Well, good afternoon everyone and thank you for coming. It's the first time we've had a capital markets day. We've had various investor shows talk about things that we do but we've never really had a capital markets day. We're very excited and we're hoping to achieve a few things this afternoon. My name is Adrian Cox. I'm the CEO of Beazley, a job I've had now for just over 13 months but I've been here since 2001, so I'm a sort of new hand and old hand at the same time. Come up through the underwriting side, so I've started on the liability side and then ended up as CEO. So a number of this I've lived through. So what are we hoping to achieve today? Well, we really wanna share what our long-term strategy is as a business, where we see ourselves fitting into the insurance marketplace and what you should expect to see us doing and why. I hope that will gain an understanding of what makes us a little bit different as Beazley and why we think we have the opportunity to generate long-term growth at good levels of return on capital whilst maintaining prudent cycle management discipline on which we pride ourselves. This is also an opportunity, I think, for us to show you more of our product set than we have done for a while and hopefully we can demonstrate that that product set fits with our strategy and that it has the key attributes of product that we covet at Beazley Those are specialism, long-term demand growth and the ability to have some sort of pricing power. There are some new faces alongside me today. Some faces new to Beazley, some faces old to Beazley but in new roles. This is an opportunity for us to introduce those people to you on the executive management team. We reorganized our underwriting teams, as we mentioned a couple of months ago, from seven divisions plus digital into four plus digital. Those team leaders mostly are with us today, so we can introduce you to them. We'll start off after I've spoken with Paul Bantick, who is the leader of our new cyber team, who will talk to us about that subject. He'll also share a little more information than we have done before, as you've seen. Not a lot more. We'll be doing a little bit more again at the half year. Bob Quane, our new CEO, well, new-ish CEO, is filling in for Richard Montminy today, who heads up our property insurance and reinsurance teams. Richard can't be with us today because he's at his daughter's graduation ceremony from college. I asked him to stay but he thought apparently that was slightly more important. Bob, thank you for stepping in for Richard. Tim Turner, who heads up our MAP division, will follow that. Bethany Greenwood will talk about specialty risks. Lastly, Ian Fantozzi, leader of our newest division, will talk about digital. We've got a few other folks from Beazley here today, including Sally Lake, who will answer all the questions afterwards, our CFO, Sarah, our Head of Investor Relations and Christine. For full disclosure, I should say that at the front here is David Roberts, our Chairman. Thank you for coming, David. Hopefully, we'll leave you with some key messages today about what makes us different and what our sort of investment thesis is. Really, it's on these next two slides. There is a long-term growth strategy which I do think differentiates us, so we can do that and maintain our ROIC and cycle management. Hopefully, we'll explain why we can manage to reconcile those two things. A key part of that is our platform strategy, which I will go into. The diversification we have with our product strategy and it's really the intersection of those two things I think that drives our differential. We are specialists and that allows us to add value, it allows us to lead the market, it allows us to have a little bit more pricing power. We focus on that where there's natural demand growth, so we look at high growth markets. Hopefully, that's what you'll take away with this afternoon. We should give you some good examples of that. That allows us, I think, to continue to build upon our track record of outperformance. As I've been talking to analysts and investors and others in this last 13 months or so, one of the things I realized that it's been quite a long time since we've gone back to first principles and discussed the why of what we do and the where and why we invest or indeed don't invest. Because one of our defining characteristics is there's a lot more that we don't do than we do and it's not always evident why we make those choices. Our strategy is essentially the intersection of two separate strategies, a platform one and a product one. I thought we should explain what those are. You know us, I think, as a specialist insurer. Lloyd's based but with a U.S. platform and a few other bits and bobs elsewhere. Why do we have them? What value do those add? To help explain that, I thought we should start with how insurance distribution works. I'd start with distribution in North America. I've chosen North America because it's the largest long life market, it's also the largest specialty market and it's our largest market. 60%-ish of the premiums that we write are in North America. To a greater or lesser extent, the dynamics I describe here are true in all the major markets that we operate. If we start on the left here, we have a client who wants some insurance. That client will talk to a broker and quite rightly so, 'cause insurance is complex. You need an advocate and an advisor. If those clients' needs are relatively simple, the retail broker here on the left will go into the admitted marketplace to place that business. What is the admitted market? It's the one that the brokers have to go to first. It's the primarily regulated marketplace in the U.S. It's the highly regulated one. It's regulated by state, so each of the 50 states have their own insurance regulations and those states are allowed to approve or disapprove the policy forms that you use and the way that you underwrite and price for that business. It's a relatively slow-moving marketplace because you have to get approval from 50 states before you can change anything or do anything new. It's the first place the brokers have to go to place risk. If the broker cannot place a risk there and they need to show they've had at least three markets decline a piece of business, they can then go to the E&S market, the excess and surplus lines market. Generally, not always but generally, they will use a wholesale broker to do that. That wholesale broker firstly will go to the wholesale markets located in the U.S. but if they're not satisfied with the response they've had from there, they can then go to the international markets in London, Bermuda, Switzerland and so on and so forth. That will then involve a third broker in that chain. Sometimes that broker will use an MGA for the solution. If you're the capital backer for that MGA, there is only fourth broker in the chain placing that with you. Then of course, all those insurers need reinsurance to help manage their risks and so they'll place that using a fifth broker. There are two takeaways, I think, from this slide. Broadly speaking, we divide the U.S. world into two, admitted and not admitted, which is everything else, mostly E&S. The second point to take away is that depending on where you are in that chain, there are between one and five brokers between you and the client. If we look at the characteristics of those two markets next, the E&S market and the admitted market or retail and wholesale underwriting. We've missed a slide somewhere. Hang on. We're missing a slide. Okay. There's a slide somewhere that shows a comparison of wholesale and retail markets that we don't have. Do you know where that is? Excellent. I'm not sure how to play this now. We'll come back to differences between retail and wholesale but while we do that, I'll talk about the wholesale market more generally and then we'll go back to that. That's unexpected. Right. Wholesale is very important for us, which you will see. We have the biggest presence in the biggest wholesale market, which is in London. We also have presence in Singapore and Miami and we write wholesale business onshore in the U.S. as well. It is important to us. It has advantages and it has disadvantages and I list those at the bottom there. The main advantage of the wholesale markets is that it provides concentration. They're great places to access lots of risk, they're great places to access lots of talent 'cause there's a concentration of that there and you can get it all in a single geography. Lots of talent, lots of business and only one office. It's extremely efficient way to access and underwrite business. We are an insurer that likes to be in hubs, right? We have a limited amount of firepower. We can't put underwriters and claims people all in every city around the world. We have a footprint where the business is hubbed and the biggest hub is in London. As I mentioned in the slide, two slides, one I've skipped over and the first one I actually did, it can be quite a long chain between you and the client. The business in the wholesale markets can be less, sticky and more transactional than that in the admitted marketplace. Those extra links in the chain all need to be paid for. The cost of acquiring that business is higher. Some of that cost can be offset by the fact that you can write more premium per underwriter in the wholesale markets than you can in the retail but not all of that can be offset. Lastly, although you get access to a lot of risk, as I will show you or I will have shown you, had the thing gone well, I will show you, there's you get access to less risk in the wholesale markets. What does drive business into it? I thought quite a lot about how to demonstrate it and it doesn't come across terribly easily. I'll kind of explain it to you. Please bear with me. The chart on the right is supposed to show the drivers of business in three dimensions, specialty, cyclicality and capacity. These are the things that will act as the drivers into or out of. The horizontal axis is by far the most important and that is specialty. The admitted marketplace, as I will show you, is full of standard companies buying standard lines of insurance, standard products. It doesn't naturally do specialist that well. The more specialist something is, the more niche it is, the smaller of a marketplace it is, the less likely the admitted market is to be a major competitor. War insurance, a great example and a very topical example, is a great example. It's the aviation war market is $500 million, 90% of that is in the London market. It's a small market, very niche, very volatile, very fast-moving. Cyber is another great example. Fast-moving, emerging, complex, volatile. Lloyd's has over a 20% market share. The more specialist a product is, the more likely the wholesale markets have a leading voice. The second thing that drives business into the wholesale market is capacity and/or the desire as a buyer to diversify your insurance panel. If you're buying hundreds of millions or billions of dollars of insurance, you don't want to be beholden to a small number of insurers in your home market. Right? You want to diversify those across different platforms and get access to as many capital markets as you can. Property catastrophe is a good example of that. Not the most specialist product in the world but a very large demand for capacity and one that's growing all the time as asset values continue to grow. The larger the need for capacity, the more likely it is that the wholesale markets will be relevant. The last driver is cyclicality. Insurance is a cyclical market by nature, they harden and soften according to all sorts of different things. The wholesale markets are the markets of last resort when business moves in and out. The local markets generally want to be the primary insurer for business that comes in and out is a driver of cyclicality. Where you don't want to be is in products where the local markets really want that business. You don't wanna be in business where you're gonna go head to head with the big local carriers like Generali in Italy or Allianz in Germany for 10 years out of 15. That's not a good place to be. Our strategy as Beazley is to drive towards the strength of the wholesale markets, specialism, the need for capacity and a diversification of panel. Those tenets are surprisingly resilient. Yes, we'll write opportunistic business. We'll write business that comes in and out where the market is hard but we know we have to let that business go as quickly as it came in and you can't build a resilient business around it. As you look at the map of our products there and there are five of them up there, you can see that we try and concentrate on those that have genuine specialism and or a strong need for capacity and avoid just the ones that come here on a cyclical basis, knowing that actually insurance all to some degree or not is cyclical. That's a strategy in the wholesale market that's served us very well since we started in 1986. We've got a $2 billion business in London. It's the core of what we are. However, what we also know and what we wanna demonstrate to you this afternoon, that a lot of business doesn't go to the international wholesale markets at all. A surprising amount of specialty business is written in the admitted marketplaces. The bottom disadvantage, access to risk, is a big one. For us, a wholesale strategy is necessary but not sufficient platform strategy. People talk a lot about high distribution costs being the key disadvantage in the wholesale markets and it isn't. It's access to risk. Has Sarah managed to get us the other slide yet? Do we know? 'Cause it's a really interesting slide. Not yet. Right. Okay. Ready? Is it there, Sarah? Yeah. We're gonna find out. Ooh. We're ready for it. Come on then. Having given it the big introduction. Worth the wait. Very special talent. I just thought it. Pretend you haven't seen the next slide. Talking about retail and wholesale underwriting or the admitted and the E&S marketplace. The left-hand chart gives you a comparison of the two marketplaces. The admitted marketplace is a lot bigger. It's $270 billion of commercial insurance was placed there in 2020 compared to the E&S market, which was just over $60 billion. E&S business placed in the offshore markets are an addition to that. It's very difficult to track. There aren't many numbers around it, so we're showing the businesses placed onshore in the E&S markets. The first thing to note is that if you're not in the admitted world, there's an awful lot of risk that you're not getting access to. The E&S marketplace, which is a more specialist marketplace, is growing faster, generally speaking but particularly in a hard market. Because in a hard market, when the claims are high, insurers in the admitted world aren't able to change quickly. They're not able to change their pricing quickly or their forms quickly because regulations mean they have to get permission to do so beforehand. So oftentimes their only action is to non-renew business because they can't change it. As that business gets non-renewed, it flows into the E&S market, which has much more freedom to act as it wants to. If we fast-forward a couple of years, you'll start to see that trend reverse because the admitted insurers will then have revised their pricing, revised their policy forms and began to start growing again. They have preferred access to business because it comes to them first. They will start growing and it will start flowing out of the E&S marketplace again. One of the most dangerous things you can do as an E&S insurer is to try to stop that flow because you don't have preferred access, you have secondary access. The way you have to compete to prevent business flowing back naturally into those markets is to do things you really shouldn't be doing. The third thing to notice is that the loss ratios in the E&S markets are a lot more volatile. Not necessarily worse, just more volatile. I show up here, loss ratio standard deviations. What that number is the standard deviation of loss ratios in the admitted world and the E&S world, over the last five years. 2.9 is the admitted one and the 7, whatever it is, 8 is the E&S one. The E&S loss ratios are a lot more volatile, not surprisingly, because they're writing risks that's ebbing and flowing a lot more and they're writing the more specialist, more volatile stuff. Admitted insurance market, a lot bigger, a lot more stable and sticky but much more straitjacketed by regulation and slower moving. The E&S market is smaller, second choice, more volatile but faster growing and with less regulation and more underwriting freedom. When you look on the right-hand side, you can see what we've been doing in London and in onshore in the U.S., E&S and admitted. Our growth rates don't look anything like the growth rates of the market as a whole. whole. There is some sense you can make out of it though. If you look at the London one, which is the white one, the 2017 number is a technical anomaly, so I would ask you to ignore that if you can. Pretend it's 2016. That platform was very flat because we're at the back end of a soft market, so we weren't growing very much and rightly so. Once the market started to turn at the tail end of 2018, our growth rate increased sharply. That's what I want, that's when we grow. We were very disciplined until then. Our onshore E&S business and admitted business has been growing much more quickly and consistently since 2016 and there's two things driving that really. One, we're getting better access to risk, as we are closer to the client and closer to the retail broker. We have access to two pools of risk, not one. We're tiny, relatively speaking, onshore. We're big in London but tiny onshore in the U.S. Our market share is small. There's a lot more headroom for us there, because the pools are so much bigger. That then feeds back into the wholesale slide that I took you through and then leads very neatly onto the next slide, which is our platform strategy in the U.S. We have three platforms across the globe. Our international wholesale one in the middle there and two domestic ones in the two biggest non-life markets in North America and in Europe. We have pretty much built our North American one. We are building our European one. That build process takes at least 15 years. You've got to be quite patient to build a local carrier. The prize for so doing properly is enormous. It's access to risk. Access to risk with a chain that has fewer links, so it's stickier and there's business that is at the less volatile end of what we do. Those platforms are all that we need and there's so much opportunity with those platforms because we are tiny in those platforms. They're massive markets and they've got markets with natural demand growth. We don't need to do anything more to have all the growth opportunity that we need. In addition to that, the other markets around the world aren't really big enough to warrant that multi-decade investment that you need to build a well-built, resilient local carrier. The access we get from the wholesale markets in London, Miami and Singapore get us all the business that we need, really. We do not have an ambition to build offices around the world. If you look at these three things, then our wholesale platform remains our largest at just over 50%. I don't think it will be that eventually, because the other two platforms have faster long-term growth rates, because the business isn't ebbing and flowing to the same degree that it is in the international wholesale markets and our market share is relatively small. I think our wholesale business will grow at the same rate as that of the market as a whole, at a maximum. Some years, when the market cycle is not so good, it'll be shrinking. On the left, our North American platform at 38% of the whole is growing and has a lot of headroom. It's about a third admitted, two-thirds E&S. That I expect to remain relatively consistent. I said it takes 15 years to grow a platform out there, a couple of moments ago and it's right. It really does take that long to get accepted as a genuine local carrier. We really saw that a couple of years ago when the D&O market dislocated and for the first time ever, brokers were offering us primary D&O business for mid-market, Midwest, stable, relatively boring accounts. That is their core business. They will only really entrust to a carrier that they actually trust to be there for the long term. We wouldn't have got that five years ago and we got it too. That stuff is gold dust. It's why we're there and it's why we think we can carry on building for the long term out there and keep that build on for the next 10-20 years. Long-term, stable compound growth. That's the prize you get when you've built something with that level of patience. On the right, our European platform. We're much, much earlier in the journey there. We really started investing back in 2016. There's a long way to go to build that platform out and we will be patient. We will stick to our knitting. We will underwrite what we're competent at. Demand long term is growing for the sort of specialty product set that we have. Financial lines, which dislocated in 2019 and cyber, which we've been investing out