(Reuters) – Bermuda-based insurer Catlin Group Ltd reported a 27% rise in full-year profit as it wrote more premiums and paid out less in disaster claims, and said it was optimistic amid industry warnings of a difficult 2014.
“Overall we are still expecting top-line growth of between 5% and 10% in 2014,” Group Chief Operating Officer Paul Jardine told Reuters.
Low catastrophe losses and increased competition in the reinsurance industry have put rates under pressure, analysts at Espirito Santo said last month, noting that property catastrophe rates fell 11% in January renewals.
However, Catlin, the operator of the biggest syndicate in the Lloyd's of London insurance market, said it was seeing good underwriting margins across the majority of its business.
Catlin's shares rose as much as 4% in early trading on Monday.
The company's profit before tax rose to $432 million in the year ended Dec. 31 from $339 million a year earlier. At least two analysts had expected $390 million.
“This is solely down to stronger-than-expected investment returns that came in at $135 million versus our expectations for $87 million,” Peel Hunt analyst Mark Williamson said in a note to clients.
The company's first-half profit had fallen by more than a third, hit by a steep drop in the value of its fixed-income portfolio due to higher interest rates.
Catlin's gross premiums written rose 7% in the full year. It reported net underwriting contribution of about $1 billion, driven by an increase in business from underwriting hubs outside the London market.
Net underwriting contribution from non-London hubs rose 83% at $480 million.
Catastrophe losses, net of reinsurance and reinstatement premiums, fell to $156 million in 2013 from $225 million a year earlier.
Munich Re, the world's biggest reinsurer, had said in January that natural catastrophes globally claimed fewer lives and cost less damage in 2013 than on average over the past decade.
Total investment returns at Catlin fell 22% to $135 million – a smaller fall than the company had anticipated.
The insurer raised its annual dividend to 49.8 cents per share from 46 cents per share.
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