Amlin First-Half Profit Drops 17% as Catastrophe Claims Mount

Amlin Plc, the second-biggest Lloyd’s of London insurer by market value, posted a 17 percent drop in first-half profit as catastrophe claims jumped on flooding in central Europe.

Profit was £140.2 million ($219 million) in the first six months of 2013, compared with £168.8 million [$264.173 million] a year earlier, the London-based insurer said today in a statement. The firm paid £32.2 million [$50.4 million] in large catastrophe claims in the first half, compared with zero in the same period last year.

The only major catastrophe in the period was the European flooding in May and June, which will likely result in losses between $3.5 billion and $4.5 billion for the entire industry, Amlin said.

Renewal rates for catastrophe insurance are falling amid increased competition from the capital markets, with prices likely to keep declining into next year unless there are more natural disasters in the second half, the company said.

“There are positive trends in a number of our businesses which will counteract downward pressure on catastrophe reinsurance rates,” Chief Executive Officer Charles Philipps said in the statement. “We are optimistic about the out-turn for the full year.”

Editors: Keith Campbell, Edward Evans.