Third Point Re grows in Q1; forecasts US boost
Bermuda-based Third Point Re enjoyed strong growth in the first quarter of 2015 as its gross written premiums in its property/casualty reinsurance segment grew by 159.8 percent.
Its chief executive also said the company had developed a strong pipeline of new business due in part to the expansion of its underwriting platform to include a new US office.
The company reported an increase of $131.2 million to $213.4 million, compared with $82.1 million for the three months ended March 31, 2014, driven by new business written and contracts renewed in the first quarter that did not have comparable premiums in the prior year period.
Third Point Re’s net income grew by 26.9 percent, reaching $50.5 million, compared with $39.8 million in the same period a year earlier.
Net premiums earned in the property/casualty reinsurance segment increased by $66.8 million, or 92.4 percent, to $139.1 million, which reflects net premiums earned on a larger in-force underwriting portfolio compared to the three months ended March 31, 2014.
The segment made a net underwriting loss of $3.9 million and $5.2 million for the three months ended March 31, 2015 and 2014, respectively. The improvement in the net underwriting loss is due to a higher in-force book of business for 2015 and improvement in the combined ratio, the company said.
"Through our total return business model, we aim to generate superior returns for investors by writing profitable reinsurance business and successfully investing the float generated from our reinsurance operations and our capital base through an exclusive arrangement with Third Point, our investment manager," said John Berger, chairman and chief executive officer.
"In the first quarter, we generated net income of $50.5 million and a return on beginning shareholders' equity of 3.5 percent by successfully executing on our business model.
“Compared to last year's first quarter, our combined ratio improved to 102.8 percent from 107.1 percent. Premiums written in the first quarter were $213.3 million, an increase of 143.6 percent and we continue to develop a strong pipeline of new business due in part to the expansion of our underwriting platform to include a new US office."
The Catastrophe Risk Management segment, which includes the combined results of Third Point Reinsurance Opportunities Fund (the Catastrophe Fund), Third Point Reinsurance Investment Management and Third Point Re Cat (the Catastrophe Reinsurer) posted a net loss of $0.2 million compared with $0.1 million in 2014.
Net assets under management for the Catastrophe Fund were $77 million as of March 31, 2015 compared to $119.7 million in 2014.
In December 2014, the company announced that it would no longer accept investments in the Catastrophe Fund, that no new business would be written in the Catastrophe Reinsurer and that the Company would be redeeming all existing investments in the Catastrophe Fund, as it winds down due to challenging market conditions and competition with other collateralised reinsurance and insurance-linked securities vehicles.