Notice of AGM

Notice of AGM

Amlin Plc

AMLIN plc (“Amlin”)

RELEASE OF ANNUAL REPORT AND NOTICE OF AGM

The following documents have today been made available to shareholders:

1. 2014 Annual Report

2. Notice of the 2015 Annual General Meeting

3. Form of Proxy for the 2015 Annual General Meeting

Copies of the 2014 Annual Report and Notice of AGM may be viewed on the Company’s website at www.amlin.com under “Investors/Reports” and “Investors/Shareholder-circulars” respectively.

In accordance with Listing Rule 9.6.1, copies have been uploaded to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do.

COMPLIANCE WITH DTR 6.3.5 – EXTRACTS FROM THE 2014 ANNUAL REPORT

The information below, which is extracted from the 2014 Annual Report, is included solely for the purpose of complying with DTR 6.3.5. It should be read in conjunction with the Company’s Preliminary Announcement issued on 2 March 2015 which is available at www.amlin.com. Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text via a Regulatory Information Service. This material is not a substitute for reading the full 2014 Annual Report.

The information contained in this announcement and in the Preliminary Announcement does not constitute the Group’s statutory accounts, but is derived from those accounts.

Principal Risks and Uncertainties

Principal risks and description

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Attitude/appetite

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Amlin’s analysis of impact and exposure

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Risk trend and measure

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Mitigation strategies and key controls for each underlying risk exposure are outlined below

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Executive responsibility

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Link to strategic priorities

Enterprise-level risk: Risks associated with one or more of a portfolio of principal risks occurring and providing an aggregated impact on the organisation as a whole.

Attitude: Balanced Amlin recognises that a balanced approach to underlying risk is important to manage the risk profile for the enterprise as a whole. The governance of risk seeks to ensure that profit targets can be achieved without unacceptable levels of potential loss which could ultimately impact the solvency of the Group.

Amlin is exposed to a domino-type event, whereby, for example a major natural catastrophe event not only affects Amlin's insurance underwriting portfolio but also impacts stock markets, causing significant market and currency movements and a material impact to investments. The combined effect of these risk events could trigger reinsurance counterparty default events and hence a secondary impact on liquidity.

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The risk management framework developed ensures that potential risk exposures are considered individually and in aggregation The risk function produces an aggregated group risk profile providing an enterprise-wide view of risk exposures for the Group Executive and the Board Stress testing of a combination of material risks is conducted to determine impact on capital Reverse stress testing of the ultimate impact of combinations of material risks on business model viability and reputation is also conducted The Internal Model produces 100,000 simulated results and combined scenarios which are then measured to ascertain the appropriate level of capital for Amlin.

Chief Risk Officer responsible for framework-wide view of risk exposures

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Strategic risk: Risks associated with the appropriateness of business strategy in the face of the external environment.

Attitude: Positive Amlin has a positive attitude to strategic risk as it actively pursues ways of developing the business. The Group also faces a number of external factors which may impact demand for or supply of our products. These risks are analysed and actions agreed to adapt the strategic approach to cater for them.

It is critically important to Amlin’s reputation that the organisation responds effectively to changes in the external environment and seeks to secure opportunities for growth through organic expansion and acquisition where market conditions allow. Once acquisition targets are secured, project teams need to successfully implement integration programmes.

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Long-term strategies are developed addressing diversification of underwriting platforms Due diligence and risk assessment processes are conducted for acquisitions Risk event and near-miss reporting processes capture loss circumstances and actions to prevent recurrence Emerging risks are identified and monitored.

Chief Executive

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Underwriting – catastrophe risk: The risk of claims arising from inherent uncertainties in the occurrence of insurance losses associated with natural or man-made catastrophic events.

Attitude: Positive Amlin has a positive attitude to catastrophe risk, which remains a core product offering to our reinsurance and commercial clients. Amlin has invested in people and infrastructure to price, manage and model catastrophe exposures. Tolerance limits are applied to specific loss scenarios, and the Group and its subsidiary businesses operate to modelled annual loss limits. Appetite for these risks is also influenced by our ability to achieve an acceptable balance of exposures across territories.

Amlin has an extensive portfolio of property and marine insurance and reinsurance business that has significant exposure to weather and earthquake exposures as well as non-elemental perils such as industrial accidents.   Catastrophe exposures have reduced through non-renewal of business and improved reinsurance protection.

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Underlying strategy and diversity of exposure Modelling and pricing takes account of hazards Maximum line size and programme limits contain potential losses from one risk event Aggregate exposure limits are used to control exposures in any one zone Probable maximum loss limits are used to limit potential single event losses Modelling of loss scenarios and stochastic modelling measure single and annual aggregate loss events so they can be compared against agreed tolerances The reinsurance programme protects the Group against severe single or multiple catastrophes.

