Catlin to raise £200m

Loss-making Lloyd’s insurer Catlin is to raise £200m in an underwritten rights issue to take advantage of the improving market conditions.

The Rights Issue will involve the issue of up to 106,643,145 New Common Shares at 205 pence per share, on the basis of two New Common Shares for every five Existing Common Shares

Catlin also announced its 2008 financial results and said there were clear signs that the property/casualty insurance and reinsurance market is hardening. It raised its dividend by 6%.

J.P. Morgan Securities Ltd. ('JPMSL') and UBS Limited ('UBS') are acting as joint underwriters and JPMorgan Cazenove and UBS are acting as joint bookrunners to the Rights Issue. JPMorgan Cazenove is acting as Sponsor.

2008 highlights

• 2% increase in gross premiums written to $3.4bn; 32% increase from Catlin US, Catlin Bermuda and international offices
• Combined ratio of 95% on US GAAP basis; reflects increase in catastrophe and large single-risk losses (2007: 84%)
• Average weighted premium rate decrease across risk portfolio of 4%
• -1.5% net investment return, including all unrealised gains and losses; reflects economic volatility (2007: 4.5 per cent)
• Loss before tax of US$13m (2007: $543m profit)
• Net loss to common stockholders of $46m (2007: $462m profit)
• -2.2 per cent return on average equity (2007: 20.8%)
• Proposed 6 per cent increase in annual dividend to 26.6 pence
• 7% increase in sterling book value per share to £5.18; 21% decrease in US dollar book value per share to $7.57
• 10% increase in sterling net tangible book value per share to £3.63; 19% decrease in US dollar net tangible book value per share to $5.30