Blue Capital Reports Q4 2014 Income: $4.6M

February 10, 2015

Blue Capital Reinsurance Holdings Ltd, a Bermuda holding company that offers collateralized reinsurance in the property catastrophe market and invests in various insurance-linked securities,  reported its financial results for the fourth quarter of 2014.

The Company’s net income and operating income for the quarter was $4.6 million [$0.52 per share]. The Company’s fully converted book value per common share [FCBVPS] was $20.62 at December 31, 2014, reflecting a 2.6% increase for the quarter and an 8.7% increase for the year, each inclusive of any dividends declared in such periods.

Loss and loss adjustment expenses for the quarter were $3.6 million, the majority of which resulted from an aggregation of U.S. weather events.
Acquisition costs were $2.1 million for the quarter, which included $0.4 million of accrued profit commissions.

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.

As of December 31, 2014, the Company had $8.0 million of outstanding borrowings under its $20 million revolving credit facility. Half of these outstanding borrowings [$4.0 million] were repaid in January 2015 and the remainder is expected to be repaid in April 2015.

In addition, the Company’s Board of Directors has declared a special dividend of $0.66 per common share, which is payable on March 13, 2015 to all shareholders of record as of February 27, 2015.

This special dividend, coupled with the regular dividends declared during each of the first three quarters of 2014, represents 90.4% of the Company’s “Distributable Income” with respect to 2014. Distributable Income, a non-GAAP measure, has been defined within the Company’s dividend policy to be its net income plus [minus] non-cash expenses [revenues] recorded in net income for the period.

William Pollett, President and CEO, commented: “We are pleased to have successfully concluded our first full year of operations generating a total return for our shareholders, as measured by growth in book value per share plus dividends, of 8.7%.

“We declared $1.56 of dividends for the full year, representing a dividend yield of 7.8% on the original IPO price of $20. This return was achieved by generating a combined ratio of 66.7%, a solid result by any standards.”

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