HAMILTON, Bermuda—Though natural catastrophe losses and persistent challenges in the world's investment markets drove its net income down more than 80% in 2011, Catlin Group Ltd. said Thursday that it experienced modest gains in revenue and premiums written for the year.

The Hamilton, Bermuda-based insurer and reinsurer reported $3.87 billion in total 2011 revenue, an increase of 13% from its 2010 total of $3.41 billion.

Catlin's net premiums written also rose in 2011, to $3.83 billion from $3.32 billion in the prior year, a 15% increase. Income from investments and other sources grew 27%—to $261 million in 2011 from $205 million in 2010—but remained 36% below totals recorded in 2009.

Despite those gains, the company's net income, combined ratio and return on equity deteriorated significantly last year. Catlin's profits for 2011 fell to $71 million, an 82% decline from the $406 million recorded in 2010. The company's combined ratio rose to 102% from 2010's 89.8%, while its return on equity for the year fell to 1.3% from 12.5% in the prior year.

In a statement Thursday, executives pointed to $961 million in gross losses Catlin sustained from natural catastrophes and sluggish investment markets as the primary impediments to its financial performance.

“2011 was a tough year for the insurance industry and for Catlin due to the extraordinary series of natural catastrophes,” Catlin Chairman Sir Graham Hearne said in the statement.

Mr. Hearne added that he believed Catlin had performed well in 2011, given the circumstances.

“Catlin has not only grown in size, but it has significantly increased value for its shareholders since its initial public offering, despite the tough economic conditions during much of that period,” Mr. Hearne said.

CEO Stephen Catlin highlighted positive results in gross premiums written, premium volume for non-United Kingdom underwriting hubs and its attritional loss ratio as evidence of the company's strength in difficult financial times.

Mr. Catlin also expressed optimism at the company's prospects in the near term, noting a 5% increase in average weighted premium rates for Jan. 1, 2012, renewals and a 9% increase for catastrophe-exposed risk classes. Property treaty reinsurance rates grew as well, increasing 17% for U.S. policies and 12% for international policies.

“Our structure is designed to perform in all phases of the market cycle,” Mr. Catlin said. “Whilst it may be too early to declare that the market has turned, nearly all signals are encouraging.”