2016 was a year of change at UK insurer Brit Ltd. On the back of being bought out by Canadian financial giant Fairfax in 2015, the company underwent a number of executive changes and, amid tough market conditions and increased competition, saw its premiums slip back.
Earlier today the firm revealed its financial results, which saw gross written premiums move back from $2.0 billion (approximately £1.6 billion) to $1.9 billion, while net earned premium also decreased, falling 6.1% to $1.5 billion.
The company’s combined ratio also took a hit as it increased from 91.7% to 96.4%, although Brit noted that this was largely due to a 4.5% contribution from major losses compared to no major losses during the previous year.
Despite this, however, the company saw its profit after tax jump from $16 million to $158 million as it generated $464 million over the year compared to $96.7 million during 2015.
In a statement issued to Insurance Business this morning, Mark Cloutier, the group’s executive chairman, described the performance as “strong” but noted that market conditions had impacted premiums and shaped a “defensive stance” from the firm.
“Market conditions remain challenging as competition from new entrants and additional capacity from existing competitors with appetite to grow has put continuing downward pressure on rates across several major classes of business,” he explained. “We do not believe these conditions are sustainable over the longer term and certainly call for a cautious approach to growth.
“In this climate, we are determined to maintain underwriting discipline and have adopted a defensive stance to protect our business and preserve capital. Our strategy is to remain well diversified and to focus on retaining quality business, while contracting the areas of our book experiencing the most rating pressure. We also continue to assess cautiously new business and manage our portfolio mix to target areas of our book with less rating pressure. We believe that such an approach will enable us to weather the current environment and position us well for the future when the ill-discipline reads through to results and market conditions improve.”
During the course of the year, the company made a host of executive changes including Cloutier moving into the executive chairman role after Richard Ward stepped away, and Matthew Wilson becoming the company’s new chief executive.
Wilson is confident that a number of initiatives implemented by the firm over the last 12 months will soon put it on track.
“In September 2016 we announced the launch of Syndicate 2988, which has a capacity of £52m (US$82m) for its first year of trading,” he said. “Syndicate 2988 reaffirms our commitment to the Lloyd’s market and will help us further position Brit as the specialist underwriter of choice, building on our existing strength across underwriting, claims and capital management and track record of delivering attractive returns for capital providers.
“Delivering new products, solutions and perspectives for brokers and clients is at the very heart of our strategy. The launch of Syndicate 2988 is a powerful demonstration of this objective, and we look forward with excitement to the resulting expansion of Brit’s presence at Lloyd’s.”
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