Hedge fund-backed reinsurer Third Point Re has posted a net income of $29.7 million for the fourth quarter of 2019, compared to a $298 million loss in the prior year quarter.
This swing was boosted by healthy investment returns of 2.4% for the quarter (compared to a 11.4% loss the previous quarter), and 12.4% for the full year.
Net income for the full year hit $200 million, against a $317 million loss incurred across 2018.
“We are very pleased with our results for the fourth quarter and full year of 2019. Our return on equity was 2.1% in the fourth quarter bringing the full year to 16.7% and our diluted book value per share at the end of the year was $15.04,” commented Dan Malloy, Chief Executive Officer.
Gross premiums written increased by $14.1 million, or 11.7%, to $134.2 million for Q4, up from $120.1 million for the three months ended December 31, 2018.
The increase in gross premiums written was primarily due to $85.6 million of new premium written in the period, partially offset by the net impact of contract extensions, cancellations and contracts renewed with no comparable premium in the comparable period.
“Our combined ratio for the year was 103.2%, of which 4.1 percentage points, or $29.0 million, was attributable to catastrophe events that occurred during the year. Our combined ratio continues to improve as we execute on our shift in underwriting strategy,” Malloy added.
“Our year to date investment return of 12.8% has contributed significantly to overall profits for the year.
“With underlying insurance and reinsurance market conditions both improving across many of the lines of business that we write, we believe we are well positioned to deliver increasingly attractive returns to shareholders and remain on track to achieve our goal of underwriting profitability in 2020.”
For Q4, the reinsurer incurred net catastrophe losses of $16.3 million, net of reinstatement premiums and profit commission adjustments, or 8.2 percentage points on the combined ratio, primarily related to Typhoon Hagibis, compared to $18.5 million in the prior year quarter 8.8 percentage points on the combined ratio, related to the California wildfires and other catastrophe events.
The improvement in the net underwriting results for the fourth quarter compared to prior year periods, after giving effect to catastrophe losses and reserve development, was primarily due to a shift in the mix of business, including earnings on new property catastrophe and specialty business.
