Insurer Amlin "optimistic" despite fall in profits

Insurance group Amlin has reported it made a first half pre-tax profit of £161.4m, in line with analyst expectations (release).

Despite the fall from £184.4m in the same period the previous year, the combined ratio came in at 85 per cent. Basic earnings per share fell to 28.2p from 34.1p.

Chief executive Charles Philipps said "these are a solid set of results which demonstrate a good level of underlying underwriting profitability".

There are positive trends in a number of our businesses which will counteract downward pressure on catastrophe reinsurance rates and this reinforces the benefit of our diversification strategy. We are optimistic about the out-turn for the full year.

The company’s performance was dragged down by growing competition in the reinsurance market, and the company expects a further reduction in catastrophe rates next year unless there is a significant loss activity in the second half of 2013.

However, renewals US catastrophe rates responded positively to losses from Hurricane Sandy in 2012, with an average rate increase of 4.2 per cent. In addition, the UK commercial book is improving, with an average renewal rate increase of 3.5 per cent in the first half.

The group added liability rates were moving “in the right direction”, and competitor results and statements suggest this trend will continue.

The interim dividend rose to 7.8p per share from 7.5p the year before