Reinsurer and Lloyd’s underwriter Amlin recorded a 21% drop in net profit to £236.4 million ($465.31 million) last year due to lower reserve releases and a fall in investment returns.

Chairman Richard Davey says the reinsurance market in particular was more competitive, but Amlin’s catastrophe business was stable and non-catastrophe business grew.

“With competitive markets in many of our core business lines, it is unlikely we will see significant growth in the short term.

“The pace of change in traditional insurance markets, particularly London, combined with weaker pricing in market segments where surplus capacity is driving competition, present a more challenging trading environment [this year].”

Catastrophe rates fell an average of 8.3% last year.

Gross written premium grew 4% to £2.56 billion ($5.04 billion), and the combined operating ratio deteriorated to 89% from 86%.