4 Segmental reporting by business group
The tables below show segmental information by business segment. Business segments are primary segments and represent the distinct underwriting units by which the Group is organised and managed. Each segment underwrites sub-classes of business. In 2008, the Non-marine business was reorganised into two business units: Property and Casualty and Reinsurance. The segmental disclosure reports these business units as Non-marine as this is how financial information was reported internally for management purposes. In November 2008, the Group acquired Anglo French Underwriters (note 35). One month’s income and expense has been included in the other technical business segment. The segments are discussed in more detail in the The business section of the Review.
Income and expenses by business segment
|
Year ended 31 December 2008 |
Non-marine £m |
Marine £m |
Aviation £m |
Amlin UK £m |
Total Syndicate 2001 divisions £m |
Amlin Bermuda £m |
Intra group items £m |
Other technical £m |
Total £m |
|
Gross premium written |
|||||||||
|
Analysed by geographic segment |
|||||||||
|
UK |
47.5 | 53.6 | 9.6 | 136.8 | 247.5 | 125.0 | (106.0) | 0.5 | 267.0 |
|
US |
263.5 | 35.0 | 18.5 | – | 317.0 | 124.2 | – | – | 441.2 |
|
Europe |
34.2 | 35.3 | 13.2 | 5.3 | 88.0 | 16.3 | – | – | 104.3 |
|
Worldwide |
10.9 | 22.0 | 0.5 | 1.0 | 34.4 | – | – | – | 34.4 |
|
Other |
87.5 | 43.6 | 14.8 | 9.7 | 155.6 | 31.5 | – | – | 187.1 |
|
Total |
443.6 | 189.5 | 56.6 | 152.8 | 842.5 | 297.0 | (106.0) | 0.5 | 1,034.0 |
|
Gross premium earned |
456.6 | 195.3 | 57.9 | 144.4 | 854.2 | 271.7 | (100.4) | 2.3 | 1,027.8 |
|
Reinsurance premium ceded |
(115.6) | (49.0) | (17.5) | (22.6) | (204.7) | (0.3) | 90.7 | – | (114.3) |
|
Net premium earned |
341.0 | 146.3 | 40.4 | 121.8 | 649.5 | 271.4 | (9.7) | 2.3 | 913.5 |
|
Insurance claims and claims settlement expenses |
(315.7) | (114.7) | (26.6) | (68.0) | (525.0) | (176.7) | 73.2 | 0.7 | (627.8) |
|
Reinsurance recoveries |
148.8 | 34.7 | 5.5 | 9.2 | 198.2 | – | (71.3) | 0.2 | 127.1 |
|
Underwriting expenses |
(67.7) | (34.5) | (8.3) | (37.8) | (148.3) | (48.5) | 7.8 | (1.6) | (190.6) |
|
Profit attributable to underwriting |
106.4 | 31.8 | 11.0 | 25.2 | 174.4 | 46.2 | 1.6 | 222.2 | |
|
Investment return |
– | – | – | – | 53.0 | (48.4) | – | 13.4 | 18.0 |
|
Other operating income |
– | – | – | – | 2.5 | – | – | 0.2 | 2.7 |
|
Agency expenses (1) |
(13.5) | (4.0) | (1.7) | (3.4) | (22.6) | – | 22.6 | – | – |
|
Other non-underwriting expenses (2) |
(100.1) | ||||||||
|
Finance costs (2) |
(21.2) | ||||||||
|
Profit before taxation |
121.6 | ||||||||
|
Combined ratio |
69% | 78% | 73% | 79% | 73% | 83% | 76% | ||
Included within the UK gross premium written of Amlin Bermuda Ltd is premium ceded from Syndicate 2001 amounting to £106.0 million on reinsurance contracts undertaken at commercial rates (2007: £90.3 million).
(1)Agency expenses allocated to segments represent fees and commission payable to Amlin Underwriting Limited;
(2)Other non-underwriting expenses and finance costs are incurred in support of the entire business of the Group and have not been allocated to particular segments.
Assets and liabilities by business segment
|
At 31 December 2008 |
Non-marine £m |
Marine £m |
Aviation £m |
Amlin UK £m |
Total Syndicate 2001 divisions £m |
Amlin Bermuda £m |
Intra group items £m |
Other technical £m |
Total £m |
|
Assets |
|||||||||
|
Assets attributable to business segments |
1,046.4 | 464.1 | 321.4 | 565.6 | 2,397.5 | 1,367.1 | (81.2) | 9.9 | 3,693.3 |
|
Assets allocated between the UK and Bermuda |
424.5 | 424.5 | |||||||
|
Total assets |
4,117.8 | ||||||||
|
Liabilities |
|||||||||
|
Liabilities attributable to business segments |
924.8 | 432.4 | 307.3 | 511.0 | 2,175.5 | 415.4 | (81.2) | 8.7 | 2,518.4 |
|
Liabilities allocated between the UK and Bermuda |
383.3 | 383.3 | |||||||
|
Total liabilities |
2,901.7 | ||||||||
|
Total net assets |
1,216.1 |
The net assets of Amlin Bermuda Ltd are located in Bermuda and the USA. The majority of the other assets of the Group are located in the UK, the US and Canada. The corresponding liabilities are also concentrated in these countries, but given the nature of the Groups business some of the liabilities will be located elsewhere in the world.
