Catlin 2007 Net up 4% to $543 Million

March 7, 2008

The Bermuda-based Catlin Group Limited, which does business in the UK, the Lloyd’s market and the U.S., reported a 4 percent rise in pretax net income for 2007 to $543 million, compared to $520.5 million for 2006.

Other financial highlights cited in the Group’s earnings report, included the following:
— 8 per cent increase in net income available to common shareholders to $462 million
— 21 per cent return on average equity;
— 33 per cent return on net tangible assets
— 24 per cent increase in gross premiums written to $3.4 billion
— Combined ratio of 84 percent (2006 = 87 per cent)
— Total investment return of 4.5 per cent including subprime provision

Catlin also noted a strengthened balance sheet, as follows:
— 49 per cent increase in stockholders’ equity to US$3.0 billion2
— 20 per cent increase in cash and investments to US$6.0 billion2
— 19 per cent increase in book value per share to US$9.592
— 29 per cent increase in net tangible assets per share to US$6.572
— 17 per cent increase in unearned premiums to US$1.5 billion
— 9 per cent increase in total dividend to 25.1 pence (50.2 US cents) per share

“Operational Highlights” for 2007 included:
— Successful integration of Catlin-Wellington operations
— Excellent business retention
— Growth in Catlin US and international offices

The outlook for 2008 is somewhat guarded, but Catlin said that despite “further rate softening,” its margins would “remain good.” It foresees “Stable premium volume (decrease in London; growth from Catlin US, international offices); Embedded growth in earned premiums from Wellington acquisition; Anticipated acquisition-related synergies increased to more than $125 million annually.”

Sir Graham Hearne, Chairman of Catlin Group Limited, stated: “Catlin is reporting record financial results today, including an 8 per cent increase in net income available to common shareholders, a return on average equity of 21 per cent and an increase in net tangible assets per share of 29 per cent. We have entered 2008 in a strong position and are confident of our prospects. This confidence is reflected in the proposed total dividend of 25.1 pence per share, an increase of 9 per cent.”

Chief Executive Stephen Catlin added: “2007 was a landmark year for Catlin. All parts of our business performed well, and we successfully integrated Wellington’s operations with our own. We advanced our strategy of further diversifying our risk portfolio and expanding our distribution capabilities through the development of Catlin US and our international offices.

“The progress in our operations outside London and the embedded growth emerging from the Wellington acquisition should enable us to maintain business volumes even in the challenging underwriting conditions anticipated during 2008. Those factors, combined with more than $125 million in annual cost synergies, provide the Group with a strong foundation for ongoing success.”

The full report and additional commentary is available on the Group, web site at:

Source: Catlin Group

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