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MS Amlin’s investment gain drives improved 9M net income

14th February 2020 - Author: Luke Gallin

Insurer and reinsurer MS Amlin increased its contribution to its parent, MS&AD Insurance Group Holdings, Inc., in the nine-month period ended December 31st, 2019, as a strong investment return more than offset an underwriting loss.

ms-amlin-logoIn its 3Q2019 earnings releases, MS&AD Insurance Group underlines the strong performance of its overseas operations, which was mostly driven by the increase at its MS Amlin subsidiary.

The business recorded net income after-tax of £62 million for the nine-month period, which represents a significant improvement on the £65 million net loss recorded for the same period in 2018.

MS Amlin’s results show that the strong performance was driven by a £111 million rise in investment income to £235 million, against £123 million in the same period in 2018.

The re/insurer’s spike in investment return more than offset an improved, but still negative underwriting return of £47 million for the period.

The firm notes that underwriting profit was broadly in line with expectations and highlights a 5.4 percentage point improvement in the non-catastrophe claims ratio to 63.8%, but adds that this still fell short of the initial plan as a result of non-catastrophe large loss activities.

Net premiums written expanded by more than 5%, or £135 million in the nine-month period to £2.75 billion, while net premiums earned jumped by approximately 1%, or £22 million to £2.4 billion.

At £1.6 billion, incurred losses and loss adjustment expenses fell slightly year-over-year, and the firm reveals that MS Amlin’s expense for acquisition and other operating expense also fell in the period, by £31 million to £805 million.

Overall, MS Amlin’s claims ratio fell by 1.4 percentage points to 69.5%, while its expense ratio declined by 1.7 percentage points to 32.5%, when compared with the prior year nine-month period.

As a result of the above, MS Amlin saw its combined ratio for the nine-month period ended December 31st, 2019 strengthen by 3.1 percentage points when compared with the prior year period. However, at 102%, this remains in unprofitable territory.

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