writing the future
Brit Group
Holdings Limited
Annual Report 2025
We exist to ensure that uncertainty never stands in the
way of progress.
We provide market-leading specialty insurance and
reinsurance.
We make disciplined and considered decisions.
We have a culture that is open, honest and fair.
We bring together the best talent and tools to provide
service excellence.
We help people and businesses face the future and thrive.
Let’s do it together.
writing the future
Brit Group Holdings Limited Annual Report 2025 1
A focused Brit delivering a strong performance
• Group profit before tax of $716.7m (2024: $571.1m).
• Group profit after tax of $651.8m (2024: $478.4m).
• Return on net tangible assets of 28.8% (2024: 25.8%).
• Combined ratio after discounting of 81.9% (2024: 75.7%) and an undiscounted combined ratio
of 89.3% (2024: 85.3%).
• Insurance service result of $446.2m (2024: $557.0m).
• Insurance premium written for 2025 of $3,091.7m, an increase of 3.8% over 2024 ($2,978.5m),
or by 3.2% at constant rates of exchange.
• Strong investment return of $586.5m or 9.0% (2024: $272.3m or 4.8%).
• Capital position remains strong, with a surplus over our management capital requirement
of $1,524.7m or 175.2% (2024: $823.1m or 147.9%), after dividend payments in the year of
$236.0m. A significant proportion of our investment portfolio remains invested in cash and
fixed income securities (2025: 80.2%; 2024: 80.6%).
• Overall risk adjusted rate decrease of 4.8% (2024: decrease of 1.4%).
• Key developments include:
• First year of trading following our separation from Ki;
• Continued focus on developing our lead underwriting capability;
• Through Brit Re, the strategic expansion of our Bermuda presence;
• Successful placement of Brit-sponsored catastrophe bond;
• Strengthening of capital base, with Brit becoming the co-obligor on two existing senior
unsecured notes, issued by Fairfax, with a total nominal value of CAD 700.0m;
• Continued focus on our customers through claims innovation; and
• Development of our digital, data and AI strategy.
Note 1: This Annual Report presents the consolidated position for the Brit Group Holdings Limited Group (Brit or Group) for the first time. From 1 January 2025, the Brit and Ki Financial
Limited (Ki) businesses have operated independently, with these two holding companies being the key reporting entities for their respective businesses. Both Brit and Ki remain subsidiaries of
Fairfax UK Holdings Limited (formerly Brit Limited). Unless otherwise stated, all amounts presented in this Annual Report, including comparatives, are for the consolidated Brit Group Holdings
Limited Group only and therefore do not include amounts arising in the Ki Group or in Fairfax UK Holdings Limited. Further details are provided in the ‘Group restructuring, including the
separation of Ki’ section of this Annual Report and in Note 2.1 of the consolidated financial statements.
Note 2: The calculations of the combined ratio and other ratios are set out in ‘key performance indicators and alternative performance measures’ on pages 183 to 186.
We have a culture that is open, honest and
fair so that our partnerships can be the
most effective they can be.
2
We have a culture that is open, honest and
fair so that our partnerships can be the
most effective they can be.
Brit Group Holdings Limited Annual Report 2025 3
contents
Strategic Report
The Strategic Report contains information about
the Group, how we make money and how we run
the business. It gives an insight into our markets,
approach to governance, sustainability and risk
management. It provides context for our Financial
Statements, sets out our key performance
indicators (KPIs) and analyses our financial
performance. It also sets out how we engage with
our people and other stakeholders and includes our
Section 172(1) Statement
Officer Statements
Brit at a Glance
Our Underwriting
Business Review
Financial Performance Review
Financial Position and Capital Strength
Risk Management, Principal Risks and Uncertainties
Our People, Culture, Social and Community Matters
Environmental Responsibility
Non-Financial and Sustainability Information
Statement (NFSIS)
Stakeholder Engagement
Section 172(1) Statement
6
8
12
17
20
29
32
39
41
46
48
51
Governance
This report sets out other information of interest
to our stakeholders. It includes our Directors’
Responsibility Statement and our Directors’
Statement on Going Concern. It also explains our
governance framework and contains our Modern
Slavery and Human Trafficking Statement.
Directors’ Report
Corporate Governance Report
Modern Slavery and Human Trafficking Statement
56
59
61
Financial Statements
This section presents the financial position,
performance and development in accordance with
generally accepted accounting practice for both
the Group and the standalone parent company
(Company). It also contains the Auditors’ Report.
Independent Auditors’ Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial Statements
Parent Company Financial Statements
64
74
75
76
77
78
79
174
Additional Information
This section explains how we calculate our KPIs and
alternative performance measures with reference
to data contained within the financial statements.
We also summarise other information relating to
the Company that is useful to stakeholders.
Key Performance Indicators and Alternative
Performance Measures
Company Information
183
187
Glossary
In this section, we include definitions of the terms
used in this Annual Report, focusing on terms
specific to the insurance industry and to Brit.
Glossary 188
Disclaimer
This document does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer or invitation or
advice or recommendation to subscribe for, underwrite or otherwise acquire or dispose of any securities (including share options and debt instruments) of the
Company nor any other body corporate nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever
which may at any time be entered into by the recipient or any other person, nor does it constitute an invitation or inducement to engage in investment activity under
Section 21 of the Financial Services and Markets Act 2000 (FSMA). This document does not constitute an invitation to effect any transaction with the Company or to
make use of any services provided by the Company. Past performance cannot be relied on as a guide to future performance.
strategic report
4 Brit Group Holdings Limited Annual Report 2025
This Strategic Report contains information about our business and provides an insight into
how we operate and our approach to sustainability and risk management. It provides context
for our Financial Statements, sets out our key performance indicators (KPIs) and analyses
our financial performance. All monetary figures in this report are presented in US dollars ($),
unless otherwise stated.
The calculations of the combined ratio and other underwriting ratios are set out on page 183 to 186.
6
Officer Statements
Martin Thompson, our Group
CEO, and Gavin Wilkinson,
our Group CFO, comment on
the Group’s performance
and business developments
during 2025 and look ahead
to 2026.
17
Business Review
We review market conditions,
our underwriting activities
and other business
developments during 2025.
32
Risk Management, Principal
Risks and Uncertainties
We set out our Risk
Management Framework and
explain how we will manage
the principal risks facing our
business in 2026, to ensure
we deliver our strategic
priorities. We also consider
emerging risks including
climate related risk.
48
Stakeholder Engagement
We set out our key
stakeholders, as identified
by the Board, together
with why and how we engage
with them and the outcomes
of that engagement.
8
Brit at a Glance
We introduce the Brit Group,
explain who we are and
what we do. We discuss our
underwriting philosophy and
the Brit offering. We also set
out our track record.
20
Financial Performance Review
We set out our KPIs. We
explain how we use them to
monitor our performance and
outline their performance
from 2021 to 2025. We then
provide an analysis of the
performance of our business
during 2025.
39
Our People, Culture, Social
and Community Matters
We provide information on
our people (including how
we engage with them) and
on social and community
matters, to the extent that it
is necessary to understand
our business.
51
Section 172(1) Statement
We set out how our Directors
promote the success of the
Company and discharge their
responsibilities under Section
172(1) of the Companies Act.
12
Our Underwriting
We set out our broad range
of underwriting products
and services, and analyse
how each of our portfolios
contributed to our premium
income in 2024 and 2025.
29
Financial Position and
Capital Strength
We review our financial
position at 31 December
2025. This section includes a
discussion of our investment
portfolio.
41
Environmental Responsibility
We explain our progress on
delivering our environmental
responsibilities, and set out
our related governance,
strategy, risk management
and metrics. This section
includes our non-financial
and sustainability information
statement.
This Strategic Report was approved by the Board on 26 February 2026.
Martin Thompson
Group Chief Executive Officer
Gavin Wilkinson
Group Chief Financial Officer
strategic report
We provide
market-leading
specialty
insurance and
reinsurance
so you can
present the
best solutions
to your clients.
5
strategic report
6 Brit Group Holdings Limited Annual Report 2025
officer statements
I am pleased to report on the
first set of annual results of the
reconstituted Brit Group (Brit),
following the separation of Ki
Financial Limited (Ki) on 1 January
2025. Both Brit and Ki remain
members of Fairfax, and we wish
Ki well for its future development
and success.
In 2025 we delivered a strong performance, generating
profits for the year of $651.8m and delivering a discounted
combined ratio of 81.9% (2024: 75.7%). We also returned a
dividend of $236.0m to our shareholder, Fairfax.
Reflecting on the past twelve months, the unprecedented
LA wildfires in January brought a turbulent start to 2025, and
highlighted a few important principles:
• Our catastrophe exposure isn’t defined solely by
windstorms in the second half of the year;
• The importance of portfolio construction, diversification
and managing aggregation; and
• Our claims service, diligence and speed enable our
customers to get back on their feet – it’s why we exist.
Against this backdrop, we have continued to deliver against
our strategic objectives; driving consistent financial
performance and profitability, while building a culture where
we all do ‘our best for Brit’ and enjoy the opportunity to grow
and develop.
We have remained focused on our four strategic pillars:
Focus; Capability; Simplification; and Culture. These pillars
provide us with a navigation point for delivering on our
overarching objective and enable us to think about the bigger
picture in terms of where we are today and what we need to
build to compete and win in the future. They also help us fulfil
our social and environmental responsibilities.
With Ki operating as a separate operation within the Fairfax
group since the beginning of 2025, we have focused on
building our position and reputation as a lead market. We
lead on most of our business and are committed to both
strengthening and broadening our leadership capabilities at
Lloyd’s. From Property and Casualty Treaty, Cyber, Property,
Energy, Terror, Healthcare to name a few classes – we are
setting price and terms and, with support from our excellent
Claims team, we are improving our proposition to the market.
As a lead underwriter, it is important that we display
strong underwriting leadership given the prevailing market
conditions. Over 2025 we saw increasing pressure on both
rate and terms across many parts of our book. This means
our strategy to prioritise underwriting discipline and cycle
management is now more important than ever. We still believe
attractive margins remain in many lines, and this is where we
are choosing to deploy our capital and grow.
I am pleased with how we executed against our plan to expand
our presence in Bermuda this year. With Brit Re we are
building a Bermudian reinsurance platform for the long term.
The platform gives us access to business and talent outside of
London and enables us to apply our great underwriting skills
to develop a new market. The team in Bermuda have delivered
a strong result in 2025, and we look forward to continuing the
development of the platform in 2026 and beyond.
We continue to invest in our ability to equip our people with
the tools they need to compete and win. This year we have
made further strides in how we use data whilst upgrading
our company-wide AI literacy, our underwriting platform and
the sophistication of our pricing tools. We have also made
significant progress with the simplification of our Operations,
Reserving and Finance processes. This provides the basis
for us to become a more nimble, dynamic and data-first
organisation. Fundamentally, Brit recognises the importance
of technology and will continue to invest heavily – not just in
our tools, but in the skills of our people.
Our culture underpins our success across each of our
other three strategic pillars, and it will drive our long-term
success. At Brit we recognise that we work better when we
work together. I am proud of how our unique culture sees
Brit strive for excellence in everything we do, and would like
to thank everyone at Brit for their hard work in delivering
these results.
Looking ahead to 2026, our strategy remains unchanged. Our
aspiration for the Group is to be a long-term winner at Lloyd’s,
supported by our clear strategic focus on lead underwriting
and sustainable profitability. We are fortunate to have our
ownership with Fairfax, which allows us to have a long-term
mindset. In the near term, we remain focused on managing
the cycle and delivering against our objectives, against the
backdrop of a market which continues to become more
competitive and challenging.
Martin Thompson
Group Chief Executive Officer
strategic report
Brit Group Holdings Limited Annual Report 2025 7
In 2025, following its separation
from Ki at the start of the year, Brit
delivered both a strong and resilient
underwriting result and a very good
investment performance. Overall,
Brit returned a profit for the year
of $651.8m (2024: $478.4m) and
a return on net tangible assets
(RoNTA), excluding the effect of
foreign exchange, of 28.8% (2024: 25.8%).
Our insurance service result remained profitable at $446.2m
(2024: $557.0m). This result, together with our discounted
combined ratio of 81.9% (2024: 75.7%) and our undiscounted
combined ratio of 89.3% (2024: 85.3%), reflected good
underwriting discipline and rigorous risk selection.
The increased competition we saw in 2025, with supply of
capacity ultimately outstripping demand, translated to risk
adjusted rate decreases of 4.8% (2024: 1.4% decrease).
Despite this, we believe rate adequacy is attractive across
large segments of our book and we continue to grow where
there are higher margins.
The expansion of our reinsurance platform in Bermuda
resulted in $102.8m of additional insurance premium written
for the Group and acted as the primary contributor to our
overall growth in insurance premium written of $113.2m to
$3,091.7m (2024: $2,978.5m). We saw a modest increase in
insurance premium written across our Lloyd’s businesses.
Net insurance revenue grew by $175.6m to $2,469.7m in the
year, partly explained by the growth in premium described
above. The $81.3m reduction in our allocation of reinsurance
premiums also contributed to this improvement, driven by
reduced expenditure on outwards reinsurance with the Group
seeking to retain more of its profitable business.
Undiscounted net claims increased by $220.8m to $1,391.8m,
reflecting increased major losses in the period. In total we
recognised $158.3m (2024: $113.5m) of undiscounted best
estimate reserves after reinstatement premiums from major
losses, $136.0m of which related to the wildfires in California.
Whilst higher than prior year, current year net losses from
catastrophes fell within budget. It was also pleasing to see
healthy attritional experience and continued positive reserve
releases. We continue to reserve conservatively and have
increased our reserves to the 80th percentile (2024: 78th
percentile), resulting in a net risk adjustment above the best
estimate of claims reserve of $231.1m (2024: $186.4m).
We saw a reduction in the discounting benefit we gain in the
insurance service result (2025: $183.1m, 2024: $220.6m) and
in the discounted combined ratio (2025: 7.4%, 2024: 9.6%).
This was driven by market movements, with yield curves
reducing in the period. This movement in yields, alongside the
unwind of initial discounting benefit, resulted in net finance
expenses of $244.2m (2024: $170.4m).
Our return on invested assets net of fees was a strong
$586.5m or 9.0% (2024: $272.3m or 4.8%), with all
investment classes other than derivatives contributing to this
return. The result reflects market conditions, with strong
yields and positive equity market performance.
Our investment portfolio remains conservatively positioned.
It includes a large allocation to debt securities and cash and
cash equivalents of $5,874.8m or 80.2% (2024: $4,635.5m
or 80.6%), while Brit’s equity, fund and structured product
allocation stands at $1,445.6m or 19.7% (2024: $1,112.3m or
19.3%). At 31 December 2025, 76.0% of our invested assets
were investment grade quality (2024: 75.4%) and the duration
of the portfolio was broadly neutral to the duration of our
liabilities.
Our balance sheet remains strong and well capitalised, with
adjusted net tangible assets of $2,666.0m (2024: $2,241.7m).
Our management capital surplus was $1,524.7m or 175.2%
(2024: $823.1m or 147.9%) over our management capital
requirement. Our capital base has strengthened in the
year, with us becoming the co-obligor on two existing senior
unsecured notes, issued by Fairfax, with a total nominal
of CAD 700.0m. We are therefore confident that we have
sufficient capital to deploy in areas of the market we believe
we can win and ultimately meet our strategic objectives.
Gavin Wilkinson
Group Chief Financial Officer
strategic report
8 Brit Group Holdings Limited Annual Report 2025
Brit at a glance
Brit Group Holdings Limited
This Annual Report presents the consolidated position for the
Brit Group Holdings Limited Group (Brit or Group) for the first
time. From 1 January 2025, the Brit and Ki Financial Limited
(Ki) businesses have operated independently, with these two
holding companies being the key reporting entities for their
respective businesses. Both Brit and Ki remain subsidiaries
of Fairfax UK Holdings Limited (formerly Brit Limited).
Unless otherwise stated, all amounts presented in this Annual
Report, including comparatives, are for the consolidated
Brit Group Holdings Limited Group only and therefore do
not include amounts arising in the Ki Group or in Fairfax UK
Holdings Limited.
Further details are provided in the ‘Group restructuring,
including the separation of Ki’ section of this Annual Report
and in Note 2.1 of the consolidated financial statements.
Overview
We are a market-leading global specialty (re)insurer and one
of the largest businesses that trades primarily on the Lloyd’s
of London platform, the world’s leading specialist commercial
insurance market. We provide highly specialised insurance
products to support our clients across a broad range of
complex risks, underpinned by our strong underwriting and
claims expertise.
We care deeply about our clients’ needs, ensuring that we not
only surround them with the best talent in the industry, but
also combine the depth of our experience with technology to
deliver innovation. Acting in open, honest partnership, our
clients can be sure that with Brit by their side, the future is
not something to be feared, it is something to be seized.
A full history of Brit can be found at www.britinsurance.com.
The Fairfax group
Since June 2015, Brit has been a member of the Fairfax
Financial Holdings Limited group (Fairfax), a Canadian
company whose shares are listed on the Toronto Stock
Exchange (www.fairfax.ca). At 31 December 2025, Fairfax
owned 100% of Brit Group Holdings Limited (BGHL).
We believe that Fairfax is an excellent parent for Brit, enabling
us to enhance our global product offering. It provides us with
a strong and stable base for long-term growth and affords us
with opportunities to expand our underwriting and distribution
channels, combined with the freedom to pursue our own
identity, philosophy and ambitions.
Our financial strength
Our strong and efficient capital model results from our focus
on Lloyd’s. As part of the Fairfax group we also benefit from
the group’s financial strength. We believe that our efficient,
flexible and scalable operating model provides a stable
foundation that enables us to pursue our strategy of focusing
on maximising profitability of the underwriting business and
extending our global reach.
Our capabilities and ambition are underpinned by our strong
financial position. Our business is underwritten primarily
through our wholly-aligned Lloyd’s Syndicate 2987, and the
partly-aligned Lloyd’s Syndicate 2988, which benefit from
Lloyd’s ratings of A+ (Superior) from A.M. Best, AA- (Very
Strong) from Fitch Ratings, AA- (Very Strong) from S&P
Global, and AA- (Very Strong) from Kroll Bond Rating Agency.
In addition, Brit Reinsurance (Bermuda) Limited (Brit Re) has
an A.M. Best Financial Strength Rating of ‘A’ (Excellent) and a
Long-Term Issuer Credit Rating of ‘a’ (Excellent). These ratings,
reaffirmed in January 2026, reflect Brit Re’s financial strength
and the positive impact of having Fairfax as its ultimate parent.
At 31 December 2025, we had capital resources equal to
175.2% of the management capital requirement needed
to support our business and Fairfax has supported our
continued capital strength allowing us to take advantage of
business opportunities as they arise. Our capital strength
provides the flexibility to allow us to cope with major losses
while not deviating from our commitment to fund profitable
expansion and to provide attractive returns.
Providing a risk service
Choosing to work with Brit means clients are buying a service,
not just buying a product. Every day, our multidisciplined
teams bring diverse skills and experience to our clients’
businesses, and our deep underwriting expertise helps
clients to effectively mitigate their risks. By working in close
collaboration across Underwriting, Claims, Actuarial and
Technology, our teams gain and share unparalleled insight into
the risks that our clients face.
Extensive distribution network
We are proud of our extensive distribution network and are
focused on tailoring our distribution strategy. We source
our business through established trading relationships
with Lloyd’s brokers, wholesale brokers, retail agents and
global reinsurance intermediaries. This network allows us
to understand and exceed our clients’ needs and serve them
globally. In London, our specialist Delegated Underwriting
Management team has a reputation for its commitment to
providing an excellent broker and coverholder experience.
Our strategic objectives
In delivering our strategy, we focus on the four strategic
pillars: Focus; Capability; Simplification; and Culture. We believe
these are core to achieving outstanding cycle management,
best-in-class underwriting, leadership at Lloyd’s, and targeted
returns, as well as helping us fulfil our social and environmental
responsibilities.
Underwriting and claims excellence
Underscored by comprehensive underwriting, claims and
risk services, we operate as a market lead across our
primary underwriting classes. At Brit we pride ourselves on
Underwriting and Claims excellence, deploying the latest
tools and a disciplined approach, and we have a long record
of strong performance.
strategic report
Brit Group Holdings Limited Annual Report 2025 9
Underwriting excellence
We predominantly underwrite complex, high value insurance
and reinsurance risks. Our largest source of business is the
US Excess and Surplus lines market and the majority of our
premium income is denominated in US dollars, although the
risks underwritten are distributed globally. We complement
our core classes with highly specialised niche lines which
provide both diversification and the potential for high returns.
We have an influential and respected presence within
the Lloyd’s of London insurance market. With one of the
largest and most diverse portfolios, we underwrite through
Syndicates 2987, Syndicate 2988, and Brit Re. We have a long
and successful track record of leading an extensive range of
insurance and reinsurance programmes, based on rigorous
risk selection and a disciplined approach to underwriting. We
hire the best people and develop their skills and expertise.
Combining technical expertise with industry knowledge, we
listen, we share and we collaborate, to create best-in-class
insurance solutions for our clients.
Claims excellence
Should the worst happen, our team of claims professionals are
committed to helping those affected not only to move on from
the incident, but to move forward. When a customer has a claim,
their life or business has been disrupted, or even put in peril. They
expect their insurance to deliver – and it is our responsibility to
fulfil that commitment.
Our team is highly experienced at both senior and adjuster levels,
and has successfully managed claims arising from some of the
market’s most challenging events. Our claims professionals
collaborate closely with our underwriters, giving them real
insight into the risks that our clients face, enabling us to tailor our
responses appropriately.
Broker surveys consistently highlight Brit’s effective client
engagement, proactive communications and case-by-case
approach.
Market-leading innovation
By putting innovation at the heart of our business we are
constantly looking for ways to provide the ongoing value that
will help our customers thrive in a changing world. We have
created a stimulating environment where talented original
thinkers flourish, and we channel this creativity towards
meeting real customer needs: turning smart ideas into
cutting-edge insurance solutions.
Investment management
At Brit we have a significant investment portfolio comprising
financial investments, investment-related derivatives and
cash. The value of our invested assets at 31 December 2025
was $7,325.4m. The investment portfolio is managed for the
most part by Hamblin Watsa Investment Counsel Limited, a
Fairfax subsidiary with an excellent long-term track record,
whose sole business is managing investment portfolios of
Fairfax companies.
Our culture
Our culture is the fabric that differentiates us from our
competition, and we have many great aspects to our culture
at Brit. We are low politics, we are very collaborative, and
we have a strong belief people should feel safe being their
authentic self.
We believe collaboration is essential to our success, working
together across functions ensures a good understanding
of our business and the knowledge of how working together
ensures we achieve our goals while maintaining, protecting,
and enjoying our culture.
Our social responsibility
We have a longstanding ethos of social responsibility and
we have a strong culture of ‘doing the right thing’; from
volunteering in our local communities to supporting good
causes further afield. The projects we choose align with our
strategic priorities and each year ten charities are chosen
by our employees for significant support.
Our environmental responsibility
Our vision centres on ‘Writing the future’, responsibly –
leveraging our culture and products to help deliver positive
outcomes for people, the planet and our business. We actively
consider the potential implications of climate change and
sustainability, and reflect these in our underwriting and
investment strategies. We are committed to responsible
business practices and aim to act in unison with our regulator
and the rest of our industry.
strategic report
10 Brit Group Holdings Limited Annual Report 2025
Our track record
Insurance premium written ($m)
3,238.3
3,970.0
3,753.5
2,978.5
3,091.7
1,912.2
2,057.0
2,239.1
2,293.5
2,424.4
2021
2
2022
2
2
023
2
2024
1
2025
1
2017
2,3
2018
2,3
2
019
2,3
2020
2,3
2016
2,3
0 1,000 2,000 3,000 4,000
Combined ratio (undiscounted) (%)
89.3
112.7
95.7
96.2
85.3
85.3
95.9
111.8
103.2
95.8
2021
2
2022
2
2
023
2
2024
1
2025
1
2017
2,3
2018
2,3
2
019
2,3
2020
2,3
2016
2,3
0 20 40 60 80 100 120
Combined ratio (discounted) (%)
76.2
75.7
81.9
2
023
2
2024
1
2025
1
88.5
2022
2
0 20 40 60 80 100 120
Investment return (net of fees) (%)
3.3
(2.3)
4.8
9.0
2.6
4.9
(2.0)
3.6
1.0
6.2
2021
2
2022
2
2
023
2
2024
1
2025
1
2017
2,3
2018
2,3
2
019
2,3
2020
2,3
2016
2,3
-4 -2 0 2 4 6 8 10
RoNTA
4
(%)
19.4
12.6
51.9
25.8
28.8
13.1
1.3
(15.2)
18.9
(20.1)
2021
2
2022
2
2
023
2
2024
1
2025
1
2017
2,3
2018
2,3
2
019
2,3
2020
2,3
2016
2,3
-30 -20 -10 0 10 20 30 40 50
Capital ratio (%)
139.1
139.9
154.5
147.9
175.2
125.6
136.8
130.4
128.4
122.1
2021
2
2022
2
2
023
2
2024
1
2025
1
2017
2,3
2018
2,3
2
019
2,3
2020
2,3
2016
2,3
0 20 40 60 80 100 120 140 160 180
Brit at a glance
Note 1: The 2025 and 2024 figures are for Brit Group Holdings Limited. The calculations are set out in ‘key performance indicators and alternative performance measures’ on pages 183 to 186.
Note 2: The figures for 2016 to 2023 are as previously reported for Brit Limited and therefore include Ki from 2021 to 2023.
Note 3: The figures for 2016 to 2020 are as previously reported under IFRS 4.
Note 4: RoNTA from all operations, continuing and discontinued.
We make disciplined and considered
decisions so you can rely on us to be
here for the long term.
11
strategic report
12 Brit Group Holdings Limited Annual Report 2025
2025
■
Total Direct portfolios, $2,264.2m
■ Financial and Professional Liability, $613.6m
■ Property, $706.9m
■ Programmes and Facilities, $458.5m
■ Specialty, $358.4m
■ Casualty, $126.8m
■
Total Reinsurance portfolios, $862.5m
■ Casualty Treaty, $402.1m
■ Property Treaty, $460.4m
■
Underwriting classes in run-off, $(15.4)m
■
Other underwriting, $(19.7)m
Insurance premium written
by portfolio 2025
($m)
Total
$3,091.7m
our underwriting
2024
■
Total Direct portfolios, $2,254.5m
■ Financial and Professional Liability, $565.8m
■ Property, $648.3m
■ Programmes and Facilities, $536.8m
■ Specialty, $361.6m
■ Casualty, $142.0m
■
Total Reinsurance portfolios, $742.4m
■ Casualty Treaty, $333.1m
■ Property Treaty, $409.3m
■
Underwriting classes in run-off, $4.9m
■
Other underwriting, $(23.3)m
Insurance premium written
by portfolio 2024
($m)
Total
$2,978.5m
writing the future
The breadth of classes we support, the depth of our experience and our commitment to our
clients differentiates us.
strategic report
Brit Group Holdings Limited Annual Report 2025 13
Direct Underwriting
Financial and Professional Liability Property
Financial Lines
Directors’ and Officers’ (D&O)
As recognised experts in the D&O
market, specialising in tailoring products
to precisely match individual clients’
needs.
Financial Institutions
As acknowledged leaders in the
traditional insurance lines, we also
offer exclusive, innovative solutions for
organisations of all sizes across mature
and emerging economies.
Transactional
Through our specialist MGA partners
we write the following Transactional
classes: Representations and
Warranties/Warranties and Indemnities.
Political and Credit Risk
We cover financial losses as a result
of non-payment or performance of
counterparties and confiscation,
expropriation, nationalisation, deprivation,
sequestration or forced abandonment of
fixed and mobile assets in foreign countries.
Cyber
Global Cyber Privacy and Technology
Our knowledge of the cyber risk
landscape gives us a deeper
understanding of the different types
of cyber risk. We provide cutting-edge
products to clients ranging from agile
start-ups to multinational corporations.
Professional Lines
Healthcare Liability
With a wealth of industry expertise,
our healthcare team is committed to
providing tailored insurance solutions,
innovative products and related risk
services. We focus on hospitals, allied
health and medical liability coverage.
North American Professional Liability
An established leader in this sector, we
provide cover on both an open market
and binding authority basis. Clients
range from small start-ups to the
largest multinationals.
Property Open Market
International Property
Our underwriting team offers significant
breadth and depth of experience, and
has access to our technical expertise in
the areas such as catastrophe modelling
and policy wordings. We offer a diverse
range of market-leading property products throughout
the world and insure a wide range of clients, diverse in
size and occupancy.
North American Open Market Property
Our technical expertise in the areas of
catastrophe modelling, pricing, policy
wordings and claims has made our North
American Open Market Property team a
market of choice for both brokers and clients.
UK Property
We have a proven track record of
writing and delivering flexible commercial
solutions to address the precise nature
of our customers’ requirements, covering
both commercial and residential property.
Political Risk and Violence
Political Violence/Terrorism
We offer a range of covers including
physical damage, denial of access and
business interruption losses arising
from perils including terrorism, strikes,
riots, civil commotion, malicious damage,
insurrection, revolution, rebellion, mutiny, war and civil war.
Private Client and Specie
Private Client
Our team has over 25 years of
underwriting experience in the high net
worth market, specialising in tailoring
products to clients’ unique needs.
Fine Art and Specie
We offer broad flexible coverage on all
risks of physical loss or damage basis.
We have the ability to design bespoke
policies in niche market areas.
strategic report
14 Brit Group Holdings Limited Annual Report 2025
our underwriting
Direct Underwriting
Programmes and Facilities
Accident and Health
Personal Accident and Medical Expenses
We are a leading Lloyd’s market offering
a broad range of specialist products
in the Accident and Health market,
concentrating on adding value to our
clients and commercial partners. Our
dynamic underwriting team is renowned for its diligence
and responsiveness. We can structure bespoke coverage
to a client’s specific needs, and we have a proven track
record of working with our clients to respond to complex
claims in a timely and efficient manner.
Contingency
A recognised lead market in Lloyd’s, we
are able to offer extensive knowledge
and significant capacity. We offer three
main products (event cancellation, non-
appearance, and film and prize indemnity)
and also offer specialist cover for diverse and esoteric risks.
Property Facilities
Commercial Property
Our long-established portfolio insures a
variety of commercial risks throughout
North America, including the Gulf and
Atlantic coast territories.
Homeowners
We offer coverage for primary,
secondary and vacant dwellings as well as
condominium unit owners in the USA. We
have the ability to include flood, earthquake
and landslide, separately or as a package.
Flood
We offer primary and excess flood
solutions for residential, condominium
and commercial risks throughout the
USA. Optional loss of rents and business
interruption cover is also available.
Property Facilities
Financial Property
Where a financial institution forecloses
on a property following loan default or
an investor purchases a portfolio of
properties, it can be covered under
a real estate owned policy. We also
offer mortgage impairment coverage, which protects a
financial institution’s owned and serviced loan portfolio
against physical loss or damage where no other
insurance exists and the loan is in default.
Transportation
Commercial transportation is the lifeblood
of industry and commerce across
North America and we understand
what it takes to help clients move their
business forward. We insure commercial
Automobile Physical Damage and Motor Truck Cargo across
the USA and Canada. We support all sizes of fleet through
our network of Lloyd’s brokers and coverholders.
Long Tail Facilities
Small North American Liability
We insure small and medium-sized
(SMEs) enterprises in North America for
errors and omissions liability through our
dedicated team. Smaller enterprises are
no less complex and we take the time to
write risks that enable a small business to continue on
their growth path.
strategic report
Brit Group Holdings Limited Annual Report 2025 15
Direct Underwriting
Specialty
Marine
Cargo
Our experienced and respected team
provide Cargo insurance for goods on
land, sea, air and in storage in warehouses
worldwide as well as project cargo for
construction and pre-launch for satellites.
Marine Hull and War
An expert team providing market-
leading Hull insurance across the Lloyd’s
platform. Brit insures a range of blue-
water, inland and war risks and specialist
operations on a worldwide basis.
Marine and Energy Liability
We offer specialist Marine Liability cover
through the Marine IGA programme. Our
specialist Energy Liability portfolio focuses
on Upstream, Midstream and Onshore and
Offshore Renewables.
Energy
A highly technical class with an
experienced and well-respected team
offering coverage for all aspects of
Upstream and Midstream Energy
operations, including Renewables.
Casualty
Casualty Direct
Our experienced team works with their
clients to provide liability coverage to their
specific market needs. Products include
Public and Products Liability, Employers’
Liability and Environmental Liability.
Through our specialist MGA partners,
we also write Financial and Professional Liability (Cyber
and Technology) and Specialty (Excess Casualty;
General Liability).
Reinsurance Underwriting
Casualty Treaty
We have dedicated teams for North
America and International business
based in London, offering our clients a
considerable breadth of expertise. We
underwrite on a Worldwide basis and
are a recognised quoting market. We
are a lead market on approximately half of our business,
with capacity varying according to class and source of
risk. Retrocessional risks are also actively considered.
Property Treaty
Our teams of specialist underwriters in
both London and Bermuda operate
together to provide superior service
and tailored solutions to brokers and
clients utilising a blend of up-to-date
technical expertise, embedded modelling
capability and real-world market experience. Our client
base represents a significant and established cross-
section of carriers writing simple policies to complex
risks. Our London office is focused on catastrophe
excess of loss and risk excess of loss where significant
capacity can be offered. The portfolio has global scope,
focusing on US, Europe, Japan, and Australia. Our
Bermuda office writes US Property catastrophe
reinsurance.
We bring together the best talent and
tools to provide service excellence so
you can rely on us to support you in
winning and retaining business.
16
We bring together the best talent and
tools to provide service excellence so
you can rely on us to support you in
winning and retaining business.
strategic report
Brit Group Holdings Limited Annual Report 2025 17
business review
2025 underwriting review
Overview
For the twelve months to 31 December 2025, Brit returned
a combined ratio (CoR) before discounting for continuing
operations of 89.3% (2024: 85.3%) and an insurance service
result after discounting of $446.2m (2024: $557.0m).
Insurance premium written increased by 3.8% to $3,091.7m
(2024: $2,978.5m), or by 3.2% at constant exchange rates. This
primarily reflected an overall increase in current year insurance
premium of $114.0m, resulting from our focus on strong
performing classes, and favourable foreign currency movements
of $16.9m, partly offset by unfavourable prior year premium
development of $17.7m.
Market conditions
In 2025, Brit experienced risk adjusted rate changes (RARC)
of -4.8%, reflecting increased market competition with capacity
outstripping demand. Compound RARC for the Brit Group since
1 January 2018, the low point of the last market cycle, is now
55.0%. While rate reductions have been experienced, and while
conditions are expected to continue to be challenging, healthy
margin remains in many lines of business, and we continue to
underwrite for profit, not top-line income.
Rating increases/(decreases) by portfolio in 2024 and 2025
are as follows:
2025
%
2024
%
Financial and Professional Liability
( 7.0) (8.7)
Property
(9.0) (0.8)
Programmes and Facilities (1.4) 3.9
Specialty (4.2) 2.2
Casualty 0.7 0.5
Total Direct portfolios (5.5) (1.9)
Casualty Treaty (0.3) (0.5)
Property Treaty (5.3) 0.4
Total Reinsurance portfolios (2.9) (0.1)
Total (4.8) (1.4)
The economic environment and the impact of inflation
Brit has carefully considered the impact of the higher levels of
inflation. Focus is continually placed on ensuring Brit’s pricing
models adequately address current inflationary trends.
Feeding into these models is a framework assessing the key
drivers of claim settlement costs for each class of business.
Our reserves are set on a best estimate basis together with a
risk adjustment. For 2025, this risk adjustment has been set at
the 80th percentile (2024: 78th percentile) on a net basis. As
part of the year-end reserving exercise, the impact of inflation
was considered in detail by the Actuarial team to ensure
that assumptions are consistent with our forward-looking
expectations for claims inflation. Various techniques have been
considered in line with guidance from Lloyd’s and regulators.
2025 Major loss activity
Worldwide natural disasters in 2025 resulted in estimated
economic losses of around $220bn (2024: $327bn), below the
ten-year average of $267bn, while estimated insured losses
were in the region $107bn (2024: $141bn), below the ten-year
average of $111bn (Source: Swiss Re).
2025 produced the highest insured wildfire losses on record
($40bn), driven by the LA wildfires, and insured losses from
severe convective storms are estimated at $50bn, making 2025
the third costliest year on record.
There were relatively low hurricane losses, despite an active
wind season, with 13 named storms, five hurricanes, four major
hurricanes and three category five hurricanes. Hurricane
Melissa was the costliest hurricane, with insured losses
estimated at $2.5bn.
Brit’s undiscounted best estimate reserves established for major
natural catastrophe losses in 2025, net of amounts recoverable
from reinsurers and reinstatement premiums, amounted to
$158.3m (2024: $113.5m), comprising the LA wildfires ($136.0m)
and Hurricane Melissa ($22.3m). Brit does not have material
exposure to other natural catastrophe events which occurred
during the year; while we anticipate that some claims will emerge,
we expect these to be attritional in scale.
2024 and prior major loss activity
Net undiscounted best estimate reserves for 2024 and prior
major losses reduced by $23.3m during the year, driven
by reductions in estimates for Hurricane Milton following
favourable claims experience.
Middle East conflict
We continue to monitor events in the Middle East. Claims
information and notifications continue to be limited and
we currently expect any losses arising to be attritional
in nature.
Russian invasion of Ukraine
During 2025, net undiscounted loss best estimate reserves
arising from the Russian invasion of Ukraine increased by
$10.6m. The movement is largely driven by an increase in the
estimate for Casualty Treaty, following the English High Court
ruling that Aviation losses are recoverable under All-Risk War
covers, rather than confined to the Aviation market.
Supporting our customers
Our customers are our priority. When a customer has a
claim, we understand they are likely to be facing difficult and
unexpected challenges. We believe they expect the insurance
they have purchased to respond and deliver when they need it
most. We see each claim as an opportunity to deliver the claims
service our customers need to move forward with their lives.
The Claims team at Brit are pragmatic, transparent and
innovative. We approach claims with a hands-on, practical
mindset. Our efforts focus on solving challenges with agility.
In that regard, if an innovative approach creates the best
outcome for our customers, we embrace it. Transparency
and open communication remain central to how we operate,
internally, with our Market and with our insureds.
strategic report
18 Brit Group Holdings Limited Annual Report 2025
We manage a wide variety of complex matters spanning different
industries, geographies and legal frameworks. We equip market-
leading talent with cutting-edge tools to enhance our service.
We believe every client deserves to feel heard, supported and
confident that they’ll receive a fair resolution. Our goal is not just
to collaborate with our Underwriters, but to function as one.
• Complex claims management:
The Brit Claims teams will often have to manage incredibly
complex claims in challenging jurisdictions. In 2025, cyber
events, geopolitical tensions, and natural catastrophes
triggered events that required the Brit Claims team to
respond with urgency and expertise. Our customers range
from private homeowners and small businesses to large
commercial insureds and sophisticated insurance carriers
reinsured by Brit.
• Market recognition:
In 2025, the Brit Claims team was consistently recognised for
its quality, leadership and service, winning five awards from
different market associations, press and trade organisations.
The Lloyd’s Market Association (LMA) awarded the Brit Claims
team with its Claims Innovation award for leading the market
in developing a solution that transforms fragmented delegated
claims bordereaux files into a structured, unified format,
providing visibility and reporting of the data at the highest
quality known in the market. Brit was awarded four additional
awards during the year for 2025 Excellence in Claims
Achievement and Claims Champion of the Year (Insurance
Times), 2025 Claims Service Award (Insurance Insider) and the
2025 Major Loss Award Winner (British Insurance Awards).
The judges from the Insurance Times Claims Excellence
Awards who gave Brit the Claims Achievement Award
remarked, “when faced with unprecedented challenges in an
exceptionally high-risk salvage operation, Brit showcased the
very best in claims achievement. Through collective bravery
and rapid actions, they demonstrate the vital role played by
the insurance sector and Lloyd’s of London, bringing together
world-class specialists to mitigate a potential catastrophe in
real time and at short notice.”
Other underwriting developments
• Focus on underwriting capability development
Brit continues to make good progress with its investment
in digital and data-enabled capabilities. In 2025, we have
successfully expanded our new pricing and rating engine
platform to further classes and continued to develop
additional capabilities that will benefit multiple classes. This
technology facilitates greater underwriting capability and
has resulted in faster pricing and improved performance.
• Brit Reinsurance (Bermuda) Limited expansion
In 2024, Brit announced its intent to embark on a strategic
plan to significantly expand its presence in Bermuda,
to complement our existing reinsurance underwriting
capabilities in London. In 2025 we have started to deliver
on this plan, with Brit Re achieving third party insurance
premium written of $120.5m (2024: $17.7m).
In January 2026, AM Best affirmed its Brit Re Financial
Strength Rating of A (Excellent) and a Long-Term Issuer
Credit Rating of ‘a’ (Excellent). In affirming Brit Re’s rating,
AM Best assessed its balance sheet strength as ‘very
strong’ and noted this as being ‘supported by historically
profitable underwriting results’. We are pleased that AM
Best has affirmed its rating as we continue our strategy to
meaningfully grow Brit Re’s third party premium income.
• Successful placement of Brit-sponsored catastrophe bond
To provide additional long-term tail risk protection, Brit
successfully sponsored a new catastrophe bond placement
(named ‘Lapis’), providing $100m of cover from 1 April
2025 until the end of 2028. Current market conditions
for catastrophe bonds make this a preferable option over
traditional reinsurance. This bond has been issued via the
Lloyd’s ‘London Bridge 2 PCC’ investment platform, which
provides an access point for qualifying institutional investors
to deploy funds in a tax transparent way into the Lloyd’s
market. This also forms part of a wider restructure of our
catastrophe protection alongside the purchase of a new
$100m Earthquake Industry Loss Warranty and Direct and
Facultative Excess of Loss cover.
• Senior underwriting appointments
Syndicate 2988: Jonathan Mudd (Managing Director
Financial Professional and Deputy Active Underwriter
Syndicate 2988) succeeded Simon Bird as Active Underwriter
for Syndicate 2988 with effect from 10 April 2025.
business review
strategic report
Brit Group Holdings Limited Annual Report 2025 19
Other key business developments
Other key strategic developments during 2025 have included:
• Ki separation
In December 2024 it was announced that Ki would become a
separate operation within the Fairfax group from 1 January
2025. Over the last four years, Ki has grown significantly and
evolved to become a digital follow platform offering capacity
from multiple syndicates with over $1 billion of insurance
premium written through its platform in 2024. The scale,
sophistication and growth potential of Ki made this separation
a natural next step, enabling Brit and Ki to focus on their core
strengths in ‘lead’ and ‘follow’ respectively. We are immensely
proud of Ki’s success and look forward to a continued close
partnership between the Brit and Ki operations.
To facilitate the separation of Ki, the Fairfax UK Holdings Limited
group was restructured under two holding companies:
• Brit Group Holdings Limited, a wholly owned direct
subsidiary of Fairfax UK Holdings Limited incorporated on
7 August 2024, is the new holding company for the Brit
insurance businesses. Brit Group Holdings Limited became
the holding company for the Brit Group on 12 December
2024 when Fairfax UK Holdings Limited’s investment in
Brit Insurance Holdings Limited (an intermediate holding
company itself) was transferred to it.
• Ki Financial Limited, also a direct subsidiary of Fairfax UK
Holdings Limited, remains the holding company for the Ki
insurance businesses.
From 1 January 2025, the Brit and Ki insurance businesses
are operating independently, with these two holding companies
preparing their own consolidated accounts and being the key
reporting groups for their respective businesses.
The consolidated financial statements included in this
Annual Report, including comparatives, present the annual
consolidated position for the Brit Group Holdings Limited
Group for the first time. All amounts presented in these
financial statements, including comparatives, are for the
consolidated Brit Group Holdings Limited Group only and
therefore do not include amounts arising in the Ki Group
or in Fairfax UK Holdings Limited. Refer to Note 2.1 of the
consolidated financial statements for further details.
• Digital, data and artificial intelligence (AI) strategy
We continue to advance our strategy to deliver a digital,
data and AI driven platform that improves our underwriting
performance and capabilities. Our strategy is to advance
the development and adoption of AI solutions/AI Agents
through three methods: our internal data science team,
off-the-shelf products, and partnerships with external
AI vendors. In 2025, we focused on adoption and accelerating
experimentation via an AI lab for smarter underwriting. We
have also launched our AI learning programme, for staff
to learn how to use AI for maximum value and to adapt
our ways of working to become more AI assisted. We have
also embedded our AI Policy across the Group, selected
several AI Champions and selected 20 AI proposals from our
Champions for development and mobilisation.
• Simplification
We have continued to develop and implement our ‘Simplification’
strategy, including leveraging our AI and underwriting
capability initiatives, and implementing revised outsourced
support models.
• Senior Brit corporate appointments
• Brit Group Holdings Limited Board changes:
Following the Brit group restructuring a new board was
constituted comprising Gavin Wilkinson (appointed
2 October 2024) and Martin Thompson, Gordon Campbell,
Simon Lee, Andie Welsch and Mike Wallace (all appointed
21 January 2025). Jean-Jacques Henchoz became a Non-
Executive Director with effect from 1 May 2025.
• Brit Syndicates Limited board changes: On 2 April
2025, Brit announced the appointment of Jean-Jacques
Henchoz to the board of Brit Syndicates Limited as a
Non-Executive Director, with effect from 1 May 2025.
strategic report
20 Brit Group Holdings Limited Annual Report 2025
Overall performance
Return on net tangible assets (RoNTA)
28.8%
19.4%
12.6%
51.9%
25.8%
28.8%
2021
2022
2
023
2024
2025
0 10 20 30 40 50
RoNTA shows the return generated by our operations
for our shareholder before foreign exchange
movements, compared to the adjusted net tangible
assets deployed in our business attributable to our
owners. The impact of the group’s defined benefit
pension schemes is excluded from both the return and
the assets in the calculation.
In 2025, our RoNTA was 28.8%, reflecting a positive
underwriting result and a strong return on invested
assets.
financial performance review
Key Performance Indicators
At Brit we monitor and measure our performance by
reference to certain key performance indicators (KPIs).
These KPIs are used by us to manage our business and allow
us to see, at a glance, how we are performing.
Our five KPIs show the returns that we are generating, the
performance of our underwriting activities, our risk adjusted
rate change, our investment portfolio, and our financial
strength. The development of our KPIs over the five years (set
out below) reflects our focus on underwriting performance
and improving underwriting market conditions, together with
the challenges presented by the increased frequency and
severity of catastrophe events, COVID-19, and the increase in
investment market volatility.
A reconciliation of each KPI to the amounts presented in
the financial statements, where relevant, is included in the
‘key performance indicators and alternative performance
measures’ section of the Annual Report starting on page 183
and definitions of each of our KPIs are included in the Glossary
starting on page 188.
The 2025 and 2024 figures are for Brit Group Holdings
Limited. The figures for 2021 to 2023 are as previously
reported for Brit Limited and therefore include Ki between
2021 and 2023. The figures for 2022 to 2025 are reported
on an IFRS 17 (Insurance Contracts) basis, while the figures
for 2021 are as previously reported under IFRS 4 (Insurance
Contracts).
strategic report
Brit Group Holdings Limited Annual Report 2025 21
Underwriting
Combined ratio (undiscounted basis)
89.3%
95.7%
96.2%
85.3%
85.3%
89.3%
2021
2022
2
023
2024
2025
0 20 40 60 80 100
The combined ratio on an undiscounted basis in respect
of continuing business is our key underwriting metric and
measures the profitability of our underwriting. It shows
how much of every $1 of premium is spent in the total
costs of sourcing and underwriting the business and
settling claims. A combined ratio under 100% indicates
underwriting profitability.
Our undiscounted combined ratio in 2025 was 89.3%
(2024: 85.3%).
Underwriting
Risk adjusted rate change
(4.8)%
12.9%
12.4%
7.1%
(1.4)%
(4.8)%
2021
2022
2
023
2024
2025
-4 -2 0 2 4 6 8 10 12
The risk adjusted rate change (RARC) shows whether
premium rates are increasing, reflecting a hardening
market, or decreasing, reflecting a softening market.
A hardening market is one indicator of increasing
profitability. The data reflects internal estimates by
Brit’s underwriters, based on available year-on-year
underlying renewal data after allowing for changes to
terms and conditions. Generally, no adjustment is made
to the figures to reflect the impact of inflation beyond
the level of inflation in the underlying exposure measure
used in pricing.
In 2025, we experienced RARC of -4.8% (2024: -1.4%).
Investment management
Investment return
9.0%
3.3%
(2.3)%
6.2%
4.8%
9.0%
2021
2022
2023
2024
2025
-3 -2 -1 0 1 2 3 4 5 6 7 8 9
We assess the performance of our investment portfolio
by comparing the return generated by our invested
assets, net of external investment related expenses,
against the average value of those invested assets.
Our investment strategy takes a long-term view of
markets, which can lead to significant variations in our
year-on-year return figures.
Capital management
Capital ratio
175.2%
139.1%
139.9%
154.5%
147.9%
175.2%
2021
2022
2023
2024
2025
0 20 40 60 80 100 120 140 160 180
The available capital ratio measures our financial
strength position by comparing our available capital
resources to the capital we need to hold to meet our
management capital requirements.
Our financial position remains strong. At 31 December
2025, Group capital resources totalled $3,551.3m
(2024: $2,541.7m) giving surplus management capital of
$1,524.7m (2024: $823.1m), or 175.2% over our Group
management capital requirement. During the period,
our management capital requirements increased from
$1,718.6m to $2,026.6m, primarily resulting from our
2026 underwriting plans.
The increase in our capital resources in 2025 reflects
strong profitability in the current period and the Group
becoming the co-obligor on two existing unsecured
senior notes, issued by Fairfax, with a total nominal
of CAD 700.0m. This was partly offset by capital
distributions to Fairfax.
strategic report
22 Brit Group Holdings Limited Annual Report 2025
Overview of Results
The Group’s income statement, re-presented to show the key components of our result, is set out below:
2025
$m
2024
$m
Insurance premium written 3,091.7 2,978.5
Insurance revenue 2,950.3 2,856.0
Insurance service result 446.2 557. 0
Net insurance finance expenses (244.2) (170.4)
Net investment return 586.5 272.3
Other income 92.3 122.6
Other operating expenses (166.1) (171.3)
Finance costs (25.0) (13.3)
Net foreign exchange gains/(losses) 27.0 (25.8)
Profit before tax 716.7 571.1
Tax charge (64.9) (92.7)
Profit for the year 651.8 478.4
Group performance
Our 2025 result reflected both strong underwriting and investment results.
The result for 2025 before tax was a profit of $716.7m (2024: $571.1m) and after tax was a profit of $651.8m (2024: $478.4m).
Return on adjusted net tangible assets (RoNTA) for all operations, excluding the effects of FX, was 28.8% (2024: 25.8%).
A reconciliation of each performance measure to the amounts presented in the financial statements is included in the Annual
Report starting on page 183 and a definition of each measure is included in the Glossary starting on page 188.
financial performance review
strategic report
Brit Group Holdings Limited Annual Report 2025 23
Underwriting
Insurance service result
2025
$m
2024
$m
Insurance revenue 2,950.3 2,856.0
Allocation of reinsurance premiums (480.6) (561.9)
Net insurance revenue 2,469.7 2,294.1
Insurance claims and claims-related expenses (1, 537.8) (1,405.7)
Amounts recoverable from reinsurers 329.1 428.7
Net insurance claims (1,208.7) (9 77. 0)
Acquisition expenses (736.2) (715.5)
Other directly attributable expenses (78.6) (44.6)
Insurance-related expenses (814.8) (760.1)
Insurance service result 446.2 557. 0
Undiscounted combined ratio 89.3% 85.3%
Discounted combined ratio 81.9% 75.7%
Overall, we delivered a discounted combined ratio of 81.9% (2024: 75.7%) and an insurance service result of $446.2m (2024:
$557.0m), a decrease of 19.9%. We have also delivered an undiscounted combined ratio of 89.3% (2024: 85.3%). This result
demonstrates positive underlying underwriting performance despite market conditions and higher major losses.
(i) Net insurance revenue
Net insurance revenue, which comprises insurance revenue less an allocation of reinsurance premiums, increased by 7.7%
to $2,469.7m (2024: $2,294.1m). This was driven by an increase in total insurance revenue and a reduction in reinsurance
premiums, as set out below.
Insurance revenue
Insurance revenue increased by 3.3% to $2,950.3m (2024: $2,856.0m) during 2025. This increase was primarily driven by growth
in Property and Specialty. This reflects strong writing trends from 2024 and growth this year as we continue to grow this segment.
These gains were partially offset by revenue declines in other classes, most notably Programmes & Facilities following unfavourable
prior year premium development.
Insurance revenue comprises gross premiums earned less inwards reinstatement premiums, profit commissions and non-distinct
investment components, and is net of assuming ceding commissions earned on inwards reinsurance.
Allocation of reinsurance premiums
The allocation of reinsurance premiums decreased by 14.5% to $480.6m (2024: $561.9m). This reflects Brit’s ongoing strategy
to optimise the outwards programme to cede less profitable business.
The allocation of reinsurance premiums comprises ceded premiums earned less outwards reinstatement premiums, profit
commissions and non-distinct investment components, and is net of outwards ceding commissions.
strategic report
24 Brit Group Holdings Limited Annual Report 2025
financial performance review
(ii) Net insurance claims
Net insurance claims, which comprises claims and claims-related expenses net of amounts recoverable from reinsurers,
increased by 23.7% to $1,208.7m (2024: $977.0m).
Claims
Our claims ratio deteriorated by 6.3pps to 48.9% (2024: 42.6%) on a discounted basis, which reflects:
• Attritional losses: We continue to see strong underlying performance from our underwriting portfolios, with our attritional
performance broadly stable year-on-year. This primarily reflects improved attritional ratios for Financial and Professional
Liability, Property Treaty, and Property and Specialty.
• Catastrophe losses: Major losses relate primarily to the LA wildfires ($159.3m) and to a lesser extent Hurricane Melissa
($22.3m). The LA Wildfire losses were partially offset by $23.3m recognised for related reinstatement premiums, resulting
in total major losses of $158.3m. This compares adversely to $113.5m of major losses in the prior year relating to Hurricane
Helene and Hurricane Milton. A breakdown is provided in the table below.
• Prior year reserve releases: We recognised favourable prior year development of $58.4m in 2025 (2024: $100.3m), after
the impact of discounting. This was driven by a reduction in loss estimates for prior year catastrophes and prior year
releases on our risk adjustment.
Brit’s undiscounted best estimate reserves for major losses, net of amounts recoverable from reinsurers and reinstatement
premiums, totalled $158.3m (2024: $113.5m). The events to which Brit had material exposure were as follows:
2025
$m
2024
$m
LA wildfires 136.0 –
Hurricane Melissa 22.3 –
Hurricane Helene – 47.3
Hurricane Milton – 66.2
Total catastrophe losses 158.3 113.5
We continue to reserve conservatively and have increased our reserves to the 80th percentile (2024: 78th percentile),
resulting in a net risk adjustment above the best estimate of claims reserve of $231.1m (2024: $186.4m).
