UK insurers may have to wait at least nine months before they get the price rises they need, according to Brit Insurance chief executive Dane Douetil.
Speaking to Insurance Times after the Lloyd’s insurer posted a £6.4m profit for the first half of 2011, Douetil said: “I don’t think we are going to see the desired rate increases the market needs to return to an acceptable level of profitability and return on capital in the UK in the next 6 to 9 months.”
He added: “Although we think we are heading in the right direction and people are beginning to feel the pain, I think it will probably not be until nearer 2013 until we see the real market turn we have all been waiting for.”
Brit saw rate increases of 0.9% across its portfolio in the first half of 2011, with the largest rate increase, 1.6%, emanating from the company’s UK strategic business unit. Douetil said most of this increase was attributable to commercial motor fleet business, but noted there was still room for rates to go up further in this line.
He added: “The property book was up by a couple of percent, but casualty is predominantly flat in the UK and we do need to see rate increases in that business.”
Having completed the build-out its UK infrastructure around 24 months ago, Brit is now poised for a market hardening. “is a waiting game to wait until the market conditions change that will allow us to grow,” said Douetil.
However, he also pointed out that the company has recently moved into the property-owners insurance business with the hire of a new team, headed by ex-Zurich real-estate head Kevin Simmons.
“We’re going to have a bit of a push in that whole area and we have set up a team to focus on it where we think there is growth potential at reasonable rates,” Douetil said.
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