Brit reports sharp increase in profits for first half 2016 results

Brit experienced a substantial increase in profits for its first half results in 2016, but its gross written premiums (GWP) and combined ratio decreased.

The company's GWP decreased by 4.9 percent to $1 billion for the six-month period ending June 30 2016, compared to $1.1 billion for the same period in 2015.

Brit's profit after tax for this period was $197.6 million compared to $6.4 million the same period in 2015.

The profitability of Brit's underwriting decreased slightly, with a combined ratio of 96.5 percent, an increase of 5.9 percentage points from last year's results. This included 4 percentage points of major losses, compared to 0 in 2015, and further rate decreases from an ongoing challenging rating environment.

Mark Cloutier, group chief executive officer of Brit, said: “Brit has delivered a sound performance in the first half of 2016. Our non-annualised return on adjusted net tangible assets before FX, which we see as a key indicator of our performance, increased significantly to 16.1 percent. This was driven by the combination of a continuing contribution from underwriting results, under difficult circumstances, and a very strong performance from our investment portfolio.

“Focused and disciplined underwriting remains at the heart of our strategy and, in the first half of 2016, we reported a combined ratio of 96.5 percent, including 4 percentage points attributable to major losses. This was a solid result in today’s challenging environment, as we continue to see pressure on pricing and an increasingly complex marketplace in terms of capacity, distribution and regulation.

“During 2016, we have maintained our strategy of building our platform through the addition of specialty underwriting talent in targeted areas. We have also launched a number of initiatives, demonstrating our commitment to innovating new products that address real client needs, both in terms of the cover we offer and the claims service we provide.

“Our international distribution capabilities also continue to expand, with our new Singapore service company starting to write business in the period and with a significant strategic investment in Camargue Underwriting Managers, a Lloyd’s coverholder and one of South Africa's leading providers of specialised insurance products.

“Following the rebalancing of our investment portfolio in 2015, we have adopted a defensive strategy which takes a long term view on markets. We are pleased this strategy has resulted in a non-annualised return of 4.6 percent in the period, primarily driven by contraction in the US yield curve, giving rise to mark to market gains on our long dated treasuries.

“The medium and long-term ramifications of the UK’s vote to leave the EU will take some time to assess. Our focus remains on putting our clients first. Their needs will remain at the core of everything we do, and we will continue to manage our business with this in mind. We will continue to monitor developments and work to minimise the impact on Brit and our clients and to take advantage of opportunities as they arise.”