(iii) Insurance-related expenses
Insurance-related expenses, which comprises acquisition expenses and other directly attributable expenses, increased by
$54.7m to $814.8m (2024: $760.1m).
Acquisition expenses increased by $20.7m to $736.2m (2024: $715.5m). This consists of direct commission costs (2025: $593.6m;
2024: $573.2m) and an allocation of the expense base which are deemed directly related to the acquisition of insurance contracts
(2025: $142.7m; 2024: $142.3m). The increase in commission costs is driven primarily to more contracts being written.
Other attributable expenses increased by $34.0m to $78.6m (2024: $44.6m), driven by increased staff costs in the period, as
well as an update to the allocation assumptions. The allocation updates shifted a proportion of underwriting and shared service
costs from other operating expenses to insurance service expenses.
strategic report
Brit Group Holdings Limited Annual Report 2025 25
The Group expense base is discussed below.
Net finance (expense)/income from insurance and reinsurance contracts
The analysis between the unwind of discounting and the impact of changes in interest rates is as follows:
2025
$m
2024
$m
Insurance
contracts
issued
Reinsurance
contracts
held Total
Insurance
contracts
issued
Reinsurance
contracts
held Total
Unwind of discount 225.7 (69.0) 156.7 270.8 (80.7) 190.1
Impact of changes in interest rates 106.3 (18.8) 87.5 (44.5) 24.8 (19.7)
332.0 (87.8) 244.2 226.3 (55.9) 170.4
Net finance expense rose to $244.2m, an increase of $73.8m compared with the prior year. A key driver was the decline in
discount rates — c80bps over the period — which had an unfavourable impact on the valuation of net insurance reserves.
As discount rates fall, the present value of net insurance reserves increases, resulting in an insurance net finance expense.
Net investment return
The investment portfolio is managed, for the most part, by Hamblin Watsa Investment Counsel Limited, a Fairfax subsidiary with
an excellent long-term track record, whose sole business is managing investment portfolios of Fairfax group companies. They
are supported by a number of external managers covering core fixed income and specialised credit mandates.
Our net investment return was a positive $586.5m or 9.0% (2024: $272.3m or 4.8%). This result is analysed below:
2025
$m
2024
$m
Income 246.4 223.8
Realised gains 18.9 92.6
Unrealised gains/(losses) 347.1 (22.7)
Investment return before fees 612.4 293.7
Investment management fees (18.4) (14.9)
Investment return, net of fees 594.0 278.8
Investment related derivative return ( 7.5) (6.5)
Total return 586.5 272.3
Total return 9.0% 4.8%
Equity markets were positive in 2025, buoyed by AI optimism and interest rate cuts, and weathered bouts of volatility driven by
US trade policy announcements. Our equity portfolio generated a positive return of $151.3m (2024: $74.8m), benefiting from
a value focused approach. Our return on fund investments was a positive $151.2m (2024: $97.4m).
The fixed income portfolio generated a return of $260.6m (2024: $78.0m), as capital gains added to income in the portfolio,
while mortgages and loans generated $6.6m (2024: $8.3m). The US Government bond yield curve fell up to 77bps across the
curve, excluding the 30-year tenor which rose 6bps, as markets evaluated the impact of trade tariffs and the One Big Beautiful
Bill act introduced by the US President Trump and the US Federal Reserve cut rates 25bps in each of September, October and
December. Over 2025, the US two-year yield fell from 4.24% to 3.48%, the five-year yield fell from 4.38% to 3.73% and the
ten-year yield fell from 4.57% to 4.17%. Investment grade spreads narrowed in the US from 0.60% to 0.59% and from 0.92%
to 0.66% in Europe. High yield spreads in the US narrowed from 2.87% to 2.68% and in Europe narrowed from 3.08% to 2.64%.
Cash and cash equivalents generated interest of $37.9m (2024: $35.2m). Our approach to cash management during the year has,
and continues to be, to limit the amount of operational cash and to maximise amounts held within short-term government bills.
At 31 December 2025, the running yield (expressed as yield as a percentage of invested assets) of our total portfolio was 3.0%
(2024 3.8%).
strategic report
26 Brit Group Holdings Limited Annual Report 2025
financial performance review
Other income
Other income totalled $92.3m (2024: $122.6m), as set out below:
2025
$m
2024
$m
Fee and commission income 32.0 41.5
Losses on other financial liabilities – (4.6)
Change in value of ultimate parent company shares 46.8 65.9
Profit on sale of associate – 15.2
Other 13.5 4.6
Total other income 92.3 122.6
Fee and commission income generated by the Group decreased by $9.5m to $32.0m (2024: $41.5m). This was predominantly
driven by a reduction in our managing agency income from our non-aligned syndicates, following the transfer of the
management of Ki Syndicate 1618 from Brit Syndicates Limited to Asta Managing Agency Ltd on 1 January 2025. This was
partly offset by increased commissions from consortia management.
Total operating expenses
Operating expenses were classified as follows:
2025
$m
2024
$m
Insurance service expenses excluding claims and commissions 248.3 210.5
Net expenses from reinsurance contracts held 3.2 2.8
Other operating expenses 166.1 171.3
Total operating expenses 417.6 384.6
Total operating expenses during 2025 increased by 8.6% to $417.6m (2024: $384.6m). The main contributors to this increase
were headcount, legal and professional fees, IT infrastructure costs and regulatory fees.
At 31 December 2025, Group headcount was 792 (2024: 770). The increase was primarily due to targeted underwriting
expansion and the related growth of support functions.
A further breakdown of expenses is given in Note 10 to the financial statements.
Net foreign exchange gains/(losses)
We manage our currency exposures to mitigate the impact on solvency rather than to achieve a short-term impact on earnings.
We experienced a foreign exchange gain of $27.0m in 2025 (2024: loss of $25.8m), reflecting the movement of the US dollar
against other currencies in which we trade and hold assets, and the impact of FX related derivatives purchased by the Group.
2025
$m
2024
$m
Net foreign exchange gains/(losses) 17.5 (51.3)
Gains on derivative contracts – FX related instruments 9.5 25.5
Total net foreign exchange gains/(losses) 27.0 (25.8)
Finance costs
Finance costs totalled $25.0m (2024: $13.3m) and represented cost of the revolving credit facility and other bank borrowings,
the coupons on the subordinated debt, the coupons on senior debt and interest payable on lease liabilities.
strategic report
Brit Group Holdings Limited Annual Report 2025 27
Tax charge
Our tax charge for 2025 resulted in a tax charge of $64.9m (2024: tax charge of $92.7), based on a Group profit before tax
of $716.7m (2024: profit before tax of $571.1m).
This charge of $64.9m comprised current tax charge of $53.1m and a deferred tax charge of $11.8m.
The Group is liable to taxes on its corporate income in several jurisdictions where its companies carry on business, most
notably the UK and Bermuda. The tax charge is calculated in each legal entity across the Group and then consolidated.
Therefore, the Group effective rate is sensitive to the location of taxable profits and is a composite tax rate reflecting the mix
of tax rates in those jurisdictions.
The 2025 Group rate varies from the weighted average rate in those jurisdictions due to several factors. The principal factors
are the impact of the reduction in the unrecognised deferred tax asset in respect of losses which is now fully recognised,
prior year adjustments and realised and unrealised gains on equities which are not taxable in Bermuda. The rate is further
influenced by the impact of exempt income such as dividend income, disallowable expenses and by non-UK taxes arising in our
Lloyd’s syndicates.
28
strategic report
Brit Group Holdings Limited Annual Report 2025 29
financial position and capital strength
Financial position
At 31 December 2025, our adjusted net tangible assets
totalled $2,666.0m (2024: $2,241.7m).
Summary consolidated statement of financial position
2025
$m
2024
$m
Assets
Intangible assets
65.1 54.2
Reinsurance contract assets
1,668.3 1,707. 2
Insurance and other receivables
578.2 673.6
Financial investments and cash
7, 321.7 5,750.5
Investment related derivatives
12.0 7.0
FX related derivatives 2.6 8.0
Other assets 33.2 57.6
Total assets 9,681.1 8,258.1
Liabilities
Insurance contract liabilities
5,786.0 5,343.2
Borrowings
685.3 159.5
Investment related derivatives
8.3 7.6
FX related derivatives
5.2 4.5
Insurance and other payables 316.9 342.8
Other liabilities 155.6 108.9
Total liabilities 6,957.3 5,966.5
Net assets
2,723.8 2,291.6
Adjusted net tangible assets (Note 1)
2,666.0 2,241.7
Note 1: A reconciliation of adjusted net tangible assets to the amounts presented in the
financial statements is included in the Annual Report on page 183.
All our net assets at 31 December 2024 and 31 December
2025 were attributable to the owners of Brit Group Holdings
Limited.
In addition to the result recognised through the consolidated
income statement, the other movements in our net assets as
recognised in the Consolidated Statement of Comprehensive
Income and the Consolidated Statement of Changes in Equity
included defined benefit pension scheme related gains and
charges (2025: $4.0m net gains; 2024: $5.0m net loss);
changes in unrealised foreign currency translation gains on
foreign operations (2025: $12.4m net gains; 2024: $2.7m net
loss); dividends paid (2025: $236.0m; 2024: $140.6m).
Capital strength
Brit is strongly capitalised from both a regulatory and a ratings
agency standpoint, a factor critical to the long-term success of
an insurance company.
At 31 December 2025 we held an available capital surplus of
$1,524.7m or 175.2% (31 December 2024: $823.1m or 147.9%)
over our Group management capital requirement of $2,026.6m
(31 December 2024: $1,718.6m). The increase in the surplus
was driven by the additional $514.5m capital resources related
to senior debt (see below), transfer of subordinated debt of
$170.8m to BGHL in January 2025 and total comprehensive
income for the period ($668.2m), partially offset by the
increase in the Group’s management capital requirement.
• Following the recent restructuring of the group, on
22 January 2025 Brit Group Holdings Limited was
substituted in place of Brit Limited (renamed Fairfax UK
Holdings Limited on 11 March 2025 and therefore referred
to by this new name in this Report) as issuer and principal
debtor under the listed subordinated debt notes that are
denominated in GBP, have a principal amount of £127.0m,
mature in 2030 and carry a coupon rate of 3.6757%.
• On 16 May 2025 the Group’s revolving credit facility (RCF)
was reduced from $550.0m to $415.0m and term extended
from December 2027 to December 2029, with options to
extend for either one or two years to either December 2030
or 2031. In accordance with the Group’s Capital Policy, a
maximum of $200.0m of the RCF forms part of our available
capital resources (31 December 2024: $300.0m). In respect
of this facility at 31 December 2025 and 31 December 2024
there was no letter of credit (LoC) outstanding and no cash
drawings.
• On 17 June 2025 the Group became co-obligor on two
senior unsecured notes previously issued by Fairfax
Financial Holdings Limited. As part of this transaction the
Group received $519.8m in cash and cash equivalents,
representing the fair value of the notes on that date.
These notes, which are listed on the Dublin Stock Exchange,
are denominated in Canadian Dollars (CAD). They consist
of CAD 450.0m with a 4.73% coupon maturing in November
2034, and CAD 250.0m with a 5.23% coupon maturing in
November 2054.
The total carrying amount of senior debt at 31 December 2025
was $514.5m.
Dividends
During 2025, dividends totalling $236.0m were paid from
Brit Group Holdings Limited. In the comparative period
dividends totalling $140.6m were paid by Brit Insurance
Holdings Limited.
Reserving policy
Preserving a strong financial position is critical to the long-
term success of an insurance business. The Group maintains
appropriate loss reserves to cover its estimated future
liabilities. Reserves are estimates that involve actuarial and
statistical projections of the expected cost of the ultimate
settlement and administration of claims. The reserving
process is robust and managed by the Chief Risk Officer
and Chief Actuary and under the oversight of the Reserving
Committee. Reserving estimates are prepared quarterly
and are based on facts and circumstances then known,
predictions of future developments, estimates of future
trends in claims frequency and severity and other variable
factors such as inflation. Movement in these reserves forms
an integral element of our operating result.
Maintaining reserves is critical to safeguard future
obligations to policyholders and our approach provides
strategic report
30 Brit Group Holdings Limited Annual Report 2025
a secure foundation. It also provides a secure foundation for the pricing of new business which is particularly critical in a soft
rating environment.
Our reserving policy is to reserve to a best estimate and carry an explicit risk adjustment, as required under IFRS 17
(Insurance Contracts) above that best estimate. Under the requirements of IFRS 17, we also apply discounting to our reserves.
Asset allocation
Brit’s invested assets (financial investments, cash and cash equivalents and investment derivative contracts) at 31 December
2025 were $7,325.4m (2024: $5,749.9m).
Our asset allocation, on both a look-through basis and statutory disclosure basis, is set out in the tables below. The look-though
basis sets out the underlying instruments held within our debt securities portfolio and within our specialised investment funds.
Statutory basis
31 December 2025
Equity
securities
$m
Debt
securities
$m
Loan
ultimate
parent
$m
Loan
instruments
$m
Specialised
investment
funds
$m
Cash
and cash
equivalents
$m
Derivative
assets
(net)
$m
Derivative
liabilities
$m
Total
invested
assets
(look-
through)
$m
Look-through basis
Government debt securities
– 4,312.2 – – 180.8 – – – 4,493.0
Corporate debt securities
– 443.0 – – 77.1 – – – 520.1
Structured products
– – – – 29.6 – – – 29.6
Loan instruments
– – 200.0 70.4 12.5 – – – 282.9
Equity securities
791.6 – – – 624.4 – – – 1,416.0
Cash and cash equivalents
– – – – 1.6 577.2 – – 578.8
Investment related derivatives
– – – – 1.3 – 12.0 (8.3) 5.0
Total invested assets (statutory) 791.6 4,755.2 200.0 70.4 927.3 57 7.2 12.0 (8.3) 7, 32 5. 4
31 December 2024
Look-through basis
Government debt securities – 2,444.2 – – 168.0 – – – 2,612.2
Corporate debt securities – 1,367.3 – – 81.5 – – – 1,448.8
Structured products – – – 27. 8 – – – 27.8
Loan instruments – – – 83.0 13.6 – – – 96.6
Equity securities 620.4 – – – 464.1 – – – 1,084.5
Cash and cash equivalents – – – – 1.5 476.4 – – 47 7.9
Investment related derivatives – – – – 2.7 – 7.0 (7. 6) 2.1
Total invested assets (statutory) 620.4 3,811.5 – 83.0 759.2 476.4 7.0 (7. 6) 5,749.9
The assets remain primarily invested in cash and fixed income securities (2025: $5,874.8m or 80.2% of the portfolio; 2024:
$4,635.5m or 80.6%). The fixed income portfolio is short dated, with a majority allocation to government bills. Corporate bonds
and other loan instruments represent 11.0% (2024: 26.9%) of the total portfolio with only 0.3% (2024: 0.5%) of this figure
being below investment grade.
The allocation to credit decreased over the year. The allocation to credit risk, is primarily defensive, focused on high quality,
investment grade non-cyclical companies. Equity allocations are invested in a portfolio of both listed and private (non-listed)
equities and funds.
The exposure to equities, funds and structured products has increased over 2025 (2025: $1,445.6m or 19.7% of the portfolio;
2024: $1,112.3m or 19.3% of the portfolio), driven by market movements.
At 31 December 2025, the duration of our assets was marginally short compared to the duration of our liabilities.
financial position and capital strength
strategic report
Brit Group Holdings Limited Annual Report 2025 31
At 31 December 2025, 76.0% of our invested assets were
investment grade quality (2024: 75.4%). An analysis of the
credit quality of our invested assets is set out below:
Invested assets by rating
2025
%
2024
%
AAA 6.8 48.7
AA
58.5 2.8
A
8.1 17.5
BBB and below
2.6 6.4
Other 24.0 24.6
Total 100.0 100.0
Other includes equities, funds and investment related derivatives
Gearing
At 31 December 2025, our gearing ratio was 20.4%
(2024: 0.0%).
We have in issue £127.0m of 3.6757% subordinated debt with
a carrying value of £127.0m/$170.8m (2024: £nil/$nil). The
subordinated debt was previously held with Brit Limited and
transferred to Brit Group Holdings Limited on 22 January 2025.
This instrument, which is listed on the London Stock Exchange,
was issued in December 2005 and matures on 9 December 2030.
Additionally, on 17 June 2025 the Group became co-obligor
on two senior unsecured notes previously issued by Fairfax
Financial Holdings Limited (the Group’s ultimate parent). The
senior debt consists of CAD 450.0m with a 4.73% coupon
maturing in November 2034, and CAD 250.0m with a 5.23%
coupon maturing in November 2054. As part of this transaction
the Group received $519.8m in cash and cash equivalents,
representing the fair value of the notes on that date. These
notes, which are listed on the Dublin Stock Exchange, are
denominated in Canadian Dollars (CAD).
Brit has in place a $415.0m (2024: $550.0m) revolving credit
facility (RCF), the expiration date of which is 31 December
2029. Under our capital policy we have allocated a maximum of
$200.0m (2024: $300.0m) of this facility to form part of our
capital resources, with the balance available for liquidity funding.
At 31 December 2025, the cash drawings on the facility were $nil
(2024: $nil), with no letters of credit (LoCs) in place (2024: $nil).
At the date of this report, these borrowings were unchanged.
Adjusted Net Tangible Assets (NTA) at 31 December 2025
totalled $2,666.0m. Total debt comprised $514.5m of senior
debt and $170.8m of subordinated debt. On this basis, gearing is
calculated as total borrowings (senior debt, subordinated debt,
revolving credit facility cash drawdowns and uncollateralised
drawn letters of credit) divided by adjusted NTA plus total
borrowings. This results in a gearing ratio consistent with the
20.4% reported for the year.
Foreign exchange management
At 31 December 2025, our US-dollar denominated net assets
equated to 109.3% of our total net assets (2024: 95.9%),
reflecting the currency denomination of the majority of the
business we write. Our net assets, analysed by currency, are
as follows:
Net assets/(liabilities) by currency
2025
%
2024
%
US dollar 109.3 95.9
Sterling 1.3 (1.6)
Canadian dollar (14.9) 3.4
Euro 4.6 2.4
Australian dollar (0.3) (0.1)
Total 100.0 100.0
The reporting currency for the Group’s consolidated Financial
Statements is US dollars, as are the functional and reporting
currencies of a number of our subsidiaries, including all of
our underwriting subsidiaries. A portion of our revenues
and expenses, and assets and liabilities, are denominated
in currencies other than US dollars, hence we are exposed
to fluctuations in the values of those currencies against the
US dollar. These fluctuations impact our reported operating
results and our assets and liabilities.
Our strategic approach to managing FX risk is to match the
currencies of our liabilities and capital requirements with the
assets we hold. As a consequence of this, because we report
our results in US dollars, we import some exchange rate
volatility into the income statement through the revaluation of
our net tangible assets. The Group’s net tangible assets are,
however, largely matched against our capital requirement,
protecting our shareholder against the risk of additional
capital being required as a result of FX volatility. Any excess
is held in US dollars.
strategic report
32 Brit Group Holdings Limited Annual Report 2025
Risk Management Framework
Brit delivers shareholder value by actively seeking and accepting risk within agreed limits. Risk management at Brit is a
continuous process that links directly to the organisation’s business and risk management strategies and the associated Board
risk tolerances.
Brit’s Risk Management Framework (RMF) applies a consistent methodology and structure to how risks are identified,
measured, managed and monitored. This process enables us to protect policyholders and maximise shareholder value by
ensuring the risk and capital implications of business strategy are well understood.
The RMF has the following key elements:
Element Element Description Responsibility Oversight
Identification Risk events, risks and relevant controls are
identified and classified. This is a continuous
process which considers any emerging and
existing risks. The risk register sets out the
significant risks faced by the business and
identifies the potential impact and likelihood
of each risk.
Chief Risk Officer, supported by
the Risk function
Risk Oversight Committee
(ROC)/Board
Measurement Risks are assessed and quantified and
controls are evaluated. This is done through a
combination of stochastic modelling techniques,
stress and scenario analysis, reverse stress
testing and qualitative assessment using
relevant internal and external data.
Chief Risk Officer, supported by
the Risk function
ROC/Board
Management The information resulting from risk identification
and measurement is used to improve how the
business is managed.
Senior management, with
guidance from CRO and Risk
function
ROC/Board
A key part of the RMF is the setting of risk tolerances and risk appetite. Risk tolerances are set by the relevant Board and
represent the maximum amount of risk Brit is willing to accept to meet its strategic objectives. Risk appetites are set by
management and reflect the maximum amount of risk that Brit wishes to take in the current market environment. The actual
amount of risk taken is monitored against the tolerances and appetites on an ongoing basis.
The RMF, including the risk tolerances and appetite, reflects Brit’s strategy and seeks to ensure that risk is accepted in the
areas which are expected to maximise shareholder value whilst continuing to protect policyholders against extreme events.
The process applies to both the Brit Group and to the individual underwriting entities.
risk management, principal risks and uncertainties
strategic report
Brit Group Holdings Limited Annual Report 2025 33
Strategy
Business Strategy Risk Tolerances and Appetites
Risk Management Framework Planning and Capital Processes
Identification Business plan
Measurement Economic capital requirements
Management Capital allocation
The Risk Management function, led by the Group Chief Risk
Officer & Chief Actuary, monitors whether Brit is operating
within the risk tolerance levels approved by the relevant
Boards. This includes assessments of any new strategic
initiatives and the principal risks and uncertainties faced by
the business as detailed below.
All Brit staff are involved in ensuring there is an appropriate
risk culture which promotes the identification and
management of risk. Brit’s risk culture aims to ensure the risk
and capital implications of decisions are understood and there
is open communication about risks and issues in all areas of
the business.
Brit’s approach to risk management is designed to encourage
clear decision-making as to which risks Brit takes and how these
are managed based on the potential strategic, commercial,
financial, compliance and legal implications of these risks.
The sections below set out the approach to risk governance,
and the key risks identified, measured and managed under
the RMF.
Risk Governance
The Board is responsible for overseeing our risk management
and internal control systems, which management is responsible
for implementing.
Brit maintains a strong risk governance framework using Risk
Oversight Committees and Audit Committees whose membership
consists of independent non-executive Directors. Board,
Risk and Audit Committee agendas are designed to ensure all
significant areas of risk are reported on and discussed. The Risk
Oversight Committees monitor and review the risk profile and the
effectiveness of all risk management activities and, in particular,
monitor adherence to agreed risk limits.
Brit operates a three lines of defence model for governing
risk. Within the first line of defence individual risk committees
monitor day-to-day risk control activities. The Risk
Management function, as a second line of defence, provides
oversight of business processes and sets out policies and
procedures. Internal Audit, as a third line of defence, provides
independent assurance and monitors the effectiveness of the
risk management processes.
Our Internal Audit function provides assurance to the Risk
Oversight Committees, Audit Committees and Boards,
while external experts are regularly used for independent
assessments.
strategic report
34 Brit Group Holdings Limited Annual Report 2025
Key risks
The RMF categorises the risks to Brit as follows:
• Individual risk categories: strategic, insurance, market, liquidity, credit, and operational and Group.
• Contingent risks: earnings, solvency and reputational.
Insurance risk is the key driver of our Group management capital requirements.
The key risks and uncertainties are set out in the following table and the principal risks in the current environment are further
described below.
Risk category Risk Description
Principal
risks
Overarching
Strategic Risk that Brit’s strategy is not appropriate or is not implemented effectively.
Earnings Unexpected earnings volatility leads to unexpected losses.
Solvency Capital ratio falls below the level targeted by management.
Insurance
Underwriting – pricing Emerging experience is inconsistent with the assumptions (e.g. inflation) and
pricing models used.
✓
Underwriting – natural
catastrophe
Natural catastrophe events, including the impact of climate risk, impacting
Brit’s (re)insureds, leading to large volumes of claims.
✓
Underwriting – man-
made catastrophe
Extreme man-made events, such as terrorist attacks or cyber attacks,
impacting Brit’s (re)insureds, leading to large volumes of claims.
✓
Underwriting –
reinsurance
Failure to obtain reinsurance on attractive terms, or failure to recover under
reinsurance arrangements.
Reserving Prior year reserves are insufficient to cover claims (net of reinsurance)
e.g. due to higher than anticipated inflation.
✓
Market Investment market risk Invested assets adversely affected by changes in economic variables, such as
interest rates, inflation, bond yields, equity returns, credit spreads and credit
ratings.
✓
Currency Exchange rate fluctuations materially impact our financial performance.
Liquidity Liquidity Insufficient financial resources available to meet liabilities as they fall due.
Credit Counterparty risk Deterioration in the creditworthiness of, defaults by, or reputational issues
related to, premium debtors, reinsurers or other third parties with whom we
transact business.
Operational
and group
People Failure to attract, motivate and retain key Directors, senior underwriters,
senior management, and other key personnel, on whom our future success is
substantially dependent.
✓
Systems and processes Failure of our systems or processes, impacting our ability to conduct business
and our ability to provide continuity of service to our clients.
Information security Failure to properly protect information could compromise the confidentiality,
integrity or availability of our information and data, potentially resulting in
financial loss and legal, regulatory, and reputational consequences.
Outsourcing
arrangements
Failure on the part of any third-party to perform agreed outsourced services,
on which we are heavily reliant.
Reputational Damage to reputation due to actions taken by Brit or related parties and the
impact this has on Brit’s business and operations.
Regulatory and legal Legislation or regulation adversely affects Brit’s operations.
Conduct Failure to ensure the Group’s products and services deliver the right
outcomes for consumers.
Change management Major projects or other key changes are not implemented effectively.
risk management, principal risks and uncertainties
strategic report
Brit Group Holdings Limited Annual Report 2025 35
Principal risks
The table below provides additional information on the principal risks in the current environment and how we manage them.
Principal risk Mitigation tools Metrics Status
Underwriting – pricing
Inadequate pricing
could have a material
adverse effect
on our results
for underwriting
operations and
financial condition.
• Strategic focus on underwriting
performance rather than on top
line growth.
• Strong governance processes
around strategy and planning.
• Pricing discipline is maintained
through strict underwriting
guidelines, monitoring of the
delegated authorities and
enforcement of the technical
pricing framework.
• Efficient use of the outwards
reinsurance programme.
• Monitoring of pricing adequacy
metrics and risk adjusted rate
change.
Risk adjusted rate change (2025:
decrease of 4.8%; 2024: decrease
of 1.4%).
Following years of rate
rises from 2018 to 2023,
the market started to
soften in 2024 with
further rate reductions
experienced in 2025.
Active rebalancing of
the portfolio to manage
the underwriting cycle
remains a key focus for
management.
Underwriting – natural and man-made catastrophe
Naturally occurring
or man-made
catastrophic event(s)
could result in large
insured losses that
adversely impact our
financial results and
potentially our capital
position.
• Diverse portfolio of risks
written.
• Regular modelling and
monitoring against natural
and man-made catastrophe
risk appetite by our exposure
management team.
• Effective outwards reinsurance
programme in place.
• Clear limits set for key
accumulations and conservative
use of line size by our
underwriters.
• Identification and monitoring of
emerging risks such as climate
change, developing cyber threat
landscape and geopolitical risks.
Largest five natural and man-made
realistic disaster scenarios (based on
net of reinsurance losses):
Event
Gross
$m
Net
$m
Natural catastrophes
San Francisco Earthquake 1,512 735
Gulf of Mexico Windstorm 1,200 599
Pinellas Windstorm 1,051 552
North East Windstorm 1,071 527
Los Angeles Earthquake 844 380
Man-made catastrophes
Terror – Rockefeller Centre
517 371
Terror – WTC
527 355
NCBR – Nuclear
364 298
Cyber – Cloud Cascade
289 180
Cyber – Ransomware
Contagion 233 144
Management has
focused on actively
optimising the portfolio
to ensure gross
exposure is in line with
appetite, reinsurance
protection is adequate,
and that catastrophe
exposed business is
appropriately priced to
ensure that the Group is
resilient.
Climate risk and the
cyber threat landscape
are key considerations,
and Brit continues to
develop its assessment,
mitigation, and
management of this risk.
strategic report
36 Brit Group Holdings Limited Annual Report 2025
Principal risk Mitigation tools Metrics Status
Reserving
Estimating insurance
reserves is
inherently uncertain
and, if insufficient,
may have a material
adverse effect on
our results and
financial condition.
• Brit’s reserving philosophy has
resulted in a track record of
prior year reserve releases.
• Actuarial team recommend
reserves independently
from underwriting division
using established actuarial
techniques
Reserve releases, after discounting
and including movement in risk
adjustment, in 2025 of $58.4m
(2024: $100.3m).
Reserves are held
at a best estimate,
with an additional
risk adjustment. Our
reserves are discounted
per the provisions of
IFR S 17.
No change to the best
estimate approach from
prior years.
For 2025, the risk
adjustment has been set
at the 80th percentile
(2024: 78th percentile)
on a net basis.
Investment risk
Invested assets
are susceptible
to changes in
economic conditions.
A decrease in the
value of our invested
assets may have a
material adverse
effect on our results,
financial condition
and liquidity.
• Strong governance processes
around investment strategy.
• Regular monitoring against
investment risk appetite which
includes defined limits for
solvency, earnings risk and
liquidity risk.
• Investment guidelines in place
for individual asset classes and
monitored regularly.
Return on invested assets, net of fees
(2025: 9.0%; 2024: 4.8%).
Running yield (2025: 3.0%; 2024: 3.8%).
Financial markets
remain volatile
reflecting geopolitical
and economic
uncertainty. Our
portfolio remains
highly liquid, and was
primarily invested in
cash and investment
grade fixed income
securities at
31 December 2025.
People
The loss of key
employees or by an
inability to attract
and retain qualified
personnel, could
adversely affect Brit.
• Our remuneration strategy
(including share-based
remuneration) is designed to
reward talent and success.
We have a proven track record
in being able to retain high-
performing staff.
• Succession and contingency
plans are in place in the event
of the loss of a key employee.
• Regular monitoring of employee
turnover and morale.
• Our culture of openness,
inclusiveness and collaboration.
Staff turnover (2025: 8.2%;
2024: 10.7%).
The Group’s key
functions continued to
operate effectively.
The current
environment remains
competitive with a
number of our peers
actively seeking
talented staff. We
actively manage our
remuneration and HR
policies to ensure we
continue to retain and
attract the best staff.
Current turnover rates
remain within our
appetite.
risk management, principal risks and uncertainties
strategic report
Brit Group Holdings Limited Annual Report 2025 37
Geopolitical uncertainty and the global economic environment
Geopolitical uncertainties driven by factors such as US trade
policy and the ongoing war in Ukraine have the potential
to cause insurance losses for the Group and disruption to
financial markets which could impact the Group’s investments.
These factors give rise to recessionary and inflationary
risks, which may impact the frequency and cost of claims,
investment results, the likelihood of counterparty defaults
and the potential for operational risk events. Brit continues
to actively monitor and respond to changes in the economic
environment.
Brit has considered the impact of increased levels of inflation
and an economic downturn. Brit continues to ensure that
its pricing models adequately address current inflationary
trends. Feeding into these models is an enhanced framework
assessing the key drivers of claim settlement costs for each
class of business. Inflationary impacts are also considered
during the reserving process. Additionally, the investment
portfolio is appropriately positioned amid the uncertainty with
investment grade assets in excess of insurance liabilities,
strong credit quality in the bond portfolio and the duration
position materially consistent with the solvency matched
position (immunising the solvency position against parallel
movements in interest rates).
Emerging risks including climate change financial risks
Brit undertakes a formal emerging risk review annually with
the results reported to the Risk Oversight Committee and
included in the Own Risk & Solvency Assessment (ORSA)
report and Commercial Insurer’s Solvency Self-Assessment
(CISSA) reports of the underwriting entities. The review is
an important part of the risk identification aspect of the RMF
and includes horizon scanning of the internal and external
risk environment to identify potential new or developing risks
to Brit. These risks can then be included in the risk appetite
framework and managed appropriately as required.
The emerging risk review has previously identified risks such as
climate change and cyber risk. These risks have been managed
throughout their development and are now monitored as part
of the business-as-usual risk management process.
Climate change related financial risks are discussed on
page 43. Other emerging risks are discussed in Note 4.7 to
the financial statements, starting on page 117.
38
strategic report
Brit Group Holdings Limited Annual Report 2025 39
Introduction
To generate value, we recognise that our people, culture,
social and community strategies must be both sustainable and
aligned to the long-term interests of all our stakeholders. We
seek to make both a positive contribution to society and to be
aware of the long-term consequences of our actions. We also
seek to generate new commercial opportunities by developing
strong stakeholder relationships and by recruiting and
retaining a highly skilled, engaged and motivated workforce.
Our people and culture
Overview
Our people are our greatest asset and managing our talent
appropriately contributes significantly to our success.
Brit’s culture is a key pillar of its strategy and is designed
to support collaboration, innovation and inclusivity. We have
a strong commitment to doing what is right for Brit and its
employees.
During 2025 we continued to strengthen our highly committed
team. Through the attraction and recruitment of new talent
and the ongoing development of existing expertise, we
continued to live our culture whilst increasing our capabilities.
During 2025 we have had 99 joiners, primarily strengthening
our Technology & Data, Actuarial and Underwriting teams.
We have continued to recruit to support our strategic growth
of Brit Re in Bermuda.
We are committed to developing the capability, behavioural
and leadership skills required for our teams to outperform.
A focus in 2025 was to improve our critical conversations
capability through training and ongoing role modelling. We
recognise that feedback is vital to deliver our strategy
and demonstrates our ongoing commitment to developing
essential management and leadership capability, fostering
high-performance, and enabling constructive feedback.
In 2025 we rearticulated our vision for AI – leveraging it for
smarter underwriting and simpler operations. As part of this
vision, we launched a Group wide AI Literacy Programme to
create awareness around AI, present the opportunities and
the risks and upskill our employees to create value from it.
We also appointed AI Champions from across the business
to promote awareness, create buy-in, identify use cases
and develop AI roadmaps for their business areas, facilitate
collaboration across Brit and design, and pilot and scale AI
solutions while working closely with our data talent.
In 2025, our mental health strategy and initiatives focused
on fostering inclusive communities, reducing stigma, and
equipping employees with practical tools and support,
creating a measurable impact on wellbeing and organisational
culture.
Brit Syndicates Limited continues to have Chartered Insurer
status through the Chartered Insurance Institute. This
prestigious designation signifies to our colleagues and
customers that we are committed to the pursuit of the
highest standards and demonstrates our adherence to ethical
good practice.
Brit’s cross-functional Social Committee has continued to
organise a range of social, sports, community and charitable
events for employees during the year. We have an active
football and netball team who regularly play friendly and
competitive matches as well as running and cycling clubs.
In 2025 voluntary staff turnover was 8.2% (2024: 10.7%) and
as at 31 December 2025, our headcount was 792 (2024: 770).
39.1% (2024: 26.7%) of employees had completed more than
five years of service and 19.3% (2024: 12.0%) had completed
more than ten years’ service.
Details of Brit’s employment policies are given in the
‘Employment’ section of the Directors’ Report on page 56.
Inclusion and diversity (I&D)
2025 was another successful year for I&D at Brit.
Our four Employee Resource Groups (ERGs), covering Race
and Belonging, LGBTQ+, Gender, and Disabilities, continue
to be a focal point for our employees, alongside our Mental
Health and Wellbeing Group. These groups are an opportunity
for colleagues to come together in a safe-space and discuss
issues of importance to them, including successes and
challenges, and share ideas for events and initiatives. Our
ERGs are empowered to produce informative communications
and engaging events. Each ERG has an executive sponsor,
demonstrating our commitment to I&D from our leadership
team, as well as giving additional visibility to the groups.
Brit won the Inclusion and Diversity Award at the National
Insurance Awards, and was nominated or shortlisted for
the Insurance Insider Honours: Progress (DEI) Award, the
Insurance Post I&D Awards, and three colleagues were
finalists in the Women in Insurance awards.
Highlights from the year included: marking cultural moments,
from Lunar New Year and Eid, to Pride and Black History
Month, with events that sparked connection and learning
across our business; deepening our partnership with iCAN
(The Insurance Cultural Awareness Network), including
supporting the market’s first Eid celebration; supporting
inclusive communities through volunteering with Tonic Housing
during Pride Month; and launching our Sunflower lanyards to
support colleagues with visible and non-visible disabilities.
In September 2025, responsibility for I&D in Brit moved to
the ESG team. ESG principles form the cornerstone of how
a responsible organisation operates, both now and in the
future, and the alignment of I&D allows us to integrate our
thinking, build stronger connections between our inclusion,
diversity, sustainability and governance efforts, as well as
helping to develop more holistic and impactful initiatives.
Our Chief Actuary and Chief Risk Officer continues to be the
Executive Sponsor for I&D.
Staff engagement
Engagement with our staff allows us to assess the extent to
our people, culture, social and community matters
strategic report
40 Brit Group Holdings Limited Annual Report 2025
which they are motivated and helps us identify where we need
to focus. High engagement results have a positive impact on
our team performance and employee retention, our service
quality and our overall business performance, ultimately
benefitting all stakeholders.
In 2025 we moved our staff survey from bi-annual to annual.
Our survey results year-on-year improved. Following the
survey, each team has developed a local action plan for 2026
to continue to drive engagement.
Brit participated in the Lloyd’s culture survey in October 2025.
We had a 66% completion rate and overall the survey result
was 82% which is categorised by Lloyd’s as ‘Very Good’.
Brit believes that strong communication is key to enabling
teams to perform at their best. The Board connects with
employees through the Executive Directors, who champion
open dialogue and use a variety of channels to share updates,
invite feedback, and foster alignment around strategic
priorities and goals. Communication is delivered through
several core methods:
• The Hub (Brit’s intranet) serves as the central source
for news and evergreen resources. It also hosts internal
podcasts featuring diverse voices from across the
business.
• Email updates ensure key messages are shared in an
engaging format. Monthly Spotlight articles provide deeper
insights into different areas of the organisation.
• Working floor screens highlight information on employee
benefits, company culture, ERGs, and underwriting products.
• Company-wide Town Halls bring colleagues together to
hear updates on strategy, inclusion and diversity, and other
important topics. These sessions feature presenters from
all levels and departments, demonstrating collaboration in
action.
Social and community
We are committed to supporting the communities in which we
operate and charities that are meaningful to employees. Our
objective is to select charitable giving and community projects
based on three criteria: projects should be for a good cause
and operate in an area relevant to us, financial involvement
should be for the benefit of the good cause, and projects
should offer alignment with our strategic priorities.
During 2025, Brit donated, or made arrangements to donate,
$9.5m (2024: $3.8m) under its charitable initiatives. In
addition to this, Brit employees completed 118.5 volunteering
days (2024: 122.5 days). In the year, Brit:
• Made arrangements to donate $4.7m to a centrally
administered Fairfax charitable foundation.
• Supported ten charities chosen by employees. We donated
a sum of money to each charity at the start of the year
and continued donations with fundraising activities through
the year;
• Further promoted staff involvement in the community by
granting every employee two additional days of paid leave
a year to volunteer their time to a registered local charity;
• Continued our support for the Soweto Academy, a school
that educates boys and girls from the age of five to 18 in
Kibera, the largest slum in Africa. Ten volunteers spent a
week at the Soweto Academy in October 2025 where they
painted classrooms and dormitories, landscaped the junior
school playground and built furniture for a new science lab;
• Donated $2.8m to Blood Cancer UK, funding research into
the hardest to treat blood cancer and supporting those
affected by these conditions;
• Set up new corporate partnerships with a number of UK
charities, focusing on child welfare, loneliness and the
environment;
• Supported Team BRIT, a team of disabled motor racing
drivers, since 2017. In 2025, we continued our contract with
Team BRIT, as title sponsor, to support their racing academy
and success on the racetrack;
• Brit participated in The City Giving Day in September 2025
raising $6k; and
• Continued to run a payroll giving scheme and match any
money raised by employees participating in charitable
events. In 2025 we paid out over $281k through payroll and
gave $521k through sponsorship matching.
our people, culture, social and community
strategic report
Brit Group Holdings Limited Annual Report 2025 41
Environmental responsibility
Overview
Climate change will have a major impact on our business and
on all our stakeholders. Brit actively considers the potential
implications of climate change and sustainability on its
investment and underwriting strategies, how it should engage
more widely on environmental and ethical issues, and its own
sustainability initiatives.
We remain committed to responsible business practices and
aim to act in unison with our regulator and the rest of our
industry. We are active members of Climate Wise, submitting
our fifth report in 2025 (seeing a strong improvement in both
score and ranking), and we participate in ESG initiatives within
the Lloyd’s market and the wider Fairfax group. Brit has also
worked to incorporate guidance issued by the Taskforce of
Climate Change-Related Financial Disclosures (TCFD) into its
reporting.
During 2025 our ESG focus has been on delivering on the ESG
strategy, which has included taking steps to begin developing an
internal Transition Plan, in line with the guidance set out by the
Transition Plan Taskforce (TPT).
Governance
Board oversight
Climate change has been on our Board’s agenda since 2014.
From this point, the Board has focused on developing its
understanding of the uncertainty associated with climate
change and climate-related risks and opportunities.
While retaining direct oversight of climate change and ESG
related matters, the Board has delegated responsibility to
subsidiary boards and committees.
The Brit Syndicates Limited (BSL) board receives quarterly ESG
updates, and has nominated one of its non-executive directors
to provide Board oversight to Brit’s ESG roadmap. BSL’s Chief
Risk Officer is responsible for overseeing Brit’s response to
managing financial risks arising from climate change.
The Board committees have taken climate-related issues into
consideration as follows:
• BSL Audit Committee: The Audit Committee is responsible
for overseeing internal controls, adherence to reporting
requirements, and approval of climate-related disclosures.
• BSL Investment Committee: ESG/Climate risk has been
a standing agenda item since 2021. Climate risk metrics
are provided on a monthly basis which are considered in
strategic decisions as relevant.
• BSL Risk Oversight Committee: Oversees the financial
risks arising from climate change. Its review focuses on
natural catastrophe, liability and transition risk. It oversees
key initiatives and, where necessary, makes risk-related
recommendations to the BSL Board.
• Brit Re Risk Oversight Committee: Regularly considers
climate change related risks.
Management oversight
Brit has implemented the following climate-related
Committees and Working Groups:
• Executive Committee (EC): The EC has overall responsibility
for ESG matters and is extensively involved in key strategic
decisions involving climate change.
• Climate Change Risk Working Party (CCRWP): The
multidisciplinary CCRWP is responsible for managing
financial risks arising from climate change and it provides a
forum for identifying and escalating any material risks that
require further investigation. It reports to the entity ROCs.
• ESG Steering Committee (ESGSC): The ESGSC reports
to the EC and has responsibility for delivering the ESG
strategy. It is chaired by the Head of ESG and includes
senior representation from Underwriting, Investments,
Finance, Risk, Claims, Legal and Communications.
• BSL Underwriting Committee: Receives management
information on natural catastrophe risk including regions
and perils impacted by climate change. It is responsible for
managing this risk in line with business appetite, and for
reviewing the ‘Brit View of Risk’.
• Responsible Underwriting Working Group is a sub-
committee of the ESGSC, with specific focus on ESG related
underwriting activities, including developing Brit’s approach
and framework to responsible underwriting, and embedding
climate-related processes into Brit’s underwriting
guidelines, policies and operations.
• ESG Data Working Group: The ESG Data Working Group
is a sub-group on the ESGSC. It has a specific focus on
developing and analysing data, metrics and reporting, and
ensures that all requests for ESG-related information are
adequately and consistently responded to.
Strategy
In 2023 we refreshed our ESG Strategy guided by the
development of a double-materiality assessment. The ESG
strategy is closely linked to our business strategy, and in
January 2024, we appointed our first Head of ESG.
Our vision centres on ‘Writing the future, responsibly’ –
leveraging our culture and products to help deliver positive
outcomes for people, the planet and our business.
At the start of 2025 we revisited the materiality assessment
to ensure it is current and applicable. We re-interviewed a
range of stakeholders and re-assessed the materiality. This
confirmed that the materiality assessment was overall still
current, and our strategy remained correct. Our strategy
spans our underwriting and investment operations and has
four key pillars:
• Reducing our Environmental Footprint
• Enabling the Net Zero Transition
• Responsible Product Deployment
• An inclusive culture for our people
environmental responsibility
strategic report
42 Brit Group Holdings Limited Annual Report 2025
Underwriting strategy
Brit’s underwriting guidelines encourage an appropriate level
of due diligence within the underwriting process at a product
level, reducing exposure to businesses with poor sustainability
practices. In the longer term, these will form part of a referral
framework which will influence our business appetite and growth
strategy. In addition, underwriters are actively encouraged
to consider and assess ethical, sustainable and governance
approach of insureds within their portfolio. We review our ESG
appetite and underwriting criteria on an annual basis.
Across the business, we have undertaken various initiatives
to align ourselves to the broader Lloyd’s market, and have
implemented products that promote improvements in ESG
standards across our client base. These include:
• Renewable Energy: In Specialty, we identified opportunities
to provide insurance cover for climate-transitioning
business (e.g. the renewable energy sector). Brit continues
to provide coverage for renewable energy producers, an
area for further growth in 2026;
• Cargo: Our Marine Cargo team insure an increasing amount
of parts and equipment that is destined for use in a number
of green energy power plants, including solar, wind and
hydro plants;
• Financial Institutions and D&O: We are using external
data platforms for financial and ESG information about
prospective clients. ESG scores are factored into the
underwriting decision process; and
• Financial Institutions: In 2024 we partnered in a new
facility offering cover for the risks relating to fraud within
the Carbon Credit market.
In addition we have begun to perform a market scan to support
the development of an internal white paper which looks at the
opportunities that new ESG or sustainability related products
could bring to our underwriting function.
Brit has been progressing the integration of externally sourced
ESG scores into the underwriting process. The work to date
has allowed Brit to better understand the composition of its
portfolio and to better understand the drivers of these scores.
In the longer term these insights will shape a key input to the
Brit underwriting strategy, helping to optimise risk selection and
business mix. In 2025 we also began the progress of baselining
our insurance associated emissions (IAE) so that we can begin to
internally track and measure our Scope 3 category 15 emissions,
with this work continuing into 2026.
We have developed guidance for our underwriters when
underwriting risks in ESG sensitive industries, and will be
monitoring the impact this has on portfolio ESG scores. This
included reviewing our underwriting in a number of ESG sensitive
industries, to ensure we are best positioned to support insureds
in their transition to net-zero. This support includes developing
our understanding of their transition plans, and monitoring
trends to assess how realistic those transition plans are.
We have also made a commitment that states ‘We expect our
customers in carbon intensive industries, to have clear and
measurable transition plans’. As part of our underwriting
process, we will review the transition plans of potential insureds
in sectors where climate related transition risks are material,
and incorporate these assessments into pricing and risk
evaluation.
In 2025 we also began the process of developing an internal
transition plan for the business, utilising global frameworks
such as the Transition Plan Taskforce (TPT). Our transition
plan will set our ambition across our core business activities:
operations, underwriting and investment and is supportive of
our sustainability strategy.
Investment strategy
ESG considerations are integrated across our investment
strategy to ensure we fully understand the portfolio
exposure.
We regularly review the sector exposure of our portfolios
to ensure we monitor and fully understand the portfolio
exposures to climate exposed sectors, and supplement this
with detailed reports from external managers on the ESG
positioning of the portfolios managed on our behalf along with
the engagement they have with investee companies on our
behalf. We also undertake annual ESG reviews of the equity
positions in our portfolios.
When undertaking manager selection exercises, we ensure
selected managers have strong ESG credentials, and
integrate ESG into their security selection processes, and
we include ESG guidelines in our external manager mandates.
We aim to have a lower carbon intensity than the index and
to reduce carbon intensity through time. We incorporate
ESG into our annual due diligence reviews of the investment
managers and hold regular discussions on the managers’ ESG
capabilities, and their engagement with companies.
We focus on asset classes where ESG considerations can be
most impactful, such as equity and corporate bonds. Where
we select commingled funds or exchange traded funds, we
assess the ESG restrictions in the funds, and invest in funds
which meet our ESG approach.
Risk management
Risk Management Framework
Brit’s Risk Management Framework (RMF) (page 32) sets
out the methodology by which Brit identifies, measures, and
manages all risks, including those associated with climate
change. Consideration is also given to other ESG related risks
such as biodiversity and nature related risks.
Brit considers the impact of climate change on natural
catastrophe, liability and investment risks to be the most
material impact of ESG-related risks on our business. Using
Board tolerances and management metrics, exposure to the
above risk types is managed and monitored on an ongoing basis.
environmental responsibility
strategic report
Brit Group Holdings Limited Annual Report 2025 43
The RMF is reviewed annually, and regulatory developments
are monitored on an ongoing basis. Brit’s two syndicates have
been compliant with PRA Supervisory Statement SS3/19
since 2021 which sets expectations for firms regarding their
consideration of climate risk.
Climate risk management
Natural catastrophe risk
Natural catastrophe risk relates to the physical risks posed by
both non-climatic and climatic hazards. Physical climate risk
pertains to the increased frequency and severity of weather-
related natural catastrophes, which will likely manifest as
additional claims to a (re)-insurer. Climate change to date
may already be affecting present-day weather events and
therefore claims.
Brit’s Research and Development team are responsible
for evaluating third party catastrophe models and where
appropriate applying adjustments to align the modelled risk
landscape with the present-day. In areas where models are
not licensed, Brit’s Research and Development team offer risk
management solutions, primarily based off empirical data and
published research studies. Vendor models such as ’Verisk’
and ‘KatRisk’ (developed by scientists and specialists) are used
for the most material and established perils. The modelling
is supplemented using the ‘Brit View of Risk’ which is a set of
in-house adjustments used to apply Brit’s view of risk to vendor
model outputs. Brit continuously monitors scientific studies,
and regularly reviews both the completeness of existing models
and the application of the ‘Brit View of Risk’.
Natural catastrophe modelling is leveraged in pricing, risk
selection, capital setting, outwards reinsurance purchasing
and in determining the risk appetite framework. Brit seeks
to ensure a balanced and well diversified portfolio (including
exposure to weather perils). Brit has reviewed its property
underwriting strategy in recent years and has sought to
reduce aggregation of exposure in peak catastrophe regions.
Brit’s exposure to both natural catastrophe risks and physical
climate risks at an overall and peril-region level at key return
periods are monitored on an ongoing basis by the Risk
Management function. Board limits are in place to ensure Brit is
not over-exposed to natural catastrophe risk, and reinsurance
is purchased to manage tail risk.
Liability risk
Climate change could result in liability claims arising from
litigation against Brit’s clients. For example, claims could arise
from firms being held responsible for directly contributing
to climate change, not taking climate change into account in
business decisions or inadequate disclosures.
Brit’s exposure is managed by use of limits on gross
underwriting exposure, contract wording and through the
purchase of reinsurance. There is uncertainty over whether
courts rule against insurers and if so, over what time horizon.
Brit’s inhouse counsel is part of external working groups
to monitor emerging trends. The number of climate change
litigation related claims notifications is monitored to enable
early identification of any material increase.
Market risk
Investment losses have the potential to arise from exposure
to industries contributing to climate change whose market
value could reduce as the economy transitions away from
fossil fuels. This transition risk could occur over the short
or long-term depending on government policies and financial
market movements.
Brit has a diversified investment portfolio, with limits on
exposure to individual issuers. Additionally, Brit has developed
metrics to monitor investment exposure to potentially ‘at-risk’
industries such as oil and gas or transport. An annual review
of equity holdings is conducted which includes a review of the
ESG strategy of the underlying companies.
Other risks
There may be reputational risk to firms if customers deem
they are insufficiently responsive to concerns about climate
change. Brit has developed an ESG strategy, as discussed
above, which seeks to address this.
Scenario analysis
Brit annually performs climate change related scenario
analysis (e.g. in each syndicate’s ORSA and Brit Re’s CISSA)
which encompasses natural catastrophe, market and liability
risks.
The findings from the various scenario analyses have been
integrated into:
• The internally developed ‘Brit View of Risk’ which is used to
supplement natural catastrophe modelling software;
• Brit’s Property catastrophe underwriting strategy,
identifying the regions and perils most sensitive to climate
change;
• Industry level exposure monitoring for Brit’s investment
portfolio for ‘high risk’ sectors;
• Clarity on potential losses (e.g., natural catastrophe and
liability risks) to be accounted for in underwriting and
business planning decisions; and
• The ORSA process, to ensure climate change related risks
are considered across relevant areas of the business.
Risk management policies are further addressed in Note 4 to
the financial statements.
Metrics: climate and environment
Energy management and greenhouse gas reduction
As part of our dedication to our environmental responsibilities
we continually seek to improve the sustainability of our
business. In 2025 we have continued to focus on greenhouse
gas (GHG) reduction, carbon management, staff engagement
and data collection for our scope 3 emissions.
strategic report
44 Brit Group Holdings Limited Annual Report 2025
In 2025, we set emissions reduction targets for Scope 1 and 2,
alongside selected Scope 3 categories. Our 2026 transition
plan will set out how this process is being progressed,
governed, and integrated into our broader decarbonisation
trajectory.
Carbon management
Our carbon management focus during 2025 was as follows:
• Net-zero: We are currently carbon neutral. We are
reviewing our operations to actively reduce our emissions,
waste and water consumption. We currently offset our
carbon emissions through ClimateCare.
• Supply chain: Work continues to streamline our supply
chain, as we seek to minimise our carbon footprint. During
2025, we worked with our supply chain to identify and
measure those suppliers who contribute most significantly
to our Scope 3 Category 1 emissions. This allowed us to set
a baseline and begin to work with our suppliers to deliver
improvements.
• Travel: Brit’s travel policy promotes lower-carbon flight
choices and supports longer, less frequent trips to reduce
overall travel impact, consistent with our business travel
disclosures. To further limit travel requirements, Brit has
invested heavily in flexible working and in the modernisation
of its digital and video-conferencing infrastructure.
• Employee commuting: During 2024 we ran our first
commuting survey for UK based employees. This allowed
us to baseline average commuting (scope 3, category 7)
emissions. Throughout 2025 we continued to encourage
employees to commute using public transport, offering
a season ticket loan scheme and a cycle to work scheme.
Improvements to cycle parking and facilities that were
carried out in 2025 in the Leadenhall Building are expected
to encourage more of our employees to cycle to work.
• Waste management: In 2024, we changed our waste
management supplier First Mile. We have been working
with them to monitor our waste management through data
provided by their client portal throughout 2025.
• Internal hospitality: We continue to use a hospitality
provider that is committed to sustainable food
procurement.
• Staff engagement: In 2025, Brit expanded its volunteering
allowance to four days and continued to actively involve
employees in ESG initiatives. We partnered with charities
such as DEFRA, Little Village and HandsOn to deliver
volunteering opportunities focused on social value,
environmental impact and biodiversity.
Measurement and offset
We have continued with our initiative to offset our scope 1 and
2 carbon emissions through ClimateCare (www.climatecare.
org). For every tonne of carbon generated we fund the
equivalent reduction through ClimateCare’s carbon reduction
projects. At 31 December 2025, we remained fully Energy
Saving Opportunities Scheme (ESOS) compliant.
