Brit has joined a growing chorus warning of the difficulties facing the insurance market.
The Lloyd’s of London insurer said that premium rates had slid by 2.2 per cent in the first half, albeit not as sharp a decline as the 3.7 per cent decline a year earlier.
The news was not a surprise — Matthew Wilson, chief executive, said that “market conditions have, as expected, remained difficult during the first half of 2017” — nor was it an isolated case. Bronek Masojada, chief executive of Hiscox, said this week that the rival insurer had pulled out or reduced its presence in political risk and had dramatically shrunk in aviation and big property contracts, where it believes that premiums have slumped too low.
Brit improved its combined ratio, a measure of profitability where a figure below 100 indicates a profit, from 96.5 per cent to 95.1 per cent by avoiding big losses. However, the government’s change to the discount rate used to calculate compensation for serious injuries stopped it hitting 93.3 per cent. Its profit after tax was $139.7 million.
Brit is expanding into several new lines, including cyberthreats and yachts. Its gross written premiums rose by 6 per cent to $1.1 billion or, stripping out currency moves, by almost 8 per cent.
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According to Mr Wilson, growth was “driven by our initiatives to broaden our distribution base. We continue to add specialty underwriting talent in targeted areas and in 2017 . . . have launched a new US cyber and technology team”.
Mark Cloutier, executive chairman, said: “Producing strong results in the current environment demands a great deal of concentration and discipline and, in that regard, we have . . . maintained our strategy of remaining well diversified while adopting a defensive stance to protect our business and preserve capital.”
Brit, which writes property, casualty and energy cover, was bought by Fairfax Financial, of Canada, in 2015 for almost $2 billion. It launched a new underwriting syndicate at Lloyd’s at the end of last year, which it said “reinforces Brit’s long-term commitment to the Lloyd’s market and ambition to use its infrastructure to expand its current position as the largest Lloyd’s-only insurer”.