@Austinhealeysprite this popped up on my radar about 4 months...

@Austinhealeysprite this popped up on my radar about 4 months ago at 90c or so.
I don't understand insurance well but I hear it's competitive, this small company competes with global giants. It's had mismanagement issues with much money wasted on IT upgrades that haven't helped - it's systems need further investment.
Of course it's very cheap on earnings so I was interested to buy - asked a friend of a friend who works at the district court in sunny Christchurch. Apparently there is a backlog of insurance claims coming through in the next few months due to a limitation period from the Christchurch February 2011 Earthquake.
Unless you have lived in the city before and after you probably have no conception of the scale of what happened. We knew about the Alpine fault but never thought Chch would be hit as it's a long way away.
Anyways 2011 earthquake 2017 payout? That's a load of rubbish right Uberrimae Fidae my hairy ass. How would you feel about this?
You would be fighting it through the courts right?
http://i.stuff.co.nz/the-press/busi...ithholding-report-from-Christchurch-architect
So the company is very cheap it looks like to me, there is a provision for chch earthquakes but it looks like that may blow out. They have raised the idea of recapitalization through a runoff company.
For me it's another I am not sure again, maybe wait another couple of months and see if the situation around the claims cristallises a bit more.
If someone was to go through the 100 claims then they could determine the probable liability just like at MRM one could determine the liquidation value. For me I am lazy I just watch wait and see what happens - wait for recap or not. I think this is more reliable as well.
If I miss a good opportunity it costs me nothing, I am happy to miss a dozen for the one I personally am sure about.
On the insurance cycle I hear it is a cyclical industry like many others, the time to buy is after some years of doom and gloom on the anticipation that things will eventually get less worse. That can be dangerous, however this anticipation is in my view fundamentally related to economics; I don't pretend to understand the economics of insurance cycles. In the oil industry I am more sure that Capex cuts will eventually restore balance and can wait it out.
Insurance companies make money on the float, loaning out money they have taken in on premiums for interest. As we know interest rates have been very low and expectations were for this to continue, then the unexpected happened in the form of Trump and we have seen a rerating in the sector with the likes of QBE and TWR also. Well only unexpected if like the pundits you believed you could predict the future. I expect I have no idea of what will happen next.
Best wishes to investors and good luck to traders/speculators - they need all the help they can get