Shareholders of Bermuda-domiciled CatCo Reinsurance Opportunities Fund Ltd have benefited from a handsome return thanks to a lack of reinsurance claims.

The fund announced yesterday that it will pay a 5.9 cent dividend and additionally proposed a “return of value” of 11.5 cents, amounting to a return of around 15 per cent.

Shares of the fund, which trades on the London Stock Exchange as well as the Bermuda Stock Exchange, closed yesterday at $1.163.

The fund invests most of its assets in the Catco Diversified Fund, which invests in fully collateralised catastrophe reinsurance contracts written by the Bermuda reinsurer, Catco Re Ltd.

Shareholders can opt to receive their return of value as either income or capital, in the form of “B” shares.

In its statement yesterday, the fund said its target returns are Libor (the London Interbank Overnight Rate) plus 12 to 15 per cent. The one-year Libor rate was yesterday at 0.63 per cent, according to the Bankrate.com website.

“To that end, the directors believe that there is an optimum level of capital required to achieve these aims beyond which they may start to become impaired,” Catco’s statement read.

“The directors are therefore proposing to return up to approximately $35 million by way of the proposed Return of Value ...”

The fund’s net asset value has reached about $360 million, according to its website.

A special general meeting will be held on January 29 at Crawford House on Cedar Avenue, Hamilton, and if the return of value proposal is not approved, the fund’s directors intend to issue a special dividend of 11.5 cents.

Despite reports of plunging catastrophe reinsurance rates at the key January 1 renewals, Catco appears satisfied with the contracts it has managed to write.

“As at January 1, 2015, the Master Fund has deployed collateralised retrocession reinsurance capacity at rates in excess of the company’s target returns,” Catco’s statement reads.

At the launch of the Company, the Board of Directors indicated the intention to pay an annual dividend in

respect of any Fiscal Year of an amount equal to LIBOR plus 5 per cent of the Net Asset Value as at the

end of the relevant Fiscal Year.

The Board of Directors are declaring an annual dividend of $0.05929 in respect of the Ordinary Shares for

the year to 31 December 2014. The record date for this dividend will be 16 January 2015 and therefore

the Ordinary Shares will go ex-dividend on 15 January 2015. It is expected that this final dividend will be

paid to shareholders on 30 January 2015.