A.M. Best Affirms Ratings of Catlin Group Limited and Its Subsidiaries
LONDON -- July 25, 2013
A.M. Best Europe – Rating Services Limited has affirmed the financial strength
rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Catlin
Insurance Company Limited (CICL) (Bermuda), Catlin Insurance Company (UK) Ltd.
(Catlin UK) (United Kingdom) and Catlin Re Switzerland Ltd. (Catlin Re)
A.M. Best also has affirmed the ICRs of “bbb” of Catlin Underwriting (CU)
(United Kingdom), a non-operating holding company and Catlin Group Limited
(CGL) (Bermuda), the ultimate parent company of the Catlin group.
Concurrently, A.M. Best has affirmed the debt ratings of “bbb” on USD 600
million preferred stock issued by CICL as well as “bbb-” on USD 27 million
subordinated floating rate notes and EUR 7 million subordinated floating rate
notes issued by CU. The outlook for all the above ratings remains stable.
The FSR of A (Excellent) and ICR of “a+” of Lloyd’s Syndicate 2003 (United
Kingdom), which is managed by Catlin Underwriting Agencies Limited, remain
unchanged following the rating actions taken on 19 July 2013, on the Lloyd’s
market. At that time, the outlook for both ratings was revised to positive
from stable. However, due to an administrative error, these rating actions
were not released until 22 July 2013. The ratings of Lloyd’s Syndicate 2003
reflect the financial strength of the Lloyd’s market, which underpins the
security of all Lloyd’s syndicates.
Catlin UK and Catlin Re’s ratings benefit from the explicit support provided
by CICL, in the form of capital contributions to sustain growth. Additionally,
Catlin Re remains of strategic importance to the Catlin group as the provider
of significant intra-group reinsurance protection and as the platform for
expansion of the group’s reinsurance business in Europe.
CGL’s consolidated risk-adjusted capitalisation is expected to remain at a
strong level in 2013, supported by high retained earnings. Additionally, the
adverse development cover purchased in 2012 remains in place, limiting CGL’s
consolidated underwriting risk exposure.
Pre-tax profits in 2013 are expected to remain comparable to the USD 339
million reported in 2012, subject to normal catastrophe activity for the rest
of the year. Despite exposure to the US tornadoes and the European floods
during the first half of the year, A.M. Best expects a combined ratio between
90% and 95%, supported by rate increases, largely derived from the major loss
affected classes of business. Contribution from the group’s conservative
investment portfolio of cash and fixed income securities is likely to remain
low, reflective of the low interest rate environment.
The Catlin group maintains a robust business profile, supported by its
well-spread underwriting hubs in the United Kingdom, Bermuda, United States
and other international markets—including Europe, Asia-Pacific, Canada,
Guernsey and South America—which provide access to a broad range of
property/casualty business. In spite of the group’s strong competitive
position in the London market, which is supported by the profile of Syndicate
2003 (accounting for 60% of consolidated gross premium income), prospective
growth is expected to target the better priced segments of the local US and
Positive rating actions are unlikely in the near future for the Catlin group,
whereas unexpected weak operating performance or a deterioration in its
risk-adjusted capitalisation could lead to negative rating pressure.
A factor that may lead to positive or negative rating actions for Lloyd’s
Syndicate 2003 is a change in the ratings of the Lloyd’s market, which
currently has an FSR of A (Excellent) and an ICR of “a+”, with a positive
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at
In accordance with Regulation (EC) No. 1060/2009, the following is a link to
required disclosures: A.M. Best Europe - Rating Services Limited Supplementary
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best
Company. A.M. Best Company is the world’s oldest and most authoritative
insurance rating and information source. For more information, visit
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
Reza Pakravan, +(44) 20 7397 0293
Deniese Imoukhuede, +(44) 20 7397 0277
Senior Financial Analyst
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
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