Catco Reinsurance Opport... Share Discussion Threads

[deepvalueinvestor] 03/6/2013 05:43

Thanks jonwig. This period is also when the nav is loaded. I remain a buyer because I am so bearish on every other asset class. Statistically, one year without a major claim is possible too! Lets hope so.

[jonwig] 02/6/2013 18:59

1 June marks the start of the 2013 Atlantic storm season, which runs until November each year.

About 10 named storms form each season with more than half becoming hurricanes and about 20 per cent reaching category level three or greater.

Experts have warned that 2013 could be a particularly active season with seasonal indicators pointing to up to eight hurricanes.

http://www.independent.co.uk/news/business/analysis-and-features/storm-season-has-insurers-braced-for-a-buffeting-8638769.html

[jonwig] 29/5/2013 15:53

Hurricane Sandy estimate repeated as $18.75m.

"The existing retrocessional reinsurance loss reserve provision that is included in the Company's Net Asset Value calculation is based on an insured industry loss of $20 billion. The Board of Directors remains of the opinion that there is no need to amend the existing retrocessional reinsurance loss reserve provision that is currently in place."

Presumably that will be the end-Nov 2012 NAV. The share price looks to be matching the likely end-May NAV.

[jonwig] 23/5/2013 13:48

Quite a detailed assessment re. Oklahoma:

... the modeled impact to the Company's 2013 retrocessional portfolio net returns is 0% and 5%, respectively.

It is the Manager's opinion that the insured losses related to this event will be below $5bn which would have no meaningful impact to the current portfolio. The Manager will continue to work closely with our reinsurance counterparties, and the market, to be able to provide as much information as possible when it becomes available.

"Below $5bn" fits with IRIS - of course these things have a common source.
And they do get revised!

BCGR puts us on hold: Blue Capital has commenced its normal post-event procedures to estimate any loss to the Company. Based on current information, we do not expect this loss event to be material to the Company. We will provide an estimate of any potential loss in due course.

[deepvalueinvestor] 22/5/2013 18:45

I agree, I remain a buyer though.

[jonwig] 22/5/2013 13:27

Cazenove added yesterday, and the initial markdown has been partly reversed. A statement from the company would be most welcome!

BCGR and IRIS unmoved.

[jonwig] 21/5/2013 08:16

Markdown at the open (only one trade to date).

Oklahoma tornado:



Is this, insurance-wise, "US Severe Convective Storm" or "US Wind"? In either case, there's a potentially large hit.

EDIT: Credit Suisse says (IRIS RNS): We currently expect insured losses for this week's event to be below $5 billion.

[jonwig] 13/5/2013 10:31

From DCG IRIS's March report:

The new PCS numbers on hurricane Sandy were published on 22 March. Notwithstanding reported loss numbers moving up in some states, some saw downward development, leaving the resulting reported loss number unchanged at $18.75bn. We expect to see the loss move closer to $20bn in the next PCS report, which is due out approximately 60 days following the last one.

So any revision should be known in a week or so.

[jonwig] 11/4/2013 08:01

No exposure to a Korean war, I see. (Silly of me, I suppose, but I checked!)

[deepvalueinvestor] 11/4/2013 07:40

I got another chunk yesterday at $0.946 so good to see the price at $0.95-$0.97 this morning. One of the few areas of value in the market as long as we avoid nasty storms etc

[deepvalueinvestor] 04/4/2013 06:55

Yes, flash website.the main negative I see for future years is that a lot of money has come into the sector recently and this is keeping reinsurance rates down. I remain a buyer though as equity and bond markets look so over heated.

[jonwig] 04/4/2013 06:24

The new website (see header) has some useful features, including analysis from Numis.

Also, the appointment of a CFO looks like a prelude to expansion of some sort.

[deepvalueinvestor] 27/3/2013 19:31

Numis put Catco on their core buy list. Ironically, talking about 27% returns, Lonrho went up today 27%!

[deepvalueinvestor] 27/3/2013 07:52

Jonwig, last estimate was +25% from Numis but I am hoping for a bit more due to Sandy NAV write down and reinvestment of the side pocket cash in the middle of the year. Currency is also a factor for UK holders and all things being equal I expect that to be positive. It is interesting to see the delayed buys coming through but I think I overpaid slightly at $0.95 the other day.

[jonwig] 27/3/2013 06:50

Your suggestion of $1.20 for end-2013 NAV fits well with the company's projection of 27% net gain if "no losses" as announced on 9 Jan - that would mean $1.18.

Single events aren't so damaging, though!

NB. We should get a dividend today but I'll bet TD doesn't pay me until well after Easter.

[deepvalueinvestor] 26/3/2013 21:26

Nav at $1.20 is certainly achievable if, for once, the world can avoid a major disaster. You may be right about Lonrho, it is certainly a punt.

[topvest] 26/3/2013 20:58

Everyone to his own. CATCo's share price will depend on whether they can show some NAV growth on top of the dividend. We need NAV growth to $1.20 or so this year, to help the sentiment here.
Lonrho is a dog in my view. Held some in the Lonrho Africa days.

[deepvalueinvestor] 26/3/2013 20:38

A very odd market. I am pretty much selling everything but I like catco, hansard global and for the brave, Lonrho.

[topvest] 26/3/2013 20:35

Yes, looks like good news.

[jonwig] 26/3/2013 06:55

DVI I'd agree with your conclusion in para 2, but I can't give you a view. Like you, I suspect the NAV writedown on 30/11 and further on 31/12 is a full provision.

From 23/01:

The existing retrocessional reinsurance loss reserve provision that is included in the Company's Net Asset Value calculation is based on an insured industry loss of $20 billion. The Board of Directors remains of the opinion that there is no need to amend the existing retrocessional reinsurance loss reserve provision that is currently in place. Shareholders should note that this is a loss reserve, and not a crystalised loss, as CATCo-Re's protections are based on the actual paid claims.

... I think if anything they will have been over-cautious as you suggest.

[deepvalueinvestor] 25/3/2013 19:18

With today's update of industry losses from Sandy at $17.75bn (at lower than our written down nav assuming $20bn) and with the rally in sterling to $1.5225, I added again at $0.95 and $0.945 today.

Does anyone have a view at the best case scenario for our losses on hurricane Sandy? Management were heavily criticised for not writing down NAV previously that my gut feeling is that have been overly prudent this time in their loss estimates.

[jonwig] 20/3/2013 14:28

Already xd, but payment date now approved:

Following Shareholder approval at the Company Annual General Meeting held earlier today, the Board of Directors confirm a final dividend of $0.05006 in respect of the Ordinary Shares. The record date for this dividend was 18 January 2013 and the Ordinary Shares went ex-dividend on 16 January 2013. The final dividend will be paid to shareholders on 27 March 2013.

[deepvalueinvestor] 12/2/2013 22:33

Latest numbers suggest a 25% total return in 2013 if we avoid claims.

[topvest] 12/2/2013 20:13

Yes, hopefully a better year in 2013!

[jonwig] 12/2/2013 07:10

Final results today.
NAV total returns on three different share tranches is an interesting detail, showing the potential, and the risks:

. Ordinary Shares issued on 20 December 2010: +2.41% (Exposed to Japan/NZ Quakes, Costa Concordia, Hurricane Sandy)

. C Shares Issued on 20 May 2011: +19.51% (Exposed to Costa Concordia and Hurricane Sandy)

. C Shares issued on 16 December 2011: +7.40% (Exposed to Costa Concordia and Hurricane Sandy)