Blue Capital Reinsurance Holdings announced its earnings for the second quarter of 2014. The report revealed the impact of catastrophic events and growth in acquired premiums.
The net income and operating income, as stated by the company’s second quarter financial report, had a total of $1.2 million ($0.13 a share). The company reported that its reinsurance premiums brought the company $11.1 million during the second quarter (approximately 25% of the expected total annual premium, and somewhat higher than first quarter results). The company kept its earnings on board. The fully converted book value per common share of the holdings was $20.02 by June 30, 2014 (0.6% increase for second quarter and 4.1% improvement for the first six months). The increases include dividends declared by the reinsurance holdings.
During a recent conference, the president and CEO of the holdings, William Pollett, believed that smaller industry catastrophe events (windstorm Ela in Western Europe and severe tornadoes in the United States) affected the company’s earnings. The quarter’s loss and loss adjustment expenses even reached $7.3 million (including losses’ provision for events that have no claims yet). In contrast, June 1 renewal period marked the high performance of underwriting team (responsible for constructing risks in diversified portfolio and client base expansion through available capital deployment).
The approximated total annual premiums of $45.4 million and $32.6 million in premium are from the company’s binding of collateralized indemnity reinsurance contracts. Since the start of the contract, the reinsurer is represented by $203.5 million in the general contract limit of reinsurance.
Other finances included in the earnings report are acquisition costs ($1.5 million) and general and administration expenses ($1.1 million). A new $20 million unsecured circulating credit agreement has been closed by the financial company. The purpose of the arrangement is to support capital deployment with additional flexibility. This will allow complete net proceeds deployment.
Presently, the earnings of Blue Capital Reinsurance Holdings gave way to $201.9 million total assets for the company (higher than 2013’s $175.5 million).
Investors will have more convenient access to reinsurance asset class by utilizing collateralized reinsurance vehicle of different stock exchange listing. This is determined by the holdings’ strategy of bringing back its profit in form of dividends. The revenue of Blue Capital Reinsurance Holdings showed uncontrolled growth of the company, which will even prevent catastrophe events in the future from affecting its quarterly net income as its capital negatively. The holdings may expectedly take larger roles in branched reinsurance business.