Roger Taylor   Chairman

Hurricane losses reached an unprecedented level in 2005 and challenged the insurance industry. Amlin absorbed some large losses but, due to its approach to risk management and diverse portfolio, still produced excellent results. Our return on equity of 28.4% in 2005 brings our weighted average five year return to 17.4%.

Our 2005 profit before tax, of £182.7 million,was up 42% on 2004 (£128.9 million) which, after losses of £130.1 million (2004: £74 million) from major catastrophes, highlights the strength of the underlying performance across the Group. The underwriting contribution increased by29% to £137.1 million (2004: £106.6 million), with a combined ratio of 82% (2004: 82%), and investments contributed £90.9 million, up 74% (2004: £52.1 million). £16 million of the profit earned in 2005 was one off in nature, largely consisting of foreign exchange gains. Compared to our previous accounting treatment, a further £26 million has been recognised on foreign exchange translation of premium.

Dividend
The Board proposes a final dividend of 6.2p per share, making total dividends for 2005 of 10.2p per share (2004: 8p). This equates to 30% of earnings and is consistent with our commitment made two years ago to distribute at least the higher of 8p per share, adjusted for inflation, or 30% of earnings for each of 2005 and 2006.

Strategy
Having taken stock of the likely effect of the 2005 hurricane activity on the shape of the insurance cycle for many of our business areas, we accelerated our long term strategic plan to diversify beyond the Lloyd's market and set up Amlin Bermuda which opened for business on 1 December 2005. Our ability to react so quickly and to be up and running with a high quality team supported by proper systems is a testimony to both the depth of our underwriting skill base, as we transferred existing employees from London to Bermuda, the quality of operational management, and the successful development of our administrative processes and systems.

Our strategy in Bermuda is to grow the premium in selected classes, with target new business to
the Group of US$350 million and US$500 million for 2006 and 2007 respectively.

Our Operating and Financial Review describes in detail the continued good progress we are making in working towards our Vision of becoming the "global reference point for quality" in our markets.
The dynamics forcing change in our markets are accelerating and we believe that our focus on quality reinforces our ability to seize opportunities which will enable us to accelerate our progress towards our overall strategic goals.

Outlook
Property insurance and reinsurance markets have been badly shaken by the size of hurricane losses in 2005, particularly from Katrina and Wilma, with many companies forced to re-examine their business models and reduce risk exposures, notably in major catastrophe zones.

Consequently, rates today are considerably better in our non-marine and marine businesses than we had expected they would be this time last year and for US catastrophe exposed risk, in particular, we
are experiencing significant price increases.

Retrocessional reinsurance, which is the reinsurance of reinsurance portfolios and which we have historically purchased to protect against extreme frequency and severity of loss, has become so expensive that we believe it appropriate to run more catastrophe risk internally whilst reducing our peak exposures. The adjustment is being managed through this year.

An unearned premium reserve has been brought forward into 2006 of £523.8 million, broadly equivalent to last year. Substantially all of this will be earned this year and, with stronger overall pricing, 2006 has the potential to be another very good year for Amlin.

We expect conditions for our non-marine and marine businesses to remain favourable through 2006 which would bode well for 2007. Our airline and UK commercial classes have continued to come under increasing pressure but we expect that competitors in these areas will realise the need to positively adjust prices before too long. Amlin Bermuda has made a promising start. All in all, we look to the future with confidence.

Board
Richard Davey joined the Board as a non-executive Director in December 2005 and brings with him a broad City experience.

We look forward to welcoming Sir Mark Wrightson as a further new non-executive Director, during March 2006.

At our AGM in May 2006 my deputy Lord Stewartby will not be standing for re-election. Ian has been involved with the companies that preceded Amlin and has served as Deputy Chairman since our formation in 1998. The Company has grown and prospered throughout this period and we owe a great deal to him for his constant support and valuable contribution.

Michael Davies has been Chairman of our principal subsidiary Amlin Underwriting Limited since 2000. Now that the last year in which Lloyd's Names participated has closed, Michael has decided to retire from that Board and I would like to place on record our warm thanks for his contribution.

The Amlin Team
2005 has been a challenging year yet we have produced record results and launched an important new company in Bermuda. This is due to the strong leadership of Charles Philipps and his excellent management team who are supported by all the employees in Amlin. Sustained progress continues to be made and this is not achieved without a combination of skill and hard work for which we
owe our thanks.

Roger Taylor
Chairman