Specialty re/insurer Brit has published its full year results for 2022, reporting a “strong and robust” underwriting result with a profit of $95.4m with a combined ratio of 96.6%, compared to the $90.6m reported in 2021 with a combined ratio of 95.7%.
This is the second consecutive year the insurer has reported profitability after having seen a loss of over $217m in 2020.
As well as a stronger underwriting performance, Brit reported gross written premium (GWP) growth to $3,970.0m, net written premium growth to $3,146.4m, and growth in net earned premium to $2,866.9m.
The company also reported a “strong” full year attritional ratio was 51.0%, compared to a 47.7% in 2021.
Brit noted that the company was able to see profitability despite major losses, as they reported $338.5m in 2022, impacting the CoR by 12.0pps. In 2021 the company reported major losses totaling $324.4m, 15.5pps.
Major nat cat losses amounted to $306.6m and added 10.9pps to the Brit CoR in 2022 , driven by Hurricane Ian ($280.2m net), Australian floods ($16.9m net) and winter storm Elliott ($9.5m net).
Losses arising from the Russian Invasion of Ukraine totalled $31.9m net, or 1.1 CoR percentage points. This follows an assessment of direct exposures within the Terrorism, Casualty Treaty, Marine War, Contingency and Political and Credit Risk classes, along with potential secondary impacts. Brit does not write Aviation business, the company noted.
Martin Thompson, Group CEO, commented: “In late October, Matthew Wilson took the decision to step down from his roles of Group CEO and Executive Chairman of Ki to focus on his health and his family. Matthew leaves a business that is in good shape and I am excited about our potential and how much more we have to achieve.
“I am pleased to report that our strategy has delivered a resilient underwriting performance for 2022 with a combined ratio of 96.6%. In a year that saw significant losses arising from natural catastrophes and the Ukraine crisis, this is a robust result and testament to our underwriting discipline, further evidenced by our healthy attritional ratio.
“Alongside delivering a profitable underwriting result, we were able to grow our premium written to $3,970.0m, an increase of 24.7% at constant rates of exchange. This growth reflects a combination of both new business and rate increases across our direct and reinsurance portfolios as well as Ki’s continued expansion.
Brit’s Ki, a fully digital and algorithmically-driven Lloyd’s syndicate launched in collaboration with Google Cloud, also reported a highly successful second year of trading.
Profit was achieved against the backdrop of significant catastrophe activity in 2022, as it was exposed to gross losses from Hurricane Ian, the Australian floods, Ukraine, and winter storm Elliott, Brit noted.
“Ki continues to develop at pace and has already gained significant traction in the market, writing $834.1m of premium in 2022 and reporting a very creditable combined ratio of 99.4%, Thompson said. “We are hugely optimistic about the prospects for Ki in 2023 and beyond as we continue to see growing demand for its capacity and consistently high broker engagement with its digital business model.”
He added: Brit’s result for all operations before FX and tax was a loss of $92.8m and our return on net tangible assets was -3.6%. This reflected our underwriting profit offset by negative investment return, corporate expenses and finance costs.
“During the year we also made progress with our technology and data strategy. This will be a priority in the coming year and will help shape Brit as a lead underwriter of the future. This strategy will see us deliver an innovative, data-driven and technology enabled platform that empowers our underwriting and claims teams to thrive. Brit Limited – 31 December 2022 2
The major loss events of 2022 bought into sharp focus the crucial role insurance plays in times of crisis, and our ability to deliver a best-in-class claims service continues to be a core focus. We have supported our clients when they need it most, with innovation at the heart of our claims approach. In the immediate aftermath of Hurricane Ian, using our proprietary machine learning algorithm in tandem with ultra-high-resolution aerial imagery, we were able to make our first claim payments one week after the event.
Brit also noted that it successfully completed its non-catastrophe reinsurance renewals at 1 January, with the erosion of coverage minimised despite challenging market conditions.
It said: “The cost has increased in several lines, but within our business planning assumptions. Brit’s main catastrophe protections renew at 1 April and discussions are currently underway with our reinsurance partners. Currently, we do not foresee any material challenges in placing the required protections.”
Going into 2023, Thompson forecasts the industry will keep facing a number of challenges and uncertainties, driven by the volatile geopolitical and economic landscapes, including ongoing inflationary pressures.
Wider challenges will also continue to exist, he added, such as the potential for increased frequency and magnitude of major loss events, excess capacity, the cost of doing business in the London Market, and increased competition.
“However, against this backdrop we believe Brit is uniquely placed,” he concluded. “We have enviable scale and reputation as a lead market, a clear digital and data strategy that will make us more efficient and easier to do business with, and a proven commitment to investing in innovative solutions that improve outcomes for our customers.
“Underpinning this is a differentiated culture and some of the industry’s best talent, taken together we are excited about how Brit is positioned to respond to the opportunities and challenges ahead.”
