Brit Insurance posted an undiscounted combined ratio of 89.5% and profit before tax of $326.8 million in the first half of 2026, as a stronger underwriting result offset lower investment returns and higher attritional losses from Middle East conflict exposure.
The Lloyd's market specialist, a subsidiary of Fairfax Financial Holdings Limited, reported insurance premiums written of $1,767.3 million for the six months to June 30, up 4.4% from $1,692.2 million in the same period of last year. On a constant exchange rate basis, growth was 3.6%.
The undiscounted combined ratio improved 5.7 percentage points from 95.2% in the prior period, while the discounted combined ratio tightened to 83.9% from 87.4%. The insurance service result rose 45.1% to $200.4 million from $138.1 million.
Brit's 89.5% undiscounted combined ratio sits above the Lloyd's market's full-year 2025 result of 87.6%, though that figure benefited from a comparatively benign second-half catastrophe year. S&P Global forecast a 2026 market-wide combined ratio of close to 93% as pricing softens.
Risk-adjusted premium rates fell 7.3% across the portfolio in the first half of 2026, compared with a 3.8% reduction in the same period of 2025 and a 4.8% full-year decrease for 2025. The acceleration was most pronounced in property treaty, property and specialty, cyber, and programmes and facilities. Brit said increased competition and favorable reinsurance market conditions continued to pressure pricing.
Brit's 7.3% rate reduction is nearly double the 3.7% market-wide pricing fall Lloyd's reported across its syndicates for full-year 2025, a gap that indicates the specific classes where Brit is most exposed to the softening cycle.
The rate trajectory sits within a broader Lloyd's market picture. The corporation's own full-year 2025 results showed a combined ratio of 87.6% alongside a 3.7% pricing reduction. Lloyd's chief executive Patrick Tiernan, in his half-year 2025 CEO statement, said "premiums in certain lines are falling at a concerning rate."
Brit's response was a more selective approach to its Lloyd's book, with capital steered toward lines where margin held rather than defending volume. The group's capital ratio improved to 197.9% from 175.2% at December 31, 2025.
The claims ratio held broadly flat at 52.6%, up 0.1 percentage points from 52.5% in the prior period. A benign catastrophe environment helped offset three headwinds: higher attritional losses, reduced prior year reserve development, and a lower discounting benefit. There were no major catastrophe losses in the period, compared with $132.6 million in undiscounted net losses from the California wildfires in the first half of 2025.
Attritional loss experience was less favorable primarily from losses arising from the Middle East conflict. The group said its principal areas of exposure are its marine war and war and terror portfolios. Prior year reserve development fell sharply to a favorable $4.4 million from $64 million, as positive movement in the property treaty portfolio was partly offset by reserve strengthening on COVID-related claims.
The expense ratio fell to 31.3% from 34.9%. Other attributable expenses decreased by $10.8 million to $28.1 million on lower employee costs. The acquisition expense ratio improved 2.2 percentage points to 29.1% as a higher proportion of treaty business earned through at lower commission rates.
Growth was driven primarily by Brit Re, the group's Bermudian reinsurance platform in its second full year of third-party deployment. Third-party premiums written through Brit Re grew 69.8% to $150.6 million from $88.7 million in the prior period, largely from expansion in the casualty treaty portfolio.
Brit Re's build-out is part of a wider trend of Lloyd's-affiliated groups adding Bermuda platforms alongside their syndicate operations. Six new Bermuda property operations were expected to enter the market in 2026, according to analysis cited in the London specialty market.
The H1 2026 result builds on a full-year 2025 performance that produced a pre-tax profit of $716.7 million and an undiscounted combined ratio of 89.3%.
Total net investment return was $241.8 million, down from $300 million in the same period of 2025, with the return on invested assets falling to 3.2% from 4.7% on a non-annualized basis. Positive contributions came from equities ($109.7 million), specialized investment funds ($111.2 million) and debt securities ($23 million).
Martin Thompson, group chief executive officer of Brit, said the result came against a backdrop of "increasing competition and accelerating rate reductions across many of our markets." Thompson said the group remained focused on "protecting underwriting margins and maintaining portfolio quality" and that Brit Re's growth added to its capacity to deploy capital where returns were most attractive.
On the outlook, Thompson said the group remains "mindful of continued market softening and increasing competition" in the second half of 2026 and that "underwriting discipline and effective portfolio management become increasingly important" in that environment.
