The Bermuda-based Catlin Group Limited announced its financial results for the six-month period ended 30 June 2011 from its London office, highlighted by a $201 million net loss for the period, compared to an $86 million profit in the first half of 2010. The losses stemmed primarily from the catastrophic events that occurred in the first quarter of the year.
The Group’s bulletin listed the following financial information for the period:
• $534 million in losses from catastrophe events during the period, net of reinsurance and reinstatement premiums (30 June 2010: $135 million)
• Negative net underwriting contribution1 of $91 million (30 June 2010: $227 million net underwriting contribution)
• 50 percent attritional loss ratio (30 June 2010: 51 percent)
• 9 percent increase in gross premiums written to $2.7 billion (30 June 2010: US$2.5 billion); 4 percent decrease for London/UK underwriting hub, 26 percent aggregate increase for all other hubs
• 12 percent increase in net premiums earned to $1.8 billion (30 June 2010: US$1.6 billion)
• Prior year loss reserves stable (30 June 2010: $29 million release)
• 117 percent combined ratio; 32 percentage points relate to catastrophe losses (30 June 2010: 98 percent combined ratio; 9 percentage points related to catastrophe losses)
• 9.8 percent negative return on net tangible assets for period (30 June 2010: 2.8 percent return on net tangible assets)
• 7.7 percent negative return on equity for period (30 June 2010: 2.1 percent return on equity)
• 1.5 percent total investment return for period (30 June 2010: 1.8 percent)
• 5 percent increase in interim dividend to 9.0 pence per share (30 June 2010: 8.6 pence)
Catlin also listed the following operational highlights
• 50 percent of gross premiums written by non-London/UK underwriting hubs (30 June 2010: 43 percent)
• 1 percent increase in average weighted premium rates across portfolio during period (30 June 2010: nil percent); significant increases in catastrophe reinsurance pricing at 1 June and 1 July renewals
• Successful start-up by Catlin Re Switzerland produces significant volume of new business for Group
• 32 percent expense ratio (30 June 2010: 33 percent)
• Catastrophe losses during second half or deterioration in previous 2011 catastrophe estimates likely to trigger Catastrophe Aggregate reinsurance protection.
Chief Executive Stephen Catlin offered the following comments: “The unprecedented series of natural catastrophes during the first half of 2011 caused the Group to report a loss before tax of $201 million. However, Catlin’s underlying performance during the period was strong.
“The attritional loss ratio – which excludes catastrophe and large single-risk losses – decreased to 50 percent, the lowest in five years, reflecting Catlin’s portfolio management skills during a period of rate competition for most classes of business. In addition, our US and International underwriting hubs continued to grow significantly and produced positive underwriting contributions. Rates for Property Treaty reinsurance increased significantly during 1 June and 1 July renewals, and we are already seeing evidence that rates for primary Property insurance are hardening.
“Our multiple hub structure, diversified portfolio and disciplined approach to underwriting will allow Catlin to prosper in the current market environment and put us in a good position to take advantage of opportunities whenever and wherever they occur worldwide. Those factors, together with the protection provided by our Catastrophe Aggregate reinsurance program, give us confidence for the second half of 2011 and beyond. Accordingly, we have increased the interim dividend by 5 percent to 9.0 pence [$0.147] per share.”
He also announced that “Sir Graham Hearne will be retiring as Chairman at the Annual General Meeting in May 2012. He will be succeeded by John Barton, who will join the Board as an Independent Non-Executive Director on 1 December 2011. John’s wide experience in the insurance industry and commercial sector will greatly benefit the Group.
“Sir Graham has served as Chairman of the Board since 2003 during a period of substantial growth in the Group’s worldwide operations. On behalf of the Board, I would like to thank Sir Graham for his leadership and tireless efforts on behalf of the Company.”
Source: Catlin Group
Topics Catastrophe USA Profit Loss Underwriting Reinsurance London
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