A `calamitous year' of claims means no final dividend for shareholders

Brit Insurance Holdings has reported a "truly shocking" pre-tax loss of £114.5m for 2001, down from a profit of £1.5m the year before.

The huge loss included a £90.5m charge for the 11 September tragedy, the terrorist attack on aircraft in Sri Lanka, the failure of the $85m (£58m) Hughes satellite, the Petrobras oil rig disaster off the Brazilian coast, devastation caused by tropical storm Allison in the US and the explosion of a chemical refinery in Toulouse.

In addition, it suffered from the collapse of Japanese insurer Taisei and the fallout from Enron's demise.

Brit's investments made a loss of £2.5m for the year, compared to a profit in 2000 of £20.5m.

Chairman Jo Welman said: "It is hard to imagine a more calamitous year for the insurance industry.

"This extraordinary combination of events follows a period in the late 1990s when the coincidence of a soft rating environment and a high level of claims had already weakened many insurers' balance sheets.

"Brit's 2001 result is truly shocking, but we believe that prior to 11 Sept-ember even the most imaginative realistic loss scenario would have struggled to conjure up the combination of events that affected your company so badly."

The company's combined ratio, which measures costs and claims as a percentage of premiums, was 154.1%, compared to 106.9% for 2001.

Shareholders will receive no final dividend for the year as the company conserves its capital.

It raised £153.9m in December to fund new growth and gross written premiums were up 50% to £374m compared to £249m in 2000.

The group's share price nudged up by 0.5p (0.76%) on Monday with the announcement, to trade at 66p.