Strong underwriting performance by Bermuda-based Catlin Group Ltd. set a company record in the first half of the year by bringing its highest ever net underwriting levels. Absence of significant global catastrophes in the first six months helped the company.
Catlin's net underwriting contribution, which is net premiums earned less losses, loss expenses and policy acquisition costs, was $443 million for the first half of the year, compared with an underwriting loss of $91 million in the same period last year. The company's net income was $231 million, compared with a net loss of $201 million in the first half of 2011.
Losses and loss expenses decreased in the first half of the year by 41%, coming in at $882 million, due to fewer catastrophe-related losses. The company was hammered by those losses in the first half of 2011, totaling $534 million. Large single-risk losses in the first six months of 2012 totaled $52 million. Those losses stemmed from the January grounding of the Costa Concordia cruise ship off the Italian coast and a May explosion and fire at a synthetics facility in Thailand.
Stephen Catlin, the company's chief executive officer, said in a written statement the market is seeing favorable rate conditions and the company saw a 5% average increase in premium across its book of business during the first half of the year, as opposed to 1% last year. He said rates for catastrophe-exposed business continue to increase and were up 9% during the first six months of 2012, as opposed to 3% in 2011.
The company's United Kingdom, Bermuda and U.S. underwriting hubs all increased their net underwriting contribution in the first half of 2012 over the same period a year ago. The company's international hub had a 52.5% in net underwriting contribution during the first half of the year to come in at $19 million. That number was hampered by the losses in Thailand, flooding in Montreal and a fire at an Ontario petrochemical plant, the company said.
"The group will continue to stress the fundamentals of disciplined underwriting, portfolio diversification, and capital preservation and flexibility," Catlin wrote. "We will not sacrifice long-term profitability for increased market share."