We measure and monitor our carbon footprint covering scope
1, 2 and 3 (category 6). In 2025 our carbon emissions per
employee covering scope 1, 2 and 3 (category 6) before offset
were 2.5 tonnes (2024: 1.9 tonnes), all of which has been
offset (2024: all offset).
The sources of our emissions were as follows:
Emission source
2025
CO2 (tonnes)
2024
CO2 (tonnes)
Gas (Note 1) 135 93
Electricity (Note 1)
168 133
Business travel – air (Note 2)
1,321 1,491
Business travel – hotels (Note 2) 61 30
Business travel – other (Note 2) 8 15
Total carbon footprint before offset
1,693 1,762
Offset (1,693) (1,762)
Total carbon footprint after offset – –
Emissions per employee were as follows:
2025
CO2 (tonnes)
2024
CO2 (tonnes)
Number of employees at
31 December, excluding NEDs 684 673
Carbon footprint per employee
before offset 2.5 2.6
Carbon footprint per employee
after offset – –
Note 1: Where Brit operates from offices which form part of a larger commercial
development, usage and emission data has been supplied by the building manager. Where
data was unavailable, estimates have been used. Where Brit operates out of serviced office
suites, it has no control over the management of utilities, with that responsibility falling to the
landlord. Such serviced accommodation is considered out of scope for this purpose.
Note 2: For all travel including air, hotels and rail, data has been provided from our travel
agent partner, through whom travel is arranged. The figures do not currently include
radiative forcing (RF)
Brit’s Streamlined Energy and Carbon Reporting (SECR) as
follows:
2025 2024
kWh
GHG
(CO2 tonnes) kWh
GHG
(CO2 tonnes)
Scope 1 662,678 135.8 400,374 93.4
Scope 2 950,232 168.2 372,817 119.7
Note 1: The scope of table differs from the carbon emissions reported above, in that it only
covers UK based operations, in accordance with SECR requirements for unlisted companies.
Note 2: Gas and Electricity values for the fourth quarter were estimated by using the values
from the first quarter as the seasonality of the data for those quarters are closely aligned.
Note 3: Brit utilised the GHG conversion factors published by the UK Government on 10 June
2023 for these calculations.
Note 4: For all travel including air, hotels and rail, data has been provided from our travel
agent partner, through whom travel is arranged.
Note 5: In the UK, Brit operates out of an office which forms part of a larger commercial
development. Usage and emission data has been supplied by the building manager.
Note 6: Includes gas purchased for consumption in Brit’s UK office, for which data has been
supplied by the building manager.
Note 7: Includes electricity purchased for consumption in Brit’s UK office, for which data has
been supplied by the building manager.
environmental responsibility
strategic report
Brit Group Holdings Limited Annual Report 2025 45
The year-on-year CO2 increase in scope 1 and 2 emissions
reflects higher office utilisation and metered energy use,
more intensive multi day travel evidenced by hotel emissions
rising from 30 to 61, and a modest increase in headcount
indicating operational rather than structural drivers.
Brit had de-minimis Scope 3 emissions from business travel in
rental or employee-owned vehicles in 2025 and 2024.
Metrics in Brit’s operations
The setting of risk tolerances and risk appetite is a key part
of risk management. We are focused on developing a metrics
and targets framework to manage climate-related risks and
opportunities. We continue to advance the development of
an internal ESG framework for our underwriting portfolio,
aligned with the targets set out in our transition plan. This
work is supported by several ESG integration initiatives
currently in place, including the underwriting screening
service provided to underwriting teams, the ESG analytics
dashboard leveraging third party data from Dun & Bradstreet,
and our ongoing efforts to enhance and streamline ESG
processes across the organisation. In parallel, we maintain
a set of climate risk metrics for our investment portfolio.
Work has progressed well on the integration of ESG scores
from an external data provider into our underwriting processes,
and our internal ESG dashboard now allows us to view ESG
scores and CO2 analysis at the portfolio and class level.
We also have a set of key climate change-related underwriting
and investment metrics that are being monitored on a
quarterly basis, and reported to the CCRWP on a half-yearly
basis. These include board tolerance levels, the number
of climate change related litigation notifications, and the
investment exposure to higher risk industries.
strategic report
46 Brit Group Holdings Limited Annual Report 2025
Brit continues to develop aspects of its non-financial and sustainability information reporting, such as non-financial
performance indicators and targets by which to manage climate-related risks. Brit’s NFSIS statement, as required by section
414CA and 414CB of the Companies Act 2006, is set out below.
Matters relating to our employees and communities, our respect of human rights and how we address anti-corruption and
anti-bribery are covered in the ‘stakeholder engagement’ and ‘section 172(1) statement’ sections of this Annual Report.
Non-financial reporting information Section and page reference
A description of Brit’s business model. An overview of the business and strategy is presented per
‘Brit at a Glance’ (pages 8 to 10).
Principal risks relating to the non-financial matters set out in
section 414CB (1) (a) to (e), arising in connection with Brit’s
operations, likely impacts from any such principal risks, and
how they are managed.
Risk management, principal risks and uncertainties (pages
32 to 38).
Environmental responsibility (pages 41 to 45).
Non-financial performance indicators. Brit monitors a range of non-financial metrics relating to
sustainability. Within Climate Change Risk Working Party
(CCRWP) we have metrics for underwriting relating to
natural catastrophe risk and breaches of board tolerance
relating to climate change; Litigation risk and the number
of climate litigation notifications by cedent. We also
monitor our exposure to ‘high risk’ industries within our
investments. As these figures are commercially sensitive,
we are not disclosing them at this time, other than those
set out in Climate and Environment (pages 43 to 45).
Sustainability and climate-related financial information Section and page reference
The governance arrangements in relation to assessing and
managing climate-related risks.
The governance arrangements to assess and manage
climate-related risks and opportunities is outlined in the
Governance section of the Environmental responsibility
disclosure on page 41.
How Brit identifies, assesses, and manages climate-related
risks and opportunities.
How processes for identifying, assessing, and managing
climate-related risks are integrated into Brit’s overall risk
management process.
Brit’s approach to identifying, assessing, and managing
climate-related risks and opportunities is presented
in the Risk management section of the Environmental
responsibility disclosure on page 43.
Overall risk management processes are presented in
the Risk management, principal risks and uncertainties
disclosure from page 32.
A description of the principal climate-related risks and
opportunities arising in connection with Brit’s operations;
and the time periods by reference to which those risks and
opportunities are assessed.
Brit’s approach to identifying, assessing, and managing
climate-related risks and opportunities is presented
in the Risk management section of the Environmental
responsibility disclosure on page 43.
A description of the actual and potential impacts of the climate-
related risks and opportunities on Brit’s business model and
strategy.
The actual and potential impacts of climate-related risks
and opportunities are set out in the Risk management
section of the Environmental responsibility disclosure on
page 43, and also within our ClimateWise document, which
can be found on our website. In addition, we are aware
of the scale of the global investment that is required to
achieve the global transition to 2050 net-zero, and are
actively exploring the underwriting opportunities that a
just transition will bring, be they new insurance products,
new asset types, or emerging localities.
non-financial and sustainability information statement (NFSIS)
strategic report
Brit Group Holdings Limited Annual Report 2025 47
Sustainability and climate-related financial information Section and page reference
An analysis of the resilience of Brit’s business model and
strategy, taking into consideration different climate-related
scenarios.
We are addressing climate-related scenarios in the
resilience of the business model through several
strategies:
Physical Risk: We have focused on managing exposure to
natural catastrophes by decreasing peak zone exposures,
and non-renewing catastrophe-intensive accounts. We
have also reduced reliance on catastrophe reinsurance
due to its increasing cost.
Transition Risk: We have identified opportunities to
provide insurance cover for climate-transitioning
businesses, such as the renewable energy sector.
We expect customers in carbon-intensive industries
to have clear and measurable transition plans, and
underwriters consider this when pricing and quoting risks.
ESG considerations are integrated within investment
guidelines, with an objective of gradually increasing the
ESG standing of the portfolio over time.
Litigation Risk: We have introduced climate change
exclusions within most of the Specialty book to clarify our
stance. Underwriters consider potential climate change
litigation losses as part of their due diligence.
Targets used by Brit to manage climate-related risks and to
realise climate-related opportunities and performance against
those targets.
During 2025 we focused on data quality and accuracy,
using figures from our third-party ratings supplier.
Following this, we now have the data to set an internal
baseline figure for Scope 3 category 15 insurance
associated emissions. This will allow us to investigate the
appropriateness of targets in this emissions category,
which we expect to be set out in our internal transition
plan in 2026.
Brit’s key performance indicators used to assess progress
against targets used to manage climate-related risks and
realise climate-related opportunities and a description of
the calculations on which those key performance indicators
are based.
Brit continues to develop its ESG related non-financial
performance indicators and will report on these in
future periods.
strategic report
48 Brit Group Holdings Limited Annual Report 2025
The Board recognises the importance of engaging with its broader stakeholder base. The Company’s key stakeholders,
as identified by the Board, are set out below, together with why and how we engage with them and the outcomes of that
engagement.
Clients and Intermediaries
Why we engage Form of engagement Impact of engagement
We work with brokers and partners to
share expertise and deliver a seamless
service for our clients.
As a specialty insurer, almost 100%
of Brit’s business is distributed via
intermediaries. Engagement and building
strong relationships with them are crucial
for us to source business and to deliver
the best service and products for our
insureds.
Intermediaries also provide a range of
services to Brit, for which we remunerate
them via brokerage and commissions.
Any new intermediary is subject to
a robust on-boarding process.
Brit underwriters engage with
intermediaries in a number of ways,
including in person and by electronic
means.
To maximise our intermediary
relationships, Brit has entered into
Board-approved strategic partnership
agreements with seven of our largest
brokers, covering over 66% of
our premium income. Under these
agreements Brit pays an annual fee,
which gives access to a range of
services.
Broker surveys consistently highlight
Brit’s efficient client engagement,
and proactive communications.
By engaging with clients and
intermediaries we provide a risk
service that helps clients not only
prepare for but manage and mitigate
the risks they face.
By building stronger and
deeper relationships with our
intermediaries, we believe we put
ourselves in a stronger position
to quickly take advantage of new
opportunities and understand and
satisfy changing customer needs.
When a client has a claim, their life or
business has been disrupted, or even put
in peril, they expect their insurance to
deliver. It is our responsibility to fulfil that
commitment. At Brit, we see every claim
as an opportunity to help our clients move
forward.
When a client has a claim we engage
directly with them or their intermediary
to ensure their needs are met. Following
a major loss event, we instigate additional
measures including 24/7 contact with
claims administrators, and swiftly
establishing dedicated loss funds.
Engagement with our clients,
intermediaries and other service
providers after an event reinforces
our provision of a risk service that
helps people not only move on from
an event but helps them to move
forward rapidly with confidence.
Reinsurers
Why we engage Form of engagement Impact of engagement
Brit purchases reinsurance to help
manage risk, reduce volatility, enhance
earnings, control aggregations and
create capital efficiency.
We also engage when we make
recoveries.
Brit uses its appointed brokers for
the majority of reinsurer interactions,
allowing us to benefit from their
expertise.
Brit also engages directly with
reinsurers. These tend to be with our
largest reinsurance counterparties.
This engagement allows Brit
to access up to date market
information and a broad range
of reinsurance counterparties
and products, thereby effectively
managing its risk appetite.
When we make recoveries, such
engagement helps to expedite the
process.
stakeholder engagement
strategic report
Brit Group Holdings Limited Annual Report 2025 49
Investment managers
Why we engage Form of engagement Impact of engagement
We manage the assets which support
our underwriting and ensure that
clients’ claims can be paid. We manage
those assets with a long-term view and
aim to maximise return while controlling
the level of market risk.
We implement our investment strategy
using the expertise of investment
managers and we engage with them to
monitor their performance, to ensure
terms of the investment management
agreements are met and to gain
additional insights.
We have regular discussions with our
managers to monitor performance
and assess the outlook for investment
markets. We also receive regular written
investment reports.
We have regular and ad-hoc discussions
to review new investment opportunities.
We also perform annual due diligence on
their operational processes.
Investment managers regularly present
to the Investment Committee.
Engaging with our investment
managers allows us to ensure that
assets are managed within our risk
tolerances and guidelines and that
any changes are implemented in a
timely fashion. Insights from our
investment managers enhance our
strategy and performance.
Engagement allows us to discuss
new opportunities, helps us
understand their approach to ESG
issues, validates the sustainability
of our portfolio and helps us confirm
assets are managed robustly and
with effective controls in place.
Capital providers
Why we engage Form of engagement Impact of engagement
Working with third-party capital
providers, primarily on Syndicate 2988,
creates the opportunity to increase
Brit’s footprint and proposition to
clients.
Engagement with third-party capital
providers also supports our growth
strategy for those vehicles.
Brit regularly engages with current
and prospective providers ahead
of an underwriting year, to market
Syndicate 2988, and to understand
investor appetite. After an underwriting
year incepts, Brit formally meets
each provider regularly to discuss
performance, outlook and any other
relevant matter.
Successful implementation of
the Syndicate 2988 strategies is
dependent on developing strong
relationships with third-party
investors. Such engagement helps
facilitate this.
The insight we gain from interactions
and feedback helps us ensure that
our propositions can continuously
evolve in line with investor appetite.
Members
Why we engage Form of engagement Impact of engagement
Our aim is to provide long term
sustainable value for our shareholder,
Fairfax. Engagement ensures that our
objectives are aligned and that our
strategy, operating environment and
performance are clearly understood.
Brit’s ultimate shareholder is
represented on the Brit Group Holdings
Limited Board and there is regular
contact between Brit executives and
senior management and those of our
shareholder.
This engagement helps ensure that
Brit’s strategy is aligned to and
supported by our shareholder.
It also presents us with underwriting
and investment opportunities,
including collaboration with other
members of the Fairfax group.
strategic report
50 Brit Group Holdings Limited Annual Report 2025
Regulators
Why we engage Form of engagement Impact of engagement
Regulators are key stakeholders and
Brit’s relevant Boards are pro-active
in ensuring that Brit meets regulators’
expectations around compliance,
transparency and aligning the business
with regulators’ objectives.
Brit engages with regulators to ensure
that:
• We understand their regulatory
objectives and how they apply to Brit;
and
• Regulators have a proper
understanding of Brit’s business model,
strategy and risk appetite, and how
they align to regulatory objectives.
Brit engages with its principal regulators
through:
• Regular meetings between supervisory
teams, key decision-makers and
authorised persons at Brit, including
Directors;
• Sharing of key business updates
and internal documents to ensure
regulators have a thorough
understanding of Brit’s business;
• Responding to thematic reviews and
information requests;
• Engaging with Lloyd’s across the
business including around business
planning and compliance; and
• Ensuring the relevant boards are kept
up-to-date on regulatory matters as
communicated by regulators.
• The Periodic Summary and Close
and Continuous supervision
approach by the PRA enables
Brit to respond promptly on any
concerns or focus areas;
• Engagement on thematic reviews
and information requests enables
Brit to contribute to regulators’
understanding of the market;
• Brit’s regular engagement enables
it to pro-actively plan its response
to areas of regulatory focus,
e.g. operational resilience;
• Engagement assists Brit to
meet the prudential and conduct
standards required by regulators;
and
• Directors and employees
understand their regulatory
responsibilities.
Key suppliers
Why we engage Form of engagement Impact of engagement
Supply chain integrity is critical as we rely
on a number of key suppliers of goods and
services to help us meet the needs of our
customers and other stakeholders.
On-going engagement helps us ensure
that those needs are met and ensures
that the standards set by those suppliers
meet Brit’s criteria.
Such suppliers include providers
of IT systems, claims management,
professional services, facilities and travel
providers.
Brit determines the risk of the potential
engagement by investigating the potential
spend value criticality of the services to
be provided. Brit has a rigorous
on-boarding process for new suppliers.
Brit has strong partnerships with a
number of critical suppliers, fostered
by a range of activities including ongoing
dialogue and meetings. We also engage
with key suppliers in areas such as
technical and product roadmaps,
integration planning and disaster
recovery.
Such supplier engagement enables
us to:
• Provide a better service to,
and satisfy the needs of, our
stakeholders;
• Enhance current operational
processes, leading to better
efficiencies and increased
competitive advantage;
• Comply with appropriate laws and
regulations;
• Improve the Company’s
technological resilience; and
• Ensure the robustness and
integrity of our suppliers, such as
their compliance with the Modern
Slavery Act 2015.
stakeholder engagement
strategic report
Brit Group Holdings Limited Annual Report 2025 51
Introduction
The Brit Group Holdings Limited Directors’ key responsibility
is to promote the success of the Company, and the broader
Brit Group. This principle is embodied in the Board’s terms
of reference and is the cornerstone of their discussions
and decision making. Each Director is cognisant that in
discharging this key responsibility, they must have regard to:
• The likely consequences of any decisions in the long-term;
• The interests of the our employees;
• The need to foster the our business relationships with
suppliers, customers and others;
• The impact of our operations on the community and
environment;
• The desirability of maintaining our reputation for high
standards of business conduct; and
• The need to act fairly between shareholders of the
Company.
The Directors of Brit Group Holdings Limited consider, both
individually and collectively, that they have acted in the way
they consider, in good faith, would be most likely to promote
the success of the Company for the benefit of its members as
a whole (having regard to the stakeholders and matters set
out in s172(1)(a-f) of the Act).
The Board’s approach to section 172(1) and decision making
The Board’s terms of reference, which are reviewed annually,
clearly articulate the Board’s responsibilities, the role of
the Chair and matters reserved for the Board. They also
set out which of the Board’s powers and responsibilities
may be delegated to other committees and the governance
mechanisms by which the Board monitors those committees’
activities and performance. The Chair ensures that these
terms of reference are adhered to and, by doing so, ensures
that Directors have due regard for all appropriate factors
during the decision-making process.
Our strategy
The Board is responsible for a number of key strategic
decisions, including approving the business plans, objectives
and strategy of the Group. It is also responsible for managing
Group capital, including the setting of Group Capital Policy and
the recommendation of dividends to our shareholder.
The Group’s strategy and business plans are approved
annually by the Board. The Board also assesses how the
strategy underpins long-term value creation, and on-going
performance is discussed and monitored at Board meetings.
The Directors’ assessment of long-term value creation also
considers the Group’s resilience. Directors monitor relevant
underwriting, reserving, business, operational, credit, market
and liquidity risk appetites and tolerances, and ensure the
Group has an effective Risk Management Framework in place.
Board information
The Board receives regular information on a range of relevant
topics, and receives information on other areas as requested
by the Directors from time to time.
The Board receives regular formal reports on the operations
and performance of the Group from the Group Chief Executive
Officer and the Group Chief Financial Officer. The Board also
receives regular reports from the chairs of the committees
of the Board such as the Audit Committee, Remuneration
Committee and Nomination Committee, and from the Chairs
of its principal subsidiaries’ boards including those of Brit
Syndicates Limited and Brit Reinsurance (Bermuda) Limited.
Each of these reports provides an update on areas necessary
to help the Directors promote the success of Brit Group
Holdings Limited.
In addition, the Board receives and considers a number
of ad hoc or annual reports.
Our policies and practices
All relevant factors are appropriately addressed by the Board
when considering matters reserved for it, as set out in its
terms of reference.
The Board also ensures that appropriate consideration is given
to relevant factors by the committees to which it delegates
responsibilities. The Board reviews the terms of reference
of such committees on an annual basis, and receives regular
updates and reports from those committees’ chairs.
The Board also reviews the Group’s key policies on an annual
basis, ensuring that all relevant considerations to assist
it discharge its responsibilities are embedded in the key
operations of the business. These policies help to promote the
long-term success of the Group by focusing on areas such as
the key operations of the Group.
The Board reviews its key stakeholder map on an annual
basis. New key stakeholder relationships are identified
through information received and considered by the Board
on a regular basis, or through the Board’s consideration and
approval of substantial contracts and commitments.
Training
To assist the Directors in discharging their responsibilities,
they are provided with on-going training and development
opportunities. They have received a number of in-depth
briefings on specific relevant issues.
For the wider workforce, there is a comprehensive staff
development programme tailored to meet individual needs.
Elements of this training are mandatory, with all staff
required to successfully complete e-learning modules on key
areas such as money laundering, bribery and corruption, data
protection, fraud and cyber risk.
section 172(1) statement
strategic report
52 Brit Group Holdings Limited Annual Report 2025
section 172(1) statement
Our culture
Building and maintaining the Group’s reputation and its high
standards of business conduct are essential to the future
success of the Group. This is embedded in our culture.
Our brand purpose informs everything we do, from how we
communicate, to how we develop and deliver our services, to
how we work together.
The Group also maintains a ‘Code of Conduct’ setting out the
standard we expect from all of our staff. This is regularly
reviewed and updated, and compliance is attested to by each
employee on an annual basis.
Our people
Our people are key to our success. How we engage with them
and how we invest in them is set out on pages 39 to 40.
Our stakeholders
The Board recognises the importance of engaging with its
broader stakeholder base. The Group’s key stakeholders,
as identified by the Board, are set out on pages 48 to 50,
together with why and how we engage with them and the
outcomes of that engagement.
Community and environment
The Board recognises the importance of not only generating
value for our shareholder but also to contribute to wider
society. We do this through a number of initiatives, as set out
on page 40. We also monitor and manage our environmental
impact, as set out on page 41.
strategic report
Brit Group Holdings Limited Annual Report 2025 53
Key decisions made by the Directors during the year
Capital restructuring
In April, the Board considered the recommendations of
a capital structure review and approved the introduction
of $519.8m of long-term senior debt.
The Board considered the Group’s current capital position,
its growth plans and targets, and potential higher market
volatility. It also considered the impact of effective cycle
management on the Group’s capital requirements, and the
need to respond to market opportunities as they arise.
The Board concluded that additional capital was required
to support the delivery of these objectives. The Board also
considered the most appropriate nature of this additional
capital. It considered the relative merits of equity capital,
bank borrowing and long-term debt, and considered the
Group’s low gearing levels. It also considered the views of
the Group’s shareholder. The Board concluded that long-
term debt was the most appropriate instrument.
Revolving credit facility (RCF) amendment and restatement
In April, the Board considered and approved a proposal
to amend the Group’s undrawn RCF, reducing the facility
from $550.0m to $415.0m, and the extension to the facility
from 31 December 2027 to 31 December 2029.
The Board considered actual and potential overall
borrowing levels and limits following the decision to
introduce long-term senior debt, the Group’s future
requirements and the Group’s strong liquidity position.
It also considered the views of the Group’s shareholder.
Capital reorganisation
In July, the Board considered and approved a capital
reorganisation. It agreed to reduce the share premium
account, and increase retained earnings, by $400.0m.
The Board considered the Group’s strong capital position,
overall level of retained earnings and dividend paying
capacity, overall capital structure, business plans, and the
need for future financial flexibility. It also considered the
views of the Group’s shareholder.
Capital Policy
In July, the Board considered and approved the Group
Capital Policy.
In reviewing and approving the policy, the Board considered
regulatory requirements in each of the jurisdictions in
which the Group operates, and the internal and external
reporting bases and requirements. It also ensured the
policy facilitated an appropriate framework for managing
the Group’s capital requirements. In addition, the Board
considered the interests of the Group’s stakeholders.
2025 Interim Report
On 30 July 2025, the Board approved the Group’s 2025
Interim Report, the first consolidated financial report
relating to the new Brit Group Holdings Limited group.
It considered and approved the Group’s key accounting
policies, and areas of key estimates and judgement, and
ensured they were aligned to shareholder expectations.
The Board also considered the claims reserves held by
the Group’s underwriting entities, and were mindful of
the importance of those entities maintaining the policy of
reserving on a best estimate basis with a risk adjustment.
This policy provides robust security to our policyholders,
while ensuring the long-term financial strength of the Group,
thereby protecting the interests of our key stakeholders
including our clients, members and employees.
2026 Brit Group business plan and capital requirements
In November, the Board reviewed and approved the 2026
business plan. The plan included the Group’s underwriting
and investment strategy, together with the capital needed
to support the plan.
The Directors considered the Group’s immediate and
longer-term strategic priorities, together with the risks
facing the business. They also considered the needs and
expectations of the Group’s shareholder, the interest of its
clients and employees, and those of the wider stakeholder
group. After due discussion, the Board concluded that the
plans and attaching capital positioned the Group well for
2026 and the longer term.
Tax strategy
In November, the Board reviewed and approved the Group’s
tax strategy and approved its publication on the Brit website.
In reviewing and approving the tax strategy, the Board
considered the Group’s statutory obligations. It also
ensured the strategy and policy enabled the Group to meet
expectations around tax governance and risk management,
and ensured they facilitated an appropriate framework
for managing the Group’s tax risks. In addition, the Board
considered the interests of stakeholders, primarily those
of the Group’s shareholder.
Dividends
In December, the Board approved a dividend of $236.0m.
In considering this decision, the Board assessed the
Group’s ongoing underwriting strategy and capital
requirements, its capital policy, and its obligation to act
fairly between members. The Board also liaised closely
with the Group’s shareholder with regard to the dividend
payments.
54
governance
Brit Group Holdings Limited Annual Report 2025 55
governance
Directors’ Report
This report sets out other information of
interest to our shareholder. It includes information
on our shareholder, the Directors’ responsibility
statement and the Directors’ statement on
going concern.
Directors’ Report
Corporate Governance Report
Modern Slavery and Human Trafficking Statement
56
59
61
Corporate Governance Report
This report explains our governance framework.
Modern Slavery and Human Trafficking Statement
This statement sets out the steps taken by us to
ensure that slavery and human trafficking are not
taking place in our supply chains or in any part of
our business.
governance
56 Brit Group Holdings Limited Annual Report 2025
The Directors present their report together with the audited
financial statements for the year ended 31 December 2025.
Principal activities, review of business and other disclosures
Details of the Company’s principal activities and a review
of the business, including how the business environment is
likely to affect its future development and performance, are
included in the Strategic Report.
Directors
The following Directors held office during the financial year:
Mr Gordon Campbell – Independent Non-executive Director
(Chair) (appointed 21 January 2025)
Mr Martin Thompson – Group Chief Executive Officer
(appointed 21 January 2025)
Mr Gavin Wilkinson – Group Chief Financial Officer
(appointed 2 October 2024)
Mr Simon Lee – Independent Non-executive Director
(appointed 21 January 2025)
Mr Michael Wallace – Non-executive Director
(appointed 21 January 2025)
Ms Andrea Welsch – Independent Non-executive Director
(appointed 21 January 2025)
Mr Jean-Jacques Henchoz – Independent Non-executive Director
(appointed 01 May 2025)
Mr Antony Usher – Executive Director
(resigned 24 January 2025)
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Directors’
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires that the Directors prepare financial
statements for each financial year. Under company law the
Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the
state of affairs of the Company and of the profit and loss
of the Company for that period. In preparing these financial
statements, the Directors are required to:
• Select suitable accounting policies and then apply them
consistently;
• Make judgements and accounting estimates that are
reasonable and prudent;
• Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business; and
• State whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements.
The Directors are responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that the
financial statements comply with the Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
The Directors confirm that, to the best of their knowledge:
• The consolidated financial statements, which have been
prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the
assets, liabilities, financial position, and profit or loss
of the Group;
• The Company financial statements, which have been
prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 102, give a true and fair view of
the assets, liabilities and financial position of the Company;
and
• The Strategic Report includes a fair review of the
development and performance of the business and the
position of the Group, together with a description of the
principal risks and uncertainties that it faces.
Dividends
A $236.0m dividend was paid to the sole shareholder on
18 December 2025.
Share capital
The Company’s share capital comprises 1,000 Ordinary
Shares of £1.00 nominal value each, which is fully paid.
Shareholder
The Company’s sole shareholder is Fairfax UK Holdings Limited.
Significant agreements
The following agreement, which was in force at 31 December
2025, may be terminated on a change of control of the Company.
Revolving credit facility
The Group has a syndicated revolving credit facility (RCF)
which provides for $415.0m of committed multi-currency
financing. The RCF was refinanced on 16 May 2025, reducing
the total facility from $550.0m and extending the term by
two years to 31 December 2029, with options to extend to
December 2030 or December 2031.
The facility contains a standard change of control provision
under which, upon the occurrence of a change of control of the
Company, lenders may refuse to fund utilisation requests, cancel
their commitments, and require immediate repayment of all
outstanding amounts.
At 31 December 2025, there were no cash drawings on the
facility (2024: $nil) and no letter of credit in place (2024: $nil).
At the date of this report, these borrowings remain unchanged.
directors’ report
governance
Brit Group Holdings Limited Annual Report 2025 57
Employment
We employ a truly diverse, genuinely inclusive work environment.
We comfortably and confidently bring our authentic selves to
work, because we know we’ll be respected, valued and accepted,
whoever we are. Our Employee Resource Groups (ERG) are safe
spaces for people to share their experiences, aspirations and
suggestions about how we do things. Employees are encouraged
to join our ERGs, which represent gender equality, LGBTQ+ and
trans experiences, mental health, neurodiversity, visible and
non-visible disabilities and race and belonging.
We have four pillars which represent our vision for inclusion
and diversity at Brit:
• Our colleagues consider us to be a progressive organisation
which demonstrates its commitment to inclusion and
diversity both across the business and in our sector.
• We have a robust recruitment process to ensure we attract
and recruit the best talent from a diverse talent pool and
we make sure candidates are given an equitable playing field
regardless of their identity or characteristic.
• We are an organisation that accepts, recognises,
encourages, celebrates and promotes diversity in all its
forms and adopts a zero-tolerance approach to all forms
of discriminatory and non-inclusive behaviour.
• Our leadership and management populations act as role
models and allies, actively raising awareness, challenging
prejudice and demonstrating best practice approach
regarding inclusion and diversity at Brit.
We encourage employees to speak up on any matters that
concern them and have policies and processes to support and
encourage this.
We provide a competitive remuneration and benefits package.
This is kept under constant review to make sure it stays
relevant. We also understand the power of ‘thank you’, so we
make a point of acknowledging and rewarding extraordinary
effort and achievement by teams or individuals. Our Employee
Share Ownership Plan provides an opportunity for employees
to be involved in the Company’s performance.
Energy consumption and greenhouse gas emissions
Brit’s energy consumption and greenhouse gas emissions, and
its related strategy, are discussed on pages 44 to 45
Political donations
Neither the Company nor any of its subsidiaries made any
political donations during the year (2024: $nil).
Disclosure of information to the Group’s and Company’s auditor
In accordance with the provisions of section 418 of the
Companies Act 2006, each of the persons who are Directors of
the Company at the date of approval of this report confirms that:
• So far as the Director is aware, there is no relevant audit
information (as defined in the Companies Act 2006) of which
the Company’s auditor is unaware; and
• The Director has taken all the steps that he/she ought to have
taken as a Director to make himself/herself aware of any
relevant audit information (as defined) and to establish that the
Company’s auditor is aware of that information.
External Auditor
PricewaterhouseCoopers LLP remain in office as the Group’s
and Company’s auditor.
PricewaterhouseCoopers LLP was first appointed external
auditor of the Company for the financial year ended 31 December
2024 by the directors and continues in office for the financial
year ended 31 December 2025 following approval by our
shareholder, in accordance with section 485 of the Companies
Act 2006. PricewaterhouseCoopers LLP’s uninterrupted
engagement covers two financial years, and includes eight
financial years as auditors of a predecessor entity.
Going concern
As part of its going concern assessment, the Board considered:
• Brit’s baseline 2026 financial plan and 2026 outlook: While
Brit expects premium rates reduction to continue during
2026, attractive margins remain in many areas of our
underwriting portfolio. We anticipate modest growth within
areas where conditions are most favourable and a reduced
appetite where the market is more challenging.
• Catastrophe exposure management: The Directors
assessed the Group’s aggregate exposure to natural
catastrophe risk within the 2026 plan by reference to
the Cat Risk Management Framework and associated risk
appetite. The framework defines the Group’s catastrophe
risk appetite relative to Shareholders’ Equity using 1-in-250
Occurrence Exceedance Probability (OEP) metrics,
calibrated for prevailing market conditions and pricing
adequacy. Within this appetite, catastrophe capacity is
allocated across underwriting teams based on available
underwriting terms, pricing margin and relative risk-return
characteristics. By proactively adjusting its risk profile,
the Group aims to preserve profitability and financial
resilience in changing market conditions.
• Brit’s recent underwriting performance: During 2025,
Brit continued to demonstrate the strength of its business
with a combined ratio before the effects of discounting
of 89.3%. This strong ratio is partly driven by market
conditions, together with Brit’s management of its
underwriting portfolio. Brit’s comparable 2024 combined
ratio of 85.3% also reflected a robust underwriting
performance. In considering underwriting performance,
the Directors were able to assess the underlying quality
of the underwriting portfolio and its reflection in the
2026 plan.
• Market conditions: In 2025, Brit experienced risk adjusted
rate changes (RARC) of -4.8%, reflecting increased market
competition with capacity outstripping demand. While rate
reductions have been experienced, healthy margin remains
in many lines of business, and we continue to underwrite for
profit, not top-line income.
• Brit’s reserving policy and track record: Brit has a policy
of reserving on a best estimate basis and, under IFRS 17,
governance
58 Brit Group Holdings Limited Annual Report 2025
directors’ report
carrying an explicit risk adjustment above that estimate.
This policy has led to modest releases in the current and
prior financial years. This reserving approach, which
has been adopted unchanged for the 2026 plan, has
demonstrated the robustness of Brit’s approach.
• Investment market conditions and outlook: The Directors
considered the current economic environment, and
concluded it was appropriately reflected in the 2026 plan.
• Liquidity: The Directors considered the liquidity position of
the Group. The Group ended 2025 in a strong position, with
cash and cash equivalents of $578.8m on a look through
basis. The Directors also considered the duration of the
investment portfolio and the forecast yields for 2026.
The Directors also noted the availability of the $415.0m
Revolving Credit Facility to 31 December 2029. Brit’s
2026 plan envisages the Group’s strong liquidity position
continuing in 2026.
• Risk and risk management: The Board considered the risks
faced by Brit, and the management of those risks, including
emerging risks such as those arising from climate change,
US tariffs and geopolitical tensions, the global economic
environment and insurance market trends. These risks are
discussed in more detail on pages 32 to 37 and in Note 4 to
the financial statements.
A review of the financial performance of the Group is set out
on pages 20 to 27. The financial position of the Group, its cash
flows and borrowing facilities are set out on pages 29 to 31.
After assessing the evidence from the reviews performed,
the Directors concluded they have a reasonable expectation
that the Group has adequate resources to continue in
operational existence for the foreseeable future. The ability
of the Company to continue as a going concern is contingent
on the operational existence of the Group. The Directors
therefore continue to adopt the going concern basis in
preparing the Group and Company financial statements.
Information included in the Strategic Report
The information below is not shown in the Directors’ report
because it is shown in the Strategic Report instead under
s414C(11).
• Future developments of the business
Disclosures regarding future developments of the business
can be found on pages 17 to 19.
• Employee engagement
Disclosures regarding employee engagement can be found on
pages 39 to 40.
• Stakeholder engagement
Disclosures regarding stakeholder engagement can be found
on pages 48 to 50.
• Charitable donations
Disclosures regarding charitable donations can be found on
page 40.
• Financial instruments
Details of the Group’s Risk Management Framework
supporting our investment in financial instruments is set out
on pages 32 to 37.
• Environmental related disclosures
Disclosures regarding environmental matters can be found on
pages 41 to 45.
• Non-Financial and Sustainability Information Statement
(NFSIS)
Disclosures regarding NFSIS can be found on pages 46 to 47.
• Streamlined Energy and Carbon Reporting (SECR)
Disclosures regarding SECR can be found on page 45.
By order of the Board
Martin Thompson
Group Chief Executive Officer
26 February 2026
Brit Group Holdings Limited – 15884169
governance
Brit Group Holdings Limited Annual Report 2025 59
This corporate governance statement is prepared in
accordance with Disclosure Guidance and Transparency
Rule 7.2.
Corporate Governance Policy
The governance arrangements adopted by the company
concern the management of the Brit group of companies
(Brit Group).
The company is not required to comply with any published
corporate governance code and does not do so voluntarily.
Instead, the company welcomes the flexibility to design, adapt
and report against its corporate governance arrangements
to suite its individual circumstances – including strategy,
ownership structure and stakeholder network. The provisions
of the published corporate governance codes are considered
within that process.
Board of Directors
The Board of directors comprises:
• Gordon Campbell (independent non-executive) – Chair
• Jean-Jacques Henchoz (independent non-executive)
• Simon Lee (independent non-executive)
• Mike Wallace (non-executive)
• Andie Welsch (independent non-executive)
• Martin Thompson (Chief Executive Officer), and
• Gavin Wilkinson (Chief Financial Officer)
As outlined above, the Board comprises seven directors –
two of whom are executive and five non-executive. Four of
those non-executives are considered to be independent, while
the fifth (Mike Wallace) is a representative of the ultimate
shareholder, Fairfax. The composition ensures that executive
management of the group is both guided and challenged by the
ultimate shareholder and independent perspectives.
The primary responsibility of the Board is to review and
oversee the achievement of group strategy and governance.
In doing so, the Board ensures that the group is appropriately
capitalised to support that strategy, and that material risks
threatening its achievement are appropriately managed.
Inherent in the latter is oversight of the group’s internal
control and compliance frameworks.
The Board meets quarterly and at such other times
as required.
Chair of the Board
The chair of the Board is ultimately responsible for the
Board’s performance. In doing so, they manage and draw
on the membership of the Board to ensure discussions
benefit from an appropriate balance of executive leadership,
independent non-executive challenge and an appreciation of
stakeholder expectations. Further, with the assistance of the
Company Secretary, the chair ensures that the Board has the
resources and procedures it needs to operate effectively.
To assist with these responsibilities, the chair periodically
commissions a review of the Board’s performance (as below).
Audit Committee
The Audit Committee comprises:
• Gordon Cambell (independent non-executive) – Chair
• Andie Welsch (independent non-executive)
• Caroline Ramsay (independent member)
In line with Disclosure Guidance and Transparency Rule 7.1,
the Audit Committee comprises independent non-executive
directors; at least one member with accounting or auditing
experience; and a membership which, as a whole, has
competence in the sector which the company operates.
Caroline Ramsay is a member of the committee in her capacity
as chair of the Audit Committee for Brit Syndicates Limited
– a material subsidiary of the company. This arrangement
improves connectivity between those committees – allowing
for better oversight of matters material to the group.
The Audit Committee is responsible for:
• overseeing the effectiveness of the group internal control
framework, which includes continuous monitoring of its
performance and an annual review of its structure.
• overseeing the effectiveness of the group internal audit
framework, which includes an annual review of the Internal
Audit policy; active engagement in the Internal Audit Plan;
the monitoring of internal audit findings, and collaboration
with the Head of Internal Audit (including assessments
of their ongoing independence). The Audit Committee
periodically meets with the Head of Internal Audit in the
absence of management.
• managing the relationship with the external auditor,
which includes engagement in external audit planning
procedures and the review of external audit findings. The
Audit Committee periodically meets with the external audit
partner in the absence of management, and
• monitoring the integrity of the group’s financial statements,
which is supported by the above assurance activities
and ongoing review of material accounting policies and
judgements.
The Audit Committee meets quarterly and at such other
times as required. The committee reports into the Board
after each meeting.
Remuneration Committee
The Remuneration Committee comprises:
• Gordon Campbell (independent non-executive) – Chair
• Simon Lee (independent non-executive)
• Mike Wallace (non-executive)
• Martin Thompson (Chief Executive Officer)
The committee contains one executive director and three
non-executive directors. Two of those non-executives are
independent while one is a representative of the ultimate
shareholder, Fairfax. The composition ensures that
remuneration discussions are informed by both executive
management and shareholder expectations, yet subject to
independent guidance and challenge.
corporate governance report
governance
60 Brit Group Holdings Limited Annual Report 2025
corporate governance report
The Remuneration Committee is responsible for setting the
remuneration policy of the group and the remuneration of
executive directors. Remuneration is designed to be fair and
to promote the achievement of group strategy. No director is
involved in setting their own remuneration.
The Remuneration Committee meets biannually and at such
other times as required. The committee reports into the
Board after each meeting.
Nominations Committee
The Nominations Committee comprises:
• Gordon Campbell (independent non-executive) – Chair
• Simon Lee (independent member)
• Mike Wallace (non-executive)
• Martin Thompson (Chief Executive Officer)
The composition of the Nominations Committee is aligned to
that of the Remuneration Committee, supported by the
same rationale. Further, the chair of the Board occupies
the chair of the Nominations Committee in support of their
responsibility to manage the effectiveness of the Board – and
Simon Lee is a member of the committee to similarly support
his responsibilities as the chair of Brit Syndicates Limited.
The Nomination Committee leads the appointment of directors
to the company and material subsidiaries, including Brit
Syndicates Limited. As part of that role, the committee
periodically assesses Board and committee composition
against the skills and experiences required to achieve group
strategy. The findings from those reviews are incorporated
into succession planning.
The Nomination Committee meets biannually and at such other
times as required. The committee reports into the Board
after each meeting.
Effectiveness Reviews
The Board and Board committees are subject to periodic
internal and external review. The most recent review was
conducted internally in April 2025 and concluded that the
Board and its committees continue to operate effectively.
The last external review was conducted in February 2024,
which similarly supported the effectiveness of the Board and
committees, while proposing a number of enhancements.
Those enhancements were implemented in full.
Board Diversity Policy
The Board have adopted a Diversity Policy applying to itself
and its committees.
A clear and effective culture is a strategic imperative for the
Brit Group. It enables the business to achieve its objectives
by fostering collaborative and efficient ways of working.
Diversity catalyses those benefits – allowing different
perspectives to develop into new and innovative solutions.
The aim of the Board Diversity Policy is reflective of the
group position and aims to enhance the breadth and depth
of boardroom discussion by ensuring directors offer varying
perspectives.
The Board Diversity Policy articulates how the roles and
responsibilities of the Nominations Committee ensure
diversity. Specifically, it notes their role in:
1. assessing the composition of the Board and its committees
against the range of qualities and experience required to
deliver long-term strategy. As that strategy is reflective
of the external environment (including its diversity), the
qualities and experience required for its delivery are
similarly reflective, and
2. ensuring the Board and its committees are subject to
appropriate succession and renewal arrangements,
to allow findings from composition assessments to be
implemented.
These processes were fundamental to the appointment of
Jean-Jacques Henchoz to the Board of Brit Group Holdings
Limited and Brit Syndicates Limited in May 2025, where the
Nominations Committee considered his extensive global
experience across the reinsurance industry to complement
and widen existing Board perspectives and support the
business’s strategic direction. The above processes have
also been fundamental in developing succession plans for
non-executive directors more widely.
The Nominations Committee recognises that the above
processes should be operated in consideration of the
principles and provisions of published corporate governance
codes and in accordance with applicable statutory and
regulatory obligations
Executive Management
Aside from the functions reserved to the Board or otherwise
delegated to committees of the Board, all management
functions are delegated to the Chief Executive Officer. In
turn, the Chief Executive Officer delegates authority to the
executive team, and operates the Executive Committee to
manage that arrangement. These arrangements create clear
accountability.
By order of the Board
Joe Marinelli
Company Secretary
26 February 2026
governance
Brit Group Holdings Limited Annual Report 2025 61
modern slavery and human trafficking statement
This statement sets out the steps taken by Brit Group Holdings
Limited to ensure that slavery and human trafficking are not
taking place in our supply chains or in any part of our business.
Slavery and human trafficking can occur in many forms, such as
forced labour, child labour, domestic servitude, sex trafficking
and workplace abuse. Given the nature of the work that we do,
we believe that there is a low risk of slavery or human trafficking
having any connection with our business. We must, however, not
be complacent, and all staff have a responsibility to be aware
of any risks in our business and in our wider supply chains and
report any concerns to senior management.
Our business
At Brit, we provide highly specialised insurance products to
support our clients across a broad range of complex risks. We
have a major presence in Lloyd’s of London (Lloyd’s), the world’s
specialist insurance market provider, and a significant US and
international reach. We have local offices in Bermuda, India,
South Africa and Japan.
We operate globally via our own international distribution network
and broker partners. The average number of employees working
at Brit during 2025, including non-executive Directors, was 789
and the result after tax in 2025 was a profit of $651.8m.
Our supply chains
We source our business through trading relationships
with Lloyd’s brokers, wholesale brokers, retail agents and
reinsurance intermediaries. Most of our reinsurance business
is sourced through global reinsurance brokers.
We require that contractual agreements with third-party
suppliers contain obligations to ensure compliance with the
Modern Slavery Act 2015.
Our Global Procurement and Outsourcing Policy ensures that
information around our requirements is detailed and available
to our wider business.
Our policies on slavery and human trafficking
We are committed to ensuring that there is no modern slavery
or human trafficking in our supply chains or in any part of
our business. We believe in paying people fairly and properly
for their work. This policy reflects our commitment to acting
ethically and with integrity in all our business relationships and
to implementing and enforcing effective systems and controls
to ensure slavery and human trafficking is not taking place
anywhere in our supply chains.
Due diligence processes for slavery and human trafficking
As part of our initiative to identify and mitigate risk we have in
place systems to:
• Identify and assess potential risk areas in our supply chains.
We give all suppliers a copy of this statement and request
a copy of their statement (if they are required to have one);
• Mitigate the risk of slavery and human trafficking occurring
in our supply chains. We set clear expectations for our
suppliers by informing them of our Code of Conduct, which
states ‘Brit does not tolerate modern slavery or any form
of human trafficking within its business or supply chains.
Brit does not allow harsh or inhumane treatment and
we expect our suppliers to share our values’;
• Monitor potential risk areas in our supply chains. Staff are
encouraged to report any concerns to senior management
and there is a risk register operated by the Head of
Operational Risk to record any such concerns;
• Ensure appropriate recruitment practices are carried
out, using reputable employment agencies. We verify the
practices of any new recruitment agency as part of our
terms of business with them and before accepting any
candidates and temporary workers from that agency. We also
request a copy of the agency’s modern slavery statement
(if it is required to have one). We ask any agency supplying
us with candidates to conduct verification checks on those
individuals (including verification of identity, references,
evidence of qualifications and criminal and financial checks).
We also carry out more detailed pre-employment screening
which include criminal and credit checks, media searches and
regulatory checks as required for all future joiners; and
• Protect whistleblowers. At Brit, workers, customers and
suppliers are encouraged to report any concerns related to
our activities or supply chains. This includes circumstances
which may give rise to increased risk of slavery or human
trafficking. Our whistleblowing procedure is designed to
make it easy for people to make disclosures without fear
of retaliation.
Key Performance Indicators
Several key performance indicators are collated from across the
business to measure the effectiveness of existing processes and
controls and performance against specific appetites as set by
the Board and/or management. These KPIs are proportionate
to the risk profile of the Group and where applicable, include
Modern Slavery and Human Trafficking considerations (e.g. the
completion rate of staff mandatory training measures the
completeness of all new starter training modules, of which
Modern Slavery and Human Trafficking is one).
Training
To ensure a high level of understanding of the risks of modern
slavery and human trafficking in our supply chains and our
business, we provide appropriate training to members of staff.
Our commitment
This statement is made pursuant to section 54(1) of the Modern
Slavery Act 2015 and constitutes our Group’s slavery and
human trafficking statement for the financial year ending
31 December 2025.
This Modern Slavery and Human Trafficking Statement is
reviewed by Brit’s Board of Directors at least annually and
may be amended from time to time.
By order of the Board
Martin Thompson
Chief Executive Officer
26 February 2026
financial statements
62
financial statements
Brit Group Holdings Limited Annual Report 2025 63
Independent Auditors’ Report
Consolidated Financial Statements
Parent Company Financial Statements
64
74
174
financial statements
financial statements
64
Brit Group Holdings Limited Annual Report 2025
Independent auditors’ report to the members
of Brit Group Holdings Limited
Report on the audit of the financial
statements
Opinion
In our opinion:
• Brit Group Holdings Limited’s group financial
statements and company financial statements (the
“financial statements”) give a true and fair view
of the state of the group’s and of the company’s affairs
as at 31 December 2025 and of the group’s profit and the
group’s cash flows for the year then ended;
• the group financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards as applied in accordance with the
provisions of the Companies Act 2006;
• the company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards, including FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”, and
applicable law); and
• the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements, included within the
Annual Report, which comprise:
• the Consolidated Statement of Financial Position
as at 31 December 2025;
• the Parent Company, Statement of Financial Position
as at 31 December 2025;
• the Consolidated Income Statement for the
year then ended;
• the Consolidated Statement of Comprehensive Income
for the year then ended;
• the Consolidated Statement of Cash Flows for the
year then ended;
• the Consolidated Statement of Changes in Equity for the
year then ended;
• the Parent Company, Statement of Changes in Equity
for the year then ended; and
• the notes to the financial statements, comprising
material accounting policy information and other
explanatory information.
Our opinion is consistent with our reporting to the
Audit Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We remained independent of the group in accordance with
the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with
these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
Other than those disclosed in Note 12 of the group financial
statements, we have provided no non-audit services to the
company or its controlled undertakings in the period under audit.
Our audit approach
Context
Brit Group Holdings Limited was incorporated on 7 August 2024
as a direct subsidiary of Fairfax UK Holdings Limited (formerly
Brit Limited until 11 March 2025). On 12 December 2024 Brit
Group Holdings Limited acquired the entire share capital of Brit
Insurance Holdings Limited (an intermediate holding company
of the Brit insurance businesses) from Fairfax UK Holdings
Limited in exchange for the issuance of share capital.
With effect from 22 January 2025 Brit Group Holdings
Limited was substituted in place of Brit Limited as issuer and
principal debtor of the listed subordinated debt notes that are
denominated in GBP and listed on the London Stock Exchange.
Accordingly, Brit Group Holdings Limited is now required
to file consolidated financial statements with the London
Stock Exchange.
This is Brit Group Holdings Limited's first set of consolidated
financial statements since the Brit group restructuring
(note 2.1) and the transfer of listed debt referenced above.
Prior to this date, the corresponding figures disclosed
in these consolidated financial statements for the year ended
31 December 2024 formed a part of the consolidated financial
statements of Brit Limited. The corresponding figures of these
consolidated financial statements have therefore not been
subject to a statutory audit in accordance with the United
Kingdom Companies Act 2006. However, the Brit Limited
consolidated group financial statements for the year ended
31 December 2024, of which the Brit Group Holdings Limited
figures formed a part, were audited and an unqualified
opinion presented.
financial statements
Brit Group Holdings Limited Annual Report 2025 65
Overview
Audit scope
• Brit is a global specialty insurer and reinsurer, present
in Lloyd’s of London with operations in Bermuda, and writes
insurance business internationally. The group maintains
a finance team within the UK and utilises shared service
centres within the wider Fairfax group;
• Our audit scope has been determined to provide coverage
of all material financial statement line items. We performed
full scope audit procedures over one of the group’s
components, namely the Lloyd's segment (comprising
Lloyd’s syndicate 2987 and the group’s share of Lloyd’s
syndicate 2988). Shared service auditors were engaged
to carry out audit testing and provide coverage, under
the direction and supervision of the group team, over the
group’s IFRS 17 calculation system and certain investment
balances. In addition, we have ensured appropriate
coverage has been obtained over the Brit Group Holdings
Limited group’s consolidation adjustments;
• For certain other components, we performed audit
procedures over specified financial statement line
item balances; and
• For the remaining components that were not
inconsequential, analytical procedures were performed
by the group engagement team.
Key audit matters
• Valuation of the liability for incurred claims and the
corresponding asset for incurred claims (group)
• Valuation of estimated premium receipts (group)
• Valuation of shares in group undertakings (parent)
Materiality
• Overall group materiality: $29.5m based on 1%
of insurance revenue (rounded down).
• Overall company materiality: $15.6m based on 1% of total
assets (net of intercompany assets) (rounded down).
• Performance materiality: $22.1m (group) and $11.7m
(company) (rounded down).
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit
of the financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including
those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
financial statements
66
Brit Group Holdings Limited Annual Report 2025
Independent auditors’ report to the members of Brit Group Holdings Limited
Key audit matter How our audit addressed the key audit matter
Valuation of the liability for incurred claims and the
corresponding asset for incurred claims (group)
See notes 2.5.1, 3.2.1, 3.3.1 and 18 of the group financial
statements for disclosures of related accounting policies,
judgements and estimates.
The Liability for Incurred Claims (LIC) and the corresponding
Asset for Incurred Claims (AIC) are inherently uncertain and
contain material estimates.
The most subjective element of the LIC and the AIC continues
to be the incurred but not yet reported (IBNR) claims cash flows,
which form part of the LIC, and the associated reinsurers’ share
of IBNR claims cash flows, which form part of AIC.
Management bases these estimates on the estimated ultimate
cost of all claims, together with estimates of the related claims
handling costs. These estimates can be materially impacted
by numerous factors including:
• the underlying volatility attached to estimates for certain
classes of business, where small changes in assumptions can
lead to large changes in the levels of the estimate held;
• the risk of inappropriate assumptions used in determining
current year estimates, especially for ‘long-tailed’
classes of business;
• the risk that key assumptions in respect of natural
catastrophes and other large claim losses are inappropriate,
particularly as they can be based on limited data; and
• the determination of discount rates (including the choice
of illiquidity premium) and payment patterns used to derive
the cash flows for incurred claims.
The valuation of AIC is uncertain due to the significant degree
of judgement applied in valuing the underlying insurance
contracts that have been reinsured, the complexity of the
application and coverage of the reinsurance programme.
The LIC and AIC also include the risk adjustment to reflect the
management’s view of the compensation that it requires for
bearing uncertainty about the amount and timing of cash flows
from non-financial risks.
Given the inherent uncertainty and the judgement involved
in the determination of the LIC and the AIC this was a focus
area in our audit.
We tested the group’s best estimates of the LIC and the
AIC focussing specifically on the IBNR claims cashflows. We
performed our work with the assistance of our actuarial
specialists. Specifically:
• We understood, assessed and tested the design and
operating effectiveness of key controls over the group’s
estimation of ultimate claims and the associated reinsurance
recoveries. This included the review and approval of the
ultimate claims and the associated reinsurance recoveries;
• We developed a point estimate of ultimate claims and
the associated reinsurance recoveries related to
non-catastrophe claims. We used our point estimates
to challenge management’s estimates;
• We understood the approach used to establish the ultimate
claims and the associated reinsurance recoveries in relation
to catastrophe events and the consistency of its application
across the group. We tested the process by which
management identified exposed insurance contracts and
assessed key assumptions used by management. For
catastrophe events that occurred in prior years we tested
notifications received, payments made and assessed the
assumptions made by management supporting the remaining
best estimate liability and associated reinsurance recoveries.
In concluding on the reasonableness of management’s
estimates in this area, we also considered PwC’s market view
for major events;
• We tested the underlying source data including ultimate
premiums, claims incurred, claims payments, reinsurance
purchases and reinsurance recoveries to supporting
documentation; and
• We tested the application of the earning patterns and the
claims payment patterns which are used to convert the
ultimate claims and the associated reinsurance recoveries
into the incurred best estimate liability/asset fulfilment cash
flows, including those related to IBNR.
