August 6, 2012 / 6:29 AM / in 8 years

Insurer Catlin back in profit as disaster claims fall

LONDON (Reuters) - Bermuda-based insurer Catlin CGL.L swung back to profit in the first six months of 2012, helped by a sharp drop in natural catastrophe-related claims relative to last year.

Catlin, operator of the biggest syndicate in the Lloyd’s of London LOL.UL insurance market, made a pretax profit of $231 million in the six months to June 30, compared with a loss of $201 million a year earlier, it said on Monday.

Analysts had expected a profit of $212 million, according to the average of 10 estimates collected by the company.

Catlin said the improvement reflected a lack of catastrophe claims during the first half, in contrast with the same period in 2011, when it absorbed a net $534 million loss following a string of natural disasters including Japan’s Tohoku earthquake.

Last year was the insurance industry’s second-worst on record for catastrophe claims, with earthquakes in Japan and New Zealand, flooding in Australia and Thailand, and tornadoes in the U.S. generating some $116 billion in claims, according to reinsurer Swiss Re SRENH.VX.

London-listed Catlin's shares were up 3.3 percent by 0935 GMT, outperforming a 0.8 pct increase in the FTSE 250 share index .FTMC. The stock has risen 12 percent since the start of the year, lagging a 16 percent increase in the FTSE non-life insurance index .FTASX8530.

“An impressive set of results, beating consensus, demonstrating top-line growth, and maintaining underwriting discipline,” Oriel Securities analyst Marcus Barnard wrote in a note.

Catlin said it had been able to push through average price increases of 5 percent over the first half of 2012 as financially weaker rivals retrenched in response to last year’s losses, easing competitive pressures.

The price increases, the first sustained upturn in global property and casualty insurance rates in four years, allowed Catlin to expand its revenues in the core London market by 8 percent, the first increase there in five years.

“This is the first year for some time we’ve been able to grow in London and we’re very pleased to have done that,” Chief Executive and founder Stephen Catlin told Reuters.

The insurer opened an office in Beijing four weeks ago and is planning further expansion in China and Latin America over the next five years, and could also establish a presence in Turkey, Catlin added.

The insurer is paying a dividend of 9.5 pence per share, an increase of 5 percent.

($1 = 0.6411 British pounds)

Reporting by Myles Neligan; Editing by Sinead Cruise and Jane Merriman

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