Brit leverages rate & Ki for growth, sidesteps nat cat for profit
Global specialty re/insurer Brit increased undiscounted underwriting profits by nearly 20% in the first half of 2023 to $95.1 million tally, leveraging rate hikes and its tech-driven Lloyd’s platform for growth while side-stepping all forms of nat cat losses.
The undiscounted combined ratio of 93.3% was a fractional improvement on the prior year's restated 93.6% reading.
“This performance reflected good underwriting discipline, rigorous risk selection, and healthy compound rate increases,” Martin Thompson, group CEO of Brit claimed.
Gross written premium increased by a mere 1.5% to $2.0 billion and would have been 2.5% at constant FX rates.
That growth falls below the 7.7% risk adjusted rate change that Brit managed to work into its sales. Retention slipped to 77%.
Of the $112.8 million rise in premium, the group’s digital-first algorithmically-driven Lloyd’s syndicate Ki provided $110 million, growing its own GWP by 32.1% to $453 million.
“While overall market conditions remain fundamentally attractive, we are also starting to experience rating pressure in certain classes,” Thompson said, citing “a complex and constantly evolving landscape” including inflation and elevated number of major loss events.
The group took no gain in H1 from prior period reserve adjustments. New reserve strengthening in casualty treaty plus for prior cat events offset releases in ex-cat loss in programmes & facilities, property, specialty and financial professional lines. Loss reserves for the war in Ukraine were hiked $9 million to $40 million.
Following the major swing to investment gains in 2023 from the prior year’s market pains, an adjusted group operating profit counting out IFRS17 tricks rose by $412 million to a $257.4 million gain.
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