Catlin Group’s Profits Plunge In 2011
Bermuda-based property/casualty insurer and reinsurer Catlin Group’s net pre-tax profits plunged after catastrophe claims soared in 2011.
Catlin, the second-biggest Lloyd’s of London insurer by market value, reported profits for the year to the end of December fell to $71 million — down from $406 million in 2010.
Highlights for the year included:
- $71 million in profit before tax [31 December 2010: $406 million]
- 50 per cent attritional loss ratio [31 December 2010: 52 per cent]
- $961 million in gross losses from natural catastrophes; US$678 million in net losses from natural catastrophes
- Catastrophe aggregate protection responded as anticipated to catastrophe losses during second half of 2011
- 11 per cent increase in gross premiums written [31 December 2010: 10 per cent]
- 24 per cent increase in gross premiums written by non-London/UK hubs
- 3.1 per cent total investment return [31 December 2010: 2.7 per cent]
- $103 million release from prior year reserves, equal to 2 per cent of opening reserves [(31 December 2010: US$144 million, equal to 3 per cent of opening reserves]
- 5 per cent increase in average weighted premium rates for 1 January 2012 renewals [9 per cent increase for catastrophe-exposed classes; 1 per cent increase for non-catastrophe classes]
- 17 per cent increase in US Property Treaty Reinsurance rates; 12 per cent increase in International Property Treaty rates
- 6 per cent increase in annual dividend to 28.0 UK pence per share [44.9 US cents) (31 December 2010: 26.5 UK pence; 42.5 US cents]
The company said net losses from natural catastrophes jumped to $961 million as it absorbed claims from earthquakes in Japan and New Zealand, floods in Australia and Thailand and hurricanes in the US.
Gross premiums written rose to $4,513 million from $4,069 million and net premiums written increased to $3,835 million from $3,318 million.
Chairman Sir Graham Hearne said: “2011 was a tough year for the insurance industry and for Catlin due to the extraordinary series of natural catastrophes.
“However, Catlin performed well.
“Whilst the group sustained nearly $1 billion in gross losses from natural catastrophe claims, Catlin’s profit before tax amounted to $71m.
“Catlin has not only grown in size, but it has significantly increased value for its shareholders since its initial public offering, despite the tough economic conditions during much of that period.
“Since 31 March 2004, Catlin has produced total shareholder return amounting to 93%, compared with average total shareholder return of 71% for FTSE 350 companies during that same period.”
