INSURER Amlin yesterday announced a fall in first-half profits after floods in central Europe required it make hefty payouts for catastrophe claims.
The second biggest Lloyd’s of London insurer declared pre-tax profits of £161.4m for first the first six months of 2013, down 17 per cent on the same period last year.
This was mainly due to the company taking a hit of £32.2m on large payouts for natural disasters, prompted by heavy rain during May and June across Germany, Hungary and Austria.
“These are a solid set of results which demonstrate a good level of underlying underwriting profitability,” said Amlin chief executive Charles Philipps.
Despite this, the company warned that it is experiencing “more intense competition with renewal rates” for its US catastrophe business, in part due to the flood of money into catastrophe bonds from non-traditional sources of money such as pension funds.
Such bonds, which provide an alternative to traditional reinsurance, have helped push down Amlin’s US catastrophe renewal rates down by 14.9 per cent for June and the firm says the weakness is set to continue into the new year.
“Amlin may not have the same exposure to US casualty as some of its peers but its book is more diversified and insurance focused than often is recognised,” said Joanna Parsons, an analyst at Westhouse.