Operating & Financial Review

UK commercial

The UK commercial division underwrites insurance for mainly UK based clients and the majority of risks are not written in the subscription market but are assumed entirely by the division.

The division writes a balanced portfolio of motor and liability business, combined with a small property account.

The UK commercial market has seen increasing competition over recent years and this continued in 2006. Overall renewal rates reducedby 2.7% but claims inflation is estimated to have reduced margins by a further 6%. The motor account renewal rate reduced by 1% and liability 5.5%. In the face of this competition the division reduced its underwriting activity with retention rates falling to 68% (2005: 78%).

In this environment the combined ratio of 84% (2005: 73%) is again commendable. Reserve releases were again healthy at £19.8 million (2005: £27.8 million) reflecting the continued steady release of case reserves as claims are settled. The expense ratio has risen by 3% in the year as lower levels of premium are earned against a fixed expense base.

© Copyright Amlin 2006