Catlin Group Six Months Underwriting Results Steady; Net Income Falls

The Bermuda-based Catlin Group Limited listed the following highlights for the financial results for the six months ended 30 June 2013.
— Strong Underwriting Reflected in 88.9 percent Combined Ratio
— Strong underwriting performance US$441 million in net underwriting contribution (30 June 2012: $443 million), despite US$99 million in net catastrophe losses (30 June 2012: nil)
— 43 percent of net underwriting contribution produced by non-London/UK underwriting hubs (30 June 2012: 35 percent)
— Good underwriting conditions for most classes of business: 1.6 percent increase in average weighted premium rates across portfolio (0.4 percent increase for catastrophe-exposed classes; 2.4 percent increase for non-catastrophe classes)
— 10 percent increase in gross premiums written
— 0.4 percent annualized total investment return
— $16 million in total investment return as a result of $76 million in mark-to-market reductions in the value of the fixed income portfolio (30 June 2012: $87 million total investment return)
— Investment portfolio is positioned to benefit over longer term from rising interest rates
— $145 million profit before tax; $118 million net income to common stockholders
— 5 percent increase in interim dividend to 10.0 pence (15.5 US cents)

Catlin’s pretax profits were affected by the disasters that occurred in the first half of the year. In the same period for 2012 it posted pretax profits of $231 million, and net income to common shareholders of $184 million.

Chief Executive Stephen Catlin commented: “Catlin produced another strong underwriting performance during the first half of 2013. Our attritional loss ratio remains low, and our net underwriting contribution matched last year’s record amount, despite incurring nearly US$100 million in additional catastrophe claims in this year’s first half.

“Our global underwriting infrastructure continues to produce profitable growth. The share of our gross premiums written – and more importantly net underwriting contribution – produced by the non-London/UK underwriting hubs continues to grow. We see further promising opportunities ahead.”

He also noted that the Group’s “reported investment performance suffered due to mark-to-market reductions in the value of our fixed income portfolio caused by rising interest rates. The decrease in profits before tax compared with a year ago is the result of these movements. Catlin’s investment returns will ultimately benefit from higher interest rates.

“We continue to benefit from our leadership position as we renew and retain business. That, along with our focus on fundamentals – disciplined underwriting and superior service to clients and brokers – will serve Catlin well in all types of market environments in the years ahead.”

Source: Catlin Group