"Unprecedented" cat losses push Amlin to £152m loss

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Lloyd’s insurer Amlin made a loss after tax of £151.5m in the first half of 2011, compared with a profit of £84.5m in the same period last year.

The company’s loss before tax was even higher at £192.3m, which was reduced by a £40.8m tax credit.

The company attributed the loss largely to “unprecedented first-half catastrophe loss activity”, as well as higher-than-expected claims in its Amlin Corporate Insurance (ACI) division and lower reserve releases.

Amlin issued a profit warning on 2 August, stating that it was unlikely to meet its full-year 2011 profit targets, and that its first-half results would be £65m below pre-tax expectations and £53m below what it thought it would make on an after-tax basis.

"Exceptional catastrophe losses in the first half of 2011 have taken a heavy toll on the reinsurance industry, and Amlin has been no exception,” said Amlin chief executive Charles Phillips in a statement.

However, he added: “While our results are disappointing, the core underwriting businesses in London and Bermuda are well placed to take advantage of an improving rating environment, particularly in catastrophe lines.”

Amlin’s first-half 2011ccombined ratio came in at 121% (H1 2010: 88%) on the back of an underwriting loss of £194.3m (H1 2010: profit of £100.1m).

Total catastrophe claims were £314.3m, which added 34 percentage points to Amln’s loss ratio.

Reserve releases almost halved, dropping to £36.8m (H1 2010: £70m). Releases were lower for Amlin London, Amlin UK and ACI, with Amlin UK strengthening prior period reserves by £3.2 million to reflect inflated winter freeze claims and slower development within the fleet and private car accounts.

Across its book of business, Amlin put through price increases at renewals of 0.3%, with rate increases in some lines offset by reductions in Amlin London’s reinsurance and property/casualty insurance lines, Amlin Bermuda and ACI.