Brit Announces Record 1st half Results; Industry Katrina Loss $50 Billion

Brit Insurance Holdings PLC, a U.K.-based Lloyd’s and general insurer, posted record 1st half pre-tax profits of 112.2 million pounds ($207 million), up 61 percent from the same period last year. Brit indicated that it would have losses related to Hurricane Katrina, but as yet the Group said it is unable to estimate them due to the complexity of the disaster.

Other highlights included in the report were as follows:
— Earnings per share 8.1pence (14.9 cents), up 54.8 percent.
— Group combined ratio 87.4 percent.
— Premium growth over recent years reflected in strong earnings growth and good returns.
— Full year gross written premium expected to be ahead of 2004.
— Excellent investment performance of 59.8 million pounds, up 169.4 percent.
— Dividend of 3 pence 5.5 cents) per share payable in November 2005
— Potential return of cash to shareholders, subject to CULS conversion, market and other conditions.

CEO Dane Douetil commented: “It is a real pleasure to announce excellent record results in the first Interim Statement since becoming Chief Executive. Pre-tax profits of 112.2 million pounds reflect the benefits of the significant restructuring of the Group post 9/11, with a single minded focus on underwriting for our own account. This first half of the year has been helped by better than expected investment performance and a relatively favourable loss environment.

“It was unlikely that we would see such benign conditions in the second half of the year and Hurricane Katrina has shown this to be the case. However, we remain optimistic for the future and look forward with confidence. Recent catastrophes such as Hurricane Katrina serve as a sharp reminder of the need to maintain underwriting and pricing discipline.

We believe these events will extend the duration of the hard market. We have recently strengthened Brit at both executive and non-executive levels and I believe we have the management team in place to continue delivering excellent returns to our shareholders. The insurance industry is going through huge change which we welcome. We are thoroughly prepared for it and are confident of reaping significant benefit from a more transparent, efficient and ultimately better market place.”

Douteil indicated at a press conference following the announcement of the results that he expected industry wide losses from Katrina to be in the $50 billion range, making it the largest loss the industry has ever sustained. Brit indicated in its report that its overall U.S. windstorm losses for 2005 were expected to be around 82.4 million pounds ($152 million).

The full report and additional comments may be consulted on the Group’s Website at: http://www.britinsurance.com.