Third Point Re profits to plunge

Bermuda-based Third Point Reinsurance expects its net profits to fall by up to 79 percent from the prior year.

In a Securities and Exchange Commission filing, Third Point Re estimated that its 2014 full-year profits will fall up to $53.4 million, compared with $227.3 million in 2013.

It added that it expects its combined ratio to improve to around 102 percent in 2014, compared with 107.5 percent in 2013.

The company’s US subsidiary, Third Point Re (USA), will pursue an offering of senior notes to partially finance the capitalisation of Third Point Reinsurance (USA).

On January 19, AM Best assigned ratings to Third Point Re’s US operations. It assigned a financial strength rating (FSR) of A- (Excellent) and an issuer credit rating (ICR) of ‘a-‘ to Third Point Reinsurance (USA) (TPRUSA) (Bermuda) and an ICR of ‘bbb-‘ to its parent, Third Point Re (USA). The outlook assigned to the ratings is stable.

The rating agency said that it was concerned that the “management team may be challenged by the increased competition from established carriers as well as other alternative capital insurers, also in the start-up phase.”