Broker snap: Peel Hunt remains optimistic about Amlin

Date: Tuesday 07 Feb 2012

Peel Hunt has maintained its buy rating for insurance and reinsurance company Amlin, saying that losses are in line with expectations and there are signs of some improved pricing in certain segments.

Amlin currently has a written total income year-to-date of £746.4m, net of brokerage, a 19.2% increase on the prior year, while overall renewal rates for the group have increased by 4.0% (January 2011: decreased by 1.3%). The scale of insured damage arising from the flooding in Thailand remains uncertain, with current insured loss estimates ranging between $8bn and $20bn.

"Amlin has one of the larger exposures to catastrophe business in the sector and looks set to benefit in 2012 on the back of losses in 2011," said Peel Hunt analyst Sarah Lewandowski.

"The Thailand loss estimate is within expectations, not as bad as some feared, and we have further clarity on Amlin capitalising on segments of improved pricing," she said,

The broker maintains its fair value target price of 434p, which it says gives 29% potential upside for Amlin.

Shares were trading 5.96% higher at 357.5p in afternoon trade.

BC

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