Chief Underwriting Officer

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Underwriting – attritional risk: The risks of unexpected or unbudgeted increase in cost of small or large insurance claims.

Attitude: Positive Amlin has a positive attitude to underwriting risk and accepts that there will be claims arising from all areas of its (re)insurance risk profile. The appetite for attritional risk is governed by the amount of business that meets our pricing requirements but also by the capacity determined by our capital base and reinsurance arrangements. Amlin aims to achieve a diversified balance of exposures across lines of business and territories.

Amlin is exposed to attritional losses caused by inadequate pricing and/or unexpected claims frequency as well as systemic change in the nature of claims. As the downward trend in the pricing cycle leads to lower margins, the risk increases, although underwriters are expected to take action to decline business if pricing is unacceptable.

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Underwriting authority limits per contract control single risk losses and peer review is carried out to monitor risk selection Underwriting strategy is agreed to determine the approach to each line of business and this is regularly reviewed Group business planning processes include challenge of potential levels of income and expected loss ratios The technical pricing assessment provides underwriters with a risk-based comparative benchmark price The reinsurance programme limits the cost of single claims Underwriting monitoring and performance review is used to address poor-performing parts of the portfolio Underwriting pricing is expected to cover cost of expected claims.

Chief Underwriting Officer

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Underwriting – reserving risk: The risk of unexpected or unbudgeted increase in claims emanating from business written where profit has been declared.

Attitude: Balanced Amlin adopts a balanced approach to reserving risk, which is an unavoidable consequence of underwriting a portfolio of business where claims may develop after the policy period has elapsed. Our appetite is governed by a policy which ensures that reserves are carried above the actuarial best estimate of future outcomes. Classes of business which have a higher level of uncertainty of potential development will naturally carry a higher level of reserve provision. Amlin does not discount reserves to take account of the investment return generated by premium or reserves held for future claims payments and takes consideration of likely cash flow requirements when investing carried reserves.

Due to the short-tail nature of many of its business lines underwriting outcomes are determined relatively quickly after a loss is notified.

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Amlin operates a consistent, actuarially driven process quarterly to assess that appropriate level of reserves are carried, taking account of the characteristics and risks of each class of business, to arrive at a best estimate. The best estimates are subject to challenge and review by management and the Audit Committee on behalf of the Amlin Board The reserving risk tolerance requires a minimum probability of carried reserves being in excess of liabilities of at least 65%. This is tracked as a key metric The reinsurance programme responds to large loss developments from prior years Consistent claims processes and accurate case reserve setting aims to ensure that adequate provision is established for advised claims.

Chief Underwriting Officer

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Market risk – investment market volatility: The risk arising from fluctuations in values of investments.

Attitude: Positive Amlin has a positive attitude to market risk, constrained by a desire to limit the potential downside risk to the value of carried assets to within a maximum Value at Risk (VaR) tolerance. Premium and reserve investments are limited by the liquidity requirements of meeting claims as they become payable.

Amlin seeks to optimise its investment income whilst focusing on ensuring it maintains sufficient capital to meet solvency requirements and sufficient liquid funds are available to meet liabilities when they fall due. Exposure to market risk is therefore limited to the extent that investment strategies are balanced by these primary objectives.

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Investment policy and strategic asset allocation aims to maximise long-term investment returns in relation to an agreed risk budget Tactical asset allocation responds to expectations for short-term market prospects or volatility A diversified portfolio limits exposure to any one security or asset class The investment team conducts modelling and monitoring of investment risk against agreed tolerance using an economic scenario generator model.

Chief Finance & Operations Officer

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Market risk –currency fluctuation: Impact on the value of balance sheet or earnings arising from the movement in value of sterling against key non-functional currencies.

Attitude: Balanced Amlin has a balanced attitude to currency risk, which is an unavoidable consequence of holding balance sheet assets, premiums and liabilities in currencies other than sterling. This risk is managed by hedging balance sheet exposure and by matching liabilities to the appropriate currency where possible.

Amlin has an international business with subsidiaries operating in US dollar and euro currencies as well as significant underwriting activity conducted in US dollars and Japanese yen.

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We aim to match assets and liabilities by major currency, which includes actively selling underwriting profits earned in non-base currencies as they crystallise Foreign currency forwards and options are used to reduce Group balance sheet foreign exchange volatility arising from non-sterling net assets.

Chief Finance & Operations Officer

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Credit risk – reinsurance counterparty: The risk of loss if a counterparty fails to perform its obligations or fails to perform them in a timely fashion.

Attitude: Balanced Amlin has a balanced attitude to reinsurance counterparty credit risk, which emanates from use of reinsurance to increase Amlin's risk capacity and to protect the company against severe catastrophe events. Counterparty exposure is controlled by maximum exposure limits applicable to each reinsurer, linked to their ability and willingness to pay claims.

