A.M. Best has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Third Point Reinsurance Company (TP Re) in Bermuda.
Partially offsetting positive rating factors are the start-up nature of TP Re, the greater investment risk associated with its alternative investment strategy and the increasing competition and capacity in the reinsurance marketplace, said the ratings firm.
TP Re could be exposed to a convergence of events that could test its capital strength. The underwriting risk along with significant investment risk could have a duplicative adverse effect on its risk-adjusted capital.
The assets of TP Re will be managed by Third Point, a New York-based SEC-registered investment manager with over $10.1 billion of assets under management. TP Re's assets will be in a separate portfolio within Third Point LLC and will not be combined with other investors at Third Point.
In addition, A.M. Best anticipates that TP Re's management will be challenged by competition from established reinsurers as well as other start-up entities.
