LRE.L - Lancashire Holdings Ltd

[giofranchi]

An article from a few weeks back to add to what twacowfca was saying:

 

Lancashire to avoid the competition with collateralized Kinesis offering

 

"With its Kinesis Capital Management unit, and its Kinesis Re collateralized reinsurance vehicle, Lancashire Holdings aims to offer a niche product which has unique features within the alternative reinsurance capital, collateralized reinsurance and ILS space.

 

We wrote earlier today about Lancashire’s third-quarter earnings statement as it reiterated its mission to create a multiple balance sheet and capital source agnostic insurance and reinsurance platform, leveraging all forms of capital and targeting multiple markets. Its Kinesis Capital Management unit will play a key role in this mission, particularly in the management of third-party reinsurance capital.

 

Lancashire has revealed more details of its thinking surrounding Kinesis, third-party capital and the products it intends to offer during its third-quarter earnings call earlier and its investor day presentation held in London, which has just finished. Here we cover a mixture of comments from both events, and from the presentations made, which reveals more detail on Kinesis..."

 

http://www.artemis.bm/blog/2013/11/06/lancashire-to-avoid-the-competition-with-collateralized-kinesis-offering/

 

Thank you for the link AJC.

 

Kinesis is  the potential "killer app" for Lancashire. It's not a commoditized retro product , but customized to meet the needs of a Bermuda - Lloyd's type (re)insurer to lay off a company's specific peak risk profile. It's a unique product that has a profit percentage potential many times higher than cheap ILW's that are deeply flawed because they have basis risk for the buyers. 

 

It's good to see that they are staying with it because it has  compelling value to the buyer that no one else is able to copy.  Elaine is rather modest in her projection of how much it could goose their ROE if it starts to gain traction.

 

Thank you for the link, ajc!

And thank you for the comment, twacowfca!

 

:)

 

Gio

 

[twacowfca]

An article from a few weeks back to add to what twacowfca was saying:

 

Lancashire to avoid the competition with collateralized Kinesis offering

 

"With its Kinesis Capital Management unit, and its Kinesis Re collateralized reinsurance vehicle, Lancashire Holdings aims to offer a niche product which has unique features within the alternative reinsurance capital, collateralized reinsurance and ILS space.

 

We wrote earlier today about Lancashire’s third-quarter earnings statement as it reiterated its mission to create a multiple balance sheet and capital source agnostic insurance and reinsurance platform, leveraging all forms of capital and targeting multiple markets. Its Kinesis Capital Management unit will play a key role in this mission, particularly in the management of third-party reinsurance capital.

 

Lancashire has revealed more details of its thinking surrounding Kinesis, third-party capital and the products it intends to offer during its third-quarter earnings call earlier and its investor day presentation held in London, which has just finished. Here we cover a mixture of comments from both events, and from the presentations made, which reveals more detail on Kinesis..."

 

http://www.artemis.bm/blog/2013/11/06/lancashire-to-avoid-the-competition-with-collateralized-kinesis-offering/

 

Thank you for the link AJC.

 

Kinesis is  the potential "killer app" for Lancashire. It's not a commoditized retro product , but customized to meet the needs of a Bermuda - Lloyd's type (re)insurer to lay off a company's specific peak risk profile. It's a unique product that has a profit percentage potential many times higher than cheap ILW's that are deeply flawed because they have basis risk for the buyers. 

 

It's good to see that they are staying with it because it has  compelling value to the buyer that no one else is able to copy.  Elaine is rather modest in her projection of how much it could goose their ROE if it starts to gain traction.

 

Thank you for the link, ajc!

And thank you for the comment, twacowfca!

 

:)

 

Gio

 

The broadest market for Kinesis is at Lloyds.  Being a member of Lloyds with their Cathedral acquisition may be a plus for sales of that product. It will be interesting to see if syndicates start to buy it around the time of the January renewals.

[giofranchi]

The broadest market for Kinesis is at Lloyds.  Being a member of Lloyds with their Cathedral acquisition may be a plus for sales of that product. It will be interesting to see if syndicates start to buy it around the time of the January renewals.

 

Whatever the final outcome, I love this kind of strategic, very well thought out plans! They tend to add great value most of the time. Let’s hope Kinesis and the Cathedral acquisition won’t be the exception. We will see. Anyway, I like Mr. Brindle's modus operandi more and more. :)

 

Gio

 

[WhoIsWarren]

 

Elaine is rather modest in her projection of how much it could goose their ROE if it starts to gain traction.

