Brit quits where it can’t profit

Brit Insurance announced Q1 gross written premium down 13.3% to £483.5m (£557.6m), a decrease of 9.9% at constant exchange rates.

It said average premium rate increase on renewal business was just 1.4% compared with 4.6% last year

It said it pulled out of business rather than cut premiums and does not expect to grow in 2010 in order to protect profit margins

The Chile earthquake claims are still estimated to cost $71m (£46m).

GWP by sector £m

• Brit Global Markets 214.2 (259.9)
• Brit Reinsurance 166.7 (193.9)
• Brit UK 102.3 (103.6)
• Other underwriting 0.3 (0.2)
• Group 483.5 (557.6)

Dane Douetil, chief executive officer, said: "The underwriting market in the first quarter of 2010 has developed broadly in line with our expectations. I am particularly pleased that, as a result of our underwriters being prepared to walk away from inadequately priced business, we have achieved an overall 1.4% rate increase in a competitive market place.

“The corollary of this underwriting discipline, and of the portfolio management measures we have put in place over the last two years, is that we are seeing reduced premium volumes. This is to be expected at this part of the underwriting cycle and as we work hard to enhance our underwriting portfolio.

Catastrophes

"The earthquake in Chile will be a significant market loss and our expected exposure in relation to our size reflects the controlled nature of our catastrophe account.

"The diversity within the underwriting portfolio stands us in good stead as the various markets we operate in follow different cyclical patterns. We are ready to capitalise on opportunities should they arise, but we continue to expect that, absent significant rate increases, there will be no premium volume growth during 2010."

Brit said the Deepwater Horizon rig explosion in the Gulf of Mexico and the partial closure of European airspace following a volcanic eruption in Iceland would not be major claims for the group.