A strong underwriting performance in a challenging environment




Key points
  • Gross written premiums of US$1,999.2m (2014: US$2,148.5m), a decrease at constant exchange rates of 3.9%.
  • Net earned premium1 increased by 2.2% at constant exchange rates to US$1,649.6m (2014: US$1,601.1m). 
  • Combined ratio1 of 91.7% despite the challenging rating environment (2014: 89.5%).
  • Operating profit before FX and corporate activity costs of US$91.7m (2014: US$232.8m).
  • Profit after tax of US$15.6m (2014: US$229.3m).
  • Investment return2 after fees for the period of US$5.0m or 0.1% (2014: US$124.8m or 2.9%).
  • RoNTA3 of 9.1% (2014: 20.7%).
  • Adjusted net tangible assets4 decreased to US$1,074.7m (2014: US$1,209.6m), driven by dividend payment of US$154.1m in April 2015. 
  • Adoption of a revised investment strategy with a focus on long-term return and capital preservation. Portfolio rebalanced, significantly reducing exposure to riskassets, increasing exposure to government debt and extending duration in risk-free assets. 
  • Continued commitment to deliver opportunity-driven profitable growth, with a strategic investment in Ambridge Partners LLC, the formation of a Singaporeservice company and considered expansion of a number of areas of our book including healthcare, international inland marine, US general liability, LatinAmerican business, US inland marine and US property facultative.
  • Successful acquisition of the Company by Fairfax Financial Holdings Limited completed.
Mark Cloutier, Group CEO of Brit Limited, said:

‘2015 has been an exciting but challenging time for Brit, with the highlight being the successful completion of the transaction with Fairfax. This partnership providesBrit with a supportive and stable long-term platform from which to continue to deliver on our strategy to become a leading global specialty (re)insurer.

Focused and disciplined underwriting is at the heart of this strategy and, in 2015, we reported a combined ratio of 91.7%, a strong result in what is undoubtedly achallenging environment as we continue to see pressure on pricing and an increasingly complex marketplace in terms of capacity, distribution and regulation.

I am pleased that the growth initiatives implemented over the past few years continued to develop and make an increased contribution to our gross written premium.During 2015, we maintained our approach of building our platform through the addition of specialty underwriting talent in targeted areas. In addition, to this wemade a strategic investment in Ambridge, the US and London based MGU specialising in transactional insurance products, and we look forward to supporting thiswell-established profitable niche business to further expand its offering and platform. I am also pleased that we have further developed our international distributioncapabilities with the formation of a Singapore service company, which will start writing business on behalf of our Syndicate in 2016.

A volatile geopolitical backdrop, low interest rate environment and declining growth within global economies resulted in a challenging investment environment in2015, with few asset classes generating strong returns. Against this backdrop, we rebalanced our investment portfolio, reducing credit exposures, increasing exposureto government debt and extending duration in risk-free assets. This revised strategy takes a long-term view of markets which was reflected in our overall 2015 returnof 0.1%. We also transitioned the management of a significant part of our investment portfolio to Hamblin Watsa, a Fairfax subsidiary with an excellent long-termtrack record, whose sole business is managing investment portfolios of Fairfax group companies.

Looking forward, while we expect trading conditions to remain challenging, we believe we have the right operating model and underwriting approach to continue todrive success and we look forward to our future as a member of the Fairfax family with confidence.’

Matthew Wilson, Chief Underwriting Officer and Group Deputy CEO of Brit Limited, commented:

‘Market conditions have remained difficult during 2015, with the industry experiencing continued pressure on premium rates, influenced by low levels of catastropheactivity and increased competition from both traditional and non-traditional capital sources. Against this backdrop and a higher than average incidence of smallerweather and risk losses, our 91.7% combined ratio is particularly pleasing.

Risk adjusted premium rates decreased in-line with our expectations, strongly influenced by reductions seen across our reinsurance business and direct energy,property, aviation and BGSU specialty portfolios. In these lines in particular, we have been rigorous with our risk selection and, as a result, total gross premiums fellby 3.9% on a constant currency basis. Net earned premium increased by 2.2% on a constant currency basis, primarily reflecting the growth in written premium during2014, driven by our 2013 and 2014 underwriting initiatives and organic growth in classes experiencing more favourable rating conditions.

We continue to look at new opportunities as they arise and I am pleased to see a number of the underwriting initiatives we have launched in recent years deliveringprofitable premium growth for the Group. Looking ahead, we believe our disciplined underwriting approach and opportunity driven growth strategy should allow us tonavigate the current challenging conditions. I also look forward to exploring the opportunities to leverage the broader global Fairfax network for the Brit Group andour clients.’


  1. Net earned premium and the combined ratio exclude the effect of foreign exchange on non-monetary items.
  2. Investment return includes return on investment related derivatives and is after deducting investment management fees.
  3. RoNTA excludes all foreign exchange movements and corporate activity costs and is based on adjusted net tangible assets.
  4. Adjusted net tangible assets are defined as total equity, less intangible assets net of the deferred tax liability on those intangible assets.

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