Brit boss: delisting will boost investment returns

Brit chief executive Dane Douetil says that the insurer’s delisting could bring advantages to its underwriting and investment returns.

Speaking to Insurance Times on the day his company announced a full-year 2010 profit after tax of £110.5m, Douetil said he was looking forward to Brit becoming a private company following its acquisition by private equity consortium Achilles.

“One of the advantages with going private is that the company will very much be able to focus on the medium-term outlook and make certain we can take advantage when the market does turn and not be forced to grow at the wrong time in the cycle,” he said.

“What I am looking forward to is being able to take a more considered, three-year view of life, both on the liability side and investments, and not being driven so much by quarterly output. What is important is the overall franchise value and the results of the group over a period of time, not on a short-term basis.”

Discussing Brit’s 17.4% fall in investment return to £113.4m in 2010 from £137.4m in 2009, Douetil suggested that making better investment returns might be easier out of the public eye.

“What going private means is that we can take a little more volatility and, therefore, we will probably be prepared to take a little bit more credit and duration risk on our bond portfolio than we would normally do,” he said. Brit’s 2010 combined ratio increased to 97.1% from 94%.

Douetil is hopeful that the underwriting losses suffered by rivals in 2010 will result in rate-hardening in lines outside personal lines motor, where prices have already rocketed. But he added: “We have to plan and run the business regardless of the market cycle and therefore I’m not focused on top-line growth at this stage.”