Blue Capital Reinsurance Holdings will cease active operations and pursue an orderly run-off of its liabilities and in-force portfolio, returning capital to shareholders, the company has said.
Blue Capital Re said its board of directors had considered a range of strategic alternatives but had decided to wind up its operations. It currently expects, based upon management’s best available estimates, that 20 percent of its existing shareholders’ equity as of June 30, 2019 will have been distributed or will become available for distribution this year. Another 65 percent will become available for distribution in 2020, with 15 percent becoming available after that.
The Company expects the first of these special distributions to be declared on or about August 30, 2019.
Blue Capital Re will remain exposed to the performance of its underlying in-force reinsurance treaties and the future release of collateral held in trust under the terms of underlying expired reinsurance treaties during the run-off of its business. The amount returned to shareholders and its timing will therefore depend on the performance of those underlying in-force treaties, among other factors, including applicable regulatory approvals for such distribution.
It warned the timing and ultimate amount of special distributions could be materially adversely impacted by unforeseen events and the ultimate development and settlement of existing losses and loss adjustment expenses.
Blue Capital Re will delist its common shares from the New York Stock Exchange and the Bermuda Stock Exchange prior to March 31, 2020. It said it expects its common shares to continue being quoted on the OTC Pink, a centralised electronic quotation service operated by the OTC Markets for over-the-counter securities, but this cannot be guaranteed.
Michael McGuire, chairman and chief executive officer of Blue Capital Re, said: “Recognising the valuation level of the company’s common shares in the public markets, the board of directors determined that an orderly runoff of the company’s liabilities and return of the company’s capital through special distributions is the best course of action to maximise value for our shareholders.”
Blue Capital Reinsurance, Michael McGuire