Chile earthquake set company back £46m

Brit’s gross written premium declined 13.3% in the first quarter of 2010, to £483.5m (£557.6m in the same period last year), as it stuck to its stance of pulling out of unprofitable business.

It said average premium rate increase on renewals was 1.4%, compared with 4.6% last year. It did not expect to grow in 2010 to protect profit margins.

The Chile earthquake claims were still estimated to cost $71m (£46m), it said.

Chief executive officer Dane Douetil commented: “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 marketplace.

“The corollary of this underwriting discipline, and of the portfolio management measures we have put in place over the past 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.”

Douetil said that the earthquake in Chile would be “a significant market loss” but that the company’s expected exposure in relation to its size reflected the controlled nature of its catastrophe account.

The oil leak on the Deepwater Horizon rig 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.