Furthermore:
• We assessed the appropriateness of the policy applied
to determine the risk adjustment and tested the derivation
of the adjustment made in respect of the LIC and the AIC
accordingly; and
• We assessed the reasonableness of the yield curves
used to discount the LIC and the AIC (inclusive of the risk
adjustment) and conducted testing to ensure that the yield
curves had been applied accurately.
Based on the work performed, the valuation of the LIC and
the AIC were consistent with the evidence obtained.
financial statements
Brit Group Holdings Limited Annual Report 2025 67
Key audit matter How our audit addressed the key audit matter
Valuation of estimated premium receipts (group)
See notes 2.5.1, 3.2.1, 3.3.1 and 18 of the group financial
statements for disclosures of related accounting policies,
judgements and estimates.
Insurance revenue in each reporting period represents the
change in the Liability for Remaining Coverage (LRC) that
relates to services for which the group expects to receive
consideration. The associated estimated premium receipts
(‘estimated ultimate premiums’) could be adjusted to alter the
recognition of insurance revenue over time leading us to focus
on this area in our audit.
Estimated ultimate premiums are formed by applying
assumptions about past events, current conditions and
forecasts of future conditions. These estimates are particularly
uncertain where business is conducted through a delegated
underwriting authority arrangement (DUA).
We tested the group’s estimated ultimate premiums
by undertaking the following work:
• We understood, assessed and tested the design and
operating effectiveness of the governance and controls over
the monitoring of estimated ultimate premium amounts;
• We performed a retrospective review for the 2024 and
prior underwriting years to assess management’s historical
accuracy in estimating ultimate premiums;
• We developed a point estimate of the 2025 and 2024
underwriting years’ ultimate premiums based on historical
signing ratios and, assisted by our actuarial specialists,
challenged management on the basis for their estimates;
• Assisted by our actuarial specialists, we reprojected
estimated ultimate premiums by class of business and
by underwriting year for the 2023 and prior underwriting
years, challenging management to provide explanations
where differences were identified;
• We tested the current calendar year data used in developing
the point estimates and the actuarial projections noted
above to source systems, and tested the historical data was
consistent year-on-year; and
• We tested the conversion of the estimated ultimate premiums
to fulfilment cashflows and tested the change in the LRC
over the period, including amounts recognised within
insurance revenue.
Based on the above procedures, the estimated ultimate
premiums, the change in LRC over the period, and therefore
insurance revenue, were found to be consistent with the
evidence obtained.
financial statements
68
Brit Group Holdings Limited Annual Report 2025
Key audit matter How our audit addressed the key audit matter
Valuation of shares in group undertakings (parent)
See notes 1.2 and 3 of the parent company financial statements
for disclosures of related accounting policies, judgements
and estimates.
In the company’s statement of financial position, the shares
in group undertakings are reported at cost less impairment.
Management carry out an impairment assessment on an
annual basis which requires judgement and the application
of underpinning assumptions and as such this was a focus
for our audit.
We performed the following audit procedures to assess the
valuation of the shares in group undertakings:
• We obtained management’s impairment indicator
assessment; and
• We challenged management's impairment indicator
assessment taking into consideration our understanding
of the group’s undertakings, the underlying businesses,
their financial condition and trading performance and the
broader results of the group audit.
Based on these procedures, the valuation of the shares
in group undertakings was found to be consistent with the
evidence obtained.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry
in which they operate.
Brit is a global specialty insurer and reinsurer, present in Lloyd’s of London with operations in Bermuda, and writes insurance
business internationally. The group is structured into five segments (see Note 5 to the consolidated financial statements) and
is a consolidation of a number of separate legal entities. The group maintains a finance team within the UK and utilises shared service
centres within the wider Fairfax group.
For the purposes of the group audit, a full scope audit was performed over one significant component located in the United Kingdom,
namely Lloyd's (comprising Lloyd’s syndicate 2987 and the group’s share of Lloyd’s syndicate 2988). Shared service auditors were
engaged to conduct audit testing and provide coverage over the group’s IFRS 17 calculation system and certain investment balances.
For certain other components, we identified account balances which were considered to be significant in size or audit risk at the
financial statement line item level in relation to the consolidated financial statements, and performed financial statement line item
audit procedures over these specified balances.
In addition, we have ensured appropriate coverage has been obtained over the Brit Group Holding Limited group’s consolidation
adjustments. Analytical procedures over the remaining components that were not assessed as inconsequential were performed
by the group engagement team.
In establishing our overall approach to the group audit, we determined the type of work that needed to be performed by us, as the
group engagement team, or by the auditors of the shared service centres. Where the work was performed by auditors at the shared
service centres, we determined the level of involvement we needed to have in the audit work over the IFRS 17 calculation system
and the investment balances to be able to conclude whether sufficient appropriate audit evidence had been obtained. The group
engagement team had regular interaction with the shared service centre auditors during the audit process. The engagement leader
and senior members of the group engagement team reviewed, in detail, all reports with regards to the audit approach and findings
submitted by the share service centre auditors. This, together with additional procedures performed at the group level, as described
above, gave us the evidence we needed for our opinion on the consolidated financial statements as a whole.
The parent company, Brit Group Holdings Limited, is a UK based holding company wholly owned by Fairfax Financial Holdings Limited.
The company maintains a finance team within the UK. We have performed a full scope audit of the parent company, taking into
account our determination of materiality and the risks of material misstatement of the company’s financial statements.
Independent auditors’ report to the members of Brit Group Holdings Limited
financial statements
Brit Group Holdings Limited Annual Report 2025 69
The impact of climate risk on our audit
As part of our audit we made enquiries of management
to understand the extent of the potential impact of climate
risk on the group’s and company’s financial statements, and
we remained alert when performing our audit procedures for
any indicators of the impact of climate risks. We assessed the
consistency of the disclosures related to climate risk within
the Annual Report against the knowledge obtained from our
work. Our procedures did not identify any material impact
as a result of climate risk on the group’s and company’s
financial statements.
Materiality
The scope of our audit was influenced by our application
of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Financial statements
– group
Financial statements
– company
Overall
materiality
$29.5m. $15.6m.
How we
determined it
1%
of insurance revenue
(rounded down)
1% of total assets (net
of intercompany assets)
(rounded down)
Rationale for
benchmark
applied
In determining our
materiality, we have
considered financial
metrics which we
believe to be relevant
to the primary users
of the consolidated
financial statements.
We concluded a revenue
based metric was
most relevant to the
users. A revenue based
metric provides a good
representation of the
size and complexity
of the group’s business
and it is not distorted
by insured catastrophe
events to which the
group is exposed or to
the levels of external
reinsurance purchased
by the group.
Due to the nature
of the parent company’s
operations (a holding
company) total assets
(net of intercompany
assets) is an appropriate
and generally
accepted benchmark.
For each component in the scope of our group audit, we allocated
a materiality that is less than our overall group materiality. The
range of materiality allocated across components was $0.5m
to $28.0m (rounded down). Certain components were audited
to a local statutory audit materiality that was also less than our
overall group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account
balances, classes of transactions and disclosures, for example
in determining sample sizes. Our performance materiality was 75%
of overall materiality, amounting to $22.1m for the group financial
statements and $11.7m for the company financial statements.
In determining the performance materiality, we considered
a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness
of controls – and concluded that an amount in the middle of our
normal range was appropriate.
We agreed with the Audit Committee that we would report
to them misstatements identified during our audit above
$1.47m (group audit) and $0.78m (company audit) as well
as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and
the company’s ability to continue to adopt the going concern
basis of accounting included:
• Inspecting management’s going concern analysis as it related
to the group’s and the company’s going concern;
• Evaluating management’s analysis and supporting
documentation, taking into consideration the results of our
audit work; and
• Assessing the disclosures made in the financial statements
in respect of going concern.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group's and the company’s ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group's
and the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
financial statements
70
Brit Group Holdings Limited Annual Report 2025
Independent auditors’ report to the members of Brit Group Holdings Limited
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for
the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated.
If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report based on these responsibilities.
With respect to the Strategic Report and Directors' Report,
we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic Report
and Directors' Report for the year ended 31 December 2025
is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and
company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic Report and Directors' Report.
Responsibilities for the financial statements
and the audit
Responsibilities of the directors for the
financial statements
As explained more fully in the Statement of Directors'
responsibilities, the directors are responsible for the preparation
of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control
as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the company’s ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate
the group or the company or to cease operations, or have no
realistic alternative but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud, is detailed below.
Based on our understanding of the group and industry,
we identified that the principal risks of non-compliance with
laws and regulations related to breaches of regulatory
principles, such as those governed by the Prudential
Regulation Authority and the Financial Conduct Authority,
and we considered the extent to which non-compliance
might have a material effect on the financial statements.
We also considered those laws and regulations that have
a direct impact on the financial statements such as the
Companies Act 2006 and UK tax legislation. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk
of override of controls), and determined that the principal
risks were related to the posting of inappropriate journals
and management bias in accounting estimates. The group
engagement team shared this risk assessment with the
component auditors so that they could include appropriate
audit procedures in response to such risks in their work.
financial statements
Brit Group Holdings Limited Annual Report 2025 71
Audit procedures performed by the group engagement team
and/or component auditors included:
• Discussions with the Board, management, internal audit and
the compliance function, including consideration of known
or suspected instances of non-compliance with laws and
regulations, and fraud;
• Assessment of matters reported on the Group's
whistleblowing helpline and management’s investigation
of such matters;
• Reviewing relevant meeting minutes;
• Testing and challenging, where appropriate, the assumptions
and judgements made by management in their significant
accounting estimates;
• Identifying and testing journal entries identified as potential
indicators of fraud; and
• Designing audit procedures to incorporate unpredictability
around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related
to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment
by, for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations
of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us
to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit
of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no
other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent
in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
• we have not obtained all the information and explanations we
require for our audit; or
• adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified
by law are not made; or
• the company financial statements are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were first appointed by the company for the financial year
ended 31 December 2024. Our uninterrupted engagement
covers 2 financial years, having been auditors for a predecessor
entity for 8 financial years before.
Other matters
The group financial statements for the year ended
31 December 2024, forming the corresponding figures
of the group financial statements for the year ended
31 December 2025, are unaudited.
The company is required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rules to include these
financial statements in an annual financial report prepared
under the structured digital format required by DTR 4.1.15R
– 4.1.18R and filed on the National Storage Mechanism of the
Financial Conduct Authority. This auditors’ report provides no
assurance over whether the structured digital format annual
financial report has been prepared in accordance with those
requirements.
Paul Pannell
Senior Statutory Auditor
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
26 February 2026
financial statements
72 Brit Group Holdings Limited Annual Report 2025
Brit Group Holdings Limited Annual Report 2025 73
financial statements
contents
Index to the Consolidated Financial Statements
Consolidated Income Statement 74
Consolidated Statement of Comprehensive Income 75
Consolidated Statement of Financial Position 76
Consolidated Statement of Cash Flows 77
Consolidated Statement of Changes in Equity 78
Notes to the Consolidated Financial Statements: 79
Note 1 General information 79
Note 2 Accounting policies and basis of preparation 79
Note 3 Significant judgements and estimates 98
Note 4 Risk management policies 101
Note 5 Segmental information 119
Note 6 Investment return 121
Note 7 Net finance income or expenses 122
Note 8 Return on derivative contracts 123
Note 9 Other income 123
Note 10 Other operating expenses 123
Note 11 Staff costs 124
Note 12 Auditors’ remuneration 124
Note 13 Finance costs 125
Note 14 Foreign exchange gains or losses 125
Note 15 Tax charge 126
Note 16 Intangible assets 128
Note 17 Property, plant and equipment 129
Note 18 Insurance and reinsurance contracts 130
Note 19 Employee benefits 144
Note 20 Deferred tax 148
Note 21 Financial assets and liabilities 150
Note 22 Derivative contracts 157
Note 23 Insurance and other receivables 159
Note 24 Cash and cash equivalents 159
Note 25 Borrowings 160
Note 26 Insurance and other payables 161
Note 27 Called up share capital 161
Note 28 Dividends 162
Note 29 Notes to the consolidated cash flow statement 162
Note 30 Share-based payments 164
Note 31 Consolidated entities 166
Note 32 Related party transactions 168
Note 33 Guarantees and contingent liabilities 171
74 Brit Group Holdings Limited Annual Report 2025
financial statements
consolidated income statement
For the year ended 31 December 2025
Note
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Insurance revenue 5, 18 2,950.3 2,856.0
Insurance service expenses 5, 18 (2,349.4 ) (2,163.0 )
Net expenses from reinsurance contracts held 5, 18 (154.7 ) (136.0 )
Insurance service result 446.2 557.0
Interest revenue from financial assets not measured at FVTPL 6 42.7 35.2
Other investment return 6 543.8
Net investment return 586.5 272.3
Net finance expenses from insurance contracts issued 7
(332.0 )
(226.3 )
Net finance income from reinsurance contracts held 7 87.8 55.9
Net insurance finance expenses (244.2 ) (170.4 )
Other income 9 92.3 122.6
Other operating expenses 10 (166.1 ) (171.3 )
Finance costs 13 (25.0 ) (13.3 )
Foreign exchange gains/(losses) 14 27.0 (25.8 )
Profit before tax 716.7 571.1
Tax charge 15 (64.9 ) (92.7 )
Profit for the year 651.8 478.4
The above consolidated income statement should be read in conjunction with the accompanying notes.
Brit Group Holdings Limited Annual Report 2025 75
financial statements
Note
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Profit for the year 651.8 478.4
Other comprehensive income/(expense)
Items not to be reclassified to profit or loss in subsequent periods:
Remeasurements of post-employment benefit obligations 19 5.1 0.1
Deferred tax loss relating to remeasurements of post-employment
benefit obligations 20 (1.1 ) (5.1 )
Items that may be reclassified to profit or loss in subsequent periods:
Change in unrealised foreign currency translation gains/(losses) on foreign operations 12.4 (2.7 )
Total other comprehensive income/(expense) 16.4 (7.7 )
Total comprehensive income for the year 668.2 470.7
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
consolidated statement of comprehensive income
For the year ended 31 December 2025
76 Brit Group Holdings Limited Annual Report 2025
financial statements
consolidated statement of financial position
At 31 December 2025
Note
31 December
2025
$m
(Unaudited)
31 December
2024
$m
Assets
Intangible assets 16 65.1 54.2
Property, plant and equipment 17 20.5 22.2
Reinsurance contract assets 18 1,668.3 1,707.2
Employee benefits 19 11.9 35.0
Deferred tax assets 20 0.8 –
Current tax assets – 0.4
Financial investments 21 6,744.5 5,274.1
Derivative contracts 22 14.6 15.0
Insurance and other receivables 23 578.2 673.6
Cash and cash equivalents 24 577.2 476.4
Total assets 9,681.1 8,258.1
Liabilities and Equity
Liabilities
Insurance contract liabilities 18 5,786.0 5,343.2
Borrowings 25 685.3 159.5
Provisions 6.2 2.7
Deferred tax liabilities 20 114.6 105.9
Current tax liabilities 34.8 0.3
Derivative contracts 22 13.5 12.1
Insurance and other payables 26 316.9 342.8
Total liabilities 6,957.3 5,966.5
Equity
Called up share capital 27 – –
Share premium 655.2 1,055.2
Foreign currency translation reserve (85.7 ) (98.1 )
Retained earnings 2,154.3 1,334.5
Total equity 2,723.8 2,291.6
Total liabilities and equity 9,681.1 8,258.1
The above consolidated statement of financial position should be read in conjunction with the accompanying notes. These
consolidated financial statements were approved by the Board of Directors on 26 February 2026 and were signed on its behalf by:
Martin Thompson Gavin Wilkinson
Group Chief Executive Officer Group Chief Financial Officer
Registered number: 15884169
Brit Group Holdings Limited Annual Report 2025 77
financial statements
consolidated statement of cash flows
For the year ended 31 December 2025
Note
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Cash flows from operating activities
Cash used in operating activities 29 (294.5 ) (296.4 )
Tax paid
(28.8 )
(11.5 )
Interest received
Dividends received
Purchase of shares for share-based payment schemes (11.9 ) (7.5 )
Net cash used in operating activities (159.3 ) (74.2 )
Cash flows from investing activities
Purchase of intangible assets 16 (18.7 ) (18.2 )
Purchase of property, plant and equipment 17 (0.9 ) (1.1 )
Disposal of associated undertaking 5.9 15.2
Net cash used in investing activities (13.7 ) (4.1 )
Cash flows from financing activities
Net drawdown of immediate parent debt 25 – 14.7
Drawdown of senior debt 519.8 –
Interest paid (21.5 ) (13.6 )
Dividends paid 28 (236.0 ) (140.6 )
Net cash generated from/(used in) financing activities 262.3 (139.5 )
Net increase/(decrease) in cash and cash equivalents 89.3 (217.8 )
Cash and cash equivalents at the beginning of the year 476.4 700.9
Effect of exchange rate fluctuations on cash and cash equivalents 11.5 (6.7 )
Cash and cash equivalents at the end of the year 24 577.2 476.4
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
78 Brit Group Holdings Limited Annual Report 2025
financial statements
consolidated statement of changes in equity
For the year ended 31 December 2025
Note
Called up
share
capital
$m
Share
premium
$m
Foreign
currency
translation
reserve
$m
Retained
earnings
$m
Total
equity
$m
At 1 January 2024 (unaudited) – 1,055.2 (95.4 ) 1,001.7 1,961.5
Profit for the year – – – 478.4 478.4
Other comprehensive expense – – (2.7 ) (5.0 ) (7.7 )
Total comprehensive income recognised – – (2.7 ) 473.4 470.7
Dividends 28 – – – (140.6 ) (140.6 )
At 31 December 2024 (unaudited) – 1,055.2 (98.1 ) 1,334.5 2,291.6
Profit for the year – – – 651.8 651.8
Other comprehensive income – – 12.4 4.0 16.4
Total comprehensive income recognised – – 12.4 655.8 668.2
Capital reduction
1
– (400.0 ) – 400.0 –
Dividends 28 – – – (236.0 ) (236.0 )
At 31 December 2025 – 655.2 (85.7 ) 2,154.3 2,723.8
1. On 30 July 2025 Brit Group Holdings Limited effected a capital reduction, without the cancellation of any shares, which resulted in a $400.0m reduction to share premium and
a corresponding increase in retained earnings. Accordingly, there was no impact on total equity.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Brit Group Holdings Limited Annual Report 2025 79
financial statements
notes to the consolidated financial statements
The first three Notes provide details of the basis of preparation and accounting policies applied in producing these financial
statements and the significant accounting estimates and judgements therein.
1 General information
The consolidated financial statements of Brit Group Holdings Limited and its subsidiaries (collectively, the Group) for the year ended
31 December 2025 were authorised for issue in accordance with a resolution of the Directors on 26 February 2026. The Group’s principal
Brit Group Holdings Limited (the Company) is a private company limited by shares , incorporated and domiciled in England, United Kingdom .
The address of the registered office is The Leadenhall Building, 122 Leadenhall Street, London, England, EC3V 4AB.
2 Accounting policies and basis of preparation
2.1 Corporate reorganisation and impact on comparatives
2.1.1 Summary of corporate reorganisation
Brit Group Holdings Limited was incorporated on 7 August 2024 as a direct subsidiary of Fairfax UK Holdings Limited (formerly
Brit Limited). Brit Group Holdings Limited subsequently acquired the entire share capital of Brit Insurance Holdings Limited
(an intermediate holding company of the Brit insurance businesses) from Fairfax UK Holdings Limited in exchange for the issuance
of share capital on 12 December 2024. Upon acquisition, Brit Group Holdings Limited became the new holding company for the Brit
insurance businesses. A separate subsidiary of Fairfax UK Holdings Limited is the holding company for the Ki business, which is not
included within this set of financial statements, but was included as part of Brit Limited previously.
Brit Group Holdings Limited was a new parent company at the point of acquisition, without an integrated set of activities and assets
capable of providing goods or services or generating investment or other income. It therefore did not meet the IFRS definition
of a business. As a result, this acquisition is outside the scope of IFRS 3 Business Combinations. Furthermore, no substantive
economic change resulted from the transaction (i.e. there was no change in ultimate ownership of the Brit Insurance Holdings
Limited sub-group). The transaction has therefore been accounted for as a capital reorganisation, the assets and liabilities of the
Brit Insurance Holdings Limited sub-group were transferred at their carrying values from the Fairfax UK Holdings Limited group
consolidated financial statements.
2.1.2 Production of consolidated financial statements
As described in Note 25, on 22 January 2025 Brit Group Holdings Limited was substituted in place of Fairfax UK Holdings Limited
as issuer and principal debtor under listed subordinated debt notes. In accordance with the relevant listing requirements, Brit Group
Holdings Limited is now required to produce consolidated financial statements.
2.1.3 Impact of corporate reorganisation on comparatives
Although Brit Insurance Holdings Limited was transferred to Brit Group Holdings Limited on 12 December 2024, the comparatives
in these consolidated financial statements have been presented as if the transfer occurred before the start of the earliest period
presented (i.e. before the start of 2024). For the part of the comparative period before Brit Group Holdings Limited’s acquisition
of Brit Insurance Holdings Limited, the comparative amounts presented relate to the Brit Insurance Holdings Limited sub-group only,
except for share capital which is that of Brit Group Holdings Limited. This reflects the fact that the Brit Insurance Holdings Limited
sub-group was ultimately controlled by the same party throughout the periods presented.
As described in Note 2.1.1, the comparative amounts presented in these financial statements do not include any amounts relating
to the Ki business, which is a separate sub-group within the Fairfax UK Holdings Limited group.
Due to the restructuring of the Group and there having been no requirement to produce consolidated financial statements for
the Brit Group Holdings Limited group for the comparative period, the comparatives presented in these consolidated financial
statements and accompanying notes have not been subject to a statutory audit and are therefore referenced as unaudited. These
comparatives formed part of amounts included in the consolidated financial statements and accompanying notes of Brit Limited for
the year ended 31 December 2024, which were audited and received an unqualified audit opinion. Brit Limited changed its name to
Fairfax UK Holdings Limited on 11 March 2025. Copies of those financial statements can be obtained from The Leadenhall Building,
122 Leadenhall Street, London, England, EC3V 4AB or www.britinsurance.com.
2.2 Basis of preparation
The consolidated financial statements for the year ended 31 December 2025 have been prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those
80 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.2 Basis of preparation (continued)
The consolidated financial statements have been compiled on a going concern basis and prepared on a historical cost basis, with the
exception of financial assets and liabilities classified as fair value through profit or loss, insurance and reinsurance contract assets
and liabilities which are measured at their fulfilment value, and the defined benefit pension asset which is measured at the fair value
of plan assets less the present value of the defined benefit pension obligation. The consolidated financial statements are presented
in USD and all values are rounded to the nearest $0.1m except where otherwise indicated.
Certain amounts recorded in the financial statements include estimates and assumptions made by management, particularly about
(re)insurance assets and liabilities and investment valuations. Actual results may differ from the estimates made. Further details
on estimates, judgements and assumptions are included within Note 3 to the consolidated financial statements.
The Directors have reviewed the principal risks and uncertainties faced by the Group as summarised in the Strategic Report. Brit
manages these risks in line with its Risk Management Framework.
The Directors have considered various factors in order to be satisfied that a going concern basis of preparation is appropriate.
Such factors include, but are not limited to, recent underwriting performance, reserving policy and track record, the Group’s liquidity
position and the Group’s financial plans.
After assessing evidence in respect of these considerations, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable future. Therefore, they consider it appropriate
to continue to adopt the going concern basis for the preparation of its consolidated financial statements.
The consolidated financial statements include the results of the Company and all its subsidiary undertakings (collectively, the Group)
made up to the same accounting date.
2.2.1 New and amended standards adopted by the Group
The Group has applied the amendments to IAS 21, Lack of Exchangeability, for the first time for the annual reporting period
commencing 1 January 2025. The amendment did not have any material impact on the amounts recognised in prior periods or the
current period, and are not expected to significantly affect future periods.
2.2.2 New standards and interpretations not yet adopted
At the date of authorisation of these financial statements, the following amendment to a standard was in issue but not yet effective
and has not been early adopted by the Group:
Amendment Effective for periods commencing on or after
Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7) 1 January 2026
The Group is in the process of assessing the impact of this amendment on the Group's consolidated financial statements, but the
current expectation is that any impact will not be material.
At the date of authorisation of these financial statements, the following standards which have not been applied in these financial
statements were in issue but not yet effective:
Standard Effective for periods commencing on or after
IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027
IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027
IFRS 18 will replace IAS 1 Presentation of Financial Statements, introducing new requirements that will increase the comparability of the
financial performance of similar entities and provide more relevant information and transparency to users. IFRS 18 will not impact the
recognition or measurement of items in the financial statements and therefore there will be no impact on the Group's net profit or net
assets. However, there is likely to be an impact on presentation and disclosure in the Group's consolidated financial statements. The
Group is in the process of assessing the detailed implications of IFRS 18 on the Group's consolidated financial statements.
IFRS 19 allows for certain eligible subsidiaries of parent entities that report under IFRS to apply reduced disclosure requirements.
The Group does not expect this standard to impact its consolidated financial statements or have a significant impact on its operations.
Brit Group Holdings Limited Annual Report 2025 81
financial statements
2 Accounting policies and basis of preparation (continued)
2.3 Basis of consolidation and equity accounting
The consolidated financial statements include the financial statements of the Company, its subsidiaries and the Group’s participation
in Lloyd’s syndicates’ assets, liabilities, revenues and expenses. Subsidiaries are those entities (including structured entities) that
an investor controls, when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
The financial statements of the subsidiaries are prepared up to 31 December each year. Consolidation adjustments are made
to convert subsidiary financial statements from local GAAP into IFRS to remove any dissimilar accounting policies that may exist.
Subsidiaries are consolidated from the date control is transferred to the Group and cease to be consolidated from the date
control is transferred from the Group. All inter-company balances, profits and transactions are eliminated. The acquisition method
of accounting is used to account for business combinations by the Group.
• Underwriting members at Lloyd’s have several but not joint liability for the transactions of the syndicates in which they
participate. Therefore, for each managed syndicate on which the Group participates, only the relevant proportion of the
transactions, assets and liabilities of those syndicates are reflected in the consolidated financial statements. Syndicate
assets are held subject to trust deeds for the benefit of the syndicate’s insurance creditors. As at 31 December 2025: Brit UW
Limited, a subsidiary of the Group, provided 100% of the capital for Syndicate 2987 and therefore all transactions, assets and
liabilities of Syndicate 2987 have been included in the Group’s financial statements.
• Subsidiaries of the Group participated as members of Syndicate 2988, providing 75.86%, 51.28% and 50.21% of the capital for
the 2023, 2024 and 2025 years of account respectively. Consequently, the proportionate shares of the transactions, assets
and liabilities of Syndicate 2988 have been included in the Group’s financial statements.
If control of a subsidiary is lost during the reporting period, the assets and liabilities of that entity will be derecognised from the consolidated
statement of financial position. The revenues and expenses of the entity will no longer be consolidated following the date that control is lost.
The difference between the fair value of the consideration received, if any, from the transaction resulting in a loss of control and the fair
value of the subsidiary’s net assets will be recognised as a gain or loss in the income statement.
2.4 Business combinations
The acquisition method of accounting is used for business combinations. The cost of an acquisition is measured as the aggregate
of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest (NCI) in the
acquiree, where relevant. Acquisition-related costs are expensed as incurred. Where goodwill or a bargain purchase arises, this
is accounted for in accordance with the policy set out in Note 2.5.4(a).
When the Group acquires a business, it assesses the identifiable assets acquired and liabilities assumed, measured initially
at their fair values at the acquisition date, for appropriate classification and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions at the acquisition date. This includes the separation of embedded derivatives
in host contracts by the acquiree. No reclassification of insurance contracts is required as part of the accounting for the business
combination. Thus, insurance contracts are classified on the basis of the contractual terms and other factors at the inception of the
contract or modification date.
The Group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
If the business combination is achieved in stages, any previously held equity interest is remeasured at its fair value at the acquisition
date, and any resulting gain or loss is recognised in profit or loss.
Any contingent consideration will be recognised at fair value at the acquisition date and, where relevant, remeasured at subsequent
reporting dates. Contingent consideration that is classified as equity is not remeasured and its subsequent settlement is accounted
for within equity. Contingent consideration that is classified as an asset or liability within or outside the scope of IFRS 9 is measured
at fair value through profit or loss (FVTPL).
82 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies
2.5.1 Insurance and reinsurance contracts
The accounting policies outlined below relate to both insurance contracts issued, and reinsurance contracts held, unless stated
otherwise. The Group issues both insurance and reinsurance contracts to policyholders, therefore all references to insurance
contracts issued also apply to reinsurance contracts issued by the Group.
(a) Classification
Contracts under which the Group accepts significant insurance risk are classified as insurance contracts. Contracts held by the Group
under which it transfers significant insurance risk related to underlying insurance contracts are classified as reinsurance contracts.
Insurance and reinsurance contracts that expose the Group to financial risk but do not transfer significant insurance risk are
accounted for as financial instruments under IFRS 9. The Group does not have any insurance or reinsurance contracts that have been
classified under IFRS 9.
Insurance contracts may be issued and reinsurance contracts may be initiated by the Group, or they may be acquired in a business
combination or in a transfer of contracts that do not form a business. All references in these accounting policies to ‘insurance
contracts’ and ‘reinsurance contracts’ include contracts issued, initiated or acquired by the Group, unless otherwise stated.
(b) Separating components from insurance and reinsurance contracts
The Group assesses its insurance contracts to determine if they contain distinct components which must be accounted for under
another IFRS other than IFRS 17. After separating any distinct components, the Group applies IFRS 17 to all remaining components
of the host. Currently, the Group’s contracts issued and held do not include distinct components that require separation.
Some of the insurance contracts issued and reinsurance contracts held by the Group contain profit commission arrangements.
These arrangements result in a minimum guaranteed amount being repaid to either the Group or the policyholder in all circumstances,
either through the form of a claim, profit commission or both. The minimum guaranteed amounts meet the definition of a non-distinct
investment component given they are highly interrelated with the insurance component of the reinsurance contracts. The non-distinct
investment component is not accounted for separately but the value incurred each reporting period is excluded from insurance
revenue and insurance service expenses for the insurance contracts issued by the Group, and the components of net expenses from
reinsurance contracts held for the reinsurance contracts held by the Group. No further investment components have been identified
by the Group.
(c) Level of aggregation
Insurance contracts are aggregated into groups for measurement purposes. Groups of insurance contracts are determined by:
• Identifying portfolios of insurance contracts;
• Dividing a portfolio into a minimum of three groups (contracts that are onerous on initial recognition; contracts that on initial
recognition have no significant possibility of becoming onerous subsequently; and those contracts remaining in the portfolio);
• Dividing each set of contracts into annual cohorts (i.e. by year of issue) to arrive at groups of contracts.
Portfolios comprise contracts subject to similar risks and managed together. Contracts within a portfolio that would fall into different
groups, only because law or regulation specifically constrains the Group’s practical ability to set a different price or level of benefits
for policyholders with different characteristics, are included in the same group.
Portfolios of reinsurance contracts held are assessed for aggregation separately from portfolios of insurance contracts issued.
Applying the IFRS 17 grouping requirements, reinsurance contracts held within each portfolio and annual cohort are aggregated into
the below groups:
• A group of contracts for which there is a net gain at initial recognition;
• A group of contracts for which, on initial recognition, have no significant possibility of a net gain arising subsequently; and
• Any remaining groups of contracts in the annual cohort.
Brit Group Holdings Limited Annual Report 2025 83
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.1 Insurance and reinsurance contracts (continued)
(d) Initial recognition
The Group recognises insurance contracts it issues from the earliest of the following:
• The beginning of the coverage period of the group of contracts;
• The date when the first payment from a policyholder in the group becomes due; and
• For a group of onerous contracts, when the group becomes onerous.
Groups of reinsurance contracts held are initially recognised from the earlier of the following:
• The beginning of the coverage period of the group of reinsurance contracts held; and
• The date the Group recognises an onerous group of underlying insurance contracts, if the Group entered into the related
reinsurance contract held at or before that date.
Notwithstanding the above, the Group delays the recognition of a group of reinsurance contracts held that provide proportional
coverage until the date that any underlying insurance contract is initially recognised, if that date is later than the beginning of the
coverage period of the group of reinsurance contracts held.
(e) Modification and derecognition
The Group derecognises an insurance contract when:
• It is extinguished, i.e. when the obligation specified in the insurance contract expires, is discharged or is cancelled; or
• If the terms of the contract are modified and additional criteria discussed below are met.
When the terms of an insurance contract are modified by the Group, for example by agreement with the counterparties
or by a change in regulation, the Group treats the modification as a derecognition if any of the following conditions are met:
• The modified contract would have been excluded from the scope of IFRS 17;
• The Group would have separated different components from the host contract;
• The modified terms would have had a substantially different contract boundary;
• The modified contract would have been included in a different group of contracts; or
• The original contract was accounted for under the premium allocation approach (PAA), but the modification means the
contract no longer meets the PAA eligibility criteria.
If a contract modification meets none of the conditions, the Group treats the changes in cash flows caused by the modification
as changes in estimates of the fulfilment cash flows.
(f) Contract boundary
The measurement of a group of contracts includes all the future cash flows within the boundary of each contact in the group,
determined as follows.
Insurance contracts
Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during
the reporting period in which the Group can compel the policyholder to pay the premiums, or in which the Group has a substantive
obligation to provide the policyholder with insurance contract services. A substantive obligation to provide insurance contract
services ends when:
a) The Group has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level
of benefits that fully reflects those risks; or
b) Both of the following criteria are satisfied:
i. the Group has the practical ability to reassess the risks of the portfolio of insurance contracts that contains the contract
and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio; and
ii. the pricing of the premiums up to the date when the risks are reassessed does not take into account the risks that relate
to periods after the reassessment date.
84 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.1 Insurance and reinsurance contracts (continued)
Reinsurance contracts
Cash flows are within the contract boundary if they arise from substantive rights and obligations that exist during the reporting
period in which the Group is compelled to pay amounts to the reinsurer or has a substantive right to receive services from
the reinsurer.
A substantive right to receive services from the reinsurer ends when the reinsurer:
a) Has the practical ability to reassess the risks transferred to it and can set a price or level of benefits that fully reflects those
reassessed risks; or
b) Has a substantive right to terminate the coverage.
(g) Measurement – Contracts measured under the PAA
The Group’s policy is to apply the PAA to all groups of insurance contracts when eligible. The PAA may be applied to a group
of insurance contracts if at inception of the group:
a) The coverage period of each contract in the group is one year or less; or
b) The Group reasonably expects that such simplification would produce a measurement of the liability for remaining
coverage (LRC) for the group that would not differ materially from the one that would be produced under the general
measurement model (GMM).
On initial recognition of each group of contracts measured under the PAA, the carrying amount of the LRC is measured as the
premiums received on initial recognition minus any insurance acquisition cash flows allocated to the group at that date. The Group
has chosen not to expense insurance acquisition cash flows when they are incurred.
Subsequently, the carrying amount of the LRC is increased by any premiums received and the amortisation of insurance acquisition
cash flows recognised as expenses, and decreased by the amount recognised as insurance revenue for services provided and any
additional insurance acquisition cash flows allocated after initial recognition. On initial recognition of each group of contracts, the
Group expects that the time between providing each part of the service and the related premium due date is no more than a year.
Accordingly, the Group has chosen not to adjust the LRC to reflect the time value of money and the effect of financial risk.
If at any time during the coverage period facts and circumstances indicate that a group of contracts is onerous, then the Group
recognises a loss in profit or loss and increases the LRC to the extent that the current estimates of the fulfilment cash flows that
relate to remaining coverage exceed the carrying amount of the LRC.
The Group recognises the liability for incurred claims (LIC) of a group of insurance contracts at the amount of the fulfilment
cash flows relating to incurred claims. The fulfilment cash flows comprise estimates of future cash flows, adjusted to reflect the
time value of money and the associated financial risks, and a risk adjustment for non-financial risk. The fulfilment cash flows are
discounted at current rates and do not reflect the Group's own non-performance risk.
The estimates of future cash flows incorporate, in an unbiased way, all reasonable and supportable information available without
undue cost or effort about the amount, timing, and uncertainty of those future cash flows. To do this, the Group estimates the
expected value (i.e. the probability-weighted mean) of the full range of possible outcomes. The fulfilment cash flows use estimates
that reflect conditions that exist at the measurement date.
The risk adjustment for non-financial risk for a group of insurance contracts, determined separately from the other estimates, is the
compensation required for bearing uncertainty about the amount and timing of the cash flows that arises from non-financial risk.
The Group applies the same accounting policies to measure a group of reinsurance contracts held with the following modifications:
• The carrying amount of a group of reinsurance contracts held at each reporting date is the sum of the asset for remaining
coverage (ARC) and the asset for incurred claims (AIC).
• The Group measures the estimates of the present value of future cash flows using assumptions that are consistent with those
used to measure the underlying insurance contracts, with an adjustment for any risk of non-performance by the reinsurer.
Brit Group Holdings Limited Annual Report 2025 85
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.1 Insurance and reinsurance contracts (continued)
(h) Measurement – Contracts not measured under the PAA
For certain groups of contracts recognised in 2023 and 2024, the Group determined that the criteria to be eligible for measurement
under the PAA had not been met. These groups are typically those with a longer claim tail and have greater exposure to future
changes in discount rates impacting the subsequent measurement of the fulfilment cash flows under the GMM.
The Group measures a group of insurance contracts not eligible for the PAA as the total of the fulfilment cash flows and the
contractual service margin (CSM). The CSM of a group of insurance contracts represents the unearned profit that the Group will
recognise in profit or loss as it provides services under those contracts.
On initial recognition of a group of insurance contracts, if the total of (a) the fulfilment cash flows, (b) any cash flows arising at that
date (to the extent they are not included in the fulfilment cash flows), and (c) any amount arising from the derecognition of assets for
insurance acquisition cash flows related to the group is a net inflow, then the group is not onerous. In this case, the CSM is measured
as the equal and opposite amount of the net inflow, which results in no income or expenses arising on initial recognition. To the extent
the contract is not profitable (also referred to as ‘onerous’), there is no CSM to measure and a loss is recognised in the profit or loss
immediately for the net cash outflow.
In the event of an onerous group of contracts a loss component will be established which determines the amounts of fulfilment
cash flows that are subsequently presented in profit or loss as reversals of losses and excluded from insurance revenue when
they occur. When the fulfilment cash flows are incurred, they are allocated between the loss component and the remaining LRC
on a systematic basis.
Where a group of insurance contracts generates cash flows in a foreign currency, the Group treats the group of insurance
contracts, including the CSM, as a monetary item. The CSM is denominated in a single currency before the translation to the
functional currency. The CSM is set as the predominant currency within the group of insurance contracts.
The carrying amount of a group of insurance contracts at each reporting date is the sum of the LRC and the LIC. The LRC comprises
(a) the fulfilment cash flows that relate to services that will be provided under the contracts in future periods and (b) any remaining
CSM at that date. The LIC includes the fulfilment cash flows for incurred claims and expenses that have not yet been paid, including
claims that have been incurred but not reported.
The fulfilment cash flows of the group of insurance contracts are measured at the reporting date using current estimates of future
cash flows, current discount rates and current estimates of the risk adjustment for non-financial risk. Changes in the fulfilment cash
flows are recognised as follows:
• Changes relating to future service – adjusted against the CSM, unless the group is onerous, and measured applying the inception
discount rates for the group. If the group becomes onerous, then the CSM will be reduced to zero and a loss component established,
whereas if the group becomes profitable the loss component will be reversed through profit or loss and a CSM established.
• Changes relating to current or past services – recognised in the insurance service result in profit or loss.
• Effect of the time value of money, financial risk and changes therein on estimated future cash flows – recognised as insurance
finance income or expenses.
The carrying amount of the CSM at each subsequent reporting date is the carrying amount at the start of the reporting
period, adjusted for:
• The CSM of any new contracts that are added to the group in the period.
• Interest accreted on the carrying amount of the CSM during the period, measured at the discount rate
at inception of the group.
• Changes in fulfilment cash flows that relate to future service, except to the extent that the group is or becomes onerous and
a loss component is established.
• The effect of any currency exchange differences on the CSM.
• The amount recognised as insurance revenue reflecting the services provided in the year.
Changes in the fulfilment cash flows that relate to future service typically arise from subsequent changes to: (a) the ultimate
premiums expected to be received for a group of contracts; and (b) the ultimate value of claims that are expected to be incurred,
set as a ratio to the ultimate expected premiums.
86 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.1 Insurance and reinsurance contracts (continued)
(h) Measurement – Contracts not measured under the PAA (continued)
For the measurement of a group of reinsurance contracts held, the Group applies the same accounting policies as those applied
to insurance contracts issued, with the following modifications:
• The CSM represents a net cost or net gain on purchasing reinsurance, meaning the CSM can be either positive or negative
unlike for issued groups of contracts. However, if any net cost on purchasing reinsurance coverage relates to insured events
that have occurred already, then the Group recognises the cost immediately in profit or loss as an expense.
• The CSM is adjusted and as a result income is recognised in profit or loss when the underlying group of insurance contracts
recognises a loss component on initial recognition, if the reinsurance contract is entered into before or at the same time
as the underlying contracts are recognised.
• A loss-recovery component is created or adjusted for the group of reinsurance contracts held to depict the adjustment to the
CSM, which determines that amounts that are subsequently presented in profit or loss as reversals of recoveries of losses
from the reinsurance contracts and are excluded from the allocation of reinsurance premiums paid.
• The same modifications described above in relation to contracts measured under the PAA.
(i) Insurance receivables and payables
The premiums and claims related to groups of insurance contracts will typically remain within the insurance contract liability
or reinsurance contract asset until the point at which they are cash settled. However, there are exceptions to this rule whereby the
Group will recognise a separate receivable or payable on the balance sheet. These include (a) where cash that has been received
at the reporting date has yet to be allocated and it is not possible to reasonably determine whether the cash should be attributed
to the LRC/ARC or the LIC/AIC; and (b) where the Group has extended a loss fund payment to a third party. Loss fund payments
do not represent the settlement of a claim with the policyholder, therefore the Group does not account for these payments
as a reduction to the fulfilment cash flows.
(j) Retroactive reinsurance
The Group holds reinsurance contracts that cover events that have already occurred but the financial effect of which is still
uncertain. An example is loss portfolio transfer (LPT) held by the Group that provides insurance coverage against an adverse
development of claims that have already occurred. In such contracts, the insured event is the determination of the ultimate cost
of the claim. This means that the ARC is released over the expected settlement period of the claims of the underlying insurance
contract (since that is, in effect, the coverage period of the reinsurance contract).
For such contracts, a CSM is only established on initial recognition if the contract is in a net gain position. If there is a net cost
position on inception, the loss is immediately recognised in profit or loss as an expense. On subsequent measurement, any CSM
established at initial recognition is not adjusted for changes in fulfilment cash flows.
(k) Presentation
Income and expenses from reinsurance contracts held are presented separately from income and expenses from insurance
contracts issued. Income and expenses from reinsurance contracts held, other than insurance finance income or expenses, are
presented on a net basis as 'net expenses from reinsurance contracts' in the insurance service result.
The Group does not disaggregate changes in the risk adjustment for non-financial risk between the insurance service result and
insurance finance income or expenses. All changes in the risk adjustment for non-financial risk that relate to current or past
services are included in the insurance service result.
The Group has chosen not to disaggregate amounts recognised in the statement of profit or loss and OCI.
Insurance revenue and insurance service expenses exclude any investment components and are recognised as follows.
Brit Group Holdings Limited Annual Report 2025 87
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.1 Insurance and reinsurance contracts (continued)
(l) Insurance revenue
Contracts measured under the PAA
When applying PAA, insurance revenue for the period is the amount of expected premium receipts (excluding any investment
component and adjusted to reflect the time value of money, if applicable) allocated to the period. For most groups of contracts,
the Group allocates expected premium receipts to each period of insurance contract services on the basis of the passage of time.
However, for some groups of insurance contracts, the expected pattern of release of risk during the coverage period differs
significantly from the passage of time; therefore, the expected premium receipts are allocated based on the expected timing
of incurred insurance service expenses. Additionally, ceding commissions that are not contingent on claims are accounted for
as a reduction to insurance revenue for reinsurance contracts issued by the Group.
Contracts not measured under the PAA
The Group recognises insurance revenue as it satisfies its performance obligations. For contracts not measured under the PAA,
the insurance revenue relating to services provided during the reporting period represents the total of the changes in the LRC that
relate to services for which the Group expects to receive consideration, and comprises the following items:
• A release of the CSM, measured based on coverage units provided.
• Changes in the risk adjustment for non-financial risk relating to current services.
• Claims and other insurance service expenses incurred in the year, generally measured at the amounts expected at the
beginning of the year.
• Other amounts if any, such as experience adjustments for premium receipts, other than those that relate to future service.
In addition, the Group allocates a portion of premiums that relate to recovering insurance acquisition cash flows to each period
in a systematic way. The Group recognises the allocated amount, adjusted for interest accretion at the discount rates determined
on initial recognition of the related group of contracts, as insurance revenue and an equal amount as insurance service expenses.
The amount of CSM recognised as insurance revenue in a reporting period is determined by identifying the coverage units in the
group, allocating the CSM remaining at the end of the period (before any allocation) equally to each coverage unit provided in the
period and expected to be provided in future periods, and recognising in profit or loss the amount of the CSM allocated to coverage
units provided in the period. The number of coverage units is the quantity of services provided by the contracts in the group,
determined by considering for each contract the quantity of benefits provided and its expected coverage period. The coverage units
are updated at each reporting date and the Group has opted not to discount them.
(m) Insurance service expenses
Insurance service expenses arising from insurance contracts are recognised in profit or loss generally as they are incurred and
exclude investment components. These expenses comprise the following items:
• Incurred claims and other insurance service expenses;
• Amortisation of insurance acquisition cash flows: For contracts not measured under the PAA, this is equal to the amount
of insurance revenue recognised in the year that relates to recovering insurance acquisition cash flows. For contracts
measured under the PAA, the Group amortises insurance acquisition cash flows on a consistent basis to the earning
of premiums in insurance revenue;
• Losses on onerous contracts and reversals of such losses;
• Adjustments to the liabilities for incurred claims that do not arise from the effects of the time value of money, financial risk and
changes therein; and
• Impairment losses on assets for insurance acquisition cash flows and reversals of such impairment losses.
88 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.1 Insurance and reinsurance contracts (continued)
(n) Net income/(expenses) from reinsurance contracts
Net expenses from reinsurance contracts comprise an allocation of reinsurance premiums paid, less amounts recovered
from reinsurers.
The Group recognises an allocation of reinsurance premiums paid in profit or loss as it receives service from a reinsurer. For
contracts not measured under the PAA, the allocation of reinsurance premiums paid relating to services received for each period
represents the total of the changes in the ARC that relate to services for which the Group expects to pay consideration. For
contracts measured under the PAA, the allocation of reinsurance premiums paid for each period is the amount of expected premium
payments for receiving services in the period.
The recognition of, or any subsequent changes to, the loss-recovery component will also be reflected in the allocation of reinsurance
premiums paid in the period.
(o) Insurance and reinsurance finance income and expenses
Insurance and reinsurance finance income or expenses comprises the changes in the carrying amount of the group of (re)insurance
contracts arising from the effect of the time value of money and changes in the time value of money.
2.5.2 Revenue recognition (other than insurance revenue)
Revenue is measured by the Group based on the consideration to which it expects to be entitled through contracts with customers
(net of refunds). Amounts collected on behalf of third parties are excluded from revenue. When control of a service is transferred
to a customer, the related revenue is then recognised.
(a) Management fee income
The Group receives administration and broking fees from non-aligned syndicates, in accordance with management agreements
that are agreed on an annual basis and specify the services to be provided. These services are in relation to ‘effectively managing
and operating’ the syndicate and are therefore provided continuously throughout the year. As a result, these services are treated
as a single performance obligation. The price is fixed with no variable element and is matched against the single performance
obligation. Consequently, the passage of time is used to measure the amount of fees and commission to be recognised.
(b) Underwriting agency fee income
The Group also receives commissions for the placement or underwriting of policies on behalf of other insurers. Such commissions,
which are measured as a portion of the policy premium, are recognised at the later of the policy inception date or when the policy
placement has been completed.
Brit also receives fees in respect of the costs and expenses of establishing and administering Lloyd’s consortia and conducting the
underwriting on their behalf.
The services provided are classed as ‘establishing and administering’ the consortia and are provided continuously throughout the
year. As a result, this is treated as a single performance obligation and measured in accordance with the measurement bases set
out in the relevant consortia agreements.
2.5.3 Financial instruments
(a) Other investment return
Investment income comprises realised and unrealised gains and losses on the Group’s financial assets held for investment purposes
(investments) that have been measured at FVTPL, less investment management fees. Any interest and dividends are recognised
as part of realised gains and losses, and the dividends are only recognised when the shareholders’ right to receive the payment
is established.
Realised gains and losses on investments are calculated as the difference between net sales proceeds and cost, and are recognised
when the sale transaction occurs. Unrealised gains and losses on investments are calculated as the difference between the valuation
at the date of the statement of financial position and the valuation at the last statement of financial position or purchase price,
if acquired during the year. Unrealised investment gains and losses include adjustments in respect of unrealised gains and losses
recorded in prior years, which have been realised during the year and are reported as realised gains and losses in the current year’s
income statement.
Brit Group Holdings Limited Annual Report 2025 89
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.3 Financial instruments (continued)
(b) Interest revenue calculated using the effective interest method
Interest revenue is calculated using the effective interest method, by applying the effective interest rate (EIR) to the gross carrying
amount of financial assets recognised at amortised cost. Where there is objective evidence of impairment (credit-impaired’ assets),
the EIR is applied to the net carrying amount of financial assets recognised at amortised cost.
(c) Financial assets and financial liabilities
(i) Summary of measurement categories
The Group classifies its financial assets and liabilities in the following categories under IFRS 9:
Classification
Rationale
Financial Assets
Investments – equity securities FVTPL Mandatory
Investments – debt securities FVTPL Mandatory
Investments – Loan to ultimate parent Amortised cost Cash flow characteristics (solely payments of principal
and interest), hold to collect business model
Investments – other loans and mortgages FVTPL Mandatory
Investments – specialised investment funds FVTPL Mandatory
Trade and other receivables Amortised cost Cash flow characteristics (solely payments of principal
and interest), hold to collect business model
Other assets (Fairfax shares
purchased for awards)
FVTPL Mandatory
Derivative contracts FVTPL Mandatory
Cash and cash equivalents Amortised cost Cash flow characteristics (solely payments of principal
and interest), hold to collect business model
Financial Liabilities
Derivative contracts FVTPL Mandatory
Borrowings Amortised cost Mandatory
Other financial liabilities FVTPL Designated
Trade and other payables Amortised cost Mandatory
The accounting classification of any financial instrument issued or acquired by Brit is determined by assessing the fact pattern of the
rights and obligations of both the issuer and acquirer and by applying the recognition criteria set out in the relevant accounting
standard. In the case of issued financial instruments, this assessment includes the determination of whether an item is to be
classified as either financial liability or equity.
Trade and other receivables refers to the ‘insurance and other receivables’ line item on the Group’s statement of financial position
but excludes ‘prepayments’ and ‘other assets’.
Other assets refer to the investment in Fairfax shares held by the Group in order to settle long-term incentive plan (LTIP) awards.
Other financial liabilities refer to financial liabilities in respect of third-party investments in consolidated structured entities and
investment funds.
Trade and other payables refers to the ‘insurance and other payables’ line item on the Group’s statement of financial position but
excludes ‘deferred income’, ‘lease liabilities’ and share-based payment liabilities recorded within ‘other creditors’.
The Group does not apply hedge accounting.
90 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.3 Financial instruments (continued)
(c) Financial assets and financial liabilities (continued)
(ii) Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
instrument. All ‘regular way purchases and sales’ of financial assets are recognised on the trade date, i.e. the date that the Group
commits to purchase or sell the asset. Regular way purchases and sales are purchases and sales of financial assets that require
delivery of assets within the time frame generally established by regulation or convention in the marketplace.
At initial recognition, the Group measures a financial asset or financial liability at its fair value plus or minus, in the case of a financial
asset or financial liability not at FVTPL, transaction costs that are incremental and directly attributable to the acquisition or issue
of the financial asset or financial liability, such as fees and commissions. Transaction costs of financial assets and financial liabilities
carried at FVTPL are expensed in profit or loss. Immediately after initial recognition, an expected credit loss (ECL) allowance
is recognised for financial assets measured at amortised cost.
Trade and other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain
significant financing components when they are recognised at fair value. Fair value of borrowings on initial recognition is normally
determined by reference to the fair value of the proceeds received.
(iii) Amortised cost and effective interest rate (EIR)
Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition minus the principal
repayments, plus or minus the cumulative amortisation using the effective interest method for any difference between the initial amount
and the maturity amount and, for financial assets, adjusted for any loss allowance. The EIR is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of a
financial asset (i.e. the amortised cost before any impairment allowance) or to the amortised cost of a financial liability. The calculation
does not consider the ECL and includes transaction costs, premiums or discounts and fees, and points paid or received that are integral
to the EIR. When the Group revises the estimates of future cash flows, the carrying amount of the respective financial asset or financial
liability is adjusted to reflect the new estimate discounted using the original EIR. Any changes are recognised in the income statement.
The recognition of interest revenue is outlined in Note 2.5.3(b).
(iv) Classification and subsequent measurement of debt instrument assets
Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective.
The classification and subsequent measurement of debt instruments depend on:
• The Group’s business model for managing the asset; and
• The cash flow characteristics of the asset (represented by solely payments of principal and interest (SPPI)).
Based on these factors, the Group classifies its debt instruments into one of the following three measurement categories:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent SPPI, and that
are not designated at FVTPL, are measured at amortised cost. The carrying amount of these assets is adjusted by any ECL
allowance recognised. Interest revenue from these financial assets is included in ‘interest revenue from financial assets not
measured at FVTPL’ using the EIR method.
• FVOCI: Financial assets that are held for collection of contractual cash flows and for selling the assets, where the assets’ cash
flows represent SPPI, and that are not designated at FVTPL, are measured at FVOCI. The Group does not hold any financial
assets that would meet these criteria.
• FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss, other than
those relating to foreign exchange movements, on a debt investment that is subsequently measured at FVTPL is recognised and
presented in the consolidated statement of profit or loss within net gains on FVTPL investments in the period in which it arises.
Foreign exchange gains or losses are recognised in ‘net foreign exchange gains/(losses)’ in the period in which they arise.
