Lloyd’s insurer makes £4.4m profit on Simply Business sale but stays silent on IPO plans
Lloyd’s insurer Brit made a profit after tax of £101.7m in 2013, up 20% on the £84.7m it made the previous year.
The insurer’s combined operating ratio (COR) improved by eight points to 85.2% (2012: 93.2%) thanks to lower catastrophes, higher reserve releases and an improved attritional loss ratio.
Gross written premiums (GWP) increased by 3.2% to £1.19bn (2012: £1.15bn), despite a 6.4% drop in reinsurance GWP to £281m (2012: £300.3m).
The insurer also revealed that it made a profit of £4.4m by selling its 37% stake in XBridge, the holding company for broking group Simply Business, in April 2013.
However, Brit was silent on its rumoured plans for a £900m flotation.
Brit chief executive Mark Cloutier said: “2013 was another excellent year for Brit, our second full year operating as ‘new Brit’.
“Our continued focus on improving the quality of earnings, driven by underwriting performance and expense discipline has delivered handsomely with the Group achieving an 85.2% combined ratio.
“Our strategy is even more valid today than it was when we initially developed it three years ago. Given the challenges facing the market today, our focus on underwriting specialty products and leveraging off the Lloyd’s business model globally via our local distribution network gives us a highly efficient platform on which to develop our business and drive future profitable growth.”
He added: “Brit is a success story today because of one key ingredient, its people. We are proud of the successes the entire Brit team has achieved in 2013 and we look forward with confidence to building on this strong platform in 2014.”
Lower losses, higher reserves
Brit incurred major event claims of £30m in 2013, equivalent to 3.2 percentage points on the COR.
This compares with claims of £55m in 2012, equating to 5.9 percentage points on the COR.
Losses in 2013 included US tornadoes Canadian and European floods, and German hail storms.
Brit’s attritional loss ratio, which excludes major events, improved by 0.6 percentage points to 51.3% (2012: 51.9%). Cloutier said the attritional loss ratio had improved by 12.9 points in total since 2009.
Brit was also able to release £57.3m from prior-year loss reserves which shaved six percebtage points from the COR. This compares with a 2012 reserve release of £16.4m, which lowered the COR by 1.7 points.