Brit sees rates rise 7.7% in H1 and 66% since 2018

Brit Insurance delivered some decent first half numbers on the back of average rate rises of 7.7%, and has now secured compound rate increases of 65.7% since January 2018.

Brit’s profit after tax and including discontinued operations hit $574.1m in the first half from $32.1m at the same stage in 2022, as underlying numbers improved and the company sold its managing general underwriter Ambridge for $259.1m.

Underwriting profit was $95.1m, up from $79.5m, with the combined ratio pretty much stable at 93.3% from 93.6%.

This performance reflected good underwriting discipline, “rigorous” risk selection, and “healthy” compound rate increases, said Brit.

CEO Martin Thompson said that market conditions remain “broadly positive” for insurers, with Brit achieving its risk-adjusted rate increases of 7.7% in the first half of this year driven by the rising cost of reinsurance and market pressure on liability lines from social inflation.

But he said that while rate increases continue to accelerate in a number of classes, others have seen increased competition and a reduction.

“Going into the second half of 2023, the industry continues to face a complex and constantly evolving landscape, including the uncertain economic environment, ongoing inflationary pressures and an elevated number of major loss events from primary and secondary perils. While overall market conditions remain fundamentally attractive, we are also starting to experience rating pressure in certain classes, a reminder that, even in a hard market, risk selection remains paramount,” said Thompson.

Brit’s gross written premiums were up to $2.02bn in the first six months from $1.99bn, with net earned premiums rising to $1.43bn from $1.25bn.

Brit said it suffered no major losses in the first half, compared to $39.6m in H1 2022.

Its overall prior year reserves were unchanged. “This comprised favourable ex-cat claims experience across programmes and facilities, property, specialty and FinPro portfolios, offset by strengthening in casualty treaty and an overall increase in historical cat event losses,” it explained.