Property and casualty insurer and reinsurer Catlin (CGL) slipped 1.9% to 479.5p as floods in Canada and Western Europe and tornadoes in the USA hit its interim figures.
The Bermuda-based group highlighted the problems many insurers have faced as it took a $99 million net catastrophe hit in the six months to July and suffered from rising bond yields.
Despite its flood and tornado losses Catlin made $441 million from its net underwriting operations, slightly lower last year’s interim total. Its figures reflected a tough investment environment as it only recorded a 0.4% increase in its annualised investment return to $16 million, due to a $76 million reduction in its fixed-income portfolio.
Its investment performance hit its pre-tax profits, despite a 10% increase in gross premiums. It made $145 million of taxable income in the first half, down on the $231 million it recorded at the same stage last year, and below the $162 million consensus.
For the full year Catlin is expected to report a flat $339 million pre-tax profit and chief executive officer (CEO) Stephen Catlin remains upbeat, saying that he sees promising opportunities ahead for the group. This led him to maintain its 5% interim dividend increase to 10p per share, up from 9.5p.
Management did manage to pull back Catlin’s combined ratio – the relationship between the premiums it collects and the policies it pays out. It currently stands at 88.9%, up from a move favourable 86% a year earlier, but it has managed to crawl back lost ground after the ratio moved up to 90% at the end of 2012.