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MS Amlin’s Q1 result hit by more frequent non-cat large losses

7th August 2019 - Author: Luke Gallin

MS Amlin, the insurance and reinsurance subsidiary of Japanese insurance group MS&AD Insurance Group Holdings Inc., has reported an underwriting loss of £51 million for the first-quarter of 2019, compared with an underwriting gain of £2 million in the first-quarter of 2018.

ms-amlin-logoIn the first-quarter of 2019, MS Amlin was hit by more frequent non-cat large losses than usual, which the firm attributes to aircraft incidents and plant fires, alongside a £21 million foreign exchange loss. While a benign major natural catastrophe experience failed to exacerbate the situation, the re/insurer’s underwriting performance suffered in Q1 2019.

Incurred losses, which includes loss adjustment expenses (LAE), increased by £20 million in the quarter to £499 million when compared with the same period in 2018. MS Amlin’s claims ratio increased by 5.5% in the quarter to 68.9%, while its expense ratio increased by 1.8%, to 38.1%.

MS Amlin has recorded a combined ratio of 107% for the first-quarter of 2019, which is weaker than the 99.7% recorded in the first-quarter of 2018.

Overall, after-tax net income increased by £23 million to $24 million in Q1 2019, which the firm says is above its plan and which was driven by strong asset management and an absence of natural catastrophe events.

Net premiums written grew by £28 million, year-on-year, to £1.34 billion, while net earned premiums fell by £30 million to £725 million, compared with £755 million in Q1 2018. The firm attributes the decline in net earned premiums to “tightening underwriting as a result of continuing efforts since FY2018 to improve the quality of the portfolio.”

The re/insurer also notes that during the second-quarter of 2019 is has witnessed improvement in the underwriting result, which is primarily a result of lower non-cat large losses and a continued absence of natural catastrophe events.

“Continued efforts will be made to improve premium rates, terms and conditions, maintain prudent underwriting standards, and reduce costs,” says MS Amlin.

At £104 million, the company’s investment profits increased by a substantial £71 million in Q1 2019 on the same period in 2018, which MS Amlin attributes to a rise in stock prices, mainly in the U.S., and also the solid performance of bond funds since January 2019.

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