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[spob] 31/8/2007 07:26

Cracking results

[spob] 31/8/2007 07:26

Amlin H1 profit up 54 pct UPDATE
(Adds CEO comment, analyst reaction)

LONDON (Thomson Financial) - Amlin shares rose almost 4 pct after the UK insurer and reinsurer delivered a better-than-expected 54 pct increase in first-half profit, helped by reduced claims expenses and stronger investment returns.

Amlin said pretax profit for the six months to June 30 came in at 185 mln stg, up from 120.1 mln stg in the same period last year, and ahead of a 146.6 mln stg consensus analyst forecast supplied by the company.

The improvement was driven largely by stronger returns from Amlin's investment portfolio, which rose 73 pct on the year to 65.3 mln stg.

The company also benefited from lower claims expenses, which fell 12.5 pct to 237.4 mln stg as reinsurance contracts limited the impact of Windstorm Kyrill in January, and the floods that struck parts of the UK in June.

Amlin said its outlook for 2007 as a whole was 'positive,' estimating that any losses from Hurricane Dean and floods that hit the UK in July will be 'modest'.

By 10.15 am, Amlin shares were up 3.8 pct at 298 pence, while the FTSE 250 index was up 1.2 pct at 11,024.2 points.

Evolution Securities analyst Charles Graham described Amlin's results as 'very strong', but said he was keeping his full-year forecasts unchanged as weaker stock markets were likely to weigh on the group's investment performance in the second half.

'Investment returns in H2 may be weaker given both recent equity market performance and the group's exposure to asset-backed securities,' Graham wrote in a note to clients.

Amlin chief executive Charles Philipps said that while insurance prices are set to weaken in the marine and Bermudan markets due to increased competition, the impact should be partly offset by a cyclical increase in prices in the UK commercial insurance market.

'We do recognise that things will get tougher, but the hope is that by the end of 2008 the UK commercial sector will be in an upturn,' he told Thomson Financial News in a telephone interview.

Commercial insurance prices in the UK could receive an initial boost as insurers seek to recoup claims resulting from this year's summer floods, Philipps added.

Amlin also said that its investment division's exposure to the US sub-prime mortgage market is 'small'.

US sub-prime mortgages -- advanced to less creditworthy borrowers -- have been hit by a surge in defaults, triggering a wider credit crunch as newly risk-averse banks suspend lending to all but the safest borrowers.

Amlin's combined ratio -- costs and claims expenses expressed as a proportion of revenues, a key indicator of underwriting profitability -- improved to 71 pct in the first half of the year from 79 pct a year earlier. A reading below 100 denotes a profit.

The group is paying an interim dividend of 5 pence per share, up 19 pct from 4.2 pence per share a year earlier.

[spob] 17/8/2007 15:12

On the current rating it looks like 10 hurricane deans are already priced in, so i'm not bothered either way right now.

[amla] 17/8/2007 15:04

Let's wait and see what happens with Hurricane Dean next week before jumping into insurance stocks that might be affected if the weather turns nasty in the Gulf of Mexico!!

[spob] 17/8/2007 13:32

Credit Suisse has raised Amlin, up 6p at 269¾p, from neutral to outperform and has begun coverage of Amlin's insurance-sector peer, Beazley, 4p better at 165¼p,with a neutral view.

The broker believes current valuations for Amlin and Beazley appear to give no credit for underwriting track record, and adds that recent concerns about pricing look overdone.

It also points out that Amlin's shares have underperformed the sector by 12.4% in the year to date. It says interim results at the end of the month could lead to further weakness in the shares.

[spob] 12/8/2007 07:54

I hope 100% is not that much for you because i wouldn't put 100% in any stock. (except Tesco of course.)

[solomonthewise] 10/8/2007 18:45

This is one to watch after month-end report-back (dyor).Imho, grossly over-sold despite the recent vagaries of the weather (£3.30+ recently).In for the longterm and recently moved almost 100% into this.
Good hunting all followers.

[spob] 10/8/2007 16:45

Hooray

'One' of my stocks closed blue today.

:)

[spob] 26/7/2007 01:48

22 July 07

Underwriter Amlin's shares have fallen by 11% since early May, Fears of major hurricanes have been weighing on the shares of Lloyd's of London insurers but began to bounce back last week. It is trading on about 7.3 times forecast earnings and is projected to yield about 4.3%, excluding the impact of any buyback or capital return. At these prices, Amlin is worth a look says the Sunday Telegraph.

[spob] 26/7/2007 01:22

24 July 07

Forecaster cuts 2007 hurricane outlook


The 2007 hurricane season may be less severe than forecast due to cooler-than-expected water temperatures in the tropical Atlantic, private forecaster WSI Corp said on Tuesday.

