Catlin confident on premiums

Catlin announced a 5% increase in gross premiums written (10% on a constant currency basis) and claimed a 6% rise in average weighted premium rates.

Finncial highlights (2008 in brackets)

• Gross premiums written $3,010m ($2,858m)
• Net premiums written $2,505m ($2,134m)
• Net premiums earned $2,082m ($1,973m)
• Investments and cash $7,521m ($6,184m)

By business

• Catlin Syndicate/Catlin UK $1,921m ($2,017m)
• Catlin Bermuda $392m ($374m)
• Catlin US $429m ($257m)
• Catlin International $268m ($210m)

By sector

• Aerospace $318m ($281m)
• Casualty $590m ($525m)
• Energy/Marine $503m ($516m)
• Reinsurance $999m ($872m)
• Specialty/War & Political Risk $315m ($354m)

Catlin said that while gross premiums written from London/UK-originating business decreased, they increased slightly at constant exchange rates.

Both net premiums written and net premiums earned increased during the period.

A portion of this increase is due to the embedded growth resulting from the acquisition of Wellington Underwriting, specifically the lapse at 31 December 2008 of the quota-share reinsurance provided to the Catlin Syndicate at Lloyd's by some of the third-party Names that had provided capital to Wellington Syndicate 2020.

Reinsurance growth

The growth in gross premiums written in the Reinsurance Product Group and the reductions in Energy/Marine and Property premium volumes illustrate Catlin's flexible approach to capital allocation as the Group has reallocated catastrophe aggregate to Property Treaty Reinsurance, for which a better rating environment has been experienced.

The growth in Aerospace premium volume shows the benefit of the improved rating environment following a period of depressed market conditions.

The Group expects these rating improvements to continue into the main airline renewal season. In addition, the general aviation facility underwritten by W. Brown & Associates Insurance Services continues to provide good, profitable growth on behalf of Catlin US.

Short-tail casualty

Catlin said; “The Casualty premium growth is driven by shorter-tail classes, in particular shorter-tail Professional Lines business for which we are seeing good opportunities and much improved market conditions created from the global financial crisis.”

Volumes for long-tail Casualty classes remain static as less attractive margins continue to be available for these types of business, and the Group remains cautious about the potential impact of the recession.

Rating Environment

Market conditions were little changed during the third quarter of 2009. Average weighted premium rates increased by 6% across the Group's entire portfolio of business during the nine-month period ended 30 September 2009; the Group reported an identical increase in average weighted premium rates as at 30 June 2009.

Average weighted premium rates increased by 11% for catastrophe-exposed business classes and increased by 3% for non-catastrophe classes during the nine-month period. These average rate increases are consistent with those reported at 30 June.

Claims

Catline reported a low frequency of large single-risk losses during the third quarter and the benign hurricane season

Stephen Catlin, chief executive, said: "I am happy to report a good performance during the third quarter of 2009. Our underwriting operations have performed well, as there were no catastrophes during the quarter and a low incidence of large single-risk losses.

“Our investment portfolio continued to produce strong results, although it is clear that our year-to-date investment performance is not sustainable over the long term.

"Rates continued to increase across our overall book of business, providing good margins in nearly all classes of business. Earnings from Catlin US and our international offices also increased, and we fully expect continued, profitable growth from these two operations.

"We continue to look ahead with confidence. Whilst the market's good performance during 2009 means that conditions may be challenging for some classes of business during 2010, we believe that Catlin remains well-positioned to grow, both in terms of premium volume and underwriting profitability."