Amlin plc. Numis Non-life Insurance Briefing 13 January Charles Philipps, CEO

Transcription

1 Amlin plc Numis Non-life Insurance Briefing 13 January 2011 Charles Philipps, CEO

2 This presentation contains or may contain forward-looking statements. It is important to note that the Company s actual results could differ materially from the results anticipated or projected in any such forward-looking statements, based on a number of important factors. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Past performance cannot be relied on as a guide to future performance. Slide 2 Amlin plc

3 Amlin plc Overview

4 Amlin Leading independent insurer: available capital 2 billion UK domiciled and listed Specialist in reinsurance and commercial insurance Substantial underwriting businesses in London, Bermuda and Continental Europe, each with established franchise Diversity of risk, clients and distribution Scope for organic growth in a wide range of classes and territories Slide 4 Amlin plc

5 Markets Regulatory uncertainty Economic slowdown Low investment returns Over-capacity and increasing competition Softening market overall (with a few exceptions) Bottom of the cycle? A tough environment Slide 5 Amlin plc

6 Average renewal rates for Amlin s portfolio Average renewal rate change Jan % Average renewal rate change to Nov 2010 % Amlin London Reinsurance Property and casualty Marine Aviation Amlin UK Amlin Bermuda (direct only) Amlin Corporate Insurance (1.3)% (2.8)% (0.7)% (0.4)% 9.6% - (2.0)% % - (0.2)% Estimates Slide 6 Amlin plc

7 Amlin plc Why invest in Amlin?

8 Why invest in Amlin? Market leading underwriting expertise Stable and experienced management team A diverse and balanced portfolio Profit driven underwriting Active capital and risk management Well positioned for Solvency II Strong balance sheet Superior Financial Strength ratings and strong broker relationships Significant scope for growth through three well capitalised underwriting platforms Cross cycle record of outperformance Slide 8 Amlin plc

9 Market leading underwriting expertise Long-standing core team of some 60 senior underwriters: Average market experience 23 years Average tenure with Amlin 11 years* Average voluntary turnover less than 5% Proven ability to attract high calibre underwriting talent: London Market Europe (Amlin Re) Bermuda *Excluding ACI, Amlin France and Amlin Re Europe Slide 9 Amlin plc

10 Stable and experienced management team Long-standing core management team since Amlin created in 1998: Charles Philipps (Chief Executive), Richard Hextall (Finance Director), James Illingworth (Chief Risk Officer), Simon Beale (Underwriting Director, Amlin London), Brian Carpenter (Underwriting Director, Amlin UK) Substantial market and management experience across the Group Significant recent investment in broadening Amlin s management resource and expertise *Excluding ACI, Amlin France and Amlin Re Europe Slide 10 Amlin plc

11 supported by strength in depth in Amlin s people Investment in expertise across the Group: e.g. actuarial, risk modelling, specialist claims Focus on development of internal talent as well as recruitment Graduate and young people training schemes in London, ACI and Bermuda Amlin first London Market insurer to achieve Chartered Insurer Status Acquisitions have broadened skill base and added experience of different markets *Excluding ACI, Amlin France and Amlin Re Europe Slide 11 Amlin plc

12 A diverse and balanced portfolio Estimated Amlin Group GWP % 5% 6% 34% Reinsurance Marine Property Liability Fleet Motor Other 15% 19% Slide 12 Amlin plc

13 A diverse and balanced portfolio 300% 250% 200% 150% 100% 50% 0% Fleet Other Motor PI EL PL Package Airline Hull Airline Liability Products GA Hull GA Liability Airport Liability Space Bloodstock Cargo Energy Hull Liability Specie War Yacht Catastrophe RiskXL Marine/Aviation XL Pro Rata Direct&Facultative Binders Auto Casualty Accident&Health/PA Credit Special AIS Aviation Marine NonMarine TOTAL Illustrative Loss Ratios DFA Mean Business Plan Median DFA - business plan scoring (not including ACI) Slide 13 Amlin plc

