Disasters cost insurer Amlin dearly

HUGE claims arising from the Japanese tsunami and a string of other natural disasters plunged Lloyd’s of London insurer Amlin deep into the red in its latest half-year.

Losses at the underwriter soared to £192.3m in the six months to June as total catastrophe claims more than doubled to £314m after big hits from floods in Queensland, the New Zealand earthquake and United States tornadoes in April and May as well as major losses in Japan.

The group added that the first half of 2011 was the worst on record for natural disasters and is already worse than the whole of 2005, previously the most costly year.

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A jump in claims at the marine and property underwriting business of corporate arm ACI added to the problems, with underwriting losses there jumping to £43.1m.

Losses also rose in the UK, where the company had to shoulder higher property claims after the winter freeze and rising motor losses.

Income from its investment portfolio was also sharply lower at £45.3m. Nearly 80 per cent of its £4.3bn of funds under management is invested in bonds or cash with only nine per cent held in shares and lower interest rates hit returns.

Amlin had predicted earlier this month that the interim deficit would be £65m worse than expected at about £181m, but yesterday’s numbers came in even below that.

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Chief executive Charles Philipps said: “Exceptional catastrophe losses in the first half of 2011 have taken a heavy toll on the reinsurance industry, and Amlin has been no exception.

“While our results are disappointing, the core underwriting businesses in London and Bermuda are well placed to take advantage of an improving rating environment.”