Catlin hurt by bigger disaster bills

Have your say

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.