Newly formed property/casualty insurer Third Point Reinsurance was assigned a financial and credit strength rating of A- (Excellent) by A.M. Best, with the rating agency giving the vehicle a stable outlook.
“The ratings of [Third Point Re] are based on its excellent risk-adjusted capitalization, experienced management team and prudent business plan,” A.M. Best said in a note. “Partially offsetting these positive rating factors are the start-up nature of the company, the greater investment risk associated with an alternative investment strategy, as well as the increased competition in the reinsurance marketplace that may challenge some of the tenets of [Third Point Re’s] business plan.”
The statement adds that the rating agency anticipates that Third Point Re’s management will be “challenged by competition from established reinsurers as well as other start-up entities. The addition of more capacity into an already overcapitalized reinsurance marketplace could pressure underwriting margins.”
Third Point Re was established by hedge fund guru Daniel Loeb founder of the $8 billion Third Point hedge fund, according to Bloomberg. Loeb recruited Bermuda-based Alterra Capital Holdings Ltd CEO John Berger to run the $500 million start up.
