Third Point Reinsurance Ltd. (Form: 8-K, Received: 01/20/2015 09:21:27)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 20, 2015 (January 20, 2015)

THIRD POINT REINSURANCE LTD.

(Exact name of registrant as specified in its charter)




Bermuda	001-36052	98-1039994
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

The Waterfront, Chesney House

96 Pitts Bay Road

Pembroke HM 08 Bermuda

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: +1 441 542-3300

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:





¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)





¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)





¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))





¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The information in Item 2.02 of this Current Report on Form 8-K of Third Point Reinsurance Ltd. (the “Company”) is intended to furnish certain estimated financial and operating results of the Company as of and for the fiscal year ended December 31, 2014 as set forth in Exhibit 99.1 to this Current Report on Form 8-K.

The estimated financial and operating results as of and for the Company’s fiscal year ended December 31, 2014 included in Exhibit 99.1 hereto are preliminary, unaudited and subject to completion, reflect management’s current views, and may change as a result of management’s review of results and other factors, including a wide variety of significant business, economic and competitive risks and uncertainties. Such preliminary results are subject to the finalization of year-end financial and accounting procedures (which have yet to be performed) and should not be viewed as a substitute for full audited annual financial statements prepared in accordance with U.S. generally accepted accounting principles. The actual results may be materially different from the estimated results. See the factors discussed under the caption “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission on February 28, 2014 (the “Annual Report”).

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being “furnished” to comply with Item 2.02 of Form 8-K and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in any such filing.

Item 8.01. Other Events.

Updated Financial Information

The information in this section of Item 8.01 of this Current Report on Form 8-K is intended to update certain financial information that was previously provided in the Annual Report and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 filed with the Securities and Exchange Commission on November 7, 2014 (the “Quarterly Report”) in order to permit Third Point Re (USA) Holdings Inc. (“TPRUSA”), a Delaware corporation and an indirect wholly owned subsidiary of the Company that was incorporated on November 21, 2014, to incur indebtedness guaranteed by the Company.

The updated financial information includes, in a footnote to the consolidated financial statements of the Company for the applicable periods, condensed consolidating financial information for the periods specified in the Annual Report and the Quarterly Report with separate columns for the Company, TPRUSA, any other subsidiaries of the Company on a combined basis, consolidating adjustments and the total consolidated amounts. There was no effect on the Company’s financial position, results of operations or cash flows in any of the periods presented as a result of or otherwise relating to the updated financial information.

Accordingly, the following documents are filed as part of Item 8.01 of this Current Report on Form 8-K:

• Form 10-K: Item 8. Financial Statements and Supplementary Data (Exhibit 99.2)

• Form 10-Q: Item 1. Financial Statements (Exhibit 99.3)

Information About Third Point Re (USA) Holdings Inc.

TPRUSA is an indirect wholly owned subsidiary of the Company. Its direct parent company is Third Point Re (UK) Holdings Ltd., a private company limited by shares organized under the laws of the U.K. and Wales and a direct wholly owned subsidiary of the Company. Copies of TPRUSA’s certificate of incorporation and bylaws are filed as Exhibit 3.1 and Exhibit 3.2 to this Current Report on Form 8-K, respectively, and are hereby incorporated by reference.

TPRUSA’s only operations to date relate to accessing financing on behalf of the Company and on behalf of Third Point Reinsurance (USA) Ltd. (“Third Point Re USA”), a Bermuda company licensed as a Class 4 insurer and the wholly owned operating subsidiary of TPRUSA. Otherwise, to date TPRUSA has conducted no independent business, offers no products or services and owns no property. As a result, TPRUSA has a limited operating history and is exposed to volatility in its results of operations. Period to period comparisons of its results of operations may not be meaningful.

TPRUSA expects to provide, through a U.S.-based platform, reinsurance products that are substantially similar to the reinsurance products currently provided by the Company. In order to facilitate these new reinsurance operations and obtain surplus relief, in connection with the initial capitalization of TPRUSA and Third Point Re USA, Third Point Re USA intends to enter into a quota share reinsurance agreement with Third Point Reinsurance Company Ltd., a Bermuda company licensed as a Class 4 insurer and a wholly owned subsidiary of the Company ("Third Point Re"), pursuant to which Third Point Re would assume 75% of premium and losses for Third Point Re USA’s portfolio of reinsurance contracts. Third Point Re USA also intends to enter into a net worth maintenance agreement with the Company, pursuant to which the Company would agree to commit funds sufficient to maintain a minimum level of capital at Third Point Re USA of $250 million, and a services agreement with the Company, pursuant to which the Company would agree to provide certain general and administrative support services. In addition, Third Point Re USA intends to enter into a joint venture and investment management agreement with Third Point LLC and Third Point Advisors LLC, and to become a party to the Founders Agreement dated as of December 22, 2011 among Third Point Re and several affiliates of the Company.

TPRUSA’s U.S. presence is a strategic component of the Company’s overall growth strategy. As a result of TPRUSA’s U.S. presence, the Company expects to strengthen its relationships with U.S. cedents and brokers. The Company also expects to develop a firsthand understanding of cedent underwriting and claims capabilities that will benefit the Company’s own underwriting practices.

As a result of TPRUSA’s activities in the United States, the Company expects that TPRUSA will be subject to U.S. federal income taxation on its net income. However, the Company believes that its current activities, notwithstanding activities conducted through TPRUSA, will not cause the Company to be treated as engaging in a U.S. trade or business and will not cause the Company otherwise to be subject to current U.S. federal income taxation on its consolidated net income. See “Risk Factors--We may be subject to United States federal income taxation” in the Annual Report.

TPRUSA’s principal executive offices are located at 51 JFK Parkway, First Floor West, Short Hills, New Jersey 07078. Its telephone number is 908-608-8970.

Forward-Looking Statements

Certain statements in this Current Report on Form 8-K may constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company’s industry, business strategy, plans, goals and expectations concerning the Company’s market position, international expansion, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this Current Report on Form 8-K, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this Current Report on Form 8-K.

Forward-looking statements reflect the Company’s current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although the Company believes the expectations reflected in the forward-looking statements are reasonable, the Company can give no assurance that these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from the Company’s expectations due to a variety of known and unknown risks, uncertainties and other factors.

Factors that could materially affect these forward-looking statements can be found in the Company’s periodic and current reports filed with the Securities and Exchange Commission. In evaluating the forward-looking statements, readers are urged to carefully consider the factors discussed under the caption “Risk Factors” in Item 1A of the Annual Report as well as any additional risk factors included in the Company’s periodic or current reports since the date of the Annual Report. Although it is not possible to identify all of these risks and factors, they include, among others, the following:


•	limited historical information about the Company;


•	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;


•	depending 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 the Company’s reinsurance licenses;


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


•	potential characterization of the Company and/or Third Point Reinsurance Company Ltd. as a passive foreign investment company;


•	dependence on Third Point LLC, the Company’s investment manager, to implement the Company’s investment strategy;


•	termination by Third Point LLC of the Company’s investment management agreement;


•	risks associated with the Company’s investment strategy being greater than those faced by competitors;


•	increased regulation or scrutiny of alternative investment advisers affecting the Company’s reputation;


•	the Company potentially becoming subject to United States federal income taxation;


•	the Company potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act; and


•	other risks and factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.

Any one of these factors or a combination of these factors could materially affect the Company’s financial condition or future results of operations and could influence whether any forward-looking statements contained in this Current Report on Form 8-K ultimately prove to be accurate. The Company’s forward-looking statements are not guarantees of future performance, and readers should not place undue reliance on them. All forward-looking statements speak only as of the date made and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.






Date: January 20, 2015	/s/ Tonya L. Marshall
	Name:	Tonya L. Marshall
	Title:	Executive Vice President, General Counsel and Secretary

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits



Exhibit No.	Description

3.1	Certificate of Incorporation of Third Point Re (USA) Holdings Inc.
3.2	Bylaws of Third Point Re (USA) Holdings Inc.
23.1	Consent of Ernst & Young Ltd.
99.1	Estimated financial and operating results of Third Point Reinsurance Ltd. for the fiscal year ended December 31, 2014.
99.2	Item 8. Financial Statements and Supplementary Data, Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
99.3	Item 1. Financial Statements, Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 3.2

THIRD POINT RE (USA) HOLDINGS INC.

INCORPORATED UNDER THE LAWS OF

THE STATE OF DELAWARE

BY-LAWS

ARTICLE I. OFFICES.

The registered office of Third Point Re (USA) Holdings Inc. (the “Corporation”) shall be located in the State of Delaware and shall be at such address as shall be set forth in the Certificate of Incorporation. The registered agent of the Corporation at such address shall be as set forth in the Certificate of Incorporation. The Corporation may also have such other offices at such other places, within or without the State of Delaware, as the Board of Directors may from time to time designate or the business of the Corporation may require.

ARTICLE II. STOCKHOLDERS.

Section 1. Annual Meeting . The annual meeting of stockholders for the election of directors and the transaction of any other business shall be held on such date and at such time and in such place, either within or without the State of Delaware, as shall from time to time be designated by the Board of Directors. At the annual meeting any business may be transacted and any corporate action may be taken, whether stated in the notice of meeting or not, except as otherwise expressly provided by statute or the Certificate of Incorporation.

Section 2. Special Meetings . Special meetings of the stockholders for any purpose may be called at any time by the Board of Directors, or by the President, and shall be called by the President at the request of the holders of at least 50% of the outstanding shares of capital stock entitled to vote. Special meetings shall be held at such place or places within or without the State of Delaware as shall from time to time be designated by the Board of Directors. At a special meeting no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting.

Section 3. Notice of Meetings . Written notice of the time and place of any stockholder's meeting, whether annual or special, shall be given to each stockholder entitled to vote thereat, by personal delivery or by mailing the same to him at his address as the same appears upon the records of the Corporation at least ten (10) days but not more than sixty (60) days before the day of the meeting. Notice of any adjourned meeting need not be given except by announcement at the meeting so adjourned, unless otherwise ordered in connection with such adjournment. Such further notice, if any, shall be given as may be required by law.

Section 4. Quorum . Any number of stockholders, together holding at least a majority of the capital stock of the Corporation issued and outstanding and entitled to vote, who shall be present in person or represented by proxy at any meeting duly called, shall constitute a quorum for the transaction of all business, except as otherwise provided by law, by the Certificate of Incorporation or by these By‑laws.

Section 5. Adjournment of Meetings . If less than a quorum shall attend at the time for which a meeting shall have been called, the meeting may adjourn from time to time by a majority vote of the stockholders present or represented by proxy and entitled to vote without notice other than by announcement at the meeting until a quorum shall attend. Any meeting at which a quorum is present may also be adjourned in like manner and for such time or upon such call as may be determined by a majority vote of the stockholders present or represented by proxy and entitled to vote. At any adjourned meeting at which a quorum shall be present, any business may be transacted and any corporate action may be taken which might have been transacted at the meeting as originally called.

Section 6. Voting List . The Secretary shall prepare and make, at least ten (10) days before every election of directors, a complete list of the stockholders entitled to vote, arranged in alphabetical order and showing the address of each stockholder and the number of shares of each stockholder. Such list shall be open at the place where the election is to be held for said ten (10) days, to the examination of any stockholder, and shall be produced and kept at the time and place of election during the whole time thereof, and subject to the inspection of any stockholder who may be present.

Section 7. Voting . Each stockholder entitled to vote at any meeting may vote either in person or by proxy, but no proxy shall be voted on or after three years from its date, unless said proxy provides for a longer period. Except as otherwise provided by the Certificate of Incorporation, each stockholder entitled to vote shall at every meeting of the stockholders be entitled to one vote for each share of stock registered in his name on the record of stockholders. At all meetings of stockholders all matters, except as otherwise provided by statute, shall be determined by the affirmative vote of the majority of shares present in person or by proxy and entitled to vote on the subject matter. Voting at meetings of stockholders need not be by written ballot.

Section 8. Record Date of Stockholders . The Board of Directors is authorized to fix in advance a date not exceeding sixty (60) days nor less than ten (10) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining the consent of stockholders for any purposes, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting, and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and, in such case, such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting, and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation, after such record date fixed as aforesaid.

Section 9. Action Without Meeting . Any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return

receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 10. Conduct of Meetings . The Chairman of the Board of Directors, or if there be none, or in the Chairman's absence, the President shall preside at all regular or special meetings of stockholders. To the maximum extent permitted by law, such presiding person shall have the power to set procedural rules, including but not limited to rules respecting the time allotted to stockholders to speak, governing all aspects of the conduct of such meetings.

ARTICLE III. DIRECTORS.

Section 1. Number and Qualifications : The board of directors shall consist initially of such number of directors as is set forth in the Statement of the Sole Incorporator, and thereafter shall consist of such number as may be fixed from time to time by resolution of the Board. The directors need not be stockholders.

Section 2. Election of Directors : The directors shall be elected by the stockholders at the annual meeting of stockholders.

Section 3. Duration of Office : The directors chosen at any annual meeting shall, except as hereinafter provided, hold office until the next annual election and until their successors are elected and qualify.

Section 4. Removal and Resignation of Directors : Except as set forth in the Certificate of Incorporation of the Corporation, as such certificate may be amended by any Certificates of Designation filed by the Corporation, any director may be removed from the Board of Directors, with or without cause, by the holders of a majority of the shares of capital stock entitled to vote, either by written consent or consents or at any special meeting of the stockholders called for that purpose, and the office of such director shall forthwith become vacant.

Any director may resign at any time. Such resignation shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless so specified therein.

Section 5. Filling of Vacancies : Any vacancy among the directors, occurring from any cause whatsoever, may be filled by a majority of the remaining directors, though less than a quorum, provided , however , that the stockholders removing any director may at the same meeting fill the vacancy caused by such removal, and provided further , that if the directors fail to fill any such vacancy, the stockholders may at any special meeting called for that purpose fill such vacancy. In case of any increase in the number of directors, the additional directors may be elected by the directors in office before such increase.

Any person elected to fill a vacancy shall hold office, subject to the right of removal as hereinbefore provided, until the next annual election and until his successor is elected and qualifies.

Section 6. Regular Meetings : The Board of Directors shall hold an annual meeting for the purpose of organization and the transaction of any business immediately after the annual meeting

of the stockholders, provided a quorum of directors is present. Other regular meetings may be held at such times as may be determined from time to time by resolution of the Board of Directors.

Section 7. Special Meetings : Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors, if any, or by the President or by any two directors.

Section 8. Notice and Place of Meetings : Meetings of the Board of Directors may be held at the principal office of the Corporation, or at such other place as shall be stated in the notice of such meeting. Notice of any special meeting, and, except as the Board of Directors may otherwise determine by resolution, notice of any regular meeting also, shall be mailed to each director addressed to him at his residence or usual place of business at least two (2) days before the day on which the meeting is to be held, or if sent to him at such place by facsimile, telegraph or cable, or delivered personally or by telephone, not later than the day before the day on which the meeting is to be held. No notice of the annual meeting of the Board of Directors shall be required if it is held immediately after the annual meeting of the stockholders and if a quorum is present.

