Last year's benign claims backdrop, which allowed for a $167m (£102m) reserves writeback, significantly explains Lloyd's insurer Catlin's (CGL) decent earnings hike. Indeed, Catlin's combined ratio (of claims to premiums) improved by over four percentage points to 85.6 per cent, which signals impressive underwriting profitability.
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Low claims, however, are also driving pricing pressure. On average, Catlin's rates rose 0.8 per cent in 2013 but, at January's renewals, rates fell 3.2 per cent overall with renewal pricing on catastrophe-exposed classes having slipped 6 per cent. But non-catastrophe lines are holding up better - renewal rates on casualty business, for instance, rose 4 per cent.