2014 Full Year Report

25-02-2015

Key points

  • Return on adjusted net tangible assets (RoNTA) before FX and IPO costs of 20.7% (2013: 24.2%
  • Profit after tax increased by 39.7% to £139.0m (2013: £99.5m)
  • Gross written premiums of £1,302.1m (2013: £1,185.7m), an increase of 9.8%. The increase at constant exchange rates was 15.0%
  • Full year combined ratio of 89.5% despite challenging rating environment (2013: 85.4%)
  • Investment return for the period increased by 38.4% to £75.7m (2013: £54.7m), representing a return of 2.9%
  • Total value creation of £139.2m driven by strong operating performance (2013: £91.3m)
  • Adjusted net tangible assets increased to £775.4m or 194.0pps (2013: £661.2m/168.6pps), after payment in September 2014 of an interim dividend of £25.0m
  • Final dividend declared of 12.5pps plus a special dividend of 12.5pps, bringing total dividend for the year including the interim dividend of 6.25pps to 31.25pps
  • Recommended cash offer of 305 pps for the Company from Fairfax Financial Holdings Limited

Mark Cloutier, Group CEO of Brit PLC, said:

'Brit has had another successful year delivering on our financial targets and moving towards our goal of being the leading global speciality insurer. The return on adjusted net tangible assets before FX and IPO costs of 20.7% is driven by strong underwriting and investment performances, coupled with a continued focus on strict cost control. Our underlying underwriting performance once again excelled and coupled with a relatively benign period in terms of major losses, resulted in a combined ratio of 89.5%. Investment performance has been strong, with the portfolio producing an annualised return of 2.9% as our "income focused" portfolio benefitted from falling bond yields and tightening credit spreads in the first half of the year. As a result of our strong performance during the year I am also very pleased to announce a final dividend of 12.5p per share, in line with our guidance. The Group’s robust capital position has also facilitated a special dividend of 12.5p per share.

On 17 February we were pleased to announce that the Boards of Fairfax and Brit have reached agreement regarding the terms of a recommended cash offer of 305pps for Brit PLC. Our business is complementary to their group's current offering and the deal represents an exciting opportunity to continue our story on an even stronger footing. Our position as a market-leading global specialty insurer and reinsurer and our major presence in Lloyd's make us an attractive addition to Fairfax's global footprint. There is very little crossover in our respective international operations, thus allowing Fairfax to further diversify its portfolio while enabling Brit to leverage Fairfax's existing relationships and expertise in the international insurance and reinsurance markets. The combination will enable us to enhance our global product offering and provide us with expanded underwriting opportunities and distribution channels. We believe this is a great fit for both companies, our employees, customers and trading partners as well as representing an attractive financial return for shareholders following our successful IPO in April 2014.

We have a fantastic team here at Brit and I am particularly delighted to announce today the appointment of Matthew Wilson as Deputy Group CEO and Chief Underwriting Officer. Underwriting performance is at the core of our strategy and Matthew's leadership over the past 5 years has been a key factor in the significant transformation that has occurred at Brit. I look forward to working closely with Matthew in his new role as we start an exciting new chapter for the Brit Group.'

For further information, please contact:

Sam Dobbyn, Head of Investor Relations, Brit PLC +44 (0) 20 7984 8800
Paul Marriott, FTI Consulting +44 (0) 20 3727 1341
Tom Blackwell, FTI Consulting +44 (0) 20 3727 1051

Analyst Presentation

Brit will hold its analyst presentation to discuss its full year results at 55 Bishopsgate, London EC2N 3AS, at 9.30 a.m. GMT on Wednesday, 25 February, 2015. The presentation may be accessed at 020 3059 8125 (UK) or +44 203 059 8125 (International).

About Brit PLC

Brit PLC is a market-leading global specialty insurer and reinsurer, focused on underwriting complex risks. It has a major presence in Lloyd’s of London, the world’s specialist insurance market provider, with significant US and international reach. The Brit Group underwrites a broad class of commercial specialty insurance with a strong focus on property, casualty and energy business. Its capabilities are underpinned by robust financials. Brit PLC is listed on the London Stock Exchange. 

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.

This document contains references to the proposed offer by FFHL Group Limited for the entire issued and to be issued share capital of Brit PLC, as announced on 17 February 2015 (the "Fairfax Offer"). This document does not constitute a solicitation of (i) any vote in relation to, (ii) approval of or (iii) acceptance of, the Fairfax Offer. Any response in respect of the Fairfax Offer should be made only on the basis of information contained in the offer document to be despatched by FFHL Group Limited to shareholders of Brit PLC, which will contain the full terms and conditions of the Fairfax Offer, including how the Fairfax Offer may be accepted. Shareholders are advised to read the formal documentation in relation to the Fairfax Offer carefully once it has been despatched.

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