HDU Hardy Under. Bm

TIDMHDU

RNS Number : 1384T

Hardy Underwriting Bermuda Ld

01 December 2011

   Date:                           1 December 2011 
   On behalf of:             Hardy Underwriting Bermuda Limited 

For immediate release

Strategy and trading update

The Board of Hardy Underwriting Bermuda Limited ("Hardy"), (LSE: HDU), the specialist insurer and reinsurer, announces that it has received several preliminary expressions of interest in its business. In view of this, and in the light of the incidence and size of catastrophe events in 2011, the Board has concluded that it should undertake a strategic review; this review will include consideration of whether shareholder value might best be maximised and business opportunity might be enhanced by finding a buyer or strategic partner.

In any transaction which emerges from this strategic review, the Board would seek to safeguard the interests of all stakeholders, however, there can be no certainty that an offer will ultimately be made for Hardy.

Hardy has adopted a strategy of focusing on attractive market sectors including marine and aviation, non-marine property, specialty lines and property treaty. In 2007, Hardy began to develop the property treaty account with a bias on international rather than US risks. For the first three years, this account generated very attractive returns.

For 2010 and 2011, however, the incidence of international catastrophe events has been unprecedented in terms of size and frequency. The losses generated have overshadowed the balance of the portfolio which is performing very well in a challenging rating environment, producing a combined ratio for the 9 months ended 30 September 2011 (based on unaudited information) of 78%.

In the interim management statement released on 14 November, Hardy referred to continued uncertainty regarding the quantum of claims arising from the recent flooding in Thailand. It remains too early to provide accurate loss estimates for claims arising from these extraordinary events. Hardy has exposure to certain surplus treaties, the losses for which are rumoured to be material. Combined with a provisional loss estimate for Hardy's other exposures in Thailand, the net loss after reinsurance for the Thai floods is estimated to be in the range of GBP10 million to GBP25 million.

Hardy has sufficient liquidity and capital to absorb these losses from Thailand and funds have been lodged at Lloyd's to support the 2012 year of account business plan.

As recently announced, Arig and Tower will be providing third party capacity to Hardy for the 2012 year of account, demonstrating support for the strength of Hardy's underwriting franchise.

Hardy will provide the market with further updates as appropriate.

- ends -

Enquiries:

Hardy

Barbara Merry c/o Redleaf Polhill

Redleaf Polhill

Emma Kane / Samantha Robbins

+44 (0) 20 7 566 6700

hardy@redleafpolhill.com

 
 Rothschild                Peel Hunt 
 Joint financial adviser   Joint financial adviser and 
                            broker 
 Crispin Wright            James Britton 
 +44 (0) 20 7280 5000      +44 (0) 20 7418 8817 
                           Guy Wiehahn 
                           +44 (0) 20 7418 8893 
 

Notes to Editors:

-- Hardy is a specialist underwriting business operating within Lloyd's of London. Its business has been built around its management of and participation on Lloyd's syndicate 382, which underwrites a range of insurance and reinsurance classes on a worldwide basis.

   --     Further information on Hardy is available at the Group's website: www.hardygroup.bm 

The City Code on Takeovers and Mergers ("the Code")

Hardy is incorporated and its registered office is in Bermuda. Accordingly, Hardy is not subject to the provisions of the Code. However, the Company's Bye-laws adopt certain of the provisions of the Code including provisions dealing with compulsory takeover offers and shareholder treatment along the lines of the general principles as set out in the Code, which are to be administered at the discretion of the Board.

N.M. Rothschild & Sons Limited ("Rothschild"), which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as financial adviser to Hardy and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Hardy for providing the protections afforded to clients of Rothschild or for providing advice in relation to this matter, the content of this announcement or any matter referred to herein.

Peel Hunt, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Hardy (as financial adviser and broker) and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Hardy for providing the protections afforded to its customers or for providing advice in relation to the matters referred to in this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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