SHARES in insurer Amlin tanked more than 16 per cent yesterday after the firm issued a shock mid-afternoon profit warning.
The biggest listed Lloyd’s insurer warned investors that its pre-tax profits will be around £65m short of forecasts when it reports half-year figures on 22 August, following a review of the state of its reserves with its bankers.
Analysts had expected losses of around £115m for the first six months of the year, owing to large catastrophe losses. Amlin said in May it had reserved £260m against losses from the New Zealand and Japan earthquakes.
Amlin said it recently received a big increase in claims from a single client linked to the Christchurch earthquake, sending its total catastrophe claims for the half-year up to £314m.
The company also blamed a glut of property and marine claims during June, which have swallowed a “particularly disappointing” £28m of forecasted profits in its struggling Amlin Corporate Insurance business.
The firm added that its Bermuda branch has contributed reserves of £27m to help meet the profit shortfall.
Chief executive Charles Philipps said: “The first half of 2011 has seen an unprecedented level of catastrophes that have affected the non-life insurance sector as a whole. Despite this, we are disappointed by these further developments.”
Amlin shares, which also crashed in June after a previous catastrophe costs update, traded flat until 3.30pm, before tumbling 16.3 per cent to close at 335p.