Beazley posted a 10% jump in first-quarter gross written premiums on Thursday as it reiterated its full-year combined ratio guidance.
In the three months to the end of March, gross written premiums rose to $631m from $573m, with the property team benefitting from the improved underwriting conditions seen in the wake of the high catastrophe frequency experienced at the end of last year. As a result, premiums in the property division increased by 29% year-on-year to $108m.
Meanwhile, the reinsurance business also benefited from improved underwriting conditions, with rates up 7% across the portfolio, driving an increase in premiums of 7% to $90m.
The company's biggest division, specialty lines, saw premiums increase 6% to $295m, driven by a 17% rise in business written within the US, while the political, accident and contingency business saw good growth across a number of areas, helping to push premiums up 14% despite rate pressures in some areas, in particular terrorism.
The year-to-date investment return for the group was zero, versus 0.9% in the same period a year ago, reflecting the impact of rising bond yields.
Chief executive Andrew Horton said: "Beazley made a strong start to 2018 with premium growth of 10% on average across the portfolio. We have also seen rate increases across many lines of business as the market recalibrates its pricing in the wake of the high catastrophe activity seen in late 2017.
"While our investment return is lower than we would have hoped at this stage, US interest rates are now materially higher which will benefit the business going forward."
Beazley reiterated its previous guidance of a full-year combined ratio in the low nineties.
RBC Capital Markets said: "Rising bond yields reduce the value of bond portfolios, and for Beazley (and Hiscox earlier this week), these losses are put through the P&L. In the longer run, the increase in fixed-income yields will allow Beazley to reinvest at higher rates, leading to stronger investment returns. But for now there could be some short-term P&L volatility."
The bank had been expecting an investment return of 0.2%.
At 0825 BST, the shares
were down 0.1% to 607.50p.