 

That's my gut feeling as well.  Have you put any numbers together on what might be?? :-)

[twacowfca]

 

Elaine is rather modest in her projection of how much it could goose their ROE if it starts to gain traction.

 

That's my gut feeling as well.  Have you put any numbers together on what might be?? :-)

 

Not at all. That would be a pipe dream if it doesn't gain traction.  Monte Carlo simulations should reveal that it's a compelling value proposition, but (re)insurers often have to be quite motivated to try something new.  The problem is that there haven't been any big hits to balance sheets of most insurers recently, and Solvency II keeps getting kicked down the road to the future. 

 

I think that companies would be falling all over themselves to buy the new product if capital adequacy issues were forefront now .

[giofranchi]

I have bought more Lancashire today. :)

 

Cheers,

 

Gio

[WhoIsWarren]

A recent interview with Brindle.

 

http://www.insiderquarterly.com/adapt-or-decline

 

Some interesting comments made, particularly in relation to being acquired:

 

"We've had approaches and we've always said the same thing to people," he says. "Pay us 2x net asset value and then leave us alone after the acquisition. And that's tended to be the end of the conversation."

 

Cathedral was bought for headline 1.6x NAV, though with adjustments probably 1.4x or so.  In that context I'm surprised he wouldn't be playing harder to get than a 2x multiple (perhaps the "leave us alone" is more the issue). 

 

Also, the thrust of the article was that they needed to change with the environment ("But to stand still was not an option for us.").  I understood that Cathedral acquisition was opportunistic -- it was for sale, Lancashire met them with low expectations and found that they had a similar philosophy, a match made in heaven. I guess, in the absence of selling themselves and Cathedral not being the perfect cultural fit, what other real options had they available to them?

 

 

[twacowfca]

A recent interview with Brindle.

 

http://www.insiderquarterly.com/adapt-or-decline

 

Some interesting comments made, particularly in relation to being acquired:

 

"We've had approaches and we've always said the same thing to people," he says. "Pay us 2x net asset value and then leave us alone after the acquisition. And that's tended to be the end of the conversation."

 

Cathedral was bought for headline 1.6x NAV, though with adjustments probably 1.4x or so.  In that context I'm surprised he wouldn't be playing harder to get than a 2x multiple (perhaps the "leave us alone" is more the issue). 

 

Also, the thrust of the article was that they needed to change with the environment ("But to stand still was not an option for us.").  I understood that Cathedral acquisition was opportunistic -- it was for sale, Lancashire met them with low expectations and found that they had a similar philosophy, a match made in heaven. I guess, in the absence of selling themselves and Cathedral not being the perfect cultural fit, what other real options had they available to them?

 

Great interview.  It would be a mistake to fix on the: "pay us two times NAV" part of what he said.  They have been over capitalized.  That could be perhaps 2.5 * NAV if their capital were right sized.

 

The key part of the interview is that Lancashire and Cathedral will be able to retain more of the very profitable core business they write because the inherent leverage as a Lloyd's member will enable them to have lots of cushion that would not be there if LRE had to face rating agencies without the back up of the Lloyd's central fund and the diversification afforded by Cathedral's niches.  :)

[WhoIsWarren]

The key part of the interview is that Lancashire and Cathedral will be able to retain more of the very profitable core business they write because the inherent leverage as a Lloyd's member will enable them to have lots of cushion that would not be there if LRE had to face rating agencies without the back up of the Lloyd's central fund and the diversification afforded by Cathedral's niches.  :)

 

Absolutely -- that core message was very reassuring.  It would appear that Lancashire's destiny is in its own hands (or at least, to a far greater extent than your average insurer).

 

Is it my imagination or does the photo of him in the article kind of give him a halo, or give him a mystical or celestial look  ::)

[original mungerville]

Hi Giofranchi (and any others!!),

 

I bought in earlier at a higher price as a starter position. Since then the price has declined. I am intrigued that you are buying at 760 or so. I think in an early post you mention you would buy-in only below 700.

 

Why the higher price? Also, I would mind understanding what level of return you think you can get from these levels - ie say current earnings yield (12%?), inflation (1.5%?), and real growth in earnings (1.5%?) for a total of 15%?

 

Just wondering where are you at roughly at this share price on the above three numbers? Is this a good entry point for LRE because we expect more significant growth? Or because you don't like to the stock market levels / economy and LRE should be relatively immune relative to other investments? or some other reason...

