Global specialty re/insurer Brit saw COVID-19 heavily impact its performance in the first half of 2020, with the pandemic raising its combined ratio 15.7pps to 106.7%.
The company also registered an operating loss of $193.6 million, compared to a profit of $139.6 million in the first half of 2019.
‘The COVID-19 pandemic is a global crisis, the like of which has not been seen for generations. As well as the devastating human cost, it has created an extraordinarily significant amount of global disruption and economic uncertainty, with the impact on the global economy likely to be felt for many years to come,” said Matthew Wilson, Group Chief Executive Officer.
Gross written premiums for H1 increased 5.9% to $1,282.5 million.
Additionally, premium rate increased 8.2%, compared to 4.3% in the first half of 2019. Premium rate increases since 1 January 2018 stand at 17.8%.
Investment return stood at a loss of $120.3 million, compared to a loss of $94.7 million in the first half of 2019.
“The crisis has impacted many of our clients. Our products are designed to support businesses and individuals in such difficult times and we have focussed on responding to claims as they have been notified,” added Wilson.
“We have stood tall with respect to valid COVID-19 claims and the financial impact on Brit has been significant, with claims of US$127.9m related to COVID-19 being reported within Major Losses in the period. COVID-19 has predominantly impacted our Contingency (Event Cancellation) and Casualty Treaty books in the first half of the year.
“The pandemic has also severely impacted investment markets. The first quarter of 2020 saw markets suffer their worst period since the 2008 financial crisis, as investors priced in the short-term impact of the shutdown and potential longer term impact of a global recession, while the second quarter witnessed a partial recovery.”
Mark Allan, Group Chief Financial Officer of Brit added, “For Brit and the wider insurance market, the first half of 2020 has proved to be very challenging, with results heavily impacted by the COVID-19 pandemic and its impact on insurance, investment and currency markets.
“Brit’s operating result before FX movements for the six months ended 30 June 2020 was a loss of US$193.6m (2019: profit of US$139.6m), while the post-tax result was a loss of US$227.4m (2019: profit of US$120.3m).
“Our underwriting loss of US$55.0m and combined ratio of 106.7% included major losses of US$156.2m (or 19.2pps of the combined ratio), resulting from COVID-19 related claims (US$127.9m), the Nashville Tornadoes (US$13.3m) and US Civil Unrest (US$15.0m).
“However, we were pleased with the attritional ratio of 52.0%, an improvement of 4.0pps, and to continue our long-standing track record of prior year reserve releases (US$34.9m), benefiting our combined ratio by 4.2pps.”