Wednesday, February 9, 2011

Beazley is on the hunt for deals

The Lloyd's of London insurer, Beazley, stated yesterday that it was on the hunt for deals because bankers eye a rise in mergers and acquisitions among companies that do business at the three hundred and twenty year-old insurance market.

It came after the announcement made by another Lloyd's insurer, Chaucer on Monday that it was talking to rivals and financial bidders about a possible acquisition. One of the suitors is understood to be Terra Firma, the buyout vehicle of high-profile financier Guy Hands.

Beazley had tried and failed to buy rival firm Hardy Underwriting in the last year and its chief executive, Andrew Horton, stated that he would still be interested in buying Hardy Company if he gets the right price. But he said he expected to see further opportunities as premium levels continue to ease out making it harder for less efficient firms to make money.

Hardy had a good underwriting record and would have allowed Beazley to diversify lines of business said Mr. Horton. He said that his company is interested in buying them but their shareholders did not want to sell. Generally, Beazley looks for companies with talented underwriters who are going to want to stay around with them, and good lines of business. Beazley is under the notion that there could be opportunities in the current climate.

His comments followed Beazley’s report of a sharp increase in its pre-tax profits to $250.8m (£155.6m) from $158.1m seen in the previous year, well above forecasts. It also reported a combined ratio of eighty eight per cent, meaning that it makes twelve pounds in profit for every hundred pounds in premiums taken, after accounting for costs and claims.
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