19 December 2014ILS

Third Point Re realigns ILS in deal with Hiscox

Bermuda-based Third Point Re is moving away from offering its own insurance-linked securities (ILS) offering, in what is a notable and significant strategic move for the company that will allow it to focus on its core reinsurance operations.

The change will be made by effectively folding its existing operations in this space into Hiscox's Kiskadee ILS platform. Hiscox had seeded Third Point Re’s ILS venture in the first place.

The company described the move as a realignment of its partnership with Hiscox Insurance Company (Bermuda) in the catastrophe reinsurance fund management business. Third Point Re intends to contribute certain resources of Third Point Reinsurance Investment Management into Hiscox's Kiskadee ILS platform while winding down any remaining exposure in the Third Point Reinsurance Opportunities Fund.

Third Point Re intends to make an investment in Kiskadee funds while Manoj Gupta, the lead portfolio manager for Third Point Reinsurance Investment Management, is expected to serve as an advisor to Kiskadee Investment Managers.

Manoj will also continue to serve in various underwriting and corporate roles with Third Point Re. In addition, both parties intend to further develop their strategic relationship to include non-ILS business opportunities.

John Berger, chief executive officer of Third Point Re said: "While our existing cat fund has delivered very attractive returns to investors since its inception in January 2012, we are mindful of the increasingly difficult conditions in the catastrophe reinsurance market in the near term and the increasing value of a broad underwriting platform.

“For investors that seek to participate in the catastrophe reinsurance market, we believe Hiscox provides an outstanding franchise for sourcing risk around the globe. We look forward to supporting Hiscox across both the Kiskadee ILS platform and non-catastrophe reinsurance opportunities in the future."