improve our support and project delivery capability • Enabling our underwriters to grow the business efficiently through product and service innovation is our priority
Life, Accident & Health Christian Tolle Head of LAH
Product composition of the LAH account – 2013 year of account Life Sports BICI A&H PA Class 2013 Reinsurance 2% 1% ($m) 3% Australian Income 31 Protection PA Reinsurance 22 AIP Life Direct 34% PA Direct 19 15% Life Direct 14 Life Reinsurance 3 Sports 2 PA Direct 21% US A&H PA 1 Total 92 PA Reinsurance 24%
Classes of business – core products Personal Accident • Insurance • Reinsurance • Income protection Life • Insurance • Reinsurance Sports
Classes of business – geographic expansion - Australia • Australian Income Protection Market suffering adverse loss ratios Some carriers exiting the market Renewing with rate corrections Opportunities for specialists • Personal Accident Coverholder business Expanding into brokered open market business Building a larger more diversified book
Classes of business – geographic expansion – US gap medical US Healthcare Expenditures $B $5,000 $4,000 $3,000 • US healthcare costs continue to $2,000 rise several times faster than GDP $1,000 $0 • These costs are outstripping 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 2017 2021 people’s insurance cover • Our admitted gap protection products provide employers with flexible and cost-effective options, while helping employees offset expenses or replace lost income
LAH summary • A specialist niche that diversifies well • Beazley has successfully entered this market – albeit at a cost • My aims as team leader are: Build US business o Rebalance the Australian portfolio o Deliver Beazley target returns o 14
Marine Overview Clive Washbourn Head of Marine
Composition of the Marine account – 2013 year of account Aviation 8% War and Energy K&R Class 2013 37% 10% ($m) Energy 111 Hull 66 Marine Liabilities Cargo 40 10% Marine Liabilities 29 War & K&R 28 Aviation 24 Total 298 Cargo Hull 13% 22%
Classes of business – core product set Cargo • Cargo & Specie • Project Cargo • Fine Art Hull & War • Builders’ Risks • Hull & Machinery • Increased Value • Mortgagees’ Interest • Voyage & Tow • Hull & Aviation War • Kidnap & Ransom (Marine) Energy • Upstream • Midstream • Downstream • Utilities
Classes of business – areas of growth Aviation • Airlines – Hull & Liability • General Aviation – Hull & Liability • Rotor Wing Satellite • Launch • In-orbit Liability • Transport & Logistics Liability • Ports & Terminals Liability o Property & Equipment o Business Interruption • Marine Professional Indemnity • Offshore Professional Indemnity • Protection & Indemnity
Marine performance 2003 to date $m 19
Marine summary • Beazley Marine has continued to grow since our last presentation in 2012 • Continuing our highly segmented underwriting • Delivering outstanding returns on equity • A team able to navigate through choppy waters… and ready to open the sails when the wind changes
In summary Any questions? • Good performance in 2012, on track against our budgets • The external environment is relatively unchanged • We aim to grow in 2013 in line with our vision with an emphasis on higher margin, short tail classes 21
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