Castelnau Share Discussion Threads

[tarvold] 18/3/2011 01:04

CGL was substantially undervalued prior to the NZ earthquake.
It fell by more than the estimated losses incurred by the company after the NZ quake and then by more than the estimated losses incurred after the Japanese quake.
It's not a suprise that the share price has rallied.

[fxdealer3] 17/3/2011 20:37

I have a fair idea on Net Tangible Assets after nearly 3 months of disasters and it is very low compared to share price which is trading at levels of NZ update on March 10th .

So totally miffed and confused at minute

[joesoap3] 17/3/2011 13:27

Is it just me that's wondering what's going on here. Approaching pre-earthquake levels and rising ( now 357 + 18p dividend tomorrow for qualifying holders).

[hosede] 15/3/2011 14:49

fxdealer
But they say the time to buy is "when there is blood on the streets".

[rcturner2] 15/3/2011 08:02

But not before enormous damage to the NAV. Discounts will widen as well.

[tarvold] 14/3/2011 22:59

In the long run the Japan, NZ, Chile and Australian disasters will be a benefit for reinsurers as the cost of reinsurance will soar for all insurance providers in the Asia Pacific region.

[justthemoney] 14/3/2011 17:22

Look at AML (insurance co.), ex div next week, rallied strongly today.

[rcturner2] 14/3/2011 17:08

Well as I said above a reduction in the share price of 50% would not surprise me at all. I can easily see £2 - £3 of NAV per share being lost.

[effortless cool] 14/3/2011 16:41

Quite sizeable. From their 2009 R&A for japanese quake:

Industry loss $51bn
Gross loss $455m
Net loss $345m

[rcturner2] 14/3/2011 15:03

EC - thanks.

To what extent though is CGL themselves a reinsurer for Japan though?

[effortless cool] 14/3/2011 14:20

RCT2,

Reinsurance is the critical factor here.

As long as the gross loss stays within the reinsurance programme, then the net loss is capped at the excess point (bottom) for the programme, except to the extent that reinstatement premiums are payable). However, if the loss goes through the limit (top) of the programme, then each additional £ of gross loss goes straight to the bottom line.

IMHO, it's these 'biggest ever of their type' losses that bring the highest likelihood of going through the top of the programme.

Another aspect is that, with two laarge catastrophes already this year, comapnaies may have exhausted the horizontal cover within their catastrophe programmes. In that case, with the hurricane season still to come, they will have to buy more cover. This will now be very expensive.

These comments are general, rather than specifically related to Catlin.

[fxdealer3] 14/3/2011 14:19

NZ is already $125m loss and Aus losses also .another 9 months to go before you buy imo


Madness buying until financial affects are clear .

safer plays on llyods market than this one .

[rcturner2] 14/3/2011 14:00

If the total loss is only $576m then they will have got away lightly. I believe it will be more than that. Since that wipes £1 per share off the NAV, I still cannot follow why the price has not fallen further.

[hosede] 14/3/2011 13:52

If there's going to be a fund raising then I would have thought it foolish to buy before that is announced. On a technical point the share price is now at the bottom of the channel i'ts been in for nearly two years

[kimboy2] 14/3/2011 13:45

Well I think the numbers are going to be bad and there is the possibility a fund raising some time later in the year. However on the positive side I think that this will be a market changing event and catastrophe insurance is going to harden.

CGL will be a buy at some stage but not for a while IMV.

[iomhere] 14/3/2011 13:43

My apologies as well. I was taking the net tangible asset figure.

[fxdealer3] 14/3/2011 13:32

Net Asset Val PS (p)
612.83

MInimum 16%+ = £1 per share =£360m * 1.6 =$576 loss

The Tangible NAV was £4 at 31/12/2010 per share would drop to below £3 which is main factor in determining the share price along with profit /loss .

Also capital raising may dilute holders if higher loss for underrighting purposes .

[rcturner2] 14/3/2011 13:29

Sorry I calculated off total assets not net.

[joesoap3] 14/3/2011 13:27

RCT.

If 16% is $2bn then the NAV of Catlin must be $12.5bn and I'm not sure it's that high

[fxdealer3] 14/3/2011 13:23

I think Friday estimate was $10b-$20b insured losses based on 16% NAV using Dec 31,2010 is circa $500m +

However today read below .


Analysts at Panmure said the total economic damage in Japan from the catastrophe could reach $100 billion with insured losses hitting $60 billion

[iomhere] 14/3/2011 13:18

From CGL's last annual report, 360 million shares in issue, nav $6.53. If theses figures are correct, I make 16% approx $375m.

[rcturner2] 14/3/2011 11:44

Well if its 16% then you are looking at $2bn.

[kimboy2] 14/3/2011 11:33

Japan exposure: Catlin, Hardy, Swiss Re
11 March 2011

Initial loss estimates for Lloyd's insurers have been attempted by broker Collins Stewart, which expects Catlin and Hardy to have the highest exposure at 16% of net asset value (NAV) each.

The NAV of Lancashire is about $1.2bn and they said a 1 in 100 year Japanese event would cost $250m.



I think we are looking at a big number.

[rcturner2] 14/3/2011 11:22

I didn't suggest anything - I asked what would happend if that were the size of their losses. If you take the death toll as a proxy for the damage done, then in NZ 150 deaths lead to a loss of $125m. The death toll in Japan could easily be 100x that of NZ, but you only have to multiple by 10 to get to $1.25bn as the exposure, yet my understanding is the CGL has greater exposure in Japan than NZ.

Time will tell.

[ursus] 14/3/2011 11:12

RCT --

do you have any basis for suggesting that Catlin's Japanese liabilities will be $1bn (presumably you mean net of r/i)? If so, what is it? Or is this some sort of private speculation of yours?