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 $145m (£93m), compared with $231m a year earlier, after its net investment return dropped to $9m from $83m. “If we’d had the right interest rate environment these would have been a stonking set of results,” the chief executive Stephen Catlin said.
“However, Catlin’s investment returns will ultimately benefit from higher interest rates.”
Despite this, the group posted an impressive combined ratio of 88.9 per cent. This measures underwriting profitability with figures below 100 per cent reflecting a profit.