Brit Insurance Share Discussion Threads

[speedsgh] 08/6/2010 18:51

Campomar2 - they go ex-div on 10/6 so if you do not already hold, you have to buy by close of business tomorrow (i.e. 9/6) to qualify for the final distribution payment on 15/7. see extract from rns 15/3/10 below...

Timetable for the final distribution for the year ended 31 December 2009 of Brit Insurance Holdings N.V. ('Brit Insurance')

On 26 February 2010 Brit Insurance in its preliminary announcement for the year ended 31 December 2009 stated that the Board had recommended a final distribution for the year ended 31 December 2009 of 30.0p per share (after 1 for 4 share consolidation) making a total combined distribution of 60.0p per share for Brit Insurance Holdings PLC and Brit Insurance Holdings N.V. (2008: 60.0p per share after 1 for 4 share consolidation). The timetable and procedure for the approval and payment of the above recommended distribution is as follows:


+-----------------+------------------------------------------------------------+
|10 June 2010 |Ex date for Distribution |
+-----------------+------------------------------------------------------------+
|14 June 2010 |Record date for Distribution |
+-----------------+------------------------------------------------------------+

|15 July 2010 |Distribution payment date |
+-----------------+------------------------------------------------------------+

[campomar2] 08/6/2010 18:32

Thats a good help. I fancy this one. Can you clarify whenthe 30p dividend day is?

[envirovision] 08/6/2010 15:38

No one can say if they will or wont fall by 30p. I prefer to take the divi now and re-invest it when paid next month as you never know what the markets may be like. Hence I bought more today.

I guess anouther way top play it is buy half now and half XD, or half now half next month when divi is credited.

Another way to play it might be not to buy at all and stick the cash in the bank (Norther Rock).

I doubt any of this is of any help, but you pays your money.

[campomar2] 08/6/2010 15:32

Clarfication anyone? The 30p payout on Thursday. Am I not best to wait for the shares to go 30p cheaper and buy some then - or buy now, and re invest the payout if the shares drop by that much? Looking to buy butnot sure when.Advice gratefully received.

[boadicea] 08/6/2010 11:51

BRE goes ex distribution (not technically a dividend but a capital repayment) this Thursday, which should, I think, be totally tax free in an ISA or possibly taken as a reduction in original cost elsewhere.
Details:


It will be interesting to see if the share price falls by the whole 30p on Thursday and, if so, how long it takes to recover.

For those who may be newly looking at BRE on the prompting of recent tips, as noted by Crawford above, it is also instructive to note that it trades as DI's which carry no 0.5% SDRT.

[crawford] 08/6/2010 09:13

Tipped again:

[hieronymous1] 03/6/2010 08:14

jonwig - agreed the weather forecast is good news. More detail (including US west coast)here:

NOAA Expects Busy Atlantic Hurricane Season
June 2nd, 2010

Source: National Oceanic and Atmospheric Administration

An "active to extremely active" hurricane season is expected for the Atlantic Basin this year according to the seasonal outlook issued today by NOAA's Climate Prediction Center – a division of the National Weather Service. As with every hurricane season, this outlook underscores the importance of having a hurricane preparedness plan in place.

Across the entire Atlantic Basin for the six-month season, which begins June 1, NOAA is projecting a 70 percent probability of the following ranges:

* 14 to 23 Named Storms (top winds of 39 mph or higher), including:
* 8 to 14 Hurricanes (top winds of 74 mph or higher), of which:
* 3 to 7 could be Major Hurricanes (Category 3, 4 or 5; winds of at least 111 mph)

+ NOAA: 2010 Atlantic Hurricane Season Outlook

See also:
+ Hurricanes and the Oil Spill Fact Sheet (PDF)


+ NOAA Predicts Below Normal Eastern Pacific Hurricane Season

[jonwig] 29/5/2010 07:25

boadicea - yes, what you say sounds logical.

Hieronymous - yes, I saw that. Look on the bright side ... premiums will harden!