(v) Business Model
The business model reflects how the Group manages assets in order to generate cash flows. That is, it reflects whether the Group’s
objective is solely to collect the contractual cash flows from assets or to collect both the contractual cash flows and cash flows
arising from the sale of assets. If neither of these is applicable (e.g. financial assets are held for trading purposes), then the financial
Brit Group Holdings Limited Annual Report 2025 91
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.3 Financial instruments (continued)
(c) Financial assets and financial liabilities (continued)
(v) Business Model (continued)
Factors considered by the Group in determining the business model for a group of assets include past experience on how the cash
flows for these assets were collected, how the asset’s performance is evaluated and reported to key management personnel, how
risks are assessed and managed and how managers are compensated.
The Group’s debt instruments held for investment purposes are mandatorily classified as FVTPL in accordance with the Group’s
business model for managing investments on a fair value basis. There is a documented investment strategy to manage investments
on a fair value basis, as opposed to primarily collecting contractual cash flows or primarily selling assets, and this is consistent
with investment risk being assessed on a portfolio basis. Information relating to investments is provided internally to the Group’s
Directors and key managers on a fair value basis.
(vi) SPPI
Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell, the Group
assesses whether the financial instruments’ cash flows represent SPPI (the SPPI test). In making this assessment, the Group considers
whether the contractual cash flows are consistent with a basic lending arrangement (i.e. interest includes only consideration for the
time value of money, credit risk, other basic lending risks, and a profit margin that is consistent with a basic lending arrangement).
Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related
financial asset is classified and measured at FVTPL.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are SPPI.
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
The reclassification takes place from the start of the first reporting period following the change.
The Group may also irrevocably designate financial assets at FVTPL, if doing so significantly reduces or eliminates a mismatch
created by assets and liabilities being measured on different bases. The Group has not designated any such financial assets during
the current period.
(vii) Classification and subsequent measurement of equity instrument assets
Equity instruments are instruments that meet the definition of equity from the issuer’s perspective (i.e. instruments that do not
contain a contractual obligation to pay, and that evidence a residual interest in the issuer’s net assets). The Group subsequently
measures all equity investments at FVTPL. Gains and losses on equity investments at FVTPL, other than those relating to foreign
exchange, are included in the line ‘investment return’ in the income statement. Foreign exchange gains or losses are recognised
in ‘net foreign exchange gains/(losses)’ in the period in which they arise.
The Group chooses not to apply the FVOCI option for equity instruments that are not held for trading.
(viii) Impairment of financial assets
The Group assesses, on a forward-looking basis, the ECL associated with its debt instrument assets carried at Amortised Cost (AC).
The Group recognises a loss allowance for such losses at each reporting date. The measurement of the ECL reflects:
• An unbiased and probability weighted amount that is determined by evaluating a range of possible outcomes;
• The time value of money; and
• Reasonable and supportable information that is available without undue cost or effort at the reporting date about past events
(including historical losses), current conditions, and forecasts of future economic conditions.
The Group applies the simplified approach for impairment of trade and other receivables as well as any contract assets arising from
contracts with customers and recognises the lifetime ECL at initial recognition of such financial assets. Where it becomes probable
that a counterparty will enter bankruptcy, any such assets with that counterparty are deemed to be ‘credit-impaired’.
Individual receivables are written off by the Group when there is no reasonable expectation of recovering the asset or a portion
thereof. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage
in a repayment plan with the Group, and when the Group determines that the counterparty does not have assets or sources
of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
92 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.3 Financial instruments (continued)
(c) Financial assets and financial liabilities (continued)
(ix) Derecognition of financial assets
Financial assets, or a portion thereof, are derecognised when the contractual rights to receive the cash flows from the assets
have expired, or when they have been transferred and either (i) the Group transfers substantially all the risks and rewards
of ownership; or (ii) the Group neither transfers nor retains substantially all the risks and rewards of ownership and the Group has
not retained control.
(x) Classification and subsequent measurement of financial liabilities
In both the current and prior period, financial liabilities are classified and subsequently measured at amortised cost, except for
derivatives and other financial liabilities, which are measured at FVTPL.
Other financial liabilities are recognised in respect of third-party investments in consolidated structured entities and investment funds.
The fair value of the investments by independent third parties is determined by reference to the net assets of those entities, which
may also require reference to the underlying net assets of other vehicles or investment funds in which those entities have invested.
The Group has designated other financial liabilities as FVTPL to eliminate an accounting mismatch that would otherwise arise
from recognising the gains or losses on these liabilities on a different basis. The insurance and investment assets and liabilities
of consolidated structured entities and investment funds are measured at fair value and, in the absence of designation as FVTPL, the
other financial liabilities would be measured at amortised cost (with changes in fair value not recognised). The Group has concluded that
its financial statements would provide more relevant information if other financial liabilities were, therefore, measured as at FVTPL.
Accordingly, gains or losses in respect of changes in fair value of other financial liabilities are recognised through the income statement.
(xi) Derecognition of financial liabilities
A financial liability is derecognised when it is extinguished, which is when the obligation in the contract is discharged,
cancelled or expired.
(xii) Derivative contracts
Derivative financial instruments include foreign exchange contracts, forward rate agreements, interest rate futures, currency and
interest rate swaps, and other financial instruments that derive their value mainly from underlying interest rates, foreign exchange
rates, credit indices, commodity values, or equity instruments.
Derivatives are initially recognised at fair value on the date on which the derivative contract is entered into, and are subsequently
remeasured at FVTPL. All derivatives are carried as assets when fair value is positive, and as liabilities when fair value is negative.
Derivative contracts may be traded on an exchange or over-the-counter (OTC). Exchange-traded derivatives are standardised and
include certain futures and option contracts. OTC derivative contracts are individually negotiated between contracting parties and
include forwards and swaps.
Derivatives are subject to various risks including market, liquidity and credit risk, similar to those related to the underlying financial
instruments. Many OTC transactions are contracted and documented under International Swaps and Derivatives Association (ISDA)
master agreements, or their equivalent, which are designed to provide legally enforceable set-off in the event of default, reducing
the Group’s exposure to credit risk. The notional or contractual amounts associated with derivative financial instruments are not
recorded as assets or liabilities on the statement of financial position as they do not represent the fair value of these transactions.
Brit Group Holdings Limited Annual Report 2025 93
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.3 Financial instruments (continued)
(c) Financial assets and financial liabilities (continued)
(xiii) Fair value measurements
Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market
participants at the measurement date. The fair value of financial assets and liabilities traded in active markets (which are the
principal markets or, in the absence of a principal market, the most advantageous markets that maximise the amount that would be
received to sell the asset, or minimise the amount that would be paid to transfer the liability) are based on quoted market bid and ask
price for both financial assets and financial liabilities respectively.
The fair value of financial assets and liabilities that are not traded in an active market, including over-the-counter derivatives,
is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market
conditions existing at each reporting date. Valuation techniques include the use of comparable recent arm’s-length transactions,
reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and others
(xiv) Offsetting of financial instruments
Financial assets and liabilities are offset, and the net amount reported in the statement of financial position only when there
is a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net basis or to realise the
assets and settle the liability simultaneously.
2.5.4 Intangible assets
(a) Goodwill
Goodwill is initially measured at cost, being the excess of the fair value of the consideration transferred and the amount recognised
for any non-controlling interests (NCIs) and any previous interest held, over the net identifiable assets acquired and liabilities
assumed. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference
is recognised directly in profit or loss as a bargain purchase.
After initial recognition, goodwill is not amortised but is measured at cost less any accumulated impairment losses. Goodwill is tested for
impairment annually or more frequently if events or circumstances indicate that it might be impaired. For the purposes of impairment
testing, goodwill acquired in a business combination is allocated to an appropriate cash generating unit (CGU) that is expected to benefit
from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with
the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal of the
operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of, and the
portion of the cash-generating unit retained.
(b) Trade names
Trade names that have been acquired on acquisition of a subsidiary are initially recognised at fair value. They are considered to have
an indefinite useful life as they will provide benefits over an indefinite future period and are, therefore, not subject to an annual
amortisation charge. The carrying value of the trade names is reviewed for impairment annually by reference to the expected future
profit streams to be earned from the CGUs to which the trade names relate, with any impairment in value being charged to the
income statement.
(c) Computer software
Acquired computer software licences are capitalised based on the costs incurred to acquire and bring into use the specific software.
Internal development costs that are directly associated with the production of identifiable and unique software products, controlled
by the Group, are also capitalised where the cost can be measured reliably, the Group intends to and has adequate resources
to complete development, and the computer software will generate future economic benefits. All items of computer software are
finite life assets and amortised on a straight-line basis over their expected useful lives, not exceeding a period of five years.
94 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.4 Intangible assets (continued)
(d) Distribution channels
Distribution channels that have been acquired on acquisition of a subsidiary are initially recognised at fair value. They are deemed to be
finite life assets and amortised on a straight-line basis over their expected useful economic lives, not exceeding a period of 15 years.
Property, plant and equipment are carried at cost, less accumulated depreciation and any impairment in value. Depreciation
is calculated so as to write-off the cost over their estimated useful lives on a straight-line basis having regard to the residual value
of each asset, as follows:
Land Indefinite
Buildings 30 years
Office refurbishment 3 to 15 years
Computers, office machinery, furniture and equipment 3 to 7 years
The assets’ residual values and useful lives are reviewed at the date of each statement of financial position and adjusted if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Gains and losses on the disposal of property, plant and equipment are determined by comparing
proceeds with the carrying amount of the asset and are included in the income statement. Costs for repairs and maintenance are
expensed as incurred.
2.5.5 Impairment
Goodwill and trade names are not subjected to amortisation but are tested annually for impairment as they are assets with
an indefinite useful life. Other assets, except for assets arising from insurance contracts, deferred tax assets, assets arising from
employee benefits, financial assets within scope of IFRS 9 ‘Financial Instruments’, and non-current assets (or disposal groups)
classified as held for sale, are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable.
If the carrying value of an asset is impaired, it is reduced to the recoverable amount by an immediate charge to the income
statement. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
Value in use is based on discounting cash flows at the Group’s weighted average cost of capital which is loaded where significant
uncertainties exist. Assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Cash flow
forecasts have been performed to account for the impact of climate change.
Impairment reviews are made by comparing carrying value to recoverable amount.
2.5.6 Cash and cash equivalents
Cash and cash equivalents in the statement of financial position include cash in hand, deposits held at call with banks, and other
short-term, highly liquid investments with a maturity of three months or less at the date of acquisition.
2.5.7 Income taxes
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except where it relates to an item
which is recognised in equity.
(a) Current income tax
Current income tax is the expected tax payable on the taxable profit for the period using tax rates (and laws) enacted,
or substantively enacted, at the date of the statement of financial position and any adjustment to the tax payable in respect
of previous periods. The Group calculates current income tax using current income tax rates.
Brit Group Holdings Limited Annual Report 2025 95
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.7 Income taxes (continued)
(b) Deferred income tax
Where relevant deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities, and their carrying amounts in the consolidated financial statements. If the deferred income tax arises
from initial recognition of an asset or liability in a transaction, other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is not recognised.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the
statement of financial position, and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which
the temporary differences can be utilised.
Deferred income tax relating to items recognised in other comprehensive income is also recognised in other comprehensive income.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities, and when the deferred income taxes relate to the same fiscal authority.
Deferred tax assets and liabilities are not discounted.
(c) Pillar Two Model Rules
The Group has determined that the global minimum top-up tax – which it is required to pay under Pillar Two legislation – is an income
tax in the scope of IAS 12. The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the
top-up tax and accounts for it as a current tax when it is incurred.
2.5.8 Employee benefits
The Group operates a number of defined contribution schemes. It also makes payments into a number of personal money purchase
pension plans. Contributions in respect of these schemes are charged to the income statement in the period to which they relate.
The asset recognised in the statement of financial position in respect of a defined benefit scheme is the fair value of the scheme
assets less the present value of the defined benefit obligation, which is determined by discounting the estimated future cash
outflows. The discount rate is based on market yields at the reporting date of high-quality corporate bonds that have terms
to maturity which approximate to those of the related pension liability. An asset is recognised only to the extent that it is considered
available in the form of future refunds from the plan, in particular taking into consideration any minimum funding requirements that
apply to the plan.
Actuarial gains and losses are recognised immediately through other comprehensive income.
The Group determines the net interest expense/income on the net defined benefit liability/asset for the period by applying the
discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit
liability/asset.
Past service costs arising in the period are recognised as an expense at the earlier of the date when the plan amendment
or curtailment occurs, and the date when the Group recognises related restructuring costs or termination benefits.
A net pension asset is derecognised when a scheme completes a buy-out (i.e. full transfer of the obligation for paying members’
benefits to an insurance company) and any remaining surplus has been paid to the Group by the scheme.
The Group recognises an accrual in respect of profit-sharing, bonus plans, and long service cash awards where a contractual
obligation to employees exists or where there is a past practice that has created a constructive obligation.
96 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.9 Share-based payments
The fair value of equity instruments granted under share-based payment plans are recognised as an expense and spread over the
vesting period of the instrument. The total amount to be expensed is determined by reference to the fair value of the awards made
at the grant date.
At the date of each statement of financial position, the Group revises its estimate of the number of equity instruments that are
expected to become exercisable and it recognises the impact of the revision of original estimates, if any, in the income statement.
Where the granted awards have been classified as equity-settled, a corresponding adjustment is made to equity. Awards are
classified as equity-settled when the Group has no obligation to settle the award.
Where the awards have been granted by the Group and are treated as cash-settled, a liability is provided for settlement of the
awards. The corresponding adjustment arising on a revision of the original estimate is made to that liability. In addition, the fair value
of the award and ultimate expense are adjusted upon a change in the market share price of the underlying shares or at the valuation
date. The liability is remeasured at each reporting date and on settlement, at which point it is derecognised from the statement
of financial position.
2.5.10 Provisions and contingencies
Provisions are liabilities with uncertainties in the amount or timing of payments. Provisions are recognised if there is a present
obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate of the amount of the obligation can be made at the date of the statement
of financial position.
A contingent liability is a possible obligation that arises from past events, or a present obligation that is not recognised as it is not
probable that an outflow of resources will be required to settle the obligation, or the amount of obligation cannot be measured with
sufficient reliability. A contingent liability is disclosed but not recognised.
2.5.11 Leases
The Group leases various offices under rental contracts that are typically from 1 to 15 years, but may have extension options. Lease
terms are negotiated on an individual basis and contain a wide range of terms and conditions. Leased assets are recognised as right-
of-use assets and corresponding liabilities are recorded at the date at which the leased assets are available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease payments:
• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date; and
• Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security, and conditions. To determine this, the Group uses recent third-party financing received
by the individual lessee (where available) and, if necessary, makes adjustments to reflect subsequent changes in financing conditions
and other adjustments specific to the lease (for example, to reflect lease term, country of leased asset, contract currency,
and security).
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability
is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Brit Group Holdings Limited Annual Report 2025 97
financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.11 Leases (continued)
Right-of-use assets are measured at cost comprising of the following:
• The amount of the initial measurement of lease liability;
• Any lease payments made at or before the commencement date less any lease incentives received;
• Any initial direct costs; and
• Restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense
in profit or loss. Short-term leases are leases with a term of 12 months or less.
Extension and termination options are included in a number of leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s operations. Most of the extension and termination options held are
exercisable only by the Group and not by the respective lessor.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. It assesses
the lease classification of a sublease with reference to the right-of-use asset arising from the head lease, not with reference
to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption, then it classifies the
sublease as an operating lease. The Group recognises assets held under a finance lease in its statement of financial position, and
presents them as a receivable at an amount equal to the net investment in the lease. The lessor will derecognise the carrying
amount of the underlying asset (i.e. right-of-use-asset) that relates to the sublease, and the difference between this and the net
investment in lease is recognised in the income statement. Subsequently, finance income will be recognised over the lease term with
a corresponding increase in the net investment in the lease. Any cash received by the Group is recorded as a reduction in the net
investment in the lease.
2.5.12 Foreign currency translation
Items included in the financial statements of the parent and subsidiaries are measured using the functional currency, which is the
primary economic environment in which the entity operates. The Group presents its consolidated financial statements in US dollars,
which is the functional currency of the parent.
Foreign currency transactions are recorded in the functional currency for each entity using the exchange rates prevailing at the
dates of the transactions, or at the average rate for the period when this is a reasonable approximation.
Substantially all of the Group’s operations have US dollars as their functional currency. Monetary assets and liabilities denominated
in foreign currencies are translated at period end exchange rates. The resulting exchange differences on translation are recorded
in the income statement. Non-monetary assets and liabilities that are measured at historical cost denominated in a foreign currency
are not retranslated.
The functional currencies of some of the Company’s subsidiaries differ from the consolidated Group US dollar presentation
currency. As a result, the assets and liabilities of these subsidiaries, including any goodwill arising on consolidation, are translated
on consolidation at the rates of exchange prevailing at the balance sheet date. Revenue and expenses are translated at the average
rate of exchange for the period. The unrealised gain or loss resulting from this translation is recognised in other comprehensive
income and transferred to a foreign currency translation reserve.
2.5.13 Segmental reporting
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur
expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker and for which discrete
financial information is available.
2.5.14 Dividend and capital distributions
Dividend and capital distributions to the Company’s shareholders are recognised in the Group’s financial statements in the period
in which they are declared and appropriately approved.
98 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
2 Accounting policies and basis of preparation (continued)
2.5 Other accounting policies (continued)
2.5.15 Collateral
The Group receives collateral from certain reinsurers and pledges collateral where required for regulatory purposes and other
funding arrangements. Collateral received in the form of cash is recognised as an asset on the statement of financial position with
a corresponding liability for the repayment. Non-cash collateral received is not recognised on the statement of financial position.
Except where it is used for the purposes of the agreement to which it relates, collateral pledged is not derecognised from the
statement of financial position unless it is cash or where the Group defaults on its obligations under the relevant agreement.
2.5.16 Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through
a sale transaction, rather than through continuing use and a sale is considered highly probable. They are measured at the lower
of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from
employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance
contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs
to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not
in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale
of the non-current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified
as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue
to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are presented separately
from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately
from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of, or is classified as held for sale, and that represents
a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line
of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations
are presented separately in the statement of profit or loss.
3 Significant judgements and estimates
3.1 Introduction
In preparing the Group’s consolidated financial statements, management makes various judgements and estimates that affect the
reported amount of assets, liabilities, income and expenses. Such judgements and estimates are regularly re-evaluated and are
based on a combination of historical experience and other factors, including exposure analysis, expectations of future experience
and expert judgement.
3.2 Significant judgements
The judgements that management has made in applying the Group’s accounting policies that have the most significant effect on the
amounts recognised in the financial statements are outlined below.
3.2.1 Significant judgement involved in the measurement of insurance contract liabilities and reinsurance contract assets
(a) Relating to the asset and liability for remaining coverage
Level of aggregation
The Group is required to identify portfolios of insurance contracts and subdivide these into groups of insurance contracts for
measurement purposes. The assessment of which risks are similar and how contracts are managed, as well as how each portfolio
should then be subdivided into groups of insurance contracts, requires judgement to be exercised by management.
The Group manages insurance contracts issued with reference to its Direct Portfolios, such as Financial and Professional Liability and
Programmes and Facilities, which are reported to senior management for each insurance carrier and are referred to in the strategic
report. After being subdivided into property, casualty and Specialty risks, the Group determined that these Direct Portfolios meet the
definition of 'similar risks and managed together' and therefore comprise portfolios of insurance contracts under IFRS 17.
Brit Group Holdings Limited Annual Report 2025 99
financial statements
3 Significant judgements and estimates (continued)
3.2 Significant judgements (continued)
3.2.1 Significant judgement involved in the measurement of insurance contract liabilities and reinsurance contract
assets (continued)
These portfolios are subdivided into groups of insurance contracts based on anticipated profitability and Year of Account. Management
has chosen to subdivide these groups based on class of business to enable consistency across reporting bases. A class of business
represents a specific risk that is underwritten within a Direct Portfolio, for instance insurance contracts covering cyber-related risks
represent a class of business within the Financial and Professional Liability Direct Portfolio.
For contracts recognised from 1 January 2025, management has opted to further subdivide these classes of business into two
separate groups of insurance contracts based on coverage period, thereby establishing:
(1) One group where each contract has a coverage period of 12 months or less; and
(2) Another group where each contract has a coverage period of greater than 12 months.
For simplicity, the Group has summarised the above into the following table:
Dimensions selected for subdividing portfolios into groups
Contracts recognised prior to
1 January 2025
Contracts recognised from
1 January 2025
Year of Account ✔ ✔
Profitability ✔ ✔
Class of Business ✔ ✔
Coverage period ✔
The Group aggregates portfolios of reinsurance contracts held based on the type of reinsurance and the insurance carrier ceding
the risk, further subdivided by property, casualty and Specialty risks.
PAA eligibility
The Group applies the simplified measurement model to all insurance contracts when the eligibility criteria are met. For contracts
with coverage periods greater than 12 months, management must assess if the simplification would produce a measurement of the
liability/asset for remaining coverage (LRC/ARC) for the group of contracts that would not differ materially from the one that would
be produced under the General Measurement Model.
The criterion is not met if, at the inception of the group of contracts, the Group expects significant variability in the fulfilment cash flows
that would affect the measurement of the LRC during the period before a claim is incurred. In making this assessment, the Group must
assess what scenarios may reasonably be expected that would create significant variability in the fulfilment cash flows. The Group
exercises judgement in setting criteria to assess whether the quantum of variability in fulfilment cash flows is considered significant.
Having subdivided insurance contracts recognised from 1 January 2025 into separate groups based on coverage period, all groups
of insurance contracts recognised by the Group in 2025 met the PAA eligibility criteria determined by management. Prior to 2025,
some groups of contracts did not meet the PAA eligibility criteria and were therefore measured under the GMM.
(b) Relating to the asset and liability for incurred claims
Future cash flows
The projection of future cashflows is estimated using a range of standard actuarial techniques, such as Basic Chain Ladder,
Bornhuetter-Ferguson and Initial Expected Loss Ratio.
The key judgement underpinning the Basic Chain Ladder and Bornhuetter-Ferguson projection methods is that the historical
development of cash flows is representative of future development. Claims inflation is taken into account in the Initial Expected Loss
Ratio selections, but is otherwise assumed to be in line with historical inflation trends, unless explicit adjustments for other drivers
of inflation such as legislative developments are deemed appropriate.
The initial ultimate selections derived by the actuarial department, along with the underlying key assumptions and methodology,
are discussed with class underwriters, divisional underwriting directors and the claims team. The actuarial department may apply
further judgement and adjust the initial ultimates following these discussions to reflect instances where past trends may not
apply in future.
Following this exercise, the ultimate future cashflows are then reviewed and approved by the Reserving Committee.
100 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
3 Significant judgements and estimates (continued)
3.3 Significant estimates
The sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying amount
of assets and liabilities within the next financial year have been outlined below.
3.3.1 Significant estimates in the measurement of insurance contract liabilities and reinsurance contract assets
(a) Relating to the asset and liability for remaining coverage
Insurance revenue
Estimation is required in calculating insurance revenue recognised in the period. This includes the estimation of premium written
during the reporting period, especially with regards to delegated arrangements where financial information is provided to the Group
on a periodic basis and assumptions are required to estimate the amounts written at the reporting date. Premiums are estimated
net of commissions. The expected commissions are estimated based on historical average acquisition expenses applied to the
estimated premiums.
The corresponding estimate of the amount of reinsurance premiums payable on outwards reinsurance contracts held is based
on assumptions estimated on the underlying inwards insurance contract.
(b) Relating to the asset and liability for incurred claims
Future cash flows
Estimation is required in calculating the expected cash flows to settle obligations to pay for insured events that have occurred, and
insurance contract services already provided plus any investment components. This includes loss events that have occurred, but not
been reported, events not in data (ENIDs) and other incurred expenses. Uncertainty in the estimation of these cash flows primarily
arises from the frequency and severity of claims, the estimated cash settlement patterns and uncertainties regarding future
inflation rates. Where a class of business may not lend itself to statistical estimation techniques due to low data volumes, a policy-by-
policy review will typically be performed to supplement statistical estimates. Lastly, in the event of a catastrophe, estimates of future
cash flows are determined using a combination of outputs from modelling software and a detailed review of contracts exposed to the
event in question.
The corresponding estimate of the amount of reinsurance claim recoveries on outwards reinsurance contracts held is based
on assumptions estimated on the underlying inwards insurance contract, plus the effect of any risk of non-performance
on recoveries by the reinsurer where material.
Sensitivities to a change in claims ratio against the carrying value of the insurance contract liabilities are included in Note 4.1.3.
Brit Group Holdings Limited Annual Report 2025 101
financial statements
3 Significant judgements and estimates (continued)
3.3 Significant estimates (continued)
3.3.1 Significant estimates in the measurement of insurance contract liabilities and reinsurance contract assets (continued)
(b) Relating to the asset and liability for incurred claims (continued)
Discount rates
Estimation is involved in determining discount rates that reflect the time value of money, and the financial risks associated with the
cash flows of the insurance contract.
The risk-free rate component of the discount rate is calculated using standard Smith-Wilson Extrapolation including all liquid points
available for government bonds. Estimation of the illiquidity premium component of the discount rate is required which is the difference
between the risk-free rates and the current yields for a representative investment grade corporate bond portfolio, denominated
in relevant currencies and adjusted to remove expected credit losses and credit risk premium.
The discount rates applied by currency in the current and prior period are as follows:
Year ended 31 December 2025 Year ended 31 December 2024 (unaudited)
1 Year
%
5 Years
%
10 Years
%
15 Years
%
1 Year
%
5 Years
%
10 Years
%
15 Years
%
USD 3.82 4.06 4.65 5.08 4.64 4.83 5.17 5.37
GBP 3.89 4.29 4.97 5.46 4.74 4.68 5.14 5.51
EUR 2.04 2.63 3.33 3.79 2.38 2.50 2.91 3.23
CAD 2.70 3.76 4.47 4.76 3.36 3.82 4.43 4.60
Sensitivities to a change in discount rates against the carrying value of the insurance contract liabilities are included in Note 4.3.2.
Risk adjustment
Risk adjustment for non-financial risk is determined to reflect the compensation that an insurer would require for bearing non-
financial risk. The Group has estimated the risk adjustment via a confidence level approach. This has been based on a review
of distributions estimated using the Bootstrap method. The Bootstrap distributions are estimated gross and net of reinsurance
contracts, with reinsurance contracts calculated as the difference between the two.
The chosen confidence level of the risk adjustment is set and reviewed annually. As at 31 December 2025, the risk adjustment is set
at a net confidence level of 80% (2024: 78%) over the lifetime of the contracts.
Sensitivities to a change in confidence level against the carrying value of the insurance contract liabilities are included in Note 4.1.3.
3.3.2 Valuation of level 3 financial investments
The Group has categorised $600.3m of equity securities, loans and mortgages and specialised investment funds as level 3 within
the fair value hierarchy. Determining the fair value of these financial investments requires estimation and the incorporation of both
observable and unobservable market inputs and assumptions.
Refer to Note 21 for further details on the valuation techniques that the Group uses, as well as the sensitivity of level 3
financial investments.
The $200.0m loan to FFHL, with a maturity date of 31 March 2026, has not been identified as a key source of estimation uncertainty.
4 Risk management policies
This Note provides details of key risks that the Group is exposed to and explains the Group’s strategies and the role of management
in mitigating these risks.
4.1 Insurance risk
Insurance risk arises from the possibility of an adverse financial result due to actual experience being different from that expected
when an insurance product was designed and priced. The actual performance of insurance contracts is subject to the inherent
uncertainty in the occurrence, timing and amount of the final insurance liabilities. This is the principal risk the Group is exposed
to as the Group’s primary function is to underwrite insurance contracts. The risk arises due to the possibility of insurance contracts
being under-priced, under-reserved or subject to unforeseen catastrophe claims.
The areas of insurance risk discussed below include underwriting (including aggregate exposure management), reinsurance
and reserving.
102 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.1 Insurance risk (continued)
4.1.1 Underwriting risk
(a) Introduction
Underwriting risk is the risk that insurance premiums will not be sufficient to cover the future losses and associated expenses.
It arises from the fluctuations in the frequency and severity of financial losses incurred through the underwriting process by the
Group as a result of unpredictable events.
The Group is also exposed to the risks resulting from its underwriters accepting risks for premiums which are insufficient to cover
the ultimate claims which result from such policies. The underwriting and economic environment and the associated impact
on premium rates, including trends due to the underwriting cycle and inflation, are factored into the Group’s pricing models and risk
management tools, and is continually monitored to assess whether any corrective action is required. Additional controls over the
underwriting strategy are described in the section below.
The Group primarily writes its business through Lloyd’s and therefore can take advantage of Lloyd’s centralised infrastructure
and service support. Lloyd’s also has an established global distribution framework, with extensive licensing agreements providing
the Group access to over 200 territories. Primarily using the Lloyd’s platform to underwrite, subjects the Group to a number
of underwriting risks. The Group relies on the efficient functioning of the Lloyd’s market. If for any reason Brit Syndicates Limited
(BSL) was restricted or otherwise unable to write insurance through the Lloyd’s market, there would be a potentially material
adverse effect on the Group’s business. In particular, any damage to the brand or reputation of Lloyd’s, increase in tax levies imposed
on Lloyd’s participants or deterioration in Lloyd’s asset base when compared with its liabilities may have a material adverse effect
on the Group’s ability to write new business.
Brit also benefits from the ability to write business based on the Lloyd’s financial rating, which allows the Group to write more
business as part of the Lloyd’s platform. A downgrade in Lloyd’s financial strength ratings may have an adverse effect on the Group.
The Group also writes business through Brit Reinsurance (Bermuda) Limited (Brit Re).
(b) Controls over underwriting strategy
The Board sets the Group’s underwriting strategy for accepting and managing underwriting risk. The Group, Brit Re and syndicates'
Underwriting Committees meet regularly to drive the underwriting strategy and to monitor performance against the plans. The
assessment of underwriting performance is all-encompassing applying underwriting key performance indicators (KPIs), technical
pricing management information (MI), premium monitoring, delegated underwriting operations and claims. The risks are managed
by the committees in line with the underwriting risk policy and within the risk tolerance set by the underwriting entity Boards and risk
appetites set by the committee. The underwriting risk policy also sets out a number of controls, which are summarised below.
The Group carries out a detailed annual business planning process for each of its underwriting units. The resulting plans set out
premium, territorial and aggregate limits and reinsurance protection thresholds for all classes of business and represent a key tool
in managing concentration risk. Performance against the plans is monitored on a regular basis by the Underwriting Committees
as well as by the Boards of the regulated entities. A dedicated Risk Aggregation Team also performs catastrophe modelling and
scenario analysis including Realistic Disaster Scenario (RDS) analysis on a regular basis to ensure that the Group’s net losses
remain within its risk appetite.
The Group has developed underwriting guidelines, limits of authority and business plans which are binding upon all staff authorised
to underwrite. These are detailed and specific to underwriters and classes of business. Gross and net line size limits are in place for
each class of business with additional restrictions in place on catastrophe exposed business.
A proportion of the Group’s insurance risks are written by third parties under delegated underwriting authorities, with the
remaining being written through individual risk acceptances or through reinsurance treaties. The third parties are closely vetted
in advance and are subject to tight reporting requirements. In addition, the performance of these contracts is closely monitored
by underwriters and/or portfolio managers, and regular audits are carried out.
The technical pricing framework ensures that the pricing process in the Group is appropriate. It ensures pricing methodologies
are demonstrable and transparent and that technical (or benchmark) prices are assessed for each risk. The underwriting and
actuarial functions work together to maintain the pricing models and assess the difference between technical price and actual
price. The framework also ensures that sufficient data is recorded and checked by underwriters to enable the Group to maintain
an effective rate monitoring process.
Compliance is checked through both a peer review process and, periodically, by the Group’s internal audit department which is entirely
independent of the underwriting units. In order to limit risk, the number of reinstatements per policy is limited, deductibles are
imposed, policy exclusions are applied and whenever allowed by statute, maximum indemnity limits are put in place per insured event.
Brit Group Holdings Limited Annual Report 2025 103
financial statements
4 Risk management policies (continued)
4.1 Insurance risk (continued)
4.1.1 Underwriting risk (continued)
(c) Underwriting risk profile
The Group underwrites a well-diversified portfolio across classes. The core insurance portfolio of property, cyber, marine, energy and
casualty covers a variety of largely uncorrelated events and also provides some protection against the underwriting cycle as different
classes are at different points in the underwriting cycle. The underwriting portfolio is managed to target top quartile underwriting
performance and the mix of business is continually adjusted based on the current environment (including the current pricing strength
of each class). This assessment is conducted as part of the business planning and strategy process which operates annually and uses
inputs from the technical pricing framework. The business plan is approved by the entity level Boards and is monitored monthly.
(d) Geographical concentration of insurance revenue
The Group enters into policies with policyholders from all over the world, with the underlying risk relating to premiums spread worldwide.
This allows the Group to benefit from a wide geographic diversification of risk. The four principal locations of the Group’s policyholders
are the United States, UK, Europe and Canada, with 78.1% of the insurance revenue for the Group in 2025 relating to either the United
States or United Kingdom (2024: 79.7%). Further detail on the geographical concentration of insurance revenue is disclosed in Note 5(b).
(e) Portfolio mix
The Group underwrites business in a wide variety of classes. The breakdown of insurance revenue before reinsurance by principal
lines of business is summarised below:
2025
Insurance revenue
(Unaudited)
2024
Insurance revenue
$m % $m %
Financial and Professional Liability 597.6 20.2 566.8 19.8
Programmes and Facilities 501.2 17.0 542.8 19.0
Property 650.9 22.0 513.3 17.9
Casualty 123.1 4.2 146.6 5.1
Specialty 379.7 12.9 372.9 13.1
Casualty Treaty 304.9 10.3 315.6 11.1
Property Treaty 382.4 13.0 379.1 13.3
Classes in run-off and Other lines 10.5 0.4 18.9 0.7
2,950.3 100.0 2,856.0 100.0
The Group underwrites a mix of both insurance and reinsurance, long and short-tail business across a number of geographic areas
which results in diversification within the Group’s portfolio. The business mix is monitored on an ongoing basis.
The risk profile of Brit’s underwriting portfolio is set out in more detail in the sections below.
(i) Core Underwriting
(1) Financial and Professional Liability (FinPro)
Directors and Officers (D&O) Coverage provided to both directors and officers and companies for personal liability
or securities-related lawsuits.
Financial Institutions (FI) Coverage of financial institutions for risks including internal and external fraud, and
liability to customers, shareholders and regulators.
Transactional Transactional Insurance, including Representations and Warranties, and Warranties
and Indemnities.
Cyber Privacy and Technology Coverage of first- and third-party risks relating to network security, privacy and
data protection risks.
Healthcare Coverage of hospitals, allied health and long-term care liability, predominantly in the US.
US Professional Indemnity Coverage for professional negligence, errors and omissions, provided on both an open
market and a binding authority basis.
104 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.1 Insurance risk (continued)
4.1.1 Underwriting risk (continued)
(e) Portfolio mix (continued)
(i) Core Underwriting (continued)
Financial and professional lines are typically long-tailed, meaning that on average the claims are not settled for several years
after the expiry of the policy, which increases exposure to claims inflation. Other key risks relate to increasing claim frequency
due to global recessions or systemic malpractice, as well as an increasing prevalence of cyber security risk. This portfolio is also
exposed to the risk of latent claims arising from risks that were not envisaged at the time of writing the policy.
(2) Programmes and Facilities
Accident and Health Coverage for personal accident and medical expenses, kidnap and ransom,
and contingency.
Long Tail Facilities Coverage of legal expenses for individuals, companies and affinity groups worldwide,
and of professional negligence, errors and omissions for small and medium-sized
enterprises predominantly in the US and Canada.
Property Facilities Coverage of commercial and residential properties and for financial institutions,
loan servicers and property investors, including lender-placed hazard and flood
protection as well as commercial automobile physical damage and motor truck cargo
predominantly across the US and Canada.
The Programmes and Facilities portfolio consists of business written on a delegated authority basis. Property Facilities is exposed
to catastrophe claims, particularly US windstorms, earthquakes, floods and terrorist events, and to an increased frequency of fire
and weather-related events.
Accident and Health offers diversification due to low correlation with other business lines. Personal accident has the potential
to suffer from large losses due to a high concentration of multiple deaths from a catastrophe or large claims from highly valued
insured individuals. Medical expense claims are subject to high inflationary costs and may experience a high claim frequency.
Contingency classes have exposure to multiple claims from a single event.
The key risks relating to Long Tail Facilities lie with increasing claim frequency due to global recessionary events or systemic malpractice.
(3) Property
Political Risk and Trade Credit Covers non-payment/performance of counterparties and confiscation, expropriation,
nationalisation, deprivation, sequestration or forced abandonment of overseas assets.
Political Violence Covers physical damage and business interruption losses due to perils including
terrorism, riots, war, chemical, biological and/or radiological attacks.
Open Market and Worldwide Property Coverage of commercial property in the US and internationally.
UK Property UK property package covers for individuals and small or medium-sized enterprises.
Private Client Coverage of fine art and private client risks.
Brit provides property cover on a worldwide basis, with the largest exposures in the US. The open market, UK and worldwide
property lines are exposed to catastrophe claims, particularly windstorms, earthquakes, floods and terrorist events, and
to an increased frequency of fire and weather-related events. The Political Risk and Political Violence classes are exposed
to individual large losses arising from terrorist attacks or state action.
(4) Specialty
Marine Coverage for cargo, hull, marine war and marine liability.
Energy Coverage for upstream and midstream operations, including renewables.
Specie Coverage of specie.
The Specialty portfolio includes a diverse range of business lines. However, the portfolio is exposed to large losses on individual risks,
for example due to the loss of marine vessels or offshore oil platforms.
Brit Group Holdings Limited Annual Report 2025 105
financial statements
4 Risk management policies (continued)
4.1 Insurance risk (continued)
4.1.1 Underwriting risk (continued)
(e) Portfolio mix (continued)
(i) Core Underwriting (continued)
(5) Casualty
Specialist Liability Coverage for UK and international liability business including Employers, Public,
Products and Environmental Liability across a range of territories.
North American portfolio, covering a range of classes including general liability,
umbrella, professional liability, personal accident, auto liability, environmental liability,
medical malpractice and workers compensation. Target client focus is broad and
includes but is not limited to captives, regional, super-regional and nationwide carriers.
Casualty Treaty Casualty and Accident Treaty reinsurance. Worldwide portfolio, writing predominantly
non-proportional reinsurance (including retrocession) covering all the principal casualty
classes as well as Personal Accident and other accident classes. These include Property
Terror, Products Recall, Credit/Bond/Surety, Political Risks and Contingency.
Casualty business is exposed to man-made catastrophe claims such as terrorism, increased claim activity in the event
of an economic downturn and the potential for latent claims which were not foreseen at the time the policies were underwritten.
This division contains the longest tailed liabilities the Group holds, i.e. there can be a significant delay between the loss event and final
settlement of a claim. This delay can result in the final settlement being subject to significant claims inflation.
The Employers’ Liability (EL) and Public Liability (PL) portfolios are exposed to large losses resulting from bodily injury claims, and the
risk of latent claims arising from risks that were not envisaged at the time of writing the policy.
(6) Property Treaty
Property Treaty Catastrophe excess of loss, risk excess of loss reinsurance and retrocession.
The key exposures for Property Treaty are US windstorms and Californian earthquakes. Property Treaty also has exposures
to Japanese earthquakes and European windstorms.
(ii) Aggregate exposure management
The Group closely monitors aggregations of exposure to natural catastrophe events against agreed risk appetites using stochastic
catastrophe modelling tools, along with knowledge of the business, historical loss information, and geographical accumulations.
Climate change impacts natural catastrophe events and Brit’s approach to climate change is discussed in section 4.7.1. Analysis and
monitoring also measures the effectiveness of the Group’s reinsurance programmes.
Aggregations of exposure to man-made catastrophes are monitored using in-house scenario analysis and Lloyd’s Realistic Disaster
Scenarios (RDS).
The Group’s catastrophe risk tolerance is reviewed and set by the Boards on an annual basis. The last review of catastrophe risk
tolerances was in December 2025.
For major natural catastrophe events, the Group has tolerances for gross and net Worldwide All Perils at the 1-in-250-year
return period expressed as a percentage of the Brit Group Holdings Limited Shareholder Equity. More granular tolerances
at lower return periods and by region are set for Brit’s syndicates and Brit Re. Board tolerances are also set for major man-made
catastrophe events.
106 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.1 Insurance risk (continued)
4.1.1 Underwriting risk (continued)
(e) Portfolio mix (continued)
(ii) Aggregate exposure management (continued)
Stress and scenario tests are also run, such as Lloyd’s and internally developed RDS’s. Below are the key RDS losses to the Group
for all classes combined (unaudited):
Estimated
industry loss at
1 October 2025
$m
Modelled Group loss at
1 October 2025
Modelled Group loss at
1 October 2024
Gross
$m
Net
$m
Gross
$m
Net
$m
Gulf of Mexico windstorm 111,000 1,200 599 936 517
Florida Miami windstorm 131,000 637 278 506 262
US North East windstorm 81,000 1,071 527 915 331
San Francisco earthquake 80,000 1,512 735 1,468 756
Japan earthquake 54,000 330 183 291 192
Japan windstorm 12,000 108 53 88 54
European windstorm 28,000 162 93 110 74
Actual results may differ materially from the losses stated above given the significant uncertainties within model assumptions,
techniques and simulations applied to calculate these event loss estimates. There could also be non-modelled losses which result
in actual losses exceeding these figures. Moreover, the portfolio of insured risks changes dynamically over time.
4.1.2 Reinsurance
The Group purchases reinsurance to manage its exposure to individual risks and aggregation of risks arising from individual large
claims and catastrophe events. This allows the Group to mitigate exposure to insurance losses, reduce volatility of reported results
and protect capital.
Proportional quota share reinsurance is purchased to provide protection against claims arising either from individual large claims
or aggregation of losses. Quota share reinsurance is also used to manage the Group’s net exposure to classes of business where
the Group’s risk appetite is lower than the efficient operating scale of the class of business on a gross of reinsurance basis. These
placements are reviewed on the basis of market conditions.
The Group also has in place a comprehensive programme of excess of loss reinsurances to protect itself from severe size
or frequency of losses:
• Facultative reinsurance is used to reduce risk relating to individual contracts. The amount of cover bought varies by class
of business. Facultative reinsurance is also used as a tool to manage the net line size on individual risks to within tolerance.
• Risk excess of loss reinsurance is used to protect a range of individual inwards contracts which could give rise to individual
large claims. The optimal net retention per risk is assessed for each class of business given the Group’s risk appetite during
the business planning exercise.
In March 2025 Brit issued a catastrophe bond which provides $100.0m of reinsurance protection to Group. The bond expires at the
end of 2028 and covers annual aggregate losses from US named windstorms and US and Canadian earthquakes based on the
territory-weighted industry loss from such events.
Given the fundamental importance of reinsurance protection to the Group’s risk management, the Group has in place internal
controls and processes to ensure that the reinsurance arrangements provide appropriate protection of capital and maintain our
ability to meet policyholder obligations. The Syndicate and Brit Re Underwriting Committees oversee the purchase of reinsurance.
Brit Group Holdings Limited Annual Report 2025 107
financial statements
4 Risk management policies (continued)
4.1 Insurance risk (continued)
4.1.2 Reinsurance (continued)
The Group remains exposed to a number of risks relating to its reinsurance programme:
• It is possible for extremely severe losses to exhaust the reinsurance purchased. Any losses exceeding the reinsurance
protection would be borne by the Group.
• Some parts of the programme have limited reinstatements which limit the amount that may be recovered from second or subsequent
claims. If the entirety of the cover is exhausted, it may not be possible to purchase additional reinsurance at a reasonable price.
• A dispute may arise with a reinsurer which may mean the recoveries received are lower than anticipated.
• Basis risk on reinsurance which responds to something other than Brit’s Ultimate Net Loss.
These risks are managed through a combination of techniques and controls including risk aggregation management, capital modelling
and internal actuarial review of outward reinsurance costs. The counterparty risk in relation to reinsurance purchased is managed
by the Credit Committee. This is further discussed in the Credit risk section below.
4.1.3 Reserving risk
Reserving risk relates to the risk that the actual cost of losses for policyholder obligations incurred is different from the amounts
provided for within the liability for incurred claims, net of reinsurance, due to inaccurate assumptions or unforeseen circumstances.
This is a key risk for the Group as the net liability for incurred claims is the largest component of the Group’s liabilities and the
actual final cost of losses incurred is inherently uncertain. The BSL Reserving Committee is responsible for the management of Brit
Syndicates 2987 and 2988’s reserving risk, and the Brit Re Reserving Committee performs a similar function for Brit Re.
The Group has a rigorous process for measuring incurred claims and a number of controls are used to mitigate reserving risk. The
process starts with controls over claims data which ensure complete and accurate recording of all paid and notified claims. Claims
adjusters validate policy terms and conditions, adjust claims and investigate suspicious or disputed claims in accordance with the
Group’s claims policy.
The liability for incurred claims includes an estimate of expected cash flows required to settle obligations to pay for insured events that
have occurred as at the balance sheet date, which includes estimates for both reported and incurred but not reported (IBNR) claims.
Reported claims are set using the experience of specialist claims adjusters, underwriters and external experts where necessary.
For IBNR claims, estimates are calculated using further actuarial techniques to capture potential liabilities arising from claims not yet
reported or where further liabilities could arise beyond information available to date. This is particularly the case for the longest tailed
classes of business where the final settlement can occur several years after the claim occurred. Actuarial triangulation techniques are
employed by the Group’s experienced actuaries to establish the IBNR claims. These techniques project IBNR claims based on historical
development of paid and incurred claims by underwriting year.
For the most uncertain claims, the triangulation techniques are supplemented by additional methods to ensure the established
insurance contract liabilities are appropriate. The Actuarial function works closely with other business functions such
as underwriting, claims and risk aggregation management to ensure that they have a full understanding of the emerging claims
experience across the Group. Further details on the actuarial methods used can be found in Note 18. Inflation and other relevant
economic factors are considered as part of the process.
The Group’s Reserving Policy sets out the approach to estimating incurred claims and is designed to produce accurate and reliable
estimates that are consistent over time and across classes of business. The Actuarial best estimate set out in the policy is subject
to BSL and Brit Re Reserving Committee sign-off as part of the formal governance arrangements for the Group. The estimate agreed
by the committees is used as a basis for the ‘best estimate’ component of the liability for incurred claims. A risk adjustment is also
applied over and above the best estimate to allow for the inherent uncertainty within the best estimate reserve. Finally, the insurance
contract liabilities are presented to the respective Audit Committees for recommendation to the relevant Boards.
The liabilities can be more or less than what will ultimately be required to meet the claims arising from earned business. The level
of uncertainty varies significantly between the classes written by the Group but typically is highest for those classes where there
are longer periods before final fulfilment of the claim. More specifically, the key areas of uncertainty are considered to be claims
from the long-tailed direct and long-tailed reinsurance classes. The issues contributing to this heightened uncertainty are common
to all entities which write such business. Further details on the insurance contract liabilities, including changes over time and claims
development tables, can be found in Note 18.
108 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.1 Insurance risk (continued)
4.1.3 Reserving risk (continued)
The table below provides a sensitivity analysis of the potential impact of a change in the claims ratio and of a change in the
confidence level used for determining the risk adjustment on the Group's profit or loss before tax. The sensitivity was calculated
by adjusting the risk adjustment 2.5 percentage points above/below the current confidence level. Other potential risks beyond
the ones described could have additional financial impacts on the Group.
Impact of change on profit before tax
(Unaudited)
Gross
2025
$m
Net
2025
$m
Gross
2024
$m
Net
2024
$m
Change in claims ratio
1
(1% increase) (15.4) (12.1) (13.8) (8.6)
Change in claims ratio
1
(1% decrease) 15.4 12.1 13.8 8.6
Change in confidence level used for determining the
risk adjustment (2.5% increase)
44.0 32.9 44.5 32.5
Change in confidence level used for determining the
risk adjustment (2.5% decrease)
(45.6) (34.1) (38.9) (28.4)
1. The calculations of the combined ratio and other ratios are set out in ‘key performance indicators and alternative performance measures’ section of the report.
The analysis is based on the information at the reporting date. It involves a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions might be correlated.
Subject to taxation, the impact on total equity would be the same as that on profit following a change in the net claims and risk
adjustment confidence level.
4.2 Investment risk management
4.2.1 Introduction
This section describes the Group’s approach to managing investment risk, from both a quantitative and a qualitative perspective.
Investment risk includes market risk (which is covered in section 4.3), investment credit risk (which is covered in section 4.4) and
liquidity risk (which is covered in section 4.5).
4.2.2 Investment governance framework
Investment risk is managed in line with the elements of the Risk Management Framework (RMF) – identification, measurement
and management. The Brit Group Holdings Limited Board has overall responsibility for determining the overall Group investment
strategy, with the BSL and Brit Re Boards exercising control over the syndicates’ and Brit Re’s investment portfolios, including
defining risk tolerances. This is achieved through investment policies and guidelines, which reflect the risk appetite and the business
strategy of the Group and individual entities within the Group.
The BSL Investment Committee and the Brit Re Operations Committee have been mandated to review, advise and make
recommendations to the respective Boards on investment strategy with a view to optimising investment performance. The
investment strategy is executed through outsourced investment management agreements, which is in line with prevailing
regulations, with Hamblin Watsa Investment Counsel Limited (HWIC) and a range of other third-party investment managers.
The entity level Risk Oversight Committees ensure that the investment risk is managed within the framework and also report to the
relevant Boards. An Investment and Treasury Operations Committee oversees the operational risk that is relevant to the investment
management function.
Information is provided at least quarterly covering portfolio composition, performance, forecasting and the results of stress and
scenario tests. Any operational issues and breaches to the risk appetite framework are reported to the entity level Risk Oversight
Committee and the Board.
Brit Group Holdings Limited Annual Report 2025 109
financial statements
4 Risk management policies (continued)
4.2 Investment risk management (continued)
4.2.3 Risk tolerance
Investment risk tolerances are set by the entity Boards, defining the appetite to investments, solvency risk, concentration risk, credit
quality, currency risk and liquidity risk. The appetite to these elements of investment risk is derived from the overall risk appetite and
business strategy and reflects a number of factors, including the current and expected economic climate, capital management strategy,
liquidity needs and asset liability matching (ALM) policy. The investment risk tolerance helps determine the strategic asset allocation.
Risk metrics are monitored and reported on regularly, to ensure that performance is within the Board-approved levels and limits
continue to remain appropriate, within the governance framework highlighted above.
4.2.4 Solvency matching
Assets are considered by both currency and duration profile in relation to the liabilities thereby managing the impact of foreign
exchange and interest rate risk on the solvency position.
Under this strategy, the total assets of each underwriting entity within the Group are sought to be held in proportion to the
currencies of that entity’s technical provisions. For each Group underwriting entity, a solvency matched benchmark is calculated.
This benchmark is the cash flow profile for investments which would minimise the sensitivity of the Group’s solvency position
to changes in interest and exchange rates. The Group seeks to implement this through the use of cash, investments and foreign
exchange forward contracts in the respective currencies. The investment guidelines for each entity stipulate duration limits and the
positioning and sensitivity for both the asset and solvency position is reported quarterly.
As at 31 December 2025, the Group’s asset portfolio duration was relatively matched to the Solvency Matched Benchmark duration,
limiting the sensitivity of the solvency position to parallel shifts in interest rates. The sensitivity of the portfolio to interest rate
changes is shown within Note 4.3.2.
4.2.5 Investment management
The investment management strategy is delivered, at the entity level, through outsourced Investment Management Agreements
(IMAs) with HWIC and a range of other third-party investment managers. The IMAs prescribe the investment parameters within
which investment managers are permitted to make asset allocation decisions on behalf of the respective entities. Each of the Group’s
investing entities is governed by separate investment policies; these detail the parameters, roles and responsibilities relating to the
management of each entity’s investment portfolio.
4.3 Market risk
4.3.1 Introduction
Market risk is the risk that the fulfilment cash flows of insurance and reinsurance contracts and the fair value or future cash flows
of financial instruments will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate
risk, currency risk and other price risk. Credit risk on financial investments and cash is covered in the credit risk section.
110 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.3 Market risk (continued)
4.3.2 Interest rate risk
Introduction
Interest rate risk in the context of Market risk is the risk that the value of the Group's assets and liabilities and/or future cash flows
are adversely impacted by changes in market interest rates. The Group is exposed to interest rate risk, primarily in the US, through
its investment portfolio, borrowings, cash and cash equivalents, insurance contract liabilities and reinsurance contract assets.
This risk is managed by reducing the mismatch between asset and liability duration positions as discussed above. The sensitivity
of financial investments to interest rate risk is indicated by their respective durations. This is defined as the modified duration,
which is the change in the price of the security subject to a 100 basis points parallel shift in interest rates. The greater the duration
of a security, the greater the possible price volatility.
The duration of the investment portfolio is set within an allowable range relative to the targeted duration and monitored
on a quarterly basis.
Included within Note 4.5 are tables that set out the remaining maturity profile of the Group's monetary assets and liabilities, including
financial investments and insurance contract liabilities. These maturity profiles provide an indication of the duration of these assets
and liabilities and therefore their sensitivity to changes in market interest rates.
Sensitivity to changes in investment yields
The sensitivity of profit to the changes in investment yields is set out in the table below. The analysis is based on information at the
reporting date. It involves a change in an assumption while holding all other assumptions constant. In practice, this is unlikely
to occur, and changes in some of the assumptions might be correlated.
This analysis demonstrates that the impact of changes in investment yields on financial investments and insurance and reinsurance
contract balances is expected to be offset to an extent.
(Unaudited)
Impact on profit before tax
Financial
investments
2025
$m
Insurance
and reinsurance
contracts
2025
$m
Financial
investments
2024
$m
Insurance
and reinsurance
contracts
2024
$m
Increase
50 basis points (60.0) 61.7 (83.6) 56.4
100 basis points (120.0) 123.3 (167.1) 112.8
Decrease
50 basis points 60.0 (61.7) 83.6 (56.4)
100 basis points 120.0 (123.3) 167.1 (112.8)
Analysis of larger movements in yield is not shown above as the relationship between profit and investment yields is linear in respect
of Brit’s portfolio. Subject to taxation, the effect on total equity would be the same as the effect on profit.
Brit Group Holdings Limited Annual Report 2025 111
financial statements
4 Risk management policies (continued)
4.3 Market risk (continued)
4.3.3 Currency risk
Introduction
Currency risk is the risk that movements in exchange rates impact the financial performance or solvency position of the Group.
