Amlin to miss first half targets

2nd Aug 2011 16:54

Shares in Amlin plummeted over 16% in afternoon trading after the underwriter warned that it is likely to miss its profit targets for the full year. Amlin, the biggest Lloyd's of London insurer by market value, revealed that for the first half it is £65m below its previous pre-tax expectations and £53m short on an after-tax basis."The first half of 2011 has seen an unprecedented level of catastrophes that have affected the non-life insurance sector as a whole. Despite this, we are disappointed by these further developments and their impact on our 2011 performance," said chief executive officer Charles Philipps.Total catastrophe claims reserved in the period totalled £314m, due to higher-than-expected claims from a client relating to the New Zealand Christchurch Earthquake in February. Additionally, Amlin Bermuda increased its net major catastrophe reserves which contributed £27m to the shortfall in profit.However, this was partly offset by smaller-than-expected losses from the Japanese earthquake in March, "and for Amlin London this net deterioration was largely absorbed by its reinsurance programme," the firm said.ACI (or Amlin Corporate Insurance) - the group's corporate insurer in Marine, Liability, Property and Fleet in the Netherlands and Belgium - has performed below expectations due to "a higher than normal frequency of large claims advices on its property and marine accounts, particularly in June 2011." The underperformance has led to a £28m shortfall in profit."Amlin expects some of the overall shortfall in profit expectations to be offset in the second half of the year by increased income from catastrophe reinsurance, which has been written in the second quarter in an improved rating environment, whilst containing exposure to peak catastrophe disaster scenarios to well within normal risk appetite," the statement said.BC