Hedge fund backed reinsurer Third Point Re has noted that the catastrophe events of 2017 have had a positive impact on rates for the type of deals it focuses on, with the company feeling “pretty good” about a moderate positive trend for the remainder of 2018.
This is according to the firm’s President and Chief Executive Officer (CEO), Rob Bredahl, who said during the firm’s first-quarter 2018 earnings call that the company has witnessed some improvements in light of the catastrophe events of 2017.
Bredahl explained that over the last few weeks, discussions with brokers and reinsurance company peers underlined flat renewals for Florida cat submissions, which Bredahl described as “too bad” and that contributes to a broader feeling of disappointment across the market with regards to cat renewals.
“Interestingly, we think the cats might have had a bigger impact on pricing, a positive impact on the types of deals that we focus on, which to date have been surplus relief type deals,” said Bredahl.
He continued to explain that ultimately Third Point Re feels this type of business has been underpriced for some time, although this was being masked by a period of low-loss years leading up to the very costly 2017.
“So, with the cat losses, we have seen some improvement. Just roughly, I would say we’re renewing deals at maybe 200 to 300 basis points better. It happened that we saw more of an improvement in our portfolio in the first quarter because of the mix, but there’s a noticeable improvement.
“Now, whether that continues or not, I guess we’ll see. We’re feeling pretty good about a moderate positive trend for the rest of the year,” said Bredahl.
