Loeb’s Third Point Reinsurance Ltd. Shuns Acquisitions in U.S., Europe

By and | February 12, 2015

Third Point Reinsurance Ltd., the Bermuda-based company co-founded by hedge-fund manager Dan Loeb, said buying a competitor in the U.S. or Europe could clash with its business model.

“One of our strengths is we can tell people that our money is managed” by Loeb’s Third Point LLC, said John Berger, the reinsurer’s chief executive officer, at a conference in New York on Wednesday. For European and U.S.-based companies, there are usually “restrictions on how you can invest the money.”

When Third Point Re went public in 2013, it highlighted how Loeb’s hedge-fund firm would be overseeing its investment portfolio, potentially helping the company achieve higher returns. That model means the company takes on more risk on the asset side of its balance sheet than some of its competitors, Berger said.

“If you have to deviate from that, that changes the story,” he said. “We don’t expect any mergers to make sense in the near term.”

Reinsurers, which help insurance companies shoulder risk, have been consolidating to gain scale as a glut of capital pushes down prices for coverage. Last month, XL Group plc agreed to buy Catlin Group Ltd. for about $4 billion, and AXIS Capital Holdings Ltd. and PartnerRe Ltd. announced plans to combine, creating a firm worth about $11 billion.

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