Brit’s profits drop 35% to £75.8m

Brit’s pre-tax profits dropped 35%, to £75.8m in 2011 compared to £116.4m in 2010.

The private equity-owned insurer also trimmed its gross written premium to £1.49bn compared to £1.53bn. Combined operating ratio worsened to 99.6% compared to 97.1%.

Brit paid out £141.9m in catastrophe claims in 2011, which added 11.3 percentage points to the claims ratio. This was partially offset by £89.9m of reserve releases.

Chief executive Mark Cloutier said the results was “solid” considering the record catastrophe year, low investment returns and flat pricing environment.

Cloutier said: “Brit delivered a solid result in 2011 against a weak market, while at the same time making good progress in our efforts to reposition the Group for the future. With record natural catastrophe and other large losses, low interest rates, volatile investment markets and a broadly flat pricing environment in a weak macroeconomic environment, 2011 was an extremely challenging year for the sector.

“We are very pleased to have delivered a return on equity of 9% against this backdrop. The significant changes we have made during the year are already yielding results, with a 4% improvement in the attritional loss ratio and core expenses falling by 19% year over year.

“The creation of Brit Global Specialty, a combination of Global Markets and Reinsurance, led by Matthew Wilson, will enable us to focus harder on underwriting excellence across insurance and reinsurance, and positions our Lloyd’s franchise well for prudent growth with a clearer mission statement and brand in the market. The focus on investments including key hires introduces a new level of expertise into our asset management efforts.

“We look forward to seeing further benefit from these initiatives in the years ahead irrespective of any real improvements in the (re)insurance pricing environment as Brit concentrates on establishing a leading position as a global specialty (re) insurance player with a key presence at Lloyd’s, in the United States and internationally.”

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