Watford warns of potential losses ahead of Q4 results release

Watford Holdings expects to report a 2019 Q4 net loss, primarily due to a strengthening of net loss reserves of approximately $28 million across the current and prior accident years.

Catastrophe losses will also undermine its underwriting results by approximately $5 million.

The loss reserve is strengthening due to higher than projected reported losses in the quarterm with US casualty reinsurance having a particularly difficult quarter. Losses are also believed to have been incurred in known casualty exposures, though have yet to be reported.

The reserve increase primarily relates to two large casualty reinsurance contracts. One of those is in run-off, and the other has been renewed at increasingly smaller participations over the past several years.

However, Watford expects to report positive growth in book value per share in excess of 3 percent for the quarter, after reflecting strong investment income and the impact of share repurchases.

Watford will release its Q4 results after the close of business on February 11.