Results for the year ended 31 December 2023

A record result

Key points

• Group profit after tax (including discontinued operations) of $895.4m (2022: $308.9m).
• Profit on ordinary activities before tax, FX and discontinued operations of $720.3m (2022: $281.3m).
• Return on net tangible assets on all operations of 51.9% (2022: 12.6%) and return on net tangible assets on continuing operations of 41.7% (2022: 12.9%).
• Combined ratio for continuing business after discounting of 76.2% (2022: 88.5%) and an undiscounted combined ratio for continuing business of 85.3% (2022: 96.2%).
• Insurance operating result, excluding the impact of discounting, was a profit of $405.7m (2022: $93.9m), and the result including the impact of discounting was a profit of $423.7m (2022: $492.5m).
• Insurance premium written for 2023 of $3,753.5m, a reduction of 5.5% over 2022 ($3,970.0m) at constant rates of exchange, reflecting market conditions in certain classes, the implementation of our catastrophe strategy, and our continued focus on improving our performance by exiting underperforming business.
• Investment return was a strong $394.4m or 6.2% (2022: loss of $132.1m or -2.3%).
• Result from discontinued operations after tax totalled $266.2m (2022: $21.7m), including the gain on sale of Ambridge of $259.1m.
• Capital position remains strong, with a surplus over management entity capital requirements of $1,050.5m or 54.5% (2022: $709.8m or 39.9%), after dividend payments in the year of $413.6m. A significant proportion of our investment portfolio remains invested in cash and fixed income securities (2023: 85.8%; 2022: 85.1%).
• Highly successful third year of trading for Ki³, recording insurance premiums written of $877.0m (2022: $834.1m), a combined ratio after discounting of 83.2% (2022: 91.1%) and an undiscounted combined ratio of 89.4% (2022: 95.0%).
• Overall market conditions continued to harden, albeit at a reducing rate, and we achieved risk-adjusted rate increases of 7.1%, bringing the compound increase since 1 January 2018 to 65.1%.
• Key developments include:
  • Completion of the sale of the Ambridge MGA companies;
  • Agreement to sell our holding in Canadian MGA Sutton, which completed post year end on 8 March 2024;
  • Execution of our catastrophe strategy, reducing our Property portfolio’s gross exposure to such events;
  • Launch of Ki’s enhanced offering allowing brokers to access third-party digital capacity from multiple syndicates directly through the Ki platform;
  • Continued focus on our customers through claims innovation;
  • Continued focus on our digital, data and AI strategy; and
  • Adoption of IFRS 17 ‘Insurance Contracts’.

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Martin Thompson, Group Chief Executive Officer, commented: 

‘Brit has delivered an excellent result for 2023, with a strong underwriting and investment performance.

Our undiscounted combined ratio of 85.3%, a 10.9 percentage point improvement from 2022, reflects the strength of Brit’s underwriting teams and the successful execution of our catastrophe strategy, as well as a year of more benign major loss activity.   Our discounted combined ratio reduced to 76.2% (2022: 88.5%).

Overall, market conditions have remained broadly positive, and we achieved risk adjusted rate increases of 7.1%.  In total, we have seen compound increases since 1 January 2018 of 65.1%.  While we have continued to achieve rate increases in most of our underwriting portfolios, in some lines we are seeing increased competition and rate reductions, putting pressure on premium income. We remain vigilant to this and continue to closely monitor our underwriting approach as we maintain our focus on cycle management.

Against this backdrop we have remained highly disciplined and focused on underwriting profitability. This is reflected in a slight reduction in the Group’s overall insurance premium written to $3,753.5m (2022: $3,970.0m), mainly driven by market conditions in certain classes, the implementation of our catastrophe strategy, and our continued focus on improving our performance by exiting underperforming business.  

In its third year of trading, Ki’s insurance premium written increased by $42.9m to $877.0m and continued to make a positive contribution to the Group.  Ki has further driven change in the Lloyd’s market including the evolution of Ki’s business model, allowing brokers to access digital capacity from multiple Lloyd’s syndicates directly through the Ki platform, made possible through multi-year partnerships with capacity partners.

On 10 May 2023, Brit completed the sale of Ambridge, its US and European based managing general underwriter (MGU) to Amynta Group, recording a gain on sale of $259.1m.  In November 2023 we also entered into an agreement with Amynta to sell Sutton, the Canadian MGU in which we have a 49% interest, which closed on 8 March 2024.  We believe it was the appropriate time to realise the value of our investments in Ambridge and Sutton as we focus on our strategic priorities: our core underwriting capabilities and our investment in building out our market leading digital capabilities.  Importantly, Ambridge, Sutton and Amynta remain key partners for Brit, and we look forward to a long and deep underwriting relationship with them as an independent MGUs. 

Our ability to deliver a best-in-class claims service is an important differentiator for Brit.  We continued to support our clients when they need it most, with innovation at the heart of our claims approach, as demonstrated with our response to the 2023 Hawaiian wildfires and other major loss events.  We were delighted that this resulted in our claims team being recognised in winning a number of prestigious industry awards.

Looking ahead, our aspiration for the Group is to be a long-term winner in the Lloyd’s market, supported by our clear strategic focus on driving performance and profitability. Our 2023 results show we have the foundations from which to achieve this: through Syndicate 2987 we are a highly relevant lead market, while Ki is demonstrating the future of follow. In 2024 we will continue to invest in our technology strategy, broker relationships and underwriting capabilities to build on the established leadership positions of these respective parts of the Group, while retaining our long-term focus on careful management of the insurance cycle. 

While we remain mindful of shifting market dynamics, this positioning gives me great confidence in the outlook for Brit. Underpinning this confidence is our special and unique culture and I am proud of Brit’s reputation for fostering diverse talent. I would like to thank all my colleagues at Brit for their contributions over the last year, as well as our brokers and partners in the market for their ongoing support.’ 

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Disclaimer

This press release 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.