there really since 2016, provide the bridgehead for us to build around. We'll build a good business around those two franchises alongside the growth of other specialty products that we have. This path has been forged before. When you look at the likes of ACE and Chubb, their international operations were built around the growth of D&O back in the 1980s and 1990s. It's been done before. That's what you'll see us do. We have a hub in Barcelona and offices in France and Germany because those are the two biggest markets in Europe and we will continue to invest in those following demand for products as it grows, be that healthcare, political risk, contingency and so on and so forth. Our domestic European platform will never be the size of our U.S. platform but there's a billion-dollar opportunity for us there in the next 10-15 years. As you can see by the growth rates there, we expect the bulk of that to be in our insurance company platform and the Lloyd's business to ebb away, because that's a preference for customers out there. Looking into our U.S. platform strategy, there's a couple of points I'd like to make here. This is our North American business written on both platforms, London and onshore in the U.S., E&S and admitted. The bottom right there is the E&S and admitted combined. On the top right, you can see our admitted business and in there is cyber, digital and specialty, which make up the bulk of that. Yes, a lot of mid-market and SME cyber business and D&O business is in the admitted marketplace, which is counterintuitive at first, as is indeed a lot of SME PI business or E&O business as it's known in the States. That's the interesting thing. The barrier to entry that the admitted market generates means that insurers write specialty business anywhere, anyway, because the extra regulation is worth it because of the barrier to entry that it builds. It is a genuine barrier because the brokers have to go there first. The specialty business that we put in there is business that we know we can't act on as quickly as we can in the S market. It has to be the business we know we don't need to change that often or that much. W e've got to be careful what we grow in there but that barrier to entry is extraordinarily valuable. Secondly, I think to take from here is the shape of our North American business in total is quite different to that in London. The first thing that springs out is there's relatively little MAP business there at 2% of the whole, versus 29% in London. There's an opportunity for us to round out that part of our business. In addition, there's not much admitted property business that we write onshore in the U.S. and there is an awful lot of admitted property business in the U.S. Eventually we'll get around to figuring out what our place in that market is. A part of our platform strategy is ultimately, when the time is right, to ensure that we sell most, if not all of our products across all the platforms that we have. That gives another form of growth opportunity for us. That's it. That is our platform strategy. I think that distinguishes us from some of our specialty peers who are mostly, if not entirely, concentrated in the wholesale distribution, which is a perfectly good model. It does limit access to risk and it does mean you're much more exposed to the ups and downs of the market cycle, that you need to manage much more aggressively and can't mitigate in the way that you can with better, closer and cheaper access to risk. If we move on to product strategy then, I said we're a specialist insurer, so what are the characteristics of that for us, right? Well, our thing is to build teams on the underwriting side and on the claims side with subject matter expertise and deploy those teams with decision-making authority at the point of sale. We do that where that has value in the marketplace. Generally, you can generate value in the marketplace in two ways. First, by outpricing or out-risk selecting or out-claims adjusting your peers. Secondly, in areas of business where clients, brokers and insurers value access to their expertise, where they wanna talk to people who know what they're talking about and have the authority to make decisions. In most of insurance, that has no value at all, right? Which is why we don't do more than we do. Risk selection and pricing is heavily centralized for most insurance and most buyers of insurance have no interest in meeting their underwriter or their claims manager. Certainly, I don't in my motor or my home insurance. In some areas, it does. It tends to be where the characteristics are there on the top, in top left, where risk is new, changing, volatile or complex. That's where you'll find us. That's where we have some value to add. The more true that is, the better we tend to do and vice versa. That's the first characteristic that we look for, specialization. The second, as I sort of alluded to before, is we like growing markets. It's much easier to be able to underwrite well and to grow when the demand pool is naturally growing and naturally growing at a healthy clip. Specialty business anyway grows faster than general P&C business. General P&C business grows at GDP plus one or two, specialty plus five or six. There are some areas within specialty that grow a lot faster than that and that's what we look for. That's why you find us in technology, healthcare, environmental business, where the world's trying to clean itself up, political risk, where the world's getting riskier, event cancellation, because we've got more leisure time, all that kind of stuff. Cyber, because we're growing interconnected. That's what we look for. We look for naturally growing demand pools. That's the second thing that we look for. Lastly, because we are here for our shareholders, there's got to be decent margin if you get it right. There's no point in doing it unless the margin's decent. We like to have the capability or at least the potential to be able to outperform our peers. The third characteristic is we like to choose products that give us the opportunity to do that, to be a market maker, to demonstrate thought leadership, build new products and services and show the value that application of expertise at a point of sale can bring. I think the chart at the bottom left shows that prize. This comes from Dowling & Partners, that periodical. VJ Dowling segments the U.S. marketplace into four, plus personal lines but I haven't shown personal lines, into large cap commercial, regional, primary specialty and multi-line reinsurance. You can see, can't you, that the one with the best five-year combined ratio by far is specialty, because that's the prize when you get it right. What you'll see, I hope, as the team leaders next talk you through the products, is that we do have a product set that exhibits those characteristics, specialists with long-term demand growth and the ability to be a thought leader and a market maker and therefore have some sort of pricing power. I mentioned that one of the things that we like to have the opportunity to do is to outperform. Part of being a good business is in being in good business. I think being a specialty insurer the way that we have gives us access to being good business. It's also about being able to give yourself the potential to outperform and that's what we like to do. I think the segmentation of what we do, the overlap of the products and the platform strategy and the expertise that we built, does give us the opportunity to outperform. I thought I'd start with a couple of slides that sort of demonstrate we've managed to do that. The first is taken shamelessly from an EY study that they do every year of the specialty insurance world across the U.S., Europe and in London. We borrowed the return on capital that they had. Our peer group have done since 2014 and compared it to the return on capital that we've built at Beazley since those years. We have managed to outperform more often than we haven't. Of course, the slip up that we had is in 2020, when we got COVID wrong with our contingency products. We have been able to outperform and I think our strategy allows us the opportunity at least to continue that outperformance and it's one we are determined to keep going. The last slide I thought I'd leave you with is concentrates on the Lloyd's market. This is from the Insurance Insider, the bible of all of us that are in the insurance world and it shows results and volatility by quadrant. What you can see, again, between 11 and 20, is that our syndicates here show the best results and the lowest volatility. We have been able to outperform. I think that's partly a result of the people that we have and partly a result of that platform and product strategy that we have. We're particularly pleased with this one because our market share in Lloyd's is quite high. The higher your market share, I think as Paul will relate to earlier or later, the more difficult it is to outperform. Our share in Lloyd's is about 15%. That's it. That's our platform and our product strategy. I hope that has been a useful session and I hope you can see what we do and more importantly, why we do it. I hope it's whetted your appetite to hear more about our products as I turn over to Paul. Thank you. Like this, as I've met with quite a few people in this room, there's some new faces, which is great to meet you all. My name is Paul Bantick. I've been at Beazley for about 17 years and during that time, I started out in the Specialty Lines division. I was more of a generalist back then. Cyber didn't exist, unfortunately and my background was E&O, D&O and lots of other lines of insurance. I have really grown through the cyber business and with the cyber business over the last 10 years or so as it started to emerge as a standalone product to what it is today. More recently, you know, I have the privilege now of leading the cyber risk division that's just been newly created and I've joined the executive committee, as Adrian said, from the first of April, which is not just hugely exciting for me but hugely exciting for the whole cyber team and the opportunity that that brings. Gonna talk to you a little bit today. I did some stuff. I recognize the faces from the half year results and this is meant to be an evolution of that. I will cover some things again, just to give the context but we're gonna evolve and there'll be more to come in the future, I'm sure. In terms of the team that I'm responsible for. This isn't moving. There we go. In terms of the team that I'm responsible for, the way that we're organized is that the underwriting, so the teams we have around the globe that underwrite cyber risks, roll up and reporting to me, as well as the cyber underwriting management team reports to me. That's the team that goes to bed, wakes up, thinks about one thing, which is profitability and how to make sure we keep ourselves and our clients safe and that's hugely important. The last piece that's absolutely critical that reports to me is the Cyber Services team. Cyber Services team is something we created really many years ago and I'll get to that in a minute. Ultimately, we are there to provide services not just when a client's having some kind of a cyber attack but hopefully to help them prevent some kind of cyber attack. Wanted to show you this slide. You'll see some consistency in slides between us all. This one is to hopefully show you some of the products that we have. Beazley Breach Response, you've heard us talk about that a lot. That is our flagship product and it's a very important product for us. Realistically, it was the first product in the cyber insurance space that was launched. In my mind, really, we're still the only insurer that does this and has this in-house that has services attached to a policy to do with cyber. That team came from four or five of us going on business trips around America, talking to people, talking to clients and saying, "Oh, cyber, we're getting these attacks." "Oh, you know, there's got to be something you can do insurance-wise." "There is but actually, we'd be more interested if you can just help us. We don't know how to manage one of these. We've never experienced one of these. We're not sure what to do. It's a crisis." And so we thought, "Well, hang on a minute. If we can provide value on the services, not only does that help the client, it addresses their biggest need, it helps contain the costs, it helps the client respond better, more quickly, it mitigates regulatory exposures." How you respond to an event was critical. The moment in time that we're at right now and I think the reason that's really important to bear in mind is the conversation has evolved a lot. When I go around and thankfully, we are going around again and I go on business trips to America like I have been this year. What I hear is, what clients want is help not to have one of these events. They understand that you're the market leader and you can help them when they have one but let's just make sure they don't have one. The conversation is really changing, which is fantastic. The second, information security and privacy, that is a cyber product but what you'll find there is that's mainly focused at large accounts. The BBR product is mainly focused in the middle market. The information security and privacy, it's a cyber policy, very similar to other cyber policies in the market that is dovetailed towards larger clients. MediaTech is a book that we've had and it has been the foundation of our cyber business, particularly from the early days. This is a book of technology clients that we insure for E&O and cyber risks. That's really important because the distribution on those accounts is exactly the same as the cyber. As Adrian showed you, the distribution mirrors the same for cyber. Not only that, the brokers that broke the cyber actually all used to be technology E&O brokers nine times out of ten. There's a lot of synergies between those two books. We have larger accounts and then we have quite a large middle market book of technology, you know, companies in the U.S. Lastly, we have some media, which is insuring some media organizations in the U.S. This shows what we're doing on the various platforms and where. As Adrian said, people might be surprised to learn that we do cyber on admitted. It's very important to us. We love that business. It's very sticky. There's barriers to entry. It's much harder for competition to come in and take that business from us and we really like that and we want to grow that. We also do a lot on E&S. As you can see, in the U.S., the admitted is predominantly the middle market or the lower end of middle market, what we would call PE size, private equity, SME size firms. That is the business that for cyber right now gravitates to the admitted product. Then in the wholesale market, in Lloyd's and obviously in London, we've been writing a lot of cyber, both U.S. and non-U.S. You'll predominantly find it to be large accounts. Large accounts tend to gravitate to the London wholesale market. We've seen some great growth in Singapore. I know 1% is a very low percent on this page but we're very excited about that 1%. The reason for that is, you know, we have one underwriter there. What we're really starting to see now, we're getting to the point of reaching a tipping point where we may need to add more underwriters in the future and we see a real opportunity to build a book there. LATAM and Miami, which is where we write the LATAM business from, is starting to show real promise as well. The third one, the domestic European, this is a huge and exciting opportunity for cyber. I think you've got to bear in mind that the European market is probably five or six years behind the U.S. market. The sort of excitement and growth opportunity that we're seeing there is similar to what we saw in the U.S. five, six years ago but in my opinion, it's bigger. It's bigger because cyber risk is more front and center now than it's ever been. It wasn't this prolific. There wasn't ransomware, there wasn't the news, there wasn't the press, there wasn't the things that you're probably gonna all ask me questions about going on in the world that we have today. I think that is actually fueling cyber demand, even more. The other point that we're very proud of is we're a global team and we're very focused on that within Beazley and within the cyber team, that we have global teams organized around our product. The reason that's important for cyber is 'cause number one, cyber is clearly a global issue. No matter where you go, it has no barriers, it doesn't respect countries, it doesn't respect boundaries. But also, while we've been launching in the U.S. back in 2004 and I was here for a lot of the launch of the U.S. and some of the colleagues in the cyber team were, you know, the first five employees into the U.S. business, we have grown all of our platforms. We haven't grown the U.S. to the detriment of the London-U.S. business. They've all grown together. Figuring out how to make that distribution yin and yang is really important. It's really hard to do. Once you've got it, that's the secret sauce that I found from my time here that you wanna keep evolving. Our cyber ecosystem. Our cyber ecosystem, as we all know, is critically important to us. I think the last two or three years has grown in importance. I think this time next year, I'll be telling you it's even more important than it was this time this year. That will never stop now. I don't think that'll ever stop. We started really to invest and evolve our ecosystem in 2018, when we saw claims and cyber threats starting to, you know, present themselves and change and morph and move. We knew that we had to invest. We knew we had to invest in our infrastructure, in our ecosystems to be able to support clients. Also, we are very much focused on frequency. If we have lower frequency of cyber events, that is good for us. That then means our clients are having lower frequency of cyber events. We have to underwrite. Not only that, we have to help our clients. It is the biggest win-win that I can see right now because it is working and we'll come on to it working in a little bit. Our sole mission right now, if you talk to my team, it's interesting, you know, you'd expect us to come in and talk about a lot of insurance things. If you come and talk to my team, our sole mission in life is to help clients be more resilient. I genuinely believe that if you have that at your heart and as your goal, everything else you do around that from an underwriting proposition, from a profitability standpoint, from a frequency standpoint will follow. I think that's really important. The way we manage and we're making a lot of changes and a lot of investments continuing in our ecosystem but the way we manage it is through something called the Cyber Transformation Program. That sounds really cool and it is. What we have is we have a group of senior people from across the organization that have volunteered to get involved and help with this. You know, the advisory group that drives this is not just made up of myself and my team but we have representation. Bethany sits on it as an example. Our head of claims sits on it. Ian from the digital business sits on it and also our COO. What we're doing is driving real collaboration across the company to deliver the ecosystem. No one can do this on their own. That leads me on to my next point, which is agility is king. The thing we've learned when you see the history in a minute over the years is that agility in cyber is king. If you don't have an agile business from an underwriting management standpoint, if you can't pivot quickly, if you can't see threats coming and do something about it and take underwriting action to help your clients and do that in a very, very quick manner, you are not gonna be able to do cyber insurance well. That's table stakes for doing cyber insurance well moving forward. What we're really doing with a lot of this, if you think about it, is building agility into the business. Gonna just talk about a couple of things here. The one of the things we've done under this is we've created something called the Beazley Cyber Council. I wanted to touch on this because it's one of the most exciting and interesting meetings that certainly a few of us in this room get to go to and we thought we'd give you some insights into it. We created Beazley Cyber Council because we wanted to be on the front of the threats and what's coming out in the world and what the next cyber threat may be, what cyber threats are happening right now, what could evolve in the future. We put together a group and we don't name them but they include people representing government agencies. We've got ex-spies. We've got people from the top CEOs of top threat intelligence firms in the world. We have probably four or five people representing four different agencies across the world that all come together and help support us in just talking about this issue and starting to really get great intel on what's going on. I can tell you now, it's absolutely invaluable. It's something that I don't believe I've seen anywhere else and it's something that we're very proud of and we're gonna keep evolving it. Second thing that I thought I'd call out here, which is a