Last year proved a difficult one for the insurance industry, which suffered heavy losses after a string of natural disasters. This year has, conversely, proved relatively benign so far, which meant a return to profit for Lloyd's insurer Amlin.
Its combined ratio of claims to premiums fell from a loss-making 122 per cent a year ago to a healthy 84 per cent, helped by a lack of catastrophe-related losses and average renewal rate increases of 4.2 per cent across the business. That included a 16.2 per cent increase on its international catastrophe reinsurance account, with marked increases in heavily loss-affected areas such as Australasia and Japan.
However, it was a much improved performance in its long-struggling European business that explained the better-than-expected figures. With no claims above €5m (£3.9m) in the period, its combined ratio fell from 118 per cent a year ago to 98 per cent, which meant it made a £3.9m contribution having lost £41m in the first half of last year.
A 4 per cent annualised return on Amlin's investment book was also a significant improvement from the 0.9 per cent reported at the year-end, but analysts aren't convinced this can be sustained across the full year.
Broker Numis expects full-year EPS of 48.7p (from loss of 30.3p in 2011).
AMLIN (AML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 391p | MARKET VALUE: | £1.94bn | |
| TOUCH: | 390-391p | 12-MONTH HIGH: | 392p | LOW: 270p |
| DIVIDEND YIELD: | 6.0% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 300p | COMBINED RATIO: | 84% | |
| Half-year to 30 Jun | Gross premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.06 | -192 | 45.3 | 7.2 |
| 2012 | 1.17 | 185 | 82.1 | 7.5 |
| % change | +11 | - | +81 | +4 |
Ex-div: 5 Sep Payment: 4 Oct | ||||