 

Cheers.

[twacowfca]

The key part of the interview is that Lancashire and Cathedral will be able to retain more of the very profitable core business they write because the inherent leverage as a Lloyd's member will enable them to have lots of cushion that would not be there if LRE had to face rating agencies without the back up of the Lloyd's central fund and the diversification afforded by Cathedral's niches.  :)

 

Absolutely -- that core message was very reassuring.  It would appear that Lancashire's destiny is in its own hands (or at least, to a far greater extent than your average insurer).

 

Is it my imagination or does the photo of him in the article kind of give him a halo, or give him a mystical or celestial look  ::)

 

it's just the reflection off his bald head.  :)

[giofranchi]

Hi Giofranchi (and any others!!),

 

I bought in earlier at a higher price as a starter position. Since then the price has declined. I am intrigued that you are buying at 760 or so. I think in an early post you mention you would buy-in only below 700.

 

Why the higher price? Also, I would mind understanding what level of return you think you can get from these levels - ie say current earnings yield (12%?), inflation (1.5%?), and real growth in earnings (1.5%?) for a total of 15%?

 

Just wondering where are you at roughly at this share price on the above three numbers? Is this a good entry point for LRE because we expect more significant growth? Or because you don't like to the stock market levels / economy and LRE should be relatively immune relative to other investments? or some other reason...

 

Cheers.

 

Well, that was before I knew BVPS had increased 7.5% in Q3 2013… I have bought more at 750: 700 x 1.075 = 752.5. Of course, valuation changes.

 

It is true they have paid out a special dividend in the meantime, but probably BVPS has kept increasing in Q4 2013 too.

 

Your analysis is much similar to how I value Lancashire.

 

Anyway, I think there is another reason: my “universe” of investments is very limited… I have great confidence in only a small number of businesses… And I don’t tend to stray outside that circle… Right now practically every investment of mine is shooting up in price, with the exception of Fairfax and Lancashire. In FFH I already have a full position. In LRE, instead, I still have room to average down. As my other investments increase in price, I am taking profits, and then I have two options: either increase cash, or invest more in something I know, understand, have great faith in its future prospects, and still think is fairly priced, and still look for building in it a larger position than the one I currently have: the only investment I know with all those characteristics is LRE. ;)

 

By the way, it is true that LRE is selling at around 1.5xBVPS, but such a rising market as the one we are living trough sooner or later will recognize that LRE is also selling around 9.5 TTM EPS… An euphoric market should find its way to “such an excuse”, and start buying LRE too!  ;D ;D

 

Cheers!

 

Gio

 

[twacowfca]

Hi Giofranchi (and any others!!),

 

I bought in earlier at a higher price as a starter position. Since then the price has declined. I am intrigued that you are buying at 760 or so. I think in an early post you mention you would buy-in only below 700.

 

Why the higher price? Also, I would mind understanding what level of return you think you can get from these levels - ie say current earnings yield (12%?), inflation (1.5%?), and real growth in earnings (1.5%?) for a total of 15%?

 

Just wondering where are you at roughly at this share price on the above three numbers? Is this a good entry point for LRE because we expect more significant growth? Or because you don't like to the stock market levels / economy and LRE should be relatively immune relative to other investments? or some other reason...

 

Cheers.

 

Well, that was before I knew BVPS had increased 7.5% in Q3 2013… I have bought more at 750: 700 x 1.075 = 752.5. Of course, valuation changes.

 

It is true they have paid out a special dividend in the meantime, but probably BVPS has kept increasing in Q4 2013 too.

 

Your analysis is much similar to how I value Lancashire.

 

Anyway, I think there is another reason: my “universe” of investments is very limited… I have great confidence in only a small number of businesses… And I don’t tend to stray outside that circle… Right now practically every investment of mine is shooting up in price, with the exception of Fairfax and Lancashire. In FFH I already have a full position. In LRE, instead, I still have room to average down. As my other investments increase in price, I am taking profits, and then I have two options: either increase cash, or invest more in something I know, understand, have great faith in its future prospects, and still think is fairly priced, and still look for building in it a larger position than the one I currently have: the only investment I know with all those characteristics is LRE. ;)

 

By the way, it is true that LRE is selling at around 1.5xBVPS, but such a rising market as the one we are living trough sooner or later will recognize that LRE is also selling around 9.5 TTM EPS… An euphoric market should find its way to “such an excuse”, and start buying LRE too!  ;D ;D

 

Cheers!

