Catlin rises outside London

Catlin announced a 9% increase in gross premiums written with a 39% rise in gross premiums written by non-London underwriting hubs. It said premiums had risen on average 0.5%.

Catlin said its exposure to Deepwater Horizon claims in second quarter estimated at $40m net of reinsurance and reinstatements.

Financial highlights $m (2009 in brackets)

• Gross premiums written 1,272 (1,172)
• Net premiums earned 798 (641)
• Investments and cash 7,471 (6,744)

GWP by region $m

• London 754 (798)
• Bermuda 194 (147)
• US 174 (117)
• International (Asia, Europe and Canada) 150 (110)
• Total 1,272 (1,172)

GWP by sector $m (2009 in brackets)

• Aerospace 81 (99)
• Casualty 243 (221)
• Energy/Marine 177 (179)
• Property 120 (79)
• Reinsurance 506 (465)
• Specialty/War & Political Risk 145 (129)
• Total 1,272 (1,172)

The Bermuda, US and International underwriting hubs accounted for 41% of the Group's gross premiums written at 31 March 2010, compared with 37% at 31 December 2009 and 32% at 31 March 2009.

Group-wide net premiums earned increased by 24% (19% on a constant currency basis) during the first quarter of 2010. This growth is partly attributable to increases in premium volume and higher rates relating to business written in 2009 but not earned until 2010.

The decrease in Aerospace premiums resulted largely from the reduction in satellite launches during the first quarter of 2010 compared with the corresponding period of 2009.

Casualty

The increase in Casualty gross premiums written resulted primarily from changes in the accounting treatment of multi-year contracts. On a consistent accounting basis, overall casualty written premium increased marginally, with a decrease in long-tail business and an increase in short-tail volume.

Gross premiums written for the Energy/Marine Product Group were flat during the first quarter. Market conditions were difficult in the Energy sector prior to the Deepwater Horizon loss, prompting the Group to choose not to renew certain contracts.

The growth in the Property Product Group resulted from the decision to increase the volume of business written in the first quarter in anticipation of accelerated rate competition as the year progresses. In 2009, the opposite was true.

Reinsurance

The growth in Reinsurance gross premium volume was expected due to continued favourable market conditions for most types of reinsurance. The growth in Specialty/War & Political Risk premium volume was also largely according to plan.

Stephen Catlin, chief executive, said: "Catlin's underlying performance during the first quarter of 2010 was strong. The rating environment remains good overall, although there is negative pressure on pricing in certain areas of the portfolio.

“The volume underwritten by our London hub decreased as intended, but each of our non-London underwriting hubs recorded strong increases in gross premiums written, supporting the Group's decision over the past several years to invest in these hubs.

Catastrophes

"So far this year, the property/casualty insurance market has witnessed two exceptional losses: the Chilean earthquake, which is one of the most devastating earthquakes in the past century, and the Deepwater Horizon oil rig disaster, which is the largest Energy market loss in more than 20 years.

“Both of these losses are within Catlin's planning margins, although further exceptional losses during 2010 will likely have an impact on the Group's financial results for the year.

"Whilst large, these are the types of losses for which policyholders purchase insurance, and we anticipate that these two losses will have a positive impact on pricing and demand for coverage over time. Based on this expectation, along with the overall level of rate adequacy and the underlying performance of our business during the first quarter, Catlin looks ahead with confidence."