Non-marine
The non-marine division is the Group's largest business segment, accounting in 2005 for 56% (2004: 55%) of gross premiums written. As illustrated the business is a blend of classes which are exposed to catastrophic loss (eg catastrophe reinsurance), large claim events (eg aviation reinsurance) and attritional claims (auto or casualty).

Underwriting performance - Non-marine and reinsurance

**2001 £m **2002 £m **2003 £m *2004 £m *2005 £m Gross premium 480.3 535.9 580.3 521.7 557.0 Net earned premium 284.6 367.9 465.9 419.1 447.4 Claims ratio % 101 61 45 48 67 Expense ratio % 38 39 36 32 26 Combined ratio % 138 100 81 80 93 Underwriting contribution -109.1 0.7 90.9 83.8 31.7 (*/** see Financial Highlights for basis of preparation)

Geographically the division's largest market is the United States with 55% of business written there
for 2005. However, diversity is important. For example, in the United States our property catastrophe underwriting is focused on regional insurance companies and regional exposures are closely monitored. Internationally, our insurance and reinsurance include the provision of cover for earthquake and windstorm in Japan, windstorm exposure in Europe and earthquake in New Zealand.

Premiums written increased by £35 million or 6.7%, to £557 million. Overall, rates fell during 2005 by 5% but renewal retention remained high at 83% (2004: 81%). Experience by class was varied. For example US catastrophe reinsurance rates remained stable following the hurricane losses of 2004
but international catastrophe reinsurance rates fell by 10%. However, following the active US
hurricane season rates began to rise again in the final quarter of the year.



The division's combined ratio was 93% (2004: 80%). The division again bore the brunt of the windstorm losses which increased the combined ratio by 22.7% (2004: 16.7%). This was partially offset by reserve releases of £23.7 million. Underlying performance remained strong with the limited impact from other catastrophes in the year and no other major loss events.