Depreciation has been charged on property and equipment for the year amounting to £3.3 million (2007: £3.0 million) of which £0.4 million has been charged to Non-marine, £0.2 million to Marine, £0.1 million to Aviation, £0.5 million to Amlin UK and £1.0 million to Amlin Bermuda Ltd.
Income and expenses by business segment
|
Year ended 31 December 2007 |
Non- marine £m |
Marine £m |
Aviation £m |
Amlin UK £m |
Total Syndicate 2001 divisions £m |
Amlin Bermuda £m |
Intra group items £m |
Other technical £m |
Total £m |
|
Gross premium written |
|||||||||
|
Analysed by geographic segment |
|||||||||
|
UK |
49.4 | 50.1 | 11.1 | 134.0 | 244.6 | 105.1 | (90.3) | 1.6 | 261.0 |
|
US |
300.0 | 41.8 | 21.3 | 0.1 | 363.2 | 90.2 | – | – | 453.4 |
|
Europe |
39.3 | 34.7 | 13.6 | 4.9 | 92.5 | 8.3 | – | – | 100.8 |
|
Worldwide |
17.3 | 21.3 | 0.4 | 1.3 | 40.3 | – | – | – | 40.3 |
|
Other |
94.6 | 39.3 | 17.2 | 8.9 | 160.0 | 29.2 | – | – | 189.2 |
|
Total |
500.6 | 187.2 | 63.6 | 149.2 | 900.6 | 232.8 | (90.3) | 1.6 | 1,044.7 |
|
|
|||||||||
|
Gross premium earned |
534.0 | 198.0 | 71.3 | 151.3 | 954.6 | 216.2 | (84.3) | 1.5 | 1,088.0 |
|
Reinsurance premium ceded |
(107.8) | (40.9) | (24.3) | (21.0) | (194.0) | – | 78.3 | – | (115.7) |
|
Net premium earned |
426.2 | 157.1 | 47.0 | 130.3 | 760.6 | 216.2 | (6.0) | 1.5 | 972.3 |
|
Insurance claims and claims settlement expenses |
(148.7) | (83.6) | (34.0) | (84.8) | (351.1) | (73.6) | 45.2 | (0.6) | (380.1) |
|
Reinsurance recoveries |
31.0 | 15.8 | 19.4 | 4.8 | 71.0 | – | (45.2) | 0.1 | 25.9 |
|
Underwriting expenses |
(133.2) | (59.3) | (17.2) | (31.4) | (241.1) | (26.4) | 6.0 | (1.6) | (263.1) |
|
Profit attributable to underwriting |
175.3 | 30.0 | 15.2 | 18.9 | 239.4 | 116.2 | – | (0.6) | 355.0 |
|
Investment return |
114.1 | 42.9 | – | – | 157.0 | ||||
|
Other operating income |
2.8 | – | – | – | 2.8 | ||||
|
Agency expenses (1) |
(15.3) | (4.4) | (2.1) | (4.1) | (25.9) | – | 25.9 | – | – |
|
Other non-underwriting expenses (2) |
(49.8) | ||||||||
|
Finance costs (2) |
(20.0) | ||||||||
|
Profit before taxation |
445.0 | ||||||||
|
Combined ratio |
59% | 81% | 68% | 85% | 69% | 46% | 63% | ||
(1) Agency expenses allocated to segments represent fees and commission payable to Amlin Underwriting Limited;
(2) Other non-underwriting expenses and finance costs are incurred in support of the entire business of the Group and have not been allocated to particular segments.
