Amlin smashed analysts' expectations with a first half profit bigger than the sum made for the whole of last year.

The Lloyd's insurer reported profit on ordinary activities before tax of £63.3m for the six months to 30 June compared to £55.4m in the whole of 2002 and £18.2m in the first half of last year.

Lloyd's analysts Numis raised its price target on the group's stock by 20p to 160p, saying the group's results were "significantly better than our expectations".

The shares were up by 1.75% to 145.5p in early trading on Thursday when the results were announced.

Numis analyst Richard Carter said both underwriting and investment had done better than expected.

The combined ratio fell to 83% in the first half, down from 95% in the same period last year.

The claims ratio fell to 52% from 63% and the expense ratio was stable at 32%.

Gross written premium increased to £664.9m, up 44% from £461.1m in the first half of 2002.

Total investment return increased by 22% to £18.3m from £15m in the first half of 2002.

The company said the "vast majority" of its funds was held in cash and bonds.

Chief executive Charles Philipps said the decision to increase the interim dividend to a modest 0.85p from 0.75p reflected restrictions imposed by Lloyd's.

"We don't get the cash released from Lloyd's until the beginning of next year," he said.

But the dividend would be reviewed at the year end, he said.

"At some point we will be awash with cash," he added.

Results box

  • Profit before tax up 248% to £63.3m in six months from £18.2m
  • Gross written premiums up 44% to £664.9m from £461.1m