Beazley plc, the LSE-listed specialist insurer which recently relocated its head office back to London after a seven year spell in Dublin, intends to use its Irish reassurance operation to spearhead a concerted push for growth in Europe.

Beazley came to Dublin in March 2009, one of a number of UK and US insurers that redomiciled from London or Bermuda around this time, mainly for tax purposes. In February 2010 it revealed that by opening a three-man office in Dublin and becoming Irish tax-resident it had reduced its tax rate to 12 per cent, less than half the 26 per cent it had faced in the UK in 2008, boosting its net profit by €16 million (GBP14 million) in the process.
At the time Beazley said Dublin had been chosen over other reinsurance hubs such as Bermuda, ‘because it is within the EU and enjoys a respected legal, regulatory and tax environment’.

Two years ago Beazley chief executive Andrew Horton said a return to London was on the cards. That redomiciliation occurred last April. In Beazley's recently published interim statement for H1 2016 Horton said: 'The move allows the group to be managed from London but has no material effect on our strategy or financial performance. Our reinsurance vehicle Beazley Re was not affected by the restructure and remains Irish domiciled. As a consequence the Beazley group continues to be regulated by the Central Bank of Ireland.'
Clarifying the position further, Beazley's Head of Communications, William Pitt, told Finance Dublin that the most significant practical repercussion of the redomicilliation is that management decisions in relation to the group can now be made in London, instead of people having to come to Dublin for the purpose.

Beazley has disclosed that it is seeking permission to convert its Irish reinsurer into an insurance company, which would guarantee passporting rights into Europe from Dublin, where it currently employs about a dozen people.

'We're looking at getting the licences for our EU reinsurance company in Dublin and have an EU insurance company, which will give us some protection for growing in Europe into the future, if there are problems with the Lloyd's licences,' Horton said last week.

But Pitt and Horton have also made it quite clear that Beazley's European growth plans, including the use of Dublin to spearhead them, were underway well before an exit vote in the UK's referendum on EU membership was even a vague possibility in the minds of most people.
As the manager of six Lloyd’s syndicates Beazley is fully supportive of the lobbying being undertaken to ensure that the Lloyd’s market manages to maintain the insurance licences that allow it access to the European Union. But its established presence in Dublin means that it has alternatives, making Brexit an inconvenience, perhaps, rather than an imperative driving its current European strategy.

'One of our original reasons for choosing Ireland as a location for Beazley Re was the options it gave us to develop business in Europe. We will be looking to capitalise on these opportunities in the coming months,' Horton said.

'We have a clear business plan, not a Brexit contingency,' Pitt emphasised. 'We have around 80 per cent of our business now in US dollars and about 5 per cent in Euros and we want to grow that. So for us it's not a matter of protecting our interests in response to Brexit, but about achieving real growth.'

Beazley currently has offices in Paris and Munich, where it has recently teamed up with Munich Re to launch a major new push into cyber insurance, and a small office in Oslo. 'The single market notwithstanding,' Pitt pointed out, 'you do need a presence on the ground in each market to achieve growth.' He pointed out that in the US Beazley operates from six regional hubs.

'Europe is a developed market, which is good for us,' Pitt added. 'As an insurer with a strong focus on providing indemnity cover to professionals, such as engineers, architects and lawyers, Europe is an attractive market.'

Europe also provides a good opportunity for Beazley's new cyber business. This continued to develop strongly in multiple geographies in the first half of the year, Beazley said in a statement, driven by the prospect of tighter regulation in Europe (including fines of up to 4 per cent of worldwide revenues for companies that seriously mishandle data breaches); the launch of its flagship Beazley Breach Response (BBR) product in Canada; and the new partnership with Munich Re to provide broad cyber cover for the world’s largest companies.