Section 9. Business Transacted at Meetings, etc. : Any business may be transacted and any corporate action may be taken at any regular or special meeting of the Board of Directors at which a quorum shall be present, whether such business or proposed action be stated in the notice of such meeting or not, unless special notice of such business or proposed action shall be required by statute.

Section 10. Quorum : A majority of the Board of Directors at any time in office shall constitute a quorum. At any meeting at which a quorum is present, the vote of a majority of the members present shall be the act of the Board of Directors unless the act of a greater number is specifically required by law or by the Certificate of Incorporation or these By‑laws. The members of the Board shall act only as the Board and the individual members thereof shall not have any powers as such.

Section 11. Compensation : The directors shall not receive any stated salary for their services as directors, but by resolution of the Board of Directors a fixed fee and expenses of attendance may be allowed for attendance at each meeting. Nothing herein contained shall preclude any director from serving the Corporation in any other capacity, as an officer, agent or otherwise, and receiving compensation therefor.

Section 12. Action Without a Meeting : Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board or committee.

Section 13. Meetings Through Use of Communications Equipment : Members of the Board of Directors, or any committee designated by the Board of Directors, shall, except as otherwise provided by law, the Certificate of Incorporation or these By‑laws, have the power to participate in a meeting of the Board of Directors, or any committee, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.

ARTICLE IV. COMMITTEES.

Section 1. Executive Committee : The Board of Directors may, by resolution passed by a majority of the whole Board, designate two or more of their number to constitute an Executive Committee to hold office at the pleasure of the Board, which Committee shall, during the intervals between meetings of the Board of Directors, have and exercise all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, subject only to such restrictions or limitations as the Board of Directors may from time to time specify, or as limited by the Delaware Corporation Law, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it.

Any member of the Executive Committee may be removed at any time, with or without cause, by a resolution of a majority of the whole Board of Directors.

Any person ceasing to be a director shall ipso facto cease to be a member of the Executive Committee.

Any vacancy in the Executive Committee occurring from any cause whatsoever may be filled from among the directors by a resolution of a majority of the whole Board of Directors.

Section 2. Other Committees : Other committees, whose members need not be directors, may be appointed by the Board of Directors or the Executive Committee, which committees shall hold office for such time and have such powers and perform such duties as may from time to time be assigned to them by the Board of Directors or the Executive Committee.

Any member of such a committee may be removed at any time, with or without cause, by the Board of Directors or the Executive Committee. Any vacancy in a committee occurring from any cause whatsoever may be filled by the Board of Directors or the Executive Committee.

Section 3. Resignation : Any member of a committee may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective unless so specified therein.

Section 4. Quorum : A majority of the members of a committee shall constitute a quorum. The act of a majority of the members of a committee present at any meeting at which a quorum is present shall be the act of such committee. The members of a committee shall act only as a committee, and the individual members thereof shall not have any powers as such.

Section 5. Record of Proceedings, etc. : Each committee shall keep a record of its acts and proceedings, and shall report the same to the Board of Directors when and as required by the Board of Directors.

Section 6. Organization, Meetings, Notices, etc. : A committee may hold its meetings at the principal office of the Corporation, or at any other place which a majority of the committee may at any time agreed upon. Each committee may make such rules as it may deem expedient for the regulation and carrying on of its meetings and proceedings. Unless otherwise ordered by the Executive Committee, any notice of a meeting of such committee may be given by the Secretary of the Corporation or by the chairman of the committee and shall be sufficiently given if mailed to each member at his residence or usual place of business at least two (2) days before the day on which the

meeting is to be held, or if sent to him at such place by facsimile, telegraph or cable, or delivered personally or by telephone not later than twenty-four (24) hours before the time at which the meeting is to be held.

Section 7. Compensation : The members of any committee shall be entitled to such compensation as may be allowed them by resolution of the Board of Directors.

ARTICLE V. OFFICERS.

Section 1. Number : The officers of the Corporation shall be a President and a Secretary and such other officers as may be appointed in accordance with the provisions of this Article V. The Board of Directors in its discretion may also elect a Chairman of the Board of Directors.

Section 2. Election, Term of Office and Qualifications : The officers, except as provided in Section 3 of this Article V, shall be chosen annually by the Board of Directors. Each such officer shall, except as herein otherwise provided, hold office until his successor shall have been chosen and shall qualify. The Chairman of the Board of Directors, if any, and the President shall be directors of the Corporation, and should any one of them cease to be a director, he shall ipso facto cease to be such officer. Except as otherwise provided by law, any number of offices may be held by the same person.

Section 3. Other Officers : Other officers, including one or more vice-presidents, assistant secretaries, treasurer or assistant treasurers, may from time to time be appointed by the Board of Directors, which other officers shall have such powers and perform such duties as may be assigned to them by the Board of Directors or the officer or committee appointing them.

Section 4. Removal of Officers : Any officer of the Corporation may be removed from office, with or without cause, by a vote of a majority of the Board of Directors.

Section 5. Resignation : Any officer of the Corporation may resign at any time. Such resignation shall be in writing and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary in order to make it effective, unless so specified therein.

Section 6. Filling of Vacancies : A vacancy in any office shall be filled by the Board of Directors or by the authority appointing the predecessor in such office.

Section 7. Compensation : The compensation of the officers shall be fixed by the Board of Directors, or by any committee upon whom power in that regard may be conferred by the Board of Directors.

Section 8. Chairman of the Board of Directors : The Chairman of the Board of Directors, if any, shall be a director and shall preside at all meetings of the stockholders and the Board of Directors, and shall have such power and perform such duties as may from time to time be assigned to him by the Board of Directors.

Section 9. President : In the absence of the Chairman of the Board of Directors, or if there be none, the President shall preside at all meetings of the stockholders and the Board of Directors. He shall have power to call special meetings of the stockholders or of the Board of Directors or of the Executive Committee at any time. He shall be the chief executive officer of the Corporation, and

shall have the general direction of the business, affairs and property of the Corporation, and of its several officers, and shall have and exercise all such powers and discharge such duties as usually pertain to the office of President.

Section 10. Vice-Presidents : The vice-president, or vice-presidents if there is more than one, shall, subject to the direction of the Board of Directors, at the request of the President or in his absence, or in case of his inability to perform his duties from any cause, perform the duties of the President, and, when so acting, shall have all the powers of, and be subject to all restrictions upon, the President. The vice-presidents shall also perform such other duties as may be assigned to them by the Board of Directors, and the Board of Directors may determine the order of priority among them.

Section 11. Secretary : The Secretary shall perform such duties as are incident to the office of Secretary, or as may from time to time be assigned to him by the Board of Directors, or as are prescribed by these By‑laws.

Section 12. Treasurer : The Treasurer shall perform such duties and have powers as are usually incident to the office of Treasurer or which may be assigned to him by the Board of Directors.

ARTICLE VI. CAPITAL STOCK.

Section 1. Issue of Certificates of Stock : Certificates of capital stock shall be in such form as shall be approved by the Board of Directors. They shall be numbered in the order of their issue and shall be signed by the Chairman of the Board of Directors, the President or one of the vice‑presidents, and the Secretary or an assistant secretary or the treasurer or an assistant treasurer, and the seal of the Corporation or a facsimile thereof shall be impressed or affixed or reproduced thereon, provided, however, that where such certificates are signed by a transfer agent or an assistant transfer agent or by a transfer clerk acting on behalf of the Corporation and a registrar, the signature of any such Chairman of the Board of Directors, President, vice‑president, Secretary, assistant secretary, treasurer or assistant treasurer may be facsimile. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon have not ceased to be such officer or officers of the Corporation.

Section 2. Registration and Transfer of Shares : The name of each person owning a share of the capital stock of the Corporation shall be entered on the books of the Corporation together with the number of shares held by him, the numbers of the certificates covering such shares and the dates of issue of such certificates. The shares of stock of the Corporation shall be transferable on the books of the Corporation by the holders thereof in person, or by their duly authorized attorneys or legal representatives, on surrender and cancellation of certificates for a like number of shares, accompanied by an assignment or power of transfer endorsed thereon or attached thereto, duly executed, and with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require. A record shall be made of each transfer.

The Board of Directors may make other and further rules and regulations concerning the transfer and registration of certificates for stock and may appoint a transfer agent or registrar or both and may require all certificates of stock to bear the signature of either or both.

Section 3. Lost, Destroyed and Mutilated Certificates : The holder of any stock of the Corporation shall immediately notify the Corporation of any loss, theft, destruction or mutilation of the certificates therefor. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost, stolen or destroyed, and the Board of Directors may, in its discretion, require the owner of the lost, stolen or destroyed certificate, or his legal representatives, to give the Corporation a bond, in such sum not exceeding double the value of the stock and with such surety or sureties as they may require, to indemnify it against any claim that may be made against it by reason of the issue of such new certificate and against all other liability in the premises, or may remit such owner to such remedy or remedies as he may have under the laws of the State of Delaware.

ARTICLE VII. DIVIDENDS, SURPLUS, ETC.

Section 1. General Discretion of Directors : The Board of Directors shall have power to fix and vary the amount to be set aside or reserved as working capital of the Corporation, or as reserves, or for other proper purposes of the Corporation, and, subject to the requirements of the Certificate of Incorporation, to determine whether any, if any, part of the surplus or net profits of the Corporation shall be declared as dividends and paid to the stockholders, and to fix the date or dates for the payment of dividends.

ARTICLE VIII. MISCELLANEOUS PROVISIONS.

Section 1. Fiscal Year : The fiscal year of the Corporation shall commence on the first day of January and end on the last day of December.

Section 2. Corporate Seal : The corporate seal shall be in such form as approved by the Board of Directors and may be altered at their pleasure. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 3. Notices : Except as otherwise expressly provided, any notice required by these By‑laws to be given shall be sufficient if given by depositing the same in a post office or letter box in a sealed postpaid wrapper addressed to the person entitled thereto at his address, as the same appears upon the books of the Corporation, or by sending via facsimile, telegraphing or cabling the same to such person at such addresses; and such notice shall be deemed to be given at the time it is mailed, sent via facsimile, telegraphed or cabled.

Section 4. Waiver of Notice : Any stockholder or director may at any time, by writing or by telegraph or by cable, waive any notice required to be given under these By‑laws, and if any stockholder or director shall be present at any meeting his presence shall constitute a waiver of such notice.

Section 5. Checks, Drafts, etc. : All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner, as shall from time to time be designated by resolution of the Board of Directors.

Section 6. Deposits : All funds of the Corporation shall be deposited from time to time to the credit of the Corporation in such bank or banks, trust companies or other depositories as the Board of Directors may select, and, for the purpose of such deposit, checks, drafts, warrants and other orders for the payment of money which are payable to the order of the Corporation, may be endorsed for deposit, assigned and delivered by any officer of the Corporation, or by such agents of the Corporation as the Board of Directors or the President may authorize for that purpose.

Section 7. Voting Stock of Other Corporations : Except as otherwise ordered by the Board of Directors or the Executive Committee, the President or the treasurer shall have full power and authority on behalf of the Corporation to attend and to act and to vote at any meeting of the stockholders of any corporation of which the Corporation is a stockholder and to execute a proxy to any other person to represent the Corporation at any such meeting, and at any such meeting the President or the treasurer or the holder of any such proxy, as the case may be, shall possess and may exercise any and all rights and powers incident to ownership of such stock and which, as owner thereof, the Corporation might have possessed and exercised if present. The Board of Directors or the Executive Committee may from time to time confer like powers upon any other person or persons.

Section 8. Indemnification of Officers and Directors : The Corporation shall indemnify any and all of its directors or officers, including former directors or officers, and any employee, who shall serve as an officer or director of any corporation at the request of this Corporation, to the fullest extent permitted under and in accordance with the laws of the State of Delaware.

ARTICLE IX. AMENDMENTS.

The Board of Directors shall have the power to make, rescind, alter, amend and repeal these By‑laws, provided, however, that the stockholders shall have power to rescind, alter, amend or repeal any by‑laws made by the Board of Directors, and to enact by‑laws which if so expressed shall not be rescinded, altered, amended or repealed by the Board of Directors. No change of the time or place for the annual meeting of the stockholders for the election of directors shall be made except in accordance with the laws of the State of Delaware.

* * * * *

Dated: November 21, 2014

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-190724) pertaining to the Third Point Reinsurance Limited Share Incentive Plan and the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan of Third Point Reinsurance Ltd. of our report dated February 27, 2014, except for Notes 25 and 26, as to which the date is January 19, 2015, with respect to the financial statements and financial statement schedules of Third Point Reinsurance Ltd., included in the Annual Report (Form 10-K) for the year ended December 31, 2013, as updated by this Current Report on Form 8-K filed with the Securities and Exchange Commission.

/s/ Ernst & Young Ltd.

Hamilton, Bermuda

January 20, 2015

Exhibit 99.1

The following tables set forth certain estimated financial and operating results of Third Point Reinsurance Ltd. ("TPRE") as of and for the fiscal year ended December 31, 2014, together with audited financial and operating results as of and for the fiscal year ended December 31, 2013:



	For the years ended December 31,		Percentage change
	2014	2013	Percentage change
	($ in millions)

Net income	$47.4 - $53.4	$227.3	(79)% - (77)%
Net investment return on investments managed by Third Point LLC(1)	5.1% - 5.3%	23.9 %	(79)% - (78)%
Combined ratio for Property and Casualty Reinsurance Segment(2)	101.7% - 102.7%	107.5%	(5)% - (4)%



	As of December 31,		Percentage change
	2014	2013	Percentage change
	($ in millions)

Total net investments managed by Third Point LLC(3)	$1,799.2 - $1,805.2	$1,559.4	15% - 16%
Total shareholders’ equity attributable to shareholders	$1,448.9 - $1,454.9	$1,391.7	4% - 5%

^{(1) TPRE’s investments are managed by its investment manager, Third Point LLC, under a long-term investment management contract. TPRE directly owns the investments, which are held in a separate account and managed by Third Point LLC. Net investment return represents the return on our investments managed by Third Point LLC, net of fees. The net investment return on investments managed by Third Point LLC is the percentage change in value of a dollar invested over the reporting period on our investment assets managed by Third Point LLC, net of non-controlling interest. The stated return is net of withholding taxes, which are presented as a component of income tax expense in our condensed consolidated statements of income. Net investment return is the key indicator by which we measure the performance of Third Point LLC, our investment manager.}

⁽²⁾ ^{Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned. The combined ratio compares the amount of net premiums earned to the amount incurred in claims and underwriting related expenses. This ratio is a key indicator of a reinsurance company’s profitability. A combined ratio greater than 100% means that loss and loss adjustment expenses, acquisition costs and general and administrative expenses related to underwriting activities exceeded net premiums earned.}

^{(3) See additional information in Note 5 to TPRE’s consolidated financial statements for the quarter ended September 30, 2014 and Note 5 to TPRE’s consolidated financial statements for the year ended December 31, 2013 included in this Current Report on Form 8-K filed on January 20, 2015.}

The financial and operating results for TPRE as of and for the fiscal year ended December 31, 2013 included in the tables above have been derived from TPRE’s audited financial statements included in this Current Report on Form 8-K filed on January 20, 2015 and incorporated by reference herein.

