Profits sink at Third Point Re

Bermuda-based Third Point Re posted growth in 2014, despite profits diving by 77.8 percent.

Its profits fell to $50.4 million for the year ended December 31, 2014, compared with $227.3 million for 2013. In the fourth quarter of 2014, the reinsurer reported a net loss of $14.7 million, a decrease of 118.3 percent, compared with $80.1 million in the fourth quarter of 2013. This was partly driven by a fall in investment income to $85.6 million in 2014, compared with $258.1 million in 2013.

However, its gross written premiums increased to $613.3 million in 2014, compared with $401.9 million in 2013.

Third Point Re’s property and casualty drove the growth, with growth in GWP of 53.8 percent to $601.3 million in 2014, compared with $393.6 million in 2013. The reinsurer said the increase was primarily due to new business written, partially offset by business not renewed.

Its combined ratio improved to 102.2 percent for the year, compared with 107.5 percent in 2013.

"The overall results for the quarter were disappointing due to challenging investment market conditions," said John Berger, chairman and chief executive officer. "While slightly higher than the returns of the broader hedge fund indices, the return on our investment portfolio managed by Third Point was slightly negative for the quarter.

“We are making significant progress in developing our reinsurance business and believe we are well positioned to benefit from future investment portfolio gains. In the fourth quarter of 2014, gross premiums written increased by fifty percent, our combined ratio dropped to 100.2 percent and our float grew to $389.2 million.

“We are pleased that we have completed the initial capitalisation of Third Point Reinsurance (USA), our US underwriting platform. We expect continued growth in the near term due to this expansion of our underwriting platform and a robust deal pipeline."