Third Point RE September 2017

Third Point September 2017 Investor Presentation

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

Third Point RE September 2017

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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