Brit Insurance 2011 Full Year Results

29-02-2012

BRIT INSURANCE HOLDINGS BV
PRESS RELEASE
FOR IMMEDIATE RELEASE

29 FEBRUARY 2012
2011 FULL YEAR RESULTS

SOLID PERFORMANCE IN A WEAK MARKET

SIGNIFICANT PROGRESS ON REPOSITIONING FOR THE FUTURE

Financial highlights

  • Profit before tax was £75.8m (2010: £116.4m).
  • Return on equity of 8.6% (2010: 14.4%).
  • Gross written premiums were £1,489.4m (2010: £1,530.2m).
  • Premium rate increases of 1.8% (2010: 1.0%).
  • Combined ratio of 99.6% (2010: 97.1%) including 11.3% for major catastrophes and claims (2010: 4.4%).
  • Underlying attritional claims ratio improved by 3.8% to 58.2%, with improvement since 2009 of 8.7%.
  • Underlying management expenses (excluding deal and project costs) reduced by 19.2% to £144.9m.
  • Investment return of 2.8% against a backdrop of a challenging and volatile economic environment (2010: 3.2%).
  • Total value created1 after all expenses of £79.4m (2010: £117.5m) with closing net tangible assets (NTA) of £897.2m (2010: £889.8m).

Strategic highlights

  • Since the acquisition by Achilles, the group has undertaken a significant reorganisation to optimise performance and position the group for the future.
  • Key management and senior hires across underwriting and investments, to create an organisation more focused on effectively managing risk and return through the cycle.
  • Creation of Global Specialty by combining Global Markets and Reinsurance business units into an integrated, more efficient and nimble unit focused on underwriting excellence and rigour across lines.
  • Active management of the investment portfolio to generate solid returns against a low interest rate environment and uncertain macroeconomic climate, especially in Europe.
  • Investing in better operating practices and systems, including an outsourcing contract to respond better to underwriting needs and manage costs more effectively.

Mark Cloutier, Group CEO of Brit Insurance said:

“Brit delivered a solid result in 2011 against a weak market, while at the same time making good progress in our efforts to reposition the Group for the future. With record natural catastrophe and other large losses, low interest rates, volatile investment markets and a broadly flat pricing environment in a weak macroeconomic environment, 2011 was an extremely challenging year for the sector.

We are very pleased to have delivered a return on equity of 9% against this backdrop. The significant changes we have made during the year are already yielding results, with a 4% improvement in the attritional loss ratio and core expenses falling by 19% year over year.

The creation of Brit Global Specialty, a combination of Global Markets and Reinsurance, led by Matthew Wilson will enable us to focus harder on underwriting excellence across insurance and reinsurance, and positions our Lloyd’s franchise well for prudent growth with a clearer mission statement and brand in the market. The focus on investments including key hires introduces a new level of expertise into our asset management efforts.

We look forward to seeing further benefit from these initiatives in the years ahead irrespective of any real improvements in the (re)insurance pricing environment as Brit concentrates on establishing a leading position as a global specialty (re) insurance player with a key presence at Lloyd’s, in the United States and internationally.”

For further information, please contact

Mark Cloutier, Chief Executive Officer, Brit Insurance +44 (0) 20 7984 8500
Tom Burns / James Olley, Brunswick +44 (0)20 7404 5959

1 Total value created represents the increase in net tangible assets during the year, before capital distributions and dividends

Notes to Editors

Brit Insurance is an international general insurance and reinsurance group specialising in commercial insurance. The Group writes a diverse portfolio of insurance and reinsurance, offering worldwide protection. The scope is wide-ranging: from sole traders to the largest multinational corporations; from manufacturers to professional services; from shops to satellites. Our distribution model is centred on brokers and intermediaries. Reflecting where our customers trade, we are organized into two underwriting strategic business units – Brit Global Specialty (aligned to our Lloyd’s syndicate, Brit Syndicate 2987) and the UK (aligned to Brit Insurance Limited).

Disclaimer

This document does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer or invitation or advice or recommendation to subscribe for, underwrite or otherwise acquire or dispose of any securities (including share options and debt instruments) of the Company nor any other body corporate nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever which may at any time be entered into by the recipient or any other person, nor does it constitute an invitation or inducement to engage in investment activity under Section 21 of the Financial Services and Markets Act 2000 (FSMA). This document does not constitute an invitation to effect any transaction with the Company or to make use of any services provided by the Company. Past performance cannot be relied on as a guide to future performance.

Read the full RNS