Press Releases
Catlin Group Limited announces Interim Results for period ended 30 June 2005
HAMILTON, Bermuda - Catlin Group Limited ('CGL': London Stock Exchange), the international property and casualty insurer and reinsurer, announces record net income for the six months ended 30 June 2005.
Financial highlights:
- Net income increased to record US$111.2 million (30 June 2004: US$95.8 million)
- Annualised weighted return on average equity was 22.0 per cent (30 June 2004: 23.3 per cent)
- Book value per share grew by 7.8 per cent from US$6.30 at 31 December 2004 to US$6.79; in sterling terms this increase is 15.5 per cent from £3.28 to £3.79
- Gross premiums written decreased to US$781.7 million (30 June 2004: US$935.3 million) due to disciplined underwriting and timing of premiums written
- Net premiums earned increased to US$627.1 million (30 June 2004: US$548.2 million)
- Combined ratio was stable at 82.3 per cent (30 June 2004: 81.8 per cent) despite increasing competitive pressures and does not reflect any significant releases from prior year reserves
- Earnings per share of 72 US cents (30 June 2004: 62 US cents1)
- Interim dividend increased to 9.9 US cents (5.4 pence) per share (30 June 2004: 7.9 US cents; 4.3 pence)
| US$000 except where indicated |
For the six months ended 30 June | ||
|---|---|---|---|
|
2005 |
2004 |
% change | |
|
Gross premiums written |
781,739 |
935,300 |
-16.4% |
|
Net premiums written |
658,695 |
795,343 |
-17.2% |
|
Net premiums earned |
627,086 |
548,230 |
14.4% |
|
Income before income tax expense |
126,335 |
112,627 |
12.2% |
|
Net income |
111,175 |
95,846 |
16.0% |
|
Earnings per share (US$)1 |
0.72 |
0.62 |
16.1% |
|
Interim dividend per share (US cents) |
9.9 |
7.9 |
25.3% |
|
Book value per share (US$) |
6.79 |
5.93 |
14.5% |
|
Effective tax rate |
12.0% |
14.9% |
- |
|
Combined ratio |
82.3% |
81.8% |
- |
|
Annualised weighted return on average equity |
22.0% |
23.3% |
- |
1 30 June 2004 figure is pro forma based on 154.1 million shares in issue
Operational highlights:
- Hurricane Katrina provisional loss estimate of $275 million gross of reinsurance, $125 million net of reinsurance; comparable with 2004 hurricane losses; will be reflected in second half results
- Weighted average rate decrease of 2 per cent during period ended 30 June 2005 (30 June 2004: 2 per cent increase)
- Continued growth in Catlin Bermuda and Catlin UK business segments; 51 per cent of gross premiums written by these segments (30 June 2004: 27 per cent)
- Positive contribution to profits from all business segments
- Establishment of underwriting offices in Belgium, Canada and Guernsey
- Establishment of Catlin Insurance Company (UK) Ltd (Catlin UK) as a separate subsidiary, replacing previous UK branch office of Catlin Bermuda
- Agreement in principle reached to purchase US shell insurance company, allowing Catlin to develop a fourth underwriting platform writing admitted business in 27 states
Commenting on the Group's interim results, Chief Executive Stephen Catlin said:
-
- "The first half of 2005 was a successful period for Catlin with both net income and book value per share increasing substantially. This performance demonstrates Catlin's determination to underwrite in a disciplined manner as market competition increases.
"Hurricane Katrina has caused widespread economic and human loss in the United States, and our thoughts are very much with the residents of New Orleans and surrounding areas at this difficult time. The staff of our New Orleans office, and their families, are safe and accounted for. We have, for the interim, relocated our New Orleans employees, and they are working from our Houston office. Our priority now is to ensure that our policyholders in the impacted areas receive first class claims handling services.
"Estimates of the impact of Hurricane Katrina on the Catlin Group are necessarily provisional and subject to significant uncertainty at this time. We estimate that losses arising from Hurricane Katrina will be of the order of US$275 million gross of reinsurance and US$125 million net, figures that are comparable with the losses sustained by the Group in respect of the 2004 hurricanes. We currently expect Hurricane Katrina to have a positive impact on rates in many classes of business.
