Preliminary Results for Year Ended 31 December 2007
| 6 March 2008 | Release 2008-4 |
HAMILTON, Bermuda – Catlin Group Limited (‘CGL’: London Stock Exchange), the international specialty property/casualty insurer and reinsurer, announces record financial results for the year ended 31 December 2007.
Record Financial Performance:
- 4 per cent increase in income before tax to US$543 million1
- 8 per cent increase in net income available to common shareholders to US$462 million1
- 21 per cent return on average equity;
- 33 per cent return on net tangible assets
- 24 per cent increase in gross premiums written to US$3.4 billion1
- Combined ratio of 84 per cent (2006: 87 per cent)1
- Total investment return of 4.5 per cent including subprime provision
Strong Balance Sheet:
- 49 per cent increase in stockholders’ equity to US$3.0 billion2
- 20 per cent increase in cash and investments to US$6.0 billion2
- 19 per cent increase in book value per share to US$9.592
- 29 per cent increase in net tangible assets per share to US$6.572
- 17 per cent increase in unearned premiums to US$1.5 billion
- 9 per cent increase in total dividend to 25.1 pence (50.2 US cents) per share
Operational Highlights:
- Successful integration of Catlin-Wellington operations
- Excellent business retention
- Growth in Catlin US and international offices
2008 Outlook:
- Further rate softening, but margins to remain good
- Stable premium volume (decrease in London; growth from Catlin US, international offices)
- Embedded growth in earned premiums from Wellington acquisition
- Anticipated acquisition-related synergies increased to more than US$125 million annually
1 2006 comparatives presented on an
unaudited combined basis: Catlin results and Wellington results
aggregated, both prepared under US GAAP for period ended 31
December 2006
2 Comparison to 2006 results as reported by Catlin
Group
| US$000 | 2007 | 2006 combined1 | 2006 as reported |
Change2 from 2006 combined |
|---|---|---|---|---|
| Gross premiums written | 3,360,626 | 2,721,800 | 1,605,019 | 24% |
| Net premiums written | 2,573,518 | 2,323,261 | 1,410,123 | 11% |
| Net premiums earned | 2,489,534 | 2,228,162 | 1,325,861 | 12% |
| Income before income tax expense | 543,368 | 520,514 | 275,417 | 4% |
| Net income available to common shareholders | 461,718 | 428,481 | 258,789 | 8% |
| Earnings per share (US dollars) | $1.84 | $1.73 | $1.59 | 6% |
| Total dividend per share (pence) | 25.1 | - | 23.0 | 9% |
| Total dividend per share (US cents) | 50.2 | - | 44.1 | 14% |
| Loss ratio | 46.4% | 50.0% | 51.4% | |
| Expense ratio | 37.7% | 37.3% | 36.8% | |
| Combined ratio | 84.1% | 87.3% | 88.2% | |
| Annualised investment return | 4.5% | 4.1% | 3.5% | |
| Effective tax rate | 11.0% | 17.7% | 6.0% | |
| Return on average equity | 20.8% | 23.8% | 24.2% | |
| Return on net tangible assets | 32.9% | 31.7% | 24.1% | |
| 31 December 2007 | 31 December 2006 |
31 December 2006 |
Change2 | |
| Total assets | 9,813,135 | 8,806,318 | 8,806,318 | 11% |
| Investments and cash | 6,001,144 | 5,013,709 | 5,013,709 | 20% |
| Stockholders’ equity | 3,017,004 | 2,018,280 | 2,018,280 | 49% |
| Unearned premiums | 1,506,899 | 1,290,379 | 1,290,379 | 17% |
| Book value per share (US dollars) | $9.59 | $8.07 | $8.07 | 19% |
| Net tangible assets per share (US dollars) | $6.57 | $5.11 | $5.11 | 29% |
1 Catlin results and Wellington results
aggregated, both prepared under US GAAP for period ended 31
December 2006
2 Calculated as the movement between Catlin’s 2007
results and 2006 combined, except for dividends and balance sheet
items which are calculated as the movement between Catlin’s
2007 results and 2006 as reported
Sir Graham Hearne, Chairman of Catlin Group Limited, said:
“Catlin is reporting record financial results today, including an 8 per cent increase in net income available to common shareholders, a return on average equity of 21 per cent and an increase in net tangible assets per share of 29 per cent. We have entered 2008 in a strong position and are confident of our prospects. This confidence is reflected in the proposed total dividend of 25.1 pence per share, an increase of 9 per cent.”
Stephen Catlin, Chief Executive of Catlin Group Limited, said:
“2007 was a landmark year for Catlin. All parts of our business performed well, and we successfully integrated Wellington’s operations with our own. We advanced our strategy of further diversifying our risk portfolio and expanding our distribution capabilities through the development of Catlin US and our international offices.
“The progress in our operations outside London and the embedded growth emerging from the Wellington acquisition should enable us to maintain business volumes even in the challenging underwriting conditions anticipated during 2008. Those factors, combined with more than US$125 million in annual cost synergies, provide the Group with a strong foundation for ongoing success.”
For more information contact:
| Media Relations: | ||
| James Burcke, Head of Communications, London |
Tel: Mobile : E-mail: |
+44 (0)20 7458 5710 +44 (0)7958 767 738 james.burcke@catlin.com |
| Liz Morley, Maitland |
Tel: |
+44 (0)20 7379 5151 emorley@maitland.co.uk |
| Investor Relations: | ||
| William Spurgin, Head of Investor Relations, London |
Tel: |
+44 (0)20 7458 5726 +44 (0)7710 314 365 william.spurgin@catlin.com |
Notes to editors:
- Catlin Group Limited, headquartered in Bermuda, is an
international specialist property/casualty insurer and reinsurer
writing more than 30 classes of business worldwide through four
underwriting platforms – the Catlin Syndicate at
Lloyd’s, Catlin Bermuda, Catlin UK and Catlin US – and
an international network of offices. Gross premiums written in 2007
amounted to US$3.4 billion. Catlin shares are traded on the
London Stock Exchange (ticker symbol: CGL). More information
about Catlin can be found at
www.catlin.com.
- Catlin’s financial statements are prepared in accordance
with accounting principles generally accepted in the United States
of America (‘US GAAP’). The Group reports in US
dollars.
- Catlin’s results for the year ended 31 December 2006, as
shown in the attached financial statements, included the
acquisition of Wellington on 18 December 2006. Because of its
timing, the acquisition had no impact on the statement of
operations, including net income, but the acquisition is reflected
in the balance sheet at 31 December 2006.
- Income statement figures presented on a Catlin-Wellington
combined basis for the year ended 31 December 2006 represents the
aggregation of audited Catlin results and Wellington results, both
presented under US GAAP; the Wellington US GAAP income statement
has not been audited.
- Earnings per share are based on weighted average shares in
issue of 250.3 million during 2007. Book value per share is based
on shares in issue of 253.1 million at 31 December 2007.
- Catlin management will make a presentation to investment
analysts at 9.00am GMT today at its London office. The
presentation will be broadcast live on the Group’s website
(www.catlin.com). The
webcast will also be available following the
presentation.
- Rate of exchange at 31 December 2007: £1 = US$1.99
(balance sheet); £1 = US$2.00 (income statement); at 4 March
2008: £1 = US$1.99
- Detailed information regarding Catlin’s operations and financial results for the year ended 31 December 2007 follow, including statements from the Chairman and Chief Executive, and underwriting, financial and investment information
See the full Preliminary Results in PDF format (256 Kb).
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