CATco’s performance ‘very satisfactory’
CATCo Investment Management's investment funds have produced “very satisfactory” performance, according to chairman Nigel Barton in a half-year report released yesterday.
CATCo has built a burgeoning share of the retrocessional reinsurance market and “will seek to consolidate that”.
The CATCo Reinsurance Opportunities Fund Ltd, its flagship reinsurance-linked investment fund, saw a net asset value capital return of 7.90 percent for the first-half of 2013, according to yesterday's report.
On a share price capital basis the return was 3.74 percent, which beat an insurance-linked securities (ILS) and catastrophe bond market total return benchmark of 3.47 percent.
CATCo said it is on track to maximise its potential returns this year — if the year remains loss free. So far there have been no catastrophic events which have caused any impact to the funds investments.
Reinsurance broker Guy Carpenter said CATCo reinsurance products now account for approximately a 20 percent market share of the retrocessional market.
CATCo said yesterday: “The market reputation for CATCo's products has meant that this recent oversupply of capital in the sector has had little or no effect on CATCo-Re Ltd, the company's reinsurance company, or its ability to retain or win new business.”
CATCo may be impacted at the January renewals. But with specialised products providing niche coverage there likely is room to boost its portfolio to maintain solid returns.
Mr Barton said: “The company's financial performance during the first half of the year has been very satisfactory as we are approaching US hurricane season.
“The board strongly believes that offering tailor-made reinsurance solutions to meet clients' needs enables the company both to continue to perform strongly and to consolidate further its position in the retrocessional reinsurance market.”
“CATCo deployed around $2 billion of retrocessional reinsurance capacity in 2013 and we expect that this number will increase at the start of 2014. With retro increasingly in demand, as reinsurers seek to hedge their own portfolio risks, CATCo will seek to continue to grow its capacity and further consolidate its share of the retro reinsurance market.”
The company also confirmed a final dividend of $0.05006 paid to shareholders of record as of March 27.