Brit Ltd., a global specialty re/insurer and subsidiary of FairFax Financial Holdings Limited, has reported a strong underwriting and investment performance for the first half of 2023, as premiums rose to more than $2 billion.
The company has today reported a combined ratio of 93.3% compared with 93.6% a year earlier, which primarily reflects a healthy attritional ratio and the absence of any major losses.
The underwriting profit increased from $79.5 million in H1 2022 to $95.1 million in H1 2023.
Alongside the improved underwriting result, Brit’s return on invested assets for the period strengthened dramatically, to $147 million, or 2.4% compared with a loss of $233 million, or -4.3% a year earlier.
Gross written premiums grew to more than $2 billion compared with $1.9 billion in the prior year first half period, representing an increase of 2.5% at constant rates of exchange. Brit says that this growth was mainly driven by Ki, whose premium in its third year of trading increased by $110.1 million to $453 million.
All in all, group profit after tax (including discontinued operations) reached $574.1 million, up from 2022’s restated figure of $32.1 million.
Adjusted group operating profit increased to $257.4 million in H1 2023 from H1 2022’s restated loss of $154.1 million.
Martin Thompson, Group Chief Executive Officer of Brit Limited, commented: “I am pleased to report that our strategy has delivered an excellent overall performance for the first half of 2023, underpinned by a strong underwriting result, with an undiscounted combined ratio of 93.3% for the period.
“Market conditions remain broadly positive, and we achieved risk-adjusted rate increases of 7.7% in the first half, driven by the rising cost of reinsurance and market pressure on liability lines, primarily reflecting social inflation. In total, we have seen compound increases since 1 January 2018 of 65.7%.
“However, while rate increases continue to accelerate in a number of classes, others have seen increased competition and a reduction in the level of rate, putting pressure on premium income in some lines. Against this backdrop, we have remained highly disciplined and focused on underwriting profitability.”
Thompson added: “Going into the second half of 2023, the industry continues to face a complex and constantly evolving landscape, including the uncertain economic environment, ongoing inflationary pressures and an elevated number of major loss events from primary and secondary perils. While overall market conditions remain fundamentally attractive, we are also starting to experience rating pressure in certain classes, a reminder that, even in a hard market, risk selection remains paramount.
“Brit is well placed to navigate these challenges, while taking advantage of the opportunities we are seeing. We have a clear strategic focus on driving performance and profitability, and this clarity will stand us in good stead. Our significant investments in data and digital are enhancing the way in which we write business and interact with our trading partners and will ensure Brit’s future success as a lead underwriter, while Ki continues to revolutionise the follow market.
“Finally, our unique culture underpins all of this, creating a positive environment that empowers our people and makes Brit a home for talent. We remain excited about what Brit can achieve and look forward with confidence.”
