Bermuda reinsurer Third Point Re started 2019 with a record first quarter income of $132.9 million, driven by strong investment returns, although the company still paid out more money in claims than it is received in premiums.
The company’s net income for the quarter was a substantial increase from $26.0 million for the same period in 2018.
While it did not make an underwriting profit, Third Point Re’s combined ratio improved to 103.8 percent in the quarter, up from 104.5 percent for the first quarter of 2018.
Dan Malloy, the recently appointed interim CEO of Third Point Re, explained that the reinsurer is taking steps to achieve underwriting profitability, which includes focusing on higher margin business, and the hiring of a specialty lines underwriting team.
"We are pleased with our first quarter performance, which resulted in a return on beginning shareholders' equity of 11 percent for the period driven by strong investment returns. We generated net income of $132.9 million in the quarter which was a record quarter for Third Point Re," Malloy said.
Malloy continued: "Consistent with our ongoing plans to increase our focus on higher margin business, we wrote a modestly sized property cat portfolio at 1/1 and announced the hiring of a specialty lines underwriting team. Both of these efforts to expand our underwriting platform have gone better than expected and were critical steps in reshaping our underwriting portfolio in order to achieve underwriting profitability. Our combined ratio for the quarter was 103.8 percent and we expect this to improve over time as we execute on our underwriting plan."
Gross premiums were down 15.5 percent this quarter to $319.6 million, which the company attributes to certain contracts that did not renew due to underlying pricing, terms and conditions and contracts written in the prior year period on a multi year basis with no comparable premium in the current year period. This was partially offset by new contracts bound in the current year period.
Third Point Re, Results, Bermuda