Investment income boosts Third Point Re results

Bermuda-based Third Point Re has swung to profit in the fourth quarter of 2017 and saw its full year 2017 results jump due to investment profits while underwriting produces losses.

Net investment income of $67.2 million drove net income to $44.3 million in the fourth quarter of 2017 compared to a net loss of $46.7 million in the same period a year ago.

The net underwriting loss in the fourth quarter was $9.2 million, similar to the negative $9.5 million in the same period a year ago. The combined ratio deteriorated to 107.1 percent from 105.0 percent over the period. Third Point Re said that it did not have any catastrophe losses in the fourth quarter of 2017. Gross premiums written doubled to $164.2 million from $80.8 million over the period.

"Third Point Re generated a market leading return for its shareholders in 2017. Our return on equity was 2.8 percent in the fourth quarter bringing the full year to 20.1 percent, driven largely by strong investment performance," commented CEO Rob Bredahl.

In the full year 2017 net investment income of $392.0 million drove net income to $277.8 million from $27.6 million in 2016. The underwriting loss was $42.6 million after a negative $50.1 million in 2016. The combined ratio improved slightly to 107.7 percent from 108.5 percent over the period. Gross premiums written grew to $641.6 million in 2017 from $617.4 million in 2016.

"We have been encouraged by recent improvements in reinsurance terms and conditions and underlying pricing and expect our underwriting results to improve over the next 12 to 24 months,” Bredahl noted. “We remain confident that the improving underwriting environment and our proven investment strategy will continue to produce attractive returns for our shareholders over time."

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