Catlin Bermuda GWP down 16% as it rejects poorly-rated business

Lloyd’s insurer Catlin has slashed gross written premium in its Bermuda operation by 16% in the first quarter of 2012 after exiting  what it considered to be poorly-rated business.

Gross written premium at the division dropped to $185m (£114.6m) from $219m, which Catlin said “reflects the decision not to renew certain property reinsurance contracts whose rates did not meet the Group’s expectations.”

It added that it expects to use the capacity that would have been used on these contracts later in the year.

Despite the Bermuda slump, Catlin’s overall gross written premium  increased 12% in the first quarter to $1.6bn (Q1 2011: $1.5bn). The biggest growth came from its international book, where gross written premiums increased 27% to $395m (see table below).

The company also reported that rates increased for most lines of business. resulting in average group-wide price hikes of 4% during the first quarter this year. Rates for catastrophe affected business increased 10%, while prices in non-catastrophe classes rose by a more modest 1%.

Chief executive Stephen Catlin praised the results. “Catlin performed well during the first quarter of 2012, thanks to continued growth in gross premiums written and the absence of catastrophe losses,” he said. “Nearly all areas of the business continue to grow, including our US and International underwriting hubs.”

He added: “It is gratifying that the market is heading in the right direction for nearly all classes of business after last year’s unprecedented series of catastrophe losses. I am also pleased to report that rates for Japanese reinsurance renewals at 1 April were slightly ahead of our expectations. We expect market conditions to continue to improve as the year progresses.”

Catlin also thanked departing chairman Sir Graham Hearne, who retired at the conclusion of Catlin’s annual general meeting yesterday, for his contribution. John Barton has succeeded Hearne as chairman.