The estimated financial operating results as of and for the fiscal year ended December 31, 2014 reflect the following:

• The primary driver of TPRE's net income is the net investment return on investments managed by Third Point LLC, which was lower for the year ended December 31, 2014 compared to the year ended December 31, 2013.

• TPRE's combined ratio improved primarily due to a lower general and administrative expense ratio compared to the prior year driven by proportionately higher net premiums earned.

• TPRE's increase in total net investments managed by Third Point LLC reflects net investment income and contributions of float generated by TPRE's reinsurance operations for the year ended December 31, 2014.

• The increase in TPRE's total shareholders' equity attributable to shareholders primarily reflects net income for the year ended December 31, 2014.

The estimated financial and operating results for TPRE’s fiscal year ended December 31, 2014 included in the tables above are preliminary, unaudited and subject to completion, reflect management’s current views, and may change as a result of management’s review of results and other factors, including a wide variety of significant business, economic and competitive risks and uncertainties. The preliminary results are subject to the finalization of year-end financial and accounting procedures (which have yet to be completed) and should not be viewed as a substitute for full annual financial statements prepared in accordance with U.S. generally accepted accounting principles. The actual results may be materially different from the estimated results. See the factors discussed under the caption “Risk Factors” in Item 1A of TPRE’s Form 10-K for the year ended December 31, 2013 as well as any additional risk factors included in TPRE’s quarterly or interim reports since the date of the most recent Annual Report on Form 10-K.

The estimated financial and operating results presented in the tables above were not prepared with a view toward complying with the Public Company Accounting Oversight Board guidelines with respect to prospective financial information. Neither our independent registered public accounting firm nor any other independent registered public accounting firm has audited, reviewed or compiled, examined or performed any procedures with respect to the estimated results, nor have they expressed any opinion or any other form of assurance on the estimated results.

You should read the information in the tables above in conjunction with TPRE’s historical financial statements and the notes thereto and the other financial and statistical information that we include or incorporate by reference in this prospectus supplement and the accompanying prospectus.

Forward-Looking Statements

Certain statements in this Exhibit 99.1 may constitute “forward-looking” statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding TPRE’s industry, business strategy, plans, goals and expectations concerning TPRE’s market position, international expansion, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this Exhibit 99.1, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this Exhibit 99.1.

Forward-looking statements reflect TPRE’s current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although TPRE believes the expectations reflected in the forward-looking statements are reasonable, TPRE can give no assurance that these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from TPRE’s expectations due to a variety of known and unknown risks, uncertainties and other factors.

Factors that could materially affect these forward-looking statements can be found in TPRE’s periodic and current reports filed with the Securities and Exchange Commission. In evaluating the forward-looking statements, readers are urged to carefully consider the factors discussed under the caption “Risk Factors” in Item 1A of TPRE’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission on February 28, 2014 (the “Annual Report”) as well as any additional risk factors included in TPRE’s periodic or current reports since the date of the Annual Report. Although it is not possible to identify all of these risks and factors, they include, among others, the following:


•	limited historical information about TPRE;


•	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;


•	depending 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 TPRE’s reinsurance licenses;


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


•	potential characterization of TPRE and/or Third Point Reinsurance Company Ltd. as a passive foreign investment company;


•	dependence on Third Point LLC, TPRE’s investment manager, to implement TPRE’s investment strategy;


•	termination by Third Point LLC of TPRE’s investment management agreement;


•	risks associated with TPRE’s investment strategy being greater than those faced by competitors;


•	increased regulation or scrutiny of alternative investment advisers affecting TPRE’s reputation;


•	TPRE potentially becoming subject to United States federal income taxation;


•	TPRE potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act; and


•	other risks and factors listed under “Risk Factors” in TPRE’s most recent Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.

Any one of these factors or a combination of these factors could materially affect TPRE’s financial condition or future results of operations and could influence whether any forward-looking statements contained in this Exhibit 99.1 ultimately prove to be accurate. TPRE’s forward-looking statements are not guarantees of future performance, and readers should not place undue reliance on them. All forward-looking statements speak only as of the date made and TPRE undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Exhibit 99.2

ITEM 8. Financial Statements and Supplementary Data

THIRD POINT REINSURANCE LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA



	Page
Report of Independent Registered Public Accounting Firm	F-2
Audited Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2013 and 2012	F-3
Consolidated Statements of Income (Loss) for the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation) to December 31, 2011	F-4
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation) to December 31, 2011	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation) to December 31, 2011	F-6
Notes to the Consolidated Financial Statements	F-7
Schedule I - Summary of Investments - Other than Investments in Related Parties	F-54
Schedule II - Condensed Financial Information of Registrant	F-55
Schedule III - Supplementary Insurance Information	F-58
Schedule IV - Reinsurance	F-59

All other schedules and notes specified under Regulation S-X are omitted because they are either not applicable, not required or the information called for therein appears in response to the items in the Consolidated Financial Statements and the related Notes to Consolidated Financial Statements of Third Point Reinsurance Ltd. and its subsidiaries listed on the above index.

F- 1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Third Point Reinsurance Ltd.

We have audited the accompanying consolidated balance sheets of Third Point Reinsurance Ltd. as of December 31, 2013 and 2012, and the related consolidated statements of income, shareholders' equity and cash flows for years ended December 31, 2013 and 2012 and the period from October 6, 2011 (date of incorporation) to December 31, 2011. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Third Point Reinsurance Ltd. at December 31, 2013 and 2012, and the consolidated results of its operations and its cash flows for the years ended December 31, 2013 and 2012 and the period from October 6, 2011 (date of incorporation) to December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

/s/ Ernst & Young Ltd.

Ernst & Young Ltd.

Hamilton, Bermuda

February 27, 2014, except for Notes 25

and 26, as to which the date is January 19, 2015

F- 2

THIRD POINT REINSURANCE LTD.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2013 and 2012

(expressed in thousands of U.S. dollars, except per share and share amounts)



	December 31, 2013		December 31, 2012
Assets
Equity securities, trading, at fair value (cost - $824,723; 2012 - $450,766)	$	954,111	$	500,929
Debt securities, trading, at fair value (cost - $408,754; 2012 - $249,110)	441,424		279,331
Other investments, at fair value	65,329		157,430
Total investments in securities and commodities	1,460,864		937,690
Cash and cash equivalents	31,625		34,005
Restricted cash and cash equivalents	193,577		77,627
Due from brokers	98,386		131,785
Securities purchased under an agreement to sell	38,147		60,408
Derivative assets, at fair value	39,045		25,628
Interest and dividends receivable	2,615		2,088
Reinsurance balances receivable	191,763		84,280
Deferred acquisition costs, net	91,193		45,383
Loss and loss adjustment expenses recoverable	9,277		—
Other assets	3,398		3,123
Total assets	$	2,159,890	$	1,402,017
Liabilities and shareholders' equity
Liabilities
Accounts payable and accrued expenses	$	9,456	$	5,278
Reinsurance balances payable	9,081		—
Deposit liabilities	120,946		50,446
Unearned premium reserves	265,187		93,893
Loss and loss adjustment expense reserves	134,331		67,271
Securities sold, not yet purchased, at fair value	56,056		176,454
Due to brokers	44,870		66,107
Derivative liabilities, at fair value	8,819		12,992
Interest and dividends payable	748		1,255
Total liabilities	649,494		473,696
Commitments and contingent liabilities
Shareholders' equity
Preference shares (par value $0.10; authorized, 30,000,000; none issued)	—		—
Common shares (par value $0.10; authorized, 300,000,000; issued and outstanding, 103,888,916 (2012: 78,432,132))	10,389		7,843
Additional paid-in capital	1,055,690		762,430
Retained earnings	325,582		98,271
Shareholders’ equity attributable to shareholders	1,391,661		868,544
Non-controlling interests	118,735		59,777
Total shareholders' equity	1,510,396		928,321
Total liabilities and shareholders' equity	$	2,159,890	$	1,402,017

The accompanying Notes to the Consolidated Financial Statements are
an integral part of the Consolidated Financial Statements.

F- 3

THIRD POINT REINSURANCE LTD.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

For the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation)

to December 31, 2011

(expressed in thousands of U.S. dollars, except per share and share amounts)



	2013			2012			2011
Revenues
Gross premiums written	$	401,937		$	190,374		$	—
Gross premiums ceded	(9,975		)	—			—
Net premiums written	391,962			190,374			—
Change in net unearned premium reserves	(171,295		)	(93,893		)	—
Net premiums earned	220,667			96,481			—
Net investment income	253,203			136,422			—
Total revenues	473,870			232,903			—
Expenses
Loss and loss adjustment expenses incurred, net	139,812			80,306			—
Acquisition costs, net	67,944			24,604			—
General and administrative expenses	33,036			27,376			1,130
Total expenses	240,792			132,286			1,130
Income (loss) including non-controlling interests	233,078			100,617			(1,130		)
Income attributable to non-controlling interests	(5,767		)	(1,216		)	—
Net income (loss)	$	227,311		$	99,401		$	(1,130	)
Earnings (loss) per share
Basic	$	2.58		$	1.26		$	(0.01	)
Diluted	$	2.54		$	1.26		$	(0.01	)
Weighted average number of common shares used in the determination of earnings (loss) per share
Basic	87,505,540			78,432,132			78,432,132
Diluted	88,970,531			78,598,236			78,432,132
The accompanying Notes to the Consolidated Financial Statements are
an integral part of the Consolidated Financial Statements.

F- 4

THIRD POINT REINSURANCE LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation)

to December 31, 2011

(expressed in thousands of U.S. dollars, except share amounts)



	2013			2012			2011
Common shares
Balance, beginning of period	78,432,132			78,432,132			—
Issuance of common shares	25,456,784			—			78,432,132
Balance, end of period	103,888,916			78,432,132			78,432,132
Common shares
Balance, beginning of period	$	7,843		$	7,843		$	—
Issuance of common shares	2,546			—			7,843
Balance, end of period	10,389			7,843			7,843
Additional paid-in capital
Balance, beginning of period	762,430			756,219			—
Issuance of common shares, net	283,460			(197		)	756,219
Fair value of Founder and advisor warrants	3,747			—			13,627
Fair value of warrants qualifying as shareholders' equity	(3,747		)	—			(13,627		)
Share compensation expense	9,800			6,408			—
Balance, end of period	1,055,690			762,430			756,219
Subscriptions receivable
Balance, beginning of period	—			(177,507		)	—
Subscriptions due from shareholders	—			—			(177,507		)
Receipt of subscriptions due from shareholders	—			177,507			—
Balance, end of period	—			—			(177,507		)
Retained earnings (deficit)
Balance, beginning of period	98,271			(1,130		)	—
Net income (loss)	227,311			99,401			(1,130		)
Balance, end of period	325,582			98,271			(1,130		)
Shareholders' equity attributable to shareholders	1,391,661			868,544			585,425
Non-controlling interests
Balance, beginning of period	59,777			—			—
Contributions	88,320			58,561			—
Distributions	(35,129		)	—			—
Income attributable to non-controlling interests	5,767			1,216			—
Balance, end of period	118,735			59,777			—
Total shareholders' equity	$	1,510,396		$	928,321		$	585,425
The accompanying Notes to the Consolidated Financial Statements are
an integral part of the Consolidated Financial Statements.

F- 5

THIRD POINT REINSURANCE LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2013 and 2012 and the period from October 6, 2011 (incorporation date)

to December 31, 2011

(expressed in thousands of U.S. dollars, except per share and share amounts)



	2013			2012			2011
Operating activities
Net income (loss)	$	227,311		$	99,401		$	(1,130	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Share compensation expense	9,800			6,408			—
Net unrealized gain on investments and derivatives	(78,950		)	(113,421		)	—
Net realized gain on investments and derivatives	(236,333		)	(55,632		)	—
Amortization of premium and accretion of discount, net	(262		)	(2,434		)	—
Changes in assets and liabilities:
Reinsurance balances receivable	(107,483		)	(84,280		)	—
Deferred acquisition costs, net	(45,810		)	(45,383		)	—
Loss and loss adjustment expenses recoverable	(9,277		)	—			—
Other assets	(275		)	(1,701		)	(1,420		)
Interest and dividends receivable, net	(1,034		)	(833		)	—
Unearned premium reserves	171,294			93,893			—
Loss and loss adjustment expense reserves	67,060			67,271			—
Accounts payable and accrued expenses	4,089			4,157			995
Reinsurance balances payable	9,081			—			—
Net cash provided by (used in) operating activities	9,211			(32,554		)	(1,555		)
Investing activities
Purchases of investments	(2,172,077		)	(2,317,234		)	—
Proceeds from sales of investments	1,943,655			1,521,110			—
Purchases of investments to cover short sales	(407,965		)	(535,443		)	—
Proceeds from short sales of investments	290,770			729,182			—
Change in due to/from brokers, net	12,162			(65,678		)	—
Increase (decrease) in securities purchased under an agreement to sell	22,261			(60,408		)	—
Non-controlling interest in investment affiliate	29,588			40,129			—
Change in restricted cash and cash equivalents	(115,950		)	(77,627		)	—
Net cash used in investing activities	(397,556		)	(765,969		)	—
Financing activities
Proceeds from issuance of common shares, net of costs	286,095			158,593			605,396
Increase in deposit liabilities	70,500			50,446			—
Non-controlling interest in Catastrophe Fund	29,608			19,646			—
Non-controlling interest in Catastrophe Fund Manager	(238		)	2			—
Net cash provided by financing activities	385,965			228,687			605,396
Net (decrease) increase in cash and cash equivalents	(2,380		)	(569,836		)	603,841
Cash and cash equivalents at beginning of period	34,005			603,841			—
Cash and cash equivalents at end of period	$	31,625		$	34,005		$	603,841
Supplementary information
Interest paid in cash	$	4,221		$	1,823		$	—

The accompanying Notes to the Consolidated Financial Statements are
an integral part of the Consolidated Financial Statements.

F- 6

Third Point Reinsurance Ltd.

