Blue Capital Reinsurance Holdings Reports First Quarter Financial Results

HAMILTON, Bermuda--(BUSINESS WIRE)-- Blue Capital Reinsurance Holdings Ltd. (NYSE:BCRH) (the “Company”), a Bermuda holding company that offers collateralized reinsurance in the property catastrophe market and invests in various insurance-linked securities, today reported its financial results for the first quarter of 2015.

The Company’s net income and operating income for the quarter was $5.4 million ($0.62 per share). The Company’s fully converted book value per common share (FCBVPS) was $20.28 at March 31, 2015, reflecting a 3.0% increase for the quarter and an 8.3% increase for the past twelve months, each inclusive of dividends declared in such periods.

The table below illustrates the components of the Company’s first quarter 2015 results:

Loss and loss adjustment expenses for the quarter were $0.8 million, which included $0.1 million of favorable prior year loss reserve development.

Acquisition costs were $2.3 million for the quarter, which included $0.5 million of accrued profit commissions.

General and administration expenses were $1.3 million, which consisted of management and performance fees of $0.8 million, public company expenses of $0.4 million and administrative fees of $0.1 million.

As of March 31, 2015, the Company had $4.0 million of outstanding borrowings under its $20 million revolving credit facility.

During the first quarter of 2015, the Company declared: (i) a special dividend with respect to 2014 of $0.66 per common share, which was paid on March 13, 2015 to all shareholders of record as of February 27, 2015; and (ii) a regular 1Q15 dividend of $0.30 per common share, which was paid on April 15, 2015 to all shareholders of record as of March 31, 2015.

William Pollett, President and CEO, commented: “We had a strong first quarter start in our second year of operations. Our annualized return was 12% for the quarter and the portfolio remains well-positioned going into the mid-year renewal season.”

Additional information can be found in the Company’s public filings with the Securities and Exchange Commission and at www.bcapre.bm.

Blue Capital Management Ltd., which serves as the Company’s investment and reinsurance manager, is a wholly-owned subsidiary of Montpelier Re Holdings Ltd. (NYSE: MRH, “Montpelier”), a leading global provider of property catastrophe and short-tail reinsurance solutions with $4.0 billion of assets. Through this relationship, the Company benefits from Montpelier’s industry leading proprietary reinsurance modelling tools, underwriting expertise and broker/client relationships. The Company was formed on June 24, 2013 and began trading on the New York Stock Exchange on November 6, 2013.

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the United States (the “U.S.”) federal securities laws, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are not historical facts, including statements about our beliefs and expectations. These statements are based upon current plans, estimates and projections. Forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and various risk factors, many of which are outside our control. See Item 1A “Risk Factors” contained in the Company’s 2014 Report on Form 10-K, as filed with the U.S. Securities and Exchange Commission, for specific important factors that could cause actual results to differ materially from those contained in forward looking statements. You can identify forward-looking statements in this earnings release by the use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans” and “believes,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.” These forward-looking statements include, among others, statements relating to our future financial performance, our business prospects and strategy, our dividend policy and expected dividend payout, anticipated financial position, liquidity and capital needs and other similar matters. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements included in this earnings release as a result of various factors, including, among others:

• the fact that we have limited operating history;
• the possibility of severe or unanticipated losses from natural and man-made catastrophes, including those that may result from changes in climate conditions, including global temperatures and expected sea levels;
• the effectiveness of our loss limitation methods;
• our dependence on our Chief Executive Officer, our Chief Financial Officer and our service providers;
• our ability to effectively execute our business plan and any new ventures that we may enter into;
• continued acceptance of our business strategy, security and financial condition by regulators, brokers and insureds;
• failure by any service provider to carry out its obligations to us in accordance with the terms of its appointment;
• conflicts of interest that could result from our relationships and potential overlaps in business with related parties, including Montpelier Re Holdings Ltd. and its subsidiaries;
• the cyclical nature of the property catastrophe insurance and reinsurance industry;
• the availability of capital and financing, including our ability to raise more equity capital and our ability to release capital from existing obligations to redeploy annually;
• the levels of new and renewal business achieved;
• the availability of opportunities to increase writings within our property and catastrophe lines of business and our ability to capitalize on those opportunities;
• the inherent uncertainty of our risk management process, which is subject to, among other things, industry loss estimates and estimates generated by modeling techniques;
• the accuracy of those estimates and judgments used in the preparation of our financial statements, including those related to revenue recognition, reserves for loss and loss adjustment expenses, reinsurance recoverables, asset valuations, contingencies and litigation which, for a newer reinsurance company like us, are even more difficult to make than those made by a mature company because of our limited operating history;
• the inherent uncertainties in establishing loss and LAE reserves and unanticipated adjustments to premium estimates;
• changes in the availability, cost or quality of reinsurance or retrocessional coverage;
• general economic and market conditions, including inflation, volatility in the credit and capital markets and conditions specific to the insurance and reinsurance markets in which we operate;
• changes in and the impact of governmental legislation or regulation, including changes in tax laws in the jurisdictions where we conduct business;
• statutory or regulatory developments, including those involving tax policy, reinsurance and other regulatory matters such as the adoption of proposed legislation that would affect Bermuda-headquartered companies or Bermuda-based insurers or reinsurers;
• potential treatment of us as an investment company or a passive foreign investment company for purposes of U.S. securities laws or U.S. federal taxation, respectively;
• the amount and timing of reinsurance recoveries;
• the overall level of competition, and the related supply and demand dynamics in our markets relating to growing capital levels in our industry;
• declining demand due to increased retentions by cedants and other factors;
• acts of terrorism, political unrest, outbreak of war and other hostilities or other non-forecasted and unpredictable events;
• unexpected developments concerning the small number of insurance and reinsurance brokers upon whom we rely for a large portion of revenues;
• operational risks, including the risk of fraud and any errors and omissions, as well as technology breaches or failures;
• our dependence as a holding company upon dividends or distributions from our operating subsidiaries; and
• changes in accounting principles or the application of such principles by regulators.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Investors:

Blue Capital Reinsurance Holdings Ltd.

Laura Newhook, 1-441-278-5067

or

Media:

Kekst and Company

Ruth Pachman, 1-212-521-4891

or

General Inquiries, 441-278-5004

Source: Blue Capital Reinsurance Holdings Ltd.