CATCo expecting large losses after California Fires – CATco Investment Management Ltd (CAT) is expecting large losses after the recent early November wildfires in California, specifically the Camp Fire and Woolsey fires. These fires are the most destructive in California’s history. the early estimates are predicting potential losses due to the fires in the portfolio exceeding the impact the fires in California had in 2017 which was 17% (read more about last years losses). The estimated impact of the fires will not be known until the fires are fully contained and further industry information is made available.
CATco’s ordinary shareholders and C shareholders will also be affected by the potential losses from the 2018 events Hurricane Michael and Typhoon Jebi (read more here). The manager has implemented a loss reserve of 3.7% impact to the ordinary shares NAV and 9.8% impact to the C share NAV as of 31 October 2018. Though information is still changing and the reserves are based on early industry estimates.
Also the CATCo ordinary shares continue to be exposed to the loses from 2017 major events (read more here). Since the reserve provisions made in April 2018 for the 2017 events, the insurance market continues to report further loses. The industry estimates for the loses from the 2017 events continues to increase, they have increased 9% since the estimated were reported on in April 2018. As a result of these loses there will further reserve strengthening will be highly likely. CATCo is currently going though the Q3 loss information and an announcement on the impact to the portfolio will be made before the 30 November 2018 NAV.
The investment manager also announced that the unaudited net asset value of the CATCo’s ordinary shares and C shares of $0.6969 and $1.502 respectively, at the close of business on 31 October 2018. The NAV is inclusive of a loss reserve of 15 bps per month.
CAT- CATCo expecting large losses after California Fires