Insurer’s UK book shrinks 14% in year to date
Amlin is expecting further improvements in UK commercial insurance rates in 2014 after boosting fleet motor prices by 9% in 2013 to date.
However, the Lloyd’s insurer also reported that its UK business had shrunk by 14% in the first nine months of 2013.
In its nine-month interim management statement this morning Amlin said that it expects reinsurance rates to come under pressure and “reasonably flat” pricing elsewhere.
However it said it is expecting “further rate improvement” in UK commercial, US property and casualty.
Amlin’s UK business enjoyed renewal rate rises of 4.2% in the first nine months of 2013, more than any of Amlin’s other business units.
The company said: “Steady improvement in our UK commercial business, particularly for UK fleet motor, has continued, with increasingly positive signs for other classes.
“Fleet motor rates increased by an average of 9% in the first nine months of 2013. Liability rates are also moving in the right direction, with all classes now achieving increased rates.
“Our expectation is that this trend will continue.”
UK GWP drop
Despite the rate increases, Amlin UK’s gross written premium (GWP) fell 14% to £269.6m in the first nine months of 2013 from £312.6m in the same period last year.
Overall group GWP was flat at £2.2bn.
Amlin said it had adjusted its 2012 premium to account for reduced premium estimates from binding authorities.
The company said: “Notably, Amlin UK has reduced estimates for its property and package accounts by £33.2m. This portfolio has expanded rapidly in recent years, with significant new business, making the income estimation process inherently more difficult.”
As a group, Amlin expects to beat its 15% return on equity target in the full year of 2013 after “excellent” underwriting results in the third quarter of 2013.
Investment returns were 2% of invested assets.
Chief executive Charles Philipps said: “Amlin has had a good third quarter and we expect to deliver an above-target return on equity in 2013.
“Our core businesses are performing well in demanding market conditions, Amlin is well positioned to take advantage of the opportunities created by changes in the reinsurance market and the improving returns on our investments in Amlin Europe, Amlin Re Europe and Leadenhall Capital will increase the benefit of the diversity they bring to the group.”