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Directors' Report and Financial Statements 31 December 2024

It all started with a hat stand...

Beazley Insurance dac | Annual report and accounts 2024

Welcome to our Annual report 2024

Beazley Insurance dac is a non-life insurance company that underwrites through its European branch network and acts as an internal reinsurer within the Beazley Group. It also provides capital to support the underwriting activities of Beazley Underwriting Limited in the Lloyd's market.

Contents

  • Highlights
  • Directors' report

11 Independent auditor's report

  1. Statement of comprehensive income
  2. Statement of changes in equity
  3. Balance sheet
  1. Notes to the financial statements
  1. Directors and advisors

Highlights

Gross premiums written

$1,494.3m

(2023: $1,047.9m)

Net earned premiums

$1,070.3m

(2023: $934.6m)

Profitbefore tax for the financial year

$712.9m

(2023: $769.7m)

Net investment return

$139.7m

(2023: $138.0m)

Cash and investments

$2,269.1m

(2023: $1,796.0m)

Solvency coverage ratio

237%

(2023: 207%)

www.beazley.com

Beazley Insurance dac |Report 2024

1

Directors' report

The Directors submit their report, together with the financial statements of Beazley Insurance dac (the Company) for the year ended 31 December 2024.

Company purpose and vision

The Company, as part of the Beazley Group (the Group), has the culture and values of being bold, striving for better and doing the right thing. These underpin the five key pillars of our business: clients, protection, people, tools and sustainability. Together they support our vision to be the highest performing specialty insurer and, in that role, we can fulfil our purpose of enabling our stakeholders to explore, create and build.

Principal activities and business review

The Company is authorised by the Central Bank of Ireland to underwrite non-life insurance and reinsurance business. The Company operates its direct insurance business through a branch network in the United Kingdom, France, Germany, Spain and Switzerland and operates across the European Union on a freedom of services basis.

The Company acts as an intra-group reinsurer and provides capital to support the underwriting activities of its related company, Beazley Underwriting Limited (BUL). BUL is a Lloyd's of London corporate member. BUL participates in the Lloyd's insurance market on a limited liability basis through syndicates 2623, 3622, 3623 and 5623. Under the 2024 contract, BUL cedes effectively 65% of the final declared result (less a retention of $2.6m) of its participation in syndicates 2623 and 3623 to the Company. In the event that the declared result is a loss, the extent of the reinsurance is limited to the loss in excess of $2.6m not exceeding 65% of the Funds at Lloyd's (FAL). The Company also has a credit facility agreement with BUL. Under the 2024 agreement, the Company can provide up to 37% of BUL's total required FAL. This facility was not utilised during the year.

The Company has also written two new intra-group quota-share reinsurance contracts which incepted 1 January 2024. The first contract reinsures business from two syndicates at Lloyd's (2623 and 623), which are managed by the Group's managing agent, Beazley Furlonge Limited. The second contract is with the Group's newly established North American surplus lines carrier, Beazley Excess and Surplus Insurance inc. (BESI).

The Company achieved strong premium growth in 2024, with growth achieved across four of the five direct insurance underwriting divisions. The new intra-group reinsurance contracts with BESI and syndicates 2623 and 623 also contributed to premium growth. The Company is reporting a profit before tax of $712.9m in 2024 (2023: $769.7m). The Company's performance in 2024 was driven by positive underwriting in the direct insurance division in addition to a strong investment return. Our direct business delivered a pre-tax profit of $156.1m (2023: $55.7m).

Throughout 2024, the Company continued to invest in and develop its business across Europe. Premiums from the Company's non-life insurance and reinsurance business carried out through its branches grew from $346.5m in 2023 to $401.0m in 2024. We expect growth to continue in 2025 as a result of sustained organic growth on our current portfolio alongside new opportunities for the Company.