Notes to the Consolidated Financial Statements

(Expressed in United States Dollars)


1.	Organization

Third Point Reinsurance Ltd. (the “Company”) was incorporated as an exempted company under the laws of Bermuda on October 6, 2011 and, through its wholly-owned subsidiary Third Point Reinsurance Company Ltd. (“Third Point Re”), is a provider of global specialty property and casualty reinsurance products. Third Point Re was incorporated in Bermuda and is registered as a Class 4 insurer under the Insurance Act 1978, as amended, and related regulations (the “Act”). Third Point Re commenced reinsurance operations in January 2012.

On June 15, 2012, Third Point Reinsurance Opportunities Fund Ltd. (the “Catastrophe Fund”), Third Point Reinsurance Investment Management Ltd. (the “Catastrophe Fund Manager”), and Third Point Re Cat Ltd. (the “Catastrophe Reinsurer”) were incorporated in Bermuda. The Company subsequently announced a strategic arrangement with Hiscox Insurance Company (Bermuda) Limited (“Hiscox”) to launch a collateralized catastrophe reinsurance underwriting fund management business. The Catastrophe Fund Manager, a Bermuda exempted company, is the investment manager of the Catastrophe Fund and is 85% owned by Third Point Re and 15% owned by Hiscox. The Catastrophe Fund Manager is responsible for the investment and management of the Catastrophe Fund’s assets. The Catastrophe Fund is an exempted company incorporated in Bermuda and is open to both related party and third party investors. The Catastrophe Fund Manager also acts as manager of the Catastrophe Reinsurer and, in this capacity, is responsible for overseeing the underwriting and investment activities of the Catastrophe Reinsurer. The Catastrophe Reinsurer is a Bermuda exempted company and is licensed as a special purpose insurer under the Act.

On August 2, 2012, the Company established a wholly-owned subsidiary in the United Kingdom, Third Point Re Marketing (UK) Limited. (“TPRUK”). On May 20, 2013, TPRUK was licensed as an insurance intermediary by the UK Financial Conduct Authority.

On August 20, 2013, the Company completed an initial public offering (“IPO”) of 24,832,484 common shares at an offering price of $12.50 per share. The net proceeds of the offering were $286.0 million , after deducting offering costs. The Company's common shares are listed on the New York Stock Exchange under the symbol “TPRE”.

These consolidated financial statements include the results of the Company and its wholly and majority owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). All significant intercompany accounts and transactions have been eliminated.


2.	Significant accounting policies

The following is a summary of the significant accounting and reporting policies adopted by the Company:

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The major estimates reflected in the Company’s consolidated financial statements include, but are not limited to, the loss and loss adjustment expense reserves, estimates of written and earned premiums and fair value of financial instruments.

Cash and restricted cash and cash equivalents

Cash and cash equivalents consist of cash held in banks and other short-term, highly liquid investments with original maturity dates of ninety days or less.

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Restricted cash and cash equivalents consist of cash held in trust accounts with the Catastrophe Reinsurer, securing collateralized reinsurance contracts written and cash held with brokers securing letters of credit issued under credit facilities.

Premium revenue recognition

The Company estimates the ultimate premiums for the entire contract period and records this estimate at the inception of the contract, to the extent that the amount of written premium is estimable. For contracts where the full written premium is not estimable at inception, the Company records written premium for the portion of the contract period for which the amount is estimable. These estimates are based primarily on information in the underlying contracts as well as information provided by clients and/or brokers.

Premiums written are earned over the exposure period in proportion to the period of risk covered. Unearned premiums represent the portion of premiums written that relate to the remaining term of the underlying policies in force.

Premiums for retroactive reinsurance contracts, where the Company has evaluated and concluded that risk transfer has occured, are earned at the inception of the contract, as all of the underlying loss events covered by these contracts occurred in the past. Any underwriting profit at inception of a retroactive reinsurance contract is deferred and recognised over the estimated future payout of the loss and loss adjustment expenses reserves. Any underwriting loss at inception of a retroactive reinsurance contract is recognised immediately.

Changes in premium estimates are expected and may result in adjustments in any reporting period. These estimates change over time as additional information regarding the underlying business volume is obtained. Any subsequent adjustments arising on such estimates are recorded in the period in which they are determined.

Reinsurance premiums ceded

The Company reduces the risk of losses on business written by reinsuring certain risks and exposures with other reinsurers. The Company remains liable to the extent that any retrocessionaire fails to meet its obligations and to the extent that the Company does not hold sufficient security for their unpaid obligations. Ceded premiums are written during the period in which the risks incept and are expensed over the contract period in proportion to the period of risk covered. Unearned premiums ceded consist of the unexpired portion of reinsurance ceded.

Deferred acquisition costs

Acquisition costs consist of commissions, brokerage and excise taxes that are related directly to the successful acquisition of new or renewal reinsurance contracts. These costs are deferred and amortized over the period in which the related premiums are earned. The Company evaluates the recoverability of deferred acquisition costs by determining if the sum of future earned premiums and anticipated investment income is greater than expected future loss and loss adjustment expenses and acquisition costs. If a loss is probable on the unexpired portion of contracts in force, a premium deficiency loss is recognized. As of December 31, 2013 , deferred acquisition costs are considered to be fully recoverable and no premium deficiency has been recorded.

Acquisition costs also include profit commissions that are expensed when incurred. Profit commissions are calculated and accrued based on the expected loss experience for contracts and recorded when the current loss estimate indicates that a profit commission is probable under the contract terms.

Loss and loss adjustment expense reserves

The Company’s loss and loss adjustment expense reserves include case reserves and reserves for losses incurred but not yet reported (“IBNR reserves”). Case reserves are established for losses that have been reported, but not yet paid, based on loss reports from brokers and ceding companies. IBNR reserves represent the estimated loss and loss adjustment expenses that have been incurred by insureds and reinsureds but not yet reported to the insurer or reinsurer, including unknown future developments on loss and loss adjustment expenses which are known to the insurer or reinsurer. IBNR

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reserves are established by management based on actuarially determined estimates of ultimate loss and loss adjustment expenses.

Inherent in the estimate of ultimate loss and loss adjustment expenses are expected trends in claim severity and frequency and other factors that may vary significantly as claims are settled. Accordingly, ultimate loss and loss adjustment expenses may differ materially from the amounts recorded in the consolidated financial statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are recorded in the consolidated statements of income (loss) in the period in which they become known.

Deposit liabilities

Certain contracts do not transfer sufficient insurance risk and are accounted for using the deposit method of accounting. Management exercises judgment in determining whether contracts contain sufficient risk to be accounted for as reinsurance contracts. Using the deposit method of accounting, a deposit liability, rather than written premium, is initially recorded based upon the consideration received less any explicitly identified premiums or fees. In subsequent periods, the deposit liability is adjusted by calculating the effective yield on the deposit to reflect actual payments to date and future expected payments.

Fair value measurement

The Company determines the fair value of financial instruments in accordance with current accounting guidance, which defines fair value and establishes a three level fair value hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Fair value is defined as the price that the Company would receive to sell an asset or would pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Company determines the estimated fair value of each individual security utilizing the highest level inputs available.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments, approximates the carrying amounts presented in the consolidated balance sheets.

Investments

The Company’s investments are classified as “trading securities” and are carried at fair value with changes in fair value included in earnings in the consolidated statements of income (loss).

The fair value of the Company’s investments are based on quoted market prices, or when such prices are not available, by reference to broker or underwriter bid indications and/or internal pricing valuation techniques. Investment transactions are recorded on a trade date basis with balances pending settlement included in due to/from brokers in the consolidated balance sheets.

Realized gains and losses are determined using cost calculated on a specific identification basis. Dividends are recorded on the ex-dividend date. Income and expense are recorded on the accrual basis including interest and premiums amortized and discounts accreted.

Derivatives

Underwriting

The Catastrophe Reinsurer enters into certain contracts under which the potential loss payments are triggered exclusively by reference to a specified index, such as an industry loss. These contracts are considered derivatives. The Company records the fair value of these contracts in derivative liabilities, at fair value, in the consolidated balance sheet. Changes in the fair value of these contracts are recorded in net investment income in the consolidated statement of income.

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Investments

Derivative instruments within our investment assets managed by our investment manager Third Point LLC, are recorded in the consolidated balance sheets at fair value, with changes in fair values and realized gains and losses recognised in net investment income in the consolidated statements of income (loss).

Derivatives serve as a key component of the Company’s investment strategy and are utilized primarily to structure the portfolio, or individual investments, and to economically match the investment objectives of the Company. The Company's derivatives do not qualify as hedges for financial reporting purposes and are recorded in the consolidated balance sheets on a gross basis and not offset against any collateral pledged or received. Pursuant to the International Swaps and Derivatives Association ("ISDA") master agreements, securities lending agreements and other derivatives agreements, the Company and its counterparties typically have the ability to net certain payments owed to each other in specified circumstances. In addition, in the event a party to one of the ISDA master agreements, securities lending agreements or other derivatives agreements defaults, or a transaction is otherwise subject to termination, the non-defaulting party generally has the right to set off against payments owed to the defaulting party or collateral held by the non defaulting party.

The Company enters into derivative contracts to manage credit risk, interest rate risk, currency exchange risk, and other exposure risks. The Company uses derivatives in connection with its risk-management activities to economically hedge certain risks and to gain exposure to certain investments. The utilization of derivative contracts also allows for an efficient means by which to trade certain asset classes.

Fair values of derivatives are determined by using quoted market prices and counterparty quotes when available; otherwise fair values are based on pricing models that consider the time value of money, volatility, and the current market and contractual prices of underlying financial instruments.

Share-based compensation

The Company accounts for its share-based compensation transactions using the fair value of the award at the grant date. Determining the fair value of share purchase options at the grant date requires estimation and judgment. The Company uses an option-pricing model (Black-Scholes) to calculate the fair value of share purchase options.

For share purchase options granted that contain both a service and performance condition, the Company recognizes share compensation expense only for the portion of the options that are considered probable of being exercised. Share compensation for share purchase options considered probable of being exercised is expensed over the service (vesting) period on a graded vesting basis. The probability of share purchase options being exercised is evaluated at each reporting period. When the share purchase options are considered probable of being exercised, the Company records a catch up of share compensation expense from the grant date (service inception date for existing options) to the current reporting period end based on the fair value of the options at the grant date.

The Company measures grant date fair value for restricted share awards based on the price of its common shares at the grant date and the expense is recognised on a straight-line basis over the vesting period.

Warrants

The Company accounts for certain warrant contracts issued to its Founders in conjunction with the initial capitalization of the Company, and which it may settle by using either the physical settlement or net-share settlement methods. The fair value of these warrants was recorded in equity as additional paid-in capital. The fair value of warrants issued are estimated on the grant date using the Black-Scholes option-pricing model.

The Company accounts for certain warrant contracts issued to an advisor, where services have been received by the Company, in part, in exchange for equity instruments, based on the fair value of such services. The associated cost of these warrants has been recorded as capital raise costs and is included in additional paid in capital in the consolidated statements of shareholders’ equity.

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Offering costs

Offering costs incurred in connection with the initial capital raise of the Company and the IPO, which included underwriters’ fees, legal and accounting fees, printing and other fees have been deducted from the gross proceeds of the offering. The proceeds from the issuance of shares net of offering costs is included in additional paid in capital in the consolidated statements of shareholders’ equity.

Foreign currency transactions

The Company’s functional currency is the U.S. dollar. Transactions in foreign currencies are recorded in U.S. dollars at the exchange rate in effect on the transaction date. Monetary assets and liabilities in foreign currencies are translated at the exchange rates in effect at the reporting date and foreign exchange gains and losses are included in the consolidated statements of income (loss).

Income taxes and uncertain tax positions

Under current Bermuda law, the Company and its Bermuda subsidiaries are not subject to any income or capital gains taxes. In the event that such taxes are imposed, the Company and its Bermuda subsidiaries would be exempted from any such taxes until March 2035 pursuant to the Tax Assurance Certificates issued to such entities pursuant to the Bermuda Exempted Undertakings Tax Protection Act of 1966, as amended.

As of December 31, 2013 , the Company did not have any uncertain tax positions.

Non-controlling interests

The Company consolidates the results of entities in which it has a controlling financial interest. The Company records the portion of shareholders’ equity attributable to non-controlling interests as a separate line within shareholders’ equity in the consolidated balance sheets. The Company records the portion of income attributable to non-controlling interests as a separate line within the consolidated statements of income (loss).

Earnings per share

Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and convertible securities such as unvested restricted shares. Diluted earnings per share is based on the weighted average number of common shares and share equivalents including any dilutive effects of warrants, options and other awards under share plans and are determined using the treasury stock method. U.S. GAAP requires that unvested share awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (referred to as ‘‘participating securities”), be included in the number of shares outstanding for both basic and diluted earnings per share calculations. The Company treats its unvested restricted shares as participating securities. In the event of a net loss, the participating securities are excluded from the calculation of both basic and diluted loss per share.

During the fourth quarter of 2013, the Company determined that it had incorrectly calculated diluted earnings per share for the prior periods, which resulted in an understatement of diluted earnings per share. Basic earnings per share was correctly presented for the prior periods. The accompanying consolidated financial statements for the years ended December 31, 2013 and 2012 and for the period from October 6, 2011 (incorporation date) to December 31, 2011 correctly present diluted earnings per share and the weighted average number of dilutive shares outstanding. The following tables summarize the correct diluted earnings per share amounts and weighted average number of dilutive shares outstanding amounts for the prior periods.

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	Three months ended
	March 31, 2012			June 30, 2012 (1)			September 30, 2012		December 31, 2012		March 31, 2013		June 30, 2013		September 30, 2013
	(unaudited)
Diluted EPS (as originally reported):	$	0.35		$	(0.40	)	$	0.45	$	0.69	$	0.85	$	0.30	$	0.46
Diluted EPS (as corrected):	$	0.38		$	(0.40	)	$	0.50	$	0.76	$	0.93	$	0.33	$	0.51

Weighted Average Number of Dilutive Shares Outstanding (as originally reported):	85,335,404			78,432,132			87,888,983		87,866,613		87,777,462		87,895,953		100,176,416
Weighted Average Number of Dilutive Shares Outstanding (as corrected):	78,432,132			78,432,132			78,551,830		78,820,844		79,083,675		79,254,268		90,915,805

	Six months ended						Nine months ended				Year ended December 31, 2012
	June 30, 2012 (1)			June 30, 2013			September 30, 2012		September 30, 2013		Year ended December 31, 2012
	(unaudited)						(unaudited)				(audited)
Diluted EPS (as originally reported):	$	(0.01	)	$	1.15		$	0.44	$	1.59	$	1.14
Diluted EPS (as corrected):	$	(0.01	)	$	1.26		$	0.49	$	1.75	$	1.26

Weighted Average Number of Dilutive Shares Outstanding (as originally reported):	78,432,132			87,836,378			87,031,196		92,438,629		87,253,760
Weighted Average Number of Dilutive Shares Outstanding (as corrected):	78,432,132			79,147,972			78,492,979		83,453,835		78,598,236

(1) Prior periods with a net loss correctly presented diluted earnings per share.

