CATCo Reinsurance Opps Fund Ltd Net Asset Value(s) and Portfolio Update (3315C)
19 January 2018 - 6:00PM
UK Regulatory
TIDMCAT
RNS Number : 3315C
CATCo Reinsurance Opps Fund Ltd
19 January 2018
FOR IMMEDIATE RELEASE
19 January 2018
To: SFS, London Stock Exchange and Bermuda Stock Exchange
NET ASSET VALUE ("NAV") AND PORTFOLIO UPDATE
Markel CATCo Investment Management Ltd., as Investment Manager,
announces the unaudited net asset value of the Company's Ordinary
Shares and C Shares of $0.8915 and $0.9800 respectively, as at the
close of business on 31 December 2017.
The Company's Ordinary Shareholders are exposed to potential
losses related to the Tubbs, Atlas, and Mendocino wildfires that
impacted parts of Northern California, U.S.A. during October 2017.
Recent estimates have indicated a substantial increase to insured
industry losses, with the Tubbs fire, in particular, having
increased 75% over the initial loss estimate. In addition, the
Company's Ordinary Shareholders could be further exposed to
potential losses following the Thomas, Creek, and Lilac wildfires
that impacted parts of Southern California, U.S.A. during December
2017.
The cumulative insured losses from 2017 wildfire events are now
estimated at c. USD 12.5 billion, more than four times the
cumulative insured losses recorded in any previous year due to
wildfires in U.S.A. history. As a result of the significant
increase in insured losses, the Manager has increased specific loss
reserves for 2017 wildfire events by c. 14.4% of Net Asset
Value.
The Manager has also continued to monitor the possible impact
from the 2017 hurricanes Harvey, Irma, and Maria (HIM). The overall
private insured industry loss impact resulting from HIM continues
to be uncertain as of the 2017 year end. Due to this remaining
uncertainty, the Manager has implemented an increase in the loss
reserves related to HIM by c. 3.6% of Net Asset Value.
Finally, the December NAV is inclusive of a total 2017
attritional loss reserve of 1.80% as recorded on a monthly basis
throughout the year. At this time, the attritional loss reserve is
expected to be sufficient to absorb the impacts of any other 2017
loss activity, including Cyclone Debbie, the earthquakes in Mexico,
and U.S.A. Severe Convective Storm activity.
Munich Re has estimated 2017 global insured industry losses at
USD 135 billion, making 2017 the highest insured loss year on
record. The combined effect of 2017 loss events has resulted in the
largest impact to portfolio returns since the Company commenced
operations at the end of 2010. As a result of this unprecedented
catastrophic loss activity, the NAV annual return for the year end
2017 for Ordinary Shares was -27.6%. However, these severe loss
events serve to reaffirm the collective importance of the
traditional insurance, reinsurance, and collateralized reinsurance
markets in the efforts to rebuild communities that have been
severely impacted.
Further, the catastrophic loss events of 2017 has led to higher
pricing, generating a net no loss return of c. 23% for the 2018
portfolio versus 16% for the 2017 portfolio. Also, risk levels have
been reduced in the 2018 portfolio.
During the autumn of 2017, the Manager raised over USD 2.5
billion between its public and private funds. These new funds have
now been fully deployed for 2018.
For further information:
Markel CATCo Investment Management Numis Securities Limited
Ltd. David Benda / Hugh Jonathan
Telephone: +44 (0) 20
Judith Wynne 7260 1000
General Counsel
Telephone: +1 441 493 9005
Email: judith.wynne@markelcatco.com
Mark Way
Chief Operating Officer
Telephone: +1 441 493 9001
Email: http://mark.way@markelcatco.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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