Press Releases
Preliminary Financial Results for Year Ended 31 December 2005
NOT FOR DISTRIBUTION IN THE UNITED STATES
FOR IMMEDIATE RELEASE
The shares to be issued in the proposed placing have not been registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws. This announcement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The shares to be issued in the proposed placing will not be offered or sold to the public in the United States.
| 9 March 2006 | Release 2006-2 |
HAMILTON , Bermuda - Catlin Group Limited (‘ CGL': London Stock Exchange), the international property and casualty insurer and reinsurer, announces its financial results for the year ended 31 December 2005.
Financial highlights:
- Income before tax amounted to US$27.7 million (2004: US$173.9 million) despite net incurred losses from the three major hurricanes of US$333.5 million (2004 major hurricanes: US$114.6 million); net income amounted to US$19.7 million (2004: US$154.1 million)
- Return on average equity was 2.1% (2004: 19.1%)
- Book value grew to £3.47 per share (2004: £3.28) in sterling terms; declined to US$5.97 (2004: US$6.30) in dollar terms
- Gross premiums written decreased to US$1.39 billion (2004: US$1.43 billion)
- Net premiums earned increased to US$1.22 billion (2004: US$1.16 billion)
- Combined ratio was 103.1 per cent (2004: 89.4 per cent); net incurred losses from the three major hurricanes represent 27.4 percentage points of the combined ratio (2004 major hurricane losses amounted to 9.9%)
- Proposed final dividend of 10.1 pence (17.6 US cents) per share (2004: 8.1 pence; 15.6 cents); proposed total dividend of 15.5 pence (27.5 US cents) per share (2004: 12.4 pence; 23.5 cents)
- Five percent capital raise and debt restructuring during the first half of 2006
| US$000 (except as indicated) |
2005 |
2004 |
% change |
|---|---|---|---|
|
Gross premiums written |
1,386,600 |
1,433,836 |
(3) |
|
Net premiums written |
1,189,099 |
1,246,505 |
(5) |
|
Net premiums earned |
1,216,442 |
1,161,110 |
5 |
|
Income before income taxes |
27,665 |
173,942 |
(84) |
|
Net income |
19,662 |
154,056 |
(87) |
|
Earnings per share (US$)* |
0.13 |
1.08 |
(88) |
|
Total dividend per share (pence) |
15.5 |
12.4 |
25 |
|
Total dividend per share (cents) |
27.5 |
23.5 |
17 |
|
Book value per share (US$) |
$5.97 |
$6.30 |
(5) |
|
Book value per share (sterling) |
£3.47 |
£3.28 |
6 |
|
Tax rate |
28.9% |
11.4% |
-- |
|
Loss ratio |
71.1% |
56.9% |
-- |
|
Expense ratio |
32.0% |
32.5% |
-- |
|
Combined ratio |
103.1% |
89.4% |
-- |
|
Return on average equity |
2.1% |
19.1% |
-- |
* 2004 figure is pro forma
Operational highlights:
- Disciplined underwriting resulted in less than 1 per cent decrease in weighted average premium rates across all classes of business
- Strong underlying business performance, distorted by record hurricane losses
- US$94 million release of prior year reserves reflects underlying reserving strength and profitability
- Establishment of fourth underwriting platform, Catlin US, to write admitted US business, subject to regulatory approval
- Establishment of fourth underwriting platform, Catlin US, to write admitted US business, subject to regulatory approval
- Opened new offices in Antwerp, Toronto, Guernsey and San Francisco
- Centralisation and strengthening of support infrastructure
Outlook:
- Premium levels are strong across entire risk portfolio
- 9 per cent increase in average weighted premium rates across all classes for business incepting in January; (17 per cent increase for hurricane impacted classes; 1.5 per cent increase across balance of portfolio)
- Exposure to potential catastrophe losses is being reduced as business renews during 2006
- Share placing of approximately 5% of capital and debt restructuring to maximise flexibility to respond to market opportunities in 2006, particularly in the United States
Commenting on the Group’s preliminary results, Sir Graham Hearne, Chairman of Catlin Group Limited, said:
“Catlin's operating performance during 2005 was very satisfactory, notwithstanding the unprecedented impact of the hurricanes. The proposed total dividend of 15.5 pence per share, which represents an increase of 25 per cent, reflects our confidence in underlying trends and prospects for Catlin.”
Chief Executive Stephen Catlin said:
“Catlin's performance during 2005 demonstrates the strength of the Group's strategy and the advantages offered by our operating structure and diversified portfolio of business.
Our strong capital base has remained intact despite a very tough 2005; we are now increasing our capital and improving our debt structure to take maximum advantage of growth opportunities in 2006 and beyond.”
This summary should be read in conjunction with the detailed announcement which follows.
- ends -
For more information contact:
| Media Relations: | ||
| James Burcke, Head of Communications |
Tel: |
+44 (0)20 7458 5710 +44 (0)7958 767 738 james.burcke@catlin.com |
| Liz Morley, The Maitland Consultancy | Tel: E-mail: |
+44 (0)20 7379 5151 emorley@maitland.co.uk |
| Investor Relations: | ||
| William Spurgin, Head of Investor Relations |
Tel: |
+44 (0)20 7458 5726 +44 (0)7710 314 365 william.spurgin@catlin.com |
Notes to editors:
- 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 $1.4 billion in 2005. Catlin shares are traded on the London Stock Exchange (ticker symbol: CGL).
- Catlin management will make a presentation to investment analysts at 11.00am GMT today at its London office. The presentation will be broadcast live on the Group’s website (www.catlin.com). The webcast will be 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 in US dollars.
- Pro forma net income per share for 2004 has been calculated based on weighted average pro forma shares in issue of 142.8 million.
- Rate of exchange at 31 December 2005: £1 = US$1.72 (balance sheet); £1 = US$1.82 (income statement); at 7 March 2006 £1 = US$1.74.
- Detailed information regarding Catlin’s financial results for the year ended 31 December 2005 follow, including statements from the Chairman, Chief Executive and Chief Financial Officer and unaudited financial statements.
- Syndicate 2003 at Lloyd’s (the Catlin Syndicate) and Catlin Insurance Company Ltd. (Catlin Bermuda) and Catlin Insurance Company (UK) Limited (Catlin UK) have been assigned financial strength ratings of ‘A' (Excellent) by A.M. Best Company.
See the full Preliminary Results in PDF format (280 Kb).