Beazley raises £247m ‘to support ongoing organic growth’
Insurer Beazley said on Tuesday that it had raised £247m in a placing "to continue to support ongoing organic growth".
Beazley
672.00p
16:25 23/04/24
FTSE 250
19,790.63
16:25 23/04/24
FTSE 350
4,424.54
16:25 23/04/24
FTSE All-Share
4,379.07
16:25 23/04/24
Insurance (non-life)
3,705.35
16:24 23/04/24
The shares were placed at 315p each, which is a 4.9% discount to the closing share price on Monday.
In a statement announcing the placing late on Monday, Beazley pointed out that rate changes for the three months ended 31 March 2020 were "particularly encouraging", with an average rate increase of 8% and three divisions achieving double digit increases.
"This strong momentum is expected to continue. Certain markets, such as property and marine, have now experienced two consecutive years of rising rates and present attractive near term opportunities. Beazley continues to maintain its strong underwriting discipline with a focus on risk quality and selection.
"The board has considered the optimal capital structure for the group and believes that it is an appropriate time for the company to raise equity in order to position the business for future growth opportunities as well as providing further strength to the balance sheet in light of the continued uncertainty from Covid-19."
Beazley also announced that it had increased its banking facility from $225m to $450m, with $225m of unutilised capacity at present.
At 0910 BST, the shares were up 10% at 365.20p.
RBC Capital Markets said: "We expect that Beazley will deploy its capital selectively and cautiously in line with the majority of its underwriting behaviour that it has taken in recent years.
"In the case of this capital raise, we can see that it will be deployed in order to support growth in what should be a more attractive market place. With a capital surplus of 35% versus its 15-25% target, Beazley has plenty of room to deploy this new capital into improving market conditions going forward."