Brit Insurance, which has been sold to US private equity firms Apollo and CVC Capital, has been hit by earthquake claims and weaker investment returns.
The Lloyds of London insurer, which sponsors the England cricket team, reported a 30% drop in profits before tax to £119.2m last year. It paid out £57.8m for claims relating to the earthquakes in Chile (£29.9m) and the New Zealand in September (£27.9m). The group, whose sale to the US private equity groups is set to be completed by the end of March, said the results reflected lower premium volumes, a higher burden of major claims and lower investment returns, partially offset by a lower tax charge.
Premiums edged up 1% compared with a 4.8% rise in 2009. The UK saw the highest rate increases at 3%, helped by increases of more than 10% in motor insurance.
Another earthquake struck New Zealand on Monday, with the damage described as far worse than the previous one on 4 September. Oriel Securities analyst Thomas Dorner said Brit, Catlin and Lancashire had the least exposure to the first earthquake while rivals Hardy, Amlin and Chaucer had the greatest.
“Based on the experience of the previous earthquake – ie an industry loss of around $3-5bn – the impact of this week’s earthquake on the pricing is likely to be limited to the region,” he added.
Source : The Guardian
