Amlin UK drives down group’s 2014 profits

Amlin has posted a solid set of results for 2014, despite disappointing results in its UK property and casualty business.

Its profit before tax fell to £258.7 million in the year ended December 31, 2014, compared with £325.7 million in 2013. Amlin said this was driven by a combination of reduced reserve releases after high levels in 2013, and a fall in investment return reflecting weak economic growth in the world economy and low interest rates.

Amlin’s gross written premiums increased to £2.6 billion in 2014, compared with £2.5 billion in 2013 and its combined ratio deteriorated to 89 percent in 2014, compared with 86 percent in 2013.

The re/insurer said that its financial results benefitted from a low level of major catastrophes but were impacted by a higher frequency of smaller catastrophes and large risk losses, particularly in the aviation sector.

Amlin added that performance in its UK property and casualty business was disappointing and management are actively taking steps to address particular lines where pricing has proved inadequate.

Amlin UK’s combined ratio hit 105 percent for 2014, compared with 100 percent in 2013, while the claims ratio increased to 70 percent compared with 62 percent in 2013, driven by claims from winter floods of £10 million and a higher than normal frequency of large losses on the commercial motor account.

Prior year reserve releases were also lower, in part resulting from a material increase in cedants’ estimates of claims from the 2010/11 New Zealand earthquakes.

Amlin also unveiled its plans to begin operating in Dubai in the first half of 2015, while reinforcing its position in Asia by participating in the Lloyd’s platform in Shanghai from the first quarter of 2015.

The re/insurer has also declared a special dividend of £75 million on 15 pence per share.

Charles Philipps, chief executive, said: “This is a solid result in a more competitive trading environment. We have delivered an attractive return on equity and our confidence in the business has allowed us to increase our ordinary dividend as well as declare a special dividend of £75 million whilst retaining a strong capital position.

“The strength of our franchise, underwriting expertise and ability to adapt are powerful advantages as the market evolves. Amlin is well positioned to take advantage of the opportunities created by the pace of change in our markets, and has an excellent track record of cross-cycle underwriting discipline. We continue to believe that we can deliver attractive returns on equity.”