Stmnt re US Events
Amlin PLC
15 October 2001
Immediate 15 October 2001
AMLIN REVISES US TERRORIST ATTACKS LOSS ESTIMATE
CAPACITY INCREASED TO £800 MILLION FOR 2002
Amlin plc has reviewed and revised its estimate of losses arising from the
terrorist attacks of 11 September 2001. The revised estimate of the net loss
to Amlin plc, including reinstatement premium costs for reinsurance contracts,
is £60 million before tax, equivalent to 21p per share after tax. This
compares with the preliminary estimate made, on 18 September 2001, of £45
million before tax, equivalent to 16p per share. The change in estimated
losses arises mainly in Syndicate 2001's property and risk XL accounts where
information received from insureds has changed. The situation continues to be
monitored closely and, owing to the nature and scale of the impact of the
terrorist attacks, it is likely to be a considerable period before all claims
are determined. Accordingly, the estimate of losses may increase or decrease
in the future.
Amlin expects the losses arising from the terrorist attacks to be mitigated by
the strengthened performance of its underlying business in the current year
and by the substantial increases in premium rating which have been experienced
in the aftermath of the attacks.
Amlin has the ability to underwrite up to £200 million of premium income for
the remainder of 2001 following 11 September. Approximately £60 million of
this is likely to be in Amlin's airline account where around 65% renews in the
last quarter, and where risks already renewed since 11 September have seen
premiums increase to about 300% of last year's levels. We are limiting third
party (non passenger) liability cover for terrorism to US $50 million per
policy, and terrorism cover for passengers continues to exist within the
normal liability limits but with a premium surcharge per passenger. Syndicate
2001 typically underwrites a 5% line on the major airlines that it covers. We
are also now excluding terrorism cover from major US property renewals.
Following the US terrorist attacks, insurance market conditions are expected
to be more favourable than for many years. Amlin has therefore applied to
Lloyd's and been granted approval to increase its capacity for 2002 from the
previously announced £700 million to £800 million. This is a 39% increase in
capacity compared to 2001.
Enquiries:
Charles Philipps, Chief Executive 020 7746 1059
Richard Hextall, Finance Director 020 7746 1058
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