CATCo Reinsurance Opps Fund Ltd Portfolio Update (2623N)
May 08 2018 - 1:01AM
UK Regulatory
TIDMCAT
RNS Number : 2623N
CATCo Reinsurance Opps Fund Ltd
08 May 2018
FOR IMMEDIATE RELEASE
8 May 2018
CATCo Reinsurance Opportunities Fund Ltd. (the "Company")
Portfolio Update
To: SFS, London Stock Exchange and Bermuda Stock Exchange
Markel CATCo Investment Management Ltd., as Investment Manager
of the Company (the "Manager"), announces its intention to increase
the specific loss reserves held by the Company in relation to the
Ordinary Shares for the 2017 loss events.
The impact of the increase is estimated to be approximately 19.5
per cent of the 31 March 2018 Ordinary Share Net Asset Value
("NAV") and will be accounted for within the 30 April 2018 NAV. On
a normalised basis, this represents approximately a 14 per cent
deterioration in the Ordinary Share 2017 annual performance and is
equivalent to a 2017 NAV return on the Ordinary Shares of
approximately -41.4 per cent (down from the -27.6 per cent reported
at year-end).
Following the 2017 Hurricanes Harvey, Irma, Maria (HIM) and the
California Wildfires, the Manager has continued to monitor the
ongoing uncertainty related to these loss events.
Recent market information has indicated that industry loss
estimates are expected to rise for Hurricane Irma following reports
of significant increases in loss adjustment expenses, late claims
reporting and an increase to loss exposures in the Caribbean.
In addition, in late April 2018, a number of reinsurance
counterparties reported increases to their ultimate loss exposures
related to Hurricane Irma, reinforcing the Manager's belief that
industry loss estimates for this event will increase. As a result,
the Manager has concluded that material increases in the 2017
specific loss reserves are required, mainly attributable to
Hurricane Irma.
Alissa Fredricks, Chief Executive Officer, Bermuda, of Markel
CATCo Investment Management Ltd. said:
"Following the impact of the 2017 loss events, we have
maintained extensive monitoring of industry trends and the inherent
uncertainty with regards to counterparty ultimate loss exposures.
Until very recently, all trends were in line with expectations,
providing evidence that the 2017 loss reserves would likely be
sufficient to support our remaining loss exposures.
"However, in late April, we received updated notifications from
our reinsurance counterparties indicating a material loss creep in
Irma could occur. This further supports market information
suggesting that abnormal levels of loss adjustment expenses and
late claims have resulted in further deterioration in Irma losses,
which has become the consequence of multiple catastrophic events
occurring in a short period of time.
"As a result of the information received in late April, we
believe an increase in the Company's loss reserves is appropriate
in order to mitigate any further loss creep in Irma and to reduce
the Company's potential exposure to other 2017 loss events."
The Manager expects the next report of industry loss estimates
for Hurricane Harvey and Irma will be released at the end of May
2018. The Manager continues to believe that some level of
uncertainty remains with regards to the final industry insured loss
impact of the 2017 loss events.
The Company intends to report the 30 April 2018 Net Asset Value
for the Company's Ordinary Shares and C Shares in mid-May.
For further information:
Markel CATCo Investment Management Ltd. Numis Securities Limited
David Benda / Hugh Jonathan
Judith Wynne Telephone: +44 (0) 20 7260
General Counsel 1000
Telephone: +1 441 493 9005
Email: judith.wynne@markelcatco.com
Mark Way
Chief Operating Officer
Telephone: +1 441 493 9001
Email: mark.way@markelcatco.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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