A weakened investment performance and $99m (£63m) of catastrophe-related claims dented half-year profits at Lloyd's insurer Catlin (CGL). But despite those claims - reflecting floods in Canada and central Europe and tornadoes in Oklahoma - the combined ratio (of claims to premiums) deteriorated by just 2.6 percentage points to a still solidly profitable 88.9 per cent.
Overall, premium rates are holding up, too - average weighted rates across the portfolio rose by 1.6 per cent in the half. Average rates for non-catastrophe business grew 2.4 per cent, although the pace has slowed for catastrophe-exposed classes as rates grew just 0.4 per cent, compared with 9.5 per cent in 2012's first half. Within this average picture, however, there's quite a divergence between business classes. Catlin's casualty book, for instance, saw rates rise 8 per cent, but the aviation account suffered a 7 per cent rate slide.
Meanwhile, in today's low yield environment, the annualised return from Catlin's investment portfolio tumbled from last year's 2 per cent to just 0.4 per cent. The book is 94 per cent invested in cash and bonds.
JPMorgan Cazenove expects adjusted full-year pre-tax profit of $350m, giving adjusted EPS of 45.54p (from $339m and 52.9p in 2012) and net tangible assets (NTA) of 425p.
CATLIN (CGL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 482p | MARKET VALUE: | £1.7bn | |
| TOUCH: | 481-483p | 12-MONTH HIGH: | 597p | LOW: 441p |
| DIVIDEND YIELD: | 6.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 802¢* | COMBINED RATIO: | 88.9% | |
| Half-year to 30 Jun | Net premiums ($m) | Pre-tax profit ($m) | Investment return ($m) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 2.26 | 231 | 83.0 | 9.5 |
| 2013 | 2.44 | 145 | 9.0 | 10.0 |
| % change | +8 | -37 | -89 | +5 |
Ex-div: 21 Aug Payment: 20 Sep *Includes intangible assets of $716m, or 198¢ a share Capacity owned: 100% £1=£1.56 | ||||
