Amlin Issues AGM Statement

Leading Lloyd’s insurer Amlin plc announced that it will provide an update to its Syndicate 2001’s forecasts for the 2003 and 2004 years of account and will comment on current trading at its Annual General Meeting (AGL) to be held today, May 18, 2005.

“Our underwriting activity in 2005 is developing broadly in line with our expectations,” said the announcement. “Syndicate 2001’s premium income (net of brokerage) to the end of April 2005 was £415 million [$760 million at current exchange rates – at rates of $1.89 to the pound = $ 785 million], compared to £459 million [$840 million] for the previous year. This represents 52 percent of the Syndicate’s planned income for the year. The reduction in premium income is consistent with the 15 percent reduction in capacity for the syndicate in 2005.”

Amlin said the “average renewal rate reduction for the first quarter was 3 percent with renewal retention at 86 percent. The most recent 1 April renewals for Japanese treaty exposures resulted in modest rate increases, as expected following the scale of windstorm losses in Japan during 2004. We expect that rate increases will also be achieved on our Florida and Caribbean exposures which renew over the next couple of months.”

The bulletin also noted that the “reduction in premium income is predominantly in the non-marine account and reflects a disciplined, profit focussed approach to underwriting as rates come under pressure. New business levels are reducing as our underwriters seek to avoid more intensive areas of competition.”

It also observed that the “most significant catastrophe loss affecting the insurance industry in the 2005 calendar year to date is Windstorm Erwin which struck Northern Europe in January. Amlin’s gross loss from this event is currently estimated to be £11 million [$20.1 million].”

Amlin also increased its profit forecasts for the 2003 and 2004 years of account in each of which it’s capacity was £1 billion ($1.83 billion at current exchange rates). The company expects a return on that capacity for 2003 of between 17 and 22 percent and between 7 and 12 percent for 2004. Both are slightly higher than it had previously estimated.

Amlin noted that “claims development for both years of account has been good. A considerable amount of exposure remains on risk for the 2004 year of account, particularly for our aviation account, but Amlin expects the forecasts to continue to improve if a normal level of loss development is experienced.”

Chairman Roger Taylor commented: “Trading conditions remain positive with some discipline evident in our markets. We are pleased with the continuing good development of the 2003 and 2004 years of account which underpins the outlook for this year.”