Preliminary results for the year ended 31 December 2007 - "Positioned to outperform"

Brit Insurance Holdings PLC, the UK-domiciled international general insurer and reinsurer, today announces preliminary results for the year ended 31 December 2007.
March 10, 2008


HIGHLIGHTS - FINANCIAL PERFORMANCE:
  • Return on equity increased to 22.1% (2006: 21.6%)
  • Profit before tax increased to £191.2m (2006: £186.3m)
  • Earnings per share increased to 43.2p (2006: 41.3p)
  • Gross written premiums increased to £1,264.9m (2006: £1,236.3m)
  • Underlying gross written premium growth of 6.7% (premiums adjusted for exchange rate movements)
  • Net tangible assets per share increased by 12.4% to 248.0p (2006: 220.7p)
  • Net unearned premium reserve increased to £555.1m (2006: £539.1m)
  • Recommended final dividend of 7.5p per share, plus a special dividend of 7.0p per share, payable on 19 May 2008 to shareholders on the register on 18 April 2008, ex-dividend date 16 April 2008
  • Capital returned to shareholders since 2005, including the above proposed dividends, totals £234.4m
  • Combined Ratio of 92.7% (2006: 86.9%)
  • Investment return up to 5.42% (2006: 4.74%)


HIGHLIGHTS - OPERATIONS AND CAPITAL MANAGEMENT:
  • £50m share buy-back completed
  • New Gibraltar reinsurer, Rockhampton, expected to enhance earnings from 2008 through improved risk retention and tax management
  • Innovative use of alternative capital markets including an award-winning catastrophe swap
  • Norton Re I successful with return on the utilised capital of 27% profit for all investors. Brit Insurance’s share of profit of £2.1m. Norton Re II established with increased capacity
  • New five year £150m revolving credit facility entered into on 21 December 2007, allowing more efficient and effective management of the overall capital base while enhancing liquidity
  • Continued focus on core activities: Disposal of EPIC Investment Partners and partial disposal of RI3K, two non-core holdings, resulting in a profit on disposal of £5.2m and an increase in net tangible assets of £12.6m


OUTLOOK

Brit Insurance is confident of continued success despite the downturn in the global economic outlook.

Rating levels in Brit Global Markets and Brit Reinsurance remain at satisfactory levels despite being under downward pressure from the high levels of the last two years. The UK market remains highly competitive. However, rates in UK motor stabilised towards the end of 2007, giving weight to our view that the market should start to improve in the second half of 2008.

Brit Insurance's underwriters are achieving increasing access to target business both in the UK and elsewhere. This, together with the diversity of the underwriting portfolio which enables underwriters to be selective with the risks they underwrite, will allow modest gross written premium growth of around 5% in 2008. This can be achieved within the parameters established to deliver targeted cross cycle returns.

Dane Douetil, Chief Executive Officer of Brit Insurance Holdings PLC, said:

"I am extremely pleased with the record performance of the Group in 2007, particularly in view of a more normal claims environment. Improvements to market conditions in the UK should come over the course of 2008 taking us towards the beginning of the next growth phase in this market. Conditions elsewhere remain satisfactory overall, though with competitive pressures. Brit Insurance is built to weather storms and is positioned for outperformance."

For further information, please contact

Dane Douetil, Chief Executive Officer, Brit Insurance Holdings PLC
020 7984 8500

David Haggie/Peter Rigby/Juliet Tilley, Haggie Financial
020 7417 8989

There will be a presentation to analysts at Brit Insurance's office at 55 Bishopsgate at 9.30am today

An audio webcast of the analysts' presentation will be available on our website www.britinsurance.com from 3pm today.

Notes to Editors
Brit Insurance's operations comprise three strategic business units: Brit Global Markets, Brit Reinsurance and Brit UK. All three have access to the two regulatory vehicles through which Brit Insurance underwrites: Brit Insurance Limited which is a UK FSA regulated insurance company and Lloyd's syndicate 2987 which is managed by Brit Syndicates Limited. Brit Insurance has UK underwriting offices in London, Reading, Birmingham, Bristol, Glasgow, Leeds, Darlington, Ilford and Manchester.

www.britinsurance.com
 
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