TIDMBRIT
RNS Number : 7633W
Brit PLC
12 November 2014
Brit PLC
PRESS RELEASE
12 November 2014
INTERIM MANAGEMENT STATEMENT
Brit PLC ('Brit' or 'the Group'), the global specialty insurer
and reinsurer, releases the following Interim Management Statement
for the nine months ended 30 September 2014.
Key points
-- Gross written premium GBP990.7m (30 September 2013:
GBP944.0m), an increase of 4.9%. The increase at constant rates of
exchange (CRE) was 11.7%.
-- Attritional claims experience in line with expectations.
Catastrophe experience remains relatively benign.
-- Investment return for the period of GBP68.8m (net of
investment management fees), representing a non-annualised return
for the period of 2.7% (30 September 2013: GBP28.5m / 1.4%).
-- Continued development of US operations, with Brit Global
Specialty USA (BGSU) premiums of GBP71.9m, up 73.7% over the same
period in 2013 at CRE, largely driven by initiatives undertaken in
2013.
-- Successful commutation of the remaining reinsurance contract
from the sale of the UK Company in 2012.
Mark Cloutier, Group CEO of Brit PLC, said:
'We are very pleased with the Group's performance through the
third quarter of the year. Our specialty insurance focused book has
allowed us to continue to capitalise on opportunities in our core
insurance lines, whilst remaining disciplined in our approach to
those classes experiencing rate pressure as conditions in some
classes of business become increasingly challenging. We are
experiencing rate movement consistent with our plan, and continue
to see rates as adequate for meeting our financial targets.
During 2014 we have continued to build on our strong portfolio
of specialty business with the successful additions to Brit of
experienced Aviation and UK Property teams in London, a Facultative
Reinsurance team in Miami targeting Latin American specialty
business, while continuing to deliver profitable growth from our US
and Bermudian platforms.
The investment portfolio continues to perform well and
demonstrates the strength of our strategy to focus on a diversified
mix of predominantly income generating asset classes. During the
quarter we have shortened duration to reduce P&L exposure to
interest rate rises.
In August we successfully completed the commutation of a
portfolio reinsurance transaction relating to the restructuring of
the group in 2012. Following good performance of this contract
since the sale of Brit Insurance Limited (BIL) in 2012, we are
pleased to have commuted at favourable terms, bringing closure on a
portfolio of long-tail liability reserves including those related
to the financial crisis.
While market conditions are probably best described as
'variable' depending on distribution, classes and geography, we
believe the combination of our business model, disciplined
underwriting and active capital management all operating on a
scalable and expense efficient platform, places Brit in a strong
position to continue to deliver very healthy returns for our
shareholders.'
Financial performance
Premium
Gross written premium 9 months ended 9 months ended
30 September 30 September Growth at
2014 2013 Growth CRE
GBPm GBPm % %
----------------------- --------------- --------------- --------- ----------
Brit Global Specialty
Direct 768.7 692.5 11.0 17.9
Brit Global Specialty
Reinsurance 222.0 251.5 (11.7) (5.3)
Group 990.7 944.0 4.9 11.7
----------------------- --------------- --------------- --------- ----------
The 17.9% increase in Brit Global Specialty Direct reflects the
continued expansion of the Group's Chicago based US service
platform, BGSU, the impact of new initiatives and selective growth
in well priced classes. BGSU wrote premiums of GBP71.9m in the nine
months to 30 September 2014, an increase of 73.7% over the same
period in 2013. This growth included the impact of the Maiden
Specialty renewals rights deal completed in 2013. Other new
initiatives have also contributed to growth in BGS Direct including
GBP12.5m from the Aviation team that joined the Group in June and
GBP8.1m from the Political and Credit Risk team.
Despite a more challenging rating environment the Group has
still identified growth opportunities in well priced lines and in
particular on our US property binder book, where our experience,
expertise and, importantly, long-term relationships have enabled us
to take advantage of positive rate increases.
The 11.7% reduction in Brit Global Specialty Reinsurance is in
line with expectations and reflects challenging market conditions
experienced primarily by the Property Treaty book. Brit has
maintained underwriting discipline in this environment. This
reduction was partly offset by new business written by Brit's
recently established Bermudan office, which wrote over GBP20.6m of
premium in the period, of which the majority was Casualty
Treaty.
Rate Environment
The rating environment remains challenging, with overall risk
adjusted premium rates decreasing on average across the portfolio
by 3.0% (30 September 2013: increase of 0.4%), in line with trends
at the time of the half year report. This reduction was strongly
influenced by reinsurance business which experienced rate
reductions of 7.5%, driven by a 10.6% rate reduction in Property
Treaty. Rates for Brit Global Specialty Direct business on the
whole remain robust, falling by only 1.5% in the period. Whilst the
direction of rates continues to be a focus, overall, premium
adequacy remains satisfactory and Brit continues to develop its
book in classes and territories where more attractive margins are
achievable, with particular focus currently on US property binders
and our US Specialty business through BGSU.
Claims
Attritional claims experience in the nine months to 30 September
2014 was in line with expectations. During Q3 Brit experienced
limited losses in relation to the Tripoli airport attack and
Hurricane Odile. However, the catastrophe experience has been
relatively benign for the year to date. Management remain confident
in loss ratio guidance provided at the time of the IPO.
Investments
Investment return for the 9 months ended 30 September was
GBP68.8m (net of investment management expenses) which equated to a
non-annualised return for the period of 2.7% (2013: GBP28.5m /
1.4%). During the third quarter, the portfolio generated income in
line with expectation, against a back drop of increased volatility
stemming from uncertainty around developed and emerging market
economic performance, geopolitical issues, monetary policies and
the subsequent path of interest rates. In light of this the Group
has reduced the duration of its investment portfolio to 1.2 years.
Total investment assets were GBP2.5bn at 30 September 2014 and the
asset allocation is broadly unchanged from 30 June 2014.
Commutation of the RiverStone reinsurance contract
In October 2012, the Group completed the sale of BIL to
RiverStone Group (a member of the Fairfax Financial Holdings
Limited group). Under the terms of the sale, the Group retained
control of certain classes of business via a reinsurance agreement.
RiverStone Group had the right, exercisable from April 2014, to
commute this reinsurance arrangement.
Brit is pleased to announce that on 14 August 2014 agreement was
reached with RiverStone to commute this reinsurance arrangement.
Under the commutation reinsured liabilities of GBP192.3m have been
transferred to RiverStone. This transaction marks the final element
of the major restructuring of the business undertaken since 2011 by
Brit's new management. Brit does not expect this transaction to
have any impact on current Group targets.
Capital Management
Brit is committed to an active capital management strategy and
will update shareholders on the capital position at year end.
For further information, please contact
Sam Dobbyn, Head of Investor Relations, Brit PLC +44 (0) 20 7984 8800
Tom Burns, Brunswick +44 (0) 20 7404 5959
About Brit
Brit PLC is a market-leading global specialty insurer and
reinsurer, focused on underwriting complex risks. It has a major
presence in Lloyd's of London, the world's specialist insurance
market provider, with significant US and international reach. The
Brit Group underwrites a broad class of commercial specialty
insurance with a strong focus on property, casualty and energy
business. Its capabilities are underpinned by robust financials.
Brit PLC is listed on the London Stock Exchange.
www.britinsurance.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IMSBLBDBGUBBGSB
Tellworth British Recove... (LSE:BRIT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Tellworth British Recove... (LSE:BRIT)
Historical Stock Chart
From Jul 2023 to Jul 2024
