It is fair to say that results for specialist insurer Beazley (BEZ) look increasingly like the company’s last as a UK-listed entity, after a jointly recommended all-cash bid from Zurich Insurance hit the wires prior to results day.
Given the near-60 per cent premium on offer, shareholders may overwhelmingly be tempted to allow the deal to go through via a scheme of arrangement, although notably the share price had not quite matched the 1,335p offer price at the time of writing. The bid comprises 1,310p in cash and 25p of interim dividend. Zurich Insurance has raised $5bn (£3.7bn) in equity and $2.9bn in debt to fund the deal.
So, what is Zurich getting for its money?
Judging by these results, Beazley’s top line is still floating on business written in 2024, and it’s clear that the market is in a soft rate phase. For example, insurance written premiums decreased by 1 per cent in 2025 to $6.1bn, which indicated that management had prioritised underwriting discipline over profit growth – even in the high-growth cyber risks insurance market, Beazley’s underwriting moderated to $1.16bn.
However, the company did benefit from a more benign period for disasters. Although the claims ratio increased to 44.5 per cent due to an overall strengthening of reserves, this was offset by better current-year losses.
Peel Hunt analyst Andreas van Embden noted Beazley’s mixed underwriting performance. However, “with the offer now firm and 2025 net asset value (NAV) confirmed at 612p, we continue to view the shares as fully valued at the implied 2.2 times 2025 NAV multiple”.
We agree with that view and suspend our recommendation. Await documents.
Last IC view: Hold, 818p, 13 Aug 2025
BEAZLEY (BEZ) ORD PRICE:1,291pMARKET VALUE:£7.7bnTOUCH:1,290-1,291p12-MONTH HIGH:1,295pLOW: 750pDIVIDEND YIELD:1.4%PE RATIO:12NET ASSET VALUE:813pCOMBINED RATIO:81%Year to 31 DecInsurance revenue ($bn)Pre-tax profit ($bn)Earnings per share (ȼ)Dividend per share (p)20213.510.3750.912.920224.850.5826.313.720235.441.2515514.220245.681.4217525.020256.061.1514925.0% change+7-19-15-Ex-div:19 MarPayment:01 May£1 = $1.34