CatCo Reinsurance Opportunities has published its interim accounts for the period ending 30 June 2015. The Net Asset Value return was 4.47%, the share price total return 4.86%. these figires compare well to the Eurekahedge Insurance-Linked Securities Advisers Index return of 1.26%. In January they announced the return of c$35m (roughly 10% of the Company’s market capitalisation as at 1 January 2015). The Return of Value is in addition to the Company’s intended annual dividend paid to Shareholders. On 30 January 2015, the Company paid an annual dividend of $0.05929 in respect of the Ordinary Shares for the financial year ended 31 December 2014. This equates to LIBOR plus 5 percent of the NAV as at the end of Fiscal Year.
The report says that they took advantage of buoyant market conditions to further derisk the portfolio, while continuing to work towards LIBOR plus 12%-15% returns for shareholders. They reckon, overall, the likelihood of a catastrophic event leading to a claim against the Company is approximately 20% below that of 2014.
The year began with winter storms in Europe and the U.S. causing hundreds of millions of dollars worth of damage. Parts of Western Europe were struck by four powerful windstorms in quick succession in January, while, in the U.S., two separate winter weather events brought record snowfall to parts of the Northeast. In February, Cyclones Lam and Marcia made landfall and the associated strong winds, rain and high tides caused over $381m of damage in Australia, according to the Insurance Council of Australia. In March, Vanuatu was devastated by category 5 Cyclone Pam, which ripped across the Paci c nation. The most expensive losses so far in 2015 came in April from the U.S. After a slow start to the tornado season, severe thunderstorms caused an estimated $2bn worth of insurance losses across parts of the Plains, Midwest, Southeast and Mid-Atlantic. Dozens of tornadoes touched down, including tornado that recorded 4 on the Enhanced Fujita Scale (EF4) in the town of Fairdale, Illinois. However, the most costly damage occurred as a result of large hail, strong winds and flash flooding. May was another month of billion dollar losses in the U.S. after excessive rainfall and widespread severe weather. Meanwhile, preliminary analysis of the earthquake in Nepal that read 7.3 on the Richter scale – in a country with a low insurance penetration – suggests economic losses will reach $5bn. The earthquake that struck China’s Xinjiang province on 2 July that read 6.5 on the Richter scale, is also not expected to result in significant insurance claims. The hurricane season is now underway in the North Atlantic and the latest forecasts are for below-average activity in 2015. Cooler waters and the El Niño meteorological cycle are some of the drivers, with Colorado State University forecasters predicting the coming months will include three hurricanes, one of which will develop into a major storm of category 3 or above. None of these events had an impact on CatCo’s portfolio. However, they emphasis that it is impossible to predict what catastrophe events could occur in the next six months and there will undoubtedly be surprises.
CAT : CatCo sees no losses in H1 from de-risked portfolio