Amlin profits hit by large catastrophe losses, FX movements

18th Aug 2014 11:14

Non-life insurance and reinsurance underwriting group Amlin posted a drop in half-year pre-tax profit, which it blamed on an adverse foreign exchange translations of £24.6m and large catastrophe losses. The figure dropped from £161.4m to £148.5m year-on-year, while earnings per share declined from 28.2p to 27.3p. The group said its large catastrophe losses were limited, with only "modest" exposure to the Malaysian Airlines MH370 and the Sewol Korean passenger vessel disasters. In all, large catastrophe losses totalled £48.9m, significantly higher than the £32.2m reported in the same period a year earlier. Gross written premiums rose 2.8% from £1,838.9m to £1,891.2m and at constant currency climbed 8.2%. Overall, the average renewal rate for the period was a decrease of 3.3%, with reinsurance rates coming under further downward pressure. Renewal retention, however, remained high at 86% (H1 2013: 87%).Net written premiums increased by 7.3% to £1,637.2m following changes made to the outwards reinsurance programme at the beginning of the year. The underwriting return was healthy, supported by pleasing growth in written premium and changes made to the outwards reinsurance programme. Despite the challenging conditions facing investment markets, the six month investment return was "solid" at 1.3%.Chief executive Charles Philipps said: "Amlin continues to generate good returns despite a more competitive trading environment, demonstrating the strength of our franchise and the benefit of a well diversified portfolio. While remaining focused on underwriting discipline, we continue to identify opportunities for profitable growth. "With the benefit of previous premium growth and significant savings on outwards reinsurance, Amlin remains well positioned in current market conditions."Shares had fallen 0.6% to 444.70p by 11:12.NR