Commission File Number 001-35039

THIRD POINT REINSURANCE LTD.

(Exact name of registrant as specified in its charter)

Bermuda		98-1039994
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer (do not check if a smaller reporting company)	x	Smaller reporting company	¨

•	limited historical information about us;

•	operational structure currently is being developed;

•	fluctuation in results of operations;

•	more established competitors;

•	losses exceeding reserves;

•	downgrades or withdrawal of ratings by rating agencies;

•	dependence on key executives;

•	dependence on letter of credit facilities that may not be available on commercially acceptable terms;

•	potential inability to pay dividends;

•	unavailability of capital in the future;

•	dependence on clients’ evaluations of risks associated with such clients’ insurance underwriting;

•	suspension or revocation of our reinsurance license;

•	potentially being deemed an investment company under U.S. federal securities law;

•	potential characterization of Third Point Reinsurance Ltd. and/or Third Point Reinsurance Company Ltd. as a PFIC;

•	dependence on Third Point LLC to implement our investment strategy;

•	termination by Third Point LLC of our investment management agreement;

•	risks associated with our investment strategy being greater than those faced by competitors;

•	increased regulation or scrutiny of alternative investment advisers affecting our reputation;

•	potentially becoming subject to United States federal income taxation;

•	potentially becoming subject to U.S. withholding and information reporting requirements under the FATCA provisions;

•	other risks and factors listed under “Item 1A. Risk Factors” and elsewhere in this Annual Report.

PART I.

Item 1. Business

Overview

We are a Bermuda-based property and casualty reinsurer with a reinsurance and investment strategy that we believe differentiates us from our competitors. Our goal is to deliver attractive equity returns to shareholders by combining profitable reinsurance underwriting with superior investment management provided by Third Point LLC, our investment manager.

Our reinsurance strategy is to be highly opportunistic and disciplined. During periods of extremely competitive or soft reinsurance market conditions we intend to be selective with regard to the amount and type of reinsurance we write and conserve our risk-taking capital for periods when market conditions are more favorable to us from a pricing perspective.

Substantially all of our investable assets are managed by our investment manager, Third Point LLC, which is wholly owned by Daniel S. Loeb, one of our founding shareholders. Third Point LLC is an SEC-registered investment adviser headquartered in New York, managing $13.9 billion in assets as of December 31, 2013. We directly own our

	2013							2012
	Amount				Percentage of Total			Amount				Percentage of Total
	($ in thousands)
Property and Casualty Reinsurance Segment
Property	$	67,612			16.8	%		$	103,174			54.2	%
Casualty	210,017				52.2	%		44,700				23.5	%
Specialty	115,959				28.9	%		42,500				22.3	%
	393,588				97.9	%		190,374				100.0	%
Catastrophe Risk Management Segment	8,349				2.1	%		—				—	%
Total	$	401,937			100.0	%		$	190,374			100.0	%

•	creative solutions that address the specific business needs of our clients;

•	rapid and substantive responses to structuring and pricing quote requests;

•	financial security; and

•	clear indication of risks we will and will not underwrite.

	2013							2012
	Premiums written				% of Total			Premiums written				% of Total
	($ in thousands)
Name of broker
Aon Benfield - a division of Aon plc	$	111,865			27.8	%		$	22,000			11.6	%
Guy Carpenter & Company, LLC	89,125				22.2	%		65,073				34.2	%
Advocate Reinsurance Partners, LLC	57,994				14.4	%		22,473				11.8	%
BMS Intermediaries	46,095				11.5	%		5,269				2.8	%
Other brokers	40,246				10.0	%		33,059				17.4	%
Total broker placed	345,325				85.9	%		147,874				77.8	%
Other	56,612				14.1	%		42,500				22.2	%
	$	401,937			100.0	%		$	190,374			100.0	%

•	require our clients to maintain a meaningful risk position in their business;

•	pay our clients a commission based upon their actual expenses and offer an additional commission as an incentive based upon profitability;

•	include deficit carry-forward provisions in our multi-year contracts which allows us to potentially offset underwriting losses from one year to the next;

•	charge the client a premium for reinstatement of the amount of reinsurance coverage to the full amount reduced as a result of a reinsurance loss payment, which we refer to as a reinstatement premium;

•	require specific levels of rate increases on the underlying insurance policies.

•	the client’s and industry historical loss data and current market conditions;

•	the business purpose served by a proposed contract;

•	the client’s pricing and underwriting strategies;

•	the expected duration for claims to fully develop;

•	the geographic areas in which the client is doing business and its market share;

•	the reputation and financial strength of the client;

•	the reputation and expertise of the broker;

•	proposed contract terms and conditions; and

•	reports provided by independent industry specialists.

