Operating & Financial Review

Marine

The Marine division writes a mixture of volatile classes like energy, specie and war and more attritional classes like hull, cargo and yacht. The business is written worldwide, reflecting the nature of marine risk. However the yacht and bloodstock accounts have a greater UK concentration.

Written premium in 2006 increased by 22% to £210.8 million. Renewal rate increases were 4.5% overall. Pricing was stable in most classes except energy and war. Energy renewal rates increased by 48% as the market reacted to the heavy losses for energy insurance emanating from the 2005 hurricanes. Renewal rates for the war account reduced by 6.4% as a lack of loss activity encouraged continued competition.

The combined ratio was again strong at 81% (2005: 66%). Reserve releases totalled £19.1 million (2005: £29.5 million) as claims development was better than expected in most areas. This release is net of £5.9 million of deterioration on our 2005 hurricane related energy losses which arose from a number of late claims advices. The claims ratio has also been increased by 8% by one large risk claim of £13 million.This is an extraordinary circumstance which we would not expect to see repeated frequently.

© Copyright Amlin 2006