CATCo Reinsurance Opps Fund Ltd Portfolio Update (8444A)
03 June 2019 - 4:01PM
UK Regulatory
TIDMCAT
RNS Number : 8444A
CATCo Reinsurance Opps Fund Ltd
03 June 2019
FOR IMMEDIATE RELEASE
3 June 2019
CATCo Reinsurance Opportunities Fund Ltd. (the "Company")
Portfolio Update
To: SFS, London Stock Exchange and Bermuda Stock Exchange
Markel CATCo Investment Management Ltd., as Investment Manager
of the Company (the "Manager"), announces its intention to increase
the specific loss reserves held by the Company in relation to the
Ordinary Shares and C Shares for the 2017 and 2018 loss events.
Update on 2018 Events
In September 2018, Typhoon Jebi made landfall in the Japanese
Prefecture of Tokushima on Shikoku Island as the equivalent of a
Category 3 hurricane. The typhoon made a second landfall on the
main island of Honshu where it affected Kobe and Osaka. Typhoon
Jebi is the most intense tropical cyclone to make landfall over
Japan since Typhoon Yancy in 1993 and is Japan's largest
typhoon-related insurance and reinsurance market loss on
record.
Shortly afterwards in October 2018, Hurricane Michael made
landfall in the Florida Panhandle as a Category 4 hurricane, the
strongest hurricane to affect the Continental U.S. since Hurricane
Andrew in 1992. Industry loss estimates for Typhoon Jebi and
Hurricane Michael have continued to rise meaningfully since the
start of 2019.
Markel CATCo's Q1 2019 cedant loss reports, most of which were
received in the past 15 business days, show that cedant loss
reserves have also risen meaningfully during the same period. This
increase is principally driven by development on both Typhoon Jebi
and Hurricane Michael. As a result of the increase in industry loss
information and in reported cedant loss reserves, the Manager has
reviewed its estimates of the ultimate cost of the events and
concluded that further strengthening of the 2018 loss reserves is
required.
Update on 2017 Events
Furthermore, following updated loss notifications from cedants
and continued evidence of development in relation to the 2017 loss
events, additional strengthening of the 2017 loss reserves is
considered necessary by the Manager.
Impact on Net Asset Value - C Shares
The impact of the loss reserve increase is estimated to be
approximately 18 per cent of the 30 April 2019 C Share Net Asset
Value ("NAV"). The increase will be accounted for within the 31 May
2019 NAV. On a normalised basis, this represents a c. 11 per cent
deterioration in the 2018 annual performance. After this adjustment
the estimated C share NAV will be c. $0.5030 (pre premium
attribution for the month of May).
Impact on Net Asset Value - Ordinary Shares
The impact of the 2017 and 2018 loss reserve increases are
estimated to be approximately 13 per cent and 8 per cent
respectively of the 30 April 2019 Ordinary Share Net Asset Value
("NAV"). The increase will be accounted for within the 31 May 2019
NAV. On a normalised basis, this represents a c. 3.5 per cent
deterioration in the 2017 annual performance. When combining the
impact of 2017 and 2018 loss reserve adjustments the estimated
Ordinary share NAV is c. $0.2616 (pre premium attribution for the
month of May).
The Company intends to report the 31 May 2019 Net Asset Values
for the Company's Ordinary Shares and C Shares in mid-June
2019.
Further Information
As a cautionary statement, if significant loss development
continues to emerge, particularly in relation to Typhoon Jebi and
Hurricane Michael, loss reserves will need to increase further,
resulting in additional material decreases to the NAV.
In the meantime, the Manager will continue to closely monitor
cedant reporting during 2019 along with associated industry loss
updates and related market sentiment in the coming months to make
an informed decision on any further reserve adjustments
required.
The Manager will be hosting a webinar for Shareholders at 3pm UK
time on Monday, 24 June. Shareholders can click here to
register.
This Announcement contains Inside Information as defined under
the Market Abuse Regulation (EU) No. 596/2014.
The information communicated in this update contains certain
statements that are or may be forward looking. These statements
typically contain words such as "expects", "anticipates", "may",
"will", "should", "target" and "estimate" and words of similar
import. By their nature forward looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will occur in the future. Due to various risks
and uncertainties, including, without limitation, the outcome of
the governmental inquiries previously disclosed and capital and
claims submitted for any covered event exceeding estimates, actual
events or results or actual performance may differ materially from
those reflected or contemplated in such forward-looking
statements.
For further information:
Markel CATCo Investment Management Ltd. Numis Securities Limited
David Benda / Hugh Jonathan
Judith Wynne Telephone: +44 (0) 20 7260
General Counsel 1000
Telephone: +1 441 493 9005
Email: judith.wynne@markelcatco.com
Mark Way
Chief of Investor Marketing
Telephone: +1 441 493 9001
Email: mark.way@markelcatco.com
This information is provided by RNS, the news service of the
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Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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