London-based Brit plc, which completed its merger with Fairfax Financial Holdings in the first half of this year, reported operating profit before foreign exchange and transaction related expenses of $70.9 million, compared with $172.3 million in the first half of 2014.
The company’s profit after tax for the first half was $6.4 million, compared with $94.5 million for the same period last year.
Other first half financial highlights for Brit include:
- Gross written premiums of US$1.1 billion, compared with $1.2 billion in the first six months of 2014, a decrease of 6.3 percent. At constant exchange rates the decrease was 3.2 percent.
- Net earned premium increased by 1.4 percent to $816.5 million, compared with $805.2 million in the first half of 2014. At constant exchange rates the increase was 5.3 percent.
- Combined ratio of 90.6 percent, compared with 88.3 percent reported in the same period last year.
- Investment return after fees for the period of $7.6 million, representing a non-annualized return of 0.2 percent, compared with $94.0 million during the first half of 2014, a non-annualized return of 2.1 percent.
- The recruitment of a new US general liability team, the strengthening of the company’s Latin American team and the expansion of its London market healthcare team.
“The first half of 2015 has been a challenging but exciting time for our group,” said Mark Cloutier, group CEO of Brit Limited. “While both underwriting and investing conditions have been complex, our first half highlight is the successful completion of the transaction with Fairfax. The partnership with Fairfax provides Brit with a supportive and stable long-term platform from which to continue to deliver on our strategy to become a leading global specialty re/insurer.”
Cloutier said first half trading conditions were challenging as a result of continued pressure on pricing and an increasingly complex marketplace in terms of capacity, distribution and regulation.
“Against this backdrop we believe our strategy to focus on underwriting discipline has again proven its value as we delivered a 90.6 percent combined ratio for the period. While gross written premium was slightly lower (3.2 percent on a constant currency basis), we continue to build out our platform with the addition of new specialty underwriting talent and have seen the benefit in terms of profitable premium flow arising from growth initiatives implemented over the past few years.”
Looking forward, he said, trading conditions for the sector will continue to be challenging. Nevertheless, he was pleased “with the core operating performance of our model and are very excited about our future as a member of the Fairfax family.”
Matthew Wilson, chief underwriting officer and group deputy CEO of Brit Limited, said the company’s underwriting disciplined is delivering results despite a difficult market and “higher than average incidence of smaller weather and risk losses.”
“Risk adjusted premium rates decreased in-line with our expectations, strongly influenced by reductions seen across our reinsurance business and direct energy and property portfolios,” Wilson added. “In these lines in particular we have been rigorous with our risk selection and as a result total gross premiums fell by 3.2 percent on a constant currency basis year on year.”
Source: Brit plc
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