LONDON (AFX) - Amlin PLC, the Lloyd's of London insurer, said first-half pretax profits declined to 120.1 mln stg from 138.4 mln stg a year earlier, held back by the foreign exchange impact and by lower investment returns.

The profit figure was above the consensus forecast of 108 mln stg taken last week, even with a negative foreign exchange impact of 45.5 mln stg.

The company said in a statement that it had seen gross written premiums fall back in the UK commercial market due to falling retention rates as people looked for cheaper options.

Charles Phillips, chairman of Amlin, said that the company had 'made solid progress', adding that he thinks that insurance rates will continue to 'firm up' into next year after the Jan 1 season of renewals is over.

Amlin's claims ratio -- the sum of claims paid, change in the provisions for unpaid claims and claim adjustment expenses in relation to premiums earned -- rose to 47 pct from 42 pct, after slightly more property, marine and aviation losses than last year, Phillips said.

Charles Coyne, an analyst at KBC Peel Hunt, said that the numbers 'looked great,' adding that the pretax profit had beaten his expectations by 10 mln stg.

Bridgewell Securities said that the numbers reflected the underlying strength of the business, and added that the company was a quality play in the sector.

The company also said that Amlin's reinsurance platform in Bermuda had had a 'solid start,' contributing gross written premiums of 161.8 mln stg, with an underwriting profit of 23.6 mln stg.

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