Beazley (BEZ), the FTSE 100 specialty insurer, has reported a dramatic fall in profits for the first half of 2026, blaming war and escalating global risks for the sharp decline.
The London-listed insurer posted a pre-tax profit of $237.7 million for the first six months of 2026, representing a 53 per cent fall from the $502.5 million recorded in the same period last year.
Insurance written premiums also slipped, dropping four per cent to $3.05 billion as market conditions weighed heavily on the business across multiple divisions.
Chief executive Adrian Cox said conditions in the specialty insurance market were softening “rapidly” as the impact of war in the Middle East and growing cyber risks led to larger payouts to customers.
“In these conditions, our robust approach to disciplined underwriting sees us continue to focus on prudent risk selection and to de-risk in areas that have become unprofitable,” Cox said.
The board raised particular concern about excess competition in the cyber insurance market, especially in North America, where aggressive pricing is pushing rates to unsustainable levels.
Beazley warned that current market rates no longer accurately reflect the escalating risks posed by AI and geopolitical volatility, creating a structurally dangerous environment for underwriters.
In response, the insurer is scaling back its exposure to the US cyber market, which accounts for nine per cent of its portfolio, and pivoting its operations toward Bermuda instead.
Bermuda is the world leader in insurance-linked securities and one of the leading jurisdictions for captive insurance, making it an attractive destination for Beazley’s strategic repositioning.
The insurer has previously stated it is focused on “acting decisively in areas of structural opportunity” as it targets $400 million in written premiums from Bermuda by 2030.
The half-year results arrive against the backdrop of a landmark acquisition, after Beazley agreed in February to be bought by Zurich in an £8 billion deal.
Zurich’s offer valued Beazley at 1,335 pence per share, comprising a 1,310p cash payment and a permitted dividend of up to 25p to be paid by Beazley to its shareholders.
The deal is expected to close before the end of the year and will bring an end to Beazley’s long-standing presence on the London Stock Exchange.
The transaction has already begun affecting Beazley’s bottom line, with $33.6 million in direct costs related to the Zurich deal recorded in the first half, alongside a further $56 million in contingent expenses tied to its successful completion.