Amlin Share Price (AML)

Between April 5th 2012 and April 5th 2013 Amlin returned 34% into my ISA when Share Price increase is added to dividends. My third best share after Inmarsat and Fiberweb.

For once I was on the ball when Amlin decided on their dividend cut. I was actually in time to sell before the serious fall occurred. Perhaps I was daft but I did buy them to hold and decided the market would be kind to a company still paying about 5%, so held. We will see but so far the fall has been limited and I remain in profit, just. I do think the price drop makes them a good buy for a short while.

Insurance and reinsurance firm Amlin estimates its losses from hurricane Sandy, net of estimated reinsurance recoveries and inward reinstatement premiums, at 145m pounds. Approximately 80% of this is derived from reinsurance classes where the upper end of all known cedents' estimates of their recoveries under catastrophe reinsurance treaties has been assumed, Amlin explained. The group noted that Sandy's estimate was more complex than for a typical windstorm and cautioned that any estimate at this stage should be viewed with caution. "Prior to Hurricane Sandy, 2012 had experienced a low level of major catastrophe losses and the reinsurance books in both London and Bermuda (with 2012 anticipated net written premium of approximately £540m, excluding internal reinsurance arrangements) are still expected to return healthy profits after estimated losses from Sandy are taken into account," it said in a statement. Chief Executive Charles Philipps commented: "While Sandy is a major loss for Amlin, we expect to be only modestly above our catastrophe budget for the year."

Assessing its current positon the firm said: "Amlin remains in a healthy financial position and is well capitalised to support growth as conditions improve and opportunities materialise. The core profitability of our London and Bermuda business is strong and profitability continues to improve in our UK business. Additionally, there is increasing evidence that the action taken at ACI is having a positive effect. In a low interest rate environment, our profit focused underwriting strategy should encourage the business to prosper." The North American catastrophe business achieved an average renewal rate increase of 8.1%, whilst the international reinsurance account achieved an average increase of 15.0%. Rate increases were more marked in loss affected territories, such as Australasia and Japan. In the quarter ended September 30th, following the normal quarterly review of claims reserves, £16.4m was released from reserves, bringing cumulative releases for the nine months to September 30th to £69.4m (September 30th: £71.2m).

Insurance and reinsurance firm Amlin has said that the underwriting environment for the period from the start of July has been 'encouraging', with rate improvements and limited catastrophe loss activity. The group said rate improvements have been achieved for more than 80% of the portfolio during the ten months to the end of October and overall, renewal rate increases have averaged 3.8% in the period. The group's gross written premium for the ten month period was up 11.1% at £2,278.8m (October 31st 2011: £2,051.9m). The average renewal rate increase was 3.8% (October 31st 2011: 0.9%) with a renewal retention ratio of 84.5% (October 31st 2011: 82.1%). Hurricane Sandy, which hit the US in late October, caused material damage to the US east coast, but the actual impact is still to be determined. The company was keen to stress that the fact it's had a favourable first nine months means it is well placed to absorb claims.

Shore Capital maintained its "buy" recommendation on insurance firm Amlin (AML) after it released its Q3 management statement. The broker interpreted the release as largely positive and noted the 11% growth in premiums written in the 10 months so far this year as well as an "excellent" average investment return of 3.6%. The broker also believes that the company is well positioned to absorb claims resulting from hurricane Sandy. The shares gained 6.5p to 373.5p.