Catlin has announced its surprise at the decision by AM Best to place the financial strength and issuer credit ratings of Catlin Insurance Company Limited and other Catlin Group companies under review with negative implications.
The rating agency cited concerns relating to Catlin's consolidated catastrophe exposure and the likely future impact of major events on risk-adjusted capitalisation in its decision to place the ratings under review.
Catlin believed that such concerns were unwarranted, adding that during the past year, it had actually strengthened its financial security and made the group more resilient in the event of a major catastrophe. The group also reduced by one-third its exposure to natural catastrophe risk compared with a year earlier.
The group also increased its capital by approximately $65m through a placement of new common shares. Catlin's strong first half 2006 underwriting performance produced net income of $147.3m and a combined ratio of 84.7%.
Stephen Catlin, chief executive of Catlin Group, said: “We are puzzled by AM Best's decision to place the ratings of Catlin Group companies under review, especially in the light of our performance and achievements during 2006. Catlin is widely regarded as having a conservative underwriting philosophy and strong focus on all aspects of risk management. We will concentrate our efforts to engage in constructive communication with AM Best to alleviate any concerns Best may have regarding Catlin's catastrophe exposures.”
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