Amlin in £75m share buyback despite hit from catastrophes

COMMERCIAL insurer Amlin saw earthquake losses cut its 2010 profit by almost half but cheered the market with a dividend hike and £75m share buyback yesterday.

The Lloyd’s (re)insurer took more than £220m in catastrophe losses including £203.6m from earthquakes in New Zealand and Chile last year, pushing pre-tax profit to £259.2m from £509.1m in 2009.

Chief executive Charles Philipps told City A.M. the losses were “significant” but part of its business.

“We are a major catastrophe reinsurer. What this shows is how strong the underlying profitability of Amlin’s core business in London and Bermuda is,” he said. “We are pretty confident we will turn through the softer part of the cycle successfully.”

Amlin’s London and Bermuda divisions turned £125.6m and £72.5m underwriting profits respectively, but its Netherlands-based corporate insurance arm ACI, acquired in 2009, saw a £19.6m underwriting loss as it dealt with an underperforming book.

Return on equity slipped to 13.9 per cent from 37 per cent in 2009.

Amlin, which writes commercial lines such as marine and fleet motor raised its dividend 15 per cent to 23p.

Analysts said the results beat forecasts and were strong given the difficult market.