Third Point September 2017 Investor Presentation

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Third Point RE’s investor presentation for the month of September 2017.

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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

Third Point RE September 2017

Experienced Senior Management Team

Third Point RE September 2017

  • Strong business relationships
  • Expertise in writing all lines of property, casualty &specialty reinsurance
  • Track record of capitalizing on market opportunities and producing strong underwriting results
  • Significant business-building experience

Organizational Structure – Key Entities

Third Point RE September 2017

Flexible & Opportunistic Underwriting Strategy

Third Point RE September 2017

  • 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

Third Point RE September 2017

  • 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

Third Point RE September 2017

  • Our relationships allow us to often be the first call for many special situations
  • We look for dislocated markets and distressed situations where higher riskadjusted returns may be available
  • We manage our downside exposure with structural features and contract terms and conditions

Reserve Covers

Third Point RE September 2017

  • 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

Evolution Of Our Portfolio

Third Point RE September 2017

  • Portfolio of primarily Florida carriers built from past relationships. The portfolio now also includes a Northeast carrier
  • Identified Assignment of Benefits (AOB) issue in Florida early, but did not fully price for it
  • Attempted to adjust ceding commission on renewals, but the market did not follow us
  • Portfolio has decreased to $66 million from three clients, and is likely to decrease further in 2017

Third Point RE September 2017

  • Portfolio includes mostly California specialty writers and MGAs
  • Market conditions vary widely by state, segment and carrier
  • The portfolio has performed reasonably well, though not as well as originally expected (due to underperformance of one large contract)
  • We will reduce this portfolio in 2017 if we cannot achieve adequate pricing improvement on renewals

Third Point RE September 2017

  • Portfolio of MGA-driven nonstandard auto business built from past relationships
  • Underlying rate increases not enough to counter increasing loss severity (due to more expensive car parts) and frequency (due to distracted driving and increased miles driven)
  • Re-oriented our approach to focus on best-in-class carriers/MGAs with the size and differentiation to navigate difficult market conditions

See the full presentation below.

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