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Blue Capital earnings hit by tornadoes

Bermuda-based Blue Capital Reinsurance Holdings Ltd made a profit of $1.2 million in the second quarter, as tornadoes and windstorms took their toll.

The company, which offers collateralised reinsurance products, invests in insurance-linked securities and is a subsidiary of Bermuda reinsurer Montpelier Re, said its net income and operating income for the April through June period totalled 13 cents per share.

Blue Capital CEO William Pollett said: “Our second-quarter results were impacted by a series of smaller industry catastrophe events. However, our underwriting team executed well during the key June 1 renewal period, successfully deploying our available capital to construct a diversified portfolio of risks and expanding our client base.”

Blue Capital stated: “Loss and loss adjustment expenses for the quarter were $7.3 million, which includes a provision for losses that are believed to have occurred but for which no claims have been reported.

“The losses recorded during the period resulted largely from severe tornadoes in the US, as well as Windstorm Ela in Western Europe.”

During the first half of 2014 the company bound indemnity reinsurance contracts with expected total annual premiums of $45.4 million and wrote $32.6 million in premium. The business generated by the company since its inception collectively represents $203.5 million in total reinsurance contract limit.

During the second quarter, the company earned $11.1 million of reinsurance premiums, representing approximately 25 percent of the expected total annual premium associated with its in-force reinsurance contracts at June 30, 2014. The company also earned $0.1 million from reinsurance derivative contracts.

General and administration expenses were $1.1 million, which consisted of management fees of $0.7 million, public company expenses of $0.3 million and administrative fees of $0.1 million.

Blue Capital added that had closed on a new $20 million unsecured revolving credit agreement to provide it with additional flexibility in capital deployment.

Shares of Blue Capital, which floated on the New York Stock Exchange in November last year, closed down three cents at $19.90 on Friday, ten cents below its initial public offering price.

The company's current regular quarterly dividend of 30 cents per quarter translates to an annual yield of six percent.

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Published July 28, 2014 at 9:00 am (Updated July 27, 2014 at 8:06 pm)

Blue Capital earnings hit by tornadoes

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