Third Point RE investor presentation for the month of November 2016.
Our Company
- Specialty property & casualty reinsurer based in Bermuda
- A- (Excellent) financial strength rating from A.M. Best Company
- Began operations in January 2012 and completed IPO in August 2013
- Investment portfolio managed by Third Point LLC
- Total return focused
- Flexible and opportunistic reinsurance underwriting
- Superior investment management
Key Metrics
Total Return Business Model Designed To Deliver Superior Returns
Exclusive: Third Point is diving into the private and SPAC markets [In-Depth]
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
Experienced Senior Management Team
Organizational Structure – Key Entities
Flexible & Opportunistic Underwriting Strategy
[drizzle]
- Our total return model provides crucial flexibility in today’s market environment
- We leverage strong relationships to access attractive opportunities
- We are the lead underwriter on many of our transactions
- Limited property cat exposure
Traditional Quota Shares
- We focus on lines of business with volatility we believe is typically lower than that of most other reinsurance companies
- We provide reinsurance support to small and medium size insurers seeking surplus relief
- These transactions are typically relationship-driven, since reinsurance plays a key role in the client’s capital structure
Opportunistic Deals
- Our relationships allow us to often be the first call for many special situations
- We look for dislocated markets and distressed situations where higher risk-adjusted returns may be available
- We manage our downside exposure with structural features and contract terms and conditions
Reserve Covers
- Reserve covers provide clients with reinsurance protection, capital relief and potentially enhanced investment returns
- Relationships are key – decision-maker is typically the client’s CEO or CFO
- Our team has a reputation for sophisticated structuring to meet each client’s specific needs
Diversified Premium Base
Reinsurance Risk Management
Risk Management Culture
- Reinsurance business plan complements our investment management strategy: no property catastrophe excess treaties on rated balance sheet and premium and asset leverage, see slide14, lower than peer group
- Company-wide focus on risk management
- Robust underwriting and operational controls
Holistic Risk Control Framework
- Measure use of risk capital using internally-developed capital model, A.M. Best BCAR model and Bermuda Monetary Authority BSCR model
- Developed a comprehensive Risk Register that we believe is appropriate for our business model
- Instituted a Risk Appetite Statement that governs overall sensitivities in underwriting, investment, and enterprise portfolio
Ongoing Risk Oversight
- Own Risk Self Assessment (ORSA) report produced quarterly and provided to management / Board of Directors
- Provides management with meaningful statistics on our current capital requirement and comparisons to our risk appetite statement
- Growing in scope
- Low premium leverage and asset leverage compared to peer group
- Limited legacy reserves
- Limited catastrophe risk
See the full presentation below.
[/drizzle]