Beazley (BEZ) Investor Day 2024 summary

Market outlook and growth strategy

• Global cybercrime costs are projected to reach $23.84 trillion by 2027, driving rising cyber insurance demand, especially in North America (SME/middle market) and non-U.S. regions.

• The cyber insurance market is forecast to grow to $40bn by 2030, with a 26% CAGR in North America and significant growth in Europe and global wholesale.

• Growth is expected from new business and exposure, not rate increases, with a focus on underpenetrated segments and SMEs.

• The company maintains a deliberate, diversified approach to market share, prioritizing profitable, risk-adjusted growth over volume.

• Investments in digitization and automation are aimed at capturing SME opportunities and supporting broker relationships.

Risk management and underwriting

• Systemic cyber risk is managed through careful limit deployment, portfolio diversification by industry, size, and geography, and clear policy wordings for exclusions such as war and infrastructure.

• Average policy/line size is $1.9 million, with 99% of policies at $10 million or less; maximum line size is $50 million, used selectively.

• The company actively monitors and optimizes aggregate exposure, with in-force premium doubling over four years while aggregate exposure remains flat.

• Realistic disaster scenarios (RDS) and probabilistic models are used to assess and manage tail risk, with regular model validation.

• Attritional risks include incident response, ransomware, data recovery, and business interruption.

Reinsurance and capital management

• Market leadership in cyber reinsurance includes pioneering catastrophe bonds (PoleStar series), the first cyber catastrophe bond program, and the market's largest industry loss warranty (ILW).

• Total cyber catastrophe protection now stands at $1 billion, with $510 million from cat bonds and $290 million from ILW, covering both malicious and non-malicious events.

• Alternative capital is increasingly important, with traditional reinsurers still active, especially in ILW structures.

• The company is committed to further developing the reinsurance market to support future growth and market stability.

• The 1-in-250 net loss metric has been reduced from $651 million to $461 million due to enhanced reinsurance protection.