Third Point Reinsurance Ltd, the Bermudian reinsurer backed by hedge fund Third Point LLC, posted third-quarter net income of $72.1 million as the value of its investments gained.

The profit compared to a net loss of $195.7 million in the third quarter of 2015.

The company’s book value per share increased by 5.2 per cent to $13.55 per share from $12.88 per share as of June 30, 2016. At the close of regular trading in New York, before the results were released, Third Point Re’s share price closed at $11.30.

Third Point Re slashed the value of gross premiums written by nearly a third and its combined ratio was more than 100 per cent, indicating an underwriting loss.

However, the investments, managed by Dan Loeb’s hedge fund, performed well enough for the firm to make a sound profit for the quarter.

John Berger, the company’s chief executive officer, said: “During the third quarter, we generated premiums written of $142.6 million, a decrease of 30.6 per cent compared to the prior year’s third quarter, primarily due to one large reserve cover that was written in the prior year period.

“Our combined ratio for the quarter was 106.5 per cent, which was in line with expectations given current market conditions and lines of business on which we focus.

“Our investments continued to perform well through the third quarter resulting in a 5.2 per cent increase in diluted book value per share for the quarter.”

Investment returns for the quarter were 4 per cent, with the gains generated partly by Third Point’s long equity positions, with consumer and technology, media and telecommunications being notable performers, and partly by its credit portfolio.