Press Releases
Preliminary Results for Year Ended 31 December 2008
| 12 Feburary 2009 | Release 2009-6 |
HAMILTON, Bermuda – Catlin Group Limited (‘CGL’: London Stock Exchange), the international specialty property/casualty insurer and reinsurer, announces its financial results for the year ended 31 December 2008.
2008 Overview
- 2 per cent increase in gross premiums written to $3.4 billion; 32 per cent increase from Catlin US, Catlin Bermuda and international offices
- Combined ratio of 95 per cent on US GAAP basis; reflects increase in catastrophe and large single-risk losses (2007: 84 per cent)
- Average weighted premium rate decrease across risk portfolio of 4 per cent
- -1.5 per cent net investment return, including all unrealised gains and losses; reflects economic volatility (2007: 4.5 per cent)
- Loss before tax of US$13 million (2007: US$543 million profit)
- Net loss to common stockholders of US$46 million (2007: US$462 million profit)1
- -2.2 per cent return on average equity (2007: 20.8 per cent)2
- Proposed 6 per cent increase in annual dividend to 26.6 pence (43.4 US cents)
- 7 per cent increase in sterling book value per share to £5.18; 21 per cent decrease in US dollar book value per share to US$7.57
- 10 per cent increase in sterling net tangible book value per share to £3.63; 19 per cent decrease in US dollar net tangible book value per share to US$5.30
2009 Outlook
- Rates for property reinsurance and energy classes rose approximately 10 per cent during January renewals
- Rates for other classes of business expected to continue to harden during the year
- Market turn will be widespread and sustainable
- Catlin is well-placed to take advantage of 2009 opportunities
- Fully underwritten Rights Issue, announced today, to raise approximately £200 million (US$288 million), net of expenses, to allow Group to take full advantage of improving market conditions.
1 Net (loss)/income to common stockholders
for the period ended 31 December 2008 is stated after payment of
US$43.5 million preferred share dividend (2007: $21.8
million)
2 Returns on average equity and net tangible assets
exclude preferred shares
| US$000 | 2008 | 2007 | % change |
|---|---|---|---|
| Gross premiums written | 3,437,004 | 3,360,626 | 2% |
| Net premiums written | 2,611,443 | 2,573,518 | 1% |
| Net premiums earned | 2,596,041 | 2,489,534 | 4% |
| Net underwriting contribution1 | 453,966 | 803,892 | (44%) |
| Net (loss)/income before income taxes | (12,551) | 543,368 | - |
| Net (loss)/income to common stockholders | (46,389) | 461,718 | - |
| Earnings per share (US dollars) | (0.19) | 1.84 | - |
| Proposed annual dividend per share (pence) | 26.6 | 25.1 | 6% |
| Proposed annual dividend per share (US cents) | 43.4 | 50.2 | (14%) |
| Loss ratio | 62.9% | 46.4% | |
| Expense ratio | 32.1% | 37.7% | |
| Combined ratio | 95.0% | 84.1% | |
| Total net investment return | (1.5%) | 4.5% | |
| Return on average equity3 | (2.2%) | 20.8% | |
|
Return on average net tangible assets3 |
(3.1%) | 32.9% | |
| 31 December 2008 |
31 December 20072 | % change | |
| Total assets | $9,659,651 | $9,600,845 | 1% |
| Investments and cash | $5,933,413 | $6,001,144 | (1%) |
| Stockholders’ equity | $2,469,235 | $3,017,004 | (18%) |
| Unearned premiums | $1,536,203 | $1,506,899 | 2% |
| Book value per share (sterling)3 | £5.18 | £4.82 | 7% |
| Book value per share (US dollars)3 | $7.57 | $9.59 | (21%) |
| Net tangible book value per share (sterling)3 | £3.63 | £3.30 | 10% |
| Net tangible book value per share (US dollars)3 | $5.30 | $6.57 | (19%) |
1 Net underwriting contribution is defined as net
premiums earned less losses and loss expenses and policy
acquisition costs
2 Certain prior year amounts have been restated to
conform with current year presentation
3 Returns on average equity and net tangible assets as
well as book value and net tangible book value per share exclude
preferred shares. Per-share amounts exclude treasury shares
Sir Graham Hearne, Chairman of Catlin Group Limited, said:
“The Catlin Group’s performance during 2008 was significantly affected by the volatility in global investment markets as well as the increase in catastrophe and single-risk losses. However, there are clear signs that the property/casualty insurance and reinsurance market is hardening, and I believe Catlin is positioned to take advantage of this favourable market environment and to prosper during the years ahead.
“Catlin has today announced a fully underwritten Rights Issue to raise approximately £200 million (US$288 million), net of expenses. Catlin will be in a better position following the Rights Issue to take full advantage of the improving market conditions.”
Stephen Catlin, Chief Executive of Catlin Group Limited, said:
“These are uncertain economic times, but we are convinced that significant underwriting opportunities will emerge in 2009 and beyond. We anticipate that rate increases will become widespread and that the improvement in underwriting conditions will be sustainable.
“Catlin is well-prepared to prosper in this new market environment because we have consistently endeavoured to build a business that can adapt quickly to future trends. Our structure – which includes underwriting platforms in London, Bermuda and the United States combined with a global network of international offices – provides the Group with a well-diversified risk portfolio and will allow us to take advantage of opportunities wherever they may arise.”
- ends -
For more information contact:
Media Relations: |
|
|
|
James Burcke, |
Tel: |
+44 (0)20 7458 5710 |
|
Liz Morley, Maitland |
Tel: |
+44 (0)20 7379 5151 |
|
Investor Relations: |
|
|
|
William Spurgin, |
Tel: |
+44 (0)20 7458 5726 |
Notes to editors:
- Catlin Group Limited, headquartered in Bermuda, is an
international specialist property/casualty insurer and reinsurer
writing more than 30 classes of business worldwide through four
underwriting platforms and an international network of offices.
Catlin shares are traded on the London Stock Exchange (ticker
symbol: CGL). More information about Catlin can be found at
www.catlin.com.
- Catlin’s consolidated 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.
- Catlin management will make a presentation to investment
analysts at 9.30am GMT 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
demand later today.
- Rate of exchange at 31 December 2008 – balance
sheet: £1 = US$1.46 (2007: £1 = US$1.99); income
statement: £1 = US$1.85 (2007: £1 =
US$2.00).
- Earnings per share are based on weighted average shares in
issue of 250 million during 2008. Book value per share is
based on 248 million shares in issue at 31 December 2008.
Earnings per share and book value per share exclude Treasury Shares
held in trust.
- Detailed information regarding Catlin’s operations and
financial results for the period ended 31 December 2008 is
attached, including statements from the Chairman and Chief
Executive along with underwriting, financial and investment
information.
- Catlin Group Limited is the title sponsor of the Catlin Arctic Survey, a major scientific expedition to measure the thickness and density of the permanent ice surrounding the North Pole. The project’s aim is to determine, with a much greater degree of accuracy, when this ice could disappear as a result of global warming. The Survey, during which three Arctic explorers will trek on foot 1,300 kilometres to the North Pole, will begin in late February 2009. More information is available at www.catlinarcticsurvey.com.
- This announcement is not an offer or solicitation to purchase or subscribe for securities in the United States. The securities mentioned herein have not and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration thereunder. There will be no public offer of such securities in the United States.
See the full Preliminary Results in PDF format (296 Kb).
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