"Notwithstanding the positive effect of any rate rises resulting from Hurricane Katrina, we expect gross premiums written for the full year 2005 to be lower than in 2004. However, the year on year decline at 30 June is exaggerated by the timing of the underwriting of some risks. If these timing effects are excluded, the decrease in gross premiums written for the period ended 30 June 2005 would have been approximately 10 per cent. We are managing our portfolio across all of our underwriting classes to ensure maximisation of margin and efficient use of capital in challenging market conditions. The development of the Group's business has been consistent with our underlying strategy.
"We are also pleased to announce an increase in the interim dividend to shareholders, which demonstrates management's confidence in the ongoing success of our business."
- ends -
For more information contact:
Media Relations: James Burcke, Head of Communications, London Tel: +44 (0)20 7458 5710 Mobile: +44 (0)7958 767 738 E-mail: james.burcke@catlin.com Liz Morley, The Maitland Consultancy Tel: +44 (0)20 7379 5151 E-mail: emorley@maitland.co.uk Investor Relations: William Spurgin, Head of Investor Relations, London Tel: +44 (0)20 7458 5726 Mobile: +44 (0)7710 314 365 E-mail: william.spurgin@catlin.com
Notes:
- The Catlin Group, headquartered in Bermuda, is an international specialist property/casualty insurer and reinsurer writing more than 30 classes of business worldwide. Catlin wrote gross premiums of US$1.43 billion and reported record net income of US$154.1 million in 2004. Catlin shares are traded on the London Stock Exchange (ticker symbol: 'CGL').
- The Catlin Group currently operates three underwriting platforms:
- The Catlin Syndicate at Lloyd's of London (Syndicate 2003). The Catlin Syndicate is the eighth largest syndicate at Lloyd's based on 2005 premium capacity of £500 million. It is a recognised leader of numerous classes of specialty insurance and reinsurance. Over the past 20 years, the Catlin Syndicate and its predecessors have consistently outperformed the Lloyd's market as a whole.
- Catlin Bermuda (Catlin Insurance Company Ltd.). Catlin Bermuda underwrites property treaty and casualty treaty reinsurance and property and casualty insurance for US risks on a surplus lines basis.
- Catlin UK (Catlin Insurance Company (UK) Ltd.). Catlin UK specialises in writing commercial property, general liability, professional indemnity, directors' and officers' liability and commercial crime insurance for UK clients. It also writes other classes of business written by the Catlin Syndicate.
All three Catlin underwriting platforms have a financial strength rating of 'A' (Excellent) from A.M. Best Company.
The Catlin Group also operates subsidiaries located in Houston and New Orleans in the US, as well as in the UK, Guernsey, Canada, Germany, Belgium, Singapore, Malaysia and Australia. These subsidiaries, which underwrite on behalf of Catlin's underwriting platforms, allow Catlin to work more closely with local clients and their brokers.
- The Catlin Syndicate at Lloyd's of London (Syndicate 2003). The Catlin Syndicate is the eighth largest syndicate at Lloyd's based on 2005 premium capacity of £500 million. It is a recognised leader of numerous classes of specialty insurance and reinsurance. Over the past 20 years, the Catlin Syndicate and its predecessors have consistently outperformed the Lloyd's market as a whole.
- Catlin management will make a presentation to investment analysts at 10.30am BST today at its London office. The presentation will be broadcast live on the Group's website (www.catlin.com). The webcast will also be available on the website following the presentation.
- Catlin's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ('US GAAP'). The Group reports its results in US dollars.
- Rates of exchange at 30 June 2005 - balance sheet: £1=US$1.79 (30 June 2004: US$1.81); income statement: £1=US$1.88 (30 June 2004: US$1.82).
- Detailed information regarding Catlin's financial results for the six months ended 30 June 2005, including unaudited consolidated financial statements, is attached.
- The Catlin Group's website can be found at www.catlin.com.
- "The first half of 2005 was a successful period for Catlin with both net income and book value per share increasing substantially. This performance demonstrates Catlin's determination to underwrite in a disciplined manner as market competition increases.
See the full Interim Results in PDF format (660 Kb).