During the first half of 2016, Blue Capital Global Reinsurance’s net asset value decreased by approximately 0.2 per cent. excluding the impact of dividends declared. The NAV moved from US$1.1217 at 31 December 2015 to US$1.0871 per share. Most of the portfolio has been allocated to U.S. wind-related risks, for which the premiums are earned between July and October. During the first half of 2016, loss events, including adjustments to losses incurred in previous years, reduced the NAV by approximately US$0.037 per share.
They continue to target an annualised dividend of LIBOR plus 6 per cent. on the original issue price. On 22 July 2016, they declared a dividend of US$0.033 per share. The Directors’ current intention is that, save for unforeseen circumstances, the second distribution in respect of the six months ended 31 December 2016 (expected to be paid in March 2017), will be for approximately the same amount.
Japan experienced a series of earthquakes and aftershocks beginning on 14 April 2016, in wide parts of the Kumamoto and Oita prefectures. During these events the U.S. Geological Survey estimated a magnitude of M7.0 earthquake which occurred on 16 April 2016. Reports indicate damage occurred to more than 3,900 residences and 120 non-residential structures across prefectures on Kyushu Island. Fires, landslides and liquefaction caused additional damage; while shaking caused significant damage to the transportation infrastructure. The General Insurance Association of Japan has reported the loss attributable to claims payouts for damage to dwellings from the earthquakes has now surpassed $3.4 billion.
The United States experienced severe hailstorms throughout the Southeast and the Plains, with the most significant reported damage in the San Antonio and Dallas areas of Texas between 10 – 12 April 2016. Hail stones were reported to be as large as 3-4 inches in diameter. The ISO Property Claims Services report that this event has caused $3.1 billion of damage in Texas.
Wildfires began in the province of Alberta Canada on 1 May 2016 in and around the city of Fort McMurray. The fires spread rapidly through forest to neighborhoods and areas surrounding the city causing the evacuation of 88,000 residents. In total, the fire has covered nearly 600,000 acres and destroyed an estimated 2,400 structures. PCS Canada Service has reported that losses as a result of the wildfires is now in excess of $3.6 billion, making this the largest loss in Canadian history.
The manager continues its normal post-event procedures to estimate any loss to Blue Capital and continues to monitor these events for potential material impact to the Company. The manager’s loss estimates are largely derived from the utilization of proprietary catastrophe modeling, standard industry models, an in-depth review of in-force contracts and initial indications from clients and brokers. The actual losses from these events may ultimately differ materially from our estimated losses due to the nature of the risks assumed, the complexity of the assessment of damages and the limited number of reported claims received to date.
BCGR : Disasters impact Blue Capital Global Reinsurance NAV