13th Nov 2014 08:35
LONDON (Alliance News) - Catlin Group Ltd Thursday reported an 11% rise in gross premiums written, driven by double-digit percentage growth at its London, US and international underwriting hubs more than offsetting a slight fall in Bermuda.
Nevertheless, Catlin also reported that average weighted premium rates across its underwriting portfolio decreased by 2.9% during the first nine months of the year, meaning that the rate of decline has slowed from the 3.2% reported for the first six months of the year. The pressure on premium rates is largely coming from catastrophe-exposed business classes, which showed a fall of 6.9%, according to Catlin, while rates for non-catastrophe classes showed a 0.3% decrease.
The FTSE 250-listed specialty property/casualty insurer and reinsurer said gross premiums written rose to USD4.89 billion in the nine months ended September 30, compared with USD4.42 billion in the corresponding period last year.
The biggest driver in gross premium growth was Catlin's international underwriting hub, comprised of Asia-Pacific, Europe and Canada, which saw a 17% rise to USD1.03 billion. London showed growth of 11% to USD2.23 billion, while the US saw growth of 10% to USD1.09 billion. By product, Catlin saw double-digit increases across energy and marine, property and reinsurance, while specialty/war and political risk, and casualty, saw strong single digit increases. Aerospace was flat, with Catlin citing careful management due to competition on premium rates.
However, Catlin reported growth of 5% on an underlying basis, which takes into consideration items such as foreign exchange movements and the increase in the value of multi-year contracts written over the period.
Net premiums earned grew by 6% to USD3.08 billion, or by 3% on an underlying basis. Catlin had previous told the market that growth in net earned premiums at the end of the full year is likely to be 4 to 5 absolute percentage points less than the growth in gross premiums written due to premium ceded to third-party capital providers.
Catlin said it incurred claims from two catastrophe events during the third quarter, being Hurricane Odile, which struck the Baja California peninsula of Mexico in September, and the flooding in the state of Jammu and Kashmir in northern India in September.
Three large single-risk losses were sustained during the quarter, Catlin said. These comprised the loss of Malaysian Airlines Flight MH17 over Ukraine in July, the aircraft losses caused by fighting at the Tripoli airport in July and a fire at a US sawmill in July.
There has been one catastrophe event so far in the fourth quarter, Catlin said, pointing to Cyclone Hudhud, which caused damage to eastern India and Nepal in October.
Operating expenditures remained "broadly in line with expectations" during the third quarter, according to the company.
Total investment return for the nine-month period was USD171 million, compared with USD65 million in the corresponding period last year. Catlin reported a 1.4% nine-month return for fixed maturities and short-term investments and 0.2% for cash and equivalents. But the strongest figure came from "other" invested assets, showing a 10.6% nine-month return. Catlin said the double-digit return was mainly driven by strong performance by equities.
Catlin shares were down 0.3% at 551.50 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Castelnau Group