The investment policy includes requirements to ensure that assets are appropriately matched to the liabilities for each of the
main currencies. The Group’s main currencies are US dollar (USD), Sterling (GBP), Canadian dollar (CAD), Euro (EUR), and
Australian dollar (AUD). The split of assets and liabilities for each of the Group’s main currencies, converted to US dollars, is set out
in the tables below:
USD $m GBP £ Conv. $m CAD $ Conv. $m EUR € Conv. $m AUD $ Conv. $m Total Conv. $m
At 31 December 2025
Financial instruments
1
6,376.6 117.2 185.6 264.5 69.4 7,013.3
Insurance and reinsurance contracts
2
(3,318.3) (240.9) (193.8) (230.8) (133.9)
(4,117.7)
Other assets and liabilities (162.1) (11.2) – 1.5 – (171.8)
Net assets/(liabilities) before the effect
of foreign exchange derivatives 2,896.2 (134.9) (8.2) 35.2 (64.5) 2,723.8
Adjustment for foreign
exchange derivatives 80.6 171.6 (398.8) 89.9 56.7 –
Net assets/(liabilities) after the effect
of foreign exchange derivatives 2,976.8 36.7 (407.0) 125.1 (7.8) 2,723.8
At 31 December 2024 (unaudited)
Financial instruments
1
5,017.8 114.2 625.6 181.5 61.6 6,000.7
Insurance and reinsurance contracts
2
(2,956.2) (232.0) (160.8) (172.7) (114.3) (3,636.0)
Other assets and liabilities (8.7) (65.7) – 1.3 – (73.1)
Net assets/(liabilities) before the effect
of foreign exchange derivatives 2,052.9 (183.5) 464.8 10.1 (52.7) 2,291.6
Adjustment for foreign
exchange derivatives 144.1 146.0 (387.4) 45.8 51.5 –
Net assets/(liabilities) after the effect
of foreign exchange derivatives 2,197.0 (37.5) 77.4 55.9 (1.2) 2,291.6
1. The Group’s financial instruments are defined in Note 2.5.3(c) and reconciled to the financial statements in Note 21.
2. The Group’s ‘insurance and reinsurance contracts’ refers to the following items presented on the Group’s statement of financial position: reinsurance contract assets; and insurance
contract liabilities.
The non-USD denominated net assets of the Group may lead to profits or losses (depending on the mix relative to the liabilities),
should the USD vary relative to these currencies.
Foreign currency forward contracts may be used to achieve the desired exposure to each currency. From time to time the Group
may also choose to utilise foreign currency derivatives to manage the risk of reported losses due to changes in foreign exchange
rates. The details of all foreign currency derivative contracts entered into are given in Note 22.
The degree to which derivatives are used is dependent on the prevailing costs versus the perceived benefit to shareholder value
from reducing the chance of a reported loss due to changes in foreign exchange rates.
112 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.3 Market risk (continued)
4.3.3 Currency risk (continued)
In accordance with IFRS, non-monetary items are recorded at original transaction rates and are not revalued at the reporting date.
This means these amounts in the statement of financial position are carried at a different exchange rate to the remaining assets and
liabilities, with the resulting exchange differences that are created being recognised in the income statement. The Group considers
this to be a timing issue which can cause volatility in the income statement.
Sensitivity to changes in foreign exchange rates
The table below gives an indication of the impact on profit of a percentage movement in the relative strength of USD against the
value of GBP, CAD, EUR, and AUD individually. The analysis is based on the information as at 31 December 2025. It involves the change
in an assumption (i.e. single currency fluctuation) while holding all other assumptions constant. In practice, this is unlikely to occur,
and changes in some of the assumptions might be correlated.
(Unaudited)
Impact on profit before tax
Financial
instruments
2025
$m
Insurance and
reinsurance
contracts
2025
$m
Financial
instruments
2024
$m
Insurance and
reinsurance
contracts
2024
$m
USD weakens
10% against GBP 13.0 (26.8) 12.7 (25.8)
10% against CAD 20.6 (21.5) 69.5 (17.9)
10% against EUR 29.4 (25.6) 20.2 (19.2)
10% against AUD 7.7 (14.9) 6.8 (12.7)
USD strengthens
10% against GBP (10.7) 21.9 (10.4) 21.1
10% against CAD (16.9) 17.6 (56.9) 14.6
10% against EUR (24.0) 21.0 (16.5) 15.7
10% against AUD (6.3) 12.2 (5.6) 10.4
Subject to taxation, the effect on total equity would be the same as the effect on profit.
4.3.4 Other price risk
Introduction
This is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices
(other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the
individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
Financial assets and derivatives that are recognised at their fair value are susceptible to losses due to adverse changes in their
prices. This is known as price risk.
Listed investments are recognised in the financial statements at quoted bid price. If the market for the investment is not considered
to be active, then the Group establishes fair valuation techniques. This includes using recent arm’s-length transactions, consideration
of the current fair value of other similar investments, discounted cash flow models and other valuation techniques that are commonly
used by market participants.
Brit Group Holdings Limited Annual Report 2025 113
financial statements
4 Risk management policies (continued)
4.3 Market risk (continued)
4.3.4 Other price risk (continued)
Brit has a limit on the proportion of its assets it can invest in risk assets which includes equities and derivatives. This combined with
active monitoring of exposure by geography and industry helps manage downside risk.
The prices of fixed and floating rate income securities are predominantly impacted by currency, interest rate and credit risks. Credit
risk on investments is discussed in the following section of this Note.
Sensitivity to changes in other price risk
The sensitivity of profit to additional price changes in relation to the Group’s equity holdings is set out in the table below. The analysis
is based on information as at 31 December of each year presented. It involves the change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions might be correlated. No changes
were made by the Group in the methods and assumptions used in preparing the below analysis.
Impact on profit before tax
2025
$m
(Unaudited)
2024
$m
Increase in fair value
10% 171.9 137.9
20% 343.8 275.9
30% 515.7 413.8
Decrease in fair value
10% (171.9) (137.9)
20% (343.8) (275.9)
30% (515.7) (413.8)
Subject to taxation, the effect on total equity would be the same as the effect on profit.
4.4 Credit risk
This is the risk that one party causes a financial loss for the other party by failing to discharge an obligation in a timely manner.
The main sources of credit risk relate to:
• Reinsurers: through the failure to pay valid claims against a reinsurance contract held by the Group;
• Brokers and coverholders: where counterparties fail to pass on premiums or claims collected or paid on behalf of the Group;
• Investments: through the issuer default of all or part of the value of a financial instrument or the market value of that
instrument; and
• Cash and cash equivalents: through the default of the banks holding the cash and cash equivalents.
The insurance and non-insurance related counterparty credit risks are managed separately by the Group.
4.4.1 Non-insurance credit risk
Investment credit risk management process
The Group Board has overall responsibility for investment credit risk. The investment guidelines and investment policy set out
clear limits and controls around the level of investment credit risk. This includes a tolerance on matching of asset and liabilities
by currency, concentration guidelines that restrict the exposure to any individual counterparty and monitoring of exposure
by industry and geography. The investment guidelines further limit the type, credit quality and maturity profile of both the Group’s
cash and investments. In addition, the investment risk framework further limits potential exposure to credit risk through aggregate
investment risk limits.
During 2025, the BSL Investment Committee was chaired by Andie Welsch, a Non-Executive Director of the BSL Board. This
committee is responsible for the immediate oversight of the syndicates’ investments and the Brit Re Operations Committee
is responsible for the immediate oversight of the Brit Re’s investments. The Brit Group Holdings Limited Board oversees all
Group investments.
114 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.4 Credit risk (continued)
4.4.1 Non-insurance credit risk (continued)
Non-insurance credit risk profile
The summary of the non-insurance credit risk exposures for the Group's assets is set out in the tables below.
AAA
$m
AA
$m
A
$m
BBB and
below
$m
Equities
$m
Not rated
$m
Total
$m
At 31 December 2025
Financial investments 319.7 4,202.3 459.8 162.2 791.6 808.9 6,744.5
Derivative contracts – – 12.0 – – 2.6 14.6
Trade and other receivables
1
– – – – – 123.1 123.1
Other assets
1
– – – – 205.9 –
205.9
Cash and cash equivalents 196.9 209.0 140.0 31.3 0.0 0.0 577.2
516.6 4,411.3 611.8 193.5 997.5 934.6 7,665.3
At 31 December 2024 (unaudited)
Financial investments 2,614.1 69.3 955.2 335.9 620.4 679.2 5,274.1
Derivative contracts – – 10.7 – – 4.3 15.0
Trade and other receivables
1
– – – – – 177.1 177.1
Other assets
1
– – – – 152.7 – 152.7
Cash and cash equivalents 266.9 97.7 68.7 43.1 – – 476.4
2,881.0 167.0 1,034.6 379.0 773.1 860.6 6,095.3
1. ‘Trade and other receivables’ and ‘Other assets’ are defined in Note 2.5.3. To ensure the table presents non-insurance credit risk, debtors arising out of direct insurance operations and
debtors arising out of reinsurance operations have been excluded, and are instead presented as part of insurance credit risk (Note 4.4.2). All ‘Trade and other receivables’ balances are
presented before any allowance for credit losses.
The table above gives an indication of the level of credit worthiness of assets that are most exposed to credit risk. The ratings are
mainly sourced from Standard & Poor’s and where these are not available an equivalent rating agency.
4.4.2 Insurance credit risk
Insurance credit risk management process
Insurance credit risk arises primarily from reinsurers (whereby reinsurers fail to pay recoveries due to the Group in a timely
manner), direct policyholders (where policy holders fail to pay premium in a timely manner) and brokers and coverholders (whereby
intermediaries fail to pass on premiums due to the Group in a timely manner).
The BSL Credit Committee and Brit Re Operations Committee are responsible for the management of credit risk arising from
insurance activities.
Reinsurer credit risk is managed by transacting only with reinsurance counterparties that satisfy a minimum level of financial
strength or provide appropriate levels of collateral and have been approved for use by the BSL Credit Committee and Brit Re
Operations Committee. The reinsurer security list, which sets out the list of approved reinsurance counterparties, is reviewed
at least annually and following any significant change in risk profile, which includes any changes to reinsurers’ financial ratings.
Credit risk appetite limits are set for reinsurance entities and groups to limit accumulations of risk. These positions are monitored
quarterly against current balance sheet exposures and in relation to a number of extreme loss scenarios.
Reinsurance aged debt is monitored by the BSL Credit and Brit Re Operations committees. In instances where there is deemed to be
a specific risk of non-payment, this is allowed for within reinsurance contract assets. In respect of balances relating to insurance
or reinsurance operations, which are outside the scope of IFRS 17, a loss allowance provision may be made.
Any breaches of credit risk tolerance and/or appetite are reported to the Risk Oversight Committee and the Board at least quarterly.
Credit risk associated with insurance contracts issued is not considered a material risk to the Group as it has the right to terminate
Brit Group Holdings Limited Annual Report 2025 115
financial statements
4 Risk management policies (continued)
4.4 Credit risk (continued)
4.4.2 Insurance credit risk (continued)
Insurance credit risk profile
The reinsurance contract assets presented on the Group’s statement of financial position include the asset for incurred claims (AIC)
and the asset for remaining coverage (ARC).
A summary of the credit quality of the AIC, is set out in the tables below:
AAA
$m
AA
$m
A
$m
BBB and
below
$m
Equities
$m
Not rated
$m
Total
$m
At 31 December 2025
Asset for incurred claims 2.5 948.8 555.3
0.0
41.1 15.6 1,563.3
At 31 December 2024 (unaudited)
Asset for incurred claims 5.3 899.5 503.3 2.7 159.3 17.8 1,587.9
1. Collateralised recoveries relate to amounts held by an independent third party or segregated bank account, or through letters of credit issued for the benefit of the Group.
As at 31 December 2025, the maximum exposure to credit risk from insurance contracts is $1,388.6m (2024: $1,524.4m) which
relates to premiums and other insurance receivables, and the maximum exposure to credit risk from reinsurance contracts
is $1,815.8m (2024: $1,862.3m), which relates to reinsurance recoveries from claims outstanding.
As at 31 December 2025 the gross carrying amount of debtors arising from direct insurance operations and reinsurance operations,
which are not credit-rated, is $254.4m (2024: $352.4m). These amounts are presented within ‘Insurance and other receivables’
in the consolidated statement of financial position and included within ‘Trade and other receivables’ in the Notes to the financial
statements – refer to Note 2.5.3 for a definition of ‘Trade and other receivables’.
4.5 Liquidity risk
Liquidity risk is the risk that the Group may not have cash available to pay obligations when due. The predominant liquidity risk the
Group faces is the daily calls on its available cash resources in respect of claims arising from insurance contracts.
The Group monitors the levels of cash and cash equivalents on a daily basis, ensuring adequate liquidity to meet the expected cash
flow requirements due over the short term.
The Group also limits the amount of investment in illiquid securities in line with the liquidity policy set by the Boards. This involves
ensuring sufficient liquidity to withstand an internally developed stressed scenario which includes a severe catastrophe event (with
associated payment and funding requirements) and financial market volatility. Contingent liquidity also exists in the form of a Group
revolving credit facility. The investment portfolio invests in a diversified portfolio of securities. Concentration is managed via
concentration risk limits and is monitored on an ongoing basis to ensure sufficient diversification.
The tables below present, for the Group’s monetary assets and liabilities, the remaining maturity profile at the reporting date
based on contractual terms or expected payment dates. The amounts presented are fair values or approximations of fair values
except as follows:
• For insurance contract liabilities, the amounts presented are estimates of the present value of the future cash flows
as included in the liability for remaining coverage of groups of insurance contracts accounted for under the general
measurement model and in the liability for incurred claims of all groups of insurance contracts.
• For borrowings and lease liabilities, the amounts shown are undiscounted future cash flows.
116 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.5 Liquidity risk (continued)
31 December 2025
<1 year
$m
1-2 years
$m
2-3 years
$m
3-4 years
$m
4-5 years
$m
More than
5 years
$m
Equities
$m
Total
$m
Assets
Financial investments 1,397.2 1,380.5 1,377.6 423.3 1,280.1 94.2 791.6 6,744.5
Derivative contracts 7.6 7.0 – – – – – 14.6
Trade and other receivables
1
351.4 – – – – – – 351.4
Other assets – – – – – – 205.9 205.9
Cash and cash equivalents 577.2 – – – – – – 577.2
2,333.4 1,387.5 1,377.6 423.3 1,280.1 94.2 997.5 7,893.6
31 December 2025
Liabilities
Insurance contract liabilities 1,442.1 1,067.2 739.7 516.5 686.9 1,026.9 – 5,479.3
Derivative contracts 5.2 – 8.3 – – – – 13.5
Borrowings 31.3 31.3 31.3 31.3 201.7 801.7 – 1,128.6
Trade and other payables
1
163.7 – – – – – – 163.7
Lease liabilities 4.4 4.4 4.3 4.2 1.7 – – 19.0
1,646.7 1,102.9 783.6 552.0 890.3 1,828.6 – 6,804.1
1. Refer to Note 2.5.3 for the Group’s definitions of ‘Trade and other receivables’ and ‘Trade and other payables’.
31 December 2024 (unaudited)
<1 year
$m
1-2 years
$m
2-3 years
$m
3-4 years
$m
4-5 years
$m
More than
5 years
$m
Equities
$m
Total
$m
Assets
Financial investments 814.3 409.0 443.4 850.5 397.4 1,739.1 620.4 5,274.1
Derivative contracts 14.9 0.1 – – – – – 15.0
Trade and other receivables
1
508.0 – – – – – – 508.0
Other assets – – – – – – 152.7 152.7
Cash and cash equivalents 476.4 – – – – – – 476.4
1,813.6 409.1 443.4 850.5 397.4 1,739.1 773.1 6,426.2
31 December 2024 (unaudited)
Liabilities
Insurance contract liabilities 1,244.8 943.9 678.6 504.9 672.4 1,054.0 – 5,098.6
Derivative contracts 4.8 – – 7.3 – – – 12.1
Borrowings 6.0 6.0 6.0 6.0 6.0 164.9 – 194.9
Trade and other payables
1
234.7 – – – – – – 234.7
Lease liabilities 3.1 4.1 4.1 4.0 3.9 1.6 – 20.8
1,493.4 954.0 688.7 522.2 682.3 1,220.5 – 5,561.1
1. Refer to Note 2.5.3 for the Group’s definitions of ‘Trade and other receivables’ and ‘Trade and other payables’.
Brit Group Holdings Limited Annual Report 2025 117
financial statements
4 Risk management policies (continued)
4.6 Operational risk
Operational risk is the potential for loss arising from the failure of people, process or technology or the impact of external events.
The nature of operational risk means that it is dispersed across all functional areas of Brit. Operational risk exposures are managed
through a consistent set of management processes that drive risk identification, assessment, control and monitoring.
The BSL Operations Committee, chaired by the Group Chief Operating Officer, is a key governance committee reporting to the
Executive Committee. The BSL Operations Committee is responsible for managing operational risk in line with the operational risk
policy and the risk tolerance and management appetite limits set by the BSL Board and management respectively. The Brit Re
Operations Committee has the same responsibilities for Brit Re. Each committee is provided with relevant operational risk updates
and these committees include operational risk owners within executive management who actively manage operational risk within
their respective areas (such as Underwriting, Claims, Investments and Finance).
An operational Risk Management Framework is in place to ensure an appropriate standard approach is taken to managing
operational risk across the Group. The key elements of this framework are:
• Allocation of responsibility for the identification and assessment of operational risk. Standard tools are used to facilitate
these assessments;
• Definition of standard elements of sound operating controls that are expected to be in place to address all identified operational risks;
• A process that integrates with Brit’s internal model to support the setting and monitoring of operational risk appetite and tolerances;
• Governance, reporting and escalation for operational risk;
• Infrastructure supporting the operational Risk Management Framework; and
• Operational risk management training and awareness.
A conduct risk framework is in place across the Group to ensure Brit’s products and services continue to meet the needs
of our customers.
4.7 Emerging risks
Brit undertakes a formal emerging risk review annually with the results reported to the BSL and Brit Re Risk Oversight Committees
and included in the Own Risk and Solvency Assessment (ORSA) report and Commercial Insurer’s Solvency Self-Assessment (CISSA)
reports of the underwriting entities. The review is an important part of the risk identification aspect of the RMF and includes horizon
scanning of the internal and external risk environment to identify potential new or developing risks to Brit. These risks can then be
included in the risk register and managed appropriately as required.
The emerging risk review has previously identified risks such as climate change, geopolitics and cyber risk. These risks are now
considered as part of the business-as-usual risk management process for each of the main risks faced by the Group as described
earlier in this Note (insurance risk, investment risk, market risk, credit risk, liquidity risk, operational risk) – refer to the relevant sections
of this Note for details of the Group’s approach to managing those risks. The nature of these emerging risks is described further below.
4.7.1 Climate change
Climate change has been recognised as an emerging risk since 2014 and has been an area of focus since having been identified
as a high priority by Brit’s 2018 emerging risks analysis. Its potential impact on the insurance industry is an area of focus for the
wider insurance market and its regulators.
The financial risks to insurers may include the potential for increased frequency and severity of weather-related natural
catastrophes, for example, hurricanes and wildfires. The three main areas of risk identified for Brit are natural catastrophes, liability
claims and investment losses. Further details on the risk management approach are included in the Strategic Report.
4.7.2 Geopolitics
Geopolitical events, such as tariffs or wars (the ongoing war in Ukraine or future wars) have the potential to cause insurance losses
and disruption to financial markets. Insurance losses could arise either as a result of direct damage from the conflicts or from
second order impacts such as supply chain disruptions and economic instability.
There may also be a potential impact on the operational costs of the Group attributable to the downstream effects of increased
inflation resulting from geopolitical events. Such events may also impact the global economy, which could in turn impact the value
of Brit's investments.
The Group continues to monitor developments closely.
118 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
4 Risk management policies (continued)
4.7 Emerging risks (continued)
4.7.3 Cyber risk
The cyber threat landscape continues to develop with increasingly sophisticated attack techniques such as ransomware as a service,
increasing interconnectivity (such as networked critical infrastructure and cloud data storage), and the advancement of artificial
intelligence (AI).
Brit has invested significantly in developing our understanding of cyber underwriting risk, including the potential drivers of aggregate
loss events. Third-party vendor tools have been licensed, providing enhanced modelling capabilities, threat intelligence and data. The
ongoing development of the cyber exposure management approach remains an area of focus given the evolving threat environment.
Similarly, Brit has invested significantly in our own cybersecurity. An annual risk-based evaluation is conducted to ensure Brit retains
the capability to detect security vulnerabilities and safeguard our systems.
4.8 Capital management
Brit defines management capital as the amount of capital that the Board of each underwriting entity determines that it should
hold, taking into account the requirements of shareholders, regulators, policyholders, and the Boards’ solvency risk appetite. The
capital policy is set by the entity and Group Boards, while the Group Capital Committee is the responsible management committee.
Management capital requirements are in excess of capital requirements under the Solvency UK capital regime, which replaced
Solvency II in the UK effective 1 January 2025.
The capital requirements are based on the output of the internal models for each underwriting entity, which reflect the risk profile
of each entity.
The capital policy requires capital to be held well in excess of regulatory minimum requirements, underpinning Brit’s financial
strength. The policy ensures the capital adequacy of the Group as a whole, and each entity, through an efficient capital structure.
Brit proactively responds to developments in the financial environment to ensure its capital strength is maintained while optimising
risk adjusted returns.
The Group’s total available capital consists of net tangible assets (after the exclusion of the deferred tax liability on intangible assets
and non-controlling interest), senior debt, subordinated debt, letters of credit, and contingent funding. Further details of the Group’s
total available capital and the management capital requirement (unaudited) are set out in ‘key performance indicators and alternative
performance measures’ section of the report.
All regulatory capital requirements have been complied with during the year by the Group’s individual insurance subsidiaries.
The Lloyd’s market is subject to the solvency and capital adequacy requirements of the Prudential Regulation Authority (PRA).
Any regulatory intervention by the PRA in respect of Lloyd’s may adversely affect the Group. The PRA may impose more stringent
requirements on Lloyd’s which may result in higher capital requirements or a restriction on trading activities for entities within
the Group. If Lloyd’s fails to satisfy its solvency test in any year, the PRA may require Lloyd’s to cease trading and/or its members
to cease or reduce their underwriting exposure, which may result in a material adverse effect to the Group’s reputation, financial
condition and results of operations.
During 2025, Brit primarily underwrote through the Group’s principal wholly aligned Lloyd’s syndicate, Syndicate 2987, and through
Syndicate 2988, which both benefit from the Lloyd’s credit ratings of A+ (Excellent) from AM Best, AA- (Very Strong) from Fitch
and AA- (Very Strong) from Standard & Poor’s. Brit Re also benefits from a Financial Strength Rating of A (Excellent) and a Long-
Term Issuer Credit Rating of A (Excellent) from AM Best. Any downgrade in Lloyd’s or Brit Re’s financial strength ratings may have
an adverse effect on the Group.
The Group’s business plan and underwriting capacity may be affected by any decrease in the value of the Group’s Funds at Lloyd’s
or by recommendations from the Lloyd’s Franchise Board. The Group is also reliant upon the compliance of Lloyd’s with US
regulations, including the maintenance by Lloyd’s of its trading licences and approvals in the US.
Brit Group Holdings Limited Annual Report 2025 119
financial statements
5 Segmental information
This Note breaks down the operating results summarised in the income statement into the main business areas of the Group.
It also shows how our insurance revenue is split globally. This analysis is designed to help you understand how each segment of our
business has performed and how we have allocated the Group’s capital.
Segmental information is presented based on the Group’s management and internal reporting structures. This represents the level
at which financial information is reported, performance is analysed and resources are allocated.
The Group’s underwriting activities are presented across three operating segments: Lloyd’s, Brit Re and Other Underwriting.
The Lloyd’s segment reflects our underwriting activity on the Lloyd’s of London platform, which primarily takes place through
our lead syndicate, Syndicate 2987. The segment also comprises Brit’s share of Syndicate 2988, our third-party capital follow
platform, and fees earned for managing the syndicate on behalf of members. The Brit Re segment then captures our growing
Bermudian reinsurance platform, whilst the Other Underwriting segment captures the Group’s special purpose vehicles which were
predominantly closed in 2024.
In addition to these underwriting segments, the Group presents an Investments segment comprising investment-related activities,
as well as a Corporate segment comprising residual income and expenditure, finance costs and foreign exchange movements.
(a) Income statement by segment
Year ended 31 December 2025
$m Lloyd’s Brit Re
Other
Underwriting
Total
Underwriting Investments Corporate Total
Insurance revenue 2,880.5 69.8 – 2,950.3 – – 2,950.3
Acquisition costs (727.9) (8.4) – (736.3) – – (736.3)
Incurred claims and changes to liabilities for incurred
claims and other directly attributable expenses (1,573.6) (39.5) – (1,613.1) – – (1,613.1)
Insurance service expenses (2,301.5) (47.9) – (2,349.4) – – (2,349.4)
Allocation of reinsurance premiums (462.1) (18.5) – (480.6) – – (480.6)
Amount recoverable from reinsurers
for incurred claims 315.0 10.9 – 325.9 – – 325.9
Net expenses from reinsurance
contracts held (147.1) (7.6) – (154.7) – – (154.7)
Insurance service result 431.9 14.3 – 446.2 – – 446.2
Interest revenue from financial assets not measured
at FVTPL – – – – 42.7 – 42.7
Other investment return – – – – 543.8 – 543.8
Net investment return – – – – 586.5 – 586.5
Net finance expenses from insurance contracts (329.5) (2.5) – (332.0) – – (332.0)
Net finance income from reinsurance contracts held 87.3 0.5 – 87.8 – – 87.8
Net insurance finance expenses (242.2) (2.0) – (244.2) – – (244.2)
Other income 32.0 – – 32.0 – 60.3 92.3
Other operating expenses (142.9) (12.9) – (155.8) – (10.3) (166.1)
Finance costs – – – – – (25.0) (25.0)
Foreign exchange gains – – – – – 27.0 27.0
Profit/(loss) before tax 78.8 (0.6) – 78.2 586.5 52.0 716.7
Tax charge – – – – – (64.9) (64.9)
Profit/(loss) for the year 78.8 (0.6) – 78.2 586.5 (12.9) 651.8
120 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
5 Segmental information (continued)
(a) Income statement by segment (continued)
Year ended 31 December 2024 (unaudited)
$m Lloyd’s Brit Re
Other
Underwriting
Total
Underwriting Investments Corporate Total
Insurance revenue 2,842.2 12.1 1.7 2,856.0 – – 2,856.0
Acquisition costs (713.0) (2.2) (0.3) (715.5) – – (715.5)
Incurred claims and changes to liabilities for incurred
claims and other directly attributable expenses (1,450.9) 0.7 2.7 (1,447.5) – – (1,447.5)
Insurance service expenses (2,163.9) (1.5) 2.4 (2,163.0) – – (2,163.0)
Allocation of reinsurance premiums (558.3) (3.6) – (561.9) – – (561.9)
Amount recoverable from reinsurers
for incurred claims 425.4 0.5 – 425.9 – – 425.9
Net expenses from reinsurance
contracts held (132.9) (3.1) – (136.0) – – (136.0)
Insurance service result 545.4 7.5 4.1 557.0 – – 557.0
Interest revenue from financial assets not measured
at FVTPL – – – – 35.2 – 35.2
Other investment return – – – – 237.1 – 237.1
Net investment return – – – – 272.3 – 272.3
Net finance expense from insurance contracts (223.5) (0.8) (2.0) (226.3) – – (226.3)
Net finance income from reinsurance contracts held 55.4 0.6 (0.1) 55.9 – – 55.9
Net insurance finance expenses (168.1) (0.2) (2.1) (170.4) – – (170.4)
Other income 41.5 – – 41.5 – 81.1 122.6
Other operating expenses (158.5) (6.9) – (165.4) – (5.9) (171.3)
Finance costs – – – – – (13.3) (13.3)
Net foreign exchange losses – – – – – (25.8) (25.8)
Profit/(loss) before tax 260.3 0.4 2.0 262.7 272.3 36.1 571.1
Tax charge – – – – – (92.7) (92.7)
Profit/(loss) for the year 260.3 0.4 2.0 262.7 272.3 (56.6) 478.4
Brit Group Holdings Limited Annual Report 2025 121
financial statements
5 Segmental information (continued)
(b) Geographical information
The Group’s strategic business units operate mainly in five geographical areas, though the business is managed on a worldwide
basis. The segmental split shown below is based on the location of the underlying risk.
Insurance revenue
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
United States 1,962.3 1,934.7
United Kingdom 342.1 341.0
Canada 102.1 106.4
Europe (excluding UK) 142.8 124.1
Other (including worldwide) 401.0 349.8
2,950.3 2,856.0
The nature of the London Market business is such that the insureds and reinsureds are often operating on a multi-territory
or worldwide basis and hence coverage is often provided on a worldwide basis. Insurance revenue on a multi-territory or worldwide
basis is included in ‘Other’ in the table above.
The table below provides an analysis of the Group’s non-current assets in two geographical areas, though the business is managed
on a worldwide basis. Non-current assets excludes financial instruments, deferred tax assets, post-employment benefit assets, and
rights arising under insurance contracts:
Non-current assets
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
United Kingdom 63.7 56.6
Other (including worldwide) 21.9 19.8
85.6 76.4
6 Investment return
This Note shows the income generated through investing funds. It also shows the gains and losses generated on various types
of investment assets as a result of the movement in their market values.
Year ended 31 December 2025
Investment
income
$m
Net realised
gains/(losses)
$m
Net unrealised
gains/(losses)
$m
Total investment
return
$m
Cash and cash equivalents 37.9 – – 37.9
Loan to ultimate parent company 4.8 – – 4.8
Interest revenue from financial assets not measured at
FVTPL 42.7 – – 42.7
Equity securities 13.4 1.8 136.1 151.3
Debt securities 176.5 17.1 67.0 260.6
Other loans and mortgages 6.6 – – 6.6
Specialised investment funds 7.2 – 144.0 151.2
Investment-related derivatives – (17.0) 9.5 (7.5)
Other investment return before expenses 203.7 1.9 356.6 562.2
Investment management expenses (18.4) – – (18.4)
Other investment return 185.3 1.9 356.6 543.8
Total investment return 228.0 1.9 356.6 586.5
122 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
6 Investment return (continued)
Year ended 31 December 2024 (unaudited)
Investment
income
$m
Net realised
gains/(losses)
$m
Net unrealised
gains/(losses)
$m
Total investment
return
$m
Cash and cash equivalents 35.2 – – 35.2
Interest revenue from financial assets not measured at FVTPL 35.2 – – 35.2
Equity securities 9.8 92.6 (27.6) 74.8
Debt securities 164.9 (2.3) (84.6) 78.0
Other loans and mortgages 8.3 – – 8.3
Specialised investment funds 5.6 2.3 89.5 97.4
Investment-related derivatives – (10.0) 3.5 (6.5)
Other investment return before expenses 188.6 82.6 (19.2) 252.0
Investment management expenses (14.9) – – (14.9)
Other investment return 173.7 82.6 (19.2) 237.1
Total investment return 208.9 82.6 (19.2) 272.3
7 Net finance income or expenses from insurance and reinsurance contracts held
This Note shows the breakdown of net finance expenses from insurance contracts issued and the net finance income from
reinsurance contracts held.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Net finance (expenses)/income from insurance contracts
Interest accreted (225.7) (270.8)
Effect of changes in interest rates and other financial assumptions (106.3) 44.5
Total net finance expenses from insurance contracts (332.0) (226.3)
Net finance income/(expenses) from reinsurance contracts held
Interest accreted 69.0 80.7
Effect of changes in interest rates and other financial assumptions 18.8 (24.8)
Total net finance income from reinsurance contracts held 87.8 55.9
During 2025, Brit recognised net finance expenses from insurance contracts issued and reinsurance contracts held of $(244.2)m
and a total investment return on financial assets of $586.5m (see Note 6), resulting in a net financial result of $342.3m. In terms
of relationship, the expense recognised from accreting interest on the net insurance liabilities is expected to partially offset against the
investment income received on financial assets, whilst the impact of changes in discount rates on the net insurance liabilities is expected
to partially offset against the fair value gains or losses arising on financial assets driven by their correlation to movements in interest
rates. Brit expects that its investment strategy, which takes a long-term view of markets and can lead to volatility in year-on-year
returns principally driven by fair value gains and losses, will produce a positive net financial result over a long-term time horizon.
Brit Group Holdings Limited Annual Report 2025 123
financial statements
8 Return on derivative contracts
This Note shows the effect on the income statement of derivative contracts held during the year which help manage exposure
to fluctuations in interest rates and foreign exchange rates. Derivatives are shown analysed between investment and currency
related derivatives, reflecting the way the business is managed.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Investment-related non-currency options (presented within ‘Other investment return’) (7.5) (6.5)
Currency forwards (presented within ‘Foreign exchange gains/(losses)’) 9.5 25.5
Return on derivative contracts 2.0 19.0
9 Other income
This Note shows the analysis of other income generated in the year, including changes in value of other financial liabilities.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Fees and commission from non-aligned syndicates 13.0 27.4
Change in value of ultimate parent company shares held by Brit 46.8 65.9
Net commission fee income from intermediary activities 5.6 5.8
Consortium income 13.4 8.3
Profit on sale of associate – 15.2
Change in value of other financial liabilities – (4.6)
Other 13.5 4.6
Total other income 92.3 122.6
10 Other operating expenses
This Note provides a breakdown of total operating expenses incurred by the Group during the year. Expenses are presented within
other operating expenses when they do not relate to the fulfilment of insurance contracts issued or reinsurance contracts held
by the Group.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Salary, pension and social security costs (Note 11) 193.5 177.0
Other staff related costs 60.6 58.0
Other expenses 146.7 134.7
Total operating expenses 417.6 384.6
Amounts presented in:
Insurance service expenses 248.3 210.5
Net expenses from reinsurance contracts held 3.2 2.8
Other operating expenses 166.1 171.3
Total expenses 417.6 384.6
124 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
11 Staff costs
This Note gives a breakdown of the total cost of employing staff (including Executive and Non-Executive Directors) and gives the
average number of people employed by the Group during the year.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Wages and salaries 162.1 149.0
Social security costs 20.6 17.4
Pension costs 10.8 10.6
Total staff costs 193.5 177.0
The monthly average number of employees during the year, including Executive and Non-Executive Directors, was as follows:
Year ended
31 December
2025
Number
(Unaudited)
Year ended
31 December
2024
Number
Underwriters 216 201
Claims staff 70 70
Other underwriting and direct support staff 11 4
Management 160 158
Administration 332 305
Total employees 789 738
Director emoluments are included within Note 9 of the Parent Company Financial Statements.
12 Auditors’ remuneration
The Group engages PricewaterhouseCoopers LLP to perform the audit of the Group and all subsidiaries except for Camargue companies.
The remuneration of the auditors or their associates is analysed as follows:
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Audit of the Group and Company financial statements 1.7 1.5
Audit of subsidiaries 1.1 1.1
Audit related assurance services 0.2 0.2
Total audit and audit related assurance services 3.0 2.8
Total non-audit services – –
Total audit and non-audit services 3.0 2.8
Brit Group Holdings Limited Annual Report 2025 125
financial statements
13 Finance costs
Finance costs arise from interest due on moneys borrowed by the Group and any other amounts payable in respect of those
borrowings or borrowing facilities. Finance costs also include interest payable on lease liabilities. Further details of the Group’s
borrowings are set out in Note 25.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Revolving credit facility and other bank borrowings 4.4 3.7
Interest payable on lease liabilities 0.6 0.8
Subordinated debt 5.9 –
Senior debt 13.1 –
Guarantee fee in relation to senior debt 0.6 –
Borrowings from immediate parent 0.4 8.8
Total finance costs 25.0 13.3
14 Foreign exchange gains or losses
The Group operates in multiple countries and currencies and is exposed to gains and losses arising as a result of movement
in various foreign currency exchange rates. This Note explains the foreign exchange gains or losses as a result of converting the
income, expenses, assets and liabilities recognised by subsidiaries from transactional currency to functional currency.
The Group recognised foreign exchange gains of $27.0m (2024: losses of $25.8m) in the income statement in the year. Foreign
exchange gains and losses result from the translation of the statement of financial position items using closing exchange rates,
and translation of income statement items using the exchange rates prevailing at the dates of the relevant transactions, or at
the average rate for the period when this is a reasonable approximation. Net foreign exchange gains/(losses) in the consolidated
income statement also includes the return on currency forward derivatives.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Gains/(losses) on foreign exchange arising from:
Financial instruments measured at FVTPL 50.1 (67.0)
Other items (32.6) 15.7
Currency forwards 9.5 25.5
Net foreign exchange gains/(losses) 27.0 (25.8)
The principal exchange rates applied to USD are set out in the table below.
Average
Year ended
31 December
2025
Closing Average
(Unaudited)
Year ended
31 December
2024
Closing
Sterling 0.758 0.743 0.782 0.798
Canadian dollar 1.397 1.371 1.370 1.438
Euro 0.884 0.851 0.924 0.966
Australian dollar 1.550 1.500 1.516 1.615
South African rand 17.851 16.570 18.319 18.870
126 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
15 Tax charge
Income tax is tax charged on trading activities during the year. This Note shows the breakdown of tax payable in the current period
(current tax) and also tax that may become payable sometime in the future (deferred tax).
(a) Tax (charged)/credited to the income statement
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Current tax:
Current taxes on income for the year (25.8) 1.9
Overseas tax on income for the year (35.8) (4.6)
Double taxation relief 7.4 –
Adjustments in respect of prior years 1.1 (1.9)
Total current tax (53.1) (4.6)
Deferred tax:
Relating to the origination and reversal of temporary differences (19.9) (78.6)
Adjustments in respect of prior years 8.1 (9.5)
Total deferred tax (11.8) (88.1)
Total tax charged to the income statement (64.9) (92.7)
A tax rate of 25% (2024: 25.0%) has been used in the calculation of the UK current tax.
Overseas taxes arise in respect of the Group’s subsidiaries in Bermuda, India and South Africa and as a result of the Group’s
operations at Lloyd’s. Double tax relief principally arises from taxes suffered as a result of the Group’s operations at Lloyd’s.
Double tax relief is effectively limited to an amount equal to the tax due at the UK tax rate on the same source of income. The double
tax relief amount is included within deferred tax in 2024 on the basis that the amount will be recovered against future liabilities
within the Group.
Brit Group Holdings Limited Annual Report 2025 127
financial statements
15 Tax charge (continued)
(b) Tax charged to other comprehensive income
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Deferred tax charge on actuarial (losses)/gains on defined benefit pension scheme
(relates to continuing operations) (1.1) (5.1)
(c) Tax reconciliation
The tax on the Group’s profit before tax differs from the theoretical amount that would arise based on the weighted average rate
of tax as follows:
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Profit before tax 716.7 571.1
Tax calculated at weighted average rate of tax on income (143.8) (82.8)
Non-deductible and non-taxable items 39.6 0.2
Profit on disposal of subsidiaries and associates – 4.6
Taxes on income at rates in excess of the domestic rate and where credit is unavailable (0.7) (1.8)
Effect of temporary differences not recognised 30.8 (10.3)
Effect of revaluation of deferred tax following change in rate of tax – 8.8
Adjustments to tax charge in respect of prior years 9.2 (11.4)
Total tax charged to income statement (64.9) (92.7)
The weighted average rate of tax is based on the geographic split of profit across Group entities in jurisdictions with differing tax
rates. As the mix of taxable profits changes, so will the weighted average rate of tax.
(d) OECD ‘Pillar Two’ rules
Brit Group Holdings Limited and its subsidiaries fall within the scope of the Organisation for Economic Co-operation and
Development’s (OECD) global minimum tax framework known as the Pillar Two Rules.
Fairfax Financial Holdings Limited (Fairfax), a Canadian entity, is the Ultimate Parent Entity of the Brit Group for the purpose of the
Pillar Two Rules. Canada has implemented the global minimum tax in the form of the Income Inclusion Rule (IIR) and Domestic
Minimum Top-Up Tax (DMT). Fairfax is liable for any top-up tax levied via the IIR on undertaxed profits arising in the Group's non-UK
subsidiaries.
The UK has its own IIR and DMT. To the extent that a UK DMT liability arises on undertaxed profits arising in the Group's UK
subsidiaries, this will be recognised in the Group's financial statements. No UK DMT liability has been provided for by the Group
as at 31 December 2025 (31 December 2024: $nil).
The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the UK IIR and DMT and will
account for it as a current tax if it is incurred in future.
As a response to the Pillar Two rules, a 15% corporate income tax regime has come into force in Bermuda with effect from
1 January 2025. In respect of tax arising from this regime a liability of $31.2m was recognised on the statement of financial position
at 31 December 2025 (31 December 2024: $nil, as Bermuda’s corporate income tax regime had not come into force).
128 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
16 Intangible assets
An intangible asset is an asset without any physical substance but which has long-term value to the business. With the exception
of goodwill and trade names, which are classified as indefinite life assets, the values of these assets are reduced according to their
useful life by way of amortisation. Amortisation is included as an expense in the income statement.
Goodwill
$m
Trade
names
$m
Distribution
channels
$m
Software
$m
Total
$m
Cost:
At 1 January 2024 13.4 0.7 6.0 56.0 76.1
Additions – – – 18.2 18.2
Foreign exchange effect (0.4) – (0.2) (1.0) (1.6)
At 31 December 2024 (unaudited) 13.0 0.7 5.8 73.2 92.7
At 1 January 2025 13.0 0.7 5.8 73.2 92.7
Additions – – – 18.7 18.7
Disposals – – – (29.7) (29.7)
Foreign exchange effect 1.8 0.1 0.8 5.4 8.1
At 31 December 2025 14.8 0.8 6.6 67.6 89.8
Amortisation:
At 1 January 2024 – – 0.9 30.1 31.0
Charge for the year – – 0.4 7.8 8.2
Foreign exchange effect – – – (0.7) (0.7)
At 31 December 2024 (unaudited) – – 1.3 37.2 38.5
At 1 January 2025 – – 1.3 37.2 38.5
Charge for the year – – 0.4 12.3 12.7
Disposals – – – (29.7) (29.7)
Foreign exchange effect – – 0.2 3.0 3.2
At 31 December 2025 – – 1.9 22.8 24.7
Carrying amount:
At 31 December 2024 (unaudited) 13.0 0.7 4.5 36.0 54.2
At 31 December 2025 14.8 0.8 4.7 44.8 65.1
The gross cost of software fully amortised but still in use is $3.5m (2024: $16.4m). All software additions in 2025 and 2024 were
internally developed. The software amortisation charge is included in ‘Insurance service expenses’ and ‘Other operating expenses’
in the Income Statement. There were no impairments to software in 2025 (2024: $nil). Assets not yet in use with a total cost
of $13.1m (2024: $13.9m) are included in software.
Intangible assets with indefinite useful lives (goodwill and trade names) are reviewed annually for impairment. This impairment review
is performed at the level of cash-generating units (CGUs), which are based on operating segments which earn revenues and incur
expenses and whose results are regularly reviewed by management.
Goodwill and the trade names intangible asset arose from the Group’s acquisition of Camargue in 2021, therefore these
intangibles are fully allocated to the Camargue CGU for the purpose of the annual impairment review. At both 31 December 2025
and 31 December 2024, the recoverable amount of the Camargue CGU exceeded the carrying amount (including allocated
intangible assets).
Brit Group Holdings Limited Annual Report 2025 129
financial statements
17 Property, plant and equipment
This Note gives a breakdown of the type of property, plant and equipment asset classes in use. The value of these assets are
reduced according to their useful life by way of depreciation. Depreciation is included as an expense in the income statement.
An annual assessment of the carrying value of these assets is carried out and, if necessary, an impairment charge to the income
statement is made.
Office
refurbishment
$m
Computers, office
machinery,
furniture and
equipment
$m
Land
$m
Buildings
$m
Right of
use assets
$m
Total
$m
Cost:
At 1 January 2024 (unaudited) 20.2 5.2 0.3 0.6 38.1 64.4
Additions 0.7 0.4 – – 0.7 1.8
Disposals (1.6) (0.4) – – (10.2) (12.2)
Foreign exchange effect (0.3) (0.1) – – (0.4) (0.8)
At 31 December 2024 (unaudited) 19.0 5.1 0.3 0.6 28.2 53.2
At 1 January 2025 19.0 5.1 0.3 0.6 28.2 53.2
Additions – 0.9 – – – 0.9
Disposals (2.3) (1.6) – – – (3.9)
Foreign exchange effect 1.3 0.4 – 0.1 1.9 3.7
At 31 December 2025 18.0 4.8 0.3 0.7 30.1 53.9
Depreciation:
At 1 January 2024 (unaudited) 11.8 1.9 – 0.1 17.9 31.7
Charge for the year 1.2 0.8 – – 3.2 5.2
Impairment 1.5 – – – – 1.5
Disposals (1.4) – – – (5.5) (6.9)
Foreign exchange effect (0.2) – – – (0.3) (0.5)
At 31 December 2024 (unaudited) 12.9 2.7 – 0.1 15.3 31.0
At 1 January 2025 12.9 2.7 – 0.1 15.3 31.0
Charge for the year 1.0 0.6 – – 2.5 4.1
Impairment – – – – – –
Disposals (2.3) (1.6) – – – (3.9)
Foreign exchange effect 0.9 0.2 – – 1.1 2.2
At 31 December 2025 12.5 1.9 – 0.1 18.9 33.4
Carrying amount:
At 31 December 2024 (unaudited) 6.1 2.4 0.3 0.5 12.9 22.2
At 31 December 2025 5.5 2.9 0.3 0.6 11.2 20.5
The gross cost of property, plant and equipment fully depreciated but still in use is $0.1m (2024: $2.0m). The depreciation charge for
the year of $4.1m (2024: $5.2m) is included in the ‘Insurance service expenses’ and ‘Other operating expenses’ lines in the Income
Statement. There were no impairment charges recognised in 2025 (2024: $1.5m). A dilapidations provision of $3.1m (2024: $2.8m)
has been set up in respect of the refurbishment of rented property.
130 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
18 Insurance and reinsurance contracts
This Note presents an analysis of the current and non-current portions of insurance contract and reinsurance contract balances.
This Note also analyses the movement in insurance contract and reinsurance contract balances during the year, splitting them
into their component parts. It also examines the in-year movement in insurance and reinsurance contract balances applying the
general measurement model (GMM), the impact of GMM contracts recognised during the year, the movement in assets for insurance
acquisition cash flows, and the expected recognition of the CSM in future periods. On transition to IFRS 17, the Group measured all
insurance contracts issued and reinsurance contracts held using the fully retrospective approach.
The Note also shows how claims have developed over a period (before and after the effects of reinsurance) of time by setting out
the cumulative development at the end of each calendar year in respect of claims arising from business written in a particular
underwriting year.
Composition of the consolidated statement of financial position
An analysis of the amounts presented on the consolidated statement of financial position for insurance and reinsurance contracts
is included in the table below, along with the presentation of current and non-current portions of the balances:
Year ended 31 December 2025
(Unaudited)
Year ended 31 December 2024
$m
Current
portion
Non-current
portion Total
Current
portion
Non-current
portion Total
Reinsurance contract assets
1
533.8 1,134.5 1,668.3 539.5 1,167.7 1,707.2
Insurance contract liabilities:
Insurance contract liabilities excluding
assets for insurance acquisition
cash flows 1,524.7 4,281.9 5,806.6 1,260.2 4,104.5 5,364.7
Assets for insurance acquisition cash flows (20.6) – (20.6) (21.5) – (21.5)
Insurance contract liabilities
1
1,504.1 4,281.9 5,786.0 1,238.7 4,104.5 5,343.2
1. The Group does not have other pre-recognition cash flows included in either its insurance contract liabilities or reinsurance contract assets.
Brit Group Holdings Limited Annual Report 2025 131
financial statements
18 Insurance and reinsurance contracts (continued)
Movement in insurance contract balances
Insurance contracts 31 December 2025
Analysis by remaining coverage and incurred claims Remaining coverage
2
Incurred claims Total
Contracts
not under PAA Contracts under PAA
$m
Estimates
of present
value of
future cash
flows
Risk
adjustment for
non-financial
risk
Net opening balance
1
71.1 (558.4) (4,627.9) (249.5) (5,364.7)
Changes in the consolidated income statement
Insurance revenue
3
2,950.3 – – – 2,950.3
Incurred claims and other insurance service expenses – (247.5) (1,357.9) (105.2) (1,710.6)
Amortisation of insurance acquisition cash flows (736.3) – – – (736.3)
Prior year development – 8.6 18.0 70.9 97.5
Insurance service expenses (736.3) (238.9) (1,339.9) (34.3) (2,349.4)
Insurance service result
4
2,214.0 (238.9) (1,339.9) (34.3) 600.9
Net finance expense from insurance contracts (2.5) (35.7) (293.8) – (332.0)
Effect of movements in exchange rates 9.0 (14.7) (78.3) (4.9) (88.9)
Total changes in the consolidated income statement 2,220.5 (289.3) (1,712.0) (39.2) 180.0
Investment components 12.0 – (12.0) – –
Cash flows
Premiums received (3,046.5) – – – (3,046.5)
Claims and other insurance service expenses paid – 133.8 1,527.9 – 1,661.7
Insurance acquisition cash flows 763.0 (0.1) – – 762.9
Total cash flows (2,283.5) 133.7 1,527.9 – (621.9)
Net closing balance
1
20.1 (714.0) (4,824.0) (288.7) (5,806.6)
1. Opening and closing insurance contract balances exclude assets for insurance acquisition cash flows.
2. The Group has no items of loss component included within Remaining coverage.
3. $452.4m of insurance revenue related to contracts measured under the GMM, comprised of $83.1m from CSM amortisation, $10.4m from changes in risk adjustment, $241.2m
of expected incurred claims and other expenses, and $117.7m from the recovery of insurance acquisition cash flows.
4. The insurance service result presented in this disclosure note excludes ‘net expenses from reinsurance contract’ held'.
132 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
18 Insurance and reinsurance contracts (continued)
Movement in insurance contract balances (continued)
Insurance contracts 31 December 2024 (unaudited)
Analysis by remaining coverage and incurred claims Remaining coverage
2
Incurred claims Total
Contracts
not under PAA Contracts under PAA
$m
Estimates
of present
value of
future cash
flows
Risk
adjustment for
non-financial
risk
Net opening balance
1
103.4 (192.6) (4,752.2) (245.9) (5,087.3)
Changes in the consolidated income statement
Insurance revenue
3
2,856.0 – – – 2,856.0
Incurred claims and other insurance service expenses – (414.9) (1,003.3) (70.8) (1,489.0)
Amortisation of insurance acquisition cash flows (715.5) – – – (715.5)
Prior year development – 14.1 (37.0) 64.4 41.5
Insurance service expenses (715.5) (400.8) (1,040.3) (6.4) (2,163.0)
Insurance service result
4
2,140.5 (400.8) (1,040.3) (6.4) 693.0
Net finance expense from insurance contracts (3.0) (21.8) (201.5) – (226.3)
Effect of movements in exchange rates (2.1) 6.8 40.0 2.8 47.5
Total changes in the consolidated income statement 2,135.4 (415.8) (1,201.8) (3.6) 514.2
Investment components 14.1 – (14.1) – –
Cash flows
Premiums received (2,870.7) – – – (2,870.7)
Claims and other insurance service expenses paid – 50.0 1,340.2 – 1,390.2
Insurance acquisition cash flows 688.9 – – – 688.9
Total cash flows (2,181.8) 50.0 1,340.2 – (791.6)
Net closing balance
1
71.1 (558.4) (4,627.9) (249.5) (5,364.7)
1. Opening and closing insurance contract balances exclude assets for insurance acquisition cash flows.
2. The Group has no items of loss component included within Remaining coverage.
3. $762.2m of insurance revenue related to contracts measured under the GMM, comprised of $121.5m from CSM amortisation, $17.7m from changes in risk adjustment, $440.2m
of expected incurred claims and other expenses, and $182.8m from the recovery of insurance acquisition cash flows.
4. The insurance service result presented in this disclosure note excludes ‘net expenses from reinsurance contract’ held'.
