Third Point Re is to continue with its current business plan in spite of a difficult first quarter.
The company reported lower income due to reduced investment return and lower premiums written in the current challenging market.
Net income was recorded at $39.8 million for the first quarter of 2014, compared with $74.4 million, a significant decrease of 46.6 percent.
Gross written premiums were recorded at $87.6 million, down from $96 million for the first quarter of 2013.
The returns for the three months ended March 31st, 2014 were driven primarily by asset-backed securities and to a lesser extent by gains in equity positions and corporate credit.
"We continue to develop our business according to plan," says John Berger, chairman, CEO and chief underwriting officer. "In the first quarter of 2014, our 'Total Return' approach generated growth in diluted book value per share of 2.4 percent. Investment returns remained solid and our combined ratio improved to 107.1 percent from 111.6 percent in the previous year's first quarter.”
The firm did not renew a number of large contracts during the quarter and has pulled back entirely from its crop reinsurance business citing market conditions, causing the drop in premiums written. It also notes that as it deals in large reinsurance transactions which sometimes might not be renewed it is hard to compare some of these factors year on year.
Berger continues, “Reinsurance market conditions remain challenging, particularly with new capital entering the market, but we remain pleased with the number of attractive opportunities we are seeing."
Third Point, Q1, results