	2013				2012
	($ in thousands)
Gross reserves for loss and loss adjustment expenses, beginning of year	$	67,271			$	—
Less: loss and loss adjustment expenses recoverable, beginning of year	—				—
Net reserves for loss and loss adjustment expenses, beginning of year	67,271				—
Increase (decrease) in net loss and loss adjustment expenses incurred in respect of losses occurring in:
Current year	144,509				80,306
Prior years'	(4,697		)		—
Total incurred loss and loss adjustment expenses	139,812				80,306
Net loss and loss adjustment expenses paid in respect of losses occurring in:
Current year	(27,528		)		(13,035		)
Prior years'	(54,501		)		—
Total net paid losses	(82,029		)		(13,035		)
Net reserve for loss and loss adjustment expenses, end of year	125,054				67,271
Plus: loss and loss adjustment expenses recoverable, end of year	9,277				—
Gross reserve for loss and loss adjustment expenses, end of year	$	134,331			$	67,271

•

Composition of Investments : At least 60% of the investment portfolio will be held in debt or equity securities (including swaps) of publicly traded companies (or their subsidiaries) and governments of OECD (the Organization of Economic Co-operation and Development) high income countries, asset-backed securities, cash, cash equivalents and gold and other precious metals. Except with the prior written consent of the investment committee, none of the assets in the investment portfolio will be held in illiquid investments traditionally considered “venture capital” or private equity investments. In addition, no investments in third party managed funds or other investment vehicles will be made without the consent of the investment committee.

•	Concentration of Investments : Other than cash, cash equivalents and United States government obligations, no single investment in the investment portfolio will constitute more than 15% of the portfolio.

•	Liquidity : Assets will be invested in such fashion that Third Point Re has a reasonable expectation that it can meet any of its liabilities as they become due. Third Point Re reviews the liquidity of the Third Point LLC portfolio on a periodic basis.

•	Net Exposure Limits : The investment portfolio may not employ greater than 1.5 times portfolio assets managed for more than 10 trading days in any 30-trading day period.

•	a material violation of applicable law relating to Third Point LLC’s advisory business;

•	Third Point LLC’s fraud, gross negligence, willful misconduct or reckless disregard of its obligations under the investment management agreement;

•	a material breach by Third Point LLC of our investment guidelines that is not cured within a 15-day period;

•	a conviction or, a plea of guilty or nolo contendere to a felony or a crime affecting the asset management business of Third Point LLC by certain senior officers of Third Point LLC;

•	any act of fraud, material misappropriation, material dishonesty, embezzlement, or similar conduct against or involving us by senior officers of Third Point LLC; or

•	a formal administrative or other legal proceeding before the SEC, the CFTC, the FINRA, or any other U.S. or non-U.S. regulatory or self-regulatory organization against Third Point LLC; or certain key personnel which would likely have a material adverse effect on us.

Investment Portfolio

The following table represents the total long and short exposure and geographic exposure of our investment portfolio as managed by Third Point LLC, as of December 31, 2013 and 2012:  

	2013 Exposure									2012 Exposure
	Long			Short			Net			Long			Short			Net
Long/Short Equity
Consumer	8	%		—	%		8	%		7	%		(3	)%		4	%
Energy & Utility	5	%		—	%		5	%		6	%		(2	)%		4	%
Financials	12	%		(2	)%		10	%		10	%		(1	)%		9	%
Healthcare	4	%		—	%		4	%		3	%		(3	)%		—	%
Industries & Commodities	21	%		(2	)%		19	%		13	%		(3	)%		10	%
TMT	25	%		(2	)%		23	%		20	%		(1	)%		19	%
Market Hedges	1	%		(2	)%		(1	)%		4	%		(7	)%		(3	)%
Total L/S Equity	76	%		(8	)%		68	%		63	%		(20	)%		43	%
Credit
Distressed	5	%		—	%		5	%		5	%		—	%		5	%
Performing	8	%		(5	)%		3	%		13	%		(5	)%		8	%
Asset Backed Securities (1)	18	%		(1	)%		17	%		18	%		(2	)%		16	%
Total Credit	31	%		(6	)%		25	%		36	%		(7	)%		29	%
Macro
Gold	—	%		—	%		—	%		6	%		(1	)%		5	%
Government	2	%		(9	)%		(7	)%		4	%		(19	)%		(15	)%
Tail Risk	3	%		(2	)%		1	%		—	%		—	%		—	%
Total Macro	5	%		(11	)%		(6	)%		10	%		(20	)%		(10	)%
Other
Risk Arbitrage	—	%		—	%		—	%		1	%		—	%		1	%
Private	—	%		—	%		—	%		—	%		—	%		—	%
Total Other	—	%		—	%		—	%		1	%		—	%		1	%
	112	%		(25	)%		87	%		110	%		(47	)%		63	%

(1)	Includes residential mortgage-backed securities, commercial mortgage-backed securities, and related indices.

