Insurer’s profit before tax would have risen 71% without costs

Lloyd’s insurer Brit made a profit before tax of £61.5m in the first half of 2014, down 18% on the £75.4m it made in the same period last year.

The results were hit by £13.8m of costs from Brit’s initial public offering (IPO), which took place at the end of March.

The company also suffered £20.7m of losses from foreign exchange movements in the first half of 2014, while the profit from the same period last year was boosted by foreign exchange gains of £19.4m.

Excluding these effects, Brit would have made a profit before tax of £96m, up 71% on the £56m it would have made in the first half last year without the foreign exchange gains.

Brit’s combined operating ratio increased by 2.1 percentage points to 88.3% (H1 2013: 86.2%) because of higher commission expenses. The claims ratio increased by 0.8 points to 48.8%.

Gross written premium rose 4.4% to £701.2m (H1 2013: £671.2m).

Brit chief executive Mark Cloutier said: “Brit has had a successful first half of 2014 and the business is delivering on the targets set out at the time of the IPO.”

He described the 71% increase in underlying profit before tax as “particularly pleasing and reflects the underlying strength of our business”.

He added: “Looking ahead, the underwriting environment is undeniably becoming increasingly challenging.

“However, our disciplined approach to underwriting, together with our focus on optimising the risk adjusted return of our investment portfolio, means we are well positioned to continue to deliver attractive returns for our shareholders.”