9 May 2014 News

Third Point Re posts disappointing Q1 results

Third Point Re, the reinsurance firm backed by Dan Loeb’s hedge fund Third Point, posted disappointing results for the first quarter of 2014 as its profits declined, its gross written premiums fell and its chairman warned on challenging conditions in the market.

The company made a net profit of $39.8 million for the quarter compared with $74.4 million for the first quarter of 2013, a decrease of 46.6 percent. Its gross written premiums fell to $87.6 million compared with $96 million a year earlier mainly because of the cancellation of some contracts because of market conditions.

Its combined ratio for the period fell but remained at a comparatively high 107.1 percent compared with 111.6 percent in the first quarter in 2013.

John Berger, chairman, chief executive and chief underwriting officer of Third Point Re, highlighted the positives and said he remains optimistic. He noted that its diluted book value per share increased by $0.31 per share, or 2.4 percent, to $13.43per share in the quarter compared with a year earlier.

“We continue to develop our business according to plan,” Berger said. “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. 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 Re’s property/casualty reinsurance unit’s gross written premiums decreased by $10.7 million, or 11.6 percent, to $82.1 million. The firm said this was due to the non-renewal of three existing contracts partially offset by growth from new business written in the quarter. It said the largest contract not renewed was its crop contract. It has exited the line of business given current market conditions.

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