Catco Reinsurance Opport... Share Discussion Threads

[jonwig] 09/5/2018 05:54

I'm surprised at their lack of re-re-re-insurance against further write-downs!

Switching to theC shares has been a good move, but another bad season will see these hurt as well. At least with Atlantic windstorms you can see them coming!

[jimcar] 08/5/2018 21:28

yes, it certainly demonstrates that it is not correlated with the market!!

[topvest] 08/5/2018 20:20

Well, this has been a bit of a disaster. Nice income. Capital at risk!

[jonwig] 27/2/2018 06:47

Analysis and outlook:

[jonwig] 02/2/2018 07:07

@ Don - it's in the header: 31 Jan announcement.

[don julian] 30/1/2018 10:13

Where's the divi rns? I'm getting nervous! I've hung on to my holding as they have a clear divi policy... 5%plus LIBOR. In time, my view is the NAV will recover... but without a divi I would be an unhappy seller.

[jonwig] 28/1/2018 12:11

Gilston - their portfolio update (see header) ended:

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.

And, from the Citywire article:

... an investor in the major fundraising in May 2011 would still have generated positive returns of 45%, or 6% per annum ...

Maybe 23% is still insufficient compensation, but it's possible 2017 was a standalone event, since nothing remotely comparable has happened since 2006.

[gilston] 28/1/2018 11:13

Rates not increasing by very much in this year`s renewals. There is still too much surplus capital. Perhaps Catco`s huge fund raising last year may prove self defeating?

[jonwig] 22/1/2018 12:34

Stones - I think their capital reserves statement probably indicates they have provided enough.

daniel - it's more tied up with QE: institutions chasing yield without understanding the risks, so bid cat bonds to much too high prices. The insurance cycle might now be firming enough to raise rates and higher interest rates will help.
It's also worth remembering that economic losses don't turn automatically into insured losses: China and 3rd world have little insurance cover.

For myself, I swapped into the C shares in good time, but we'll have to see what this year brings.

[danieldruff2] 22/1/2018 11:47

This share is like a bet against global warming and an ever increasing world population - so far it has been a losing bet!

[stonesfan] 22/1/2018 11:42

It is to be hoped that they've taken the opportunity to include all the bad news in that update and the bottom is in for the share price. Considering dipping a toe back in.

[jonwig] 30/11/2017 06:55

Maybe the new 'C' shares are a safer buy?



US$1.00 issue, dealings tomorrow.

[jonwig] 18/10/2017 18:57

riverman - oopps, thanks. I was away a couple of days and obviously missed some stuff.

[riverman77] 18/10/2017 18:20

I think some of the other reinsurers have held up better though, Lancashire is my preferred name in this space

[riverman77] 18/10/2017 18:17

I think CAT already announced yesterday and marked the nav down a further 14% in September, following 6% in August, so 20% in total.

[jonwig] 18/10/2017 17:32

BCAI have declared an send-Sept nav of $0.8227, a 26% drop on August. CAT should be announcing within a day or two. Anything comparable would be a shock!

[glawsiain] 04/10/2017 14:19

the special general meeting just passed the following motion (89% in favour):

"Special General Meeting

Your Board believes that it is important for the Company to take advantage of market opportunities and be able to raise additional capital, should there be an appropriate level of demand from both reinsurance buyers and potential new and existing investors.

Following a recent change to the UK Prospectus Rules that enhances the ability of the Company to raise further capital without publishing a prospectus, the Company is seeking Shareholder approval at a Special General Meeting ("SGM") to permit it to issue further Ordinary Shares, up to a maximum of 20 per cent of the number of shares in issue at the date of the SGM, on a non-pre-emptive basis.

The Company will continue to maintain its policy of only ever issuing shares at a premium to the prevailing NAV. Further information appears in the section "Capital Raising - Special General Meeting" in the Directors' Report, below. "

[jonwig] 02/10/2017 06:21

"Requirement for new capital". A change from the usual demand from outside investors!

And "the Company currently estimates a NAV return for 2017 of between positive five percent to negative 15 percent." Positive five would be a result! If I've calculated right (Jan 2017 baseline) the worst outcome would be closing NAV of $1.11 and probably a missed dividend. (Clever Mr Market?)

[jonwig] 23/9/2017 08:55

Hi, Shavian!

They're still unclear themselves of course. I'm a bit puzzled by their statement that the combined effects could fully erode 2017 returns. Taking the start of the year to be $1.247 xd, returns suggest little more than the dividend value - wrong, surely! There's also the question of how much of their own risk they lay off.

[shavian] 23/9/2017 08:03

Hi chaps. Been watching this one since Harvey, having baled out of the Polar Capital Global Insurance OEIC at the first hint if flying coconuts and yachts. Just wondering where the discount is going to finish up once Maria and the earthquake effects have been fully factored in. Not tempted in just yet, although I note some chunky (insti?) buys yesterday.Good to see you here Jonwig!

[jimcar] 22/9/2017 16:36

A bit more news from citywire

[stonesfan] 19/9/2017 11:29

New storms on the horizon. It's an avoid for me for the time being.

[topvest] 18/9/2017 19:06

Yes, all getting costly. At least premiums are going to get a significant hike.

[jonwig] 18/9/2017 06:07

Hiscox estimates insurance market losses of about $25bn from Harvey.