Beazley plc - Q3 2014 Presentation

1. 1
Cover
Results for the six months ended
30 June 2014
Tuesday, 22 July 2014

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 4-5
Business update 6
Financials
Performance 7-8
Investments 9-10
Reserves 11-12
Financial Commentary 13
In Focus: Specialty Lines and the US 14-20
The Outlook 21-23
Appendix 25-34
3

4. Generic title white
Overview

5. Overview – strong results in a competitive market
• Profit before income tax of $132.9m (2013 profit: $82.3m)
• Gross written premiums increased 1% to $1,077.7m (2013: $1,066.7m)
• Combined ratio 90% (2013: 89%)
• Rate change on renewal business -1% (2013: 1%)
• Prior year reserve releases of $72.9m (2013: $60.8m)
• Investment return of $46.8m (2013: $0.3m)
• Annualised return on equity of 17% (2013: 12%)
• Interim dividend up 7% to 3.1p
5

6. • Continue to achieve rate increases in specialty lines
• Rates on short tail lines of business under pressure
• More profitable opportunities in small business lines
• Continued expansion in the US
• Continue to attract good people
o Property
o Terrorism
o Surety reinsurance
o Senior Investment Officer
Business update
6

7. Generic title white
Financials

8. Six months financial performance
6 months ended
30 June 2014
6 months ended
30 June 2013
% increase
Gross written premiums ($m) 1,077.7 1,066.7 1%
Net written premiums ($m)* 889.2 758.0 17%
Net earned premiums ($m) 804.5 758.8 6%
Profit before tax ($m) 132.9 82.3 61%
Earnings per share (pence) 13.5 9.3
Dividend per share (pence) 3.1 2.9
Net assets per share (pence) 146.0 152.0
Net tangible assets per share (pence) 135.4 138.0
8
* 2014 net written premiums includes $120m benefit from timing of proportional written premiums ceded to reinsurers compared to 2013. Underlying
growth in net written premiums is 2%. The timing difference has no impact on net earned premium in the period and will not impact full year net
written premiums.

9. On track to deliver a 2% return in 2014
9
43.5
8.5
22.5
36.1
0.3
46.8
46.9
29.0
16.8
46.5
43.0
0.0%
1.0%
2.0%
3.0%
4.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2009 2010 2011 2012 2013 2014
2nd half 1st half Return
$m
InvestmentReturn
AnnualisedInvestmentReturn

10. No material changes to the portfolio
10
Cash and Cash
Equivalents,
8.5%
Fixed Income:
Sovereign and
Supranational,
44.2%
Investment
Grade Credit,
33.6%
Other Credit,
1.7%
Capital Growth
Assets, 12.0%
June-14
Cash and Cash
Equivalents,
8.7%
Fixed Income:
Sovereign and
Supranational,
47.0%
Other Credit,
2.1%
Capital Growth
Assets, 11.7%
Dec-13

11. Prior year reserve releases remain stable
11
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
-20
0
20
40
60
80
100
120
140
160
180
200
220
2009 2010 2011 2012 2013 2013 HY 2014 HY
Specialty lines Political risks and contingency Life accident and health Marine Property Reinsurance % of NEP
$m
%ofNEP

12. Whole account reserve strength within our target range
12
Preferred upper end
%aboveactuarialestimate
6.1%
6.7%
6.4%
6.7%
7.5% 7.4%
8.2%
7.9%
7.4%
6.9%
8.2%
6.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (HY)
Financial year

13. Financial commentary
13
• Robust surplus capital position – revised disclosure at year end
• Restructuring of investment management on track – completion 30 September 2014
• SII on track for 1 January 2016 go live

14. Generic title white
In Focus – Specialty Lines and the US

15. Specialty Lines portfolio since 2008
15
Premium mix
TotalSLpremium$m
600
650
700
750
800
850
900
950
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011 2012 2013 2014 Forecast
%ofSLpremium
Healthcare Management Liability Professions Small business
Technology & Cyber Treaty Total SL premium

16. 2008 to 2014 rate change by product
16
80%
85%
90%
95%
100%
105%
110%
115%
2008 2009 2010 2011 2012 2013 2014 (B)
Professions Healthcare Management Liability Technology and cyber Treaty Small Business Total
Ratechange

17. • Continue to achieve positive rate increase
• Positive about US economy
• Growth in US
• Focus on growth areas and new business
o Cyber
o Environmental
o Miscellaneous medical
o Crime
• Opening loss ratio for 2014 reverting to pre-recession levels
• Leveraging the different strengths of our Lloyd’s & US platforms
Specialty Lines – business update
17

18. • Distribution
o Coordination
o Concentration
o Definition
• Product development
o Differentiation
o Prioritisation
o Project management
o Full life cycle cost recognition
Priorities for the US in 2014 - 15
18
• Underwriting process
o Standardisation and simplification
o Leverage the system
o Invest in automation
• Footprint
o 6 key hubs
o Core products in each hub
o Dovetail with distribution strategy

19. US originated business for HY 2014 $238.2 (2013: $208.1)
19
GWP by Product
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
2008 2009 2010 2011 2012 2013 2013 HY 2014 HY
Architects and Engineers professional indemnity Technology, Media and Business Services
Other specialty lines Property
Political risks & contingency Total US premiums
Product$m
TotalUS$m

