q2 analyst seminar

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 FantozziChief 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 WorldUS

• 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 IanFantozzi

PennyMalik

BenSpencer

JamesWright

MuniraHirji

DouglasColosky

AdamCragg

Role ChiefOperatingOfficer

Head ofTalentManagement

Global Headof IT

US Head ofIT

Head ofCommercialManagement

US Head ofOperations

UK/RoWHead ofOperations

Beazley yearsservice

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

0

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

CentralisingStandardising

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 improveour support and project delivery capability

• Enabling our underwriters to grow the business efficiently through productand service innovation is our priority

Operations summary

Life, Accident & Health

Christian TolleHead of LAH

Class 2013($m)

Australian IncomeProtection

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

AIP34%

PAReinsurance

24%

PA Direct21%

Life Direct15%

LifeReinsurance

3%

Sports2%

BICI A&H PA1%

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 marketbusiness

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 torise several times faster than GDP

• These costs are outstrippingpeople’s insurance cover

• Our admitted gap protection products provide employers with flexible andcost-effective options, while helping employees offset expenses orreplace 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:

o Build US business

o Rebalance the Australian portfolio

o Deliver Beazley target returns

14

Marine OverviewClive Washbourn

Head of Marine

Energy37%

Hull22%

Cargo13%

MarineLiabilities

10%

War andK&R10%

Aviation8%

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

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 sailswhen 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?