	2013 Exposure									2012 Exposure
	Long			Short			Net			Long			Short			Net
Americas	78	%		(13	)%		65	%		95	%		(30	)%		65	%
Europe, Middle East and Africa	15	%		(7	)%		8	%		14	%		(11	)%		3	%
Asia	19	%		(5	)%		14	%		1	%		(6	)%		(5	)%
	112	%		(25	)%		87	%		110	%		(47	)%		63	%

		2013				2012
		($ in thousands)
Net unrealized gains on investments and investment derivatives		$	78,950			$	113,422
Net realized gains on investments and investment derivatives		236,333				55,632
Net gain (loss) on foreign currencies		21,106				(219		)
Dividend and interest income, net of withholding taxes		14,233				25,284
Dividends paid on securities sold, not yet purchased		(722		)		(1,629		)
Management and performance fees		(87,333		)		(50,211		)
Other expenses		(8,863		)		(5,411		)
Net investment income on investments managed by Third Point LLC		253,704				136,868
Deposit liabilities and reinsurance contracts investment expense		(4,922		)		(446		)
Investment income on cash collateral held by the Catastrophe Reinsurer		86				—
Net gain on reinsurance contract derivatives written by the Catastrophe Reinsurer		4,335				—
		$	253,203			$	136,422

(1)	Past performance is not necessarily indicative of future results.

•	our ability to attract clients;

•	our ability to attract and retain personnel with sufficient underwriting, actuarial and accounting and finance expertise;

•	our ability to maintain at least an A- (Excellent) rating from A.M. Best or a similar financial strength rating from one or more other ratings agencies;

•	our ability to evaluate the risks we assume under reinsurance contracts that we write;

•

the risk of being deemed a passive foreign investment company or an investment company if we are deemed to not be in the active conduct of an insurance business or to not be predominantly engaged in an insurance business. See “Risks Relating to Insurance and Other Regulations-We are subject to the risk of becoming an investment company under U.S. federal securities law” and “Risks Relating to Taxation-United States persons who own our shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of shares.”

•	reinsurance contract pricing;

•	our assessment of the quality of available reinsurance opportunities;

•	the volume and mix of reinsurance products we underwrite;

•	loss experience on our reinsurance liabilities;

•	our ability to assess and integrate our risk management strategy properly; and

•	the performance of our investment portfolio.

•	price of reinsurance coverage;

•	the general reputation and perceived financial strength of the reinsurer;

•	relationships with reinsurance brokers;

•	terms and conditions of products offered;

•	ratings assigned by independent rating agencies;

•	speed of claims payment and reputation; and

•	the experience and reputation of the members of our underwriting team in the particular lines of reinsurance we seek to underwrite.

•	the lapse of time from the occurrence of an event to the reporting of the claim and the ultimate resolution or settlement of the claim;

•	the diversity of development patterns among different types of reinsurance treaties; and

•	heavier reliance on the client for information regarding claims.

•	if we change our business practices from our organizational business plan in a manner that no longer supports A.M. Best’s initial rating;

•	if unfavorable financial or market trends impact us;

•	if we are unable to retain our senior management and other key personnel;

•	if our investment portfolio incurs significant losses; or

•	if A.M. Best alters its capital adequacy assessment methodology in a manner that would adversely affect Third Point Re’s rating.

•	fund liquidity needs caused by underwriting or investment losses;

•	replace capital lost in the event of significant reinsurance losses or adverse reserve developments;

•	satisfy letters of credit or guarantee bond requirements that may be imposed by our clients or by regulators;

•	meet rating agency or regulatory capital requirements; or

•	respond to competitive pressures.

•	the historical performance of funds managed by Third Point LLC should not be considered indicative of the future results that should be expected from our investment portfolio; and

•	the returns of funds managed by Third Point LLC have benefited historically from investment opportunities and general market conditions that currently may not exist and may not repeat themselves, and there can be no assurance that Third Point LLC will be able to avail itself of profitable investment opportunities in the future.

•	a material violation of applicable law relating to Third Point LLC’s advisory business;

•	Third Point LLC’s fraud, gross negligence, willful misconduct or reckless disregard of its obligations under the investment management agreement;

•	a material breach by Third Point LLC of our investment guidelines that is not cured within a 15-day period;

•	a conviction or, a plea of guilty or nolo contendere to a felony or a crime affecting the asset management business of Third Point LLC by certain senior officers of Third Point LLC;

•	any act of fraud, material misappropriation, material dishonesty, embezzlement, or similar conduct against or involving us by senior officers of Third Point LLC; or

•	a formal administrative or other legal proceeding before the SEC, the CFTC, FINRA, or any other U.S. or non-U.S. regulatory or self-regulatory organization against Third Point LLC or certain key personnel which would likely have a material adverse effect on us.

