Ratings agency A.M. Best has predicted that Bermuda insurer Amlin Bermuda Ltd. (ABL) will make a profit of $186 million in 2006 and $255 million next year.

The ratings agency anticipates an outstanding loss ratio of approximately 40 percent for 2006 as a result of excellent performance on business assumed from syndicate 2001 and a benign hurricane season.

A.M. Best affirmed ABL?s financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of ?a-? . The outlook for both ratings remains stable.

The ratings reflect ABL?s excellent risk-adjusted capitalisation and its first year execution of operations within the parameters of the business plan presented to A.M. Best during the initial rating process in 2005.

Despite the absence of a reinsurance programme in 2006-2007, A.M. Best continues to believe that the spread of business written by the company in its target sectors effectively limits exposure to major losses to a manageable level. ABL?s links to Amlin plc provide the company with a high degree of financial flexibility. Amlin raised ?230 million ($450 million) through a subordinated debt issue in April 2006.

Best believes that ABL writes a diversified account both in terms of territory and the classes of business written. The company adopts a prudent approach to writing property catastrophe business, focusing on regional coverage with zonal exposures capped using total insured value at risk. Nationwide accounts and retrocession business are avoided.