bit of a strange one, is that we're seeing a huge growth opportunity in cyber, as I think we've all read and seen about and the market's gonna keep growing. The product's becoming more widely adopted around the world. We created a cyber service center within our operations team. What this has done, really importantly, is we are very much looking to grow the business but grow it efficiently. What that enabled us to do by creating a service center to take things off of an underwriter's day-to-day lap was that we could free them up for 25-30% of their time in the past year. As you've seen, the cyber market's been through a hardening market. It's been very busy. The underwriters have been very busy. That has been invaluable. I know that we're already thinking at Beazley about how that can benefit a lot of the other lines of business that we have. Data and analytics. We have dashboards. We have data scientists. We have very dynamic real-time data. We can push a button today and see what our position is this month, this year, this quarter. What claims are we seeing? What frequency? What ransomware? What severity? What gang? What chain? What are we worried about? What are we seeing? We're constantly looking and having those data sources connected and interconnected. What underwriting action do we need to take? Are there things we need to do differently? Do we need to pivot? Do we need to change? We're constantly challenging ourselves on that and I think that's really important 'cause the sooner you see something, the better you can mitigate it, the better you'll come out the other side. Incident rooms. We're very excited about these. We're launching these. We've actually done some demos with them and we trialed them on some actual real-life incidents. What's an incident room? Incident room is a really secure place, without getting too technical, where if you're having some kind of cyberattack or ransomware event, you can go into a virtual room, which is very secure. It's an app on your phone or on your iPad and you can have your management team in there with you, Beazley in there with you, all of our other experts in that room with you, so you're not on your network. If you're being compromised, the hardest place to respond to an event is on your own network. What we've done, working with and in collaboration with another company, is establish a third-party place where you can go and do that that's very secure. Not only that, everything you need to manage that event is already in that room. The contacts, the contracts, you can sign contracts, you can pick from our vendors of who we have to help respond to these things. You can communicate with us directly. We're very excited and that's about to be deployed across all of the cyber business. Lastly, client experience. This is a huge commitment that we're making as a team and as a company, which is we want to give the best client experience on cyber. I don't say cyber insurance on purpose. I think it starts from when we first receive a quote and a submission through the policy life cycle, through to a client that wants help with other services and risk management services all the way through to, unfortunately, they might have some kind of cyberattack. That is a long journey and that is a long client experience and we want to really change the way that works and really make sure that we're providing the best experience that we possibly can. Ultimately, we want clients to consume these services. It's great to have them. We can come up with the best services, best ideas, best products, best ways to mitigate cyberattacks. If clients can't interact with us and can't consume them, it won't work. We're working on platforms, portals. We're doing lots of work with our marketing team. It's an end-to-end. It requires the whole organization to come together and really figure this out. This is the slide that it was very popular after the half-year results. It has been updated slightly. I'm not going to go into all the updates and it's there for reading but I would say a couple of points in it. Number one, the client is at the middle of everything we do. I can't say that enough. You have to have the client in the middle of everything you do. Give you a real-life example. We've got the Beazley Cyber Council, which is up there on the slide. As you're seeing, we're also doing a lot of other threat intelligence, pilots and we've seen some of them be very successful that we're now consuming more data, more threat intelligence that we're feeding into two things. Our underwriting and our pricing and our modeling and how we price risk because it gives us even a better guide to which clients are more likely and less likely to have an event. Secondly, it's brand-new intelligence that we can feed our clients to make sure they don't have an event and we can alert them to risks ahead of time. Two examples. Last year, we started the, it's on here, the dark web, monitoring. This is basically people that look in the really nasty places on the internet to see if bad things are about to happen to a company. We got alerted to about 30 clients last year that were about to be attacked. We contacted them, we reach out, we talk to them, we let them know all the threat intelligence we've got, we make sure we connect them with experts. I don't know how many of those attacks and we'll never know how many of those would have happened but I am convinced that we averted disaster for several firms there. That's the role we have to play moving forward. The other one is between our own Beazley's threat intelligence and the dark web. We saw some other threats and that were quite large starting to emerge and we saw one company within our services team reach out that thought they'd been impacted by this threat and we started to connect the dots very quickly between our data and analytics. To cut a long story short, it was that significant that we ended up passing that information to various agencies in law enforcement and cyber experts in the U.K. and the U.S. and they acted on it and they couldn't have been more appreciative. For me, that is how that collaboration has to work. We now have people from secondment at various agencies and law enforcement agencies from our team. It's a collaboration and it's gonna take an effort from us all to come together to be able to tackle this cyber issue. We touched on it again previously but we thought we'd give a little bit more detail. Non-risk revenue is central to our strategy for cyber at Beazley. It's gonna be at the very heart of it moving forward. That will manifest itself in several ways. The first is Lodestone. Lodestone is a company that is in the U.S. and U.K. and Europe. We started Lodestone over five years ago and what it is, it's a cybersecurity service firm. It can do, as you see here, incident response, forensics work, risk management services and I'll come to some of this. But just to give an example, it's 100% owned by Beazley and they do a lot of work for our clients. If a client is being attacked and requires incident response support or forensics, Lodestone can come in and provide that support and perform those services and obviously that generates revenue. The virtual SOC, that is effectively Lodestone have built and manage and maintain the capability for companies to be able to be monitored. Instead of investing and particularly in the middle market space, to invest in your own security center and monitor yourselves 24/7 is a very expensive, costly and complex thing to set up. Lodestone have built that capability that can be deployed on mass. Now what we have is parts of our book and certain groups of large amounts of clients that are now going to be managed and looked after by the Lodestone SOC moving forward. It's something that clients are constantly reaching out to ask about. How do we get access to this 24/7 monitoring? Who can help us be more secure? That's just an example of some of the opportunities that we see for Lodestone. The Beazley Cyber Services team, that's headed by Rafael Sanchez in London. Globally now, we have people that can, via a digital platform, help with attack surface monitoring, can look for threats, can look for vulnerabilities, can bring all the data points that I just discussed together that we're seeing to feed up to clients in real time. What we're creating here is hugely powerful and valuable information that we think clients want and crave. Lastly, we work with lots of other third parties and there's lots of times that we have to bring in third parties because you always need the right person in the right place and the right firm to do the right thing. We recognize that we also have to have some strategic partnerships in place to be able to deliver the full ecosystem and everything that a client may need. Ultimately, what weaves this all together and what brings this all together will be the seamless client experience that we have and are evolving. That's gonna be mission critical to all of this. This is the update. We showed this first at the half year and we've been updating it. We've been updating regularly and it shows how we've done with our underwriting action since we started deploying our ecosystem fully in October of 2020. This is something that the team is immensely proud of because the very early decision that we took and we made was that the solution to the problem that the cyber market was facing was frequency. Targeting severity and taking other actions, what we saw for example, was a lot of competitors wanted to target severity, sub-limits, restricting coverage, removing coverage. We really wanted to make sure we maintained the integrity of the product and could provide, you know, clients with the solutions they need for cyber. When cyber risk was there, the last thing a client really wanted to hear from us is, "You're taking this coverage away from me and bringing down the, you know, the product for us." We focused on frequency. As you can see, the thing that's most satisfying for two reasons is the 25% reduction on a per policy basis. That is really important for two reasons. Number one, we're seeing our frequency down and that correlates directly to profitability and that we're seeing less claims, which is fantastic. Secondly, that means our clients, we're helping them. They're becoming more resilient. They're seeing 25% less activity. That's really important. If we're guided by that, like I say, the other things will follow. Our clients are seeing less things. That's against a backdrop and you can read many reports. There are many external articles but people widely agree that ransomware increased 60% in the U.S. and Europe last year. Now, whether that's right or wrong, to see a 25% reduction is a fantastic result that we're very pleased with. Here's this slide. I think a lot of us have seen before or anyone who's been looking online has seen before. This shows really what happened in 2021 with all the action. Where did we end up and how did things end up looking? As we said, we did shed some policies last year. We were focused on using all of our data, analytics, all the new underwriting tools and investments to identify clients less likely and more likely to have a claim. At the same time, the market was hardening and rate was coming into the market. Because of the action that others were taking, we were seeing capacity restricted in the market, which was driving the market and the pricing. We saw a lot of things happening all at once in 2021 and what you can see. The message was 2021 finished with a lot more rate for a lot less exposure than any of the few years previously. We're very pleased with that result. As you can see, 2022, as we told you, we are planning to grow exposure a little bit. Obviously premium, we let you know that we have a premium goal that's there and we're growing the business to, as you can see there, roughly GBP 1.35 billion is our plan. At this early stage, from a forecast standpoint, we're on track. As you all know, cyber is a fast-changing threat landscape and it's a fast-changing insurance market. We'll give you more updates as we go through the year but coming through April, we're definitely on track with our plan. We don't see any reason to alter our plans at this stage. Now we're gonna talk a little bit about systemic risk because there's always questions on systemic risk, so we thought we'd put a couple of slides in on it. Firstly, what do we mean by systemic risks? I know that we may have covered this before but firstly, attritional, when we talk about cyber, is a cyber event that will impact one client. It's something that's focused on one client and it's a cyberattack against them. When we're thinking about systemic risk in cyber, we're thinking about something that impacts more than one client through some kind of cyber event or attack. The widely used example is the cloud outage. Amazon or Google or Microsoft or any of the other top five cloud providers have an outage due to a cyberattack. Cyber policies could respond to that and the resulting business interruption that would ensue. Business interruption is a really important thing to pause on for a second because business interruption is one of the main or probably, in my opinion, the main driver of systemic risk on cyber policies as we sit here today. Because something that's impacting lots of people at once, yes, there will be forensics that are required, there may be legal work that's required but actually if you look at it, what's gonna drive it is that businesses generally are experiencing some kind of business interruption. Their systems are locked. They can't use them. There's a critical third party that they're dependent on that's not able to function and that drives business interruption and sometimes, as we call it, dependent or contingent business interruption. That really is driving systemic risk. We've been thinking about business interruption for a long time. It's not something that we started thinking about in 2021 because of the market. Actually, in 2019, we were already looking at the business interruption limits that we have for our clients and making sure they're fit for purpose, using our aggregate wisely, give clients the coverage they need but don't give them so much coverage that they don't need, that we're putting aggregate out there that's not being used wisely. We'd already started that journey in 2019. We continued it in 2020 and we picked it up into 2021. How do we manage systemic risk? There's gonna be another slide on this, so I won't go in too much detail but we have a focus team. There's probably anywhere from nine to 10 people every day at Beazley that think about systemic risk on cyber. That's what they do. That's what they love and that's what they constantly think about, how we're modeling it, how we're managing it, how we're running it. We, at any point in time, we can push a button and work out what we think our exposure to certain events are on any day. We can add it up. We can model it and we can add it up and that's really important. We're not managing this to any different to any other line of business that we have in Beazley. We set ourselves a risk appetite and we stay within that risk appetite. The critical piece is the scenarios that we run to establish where we're at versus that risk appetite. Those scenarios are the work products of what is ten years of our expertise but most critically, a lot of our third-party expertise. We have a lot of third parties who come in and really help us think through, are our scenarios still fit for purpose? What do we need to change? What do we need to add? Are some redundant now that actually this threat doesn't exist anymore? What are the black swans that we're not thinking about? Constantly challenging ourselves. We also run them past the government agencies, the law enforcement agencies and other people to get as much input into these as humanly possible. There's no one source of truth. We're taking the best advice and the best expertise from all of the different places and bringing them together. We hold CAT margin, which I'll come back to, shortly. As I said, we've been driving the systemic exposure that we carry down, not just because we shed policies last year, which obviously means that we have less aggregate and less exposure to systemic events but also because we've been making sure that our limits are fit for purpose on a client-by-client basis for a couple of years. If we do approach the risk appetite, then there's obviously we can use similar mechanisms that the other teams would use, reinsurance and other things to make sure that we stay within that risk appetite. The other thing that we've seen that is really important to managing cyber systemic risk is diversification. What the years have shown us is that the more diversified your portfolio, the better you'll be able to mitigate and navigate any threats that emerge and come along. I think we've learned that more in the last two years than we ever had. Yes, middle market probably got the worst end of ransomware but we had a non-U.S. and a large account book that was faring a little bit better at the time. Then when large accounts have had their trouble, we've seen the middle market faring a little bit better. Having that diversification is critical. As you can see here, we're diversified by industry and we expect the diversification. We're really proud that the international business has grown to this size but we expect this diversification to further continue because the growth rates we're seeing outside the U.S. are just much larger because they're at that point five years ago of the growth cycle. What I can say, as we went through our underwriting action in 2021, we worked really hard to make sure that we maintained this industry diversification. If you looked at this a few years back, you wouldn't see any material differences. You'd see some slight changes but ultimately, we've not changed how heavily exposed we are to any particular area. Lastly, you can see there. A lot of people see events in, you know, out there that can happen and wonder if we insure the client. Obviously, we do have a $50 million gross line that we deploy on cyber for clients that's typically used on the larger clients. It's rarely used but if you see something out there that the maximum net line we have is less than $15 million to any one particular client with an average of 1.7 across the portfolio. We spend a lot of time worrying, thinking, planning. When I say planning, I mean, not just planning how much could a systemic event cost, how would we respond to it? Because all of our clients will need those services. We actually run scenarios on our service team to make sure that we can respond to these events and help our clients most importantly, if one of these things happens. We've been thinking about how bad can things go, how big can things get? We have seen systemic events. These are all recent events. On the bottom left here, what you'll see is the most recent one, probably SolarWinds is the one that a lot of people ask me about. I don't know why SolarWinds probably sticks on people's tongues a little bit more than some of the others. As you can see, we got quite a few of the exposures as notifications, the amount of clients that were impacted. We've got quite a few clients impacted by these events. For as bad as we think things can get and that we plan for, we haven't yet seen one that has happened to that magnitude. We plan for it. We're ready for it. We're thinking about it. The events we've seen today, as you can see here, have typically been one costing less in totality than one bad ransomware against one client. I think that's just really important to note that we're now getting a lot of experience with systemic events. When they're happening, these things and you read about them and you read the press, they do feel like the things on the right-hand side of the page here, which is an example of some of our scenarios. Actually the devil's in the detail and really understanding the threat, how it's being mitigated, how impactful it really is to clients at that particular time is critical. This is all up to date as of the other week. On the right-hand side of this page, you will see we've put down what our current RDS is, our exposure, what our current RDS scenarios are as a percentage of our risk appetite. As you can see, 58% there is the highest. The important point to note is, A, there's a lot of room between where we are and our risk appetite. B, these have been coming down. If you looked at these four years ago, they would have been higher. Because of the underwriting action we've taken, because of the policy account coming down that you saw, because of the aggregate coming down that you saw, we're carrying less systemic risk exposure for our book now than we have in the past four years with a lot more premium and rate to accompany it. That's a function of the market dynamics and the underwriting action that we've taken. The other thing I'd like to point out on this, on systemic risk, is resilience is a big word that I heard when we talked to our experts about this. Through the underwriting that we've done, focusing on clients with the better controls, should a systemic event happen, whether it be one on the left or one on the right, we should have a client base now that is much more resilient and better able to respond, mitigate the impact of than we did several years ago. This slide is, I guess the headline on this slide is that, there'll obviously be more things we'll be telling you about cyber at the half year results. What we wanted to show here was the impact of the cat load. I also said one of the ways we mitigate and manage systemic risk is we carry a cat load on the book. What we did is we put this together so that we could show you that cat load and how we carry that every year. What we are doing is taking a lot of money and putting it aside for these events. It's no different than what our property team does and what the other teams do. We face that cat exposure. We are taking a cat load every year. It obviously runs off over time in a similar fashion but we put that aside in case one of these cat events should happen. We haven't seen one yet, so we haven't utilized it but we constantly do that. What you can see here is the attritional losses started to rise, as I said, in 2018 when we were starting to see that and get ready to deploy our ecosystem. In 2020, that is really the impact of ransomware. What I can tell you is that in 2019, 2018, 2017, had the CAT event have happened, that'd still been good profitable years for us. Benchmarking is much harder on cyber. Everyone else has got loads of things they can go to for benchmarking, which I'm quite jealous of. It's really hard to do benchmarking on cyber. I was thinking, how on earth are we going to do this? What I did was I went to one of our key business partners and I said, "We'd really like to get a look across." 