Anew mortgage insurance contract helped Third Point Reinsurance Ltd. partially offset thedecline of its gross premiums written in the first quarter, but the companydoes not expect to see a great deal of such contracts added to its book.
CFOChristopher Coleman said during a May 6 earnings call that Third PointReinsurance had $36 million of new business in the first quarter. In its earningsrelease, the company disclosed that the new business had partially counteredthe 7.6% year-over-year decline in its gross written premiums in the firstquarter.
Chairman and CEO John Berger said $30 million of the newbusiness was a quota share of a mortgage insurance company and a small Lloyd'squota share of political risk.
TheCEO said Third Point Reinsurance will see the current mortgage insurancecontracts it has in place grow due to the huge demand for mortgage insurance.However, he said the company does not expect to see heaps of new mortgageinsurance contracts added to its business.
"Whatwe're hoping for is that quota shares really become part of the capitalstructure of the mortgage insurance companies given the restrictions onthem," Berger said. "We haven't done any of the GSE business, andthat clearly is a growing area for other companies, but today we've done noneof those."
TheCEO said one of Third Point Reinsurance's concerns when it comes to the GSEbusiness is the "fair amount" of potential earthquake exposure,particularly in California.
"I'mnot sure they really take that into account as an exposure on thatbusiness," Berger said.