Operating & Financial Review

Reward and recognition

Amlin has developed a total rewards approach which provides a mix of financial and non-financial rewards designed to maintain our competitiveness in the employment market, incentivise superior performance, encourage long term loyalty with an alignment to shareholderinterests, as well as providing staff with flexibility and choice.

We aim to set basic pay at the median of our peers and to provide the potential for employees to earn top quartile overall rewards for top quartile performance. We also encourage share ownership among employees and expect senior management to build meaningful shareholdings in the Company.

Following a strategic review of our reward arrangements undertaken in 2005, to ensure that the way in which we incentivise employees is closely aligned to our Vision, in 2006 we implemented a number of improvements to the Company’s longer term incentives and completed the design work on others which are being introduced in 2007.

Proposals for a new 5 year Capital Builder Long Term Incentive Plan (“Capital Builder”) for senior underwriters, a new 3 year Performance Share Plan for non-underwriting senior managers and a new annual Share Incentive Plan for all staff were formally approved by shareholders at the AGM in May 2006.

Each of these incentives is intended to motivate superior performance and encourage long term alignment between employees and the Company.

Descriptions of each of them are provided in the Directors’ Remuneration Report.

The Capital Builder incentive was awarded to 54 underwriting employees in 2006. The Performance Share Plan and the Share Incentive Plan will first be awarded to qualifying employees in 2007.

Like many companies, Amlin has reviewed its pension arrangements and specifically its position in relation to its final salary schemes. The plans outlined in our 2005 Annual Report were implemented in 2006, removing much of the Company’s risk associated with salary inflation which is inherent in defined benefit schemes and promoting equality in treatment between staff.

Employee well-being

In addition to rewarding employees financially, Amlin promotes the benefits of improved health and well-being at work, both in the interests of providing a beneficial working environment for employees and for the positive impact that this has on productivity, attendance and staff turnover.

Private Medical Insurance is offered to all employees and their dependants as a core benefit and the take up is over 84% of the workforce. In addition, as part of our flexible benefits package, employees can elect to choose medical screening under the well man/well woman schemes. During 2006, 51 employees chose this option.

Amlin uses an Occupational Health Advisory service to help proactively manage sickness absence as well as for pre employment screening, executive medical screening, proactive health management, policy advice and risk management.

We provide employees with the opportunity to receive free eye tests and also offer subsidised gym membership as part of our overall benefits package. Currently 31% of employees have subsidised gym membership.

We regard Health and Safety as a core aspect of how we do business and all employees receive regular on-line health and safety training.

Amlin’s Employee Assistance Programme provided to all UK based employees through ICAS, offers counselling, life management and legal advice. This year, Amlin has worked in conjunction with ICAS to develop workshops on stress management training, which has now been delivered to senior operational management and will be rolled out to other managers in 2007.

© Copyright Amlin 2006