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CAPITAL MANAGEMENT
Amlin has boosted shareholder returns
during this highly profitable stage of
the insurance pricing cycle by using
letters of credit as supplementary capital.
We currently support our insurance
activities with letters of credit valued at
£185 million, in addition to £210 million
of group capital. Strong cash flows will
be used to eliminate this external capital
before the underwriting cycle reaches
a stage when such leverage is no longer
sensible, such that capital utilisation
remains efficient when we reduce
volumes in a pricing downturn.
Meanwhile we continue to fine tune our
capital allocation model using risk-based
capital modelling techniques, to ensure our
allocations most economically reflect the
trade-off between return on risk and the
cost of capital, and thus maximise returns.
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