18th Aug 2005 07:00
Amlin PLC18 August 2005 AMLIN PLC PRESS RELEASE For immediate release 18 August 2005 Trading update: • Excellent first half • Continued improvement in syndicate forecasts Amlin plc ("Amlin"), the leading Lloyd's insurer, today releases a tradingupdate, including improved forecasts for Syndicate 2001 for the 2003 and 2004years of account, and indicating that its results for the 2005 half year will bematerially ahead of expectations. Amlin plc A review of performance in the first half of 2005 has indicated that the outcomefor the 2005 half year is likely to be significantly better than marketexpectations due to a combination of continued strong trading, low levels ofclaims incurred and a good investment performance in the year to date, and theeffect on profits of exchange rate adjustments when reporting underInternational Financial Reporting Standards ("IFRS"). It is anticipated that the Group's pre-tax profit for the first half of 2005will be not less than £120 million. The impact of strong trading is illustrated by the improvement in syndicateforecasts for 2003 and 2004 underwriting years which are detailed below, and thelow level of loss incidence in the first six months. Good investment returns have been generated through our equity portfolio whichdelivered a 10.3% return for the period and improved returns on cash (2.5%) andbond portfolios (Sterling: 3.4%; US dollar: 1.2%) compared to last year. Thisimproved return is on larger average cash balances resulting from increasedownership of Syndicate 2001 and strong trading cash flows. The profile of Amlin's business is such that, in normal circumstances, a higherproportion of underwriting profits are earned in the first half than in thesecond half of the year. This, combined with exceptionally good claimsdevelopment in the first six months and uncertainty over future investmentreturns and the extent of future hurricane activity and other major loss eventsin 2005, means that Amlin is unlikely to repeat the first half performance inthe second half of 2005. Amlin will announce its interim results for the period ended 30 June 2005 on 5September 2005. Syndicate 2001 Syndicate 2001's premium income (net of brokerage) to the end of June 2005 was£572 million (at rates of $1.79:£1), compared with £586 million for the previousyear. This represents 71% of the Syndicate's planned income for the year. The average renewal rate reduction for the first half was 4% with renewalretention at 83%. Premium income flow has been strong in the non marineaccount, particularly on the catastrophe reinsurance account, where good rateincreases were achieved on our Florida and Caribbean exposures. Claims incidence has been relatively light with the European storm Erwin inJanuary being the largest loss event in the first half of 2005. Also, in commonwith prior periods, Amlin's prudent approach to reserving has resulted inreserve releases. These are above average owing to a better development of prioryears than would normally be expected. Syndicate forecasts The updated forecasts for the 2003 and 2004 years of account for Syndicate 2001,which are expressed as a percentage of capacity after standard personalexpenses, are as follows: Year of Capacity Amlin share Current forecasts Previous forecasts account £m % 2003 1,000 86.2 18.0% to 23.0% 17.0% to 22.0% 2004 1,000 100.0 8.0% to 13.0% 7.0% to 12.0% Amlin expects that these results will continue to improve if the Syndicatecontinues to experience normal or better than normal claims development. Charles Philipps, Chief Executive of Amlin, added: "The first half performancehas been extremely strong across all parts of the Group. While much of thewindstorm season remains, which may affect our second half performance, we lookforward to a strong set of full year results." Enquiries: Charles Philipps, Amlin plc 0207 746 1000Richard Hextall, Amlin plc 0207 746 1000Peter Rigby, Haggie Financial Limited 0207 417 8989/07803 851 426 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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