Fewer natural disasters and a move into more non-catastrophe reinsurance cover helped Lloyd’s of London insurer Amlin’s (AML) pre-tax profits beat first half expectations.
Shares fell 2.6% to 486.9p despite its £143.3 million pre-tax profit eclipsing the £142.7 million expected, as the FTSE 350 was hit by global events.
This volatility is set to hit Amlin’s investment returns in the second half, which came in at 2.2% in the six months to the end of June compared to 1.3% a year earlier.
Management claim that pre-tax profits could have been higher if not for an accounting change to the way some reinsurance contracts are calculated. The FTSE 250 insurer was also hit by rising smaller claims and expenses, sending its combined ratio up to 91% from 87% in 12 months.
The strategy to move away from catastrophe reinsurance to more property, marine, aviation and motor cover has been hailed by management as a factor behind its 6.2% rise in gross written premiums to £2 billion year-on-year. Expanding its operations in Singapore was another catalyst.
In a show of confidence that the accountancy change will not hit its second half figures management hiked the interim dividend 3.7% to 8.4p.