Blue Capital Report 2017 1Q Financial Results

May 3, 2017

Blue Capital Reinsurance Holdings Ltd, a Bermuda holding company that, through its operating subsidiaries, offers collateralized reinsurance in the property catastrophe market and invests in various insurance-linked securities, reported its financial results for the first quarter of 2017.

The Company’s net income and operating income was $4.1 million [$0.47 per share] for the three months ended March 31, 2017. The Company’s fully converted book value per common share was $20.49 at March 31, 2017, reflecting a 2.3% increase for the quarter and a 7.7% increase over the past twelve months, each inclusive of dividends declared in such periods.

Reinsurance premiums written for the current quarter were $17.0 million, modestly declining $[0.4] million or 2.6% compared to the same period in 2016. The current quarter’s reinsurance premium decline was predominantly driven by a larger purchase of reinsurance protection which offset premiums written.

The combined ratio for the current quarter was 56.5% compared to 52.2% in the same period a year ago. The increase in the combined ratio was driven by higher loss and loss adjustment and reinsurance acquisition ratios partially offset by a lower general and administrative expense ratio.

While loss and loss adjustment expenses of $1.8 million were generally consistent across both periods, the slightly lower earned premiums in the current quarter led to a modestly higher loss ratio.

Reinsurance acquisition costs were $2.7 million in the current period compared to $2.2 million a year ago as the current quarter included profit commissions on quota share business while the year ago period reflected negative commission adjustments. General and administrative expenses for the current quarter were $1.3 million, or $0.2 million lower than a year ago due to lower performance fees based on reduced profitability.

During the first quarter of 2017, the Company declared a regular dividend of $0.30 per common share, which was paid on April 15, 2017 and a special dividend of $0.59 per common share which was paid on March 15, 2017.

Michael J. McGuire, Chairman and CEO, commented: “I am pleased with the results we have generated in the first quarter, with excellent underwriting profitability, solid growth in book value per share inclusive of dividends and stable premium levels.

“These strong results highlight the value of our disciplined underwriting, our high quality portfolio management and our important strategic alignment with Sompo Holdings, Inc. These core principles and the continuity of our underwriting and portfolio management teams position Blue Capital to continue its effective and disciplined deployment of capital in a challenging market.”

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