Date: Thursday 17 May 2012
Amlin, the insurance and reinsurance company, said that the trading environment since the start of the year has been 'considerably more encouraging', and that catastrophe loss activity has also been limited in the first quarter of the year.
The trading environment for Amlin UK continued to improve in the first four months with an average renewal rate increase of 5.0%.
The firm said strong rate improvements had been evident in key classes underwritten by the group in the year-to-date, and that more than 70% of its portfolio has achieved rate increases in the period to April 30th.
Within insurance markets, the firm continued to see improvement in its UK commercial business, particularly for UK motor, where increases to fleet motor rates averaged 9.4%. Rate increases for US commercial property have also continued to improve, building on the modest increases experienced at January 1st, while the US liability business has begun to show signs of improvement.
However, volatility remains in the investment markets and the company continues to hold a cautious position.
The group's investment return for the four month period is estimated to be 2.0%, with average funds under management of £4.2bn. During this period bonds returned 1.9%, cash and cash equivalents 0.2%, absolute return funds 2.5%, equities 8.7% and property 2.1%.
In a statement the company said: "Amlin is in a strong financial position and is well capitalised to support growth as conditions continue to improve and opportunities present themselves.
"The underlying profitability of our London and Bermuda businesses is strong, profitability is improving in our UK business and there are signs that the action taken at ACI is having a positive effect. Profit focused underwriting remains at the core of our strategy which, in a challenging investment environment, should allow the business to prosper,
"Margins across our catastrophe reinsurance business are strong and our US and international books are trading at near peak levels."
During the four-month period, US catastrophe reinsurance renewal rates improved by an average of 13.7%, while renewal rates for its international business increased by an average of 16.7%. Rate increases have been more marked in loss affected territories, such as New Zealand and Japan.
Catastrophe reinsurance gross written premium amounted to £307.3m, a 20.3% increase relative to the same period in 2011.
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