Catlin hurt by bigger disaster bills

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BIGGER than expected claims bills from Superstorm Sandy and the Costa Concordia shipwreck hit profits at insurer Catlin.

The operator of the biggest syndicate at Lloyd’s of London made a pre-tax profit of $339m in 2012, missing the $384m forecast by analysts.

The shortfall reflected a widening of Catlin’s projected Sandy loss to $225m, from an initial estimate of $200m published in December.

The insurer also said that the grounding of the Costa Concordia cruise liner off the Italian coast in January last year would cost it $51m, up from previous guidance of $35m.

Catlin shares were the second-biggest faller during trading in the mid-cap FTSE 250 index. They closed at

“We expect the upgrade to Sandy loss estimates and a more surprising 45 per cent increase on Costa Concordia will raise some questions,” said Espirito Santo analyst Joy Ferneyhough.

Catlin’s 2012 profit was still up almost fivefold from the $71m it made in 2011, with natural disaster-related payouts falling to $225m from $678m.

Last year was a relatively quiet one for natural disasters, the biggest of which was Sandy, a 1,000-mile wide storm that struck the north east of the United States in October and is expected to cost the insurance industry up to $25bn.

Insurers paid out a total of $65bn in catastrophe claims last year, according to reinsurer Swiss Re, down sharply from $120bn in 2011, when they had to foot the bill for Japan’s Tohoku earthquake.

Catlin has an office in Leeds with seven staff. It opened in 2005.