Climate-related issues

The Company and the Group are focused on how we can play our part in addressing climate change. While primary responsibility for climate related issues sits with the Group Boards and Committees listed on the next page, the Company's Board has regular interactions and updates with the responsible persons to ensure that the Company's Board is appropriately consulted, engaged and informed. The Board is responsible for ensuring that the Company is operating in accordance with legal and regulatory requirements and with relevant Beazley Group policies and procedures. The Company also considers climate-related matters as part of the annual process to approve the risk framework and own risk and solvency assessment (ORSA).

With regards to sustainability issues, reference should be made to the Group Annual Report and Accounts. The Task Force on Climate Related Financial Disclosures (TCFD) on page 32 of the Group's 2024 Annual Report details recommendations and recommended disclosures at the consolidated Group level. The 2024 Beazley plc Annual Report and Accounts can be found at www.beazley.com. During the year the Company has had an increased focus on sustainability related reporting and considered other emerging sustainability related disclosures such as the Corporate Sustainability Reporting Directive (CSRD).

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Beazley Insurance dac |Report 2024

www.beazley.com

Directors' report continued

Board/Committee

Description of how climate-related matters are considered

Beazley plc Board

The Group and Company Boards consider climate-related matters as part of the annual process to approve:

and Beazley

• the risk appetite statements;

Insurance dac

• the Group's corporate business plan, including capital adequacy and the ORSA;

Board

• Beazley's new sustainability strategy and corresponding transition plan objectives;

• the Responsible Investment Policy;

• the Investment Strategy; and

• the Group Annual Report and Accounts, including TCFD report

In support of Beazley's commitment to doing the right thing and being a responsible business, the Group Audit

Committee oversaw further enhancement of Beazley's reporting of climate and sustainability matters in accordance

with the TCFD and other reporting requirements. Throughout the year the Group and Company Boards monitor progress

against the goals and targets set to address climate-related issues, through the update papers provided primarily from

the following functions: responsible business, risk and underwriting.

Beazley plc Risk

The Group Board has delegated oversight of the risk management framework to the Risk Committee. The Committee's

Committee

responsibilities include overseeing the effectiveness of the risk management framework at Beazley, of which climate-

related risk is one element.

Beazley plc Audit

The Beazley plc Audit Committee has responsibility for TCFD reporting. The Beazley plc Audit Committee has received

Committee and

regular TCFD update reports throughout the year as part of Beazley's approach to a year-on-year improvement in

Beazley Insurance

enhancing our response to the recommendations. The Beazley plc Audit Committee is part of the process for the

dac Audit

signing off and approving of the annual TCFD disclosures. The Company's Audit Committee is responsible for

Committee

company-level requirements in relation to climate related reporting such as CSRD reporting.

Beazley plc

The Committee considers the current and anticipated future leadership needs of the organisation to operate

Nomination

effectively. The Committee also recommends, for approval by the plc Board, the annual Board knowledge and training

Committee

plan. Climate-related matters can form part of this plan.

Beazley plc

This Committee is responsible for ensuring climate-related risk is considered within executive remuneration. Evidence

Remuneration

that this occurs is documented within the Executive Director's remuneration scorecard, where climate-related risk

Committee

matters are considered as part of Beazley's wider approach to sustainability. Remuneration is reviewed on an

annual basis.

Future developments in the business

The intra-group reinsurance contracts for 2025 were renewed by the Company in December 2024. Changes to the main terms of the contracts are an increase in the cession from BESI and adjustments to profit and overrider commissions relevant to the BUL and BESI contracts, respectively.

The Company plans to continue to grow and expand its non-life insurance/reinsurance business across Europe through additional underwriting capability and products through its branch network.

Risk management oversight and framework

The Company's Board delegates oversight of the risk management function and framework to its Risk and Compliance Committee. Beazley takes an enterprise-wide approach to managing risk. The risk management framework establishes the approach to identifying, measuring, mitigating, monitoring, and reporting on principal risks. The risk management framework supports the Company's strategy and objectives.

The Company has adopted a 'three lines of defence' model, in which the risk management function is part of the second line of defence. Ongoing communication and collaboration across the three lines of defence ensures that the Company identifies and manages risks effectively.

