Lloyd’s insurer Amlin (AML) delivered a solid first-half performance, helped by a benign claims environment. Profits were also boosted by a favourable run-off in claims from prior years, which resulted in reserve releases of £48.3m, up from £40.1m in the previous first half.
However, the return on net tangible assets fell from 9.5 per cent to 8.7 per cent amid further downward pressure on renewal rates. On average, these were down by 4 per cent, with reinsurance rates 6.4 per cent lower, as low-cost capital continues to flood the sector. In the absence of any material catastrophe activity, Amlin expects reinsurance rates to remain under pressure. However, the investment return on the £4.4bn of assets held rose from 1.3 per cent to a greater than expected 2.2 per cent, delivering an investment contribution of nearly £96m.
Amlin also continues to diversify its revenue stream, with non-catastrophe business as a proportion of reinsurance gross premiums rising from 52 per cent a year earlier to 65 per cent. The group also has a 75 per cent stake in fund manager Leadenhall Capital Partners, where funds under management grew by 6.7 per cent to $2bn (£1.28bn).
Analysts at Peel Hunt are forecasting adjusted EPS of 44.2p for the full year and net tangible assets of 306.5p at year-end (from 48.4p and 303.9p in 2014).
| AMLIN (AML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 488.1p | MARKET VALUE: | £2.5bn | |
| TOUCH: | 487.5-488.1p | 12-MONTH HIGH: | 528p | LOW: 406p |
| DIVIDEND YIELD*: | 5.6% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 334p | COMBINED RATIO: | 91% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 1.24 | 149 | 51.7 | 8.1 |
| 2015 | 1.16 | 143 | 89.9 | 8.4 |
| % change | -6 | -4 | +74 | +4 |
Ex-div: 3 Sep Payment: 1 Oct Capacity owned 100 per cent *Excludes special dividend of 15p a share in 2014 | ||||
