But company expects UK unit to benefit from continuing fleet motor rate rises
Amlin UK made a “small” underwriting profit of £1.5m in 2013, down 89.4% from the £14.1m it made in 2012.
The UK combined operating ratio (COR) increased by four percentage points to 99% in 2013 from 95% in 2012, after a “disappointing” claims ratio of 62% (2012: 57%).
However, the Lloyd’s insurer said its UK unit would continue to benefit from rising fleet motor rates, which increased by 9.8% in 2013 (20123: 9.7%).
Speaking on a conference call to journalists this morning, Amlin chief executive Charles Philipps said the main cause of the drop in underwriting profit was the previously announced cut in the amount of income it expects from its binding authorities business.
This reduced gross written premium by £42.2m to £336.3m (2012: £372.6m).
However, Philipps said that excluding the cut in estimated binding authority income, the underlying gross written premium growth was an “encouraging” 12.6%.
He added that the business would continue to benefit from increases in fleet motor rates. Following on from the 2013 increase of 9.8%, Phillips said Fleet motor rates increased by 10.1% in January 2014.
Commenting on UK weather claims, Philipps said that Amlin had suffered “nothing material” from the storms and flooding in 2013.
He added that the company would incur some wind and flood claims from the continuing bad weather in January and February but “nothing to send us off track”.
At group level, Amlin had a good 2013.
Profit before tax increased 23.3% to £325.7m (2012: £264.2m).
The COR improved by three percentage points to 86% (2012: 89%).
Gross written premiums increased by 2.6% to £2.47bn (2012: £2.41bn).
Philipps said: “Our 2013 result is a testament to the strength of our talent and reinforces our capability and potential. With a number of businesses improving their performance, and our actions to drive profitability forward, we are well placed to continue to deliver good returns for shareholders.”