The Company's Board approves the risk appetite statement at least annually and receives updates on monitoring against risk appetites throughout the year. This includes an assessment of principal risks.

A suite of reports from the risk management function support senior management and the Company Board in discharging their oversight and decision-making responsibilities throughout the year. The risk management function's reports include updates on risk appetite, risk profiles, stress and scenario testing (including reverse stress testing) and analysis, emerging and heightened risks, and the ORSA report.

www.beazley.com

Beazley Insurance dac |Report 2024

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Directors' report continued

Risk management oversight and framework continued

The Company operates a control environment which supports mitigating risks to stay within risk appetite. The risk management function reviews and challenges the control environment through various risk management activities (e.g. risk opinions, risk reviews etc.). In addition, the risk management function works with the capital modelling and exposure management teams, particularly in relation to validation of the internal model, preparing parts of the ORSA, monitoring risk appetite and the business planning process.

The risk management plan considers, among other inputs, the inherent and residual risk scores for the risks in the risk registers. The risk management function also incorporates results from internal audits and other assurance activities into its risk assessment process. The internal audit function considers the risk management framework in its audit universe to derive a risk-based audit plan.

The Company's approach to identifying, managing and mitigating emerging risks includes inputs from across the business, analysis of lessons learned following incidents and industry thought leadership. The approach considers the potential materiality and likelihood of impacts, which helps prioritise emerging risks which the Company monitors or undertakes focused work on. Key emerging risks in 2024 included geopolitical and conflict escalation, artificial intelligence, systemic cyber attack, political and social unrest, supply chain risk, climate change and global tax reform. The Risk and Compliance Committee carries out a robust assessment of the Company's emerging risks at least annually.

Risk management

The Company prides itself on understanding the drivers of risk. The risk management function both supports and challenges management in effectively managing these risks.

Throughout the year, we have continued to enhance, roll out, and embed elements of our risk management framework. We have worked closely with colleagues across the first and second lines of defence to support the Company's strategy.

The Company operates a risk management framework, within which risk appetite is defined, risks assumed are identified and managed and key controls are implemented and monitored. Additional information in relation to the Company's risk management objectives and policies is included in note 2 of the financial statements.

Principal risks

Due to the nature of its activities, the principal risks and uncertainties of the Company are aligned with those of the Group. Our principal risks are under continuous review with ongoing risk assessments. Whilst our risk profile has remained broadly stable in 2024, we continue to focus on operational and regulatory risks, to ensure that our control environment keeps pace with business change and growth initiatives.

The table below summarises the principal risks the Company faces, and the control environment, governance and oversight that mitigate these risks. Our approach to managing the risks arising from climate change are set out within the TCFD section of the Group's annual report.

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Beazley Insurance dac |Report 2024

www.beazley.com
Principal risks and summary descriptions

Directors' report continued

Principle risks continued

Risk outlook

Increasing

Stable

Decreasing

Mitigation and monitoring

Insurance

Insurance risk is principally managed by the Company through pricing tools,

Risk of loss arising from uncertainties and deviations

analysis of macro trends and claim frequency/severity and ensures

of the occurrence, frequency, amount and timing of

exposure is well diversified and not overly concentrated in any one area, or

insurance premium and claim liabilities relative to the

line of business.

assumptions at the time of underwriting. This includes

risk from underwriting such as market cycle,

Our strategic approach to exposure management and a comprehensive

catastrophe, reinsurance and reserves.

internal and external reinsurance programme helps to reduce volatility of

• Market cycle: potential systematic mispricing of

profits in addition to managing net exposure through the transfer of risk.

medium-

or long-tailed

business that

does not

Our prudent and comprehensive approach to reserving ensures adequate

support revenue to invest and cover future claims;

provisions are made for the payment of all valid claims. High calibre claims

• Catastrophe: one or more large events caused by

nature (e.g. hurricane, windstorm, earthquake and/

and underwriting professionals deliver expert service and claims handling to

insureds, ensuring good customer outcomes.

