Last checked at 15 May 2008 07:00
Catlin Group Limited
15 May 2008
CATLIN GROUP LIMITED INTERIM MANAGEMENT STATEMENT
LONDON - Catlin Group Limited ('CGL': London Stock Exchange), the international specialty property/casualty insurer and reinsurer, released the following interim management statement at the conclusion of the Company's Annual General Meeting, held 14 May 2008 in Bermuda.
| US$ billion | 31 March 2008 | 31 March 2007 |
| Gross premiums written | 1.2 | 1.2 |
| Net premiums written | 0.8 | 0.7 |
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| Investments and cash | 6.1 | 5.2 |
| First-quarter investment return | 0.6% | 1.3% |
| Annualised investment return | 2.4% | 5.3% |
Premiums Written
Gross premiums written during the first quarter of 2008 remained broadly constant at US$1.2 billion. This performance is in line with the outlook for 2008 provided by management at the Group's preliminary results announcement in March. Net premiums written increased slightly. This reflects the reinsurance synergies achieved following the acquisition of Wellington Underwriting plc.
The Group's individual operations performed largely according to plan. As expected, gross premiums written in London were approximately 8 per cent lower than in the first quarter of 2007, reflecting the challenging market environment. Catlin Bermuda reported modest premium growth. Excellent growth was reported by Catlin's international offices, particularly its European offices. Premiums underwritten by Catlin US during the first quarter were slightly below expectations, although the volume of premium underwritten by Catlin US is expected to increase as the year progresses.
Market Conditions
Competition continues to increase for most of the classes of business underwritten by the Group. The average weighted premium rate across all classes of business incepting in the first quarter of 2008 decreased by 5 per cent, compared with a 4 per cent decrease in average weighted premiums rates for business incepting in January 2008. During the first quarter of 2008, average weighted premium rates for catastrophe classes of business decreased by 8 per cent, whilst average weighted premium rates for non-catastrophe classes decreased by 2 per cent.
Despite the decrease in average weighted premiums rates, margins remain adequate for all classes of business underwritten.
Claims
Claims activity during the first quarter of 2008 increased, both for the industry as a whole and for Catlin, compared with the relatively benign loss experience during the first quarter of 2007. However, losses during the first quarter of 2008 remained within the Group's planning assumptions.
Operating Expenditures
Operating expenditures were within budget during the first quarter of 2008.
Share Purchases
During March, the Catlin Group Employee Benefit Trust made market purchases of 5.1 million Catlin shares at an average price of £4.13 per share.
Investment Management
Investments and cash increased by 2 per cent during the first quarter to US$6.1 billion (31 December 2007:US$6.0 billion). On a year to year basis, investments and cash increased by 17 per cent (31 March 2007: US$ 5.2 billion).
The Group's investment return for the first quarter was 0.6 per cent, representing an annualised investment return of 2.4 per cent. Investment return was boosted by good performance in parts of the Group's fixed income portfolio during the quarter, but this performance was offset by lower returns on equity and alternative investments.
Outlook
Stephen Catlin, chief executive of Catlin Group Limited, said:
"We are pleased with Catlin's performance during the first quarter. Premium volume and rate adequacy met management's expectations, despite increasing competition across our portfolio of business. Whilst loss incidence increased during the quarter, losses were within our expectations, and our underwriting result has benefited from the reinsurance synergies provided by the Wellington acquisition.
"We look ahead to the remainder of 2008 with confidence. Whilst we expect that average weighted premiums rates will continue to decrease absent a catastrophic event, margins for most classes of business should remain good. We are encouraged by the growth in business underwritten by our international offices and the continued development of Catlin US. We also will continue to benefit from the embedded growth emerging from the Wellington acquisition as well as the more than US$125 million in annual synergies expected to arise from the transaction."
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For more information contact:
| Media Relations: |
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| James Burcke, Head of Communications, London | Tel: Mobile: E-mail: | +44 (0)20 7458 5710 +44 (0)7958 767 738 james.burcke@catlin.com
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| Liz Morley, Maitland | Tel: E-mail: | +44 (0)20 7379 5151 emorley@maitland.co.uk |
| Investor Relations: |
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| William Spurgin, Head of Investor Relations, London | Tel:Mobile: E-mail: | +44 (0)20 7458 5726 +44 (0)7710 314 365william.spurgin@catlin.com |
Notes to editors:
The Catlin Syndicate at Lloyd's of London (Syndicate 2003), which is a recognised leader of numerous classes of specialty insurance and reinsurance. The Catlin Syndicate is the largest at Lloyd's in 2008 based on premium capacity of £1.25 billion.
Catlin Bermuda (Catlin Insurance Company Ltd.), which is a leading participant in the Bermuda market, underwriting a diversified portfolio of property treaty, casualty treaty, political risk and terrorism, and structured risk coverages.
Catlin UK (Catlin Insurance Company (UK) Ltd.), which specialises in underwriting commercial non-life insurance for UK clients through a network of regional offices. It also writes other classes of business written by the Catlin Syndicate.
Catlin US, which encompasses Catlin's operations based in the United States. Catlin US underwrites a wide variety of specialty property/casualty insurance and reinsurance products from a network of offices throughout the U.S. Catlin US includes Catlin Insurance Company Inc. and Catlin Specialty Insurance Company Inc.