Brit Group Holdings Limited Annual Report 2025 133
financial statements
18 Insurance and reinsurance contracts (continued)
Movement in reinsurance contract balances
Reinsurance contracts 31 December 2025
Analysis by remaining coverage and incurred claims Remaining coverage
1
Incurred claims Total
Contracts
not under PAA Contracts under PAA
$m
Estimates
of present
value of
future cash
flows
Risk
adjustment for
non-financial
risk
Net opening balance 119.3 2.1 1,491.3 94.5 1,707.2
Changes in the consolidated income statement
Allocation of reinsurance premium (480.6) – – – (480.6)
Recoveries on incurred claims and other insurance
service expenses – 62.5 279.0 27.5 369.0
Effect of changes in the risk of reinsurers’
non-performance – – (4.0) – (4.0)
Prior year development – 2.0 (18.6) (22.5) (39.1)
Recoveries from reinsurers – 64.5 256.4 5.0 325.9
Net (expenses)/income from reinsurance
contracts held (480.6) 64.5 256.4 5.0 (154.7)
Net finance income from reinsurance contracts held 11.7 0.2 75.9 – 87.8
Effect of movements in exchange rates 1.9 0.3 27.6 1.6 31.4
Total changes in the consolidated income statement (467.0) 65.0 359.9 6.6 (35.5)
Investment components (4.7) – 4.7 – –
Cash flows
Premiums paid 457.4 – – – 457.4
Claims and other insurance service expenses recovered – (50.3) (410.5) – (460.8)
Total cash flows 457.4 (50.3) (410.5) – (3.4)
Net closing balance 105.0 16.8 1,445.4 101.1 1,668.3
1. The Group has no items of loss-recovery component included within Remaining coverage.
134 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
18 Insurance and reinsurance contracts (continued)
Movement in reinsurance contract balances (continued)
Reinsurance contracts 31 December 2024 (unaudited)
Analysis by remaining coverage and incurred claims Remaining coverage
1
Incurred claims Total
Contracts
not under PAA Contracts under PAA
$m
Estimates
of present
value of
future cash
flows
Risk
adjustment for
non-financial
risk
Net opening balance 242.7 36.1 1,415.5 90.7 1,785.0
Changes in the consolidated income statement
Allocation of reinsurance premium (561.9) – – – (561.9)
Recoveries on incurred claims and other insurance
service expenses – 95.9 251.4 19.8 367.1
Prior year development – – 74.1 (15.3) 58.8
Recoveries from reinsurers – 95.9 325.5 4.5 425.9
Net income from reinsurance
contracts held (561.9) 95.9 325.5 4.5 (136.0)
Net finance (expense)/income from reinsurance
contracts held (1.9) 0.2 57.6 – 55.9
Effect of movements in exchange rates (0.7) (0.1) (15.1) (0.7) (16.6)
Total changes in the consolidated income statement (564.5) 96.0 368.0 3.8 (96.7)
Investment components (3.3) – 3.3 – –
Cash flows
Premiums paid 444.4 – – – 444.4
Claims and other insurance service expenses recovered – (130.0) (295.5) – (425.5)
Total cash flows 444.4 (130.0) (295.5) – 18.9
Net closing balance 119.3 2.1 1,491.3 94.5 1,707.2
1. The Group has no items of loss-recovery component included within Remaining coverage.
Brit Group Holdings Limited Annual Report 2025 135
financial statements
18 Insurance and reinsurance contracts (continued)
Movement in insurance contract balances applying GMM
Insurance contracts 31 December 2025
Analysis by measurement component
$m
Estimates of
present value
of future
cash flows
Risk
adjustment for
non-financial risk CSM Total
Net opening balance (470.7) (40.7) (73.8) (585.2)
Changes in the consolidated income statement
Changes that relate to current service
CSM recognised for the services provided – – 83.1 83.1
Changes in the risk adjustment for non-financial risk – (9.6) – (9.6)
Experience adjustments 14.1 – – 14.1
14.1 (9.6) 83.1 87.6
Changes that relate to future service
Contracts initially recognised in the period 20.8 (1.6) (19.2) –
Changes in estimates that adjust the CSM (9.3) 0.1 9.2 –
11.5 (1.5) (10.0) –
Changes that relate to past service
Adjustments to net liability for incurred claims 0.4 8.2 – 8.6
Net income/(expense) from insurance contracts issued 26.0 (2.9) 73.1 96.2
Finance expense from insurance contracts issued (34.5) – (3.6) (38.1)
Effect of movements in exchange rates (11.9) (1.1) (0.7) (13.7)
Total amounts recognised in comprehensive income (20.4) (4.0) 68.8 44.4
Cash flows
Premiums received (382.9) – – (382.9)
Claims and other insurance service expenses paid 133.7 – – 133.7
Insurance acquisition cash flows 85.0 – – 85.0
Total cash flows (164.2) – – (164.2)
Net closing balance (655.3) (44.7) (5.0) (705.0)
136 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
18 Insurance and reinsurance contracts (continued)
Movement in insurance contract balances applying GMM (continued)
Insurance contracts 31 December 2024 (unaudited)
Analysis by measurement component
$m
Estimates of
present value
of future
cash flows
Risk
adjustment for
non-financial risk CSM Total
Net opening balance (139.1) (18.7) (61.3) (219.1)
Changes in the consolidated income statement
Changes that relate to current service
CSM recognised for the services provided – – 121.5 121.5
Changes in the risk adjustment for non-financial risk – (5.5) – (5.5)
Experience adjustments 48.5 – – 48.5
48.5 (5.5) 121.5 164.5
Changes that relate to future service
Contracts initially recognised in the period 181.8 (18.5) (163.3) –
Changes in estimates that adjust the CSM (36.0) (0.1) 36.1 –
145.8 (18.6) (127.2) –
Changes that relate to past service
Adjustments to net liability for incurred claims 12.5 1.6 – 14.1
Net income/(expense) from insurance contracts issued 206.8 (22.5) (5.7) 178.6
Finance expense from insurance contracts issued (17.6) – (7.2) (24.8)
Effect of movements in exchange rates 4.9 0.5 0.4 5.8
Total amounts recognised in comprehensive income 194.1 (22.0) (12.5) 159.6
Cash flows
Premiums received (755.8) – – (755.8)
Claims and other insurance service expenses paid 50.0 – – 50.0
Insurance acquisition cash flows 180.1 – – 180.1
Total cash flows (525.7) – – (525.7)
Net closing balance (470.7) (40.7) (73.8) (585.2)
Brit Group Holdings Limited Annual Report 2025 137
financial statements
18 Insurance and reinsurance contracts (continued)
Movement in reinsurance contract balances applying GMM
Reinsurance contracts 31 December 2025
Analysis by measurement component
$m
Estimates of
present value
of future
cash flows
Risk
adjustment for
non-financial risk CSM Total
Net opening balance 256.6 0.2 (4.2) 252.6
Changes in the consolidated income statement
Changes that relate to current service
CSM recognised for the services received – – (4.8) (4.8)
Changes in the risk adjustment for non-financial risk – (0.3) – (0.3)
Experience adjustments 40.4 – – 40.4
40.4 (0.3) (4.8) 35.3
Changes that relate to future service
Contracts initially recognised in the period – – – –
Changes in estimates that adjust the CSM (2.9) – 2.9 –
(2.9) – 2.9 –
Changes that relate to past service
Adjustments to net liability for incurred claims 1.4 0.6 – 2.0
Effect of changes in the risk of reinsurers’ non-performance
– – – –
1.4 0.6 – 2.0
Net income/(expense) from reinsurance contracts held 38.9 0.3 (1.9) 37.3
Finance income from reinsurance contracts held
12.0 – – 12.0
Effect of movements in exchange rates 4.5 – – 4.5
Total amounts recognised in comprehensive income 55.4 0.3 (1.9) 53.8
Cash flows
Premiums paid (10.5) – – (10.5)
Claims and other insurance service expenses recovered (50.3) – – (50.3)
Total cash flows (60.8) – – (60.8)
Net closing balance 251.2 0.5 (6.1) 245.6
138 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
18 Insurance and reinsurance contracts (continued)
Movement in reinsurance contract balances applying GMM (continued)
Reinsurance contracts 31 December 2024 (unaudited)
Analysis by measurement component
$m
Estimates of
present value
of future
cash flows
Risk
adjustment for
non-financial risk CSM Total
Net opening balance 308.2 0.6 (7.6) 301.2
Changes in the consolidated income statement
Changes that relate to current service
CSM recognised for the services received – – (40.7) (40.7)
Changes in the risk adjustment for non-financial risk expired – (0.4) – (0.4)
Experience adjustments 54.9 – – 54.9
54.9 (0.4) (40.7) 13.8
Changes that relate to future service
Contracts initially recognised in the period (40.1) 0.1 40.0 –
Changes in estimates that adjust the CSM (3.1) – 3.1 –
(43.2) 0.1 43.1 –
Changes that relate to past service
Prior year development 0.1 (0.1) – –
Net income/(expense) from reinsurance contracts held 11.8 (0.4) 2.4 13.8
Finance (expense)/income from reinsurance contracts held (2.7) – 1.0 (1.7)
Effect of movements in exchange rates (2.0) – – (2.0)
Total amounts recognised in comprehensive income 7.1 (0.4) 3.4 10.1
Cash flows
Premiums paid 71.3 – – 71.3
Claims and other insurance service expenses recovered (130.0) – – (130.0)
Total cash flows (58.7) – – (58.7)
Net closing balance 256.6 0.2 (4.2) 252.6
Brit Group Holdings Limited Annual Report 2025 139
financial statements
18 Insurance and reinsurance contracts (continued)
Impact of GMM contracts recognised in the year
$m
31 December
2025
(Unaudited)
31 December
2024
Insurance contracts (profitable contracts issued
1
)
Claims and other insurance service expenses payable (48.5) (441.6)
Insurance acquisition cash flows (20.0) (185.7)
Estimates of present value of cash outflows (68.5) (627.3)
Estimates of present value of cash inflows 89.3 809.1
Risk adjustment for non-financial risk (1.6) (18.5)
CSM (19.2) (163.3)
Increase in insurance contract liabilities from contracts recognised in the year – –
1. The Group did not acquire any contracts or issue any onerous contracts in either year presented.
$m
31 December
2025
(Unaudited)
31 December
2024
Reinsurance contracts held (initiated without a loss-recovery component
1
)
Estimates of present value of cash outflows – (44.2)
Estimates of present value of cash inflows – 4.1
Risk adjustment for non-financial risk – 0.1
CSM – 40.0
Increase in reinsurance contract assets from contracts recognised in the year – –
1. The Group did not initiate any reinsurance contracts with loss-recovery components in either year presented.
Movement in assets for insurance acquisition cash flows
$m
31 December
2025
(Unaudited)
31 December
2024
Opening balance 21.5 20.2
Cash flows recognised as an asset during the year 20.6 21.5
Amounts derecognised on initial recognition of groups of insurance contracts (21.5) (20.2)
Closing balance 20.6 21.5
Presented in insurance contract liabilities 20.6 21.5
Closing balance 20.6 21.5
As insurance acquisition cash flows are not allocated to renewals, all assets for insurance acquisition cash flows are expected to be
derecognised within one year.
140 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
18 Insurance and reinsurance contracts (continued)
Expected recognition of the CSM
Duration
1 year or less
$m
1 to 2 years
$m
2 to 3 years
$m
3 to 4 years
$m
4 to 5 years
$m
> 5 years
$m
Total
1
$m
31 December 2025
Insurance contracts 5.0 – – – – – 5.0
Reinsurance contracts held 1.3 1.1 0.9 0.7 0.6 1.5 6.1
31 December 2024 (unaudited)
Insurance contracts 71.5 2.3 – – – – 73.8
Reinsurance contracts held (1.9) 1.3 1.1 0.9 0.7 2.1 4.2
1. A CSM presented as a positive in this table is expected to release as an income to the consolidated income statement in future periods. A CSM presented as a negative in this table
is expected to release as an expense to the consolidated income statement in future periods.
Insurance and reinsurance contracts – assumptions and changes in assumptions
Process used to decide on assumptions required
The risks associated with these insurance liabilities and in particular with casualty insurance liabilities are complex and subject
to a number of variables that complicate quantitative analysis.
The Group uses several statistical methods to incorporate the various assumptions made in order to estimate the ultimate costs
of claims. It is typical to consider the attritional claims separately from the large claims, separately from the catastrophe losses.
The two methods more commonly used are the chain-ladder and the Bornhuetter-Ferguson methods.
Chain-ladder methods may be applied to premiums, paid claims or incurred claims (i.e. paid claims plus case reserve estimates).
The basic technique involves the analysis of historical claims development factors and the selection of estimated development
factors based on these historical patterns. The selected development factors are then applied to cumulative claims data for each
underwriting year, that is not yet fully developed, to produce an estimated ultimate claims cost for each underwriting year.
Chain-ladder techniques are most appropriate for mature classes of business that have a relatively stable development pattern.
Chain-ladder techniques are less suitable in cases in which the insurer does not have a developed claims history for a particular
class of business or for underwriting years at early stages of development where the outcome is still highly uncertain.
The Bornhuetter-Ferguson method uses a combination of a benchmark or market-based estimate and an estimate based on claims
experience. The former is based on a measure of exposure such as premiums; the latter is based on the paid or incurred claims
to date. The two estimates are combined using a formula that gives more weight to the experience-based estimate as time passes.
This technique is used in situations in which developed claims experience is not available for the projection (recent underwriting
years or new classes of business).
The choice of selected results for each year of each class of business depends on an assessment of the technique that has been
most appropriate to observed historical developments. In certain instances, this has meant that different techniques or combination
of techniques have been selected for the individual underwriting year, or groups of underwriting years within the same
class of business.
In addition to the above statistical techniques, alternative approaches are often considered for a number of classes of business
(e.g. Casualty Treaty) and particular events (e.g. natural catastrophes), therefore alternative methodologies may be employed to add
additional rigour to the process. For example, losses from a catastrophe are typically formed from reviewing potential exposure
on a policy by policy basis and taking account of market intelligence to determine Brit’s share of the loss. An estimate of the large
claims ultimate will typically be formed from estimating the number of unreported large claims, using the standard statistical
techniques described above, and multiplying this with the expected severity of such losses.
Changes in assumptions
The Group did not change its estimation techniques in the current financial year.
Brit Group Holdings Limited Annual Report 2025 141
financial statements
18 Insurance and reinsurance contracts (continued)
Insurance and reinsurance contracts – assumptions and changes in assumptions (continued)
Claims development tables
The tables show the estimate of ultimate claim costs, inclusive of catastrophe losses, for each successive underwriting year at the
end of each year, together with cumulative paid claims at the end of the current year.
The tables reconcile the cumulative claims to the amount included in the statement of financial position, with balances in foreign
currencies converted into US dollars applying the 31 December 2025 exchange rates.
The claims development triangles include 100% of the estimate of ultimate claim costs rather than the estimate of ultimate claim
costs that reflect the Group’s proportionate share of each syndicate's underwriting capacity during the respective underwriting
years. An adjustment to reflect the Group’s consolidated share of Syndicate 2988 is included below the claims development triangle
in the ‘elimination of intercompany’ row.
The 2020 and prior years of account are impacted by the loss portfolio reinsurance contracts entered into in 2018 and 2021 with
RiverStone Managing Agency Limited (for and on behalf of Lloyd’s Syndicate 3500).
142 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
18 Insurance and reinsurance contracts (continued)
Ultimate gross claims
Underwriting year
$m 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Estimate of ultimate claims
costs (gross of reinsurance):
At end of underwriting year
1,121.3 1,643.9 1,514.1 1,355.2 1,556.1 1,723.5 2,039.9 1,693.6 1,766.6 1,809.9
One year later
1,293.7 1,822.2 1,651.4 1,535.4 1,610.5 1,820.5 1,936.3 1,577.4 1,839.1
Two years later
1,375.9 1,855.2 1,765.0 1,573.5 1,654.7 1,798.0 1,881.7 1,549.1
Three years later
1,364.9 1,893.0 1,740.0 1,580.5 1,699.1 1,795.3 1,852.5
Four years later
1,388.0 1,880.1 1,764.2 1,652.6 1,714.0 1,768.1
Five years later
1,423.9 1,904.9 1,817.1 1,642.5 1,680.7
Six years later
1,463.5 1,929.0 1,899.5 1,671.9
Seven years later
1,495.2 1,961.2 1,928.8
Eight years later
1,519.3 1,982.2
Nine years later
1,531.4
$m 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
Total ultimate gross claims at
31 December 2025
1,531.4 1,982.2 1,928.8 1,671.9 1,680.7 1,768.1 1,852.5 1,549.1 1,839.1 1,809.9 17,613.7
Less cumulative
gross paid claims
(1,357.5) (1,767.7) (1,656.4) (1,280.4) (1,269.2) (1,138.2) (1,002.4) (574.4) (421.4) (55.7)(10,523.3)
Unearned portion of gross
ultimate claims
– – – – – – – –
(54.6) (931.3) (985.9)
Cumulative liability for incurred claims from 2015 & prior
429.8
Elimination of intercompany
(278.3)
Claims handling provision and other corporate adjustments
89.6
Reinstatement premiums
(128.1)
Profit commissions
27.0
Discounting
(808.7)
Risk adjustment for non-financial risk
383.0
IFRS 9 Receivables & Payables Reclass
5.7
Other
2.2
Total gross liability for incurred claims at 31 December 2025
5,826.7
Brit Group Holdings Limited Annual Report 2025 143
financial statements
18 Insurance and reinsurance contracts (continued)
Ultimate net claims
Underwriting year
$m 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Estimate of ultimate claims
costs (net of reinsurance):
At end of underwriting year
836.4 1,098.3 1,086.5 944.9 1,186.4 1,278.8 1,512.1 1,301.5 1,440.5 1,473.5
One year later
931.8 1,143.3 1,177.3 1,097.7 1,144.2 1,324.7 1,441.4 1,212.2 1,453.5
Two years later
952.5 1,164.6 1,254.0 1,110.7 1,166.0 1,298.1 1,398.9 1,197.9
Three years later
955.3 1,198.7 1,139.6 1,129.8 1,195.0 1,289.0 1,386.6
Four years later
964.6 1,114.7 1,141.3 1,179.0 1,199.8 1,275.1
Five years later
927.9 1,115.0 1,162.6 1,163.7 1,176.2
Six years later
951.9 1,127.5 1,178.3 1,181.1
Seven years later
966.9 1,136.0 1,193.2
Eight years later
971.1 1,140.6
Nine years later
976.4
$m 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total
Total ultimate net claims at
31 December 2025
976.4 1,140.6 1,193.2 1,181.1 1,176.2 1,275.1 1,386.6 1,197.9 1,453.5 1,473.5 12,454.1
Less cumulative
net paid claims
(903.5) (1,050.3) (1,045.7) (880.7) (894.2) (840.8) (775.7) (466.5) (337.8) (46.8) (7,242.0)
Unearned portion of net
ultimate claims
– – – – – – – –
(48.1) (773.2) (821.3)
Cumulative liability for incurred claims from 2015 & prior
250.4
Elimination of intercompany
(215.7)
Claims handling provision and other corporate adjustments
101.0
Reinstatement premiums
(115.4)
Profit commissions
20.0
Discounting
(609.4)
Risk adjustment for non-financial risk
282.8
Non-performance risk
4.9
IFRS 9 Receivables & Payables Reclass
(61.6)
Presentational adjustment LPT
225.6
Other
(10.0)
Total net liability for incurred claims at 31 December 2025
4,263.4
144 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
19 Employee benefits
This Note explains the pension schemes operated by the Group for its employees.
(a) Defined benefit pension schemes
During 2025 the Group operated two funded defined benefit pension schemes providing pensions benefits to its members:
the Brit Group Services Limited Retirement Benefits Scheme (the Scheme) and the RiverStone Holdings Management Pension and
Life Assurance Plan (the Plan).
The Scheme, which had previously completed a buy-in in December 2022, successfully moved to buy-out on 28 May 2025. Under
the Trust Deed and Rules of the Scheme, a surplus of $29.5m, less tax of $7.4m, was paid in cash to the Group on 17 July 2025.
As a result of this payment the part of the net pension asset relating to the Scheme and the associated deferred tax liability were
derecognised from the Consolidated Statement of Financial Position. The Scheme was formally wound up on 12 December 2025.
The Plan only has deferred members and is closed to new entrants. Following closure to future accrual, benefits now
increase broadly in line with inflation. The weighted average duration to payment of the Plan’s expected cash flows is 13 years
(2024: 14 years).
The Plan is subject to UK regulations overseen by the Pensions Regulator and is approved by HMRC for tax purposes. The Plan
is operated from a separate trust which has assets that are held separately from the Group. The trust is managed by a corporate
Trustee, who is responsible for payment of the benefits and management of the Plan’s assets.
In October 2023 the Plan purchased a bulk-annuity policy which matches the benefits due to members. This ‘buy-in’ is reflected in the
figures below.
In accordance with the requirements set by the Pensions Regulator, every three years the Group and Trustees are required
to agree a funding strategy and contribution schedule for the Plan. The most recent triennial review of the Plan was undertaken
as at 31 March 2024 and identified a funding surplus of £7.0m.
On 19 May 2025, notice of the Group’s intention for the Plan to be wound up was given to the Trustee of the Plan. As a consequence,
a full pension risk transfer (i.e. a buy-out) was successfully completed on 13 January 2026, with a full wind-up of the Plan expected
to complete by the end of 2026. This does not change the assets or liabilities of the scheme, or tax thereon, at the reporting date.
Net amount recognised in the statement of financial position:
31 December
2025
$m
Scheme
31 December
2025
$m
Plan
(Unaudited)
31 December
2024
$m
Scheme
(Unaudited)
31 December
2024
$m
Plan
Present value of defined benefit obligation – (105.3) (111.4) (99.4)
Fair value of scheme assets – 117.2 136.6 109.2
Net pension asset – 11.9 25.2 9.8
Brit Group Holdings Limited Annual Report 2025 145
financial statements
19 Employee benefits (continued)
(a) Defined benefit pension schemes (continued)
Changes in the net pension asset recognised in the statement of financial position:
31 December
2025
$m
Scheme
31 December
2025
$m
Plan
(Unaudited)
31 December
2024
$m
Scheme
(Unaudited)
31 December
2024
$m
Plan
Opening statement of financial position 25.2
9.8 26.4 10.7
(Expense)/credit to income statement – (0.8) (0.4) (1.5)
Foreign exchange effect 1.4 0.7 (0.4) (0.1)
Amount recognised outside income statement 2.9 2.2 (0.4) 0.5
Contributions paid – – – 0.2
Payment of surplus to the Group (29.5) – – –
Closing statement of financial position – 11.9 25.2 9.8
A net pension asset is recognised on the statement of financial position in respect of the Plan as there is an unconditional right of the
Group to be refunded the surplus in the scheme.
Net (expense)/credit recognised in the income statement comprised:
31 December
2025
$m
Scheme
31 December
2025
$m
Plan
(Unaudited)
31 December
2024
$m
Scheme
(Unaudited)
31 December
2024
$m
Plan
Net interest on net defined benefit asset 0.9 0.5 0.1 0.5
Running costs (0.9) (1.3) (0.5) (2.0)
Net expense – (0.8) (0.4) (1.5)
For both the Scheme and the Plan there is no past service cost in 2025 (2024: $nil).
This net expense has been recognised in ‘Insurance service expenses’ and ‘Other operating expenses’ in the Income Statement.
Contributions to the Group’s defined contribution pension arrangements are in addition to those set out in this note and are charged
directly to the Income Statement.
The allocation of the Scheme’s and Plan’s assets were as follows:
31 December
2025
$m
Scheme
31 December
2025
$m
Plan
(Unaudited)
31 December
2024
$m
Scheme
(Unaudited)
31 December
2024
$m
Plan
Liability Driven Investment (LDI) funds – 11.6 22.7 8.8
Cash and net current assets –
0.3
5.1 0.7
Annuity policy – 105.3 108.8 99.7
Fair value of scheme assets – 117.2 136.6 109.2
146 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
19 Employee benefits (continued)
(a) Defined benefit pension schemes (continued)
The Liability Driven Investment funds have quoted prices in active markets. The schemes do not invest directly in property occupied
by the Group or in financial securities issued by the Group.
Investment strategy
The Trustee of the Plan determines the scheme’s investment strategy after taking appropriate advice from investment consultants.
The Plan has now completed a full buy-in, meaning the majority of the assets of the scheme are in respect of the buy-in policy. The
management of the surplus assets is delegated to an investment manager. The Trustee’s investment objectives are to ensure that
the Plan has adequate resources to meet the members’ entitlements under the Trust Deed and Rules as they fall due, and thereafter
to minimise long-term costs of the Plan by maximising the return on the assets. As the Plan has a full buy-in there is very little
investment risk.
Movements in the present value of the defined benefit obligation were as follows:
31 December
2025
$m
Scheme
31 December
2025
$m
Plan
(Unaudited)
31 December
2024
$m
Scheme
(Unaudited)
31 December
2024
$m
Plan
Opening defined benefit obligation 111.4 99.4 127.5 109.4
Interest on defined benefit obligation 2.6 5.7 5.6 4.9
Remeasurements due to:
Changes in financial assumptions (4.8) (4.4) (12.7) (11.8)
Changes in demographic assumptions – – 0.1 –
Experience on benefit obligations – 1.1 0.4 3.6
Foreign exchange effect 5.9 7.3 (1.9) (1.8)
Benefits paid (2.5) (3.8) (7.6) (4.9)
Settlement buy-out (112.6) – – –
Closing defined benefit obligation – 105.3 111.4 99.4
Movements in the fair value of the schemes’ assets were as follows:
31 December
2025
$m
Scheme
31 December
2025
$m
Plan
(Unaudited)
31 December
2024
$m
Scheme
(Unaudited)
31 December
2024
$m
Plan
Opening fair value of scheme assets 136.6 109.2 153.9 120.1
Interest income 3.5 6.2 5.7 5.4
Actual return excluding interest income (1.9) (1.1) (12.6) (7.7)
Running costs (0.9) (1.3) (0.5) (2.0)
Foreign exchange effect 7.3 8.0 (2.3) (1.9)
Contributions by the employer – – – 0.2
Benefits paid (2.5) (3.8) (7.6) (4.9)
Settlement buy-out (112.6) – – –
Payment of surplus to the Group (29.5) – – –
Closing fair value of scheme assets – 117.2 136.6 109.2
Brit Group Holdings Limited Annual Report 2025 147
financial statements
19 Employee benefits (continued)
(a) Defined benefit pension schemes (continued)
The principal actuarial assumptions at the year-end were:
31 December
2025
Scheme
31 December
2025
Plan
(Unaudited)
31 December
2024
Scheme
(Unaudited)
31 December
2024
Plan
Discount rate n/a 5.57% pa 5.46% pa 5.52% pa
Retail Prices Index (RPI) inflation n/a 2.85% pa 3.18% pa 3.15% pa
Consumer Prices Index (CPI) inflation n/a 2.42% pa 2.42% pa 2.63% pa
Pension increases in payment n/a 2.90% pa 3.05% pa 3.18% pa
Mortality assumptions:
Life expectancy of male aged 60 at statement of financial position date n/a 27.4 years 27.3 years 27.3 years
Life expectancy of female aged 60 at statement of financial position date n/a 29.9 years 30.2 years 29.8 years
Life expectancy of male aged 60 retiring in 20 years' time n/a 28.9 years 28.8 years 28.8 years
Life expectancy of female aged 60 retiring in 20 years' time n/a 31.3 years 31.6 years 31.2 years
The assumptions used to determine end-of-year benefit obligations are also used to calculate the following year’s cost.
Sensitivity analysis:
Assumption Change in assumption
Change in defined benefit obligation
at end of the year (Plan)
Discount rate Decrease by 0.5% pa Increase by $6.6m
Future RPI inflation increases Increase by 0.5% pa Increase by $6.0m
Future CPI inflation increases Increase by 0.5% pa Increase by $1.0m
Assumed life expectancy at age 60 Increase by 1 year Increase by $2.6m
The calculations in this section have been carried out using the same method and data as the Group’s pensions and accounting
figures with each assumption adjusted as shown above. Each assumption has been varied individually and a combination of changes
in assumptions could produce a different result. Note that as the Plan is now insured any change to the liability would result
in a materially equal and opposite change in the annuity asset.
Risks:
The Group is exposed to a number of risks in relation to its remaining defined benefit scheme (the Plan), the most significant of which
are detailed below:
Risk
Counterparty risk Most of the Plan’s liabilities are insured, which gives rise to counterparty
risk (the risk of the insurer defaulting on its contractual obligations).
Regulatory In future the Plan may have backdated claims or liabilities arising from
future legislation, emerging practice or court judgements.
(b) Defined contribution pension plan
Brit Group Services Limited (a subsidiary of the Group) operates a defined contribution group personal pension plan. The assets
of the scheme are held separately from those of the Group in an independently administered fund.
The pension cost charge represents contributions paid by Brit Group Services Limited to the fund and amounted to $9.4m
(2024: $10.2m). At 31 December 2025 no contributions were payable to the fund (2024: $nil).
The Group operates a number of other defined contribution pension plans, contributions to which had an immaterial effect on the
Group’s consolidated financial statements in both 2024 and 2025.
148 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
20 Deferred tax
This Note describes the tax that may have to be paid in the future. Deferred tax arises from differences in the way that tax
is calculated for accounting purposes and tax purposes.
The rate used in the calculation of the UK deferred tax assets and liabilities as at 31 December 2025 is 25%. For the pension surplus DTL
a rate of 35% was used from 1 January 2024 as this was the applicable UK tax rate on pension surpluses before a reduction to 25% under
The Authorised Surplus Payments Charge Order 2024 which was substantively enacted on 11 March 2024.
The deferred tax asset (DTA) is attributable to temporary differences arising on the following:
Intangible
assets
$m
Underwriting
$m
Losses
$m
Other
$m
Total
$m
At 1 January 2024 (unaudited) – – 105.6 29.9 135.5
Movements in the year: –
Credited/(charged) credited to income statement – 1.3 8.3 (15.0) (5.4)
Disposal of subsidiaries – – – – –
Foreign exchange effect – – – 1.9 1.9
At 31 December 2024 (unaudited) – 1.3 113.9 16.8 132.0
Deferred tax assets presented within deferred tax liabilities
(see table below) (132.0)
Net deferred tax asset at 31 December 2024 (unaudited) –
At 1 January 2025 – 1.3 113.9 16.8 132.0
Movements in the year:
Acquisitions – – – – –
Credited/(charged)credited to income statement – 2.5 (6.3) (7.3) (11.1)
Tax relating to components of other comprehensive
income (Note15(b)) – – – – –
Disposal of subsidiaries – – – – –
Foreign exchange effect – – – (0.4) (0.4)
At 31 December 2025 – 3.8 107.6 9.1 120.5
Deferred tax assets presented within deferred tax liabilities
(see table below) (119.7)
Net deferred tax asset at 31 December 2025 0.8
Deferred tax assets, the majority of which arise in the United Kingdom, are considered recoverable where it is expected that there
will be future taxable profits based on the approved business plans and forecast profits for the Brit Group UK entities which are
available for group relief, adjusted as appropriate to reflect the latest circumstances and supplemented by scenario modelling.
Based on this estimate of future taxable profits, management concluded that $120.5m (2024: $132.0m) deferred tax assets are
recoverable, including $107.6m (2024: $113.9m) in respect of carried forward losses which arose due to significant catastrophe-
related claims incurred in previous years. These carried forward losses can be carried forward indefinitely and have no expiry date.
At 31 December 2025 there were no deferred tax assets that were not recognised as an asset on the statement of financial position.
At 31 December 2024 a deferred tax asset of $30.8m relating to carried forward losses of $123.6m was not recognised as an asset
as it was not considered probable that the losses could be utilised in the foreseeable future.
Brit Group Holdings Limited Annual Report 2025 149
financial statements
20 Deferred tax (continued)
The DTL is attributable to temporary differences arising on the following:
Pensions
$m
Intangible
assets
$m
Underwriting
$m
Other
$m
Total
$m
At 1 January 2024 (unaudited) (12.5) (3.4) (132.1) (1.6) (149.6)
Movements in the year:
Credited/(charged) credited to income statement 9.2 (0.9) (81.6) (9.4) (82.7)
Tax relating to components of other comprehensive
income (Note 15(b)) (5.1) – – – (5.1)
Disposal of subsidiaries – – – – –
Foreign exchange effect (0.3) – – (0.2) (0.5)
At 31 December 2024 (unaudited) (8.7) (4.3) (213.7) (11.2) (237.9)
Deferred tax assets presented within deferred tax liabilities
(see table above) 132.0
Net deferred tax liability at 31 December 2024 (unaudited) (105.9)
At 1 January 2025 (8.7) (4.3) (213.7) (11.2) (237.9)
Movements in the year: – – – – –
Acquisitions – – – – –
Credited/(charged) credited to income statement 0.2 (2.6) (9.2) 10.9 (0.7)
Tax relating to components of other comprehensive
income (Note 15(b)) (1.1) – – – (1.1)
Derecognition due to payment of tax on pension surplus
(Note 19) 7.4 – – – 7.4
Disposal of subsidiaries – – – – –
Foreign exchange effect (0.7) (0.4) (0.2) (0.7) (2.0)
At 31 December 2025 (2.9) (7.3) (223.1) (1.0) (234.3)
Deferred tax assets presented within deferred tax
liabilities (see table above) 119.7
Net deferred tax liability at 31 December 2025 (114.6)
150 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
21 Financial assets and liabilities
The Group holds a number of different financial instruments. This Note disaggregates the different classes of the Group’s financial
assets and liabilities and provides additional information in relation to them, including how financial assets are categorised under
three different levels of hierarchy and the valuation methods adopted.
The carrying amounts of the financial assets and liabilities held by the Group are as follows:
31 December 2025 Note
Amortised Cost
$m
FVTPL
Mandatory
$m
FVTPL
Designated
$m
Outside scope
of IFRS 9
$m
Equity securities – 791.6 – –
Debt securities – 4,755.2 – –
Loan to ultimate parent 200.0 – – –
Other loans and mortgages – 70.4 – –
Specialised investment funds – 927.3 – –
Financial investments 200.0 6,544.5 – –
Trade and other receivables
1
351.4 – – –
Other assets (Fairfax shares purchased for LTIPs)
1
– 205.9 – –
Derivative contracts 22 – 14.6 – –
Cash and cash equivalents 24 577.2 – – –
Other 928.6 220.5 – –
Total financial assets 1,128.6 6,765.0 – –
Derivative contracts 22 – 13.5 – –
Borrowings 685.3 – – –
Trade and other payables
2
163.7 – – –
Lease liabilities
2
– – – 17.8
Total financial liabilities 849.0 13.5 – 17.8
1. Reconciliation to the financial statements for ‘trade and other receivables’ and ‘other assets’ is performed below.
2. Reconciliation to the financial statements for ‘trade and other payables’ and ‘lease liabilities’ is performed below.
Brit Group Holdings Limited Annual Report 2025 151
financial statements
21 Financial assets and liabilities (continued)
31 December 2024 (unaudited) Note
Amortised Cost
$m
FVTPL
Mandatory
$m
FVTPL
Designated
$m
Outside scope
of IFRS 9
$m
Equity securities – 620.4 – –
Debt securities – 3,811.5 – –
Other loans and mortgages – 83.0 – –
Specialised investment funds – 759.2 – –
Financial investments – 5,274.1 – –
Trade and other receivables
1
508.0 – – –
Other assets (Fairfax shares purchased for LTIPs)
1
– 152.7 – –
Derivative contracts 22 – 15.0 – –
Cash and cash equivalents 24 476.4 – – –
Other 984.4 167.7 – –
Total financial assets 984.4 5,441.8 – –
Derivative contracts 22 – 12.1 – –
Borrowings 159.5 – – –
Trade and other payables
2
234.7 – – –
Lease liabilities
2
– – – 19.1
Total financial liabilities 394.2 12.1 – 19.1
1. Reconciliation to the financial statements for ‘trade and other receivables’ and ‘other assets’ is performed below.
2. Reconciliation to the financial statements for ‘trade and other payables’ and ‘lease liabilities’ is performed below.
152 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
21 Financial assets and liabilities (continued)
Reconciliation to the financial statements for Trade and other receivables and Other assets
31 December
2025
$m
(Unaudited)
31 December
2024
$m
Assets as presented in the statement of financial position:
Insurance and other receivables 578.2 673.6
Less:
Balances not in scope of IFRS 7 (20.9) (12.9)
557.3 660.7
As presented earlier in this note:
Trade and other receivables 351.4 508.0
Other assets (Fairfax shares purchased for LTIPs) 205.9 152.7
557.3 660.7
Reconciliation to the financial statements for Trade and other payables and Lease liabilities
31 December
2025
$m
(Unaudited)
31 December
2024
$m
Liabilities as presented in the statement of financial position:
Insurance and other payables
316.9
342.8
Less:
Balances not in scope of IFRS 7 (135.4) (89.0)
181.5 253.8
As presented earlier in this note:
Trade and other payables 163.7 234.7
Lease liabilities 17.8 19.1
181.5 253.8
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets
mentioned above.
Brit Group Holdings Limited Annual Report 2025 153
financial statements
21 Financial assets and liabilities (continued)
Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount is reported in the statement of financial position where Brit Group
currently has a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net basis
or realise the asset and settle the liability simultaneously.
No amounts were offset in either financial assets or financial liabilities as at 31 December 2025 and as at 31 December 2024.
Fair value measurement – items not measured at fair value
‘Trade and other receivables’, ‘trade and other payables’ and ‘loan to ultimate parent’ are short-term in nature where carrying
amounts are deemed a reasonable approximation of fair value.
For the fair value of borrowings, please refer to Note 25.
Fair value measurement – fair value hierarchy for financial investments
The Group has classified the fair value measurements of its financial investments using a hierarchy that reflects the significance
of the inputs used in making those measurements. The fair value hierarchy comprises the following levels:
(a) Level one – Valuations based on quoted prices (unadjusted) in active markets for identical assets;
(b) Level two – Valuations based on inputs other than quoted prices included within level one that are observable for the asset,
either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
(c) Level three – Valuations based on inputs for the assets that are not based on observable market data (unobservable inputs).
Assets are categorised as level one where fair values determined in whole directly by reference to an active market relate to prices
which are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and
those prices represent actual and regularly occurring market transactions on an arm’s-length basis, i.e. the market is still active.
For assets and liabilities that are recognised at fair value on a recurring basis, the Group determines whether transfers have
occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level of input that is significant to the
fair value measurement as a whole) at the end of each reporting period. Fair values for level two and level three assets include:
• Values provided at the request of the Group by pricing services and which are not publicly available or values provided
by external parties which are readily available but relate to assets for which the market is not always active; and
• Assets measured on the basis of valuation techniques including a varying degree of assumptions supported by market
transactions and observable data.
154 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
21 Financial assets and liabilities (continued)
Fair value measurement – fair value hierarchy for financial investments (continued)
For all assets not quoted in an active market or for which there is no active market, the availability of financial data can vary and
is affected by a wide variety of factors, including the type of financial instrument, whether it is new and not yet established in the
marketplace, and other characteristics specific to each transaction. To the extent that valuation is based on the models or inputs
that are unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement
exercised is higher for instruments classified in level three and the classification between level two and level three depends highly
on the proportion of assumptions used, supported by market transactions and observable data.
Valuation techniques
Level one
Inputs represent unadjusted quoted prices for identical instruments exchanged in active markets (where transactions occur
with sufficient frequency and volume). The fair values of securities sold short and the majority of the Group’s equities are based
on published quotes in active markets. These also include government bonds and treasury bills issued in the US, UK and Canada.
Level two
Inputs include directly or indirectly observable inputs (other than level one inputs) such as quoted prices for similar financial
instruments exchanged in active markets, quoted prices for identical or similar financial instruments exchanged in inactive markets
and other market observable inputs.
Level two securities contain certain investments in US and non-US government agency securities, US and non-US corporate debt
securities and specialised investment funds. US government agency securities are priced using valuations from independent pricing
vendors who use discounted cash flow models supplemented with market and credit research to gather specific information. Market
observable inputs for these investments may include broker-dealer quotes, reported trades, issuer spreads and available bids.
Non-US government agency securities are priced with OTC quotes or broker-dealer quotes. Other market observable inputs include
benchmark yields and reported trades. Issuer spreads are also available for these types of investments.
Level two common stocks are priced using a combination of independent pricing service providers and internal valuation models that
rely on directly or indirectly observable inputs.
Level three
Level three equities include investments in limited partnerships where the fund’s underlying investments are not traded/quoted
in an active market. In some instances, limited partnerships are classified as level three because they may require at least three
months’ notice to liquidate. This requirement results in an adjustment to the reported value for illiquidity which is unobservable.
Level three debt instruments include corporate loans with unobservable inputs used in the measurement of financial instruments.
Management is required to use its own assumptions regarding unobservable inputs as there is little, if any, market activity in these
instruments or related observable inputs that can be corroborated at the measurement date.
Level three specialised investment funds include securities that are valued using techniques appropriate to each specific investment.
The valuation techniques include fair value by reference to net asset values (NAVs) adjusted and issued by fund managers based
on their knowledge of underlying investments and credit spreads of counterparties. In some instances, certain investment
funds are classified as level three because they may require at least three months’ notice to liquidate. This requirement results
in an adjustment to the reported value for illiquidity which is unobservable.
Brit Group Holdings Limited Annual Report 2025 155
financial statements
21 Financial assets and liabilities (continued)
Disclosures of fair values in accordance with the fair value hierarchy
Level one
$m
Level two
$m
Level three
$m
Total
$m
31 December 2025
Equity securities 309.1 – 482.5 791.6
Debt securities 4,312.2 443.0 – 4,755.2
Loan to ultimate parent – – 200.0 200.0
Other loans and mortgages – – 70.4 70.4
Specialised investment funds – 879.9 47.4 927.3
4,621.3 1,322.9 800.3 6,744.5
31 December 2024 (unaudited)
Equity securities 222.6 – 397.8 620.4
Debt securities 2,444.2 1,354.2 13.1 3,811.5
Other loans and mortgages – – 83.0 83.0
Specialised investment funds – 715.1 44.1 759.2
2,666.8 2,069.3 538.0 5,274.1
Transfers between fair value levels
Fair values are classified as level one when the financial instrument or derivative is actively traded and a quoted price is available.
In accordance with the Group’s policy if an instrument classified as level one subsequently ceases to be actively traded,
it is immediately transferred out of level one. In such cases, instruments are classified into level two, unless the measurement of its
fair value requires the use of significant unobservable inputs, in which case it is classified as level three. All fair value measurements
above are recurring as they are required to be measured and recognised at the end of each reporting period.
During the year, there were $nil (2024: $0.1m) of equity transfers from level one to level three.
During the year, there were $nil (2024: $nil) of equity transfers from level two to level three.
There were no transfers into level two during the period (2024: no transfers).
156 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
21 Financial assets and liabilities (continued)
Reconciliation of movements in level three financial investments
Equity
securities
$m
Debt securities
$m
Loan to ultimate
parent
$m
Other loans and
mortgages
$m
Specialised
investment funds
$m
Total
$m
At 1 January 2024 (unaudited) 288.4 26.7 – 82.1 56.3 453.5
Transfers from level one to level three 0.1 – – – – 0.1
Total gains/(losses) recognised in the
income statement 32.6 (21.8) – 1.4 (10.6) 1.6
Purchases 152.4 11.0 – 0.6 – 164.0
Sales (67.7) – – – – (67.7)
Foreign exchange gains (8.0) (2.8) – (1.1) (1.6) (13.5)
At 31 December 2024 (unaudited) 397.8 13.1 – 83.0 44.1 538.0
At 1 January 2025 397.8 13.1 – 83.0 44.1 538.0
Transfers from level one to level three – – – – – –
Total gains/(losses) recognised in the
income statement 71.8 (2.5) – – (8.1) 61.2
Purchases 18.4 1.3 200.0 0.1 6.6 226.4
Sales (10.4) (13.0) – (16.0) – (39.4)
Foreign exchange losses 4.9 1.1 – 3.3 4.8 14.1
At 31 December 2025 482.5 – 200.0 70.4 47.4 800.3
Total net gains recognised in the Income Statement under ‘Other investment return’ in respect of level three financial investments
for the period amounted to $61.2m (2024: gains of $1.6m). Included in this balance are $42.1m of unrealised gains (2024: losses
of $71.7m) attributable to assets still held at the end of the year.
Sensitivity of level three financial investments measured at fair value to changes in key assumptions
Determining the fair value of the Group’s level three financial investments requires estimation and the incorporation of both
observable and unobservable market inputs and assumptions. To illustrate the sensitivity of the Group’s consolidated financial
statements to this estimation, the following table shows the impact that a 10% change in the estimated fair value of each category
of level three financial investments, excluding the loan to ultimate parent, would have on their carrying value in the consolidated
statement of financial position and, therefore, on profit or loss before tax.
31 December 2025 31 December 2024
Carrying amount
$m
Effect of 10%
change in fair value
estimate (+/-)
$m
Carrying amount
$m
Effect of 10%
change in fair value
estimate (+/-)
$m
Equity securities 482.5 48.3 397.8 39.8
Debt securities – – 13.1 1.3
Other loans and mortgages 70.4 7.0 83.0 8.3
Specialised investment funds 47.4 4.7 44.1 4.4
600.3 60.0 538.0 53.8
Brit Group Holdings Limited Annual Report 2025 157
financial statements
22 Derivative contracts
This Note summarises the total value of the derivative contracts of the Group. It also explains how each derivative contract
is categorised under three different levels of hierarchy, the valuation methods used to value derivative contracts and amounts
transferred between levels. For the current and prior year, the options formed part of the investment management strategy, while
the currency forwards formed part of the foreign exchange management strategy.
The disclosure provided in the tables below include derivatives recorded in the Group’s statement of financial position.
Derivative contract assets
Gross amounts
of receivables on
derivative
contract
assets
$m
Gross amounts
of payables on
derivative
contract
assets
$m
Derivative
contract assets
presented in the
statement of
financial position
$m
31 December 2025
Currency forwards 342.8 (340.2) 2.6
Options 9.4 – 9.4
Contingent consideration receivable 1.4 – 1.4
Interest rate swaps – – –
Equity warrants 1.2 – 1.2
Total 354.8 (340.2) 14.6
31 December 2024 (unaudited)
Currency forwards 549.8 (541.8) 8.0
Options 2.4 – 2.4
Contingent consideration receivable 2.4 – 2.4
Interest rate swaps 0.3 – 0.3
Equity warrants 1.9 – 1.9
Total 556.8 (541.8) 15.0
Derivative contract liabilities
Gross amounts
of payables on
derivative
contract
liabilities
$m
Gross amounts
of receivables
on derivative
contract
liabilities
$m
Derivative
contract liabilities
presented in the
statement of
financial position
$m
31 December 2025
Currency forwards (444.4) 439.2 (5.2)
Credit default swaps (8.3) – (8.3)
Interest rate swaps – – –
Total (452.7) 439.2 (13.5)
31 December 2024 (unaudited)
Currency forwards (353.8) 349.3 (4.5)
Credit default swaps (7.6) – (7.6)
Interest rate swaps – – –
Total (361.4) 349.3 (12.1)
158 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
22 Derivative contracts (continued)
Disclosures of fair values in accordance with the fair value hierarchy
Level two
$m
Level three
$m
Total
$m
31 December 2025
Derivative contract assets 12.0 2.6 14.6
Derivative contract liabilities (13.5) – (13.5)
31 December 2024 (unaudited)
Derivative contract assets 10.7 4.3 15.0
Derivative contract liabilities (12.1) – (12.1)
Valuation techniques
Level two
The fair value of the vast majority of the Group’s derivative contracts are based primarily on non-binding third-party broker-dealer
quotes that are prepared using level two inputs. Where third-party broker-dealer quotes are used, typically one quote is obtained
from a broker-dealer with particular expertise in the instrument being priced.
The valuation technique used to determine the fair value of currency forwards is derived from observable inputs such as active
foreign-exchange and interest-rate markets that may require adjustments for certain unobservable inputs.
Level three
Consumer price index (CPI)-linked derivatives are classified as level three and valued using broker-dealer quotes which management
has determined utilise market observable inputs except for the inflation volatility input which is not market observable. The
reasonableness of the fair values of CPI-linked derivative contracts are assessed by comparing the fair values received from
third-party broker-dealers to recent market transactions where available and values determined using third-party pricing software
based on the Black-Scholes option pricing model for European-style options that incorporates market observable and unobservable
inputs such as the current value of the relevant CPI underlying the derivative, the inflation swap rate, nominal swap rate and inflation
volatility. The fair values of CPI-linked derivative contracts are sensitive to assumptions such as market expectations of future rates
of inflation and related inflation volatilities.
Reconciliation of movements in level three derivative contracts measured at fair value
Level three
derivatives
$m
At 1 January 2024 (unaudited) 4.1
Purchases –
Total losses recognised in the income statement 1.6
Sales –
Foreign exchange gains (1.4)
At 31 December 2024 (unaudited) 4.3
Purchases –
Total gains recognised in the income statement (4.3)
Sales –
Foreign exchange losses 2.6
At 31 December 2025 2.6
Brit Group Holdings Limited Annual Report 2025 159
financial statements
23 Insurance and other receivables
This Note sets out the various categories of amounts which are owed to the Group.
31 December
2025
$m
(Unaudited)
31 December
2024
$m
Arising out of direct insurance operations and reinsurance operations 249.2 343.8
Receivables from contracts with customers 30.0 30.5
Prepayments 20.9 12.9
Accrued income 53.4 38.3
Outstanding settlements on investments 0.6 0.9
Other assets 205.9 152.7
Other debtors 18.2 94.5
Total 578.2 673.6
Other assets relate to shares purchased to settle share-based payment awards. For further information, refer to Note 30.
The carrying amounts disclosed above reasonably approximate fair values as all amounts are receivable within one year of the date
of the statement of financial position.
24 Cash and cash equivalents
This Note analyses the amounts of cash and cash equivalents. Cash equivalents are investment instruments with less than 90 days
left to maturity when purchased by the Group. Additional analysis which explains where cash and cash equivalents are held and why
they are being held is also provided.
31 December
2025
$m
(Unaudited)
31 December
2024
$m
Cash at bank and on deposit 250.4 163.3
Cash equivalents 326.8 313.1
Total 577.2 476.4
The carrying amounts disclosed above reasonably approximate fair values.
Cash and cash equivalents comprise of cash at bank and in hand, short-term deposits and other highly liquid investments with
a maturity of three months or less at the date of acquisition. Of the total cash and cash equivalents $242.1m (2024 $136.1m) was
held in restricted accounts.
Additionally, $896.3m (2024: $667.4m) is the Group’s total pledged cash held against Funds at Lloyd’s – refer to Note 33.
160 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
25 Borrowings
This Note describes the main sources of borrowing available to the Group and the amounts currently borrowed from each
of those sources.
31 December 2025
(Unaudited)
31 December 2024
Maturity
Effective
interest rate
Amortised
cost
$m
Fair value
$m
Amortised
cost
$m
Fair value
$m
Non-current
Borrowings from immediate parent 2030 3.7% – – 159.5 136.3
Subordinated debt 2030 3.7% 170.8 154.9 – –
Senior debt (2034) 2034 4.6% 331.4 337.1 – –
Senior debt (2054) 2054 5.2% 183.1 183.3 – –
685.3 675.3 159.5 136.3
Borrowings from immediate parent and subordinated debt
With effect from 22 January 2025 the Group was substituted in place of Fairfax UK Holdings Limited (the Group’s immediate parent
company, formerly Brit Limited) as issuer and principal debtor under listed subordinated debt notes that are denominated in GBP,
have a principal amount of £127.0m, mature in 2030 and carry an effective interest rate of 3.7%. In consideration for this change the
Group’s borrowings from its immediate parent (Fairfax UK Holdings Limited), which had the same terms as the listed subordinated
notes, were effectively cancelled.
As at 31 December 2025, the fair value of the subordinated debt was determined by reference to trading market values
on recognised exchanges and was therefore categorised as a level one measurement in the fair value hierarchy. For further
information relating to the fair value hierarchy, refer to Note 21.
Senior debt
On 17 June 2025 the Group became co-obligor on two senior unsecured notes previously issued by Fairfax Financial Holdings Limited
(the Group’s ultimate parent). As part of this transaction the Group received $519.8m in cash and cash equivalents, representing the
fair value of the notes on that date. These notes, which are listed on the Dublin Stock Exchange, are denominated in Canadian Dollars
(CAD) with terms as follows:
• Notes with a total principal amount of CAD 450.0m, with a coupon rate of 4.73% and maturity date of November 2034; and
• Notes with a total principal amount of CAD 250.0m, with a coupon rate of 5.23% and maturity date of November 2054.
The total fair value of these notes at 31 December 2025 was $520.4m. This fair value was determined by reference to trading market
values on recognised exchanges and therefore categorised as a level one measurement in the fair value hierarchy.
Revolving credit facility
The Group has a $415.0m (2024: $550.0m) revolving credit facility. On 16 May 2025 the term of this facility was extended from
December 2027 to December 2029, with options to extend for either one or two years to either December 2030 or 2031. These
extension options expire in April 2027. In respect of this facility, at 31 December 2025 there was no letter of credit outstanding
(2024: none) and there were cash drawings of $nil (2024: $nil).
Other borrowings
As at 31 December 2025, the letter of credit facility to support Brit Reinsurance (Bermuda) Limited was $35.0m, of which $23.3m
was utilised (2024: credit facility was $25.0m, of which $17.6m was utilised). Of this amount, $34.9 m (2024: $18.0m) was
collateralised. This is an ongoing facility with no fixed expiry date.
Brit Group Holdings Limited Annual Report 2025 161
financial statements
26 Insurance and other payables
This Note sets out the various categories of amounts which are owed by the Group.
31 December
2025
$m
(Unaudited)
31 December
2024
$m
Arising out of direct insurance operations and reinsurance operations 88.9 136.3
Other taxes and social security costs 4.4 4.0
Accruals and deferred income 74.0 61.8
Lease liabilities 17.8 19.1
Other creditors 131.8 121.6
Total 316.9 342.8
With the exception of lease liabilities, the carrying amounts disclosed above reasonably approximate fair values as all amounts are
payable within one year of the date of the statement of financial position.
Of the total lease liabilities recognised above, $3.9m is payable within one year (2024: $2.5m). A maturity analysis of the contractual
undiscounted cash flows is shown below:
31 December
2025
$m
(Unaudited)
31 December
2024
$m
Maturity analysis for lease liabilities – contractual undiscounted cash flows
Less than one year 4.4 3.1
One to five years 12.9 12.2
More than five years 1.7 5.5
Total undiscounted lease liabilities 19.0 20.8
Total lease liabilities included in Insurance and other payables 17.8 19.1
Current 3.9 2.5
Non-current 13.9 16.6
27 Called up share capital
This Note sets out the number of shares the Company has in issue and their nominal value.
31 December
2025
£
(Unaudited)
31 December
2024
£
31 December
2025
£1 each
Number
(Unaudited)
31 December
2024
£1 each
Number
Ordinary shares:
Allotted, issued and fully paid 1,000.0 1,000.0 1,000.0 1,000.0
The number of shares reported is for Brit Group Holdings Limited, the immediate parent of the Brit Group.
As at 31 December 2025 and 31 December 2024 Brit Group Holdings Limited had 1,000 ordinary shares of £1 each issued, called-up
and fully paid.
All shares rank pari passu. There are no restrictions on the distribution of dividends and the repayment of capital. The total called up
share capital as at 31 December 2025 was £1,000 (2024: £1,000).
During the current year, no share issuances took place.
162 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
28 Dividends
This Note gives details of the amounts paid to shareholders during 2025 and 2024 by way of dividends.
2025
$/share
(Unaudited)
2024
$/share
2025
$m
(Unaudited)
2024
$m
Dividend paid 236,000 – 236.0 –
During 2025 an interim dividend of $236.0m was paid on 18 December 2025 at an amount equal to $236,000 per share.
During the comparative period Brit Group Holdings Limited did not pay a dividend, as shown in the table above. However, during the
part of the comparative period before Brit Group Holdings Limited’s acquisition of Brit Insurance Holdings Limited (see Note 2.1)
dividends totalling $140.6m were paid by Brit Insurance Holdings Limited to its parent as follows:
• An in-specie distribution on 5 November 2024 with a value of $0.6m in relation to the transfer of Ki Group Services Limited
from Brit Insurance Holdings Limited to its parent company (Fairfax UK Holdings Limited).
• An interim dividend $140.0m paid on 3 December 2024.
No final dividend was recommended or paid by Brit Insurance Holdings Limited during 2024.
29 Notes to the consolidated cash flow statement
The tables below show how the profit for the year translates into cash flows from operating activities and provide a reconciliation
of the liabilities arising from financing activities.
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Profit before tax 716.7 571.1
Adjustments for:
Realised and unrealised gains on investments (366.0) (69.8)
Realised and unrealised gains on derivatives (2.0) (19.0)
Amortisation of intangible assets 13.9 8.1
Depreciation and impairment of property, plant and equipment 4.8 3.8
Foreign exchange (gains)/losses on cash and cash equivalents (9.1) 5.9
Profit on disposal of an associate – (15.3)
Unrealised gains on shares held for share-based payments (46.8) (65.9)
Charges in respect of share-based payment schemes 62.6 69.6
Interest income (225.8) (208.4)
Dividend income (20.6) (15.4)
Finance costs on borrowings 25.0 13.3
Changes in operational assets and liabilities:
Insurance and other receivables excluding accrued income 165.7 218.2
Insurance and reinsurance contracts 481.7 338.9
Financial investments (1,049.0) (427.2)
Derivative contracts 3.8 11.4
Other financial liabilities – (104.0)
Insurance and other payables (79.7) (612.9)
Employee benefits 26.8 1.5
Provisions 3.5 (0.3)
Cash used in operating activities (294.5) (296.4)
Brit Group Holdings Limited Annual Report 2025 163
financial statements
29 Notes to the consolidated cash flow statement (continued)
Reconciliation of liabilities arising from financing activities
31 December 2025
1 January 2025
$m
Cash flows
$m
Foreign exchange
movement
$m
Other changes
$m
31 December 2025
$m
Long-term borrowings
Subordinated debt – 152.5 12.9 5.4 170.8
Borrowings from immediate parent 159.5 (158.7) (0.8) – –
Senior debt – 509.2 (5.1) 10.4 514.5
Short-term borrowings
Revolving credit facility – (3.6) – 3.6 –
Total liabilities from financing activities 159.5 499.4 7.0 19.4 685.3
31 December 2024 (unaudited)
1 January 2024
$m
Cash flows
$m
Foreign exchange
movement
$m
Other changes
$m
31 December 2024
$m
Long-term borrowings
Borrowings from immediate parent 147.2 8.7 (2.8) 6.4 159.5
Short-term borrowings
Revolving credit facility – (2.9) – 2.9 –
Total liabilities from financing activities 147.2 5.8 (2.8) 9.3 159.5
164 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
30 Share-based payments
The Group rewards its employees through various share-based incentive schemes. This Note explains the different schemes
used to facilitate those share-based payments and the charge recognised in the consolidated income statement in respect
of these schemes.
