Brit chief has no regrets about cutting firm’s motor book
The sharp increases in private motor rates last year do not necessarily mean the business is now profitable, according to Brit chief executive Dane Douetil.
The Lloyd’s insurer revealed last year that it had cut 60% of its UK private motor book during the first half of the year because it no longer considered it a sustainable line of business.
Despite the rate rises that have been seen since, and the further hikes many insurance chief executives are predicting for private motor this year, Douetil does not regret pulling back from the business line.
“I wouldn’t necessarily see that those rate increases are going to mean people have returned to profitability,” he told Insurance Times. “There is still a fundamental flaw in the private motor market, both on the distribution side and the claims side and I think you need to be very large and scalable to be able to compete effectively in that area.”
Brit’s after-tax profit for the full year of 2010 was £110.5m, up 26.2% on the £87.5m it made in 2009. Douetil described this growth as “particularly pleasing”.
He also hailed the increase in net tangible assets a share to £11.41, or £11.21 on an adjusted basis, which meant that it qualified for the additional 25p a share under the terms of its offer from private equity consortium Achilles. “That is the absolute key number,” Douetil said.
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