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Dear fellow investor
Over the past three years we have been developing
and implementing our strategy but delivery is ultimately
what counts, and I am delighted that the results for
2003 confirm Amlin’s ability to generate an excellent
return on the capital you have invested in the business.
ROGER TAYLOR
CHAIRMAN
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CHAIRMAN'S STATEMENT
Excellent results in 2003
By any measure 2003 was an outstanding year for Amlin.
The momentum established during 2001 and 2002 flowed
through into 2003 and, with 31% growth in gross written
premium and a relatively low incidence of major incurred loss
events, our profit before tax more than doubled to £120.3 million
(2002: £55.4 million) and resulted in earnings per share of
21.6p (2002: 14.1p).
Dividend
The Board proposes a final dividend of 1.65p per share (2002:
1.25p) making a total dividend for 2003 of 2.5p (2002: 2.0p).
While the Company recorded excellent profits in both 2002 and
2003, the 2003 dividend reflects the application of Lloyd’s three
year accounting whereby the profits from the 2002 and 2003
years of account will not be received as cash by the Company
until April 2005 and 2006 respectively.
The Board recognises the importance to shareholders of providing
cash returns and a clear dividend policy. Accordingly, in respect
of the years 2004, 2005 and 2006 the Board intends, in the
absence of unusual circumstances, to pay a minimum dividend
of 30% of distributable earnings in the relevant year.
Our market place
Lloyd’s is implementing a powerful programme of change which
we fully support as our progress is closely related to the success
of the market in which we trade. I believe our ability to grow our
profits gives an important signal that Lloyd’s remains a successful
insurance market place.
During 2003 the new Franchise regime began to demonstrate its
influence, not least in managing the level of overall capacity, and
is well on course to bring about the improvements necessary to
build a more robust and profitable Lloyd’s market.
There are numerous initiatives aimed at improving the administrative
efficiencies of the market in which we are playing a leading role,
and we see these benefiting Amlin in the years ahead.
Back to top
Focussing on our clients
In a year where security downgrades became an industry norm,
we have seen a flight to quality as brokers and clients have
become increasingly concerned with the financial strength of their
insurers. I was delighted when A M Best graded Syndicate 2001’s
security rating as A (Excellent) – a sound endorsement at a time
when high quality security has become scarcer, particularly for
major reinsurance risks.
During 2003 we commenced a number of initiatives with the aim
of improving the effectiveness and efficiency of our client service.
Customers rightly expect certainty of service standards in policy
issuance and claims settlement, areas where the London market
has been notoriously poor. In the medium to longer term these
initiatives will help reinforce our client proposition and strengthen
our market position.
Governance and regulation
We are well advanced with implementing the changes
recommended by the Higgs and Smith reviews.
Regulatory changes continue apace, with new rules regarding
intermediaries to take effect in 2005 and proposals being
developed by the FSA to establish new capital requirements
for general insurers.
We have specialist managers dedicated to compliance and
regulatory matters and your Board places a high priority
on maintaining strict standards.
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