20. US footprint – 2010 - 2015
* Excludes Homeworkers
San Francisco (CA) 2010 2015
Underwriters 11 16
Products 3 8
Los Angeles (CA) 2010 2015
Underwriters 2 6
Products 1 6
Dallas (TX) 2010 2015
Underwriters 0 7
Products 0 6
Chicago (IL) 2010 2015
Underwriters 19 21
Products 7 8
Minneapolis (MN) 2010 2015
Underwriters 0 2
Products 0 1
New York (NY) 2010 2015
Underwriters 15 21
Products 5 8
Philadelphia (PA) 2010 2015
Underwriters 10 13
Products 4 6
Atlanta (GA) 2010 2015
Underwriters 11 20
Products 3 9
Farmington (CT) 2010 2015
Underwriters 7 4
Products 4 2
Boston (MA) 2010 2015
Underwriters 9 4
Products 2 3
Miami (FL) 2010 2015
Underwriters 0 1
Products 0 1
Total 2010 2015
Underwriters 84 115
Av. Products Per Office 2.6 5.3

21. The Outlook

22. Cumulative rate change since 2001
22
50%
100%
150%
200%
250%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 HY 2014
Underwriting Year
Life, accident & health Marine Political risks & contingency Property Reinsurance Specialty lines All divisions
RateChange

23. • Competition remains intense
• Growth in premium and profit will be challenging in the current environment
• Rate pressure, particularly on short tail catastrophe exposed lines
• We see more attractive opportunities in small business lines
• Continued focus on growth from US operations which are 10 years old this year
• We are expecting to achieve moderate growth in 2014
• Continuing focus on profitable, disciplined underwriting across a diverse portfolio.
Outlook
23

24. Questions?
Any questions?

25. Generic title white
Appendix

26. US interest rates
26
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
US Government Bond Yields
US 10 Year Index US 5 Year Index US 2 Year Index

27. Specialty lines incurred claims remain in line with expectations
27
75%
114%
85%
57%
41% 42% 41%
45%
62% 65%
56% 56%
47%
23%
9%
82 115 56 96 275 328 346 358 434 470 431 447 435 450 479
0%
20%
40%
60%
80%
100%
120%
140%
1993-
1996
1997-
2000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Underwriting Year
Net Incurred loss ratio at each development year
6
5
4
3
2
ULR
Development
Net ultimate premium $m
Netincurredlossratio

28. Diversified portfolio achieves consistent combined ratio through market cycles
28
40
60
80
100
120
140
160
2009 2010 2011 2012 2013 2014 HY
Year

29. Life, accident & health
6 months ended 30 June
2014 2013
Gross premiums written ($m) 81.5 56.4
Net premiums written ($m) 62.9 39.0
Net earned premiums ($m) 42.9 45.4
Claims ratio 62% 76%
Rate change on renewals 12% (1%)
Percentage of business led 77% 78%
29
• Significant rate increase
• Improved claims and
combined ratios

30. Marine
6 months ended 30 June
2014 2013
Gross premiums written ($m) 196.7 197.1
Net premiums written ($m) 163.1 165.2
Net earned premiums ($m) 143.9 131.5
Claims ratio 36% 43%
Rate change on renewals (5%) (2%)
Percentage of business led 42% 44%
30
• Combined ratio of 76%
(2013: 79%)
• Prior year reserve releases
of $21.3m (2013: $17.0m)
• Rate reduction of -5%

31. Political risks and contingency
• Reduction in gross premium
driven by increased rate
pressure
• Combined ratio of 85%
(2013: 76%)
• Prior year reserve releases
of $9.4m (2013: $10.2m)
6 months ended 30 June
2014 2013
Gross premiums written ($m) 60.4 63.3
Net premiums written ($m) 47.7 46.0
Net earned premiums ($m) 42.8 46.3
Claims ratio 35% 33%
Rate change on renewals (3%) (1%)
Percentage of business led 74% 74%
31

32. Property
• Prior year releases of
$14.8m (2013: $5.5m)
• Combined ratio of 88%
(2013: 91%)
6 months ended 30 June
2014 2013
Gross premiums written ($m) 190.7 199.0
Net premiums written ($m) 151.8 130.1
Net earned premiums ($m) 145.9 150.2
Claims ratio 47% 52%
Rate change on renewals - 3%
Percentage of business led 69% 71%
32

33. Reinsurance
• Significant downward
pressure on rates
• Prior year reserve releases
of $10.1m (2013: $14.9m)
6 months ended 30 June
2014 2013
Gross premiums written ($m) 163.1 170.3
Net premiums written ($m) 124.8 121.1
Net earned premiums ($m) 80.1 70.8
Claims ratio 45% 24%
Rate change on renewals (10%) (1%)
Percentage of business led 43% 41%
33

34. Specialty lines
• 1% growth in gross
premiums written
• 1% rate increase on renewal
business
• Prior year reserve releases
of $16.6m (2013: $17.9m)
6 months ended 30 June
2014 2013
Gross premiums written ($m) 385.3 380.6
Net premiums written ($m) 338.9 256.6
Net earned premiums ($m) 348.9 314.6
Claims ratio 61% 62%
Rate change on renewals 1% 4%
Percentage of business led 95% 95%
34