•	Third Point LLC is entitled to a management fee of 2% annually (less the Founders payment paid to the Lead Investors and Dowling, as described in our investment management agreement), charged monthly, based on net assets under management; and

•	TP GP is entitled to performance compensation based on the appreciation, including unrealized appreciation, in the value of our investment portfolio equal to 20% of net profits, subject to a loss carryforward provision.

•	maintain a minimum level of capital, surplus and liquidity;

•	satisfy solvency standards;

•	restrict dividends and distributions;

•	obtain prior approval of ownership and transfer of shares;

•	maintain a principal office and appoint and maintain a principal representative in Bermuda; and

•	provide for the performance of certain periodic examinations of Third Point Re and its financial condition.

•	prepare and file periodic reports, and distribute other shareholder communications, in compliance with the federal securities laws and NYSE rules;

•	maintain comprehensive compliance, investor relations and internal audit functions; and

•	evaluate and maintain our system of internal control over financial reporting, and report on management’s assessment thereof, in compliance with rules and regulations of the SEC and the Public Company Accounting Oversight Board.

•	a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts against persons who reside in Bermuda based upon the civil liability provisions of the United States federal securities laws;

•	a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts based upon the civil liability provisions of the United States federal securities laws;

•	a holder of our shares would be able to bring an original action in the Bermuda courts to enforce liabilities against us or our directors and officers who reside outside the United States based solely upon United States federal securities laws.

•	the material facts as to such interested director’s relationship or interests were disclosed or were known to the board of directors and the board of directors had in good faith authorized the transaction by the affirmative vote of a majority of the disinterested directors;

•	such material facts were disclosed or were known to the shareholders entitled to vote on such transaction and the transaction were specifically approved in good faith by vote of the majority of shares entitled to vote thereon; or

•	the transaction were fair as to the corporation as of the time it was authorized, approved or ratified. Under Delaware law, the interested director could be held liable for a transaction in which the director derived an improper personal benefit.

•	provide the right of shareholders to act by majority written consent for so long as the Lead Investors and the Loeb Entities collectively hold at least 35% of our issued and outstanding common shares;

•	establish a classified board of directors;

•	require advance notice of shareholders’ proposals in connection with annual general meetings;

•	authorize our board to issue “blank cheque” preferred shares;

•	prohibit us from engaging in a business combination with a person who acquires at least 15% of our common shares for a period of three years from the date such person acquired such common shares unless board and shareholder approval is obtained prior to the acquisition;

•	require that directors only be removed from office for cause by majority shareholder vote once the Lead Investors and the Loeb Entities cease to collectively hold at least 35% of our issued and outstanding shares;

•	provide that vacancies on the board, including newly-created directorships, may be filled only by a majority vote of directors then in office;

•	allow each of Kelso and Pine Brook to appoint one director for so long as they hold not less than 25% of the number of shares respectively held as of December 22, 2011;

•	require a supermajority vote of shareholders to effect certain amendments to our memorandum of association and bye-laws; and

•	provide a consent right on the part of Kelso, Pine Brook and Daniel S. Loeb to any amendments to our bye-laws or memorandum of association which would have a material adverse effect on their rights for so long as they hold not less than 25% of the number of shares respectively held as of December 22, 2011.

Item 2. Properties

We do not own any facilities or real estate. We lease office space at Chesney House in Pembroke, Bermuda, pursuant to a two-year lease agreement. This two-year lease is scheduled to expire on November 30, 2015. We believe for the foreseeable future this office space will be sufficient for us to conduct our operations.

Item 3. Legal Proceedings

We are not currently involved in any litigation or arbitration. We anticipate that, similar to the rest of the reinsurance industry, we will be subject to litigation and arbitration from time to time in the ordinary course of business.

If we are subject to disputes in the ordinary course of our business we anticipate engaging in discussions with the parties to the applicable contract to seek to resolve the matter. If such discussions are unsuccessful, we anticipate invoking the dispute resolution provisions of the relevant contract, which typically provide for the parties to submit to arbitration or litigation, as applicable, to resolve the dispute.

Item 4. Mine Safety Disclosures

Not applicable.

Executive Officers of the Registrant

Set forth below is information, as of February 27, 2014 , concerning the Company’s executive officers.

Name	Age	Position
John R. Berger	61	Chairman of the Board, Chief Executive Officer and Chief Underwriting Officer
J. Robert Bredahl	51	Chief Financial Officer and Chief Operating Officer
Christopher S. Coleman	40	Chief Accounting Officer
Manoj K. Gupta	38	SVP, Underwriting; and Lead Portfolio Manager, Third Point Reinsurance Investment Management Ltd.
Daniel V. Malloy	54	Executive Vice President-Underwriting
Tonya L. Marshall	42	Executive Vice President, General Counsel and Secretary
Michael McKnight	53	Chief Actuary and Chief Risk Officer
Anthony Urban	53	Executive Vice President-Underwriting