Friday, Catlin Group Ltd. (CGL.L), a specialty property/casualty insurer and reinsurer, reported a 77% increase in first-half profit, benefited from significant improvement in investment returns, primarily from investments in Catlin US and international office network. In light of the performance, the Board has declared an increased interim dividend.
Further, Catlin noted that Christopher Stooke, who has been the company's chief financial officer and an executive director since 2003, will step down at the end of August. Benjamin Meuli, who was appointed as a director on June 30, 2009, will succeed Stooke as chief financial officer.
The Hamilton, Bermuda-based company's profit before tax for the half year increased 60% to US$239.77 million from US$150.21 million in the prior-year period.
Net income available to common stockholders improved 77% to US$195.85 million or US$0.60 per share from US$110.46 million or US$0.37 per share in the same period last year.
Total revenues for the period grew to US$1.49 billion from US$1.32 billion in the previous year. Net premiums earned increased to US$1.3 billion from US$1.26 billion in the year-ago period. The increase was 9% on constant currency basis and 3% on a reported basis, the company said.
Segment-wise, Catlin Syndicate, which comprises direct insurance and reinsurance business underwritten by the Catlin Group's syndicates at Lloyd's, earned net premiums of US$871.04 million, compared to US$875.39 million in the prior year. Catlin Bermuda, which primarily underwrites reinsurance business, including intra-Group reinsurance net earned premiums increased to US$162.25 million from US$132.13 million in the earlier year.
Catlin UK, which mainly underwrites direct insurance, reported net earned premiums of US$194.53 million, down from US$215.12 million in the same period last year, while Catlin US earned net premiums of US$70 million, higher than US$40.8 million in the preceding year.
Net investment return for the period increased to US$195.02 million from US$53.94 million in the previous year. According to the company, the benefits of its investment in Catlin US over the past several years were realized during the first half and provided more than 25% of the Group's total underwriting contribution.
The company said the Board declared an interim dividend of 8.2 pence per share, an increase of 9%, to shareholders of record on August 28, 2009, payable on September 25.
Stephen Catlin, chief executive said, "We look ahead with confidence. We believe that pricing for nearly all classes of business will continue to strengthen for the foreseeable future. Catlin is well positioned to grow - both in terms of premium volume and profitability - in this market environment."
CGL.L is currently trading at 330.9 pence, up 1.8 pence or 0.55%, on a volume of 457 thousand shares.
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