News Article Published:
Thursday, 26 July 2007
Category:
Insurance
Brit Insurance's (BI) Insurer Financial Strength has received an overall 'A+' rating from Fitch with Brit Insurance Holdings (BIH) also enjoying a 'BBB' for subordinated notes and the Issuer Default Rating of 'A-'.
Fitch said such high ratings were in order due to: "Brit's consistently good operating performance in line with Fitch's expectations, strong capital base including access to group resources, prudent reserving strategy and good market position.
"Partially offsetting these factors are the competitive market conditions in two of the group's strategic business units and the ongoing challenges associated with establishing a sustainable presence in the UK regions.
BI underwent a seven per cent drop in gross written premiums in 2006 as underwriting conditions were unfavourable. Total premiums written dropped from £656.6 million to £610.9 million although the combined ratio improved to 96.6 per cent from 104.1 per cent.
Fitch added: "The global markets and reinsurance business units were the strongest performers, whereas the UK business unit experienced an increase in the combined ratio to 96.9 per cent from 78.4 per cent. Brit's performance was in line with that of Brit Insurance Holdings where the combined ratio improved to 91.5 per cent from 107.1 per cent."
Fitch promoted Brit as disciplined and calm in the current reinsurance industry climate. "Fitch expects that the Global Markets business unit will represent the main source of growth over the next year and account for a growing proportion of overall group business. Challenging conditions in the reinsurance and UK business units will limit the rate of premium growth in these sectors," the company concluded.
"However, the agency does not expect that Brit will deviate from its disciplined approach to underwriting, which is to pursue profitable growth. The combined ratio is expected to remain in the mid to high 90s per cent in 2007, and a strong capital base will be maintained in order to support the rating level."
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