Leases

Leases in which substantially all of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognised in the consolidated statements of income (loss) on a straight-line basis over the term of the lease.

Comprehensive income

The Company has no comprehensive income other than net income disclosed in the consolidated statements of income (loss).

Segment information

Under U.S. GAAP, operating segments are based on the internal information that management uses for allocating resources and assessing performance of the Company. The Company reports two operating segments – Property and Casualty Reinsurance and Catastrophe Risk Management. The Company also has a corporate function that includes the Company’s investment results and certain general and administrative expenses related to its corporate activities.

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Recently issued accounting standards

Issued and effective as of December 31, 2013

In January 2013, the FASB issued Accounting Standards Update No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). The objective of ASU 2013-01 is to address implementation issues about the scope of ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments clarify that the scope of ASU 2011-11 applies to derivatives, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. Entities with other types of financial assets and financial liabilities subject to a master netting arrangement or similar agreement also are affected because these amendments make them no longer subject to the disclosure requirements in ASU 2011-11. ASU 2013-01 is effective for interim and annual periods beginning on or after January 1, 2013. The Company has included the required disclosures in Note 9 of notes to consolidated financial statements.

In February 2013, the FASB issued Accounting Standard Update No. 2013-02, Comprehensive Income (ASU 2013-02). The objective of ASU 2013-02 is to improve the reporting of reclassifications out of other comprehensive income. ASU 2013-02 is effective for periods subsequent to December 15, 2012. The adoption of this guidance had no impact on the Company’s consolidated financial statements.

Issued but not yet effective as of December 31, 2013

In June 2013, the FASB issued Accounting Standards Update No. 2013-08, Financial Services - Investment Companies - Amendments to the Scope, Measurement, and Disclosure Requirements (ASU 2013-08). The amendments in this update change the assessment of whether an entity is an investment company by developing a new two-tiered approach for that assessment, which requires an entity to possess certain fundamental characteristics while allowing judgment in assessing other typical characteristics. The new approach requires an entity to assess all of the characteristics of an investment company and consider its purpose and design to determine whether it is an investment company. ASU 2013-08 is effective prospectively for periods subsequent to December 15, 2013. Early adoption is prohibited. The Company is currently evaluating the impact of this guidance; however, it is not expected to have a material impact on the Company's consolidated financial statements.


3.	Restricted cash and cash equivalents

Restricted cash and cash equivalents as of December 31, 2013 and 2012 consisted of the following:



	December 31, 2013		December 31, 2012
	($ in thousands)
Restricted cash securing collateralized reinsurance contracts written by the Catastrophe Reinsurer	$	93,014	$	12,844
Restricted cash securing credit facilities	100,563		64,783
	$	193,577	$	77,627


4.	Reinsurance premiums ceded

The Company from time to time purchases retrocessional coverage for one or more of the following reasons: to manage its overall exposure, to reduce its net liability on individual risks, to obtain additional underwriting capacity and to balance its underwriting portfolio. Additionally, retrocession can be used as a mechanism to share the risks and rewards of business written and therefore can be used as a tool to align the Company’s interests with those of its counterparties. The Company currently has coverage that provides for recovery of a portion of loss and loss adjustment expenses incurred on one crop contract. Loss and loss adjustment expenses recoverable from the retrocessionaires are recorded as assets. For the year ended December 31, 2013 , loss and loss adjustment expenses incurred and reported

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on the consolidated statements of income (loss) are net of loss and loss expenses recovered of $9.3 million. Retrocession contracts do not relieve the Company from its obligations to the insureds. Failure of retrocessionaires to honor their obligations could result in losses to the Company. As of December 31, 2013 , the Company had loss and loss adjustment expenses recoverable of $9.3 million with one retrocessionaire who was rated “A (Excellent)” by A.M. Best Company. The Company regularly evaluates the financial condition of its retrocessionaires to assess the ability of the retrocessionaires to honor their obligations.


5.	Investments

The Company’s investments are managed by its investment manager, Third Point LLC (“Third Point LLC” or the “Investment Manager”), under a long-term investment management contract. The Company directly owns the investments which are held in a separate account and managed by Third Point LLC. The following is a summary of the separate account managed by Third Point LLC:



	December 31, 2013		December 31, 2012
Assets	($ in thousands)
Total investments in securities and commodities	$	1,460,864	$	937,690
Cash and cash equivalents	869		4
Restricted cash and cash equivalents	100,563		64,783
Due from brokers	98,386		131,785
Securities purchased under an agreement to sell	38,147		60,408
Derivative assets	39,045		25,628
Interest and dividends receivable	2,604		2,088
Other assets	933		829
Total assets	$	1,741,411	$	1,223,215
Liabilities and non-controlling interest
Accounts payable and accrued expenses	$	1,759	$	825
Securities sold, not yet purchased, at fair value	56,056		176,454
Due to brokers	44,870		66,107
Derivative liabilities	8,819		12,992
Interest and dividends payable	748		1,255
Non-controlling interest	69,717		40,129
Total liabilities and non-controlling interest	181,969		297,762
Total net investments managed by Third Point LLC	$	1,559,442	$	925,453

The Company’s Investment Manager has a formal valuation policy that sets forth the pricing methodology for investments to be used in determining the fair value of each security in the Company’s portfolio. The valuation policy is updated and approved at least on an annual basis by Third Point LLC’s valuation committee (the “Committee”), which is comprised of officers and employees who are senior business management personnel of Third Point LLC. The Committee meets monthly. The Committee’s role is to review and verify the propriety and consistency of the valuation methodology to determine the fair value of investments. The Committee also reviews any due diligence performed and approves any changes to current or potential external pricing vendors.

The fair values of investments are estimated using prices obtained from either third-party pricing services or dealer quotes. The methodology for valuation is generally determined based on the investment's asset class as per the Company's Investment Manager valuation policy. For investments that the Company is unable to obtain fair values from a pricing service or broker, fair values are estimated using information obtained from the Company’s Investment Manager.

Securities and commodities listed on a national securities or commodities exchange or quoted on NASDAQ are valued at their last sales price as of the last business day of the period. Listed securities with no reported sales on such date

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and over-the-counter (“OTC”) securities are valued at their last closing bid price if held long by the Company, and last closing ask price if held short by the Company. As of December 31, 2013 , securities valued at $483.2 million ( December 31, 2012 - $248.4 million ), representing 33.1% ( December 31, 2012 – 26.5% ) of investments in securities and commodities, and $41.0 million ( December 31, 2012 - $68.8 million ), representing 73.1% ( December 31, 2012 – 39.0% ) of securities sold, not yet purchased, are valued based on dealer quotes or other quoted market prices for similar securities.

Private securities are not registered for public sale and are carried at an estimated fair value at the end of the period, as determined by the Company's Investment Manager. Valuation techniques used by the Company's Investment Manager may include market approach, last transaction analysis, liquidation analysis and/or using discounted cash flow models where the significant inputs could include but are not limited to additional rounds of equity financing, financial metrics such as revenue multiples or price-earnings ratio, discount rates and other factors. In addition, the Company or the Company’s Investment Manager may employ third party valuation firms to conduct separate valuations of such private securities. The third party valuation firms provide the Company or the Company’s Investment Manager with a written report documenting their recommended valuation as of the determination date for the specified investments.

As of December 31, 2013 , the Company had $3.3 million ( December 31, 2012 - $2.8 million ) of private securities fair valued by a third party valuation firm using information obtained from the Company's Investment Manager. Private securities represented less than 1% of total investments in securities. The actual value at which these securities could actually be sold or settled with a willing buyer or seller may differ from the Company’s estimated fair values depending on a number of factors including, but not limited to, current and future economic conditions, the quantity sold or settled, the presence of an active market and the availability of a willing buyer or seller.

The Company’s derivatives are recorded at fair value, and are included in the consolidated balance sheet in derivative assets and derivative liabilities. The Company values exchange-traded derivatives at their last sales price on the exchange where it is primarily traded. OTC derivatives, which include swap, option, swaption, forward, future and contract for differences, are valued by third party sources when available; otherwise, fair values are obtained from counterparty quotes that are based on pricing models that consider the time value of money, volatility, and the current market and contractual prices of the underlying financial instruments.

As an extension of its underwriting activities, the Catastrophe Reinsurer has sold derivative instruments that provide reinsurance-like protection to third parties for specific loss events associated with certain lines of business. These derivatives are recorded in the consolidated balance sheets at fair value, with the offset recorded in net investment income in the consolidated statements of income (loss). These contracts are valued on the basis of models developed by the Company, which approximates fair value.

The Company’s holdings in asset-backed securities (“ABS”) are substantially invested in residential mortgage-backed securities (“RMBS”). The balance of the ABS positions was held in commercial mortgage-backed securities, collateralized debt obligations and student loan asset-backed securities. These investments are valued using dealer quotes or a recognised third-party pricing vendor. All of these classes of ABS are sensitive to changes in interest rates and any resulting change in the rate at which borrowers sell their properties, refinance, or otherwise pre-pay their loans. Investors in these classes of ABS may be exposed to the credit risk of underlying borrowers not being able to make timely payments on loans or the likelihood of borrowers defaulting on their loans. In addition, investors may be exposed to significant market and liquidity risks.

The Company values its investments in limited partnerships at fair value, which is estimated based on the Company's share of the net asset value of the limited partnerships as provided by the investment managers of the underlying investment funds. The resulting net gains or net losses are reflected in the consolidated statements of income (loss).

The Company performs several processes to ascertain the reasonableness of the valuation of all of the Company’s investments comprising the Company’s investment portfolio, including securities that are categorized as Level 2 and Level 3 within the fair value hierarchy. These processes include i) obtaining and reviewing weekly and monthly investment portfolio reports from the Investment Manager, ii) obtaining and reviewing monthly Net Asset Value ("NAV") and investment return reports received directly from the Company’s third-party fund administrator which are compared to the reports noted in (i), and iii) monthly update discussions with the Company’s Investment Manager regarding the

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investment portfolio, including, their process for reviewing and validating pricing obtained from outside service providers.

For the years ended December 31, 2013 and 2012 , there were no changes in the valuation techniques as it relates to the above.

Monetary assets and liabilities denominated in foreign currencies are translated at the closing rates of exchange. Transactions during the period are translated at the rate of exchange prevailing on the date of the transaction. The Company does not isolate that portion of the net investment income resulting from changes in foreign exchange rates on investments, dividends and interest from the fluctuations arising from changes in fair values of securities and derivatives held. Periodic payments received or paid on swap agreements are recorded as realized gain or loss on investment transactions. Such fluctuations are included within net investment income in the consolidated statements of income (loss).

U.S. GAAP disclosure requirements establish a framework for measuring fair value, including a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. The three-level hierarchy of inputs is summarized below:


•	Level 1 – Quoted prices available in active markets/exchanges for identical investments as of the reporting date.

•

Level 2 – Observable inputs to the valuation methodology other than unadjusted quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include, but are not limited to, prices quoted for similar assets or liabilities in active markets/ exchanges, prices quoted for identical or similar assets or liabilities in markets that are not active and fair values determined through the use of models or other valuation methodologies.


•	Level 3 – Pricing inputs unobservable for the investment and include activities where there is little, if any, market activity for the investment. The inputs applied in the determination of fair value require significant management judgment and estimation.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources other than those of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

The key inputs for corporate, government and sovereign bond valuation are coupon frequency, coupon rate and underlying bond spread. The key inputs for asset-backed securities are yield, probability of default, loss severity and prepayment.

Key inputs for over-the-counter (“OTC”) valuations vary based on the type of underlying security on which the contract was written:


•	The key inputs for most OTC option contracts include notional, strike price, maturity, payout structure, current foreign exchange forward and spot rates, current market price of underlying and volatility of underlying.


•	The key inputs for most forward contracts include notional, maturity, forward rate, spot rate, various interest rate curves and discount factor.


•	The key inputs for swap valuation will vary based on the type of underlying on which the contract was written. Generally, the key inputs for most swap contracts include notional, swap period, fixed rate, credit or interest rate curves, current market or spot price of the underlying and the volatility of the underlying.

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The following tables present the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2013 and 2012:



	December 31, 2013
	Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Total
Assets	($ in thousands)
Equity securities	$	839,903	$	17,914	$	—	$	857,817
Private common equity securities	—		94,282		2,012		96,294
Total equities	839,903		112,196		2,012		954,111
Asset-backed securities	—		325,133		400		325,533
Bank debts	—		8,017		—		8,017
Corporate bonds	—		82,139		4,610		86,749
Municipal bonds	—		10,486		—		10,486
Sovereign debt	—		10,639		—		10,639
Total debt securities	—		436,414		5,010		441,424
Investments in limited partnerships	—		29,286		5,292		34,578
Options	6,284		6,785		—		13,069
Rights and warrants	1		—		—		1
Trade claims	—		17,681		—		17,681
Total other investments	6,285		53,752		5,292		65,329
Derivative assets	321		38,724		—		39,045
Total assets	$	846,509	$	641,086	$	12,314	$	1,499,909
Liabilities
Equity securities	$	5,207	$	—	$	—	$	5,207
Sovereign debt	—		37,592		—		37,592
Corporate bonds	—		3,372		—		3,372
Options	4,714		5,171		—		9,885
Total securities sold, not yet purchased	9,921		46,135		—		56,056
Derivative liabilities	441		8,378		—		8,819
Total liabilities	$	10,362	$	54,513	$	—	$	64,875

F- 17



	December 31, 2012
	Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Total
Assets	($ in thousands)
Equity securities	$	496,473	$	1,699	—		$	498,172
Private common equity securities	—		—		2,757		2,757
Total equities	496,473		1,699		2,757		500,929
Asset-backed securities	—		191,401		—		191,401
Bank debts	—		22,531		54		22,585
Corporate bonds	—		56,814		1,046		57,860
Sovereign debt	—		7,485		—		7,485
Total debt securities	—		278,231		1,100		279,331
Investments in limited partnerships	—		91,287		—		91,287
Commodities	51,093		—		—		51,093
Options	3,191		276		—		3,467
Trade claims	—		11,583		—		11,583
Total other investments	54,284		103,146		—		157,430
Derivative assets	1,025		24,603		—		25,628
Total assets	$	551,782	$	407,679	$	3,857	$	963,318
Liabilities
Equity securities	$	104,308	—		—		$	104,308
Sovereign debt	—		59,918		—		59,918
Corporate bonds	—		8,924		—		8,924
Options	3,259		45		—		3,304
Total securities sold, not yet purchased	107,567		68,887		—		176,454
Derivative liabilities	10		12,982		—		12,992
Total liabilities	$	107,577	$	81,869	$	—	$	189,446

During the years ended December 31, 2013 and 2012 , the Company made no significant reclassifications of assets or liabilities between Levels 1 and 2.

