Weighted average return on equity over the past 5 years of 32.0%

Return on equity is calculated by taking after tax profit divided by opening shareholders' equity, adjusted for any capital raisings or returns. It provides a measure of how effectively we use our capital to the benefit of shareholders.

Our record return on equity for 2007 was 37.8%. Weighted average return on equity over the past five years is 32.0%, set against a cross cycle target of 15% and an estimated cost of equity of 10%.

Amlin believes that its shares and those of similar insurers are generally valued in relation to net tangible assets per share. Multiples applied to net tangible assets per share are closely correlated with return on equity which is a proxy for the rate of growth in net assets per share. Amlin’s net tangible assets per share have increased steadily over the past five years.