Catlin suffers jitters over Federal Reserve

Uncertainty over the US Federal Reserve’s money-printing programme hit profits at Catlin during the first half of the year.

The Lloyd’s of London insurer said higher borrowing costs across the pond had impacted the value of its fixed-income portfolio and ruined an otherwise strong underwriting performance.

The company, which operates the largest syndicate in Lloyd’s, saw pre-tax profits tumble to $145 million (£93 million), compared with $231 million a year earlier, after its net investment return fell to $9 million from $83 million.

“If we’d had the right interest rate environment these would have been a stonking set of results,” boss Stephen Catlin said.

“However, Catlin’s investment returns will ultimately benefit from higher interest rates.”

Despite the results, the group posted an impressive combined ratio of 88.9%. This measures underwriting profitability with figures below 100% reflecting a profit.