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TONY HOLT UNDERWRITING DIRECTOR
“The combination of Amlin’s underwriting expertise
and a consistent philosophy of delivering gross
underwriting profits is an extremely important
differentiator of Amlin from its peers.”
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To find out more about catastrophe modelling, please click here
To find out more about Amlin's Dynamic Financial Analysis Model click here
There are many aspects to the formulation
of a strong underwriting philosophy and it is
important to get it right at a strategic portfolio
level and also at a detailed transactional level.
The key aspects of Amlin’s philosophy are
summarised below.
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| PROFIT FOCUS |
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Underwriting, and particularly the ability to
assess and price risk, is a critical skill set for
Amlin. The Group aims to deliver an underwriting
profit from each class of business in every year
of underwriting. The importance of this to
Amlin is emphasised constantly in the planning,
execution and review of our underwriting. It is
understood that to produce adequate returns
on capital the Group cannot rely solely upon
investment returns from premiums written,
and that combined ratios must be low enough
to generate underwriting returns through the
insurance cycle.
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| DIVERSITY |
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Amlin’s portfolio of business is diverse by type
or class of insurance and territorial scope. We
aim to balance potentially volatile catastrophe
type classes such as catastrophe reinsurance or
energy with less volatile classes such as motor
or marine cargo. This diversification provides
us with returns from several independent lines
of business which have limited correlation in
terms of loss experience and pricing within
the market cycle. Analysis carried out on our
portfolio using our Dynamic Financial Analysis
(“DFA”) modelling tool shows the strong benefits
of this diversification on our risk profile.
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| SHORT TAIL FOCUS |
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Our portfolio is biased in favour of short tail
risk. This means that for a very large part of our
portfolio we will have a high level of confidence
in the expected quantum of claims within 18
months of the expiry of each risk. The
advantage of this is that we are able to assess
any repricing needs faster than in respect of
longer tail risks. We will also be less prone to
the reserving difficulties which still plague so
many in the industry.
The long tail risk that we underwrite is focused
in areas where good actuarial modelling can
help determine an acceptable price for risk
or where the risk is catastrophe related, with
claims arising from accidents rather than
disease. We have a negligible involvement
in areas such as Directors’ and Officers’
insurance, where systemic developments can
arise, resulting in significant claims, the risk
of which is not capable of proper evaluation
at the time of pricing the risk.
To find out more about catastrophe modelling, please click here
To find out more about Amlin's Dynamic Financial Analysis Model click here
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