The compensation cost recognised in the income statement under IFRS 2 ‘Share-based Payments’ for the Group’s share-based
payments arrangements are shown below:
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Equity-settled plans
Employee Share Ownership Plan 1.9 1.7
Cash-settled plans
Long Term Incentive Plan 60.7 67.9
Total 62.6 69.6
The total liability in respect of cash-settled plans at 31 December 2025 was $122.6m (2024: $76.1m). $10.9m (2024: $10.7m)
is included within ‘Other creditors’ in respect of national insurance contributions on the share schemes.
(a) Long Term Incentive Plan (Performance Share Plan replacement)
On the Fairfax acquisition of the Brit Group, the 65% of performance share plan (PSP) awards that did not immediately vest were
converted by Fairfax into awards under this scheme. The cost of the awards was recorded over the vesting period. The options
vested in November 2018 and there are a further seven years to exercise the options.
Reconciliation of movement in the number of awards
2025
(Unaudited)
2024
Outstanding at 1 January 184 239
Exercised (184) (55)
Outstanding at 31 December – 184
In order to settle share-based payment awards, in 2015 the Group purchased $10.7m of preference shares in FFHL Share Option
1 Corp. Of the purchase, $3.9m related to this scheme and was recorded within equity so as to offset the share-based payment
charges recorded in equity on exercise of the awards. There were no additional shares purchased for this scheme in 2024 and
2025. The remaining 184 shares were exercised during the year.
(b) Long Term Incentive Plan
The Group awards selected employees options to acquire shares in Fairfax at a nil exercise price. Subject to continued service, the
options vest between two and ten years after the grant date and there are a further five years to exercise the options.
The fair value of the awards are determined by the market price of the underlying shares at the valuation date. The calculation of the
compensation cost recognised in the income statement in respect of these awards assumes forfeitures due to employee turnover of
10% per annum (2024: 10%) prior to vesting, with subsequent adjustments to reflect actual experience.
Brit Group Holdings Limited Annual Report 2025 165
financial statements
30 Share-based payments (continued)
Reconciliation of movement in the number of awards
2025
(Unaudited)
2024
Outstanding at 1 January 107,209 126,633
Granted 3,398 7,668
Exercised (8,825) (25,051)
Forfeited (965) (2,041)
Outstanding at 31 December 100,817 107,209
The total intrinsic value at the end of the period of liabilities for awards that have been vested, but not exercised, amounted
to $24.8m (2024: $8.3m). The weighted average share price at the date of exercise for share options exercised during the period
was $1,536.74 (2024: $1,085.23).
The weighted average fair value at date of grant for awards granted during 2025 was $1,872.50 (2024: $1,460.13).
In order to settle share-based payment awards, in 2025 the Group purchased $11.9m (2024: $7.5m) of preference shares in FFHL
Share Option 1 Corp and that company has purchased shares in Fairfax. This has been recorded within ‘Other Assets’ so as to offset
the share-based payment recorded as a liability within ‘Other creditors’ that accrues over the vesting period of the awards.
(c) Employee Share Ownership Plan (ESOP)
Under the terms of the ESOP which was established in 2015, eligible employees are given the election to purchase common shares
in Fairfax in an amount up to 10% of their annual base salary. The Group purchases, on the employee’s behalf, a number of Fairfax’s
common shares equal in value to 30% of the employee’s contribution. In the event that the Group achieves certain performance
targets, additional shares are purchased by the Group for the employee’s benefit, to an amount equal in value to 20% of the
employee’s contribution during that year. In respect of both shares purchased by employees and matched by the Group, during the
year ended 31 December 2025, the Group purchased a total of 3,103 common shares in Fairfax (2024: 3,795) at an average price
of $1,639.68 (2024: $1,172.98).
166 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
31 Consolidated entities
This Note sets out all the entities which are members of the Brit Group Holdings Limited Group and whose results and financial
positions are consolidated to produce the Group result and financial position.
All subsidiaries of the Company are 100% owned, including those segregated accounts of Sussex Re Limited that are consolidated
by the Brit Group.
As mentioned in Note 2.3, the percentage of the result and assets/liabilities of Syndicate 2988 included in these consolidated
financial statements differs by year of account as follows: 2023 year of account: 75.86%; 2024 year of account: 51.28%; 2025 year
of account: 50.21%.
The following changes to the Group’s subsidiaries took place during the year:
• On 10 March 2025, Sussex Capital Limited was dissolved.
• On 11 June 2025, Brit Investment Holdings Limited was dissolved.
• On 14 November 2025, Brit Life Trustee Limited was incorporated as a subsidiary.
As described in note 2.1, on 12 December 2024 Brit Group Holdings Limited acquired the entire share capital of Brit Insurance
Holdings Limited. For the part of the comparative period before this acquisition, the comparative amounts presented in these
consolidated financial statements relate to the Brit Insurance Holdings Limited sub-group only. The following changes to the
Brit Insurance Holdings Limited sub-group took place in 2024 before it was acquired by Brit Group Holdings Limited:
• On 21 February 2024, RSML Pension Trustee Limited was incorporated as a subsidiary.
• On 14 February 2024, voluntary wind up commenced for Brit Investment Holdings Limited.
• On 17 May 2024, BIGCC Services India Private Limited was incorporated as a subsidiary.
The subsidiaries of the Company at 31 December 2025, together with their main function, are listed below by country
of incorporation. The registered address and principal place of business of each entity is The Leadenhall Building, 122 Leadenhall
Street, London, EC3V 4AB unless otherwise stated.
Brit Group Holdings Limited Annual Report 2025 167
financial statements
31 Consolidated entities (continued)
Subsidiary Principal activity Registered address and principal place of business
United Kingdom
Brit Insurance Holdings Limited Intermediate holding company The Leadenhall Building
Brit Syndicates Limited Lloyd’s managing agent The Leadenhall Building
Brit UW Limited Lloyd’s corporate member The Leadenhall Building
Brit Insurance Services Limited Service company The Leadenhall Building
Brit Group Services Limited Group services company The Leadenhall Building
Brit Group Finance Limited Group services company The Leadenhall Building
BGS Services (Bermuda) Limited Service company The Leadenhall Building
Brit Pension Trustee Limited Corporate trustee (Dormant) The Leadenhall Building
Brit Corporate Services Limited Group services
company (Dormant)
The Leadenhall Building
Brit Corporate Secretaries Limited Group services
company (Dormant)
The Leadenhall Building
Sussex Capital UK PCC Limited Special purpose vehicle The Leadenhall Building
NameCo (No. 1341) Limited Lloyd’s corporate member 5th Floor 40 Gracechurch Street, London,
England, EC3V 0BT
Ki Capital Solutions Limited Dormant company The Leadenhall Building
Ki Technology Limited Dormant company The Leadenhall Building
Ki Risk Services Limited Dormant company The Leadenhall Building
Ki Shelf Company Limited Dormant company The Leadenhall Building
Brit Syndicates Trustee Limited Corporate trustee (Dormant) The Leadenhall Building
RSML Pension Trustee Limited Corporate trustee (Dormant) The Leadenhall Building
Brit Life Trustee Limited (incorporated
on 14 November 2025)
Corporate trustee (Dormant) The Leadenhall Building
Bermuda
Sussex Capital Management Limited Service company Ground Floor Chesney House, The Waterfront,
96 Pitts Bay Road, Pembroke, HM 08
Sussex Re Limited Special purpose vehicle Wessex House, 3rd Floor, 45 Reid Street, Hamilton HM 12
Brit Reinsurance (Bermuda) Limited Insurance company Ground Floor Chesney House, The Waterfront,
96 Pitts Bay Road, Pembroke, HM 08
South Africa
Camargue Underwriting Managers
(Proprietary) Limited
Insurance intermediary Camargue House, 33 Glenhove Road, Melrose Estate, 2196
Synergy XOL (Pty) Ltd. Service company Camargue House, 33 Glenhove Road, Melrose Estate, 2196
Phoenix Underwriting Managers (Pty) Ltd. Service company (Dormant) Camargue House, 33 Glenhove Road, Melrose Estate, 2196
India
BIGCC Services India Private Limited Service company J Block, 1
st
Floor, Outerring Rd, Manyata Embassy,
Arabic College, Bangalore-560045
168 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
32 Related party transactions and Ultimate Parent Company
The Group has a number of related parties which includes its principal investors and its Directors. Sometimes it transacts business
with these related parties. This Note sets out those transactions.
The Group carries out a number of transactions with related parties which include paying management fees, carrying out insurance
and reinsurance activities with affiliates of the ultimate parent company, Fairfax Financial Holdings Limited , and trading with its
associates. All the transactions with related parties are undertaken on an arm’s-length basis.
(a) Ultimate Parent Company
The ultimate parent company and controlling entity, and the group of which the Group is a member, is Fairfax Financial Holdings
Limited (FFHL) which is registered in Canada and listed on the Toronto Stock Exchange. The consolidated financial statements for
Fairfax are publicly available and can be obtained from the Corporate Secretary, 95 Wellington Street West, Suite 800, Toronto,
Ontario, Canada, M5J 2N7 or from the website at www.fairfax.ca.
(b) Fairfax Financial Holdings Limited
Senior debt
On 17 June 2025 the Group became co-obligor on two senior unsecured debt previously issued by FFHL. As part of this transaction
the Group received $519.8m in cash and cash equivalents, representing the fair value of the notes on that date.
As FFHL continues to be a co-obligor on the senior debt Brit benefits from a lower interest rate than it would otherwise have been
able to obtain. In respect of this benefit the Group incurred a ‘guarantee fee’ of $0.6m in 2025 (2024: $nil), payable to FFHL.
Refer to Note 25 for further details.
Loan to ultimate parent
On 24 June 2025 the Group extended a $200.0m loan to Fairfax Financial Holdings Limited. It has an arm’s length interest rate
of 4.75%, a maturity date of 31 March 2026, and can be recalled at any time. In respect of this loan:
• In the year ended 31 December 2025 interest income of $4.8m was recognised in the consolidated income statement.
• At 31 December 2025 $204.8m was included on the consolidated statement of financial position (in respect of the principal and
accrued interest).
(c) Hamblin Watsa Investment Counsel Limited
Hamblin Watsa Investment Counsel Limited (HWIC), an affiliate of FFHL is an investment manager to a number of Group companies.
The Group incurred and paid investment management fees to HWIC of $15.9m during the period (31 December 2024: $12.7m).
(d) Insurance and reinsurance transactions with Fairfax Financial Holdings Limited and its affiliates
The amounts included in the consolidated income statement relating to trading with Fairfax Financial Holdings Limited and its affiliates
for the period were as follows:
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Insurance revenue 18.7 16.1
Insurance service expenses (10.9) (13.1)
7.8 3.0
Ceded reinsurance revenue (43.1) (9.3)
Reinsurance recoveries 16.4 6.8
(26.7) (2.5)
Brit Group Holdings Limited Annual Report 2025 169
financial statements
32 Related party transactions and Ultimate Parent Company (continued)
The amounts included in the consolidated statement of financial position outstanding with Fairfax Financial Holdings Limited and its
affiliates as at year-end were as follows:
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Insurance and reinsurance balances
Insurance contract liabilities (45.0) (36.1)
Reinsurance contract assets 22.9 28.4
(e) Ki Group
The Ki group of companies (Ki), of which Ki Financial Limited is the parent, is a fellow subsidiary in the Fairfax Group.
The Group’s (re)insurance transactions with Ki are included in Note 32(d) above. This section describes the Group’s other
transactions with Ki.
During the year ended 31 December 2025 the Group recognised net income from Ki of $20.1m. This income was in respect of IT
infrastructure services, and performance-related managing agency services provided to Ki’s Lloyd’s syndicate which the Group
receives and passes on to Fairfax UK Holdings Limited.
During the year ended 31 December 2024 the Group recognised net income from Ki of $67.3m. This income, most of which arose
before Ki separated operationally from the Brit Group, was in respect of general expense recharges and managing agency services
provided to Ki’s Lloyd’s syndicate.
At 31 December 2025 a net receivable from Ki of $2.1m (31 December 2024: $4.2m) was recorded in the consolidated statement
of financial position in respect of unsettled amounts arising from the transactions described above.
In addition to the above, as part of the restructuring of the Fairfax UK Holdings Limited (formerly Brit Limited) group the Group
transferred the following to Ki:
• 279 employees on 1 August 2024 and one further employee on 1 January 2025. Both transfers occurred pursuant to the
Transfer of Undertakings (Protection of Employment) regulations 2006.
• Certain tangible fixed assets (furniture and IT equipment), on 1 August 2024.
• A lease for office space, on 1 November 2024.
The financial impacts of these transfers were immaterial.
(f) Fairfax UK Holdings Limited
Holdings Limited.
Group restructuring
As described in Note 2.1.1, Brit Group Holdings Limited was incorporated on 7 August 2024 as a direct subsidiary of Fairfax UK
Holdings Limited (formerly Brit Limited). Brit Group Holdings Limited subsequently acquired the entire share capital of Brit Insurance
Holdings Limited (an intermediate holding company of the Brit insurance businesses) from Fairfax UK Holdings Limited in exchange
for the issuance of share capital on 12 December 2024. Upon acquisition, Brit Group Holdings Limited became the new holding
company for the Brit insurance businesses.
Subordinated debt and related borrowings
With effect from 22 January 2025 the Group was substituted in place of Fairfax UK Holdings Limited (the Group’s immediate parent
company, formerly Brit Limited) as issuer and principal debtor under listed subordinated debt notes that are denominated in GBP,
have a principal amount of £127.0m, mature in 2030 and carry an effective interest rate of 3.7%. In consideration for this change the
Group’s borrowings from Fairfax UK Holdings Limited, which had the same terms as the listed subordinated notes, were effectively
cancelled. Refer to Note 25 for further details.
170 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the consolidated financial statements
32 Related party transactions and Ultimate Parent Company (continued)
In respect of the Group’s borrowings from Fairfax UK Holdings Limited, which as above were effectively cancelled
on 22 January 2025, the Group:
• Held a liability of $159.5m on the consolidated statement of financial position at 31 December 2024.
• Recognised an interest expense in the consolidated income statement of $8.9m and $0.4m in 2024 and 2025 respectively.
Other transactions
In relation to transactions with Fairfax UK Holdings Limited other than the borrowings described above:
• In the year ended 31 December 2025 the Group recognised a net expense of $6.5m. This was in respect of performance-
related managing agency services provided to Ki’s Lloyd’s syndicate which the Group receives and passes on to Fairfax UK
Holdings Limited.
• In the year ended 31 December 2024 the Group recognised a net expense of $0.6m, underlying which was an expense
in respect of the performance-related managing agency services provided to Ki’s Lloyd’s syndicate (as described above) and
income in respect of expenses incurred by the Group and re-charged to Fairfax UK Holdings Limited.
At 31 December 2025 a net receivable from Fairfax UK Holdings Limited of $0.6m (31 December 2024: $6.2m) was recorded on the
consolidated statement of financial position, relating to unsettled amounts arising from the transactions described above.
(g) Key management compensation
The amount of the emoluments granted in respect of the financial year to the members of the administrative, managerial and
supervisory bodies by reason of their responsibilities, and any commitments arising or entered into in respect of retirement pension
for former members of those bodies, are broken down as follows:
Year ended
31 December
2025
$m
(Unaudited)
Year ended
31 December
2024
$m
Salaries and other short-term employee benefits
1
13.2 15.8
Post-employment benefits 0.7 1.0
Share-based payments 12.4 25.1
Total compensation 26.3 41.9
1
These amounts are inclusive of compensation paid to service companies.
For the purposes of IAS 24, ‘Related Party Disclosures’, key managers are defined as the Board of Directors and members of the
Executive Committee which is the primary vehicle for implementing Board decisions in respect of UK-managed operations.
As at 31 December 2025, $1.2m (2024: $0.7m) was recorded in the statement of financial position in respect of unsecured loans
to key management personnel.
Brit Group Holdings Limited Annual Report 2025 171
financial statements
33 Guarantees and contingent liabilities
This Note explains guarantees issued by Group companies and any contingent liabilities they may be exposed to.
(a) Lloyd’s
Assets have been pledged, as Funds at Lloyd’s, by way of deposits and fixed and floating charges for corporate member companies
within the Group that participate on Lloyd’s syndicates. The funds are held in trust and can be used to meet claims liabilities should
syndicates fail to meet their claim liabilities. Each corporate member has its own funds and can only use its funds to meet its own
claim liabilities.
As at 31 December 2025, the Group’s total Funds at Lloyd’s balance amounted to $896.3m (2024: $667.4m), of which $nil (2024: $nil)
was attributable to letters of credit placed as Funds at Lloyd’s.
(b) Credit facilities
The Group has in place a revolving credit facility and letters of credit. Refer to Note 25 for details of these facilities.
(c) Taxation
The Group operates in a wide variety of jurisdictions around the world through its Lloyd’s syndicate and uncertainties therefore exist
with respect to the interpretation of complex tax laws and practices of those territories. The Group establishes provisions for taxes
other than current and deferred income tax if there is a present obligation as a result of past events, it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the
obligation can be made. This assessment is made based upon various factors which are continually evaluated. Income taxes are
provided for as set out in accounting policy refer to Note 2.5.7.
172
financial statements
Brit Group Holdings Limited Annual Report 2025 173
financial statements
contents
Index to the Parent Company
Financial Statements
Statement of Financial Position 174
Statement of Changes in Equity 175
Notes to the Parent Company Financial Statements 176
Note 1 Accounting policies and basis of preparation 176
Note 2 Auditors’ remuneration 177
Note 3 Shares in Group undertakings 178
Note 4 Debtors: Amounts falling due after one year 178
Note 5 Debtors: Amounts falling due within one year 179
Note 6 Creditors: Amounts falling due within one year 179
Note 7 Creditors: Amounts falling due after more than
one year 180
Note 8 Called up share capital 180
Note 9 Directors’ emoluments 181
Note 10 Guarantees and contingent liabilities 181
Note 11 Dividends 181
Note 12 Disclosure exemptions 181
Note 13 Ultimate parent company and other related
undertakings 182
174 Brit Group Holdings Limited Annual Report 2025
financial statements
statement of financial position
At 31 December 2025
Note
31 December
2025
$m
31 December
2024
$m
Non-current assets
Shares in Group undertakings 3 1,565.5 1,055.2
Debtors: Amounts falling due after one year 4 177.5 –
1,743.0 1,055.2
Current assets
Debtors: Amounts falling due within one year 5 1.2 –
Cash at bank and in hand 1.5 –
2.7 –
Current liabilities
Creditors: Amounts falling due within one year 6 (20.5) –
Net current assets (17.8) –
Total assets less current liabilities 1,725.2 1,055.2
Creditors: Amounts falling due after more than one year 7 (685.3) –
Net assets 1,039.9 1,055.2
Capital and reserves
Called up share capital 8 – –
Share premium 655.2 1,055.2
Retained earnings 384.7 –
Total equity 1,039.9 1,055.2
The above statement of financial position should be read in conjunction with the accompanying notes.
These financial statements were approved by the Board of Directors on 26 February 2026 and were signed on its behalf by:
Martin Thompson Gavin Wilkinson
Group Chief Executive Officer Group Chief Financial Officer
Brit Group Holdings Limited Annual Report 2025 175
financial statements
statement of changes in equity
For the year ended 31 December 2025
Note
Called up
share
capital
$m
Share
premium
$m
Retained
earnings
$m
Total
equity
$m
At 7 August 2024 (date of incorporation) – – – –
Issue of share capital – 1,055.2 – 1,055.2
At 31 December 2024 – 1,055.2 – 1,055.2
Profit and total comprehensive income for the year – – 220.7 220.7
Capital reduction
1
– (400.0) 400.0 –
Dividends 11 – – (236.0) (236.0)
At 31 December 2025 – 655.2 384.7 1,039.9
1. On 30 July 2025 Brit Group Holdings Limited effected a capital reduction, without the cancellation of any shares, which resulted in a $400.0m reduction to share premium and
a corresponding increase in retained earnings. Accordingly, there was no impact on total equity.
The above statement of changes in equity should be read in conjunction with the accompanying notes.
176 Brit Group Holdings Limited Annual Report 2025
financial statements
1 Accounting policies and basis of preparation
This Note provides details of the basis of preparation and accounting policies applied in producing these parent company
financial statements.
1.1 Basis of preparation
The Company financial statements present the information about the Company as a separate entity. The Company is incorporated
and registered in England with registration number 15884169. The registered office of the Company at the date of this report is
The Leadenhall Building, 122 Leadenhall Street, London, EC3V 4AB.
The Company has prepared its financial statements in accordance with Financial Reporting Standard ‘FRS 102’, the Financial
Reporting Standard applicable in the United Kingdom and Republic of Ireland and provisions of Section 396 of the Companies Act
2006. The Company has applied accounting policies consistently to all the years presented, other than where new policies have
been adopted.
The financial statements have been compiled on a going concern basis and prepared on a historical cost basis, except for financial
investments and financial liabilities which have been measured initially at fair value. The Company financial statements are presented
in US dollars, which is also the functional currency of the Company, and all values are rounded to the nearest $0.1m except where
otherwise indicated.
1.2 Accounting policies
(a) Shares in Group undertakings
Investments in subsidiary undertakings are held at cost less accumulated impairment losses.
(b) Income from fixed asset investments
Dividend income is recognised when the shareholders’ right to receive the payment is established.
(c) Long-term debt
Long-term debt is recognised initially at transaction price which is the fair value. It is subsequently measured at amortised cost using
the effective interest rate method, in accordance with section 11 of FRS 102 (Basic Financial Instruments).
Interest payable is recognised using the effective interest rate method.
(d) Loans to Group undertakings
Loans to Group undertakings are recognised initially at transaction price which is the fair value, (including transaction costs
incurred except in the initial measurement of financial liabilities that are measured at fair value through profit or loss) and
subsequently measured at amortised cost using the effective interest rate method, in accordance with section 11 of FRS 102 (Basic
Financial Instruments).
Interest receivable is recognised using the effective interest rate method.
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses which are incidental to the acquisition or disposal of an investment
are treated as part of the cost or proceeds of the investment.
(f) Foreign currency translation
Items included in the financial statements of the Company are measured using the functional currency, which is the primary
economic environment in which it operates. The Company presents its financial statements in US dollars, which is its
functional currency.
Transactions in foreign currencies other than Sterling, United States dollars, Canadian dollars and Euros are translated at the rate
of exchange ruling at the date the transaction is processed. Unless otherwise stated, transactions in Sterling, Canadian dollars
and Euros are translated at the average rates of exchange for the period. Amounts written off investments are translated at the
historic rate of exchange that was initially used to record the shares in Group undertakings (investments in subsidiaries). Assets and
liabilities in currencies other than United States dollars are translated at the rate of exchange ruling at 31 December of each year.
Exchange differences arising on translation are dealt with in the income statement.
notes to the parent company financial statements
Brit Group Holdings Limited Annual Report 2025 177
financial statements
1 Accounting policies and basis of preparation (continued)
1.2 Accounting policies (continued)
(g) Deferred taxation
Deferred tax is recognised in respect of all timing differences which are differences between taxable profits and total
comprehensive income that arise from the inclusion of income and expenses in tax assessments in periods different from those
in which they are recognised in the financial statements, except that:
• provision is made for deferred tax that would arise on remittance of the retained earnings of overseas subsidiaries, associates
and joint ventures only to the extent that, at the statement of financial position date, dividends have been accrued as receivable;
• where there are differences between amounts that can be deducted for tax for assets (other than goodwill) and liabilities
compared with the amounts that are recognised for those assets and liabilities in a business combination a deferred
tax asset/liability shall be recognised. The amount attributed to goodwill is adjusted by the amount of the deferred tax
recognised; and
• unrelieved tax losses and other deferred tax assets are recognised only to the extent that the Directors consider that
it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing
differences reverse, based on tax rates and laws enacted or substantively enacted at the statement of financial position date.
(h) Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown
in equity as a deduction, net of tax, from the proceeds. Called up share capital represents the nominal value of the shares issued.
The share premium account represents the premium on issue of equity shares, net of any directly attributable issue costs.
(i) Other accounting estimate and judgement
The amounts recognised in the Company’s financial statements in respect of shares in Group undertakings are assessed for any
indicators of impairment on an annual basis. This may include an assessment of the recoverable amount of those shares, which
in turn may require estimates of the subsidiary’s future profits (in order to estimate its value in use). Where this is the case the
estimates are based on forecasts approved by management. An impairment is recognised where the recoverable amount of the
shares in Group undertakings (being the higher of fair value less costs to sell and value in use) is below the carrying value. For
further information, refer to Note 3.
2 Auditors’ remuneration
This Note sets out the fees paid in respect of the annual audit performed on the Company.
Audit fees charged to the Company amounted to $32,977 (2024: $60,000).
178 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the parent company financial statements
3 Shares in Group undertakings
This Note explains the direct shareholdings of the Company in other Group entities.
31 December
2025
$m
31 December
2024
$m
Investment in Brit Insurance Holdings Limited 1,565.5 1,055.2
On 12 December 2024, Fairfax UK Holdings Limited’s investment in Brit Insurance Holdings Limited was transferred to the Company
in exchange for the issuance of share capital by the Company to Fairfax UK Holdings Limited. The Company recognised an investment
in Brit Insurance Holdings Limited at $1,055.2m, with a corresponding increase in share premium of $1,055.2m.
The carrying value of this investment increased by $510.3m on 31 July 2025 following a change in the rights attaching to preference
shares in Brit Insurance Holdings Limited held by the Company that resulted in these instruments being reclassified as equity
instruments in the Company’s statement of financial position (see Note 4 for further details). The increase of $510.3m was
equal to the carrying amount of the preference shares in the Company’s statement of financial position (within ‘Loans to Group
undertakings’) immediately prior to the reclassification.
At the reporting date there were no indicators that the Company’s investment in Brit Insurance Holdings Limited was impaired.
The subsidiaries of the Company as at 31 December 2025, and their principal activities, are disclosed in the consolidated financial
statements, within Note 31.
4 Debtors: Amounts falling due after one year
This Note sets out moneys lent by the Company to other Group companies.
31 December
2025
$m
31 December
2024
$m
Loans to Group undertakings 177.5 –
On-lending of subordinated debt to Brit Insurance Holdings Limited
As described in Note 7, on 22 January 2025, the Company was assigned the benefit of a loan to Brit Insurance Holdings Limited
(a subsidiary of the Company) by Fairfax UK Holdings Limited (the Company’s immediate parent). This loan has the same principal
(£127.0m), effective interest rate (3.7%) and maturity date (2030) as the subordinated debt held by the Company (see Note 7 for
further details).
Brit Insurance Holdings Limited preference shares
On 17 June 2025 the Company acquired from Fairfax Financial Holdings Limited (the Company’s ultimate parent) preference shares
in Brit Insurance Holdings Limited (a subsidiary of the Company) in exchange for the Company becoming co-obligor on two senior
unsecured debt (see Note 7). The preference shares were classified as debt instruments (Loans to Group Undertakings) as their
terms included mandatory payment of preferential dividends and mandatory redemption. The instruments were initially recognised
at $510.3m, being the transaction price (equal to the fair value of the senior debt at that date).
Subsequently on 31 July 2025 the terms of the preference shares were changed to align with the terms of Brit Insurance Holdings
Limited’s existing ordinary shares (which do not have mandatory dividend or redemption terms) and were renamed to ordinary
shares. As a result, the instruments were reclassified as equity instruments (Shares in Group Undertakings) in the Company’s
statement of financial position (see Note 7), such that at 31 December 2025 there are no amounts within ‘Loans to Group
undertakings’ in relation to these instruments.
The Company received $3.7m of preference dividends in respect of the period before the terms of the preference shares were
changed. This amount was recognised within profit or loss.
Brit Group Holdings Limited Annual Report 2025 179
financial statements
5 Debtors: Amounts falling due within one year
This Note sets out moneys owed to the Company that are due within 12 months of the reporting date.
31 December
2025
$m
31 December
2024
$m
Interest receivable on loans to Group undertakings – –
Amounts owed by Group undertakings 0.3 –
Prepayments and accrued income 0.9 –
Other debtors – –
Total 1.2 –
‘Amounts owed by Group undertakings’ are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
6 Creditors: Amounts falling due within one year
This Note sets out moneys owed by the Company that are due within 12 months of the reporting date.
31 December
2025
$m
31 December
2024
$m
Accruals and deferred income 4.4 –
Amounts owed to Group undertakings 16.1 –
Total 20.5 –
‘Amounts owed to Group undertakings’ are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
180 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the parent company financial statements
7 Creditors: Amounts falling due after more than one year
This Note sets out moneys owed by the Company that are due more than 12 months after the reporting date.
31 December 2025 31 December 2024
Maturity
Effective
interest rate
Amortised
cost
$m
Fair value
$m
Amortised
cost
$m
Fair value
$m
Subordinated debt 2030 3.7% 170.8 154.9 – –
Senior debt (2034) 2034 4.6% 331.4 337.1 – –
Senior debt (2054) 2054 5.2% 183.1 183.3 – –
Total 685.3 675.3 – –
Subordinated debt
With effect on and from 22 January 2025, the Company was substituted in place of Fairfax UK Holdings Limited (the Company’s
immediate parent) as issuer and principal debtor under listed subordinated debt notes that are denominated in GBP, have a principal
amount of £127.0m, mature in 2030 and carry an effective interest rate of 3.7%. As consideration for this change, on 22 January 2025
Fairfax UK Holdings Limited assigned the benefit of its loan to Brit Insurance Holdings Limited (a subsidiary of the Company) to the
Company (see Note 4). This loan has the same principal, interest rate and maturity date as the subordinated debt.
Senior debt
On 17 June 2025 the Company became co-obligor on two senior unsecured debt previously issued by Fairfax Financial Holdings Limited
(the Group’s ultimate parent).
In exchange for the senior debt the Company received preference shares in Brit Insurance Holdings Limited that had been issued
to Fairfax Financial Holdings Limited on the same date. Refer to Note 4 for further details in relation to the preference shares.
The senior debt, which are listed on the Dublin Stock Exchange, are denominated in Canadian Dollars (CAD) with terms as follows:
• Senior debt with a total principal amount of CAD 450.0m, with a coupon rate of 4.73% and maturity date
of November 2034; and
• Senior debt with a total principal amount of CAD 250.0m, with a coupon rate of 5.23% and maturity date of November 2054.
Further details
Further details of these borrowings, including the approach to determining the fair values presented in the table above, are included
in Note 25 of the consolidated financial statements.
8 Called up share capital
This Note sets out the number of shares in issue and their nominal value.
31 December
2025
£
31 December
2024
£
31 December
2025
£1 each
Number
31 December
2024
£1 each
Number
Ordinary shares:
Allotted, issued and fully paid 1,000.0 1,000.0 1,000.0 1,000.0
All shares rank pari passu. There are no restrictions on the distribution of dividends and the repayment of capital. The total called up
share capital as at 31 December 2025 was £1,000.0 (2024: £1,000.0).
For further information in respect of shares currently in issue and related movements in called up share capital during the current
and prior period, please refer to Note 32 accompanying the Brit Group Holdings Limited consolidated financial statements.
Brit Group Holdings Limited Annual Report 2025 181
financial statements
9 Directors’ emoluments
This Note gives a breakdown of emoluments paid to Directors both in total and in respect of the highest paid Director.
Year ended
31 December
2025
$m
Year ended
31 December
2024
$m
Aggregate remuneration 5.1 –
Aggregate contributions to money purchase pension schemes 0.1 –
Total 5.2 –
The Directors’ remuneration disclosed above includes the following
amounts paid to the highest paid Director:
Aggregate remuneration 3.3 –
Number Number
Number of Directors with benefits accruing under money purchase pension schemes 1 0
Number of Directors who exercised share options 0 0
Number of Directors in respect of whose qualifying services, shares were received or
receivable under long-term incentive schemes 2 0
Shares were received or receivable by the highest paid Director in respect of qualifying services under a long-term incentive scheme
during 2025 and 2024. There were no shares exercised by the highest paid Director in 2025 or 2024.
10 Guarantees and contingent liabilities
This Note explains guarantees issued by the Company. The Company has no contingent liabilities.
The Company as at 31 December 2025 had a $415.0m (2024: $550.0m) revolving credit facility. On 16 May 2025, upon renegotiation,
the facility size reduced from $550.0m to $415.0m and the term of the facility was extended from December 2027 to December
2029. There is an option to extend for one or two years to either December 2030 or December 2031; the option to extend expires
in April 2027. In respect of this facility, at 31 December 2025 there was no letter of credit outstanding (2024: $nil utilised and
uncollateralised) and there were cash drawings of $nil (2024: $nil).
During 2024 Brit Group Holdings Limited replaced Fairfax UK Holdings Limited as the borrower and guarantor under this revolving
credit facility.
11 Dividends
This Note gives details of the amounts paid to the Company’s immediate parent during 2025 and 2024 by way of dividends.
Details of dividends paid by the Company to its immediate parent company during 2025 and 2024 are included in Note 28 of the notes
accompanying the Brit Group Holdings Limited consolidated financial statements.
12 Disclosure exemptions
This Note explains the Company’s approach to qualifying exemptions available in FRS 102.
The Company has taken advantage of the disclosure exemptions provided by paragraph 1.12 of FRS 102. Accordingly, these financial
statements do not include the following:
• Statement of cash flows;
• Specific information relating to financial instruments that is included within equivalent disclosures for the Group;
• Specific information relating to share-based payments that is included within equivalent disclosures for the Group; and
• Disclosure of key management personnel compensation (included in Note 32 of the Group financial statements).
The Brit Group Holdings Limited consolidated financial statements and accompanying notes provide further detail in respect
of these areas.
182 Brit Group Holdings Limited Annual Report 2025
financial statements
notes to the parent company financial statements
13 Ultimate parent company and other related undertakings
The ultimate parent company and controlling entity, and the largest group of which the Group is a member, is Fairfax of Fairfax
Financial Holdings Limited (Fairfax) which is registered in Canada and listed on the Toronto Stock Exchange. The consolidated
financial statements for Fairfax are publicly available and can be obtained from the Corporate Secretary, 95 Wellington Street West,
Suite 800, Toronto, Ontario, Canada, M5J 2N7 or from the website at www.fairfax.ca.
The Company is a wholly owned subsidiary of Fairfax UK Holdings Limited. The registered address of Fairfax UK Holdings Limited
is The Leadenhall Building, 122 Leadenhall Street, London, England, EC3V 4AB.
Further information on other related undertakings of the Company can be found in Note 31 Consolidated Entities of the notes to the
consolidated financial statements.
Brit Group Holdings Limited Annual Report 2025 183
additional information
key performance indicators and
alternative performance measures
Return on net tangible assets (RoNTA)
Return on net tangible assets (RoNTA) shows the return being generated by our operations compared to the adjusted net tangible
assets deployed in our business.
(i) RoNTA
Comment/financial statements reference
2025
$m
2024
$m
Profit after tax Consolidated income statement 651.8 478.4
Add back: Tax adjusted amortisation Amortisation of intangibles, adjusted by the tax rate 9.5 6.2
Add back: Tax adjusted pension charge in
income statement
Defined benefits schemes’ impact on income statement
0.6 1.4
Add back: Tax adjusted FX FX effect for the year, adjusted by the tax rate (27.4) 0.2
Return, as adjusted for RoNTA calculation 634.5 486.2
Adjusted NTA at start of year See ‘(ii) Adjusted net tangible assets' section below 2,241.7 1,919.8
Less: Pension asset net of deferred tax at
start of year
‘Employee benefits’ per Consolidated Statement
of Financial Position less deferred tax (26.3) (24.6)
External distributions, share issuances and
capital contributions
Weighted adjustment to reflect distributions and
shares issued during the year (9.7) (11.2)
NTA, as adjusted for RoNTA calculation 2,205.7 1,884.0
RoNTA Return, as adjusted for RoNTA calculation,
divided by NTA, as adjusted for RoNTA calculation. 28.8% 25.8%
(ii) Adjusted net tangible assets
Adjusted net tangible assets at the end of each year are calculated as follows:
Comment/financial statements reference
2025
$m
2024
$m
Total equity Consolidated statement of financial position 2,723.8 2,291.6
Less: Intangible assets Consolidated statement of financial position (65.1) (54.2)
Net tangible assets 2,658.7 2,237.4
Add back deferred tax liability on
intangible assets
Note 20: Deferred taxation
7.3 4.3
Adjusted net tangible assets 2,666.0 2,241.7
184 Brit Group Holdings Limited Annual Report 2025
additional information
key performance indicators and alternative performance measures
Insurance revenue and insurance premium written
Insurance revenue and insurance premium written are used by the Group to measure and monitor levels of incoming business.
Insurance revenue is a required measure of revenue under IFRS 17, while insurance premium written is equivalent to gross written
premium under the old insurance accounting standard, IFRS 4.
Comment/financial statements reference
2025
$m
2024
$m
Insurance revenue Consolidated income statement 2,950.3 2,856.0
Commission expense Reclassification of commissions expense on assumed
business to net off against insurance revenue 56.1 42.8
Profit commissions and
reinstatement premiums
Reclassification of profit commissions in relation to assumed
business and reinstatement premiums between insurance
revenue and insurance service expense 11.6 16.7
Non-distinct investment components
and other adjustments
Net down of non-distinct investment components; and
other GAAP adjustments 16.3 (1.9)
Gross earned premium 3,034.3 2,913.6
Change in gross unearned premiums Movement in the gross unearned premium reserve 57.4 64.9
Insurance premium written 3,091.7 2,978.5
Combined ratio, claims ratio and expense ratio
The combined ratio is our key underwriting metric and measures the profitability of our underwriting. It shows how much of every $1
of premium is spent in the total costs of sourcing and underwriting the business and settling claims. A combined ratio under 100%
indicates underwriting profitability.
The component parts of the combined ratio are the claims ratio and the expense ratio. The calculations of each of the ratios are
set out below:
Comment/financial statements reference
2025
$m
2024
$m
Insurance revenue Note 18: insurance and reinsurance contracts 2,950.3 2,856.0
Allocation of reinsurance premium Note 18: insurance and reinsurance contracts (480.6) (561.9)
Net insurance revenue 2,469.7 2,294.1
Insurance service expense Note 18: insurance and reinsurance contracts 2,349.4 2,163.0
Less directly attributable expenses
Includes insurance acquisition cash flows and all other
directly attributable expenses (811.6) (757.3)
Amounts recoverable from reinsurers
for incurred claims Note 18: insurance and reinsurance contracts (325.9) (425.9)
Less directly attributable reinsurance
expenses Note 10: Other operating expenses (3.2) (2.8)
Net claims 1,208.7 977.0
Claim ratio Net claims divided by net insurance revenue 48.9% 42.6%
Expense ratio Directly attributable expenses divided by net insurance revenue 33.0% 33.1%
Combined ratio
Claim ratio plus expense ratio 81.9% 75.7%
Effect of discounting Initial discounting impact recognised in the insurance
service result 7.4% 9.6%
Combined ratio (undiscounted) Combined ratio minus effect of discounting 89.3% 85.3%
Brit Group Holdings Limited Annual Report 2025 185
additional information
Investment return
We assess the performance of our investment portfolio by comparing the return generated by our invested assets, net of external
investment related expenses, against the value of those invested assets.
Comment/financial statements reference
2025
$m
2024
$m
Return on invested assets 586.5 272.3
Financial investments Note 21: Financial assets and liabilities 6,744.5 5,274.1
Derivative contracts (investment-related) Note 22: Derivative contracts 3.7 (0.6)
Cash and cash equivalents Note 24: Cash and cash equivalents 577.2 476.4
Invested assets 7,325.4 5,749.9
Opening invested assets 5,749.9 5,495.4
Closing invested assets 7,325.4 5,749.9
Average invested assets 6,537.7 5,622.7
Investment return (%) Return on invested assets divided by average
invested assets 9.0% 4.8%
186 Brit Group Holdings Limited Annual Report 2025
additional information
key performance indicators and alternative performance measures
Capital ratio
The capital ratio measures the strength of our statement of financial position by comparing our available capital resources to the
capital we need to hold to meet our management capital requirements.
Comment/financial statements reference
2025
$m
2024
$m
Adjusted net tangible assets Calculated earlier in this section 2,666.0 2,241.7
Subordinated debt
1
Note 25: Borrowings 170.8 –
Senior debt Consolidated statement of financial position 514.5 –
Letters of credit/contingent funding Under our capital policy we have identified a maximum of
$200.0m (2024: $300.0m) of our revolving credit facility to
form part of our capital resources 200.0 300.0
Total available capital resources 3,551.3 2,541.7
Management capital requirement The sum of our underwriting entities capital requirements,
inclusive of a group-level diversification benefit (2,026.6) (1,718.6)
Excess of resources over management
capital requirement 1,524.7 823.1
Capital ratio Total available capital resources divided by management
capital requirement 175.2% 147.9%
1
Brit Limited was the issuer of the sub-debt until Jan 2025 at which time the issuer was transferred to Brit Group Holdings Limited. Therefore, it is excluded from the
31 December 2024 position.
Risk adjusted rate change
The risk adjusted rate change (RARC) shows whether premium rates are increasing, reflecting a hardening market, or decreasing,
reflecting a softening market. A hardening market is one indicator of increasing profitability.
The data reflects internal estimates by Brit’s underwriters, based on available year-on-year underlying renewal data after allowing
for changes to terms and conditions. Generally, no adjustment is made to the figures to reflect the impact of inflation beyond the level
of inflation in the underlying exposure measure used in pricing.
By its nature, this metric cannot be reconciled to the financial statements.
company information
Brit Group Holdings Limited Annual Report 2025 187
Directors
Mr Gordon Campbell – Chair
(appointed 21 January 2025)
Mr Jean-Jacques Henchoz – Director
(appointed on 1 May 2025)
Mr Simon Lee – Director
(appointed 21 January 2025)
Mr Martin Thompson – Group Chief Executive Officer
(appointed 1 January 2025)
Mr Michael Wallace
(appointed 21 January 2025)
Mrs Andrea Welsch
(appointed 21 January 2025)
Mr Gavin Wilkinson – Group Chief Financial Officer
(appointed 2 October 2024)
Mr Joe Marinelli
(appointed 7 August 2024, resigned 2 October 2024)
Mr Antony Usher
(appointed 2 October 2024, resigned 24 January 2025)
Company Secretary
Mr Joe Marinelli
(appointed 10 December 2024)
Registered Office
The Leadenhall Building
122 Leadenhall Street
London
England
EC3V 4AB
UK
Telephone: +44 (0) 20 3857 0000
Website
www.britinsurance.com
The Company website provides information about Brit Group
Holdings Limited including information on the business,
annual reports, half yearly reports and announcements to the
London Stock Exchange.
Registered Number
15884169
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
company information
188 Brit Group Holdings Limited Annual Report 2025
glossary
A
Adjusted net tangible assets or adjusted NTA: Total equity,
less intangible assets net of the deferred tax liability on those
intangible assets, less non-controlling interest.
Amortised cost: Other than cash and cash equivalents, financial
assets measured at amortised cost.
Aggregate exposure: The expected maximum total
of claims that could be incurred by an insurer in respect
of any event or series of similar events. Also see ‘realistic
disaster scenarios’.
Asset allocation: The allocation of our investments across
different kinds of asset classes, such as equities, bonds, and
cash, in order to achieve a balance between return and risk.
Attritional claims or attritional losses: Common claims/losses,
as opposed to major or catastrophe losses, incurred from
ordinary insurance and/or reinsurance operations.
Available capital resources: Adjusted net tangible assets,
senior debt, subordinated debt and balances outstanding
on letters of credit/contingent funding.
B
Business model (when referring to financial assets): Financial
assets are classified on the basis of the business model
within which they are held and their contractual cash flow
characteristics.
Brit View of Risk: An inhouse natural catastrophe specific load
used by Brit to overlap its view of natural catastrophe risk over
vendor models, with adjustment made to reflect expectations
for example increasing the US hurricane frequency
or incorporating a load for perils where vendor models are not
licensed (e.g. due to Brit considering these models to still be
in their infancy).
C
Capital ratio: Total available capital resources divided
by management capital requirements.
Capital resources: Total equity, less intangible assets net
of related plus subordinated debt, plus deferred tax, plus
a proportion (as agreed from time to time) of our revolving
credit facilities.
Captive: An entity that provides risk-mitigation services for
other entities within the same Group only.
Catastrophe or Cat: Perils including earthquakes, hurricanes,
hailstorms, severe winter weather, floods, fires, tornadoes,
explosions and other natural or man-made disasters.
Catastrophe losses may also arise from acts of war, acts
of terrorism and political instability.
Claims reserves: Outstanding claims and claims incurred
but not reported.
Combined ratio: Insurance service expenses net of recoveries
from reinsurers, divided by insurance revenue net of
allocation
of reinsurance premium
.
Constant FX rates: An increase or decrease in figures between
two years after eliminating the effect of foreign exchange
rate movements.
Corporate member: A company providing the capital to support
the underwriting activity of a syndicate at Lloyd’s. Brit’s
corporate members are Brit UW Limited, Nameco (No. 1341)
Limited and Ki Member Limited.
Coverholder: An entity authorised by an insurer to enter into
a contract of insurance on its behalf.
D
Double materiality assessment (DMA): Double materiality
is analysis to assess the materiality of sustainability matters.
It has two dimensions: impact materiality and financial
materiality. A sustainability matter meets the criterion of double
materiality if it is material from the impact perspective or the
financial perspective or both.
Delegated authority or binding authority: An authority granted
by an underwriter to an agent (known as a coverholder)
whereby that agent is entitled to accept, within certain
limits, insurance business on behalf of the underwriter. The
coverholder has full power to commit the underwriter within
the terms of the authority.
E
Events not in data (ENID): A loading in the claims and premium
provisions intended to cover the difference between a best
estimate of all possible outcomes and whatever the Group has
a best estimate on an accounting or other basis.
Energy Savings Opportunity Scheme (ESOS): A mandatory
government initiative to promote energy efficiency
in large businesses.
Excess and Surplus (E&S): A generic US regulatory
classification referring to insurance coverage not ordinarily
written by insurers fully admitted in various states. The E&S
lines of business is largely unregulated as to rate and form
but insurers must be authorised to write such business
in a state by the local regulator.
Excess of loss (XL): A type of reinsurance that covers
specified losses incurred by the reinsured party in excess
of a stated amount (the excess) up to a higher amount
of limit, for example $5m excess of $1m. Such coverage can
operate on a per loss basis or an aggregate basis.
Expected credit loss (ECL): The weighted average of credit
losses with the respective risks of a default occurring
as the weights.
glossary
Brit Group Holdings Limited Annual Report 2025 189
glossary
F
Fair value through other comprehensive income (FVOCI):
For financial assets and liabilities measured at fair value
through other comprehensive income, some changes in fair
value are recognised in other comprehensive income.
Fair value through profit or loss (FVTPL): For financial
assets and liabilities measured at fair value through profit
or loss, changes in fair value are recognised in profit or loss
as part of net investment result.
Funds at Lloyd’s (FAL): Funds held in trust at Lloyd’s
to support a Lloyd’s underwriter’s underwriting activities.
G
Gearing ratio: Calculated as total borrowings (senior debt,
subordinated debt, revolving credit facility cash drawdowns
and uncollateralised drawn letters of credit) divided
by adjusted net tangible assets plus total borrowings.
H
Hardening or hard market: An insurance market where
prevalent prices are high, with more restrictive terms and
conditions offered by insurers.
I
Insurance-linked securities (ILS): ILSs are essentially financial
instruments which are sold to investors whose value is affected
by an insured loss event.
Incurred but not reported (IBNR): Claims incurred but
not reported, including claims which are incurred but not
enough reported (i.e. where the amount of the notification
is insufficient).
Insurance premium written: A measure used by the Group
to measure and monitor levels of incoming business.
It is equivalent to gross written premium under the old
insurance accounting standard, IFRS 4.
Invested assets: Financial investments, investment
in associated undertaking, cash and cash equivalents and
investment related derivatives.
Investment related derivatives: Includes options, credit default
swaps and interest rate swaps. Excludes currency forwards.
Investment return percentage: Investment return expressed
as a percentage of average invested assets.
L
Letter of credit (LoC): A written undertaking by a financial
institution to provide funding if required.
Line size: The proportion of an insurance or reinsurance risk
that is accepted by an underwriter or which an underwriter
is willing to accept.
Lloyd’s of London: The Society of Lloyd’s and Corporation
of Lloyd’s created and governed by the Lloyd’s Acts 1871-1982,
including the Council of Lloyd’s (and its delegates and other persons
through whom the Council may act), as the context may require.
Long-tail: The term used to describe business where the
difference between the timing of the average premium receipt
and the timing of the average claim payment is over three years.
Loss portfolio transfer (LPT): A financial reinsurance
transaction in which loss obligations that are already incurred
and will ultimately be paid are ceded to a reinsurer.
M
Major claims or Major losses: Major claims are defined
as claims which are initially assessed as having the potential
to exceed $15.0m (net of reinsurance and allowing for
reinstatements), incurred from natural or man-made
catastrophes, or from large single risk loss events.
Management capital requirement: The sum of our underwriting
entities capital requirements, inclusive of a group-level
diversification benefit.
N
Net tangible assets (NTA): The total assets of a company,
minus any intangible assets, less all liabilities.
Net financial result: The Group’s total investment return less
net finance income or expenses from insurance contracts
issued and reinsurance contracts held.
O
Outstanding claims: Claims which have been notified at the
reporting date but not settled.
Own risk and solvency assessment (ORSA): The name given
to the entirety of the processes and procedures employed
by an insurer to identify, assess, monitor, manage and report
the short and long-term risks it faces or may face and
to determine the capital necessary to ensure that the insurer’s
overall solvency needs are met at all times.
P
Protected cell company (PCC): A company that has been
separated into legally distinct portions or cells. The revenue
streams, assets and liabilities of each cell are kept separate
from all other cells. Each cell has its own separate portion of the
PCC’s overall share capital, allowing shareholders to maintain
sole ownership of an entire cell.
190 Brit Group Holdings Limited Annual Report 2025
glossary
glossary of terms
Q
Quota share (QS): A type of reinsurance which provides
that the reassured shall cede to the reinsurer a specified
percentage of all the premiums that it receives in respect
of a given section or of all of its underwriting account for
a given period in return for which the reinsurer is obliged
to pay the same percentage of any claims and specified
expenses arising on the reinsured business.
R
Radiative Forcing (RF): The additional warming effect from
high-altitude aviation emissions—such as contrails—that trap
heat in the atmosphere, for which a multiplier is applied
in aviation-related carbon reporting (including Brit’s Scope 3
travel emissions) because this impact can be as large as the
direct CO2 emissions themselves and must be accounted for
to reflect aviation’s true climate footprint.
Realistic Disaster Scenarios (RDS): Specific scenarios which
the Group uses to test its ability to settle claims arising from
certain types of disaster.
Reinsurance to close (RITC): A reinsurance which closes a year
of account by transferring the responsibility for discharging all
the liabilities that attach to that year of account (and any year
of account closed into that year) plus the right to any income
due to the closing year of account into an open year of account
of the same or a different syndicate in return for a premium.
Risk adjusted rate change: Change in premium rates during the
year expressed as a percentage of opening premium rates. The
data reflects internal estimates by Brit’s underwriters, based
on available year-on-year underlying renewal data after allowing
for changes to terms and conditions. Generally, no adjustment
is made to the figures to reflect the impact of inflation beyond
the level of inflation in the underlying exposure measure
used in pricing.
Risk free rate (RFR): Theoretical rate of return
on an investment with zero risk.
Risk Management Framework (RMF): The Group’s own
internal framework for risk management.
Return on net tangible assets (RoNTA): Profit/(loss) for the
year after tax (adjusted for amortisation net of tax, defined
benefit pension scheme’s charges/credits net of tax, and
foreign exchange movements net of tax), divided by total equity
at start of year (less intangible assets net of deferred tax, and
pension asset net of deferred tax), adjusted on a time weighted
basis for any distributions and shares issued during the year.
Running yield: The income return, expressed either
as a percentage or a monetary amount, on invested assets.
S
Service companies: Subsidiary companies set up to operate
a binding authority on behalf of the Syndicate to write business
from non-Lloyd’s brokers or direct from policymakers.
Short-tail: The term used to describe business where the
difference between the timing of the average premium
receipt and the timing of the average claim payment
is under three years.
Softening or soft market: An insurance market where
prevalent prices are low, and terms and conditions offered
by insurers are less restrictive.
Solvency capital requirement (SCR): The higher of the two
capital levels required by Solvency II. The SCR is the prudent
amount of assets to be held in excess of liabilities and
functions as an early warning mechanism if it is breached.
The SCR is calculated using either the standard formula
or an approved internal model.
Solvency matched: The matching of the currencies of the
Group’s liabilities and management capital requirements with
the currencies of the assets held by the Group.
Solvency II: A combination of several EU Directives that codify
and harmonise EU insurance regulation, primarily concerning
the amount of capital that EU insurance companies must
hold to reduce the risk of insolvency. Principal components
are Directive 2009/138/EC on the taking-up and pursuit
of the business of insurance and reinsurance and Directive
2012/23/EU on the financial position of insurance undertakings.
Solvency II came into force in all EU member states
on 1 January 2016.
Strategic asset allocation (SAA): The Group’s strategic
asset allocation defines the overall Group investment
strategy and reflects entity-level considerations and
governance matters. See ‘asset allocation’.
Syndicate: A group of underwriting members of Lloyd’s
or a single corporate member managed as a unit to underwrite
insurance business at Lloyd’s to which a particular syndicate
number is assigned by or with the authority of Lloyd’s of London.
T
Technical price: The price for the risk which is expected
to produce the long-term required return on capital
for the Group.
Total operating expenses: These represent all expenses
incurred by the Group, excluding commission costs.
Treaty: A reinsurance contract pursuant to which the reinsurer
is obliged to accept, within agreed limits, all risks underwritten
by the reinsured within specified classes of business
in a given time period.
U
Ultimate claims: The total forecast claims expected to arise
from a policy or class of business. Ultimate claims include those
losses paid, those notified and IBNR.
Underwriting capacity: The maximum premium income which
a Lloyd’s syndicate is permitted to underwrite. A capacity
figure is assigned to each underwriting year and the relevant
premium income is defined as gross written premiums less
commission payable.
Brit Group Holdings Limited
The Leadenhall Building
122 Leadenhall Street
London
EC3V 4AB
UK
writing the future
britinsurance.com
