Amlin plc Trading Statement
21 November 2005
- Continued improvement in syndicate
forecasts
- Full year outlook remains good
Amlin plc ("Amlin") today releases a trading update, including an
improved
forecast for Syndicate 2001 for the 2003 year of account and an
initial loss
estimate for Hurricane Wilma.
Syndicate 2001
Syndicate 2001's premium income (net of brokerage) to the end of
October 2005
was £715 million (at rates of $1.77:£1 and excluding
reinstatement premiums of
approximately £22 million from hurricane events). This
represents 88% of the
Syndicate's planned income for the year and is in line with
expectations.
The average renewal rate reduction of 4% to date reflects market
conditions
prior to this season's hurricane losses. Recent price
movements show a reversal
of recent rating trends in many classes with increases in rates for
property
insurance and reinsurance, energy and marine classes in
general. For syndicate
2001 the level of income renewed at this time of the year is low
and it is
expected that rate movements will accelerate for the January
renewals.
Syndicate forecasts
The updated forecasts for the 2003 and 2004 years of account for
Syndicate 2001,
which are expressed as a percentage of capacity after standard
personal
expenses, are as follows:
| Year of account |
Capacity £m |
Amlin share % |
Current forecasts |
Previous forecasts |
| 2003 | 1,000 | 86.2 | 21.0% to 26.0% | 18.0% to 23.0% |
| 2004 | 1,000 | 100.0 | 8.0% to 13.0% | 8.0% to 13.0% |
The improvement in the 2003 forecast reflects excellent development for the 2003
year of account and releases of reserves from prior periods.
The 2004 year of account forecast has remained stable despite absorbing a net
claim estimate of approximately £19 million for the 2005 hurricane losses with
the underlying improvement reflecting better than forecast development across
all divisions of the Syndicate. Amlin expects that the 2004 forecast will
continue to improve if the Syndicate experiences normal or better than normal
claims development.
Hurricane loss estimates
The loss estimates for Hurricanes Katrina and Rita combined remain materially
unchanged from those included with the rights issue prospectus. The provisional
net loss from Hurricane Wilma is estimated to be US$52 million.
Amlin plc
The better than expected underwriting climate in 2005 to date and the continued
improvement in prior period reserves are significant offsetting factors to the
hurricane losses for Amlin. Consequently the Group continues to expect a good
full year performance.
With the increase in Syndicate 2001 capacity to £1 billion for 2006 and the
formation of Amlin Bermuda, Amlin is positioned well to increase its activities
into what is expected to be a good underwriting climate.
Charles Philipps, Chief Executive of Amlin, added: "The diversity of Syndicate
2001's business, with many classes unaffected by claims emanating from the
windstorm season, coupled with the skill of our underwriting team, again
demonstrates the strength of the Amlin franchise. Despite the hurricane losses
of this year we continue to expect a good financial performance for the business
in 2005."
