INSURER Amlin yesterday bought a Dutch underwriting agency as it unveiled a return to profitability following a substantial drop in catastrophe claims.
The FTSE 250 business made a 2012 pre-tax profit of £264m, against last year’s £194m loss. The company also revealed that it paid out just £152m in claims following natural disasters, almost all of which related to last October’s superstorm Sandy.
The $50m (£33m) bolt-on acquisition of Rotterdam-based RaetsMarine is designed to boost Amlin’s shipping business, with the cost paid half in cash and half in new Amlin shares.
Chief executive Charles Philipps yesterday insisted his company was “well positioned to continue to expand into more favourable market conditions”, highlighting pension fund involvement in the catastrophe reinsurance market and Asian expansion as potential growth areas in 2013.
The company’s combined ratio – a measure that compares the amount raised in premiums to the total it paid out – fell to a healthy 89 per cent. Meanwhile investment returns increased 4.1 per cent to £165.3m as the company adopted a riskier strategy.
But Mark Williamson, an analyst at Peel Hunt, said there is “better value elsewhere in the sector”.
“[We] maintain our hold recommendation in the belief that the market will continue to look through the rear view mirror and focus on the group’s historic track record,” he added.