Third Point Re reports improved underwriting, investment results

The third-quarter results reported by Bermuda-based reinsurer Third Point Reinsurance Ltd., backed by hedge fund manager Dan Loeb’s Third Point LLC, show improvements in underwriting and investment returns as well as growing income from its catastrophe fund business.

“Following our initial public offering in August 2013, we are off to a strong start as a public company thanks to improving underwriting results and excellent investment results,” said John Berger , Chairman, Chief Executive Officer and Chief Underwriting Officer.  “While reinsurance market conditions remain challenging, we expect further improvement in our underwriting results as our reinsurance operation continues to gain scale.”

For the latest quarter, Third Point Re reported net income of 2013 of $46.6 million, compared with $39.6 million for the third quarter of 2012.  For the nine months ended September 30, 2013, Third Point Re reported net income of $147.2 million, compared with $38.7 million for the nine months ended September 30,2012.

Gross premiums written increased by $2.0 million, or 4.8%, to $43.7 million for the three months ended September 30, 2013 from $41.7 million for the three months ended September 30, 2012.   Gross premiums written increased by $68.7 million, or 42.3%, to $231.2 million for the nine months ended September 30, 2013 from $162.5 million for the nine months ended September 30, 2012.

Third Point Re began underwriting in January 2012, so the improvement this year will go down well with its shareholders who came on board when the firm floated on the New York Stock Exchange earlier this year.

Premiums earned are up even more, and in the latest quarter increased $27.5 million, or 80.1%, to $61.8 million.  Net premiums earned for the nine months ended September 30, 2013 increased $92.8 million, or 147.3%, to $155.8 million.

After attributing income to non-controlling interests (i.e., the minority third-party investors in the Catastrophe Fund), net income from the firms third-party fund management business were $2.7 million for the third quarter of 2013 and $2.6 million in the nine months ending September 30, 2013. Net assets under management within the Third Point Reinsurance Opportunities Fund Ltd. and any private accounts at Third Point Reinsurance Investment Management Ltd. were $100.5 million at September 30, 2013.

As expected the investment results delivered by the hedge fund strategy at Third Point have assisted with its income growth. The third-party capital catastrophe fund contribution is expected to grow over the coming months and it will be worth keeping an eye on this segment to see how Third Point Re can lift the assets under management in that division in 2014 and beyond.