11th Jan 2008 07:00
Amlin PLC11 January 2008 AMLIN PLC PRESS RELEASEFor immediate release11 January 2008 TRADING STATEMENT Amlin plc ('Amlin' or 'the Group'), the leading insurer, is today providing anupdate on current trading as set out below. Current trading 2007 Underwriting The Group's gross written premium (before deduction of brokerage) in the yearended 31 December 2007 was £1.03 billion, down by 5% over the same period in2006. Syndicate 2001's gross written premium was £890 million (at rates of $1.98:£1)compared with £968 million for the previous year at similar rates of exchange.This includes £38.5 million of additional business written on behalf of AmlinBermuda. Amlin Bermuda's gross written premium, including the business written in Lloyd'sbut excluding the whole account reinsurance of Syndicate 2001, increased by 17%to $368 million. The Group average renewal rate reduction for the year was 5% with renewalretention of 78%. The main renewal season for the 2007 account since the lastupdate has been for the competitive airline account where rates fell a further17%. However, the Amlin airline portfolio has been reduced to a core number ofclients. It now accounts for approximately 1% of gross premium income and sothese reductions have little effect on the expected financial prospects for theGroup. We believe that the airline insurance market as a whole made a loss for2007, despite a lack of major airline disasters, and this should increasepressure on our competitors to raise future rates to more appropriate riskadjusted levels. 2008 Underwriting 1 January is a major renewal date for a number of key classes. Amlin has writtentotal income (before deduction of brokerage) to date of £298 million. This is a7% reduction on the previous year. Overall renewal rates for Amlin have declinedby 8% with a retention ratio of 87%. We believe that at these rating levels wecontinue to write business which will produce an acceptable return. AmlinBermuda increased gross written premium by 22% to $127 million (2006: $104million). Property reinsurance rates remained satisfactory across the whole portfolio. UScatastrophe reinsurance rates fell by 10%, albeit from strong levels.International catastrophe rates reduced by 12% but discipline varied byterritory. Overall the reinsurance market still offers an acceptable prospectfor return. Experience on other classes varied widely. Large commercial property insurancerates fell by as much as 20%, continuing the downward pressure seen in 2007.However, the marine account saw only a modest 1% fall in rates. Investment returns Fourth quarter 2007 investment returns were a good 1.9%, principally driven bystrong bond returns of 2.4%. The weighted average investment return for 2007 is estimated to be 6.7% onaverage Group cash and investments of £2.5 billion. The bond portfolio returned6.3% with excellent returns on government bond holdings offset by weakness onthe credit portfolio. The equity portfolio delivered a 10.2% return in volatilemarkets. Cash returned 5.5% for the year across all currencies. Charles Philipps, Chief Executive of Amlin, stated: "2007 was another excellent year for Amlin. Premium income was modestly lowerbut the claims environment was benign and investment returns were strong. Theunderwriting environment in 2008 is softening as expected but good margins existfor selective underwriters. Our underwriting team has a consistent history ofoutperformance, particularly in a softening market. This record, together witheffective capital management as evidenced by the recent £120 million return ofcapital, gives us confidence that we can continue to deliver for shareholders." Enquiries: Charles Philipps, Amlin plc 0207 746 1000Richard Hextall, Amlin plc 0207 746 1000Hannah Bale, Head of Communications, Amlin plc 0207 746 1000David Haggie, Haggie Financial Limited 0207 417 8989 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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