Lloyd’s insurer has $225m untapped credit facility

Andrew Horton, Beazley

Lloyd’s insurer Beazley is “actively looking” for acquisitions but is struggling to find targets that meet its criteria, said chief executive Andrew Horton (pictured).

Speaking after the release of the company’s 2012 results this morning, Horton said that the company would be keen to do acquisitions, but he added: “The challenge is finding ones that hit our sweet spots, which are relatively small. The lines of business and the people who stay have to fit and it has to have the right level of profitability.”

Instead, the company will focus on growing organically through developing new products and hiring new teams of people and individuals. Horton pointed out that Beazley grew its net written premium by 11% in 2012 organically.

Horton said: “For the whole time we have been in existence, organic growth has been our primary way of being successful. We have gone from two people [in 1986] to 850 and most of that has been organic growth.”

Opportunities are emerging in marine liability following losses in 2012, and a new underwriter in this line will join the company shortly, Horton said.

He added: “We continue to attract people and that is the best way of growing.”

The company has $260m (£166m) of surplus capital before paying its special dividend and buying back £150m of subordinated debt. It also has an as-yet-untapped $225m letter of credit facility, which could be used to fund growth.

Beazley missed out on buying rival Lloyd’s insurer Hardy in 2011. Hardy was subsequenty sold to US insurance group CNA last year.

Beazley reported its highest-ever profit before tax of $251m in 2012. This followed from a far smaller profit before tax of $62.7m in 2011 – a year hit by a large number of natural catastrophes.

Horton praised the 2012 performance. “We are really pleased about it because the economic environment isn’t that great and the market remains incredibly competitive – there is still quite a lot of capital in the marketplace,” he said.