Lloyd’s insurer and reinsurer Amlin says net profit fell 2.4% to £132.8 million ($284.4 million) in the half-year to June 30 due to an accounting change.

“This is a solid set of results in the more challenging market that prevails,” CEO Charles Philipps said.

“Were it not for our change in accounting for the seasonality of catastrophe reinsurance earned premium, profit… would have been considerably ahead of the first half of last year. This will unwind in the second half.”

Gross written premium increased to £2.01 billion ($4.3 billion) from £1.89 billion ($4 billion) in the corresponding period last year.

Net earned premium fell 7.5% to £1.03 billion ($2.2 billion).

Amlin says this is due to a change in its reinsurance business, slower earning of multi-year contracts and the impact of moving North American windstorm premiums to a seasonally adjusted earnings pattern. The move reduced first-half gross earned premium by £61.7 million ($132.1 million) and reinsurance premium by £23.7 million ($50.7 million).

The combined operating ratio deteriorated to 91% from 87%.

There were no large catastrophe losses but smaller catastrophes and large risk losses increased to £39.3 million ($84.1 million) from £28.5 million ($61 million).

Renewal rates fell an average of 4%, compared with 3.3% in the corresponding period last year, but there are signs the decline is slowing.

The net foreign exchange loss narrowed to £2.5 million ($5.4 million) from £10.9 million ($23.3 million).

Amlin says measures including the transition of the North American windstorm business and its diversification focus will help overcome challenging business conditions.

“We have actively sought opportunities to adapt the balance of our portfolio, new product offerings have been developed and new markets and regions have been accessed.

“This increased diversification allows us to respond to changing markets, take advantage of opportunities for growth and to deliver returns.”