Bermuda-based Catlin Group has seen the financial strength ratings of its operating subsidiaries affirmed at A by ratings agency AM Best Co.

The New Jersey-based ratings agency said in its ratings commentary that the group's capitalisation is expected to remain strong despite losses of $140 million from February's earthquake in Chile and $40 million from the loss of the Deepwater Horizon oil rig in the Gulf of Mexico.

Best said Catlin's net premium income is expected to rise by up to ten percent this year from the $3.17 billion recorded in 2009, due to the continued expansion into the US, Europe and Asia.

Assuming normal levels of catastrophe activity in the remainder of the year, Catlin's net income is expected to fall below last year's $602 million profit.

The expected fall in profit is down to the large catastrophe losses in the first half of 2010, as well as lower investment income, as record low interest rates weigh on returns from the group's conservative fixed-income portfolio.

Best added: "The Catlin group maintains a robust business profile, supported by its well-diversified portfolio of property/casualty risks. Underwriting hubs in the UK, Bermuda, US and international (Europe, Asia-Pacific, Canada, Guernsey and South America) markets provide access to a broad range of business.

"The group continues to benefit from its strong competitive position in the London market, supported by the profile of Lloyd's Syndicate 2003, which represents approximately 65 percent of consolidated gross premium income.

"The US and international markets remain the main focus for growth in 2010, in spite of the challenging pricing environment. However, the group has tempered its growth plans for US casualty business, particularly for longer-tail risks, owing to soft market conditions and concern relating to the effect of weak economic conditions on claims experience."

The A financial strength rating and the "a" issuer credThe A financial strength rating and the "a" issuer credit rating apply to Catlin Insurance Company Ltd. (Bermuda), Catlin Insurance Company (UK) Ltd., Catlin Insurance Company, Inc. (Houston, Texas) and Catlin Specialty Insurance Company (Catlin Specialty) (Dover, Delaware).

The outlook for all ratings remains stable.