Amlin First-Half Profit Drops as Catastrophe Losses Widen

Article

Amlin Plc, the second-biggest Lloyd’s of London insurer by market value, posted an eight percent drop in first-half pretax profit on losses from foreign exchange and natural catastrophes.

Profit declined to £148.5 million ($248.5 million) from £161.4 million [$270 million] a year earlier, the London-based insurer said in a statement today. Profit from underwriting fell 11 percent to £141.6 million [$237 million], it said.

Losses on large catastrophe, impacted by European hailstorms and a tornado in Nebraska in June, widened to £48.9 million [$81.83 million] in the first half from £32.2 million [$53.9 million] in the same period last year. The company said profit also fell after “an adverse foreign exchange swing” of £24.6 million [$41.17 million].

Amlin decreased 0.9 percent to 443.3 pence [$7.42] at 9:02 a.m. in London trading, extending losses this year to 3.4 percent and valuing the company at £2.2 billion [$3.682 billion].

The combined ratio rose to 87 percent from 85 percent, indicating that the company paid out more in claims and costs relative to premiums than a year earlier. The combined ratio of Amlin U.K. rose to 102 percent in the half with roughly £10 million [$16.73 million] of claims following flooding in the U.K. in January.

“We’ll see improving profitability this year and most likely the next,” CEO Charles Philipps told journalists in a conference call. “We remain focused on the 15 percent return-on-equity target.”

Gross written premiums increased to £1.89 billion [$3.162 billion] from £1.84 billion [$3.078 billion] a year earlier.

Amlin recorded an investment return of 1.3 percent on average funds under management of £4.4 billion [$7.362 billion], down from the 1.4 percent on funds of £4.5 billion [$7.529 billion] in the year- earlier period.

The company said it increased its interim dividend 3.9 percent to 8.1 pence [13.55 cents] a share.