Amlin swings back to £169m profit in H1 2012

Amlin swung back to profit during the first half of 2012 on the back of improved underwriting conditions and limited catastrophes.

The Lloyd’s insurer posted net income of £169m for the six months to 30 June compared to a net loss of £151.5m for the same period in 2011. Amlin suffered its biggest losses since 2001 last year.

Underwriting contributed a £153.8m pre-tax profit, of which £58.4m and £97.1m was generated by Amlin London and Amlin Bermuda respectively.

More than 80% of Amlin’s portfolio achieved rate increases, with an average rise of 4.2% and a renewal retention rate of 86% for the period versus 0.3% and 83% last year. Catastrophe reinsurance was the strongest area of rate growth.

The group also incurred no major catastrophe losses, while reinsurance rates increased significantly at the start of the year and slowed by the end of H1 2012.

The insurer continued to see an improvement in its UK commercial business, particularly in commercial motor – a trend it expects to continue for the next year.

Gross written premium climbed 19.8% to £1.8bn in H1 2012 (H1 2011: £1.5bn).

Amlin London reported GWP of £782.4m in the first half of 2012 (H1 2011: £679.2m), Amlin UK £227m (H1 2011: 167.4m) and Amlin Bermuda £256m (H1 2011: £249.7m).

The group combined ratio dropped below 100% to 84% for the first half of the year (H1 2011: 122%).

Reserve releases totalled £53m for H1 2012 (H1 2011: £36.8m), mainly from Amlin London and Amlin European Insurance, largely due to favourable claims development.

Amlin chief executive Charles Philipps said: “This is a welcome return to profit and the strength of our underwriting result underlines the quality and diversity of our business. The improving trading environment is creating many opportunities for profitable growth, for which we have both the capital and the underwriting capability to take advantage.”

The board declared an interim dividend of 7.5 pence per share for H1 2012 (H1 2011: 7.2p per share), up 4.2%. It will be paid on 4 October 2012 to shareholders registered by the close of business on 7 September 2012.