Authorities in Bermuda and the US are making inquiries into the recording of loss reserves by Markel CatCo Investment Management Ltd and its subsidiaries.
This was revealed in a statement last night from Markel Corporation, the US-based parent company of the Bermudian-based collateralised reinsurance and insurance-linked securities specialist.
The statement reads: “Markel Corporation said today that after having been contacted on November 30, 2018, it is fully cooperating with inquiries by US and Bermuda authorities into loss reserves recorded in late 2017 and early 2018 at Markel CatCo Investment Management Ltd and its subsidiaries.
“These inquiries are limited to Markel CatCo Investment Management Ltd and its subsidiaries and do not involve other Markel Corporation companies. Outside counsel has been retained to conduct an internal review. The company has no further statement at this time.”
AM Best issued a statement later saying that its ratings on Markel were unchanged after the statement.
The ratings agency commented: “No rating actions are being taken at this time as the information available does not warrant any such action.”
Many reinsurers have had to raise their initial loss estimates from the 2017 Hurricane Irma this year.
In May this year, the CatCo Reinsurance Opportunities Fund strengthened its loss reserves for 2017 events by 19.5 per cent of net asset value.
At the time, Alissa Fredericks, Markel CatCo Investment Management’s chief executive officer, said a “material loss creep” relating to Hurricane Irma was the chief reason for the bolstering of reserves.
Markel acquired CatCo three years ago.