CATCo Reinsurance Opps Fund Ltd Portfolio Update (8779K)
December 18 2018 - 10:30AM
UK Regulatory
TIDMCAT
RNS Number : 8779K
CATCo Reinsurance Opps Fund Ltd
18 December 2018
FOR IMMEDIATE RELEASE
18 December 2018
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
establish specific loss reserves for the 30 November 2018 Net Asset
Value (NAV) held by the Company in relation to 2018 major loss
events.
As previously noted, the Company's Ordinary Shareholders and C
Shareholders are exposed to potential losses arising from 2018
major loss events, including Hurricane Florence, Hurricane Michael,
Typhoon Jebi, and the California Wildfires (Camp and Woolsey). The
Manager has estimated the specific loss reserves required to cover
2018 major events and to be recorded within the 30 November 2018
NAV will be c. 23% for Ordinary Shares and c. 45% for C Shares.
Estimated impacts are based on the 31 October NAV (inclusive of the
8 December 2018 announcement of the estimated reduction of the
Ordinary Share Side Pocket Investment due to the 2017 specific loss
reserve strengthening).
Recent insurance market reports have indicated Hurricane
Florence is expected to result in industry insured losses at levels
that will now exceed levels that would be absorbed by the
attritional reserve. In addition, market reports have indicated
that Hurricane Michael industry insured losses are also expected to
reach or exceed the upper end of preliminary industry insured loss
estimates. Therefore, a portion of the 30 November 2018 specific
loss reserve will be used to cover potential portfolio exposure for
both of these events.
Further, preliminary industry insured loss estimates have placed
the total industry insured loss for the California Wildfire events,
Camp and Woolsey, at c. USD 14 billion. The Manager has assumed
that additional loss increases may develop beyond preliminary
estimates, as was observed during the 2017 California Wildfire
events. Therefore, the Manager has established a preliminary
reserve for these events assuming the combined industry insured
losses may increase significantly beyond the current reported
levels of loss. It is also assumed that losses on Camp and Woolsey
will result in material exposure to cedants who have both first and
second event coverage for wildfire events.
It should be noted that significant levels of uncertainty will
remain on 2018 events, especially as it relates to the California
Wildfires. Preliminary reserves have been established based on very
early information, including catastrophe modeled data, industry
insured loss estimates, and early advice from brokers and cedants.
Formal loss advices from cedants are not expected to be received on
2018 major events until year-end 2018, or further into 2019.
Specific reserves will be re-assessed for sufficiency following the
receipt of formal cedant loss reports. Therefore, it is possible
that the expected portfolio exposure to 2018 loss events could
change, resulting in either an increase or decrease to reserves,
after further information has been made available.
The Manager expects the 30 November 2018 NAV to be released by
24 December 2018.
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
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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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