Mr. Phillips: Amlin was created by the merger of two companies in 1998. One was Angerstine, which was essentially a company involved in underwriting, but with a strong capital base. The other was the Murray Lawrence Group, one of the pre-eminent underwriting agencies in London, but a company lacking capital. Primarily the merger linked capital strength on the one hand and a very good level of underwriting expertise on the other. At that time the business was writing insurance premiums of around £500 million. It comprised a number of relatively small businesses, with a high degree of overlap. Today we have underwriting capacity of just over £1 billion in London and we are organized by major class of business, focused from a client perspective. We reorganized the business in a major way, in the second half of 2000. That has resulted in enormous efficiency gains and an improvement in performance across the business. Where are we focused now? We have made enormous progress over the past two years towards delivering the strategy and vision which formed part of our 2000 reorganization, especially in terms of consolidating our reputation with clients and with the major brokers who are our distribution force. We are clearly focused on achieving our vision goals for 2005 and on delivering good returns on equity.
TWST: Can you describe the competitive landscape?
Mr. Phillips: All our business is transacted in the Lloyd’s of London insurance market and we are the largest independent business in Lloyd’s. Essentially, over the last few years there have been an enormous number of security downgrades in the insurance industry. However Lloyd’s of London has held up exceptionally well and has therefore attracted business from competitors. Within the Lloyd’s market, there has been a general flight to quality and given our strong market position, we have benefited enormously from that. What is important is that Lloyd’s businesses today are not being adversely affected by historical reserving issues. Take for example, asbestos and pollution liabilities in the United States. Lloyd’s dealt with that back in 1993, whereas most companies now have to substantially increase reserves for such liabilities. This means that, comparatively speaking, a Lloyd’s business such as Amlin is in a strong position in both competitive and performance terms.
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