 

Gio

 

Lancashire would be trading at nearly  double its current price based on price/book or normalized  price /earnings if it were a mediocre US company in a mediocre industry instead of being among the very best companies in an industry that is now out of favor.

 

Q4 should be a good one if the final two weeks are good. I'm not aware of any major loss events that would impact them very much.  Plus, Cathedral very likely has done well. :)

 

[giofranchi]

Lancashire would be trading at nearly  double its current price based on price/book or normalized  price /earnings if it were a mediocre US company in a mediocre industry instead of being among the very best companies in an industry that is now out of favor.

 

These things invariably change. :)

 

Gio

 

[original mungerville]

Guys,

 

I am still trying to get a handle on LRE (even though I have a starter position in it already!). I feel it is relatively safe, and a decent earnings yield. But what are you assuming for a return from this stock price level. The attached very high-level article makes some broad assumptions about the dividend yield being 8%: http://seekingalpha.com/article/1843042-is-the-8-yield-of-lancashire-holdings-sustainable?source=yahoo

 

 

It would be great if you could provide any views on what the long-run return expectation of yours is (or range of returns) from this stock price level. So we are talking apples to apples, a breakdown into the following three categories would be logical:

 

1) current earnings yield (12%?),

2) inflation (1.5%?), and

3) real growth in earnings (1.5%?)

 

eg, for a total of 15%

 

1) is a function of what ROE you think they can get from the current book, and 2) is a function of the new growth areas (the acquisition, separate management pools) and the effect those will have on future ROE. 3) is a crap shoot. Any views on the return expectations at these levels? (I really like that LRE is not too dependent on invt asset values at this point and am looking to add to my position... but would appreciate any views with some key points.

 

Cheers.

[twacowfca]

Guys,

 

I am still trying to get a handle on LRE (even though I have a starter position in it already!). I feel it is relatively safe, and a decent earnings yield. But what are you assuming for a return from this stock price level. The attached very high-level article makes some broad assumptions about the dividend yield being 8%: http://seekingalpha.com/article/1843042-is-the-8-yield-of-lancashire-holdings-sustainable?source=yahoo

 

 

It would be great if you could provide any views on what the long-run return expectation of yours is (or range of returns) from this stock price level. So we are talking apples to apples, a breakdown into the following three categories would be logical:

 

1) current earnings yield (12%?),

2) inflation (1.5%?), and

3) real growth in earnings (1.5%?)

 

eg, for a total of 15%

 

1) is a function of what ROE you think they can get from the current book, and 2) is a function of the new growth areas (the acquisition, separate management pools) and the effect those will have on future ROE. 3) is a crap shoot. Any views on the return expectations at these levels? (I really like that LRE is not too dependent on invt asset values at this point and am looking to add to my position... but would appreciate any views with some key points.

 

Cheers.

 

The SA article is simplistic.  It misses much of the qualitative aspects of Lancashire that are captured by LRE's annual and quarterly reports and investor presentations plus interviews, available on their website.  More insights are available on this thread.

 

For example, Lancashire recently took about $200M of their excess capital that perhaps could have been paid out in dividends (thus making a mockery of focusing on a dividend rate) and used those funds plus the proceeds of their recent stock offering to buy Cathedral.  That purchase will facilitate making higher returns on capital in the future for reasons recently discussed on this board and open up some very sweet, high return business for LRE.

 

The best way to evaluate Lancashire is by using Warren's favorite metric, normalized, annual growth in fully diluted BV/SH, plus dividends,  and then look forward as far as the eye can see if there are clouds on the horizon or clear sailing.

[original mungerville]

Thanks Twacowfca. I have indeed read this thread and also the web-site interviews and annual report. I guess my personal issue is I can relate to P&C insurers that rely on investments to produce returns - ie I feel like I understand how to look at them better than P&C insurers which rely - like Lancashire - on insurance underwriting only/mainly. At the same time, that is exactly why I am interested in Lancashire. I don't want Markel at just over book because I don't necessarily want levered exposure to equity markets at this point (I don't like this market environment). So I am in a weird spot: the reason I am interested in Lancashire is exactly the reason I am less comfortable evaluating it.

 

Certainly, I have read this entire thread and your posts (and Giofranchi's and others) in particular help me and many others with the underwriting side (and the high-level perspective) - its been extremely helpful.

