Insurance and reinsurance firm Catlin yesterday announced 2013 profits had jumped by more than a quarter to $432 million.

The Bermuda-based firm also recorded a record of more than $1 billion in underwriting contributions — up $212 million on the previous year.

And the leap was good news for investors, with a 29 percent increase in net income to common stockholders — up to $392 million from $305 million in 2012.

Catlin’s shares surged 3.8 percent in London Stock Exchange trading yesterday to close on 560.5p.

Catlin Group chairman John Barton said: “Whilst it is now clear that market conditions are becoming increasingly competitive for many classes of business underwritten by Catlin, margins are still strong.

“I believe that Catlin has the strategy, the infrastructure and most importantly the people, in place to continue to produce good results for shareholders.”

The firm’s non-London underwriting hubs produced an 83 percent increase totalling $480 million, 48 percent of the group total and up from 33 percent in 2012.

Stephen Catlin, group CEO, added: “Catlin’s net underwriting contribution exceeded $1 billion for the first time in 2013 because of our steadfast focus on underwriting discipline and our investment in building underwriting hubs outside of the London market.”

He added: “I believe there are still good opportunities for Catlin, even in a softening market. Our diversified portfolio — by region and by product — allow us to see business that many of our competitors do not have the opportunity to write.

“Using our tested technical skills, we can select the business that we believe is most profitable. It must also be remembered that margins for most classes of business are still strong and that rages for some classes of business are still rising.

“Catlin continues to build a business for the future and we look ahead with confidence.”

The group recorded $156 million in catastrophe losses for 2013, but the loss ratio was 52.3 percent, the lowest figure recorded since 2007.

Total investment return for 2013 amounted to $135 million — 1.5 percent of invested assets and a decrease from $173 million, or two percent, in 2012.

And the report for the year announced a final dividend of 34.3c per share, payable on March 20 to shareholders of record on February 21.

The report said: “Including the interim dividend of 15.5 cents, the total 2013 dividend of 49.8 cents represents a five percent increase compared with the 2012 dividend.

“Including the final dividend to be paid in March, the annual dividend payable by Catlin in Sterling terms has increased by 187 percent since the group’s initial public offering in 2004.

“The group has declared dividends amounting to $1.2 billion during the past ten years.”

Mr Barton said: “Catlin is first and foremost an underwriting company. Our strong underwriting performance in 2013 demonstrates that the group’s basic strategy, which stresses underwriting discipline and geographic and product diversification, is fit for purpose.

“Whilst it is now clear that market conditions are becoming increasingly competitive for many classes of business underwritten by Catlin, margins are still strong.

“I believe that Catlin has the strategy, the infrastructure and most importantly the people in place to continue to produce good results for shareholders.”