Third Point Re CEO Malloy bullish over progress
Dan Malloy, chief executive of Third Point Re, is upbeat about the progress the company has made as it looks to realign its portfolio. Over the past two years it has expanded its underwriting team in line with plans to write a more diverse portfolio targeting lines of business with higher margins.
Some of the high-profile individuals who have joined the team include David Govrin who joined from Berkshire Hathaway; David Drury from Chubb; Tracy Gibbons and her team from Allied World; and most recently David Sinclair from Trans Re.
“This team is supporting our growth in Bermuda,” Malloy told Monte Carlo Today.
“Property cat and specialty lines has been our incremental focus, and we’ve written approximately $60 million so far in those new lines of business this year.
“Specialty really started in the second quarter of this year. We see that reaching in the region of $80 to $85 million next year.”
Malloy said Third Point Re’s main goal target is to improve the profitability of its portfolio, which was originally structured for growth. It wants to move towards lines with better margins, moving its combined ratio, which was 106.8 percent last year, closer to the mid-90s percent in the process.
Malloy said this goal would be achieved by adding more profitable new lines of business, plus improvements in the company’s existing book, which has averaged about $600 million of gross written premiums over the past few years.
He added that the market is at the start of a new cycle, in which insurance companies are achieving year-on-year rate increases. These are sorely needed due to the losses that are coming through the market from various lines of business, outside the headline property/cat lines, he said.
“Those companies are our clients,” Malloy said. “A large share of our $600 million in business is seeing underlying rate increases and underwriting improvements, but we’re also seeing improvements in reinsurance terms and conditions.
“We feel relatively confident that even if you put no weight on the underlying improvements outpacing loss trends, we feel the terms and conditions and changes in the mix of that portfolio would produce 200 to 300 basis points. We’re seeing that loss ratio come down year on year.”
