A.M. Best Affirms Ratings Of Third Point Re

March 30, 2017

A.M. Best has affirmed the Financial Strength Rating of A- [Excellent] and the Long-Term Issuer Credit Ratings [Long-Term ICR] of “a-” of Third Point Reinsurance Company Ltd. [TPRCL] [Bermuda] and Third Point Reinsurance [USA] Ltd. [TPRUSA] [Bermuda].

A.M. Best also has affirmed the Long-Term ICRs of “bbb-” of Third Point Re [USA] Holdings, Inc. [TP USA] [Wilmington, DE] and its ultimate holding company, Third Point Reinsurance Ltd.[TP Re] [Bermuda].

Concurrently, A.M. Best also has affirmed the Long-Term Issue Credit Rating [Long-Term IR] of “bbb-” on the $115 million 7% fixed senior unsecured notes due 2025 of TP USA. The outlook of these Credit Ratings is stable.

The ratings agency said, “The ratings of TPRCL are based on its strong risk-adjusted capitalization, acceptance in the marketplace and the solid performance of its investment portfolio. The ratings also consider TPRCL’s seasoned management team and the strong enterprise risk management that is in place. The ratings of TPRUSA consider the above mentioned attributes as well as support from TP Re, its ultimate parent, and TPRCL.

“Partially offsetting these positive rating factors are the greater investment risk associated with its alternative investment strategy and the continued competition and capacity in the reinsurance marketplace. A.M. Best is concerned with the company’s trends in underwriting performance and is looking for it to reverse course. If underwriting trends for TPRCL deteriorate further it could place negative pressure on the rating. A.M. Best will continue to closely monitor the company.

“TPRCL and TPRUSA could be exposed to a convergence of events that could test their capital strength. The underwriting and significant investment risks could have a duplicative adverse effect on their risk-adjusted capital levels. The assets of TPRCL and TPRUSA are managed by Third Point LLC, a New York-based SEC-registered investment manager. TPRCL’s and TPRUSA’s assets are in separate portfolios managed by Third Point LLC, which are not combined with assets of other investors at Third Point LLC.”

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