Amlin posts strong results; targets marine

A benign year for catastrophes has helped UK-based Amlin post strong results for 2012, which have been praised by analysts. The re/insurer has also entered into an agreement to acquire a specialist P&I and marine insurer based in Rotterdam in the Netherlands.

Amlin made a £264.2 million pre-tax profit compared with a £141.6 million loss in 2011. The 2012 result included £141.6 million of claims attributable to Hurricane Sandy, a figure that proved manageable for the business compared with the £500.8 million total net catastrophe claims it endured in 2011.

Its return on equity was 17.4 per cent last year compared with a negative 8.6 per cent return in 2011 and its combined ratio was 89 per cent compared with 108 per cent in 2011. Its declared dividend increased by 4.3 per cent to 24 pence per share compared with 23 pence in 2011.

“These were a very solid set results that should please the market and give comfort that Amlin is back on track, with no nasty surprises,” said Joanna Parsons, analyst at Westhouse.

“The ROE of 17% on average shareholder funds supports our view that Amlin remains a quality play. Having paid out capital in past (plus given the 2011 loss), it is no surprise to us that the group is not returning any additional capital today over and above its dividend. However, not beating PTP (pre-tax profit) estimates and no added extra capital repatriation may well mean we see the shares edge back after a good run.”

Meanwhile, Amlin has also announced it intends to acquire RaetsMarine, a managing general agent based in the Netherlands which is ranked in the top three global providers of fixed premium P&I business. Amlin has written the majority of RaetsMarine’s business for the last ten years.

The $50 million deal will be settled in a 50:50 split between cash and new Amlin shares. Up to a further $15 million is payable 24 months after completion depending on RaetsMarine’s hull and cargo claims ratios for the three underwriting years up to and including 2012.

Amlin said the move is part of its strategy to grow its marine business. It believes RaetsMarine is well placed to exploit further growth and dislocation opportunities in the market. It predicts an increase in the number of ship owners moving away from traditional sources of cover to seek fixed premium programmes, a trend accelerated by Solvency II.

“Amlin has ambitious growth plans for our global marine business and this acquisition represents a key part of our coherent international marine strategy,” said Simon Beale, chief underwriting officer for Amlin. “RaetsMarine is an established and well run business and we look forward to building on the opportunities it presents.”