Operating & Financial Review

Solid start for Amlin Bermuda

Our underwriting goal for Amlin Bermuda in 2006 was to establish a diverse account of well priced property reinsurance, taking advantage of the shortage of catastrophe exposed capacity in the aftermath of the 2005 hurricanes. We set an initial stretching target of US$350 million of new gross premium income (net of brokerage) of which US$68 million was budgeted to be new business written in Syndicate2001 to be specifically ceded to Amlin Bermuda.

The new company wrote less business than planned in its first January renewal season due to a later than envisaged confirmation of security rating and greater than anticipated competition for non-US catastrophe reinsurance. Following this and a decision to reduce major event risk appetite for the reasons explained below, expectations for the full year were downsized. Since then Amlin Bermuda performed well, writing US$279 million of new business for the Group in 2006, of which US$54 million was specifically ceded to it by Syndicate 2001.

Amlin Bermuda’s directly written reinsurance is well diversified, it having achieved a good split of US and non-US catastrophe income and access to the geographically spread regional US business which is underwritten by Syndicate 2001.

To provide Amlin Bermuda with greater diversity, helping to secure its strong security rating, it also wrote a whole account quota share reinsuranceof Syndicate 2001, which contributedUS$119.2 million of premium income, bringing its overall 2006 premium income to US$411.3 million.

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