'Cause as you guys will know, no one really is disclosing cyber premiums, loss ratios separately, those sorts of things. This business partner has a look across about $6 billion in cyber premium. I read an article today actually where someone was suggesting the global market's about $9 billion now. It's a really good read across the market. The question I had was, how are we performing both from a loss ratio standpoint but also from a rate standpoint? I thought it'd be interesting to share these with you. As you can see, we have been over the market cycle consistently outperforming the market and that's something we want to keep doing and maintain. As Adrian said, that's really hard to do when you have the market share that we have. We have a big market share, so outperforming is really, really hard to do. 2020 is because the ransomware prevalence. Yeah, that's the year where we are slightly above the market and that's driven by the fact that we have a huge market share. Also, as I said, we have a big presence in the middle market space. Our market share in the middle market space, particularly in the U.S., is very large. Middle market clients were impacted the worst by ransomware, both from the rise in frequency and rise in severity that we saw. What you can see is that the investments in our ecosystem really will come back and start to pay off. Rate change. Rate change is something I can appreciate the early years are a little bit harder to see but ultimately what we're pleased to see is, again, through 15, 16, 17, 18, 19, the rate change is above market. As a market leader, with the stickier business, with the services, with the investments that we made, even in those early years, we were able to achieve rate above what we were seeing or certainly this third party was seeing as the market average. 2020, again, while we were getting ready for ransomware and we saw those issues, we didn't quite see the rate the same as the market. But as you can see, with the underwriting action through maintaining the integrity of the product by not taking coverage away but charging for it. By focusing on clients that are more resilient, we were able to outperform the market last year, in 2021 on rate. Which is something that I'd heard a lot and people have been telling me was happening but to see it like this was quite stark and we're very pleased with that result. Currently, 2022, as this firm sees it, we're on track doing the same as we currently speak. Like we said, it's an early view and we'll keep you updated on that as the year progresses. I think the message I would like to leave you with is that we've done a lot but it will never stop. It'll never end. It has to continually evolve. It has to keep going. We'll be making future investments. The commitment to resilience and putting the client first has to and getting that frequency where it needs to be, has to be maintained and has to evolve. We want to keep building a cyber service proposition that clients crave and enjoy. Ultimately, as a specialty insurer, we're doing lots of things I think are hugely exciting for the company that they can hopefully leverage and grab hold of and reutilize and use as well, which I think is gonna be fantastic. It's the people we have, not just the people in the cyber team, the people that are building the platforms, the people that are helping with the client experience, the people that are helping with the underwriting management. That's what makes this deliver those results that you see. With that, I'm happy to go to Q&A. Wow. I'm gonna need help. Wait for the mic. You're here. You've got the mic. When you've got the mic, you go. Yeah, it's Kamran Hossain from JP Morgan. Three questions. The first one. They're gonna be quite short. I've got one. It's all right, I've got one. The first question is, I guess you've talked about the development of different markets in cyber. You know, Europe developing a little bit, you know, five-six years behind the U.S. But it sounds like clients in the U.S. want slightly different things than they did five-six years ago. Are you seeing clients wanting the same things in different markets or kind of just comments on that? The second question is on the services. How scalable is that? 'Cause it sounds like it's something that everyone should be doing but how scalable is that? The third question is just, I guess I should probably know this but what were the cyber caps in your 2021 loss ratio that you kind of showed in that chart? I think there was a gray bar in the actual. I'll get that. We still hold a reserve for them. We don't release it straight away. Awesome. That's just two then. That's the piggy bank we put to one side. Hopefully we'll never need it. Coming to Europe, USA differences. They're a little bit different, driven by a few things, culture. You can't underestimate the cultural differences and just the impact that has when you're trying to do business. You know, we have cyber underwriters and the service team that are all delivering everything in local languages. Having said that, what you're seeing is Europe is really catching up, you know. If you boil it all down and you look at it, everyone wants to be more resilient to a cyberattack. I think ransomware changed that. Before when it was data breach, it was like, "Well, I don't really have that much data, so I'm not gonna worry about it as much." Whereas now ransomware can happen to anyone and no one wants to experience it. I think that's been a bit of a leveler. Actually, subject to cultural differences, which are massively important that we're constantly trying to work on, yes, the craving of the services is the same. The approach to the risk is now becoming the same. It's, you know, D&O and cyber are probably the two products that the boardroom's constantly talking about and we're just seeing the same level of attention and craving services. Scalability is a great question. We've been spending a lot of time thinking about. The U.S., we have, you know, 25-30 people in the service team. We can scale that. We have great business partners. We have redundancy should we need it. Again, internationally, it's a lot more spread out.. There's a lot more water between all the places where we're conducting business. What we have is a model where we're constantly building out. We have people in Paris now, people in Spain, people in Germany that can all provide the services. Not only that, Lodestone, I think is gonna become more critical to how we provide those services. Take an example. Right now, they're taking a lot of the U.K. instant response off of our team, which is a great thing. It means they're now at the critical mass in the U.K., where Lodestone can take on and handle that. How we scale it is a combination of Beazley and Lodestone, plus some of the other resources we have. We're scaling it. We're doing it in local languages. We're not gonna have someone in the U.K. picking up the phone and dealing with a French breach or a German breach or an Italian breach. It's a cost but what we've seen over the market cycle is the service team is worth the investment because ultimately you're helping clients, they're responding better, which means ultimately you're maintaining the costs and coming in better on that as well. Sarah, you're gonna have to pick the questions. Hi. This is Ivan Bokhmat from Barclays. A few questions, please. The first one I think, which is following up on the service proposition, I mean, it does seem like a very sensible thing to do, especially if clients are asking for it. I was just wondering if you could. It seems like you have a few years of advantage over your, let's say, top five peers. I don't know if you are seeing them catching up, how do you think you can maintain that advantage and in what aspects? The second one I think was quite intriguing about the admitted cyber. I'm just wondering if you find the level of competition there higher or lower. I mean, are you working against the same competitors or somebody who is less, sophisticated, let's say, so you can, you know, price cheaper? Was that in Europe? Sorry. No, just admitted in the U.S. Admitted. Okay. Yeah and maybe the final question is related to the RDS that you disclosed. I think you're saying that the worst scenario that you have is about $200 million of loss over a book that's now well over $1 billion. When I look at most of your competitors, for them, the RDS is actually in multiple times of premium. It seems to be completely inverse relationship. I know everyone estimates this differently b ut I was just wondering if you've tried to benchmark it, what do you think are the key ingredients that make you so much, you know, the risk reward so much better? Okay. Great. Years advantage over our competitors. Yes. I mean, for example, we were worried. When we launched the services way back when in the U.S. in 2009, 2010, we thought, "Well, everyone's gonna build this in-house." No one's done it as we sit here today. We're twelve years on and no one's done it. To my knowledge, no one is making the investment internally and within their own organization, whether it be through a Lodestone or actually within their own team. What I do is I don't worry about it. I think we believe this model. We believe it's the absolute right thing to do and we'll keep investing and keep going. I don't. As a team, we don't spend. Obviously, we look at competition, we think about competition but we just wanna keep evolving and we have a vision to be, you know, the one of the biggest and best cyber service providers in the world. That includes insurance and many other things. As long as we can do that. Right now, as we sit here today, like I said, we expected it the first round in the U.S. It didn't happen. Whether it'll happen now or not, I can't predict but we're focused on keeping evolving and keeping going, hopefully out in front. On the second point, admitted, yes, we do see slightly different competition in admitted space. Tends to be, you know, admitted, as Adrian said, takes a long time to set up. You have to be committed to it. You have to have quite a big infrastructure to be able to do the filings and change the filings. You've got the 50 states and all the things that Adrian alluded to. Tends to be the larger insurers that we come across in the admitted space and more the second tier in terms of cyber insurers and insurers that we see in the non-admitted in the U.S. I think that will continue. I think the admitted product, you know, it's very hard to get going and get off the ground. I haven't seen any major changes there. Our admitted competition has remained fairly consistent over the years, would be the way to describe it. Sorry but maybe one follow-up on this. Is admitted more profitable or less profitable than E&S from cyber perspective? It's different. That would be my answer because it depends what threats you're facing and what's happening at that particular time. Like I said to you, at one point in time, our middle market book was facing the brunt of the threat. At another time, our large account book was facing the brunt of the threat. Some of those migrate to the admitted market and some migrate to the E&S market. It's not a rule for one or the other. I'm not gonna. I can't talk to what our competitors do on their risk appetite and how they model. There's lots of modeling firms out there that help lots of different people but we do it ourselves. We have confidence in our numbers. We have confidence in the team. It's got 12 years of data expertise behind it and I think that's the most I can say about that we're, you know, we're very proud of the work we've done on it. Thank you. There are a couple other things. It's that, as Paul was trying to say, diversification was not. Sorry. There are a couple other advantages I think we have. Although diversification is not quite as useful as it is on, say, a global property book, it does have some value. We are very diversified by industry, by size of business, by geography and so on and so forth. The fact that we've got a book the size we do means that actually the ratio of our average line size to the size of our book means we're much more balanced than most of our peers are and that means that our tail risk isn't quite as big. We spend a lot of time figuring out how to reinsure it and to hedge it. That's not only through things like the proportional insurance we have to grow our business, it's by buying catastrophe insurance, reinsurance specifically for cyber in a way that we do for property. I think we think about it in a slightly unique way because we've been doing it for so long with some natural advantages we have from the diversification that we do have and the modeling that we're able to do because we spend a lot of money and time and effort trying to make sure that we really understand the plumbing. You know, we have great conversations with all of those parties. Reinsurers, you know, we meet with a lot of them. We have similar meetings like this and presentations and, you know, they're very impressed and gravitate towards the work that we've done and the thinking that we do. Hi there. Faizan Lakhani from HSBC. Hello. My first question comes back to the services side of things. Just taking a step back, how does your product differentiate from, you know, the cybersecurity service companies, you know, the likes of Atos and so on, relative to maybe an insurer? What is your product there? Secondly, when I look at your slides on the loss ratio for the market in 2021, it appears it's pretty strong across the market. Could this provide an inflection point for capacity to come back into that cyber market? The third is just a short question. The frequency data is very helpful but I guess the second part of the equation is severity. How has that evolved over the past few years? Great. Differentiation against cyber service companies. The best answer I can give you there is they do one thing, right? They do that, whereas we do the insurance. We can be the effectively, to use a U.S. analogy, the quarterback. If you think about our team, they're the quarterback. They're coming in and bringing to the front all the different services. There's not one person, not one service provider that can really help you with everything you need. Beazley has a function and a way of bringing that all to you at your time of crisis and your time of need. That's the critical bit. Now we work with a lot of those service providers, so we complement each other. You know a lot of the firms I think, you know, you referenced one, we work with them. They come in and help us with certain situations on the right client at the right time. There's lots of other things like legal and forensics and potentially PR and crisis management. You need a, you need a negotiator. You need a whatever it might be. How you bring that all together seamlessly and provide an end-to-end response is really hard. Secondly, what we get to see is a really good view. We've developed tools and analytics that show us a client's risk profile. Every client that we quote, we say, "How are you presenting to us?" We boil it down very simply for our underwriters, red, amber or green. It's fairly obvious what that means, right? Ultimately, we feed that back to the clients and we say, "Ah, you're amber. The reason you're amber is because we've seen this and this goes on every quote that we do. By the way, if you would like help to become green or become more resilient or to fix whatever the issue is or the particular vulnerability or the threat, this is how we'll help you do it. No one else that I can see is getting that touch point and that's free right now, right? We're quoting business. We're just looking to figure out how good the controls are and then looking to help clients. There's lots of clients that we don't end up insuring, perhaps, that we're still helping identify weaknesses and how they can improve and become more resilient. We'd love to go on that journey with them and do that and ultimately insure them. The next question was loss ratios. 2021 is still an open year of account, as I'm sure you're aware. You know, it's early days but as you saw on that chart, performance is improving. You know, haven't seen too much, haven't seen capacity really moving into the market. We'll see how the year progresses. There's still a lot of people taking action. There's still a lot of, you know, capacity restriction in the market. There's people saying they're looking to reduce their overall cyber exposures. You know, you read the articles as much as I do. From what we're seeing now in the early signs and like we said, it's early days that we're seeing at the end of Q1 from a rate standpoint, from a competition standpoint, we're not seeing that yet. Frequency and severity. Like I said, we targeted frequency, which is why we're used to say frequency but and severity can move around a little bit but I would say the general trend on severity has been downward as well. Severity, interestingly, what we saw in, particularly in the early days when we started taking underwriting action, was driven by whether or not a client decided to pay an extortion payment or not. That was really interesting because actually clients who end up paying the extortion payment generally do it because they've got no other option. They've exhausted every other avenue. What we've seen actually over time and I think this is similar to some other reports out there, is that as we've helped clients improve their resiliency and as we've raised the bar, that means you've got more options. We've seen severity coming down because clients are paying the extortions less. Here we go. Next. Great. Sorry. Thanks. Hi, Freya from Bank of America. Two questions, please. On the RDS percentages, the highest there on your slide was 58% and you said systemic risk was coming down across the book. Are you happy with this level of risk on the book or how do you see that evolving going forward? You also talked about, I guess collaboration between Beazley and the government agencies on cyber threats. To what extent are you seeing collaboration at an insurance industry level and do you think that needs to happen for the industry to move forward and mature from here? Yeah. The 58%, that's as I said, down. We're very comfortable. I mean, we were comfortable with the level of systemic risk we had four years ago. Yes, we're comfortable. We know it's gonna grow. As we've said to you, we've got a growth plan, we've got an exposure growth plan and it's something that will always be evolving. You know, the market's predicted to grow on cyber, as we've all seen. I'm not sure whose prediction will be correct. One of them will be. Even if you take the lower end of predictions, the cyber market is predicted to grow both in the U.S. and in Europe and in Asia. We will continue to do that and we feel comfortable with the risk and that we've got room to achieve our plans. It's something we'll continually. We'll always be working on. Given we had more four years ago, we're comfortable now and we're comfortable for our plans. Yes, collaboration in the insurance industry. It's starting to happen. It's happening. It's real. I think we mentioned last time there's an entity called CyberAcuView. CyberAcuView is in the U.S. and it's a company that was formed by a lot of the cyber insurers and it's starting to bring together insurers to talk about issues. Obviously, anti-competition lawyers are there. They helped set it up and they oversee it. It brings a group of people and experts together and I