The season will bring 14 named storms, of which six will become hurricanes and three will become major hurricanes, WSI said in its revised outlook. WSI had previously expected 15 named storms of which eight would become hurricanes and four would become major hurricanes.

"Because the ocean temperatures have not yet rebounded from the significant drop in late spring, we have decided to reduce our forecast numbers slightly," said Todd Crawford, a WSI seasonal forecaster.

The energy and insurance industries are keenly watching the 2007 storm season after the record damage caused by hurricanes two years ago.

During the 2005 season, hurricanes Katrina and Rita devastated parts of the U.S. Gulf Coast and temporarily knocked out a quarter of U.S. crude and fuel production, sending energy prices to then-record highs.

WSI's Crawford added that wind conditions due to the lack of an El Nino event were less conducive to formation of tropical storms.

Despite the downgraded forecast, WSI still expects the 2007 season to be more active than last year, and added that storm-weary parts of the Gulf Coast could still be hit.

"We feel the general threat to the western Gulf is reduced slightly, with a corresponding increase in the threat to the eastern Gulf and Florida," Crawford said.

[paddyfool] 24/7/2007 11:43

Weak today on fears that british flooding will impact their RI book.

[sdtoot] 24/7/2007 11:09

raqifluz - I don't have the article to hand, but from what I can remember the ST was saying that the recent poor share price performance combined with a low PE and an attractive yield, made the shares a buy. They also mentioned that the company was expected to begin a share buy-back later in the year because it had lots of cash due to lower than expected major catastrophe claims. I don't recall the ST giving a price target!

[raqifluz] 24/7/2007 09:29

sdtoot - can you tell us what Sun Telegraph wrote and price targets...thanks

[sdtoot] 22/7/2007 23:07

AML tipped as a buy in Sunday Telegraph today.

[spob] 19/7/2007 21:21

Amlin Plc

Invitation to Amlin plc 2007 Interim Results Analysts' MeetingAmlin plc, the leading Lloyd's insurer, will be holding the analysts' meeting on
its interim results for the six months ended 30 June 2007 on Thursday 30th
August 2007 at 10.00am at Amlin plc, St. Helen's, 1 Undershaft, London EC3A 8ND.
Hosted by:
Roger Taylor, Chairman
Charles Philipps, Chief Executive
Richard Hextall, Finance Director
Tony Holt, Underwriting DirectorYou are cordially invited to attend the meeting and asked please to email
[e-mail] or call 020 7746 1074 to confirm attendance.
If you are unable to attend, but would like to take part in the conference call
and/or webcast please see below for access arrangements:Webcast:It is recommended that you register for the webcast in advance to ensure that
you will be able to connect quickly and successfully by 10.00am (London time) on
the 30th. Whilst you can register up until 15 minutes prior to the scheduled
start time, registering now will save you time and facilitate quick entry at the
start.
Click on the link below to register and/or join at the designated time:
196052F7EA6E&cb=genesysAudio connection options:1. To listen via the Internet your computer must be equipped with speakers and
the appropriate software.
2. To listen via the telephone call the audio conference Dial-In Number listed
below.
If you are in the UK call: 020 7162 0025
If you are in the US call: [phone]
If you are outside the UK and US call: [phone]If you encounter difficulties with any of the above, call Genesys: +44 (0)20
8288 8100.
The conference call ID is: 758909Enquiries:
Investor Relations, Amlin plc 0207 746 1074

[liquidkid] 02/7/2007 12:29

Sure.

An insurance company monitors its performance on a spread basis, evaluating both investment performance and operating expenses against desired results. It uses financial pricing models like CAPM or DCF to target a rate of return.

The discount rate used must incorporate internal and external risk factors affecting the company, which, in turn, determines the risk premium required over the risk-free rate.
(The risk free rate is yield on government debt.)

In a deteriorating credit environment i.e. in the US, the asset base in which these bermudian insurers are denominated, the spread on the risk free rate increases.

Hope that helps :)

[raqifluz] 02/7/2007 10:56

LK can you elaborate on the 'spread on the risk free rate' cheers.

[liquidkid] 02/7/2007 10:37

This is nothing to do with wind, it's the spread on the risk free rate.

[raqifluz] 02/7/2007 10:11

Other than hurrticane seasons downward pressure on the sp, can anyone offer opinion on the lowly share price action, within a matter of weeks weve come down from 330p+ to the 270's, almost a 20% fluctuation on a FTSE 250 co. without any co. specific news?

[raqifluz] 29/6/2007 15:47

When does Hurricane season come to an end Paddy?

[paddyfool] 29/6/2007 10:46

once the hurricane season comes to an end this will head towards £4, In the meantime I expect it to drift.

[relishing] 29/6/2007 10:15

I guess not.

[relishing] 28/6/2007 11:29

Time to go long big time?