14 Profit focused underwriting Historic gross ultimate loss ratios for Amlin v Lloyd's 150% 8 130% 7 GULR % 110% 90% 70% 50% 30% Amlin's % share of Lloyd's market 10% 1-10% Year of account 0 Amlin GULR % Lloyd's GULR % Market share Gross underwriting profitability Cross cycle discipline Robust risk management Profit-focused incentives = Outperformance in difficult markets Slide 14 Amlin plc

15 Active capital management B share issue Special dividend Ordinary dividend Pence per share H Key performance metric: Return on Equity Target ROE: at least 15% cross-cycle Slide 15 Amlin plc

16 Active capital management Subordinated debt 2004 US$50m 7.11% Maturity date US$50m 7.28% Maturity date m 6.50% Maturity date m* N/A Maturity date 2018 *(Issued by ACI) Bank facilities 5 years from Sept. 2008: multicurrency revolving credit facility, cash or LOC At 30 June 2010 m At 31 Dec 2009 m Key performance metric: Return on Equity Target ROE: at least 15% cross-cycle Slide 16 Amlin plc

17 and effective risk management Internal Model approval will be key to success under Solvency II regime Amlin already had a sophisticated internal capital and risk modelling capability following ten years of investment: well advanced with application for Internal Model approval Now focused on embedding Amlin s Target Operating Model in business practices to drive benefits across the Group, for example: more effective reinsurance purchasing taking account of Group risk appetite risk adjusted relative technical pricing framework enhanced aggregate data capture better challenge and validation of risks enhanced capital allocation and risk based performance measurement Impact of Solvency II capital requirements on weaker players expected to create opportunities for Amlin Amlin on track for Solvency II compliance before 2012 Slide 17 Amlin plc

18 delivering cross-cycle return 40 Return on equity (%) % cross cycle hurdle Slide 18 Amlin plc

19 Strength of capital Net tangible assets Subordinated debt Bank facilities (1) Total available capital 2, ,996.7 Assessed capital (2) 1, ,341.2 Surplus (1) Bank facilities are subject to a number of covenants. (2) Assessed capital is management s estimate of required capital for current trading purposes. At 30 June 2010 m 1, At 31 Dec 2009 m 1, Financial Strength Ratings AM Best S&P Moody s Fitch Syndicate 2001 A+ (Superior) Lloyd s Syn. 4 (Stable) A1 (Stable) Not rated Amlin AG A (Excellent) A (Stable) A2 (Positive) Not rated Amlin Corporate Ins. Not rated A- (Stable) Not rated A (Positive) Slide 19 Amlin plc

20 with significant scope for growth Amlin plc GWP 1,486m Net assets: 1,635m Syndicate 2001 GWP 841m FAL 416m Amlin AG Capital: $1.4bn Amlin Corporate Insurance GWP: 489m Net Assets: 333m Amlin London Amlin UK Amlin France Amlin Bermuda GWP (direct) $337m Amlin Re Europe Established 2010 Figures as at 30 June 2010 Slide 20 Amlin plc

21 Amlin AG Consolidation in the European reinsurance market combined with Solvency II has created cedant need for greater choice and spread of counterparty risk Amlin Re Europe will access Continental reinsurance business not normally ceded to London or Bermuda Capitalised at more than US$1.4 billion with same excellent ratings as Amlin Bermuda and strong client and broker relationships No new capital required for start-up: company utilises existing capital resources through redomicile of Amlin Bermuda to Zurich Benefits: diversifies Amlin s existing reinsurance portfolio by geography and class further reduces volatility within the overall reinsurance portfolio makes more efficient use of the Amlin Group s current capital and financial strength another underwriting platform from which to grow the business Slide 21 Amlin plc

22 Amlin plc Summary

23 Why invest in Amlin? Market leading underwriting expertise Stable and experienced management team A diverse and balanced portfolio Profit driven underwriting Active capital and risk management Well positioned for Solvency II Strong balance sheet Superior Financial Strength ratings and strong broker relationships Significant scope for growth through three well capitalised underwriting platforms Cross cycle record of outperformance Slide 23 Amlin plc

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