Unaudited Full Year Results for the Year Ended 31 December 2020

Strong rate increases and premium growth in an unprecedented year

Key points

• Gross written premiums of US$2,424.4m (2019: US$2,293.5m), a 5.7% increase (5.6% at constant FX rates).
• Risk adjusted premium rates increases on renewal business of 10.6% (2019: 5.9%), bringing the total increase since 1 January 2018 to 20.2%.
• Net earned premium¹ of US$1,713.9m (2019: US$1,638.5m), an increase of 4.5% at constant FX rates.
• Attritional ratio of 52.6%, an improvement of 2.4 percentage points (pps) (2019: 55.0%), with most classes showing a strong underlying performance.
• Combined ratio^1,2 of 112.6% (2019: 95.8%), including 15.9 pps of COVID-19 relates losses and 7.8pps of other major losses (2019: 3.6pps).
• Combined ratio^1,2 excluding COVID-19 related losses of 96.7%.
• Return on invested assets³ after fees of US$45.5m or 1.0% (2018: US$148.1m or 3.6%).
• Loss on ordinary activities before the impact of FX and tax of US$233.7m (2019: profit of US$183.0m).
• Loss after tax of US$232.0m (2019: profit of US$179.9m).
• Balance sheet remains strong: adjusted net tangible assets⁴ of US$1,436.8m (2019: US$1,150.4m).
• Capital surplus of US$341.0m (2019: US$348.9m) and a strong capital ratio⁵ of 122.1% (2019: 128.4%).
• We have continued to focus on our ‘Leadership, Innovation, Distribution’ strategy, including:
  • Launch of Ki, the first fully digital and algorithmically-driven Lloyd's of London syndicate;
  • Launch of a direct pay claims facility in collaboration with Visa and Vitesse; and
  • Sponsorship of a US$300m catastrophe bond via Sussex Capital UK PCC Limited.

Matthew Wilson, Group Chief Executive Officer of Brit Limited, commented:
‘At a time when the global pandemic is still ravaging communities, we spare a thought for our colleagues, brokers and clients who have had to deal with the ultimate tragedy of losing a loved one through COVID-19. The human cost, the economic impact and the toll on mental welfare has been at a level no one could have foreseen as we began the year. I am proud of the way in which everyone in Brit has responded to the challenge and not only managed to service our clients, but to excel in doing so.

Our products are designed to support businesses and individuals in such difficult times and we have focussed on responding to claims as they have been notified. We have stood tall with respect to valid COVID-19 claims and the financial impact on Brit has been significant. Furthermore, 2020 was also a very active year for catastrophe events, being the fifth-costliest on record.

Despite the backdrop of COVID-19, there were a number of positives in the period. We achieved risk adjusted rate increases of 10.6%, with almost all classes contributing to the increase. This gives a total overall increase since 1 January 2018 of 20.2%. In this positive rate environment, we continued to grow our written premium to US$2,424.4m. During the period we also delivered an attritional claims ratio of 52.6%, an improvement of 2.4pps, reflecting underwriting discipline, rigorous risk selection, and rate increases.

Looking ahead to 2021, against the challenging backdrop there are a number of indicators to give us cause for optimism, including rate increases, the withdrawal of capacity in the market from certain classes and our improving attritional claims ratio. In this environment, our clear strategy of embracing data driven underwriting discipline, rigorous risk selection and planned targeted growth for 2021, coupled with innovative capital management solutions and continued investment in distribution, positions us well to respond to the opportunities and challenges ahead.’

Notes

1. Excludes the effect of foreign exchange on non-monetary items.
2. Excludes amounts attributable to third-party underwriting capital providers.
3. Inclusive of return on investment related derivatives, return on associates and after deducting investment management expenses and third-party share of investment return.
4. Adjusted net tangible assets are defined as total equity, less intangible assets net of the deferred tax liability on those intangible assets, less non-controlling interest.
5. The capital ratio is calculated as available resources as a percentage of management entity capital requirements.

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