Brit Posts Lower Profit – $125 Million; Looking at Dutch Domicile

March 9, 2009

Brit Insurance, a diversified UK-based insurer posted lower profits for 2008, but still managed a respectable £89.2 million ($125 million), compared to £191.2 million ($267 million) in 2007.

The Company’s earnings bulletin also announced that it is considering moving its holding company domicile to the Netherlands, “subject to requisite clearances and approvals.”

Other highlights cited in the report included the following:
— Return on equity 9.2 percent (2007: 22.1 percent)
— Earnings per share 21.5 pence [app. 30 cents] (2007: 43.2 pence [app. 60 cents])
— Net tangible assets per share 248.2 pence ($3.468) (2007: 248.0 pence [$3.465])
— Gross written premiums £1.3946 billion [$1.948 billion] (2007: £1.2649 billion [$1.7 billion])
— Underlying gross written premium growth 4.2 percent (premiums adjusted for exchange rate movements)
— Combined ratio 99.4 percent (93.9 percent excluding hurricanes)
Investment return 0.16 percent in difficult markets

The bulletin gave the following “outlook” for 2009: “Capacity concerns will shape the global insurance market during 2009. Insurance capital has been eroded by the combined elements of significant catastrophe related claims during 2008 and by the varied and significant effects of economic turbulence. As a result, prospects for continued rating improvements are good across most classes and within all three of our underwriting businesses.

“Our diversity, already a strong feature of our portfolio, will continue to develop in 2009, both by the nature of the risk that we are assuming and geographically. The Group sees excellent prospects for continued profitable growth during the year.

CEO Dane Douetil commented:
“In a difficult year for insurance, our adherence to the principles of our strategy has led us to a strong result. Market conditions are improving further in most areas, our strong balance sheet and the subscription nature of much of our business are attractive to risk buyers and stand us in good stead for 2009.”

Chairman John Barton added: “Against this background, insurance remains a predominantly necessary purchase for businesses and individuals. Although the recession will inevitably affect demand for insurance, the capital reductions in banking and investment markets, together with above historical average hurricane claims, have led to rate strengthening in the catastrophe exposed insurance markets at 1 January 2009 with other insurance markets expected to record rate rises during 2009.”
n his report Douteil stated: “We have identified the Netherlands as the preferred location for the domicile of the Group’s holding company in order to enhance prospects for shareholder value. With its many positive attributes including membership of the EU, strong financial services sector, stable fiscal strategy and excellent communications we anticipate the Netherlands will provide a good springboard for future growth. Subject to receipt of requisite clearances and approvals we anticipate being able to put detailed proposals to shareholders in the coming months.

The full report and an audio replay of today’s earnings conference presentation is available on Brit’s web site at:

Source: Brit Insurance

Topics Profit Loss

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