Third Point Re

Bermuda headquartered, hedge fund backed reinsurance firm Third Point Re is set to return to underwriting property catastrophe reinsurance next year, but this time for its own balance-sheet and as a way to help reduce its combined ratio.

Hedge fund backed reinsurance firm Third Point Re revealed an, as expected, minimal loss from recent catastrophe events in the third-quarter and also highlighted why its strategy has the potential to outperform peers, by revealing a 14.4% investment return for the first nine months of the year.

John Berger’s stepping back from senior leadership roles at hedge fund backed reinsurance firm Third Point Re has driven further changes, as he hands over the CEO role at Third Point Re USA to Robert Bredahl, with Daniel Malloy now stepping up from CUO to CEO of Third Point Reinsurance Company.

The total return reinsurance model, or investment oriented reinsurance model, or hedge fund backed reinsurance model (depending on what you prefer to call it), remains a challenging strategy to execute on well, but more recent start-ups that are sponsored by an existing re/insurer and asset manager are favoured by S&P.

David Govrin, previously of Berkshire Hathaway and formerly a founder of a capital markets focused intermediary, has joined Third Point Reinsurance (USA) Ltd. as its executive vice president in charge of underwriting.

Hedge fund reinsurance firms have largely failed to produce the investment returns expected of them over the last few years, as financial market jitters hit their portfolios, but for A.M. Best the underwriting is key no matter the desire to produce a total-return.

John Berger is to step down from the Chief Executive Officer role at Bermuda based hedge fund backed reinsurance firm Third Point Re from March, with Robert Bredahl the current President and Chief Operating Officer set to succeed him.

Bermuda based hedge fund backed reinsurance firm Third Point Re saw its asset side outperform in the second quarter of 2016, as a rise in its combined ratio and a technical underwriting loss was compensated for by higher investment returns.

The two highest-profile proponents of the hedge fund reinsurance strategy, Third Point Re and Greenlight Re, have both benefited from very strong July investment returns, with a considerable boost to the year being received at both firms.

The performance of hedge fund reinsurers diverged in the opening months of 2016 following investment market volatility. Consistently being outperformed by traditional reinsurers Standard & Poor’s (S&P) questions the longevity, and success of the hedge fund reinsurance business model.