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Third Point Re dissatisfied with 2020 underwriting result

24th February 2021 - Author: Luke Gallin

Third Point Re has announced net income of $134.4 million for the fourth-quarter of 2020 and $143.5 million for the full-year 2020, as claims related to catastrophes and the COVID-19 pandemic saw the firm report an underwriting loss for both periods.

third-point-re-logoFor the quarter, net income actually improved from the $29.7 million posted by the firm a year earlier, while full-year 2020 income fell from the $200.6 million posted for 2019.

Gross written premiums (GWP) increased by 23.4% for the quarter to $165.6 million, driven primarily by $45.5 million of new casualty premium written in the period. For the full-year, GWP fell by almost 7% to $588 million, driven by certain contracts that Third Point Re chose not to renew.

In Q4 2020, Third Point Re has reported net catastrophe losses of $7 million, net of reinstatement premiums and profit commission adjustments, primarily related to Hurricanes Delta and Zeta.

For the full-year 2020, the reinsurer incurred net catastrophe losses of $36.6 million, net of reinstatement premiums and profit commission adjustments, related to Hurricane Laura and other cat events during the year.

Additionally, Third Point Re has reported that the COVID-19 pandemic drove net losses of $11.6 million for the quarter and of $46.7 million for the full-year, driven by event cancellation, property business interruption, and certain casualty and multi-line quota share contracts.

For the fourth-quarter and full-year 2020, Third Point Re recorded an increase in net underwriting loss of $37.2 million and $34.6 million, respectively.

Dan Malloy, Chief Executive Officer (CEO) of Third Point Re, commented: “For the fourth quarter, we produced a return on equity of 9.4% driven by strong investment performance. Our diluted book value per share at the end of the quarter was $16.42. The combined ratio for the fourth quarter was 123.0%, which included $37.2 million, or 20.4 percentage points on the combined ratio related to prior year reserve development where we increased certain casualty reserves in response to our accumulated loss experience and the broader industry trends of social inflation. Our fourth quarter results also included $18.6 million attributable to catastrophe losses and the ongoing impacts of COVID-19, for a total impact of 10.2 percentage points on the combined ratio.

“Our previously announced merger with Sirius Group is expected to close on February 26 and we are looking forward to welcoming our new colleagues.”

Sid Sankaran, Chairman of Third Point Re, added: “While we are not satisfied with the underwriting results in 2020, with the exceptional talent, global footprint and robust balance sheet of the combined company, we will have a strong base for building an innovative, disciplined and sustainable business. We are aiming to enhance our existing relationships and improve the economics of our key lines of business, while looking at ways that we can grow intelligently and leverage technology to improve how we manage risk, use data and develop new strategic opportunities.”

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