think roughly 60% of the premium in the U.S. is represented now. It may be slightly higher. It's a platform that enables us to talk about, you know, we're all starting to publish data. We're all gonna, you know, CyberAcuView is going to bring some data together and start to publish some early findings on some data. We're going to use it. It's for example, in the US, if a regulator has a question on cyber and it's not specific to one particular insurer, there's an entity where they can go to now and really, you know, collaboratively engage with us and talk to us. There's lots of issues, like how do we address systemic risk? That's not an issue unique to Beazley. That's an industry issue. Ultimately for the cyber market to go where the predictions say it will from a demand standpoint and be able to meet that demand and to be able to give those clients the solutions. We need to be able to think through systemic risk and how more capital is coming to the market so that clients can get the coverage they need. Because there's a lot of large clients right now that if you had a broker on here, would say, "Well, my client had $ half a billion of cyber cover this time last year and they've got $250 million now." We've got to think through how to keep resolving these issues so that we can grow the market and provide the solutions that clients need. Great. Will Hardcastle, UBS. Thanks. Really informative presentation. Couple of questions and Adrian touched on it slightly. Just thinking about the aggregate cover attachment points, perhaps, is there any color you can give on that or whether there's CAT coverage? You touched on the point that it's bought specifically for cyber. Does any get caught in other policies as well? I guess just thinking big picture with this level of growth, is there a need for reinsurance perhaps to move into the capital markets or is there plenty of supply for your near to medium-term growth ambitions? If we think about capital requirement on cyber, is there any color you can give? I guess what really changes it? Is it, you know, just pure exposure growth or is the most capital intensive side of it, is it the systemic or the CAT covers or what can help dampen the requirement? Thanks. Good for me to go? Yeah. We do buy some cyber specific aggregate. We also, as you know, we have some other coverages that are broader, that include cyber, like, the clash and other things that we have. Yes, there is cyber specific aggregate. Need for sort of more capital to complete our plans. I think right now if you look at what we went through planning for this year and we're already planning for next year, which is somewhat traumatizing, at the end of the day, no, we haven't been constrained by that. We have actually been overwhelmed by the amount of support that we received from the reinsurance market and capital that is out there that's looking to invest in cyber insurance. I think they see Beazley as one of the, if not the best in class and that has not led to us having any constraints. We're already, you know, as we sit here today talking to them about next year's plans and there's lots of people. We very much view this as a partnership that's gonna evolve with them as well as our clients over the next 5, 10 years. I've just come back from meetings in the US and Bermuda in the last couple of weeks just with that in mind and it's all about having that partnership and we're all going on a very exciting journey together. The capital question, I think the capital requirements from cyber are driven by a couple of things. I think it's got better because obviously as our exposure to systemic risk has been coming down and the premium's going up, that's an obvious benefit, right? It's systemic risk that has been driving a lot of the capital requirements on cyber. The more we evolve that, the more we manage that, the more we operationalize the business around that issue and more we become efficient with it. Overall, systemic risk with cyber will improve as resiliency improves, right? I think that's one thing to bear in mind. We'll get more of those benefits in the future. The cloud is more resilient than it ever was five years ago. Clients are more resilient than they ever were and that will continue to evolve. I think it's a combination of a few things. Hi. Sorry. Just coming back on the slide on systemic risk, the 692 policies you said they were triggered, can you give us some color on how do these compare to the overall book? Just trying to understand how systemic, w hat was the systemic event? I wanna make sure I get the right slide. Sorry. Yes. I'm just trying to understand how. Shall we take Blackbaud? Yes. How systemic was that systemic event? Those 692 clients that reached out. Look, we didn't sleep that weekend. Let's get that out there, right? My wife was really cross 'cause we were on holiday that weekend and the whole service team had to drop everything. I remember where I was. I was at Bournemouth Pier, phoning Adrian to tell him it was all gonna be okay. But ultimately, we had 692 clients reach out in about a week. Probably I would say 80% of them within a week. Can you explain what happened, what the loss was? Yeah, sure. What was Blackbaud? We can start there. Blackbaud. All of these really, if you look at them, they were something in a supply chain. It was a some kind of technology software provider, something that businesses are critical on, whereby you insert something bad into an update or into their system themselves so that everyone that's reliant on that gets impacted potentially at the same time. Some of these had different levels of impact to them. With Blackbaud, for example, it was something that if you had a certain amount of redundancy and controls in place and that you had network segregation, if you had certain other controls in place, you could mitigate it quite quickly. What we found is that our clients, although they reached out and said, "We may be impacted by this," the resiliency from us underwriting had gone up so much that they did really well with it. We had 692 clients notify it and in total, that 692 has cost us less than $10 million. There's only 11 that are still open and they're not going to be material at this stage. You know, it's on course for the same trajectory. Can you just share how does that number compare to the overall policies in force? What proportion of our total policies in place? Yeah, proportion. I mean, we have tens of thousands of policies in force, so it's a very small proportion. Hi. Iain Pearce, Credit Suisse. On the U.S. admitted business, I was just wondering if you could talk to us about the rate filing requirements, if they differ in cyber from other lines of business. You talked a lot about the need for sort of flexibility and reacting fast. Just trying to sort of square that circle about how you do that when there are such significant rate filing requirements. Secondly, just quite a quick one. How do you guys define a cyber cat? Then thirdly, on the services business, you said you expected everyone to do something similar. Why do you think no one has? Sorry, I'm writing down these questions because otherwise it's U.S. admitted business. It's something that when we first started doing it, was a little bit more time consuming. It was new, right? Probably new for us, new for the regulators, you know, if you're grappling with cyber for the first time. What I can tell you is it's now becoming very comparable to our other admitted business where we want to make a change. It's from my experience at the minute, it's no less or more intensive. Yes, there's certain states that can be sometimes a bit more tricky but that's no different from any other line of business as well. We recently updated our rates because as we all saw, the market shifted and, you know, we were able to do that within months. You know, traditionally, I remember when we used to do this, we used to be thinking about an 18-month plan, an 18-month rollout plan, particularly when we were launching in the U.S. We were new. We're probably new to a lot of these states as well with Beazley at the time and so just a lot more to it. But now we can pivot, you know, quickly enough that we can do that. I think you're seeing the other carriers in the admitted space that have been there with us for years are having pretty much the same experience. How do we define a cyber cat? Simplest way is, you know, we have roughly 12 scenarios that we constantly maintaining and evolving and they're well-defined, as you saw there. I only gave the high level description but underneath that we have a paragraph for each one. A cloud outage is a cloud provider going down from a cyberattack for a period of time, for example. There are well-defined scenarios out there but ultimately, systemic risk on cyber is. I go back to, it's still something that impacts more than one. As long as you have that at the heart of everything you're doing, you'll know when one of those are here. 'Cause someone said to me the other day, "How would we know?" Unlike a lot of other lines of business, you'll know very quickly if one of these events are happening. With Blackbaud, we figured out very quickly that that was actually gonna be what we showed you on that piece of paper. We were confident on that probably within a few days of it happening, that this is what we'd be showing you today. I think the answer is also when there's a systemic cyber event, you'll know very quickly and you'll know it's happening and you'll feel it and you'll see it. It's a bit different than, say, the longer tail liability classes where things can take longer to manifest. I think Amazon goes down, mass ransomware attack on the West, any of these things, you're gonna know quite quickly. Why haven't people invested in the services? I don't know. Can't speak for them. What I can tell you is it's a big investment. It's a lot of money. It's something you have to live with. Give you another example. The initial investment we made paid massive dividends from 2009 to 2016 when data breaches were happening, 'cause we knew that model. The clients loved it and it was making the business sticky and it was brilliant. We had this service offering. Then data breaches went quiet and everyone was like, "Oh, you're running that cost." During the bad times when there was lots of data breaches, which were good times for us, we knew that model was saving us 20%. You've got to make the investment to get the benefit. The other thing is it's really hard to do because I have people on the team that you know. I'm in insurance by background but we've got people that are data scientists. We've got people that are coming from, you know, a government background, people that are coming from IT, ex-CSOs, ex-lawyer. It's just so many capabilities that you need to invest in and be able to bring together and it's really hard to do. At the time as well as we've been doing this, I think being a specialty insurer helps. One of the things I love about Beazley over my 17 years is we can get stuff done. You know, if there's something we think that's good for the business, that's good for the clients and we wanna get it done, you know, nowadays we push one Teams button and we're all in the room. You know, previously we'd all just get in a room. We can bring the right stakeholders together to get things done and pivot pretty quickly. I think you said three more. I don't wanna rob you of your break. That's what I'm. Yeah. We're gonna have a half-hour break, so when you are coming back later try and get as many questions in. Hi. Darius Satkauskas, KBW. Two quick questions. Given the ongoing uncertainty, how should we think about cyber reserve release cycle? Essentially, how long to release the reserves for? Sorry, given the? The uncertainty, how should we think about cyber reserves release cycle? You know, h ow long does it normally take? Then you talked about the systemic risk and used cloud outage as one of the examples. I'm just trying to understand how should we think about the interplay between the big tech liability and cyber insurer's liability? I mean, would a cloud provider not have to cover the client for, you know, some of the damages? Interested in your thoughts there. Thank you. Yeah. Reserve release cycle. It's interesting 'cause I think a lot of insurers are getting their muscle memory back from the early years of cyber because obviously 2019, 2020 were more challenged years. I think the thing is we're very conservative, so start there. You know, we obviously saw we're coming out of 2019, 2020. We're taking serious action on the book, underwriting action and rate action. We're gonna be prudent and we're gonna be, you know, we're gonna be conservative in our, in our reserve releasing. Having said that, the benefit of the cyber threats at the minute is that previously they were well, it's a short tail class of business, they were slightly longer before. It was a slightly longer tail, because when you had data breaches, you would deal with a data breach, that would happen in a week or two but then you would get regulatory actions, class actions in the U.S. As we all know, these things can take years. Regulatory action is up to three years. Class actions were happening in a year or two, to resolve. Ransomware doesn't necessarily right now present those same exposures. With the main threat right now, which is ransomware, business interruption, all these things. If you have a ransomware event today, pretty much within 6 months from now, we would have managed that event over a week or two, provided all the services and really received some kind of business interruption loss that the client thought they may have incurred. Actually what we're seeing right now is the tail is shorter and it's shortened because of the change in threat. Doesn't mean it will stay that way, because once we, you know, hopefully deal with ransomware, there will be a new threat, which is why we remain prudent and conservative. Big tech, they definitely got a part to play in all this and I think there's a little bit that says, well, it depends what happens when we see these events. A lot of these events we haven't seen. How these contracts, we're aware of them, how they'll play out, we don't know. We have to model for the fact that, you know, we provide people insurance and that insurance will be there to help them if should this scenario happen. Ultimately, if there's other companies that have liabilities involved, then that will play out and we'll have to wait and see how that goes. We're not assuming that that's the case, you know. In our numbers, we're not taking credit for the fact that other people are gonna be contributing to the check. Hi, good afternoon. Ashik Musaddi from Morgan Stanley. Just a couple of question I have. I mean, thanks a lot for showing the chart about the price increases that you're seeing versus what the industry has done. There's quite a bit of stark difference between what you're achieving over the past two years versus what the industry has achieved. Couple of questions with respect to this. First of all, what are you trying to solve here? I mean, what sort of ROE combined ratio are you trying to solve with such a big price increase that you are seeing? Secondly, would you say that market is behind it because they were ahead before? Would you say you are running ahead of market and market has to catch up, i.e., the cycle could just continue? Where are we heading to? Because the gap is not like 2-3%. The gap is like we are talking about 30-40% gap. It's a huge gap. What are we what is the market missing? Is it just chase for volume? What's happening? The third question is just a simple one. I mean, you showed that a gross maximum loss you're worried about is about $50 million. What sort of exposure are we talking about here in terms of what sort of premium are we talking about you would have collected on that exposure? I'm just trying to get a bit of sense about rate on line. Thank you. No problem. I think that's the last one. That's the last one, is it? Yes. Okay. I need a drink. What's going on with us relative to the market, two important factors. First, we took action. We went very early in terms of you know, I remember going on holiday in August 2020 and we were already ready to go with our underwriting action. You know, talking to reinsurers who have a good view across the market and other people that have that view. Widely, there are markets that are six, nine months behind that point from when they started. Ultimately, I think going first and driving rate early, yes, you lose a little bit at the start but ultimately, it puts you in a favorable position. I think secondly, maintaining the integrity of the product. You've got different strategies. This is the most important part that people. We said early on and I remember being in a room with lots of people in Beazley that were challenging me and I was saying, "We're not gonna sub limit, we're not gonna co-insurance, we're not gonna do any of these other things. We need to maintain integrity of the product." Everyone's like, "Yeah but you can bring all the cover down that we need." What we were able to do was charge for that. You know, so as long as we could bring down frequency and charge for that, we knew that that was a model that was gonna work. Thankfully, you can see that, you can see that playing out. The biggest thing we did is we give the cover. We still give clients the protection they need. We just charge more than the market for it and I think that's really important. As we go through the second year of what we're currently seeing and like I say, we'll keep you updated, hardening prices, well, we're now benefiting from having gone early, right? You lose out a little bit at the start but you benefit later on in the process. I think that's what we're seeing. What do we charge for a $50 million line? That's a great question. There's a range. But it typically tends to be larger clients. Obviously, you're talking about global national companies. It will depend on whether it's primary, whether it's excess. There's some companies right now that take a very capped approach this, that we're buying for that big event. We don't wanna make this a working insurance. It's excess of we've got some programs that are excess of $250 million on a primary basis for a $50 million limit. That is not paying the same as a $50 million limit that's excess of $10 million on a primary basis. You could see premiums, there's premiums close to $10 million and there's premiums close to a couple of million dollars. There's a range there and that's gonna depend on the client, the retention and who they are and what they're doing. I think that's it. I'm gonna be back later. I think. Yeah. We all need a break, especially Paul. I think we'll reconvene at 4:00 P.M. Four o'clock? Yeah. Okay. Thank you very much, everyone. Hello, everyone. I guess we get started or is it on? Yes, sir. Mic's on. Okay. Hello, everyone. I'm Bob Quane. I'm the CUO of Beazley. I've been here just over seven months now and I did introduce myself at the investor call. I'm here in place of Richard Montminy, who's our head of property risk and Adrian had mentioned, unfortunately, he can't be with us here today. Richard is a highly specialized property underwriter and he joined Beazley in 2019. Before joining Beazley, he was the head of North America property for Zurich. Prior to that, he had a distinguished career as a broker at Marsh. I'm here in place of him to cover property and I'm gonna start with the timeline. Property was here from the beginning back in 1986. We started with reinsurance and then later we moved into insurance. Throughout the last 26 years, we've been building up our property capabilities and we've been adding different products along the way. Earlier this year in 2022, we have merged our property insurance and reinsurance teams together. We thought this was quite sensible, so now we have all our property exposure in one team. This allows us to have stronger collaboration between the two teams. It enhances our ability to manage our risk appetite and it also optimizes our underwriting of CAT risk. This is a summary of our products in insurance, property. Property is the insurance we call treaty internally as our reinsurance book. As you can see, we write a broad risk of appetite across property. We write both property insurance and reinsurance and we write stuff, jewelry, personal home, all the way up to a large commercial Fortune 500 company. We believe we are poised to grow in the segments we want and where the opportunity is greatest. In our different platforms, you saw a bigger picture from Adrian. In property, most of our exposure is in North America but we actually started underwriting out of London wholesale, using that distribution and platform. Later we moved to domestic North America, which is actually currently our greatest opportunity for growth. For property, we have a small presence in domestic Europe but we will look to grow there alongside other Beazley products. This is the market share. As Adrian talked about, you know, Beazley's approach has been to hire seasoned underwriters that are highly specialized in their product. This affords us the opportunity to outperform the market