Q2 Analyst Seminar Wednesday 28 th May, 2014 Agenda Introduction - - PowerPoint PPT Presentation

Q2 Analyst Seminar

Wednesday 28th May, 2014

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

Agenda

Beazley Operations

Ian Fantozzi Chief Operating Officer

• Supporting over 900 staff, across 25 offices globally
• Building a target operating model with 3 core platforms

Our operations

16,000 policies in 2013 550 users supported Lloyd’s Synergy IT system Rest of World US

• These platforms are underpinned by…

21,000 policies in 2013 350 users supported BeazleyPro IT system 7,000 policies in 2013 90 users supported Unirisx IT system

• 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.

Name Ian Fantozzi Penny Malik Ben Spencer James Wright Munira Hirji Douglas Colosky Adam Cragg Role

Chief Operating Officer Head of Talent Management Global Head

• f IT

US Head of IT Head of Commercial Management US Head of Operations UK/RoW Head of Operations

Beazley years service 10 10 9 10 6 8 7

• The importance of talent development goes beyond our trading teams

Experienced operations team

5

• 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

5 10 15 20 2009 2010 2011 2012 2013 Large projects delivered (typically $250k+)

• Focusing on maximising operational scalability
• Getting our products to market as efficiently as possible
• Applying consistent, high operational standards across all teams & locations

Supporting profitable growth

Offshoring/ Outsourcing

• Gaining economies of scale through our target operating model

Centralising Standardising

Removing duplication Consolidating to 3 platforms Applying our skills effectively Sharing support resources Making best use of locations Outsourcing for scale

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

European e-trading platform

• 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

• Well advanced in building a cost effective and scalable infrastructure
• Experienced operations team that has been able to continuously improve
• ur support and project delivery capability
• Enabling our underwriters to grow the business efficiently through product

and service innovation is our priority

Operations summary

Life, Accident & Health

Christian Tolle Head of LAH

Class 2013 ($m) Australian Income Protection 31 PA Reinsurance 22 PA Direct 19 Life Direct 14 Life Reinsurance 3 Sports 2 US A&H PA 1 Total 92

Product composition of the LAH account – 2013 year of account

AIP 34% PA Reinsurance 24% PA Direct 21% Life Direct 15% Life Reinsurance 3% Sports 2% BICI A&H PA 1%

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

$0 $1,000 $2,000 $3,000 $4,000 $5,000 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 2017 2021

US Healthcare Expenditures $B

• US healthcare costs continue to

rise several times faster than GDP

• These costs are outstripping

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
• Rebalance the Australian portfolio
• Deliver Beazley target returns

14

Marine Overview

Clive Washbourn Head of Marine

Energy 37% Hull 22% Cargo 13% Marine Liabilities 10% War and K&R 10% Aviation 8%

Class 2013 ($m) Energy 111 Hull 66 Cargo 40 Marine Liabilities 29 War & K&R 28 Aviation 24 Total 298

Composition of the Marine account – 2013 year of account

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
• Property & Equipment
• 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

• 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

In summary

21

Any questions?