Beazley has reported a 19% decline in pre-tax profit to US$1,146.5 million for 2025, delivering its expected final set of full-year results as an independent insurer just days after Zurich Insurance Group agreed to acquire the London specialty firm in a blockbuster deal.

Insurance written premiums edged down 1% to US$6,100.7 million from US$6,164.1 million in 2024, though net insurance written premiums rose 1% to US$5,198.7 million.

The insurance service result fell 5% to US$1,169.1 million. The undiscounted combined ratio came in at 81%, up from 79% a year earlier, while the discounted ratio was 77% against 75%.

Return on equity dropped to 19% from 27%, and earnings per share declined 17% to 113.4p. Net assets per share rose 7% to 612.0p, while net tangible assets per share also climbed 7% to 583.9p. The interim dividend held steady at 25.0p.

Beazley noted that its exposure to ongoing events in the Middle East is limited and is not expected to be material.

Chief executive Adrian Cox (pictured above) said the company delivered "another strong profit, amidst a volatile global backdrop and in a softening insurance rating environment."

He pointed to competitive pricing pressures and global instability heading into 2026, but said Beazley remains focused on profitable underwriting and growth opportunities including its new Bermuda entity and insurance solutions for the energy transition.

Zurich's US$10.9 billion bet on specialty

The results arrive against the backdrop of a blockbuster takeover agreed on March 2, in which Zurich will pay 1,335 pence per share — 1,310p in cash plus a 25p permitted dividend. Beazley's own filing puts the implied premium at 62.8% over its pre-offer market capitalisation, at a 2.5 times multiple of tangible net asset value.

The deal was not straightforward. Zurich disclosed in January that its initial approach of 1,230 pence per share had been rejected by Beazley's board as significantly undervaluing the business.

A second proposal of 1,280 pence was also rebuffed before both sides agreed on the final terms ahead of the UK Takeover Code deadline.

Zurich CEO Mario Greco framed the combination as "creating a world-class platform" in specialty insurance, with the merged entity set to write roughly US$15 billion in specialty gross written premiums.

Zurich's announcement pointed to limited product overlap and flagged around US$1 billion in incremental annual revenue over the medium term.

Market reaction

Berenberg has downgraded Beazley to "hold," raising its price target to the 1,310 pence cash component and stating it expects the deal to complete. RBC Capital Markets similarly cut the stock to "sector perform," calling the offer reasonable given an uncertain earnings outlook as specialty markets soften.

Zurich shareholders were less receptive. The insurer's stock fell 5.4% - its sharpest daily drop since April – after it unveiled a CHF 3.9 billion equity raise to part-fund the transaction, City A.M. reported.

Completion is anticipated in the second half of 2026, subject to regulatory and antitrust approvals.