Amlin's performance so far this year looks pretty creditable given that large insurance losses in recent months, notably the Chilean earthquake and the BP oil spill disaster, have darkened the skies over the insurance industry.
The insurer's combined ratio (of claims to premiums) deteriorated from a market-leading 73 per cent at this stage last year to 88 per cent as underwriting profits declined from £135m to £100m. Amlin puts its exposure to Chile at $168m (£108m) and the Deepwater Horizon oil rig loss at $15m. And this is a challenging time in the insurance cycle, with no sign of the recent softening of rates being reversed especially in view of the levels of capacity available in the market at present.
The strong growth in premium income in the six-month period largely reflects the ACI acquisition, but Amlin also been targeting areas where ratings remains buoyant such as UK property and motor; and since the Deepwater Horizon accident, rates have strengthened in the marine sector. But
Even so, brokers have cut their full-year pre-tax forecasts back from £325m to just over £300m, although this should still translate into a 20 per cent hike in net tangible assets (NTA) to 331p a share.
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AMLIN (AML) | ||||
---|---|---|---|---|
ORD PRICE: | 408p | MARKET VALUE: | £2bn | |
TOUCH: | 407-408p | 12-MONTH HIGH: | 438p | LOW: 351p |
DIVIDEND YIELD: | 5.1% | PE RATIO: | 5 | |
NET ASSET VALUE: | 331p | COMBINED RATIO: | 88% |
Half-year to 30 Jun | Net premiums written (£m) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
---|---|---|---|---|
2009 | 510 | 177 | 53.1 | 6.5 |
2010 | 863 | 108 | 78.7 | 7.2 |
% change | +69 | -39 | +48 | +11 |
Ex-div: 8 Sep Payment: 7 Oct |