Unaudited full year results for the year ended 31 December 2021

A strong and resilient result

Key points

• Profit on ordinary activities before the impact of FX and tax of $247.1m (2020: loss of $235.5m).
• Combined ratio of 95.7%¹ (2020: 112.7%²), including 15.5¹ percentage points (pps) of major losses (2020: 23.7pps²), a resilient result.
• Gross written premiums of $3,238.3m (2020: $2,424.4m), an increase of 31.8% over 2020 at constant FX rates.
• Risk adjusted premium rates increases on renewal business of 12.9% (2020: 10.6%), bringing the total increase since 1 January 2018 to 33.1%.
• Attritional ratio of 47.7%¹, an improvement of 4.8 pps (2020: 52.5%²).
• Return on invested assets³ after fees of $171.9m or 3.3% (2020: $44.6m or 1.0%).
• Gain on sale of two subsidiaries of $22.0m (2020: nil).
• Return on net tangible assets of 19.4%⁴ (2020: negative 20.1%⁴).
• Balance sheet remains strong: adjusted net tangible assets⁵ of $1,740.6m (2020: $1,436.8m).  
• Capital surplus increased by 81.2% to $617.9m (2020: $341.0m). Strong capital ratio⁶ of 139.1% (2020: 122.1%).
• A highly successful first year of trading for Ki, receiving a very positive reception from its broking partners and recording GWP of $395.6m.  
• Continued focus on our ‘Leadership, Innovation, Distribution’ strategy, including:
  • Combined our US operations under our Ambridge brand to create a single leading MGA;
  • Acquired the remaining shares of Camargue Underwriting Managers (Proprietary) Limited;
  • Continued to focus on our customers with the launch of our algorithm to enable a faster claims response to catastrophe events and our Direct Pay claims solution;
  • Piloted the first continuous binder at Lloyd’s; and
  • Launched the Keel Marine Consortium.

Martin Thompson, Interim Group Chief Executive Officer, commented:

‘In early October I was asked to step into Brit as Interim CEO, following the announcement that Matthew Wilson was to take a leave of absence due to health reasons.  All of us at Brit and Fairfax wish Matthew well and look forward to his return.

I am pleased to report a positive 2021 for Brit, with our underwriting performance and investment return delivering a strong overall result.  Underpinning this performance was continued successful execution against our strategy of Leadership, Innovation and Distribution, with the progression of our business testament to the dedication of our people and the unique culture Matthew and his team have created at Brit.

Our clear strategy saw us deliver a combined ratio for the year of 95.7%. This reflected the combination of an excellent attritional ratio, prior year reserve releases and increased income from our third party capital management and MGA businesses.  That we delivered this performance despite exposure to a number of major loss events and the continued impact of COVID-19 was particularly encouraging, demonstrating the increased resilience of our business and our firm focus on disciplined underwriting.

As well as delivering a good underwriting result, we grew our written premium by 31.8% to $3,238.3m. This reflects strong, targeted growth in our core direct and reinsurance books, and a very successful first year of trading for Ki.

Championing the potential of data and technology is central to Brit’s future success. Ki is an embodiment of this, but we also made strong progress across the whole of Brit in delivering on our innovation agenda. This includes significant milestones in how we use technology in Claims, investment in how we use data to empower our lead underwriters and, in January 2022, the appointments of a Chief Technology Officer and a Chief Data Officer.

Looking ahead to 2022, while uncertainty remains around COVID-19, rising inflation and the potential of increased frequency and severity of major loss events, we remain optimistic.  Ongoing rate rises, continued improvement in our attritional claims ratio and our clear strategy give us confidence that Brit is well placed to respond to the opportunities and challenges ahead.’

Read the full release

Read the Annual Report released on 7 March 2022

Notes

1. The calculation of underwriting ratios contains an adjustment whereby the premium paid for the loss portfolio reinsurance ($344.1m) is added back to premium earned net of reinsurance, with an equal and opposite adjustment to net claims incurred.  The benefit of a $35.0m reserve release resulting from the additional protection afforded by the contract is included in the calculation. The Directors believe that the ratios when calculated after these adjustments present a more consistent and understandable view of the Group’s performance. 
2. Ratios have been represented, and include FX movements on non-monetary items, the impact of gains/losses on other financial liabilities but exclude any adjustment for non-controlling interests.
3. Inclusive of return on investment related derivatives, return on associates and after deducting investment management expenses and third-party share of investment return.
4. Return on net tangible assets (RoNTA) shows the return generated by our operations for the owners of Brit Limited before foreign exchange movements, compared to the adjusted net tangible assets deployed in our business attributable to them.  The impact of the Group’s defined benefit pension schemes are excluded from the calculation. The 2020 figure is represented on this basis.
5. Adjusted net tangible assets are defined as total equity, less intangible assets net of the deferred tax liability on those intangible assets, less non-controlling interest.
6. The capital ratio is calculated as total available resources divided by management entity capital requirements. The management entity capital requirement is the capital required for business strategy and regulatory requirements.