H1 results: Brit takes £10m Ogden hit

Brit took a $13.1m (£9.9m) hit to its first-half profit because of the cut in the Ogden discount rate.

The Lloyd’s insurer made a profit before tax and foreign exchange impact of $143.8m in the first half of 2017, down 24% on the $189.6m it made in last year’s first half.

Excluding the Ogden hit, Brit’s profit would have been $156.9m in the first half of 2017.

The Ogden change added 1.8 percentage points to Brit’s combined operating ratio, taking it to 95.1% from the 93.3% it would have been otherwise.

Despite the Ogden hit, the COR was still an improvement over the 96.5% Brit reported in the first half of 2016.

Brit said there was no major claims activity in the first half of 2017, while major claims added four points to the COR in the first half of 2016.

The underwriting improvement came despite rate reductions of 2.2% in the half, although this was lower than the 3.7% cuts Brit experienced in last year’s first half.

The main cause of the overall profit reduction was a 31% drop in investment returns to $126.3m (H1 2016: $182m.

Gross written premiums increased 6% to $1.09bn (H1 2016: $1.03bn).

Brit said that the result was strong in the face of touch market conditions.