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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Aston Martin Lagonda Global Holdings Plc | LSE:AML | London | Ordinary Share | GB00BN7CG237 | ORD GBP0.10 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
5.70 | 4.28% | 138.90 | 138.80 | 139.30 | 153.00 | 133.00 | 133.00 | 2,234,842 | 16:35:14 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Motor Vehicles & Car Bodies | 1.63B | -228.1M | -0.2769 | -5.02 | 1.14B |
TIDMAML
RNS Number : 8521N
Amlin PLC
21 May 2015
Amlin plc
PRESS RELEASE
For immediate release
21 May 2015
Quarterly Management Statement for the three month period to 31 March 2015
Amlin has had a good start to 2015 with limited loss activity and an excellent investment return of 1.7% for the first quarter.
Underwriting
Gross written premium for the three months ended 31 March 2015 was GBP1,260.2 million (31 March 2014: GBP1,276.7 million). At constant rates of exchange, gross written premium decreased by 1.4%. Income growth from strengthening of the US dollar was largely offset by weakening in the Euro, reflecting the geographical diversity of Amlin's business.
Whilst our Reinsurance business benefitted from the prominence of its US Dollar revenue stream, income in both our Marine and Aviation and Property and Casualty businesses was impacted by weakness in the Euro.
Average renewal rates were down 3.5% (31 March 2014: decrease 2.3%) and renewal retention rates remained healthy at 89.1% (31 March 2014: 88.2%).
Following the transition in our 2014 results for North American windstorm exposed business to a seasonally adjusted earnings profile, there was a reduction in earned premium in the first quarter of approximately GBP20 million, compared to the 2014 period. The profile change reduces earnings in the first and second quarter, and to a lesser extent in the fourth quarter, with the majority earned in the third quarter reflecting the risk profile of the business.
Premium income by Strategic Business Unit (SBU) is analysed in the table below:
Gross Renewal Renewal Gross Renewal Renewal written rate written rate premium change premium change to 31 to to 31 to March March 2015 GBP 31 March retention 2014 31 March retention million 2015 ratio 2014 ratio to to % 31 March GBP % 31 March 2015 million % 2014 % --------------------- ---------- ---------- ----------- ---------- ---------- ----------- Reinsurance 603.6 (6.3) 89.6 599.8 (4.7) 87.9 --------------------- ---------- ---------- ----------- ---------- ---------- ----------- Property and Casualty 465.3 0.6 89.3 480.3 0.2 88.3 --------------------- ---------- ---------- ----------- ---------- ---------- ----------- Marine and Aviation 191.3 (4.1) 87.1 196.6 (1.3) 88.1 --------------------- ---------- ---------- ----------- ---------- ---------- ----------- Total / average 1,260.2 (3.5) 89.1 1,276.7 (2.3) 88.2 --------------------- ---------- ---------- ----------- ---------- ---------- -----------
Note: Gross written premium by SBU is shown on a direct basis, excluding the impact of any intra group transactions.
Competition within Reinsurance lines remains challenging. Amlin has continued to be selective, focussing on areas where pricing meets acceptable rates of return. Overall, reinsurance renewal rates decreased by 6.3%. US catastrophe renewal rates reduced by an average of 6.5%, while international catastrophe renewals experienced average rate decreases of 10.5%. However, non-catastrophe reinsurance classes, which now amount to approximately 20% of our estimated annual premiums, saw less pressure, with renewal rates decreasing by 4.8% and new business of GBP58.8 million being added in the period. We believe our strong client position, enhanced by Leadenhall Capital Partners which now has funds under management of US$1,921.0 million (31 December 2014: US$1,880.8 million), continues to differentiate Amlin from other markets. Income includes amounts of GBP31.2 million relating to multi-year deals.
US property and casualty rates were down 2.8%. New business of GBP38.1 million was added in the period across property and casualty classes. In our UK commercial business, UK fleet motor rates continued to rise, with an average of 6.3% in the first three months.
Renewal rates for Marine and Aviation business came under pressure across classes, but most notably for energy, which saw a rate decrease of 13.3% as falling oil prices impacted construction and drilling activity.
Outwards reinsurance
Reinsurance expenditure, excluding the cost related to Tramline Re Limited, in the three months to 31 March 2015 was GBP203.1 million, representing 16.1% of gross written premium (31 March 2014: GBP211.4 million and 16.5%). The decrease represents savings achieved through the purchase of one group-wide retrocessional programme, and more attractive terms. Increased cover was acquired, with lower retentions, protecting both the Reinsurance and the Marine and Aviation businesses.
In December 2014, the Group acquired coverage for US earthquake and storm and European windstorm perils up to $200 million from a Bermudian special purpose insurer, Tramline Re II Limited, which in turn issued a catastrophe bond into the markets. The transaction provides the Group with fully collateralised protection over a four year period with effect from 1 January 2015. The costs relating to Tramline II of GBP52.7 million have been recognised in full during the quarter, but will be earned across the four year term of the contract.
The transition to a seasonal earnings profile for outwards reinsurance costs associated with the North America Windstorm business has led to a reduction in earned reinsurance expenditure of approximately GBP13 million for the first quarter, although this difference will unwind on a full year basis.
Claims and reserves
There were no major catastrophe losses in the period and large losses were modest at GBP6.6 million (31 March 2014: nil and GBP7.5m). Following action taken in the UK part of the Property and Casualty business, there are good signs of its claim ratio returning to a more respectable level.
Claims reserves for prior years have continued to run-off positively with releases in the first three months totalling GBP29.2 million (31 March 2014: GBP17.4). Releases largely reflect positive claims development within the Reinsurance and the Property and Casualty businesses.
Investment returns
The Group's investment return for the quarter ended 31 March 2015 was ahead of expectations at 1.7%, with average funds under management of GBP4.4 billion. During this period bonds returned 0.9%, zero duration bonds returned 1.0%, cash and cash equivalents 0.1%, equities 5.7% and property 2.5%.
The asset allocation (based on allocations to sub-advisors) at 31 March 2015 was 21% bonds, 50% zero duration bonds, 5% cash and cash equivalents, 17% equities and 7% property. The average duration of the portfolios at the end of March was 0.4 years. Towards the end of April the equity weighting was reduced to 16%, with the proceeds invested predominantly in zero duration bonds.
We believe that the outlook for global economic growth is supportive for equities and property but investment return accumulation is expected to be more muted for the rest of the year with volatility picking up as the US Federal Reserve Bank starts to raise rates from current historically low levels.
Charles Philipps, Amlin's Chief Executive, commented: "We have had a good first quarter bearing in mind the more competitive market conditions which demand high levels of diligence in risk selection. We are also realising a number of benefits from the changes made to our organisational structure in 2014, in particular with the combination of outwards reinsurance programmes, from increased knowledge sharing and the ability to offer a wider product offering to some clients. We expect our business and geographical diversity, which has grown over recent years, to be of increased importance in the current environment."
Enquiries: Charles Philipps, Chief Executive, 0207 746 Amlin plc 1000 Richard Hextall, Chief Finance & Operations Officer, Amlin 0207 746 plc 1000 Media 0203 727 Ed Berry, FTI Consulting 1046
This information is provided by RNS
The company news service from the London Stock Exchange
END
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