(Reuters) - Lloyd's of London insurer Beazley Plc BEZG.L is to focus on growing its specialty insurance business as its other lines face downward pressure on prices, the firm's chief executive said on Friday.
Fierce competition has resulted in insurance rates either stagnating or falling over the past few years, leading Beazley to invest in growing its U.S. specialty lines business, which carries out professional and management liability for mid-sized and small companies.
Beazley said on Friday that its first half profit had risen 6 percent to $158.7 million, driven by growth in its U.S. specialty business and investment gains.
That was despite premium rates for all of its businesses falling by 2 percent.
"The reason we're focusing on specialty lines above the others is generally the rating environment in specialty lines is better than in the property, reinsurance and marine lines," Chief Executive Officer Andrew Horton told Reuters.
Horton said rates in specialty lines have held up over the past few years after all the claims it saw following the financial crash of 2008.
Last year, Beazley brought on a team of underwriters to focus on writing specialty line insurance outside the United States, with a specific focus on Europe.
Specialty lines currently account for between 45-50 percent Beazley's revenue and Horton sees the business' contribution hitting the 55 percent mark over the next few years.
The company also received approval to convert its Dublin-based reinsurance company into an insurance company, as part of its European expansion plan and Horton said on Friday that the company hopes to start writing European business on both its insurance company and Lloyd's balance sheet.
Horton said the company had applied for branches in Spain, France, Germany and the UK and expected those to be set up in a couple of months.
"By the end of the third quarter, our aim is to be quoting business in the specialty lines arena across Europe," he said, adding that the moves were not a result of Brexit, which has prompted many financial firms to set up European operations amid concern the UK exit could hamper trade.
"It was not a Brexit plan. Now of course with Brexit having happened, its much better having the insurance company in Ireland than it would be having it in the UK," Horton said.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Rachel Armstrong