Lloyd’s big players report healthy 2012 and progress in Europe

The two larger insurers, Amlin and Hiscox, both reported progress with their European operations. For Amlin in particular, which acquired the corporate insurance business of Fortis, the year marked something of a turnaround. Amlin reported a swing back into profit and higher revenues in 2012, reflecting fewer catastrophe losses and actions taken to stem losses at its European corporate insurance arm. Underwriting profit in 2012 was £207.1m compared with a £146m loss in 2011. In 2012, claims attributable to Hurricane Sandy were £141.6m, compared with a total catastrophe burden of £500.8m in 2011.hideThe insurer's combined ratio also improved dramatically-at 89% compared with 108% in 2011. The turnaround in the underwriting result was down to improvements in catastrophe reinsurance and UK fleet motor, as well as a positive result for Amlin Europe and Amlin Re Europe-their first ever profits. The insurer said that it has made progress consolidating its French and Benelux business, which includes Fortis Corporate Insurance that was acquired for €350m in 2009, and the re-underwriting of its European marine book. Amlin Europe reported a credible combined ratio-98% in 2012 from 113% in 2013-reflecting action taken at the former Fortis corporate insurance business to improve performance and a lower level of large losses. Zurich-based Amlin Re Europe, which launched in 2010, reported a combined ratio of 99%, having reached €206.5m of gross written premium in 2012. A vastly improved investment result of £165.3m-some four times the £40m achieved in 2011-also helped return Amlin to a positive overall result. The insurer reported pre-tax profits of £264.2m in 2012 compared with a £193.8m loss in 2011. Gross premiums were 4.4% higher at £2.4bn in 2012, although premiums were down 19.1% at Amlin Europe as the insurer took steps to address the unit's profitability. The insurer said that rates had renewed at an average 3.7% higher during 2012. However, net written premium only grew 2.3% to £2.1bn, reflecting the £51m increase in reinsurance spend and the decision to reduce risk appetite in 2012 following the losses of 2011. Like Amlin, Hiscox also reported improved profits on the back of fewer catastrophes and better investment returns. The insurer, which also has reinsurance and insurance operations outside of Lloyd's, reported pre-tax profit of £217.1m in 2012 compared with £17.3m the previous year. Hiscox's combined ratio improved 14 percentage points to 85.5%, despite UK floods, Superstorm Sandy in the US, fine art thefts in Europe, fires in substantial properties across the world and the sinking of Costa Concordia. The insurer's London market business remained its largest generator of profit, producing £121.9m in 2012 from gross premium of £640m. The London market combined ratio was 75.5% Hiscox has also been gradually building its business in the US and Europe, and now says it is 'winning' in Europe and should see a steady increase in profitability over the next few years. The insurer's European business reported profits for the fourth consecutive year-£3.9m in 2012 compared with £2.4m in 2011. Revenues grew 5.9% to €160.4m in local currency. However, the combined ratio in Europe rose 0.4 percentage points to 100.9%, reflecting the economic challenges and issues of scale. Hiscox said that it has seen recession-related claims in Europe, including jewellery thefts in public places, aggressive home invasions and some large fine art thefts. Despite the challenges, Hiscox said that it continues to see opportunity in Europe and it intends to launch a direct business in Germany in 2013. "We are well aware of the graveyard of businesses which have expanded overseas, so having expanded in the sophisticated economies of Europe and the US, we will consider any expansion east or to other emerging economies with great caution," said Robert Hiscox, the company's chairman who is stepping down after 48 years at the company he help create. Gross premiums written were £1.6bn in 2012, up 8% on 2011, with growth in each of the insurer's businesses. Lloyd's insurer Beazley reported growth and record profits in 2012. Pre-tax profit was $251.2m compared with $62.7m in 2011. The insurer, which underwrites mainly US liability, property and specialty lines such as cyber and political risks, posted an 11% increase in gross written premiums to $1.9bn. Rate increases on renewal were 3%. Beazley's combined ratio was 91% in 2012 compared with 99% the previous year. The company recently launched its data breach insurance in Europe and Latin America where increasing risk awareness and regulatory changes are driving growth.

Lloyd’s big players report healthy 2012 and progress in Europe

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Want to read this article?

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