(Reuters) - British insurer and reinsurer Amlin Plc AML.L 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 said.
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.
Reporting by Karen Rebelo and Richa Naidu in Bangalore; Editing by Gopakumar Warrier