Amlin First-Half Profit Drops on Higher Catastrophe LossTom Beardsworth
Amlin Plc, the second-biggest Lloyd’s of London insurer by market value, posted an eight percent drop in first-half pretax profit on losses from foreign exchange and natural catastrophes.
Profit declined to 148.5 million pounds ($248 million) from 161.4 million pounds a year earlier, the London-based insurer said in a statement today. Profit from underwriting fell 11 percent to 141.6 million pounds, it said.
Losses on large catastrophe, impacted by European hailstorms and a tornado in Nebraska in June, widened to 48.9 million pounds in the first half from 32.2 million pounds in the same period last year. The company said profit also fell after “an adverse foreign exchange swing” of 24.6 million pounds.
Amlin decreased 0.9 percent to 443.3 pence at 9:02 a.m. in London trading, extending losses this year to 3.4 percent and valuing the company at 2.2 billion pounds.
The combined ratio rose to 87 percent from 85 percent, indicating that the company paid out more in claims and costs relative to premiums than a year earlier. The combined ratio of Amlin U.K. rose to 102 percent in the half with roughly 10 million pounds of claims following flooding in the U.K. in January.
“We’ll see improving profitability this year and most likely the next,” Chief Executive Officer Charles Philipps told journalists in a conference call. “We remain focused on the 15 percent return-on-equity target.”
Gross written premiums increased to 1.89 billion pounds from 1.84 billion pounds a year earlier.
Amlin recorded an investment return of 1.3 percent on average funds under management of 4.4 billion pounds, down from the 1.4 percent on funds of 4.5 billion pounds in the year-earlier period.
The company said it increased its interim dividend 3.9 percent to 8.1 pence a share.