Amlin has increased use of reinsurance capacity through the purchase of additional retrocession protection for the catastrophe account. While most of this coverage is fully collateralised, there has been an increase in the level of exposure to certain reinsurers. Reinsurance protection is a key aspect of how we manage underwriting risk exposures and the use of accredited reinsurers is an important control.

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The reinsurance security team conduct accreditation selection and rating of all reinsurers There are limits over exposure placed with any one reinsurer Reinsurance debt credit control is carried out to limit outstanding balances owed by reinsurers Credit risk is reduced through the purchase of collateralised reinsurance.

Chief Finance & Operations Officer

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Credit risk – intermediary counterparty: The risk of loss if an insurance or treasury intermediary fails to meet credit obligations in a timely fashion.

Attitude: Balanced Amlin has a balanced attitude to intermediary credit risk. We recognise that brokers need to collect both premiums and claims as part of their service, and we set limits according to broker financial strength to control exposure for each counterparty.

Amlin has exposure to insurance and reinsurance brokers as well as treasury intermediaries.

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The finance team credit control procedures limit exposure to brokers Active broker debt credit control is carried out to limit levels of unpaid premium held by intermediaries.

Chief Finance & Operations Officer

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Liquidity risk – (including asset/liability matching): The risk arising from insufficient financial resources being available to meet liabilities as they fall due.

Attitude: Negative Amlin seeks to avoid any situation where funds are not available to meet claims as required because this would have significant regulatory and reputational impact. Bank facilities are used to manage cash flow and ensure that liquidity constraints do not impact our claims service to policyholders.

The strength and liquidity of the balance sheet is fundamental to our proposition as an insurer of choice, providing us with the ability to respond quickly to claims, particularly relevant in the event of a large catastrophic loss such as a hurricane or earthquake.

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Stress testing of liquidity needs relative to major catastrophe events ensures that liquidity requirements are fully understood The investment team maintains sufficient liquidity in the investment portfolio to address claims needs so that claims are paid as they fall due.

Chief Finance & Operations Officer

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Operational risk – systems and processes: Risks resulting from inadequate or failed internal processes, people and systems, or from external events, including regulatory control failures.

Attitude: Negative Amlin does not wish to have any operational failures which may hinder trading or result in financial loss, or any regulatory sanction for inadequate compliance. It is recognised, however, that achieving complete certainty that such failures could not occur would entail an unacceptable cost.

Amlin operates a diverse business across a number of offices and jurisdictions and is expected to comply with legal, regulatory and best-practice standards. The potential exists for a failure of critical business processes, people or systems resulting in an interruption to normal operations. Dependency on sophisticated stochastic models may introduce operational risk. Additionally, natural or man-made disasters could impact Amlin's operating platform in one or more location.

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The implementation of the risk management framework for the identification, evaluation and control of operational risks ensures that operational risks are understood and managed Procedural controls, including workflow management, help maintains discipline over the control of key processes Monitoring of compliance with established procedures and processes is carried out to identify shortcomings Employee manual and Human Resource policies ensure that staff are aware of key policy requirements Risk events and near misses are reported to raise awareness and identify areas for improvement Internal Model validation and data quality controls aim to ensure that data is captured and processed with accuracy Business continuity management planning ensures that key operations will be restored in an acceptable time frame should there be disruption.

Chief Finance & Operations Officer

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Operational risk – people: Loss of key staff.

Attitude: Negative Amlin's ability to service the renewal of existing business portfolios and the underwriting of new business relies on the experience and expertise of its senior underwriters.   Continuity of senior management is also important for the development and execution of Group strategy and relationships with key stakeholders.

The experience and expertise of Amlin's underwriters is an important aspect of Amlin's business model and contributes to the strength of our market franchise and our ability to underwrite profitably.   Relationships with investors, regulators and other external parties are also of equal benefit.

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Senior employee contracts have notice periods to ensure that people resigning can be replaced by successors in an orderly way Succession planning and talent management ensures there is a depth of talent Remuneration policies aim towards staff retention as well as incentivisation.

Chief Executive

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Directors’ Responsibility Statement pursuant to DTR 4

Pursuant to the Disclosure and Transparency Rules of the Financial Conduct Authority each of the directors, whose names and functions are listed in the section of the Annual Report entitled ‘Board of Directors’ confirm that, to the best of each person’s knowledge and belief:

The financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the Group and Company; and

The directors’ report contained in the annual report includes a fair review of the development and performance of the business and the position of the Company and Group, together with a description of the principal risks and uncertainties that they face.

10 April 2015

Enquiries:

Mark Stevens	Â	020 7746 1000
Group Company Secretary
Amlin plc