A benign claims backdrop helped Lloyd's insurer Brit (BRIT) - which returned to the market after a three-year absence following its flotation in March - to report robust maiden half-year figures. Indeed, the group's combined ratio (of claims to premiums) reached a highly profitable 88.3 per cent.
Still, low claims and an influx of capital into the sector in recent years is putting pressure on premium rates and, overall, Brit's rates fell 3 per cent. Especially steep price falls were recorded on the group's reinsurance account: rates there fell 7.5 per cent, driven by a 10.8 per cent rate reduction at the property treaty account. But it's far from a uniform picture and rates on Brit's global specialty book remained fairly robust, falling a more modest 1.5 per cent.
The investment book, meanwhile, is largely focused on high-quality bonds and cash but also boasts some higher-yielding assets: 11 per cent is placed in equities and alternative investments. That helped the return at the half-year stage to jump to 2.1 per cent from last year's slender 0.3 per cent.
Prior to these figures broker Numis Securities was expecting full-year EPS of 33.1p (from 42p in 2013) and net tangible assets (NTA) of 188p a share.
BRIT (BRIT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 247p | MARKET VALUE: | £988m | |
| TOUCH: | 247-248p | 12-MONTH HIGH: | 252p | LOW: 195p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 192p | COMBINED RATIO: | 88.3% | |
| Half-year to 30 Jun | Gross premiums (£m) | Pretax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 671 | 75.4 | 9.6 | nil |
| 2014 | 701 | 61.5 | 50.3 | 6.25 |
| % change | +4 | -18 | +424 | - |
Ex-div: 20 Aug Payment: 26 Sep Capacity owned: 100 per cent | ||||
