Brit profits from insurance growth
Re/insurer Brit has posted a strong set of results for 2014, as it benefitted from strong growth in its specialty insurance business despite a reduction in its reinsurance segment.
Its profits hiked nearly 40 percent to £139 million in the year ended December 31, 2014, compared with £99.5 million in 2013.
Brit also benefited from growth in its gross written premiums (GWP), posting an increase of 9.8 percent to £1.3 billion in 2014, compared with £1.2 million in 2013. The increase at constant exchange rates was 15 percent.
The re/insurer said this was driven by its specialty insurance business which grew by 22.4 percent at constant exchange rates to £1.1 billion in 2014, compared with £903.1 million in 2013.
Partially offsetting this was Brit’s choice to shrink its reinsurance portfolio by 8.1 percent, at constant exchange rates, to £245.3 million in 2014, compared with £281 million in 2013, in response to difficult market conditions.
Brit’s underwriting initiatives, launched in both 2013 and 2014, resulted in a £93.4 million increase in GWP. The main contributors were aviation, Bermuda, high value homeowners, BGSU and political and credit.
Organic growth of £32.3 million was driven by growth in classes experiencing favourable rate increases including the property binder book, specialist liability, and marine. Brit said that these growth areas were partly offset by premium reductions in classes experiencing falling rates including reinsurance and energy.
Its combined ratio deteriorated to 89.5 percent in 2014, compared with 85.4 percent in 2013.
Mark Cloutier, group chief executive officer of Brit, said: “Brit has had another successful year delivering on our financial targets and moving towards our goal of being the leading global speciality insurer. The return on adjusted net tangible assets before FX and IPO costs of 20.7 percent is driven by strong underwriting and investment performances, coupled with a continued focus on strict cost control.
On the acquisition of Brit by Fairfax, he said: “Our business is complementary to their group’s current offering and the deal represents an exciting opportunity to continue our story on an even stronger footing. Our position as a market-leading global specialty insurer and reinsurer and our major presence in Lloyd's make us an attractive addition to Fairfax’s global footprint.
“There is very little crossover in our respective international operations, thus allowing Fairfax to further diversify its portfolio while enabling Brit to leverage Fairfax’s existing relationships and expertise in the international insurance and reinsurance markets.
“The combination will enable us to enhance our global product offering and provide us with expanded underwriting opportunities and distribution channels. We believe this is a great fit for both companies, our employees, customers and trading partners as well as representing an attractive financial return for shareholders following our successful IPO in April 2014.”
