Catlin's (CLG) results for last year bring down the curtain for the Lloyd's insurer, given that a $2.79bn (£1.85bn) recommended bid from New York-listed insurer XL Group (US: XL) is expected to be completed in the first half of this year. Catlin chairman John Barton said that the business combination will be a leader in global property/casualty insurance, and will realise significant value for shareholders. Under the terms of the offer, Catlin's shareholders will receive 338p a share in cash, which is net of the 22p a share final dividend, and 0.13 XL shares for each Catlin share.
Capital released from prior years' reserves was down from $167m to $120m, but there was a sharp increase in net investment returns, which received a $31m boost from a loan made to Box Innovation Group, the parent company of telematics auto insurer Insure the Box. Catlin is also going to sell its stake in ITB in the first quarter of this year, with the estimated $240m proceeds earmarked for a proposed special dividend of 12p a share.
Net underwriting revenue was only marginally down from the previous year at $991m, which is impressive, given the stiff competition and a benign claims environment that saw average weighted premium rates fall by 2.9 per cent, having risen by 0.8 per cent in the previous year.
| CATLIN (CGL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 700p | MARKET VALUE: | £2.5bn | |
| TOUCH: | 699-701p | 12-MONTH HIGH: | 712p | LOW: 480p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 938¢* | COMBINED RATIO: | 86.8% | |
| Year to 31 Dec | Gross premiums ($bn) | Pre-tax profit ($m) | Investment return ($m) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 4.1 | 406 | 205 | 26.5 |
| 2011 | 4.5 | 71 | 248 | 28.0 |
| 2012 | 5.0 | 339 | 158 | 29.5 |
| 2013 | 5.3 | 432 | 124 | 31.0 |
| 2014 | 6.0 | 488 | 226 | 32.5 |
| % change | +12 | +13 | +82 | +5 |
Ex-div: 19 Feb Payment: 19 Mar *Includes intangible assets of $720m, or 199¢ a share £1=$1.511 Capacity owned: 100 per cent | ||||
