Interim Management Statement

RNS Number : 4152E

Catlin Group Limited

10 May 2013

 



CATLIN GROUP LIMITED
INTERIM MANAGEMENT STATEMENT

HAMILTON, Bermuda - Catlin Group Limited ('CGL'; London Stock Exchange), the international specialty property/casualty insurer and reinsurer, has issued its interim management statement for the period ended 31 March 2013.

Highlights at 31 March 2013

·     12 per cent increase in gross premiums written

·     12 per cent increase in net premiums earned

·     58 per cent of total gross premiums written by the non-London/UK underwriting hubs

·     3 per cent increase in average weighted premium rates across underwriting portfolio

·     No catastrophe losses incurred during the first quarter

·     0.5 per cent year-to-date total investment return

US$m	Three months ended 31 March 2013	Three months ended 31 March 2012	Percentage change
Gross premiums written	1,843	1,642	12%
Net premiums earned	948	847	12%
Investments and cash	8,562	8,406	2%
Total investment return to 31 March	0.5%	0.6%	--

Underwriting Operations

Gross premiums written increased during the period ended 31 March 2013 by 12 per cent to US$1.84 billion (31 March 2012: US$1.64 billion). Net premiums earned in the first quarter also increased by 12 per cent to US$948 million (31 March 2012: US$847 million).

The following table below shows the breakdown of gross premiums written by underwriting hub during the period ended 31 March 2013:

US$m	Three months ended 31 March 2013	Three months ended 31 March 2012	Percentage change
London/UK	781	761	3%
US	356	301	18%
Bermuda	208	185	12%
International (Asia-Pacific, Europe and Canada)	498	395	26%
	1,843	1,642	12%

Total gross premiums written by non-London underwriting hubs increased by 21 per cent in the first quarter of 2013 and accounted for 58 per cent of gross premiums written by the Group (31 March 2012: 54 per cent).

Gross premiums written by product group during the period ended 31 March 2013 are shown in the table below.

US$m	Three months ended 31 March 2013	Three months ended 31 March 2012	Percentage change
Aerospace	78	85	(8%)
Casualty	330	265	25%
Energy/Marine	214	212	1%
Property	158	128	23%
Reinsurance	903	788	15%
Specialty/War & Political Risk	161	158	2%

Gross premiums written increased in all product groups, with the exception of the Aerospace product group where volume was impacted by continued competitive conditions and delays in scheduled satellite launches. The increased volume for Casualty classes of business reflects growth in business written by the US and International hubs as well as rate increases for Marine Liability business. The increase in Property gross premiums written was the result of growth in International Property business as well as selected rate increases in the aftermath of Windstorm Sandy.  The growth in the Reinsurance product group was primarily the result of increased volume by Catlin Re Switzerland and growth in the US hub.

Rating Environment

Average weighted premium rates across the Group's underwriting portfolio increased by 3 per cent during the three months ended 31 March 2013. The increase for both catastrophe-exposed and non-catastrophe classes of business was 3 per cent.  Rates for classes of US Casualty business continued to increase during the quarter.

Claims and Operating Expenses

The Group incurred no catastrophe losses during the period ended 31 March 2013.

Operating expenditures remained in line with expectations during the period.

Investment Management

Total cash and investments amounted to US$8.56 billion at 31 March 2013, a 2 per cent increase compared with US$8.41 billion at 31 March 2012.

Total investment return for the period ended 31 March 2013 was US$48 million (31 March 2012: US$47 million). The year-to-date total investment return was 0.5 per cent at 31 March 2013 (31 March 2012: 0.6 per cent). Investment return includes all mark-to-market adjustments.  

The Group's investment performance by major asset category during the period ended 31 March 2013 is analysed in the table below:

	Average allocation during period (US$m)	Quarterly  return (US$m)	Quarterly return (%)
Fixed income	5,519	19	0.3%
Cash and short-term investments	2,653	3	0.1%
Other invested assets	538	26	4.9%
	8,710	48	0.5%

Although yields on high-quality bonds continued at historical lows during the quarter, emerging signs of a positive outlook resulted in higher equity values and the appreciation in the value of other risk assets.  The Group's holdings in equities and loans, included in 'other invested assets', benefitted from this rally and have produced a year-to-date return of 4.9 per cent.

The percentage of total cash and investments held in liquid assets - defined as cash, cash equivalents, government securities and fixed income securities with less than six months to maturity - was 56 per cent at 31 March 2013 (31 December 2012: 57 per cent; 31 March 2012: 57 per cent).

Commenting on the Group's performance, Stephen Catlin, Chief Executive of Catlin Group Limited, said:

"I am pleased to report that Catlin made good progress during the first quarter of 2013. Gross premiums written increased across all six of our underwriting hubs, with 58 per cent of our volume originating in our non-London/UK underwriting hubs.  Net premiums earned for the period was up by 12 per cent year-on-year.

"We have made a very good start to the 2013 underwriting year.  Premium rates have continued to rise in most classes of business, with the notable exception of the Airline account.  Whilst the rest of the year may not be catastrophe-free as the first quarter was, we are optimistic that the global infrastructure that we have built over the past decade and our emphasis on capital preservation will continue to benefit our clients and shareholders alike.  We look ahead with confidence."

- ends -

For more information contact:

Media Relations:
James Burcke,	Tel:	[phone]
Head of Communications, London	Mobile:	[phone]
	E-mail:	[e-mail]
Liz Morley, Maitland	Tel:	[phone]
	E-mail:	[e-mail]
Investor Relations:
William Spurgin,	Tel:	[phone]
Head of Investor Relations, London	Mobile:	[phone]
	E-mail:	[e-mail]

Notes to editors:

1.   Catlin Group Limited, headquartered in Bermuda, is an international specialist property/casualty insurer and reinsurer that underwrites worldwide through six underwriting hubs. Catlin shares are traded on the London Stock Exchange (ticker symbol: CGL). More information about Catlin can be found at www.catlin.com.

2.   Catlin has established operating hubs in London, Bermuda, the United States, the Asia-Pacific region, Europe and Canada. Through these hubs, Catlin works closely with policyholders and their brokers. The hubs also provide Catlin with product and geographic diversity. Altogether, Catlin operates more than 55 offices in 21 countries.

3.   Catlin's underwriting units are rated 'A' by A.M. Best and Standard & Poor's.

4.   Catlin is the title sponsor of the Catlin Seaview Survey, a major scientific expedition that is documenting the composition and health of coral reefs around the world. During 2012 the Survey investigated the Great Barrier Reef off Australia, whilst during 2013 it will study coral reefs near Bermuda, in the Caribbean and elsewhere in the world. The scientific data gathered by the Catlin Seaview Survey is intended to strengthen the understanding of how climate change and other environmental changes are likely to affect ocean ecosystems. More information is available at www.catlinseaviewsurvey.com.

 

END

 

 

IMSGGUBWAUPWUAU