Insurer Amlin to beat RoE target after catastrophe-free Q3

14th Nov 2013 07:43

- RoE to beat 15 per cent target this year- No major catastrophe losses in Q3- Outlook slightly cautious for 2014In the absence of any major catastrophe losses in the third quarter, insurance group Amlin said it now expects to deliver an above-target return on equity for 2013.Full-year results are expected to exceed the cross-cycle target RoE of 15%, the firm said, following "excellent overall underwriting returns in the [third] quarter".However, Amlin did give a cautious outlook, saying that reinsurance pricing is expected to come under further pressure in 2014 "from the growth in alternative capital market competition and limited loss activity adding to already healthy capital levels in the industry".Nevertheless, the firm said that "disciplined underwriting" should help it to maintain "acceptable margins".Gross written premiums for the nine months to September 30th totalled £2,196m, broadly in line with last year. Average renewal rates were flat on last year while the renewal retention ratio was "healthy" at 86.5%, up from 85.3%.The company said that there were no major catastrophe losses in the third quarter, with the largest event this year still the European flood losses in May and June which are estimated at £25.7m. Smaller catastrophe losses, including European hailstorm and Mexican flood losses, were £13.9m in the third quarter, and amount to £37m for the nine-month period.Large risk losses were higher in the third quarter, amounting to £28.6m, bringing the nine-month total to £41.6m.On the investment side, the investment return for the first nine months of the year was 2.0% with average funds under management of £4.3bn. However, the weakening of the US dollar during the most recent quarter led to £68.2m of foreign exchange losses.Chief Executive Charles Philipps said that the company has had a "good" third quarter. "Our core businesses are performing well in demanding market conditions, Amlin is well positioned to take advantage of the opportunities created by changes in the reinsurance market and the improving returns on our investments in Amlin Europe, Amlin Re Europe and Leadenhall Capital will increase the benefit of the diversity they bring to the group."BC