Brit's combined ratio soars in 'very challenging' half year

Global specialty re/insurer Brit saw its combined ratio jump due to high COVID-19 related losses in a "very challenging" half year. Chief executive Matthew Wilson pointed to rate increases and withdrawal of capacity in the market from certain classes as cause for optimism going forward.

The company reported a loss of $227.4 million in the first half of 2020, compared with a profit of $120.3 million in the same period a year ago.

Gross written premiums for H1 increased 5.9 percent to $1.28 billion, from $1.21 billion in the first half of 2019.

Brit's combined ratio deteriorated to 106.7 percent in the period, versus 94.4 percent in H1 2019.

Mark Allan, group chief financial officer of Brit, said: "For Brit and the wider insurance market, the first half of 2020 has proved to be very challenging, with results heavily impacted by the COVID-19 pandemic and its impact on insurance, investment and currency markets."

He added: "Our balance sheet remains strong as we maintain our ‘conservative best estimate’ reserving policy which provides us with a secure foundation.

"We continue to benefit from the financial strength of our parent, Fairfax, and from our relationships with our capital partners supporting Syndicate 2988 and the Sussex vehicles.

"We are very excited about the prospects for our new launch, Ki, that brings together the best of Lloyd’s underwriting with the latest technology and data science."

Wilson, group chief executive officer of Brit, commented: "The COVID-19 pandemic is a global crisis, the like of which has not been seen for generations.

"Against this challenging backdrop there are a number of indicators to give us cause for optimism, including rate increases, the withdrawal of capacity in the market from certain classes and our improving attritional claims ratio. In this environment, our clear strategy of embracing data driven underwriting discipline, and rigorous risk selection, coupled with innovative capital management solutions and continued investment in distribution, positions us well to respond to the opportunities and challenges ahead."