Catastrophes cut Amlin profits by 51%

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Chairman hopeful of UK commercial rate rises after winter freeze

Lloyd’s insurer Amlin made a profit after tax of £221.9m in 2010, down 51% on the £454.8m profit it made in 2009.

The company’s combined ratio increased to 88% from 72%, and return on equity slumped to 13.9% in 2010 from 37% in 2009.

Amlin attributed the decline in profits mainly to £203.6m of losses from the Chile and New Zealand earthquakes. The company was also hit by the storms in Europe, flooding in Australia and the Deepwater Horizon oil spillage.

Though profits fell, Amlin reported a 41% increase in gross written premiums to £2.2bn from £1.5bn.

While most of Amlin’s divisions were profitable, the Amlin Corporate Insurance unit, acquired in July 2009, made an underwriting loss of £19.6m in 2010, compared with a profit of £11.2m in 2009.

“ACI was the subject of concentrated attention in every aspect of its activities and, while the 2010 performance was disappointing, we remain confident that it is on course to meet our performance targets,” said Amlin chairman Roger Taylor in a statement.

Taylor noted that competition had increased in most markets, despite the major losses seen in 2010. However he said conditions improved in some areas, most notably the UK fleet motor business.

“Following the severe winter weather and consequent claims impact on major UK insurers, a more widespread upturn in the UK commercial market may be drawing closer,” added Taylor. “Amlin UK is extremely well positioned to take advantage of this upturn when it arises.”

Amlin 2010 highlights in £m (compared with 2009)