22 May 2014 Insurance

Amlin enjoys growth despite softening rates

Re/insurer Amlin enjoyed solid growth in the first quarter of 2014 despite reducing rates on most lines of business and property-catastrophe lines in particular.

The company’s gross written premiums for the quarter were £1.27 billion, a 5.1 percent increase on the same period the year before. Changes to its outwards reinsurance programme meant that its net written premiums enjoyed a bigger 11.9 percent increase and rising to £1.04 billion in the quarter.

The average rate at which business renewed was 2.3 percent lower; this compares with a 1.2 percent increase in the first quarter of 2013. The slight softening of rates was most pronounced in catastrophe reinsurance in which Amlin said rates declined by 8.8 percent in its own portfolio. It noted, however, that this was lower than reductions in the market as a whole.

“There is clear evidence of increasing competition in a number of business lines, most notably catastrophe reinsurance. However, good margins remain possible and, in this more challenging environment, Amlin achieved growth in catastrophe reinsurance gross written premium of 3.7 percent in the three month period, while recording an average renewal rate decline of 8.8 percent. US catastrophe renewal rates reduced by an average of 10.3 percent, while international catastrophe renewals experienced average rate decreases of 7.3 percent,” the company said.

“These rate reductions are believed to be lower than the catastrophe reinsurance market as a whole and is a result of the combination of Amlin's highly respected traditional reinsurance offering with that of Leadenhall Capital Partners which has strengthened Amlin's client proposition: the result has been preferential signings, access to business which is not available in the open market and, on some business, better pricing.”

It said other reinsurance lines have not come under the same pressure as catastrophe reinsurance and Amlin Re Europe continued to develop positively, adding £30.3 million of new income in the period with an average renewal rate decrease of only 1 percent. Its first quarter result was promising, with growth in earned premium reducing the expense ratio.

Amlin London added £18.1 million of well rated US property and casualty business in the period.  Renewal rates, having increased by 1.2 percent in the first quarter of 2013, recorded an average decrease of 1.6 percent in the period. Marine and aviation, renewal rates also decreased by an average of 1.6 percent.

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