US hurricanes fail to blow insurer Amlin off course

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The Independent Online

Hurricanes Katrina, Wilma and Rita, which hit the southern and eastern coasts of the US between August and October, are estimated to have cost the insurance industry up to $80bn (£46bn).

However, Amlin said that because of disciplined underwriting and sensible reinsurance, it had taken a net loss of only $236.7m from the storms. The group unveiled total pre-tax profits of £182.7m, almost £8m higher than its guidance of £175m which it issued two months ago, and said 2006 had got off to a strong start.

"In a year during which we've had some very strong storm losses, to deliver a record level of pre-tax profits is a tribute to our fantastic underwriting team, and to the diversity of the business," Charles Philipps, Amlin's chief executive, said. "We had 25 classes of business in profit in 2005, and that's more than compensated for the six classes of business which were affected by the storms."

The group raised £215m in a rights issue towards the end of last year, using the proceeds to establish a new Bermuda operation. Mr Philipps said it had established a Bermuda hub to provide more diversity for the business, hinting that he believed more customers would be attracted to the Bermudan market over London in the coming years because of better levels of transparency.

"People expect and want greater transparency," Mr Philipps said. "Bermuda has a focus on costs, and driving out unnecessary costs." He said London needed to up its game, but said Amlin would continue to support the London market, and believed it was improving.

Amlin raised its total 2005 dividend 27.5 per cent on the strong results, and said it believed the outlook for 2006 was good across most lines of business. It said rates had leapt across catastrophe lines and in the marine sector after last year's hurricanes, but were also pushing up in many other sectors.