Monday, November 2, 2009

AMI profit falls almost a third

ami insurance

AMI Insurance profit has fallen 30 per cent to $18.5 million due to rising claims costs, bad weather and less investment income.

The largest wholly New Zealand-owned fire and general insurer said substantial growth in customer and policy numbers contributed to an increase in written premiums to $302.2m.

The fall in profit after tax to $18.5m for the June 2009 year from the previous year's $26.9m was due to "the impact of major weather events on claims and of economic conditions on investment income", chief executive John Balmforth said.

Ashburton's 15 minutes of hail last November, for example, resulted in AMI covering just under $4m of damage.

Lower interest rates and the global economic recession meant AMI's investment portfolio did not achieve the record results of previous years, but still recorded solid income of $27.2 million.

Mr Balmforth said its solvency ratio – the ratio of its equity, $333.8m, to its written premiums of $302m was 114 per cent and the strongest in the industry.

Total assets rose to $496.3m from $475.7m.

Its assets were investments in mostly fixed-interest securities and cash and only a small amount in New Zealand and Australian shares ($36m).

It did not invest in international shares. Mr Balmforth said it had a conservative investment policy.

It differentiated itself from competitors by maintaining a substantial network of 73 branches and 22 agencies.

It had the largest customer-facing network of any New Zealand fire and general insurer.