Assets and liabilities by business segment
|
At 31 December 2007 |
Non- marine £m |
Marine £m |
Aviation £m |
Amlin UK £m |
Total Syndicate 2001 divisions £m |
Amlin Bermuda £m |
Intra group items £m |
Other technical £m |
Total £m |
|
Assets |
|||||||||
|
Assets attributable to business segments |
934.7 | 382.5 | 272.8 | 534.5 | 2,124.5 | 959.4 | (34.8) | 10.9 | 3,060.0 |
|
Assets allocated between the UK and Bermuda |
519.5 | 519.5 | |||||||
|
Total assets |
3,579.5 | ||||||||
|
Liabilities |
|||||||||
|
Liabilities attributable to business segments |
729.2 | 346.5 | 251.3 | 493.4 | 1,820.4 | 217.7 | (34.8) | 9.8 | 2,013.1 |
|
Liabilities allocated between the UK and Bermuda |
514.1 | 514.1 | |||||||
|
Total liabilities |
2,527.2 | ||||||||
|
Total net assets |
1,052.3 |
5 Net earned premium
|
|
2008 £m |
2007 £m |
|
Insurance contracts premium |
||
|
Gross premium written |
1,034.0 | 1,044.7 |
|
Change in unearned premium provision |
(6.2) | 43.3 |
|
Gross premium earned |
1,027.8 | 1,088.0 |
|
Reinsurance premium ceded |
||
|
Reinsurance premium payable |
(118.3) | (106.4) |
|
Change in unearned reinsurance premium provision |
4.0 | (9.3) |
|
|
(114.3) | (115.7) |
|
Net earned premium |
913.5 | 972.3 |
6 Investment return
|
2008 £m |
2007 £m |
|
|
Investment income |
||
|
dividend income |
11.9 | 12.5 |
|
interest income |
59.7 | 77.8 |
|
cash and cash equivalents interest income |
34.6 | 25.1 |
|
|
106.2 | 115.4 |
|
Net realised (losses)/gains on assets held for trading |
||
|
equity securities |
(4.8) | 21.6 |
|
debt securities |
16.9 | (1.5) |
|
property |
(1.8) | (0.1) |
|
derivative instruments |
12.0 | – |
| 22.3 | 20.0 | |
|
Net fair value (losses)/gains on assets held for trading |
||
|
equity securities |
(89.0) | (7.1) |
|
debt securities |
(15.3) | 30.2 |
|
property |
(6.2) | (0.1) |
|
derivative instruments |
(1.4) | |
|
|
(110.5) | 21.6 |
| 18.0 | 157.0 |
7 Insurance claims and loss adjustment expenses
|
2008 £m |
2007 £m |
|
|
Gross |
||
|
Current year insurance claims and loss adjustment expenses |
764.3 | 502.7 |
|
Reduced costs for prior period insurance claims |
(136.5) | (122.6) |
| 627.8 | 380.1 | |
|
|
||
|
Reinsurance |
||
|
Current year insurance claims and loss adjustment expenses recoverable from reinsurers |
(148.9) | (39.5) |
|
Additional costs for prior period claims recoverable from reinsurers |
21.8 | 13.6 |
| (127.1) | (25.9) | |
|
Total net insurance claims and loss adjustment expenses |
500.7 | 354.2 |
8 Expenses for the acquisition of insurance contracts
|
2008 £m |
2007 £m |
|
|
Expenses for the acquisition of insurance contracts |
191.8 | 187.0 |
|
Changes in deferred expenses for the acquisition of insurance contracts |
1.2 | 9.0 |
| 193.0 | 196.0 |
9 Other operating expenses
|
2008 £m |
2007 £m |
|
|
Expenses related to underwriting |
||
|
Employee expenses, excluding employee incentives |
28.8 | 26.1 |
|
Lloyds expenses |
17.2 | 22.5 |
|
Other administrative expenses |
27.1 | 25.5 |
|
Underwriting exchange gains |
(75.5) | (7.0) |
| (2.4) | 67.1 | |
|
Other expenses |
||
|
Employee expenses, excluding employee incentives |
9.5 | 10.9 |
|
Employee incentives |
21.5 | 31.4 |
|
Asset management fees |
3.4 | 3.1 |
|
Other administrative expenses |
9.1 | 5.4 |
|
Group company exchange losses/(gains) |
56.6 | (1.0) |
| 100.1 | 49.8 | |
| 97.7 | 116.9 |
10 Directors remuneration
The aggregate remuneration of the directors of the Company, including amounts received from subsidiaries, was:
|
2008 £m |
2007 £m |
|
|
Emoluments of executive directors (including payments made under long term incentive plans) |
6.5 |
5.8 |
|
Fees to non-executive directors |
0.5 | 0.5 |
| 7.0 | 6.3 | |
|
Pension contributions |
0.2 | 0.3 |
| 7.2 | 6.6 |
Remuneration includes remuneration during the period of office only. Details of directors remuneration and pension benefits, including those of the highest paid director, are included in the Directors Remuneration Report in the Accountability section. Payments were made to both a defined benefit pension scheme and stakeholder defined contribution scheme for two executive directors and to stakeholder defined contribution schemes for two other executive directors.
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