Lloyd's insurer Amlin (AML) remains upbeat on the outlook for the second half, despite a relatively lacklustre first-half performance that saw premium rates coming under continued pressure. Average rates fell by 3.3 per cent, but US catastrophe renewal rates fell by 11.3 per cent, with international catastrophe renewals down by 8.9 per cent.
However, Amlin Re Europe saw gross written premiums jump by over 26 per cent to £218m, although a spate of weather-related claims meant that the combined ratio (of claims to income) deteriorated from 102 per cent to 108 per cent. This is expected to improve though, as more income is earned in the second half. In fact, non-catastrophe reinsurance has been steadily growing over the years, and now accounts for 55 per cent of the reinsurance portfolio. This is important because non-catastrophe rates have not come under the same downward pressures seen in catastrophe reinsurance.
Profits were also hit by a net £10.9m foreign exchange loss, primarily dollar weakness. And while the investment return on the group's £4.4bn of assets was relatively impressive at 1.3 per cent, this was down from a year earlier and the investment return slipped from £64.7m to £51.7m.
Analysts at Oriel Securities are forecasting year-end adjusted EPS of 42.2p and net tangible assets per share of 305.3p (from 59.1p and 288.9p in 2013).
| AMLIN (AML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 445p | MARKET VALUE: | £2.23bn | |
| TOUCH: | 444-445p | 12-MONTH HIGH: | 491p | LOW: 373p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 334p | COMBINED RATIO: | 87% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 1.23 | 161 | 64.7 | 7.8 |
| 2014 | 1.24 | 149 | 51.7 | 8.1 |
| % change | +1 | -8 | -20 | +4 |
Ex-div: 3 Sep Payment: 2 Oct Capacity owned 100% | ||||
