Amlin reports record 2003 syndicate profit
2 March 2006
Amlin plc ("Amlin") today released Syndicate 2001's
final result for the 2003
year of account, an updated forecast for the 2004 year of account
and a forecast
for the 2005 year of account. Amlin also indicated that its
result for the year
ended 31 December 2005 will be materially ahead of market
expectations.
The result and forecasts in the table below are after all personal
expenses and
are expressed as a percentage of capacity.
| Year of Account |
Capacity £m |
% Owned |
Profit/current forecast |
Previous forecast |
| 2003 | 1,000.0 | 86.2 | 25.4% | 21% to 26% |
| 2004 | 1,000.0 | 100.0 | 9.0% to 14.0% | 8% to 13% |
| 2005 | 850.0 | 100.0 | 1.5% to 6.5% | N/a |
The 25.4% 2003 result is a record result for the syndicate beating the 2002 year
of account result of a 21.7% return. It reflects strong trading conditions for
the year and a low level of loss incidence across most classes of the business
with all divisions producing excellent returns for the year.
The improvement in the 2004 forecast reflects continued good claims development.
The combined impact of the 2004 and 2005 windstorm losses for this year of
account are reserved at £93.3 million, net of reinsurance, or 9.3% of capacity.
The 2005 year of account is at an early stage of development and a cautious
approach has been adopted in setting the forecast. The 2005 windstorm losses
are reserved at £121.3 million, net of reinsurance, or 14.3% of capacity. This
forecast illustrates that underlying trading conditions remained good in 2005.
Future reporting
Following a change in Lloyd's byelaws the principal syndicate accounts for the
year ended 31 December 2005 will be produced on an annual accounting basis,
rather than the year of account format that has been required in the past. With
the closure of the 2003 year of account Amlin no longer has third party capital
participation on Syndicate 2001 and will not be required to produce underwriting
accounts for distribution.
Equally, with the commencement of trading through Amlin Bermuda and the
associated intra group transactions, including a quota share reinsurance of
Syndicate 2001, the Company believes that it will not be relevant to continue to
produce year of account forecasts for Syndicate 2001. A quarterly trading
statement will replace the usual quarterly syndicate forecasts and this will
report the UK and Bermudian operations on a consistent basis.
Amlin plc
With the strength of the fourth quarter performance, Amlin expects that the 2005
consolidated result for Amlin plc will be significantly better than market
expectations. This is due to a combination of lower than anticipated claims
development, a strong investment return and exchange gains under IFRS of
approximately £26 million together with a realised gain of £6 million from the
funding of Amlin Bermuda. Additionally the Group's effective tax rate has
reduced as a result of unprovided deferred tax assets being utilised to offset
capital gains on the Group's equity portfolio.
It is anticipated that the Group's pre tax profit for the year ended 31 December
2005 will be not less than £175 million and that the post tax profit will be not
less than £130 million.
Charles Philipps, Chief Executive of Amlin, said: "Yet again, the benefits of
our diversity, approach to risk management and high quality team has resulted in
excellent performance, even after the costs of hurricanes Katrina, Rita and
Wilma."
