Chaucer confirms capital raising plans; says reinsurance programme 'in place'
Lloyd's insurer Chaucer Holdings plc confirmed last week that it is looking to raise additional capital after speculation had contributed to a near 40 percent slide in its share price this month.
In a 23 January Stock Exchange announcement, the firm said that it noted "recent press speculation in relation to potential capital raising plans" and confirmed "that it is currently exploring its options for raising capital in light of the improving underwriting outlook for the insurance sector and the company's capital requirements."
Lloyd's (re)insurers are under pressure to find additional funds to support 2009 underwriting plans as a result of the sharp decline in the UK pound against currencies such as the US dollar.
Responding to suggestions that the firm had still to complete its reinsurance programme, Bruce Bartell, active underwriter of Chaucer's Syndicate 1084, commented: "I am pleased to confirm that Chaucer's core 2009 reinsurance programme was in place by 1st January 2009."
Chaucer's announcement followed a report in the Financial Times (FT) suggesting that the insurer is looking to raise up to £100m and an issue of equity could be the preferred option for the £137mn market cap insurer.
2008 was a tough year for Chaucer which endured a succession of attritional underwriting and investment losses that dragged on its share price.
However, at a significant discount to net asset value, the company has also been linked with takeover speculation from either a rival Lloyd's insurer - inevitably Amlin plc gets mentioned - or an acquisitive overseas insurer, such as Bermudian Ariel Re.
Chaucer shares closed the week at 41p, down 37 percent on the 56.25p which the firm's stock opened at the beginning of the year.