Markel CATCo Investment Management Ltd. intends to increase the specific loss reserves held by CATCo Reinsurance Opportunities Fund Ltd. related to the ordinary shares and C shares for the 2017 and 2018 loss events.
Markel CATCo, the investment manager of the fund, projected the impact of the loss reserve increase to be about 18% of the April 30 C share net asset value and the impact of the 2017 and 2018 loss reserve increases to be about 13% and 8%, respectively, of the April 30 ordinary share NAV.
The increase will be accounted for within the May 31 NAV. The May 31 NAV for the ordinary shares and C shares will be reported by the company in mid-June.
The company said the increase in the cedant loss reserves shown in its first-quarter cedant loss reports was mostly due to the development on both Typhoon Jebi and Hurricane Michael.
Markel CATCo reviewed its estimates of the events' ultimate costs and concluded that there is a need for a further strengthening of the 2018 loss reserves. The company also deemed additional strengthening of the 2017 loss reserves necessary after updated loss notifications from cedants, as well as continued evidence of development related to the 2017 loss events.