or wildfire) or mankind (e.g. coordinated cyber-

attack, global pandemic, losses linked to an

The Company carries out periodic analysis to identify significant areas of

economic crisis, an act of terrorism or an act of war

concentration risk across its business and monitors solvency regularly to

and/or a political event) impacting a number of

ensure the Company is adequately capitalised.

policies,

and therefore

giving rise to

multiple

The Company makes extensive use of modelling, including

catastrophe

losses;

modelling, the use of our Solvency II model and stress and scenario testing

• Reinsurance arrangements: reinsurance may not be

available or purchases do not support the business

to ensure insurance risk is within our risk appetite.

underwritten (e.g. mismatch); and

Insurance risk outlook continues to be stable as the Company manages the

• Reserving: reserves may not be sufficiently

market cycle across all the lines of business.

established to reflect the ultimate paid losses.

Market

The Company operates a conservative investment strategy, prioritising the

The risk of loss resulting from fluctuations in the level

limitation of investment losses that could significantly impact our financial

and in the volatility of market prices of assets,

results. We employ robust policies and tools to manage market risk,

liabilities and financial instruments. Investment

ensuring alignment with regulatory requirements and industry best practices.

assets may be impacted by adverse movements in

Interest rate and foreign exchange risks are managed using natural hedges

financial markets, interest rates, exchange rates, or

and financial instruments, minimizing potential volatility. The Group

external market forces.

Investment Committee regularly reviews market risk exposures to ensure

that our risk management capabilities remain agile and effective in

responding to evolving market dynamics, with regular reporting by the

Company CFO to the Company Board.

Despite the global and political economic uncertainties, we maintain a stable

market risk outlook, driven by clear political outcomes and steady growth in

the United States, where most of our asset exposures are concentrated.

Credit

The Company maintains long-term partnerships with strategic reinsurance

The risk of loss resulting from default in obligations

partners to support the Company throughout the insurance cycle and during

due or changes in the credit standing of either issuers

potential catastrophic claim events. The Company uses a range of internal

of securities, counterparties or any debtors which

and external reinsurance mechanisms to diversify reinsurance credit risk.

Beazley is exposed to. Exposure to credit risk largely

emanates from the use of reinsurers, brokers, and

The Company's main credit risk arises from premiums receivable through

coverholders and our investments, of which

intra-group reinsurance arrangements. These positions are monitored

reinsurance asset is the largest exposure for the

closely. Credit risk arising from brokers (non payment of premiums or

Company.

claims) is monitored through robust due diligence processes, credit

monitoring and ongoing monitoring of aged debts.

The Company has credit risk arising from relationships with external

reinsurers, both directly within the European business and indirectly through

the Company's intra-group reinsurance contracts. Credit risk relating to

external reinsurers is monitored by the Group Reinsurance Security

Committee, and the Group reinsurance team report regularly to the

Company's Management Committee, with at least annual reporting to the

Company Board.

Credit risk outlook remains stable, as the Company manages reinsurance

(intra-group counterparty risk and external), broker, coverholder and

investment credit risks within agreed limits.

www.beazley.com

Beazley Insurance dac |Report 2024

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Directors' report continued

Principle risks continued

Risk outlook

Increasing

Stable

Decreasing

Principal risks and summary descriptions

Mitigation and monitoring

Group

Group risk culture is grounded in principles of transparency, accountability,

The risk that an action or inaction of one part of the

and awareness. An effective risk culture reflects a mature risk management

Group adversely affect another part or parts of the

function, encourages prudent risk-taking, and fosters awareness of existing

Company. This also includes a deterioration in culture

and emerging risks. The Board oversees this risk, with regular monitoring

which leads to inappropriate behaviour, actions and/

conducted by the Risk Management function and overseen by the Risk

or decisions including dilution of culture or negative

Committee.

impact on the brand.

Our Group risk outlook remains stable, with executive management

continuously managing and improving our risk culture through ongoing

monitoring and enhancements.

