Amlin Lifts Dividend to Yield 6%


LONDON -- Amlin (ISE: AML.L) advanced 3% to 391 pence in early London trading after the insurer of the Lloyds Banking catastrophe published its half-year results.

Amlin reported six-month net earned premiums up 7% to 988 million pounds and profit before tax of 185 million pounds, which compared favorably with a 192 million pound loss for 2011. The FTSE 250 member said the figures were bolstered by an "excellent" underwriting return, "limited catastrophe activity" and a "low frequency of large losses."

The comparable figures for last year were blighted by claims for 314 million pounds, which covered earthquakes in New Zealand and Japan, as well as flooding in Australia and tornadoes in the U.S.

The dividend was lifted 4% to 7.5 pence per share. Net tangible assets increased 6% to 257 pence per share. Amlin chief executive Charles Phillips said: "This is a welcome return to profit and the strength of our underwriting results underline the quality and diversity of our business. The improving trading environment is creating many opportunities for profitable growth, for which we have both the capital and underwriting capability to take advantage."

Amlin added that it expected the remainder of 2012 to "confirm a return of attractive levels of profitability." The group said that underwriting conditions in the reinsurance market were good, key areas of its insurance business were improving, and shareholders should expect "positive earnings momentum."

At present, Amlin's 12-month dividend is 23.3 pence per share, which supports a 6% income. On the face of it, that yield looks attractive, especially as the group has lifted its dividend steadily from 15 pence per share since the credit crunch erupted during 2007.

Amlin's income credentials are also rubber-stamped by having ace dividend investor Neil Woodford on the shareholder register. Woodford has thrashed the FTSE 100 during the past five, 10, and 15 years to 2011 by favoring solid, dividend-paying shares, and this free report -- "8 Great Income Shares Held By Britain's Super Investor" -- outlines which other companies he's backing right now. You can click here to download this free Neil Woodford report today.

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