Catco Reinsurance Opport... Share Discussion Threads

[deltalo] 04/5/2019 21:53

https://youtu.be/cqZc7ZQURMsMaybe soon.

[spectoacc] 03/3/2019 07:55

Missed that. If I'm reading it right, a vote to wind up both classes of share? With no set date when it might happen, but returning any cash. Best outcome I'd say! Is a business model that no longer works.

Both at a decent discount to NAV, tho that NAV is something of a moving feast.. (Moving famine).

[topvest] 02/3/2019 12:36

Circular out on return of capital. DOG rather than CAT is a suitable description. Any view on the likely capital return in pence per share as the circular is opaque!? Indeed, the company has always been a tad opaque...Oh well, this was a poor investment and lesson learnt!

[spectoacc] 09/2/2019 07:48

@jonwig - and somehow they seem to have managed the same with CATC, only this time without the early good years!

[jonwig] 09/2/2019 06:27

bandit - in this business, dividends and capital are separate issues.

Suppose a (re-)insurance company wants to lay off a portion of its risk. It will issue a bond to CAT and pay interest (monthly, quarterly, etc.) for a period. The bond will 'mature' only if a cat-event happens, and then CAT will pay the principal to the insurer.

This interest is what enables CAT to pay its dividend, whilst the cat-event payout comes from its share capital. There weren't any significant cat-events in the first few years and CAT was a pretty good investment. Then in 2017 and 2018 stuff happened! (See the chart from August 2017.) It also turned out that CAT was not protecting its book enough by laying off its own risks.

[hugepants] 08/2/2019 17:37

They should really change the ticker to DOG

[spectoacc] 08/2/2019 16:26

Can't say I get that - but then again, might be the only return shareholders get!

I see they've asked people to contact Numis re next steps. Which is weird - because surely the redemption share proposal is voluntary, so if holders would rather keep holding, they can:


"Redemption Share Proposal

Further to the announcement on 18 December 2018, in which the Board announced the intention to offer shareholders the option to convert their shareholdings into redemption shares, the Board is now seeking feedback on whether shareholders would prefer to either elect to convert their holdings into redemption shares or continue to hold either ongoing Ordinary or C Shares. Shareholders are requested to contact Numis Securities to provide feedback as to a preference to elect for either the redemption opportunity or continution share class."

[bandit99] 08/2/2019 14:16

still paying diviends though

[spectoacc] 10/1/2019 15:46

Hope the directors have deep pockets - they appear to be the only buyers ;)

[spectoacc] 03/1/2019 12:32

200,000 shares would have been a lot once ;)

Dunno - all their previous purchases of CATC haven't turned out so well.

[jonwig] 03/1/2019 12:19

Director James Keyes buys 200,000 @ $0.245.

Profile:

Non-executive Chairman

James Keyes has been a Managing Director of Renaissance Capital since 1 October 2008, and established the Bermuda office for Renaissance Capital in 2008. James was previously a partner of Appleby, an offshore law firm, for 11 years. He joined Appleby in 1993 and was team leader of the Funds and Investment Services Team. Prior to Appleby, he was employed in the corporate department of the law firm Freshfields, and worked in their London, New York and Hong Kong offices. James was admitted as a Solicitor in England and Wales in 1991 and to the Bermuda Bar in 1993. He became a Notary Public in 1998. He acts as a Director on a number of investment funds and private companies, including the Brummer Group and investment funds managed by Polar Capital Investments. He joined the Board of Directors of CATCo Reinsurance Opportunities Fund Ltd. on 7 December 2010.

Not an insurance professional. Follow? Pass?
But note 18/12 RNS:



following 30/11 NAV of $0.3978: 40% discount on that ... enough?

[spectoacc] 08/12/2018 15:47

Really interesting, thanks @Jonwig. I feel for the C holders, who seem to have been sold a pup - at least the Ords had some years of profit (7 or so?) before losing most of their money. C's were sold on the basis of "Now there's been big losses, prices will be much better".

The "loss creep" is the worst thing.

[jonwig] 08/12/2018 12:40

This is pretty detailed, and probably accurate. Not easy reading for a non-specialist such as myself, though:

[spectoacc] 08/12/2018 07:55

Lol @danieldruff

[jonwig] 07/12/2018 18:36

The share price of Markel Corp has fallen today from $1.135 to $1.058. Presumably the speculation is that the parent could be on the hook if the fund is insolvent?

@ danieldruff - no bounce, I think.

[danieldruff2] 07/12/2018 18:11

Dead Catco

[spectoacc] 07/12/2018 16:19

1m CATC's at 40c now. Presumably there's a bottom for both of them somewhere - clearly isn't yet.

Remember all those director buys... Clueless.

[spectoacc] 07/12/2018 13:26

3.6m dumped at 18c I see, vs close of 32c

[topvest] 07/12/2018 12:34

So, it appears that not only is the business model bust, but they have also been cooking the books. Very poor!

[alpal2] 07/12/2018 08:57

Don't know why I am still invested {though I did sell out at the top but bought back much too early}.
I did suggest that Markel be fired [before the current year losses] but the management is too busy enjoying its fees at the expense of shareholders.

I told Way and Wynne years ago that their business model was increasing risk to shareholders and I hoped they would listen. But No!

[spectoacc] 07/12/2018 07:46

Agreed. And same day as:

"On a normalised basis, this represents approximately a 15.7 per cent deterioration in the Ordinary Share 2017 annual performance and is equivalent to a 2017 NAV return on the Ordinary Shares of approximately -57.1% per cent (down from the -41.4 per cent reported at year-end). "

So another massive provision for historic losses, with California wildfires etc still to come.

And new business will be little better underwritten.

[jonwig] 07/12/2018 07:12

This looks ominous, and I can't find much to help clarify what it's talking about!

[jonwig] 23/11/2018 07:42

Yes, I think the model is bust. It was based on the fact that since 2006, hurricane seasons were quiet, and then since 2008 institutions wanted uncorrelated assets such as cat bonds, etc.

On the back of this, CAT produced some excellent returns for several years, most of them distributed. Like all good things it came to an end with Harvey last year, and then a lot more.

The argument that premiums will rise to reflect risk probably won't stand up, simply because ordinary folk won't be able to afford them. Not many parts of the world do actually insure and reinsure against natural disasters. (US, Europe, Japan - not China, India.)

As I said earlier, I sold out after Florence in September.

[spectoacc] 23/11/2018 06:56

@return - unfortunately that's the same view that has destroyed a lot of value for the C-shares.

Note also that CAT.L have admitted to yet more necessary write-downs for the historic stuff, not even just the California fires.

It's a business model that is bust.

[return_of_the_apeman] 22/11/2018 19:00

Premiums will rise following the events listed on this thread so if next yr is trouble free these could be very rewarding - perhaps a punt from Jan to June is worth the odds

I am not invested here currently, just my thoughts