Brit grows despite shrinking reinsurance unit in Q1
Brit enjoyed some growth in the first quarter of 2013 driven by its direct insurance business. Its reinsurance unit, in contrast, shrunk slightly in what its CEO admitted remain difficult market conditions in property lines in particular.
Its gross written premiums for the quarter increased by 1.2 percent to £336.5 million compared with £332.6 million a year earlier. It said at constant exchange rates the movement was an increase of 6.5 percent. Within this, direct business totalled £215.7 million, a 13.6 percent increase and reinsurance totalled £120.8 million, a 4.1 percent decrease at constant exchange rates.
It said the 13.6 percent increase in Brit Global Specialty Direct reflected the continued expansion of the group’s Chicago based US service platform, BGSU, which writes business on behalf of Brit Syndicate 2987, wrote premiums of $35.1 million in the first quarter, an increase of 69 percent over same period in 2013. It said the new teams hired in 2013 by Brit Global Specialty London covering high value homeowners, political risks, UK property and fine art & specie also contributed to this increase.
The company said the 4.1 percent reduction in Brit Global Specialty Reinsurance was in line with expectations and reflected challenging market conditions experienced primarily by the property treaty book. It said it has maintained underwriting discipline in this environment and the reduction was partly offset by new business written by the group’s recently established Bermuda office, which wrote over $16.4 million of premium in the period, of which the majority was casualty treaty.
It said the overall rate environment has remained challenging with rates across the book falling in line with expectations by 2.5 percent compared with an increase of 1.4 percent in the first quarter of 2013. It said property treaty and energy experienced particular pressure on rates, partly offset by increases in a number of direct classes including marine, specialist liability and BGSU.
But it also said that the group had taken advantage of current market conditions to significantly strengthen its group-wide catastrophe cover.
Mark Cloutier, Group chief executive officer of Brit, said: “The Group has made a good start to the year and we are delighted to announce our first interim management statement as Brit Plc. Top line premium growth of 6.5 percent on a constant exchange rate basis reflects the success of new initiatives and team hires made in 2013. Our focus on optimising the risk adjusted return on our investment portfolio has delivered a solid return for the period of 1.1 percent.
“With respect to growth initiatives, our new Bermuda office has had a successful start to 2014 writing over $16 million of premium and in Q2 we welcome our recently announced UK property team to the platform and the opening of our Miami-based Latin American office. We are also delighted to announce a renewal rights transaction with QBE which will see Brit inherit a market leading aviation team from 1 June (see separate story).”
“The current market presents both challenges and opportunities. We will continue to build on our highly efficient Lloyd’s-based business model supported by our global distribution network, while maintaining a clear focus on underwriting and pricing discipline.”
