24th Apr 2008 07:01
Amlin PLC24 April 2008 AMLIN PLC PRESS RELEASE For immediate release 24 April 2008 AGM Statement and Update on Trading At the Annual General Meeting to be held at noon today, the Chairman of Amlinplc ("Amlin" or "the Group"), the leading insurer, will provide the followingupdate on trading. An Interim Management Statement will be provided on 14 May2008. Trading environment The Group continues to write a well balanced portfolio of business. While ratesare softening in our Non marine, Marine and Bermudian lines albeit from historichigh levels, we remain well positioned to benefit from an upturn, when it comes,in our UK commercial and aviation lines. The average renewal rate reduction for the Group for the first three months was7% with renewal retention at a healthy 86%. This is analysed by division in thetable below: +---------------------+--------------------+-----------------+----------------+| | Gross Premiums to| Renewal rate| Renewal|| | | change| retention ratio|| | 31 March 2008| | |+---------------------+--------------------+-----------------+----------------+| | £ million| %| %|+---------------------+--------------------+-----------------+----------------+|Non marine | 185.3| (10.1)| 86|+---------------------+--------------------+-----------------+----------------+|Marine | 99.2| (2.8)| 84|+---------------------+--------------------+-----------------+----------------+|Aviation | 17.0| (1.5)| 83|+---------------------+--------------------+-----------------+----------------+|UK commercial | 31.8| (2.9)| 76|+---------------------+--------------------+-----------------+----------------+|Amlin Bermuda | 62.6| (8.6)| 94|+---------------------+--------------------+-----------------+----------------+|Total / average | 395.9| (7.4)| 86|+---------------------+--------------------+-----------------+----------------+ Our reinsurance classes, written within Non marine and Amlin Bermuda, are comingoff their peak rating levels but prospective margins remain acceptable. The UScatastrophe account has experienced reductions of between 10% and 12%. Theinternational catastrophe book is under continued pressure but there remainattractive areas, particularly where there have been recent losses, such as theUK and Australia. The recent Japanese catastrophe reinsurance renewals had anaverage 7% reduction in rate. Within the balance of the Non marine division the US large property insurancebook is suffering from stronger competition and we have begun to retract fromthis business. Other specialty classes are experiencing more modest ratereductions and continue to offer good margins. Within the Marine division, the energy account is under pressure, particularlyfrom new entrants, but while rates are off their peak, they still remainacceptable. War rates continue to soften but with strong aggregate management weremain confident of good returns. Our other marine classes are experiencingsmall rate reductions and continue to offer good margin potential. Airline rates remain competitive but there are growing signs that general rateimprovements will be seen in 2008. To date renewal rates have been better thanexpected, although this is based on the limited number of accounts renewing inthe first quarter. The UK commercial rating remains poor and whilst 2008 will be unlikely to offermany opportunities to increase premium volumes the rate of reduction is slowing. Premiums written The Group's gross written premium (before deduction of brokerage) incepting inthe first three months ended 31 March 2008 (see note below) is £395.9 million(2007: £440.2 million at March 2008 rates of exchange), a drop of 10% comparedto the same period in 2007. Syndicate 2001 contributed £333.3 million, a drop of 13%. The majority of thisdecrease emanates from our non marine and UK commercial classes and reflectsmore competitive markets. Of this income, £17.1 million (2007: £16.2 million)was specifically written to be ceded to Amlin Bermuda with up to a further 12.5%ceded through the renewal of a whole account quota share reinsurance contract. Amlin Bermuda has written US$123.9 million of direct income in the first threemonths, in addition to the reinsurances of Syndicate 2001 noted above. This isan increase of 10% at comparable rates of exchange to the same period in 2007. Claims development Whilst there has not been a major catastrophe event in 2008 there have been somenotable catastrophe losses and an increase in the number of individual largerisk losses. Insured loss estimates for first quarter events are up to $6billion. These included the British Airways airline crash at London Heathrow, CycloneEmma affecting Central Europe in March, significant tornado damage in AtlantaGeorgia, a Crane collapse in Manhattan and Australian mine floods. Amlin'sestimated exposure to these events is modest reflecting our relatively smallaverage line size. Investment returns The Group's investment return for the first quarter was 0.8% on average fundsunder management of £2.5 billion. Overall the Group's investments have remained defensively positioned. Despitethe efforts of Central Banks liquidity conditions in credit markets deterioratedfurther during the first three months. The flight to quality and expectations offurther interest rate cuts was positive for our bond benchmarks, which are basedon government indices. However, our bond managers' non-government holdings,whilst being highly rated, detracted from returns. Equity manageroutperformance, together with the hedges that were in place, mitigated some ofthe impact of equity market falls over the period. Share buy back programme As communicated in our recent Annual Report and in the circular to shareholderscontaining the Notice of AGM, we have commenced a share buy-back programme. Inthe first three months we have purchased 1.81 million shares at an average priceof 263.5p per share. Summary Overall, 2008 is expected to be a more challenging year but we have confidencethat we will continue to deliver acceptable returns for our shareholders. Note: Gross written premium relates to policies both written and incepting on orbefore 31 March 2008. Previous trading statements have quoted gross premium forpolicies that were written on or before the quoted date irrespective of the dateof inception. Comparatives in this statement have been updated accordingly. Enquiries: Charles Philipps, Amlin plc 0207 746 1000 Richard Hextall, Amlin plc 0207 746 1000 Hannah Bale, Head of Communications, Amlin plc 0207 746 1000 David Haggie / Peter Rigby, Haggie Financial 0207 417 8989 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Aston Martin Lagonda