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Blue Capital Reinsurance Holdings optimistic on 2018 returns

1st December 2017 - Author: Marianne Lehnis

Blue Capital Reinsurance Holdings (BCRH) has released an optimistic projected return for 2018 based on the view that upcoming renewals will see catastrophe risk prices rise after the record-level of industry losses in Q3.

The company’s projected growth in fully converted book value per common share for 2018 is set at an increase of 9.1% for a mean loss scenario, and 14.9% for a median loss scenario.

BCRH said this growth forecast is based on “the planned 2018 portfolio and assumes loss affected ceded and quota share agreements will benefit from rate increases ranging from estimates of 15% to 25% in 2018 with other agreements expected to benefit from an estimated rate increase of 2.5% in 2018 (in each case compared to 2017 and net of expenses).”

This projected growth also reflects the collateral expected to be available for redeployment during 2018 and is inclusive of any projected declared dividends.

BCRH offers collateralized reinsurance in the property catastrophe market through its subsidiaries, and invests in insurance-linked securities (ILS).

With exposure to Q3 catastrophe loss-affected lines of business, the carrier hopes to capitalise on price rises in the property market segment in 2018.

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