and that's due to our strong underwriting discipline and also strongly managing the underwriting cycle. We don't always outperform the market, as you can see. You know, we had a bad year in 2020 and an open market in 2017 in reinsurance. Over the span of all the years, we've done pretty well. As part of the strong underwriting discipline, as I mentioned, we really look to manage the underwriting cycle and we look to grow in a hard market and show resistance in a soft market. On this slide, we're comparing our gross written premium growth to our gross written premium adjusted for rate, which is really a proxy for exposure. While we were growing premium in the hard market, we really weren't growing the exposure here because we didn't think we were getting the return we needed for this risk. That was largely due to climate change. We will continue to move cautiously with property as we wait to make sure we're getting the rate that we need for this risk. You have seen this slide before. This shows how we manage our risk appetite for natural catastrophe. As a% of net earned premium, this is our mild loss at 1 in 250 and it's been shrinking since 2013 or 2012. If we had shown this on a gross basis, it would show a similar result because we haven't materially changed our reinsurance structure during this time. If we had shown you in absolute terms, we have modestly grown our 1 in 250 ex mild loss. But at the 1 in 10, we have been shrinking since 2019, which allows us to better manage our earnings volatility. This approach, again, reflects the relative deterioration and risk reward for property. You know, as I mentioned before, we're continuing to move with caution and manage risk carefully as we navigate the challenge of underwriting with climate change. We believe climate change will make underwriting property more difficult and therefore make it less commoditized. Our key areas of focus are really to strengthen our capabilities and even become stronger specialists in property and reinsurance. We are embedding climate change into our underwriting and we're doing that by strengthening our pricing and our cat models. We're also looking to engage more closely with our clients to understand their commitment to climate change and understand their path of transition. We're also building up tools to inform our underwriters at the time of quoting. This will allow them to understand the impact of an individual account that a marginal impact it'll have on the whole portfolio. As we build out these tools, we will look to grow more, 'cause we see the asset values across the companies growing greater. With again, climate change bringing more complications and challenges to underwriting, we believe it will lead to a de-commoditized product which plays to our strength. We will be well positioned to grow the U.S. book but we'll also look to explore both Canada and Europe. That is really what I wanted to cover for property and I'm gonna turn it over to Tim Turner to talk about MAP. Thank you, Bob. Good afternoon, everyone. My name is Tim Turner. I'm Global Head of Marine, Accident and Political Risk as of last month. I've been with Beazley since 1998 and have been Group Head of Marine and an exec member since 2018. Prior to that, I was head of the Hull & War team as an underwriter and I've also acted as CUO, interim CUO for Short Tail business last year. The Marine team was established in 1998, later than our property and treaty reinsurance teams that you've just seen, that Bob's talked about. We started out with traditional marine lines of business and then built out our product set into some of our more specialist areas, such as I think you can see Leviathan on there, our subsea business. We began portfolio underwriting, previously known as market facilities, writing selected Lloyd's market facilities on a following basis in 2018 and began our ESG syndicate-in-a-box at the beginning of this year. In 2022, the Marine, P&C and market facilities teams were merged together to form the MAP Risks team that we're talking about now. You can see from our product set that we're writing all the main lines of marine and P&C business. As I've already mentioned, with a number of niche business lines, such as downhole tools, subsea, space, et cetera, thrown in for good measure. To give some context about size of portfolio, the marine premium for the 2021 year of account was approximately $340 million and the P&C premium was $250 million, which makes up the bulk of the income there. As I referred to earlier, the marine P&C and portfolio underwriting teams were merged during the underwriting team restructure last month, because of the alignment of the classes, the fact that the majority of our business is written through the Lloyd's platform and its short tail nature. As you can see from the platform split here, the vast majority of our business is wholesale in nature and written on the Lloyd's platform. Historically, Lloyd's have a very large presence in the marine space and it remains a global hub and London acts still as a center of excellence for marine business just in general. As you'll see from some of the following slides, we have some reasonably substantial market shares across a number of our lines of business. We also have a presence in Singapore, where we write hull, cargo, terrorism and political risks. We're looking closely at opportunities to grow on our U.S. platform and already have established teams in place writing marine hull and liability, as well as political risk, terrorism and contingency. We believe the U.S. to be a bigger market opportunity, albeit not an easy one but a bigger opportunity than in Europe and we're looking closely at how we can build out our business there. That being said, we're always open to attempting to catch business that doesn't necessarily make its way to the Lloyd's market or the London market and so are exploring potential opportunities in Europe where we already have a small presence, writing some aviation and space, terrorism, political, life, accident and health business. Just in terms of gross written premium growth, so the market cycle was probably at its lowest ebb, depending on which line of business you were in, sort of between 2017 and 2018. A number of our peers struggled with poor results and Lloyd's remediation. I think, however, due to our sort of historic outperformance of the market, we were able to increase budget and continue writing when a variety of our competitors were not. As a result, some of our focus groups were able to substantially increase in size, particularly core products like hull, cargo, to a lesser extent, aviation. Here we're seeing some of the performances of our teams. We have a pretty mature product set in the marine world. While we're a thought leader, there is less scope for new products than in some other markets. However, we have introduced a marine cyber product and, I think with the WAR product, back in the days of marine kidnap and ransom, when it was at its peak, we introduced a combined product in that line, dealing with ship seizure, kidnap and ransom and loss of hire, which was very well received by the market. We are market leaders. We understand our business and can price it appropriately. Lloyd's is still considered, like I say, to be a hub for marine business and is one of the largest marine markets, out there and we consistently outperform our peers across a number of our classes. While it does vary. Sorry, there's another example of some more of our lines of business. While it does vary between classes, across marine and P&C in general, we lead approximately 60% of the business that we underwrite. In terms of areas of focus, drivers of growth, we believe we are very much still in a favorable rating environment and we plan to take advantage to the best of ability while we can. We do, however, want to focus on doing things better and smarter, have already undertaken work to introduce telematics into the underwriting of our hull and machinery portfolio and are in the process of doing a similar exercise with the airline account within the aviation book. We saw the impact of telematics within the motor insurance world and are keen to mirror the benefits of that by adopting a similar approach in marine and aviation. As I've already commented upon earlier in the presentation, we're also exploring growth opportunities onshore in both Europe and the U.S. For both marine and PAC, our leading market position brings development opportunities through thought leadership and our ability to understand and price risks appropriately. Space is an area that many of our competitors have found to their cost is difficult to get right. There have been some recent consecutive loss-making years for much of the market but our expertise and risk selection has meant that we've outperformed them by quite some way. Looking forward, a key area of focus is the small satellite industry, where we're able to provide solutions for promising startups. You may have seen recently in the press that we're offering some groundbreaking insurance on a new lunar vehicle being sent to the moon later on this year. It's roughly the size and weight of a tin of beans and will be transported to lunar orbit on a rocket supplied by Elon Musk. We've even heard discussions and they've been initiated regarding putting some data centers on the moon. I think probably more to follow on that in future. We're also at the forefront of thought leadership on offering coverage for cyber physical damage. We've done a lot of work in collaboration with the cyber team to create products for cyber defense, for shipping and for super yachts. That's within the hull account and we are currently looking at other areas within the team where we might be able to duplicate this. I was gonna leave it there for MAP risks and hand over to Bethany. Thank you, Adrian. Good afternoon. Thank you all for coming and for staying. Appreciate it. I'm Bethany Greenwood. I joined Beazley about three years ago. I am the head of Specialty Risks, formerly the head of SIUX and also formerly, Tim's partner in arms in the interim CUO, while we were searching for you, Bob, for that six months of glory on the long tail side. I joined Beazley after 23 years on the brokerage side, the last 19 years at Marsh and the last five of that in San Francisco, dealing with D&O, E&O cyber risks for Silicon Valley companies. I partly wish that we had gone first and Paul had gone second. Over my 25-year career, I have seen the toggle between hot topics of cyber and D&O go back and forth and obviously it is your time right now, which is great. The specialty risk division coming together in the restructuring actually made perfect sense. Taking the X of SIUX and bringing it back into specialty lines. The things that had happened over the 2.5-threed years that we were SIUX, a couple of things, cyber grew significantly but also our international and our D&O, domestic D&O portfolios grew very much. The benefit of bringing all these things together, not only the specialization in long tail but also the large D&O presence that we now have. You can see on this chart, the majority of that growth is in D&O, both global and domestic. The lion's share of that D&O growth has been maximizing the market opportunity that we've seen over the last couple of years. Bringing this all together really does allow us to harness our long-term proposition in D&O. If we think about it, we started writing D&O out of that London platform, talking about platforms back in 1993. We went onshore in the U.S. in 2004 and then we started the international book in 2016. Really right into what Adrian was talking about as far as the platform, having the access where we want it, whether that be in domestic U.S. or in domestic Europe. Putting that all together, one of the things that Paul and I actually talk about often is the collaboration that we were able to achieve with executive risk in cyber was very exponentially valuable, I think, to both sides. Now that we're part of specialty risks and specialty lines, continuing that collaboration, I think is going to be valuable for both groups and Beazley going forward. If you look at the next slide, this is our portfolio mix, our premium chart. You'll see it's broken down into seven major areas of our current premium mix. Really to distill it out a bit, half of the premium is based upon our global management liability, international financial institutions and M&A business. You've got a lot of scale there and economies of scale that we can work together on, as I said before. Then we also have our specialization, talking about hiring very experienced underwriters in our healthcare and our professions business, which each accounts for about 15% of the premium in Specialty Risks. Rounding out that portfolio is our reinsurance and our delegated business. Really trying to think about different distribution mechanisms. The takeaway here is really blending scale and diversification. Half of this premium is derived from financial lines but the other half are very diversified products, different size of insureds, different distribution partners and also direct and reinsurance. We think this coming together gives us the ability to grow and scale when the market cycle is bringing the risk and the reward better for us but also to have these niche areas to diversify the overall team together. Wouldn't be applicable if I didn't have our platform slide, as we have seen throughout the team. Actually this looks very similar to Beazley overall. I'd say specialty risks or specialty lines was one of the larger and is still one of the largest trading teams. You'll see here we really have taken advantage of that access to risk with the domestic North American market being almost 40% of the business but then also a significant share in the wholesale business. Speaking of the D&O platforms, having both of these platforms, whether it be the E&S and admitted or also the wholesale, has been a very interesting value differentiator for us in the D&O world. Because there's benefits both to us being able to access different clients that don't make it necessarily to London but also different syndicated portfolios that clients might want or manuscripted policies. Having that has had benefits both for us and for our insureds. Then if you look at the domestic Europe, similar story, a lot of opportunity there. As Adrian said, the ground that was laid and the footprint that we put there really was done so on the bedrock of management liability, financial lines and cyber. The idea is building that footprint and then we can start to put into different channels different types of products that we will continue to do and grow there in domestic Europe. Talking about the market share and our market share of loss, I think you've heard a theme here. Our aim is to outperform and have discipline when we don't feel we're seeing the right market cycle or getting the right rate for the risks that we're taking. The other thing about the overall diversification, specifically of Beazley but also specialty risks, is that we have the confidence to grow where we wanna grow and shrink where we wanna shrink, which you can kind of see evidence here, where I'm showing you our international D&O, our international financial institutions and healthcare. You can see the outcomes there. We're generally outperforming the market while we're growing our market share, which is kind of we're very proud of the teams talked about hiring very experienced underwriters and so these are the types of results that we're very proud of. They are as well. If you think about kind of the growth areas and things that are on our minds, in specialty risks in our world, it really isn't hard to find areas to grow demand. The world is changing on a risk basis every day, whether it be actual risks, whether it be legislation that changes. All of these different things that happen create new areas of liability. Those new areas of liability, whether they start out niche and grow into scale, that's where we can kind of bring our value proposition to it and where the risk meets the reward, we can lean into that and innovate, create new products. For example, COVID opened up a whole new way of delivering medicine with telemedicine, having appointments. I'm doing my COVID test on video tomorrow morning before I head back to the States. What we've done there is we've taken some of the products that we have and that we understand, whether it be cyber, medical malpractice and product liability and we bucket that in to a new product called Virtual Care. That's something that we're rolling out based upon things that we've seen in the marketplace and we'll start to roll that out internationally as well. We also have our diversified core products, which still have demand. I'm sure we'll get questions about the D&O market and we're seeing that definitely evolve and change. When I think about our M&A business, when you see transactions that are happening, pent-up capital, most of those deals that are happening are actually insured now, which is very different than where we were 10 years ago or even five years ago. If you think about our environmental practice, as I think Adrian said, people are cleaning up and trying to do things right, as far as climate change goes and we can be party to that with our insurance solutions. That's where we're excited thinking about the growth and where we're going as specialty risks but we're also not putting our heads in the sand and we're really focusing as a company. I think we spend a significant amount of time across the company with our actuaries, our claims, ourselves, thinking about both social and economic inflation. This is really embedded into how we're reserving and how we're pricing and just continuing to evolve and see what's happening and horizon scan about what else could be coming down. Despite that, you know, focusing on certain areas of risk because I think that is prudent and what we need to do and constantly think about, we are very confident about the future. We're excited about the platforms that have been invested in well before I got here to Beazley and all of the different products that we have in specialty risks to continue to grow. With that, I'm gonna turn it over to Ian, who's gonna talk to us about Beazley Digital. Okay. Right. Good afternoon. My name's Ian Fantozzi and I'm the head of Beazley Digital. I joined Beazley in 2003 and I've worked in both underwriting and operations teams during my time in the business. Most recently, I held the role of Group COO for 10 years and before taking on the leadership of Beazley Digital in March last year. Now, during my time as COO, I could see the rising potential of digital technologies to help transform the underwriting distribution of our higher volume, simpler risk segment of our business. That's what's taken me into the leadership of this exciting new business unit. What is Beazley Digital and why is it different to our other trading teams? Well, similar to my own background, it is a business unit that combines a number of different disciplines that we believe are key to digital specialty underwriting business. It is an end-to-end business unit with underwriting, sales, operations and technology in one P&L. We have limited reliance on central support functions at Beazley, giving us a high degree of autonomy to adapt our underwriting quickly and take full advantage of a rapidly developing market. We're organized around the distribution channels, digital distribution channels by which our brokers want to place business to us and I'll talk more about these in a moment. For each channel, we have built what we call cross-functional teams comprising underwriters, territory managers, who are our sales team, technology specialists and operations, these being the skills needed to deliver digital underwriting and distribution. As I mentioned before, our focus is on the higher volume, simpler risk segment of the business, typically dealing with small commercial businesses with revenues of under $35 million. Our products include cyber, management liability, tech errors and omissions, professional indemnity, medical malpractice, contingency and pleasure craft. A fair bit of diversity already in our book. This is very good business. It typically benefits from low loss ratios and high retention. However, it also demands excellence in service and speed to market, which is why we've been investing both in digital automation and in organizing ourselves into a business unit that can execute business change with great agility. We serve a number of different geographical markets, the U.S., Canada, U.K., France, Spain and Germany. Now, a question I'm often asked is, what does a digital specialty underwriting business actually look like? Well, firstly, because brokers are all at different stages of adoption of digital placement, we support four different digital channels. These are portals. We have a system called myBeazley, which offers end-to-end pricing, policy issuance, endorsement and renewal capability. This channel is typically used by small to mid-tier brokers that may have less automation of their own. APIs, which stands for Application Programming Interfaces. This is where