[hieronymous1] 28/5/2010 21:07

# 12:02pm
Hurricane warnings push up commodities
...prices over the past two days followed a warning of an active hurricane season, which influences the cost not just of oil, but of...natural gas and orange juice. The US government said the hurricane season, which begins on June 1, could be "one of the... By Javier Blas in London

# 3:00am
Heavy hurricane season forecast
Oil and natural gas prices surged yesterday as the US government said this year's hurricane season could rank among the most active to date, comparable to years that brought such devastating storms as 2005's Katrina... By Gregory Meyer in New York

[boadicea] 28/5/2010 14:08

I had assumed it would most likely be treated as a reduction of original acquisition cost and potentially taxable as an enhancement of capital gain on disposal - but tax not applicable in ISA or subject to the annual exemption allowance.

[jonwig] 28/5/2010 12:26

Yes, that's what it is, EI.

So there won't be a 10% tax credit attached, and the amount will be gross. I don't know if it will be taxed as income - I suppose so. (Which is why mine are in an ISA!)

[essentialinvestor] 28/5/2010 12:19

I thought the dividend was in the form of a capital reduction,
have I misunderstood this?.

[crawford] 28/5/2010 12:15

Thanks jonwig, I knew it was early June, just not the exact date! I think payment is 14th July.

[jonwig] 28/5/2010 12:12

Crawford. I have 10 June pencilled in as provisional xd date.

[crawford] 28/5/2010 12:08

All very quiet here.

I've bought a few more this morning, remember there is a 30p dividend due mid-July, should go ex-dividend next week I believe, although I'm not sure if this has been confirmed.

Still, getting the shares with the dividend due at the current price has got to be cheap.

[crawford] 22/5/2010 08:54

Another plane crash:

[jonwig] 20/5/2010 10:41

Questor share tip: Buy Brit Insurance for its attractive yield

There's a definite feeling in the market that it's time to reach for your tin hat.

By Garry White, Questor Editor
Published: 7:00AM BST 20 May 2010
Questor says BUY

The FTSE 100 has fallen by about 12pc in the last month as eurozone sovereign debt concerns persist. It looks like the situation is going to get worse before it gets better. This means that once again it's time to be defensive and buy shares in sectors that offer long-term value.

One way to be defensive is to buy high-yielding shares as negative market sentiment drags them lower. This is why business insurer Brit Insurance is a new buy in the portfolio today.

Cricket fans will know the Lloyds of London insurer well. The company sponsors the England Cricket Team and The Oval. It is also the sponsor of Test Match Cricket on Sky Sports.

However, the most attractive thing about Brit is the yield, which Questor, after conversations with the company, believes looks secure. The current-year yield is an impressive 8.1pc, much higher than any interest you can get in a savings account. Indeed, after the jump in inflation revealed earlier this week, rates are now a real issue for prudent savers.

The company is not expected to grow the number of premiums it sells in 2010. However, Questor regards this as a good thing. The company appears to be turning away lower-margin business and is focusing on improving underwriting returns.

This effect was seen in the group's first-quarter update, which was released on May 6. Brit's gross written premiums fell 13.3pc to £483.5m, a fall of 9.9pc at constant exchange rates. The figure fell 4.9pc on a like-for-like basis. However, the average increase in premiums on renewal business for the period was 1.4pc.

Lower premium volumes resulted from a reduction in the capital allocated to certain classes where competition is increasing. "This is consistent with the group's previous comments that it does not expect to grow in 2010 in order to protect profit margins," Brit said.

This is an important step for the group and is one reason that Questor feels the dividend is secure. The company is not going all out for growth at any expense. This focus on quality should also boost its valuation over the medium term when the market backdrop improves.

Investors taking a look at the group's dividend history will see that previous annual payments were 15p. However, the shares were consolidated on a four-for-one basis in February this year, so the rebased dividend for last year would be 60p. The current consensus is 62p – and that's why historical records of dividend payments may imply a lower yield.

Of course, insurers are in the business of managing risk and any major "black swan" event can eat into profits.

In its first-quarter update, Brit said it did not expect major claims from the partial closure of European airspace after the volcanic eruption in Iceland. It also said the explosion on Transocean's rig, which has caused the current problems for BP the Gulf of Mexico, would not see a significant claim. Brit's pre-tax net exposure to the recent earthquake in Chile was $71m (£49.5m).

The group also revealed a £30m exposure to Spanish government bonds maturing in 2010 and said it had has no direct exposure to Greece, Portugal or Ireland. This means that the Greek contagion risk for the group is actually pretty low.

