Lloyd's insurers perform best

The three biggest LLyd’s players Amlin, Hiscox and Catlin Group are among the 10 best-performing large British companies this year, boosted by forecasts of higher premiums in 2009 and gains at the expense of AIG, Bloomberg claims.

In an anlysiss the agency says the insurers have risen more than 14% this year, while banks have plummeted and the FTSE 100 index of leading British businesses has fallen about 34%. Jardine Lloyd Thompson, which trades at Lloyd’s, is up 35%.

Highlights of the Bloomberg report include:

Amlin and Hiscox are increasing their underwriting capacity to benefit from rising insurance premiums

• The structure of the Lloyd’s market allows insurers to share a common capital pool that spreads risk among several smaller companies rather than use one big one like AIG.
• Amlin, Hiscox and Catlin write much of their business in dollars and their earnings will gain from the currency’s surge against the pound this year.
• Amlin, up 20% in London trading this year, became the first independent Lloyd’s insurer to break into the FTSE 100 index on 22 December, and the company raised £50m of private capital to help it write more reinsurance next year.
• Reinsurance, which made up about one-third of premiums written at Lloyd’s last year, is well positioned to benefit from an increase in demand
• Hiscox, which has gained 18% this year, will increase 2009 underwriting capacity at its global markets syndicate by 7% to £750m pounds.
• Catlin is up 14% in 2008, while the FTSE ASX Nonlife Insurance Index has risen 3%.
• Amlin, which wrote 40% of its premiums in the US last year, and Bermuda-based Hiscox and Catlin will benefit from the pound’s 25% drop against the dollar this year.