Third Point Reinsurance posts a big increase in its profits in of 2013 – its second full year in operation. John Berger, its chief executive, praises what the company had achieved in developing the systems underlying both the underwriting and investment sides of the business.
The company made a net profit of $227.3 million in 2013 compared with $99.4 million for the year ended December 31, 2012, an increase of 128.7 percent.
The company’s gross written premiums increased by $203.2 million, or 106.7 percent, to $393.6 million in 2013 compared with $190.4 million the year before. It said these increases were the result of the development of underwriting relationships with intermediaries and reinsurance buyers and the timing of the completion of several large transactions.
The combined ratio for the company’s property/casualty business in 2013 was 107.5 percent compared to 129.7 percent for the year ended 2012. It said the improvement in underwriting results was primarily due to lower crop losses recorded in the 2013 periods and a decrease in general and administrative expenses as a percentage of net premiums earned.
For the year ended December 31, 2013, the company recorded net investment income of $253.2 million, compared to $136.4 million for the year ended December 31, 2012. The return on the company's investments, managed by its investment manager, Third Point LLC, was 23.9 percent for the year ended December 31, 2013 compared to 17.7 percent for the year ended December 31, 2012.
The company says this investments result was driven primarily by equity positions and to a lesser extent by gains in structured credit, corporate credit and macro positions.
“In 2013, our second year of operation, we made great strides in establishing our ‘Total Return’ platform, a combination of best in class reinsurance underwriting and market leading investment management,” says Berger. “Thanks to improving underwriting results and exceptional investment returns, we increased diluted book value per share by more than 20 percent for the year.”
Third Point Re, annual results