Liquidity

By actively managing its liquidity needs, the Company maximises flexibility in

Investments and/or other assets are not available or

handling its financial assets and investment strategy. This proactive

adequate in order to settle financial obligations when

approach ensures that clients and creditors are financially protected. The

they fall due.

Company regularly assesses its liquidity position, which is reported at least

quarterly to the Board by the CFO. This includes a benchmarking view from a

third-party assessment.

Our liquidity risk outlook remains stable as the Company consistently

maintain more than adequate levels of liquidity and capital.

Regulatory and legal

The Company maintains active ongoing dialogue with its regulator. A suite of

Non-compliance

with

regulatory

and

legal

compliance controls are in place to support the nature, scale and complexity

requirements, failing to operate in line with the

of the business which are overseen by the Risk and Compliance Committee.

relevant regulatory framework in the territories where

The Company wants to have an open and transparent relationship with

the Company operates. This may lead to financial loss

regulators, ensuring coordinated communication and the following of robust

(fines, penalties), sanctions, reputational damage,

processes, policies and procedures in the business. In addition, key staff,

loss of confidence from the regulator, regulatory

particularly those who hold defined roles with regulatory requirements, are

intervention, inability to underwrite or pay claims.

experienced and maintain regular dialogue with the regulator.

The Group is implementing a horizon scanning service to support in-house activity to identify relevant regulatory and legal matters and emerging policy so the Company can consider their potential impacts on the business.

Considering the needs of our clients in everything our business does is of utmost importance. We aim to deliver good customer outcomes to our clients throughout the product lifecycle. The Group's Conduct Review Group oversees this risk, with regular reporting to the Company Management Committee and the Company Risk and Compliance Committee. The Company aims to do the right thing to minimise reputational risk via stakeholder management and oversight through governance.

The Company has a very low appetite for regulatory and legal risk, therefore maintaining strong and open relationships with its regulator is of paramount importance. The outlook for this risk is increasing as throughout 2024 and into 2025, we have seen increased engagement with our regulator as the regulatory environment becomes more complex and the Company and Group grows.

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Beazley Insurance dac |Report 2024

www.beazley.com

Directors' report continued

Principle risks continued

Risk outlook

Increasing

Stable

Decreasing

Principal risks and summary descriptions

Mitigation and monitoring

Operational

The Company attracts and nurtures talented colleagues who champion

Failures of people, processes and systems or the

diversity of thought, fostering a culture of empowerment, collaboration, and

impact of an external event on operations (e.g., a

innovation. This commitment creates an environment of employee wellbeing,

cyber-attack having a detrimental impact on

where high-calibre, motivated, loyal, and productive individuals are

operations) including transformation and change

empowered to perform their duties competently.

related risks.

The Company continues investing in technology and re-engineering

processes to support its operations, overseen by the Group's Operations

Committee. The business continuity, disaster recovery, and incident

response plans ensure the stability of our processes and systems, enabling

our team to consistently deliver optimal outcomes for our clients.

We expect technology and cyber resilience to continue being key focus areas.

We are dedicated to maintaining robust controls over information security,

data, and operational resilience. We regularly review incident response plans

and continue to invest in cybersecurity training for our employees.

While maintaining a low appetite for operational risk, we observed an

increased frequency of reported risk incidents during 2024, coinciding with

an increasingly complex operating environment. The risk management

function continues to work with first line teams to ensure that controls and

processes in place remain appropriate as the operating landscape evolves.

Our risks and controls are formally monitored and reported through a risk

and control self-assessment process and the use of quantifiable Key Risk

Indicators.

Given the Company's operating model, outsourcing is a key component of

operational risk and in particular the Company closely manages the

outsourced services received under the Company's arrangement with

Beazley Management Limited.

The outlook for this risk is increased as we continue to strengthen

operationally and realise the benefits of ongoing initiatives to modernize our

systems and processes.

Strategic

The Company consistently addresses key strategic opportunities and

The risk of loss resulting from ineffective strategic

challenges, striving to be the highest performing and most sustainable

direction and implementation that leads to inadequate

specialist insurer. We ensure that we recognize, understand, discuss, and

profitability, insufficient capital, financial loss and/or

develop action plans for significant strategic priorities in a timely manner,

reputational damage for the Company.

while maintaining operational effectiveness and brand reputation.