F- 18

The following table presents the reconciliation for all investments measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2013 and 2012 :



	January 1, 2013		Transfers in to (out of) Level 3			Purchases		Sales			Realized and Unrealized Gains(Losses) (1)			December 31, 2013
	($ in thousands)
Assets
Asset-backed securities	$	—	$	133		$	552	$	(12	)	$	(273	)	$	400
Bank debt	54		(54		)	—		—			—			—
Corporate bonds	1,046		—			4,094		(1,392		)	862			4,610
Private common equity securities	2,757		(2,757		)	2,031		—			(19		)	2,012
Investments in limited partnerships	—		—			4,690		(342		)	944			5,292
	$	3,857	$	(2,678	)	$	11,367	$	(1,746	)	$	1,514		$	12,314
Liabilities
Derivative liabilities	$	—	$	—		$	—	$	(4,335	)	$	4,335		$	—

	January 1, 2012		Transfers in to (out of) Level 3			Purchases		Sales			Realized and Unrealized Gains(Losses) (1)			December 31, 2012
	($ in thousands)
Assets
Corporate bonds	$	—	$	1,093		$	—	$	(488	)	$	441		$	1,046
Bank debt	—		109			—		(8		)	(47		)	54
Private common equity securities	—		5,450			—		(2,401		)	(292		)	2,757
Trade claims	—		20			—		(22		)	2			—
Total assets	$	—	$	6,672		$	—	$	(2,919	)	$	104		$	3,857

(1) Total change in realized and unrealized gain (loss) recorded on Level 3 financial instruments are included in net investment income in the consolidated statements of income (loss).

Total unrealized gains related to fair value assets using significant unobservable inputs (Level 3) for the year ended December 31, 2013 was $1.0 million ( December 31, 2012 - $(0.7) million ).

For assets and liabilities that were transferred into Level 3 during the period, gains (losses) are presented as if the assets or liabilities had been transferred into Level 3 at the beginning of the period; similarly, for assets and liabilities that were transferred out of Level 3 during the year, gains (losses) are presented as if the assets or liabilities had been transferred out of Level 3 at the beginning of the year. The Company held no Level 3 investments where quantitative unobservable inputs are produced by the Company itself when measuring fair value.

6. Securities purchased under an agreement to sell

F- 19

securities received as collateral by the Company was $37.6 million ( December 31, 2012 - $60.0 million ). As the Company held only reverse repu rcha se agreements as of December 31, 2013, these positions are not impacted by master netting agreements. Interest expense and income related to these transactions are included in interest payable and receivable in the consolidated balance sheets. For the year ended December 31, 2013 , foreign currency gains of $1.9 million ( 2012 – gains of $0.6 million) on reverse repurchase agreements are included in net investment income in the consolidated statements of income (loss). Generally, reverse repurchase agreements mature within 30 to 90 days .


7.	Securities sold, not yet purchased, at fair value

Securities sold, not yet purchased are securities that the Company has sold, but does not own, in anticipation of a decline in the fair value of the security. The Company’s risk is that the value of the security will increase rather than decline. Consequently, the settlement amount of the liability for securities sold, not yet purchased may exceed the amount recorded in the consolidated balance sheet as the Company is obligated to purchase the securities sold, not yet purchased in the market at prevailing prices to settle its obligations. To sell a security sold, not yet purchased, the Company needs to borrow the security for delivery to the buyer. On each day that the transaction is open, the liability for the obligation to replace the borrowed security is marked-to-market and an unrealized gain or loss is recorded. At the time that the transaction is closed, the Company realizes a gain or loss equal to the difference between the price at which the security was sold and the cost of replacing the borrowed security. While the transaction is open, the Company will also incur an expense for any dividends or interest that will be paid to the lender of the securities.


8.	Due from/to brokers

The Company holds substantially all of its investments through its prime brokers pursuant to various agreements between Third Point LLC and each prime broker. The brokerage arrangements differ from broker to broker, but generally cash and investments in securities balances are available as collateral against investment in securities sold, not yet purchased and derivative positions, if required.

Margin debt balances are collateralized by cash held by the prime brokers and certain of the Company’s securities. Margin interest was paid either at the daily broker call rate or based on LIBOR.

Due from/to brokers include cash balances maintained with the Company’s prime brokers, receivables and payables from unsettled trades and proceeds from securities sold, not yet purchased. In addition, due from and to brokers includes cash collateral received and posted from OTC and repurchase agreement counterparties. As of December 31, 2013 , the Company’s due from/to brokers includes a total non-U.S. currency payable balance of $ 268.5 million ( December 31, 2012 - $90.8 million ).

F- 20


9.	Derivatives

The following tables identify the listing currency, fair value and notional amounts of derivative instruments included in the consolidated balance sheets, categorized by primary underlying risk. Balances are presented on a gross basis.



	As of December 31, 2013
	Listing currency (1)	Fair Value		Notional Amounts (2)
Derivative Assets by Primary Underlying Risk	($ in thousands)
Commodity Price
Commodity Future Options - Purchased	USD	$	256	$	12,325
Credit
Credit Default Swaps - Protection Purchased	USD	15,397		109,520
Credit Default Swaps - Protection Sold	USD	1,157		9,557
Equity Price
Contracts for Differences - Long Contracts	CHF/EUR/GBP/USD	10,549		62,847
Contracts for Differences - Short Contracts	NOK	67		2,758
Total Return Swaps - Long Contracts	BRL/JPY/USD	2,950		68,044
Total Return Swaps - Short Contracts	USD	3		290
Interest Rates
Bond Futures - Short Contracts	JPY	212		40,847
Interest Rate Swaps	EUR	182		212,594
Interest Rate Swaptions	EUR/JPY/USD	1,269		54,884
Treasury Futures - Short Contracts	USD	108		6,544
Foreign Currency Exchange Rates
Foreign Currency Forward	AUD/CAD/JPY/TRY	1,332		59,925
Foreign Currency Options - Purchased	USD	5,563		240,062
Total Derivative Assets		$	39,045	$	880,197

	Listing currency (1)	Fair Value		Notional Amounts (2)
Derivative Liabilities by Primary Underlying Risk	($ in thousands)
Commodity Price
Commodity Future Options - Sold	USD	$	148	$	35,484
Credit
Credit Default Swaps - Protection Purchased	EUR/USD	2,634		59,446
Credit Default Swaps - Protection Sold	USD	348		875
Equity Price
Contracts for Differences - Long Contracts	EUR	66		14,607
Contracts for Differences - Short Contracts	DKK	425		7,253
Total Return Swaps - Long Contracts	BRL/JPY/USD	1,385		24,807
Total Return Swaps - Short Contracts	USD	140		5,037
Index
Index Futures - Short Contracts	USD	441		8,888
Interest Rates
Bond Futures - Short Contracts				—
Interest Rate Swaps	EUR/USD	821		465,560
Interest Rate Swaptions	USD/JPY	174		99,587
Treasury Futures - Short Contracts	USD
Foreign Currency Exchange Rates
Foreign Currency Forward	EUR/GBP	709		189,030
Foreign Currency Options - Sold	USD	1,528		178,476
Total Derivative Liabilities		$	8,819	$	1,089,050

(1) USD = US dollar, JPY = Japanese yen, EUR = Euro, GBP = British pound, BRL = Brazilian real, NOK = Norwegian krone, AUD = Australian dollar, DKK = Danish krone, CAD = Canadian dollar, CHF = Swiss franc, TRY = Turkish lira

(2) The absolute notional exposure represents the Company's derivative activity as of December 31, 2013 , which is representative of the volume of derivatives held during the period.

F- 21



	As of December 31, 2012
	Listing currency (1)	Fair Value			Notional Amounts (2)
Derivative Assets by Primary Underlying Risk	($ in thousands)
Commodity Price
Commodity Future - Short Contracts	USD	$	212		$	5,363
Credit
Credit Default Swaps - Protection Purchased	JPY/USD	14,176			69,059
Equity Price
Contracts for Differences - Long Contracts	EUR/GBP/USD	4,913			40,454
Total Return Swaps - Long Contracts	BRL/USD	246			13,710
Total Return Swaps - Short Contracts	HKD	(65		)	179
Interest Rates
Bond Futures - Short Contracts	JPY	248			43,108
Interest Rate Swaps	EUR	156			6,569
Interest Rate Swaptions	EUR/JPY/USD	584			584
Treasury Futures - Short Contracts	USD	564			64,819
Foreign Currency Exchange Rates
Foreign Currency Forward	CAD/JPY/USD	2,090			57,549
Foreign Currency Options - Purchased	EUR/USD	2,504			2,504
Total Derivative Assets		$	25,628		$	303,898

	Listing currency (1)	Fair Value			Notional Amounts (2)
Derivative Liabilities by Primary Underlying Risk	($ in thousands)
Commodity Price
Commodity Future Options - Purchased	USD	$	10		$	17
Credit
Credit Default Swaps - Protection Purchased	EUR/JPY/USD	10,458			37,567
Credit Default Swaps - Protection Sold	USD	212			438
Equity Price
Contracts for Differences - Long Contracts	EUR/GBP/USD	710			9,016
Contracts for Differences - Short Contracts	EUR	29			1,513
Total Return Swaps - Long Contracts	BRL/JPY/USD	467			24,499
Total Return Swaps - Short Contracts	HKD/USD	38			1,014
Interest Rates
Interest Rate Swaps	JPY/USD	539			478,730
Interest Rate Swaptions	USD	—			—
Foreign Currency Exchange Rates
Foreign Currency Forward	EUR/GBP/USD	211			41,334
Foreign Currency Options - Sold	USD	318			318
Total Derivative Liabilities		$	12,992		$	594,446

(1) USD = US dollar, JPY = Japanese yen, EUR = Euro, GBP = British pound, BRL = Brazilian real, HKD = Hong Kong dollar, NOK = Norwegian krone, AUD = Australian dollar, DKK = Danish krone, CAD = Canadian dollar, CHF = Swiss Franc

(2) The absolute notional exposure represents the Company's derivative activity as of December 31, 2012 , which is representative of the volume of derivatives held during the period.

F- 22

The following table sets forth, by major risk type, the Company’s realized and unrealized gains (losses) relating to derivative trading activities for the years ended December 31, 2013 and 2012 . These realized and unrealized gains (losses) are included in net investment income in the consolidated statements of income (loss).



	December 31, 2013						December 31, 2012
Primary Underlying Risk	Realized Gain (Loss)			Unrealized Gain (Loss)*			Realized Gain (Loss)			Unrealized Gain (Loss)*
Commodity Price	($ in thousands)
Commodities Futures - Long Contracts	$	—		$	—		$	1,710		$	—
Commodities Futures - Short Contracts	437			(212		)	127			212
Commodity Future Options - Purchased	264			15			(17		)	(10		)
Commodity Future Options - Sold	(81		)	168			—			—
Credit
Credit Default Swaps - Protection Purchased	4,243			(10,943		)	1,239			265
Credit Default Swaps - Protection Sold	(4,845		)	10,690			—			(212		)
Equity Price
Contracts for Differences - Long Contracts	8,900			6,172			288			4,203
Contracts for Differences - Short Contracts	1,219			(341		)	931			(29		)
Total Return Swaps - Long Contracts	1,026			1,786			(4,666		)	(221		)
Total Return Swaps - Short Contracts	(557		)	76			2,569			(103		)
Index
Index Futures - Long Contracts	(2,413		)	—			—			—
Index Futures - Short Contracts	1,169			(441		)	(314		)	—
Interest Rates
Bond Futures - Short Contracts	(289		)	(36		)	—			248
Interest Rate Swaps	949			(255		)	312			(383		)
Interest Rate Swaptions	(170		)	913			665			5
Sovereign Debt Futures - Short Contracts	—			—			(970		)	—
Treasury Futures - Long Contracts	(119		)	—			—			—
Treasury Futures - Short Contracts	830			(456		)	(1,233		)	564
Foreign Currency Exchange Rates
Foreign Currency Forward	5,385			(1,255		)	(1,270		)	1,879
Foreign Currency Options	—			—			38			—
Foreign Currency Options - Purchased	5,920			1,069			(145		)	198
Foreign Currency Options - Sold	(3,787		)	(109		)	—			(87		)
Catastrophe Risk Derivatives	1,250			3,085			—			—
	$	19,331		$	9,926		$	(736	)	$	6,529

*Unrealized gain (loss) relates to derivatives still held at reporting date.

The Company’s ISDA agreements with its counterparties provide for various termination events including decline in NAV of the Company’s investments over a certain period, key-man provisions, document delivery schedules, and Employment Retirement Income Security Act and bankruptcy provisions. Upon the triggering of a termination event, a counterparty may avail itself of various remedies including, but not limited to, waiver of the termination event, request for additional collateral, renegotiation of the ISDA agreement, or immediate settlement of positions.

The Company obtains/provides collateral from/to various counterparties for OTC derivative contracts in accordance with bilateral collateral agreements. As of December 31, 2013 , the Company posted collateral in the form of cash of $35.4 million ( December 31, 2012 - $28.0 million ) to certain counterparties to cover collateral requirements for open OTC derivatives.

