Q2 Analyst Seminar
Transcript of 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 $B
• US healthcare costs continue torise several times faster than GDP
• These costs are outstrippingpeople’s insurance cover
• Our admitted gap protection products provide employers with flexible andcost-effective options, while helping employees offset expenses orreplace lost income
LAH summary
• A specialist niche that diversifies well
• Beazley has successfully entered this market – albeit at a cost
• My aims as team leader are:
o Build US business
o Rebalance the Australian portfolio
o Deliver Beazley target returns
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Marine OverviewClive Washbourn
Head of Marine
Energy37%
Hull22%
Cargo13%
MarineLiabilities
10%
War andK&R10%
Aviation8%
Class 2013($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?