View this article online: https://www.insurancejournal.com/news/international/2015/05/21/368949.htm
London-based Amlin plc reported gross written premium for the three months ended March 31, 2015 of £1.26 billion ($1.96 billion), compared with £1.27 billion ($1.97 billion) reported for the said period in 2014. At constant rates of exchange, gross written premium decreased by 1.4 percent.
Income growth from strengthening of the U.S. dollar was largely offset by weakening in the euro, reflecting the geographical diversity of Amlin’s business.
Premium income by Amlin’s strategic business unit are reported as:
While the company’s reinsurance business benefited from the prominence of its U.S. dollar revenue stream, income in both its marine and aviation and property and casualty businesses was affected by weakness in the euro, the company said in a statement.
Average renewal rates were down 3.5 percent, compared with a drop of 2.3 percent reported for the same period in 2014. Renewal retention rates remained healthy at 89.1 percent, compared with 88.2 percent reported in 2014.
Charles Philipps, Amlin’s chief executive, commented: “We have had a good first quarter, bearing in mind the more competitive market conditions which demand high levels of diligence in risk selection.”
The company is realizing a number of benefits from the changes made to the company’s organizational structure in 2014, said Philipps, pointing to outwards reinsurance programs, increased knowledge sharing and the ability to offer a wider product offering to some clients.
“We expect our business and geographical diversity, which has grown over recent years, to be of increased importance in the current environment,” he added.
Competition within reinsurance lines remains challenging, which is why the company has continued to be selective, focusing on areas where pricing meets acceptable rates of return.
Overall, reinsurance renewal rates decreased by 6.3 percent. U.S. catastrophe renewal rates reduced by an average of 6.5 percent, while international catastrophe renewals experienced average rate decreases of 10.5 percent. However, non-catastrophe reinsurance classes, which now amount to approximately 20 percent of the company’s estimated annual premiums, saw less pressure, with renewal rates decreasing by 4.8 percent and new business of £58.8 million ($91.3 million) being added in the period.
U.S. property and casualty rates were down 2.8 percent. New business of £38.1 million ($59.1 million) was added in the period across property and casualty classes. In Amlin’s UK commercial business, UK fleet motor rates continued to rise, with an average of 6.3 percent in the first three months.
Renewal rates for marine and aviation business came under pressure across classes, but most notably for energy, which saw a rate decrease of 13.3 percent as falling oil prices impacted construction and drilling activity.
The group’s investment return for the quarter ended 31 March 2015 was ahead of expectations at 1.7 percent, with average funds under management of £4.4 billion ($6.8 billion). During this period bonds returned 0.9 percent, zero duration bonds returned 1.0 percent, cash and cash equivalents 0.1 percent, equities 5.7 percent and property 2.5 percent.
(Currency conversion used for this article was £1 = $1.55 as of May 21, 2015).
Source: Amlin plc