Pervasive risks impacting multiple areas of the Company (e.g. reputation, and sustainability) occurring through real or perceived action, or inaction, by a regulatory body, market and/or third-party provider.

A negative change to Beazley's reputation could have a detrimental impact to the Company's performance and public perception.

The Company creates an environment that attracts, retains, and develops high-performing talent with diverse perspectives, encouraging exploration, creation, and innovation. By investing in understanding the complexities of the risks our clients face and deploying our expertise where it adds value, we thrive. The Company Board oversees these risks.

The Company maintains coverage above regulatory capital to meet its business plan and strategic objectives in the short, medium, and long term.

The Company's commitment is to create a sustainable business for our people, partners, and planet through responsible business goals. We embed sustainability principles and ambitions, focusing on reducing our carbon footprint (refer to the Group's TCFD report for more details on climate-related risks and mitigations), contributing to our social environment, and practicing good governance. While we consider market developments, we evaluate each on its individual merits, weighing both potential opportunities and risks.

As we consolidate and embed our achievements from 2024, our strategic risk outlook remains stable.

www.beazley.com

Beazley Insurance dac |Report 2024

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Directors' report continued

Key performance indicators (KPIs)

The Company generated a profit before tax of $712.9m in 2024 (2023: $769.7m). The Company's performance in 2024 was driven by the positive underwriting performance of the direct insurance division, as well as strong profits from the Company's investment portfolio. Retuon equity* for the year was 32% (2023: 50%) driven by positive investment and underwriting return. The Company has seen premiums from its non-life insurance and reinsurance business carried out through its branches grow from $346.5m in 2023 to $401.0m in 2024 and we anticipate further growth in 2025. During 2024, the Company increased its product offering and underwriting capability through its branch network. The two new intra-group reinsurance contracts also contributed to the increase in premium written over the prior year. Further information on the breakdown of our performance between direct insurance and intra-group reinsurance can be found in note 3 to the financial statements.

During the year increased premium volumes were written through the Company's direct insurance division, whilst the direct business saw net insurance claims fall to $82.1m (2023: $117.7m). Net insurance claims include prior year reserve releases of $81.5m (2023: $34.2m), largely driven by positive claims experience in the Cyber and Property Risks divisions. The Company saw a claims ratio on its direct business of 26% (2023: 50%).

The Company maintained a strong capital position throughout 2024, with a solvency capital requirement coverage ratio of 237% as at 31 December 2024 (2023: 207%).

*Retuon equity ("ROE") is calculated by dividing the profit after tax by the average equity for the period (using average of the opening and closing equity positions).

Results and dividends

The result for the year is shown on the statement of comprehensive income (SOCI) on page 19. On 8 March 2024, the Board approved a dividend of $300.0m payable to its sole shareholder, Beazley Ireland Holdings plc (2023: nil) which was paid on 15 April 2024.

Directors

The names of the persons who were Directors at any time during the year ended 31 December 2024 and to the date of this report are set out below:

Directors

E McGivney

F Kleiterp (appointed 8 April 2024) (Swiss)

J Dunne

K Murphy

(Independent non-executive)

M Moore

(Independent non-executive)

P O Desaulle (French)

(Independent non-executive chair)

P Ruane

(Independent non-executive)

R Anarfi (appointed 18 April 2024, resigned 28 February

(Non-executive)

2025) (British)

Secretary

The Company Secretary for the duration of the year ended 31 December 2024 was:

J Wright

Directors and secretary and their interests

The Directors and secretary who held office at 31 December 2024 had no interests greater than 1% in the shares of, or debentures or loan stock of, the Company or Group companies at the beginning (or date of appointment, if later) or end of the year (2023: nil).

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Beazley Insurance dac |Report 2024

www.beazley.com

Disclaimer

Beazley plc published this content on April 09, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 09, 2025 at 10:08 UTC.

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