Brit profits surge in 2023 annual results

CEO looks toward "long-term winner" role

Brit profits surge in 2023 annual results

Insurance News

By Kenneth Araullo

Brit Limited has released its financial results for the year ending December 31, 2023, showcasing major upticks across various metrics.

The company reported an increase in group profit after tax, including operations that have since been discontinued, recording a figure of $895.4 million for the year, compared to $308.9 million in 2022. Profit from ordinary activities before tax, foreign exchange (FX) considerations, and excluding discontinued operations was $720.3 million, a rise from the previous year's $281.3 million.

A notable highlight from the report is the return on net tangible assets across all operations, which surged to 51.9% from 12.6% in 2022. Specifically, the return on continuing operations rose to 41.7%, up from 12.9% the previous year.

The combined ratio also improved for continuing business. After accounting for discounting, it stood at 76.2%, a marked improvement from 88.5% in 2022. When not discounting, the combined ratio was 85.3%, compared to 96.2% the previous year.

The insurance operating result, before the impact of discounting, showed a profit of $405.7 million, up from $93.9 million in 2022. Including discounting effects, the profit was $423.7 million, reflecting an adjustment from the $492.5 million reported previously.

Insurance premiums written for the year amounted to $3,753.5 million, a slight decrease of 5.5% from 2022's $3,970.0 million. This change reflects the challenging market conditions in certain classes, the implementation of a strategic catastrophe strategy, and the company's ongoing efforts to exit underperforming businesses.

Investment returns were also strong at $394.4 million or 6.2%, reversing a loss of $132.1 million or -2.3% in the previous year. Discontinued operations contributed $266.2 million to after-tax results, including a $259.1 million gain from the sale of Ambridge.

Brit's capital position remains solid, with a surplus over management's capital requirements of $1,050.5 million or 54.5%, even after dividend payments totalling $413.6 million during the year. The company continues to hold a significant proportion of its investment portfolio in cash and fixed income securities.

The digital underwriting platform Ki3, in its third year of trading, posted insurance premiums of $877.0 million and a combined ratio after discounting of 83.2%, indicating continued success and operational efficiency.

Brit noted that market conditions have shown signs of hardening, albeit at a reduced rate, with the company achieving risk-adjusted rate increases of 7.1%. This increment brings the total compound increase since 1 January 2018 to 65.1%.

Key developments for Brit in the reported period include the successful sale of the Ambridge MGA companies, the agreement and subsequent completion of the sale of its Canadian MGA Sutton, execution of its catastrophe strategy, the launch of an enhanced offering through the Ki platform, a continued focus on claims innovation and digital, data, and AI strategies, along with the adoption of IFRS 17 “Insurance Contracts.”

“Long-term winner” aspirations for Brit

Group CEO Martin Thompson commended the annual results, highlighting the significant advancements made by Brit in 2023. He also outlined his aspirations for the group going into 2024.

“Looking ahead, our aspiration for the Group is to be a long-term winner in the Lloyd’s market, supported by our clear strategic focus on driving performance and profitability. Our 2023 results show we have the foundations from which to achieve this: through Syndicate 2987 we are a highly relevant lead market, while Ki is demonstrating the future of follow,” he said.

“In 2024 we will continue to invest in our technology strategy, broker relationships and underwriting capabilities to build on the established leadership positions of these respective parts of the Group, while retaining our long-term focus on careful management of the insurance cycle,” Thompson said.

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