Financial highlights

Income statement

  • Record return on equity of 37.8% (2006: 34.0%).
  • Weighted average return on equity over past five years of 32.0% (2006: 27.9%).
  • Profit before tax up 29.9% at £445.0 million (2006: £342.7 million).
  • Strong underwriting contribution up 32.5 % to £355.0 million (2006: £267.9 million).
  • Combined ratio at record 63% (2006: 72%).
  • Investment return increased by 36.4% to £157.0 million (2006: £115.1 million).

Balance sheet and capital management

  • Net assets increased 12.4% to £1,052.2 million (£936.4 million).
  • Record run-off profits from reserves of £109.0 million (2006: £68.9 million)
  • £120.4 million return of capital via issue of B shares.
  • Dividends (paid and proposed) increased by 25.0% to 15.0 pence per share.

Positive outlook

  • Underpinned by net unearned premium reserve of £474.3 million (2006: £507.8 million).
  • Underwriting margins remain good despite declining rates.
  • Strong cash flow supports future growth in dividends.
2007   2006   2005   2004   2003  
£m   £m   £m   £m   £m  
Gross premium written
1,044.7   1,113.8   993.5   945.6   937.4  
Net premium written
938.3   1,013.5
*
829.3
*
790.2
*
787.6
*
Net earned premium
972.3   973.9
*
822.1
*
722.4
*
701.1
*
Profit before tax
445.0   342.7   186.7   119.7   117.8  
Return on equity
37.8%   34.0%   29.6%   21.0%   26.6%  
Net assets
1,052.2   936.4   784.8   449.2   380.5  
Net tangible assets
983.2   870.4   718.8   383.2   317.3  
Per share amounts (in pence)
Earnings
66.3   50.4   34.3   20.7   21.0  
Net assets
220.6   175.6   148.7   113.7   98.7  
Net tangible assets
206.2
163.2   136.2   97.0   82.3  
Dividend under IFRS**
20.8
***
 10.4   9.0   4.7   2.1  
Dividends (paid and proposed final)
in respect of the calendar year**
15.0   20.0
***
 10.2   8.0   2.5  
Capital return via B shares
22.4   —
—   —   —  
Group operating ratios
Claims ratio
36%   41%   57%   50%   50%  
Expense ratio
27%   31%   25%   32%   36%  
Combined ratio
63%   72%   82%   82%   86%  
Amlin Bermuda Ltd combined ratio
46%   48%   —   —   —  
Syndicate 2001 combined ratio
69%   76%   82%   82%   86%  

* Excluding premiums associated with the reinsurance to close of increased share of capacity.
** All per share dividends are the actual dividends paid or proposed for each share in issue at the time.
*** Includes special dividend of 8.0p per share.

Claims ratio is net claims incurred divided by net earned premium for the year. Expense ratio is underwriting expense incurred divided by net earned premium. The expense ratio does not include expenses that have not been attributed to underwriting or finance costs. Combined ratio is the total of the claims and expense ratio.