Market Overview

A.M. Best Affirms Credit Ratings of Beazley's Lloyd's Syndicates, Beazley Insurance Designated Activity Company and Beazley Insurance Company, Inc.

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A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of "a+" of Lloyd's
Syndicate 2623, Lloyd's Syndicate 623, Lloyd's Syndicate
3623 and Lloyd's Syndicate 3622 (the syndicates) (United
Kingdom). Concurrently, A.M. Best has affirmed the FSR of A (Excellent)
and the Long-Term ICRs of "a" of Beazley Insurance Designated Activity
Company (BIDAC) (Ireland) and Beazley Insurance Company, Inc. (BICI)
(Farmington, CT). The outlook of these Credit Ratings (ratings) is
stable.

The ratings of BIDAC and BICI reflect the consolidated balance sheet
strength of Beazley plc (Beazley) (LSE: BEZ), which A.M. Best
categorises as very strong, as well as its strong operating performance,
neutral business profile and appropriate enterprise risk management.
BIDAC and BICI are strategically important to and integrated within
Beazley. Both companies are wholly owned by Beazley, which is the
ultimate non-operating holding company and consolidating rating unit for
the group. BIDAC reinsures 75% of the profit or loss of the syndicates'
(2623 and 3623) distribution to Beazley's Lloyd's corporate member
(after a deductible in the case of a loss), whereas BICI is an expanding
admitted insurer in the United States.

The group's balance sheet strength is underpinned by risk-adjusted
capitalisation at the strongest level, as measured by Best's Capital
Adequacy Ratio (BCAR). Beazley's strong operating performance is
evidenced by its five-year average return on equity of 16% (2013-2017)
and average combined ratio over the same period of 88%. Although
catastrophe losses dampened underwriting performance in 2017, the
overall result for the year was robust. A.M. Best expects prospective
performance to remain strong. Beazley has a well-established business
profile, with a strong franchise as an internationally recognised
Lloyd's insurance group. Beazley has a good competitive position in its
target markets, but competition is strong and market conditions remain
challenging. The group's gross premium base reached USD 2.3 billion in
2017, and is expected to grow to USD 2.6 billion in 2018.

The syndicates are managed by Beazley Furlonge Limited, and their
ratings also reflect the financial strength of the Lloyd's market, which
underpins the security of all syndicates. The capital of syndicates
2623, 3623 and 3622 is provided by Beazley plc (LSE:BEZ) via its
corporate member, whilst syndicate 623 is supported by third-party
capital. Syndicates 2623 and 623 have a track record of strong operating
performance and resilient positions in the Lloyd's market. Together,
they underwrite business at Lloyd's in parallel, with their shares of
combined business split according to each syndicate's portion of overall
combined capacity. The excellent performance of syndicates 2623 and 623
is demonstrated by a five-year average combined ratio of 88%
(2013-2017). Syndicate 3623 writes accident and sports business, and
reinsures Beazley's U.S.-admitted carrier, BICI. Syndicate 3622 is a
dedicated life syndicate, writing life business associated with
Syndicate 3623's accident and sport portfolio. The performance of these
two syndicates historically has not matched that of syndicates 2623 and
623; however, A.M. Best expects Syndicate 3623's performance to improve
over the medium term, as Beazley's admitted business in the United
States attains scale.

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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