we connect directly to broker systems so that our quotes and policies appear automatically in their system without the need for them to then log into or re-key submissions into our system. Hubs, which we are seeing as a rapidly maturing channel. This is where different brokers use the same back office hub system to get their quotes and policies from a select panel of insurers, such as Beazley and we use our APIs to connect to these hubs. Lastly, email and voice, which is still the most commonly used channel in our U.S. market. Here, we've been making placement more efficient through the use of optical character recognition and artificial intelligence to give automated responses to brokers. Behind these channels is one product engine where submissions are automatically underwritten and priced using algorithms. We try to make this process minimum touch to make the best use of our underwriters' time, who then only deal with the referred submissions which may require a human decision. To complete the end-to-end service, we've been investing in automated billing. Meanwhile, the Beazley Group claims function has been building a small claim service which aligns perfectly to Beazley Digital and our overall value proposition. Finally, all the transactions we process provide valuable data, which we can then analyze to make better decisions. Now, just noting the teams down the right-hand side of this slide. A consistent message we hear back from our brokers is how they greatly value having access to specialists throughout our value chain. From our in-field sales team, who can educate brokers or clients about our products, to the specialty underwriters, who can deal with risks that may require more bespoke cover or to our digital support team, who deal with transaction queries or provide system help. On to my version of the platform slide. Now, with regard to platforms, smaller account business often doesn't make its way into the London wholesale market unless it's delegated to a managing general agent or MGA. Even then, the retail brokers from where this type of business often originates may only have the resources to place it in domestic markets. That is why it is crucial and a major competitive advantage that we have the licenses and infrastructure to operate in the U.S. admitted market, the European domestic market through our European carrier, as well as via our Lloyd's excess and surplus licensing. This model effectively takes us closer to the client. What's our opportunity? The adoption of technology in specialty underwriting as a market has, for a while, been some way behind more commoditized markets, such as personal lines insurance. This is changing rapidly and we see significant opportunity to grow and lead in this business. In terms of meeting demand, this is already high across the digital channels I've previously described and we anticipate that hubs and APIs will become more prevalent over time as the whole insurance value chain seeks to remove unnecessary manual steps. Dialogue with our brokers now often combines commercial discussion with the logistics of connecting the technology, whereas previously, the technology would have been a secondary discussion. The makeup of the Beazley Digital team lends itself well to developing these channels in partnership with brokers or other distribution partners. On to driving efficiency. By leveraging our technology investments, there's plenty of opportunity to remove manual processing and drive more efficiency. This helps us to remove costs while improving service to brokers. The acid test for measuring efficiency is by tightly controlling headcount as we grow our revenue. As I mentioned before, we capture and analyze all the data from our transactions. We can combine this with external data sets to bring more insight to our underwriting risk selection and pricing. We see great benefits in using data to help clients become more resilient. This is particularly relevant to cyber risks, as you've heard from Paul and we are partnering with a cyber risk team to achieve this aim. More broadly on partnerships, there is no shortage of partnership opportunities to provide value-added services to our insurance products or share distribution channels. Finally and most importantly, there is significant mutual benefit between Beazley Digital and the wider Beazley business. Not only are we growing a leading digital underwriting specialty business, the digital channels that we develop are being reused to refer more business to the complex risk teams. To capitalize on these opportunities, our vision is to provide digital access to Beazley's specialist insurance expertise focused on simplicity and service and it's underpinned by five strategic objectives. Minimum touch, which is about removing those manual processes. Access to specialists, responding to our brokers' needs by providing access to underwriters or the relevant support teams. Being organized around our customers through the digital channels I've talked you through. Gaining data driven insights, so leveraging those internal and external data sets. Always striving for better, continually innovating and incentivizing innovation so that we stay a market leader in this space. Looking ahead and in conclusion, we see this business as an investment opportunit y. We're starting relatively small and aim to write around $200 million premium this year but expect strong growth in line with market demand. We said 20% here is probably conservative given the growth in this market and I'm sure Adrian will be pushing for more along the way. We'll prove the efficiency by carefully controlling headcount growth as we grow our revenue and we'll harness the power of data and continuously develop our products and services with our brokers. Thank you very much. On to Q&A. Stole my wine. You also get to do Q&A over a glass of wine. Just putting that out there. I'll ask the coordinator as to where the question goes, including but not limited to the panel here, Sally and David, depending on how much we like the question. Hi there, it's Andrew Ritchie from Autonomous Research. I think I've got a question for each of you just presented. Just a methodological question. I don't quite understand the market share versus premium versus loss graphs. Some of those market shares look very high, like 8% in global reinsurance, which doesn't seem right. Could you just clarify what is the market share of in the premium? That's for all the graphs. I presume it's a very targeted specific segment. That's Lloyd's. It's the Lloyd's business of that. Bob, how would you assess the relative pricing adequacy on property right now between primary and treaty, between the primary and reinsurance side? There's clearly a lot of debate about which is more opportunities right now. Question for the MAP book. What lessons were learned on the contingency book as a result of COVID? I appreciate there were lessons on communication but I'm thinking more lessons on the underwriting and particularly, you know, a lot of people have said they've learned some lessons from that but what lessons do you feel Beazley learned? On D&O, I mean, traditionally D&O claims are inversely correlated with the stock market and we've clearly got a lot of stock market volatility, a lot of volatility in recent IPOs the last two years. What are you seeing on the claims environment, sort of right up to speed, right now? Finally, in digital, what do you anticipate will be the referral rate? Clearly you're trying to automate it all but you did mention there's a referral ability. What's the current kind of referral rate right now? Okay. Right. I'll direct these if I may. If we can. The first question is, which do we think has more rate adequacy, property insurance or reinsurance? In property, I would say the insurance area has more rate adequacy. We are getting rate increase in reinsurance. I think we got about 12.5% but we were hoping for a lot more. We were budgeting about 15% but we were hoping for even more than that given what's been going on in the market. Rate adequacy we think is better in the insurance sector, where we've relatively grown more. But it's still not exactly where we want it to be and that's why we're building out those capabilities to help us segment better. And then as it gets de-commoditized, we think. We think in the beginning of next year, we'll be in a better position to grow. It's been ironic, hasn't it? That we use the same tools in insurance and reinsurance and yet insurance has been better priced for a long time now. We are finally beginning to see some of those dynamics move on a bit. It's very interesting to watch what's happening in Florida at once. It's very interesting to watch some of the particularly the Bermuda and U.S. reinsurers and some of the Europeans actively de-risk, partly because they've been told to in CAT and perhaps eventually we'll get enough of a market dynamic to make that shift. One of the reasons why we combined those two teams is for us to better reallocate if that does happen. Because for a long time, reinsurance was much better priced than insurance and property and, you know, that's one of the reasons why we're in both. I'll take the next question, if I may, 'cause I was CEO when contingency happened. It's a pleasure, Tim. In some ways, we got nothing wrong. In some ways, we got an awful lot of things wrong. Most of the contingency market had a pandemic RDS that said there'll be three months global stoppage of events and they'll gradually resume after that. We had roughly the same thing as everybody else because that was the market wisdom of what a pandemic RDS would look like. How wrong were we? I think the main lesson from that is that we didn't look at what happens if our RDSes are wrong and stress them and re-stress them and continue to do that. We hadn't thought about what would happen to our, the adequacy of our reinsurance, the tail risk that we had, the total aggregates that we had and that sort of thing. That has very much changed the way that we think about those kind of extreme, improbable but potentially severe risks, particularly the non-peak ones that we have and war is another good example of that. We have revamped the way we look at all those RDSes and we have a process in place now where we have a core RDS but we also stress it to see what happens if we're wrong. We hadn't done that for a while. It's interesting, isn't it, that less than two years later, the RDS for aviation used to be two planes crashing over New York and how wrong were we as an industry? I'm very glad that we did stress it and it's something that we continue to have to do. Bethany, do we think claims are inversely proportional to the heat in the stock market? What are the claims environment there now? Yes, we do. Although I would say there has been a lower number of securities class action claims, somewhat of a benign environment. There's a lot of things, you know, the reckoning of decisions that have been made over the last two years will take some time, I think, to come out in financial performance. Also, you had court closures and those types of things. I would say on the volatility of the stock market and the way a securities class action presents itself is one company has a precipitous stock price drop and the other market stays the same. What we've seen in the volatility is you've seen large sectors like technology take a hit and/or the overall stock market. When there's big movements in the volatility, rather than one company having a bad announcement or a bad earnings, you see less ability for the plaintiff's attorneys to bring a specific claim of damages to that one company. I will say we're not being lulled into a false sense of security. These take a long time to go through the process and right now, there's, I think, approximately 60-70 open D&O claims, U.S. securities class action claims, that have passed the motion to dismiss phase, which means they will continue to move on and potentially settle. That still has its way to work through the overall kind of community. We're still kind of looking at that very closely. Our central assessment of the U.S. litigation environment is that it's very high risk at the moment and it's been that way and growing that way for a while now. It's why we started pulling back quite a lot in 2016 and 2017 because we weren't able to underwrite for it now. The difference in today's environment and the similar argument to inflation, is that the market is allowing us to price for these exposures in a way that wasn't a few years ago. That's why we're feeling confident to grow, because while we're cognizant of the impact of social inflation and economic inflation and all that kind of stuff, because we're able to include those assumptions in our pricing models and charge appropriately, we're getting the right risk reward. That could change quite quickly and you'll see us change if that does. Ian, what's your target referral rate for digital? In order to hit our long-term revenue targets and headcount targets, we are targeting a referral rate of 20% across our product lines. Some products are actually already at that level but some need tweaking. It's a constant effort to make sure that we're efficient on that front. It's gone up? You're right. Right. Hi. Derald Goh from RBC. A few questions, if I may. A couple on cyber. Can you remind us how have you set your cyber risk appetite? Is it linked to premiums or is it capital and has there been any changes in that approach? Second one, the cyber capital that you hold, is that based off your internal scenario or is it based on a regulatory one? Again, just your point about how the industry or the regulatory RDSs may not have been set prudently enough. Just any comments that would be helpful. The third one, I mean, you're holding back a bit of growth on property cat. Are you seeing better capital efficiency as a result as you grow out more into, like, cyber and specialty? The fourth one, I guess, theoretically, how much more premium volumes can you write just based on existing setups in specialty and cyber without having to change things materially as of today? I guess the last one for you, Adrian, could you maybe share some of your reflections as, you know, having been in the CEO seat for just over a year now? What has changed? What hasn't? Thank you. How do we set our cyber risk appetite? It's a dollar number. Our cyber risk appetite is, which we review every year or whenever we think something's changing, we need to change it. When we set that dollar number, we think about a number of different things. We think about our market share of premium versus our market share of loss. Will we need to raise capital after a major event? Are we getting sufficiently rewarded for it? That affects how much capital we have. That impacts the dollar number that we hold but we hold a dollar number. The capital requirement for cyber is driven by our internal model, which looks at both what we think about RDSs but also takes note of what external parties think of it too. We work with CyberCube and others and we know what their view of risk is, we know what Lloyd's view of risk is and we take all those into consideration when we're building our own curve. We value our own IP. It's not the only IP that goes into our curve, particularly at the far ends of it. It's not just us that's influencing the capital. Is writing less CAT making us more efficient? Yes a nd no. I think it makes us a better business and we work very hard to make sure that we optimize the business mix that we have across the book to minimize the volatility, maximize the ROC and make it as capital efficient as possible. Part of that is done gross, part of it is using reinsurance. One of the things we've talked about the last few years is we've been partnering with reinsurers and others to help us grow in areas but also help us manage that net portfolio mix so that we optimize the capital efficiency. How much cat risk we take is part of it but it's a part of it. Fundamentally though, what we wanna make sure is that as we grow as a business, we maintain that diversification that we've always wanted. We don't want too little first party or property or cyber or third party. We wanna make sure that fundamentally they all keep in balance. We work quite hard to make sure that we don't leave ourselves skewed as a business. One of the things we're trying to hopefully bring across today is that the product set that we've got and the way we think about our product set shouldn't allow that to happen because we can maintain that diversification. The question about growth. Yes, there's lots of opportunity for growth and I think we will be able to continue to grow as a business and seize the opportunities that we have. We will be using. We're keeping as much of that on our own balance sheet as we can and also using third parties where we need to help us grow, if that's helpful. Reflections after a year. I was told a year ago that it takes three years to learn how to be a CEO. I don't think that's wrong. There we go. I thought our chairman would answer a question. It's really great to be able to set the agenda, which is, you know, really lead thinking about what we wanna do and where we wanna go as a business and I'm really enjoying doing that. One of the reasons why we're having the Capital Markets Day today, 'cause it gets us a chance to reset our agenda in front of everyone. It's been great being, you know, leading some of the thinking going through that and putting the team together. Hi, it's Ivan Bokhmat again. A few questions from my end. First, I guess a couple to you, Adrian. First one, I guess, on the platforms that you talked about, it looks like the opportunities are U.S. admitted and the European business. I'm just wondering if you could share a little bit of color where we are in the pricing cycle among the three platforms. The wholesale versus admitted the U.S. versus Europe. Is there more tail coming from growing in the U.S. in terms of rate or less? Just for me to understand better. The second one, I'm glad you brought up this resetting of expectations in front of us. Maybe you could communicate some targets by division that we could talk about. Whether growth or combined ratio or ROEs. I don't know how you allocate capital. Is that the time already? Maybe the third question I would ask, actually separately, on cyber and then MAP. We've been now 90 days almost into the war in Ukraine. I mean, what changes to the portfolio have been made? Also maybe any systemic changes on how the cyber risks are tackled more globally that you think makes the portfolio more resilient? Thank you. Okay. Pricing cycles in the platforms we have. Yeah, they're broadly correlated but you're absolutely right, they don't all happen at the same time. The market in Europe, particularly for the sort of the more retail end of that, the more mid-market end of that, moved later than the wholesale markets did, both in the U.S. and in London. London turned first, as it generally does, followed by the retail market in Europe and in North America. I think the U.S. wholesale market was more correlated with London, perhaps, although it was slightly later. The admitted markets, by dint of the way they're regulated, are slower to move. We do expect and what we're seeing, is the pricing cycle has moved in London first, then in the U.S. wholesale markets. It hasn't started shifting the same way in the admitted and we're still getting rate increase for our business onshore in Europe. The lag which we've traditionally seen persists. If that's what your intuition was, it's right. I got some feedback at the break that having talked about the platforms and the growth opportunities and that, wouldn't it be nice to reset expectations about what our long-term growth rates were or are? Because traditionally we said between 5%-10%. That's a really good idea. We'll go and have a think about it. Thank you for that feedback. I think you're right. It is useful for us to set those expectations 'cause we haven't for a while. Rather than say something off the cuff, we'll take that away and think about what expectations we should be setting, 'cause I think that's important. Right. Paul and Tim, do you wanna talk about what's happened to the war markets since the war has begun? Tim? I can go. In terms of our appetite, we're obviously not writing any political violence business in the Ukraine anymore, which is fairly obvious. We've, you know, ships are no longer calling there, ports are closed. We've put a stop to all of that, obviously. How do we view it though? We write an account, a reasonably sizable account of war, what we call war business. Pulling out of it immediately afterwards, after an event such as this is not always the way to go in terms of if one wants payback and the ability to produce profit in future and, you know, if one wants to be a trusted market in future on this type of business. We have to service that. We are still writing aviation war and marine war business, albeit more cautiously and at different pricing. We will continue to do so, within our appetite. I think that's probably. On cyber. I mean, firstly, we very quickly, you know, stood up a response. We had a period where we were meeting with our threat intelligence and all the network that we spoke about daily. You know, that's a little bit less now because things are certainly from a cyber standpoint right now a little bit calmer. I guess one of the things that's happened that our experts and ourselves hypothesized was that we would probably see less activity because by now Ukraine and Russia are clearly at war and the cyber focus that they have and the power that they have is focused at each other. What that's led to is, you know, a quiet period. I think you've heard that from many and many people agree with that. In terms of changes we've made, well, we didn't have any, you know, insureds that are domiciled in either country. So what we do as prudent underwriting management is we let all the team know to make sure that when we're underwriting new business, that we're asking about if they have locations in those countries, what are they doing to secure them? Is their network segmented? How are they managing any perhaps critical IT infrastructure that they might have in the region? We very quickly deployed that and the underwriting management deployed that to the whole team, you know, several months ago. Moving on to your question around has it changed any of our view in systemic and has it changed anything there? Not really. I mean, obviously we're constantly talking through to our experts, challenging ourselves on, okay, based on what we're seeing, based on what's playing out, does that change our view on any of our systemic scenarios? Does it change resiliency? No, I think resiliency is the same as it was, if not higher. Why is resiliency perhaps slightly higher now? 