Bermuda-based property and casualty insurer Catlin has taken a hit in first-half earnings as adverse foreign currency movements and higher claims eroded the group’s profit base.

As the group moves to diversify its largely UK-based operations, Catlin reported a first-half profit of $US86 million ($96.5 million), down $US154 million ($172.8 million) from the corresponding six months, due partly to losses sustained from the Deepwater Horizon explosion in the Gulf of Mexico and the Chilean earthquake.

Losses from the February 27 Chilean earthquake alone stripped $US135 million ($151.5 million) from Catlin’s underwriting contribution, while another $US49 million ($55 million) was lost through foreign exchange losses.

Despite the diminished return, CEO Stephen Catlin said the underlying fundamentals remained strong. Gross written premium rose over the period 11% to $US2.5 billion ($2.8 billion), of which 43% came from non-UK sources, up from 35% the previous year.

The group’s attritional loss ratio was also the lowest in four years at 51%.

Catlin will launch Catlin Re Switzerland later this year.