The company also operates in a highly competitive market, which presents another risk.

The shares are trading on a December 2010 earnings multiple of 7.3 times, falling to 5.8 next year. They are a buy for the 8.1pc yield in turbulent times.

[hieronymous1] 19/5/2010 23:20

Investors Chronicle repeat BUY

Certainly, mounting claims will hurt short-term earnings. But it should mean good news for premium rates and, therefore, for the longer-term earnings outlook. On that basis, and even though investment returns remain fairly low across the sector, we reiterate our buy advice on Hardy (285p, 27 November 2009), Brit (840p, 9 November 2009) and Catlin (337p, 19 February 2010). They are high quality underwriters, they don't share profits with Lloyds' Names, and their shares all trade below forecast net tangible assets - which is churlish given the reasonable rating

[crawford] 19/5/2010 12:33

MRPHIL,
there has been consolidation in the shares recently.

[mrphil] 19/5/2010 12:07

And to think I sold my last of these back in 2007 for around 323p, maybe need to have another look?

[crawford] 17/5/2010 12:39

Collins Stewart 925p target out today.

[jonwig] 10/5/2010 07:49

I don't understand the last paragraph here:

Jupiter Insurance LTD. insures the company's international oil and gas assets from a base in Guernsey, the offshore UK tax haven. It is likely located in a special purpose vehicle (SPV), which prevents BP from having to make public the firm's assets or liabilities.

Jupiter Insurance retains its BP liabilities, not re-insuring them through another firm or selling them off to further buyers. BP may be forced to pay some of the insurance payments on its own facilities, if it has not prepared Jupiter Insurance to make such payouts.

The company does have to have public insurance on some of its properties. This insurance is suspected to be through Lloyds of London, and be related to loss of property and liability claims.

But through all these less-than-public insurance arrangements, BP's stock is tanking. Maybe the market knows something about BP's insurance liabilities its filings don't reveal?



More detail:

Insurers and reinsurers are likely to be on the hook for about $1.4 billion in connection with the sinking of the Deepwater Horizon oil rig in the Gulf of Mexico, according to the Insurance Information Institute.

While the insurance losses from the sinking of the rig will be significant and one of the largest losses ever for global offshore energy insurance and reinsurance markets, the bulk of the losses may be paid not by the private insurance market, but by the energy companies' own self insurance, said Robert Hartwig, an economist and the president of the Institute.

"It's not unusual for the large petrochemical concerns to be substantially self-insured," Hartwig said.

The Deepwater Horizon oil rig owned by Transocean Ltd. and operated by BP Exploration & Production Inc. had a total insured value of $560 million. Transocean said it is insured for total loss coverage and for wreck removal (BestWire, April 27, 2010).

BP's Guernsey-based captive, Jupiter Insurance Ltd., does not buy reinsurance and has an underwriting limit of $700 million per occurrence, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database. Jupiter provides cover solely for BP's subsidiaries and its equity share in joint ventures, and about 75% of its gross written premium in 2009 stemmed from property insurance and business interruption lines.

Jupiter had $6 billion in capital and surplus at year-end 2009, according to BestLink.

In addition to property insurance, other lines to be triggered by the Deepwater Horizon incident include liability, including general liability and environmental/pollution liability.

Lots more in this article:

[hieronymous1] 08/5/2010 20:27

Agree with Boadicea. If the Americans have to choose between polluting their environment or abandoning their gas guzzlers and behaving like sane environmentally concerned people - they will keep their gas guzzlers.

[boadicea] 08/5/2010 20:00

Effortless - "... if they can have a loss this big, then why not twice as big or three times as big?"

That, of course, will also be the view of any prospective insurer and is why the premiums will be so eye-watering.
We have also to remember that the oil BP is producing there is desperately needed by USA itself, so there will be limits to the disincentive it will actually want to put on its exploitation.

[effortless cool] 08/5/2010 16:42

"The premiums will be eye-watering!" - but not as eye-watering as this self-insured loss.

And, if they can have a loss this big, then why not twice as big or three times as big?

$50bn xs $25bn at, say, 3% = $1.5bn. A significant cost, for sure, but a spend that will remove perhaps the biggest risk to their continued solvency.