Market conditions remain ‘positive’ despite rising competition: Brit

Martin Thompson, group chief executive officer at London-based specialty carrier Brit, said that market conditions continue to harden overall and remain “broadly positive” despite rising competition and rate reductions, as he announced healthy underwriting figures and a combined ratio for continuing business of 76.2% for 2023. “Overall, market conditions have remained broadly positive, and we achieved risk-adjusted rate increases of 7.1%. In total, we have seen compound increases since 1 January 2018 of 65.1%,” said Thompson. “While we have continued to achieve rate increases in most of our underwriting portfolios, in some lines we are seeing increased competition and rate reductions, putting pressure on premium income. We remain vigilant to this and continue to closely monitor our underwriting approach as we maintain our focus on cycle management,” he said. Thompson said that, against this backdrop, Brit had remained “highly disciplined” and focused on underwriting profitability. This was reflected in a slight reduction in the group’s overall insurance premium written to $3.75bn, down from $3.97bn in 2022. This was mainly driven by market conditions in certain classes, implementation of the group’s tighter catastrophe strategy and its continued focus on improving its performance by exiting underperforming business, said Thompson. Group profit after tax including discontinued operations for 2023 was $895m, up sharply from $309m the year before. Profit on ordinary activities before tax, FX and discontinued operations was $720m up from $281m in 2022. The combined ratio for continuing business, after discounting, of 76.2% was a big improvement on the still-healthy 88.5% reported for 2022. The undiscounted combined ratio for continuing business was 85.3%, down from 96.2% in 2022. The insurance operating result, excluding the impact of discounting, recorded a profit of $406m up from $94m in 2022. The result including the impact of discounting was a profit of $424m down from $493m the year before. The group reported a “highly successful” third year of trading for Ki, its syndicate in a box at Lloyd’s that takes an algorithmic approach to underwriting deploying follow capacity when the policy is underwritten by Brit, in a lead or follow capacity, or when it is led by one of its nominated leaders. Ki, which was initially capitalised at launch by Brit’s parent group Fairfax and alternative asset manager Blackstone with $500m, reported insurance premiums written of $877m up from $834m in 2022, a combined ratio after discounting of 83.2% down from 91.1% and an undiscounted combined ratio of 89.4% down from 95%. The year also saw the launch of Ki’s enhanced offering, allowing brokers to access third-party digital capacity from multiple syndicates directly through the Ki platform. Thompson said that, despite “shifting market dynamics”, he remains confident about the outlook. “Looking ahead, our aspiration for the group is to be a long-term winner in the Lloyd’s market, supported by our clear strategic focus on driving performance and profitability. Our 2023 results show we have the foundations from which to achieve this: through Syndicate 2987 we are a highly relevant lead market, while Ki is demonstrating the future of follow,” he said. “In 2024, we will continue to invest in our technology strategy, broker relationships and underwriting capabilities to build on the established leadership positions of these respective parts of the group, while retaining our long-term focus on careful management of the insurance cycle. While we remain mindful of shifting market dynamics, this positioning gives me great confidence in the outlook for Brit,” concluded Thompson.

Market conditions remain ‘positive’ despite rising competition: Brit

Specialty carrier reports reduced premiums as it stays ‘vigilant’

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