 

Cheers.

 

 

[vinod1]

Guys,

 

I am still trying to get a handle on LRE (even though I have a starter position in it already!). I feel it is relatively safe, and a decent earnings yield. But what are you assuming for a return from this stock price level. The attached very high-level article makes some broad assumptions about the dividend yield being 8%: http://seekingalpha.com/article/1843042-is-the-8-yield-of-lancashire-holdings-sustainable?source=yahoo

 

 

It would be great if you could provide any views on what the long-run return expectation of yours is (or range of returns) from this stock price level. So we are talking apples to apples, a breakdown into the following three categories would be logical:

 

1) current earnings yield (12%?),

2) inflation (1.5%?), and

3) real growth in earnings (1.5%?)

 

eg, for a total of 15%

 

1) is a function of what ROE you think they can get from the current book, and 2) is a function of the new growth areas (the acquisition, separate management pools) and the effect those will have on future ROE. 3) is a crap shoot. Any views on the return expectations at these levels? (I really like that LRE is not too dependent on invt asset values at this point and am looking to add to my position... but would appreciate any views with some key points.

 

Cheers.

 

I think you might be delving too deep into secondary factors - adding inflation growth and real rate, etc.

 

IMO it boils down to two things

 

1. How comfortable you are that Lancashire would be able to earn 15%+ return on equity based on underwriting

2. How far into the future Lancashire would be able to continue to do #1

 

If I am completely comfortable with both, I would expect returns to roughly equal ROE. Inflation adjustment and any real growth are just going to be noise around the very high ROE number. If LRE really compounds returns at the 19% to 20% range that Mr. Brindle has achieved, then given a sufficient long time, any valuation changes are going to be secondary to the ROE.

 

It looks like you have crossed #1, I am still getting there. I have been following LRE for a while, but it always seemed unbelievable too good to be true. After several years, I have changed my view.

 

Vinod

[giofranchi]

Thanks Twacowfca. I have indeed read this thread and also the web-site interviews and annual report. I guess my personal issue is I can relate to P&C insurers that rely on investments to produce returns - ie I feel like I understand how to look at them better than P&C insurers which rely - like Lancashire - on insurance underwriting only/mainly. At the same time, that is exactly why I am interested in Lancashire. I don't want Markel at just over book because I don't necessarily want levered exposure to equity markets at this point (I don't like this market environment). So I am in a weird spot: the reason I am interested in Lancashire is exactly the reason I am less comfortable evaluating it.

 

Certainly, I have read this entire thread and your posts (and Giofranchi's and others) in particular help me and many others with the underwriting side (and the high-level perspective) - its been extremely helpful.

 

Cheers.

 

Hi original mungerville,

of course I find myself in the same situation as yours in trying to evaluate the quality of Mr. Brindle & Co.’s underwriting decisions… I am absolutely not good at it… But, let’s face it: practically all of us invest in businesses we have no true control over, and the technicalities of those businesses very often elude us! Even with P&C insurance companies, that rely on investments to produce returns, I very rarely examine and question each single investment of theirs, and decide to buy them based on my judgment about the quality of those investments… Instead, it is always management that I try to judge. If I can muster great respect and great faith in the person (or team) at the helm (and it is absolutely not easy!), I then tend to let him/her do his/her work.

Let’s look at it this way: from my point of view, I don’t see any real difference between Mr. Marks and Mr. Brindle… They both operate in a field I know very little about: Mr. Marks high-yield bonds, Mr. Brindle underwriting contracts. Yet, I believe both of them are very astute and deeply opportunistic value investors.

 

Cheers,

 

Gio

 

[twacowfca]

There is an interesting development in the chain of relationships connecting the leaders in international insurance.

 

Brian Duperrealt recently took over SAC Re after it's  forced sale by SAC.  It's now Hamilton Re and is being repurposed as a merger and acquisition company. Sandy Weil has joined them as chairman of the board.  Capital Z is also involved as well as other capital providers.  Weil built Citigroup into a banking and insurance powerhouse through mergers and acquisitions before successors ran it into the ground.  Duperrealt built ACE into the outstanding Reinsurer that it still is through astute mergers and acquisitions.

