Insurance firm Brit said it had weathered a tough year and was confident changes and initiatives would enable the firm manage market headwinds.
The figures
Gross written premiums fell from $2.0bn (£1.6bn) to $1.9bn, a decrease of 2.3 per centon a constant exchange rates basis.
Net earned premium decreased by 6.1 per cent to $1.5bn.
The firm’s combined ratio – the amount of costs and losses compared with premiums earned – increased to 96.4 per cent from 91.7 per cent. Brit said this included a 4.5 per cent contribution from major losses compared with a nil contribution in the prior year.
Profit after tax jumped to $158m from $16m.
Brit generated $464m of cash during the year, compared with $96.7m in 2015.
Why it’s interesting
Brit’s executive chairman Mark Cloutier highlighted tough market conditions. He said: “Competition from new entrants and additional capacity from existing competitors with appetite to grow has put continuing downward pressure on rates.”
The insurer, which was bought by Canadian giant Fairfax in 2015, stressed the combined ratio was a result of major losses, implying comparisons ought to take this fact into account.
Brit has made a number of internal and external changes to the way it is governed.
Richard Ward stepped down as chairman on 1 January, to be replaced by the firm’s then chief exec Cloutier. Matthew Wilson was appointed as the firm’s new chief exec with Gordon Campbell appointed as non-exec director. Ipe Jacob and Bijan Khosrowshahi resigned as directors at the end of December.
The external change was slightly more simple to digest than the management merry-go-round. The insurer put its audit up for tender and PwC prevailed, ousting incumbent EY.
What the company said
Wilson said:
Market conditions have, as expected, remained difficult during 2016, with the industry experiencing continued pressure on premium rates. Against this backdrop with increased catastrophe activity, we delivered a respectable combined ratio.
“It is pleasing to have seen a number of initiatives successfully launched during the year, and to see those initiated in recent years delivering profitable premium growth for the group.
“In the current environment, we believe this proactive approach and emphasis on innovation is an important complement to our disciplined underwriting.
In September 2016 we announced the launch of Syndicate 2988, which has a capacity of £52m ($82m) for its first year of trading. Syndicate 2988 reaffirms our commitment to the Lloyd’s market and will help us further position Brit as the specialist underwriter of choice,
Source: City A.M.