F- 23

The Company does not offset its derivative instruments and presents all amounts in the consolidated balance sheets on a gross basis. The Company has pledged cash collateral to counterparties to support the current value of amounts due to the counterparties based on the value of the underlying security. As of December 31, 2013 and December 31, 2012, the gross and net amounts of derivative instruments that are subject to enforceable master netting arrangements or similar agreements were as follows:



	Gross Amounts not Offset in the Consolidated Balance Sheet
December 31, 2013 Counterparty	Gross Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
	($ in thousands)
Counterparty 1	$	1,128	$	1,041	$	—	$	87
Counterparty 2	4,998		400		1,629		2,969
Counterparty 3	16,066		3,509		—		12,557
Counterparty 4	1,351		1,351		—		—
Counterparty 5	3,198		1,054		—		2,144
Counterparty 6	12,234		492		10,465		1,277
Counterparty 7	2		2		—		—
Counterparty 8	—		—		—		—
Counterparty 9	68		68		—		—

Total	$	39,045	$	7,917	$	12,094	$	19,034

	Gross Amounts not Offset in the Consolidated Balance Sheet
December 31, 2013 Counterparty	Gross Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Pledged		Net Amount
	($ in thousands)
Counterparty 1	$	1,041	$	1,041	$	—	$	—
Counterparty 2	400		400		—		—
Counterparty 3	3,509		3,509		—		—
Counterparty 4	1,360		1,351		9		—
Counterparty 5	1,054		1,054		—		—
Counterparty 6	492		492		—		—
Counterparty 7	59		2		57		—
Counterparty 8	—		—		—		—
Counterparty 9	904		68		836		—

Total	$	8,819	$	7,917	$	902	$	—

F- 24



	Gross Amounts not Offset in the Consolidated Balance Sheet
December 31, 2012 Counterparty	Gross Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
	($ in thousands)
Counterparty 1	$	1,381	$	—	$	—	$	1,381
Counterparty 2	4,987		1,761		—		3,226
Counterparty 3	6,390		4,850		—		1,540
Counterparty 4	124		124		—		—
Counterparty 5	526		526		—		—
Counterparty 6	11,607		1,080		—		10,527
Counterparty 7	231		231		—		—
Counterparty 8	232		16		—		216
Counterparty 9	—		—		—		—
Counterparty 10	142		—		—		142
Counterparty 11	—		—		—		—
Counterparty 12	8		—		—		8
Total	$	25,628	$	8,588	$	—	$	17,040

	Gross Amounts not Offset in the Consolidated Balance Sheet
December 31, 2012 Counterparty	Gross Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Pledged		Net Amount
	($ in thousands)
Counterparty 1	$	—	$	—	$	—	$	—
Counterparty 2	1,761		1,761		—		—
Counterparty 3	4,850		4,850		—		—
Counterparty 4	1,812		124		1,688		—
Counterparty 5	2,456		526		1,930		—
Counterparty 6	1,080		1,080		—		—
Counterparty 7	1,017		231		786		—
Counterparty 8	16		16		—		—
Counterparty 9	—		—		—		—
Counterparty 10	—		—		—		—
Counterparty 11	—		—		—		—
Counterparty 12	—		—		—		—
Total	$	12,992	$	8,588	$	4,404	$	—

F- 25


10.	Loss and loss adjustment expense reserves

As of December 31, 2013 and 2012, loss and loss adjustment expense reserves in the consolidated balance sheets was comprised of the following:



	December 31, 2013		December 31, 2012
	($ in thousands)
Case loss and loss adjustment expense reserves	$	34,307	$	3,668
Incurred but not reported loss and loss adjustment expense reserves	100,024		63,603
	$	134,331	$	67,271

The following table represents the activity in the reserve for losses and loss adjustment expenses for the years ended December 31, 2013 and 2012:



	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

The $4.7 million decrease in prior years' reserves reflects $1.3 million of favorable loss experience on several contracts and $3.4 million related to premium estimate decreases, primarily related to one crop contract. The reduction in loss and loss adjustment expense reserves related to premium estimates was accompanied by an equal decrease in the premium written and earned for that contract, resulting in a minimal impact to net underwriting income.

11. Management, performance and Founders fees

The Company and Third Point Re are party to a Joint Venture and Investment Management Agreement (the “Investment Agreement”) with Third Point LLC and Third Point Advisors LLC under which Third Point LLC manages certain jointly held assets.

Pursuant to the Investment Agreement, Third Point Advisors LLC receives an annual performance fee allocation equal to 20% of the net investment income of the Company’s share of the investment assets managed by Third Point LLC, subject to a loss carry forward provision. Additionally, a total management fee equal to 2% annually of the Company’s share of the investment assets managed by Third Point LLC is paid to Third Point LLC and various Founders of the Company. Management fees are paid monthly, whereas performance fees are paid annually, in arrears.

F- 26

Investment fee expenses related to the Investment Agreement, which are included in net investment income in the consolidated statements of income (loss) for the years ended December 31, 2013 and 2012 are as follows:



		2013		2012
	($ in thousands)
Management fees - Third Point LLC		$	3,651	$	2,444
Management fees - Founders		20,686		13,854
Performance fees - Third Point Advisors LLC		62,996		33,913
		$	87,333	$	50,211

As of December 31, 2013 , $63.0 million (December 31, 2012 - $33.9 million ) was included in non-controlling interests related to the performance fee payable to Third Point Advisors LLC. Since the performance fee allocation is based on annual performance, the performance fees are included in total liabilities until the performance fee is determined at year end and allocated to Third Point Advisors LLC’s capital account, in accordance with the Investment Agreement.


12.	Deposit contracts

Effective October 1, 2012, Third Point Re entered into an aggregate excess of loss agreement for consideration of $50.0 million . Under the terms of the agreement, Third Point Re maintains a notional experience account, the value of which is the $50.0 million of consideration less claims paid plus a crediting rate multiplied by the annual starting balance of the notional experience account. The crediting rate varies from a minimum of 3% to a maximum of 6.1% , based on actual investment returns realized by the Company.

Effective May 1, 2013, Third Point Re entered into an aggregate excess of loss agreement for consideration of $25.0 million . Under the terms of the agreement, Third Point Re maintains a notional experience account, the value of which is the $25.0 million of consideration less claims paid plus a crediting rate multiplied by the annual starting balance of the notional experience account. The crediting rate varies from a minimum of 3% to a maximum of 6.5% , based on actual investment returns realized by the Company.

Effective June 30, 2013, Third Point Re entered into two loss portfolio contracts for consideration of $27.2 million . Under the terms of the agreements, Third Point Re maintains a notional experience account, the initial value of which is based on the consideration received less a margin. The value of the experience account is reduced by loss payments as they are made and increased by a quarterly interest credit of 0.625% .

Effective July 1, 2013, Third Point Re entered into a contract for consideration of $14.2 million. Under the terms of the agreement, Third Point Re maintains a notional experience account, the initial value of which is based on the consideration received less a margin. The value of the experience account is reduced by loss payments as they are made and increased by a quarterly interest credit of 0.625% .

The following table details the deposit liabilities as of December 31, 2013 and 2012:



	December 31, 2013			December 31, 2012
	($ in thousands)
Initial consideration received	$	116,369		$	50,000
Net investment expense accrued	5,177			446
Payments	(600		)	—
	$	120,946		$	50,446

F- 27

13. General and administrative expenses

General and administrative expenses for the years ended December 31, 2013 and 2012 and period from October 6, 2011 (incorporation date) to December 31, 2011 are as follows:



		2013		2012		2011
	($ in thousands)
Payroll and related		$	13,490	$	13,780	$	698
Share compensation expenses		9,800		6,408		—
Legal and accounting		3,312		1,436		149
Travel and entertainment		2,473		1,887		—
IT related		1,290		1,417		—
Corporate insurance		744		365		—
Credit facility fees		605		677		—
Occupancy		420		595		34
Director and board costs		213		236		—
Other general and administrative expenses		689		575		249
		$	33,036	$	27,376	$	1,130

14. Net investment income

Net investment income for the years ended December 31, 2013 and 2012 a consisted of the following:



		2013			2012
Net investment income by type	($ 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

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	2013			2012
Net investment income by asset class	($ in thousands)
Net investment gains on equity securities	$	243,449		$	96,210
Net investment gains on debt securities	69,194			65,040
Net investment gains (losses) on other investments	(5,045		)	7,386
Net investment gains on derivatives	29,257			5,793
Net investment gains (losses) on securities sold, not yet purchased	(5,974		)	17,076
Net investment income (loss) on cash	17,961			(1,230		)
Net investment gains on securities purchased under and agreement to resell	1,863			562
Management and performance fees	(87,333		)	(50,211		)
Other investment expenses	(5,247		)	(3,758		)
Deposit liabilities and reinsurance contracts investment expense	(4,922		)	(446		)
	$	253,203		$	136,422


15.	Share capital

Authorized and issued

The Company's authorized share capital of $33.0 million is comprised of 300,000,000 common shares with a par value of $0.10 each and 30,000,000 preference shares with a par value of $0.10 each. As of December 31, 2013 , 103,888,916 common shares were issued and outstanding. No preference shares have been issued to date.

On August 20, 2013, the Company completed an IPO of 24,832,484 common shares at a purchase price of $12.50 per share. The net proceeds of the offering were $286.0 million , after deducting offering costs.

Warrants

The Company’s Founders and an advisor provided insurance industry expertise, resources and relationships to ensure that the Company would be fully operational with key management in place in time for the January 2012 underwriting season. In consideration of these commitments, the Company reserved for issuance to the Founders and an advisor warrants to purchase, in the aggregate, up to 4.0% (Founders 3.5% and an advisor 0.5% ) of the diluted shares (up to a maximum of $1 billion of subscribed shares) provided that the Founders and the advisor will not be issued any warrants for common shares issued in consideration for any capital raised by the Company in excess of $1 billion . The following is a summary of warrants as of December 31, 2013 :



	Exercise price		Authorized and issued	Aggregated fair value of warrants
	($ in thousands, except for share and per share amounts)
Founders	$	10.00	4,069,868	$	15,203
Advisor	$	10.00	581,295	2,171
			4,651,163	$	17,374

The warrants were subject to a performance condition that was met as a result of the IPO. Prior to the IPO, 3,648,006 of the warrants outstanding had met the performance condition. After the IPO, the remaining 1,003,157 warrants met the performance condition. For the year ended December 31, 2013 , the Company recorded $3.7 million related to the additional warrants that met the performance condition as a result of the IPO. These amounts have been recorded as a component of capital raise costs in additional paid in capital resulting in no net impact to total shareholders’ equity.

The warrants expire 10 years from the date of issuance, December 22, 2011, and will be exercisable at a price per share of $10.00 , which is equal to the price per share paid by investors in the initial private offering.

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16.	Share-based compensation

On July 15, 2013, the Third Point Reinsurance Ltd. 2103 Omnibus Incentive Plan (“Omnibus Plan”) was approved by the Board of Directors and subsequently on August 2, 2013 by the Shareholders of the Company. An aggregate of 21,627,906 common shares were made available under the Omnibus Plan. This number of shares includes the shares available under the Third Point Reinsurance Limited Share Incentive Plan ("Share Incentive Plan"). Awards under the Omnibus Plan may be made in the form of performance awards, restricted shares, restricted share units, share options, share appreciation rights and other share-based awards.

As of December 31, 2013 , 10,613,975 of the Company's common shares were available for future issuance under the equity incentive compensation plans.

Share based compensation expense of $9.8 million for the year ended December 31, 2013 ( 2012 - $6.4 million ) was included in general and administrative expenses, which included $2.1 million related to additional expense incurred due to the performance condition having been met as a result of the IPO.

As of December 31, 2013 , the Company had $23.8 million of unamortized share compensation expense which is expected to be amortized over a weighted average period of 2.0 years .


(a)	Management and director options

The management options issued under the Share Incentive Plan were subject to a service and performance condition. The service condition will be met with respect to 20% of the management options on each of the first five anniversary dates following the grant date of the management options. The performance condition with respect to the management options was met as a result of the IPO. Prior to the IPO, 8,572,594 of the management options outstanding had met the performance condition. After the IPO, the remaining 2,357,633 management options had met the performance condition.

The director options contain only a service condition that will be met with respect to 20% of the director options on each of the five anniversary dates following the grant date of the director options. On November 6, 2013, the director options were modified so that a total of 60% of the outstanding options vested on that date and the remaining 40% of the director options were forfeited. These forfeited options were replaced with restricted share awards.

The management and director options activity for the years ended December 31, 2013 and 2012 were as follows:



	Number of options		Weighted average exercise price
Balances as of January 1, 2012	—		—
Granted - employees	10,872,090		13.20
Granted - directors	84,748		13.20
Forfeited	—		—
Exercised	—
Balances as of December 31, 2012	10,956,838		13.20
Granted - employees	348,836		14.09
Granted - directors	—
Forfeited	(324,599	)	13.20
Exercised	—
Balances as of December 31, 2013	10,981,075		$	13.23

The fair value of share options issued were estimated on the grant date using the Black-Scholes option-pricing model. The estimated share price used for purposes of determining the fair value of share options that were granted in the second quarter of 2013 (prior to the IPO) was $10.89 (2012 - $10.00 ). The volatility assumption used of 21.95% (2012

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- 31.25% ) was based on the average estimated volatility of a reinsurance company peer group. The other assumptions used in the option-pricing model were as follows: risk free interest rate of 1.23% (2012 - 1.9% ), expected life of 6.5 years (2012 - 10.0 years ) and a 0.0% dividend yield (2012 - 0.0% ). As of December 31, 2013, the weighted average remaining contractual term for options outstanding was 8.1 years (2012 - 9.0 years ).

The following table summarizes information about the Company’s management and director share options outstanding as of December 31, 2013 :



	Options outstanding				Options exercisable
Range of exercise prices	Number of options	Weighted average exercise price		Remaining contractual life	Number of options	Weighted average exercise price
$10.00-$10.89	6,588,647	$	10.03	8.06	1,872,367	$	10.00
$16.00-$16.89	2,196,214	$	16.03	8.06	624,123	$	16.00
$20.00-$20.89	2,196,214	$	20.03	8.06	624,123	$	20.00
	10,981,075	$	13.23	8.06	3,120,613	$	13.20

For the year ended December 31, 2013 , the Company recorded $8.3 million ( 2012 - $4.8 million ) of share compensation expense related to share options, which included $2.1 million related to additional expense incurred related to the performance condition being met as a result of the IPO.

The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2013 was $61.5 million and $17.6 million , respectively (2012 - $5.9 million and $0.5 million , respectively).


(b)	Restricted shares

Restricted shares vest either ratably or at the end of the required service period and contain certain restrictions during the vesting period, relating to, among other things, forfeiture in the event of termination of employment or service and transferability.

Restricted share award activity for the year ended December 31, 2013 and 2012 was as follows:



	Number of non- vested restricted shares		Weighted average grant date fair value
Balance as of January 1, 2012	—		$	—
Granted	641,800		10.00
Forfeited	(22,500	)	10.00
Vested	—
Balance as of December 31, 2012	619,300		10.00
Granted	37,856		15.22
Forfeited	—
Vested	—
Balance as of December 31, 2013	657,156		$	10.30

For the year ended December 31, 2013 , the Company issued 5,000 (2012 - 641,800 ) restricted shares to employees. The restricted shares issued to employees in 2013 will cliff vest after 2 years from the date of issuance, subject to the grantee's continued service with the Company. The restricted shares issued in 2012 cliff vest after 3 or 5 years from the date of issuance, subject to the grantee's continued service with the Company.

For the year ended December 31, 2013 , the Company also awarded 32,856 restricted shares (2012 - none ) to non-employee directors pursuant to the Company's Omnibus Plan. Each of the restricted shares issued to non-employee

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directors contain similar restrictions to those issued to employees and will vest on December 31, 2014, subject to the grantee's continued service with the Company.

For the year ended December 31, 2013 , the Company recorded $1.5 million ( 2012 - $1.6 million ) compensation expense related to restricted share awards.


