Catlin Boosts Full-Year Profit and Dividend Ahead of Investor Vote on XL

By | February 10, 2015

Catlin Group Ltd., the Lloyd’s of London insurer being bought by XL Group plc, reported a 13 percent rise in full-year pretax profit as it increased its payout to shareholders.

Pretax profit was $488 million in the 12 months to Dec. 31, boosted by a 79 percent jump in investment returns as it made money on loans from the sale of Box Innovation Group, according to the statement on Tuesday. The Bermuda-based insurer raised its final dividend 5 percent to 32.5 pence a share and declared a special payment of 12 pence.

“Catlin continued to grow profitably during 2014,” Chief Executive Officer Stephen Catlin said in the statement. Our diversification strategy “has successfully differentiated Catlin from many of its peers.”

XL, based in Dublin, agreed to buy the company last month for about 2.8 billion pounds ($4.2 billion) to help expand in specialized commercial insurance and diversify revenue amid increased competition from hedge funds and other investors to underwrite insurance. Catlin shareholders vote on the takeover, recommended by the board, in the second quarter.

Catlin’s five underwriting hubs outside of London, which includes the U.S., Bermuda, Europe, Asia-Pacific region and Canada, wrote $3.2 billion in gross premiums, or 54 percent of the Group’s total volume.

Catlin increased its gross written premiums, a measure of revenue, by 12 percent to $5.97 billion and reported a combined ratio, a measure of underwriting profitability, of 86.8 percent. Total investment return for the year was $241 million.

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