(Adds comment from Amlin, analyst, updates shares)
By Karen Rebelo
May 22 British insurer and reinsurer Amlin Plc
reported a 5 percent rise in quarterly gross written
premiums in a tough market and warned of increasing competition
in the U.S. catastrophe reinsurance market.
The absence of major hurricanes in the United States last
year has led to a fall in catastrophe reinsurance rates, which
has been exacerbated by the growing popularity of "catastrophe
bonds" sold by insurers to share risk for natural disasters.
Amlin, which underwrites property, casualty, marine and
aviation insurance, said gross written premiums for the quarter
ended March 31 rose to 1.28 billion pounds ($2.16 billion) from
1.22 billion pounds a year earlier.
The growth was driven by an almost 15 percent rise in gross
written premiums at Amlin Bermuda, which caters to the U.S. and
Canadian catastrophe markets, and a 25 jump at its property and
casualty reinsurer, Amlin Re Europe.
Amlin, which gets more than half of its catastrophe books
from the United States, said on Thursday it was possible to
achieve good margins despite a more challenging environment.
The company expects to see continued downward pressure on
catastrophe rates this year unless there is a significant
catastrophe, Amlin's head of investor & media relations,
Julianne Jessup, told Reuters.
U.S. catastrophe reinsurance rates are also being squeezed
as pension funds seeking better returns enter the market, Jessup
Amlin said U.S. catastrophe renewal rates reduced by an
average of 10.3 percent during the quarter but the reduction was
much lower than that seen by the catastrophe reinsurance market
as a whole.
"We continue to see Amlin as the Lloyd's insurer most
exposed to the decline in catastrophe pricing. However, 2014E is
shaping up to be a good year so far with low catastrophe losses
and a solid investment return in the first quarter," RBC Capital
Markets analysts Kamran Hossain said.
Amlin shares were up marginally at 459.4 pence at 1012 GMT
on the London Stock Exchange.
($1 = 0.5925 British Pounds)
(Reporting by Karen Rebelo and Richa Naidu in Bangalore;
Editing by Gopakumar Warrier)