'Cause what we've seen in the past is that when people are on high alert, less bad things happen. You know, it happened. Let's use another example. There was a weekend in the U.S. where the U.S. authorities put all healthcare on high alert. Well, nothing happened that weekend. The history has shown that people being on high alert is a good thing and I think that right now we've read that, you know, financial institutions are on high alert. You know, when those messages come out of governments and regulators and other people to warn the financial institutions, we think about, right, what could happen to financial institutions if there was an attack on them? What would that look like? Ultimately, you know, we have our RDS scenarios that we're comfortable with and many of the things that could happen or may or may not happen and then right now, as we say, it's quieter, we're already thinking through. We also did a couple of scenarios. As we were thinking about what Russia could do, we looked at our financial institutions book, we looked at our critical infrastructure book. We imagine what the sort of things Russia may start to attack and model what our downside risk was there. Then we were very open in communicating that to the executive committee and the board and the various regulators that are interested in that sort of thing. The diversification that we pursue managed to demonstrate that actually we were quite resilient to that. These are the sorts of things we could imagine could have happened if Russia had decided to do things slightly differently. As Paul said, they haven't, partly 'cause they're very, very preoccupied. I think Tim has been quite shy on our war position, which is fine. I think it's very important if we do war insurance, when there's a war, we continue to provide our clients with war insurance. 'Cause it seems a bit disingenuous to provide war insurance until there's war, when we decide not to provide any war insurance anymore. We are very open in so doing. We're a market maker in war. You know, there are products that are being permitted by the EU and the U.S. and others to come out of Russia. It's important for those economies that they do come out of Russia and we have a role to help make that happen and we're unashamed about that. I think it's an important thing for us to do. We're not writing a Russian domicile business for a whole variety of different reasons. When you've got traffic moving in and out of Russia for a globally accepted reason, we think the insurance market has a role to play in that and we are absolutely doing that. Nick. Hi. Hi, sir. Nick Johnson from Numis. Three questions please. Firstly, on digital, just wondering what the expense ratio or how the expense ratio compares to group and will t he expense ratio in digital will be materially lower than the group, at a time when it's at scale. Secondly, on cyber. Obviously, a lot of talk about the growth opportunity. Just wondered if you could perhaps talk again about what will dictate the speed of growth. Does it depend on a sufficiently large number of clients out there with the sort of cyber strength that meet your requirements? And then lastly, on climate change. You mentioned you've reduced your one in ten exposures in property. Just wondered if you can say anything about sort of what your how your tolerance has changed, the frequency of events in property. Thanks. Okay. Great. I actually planted the first question. Would you like to talk about expense ratio expectations for digital, Ian? Yeah, I was just looking at Sally. We will show that at half year. That's. It will get better over time. Yeah. Well Sorry, I have to talk. The finance director has reminded me that it will definitely get better over time. It links to the point I was saying earlier about careful headcount growth. The whole kind of efficiency model that we're building here is to use technology and leverage that technology so that we don't have to add underwriters as we grow revenue. We'll definitely see expense ratio tapering down year on year. Essentially, we've been thinking, you know, what are the ways we've got of hedging inflation as a business? Well, one of them is automating. One of the things is going through the business plan this year is, if we're hiring headcount, which is annuity with an expectation of growth of over 5%, suddenly that annuity becomes a lot more expensive than it was. We will be replacing that with stuff to automate as quickly as we possibly can. That's proven a real yeah. We already wanted to but this really does underscore the need, I think, to do that. Paul, what's gonna dictate how fast you grow other than me? Well, I'm glad I didn't get a target. No, I think there's a few things that are gonna dictate the speed of the growth. There's some things that are gonna happen outside of us. Things like the threats. I think, you know, that is definitely driving demand. You know, people are more and more becoming aware of the threats that are out there. And that's linked to the press but it's also linked to education. You know, every board, every exec is being updated on the cyber threats, what they face, what their company's doing about them. And more importantly, people are now working out and able to communicate better what the downside is for a company. That can be calculated now. Business interruption is real. You can calculate, that a lot easier than if you were to have some other kind of attack. I think that's big. I think the other thing to recognize is it doesn't all come at once. It comes in waves. What we learned from the U.S. is the large accounts came first and then the middle market came. Then what I think where you're gonna see the growth opportunities in the U.S. probably is gonna be more in the middle market, lower-end middle market and SME space as that starts to fire, because it traditionally comes later in that sales cycle. If you bring that around and you think about Europe, well, we're really at the large bit and we're just starting to see middle market come online. I think as you now start to see that education and that wave trickle down, you'll start to see in the future, in the short to medium term, it's gonna be, you know, middle market, lower-end middle market, U.S., SME and the middle market international and large international. That's where it's gonna come from. That just takes time. But it's getting there. Then the last thing is, you know, we've serviced, I think, roughly 20,000 submissions year to date. That's a lot. That number's gonna grow exponentially. We're constantly doing a lot of thought around how we distributed. Have we got, particularly outside the U.S., underwriters in the right locations? The cyber service center, building out our locations and putting in as much efficiency with, you know, our new COO and the IT and operations that we can in place so that underwriters are focused on doing the things that matter. You know, that is getting the submissions in and converting the business and the green accounts that we like. Bob, what's our tolerance for frequency of loss in the property business now? Well, I thought you were asking about how the frequency of CATs were changing due to climate change. Also does the sort of net retention go down with successive events in the insurance program? Oh, that's a very different question, Nick. Yeah. We don't sort of talk about that. But it is the sort of thing we think about. You know, like a lot of us, you know, we've been seeing that there are more frequent events which we're underwriting to as well but we're also making sure our reinsurance program does reflect that. We don't really explain. We have never really disclosed how that works. I mean, the one thing I was gonna comment on that, like in terms of climate change, it's had the most dramatic impact on wildfire. You know, we've seen that gone up dramatically. We know it's having an impact on wind but it's less clear. We're trying to update all of our models to address this. We've also hired a climate risk person to help us with to have that skill set to update the wind models for climate risk. But also to help us with our RDSs and to make sure we're taking into account the different scenarios of how the climate can change temperature, et cetera. We're also exploring other tools that allow us to see how certain conditions around a property are evolving over 10 years, 20 years, 50 years' time and to see how that'll impact how we underwrite that particular risk. There's also services we might be able to provide to clients with that insight. That's some of the stuff we're doing to improve our underwriting. Faizan Lakhani from HSBC. So the first question is on the reserving side. There are some comments suggesting that financial lines are possibly underreserved in some underwriting years. Are you seeing similar pressures? Do you feel the market is adequately reserved for that? Second question is on social claims inflation in the U. U. S. Given the fact that you write a fair bit of business through the admitted market, can you adjust for that quickly if inflation is above your expectation? The third one is on capital. Given all the moving parts, where the growth is coming from, in particular admitted side, is that better or worse in terms of capital intensity growing in the U.S. versus going through your Lloyd's platform? Right. Okay. Bethany, do you think financial lines in the U.S. are under reserved at a market level? We pay attention to the earnings announcements and things of our competitors but I don't think I would comment on the overall. We've seen some big movements in some of the legacy D&O carriers. There is, as in any kind of market like this, a lot of new capital that has come into the marketplace. When you look at some of the core larger legacy carriers, it seems that they have done some increases to their reserves in pretty large chunks. That would lend itself to that potential. When you look at the other liability claims-made market which you can do. The accident years, sort of 2016, 2017 and 2018 have been deteriorating ever since year one, which coincides with when we were starting to talk about social inflation but weren't able to price for it. When you read some external commentators like Dowling & Partners, he will tell you that the marketplace, given the more profitable recent years, is likely about right, with likely further deterioration there but probably reserve redundancy in the most recent years. I think what that tells us is that it's a high risk environment and we need the prices we're getting. Social inflation, how can we adjust quickly in the admitted market? It's a very good question. I think the first response to that, given that impacts most people here, the first response is we write claims made mostly, right? That means we get to reprice more quickly. Inflation adjustments, inflation assumptions are one of the things that are in your filings in the admitted world. If inflation changes, those are the sorts of things regulators let through because they're obvious. I think as Paul was saying, one of the things you got to learn to do if you're in the admitted marketplace is to manage the regulation as swiftly as you can and you can do and you can get better at it. It is possible and we do make sure that the business that's in there is the less risky business to start with. Is it less efficient capital-wise? Slightly. Not enough really to make a difference but slightly. Hi. Iain Pearce from Credit Suisse. I just had a couple on the sort of RDS scenarios that you were talking about in MAP mainly but in relation to sort of black swan events. How are you thinking about managing those? Is it a case of looking to bring those down, factoring those into capital loadings and large loss loadings and/or pricing? Is there anything you can do on sort of T's and C's to bring these down? Is that an ambition? Just sort of how you're thinking about that, how you're thinking about managing those. I just have one on D&O. We've seen a lot of class action lawsuits in relation to SPACs coming through. I know you mentioned you were looking at doing something in that space. Did you end up doing anything there? Is that a risk that you're considering? Is there anything we should be worrying about there? All right. Well, given the collective intake of breath when you said SPACs, why don't we start with that one first. Bethany, would you like to talk about our SPAC risk appetite? Yeah. We've been writing SPACs before they became in vogue, I guess I would say. We have familiarity with that and actually it's performed well. As it became the financial instrument of choice, we did make a very kind of conservative view that we would start to write some of the SPACs. Criteria was focused on the sponsors, so really repeat sponsors that we had seen before. We limited an aggregate that we would actually deploy for SPACs. The other thing that we did was we created our own SPAC form that was actually more to protect us in some areas but also to mirror the way a SPAC is set up. It's a two-year policy, not a one-year, so it's not a traditional D&O form that is being used for SPACs. Obviously there are no SPACs happening now but we were doing that on a very limited basis. When you look at the claims experience we have now, obviously it will take time to see this all come to fruition. So far, it has been fairly benign for us. Would you like to talk about the difference between a SPAC and a de-SPAC just to? As you guys know, the SPAC is the kind of blank check company that goes public to go out and seek a company to partner with and then when they de-SPAC is when they found that target. There are a lot of SPACs, as I'm sure you know, that are not finding their target companies. We're seeing how that plays out as far as the economics of buying the runoff and returning the money. We'll see how that plays out. The overall is we did participate in SPACs both in our U.S. and wholesale but on a very limited basis. From a risk perspective, insuring the SPAC is a lot less risky than the de-SPAC. Yes. Most of our exposure is in the SPAC r ather than the de-SPAC. Those are two very separate placements. Correct. Right. RDSs and black swan events. Tim, do you have some comments on that? Yeah. I mean, I think r elated to a bit in my presentation about telematics in some of our underwriting on the hull and the aviation lines of business. The technology, I mean, it's fairly new but it now exists where we can monitor far better than we've ever been able to before, movement of vessels or aircraft. As I say, we've sort of gone partway in terms of helping us with our rating. I think what we might be going to do is go a step further and use the data that is now available that is relatively new. You know, it's probably only a few years old and has been prohibitively expensive. But there are more vendors now that we can look to to help us with that. Yes, undoubtedly, we'll be looking to as to how we manage what we have in any given country. I think, yeah, if I'm brutal, you know, did anyone ever think that a nation like Russia would confiscate lots of assets at the same time? Possibly not. It will change our view of how that sort of thing might happen in the future. Yes, undoubtedly, it will come into our thinking. It's, you know, there's been a pricing correction in some of the business that we do. We're yet to see it in as many areas as I'd like but I think it will come. Yes. One of the lessons for the aviation market was if you don't know where your assets are, it's quite difficult to figure out where your losses. We think telematics may hold the answer to that. When we look at the losses that we've had in Ukraine and compare them to the RDSs that we had and the risk appetite that we had, we are within risk appetite. One of the things that was reassuring about this year, if any of it can be, is that we haven't gone outside risk appetite in the way that we had. The work we did a couple of years ago, rethinking black swan events and what could go wrong, has actually proven to be fairly resilient so far. One of the things that we are gonna be doing as and when this thing matures is to go, right, now we've actually had another black swan event and we can realize what the losses actually ultimately will be. How does that feel? Is our risk appetite about right? Do we need to? Can we increase it? Do a little bit less? We will have the chance to rethink that. I think the work we did a couple of years ago was fairly valuable. The lesson for the aviators was quite a stark one. You know, you've got to know where your aggregates are. Hi, Ashik Musaddi from Morgan Stanley. Just one question. I mean, looking at the presentation today, I get a bit of feeling that you're very, very comfortable with the cyber growth. I mean, on a risk-adjusted basis, the demand basis, the supply basis and where the market is heading towards as well. I mean, it doesn't look like cyber growth is going to stop in the near future. Whereas at the same time, I mean, there is a bit of noise around potential recession, et cetera, which might start hurting the volume growth in, say, specialty lines, et cetera. I mean, if that happens, then clearly you'd be growing cyber a bit more singlehandedly and the concentration risk keeps on going high er. Now, you have shown slides where the exposure level, we can clearly see that premium has gone up but exposure hasn't. Ultimately, I mean, people are think a bit more simplistically and people just look at, okay, this is the premium, this is your exposure. People don't want to go into nitty-gritty, basically. How would you say at what point would you take a call, okay, this concentration is big, this concentration is manageable? Is there anything you can share? I think this question has been around for the last year or two but given the growth in cyber premiums because of rates, I think this is becoming a bit more noisy for us. Yeah. We said that we never wanted one product to be over 15% of premium. Because the cyber rate changes have been so extreme, we rebased that premium back to 2020 and it's around 15% of premium and we would like to leave it at that sort of ratio. We are prepared to go above that, as we said but the risk reward needs to be there, right? We need to be overly rewarded, so it needs to be producing returns on capital that are much higher than our target return on capital and we need to see a way to get back to that level of diversification with, you know, within a few years. One of the things we're hoping that you will take away from today is that we're not reliant on any one product or division for growth, right? Even if there is a recession and there could perfectly easily be, there should be enough natural demand across our product set as a whole for us to be able to meet our, you know, our growth ambitions. If not, we will restrain ourselves accordingly. Just like if the prices aren't right, we will restrain ourselves accordingly. There will undoubtedly be an opportunity to grow cyber. The amount of net growth we allow ourselves will depend upon making sure that we are as diversified as we think we need to be from a capital efficiency perspective and all the rest of it. As Paul was intimating, we have lots of people that want to line up and share that risk with us. We can build a business and keep as much net as we want to and make sure that diversification, which is very important, remains in place. I think we're there. Brilliant. Fantastic. Should we have a glass of wine or a Diet Coke or something? Thank you for your time and patience this afternoon. We'll see you over there. Thank you.