Board considering fund raising options (6781P)
October 06 2011 - 3:09AM
UK Regulatory
TIDMCAT
RNS Number : 6781P
CATCo Reinsurance Opps Fund Ltd
06 October 2011
CATCo Reinsurance Opportunities Fund Ltd. ("the Company")
Board considering fund raising options
To: SFM, London Stock Exchange Date: 6 October 2011
and Bermuda Stock Exchange
Given the current demand for Company's protections for the 1
January 2012 renewal cycle together with the current dynamics of
the traditional reinsurance industry, the Board of Directors are
considering fund raising option to take advantage of the current
high premium rates. Growing the fund would help provide better risk
adjusted returns to Shareholders and will enable the Investment
Manager to further diversify the 2012 investment portfolio.
The extraordinary catastrophic events that have already occurred
in 2011, including the natural disasters in Australia, New Zealand
and Japan as well as the multiple US tornados and Hurricane Irene,
have led to billions of dollars of losses in the reinsurance
industry. As a consequence, high severity retrocession capacity is
likely to be scarce due to exposed capital that cannot be released
in time for the 1 January 2012 renewal cycle. The ongoing asset
market deterioration and Solvency II implications are also putting
pressure on capital and may lead to increased reinsurance demand in
2012. Separately, funding constraints from capital markets, given
recent volatility, and the low price to book multiples of
reinsurers, may incentivise reinsurers to strengthen their balance
sheets. All of which could further constrain reinsurance supply,
helping raise rates further.
It is our view, following on from the annual Reinsurance
Rendezvous in Monte Carlo, property prices at the 1 January
renewals will be higher driven by a number of factors,
principally:
-- large losses in the first half of 2011 and the lower yield
environment
-- Property lines have been rising since the catastrophes in the
first quarter of 2011 and are expected to continue through 2012 as
new catastrophe models from RMS indicate rising "average" loss
expectations in the US and Europe, which will act as a further
constraint on industry capital.
Our expectation is for the average January renewal rates to rise
5-15% in traditional reinsurance property catastrophe and 0-5% in
traditional reinsurance property non-catastrophe. Specialty lines,
such as Marine, are also likely to increase markedly as a result of
further capacity shortage as certain traditional players exit the
market. Further, at the retrocessional reinsurance level, we expect
average January renewal rate increases to be greater than the
traditional reinsurance rate increases, and, the demand for the
protections, deployed by our reinsurance company CATCo Re Ltd,
exceeds its available capital at this time.
For further information, please contact:
Jason Bibb
CATCo Investment Management Ltd
Telephone: +1 (441) 531 2227
Email: jason.bibb@catcoim.com
David Benda / Hugh Jonathan
Numis Securities Limited
Telephone: +44 (0) 20 7260 1000
Michael Toyer / John Whiley
Prime Management Ltd
Tel: +1 (441) 295 0329
- ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUGGAUUUPGUMQ
Catco Reinsurance Opport... (LSE:CAT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Catco Reinsurance Opport... (LSE:CAT)
Historical Stock Chart
From Jul 2023 to Jul 2024