Third Point Reinsurance Ltd, a hedge fund strategy reinsurer owned by Daniel Loeb’s Third Point LLC announced that it is winding down its catastrophe reinsurance fund.
Two years ago, Third Point Reinsurance partnered with Hiscox Insurance Company (Bermuda) Limited in establishing the catastrophe fund—Third Point Reinsurance Opportunities Fund Ltd. The catastrophe fund was structured through a quota share agreement.
In a statement, John Berger, CEO of Third Point Reinsurance explained, “While our existing cat fund has delivered very attractive returns to investors since its inception in January 2012, we are mindful of the increasingly difficult conditions in the catastrophe reinsurance market in the near term and the increasing value of a broad underwriting platform.”
In recent years, the catastrophe reinsurance rates decline because of the below-average catastrophe claim and an increase in alternative capital pouring the market through insurance-linked securities (ILS).
Third Point Reinsurance re-aligns partnership with Hiscox
Third Point Reinsurance re-aligned its partnership with Hiscox Insurance Company. The hedge fund strategy reinsurer said it will contribute some of its resources into the Kiskadee ILS of Hiscox.
“For investors that seek to participate in the catastrophe reinsurance market, we believe Hiscox provides an outstanding franchise for sourcing risk around the globe,” said Berger.
Third Point Reinsurance to invest in Kiskadee funds
Third Point Reinsurace also intends to make an investment in Kiskadee funds. Manoj Gupta, lead portfolio manager for Third Point reinsurance Investment Ltd. Gupta is expected to serve as an advisor to Kiskadee Investment Managers Ltd. He will continue to serve in various underwriting and corporate roles at Third Point Reinsurance.
Berger said, “We look forward to supporting Hiscox across both the Kiskadee ILS platform and non-catastrophe reinsurance opportunities in the future.”
Third Point Reinsurance and Hiscox intend to develop their strategic relationship further including non-ILS business opportunities.
Earlier this month, Third Point Reinsurance hired Thomas Wafer and Jonathan Norton to help establish and manage its operations in the United States. The hedge fund strategy reinsurer said it would establish a new subsidiary and a new office in the country to be able to originate incremental reinsurance business and to improve its reinsurance broker relationships.