Performance

2007 loss activity

The Group claims ratio for the year was 36% (2006: 41%). Natural catastrophe activity in the United States was again below long term averages. Our most significant loss was the California bush fires in October, where we currently estimate a net exposure of up to US$25.8 million. The UK and Australian floods in June and July (UK only) were also major losses to the international insurance industry together with Windstorm Kyrill, which swept across Northern Europe in January. Our exposures to these events has been limited, in part due to the reinsurance programmes we have in place and the risk retained by cedants, but also due to our comparatively small exposure to the UK direct household and small commercial sectors. Conservative estimates of the losses incurred from the UK, Australian floods and Windstorm Kyrill are £13.0 million, £4.2 million and £1.2 million respectively.

Elsewhere, there have been only a small number of risk losses. Our Aviation business, having become increasingly selective in the risks that it writes in the face of poor risk pricing, avoided exposure to the majority of airline losses experienced in the year.

© Copyright Amlin 2007