Amlin (AML) was hit with £32.2m of catastrophe claims mainly as a result of heavy flooding in mainland Europe and, while these losses were relatively modest, the previous first-half recorded no losses at all. Even so, higher premium rates helped to lift underwriting profits 3 per cent to £158m, while the combined ratio (of claims to premium income) only deteriorated by one percetange point to a still highly profitable 85 per cent.
However, while investment returns delivered a creditable annualised return of 2.8 per cent, this was down on the previous year, which meant that investment income slipped from £82.1m to £64.7m and largely explains the profit shortfall in the reported numbers in our table.
In the six-month period, net earned premiums grew by 7.2 per cent to £1.06bn, thanks to a favourable change in the business mix and by maintaining disciplined underwriting criteria. Of the two largest group operations, Amlin London increased gross written premiums by 3.7 per cent to £811m, while growth in higher-margin business and catastrophe losses of just £8m helped to improve the combined ratio from 83 per cent to 76 per cent. Amlin Bermuda suffered a 2.8 per cent fall in average rates, but overall written premiums increased, thanks to growth in direct business and the addition of new reinsurance business.
Analysts at Peel Hunt are forecasting 10 per cent growth in full-year adjusted EPS to 51.5p and year-end net tangible assets of 284p, up from 46.5p and 258p, respectively, in 2012.
| AMLIN (AML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 392p | MARKET VALUE: | £1.96bn | |
| TOUCH: | 391-392p | 12-MONTH HIGH: | 445p | LOW: 361p |
| DIVIDEND YIELD: | 6.2% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 330p | COMBINED RATIO: | 85% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.17 | 184 | 82.1 | 7.50 |
| 2013 | 1.23 | 161 | 64.7 | 7.80 |
| % change | +5 | -12 | -21 | +4 |
Ex-div: 4 Sep Payment: 3 Oct Capacity owned: 100 per cent | ||||
