Hedge fund-backed reinsurer Third Point Re has entered into an Amended and Restated Collateral Assets Investment Management Agreement that will help fund a realignment of its investment strategy, one influenced by an increasing shift towards catastrophe underwriting.
The company initially reallocated $350 million and expects to reallocate additional amounts to fixed income strategies over the next few months.
In the first-quarter of 2019, Third Point Re’s significantly improved investment performance more than offset another underwriting loss, helping the firm report quarterly net income of $132.9 million.
The company had said previously in the third-quarter of 2018 that it remained investment-oriented, with the performance of this side of the balance sheet being a key driver of its financial results.
Third Point Re says that the Amended Collateral Assets IMA signed with the Third Point LLC and effective May 24 will help bolster an increasing underwriting risk profile including writing property catastrophe business that the company says requires additional risk capital.
Third Point Re also states that this adjustment will meet the need for greater liquidity to pay potential claims also as a result of its changing underwriting risk profile, which now exposes the company to nat cats and other loss events where there could be a need to pay claims to our clients on short notice.
Lastly, the company says the agreement will help ensure that it maintains the highest level of balance sheet strength in light of A.M. Best revising its rating outlooks of Third Point Re to negative from stable.