 

Here's where the situation gets interesting.  Duperrealt was at the helm of ACE when they bought Tarquin, the holding company for the Charman managing agencies at Lloyds of London in 1998 for three times book value. Capital Z facilitated that transaction. Then Charman and Brindle went on to other, separate ventures.  Later, Capital Z was one of the movers in the launch of Lancashire in late 2005, picking Brindle as CEO with Capital Z's Representative becoming Lancashire's first Chairman to give the IPO stability in its first two years.

 

Time will tell if these developments have any significance for  Lancashire. :)

[giofranchi]

There is an interesting development in the chain of relationships connecting the leaders in international insurance.

 

Brian Duperrealt recently took over SAC Re after it's  forced sale by SAC.  It's now Hamilton Re and is being repurposed as a merger and acquisition company. Sandy Weil has joined them as chairman of the board.  Capital Z is also involved as well as other capital providers.  Weil built Citigroup into a banking and insurance powerhouse before successors ran it into the ground.  Duperrealt built ACE into the outstanding Reinsurer that it still is.

 

Here's where the situation gets interesting.  Duperrealt was at the helm of ACE when they bought Tarquin, the holding company for the Charman managing agencies at Lloyds of London in 1998 for three times book value. Capital Z facilitated that transaction. Then Charman and Brindle went on to other, separate ventures.  Later, Capital Z was one of the movers in the launch of Lancashire in late 2005, picking Brindle as CEO with Capital Z's Representative becoming Lancashire's first Chairman to give the IPO stability in its first two years.

 

Time will tell if these developments have any significance for  Lancashire. :)

 

Thank you, twacowfca! Always insightful! :)

 

What about the great freeze that has engulfed North America? What do you think is LRE exposure to the damages caused by such an extreme and rare event?

 

Gio

 

[twacowfca]

There is an interesting development in the chain of relationships connecting the leaders in international insurance.

 

Brian Duperrealt recently took over SAC Re after its forced sale by SAC.  It's now Hamilton Re and is being repurposed as a merger and acquisition company. Sandy Weil has joined them as chairman of the board.  Capital Z is also involved as well as other capital providers.  Weil built Citigroup into a banking and insurance powerhouse before successors ran it into the ground.  Duperrealt built ACE up to the outstanding reinsurer that it still is.

 

Here's where the situation gets interesting.  Duperrealt was at the helm of ACE when they bought Tarquin, the holding company for the Charman managing agencies at Lloyds of London in 1998 for three times book value. Capital Z facilitated that transaction. Then Charman and Brindle went to other, separate ventures.  Later, Capital Z was one of the movers in the launch of Lancashire in late 2005, picking Brindle as CEO with Capital Z's Representative becoming Lancashire's first Chairman to give the IPO stability in its first two years.

 

Time will tell if these developments have any significance for  Lancashire. :)

 

Thank you, twacowfca! Always insightful! :)

 

What about the great freeze that has engulfed North America? What do you think is LRE exposure to the damages caused by such an extreme and rare event?

 

Gio

 

The NE US is built to withstand freezes.  Structures have basements that minimize pipes freezing and bursting.  Roofs are generally steep and not vulnerable to collapse after heavy snowfall.  Residential flood damage is generally covered by a US government program.  The freeze and snow was deep, but not lengthy in time.  I'm not an expert, but I would be surprised if it becomes a big hit for reinsurers.

[giofranchi]

The NE US is built to withstand freezes.  Structures have basements that minimize pipes freezing and bursting.  Roofs are generally steep and not vulnerable to collapse after heavy snowfall.  Residential flood damage is generally covered by a US government program.  The freeze and snow was deep, but not lengthy in time.  I'm not an expert, but I would be surprised if it becomes a big hit for reinsurers.

 

Very good! Thank you very much! :)

 

Gio

[original mungerville]

Gio,

 

I live in Canada just north of the North East US. This December was indeed quite cold - far far colder than average. Also more snow than average. But the temperature and also the snow was not unlike just a bad January.

 

Maybe I am over simplifying but what this means is that I would not worry about claims at all - especially on the reinsurance side.

[giofranchi]

Gio,

 

I live in Canada just north of the North East US. This December was indeed quite cold - far far colder than average. Also more snow than average. But the temperature and also the snow was not unlike just a bad January.

 

Maybe I am over simplifying but what this means is that I would not worry about claims at all - especially on the reinsurance side.

 

Thank you, original mungerville!

Given the fact you live in Canada, will you attend the FFH's annual dinner next april? It would be great fun to meet you in person! :)

 

Cheers,

 

Gio