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AMI captures market share

By Chris Hutching

Friday 28th November 2003

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AMI Insurance's profit lift for the June year came from new business and a gain in market share from rivals, chief executive John Balmforth says.

AMI's main point of difference in the personal lines insurance business is its personal service and it has expanded its branches in recent years while other competitors have significantly reduced their outlets.

AMI reported a tax-paid profit of $19.4 million, compared with a profit of $12.1 million in 2002. It was achieved on 10.3% higher revenue from premiums of $204.4 million ($185.2 million), mostly new business rather than from more expensive premiums. Investment income was $12.3 million after tax. The cost of claims was $132 million. Total assets are a record $284 million.

Mr Balmforth said the reinsurance market had stabilised but a less optimistic feature of the local market going forward in terms of claims is the increase (up 7%) in two-car crashes in Wellington and Auckland, forcing a rise in premiums post-balance date of 6%.

Other events that would affect next year's accounts include the recent slip at Paekakariki. Some of the claims this year included hail storms in Christchurch and floods in Nelson. Mr Balmforth said the latest result continues the growth momentum of the past five years and in the latest year the organisation created another 25 jobs.

AMI's investments in Australasian bonds and shares (12% of the investment portfolio) have risen to a value of $154 million ($129 million last year), thanks to a recovery in world markets.

Mr Balmforth highlighted the benefits of the branch network. It meant they could form relationships with local ventures and organisations.

At a national level AMI is involved with the Wellington-based Malaghan Institute for Medical Research and it has a nine-year history with the Christchurch Symphony orchestra, for which AMI won the 2003 NBR Sponsor of the Year award for sponsorship of the arts.

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