Hurricanes Hit Catlin’s 2005 Net; Down 87% to $19.66 Million

The U.K.’s Catlin Group Limited joined other companies who fell victim to this recent fall’s hurricanes.

In an announcement from its Bermuda offices Catlin said net income for 2005 dropped 87 percent to $19.662 million compared to the $154.1 million it earned in 2004.

Other highlights cited in the report include the following:
— Income before tax amounted to $27.7 million (2004: $173.9 million) “despite net incurred losses from the three major hurricanes of $333.5 million (2004 major hurricanes: $114.6 million
— Return on average equity was 2.1 percent (2004: 19.1 percent)
— Book value grew to £3.47 per share [$5.78] (2004: £3.28 [$5.61]) in sterling terms; however, Catlin said it “declined to $5.97 (2004: $6.30) in dollar terms.”
— Gross premiums written decreased to $1.39 billion (2004: $1.43 billion)
— Net premiums earned increased to $1.22 billion (2004: $1.16 billion)
— Combined ratio was 103.1 per cent (2004: 89.4 per cent); “net incurred losses from the three major hurricanes represent 27.4 percentage points of the combined ratio (2004 major hurricane losses amounted to 9.9 percent)”;
— Proposed final dividend of 10.1 pence (17.6 US cents) per share (2004: 8.1 pence; 15.6 cents); proposed total dividend of 15.5 pence (27.5 US cents) per share (2004: 12.4 pence; 23.5 cents)
— Five percent capital raise and debt restructuring during the first half of 2006

Commenting on the Group’s preliminary results, Group Chairman Sir Graham Hearne stated: “Catlin’s operating performance during 2005 was very satisfactory, notwithstanding the unprecedented impact of the hurricanes. The proposed total dividend of 15.5 pence per share, which represents an increase of 25 per cent, reflects our confidence in underlying trends and prospects for Catlin.”

Chief Executive Stephen Catlin commented: “Catlin’s performance during 2005 demonstrates the strength of the Group’s strategy and the advantages offered by our operating structure and diversified portfolio of business. Our strong capital base has remained intact despite a very tough 2005; we are now increasing our capital and improving our debt structure to take maximum advantage of growth opportunities in 2006 and beyond.”

Catlin is structured into three separate operating platforms. Lloyd’s Syndicate 2003, one of the 10 largest; Catlin Bermuda, established in 2002, which writes property and casualty treaty reinsurance, structured risk and other coverages, and Catlin U..K. It is in the process of establishing a fourth platform in the U.S. (See IJ Website March 10).
The complete results and further comments can be consulted on the Group’s Website at: http://www.catlin.com.