17.	Non-controlling interests

Non-controlling interests represent the portion of equity in consolidated subsidiaries not attributable, directly or indirectly, to the Company. The ownership interests in consolidated subsidiaries held by parties other than the Company have been presented in the consolidated balance sheets, as a separate component of shareholders’ equity. Non-controlling interests as of December 31, 2013 and 2012 are as follows:



	December 31, 2013			December 31, 2012
	($ in thousands)
Catastrophe Fund	$	49,254		$	19,646
Catastrophe Fund Manager	(236		)	2
Joint Venture - Third Point Advisors LLC share	69,717			40,129
	$	118,735		$	59,777

Income (loss) attributable to non-controlling interests for the years ended December 31, 2013 and 2012 was:



		2013			2012
	($ in thousands)
Catastrophe Fund		$	4,284		$	—
Catastrophe Fund Manager		(238		)	—
Joint Venture - Third Point Advisors LLC share		1,721			1,216
		$	5,767		$	1,216

As of December 31, 2013 , the following entities were consolidated in line with voting model per ASC 810: Consolidation:

• Third Point Reinsurance Opportunities Fund Ltd.

• Third Point Re Cat Ltd.

• Third Point Reinsurance Investment Management Ltd.

As of December 31, 2013 , the following entities were consolidated in line with variable interest model as per ASC 810: Consolidation:

• Investment Joint Venture


a)	Third Point Reinsurance Opportunities Fund Ltd. and Third Point Re Cat Ltd.

As of December 31, 2013 , Third Point Re's investment in the Catastrophe Fund was $54.8 million ( December 31, 2012 - $22.0 million ), representing approximately 53% of the Catastrophe Fund’s issued, non-voting, participating share capital. The objective of the Catastrophe Fund is to achieve positive uncorrelated investment returns by investing, through the Catastrophe Reinsurer, in a portfolio of collateralized reinsurance transactions and other insurance-linked investments, including catastrophe bonds and industry loss warranties.

The Catastrophe Fund Manager holds 100% of the authorized and issued voting, nonparticipating shares of the Catastrophe Fund, while the Catastrophe Fund’s investors, including Third Point Re, hold 100% of issued non-voting, participating shares.

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Furthermore, 100% of the authorized and issued voting, non-participating share capital of the Catastrophe Reinsurer and 100% of the issued non-voting, participating share capital of the Catastrophe Reinsurer is held by the Catastrophe Fund.

For the year ended December 31, 2013 , the Catastrophe Fund called $53.0 million (Third Point Re’s share - $28.0 million ) of committed capital resulting in a contribution to non-controlling interests for the Catastrophe Fund of $25.3 million for the year ended December 31, 2013 .


b)	Third Point Reinsurance Investment Management Ltd. (the “Catastrophe Fund Manager”)

The Catastrophe Fund Manager has been consolidated as part of the Company with Hiscox’s 15% interest in the Catastrophe Fund Manager recorded as a non-controlling interest. The Catastrophe Fund Manager acts as manager for both the Catastrophe Fund and the Catastrophe Reinsurer and in that capacity is responsible for overseeing:


•	The investment activities of the Catastrophe Fund, and


•	The underwriting activities of the Catastrophe Reinsurer.

The Catastrophe Fund Manager does not participate in the profits or losses of either the Catastrophe Fund or the Catastrophe Reinsurer; however, the Catastrophe Fund Manager does receive management and performance fees for its advisory services.


c)	Third Point Advisors LLC

The joint venture created through the Investment Agreement (Note 11) has been considered a variable interest entity in accordance with U.S. GAAP. Since the Company was deemed to be the primary beneficiary, the Company has consolidated the joint venture and has recorded Third Point Advisors LLC’s minority interest as a non-controlling interest in the consolidated statements of shareholders’ equity.

For the year ended December 31, 2013 , $35.1 million (2012 - $ nil ) was distributed by Third Point Advisors LLC and reduced the amount of the non-controlling interest.

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18.	Earnings per share

The following sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation) to December 31, 2011:



		2013			2012			2011
Weighted-average number of common shares outstanding:		($ in thousands)
	Basic number of common shares outstanding	87,505,540			78,432,132			78,432,132
	Dilutive effect of options	400,149			—			—
	Dilutive effect of warrants	1,064,842			166,104			—
	Diluted number of common shares outstanding	88,970,531			78,598,236			78,432,132

Basic net income (loss) per common share:
	Net income (loss)	$	227,311		$	99,401		$	(1,130	)
	Income allocated to participating shares	(1,618		)	(734		)	—
	Net income (loss) available to common shareholders	$	225,693		$	98,667		$	(1,130	)

	Basic net income (loss) per common share	$	2.58		$	1.26		$	(0.01	)

Diluted net income (loss) per common share
	Net income (loss)	$	227,311		$	99,401		$	(1,130	)
	Income allocated to participating securities	(1,592		)	(737		)	—
	Net income (loss) available to common shareholders	$	225,719		$	98,664		$	(1,130	)

	Diluted net income (loss) per common share	$	2.54		$	1.26		$	(0.01	)

For the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation) to December 31, 2011, anti-dilutive options and warrants of 3,786,173 , 3,052,091 and 3,648,006 , respectively, were excluded from the computation of diluted earnings (loss) per share.

19. Related party transactions

In addition to the transactions disclosed in Notes 5, 11 and 17 to these consolidated financial statements, the following additional transactions are classified as related party transactions, as each counterparty has either a direct or indirect shareholding in the Company or the Company has an investment in such counterparty.


a)	Pine Brook Road Partners, LLC and Narragansett Bay Insurance Company

Third Point Re entered into a quota share reinsurance agreement with Narragansett Bay Insurance Company (“Narragansett Bay”) effective December 31, 2012, which was renewed on December 31, 2013. The Company recorded $4.7 million of premiums related to these contracts for the year ended December 31, 2013 (December 31, 2012 - $9.0 million ). Pine Brook Road Partners, LLC (“Pine Brook”) is the manager of an investment fund that owns common shares and warrants issued by the Company. Pine Brook currently owns approximately 12.0% of the Company’s outstanding common shares. Pine Brook is also the manager of an investment fund that owns common shares in Narragansett Bay.


b)	TP Lux Holdco LP

Third Point Re entered into a limited partnership agreement, as one of the limited partners of TP Lux Holdco LP (the “Cayman HoldCo”), which is also an affiliate of the Investment Manager. The Cayman HoldCo was formed as a limited partnership under the laws of the Cayman Islands and invests and holds debt and equity interests in TP Lux HoldCo S.a.r.l, a Luxembourg private limited liability company (the “LuxCo”), which is also an affiliate of the Investment Manager.

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The LuxCo was established under the laws of the Grand-Duchy of Luxembourg and its principle objective is to act as a collective investment vehicle to purchase Euro debt and equity investments. Third Point Re invests in the Cayman HoldCo alongside other investment funds managed by the Investment Manager. As of December 31, 2013 and 2012, Third Point Re held approximately a 10% interest in the Cayman Holdco. As a result, Third Point Re accounts for its investment in the limited partnership under the variable interest model, in which Third Point Re is not the primary beneficiary, at fair value in the consolidated balance sheets and records the change in the fair value in the consolidated statements of income (loss).

As of December 31, 2013 , the estimated fair value of the investment in the limited partnership was $29.3 million ( December 31, 2012 - $91.3 million). The valuation policy with respect to this investment in a limited partnership is further described in Note 5.


c)	Third Point Loan L.L.C.

Third Point Loan L.L.C. (“Loan LLC”) serves as nominee of Third Point Re and other affiliated investment management clients of the Investment Manager for certain investments. Loan LLC has appointed the Investment Manager as its true and lawful agent and attorney. As of December 31, 2013 , Loan LLC held $147.2 million ( December 31, 2012 - $43.7 million) of Third Point Re’s investments, which are included in investments in securities and in derivative contracts in the consolidated balance sheets. Third Point Re’s pro rata interest in the underlying investments registered in the name of the Loan LLC and the related income and expense are reflected accordingly in the consolidated balance sheets and the consolidated statements of income (loss).


d)	Third Point Hellenic Recovery US Feeder Fund, L.P.

Third Point Re is a limited partner in Third Point Hellenic Recovery US Feeder Fund, L.P. (“Hellenic Fund”), which is an affiliate of the Investment Manager. The Hellenic Fund was formed as a limited partnership under the laws of the Cayman Islands and invests and holds debt and equity interests.

Third Point Re committed $11.4 million in the Hellenic Fund, of which $4.3 million was called during the year ended December 31, 2013 . As of December 31, 2013 , the estimated fair value of Third Point Re’s investment in the Hellenic Fund was $5.3 million. The valuation policy with respect to this investment in a limited partnership is further described in Note 5.

As of December 31, 2013 , Third Point Re held less than a 2% interest in the Hellenic Fund. As a result, Third Point Re accounts for its investment in the Hellenic Fund under the variable interest model, in which Third Point Re is not the primary beneficiary, at fair value in the consolidated balance sheets and records the change in the fair value in the consolidated statements of income (loss).


20.	Financial instruments with off-balance sheet risk or concentrations of credit risk

Off-balance sheet risk

In the normal course of business, the Company trades various financial instruments and engages in various investment activities with off-balance sheet risk. These financial instruments include securities sold, not yet purchased, forwards, futures, options, swaptions, swaps and contracts for differences. Generally, these financial instruments represent future commitments to purchase or sell other financial instruments at specific terms at specified future dates. Each of these financial instruments contains varying degrees of off-balance sheet risk whereby changes in the fair values of the securities underlying the financial instruments or fluctuations in interest rates and index values may exceed the amounts recognised in the consolidated balance sheets.

Securities sold, not yet purchased are recorded as liabilities in the consolidated balance sheets and have market risk to the extent that the Company, in satisfying its obligations, may be required to purchase securities at a higher value than that recorded in the consolidated balance sheets. The Company’s investments in securities and amounts due from brokers are partially restricted until the Company satisfies the obligation to deliver securities sold, not yet purchased.

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Forward and futures contracts are a commitment to purchase or sell financial instruments, currencies or commodities at a future date at a negotiated rate. Forward and futures contracts expose the Company to market risks to the extent that adverse changes occur to the underlying financial instruments such as currency rates or equity index fluctuations.

Option contracts give the purchaser the right, but not the obligation, to purchase or sell to the option writer financial instruments, commodities or currencies within a defined time period for a specified price. The premium received by the Company upon writing an option contract is recorded as a liability, marked to market on a daily basis and is included in securities sold, not yet purchased in the consolidated balance sheets. In writing an option, the Company bears the market risk of an unfavorable change in the financial instrument underlying the written option. Exercise of an option written by the Company could result in the Company selling or buying a financial instrument at a price different from the current fair value.

Swaption contracts give the Company the right, but not the obligation, to enter into a specified interest-rate swap within a specified period of time. The Company’s market and counterparty credit risk is limited to the premium paid to enter into the swaption contract and net unrealized gains.

Total return swaps, contracts for differences, index swaps, and interest rate swaps that involve the exchange of cash flows between the Company and counterparties are based on the change in the fair value of a particular equity, index, or interest rate on a specified notional holding. The use of these contracts exposes the Company to market risks equivalent to actually holding securities of the notional value but typically involve little capital commitment relative to the exposure achieved. The gains or losses of the Company may therefore be magnified on the capital commitment.

Credit derivatives

Credit default swaps protect the buyer against the loss of principal on one or more underlying bonds, loans, or mortgages in the event the issuer suffers a credit event. Typical credit events include failure to pay or restructuring of obligations, bankruptcy, dissolution or insolvency of the underlying issuer. The buyer of the protection pays an initial and/or a periodic premium to the seller and receives protection for the period of the contract. If there is not a credit event, as defined in the contract, the buyer receives no payments from the seller. If there is a credit event, the buyer receives a payment from the seller of protection as calculated by the contract between the two parties.

The Company may also enter into index and/or basket credit default swaps where the credit derivative may reference a basket of single-name credit default swaps or a broad-based index. Generally, in the event of a default on one of the underlying names, the buyer will receive a pro-rata portion of the total notional amount of the credit default index or basket contract from the seller. When the Company purchases single-name, index and basket credit default swaps, the Company is exposed to counterparty nonperformance.

Upon selling credit default swap protection, the Company may expose itself to the risk of loss from related credit events specified in the contract. Credit spreads of the underlying together with the period of expiration is indicative of the likelihood of a credit event under the credit default swap contract and the Company’s risk of loss. Higher credit spreads and shorter expiration dates are indicative of a higher likelihood of a credit event resulting in the Company’s payment to the buyer of protection. Lower credit spreads and longer expiration dates would indicate the opposite and lowers the likelihood the Company needs to pay the buyer of protection. Cash collateral available to the Company to mitigate potential counterparty risk related to written credit default swaps amounted to $1.6 million as of December 31, 2013 . Cash collateral received is based on the net exposure associated with all derivative instruments subject to applicable netting agreements with counterparties and may not be specific to any individual derivative contract.

F- 36

The following table sets forth certain information related to the Company’s written credit derivatives as of December 31, 2013 :



	Maximum Payout/ Notional Amount (by period of expiration)						Fair Value of Written Credit Derivatives (2)
Credit Spreads on underlying (basis points)	0-5 years		5 years or Greater Expiring Through 2046		Total Written Credit Default Swaps (1)		Asset		Liability			Net Asset/(Liability)
	($ in thousands)
Single name (0 - 250)	$	368	$	—	$	368	$	—	(104		)	(104		)
Single name (251-500)	9,514		—		9,514		1,136		—			1,136
Index (0-250)	—		550		550		21		(244		)	(223		)
	$	9,882	$	550	$	10,432	$	1,157	$	(348	)	$	809


(1)	As of December 31, 2013 , the Company did not hold any offsetting buy protection credit derivatives with the same underlying reference obligation.


(2)	Fair value amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting.

As of December 31, 2012, the Company sold protection on an index-reference obligation with a maximum potential payout amount of $0.4 million , a credit spread of 0.44% and maturity in 2046. The fair value of such protection sold totaled $0.2 million as of December 31, 2012.

Concentrations of credit risk

In addition to off-balance sheet risks related to specific financial instruments, the Company may be subject to concentration of credit risk with particular counterparties. Substantially all securities transactions of the Company are cleared by several major securities firms. The Company had substantially all such individual counterparty concentration with these brokers or their affiliates as of December 31, 2013 . However, the Company reduces its credit risk with counterparties by entering into master netting agreements. Therefore, assets represent the Company’s greater unrealized gains less unrealized losses for derivative contracts in which the Company has master netting agreements. Similarly, liabilities represent the Company’s greater unrealized losses less unrealized gains for derivative contracts in which the Joint Venture has master netting agreements. Furthermore, the Company obtains collateral from counterparties to reduce its exposure to counterparty credit risk.

The Company’s maximum exposure to credit risk associated with counterparty nonperformance on derivative contracts is limited to the net unrealized gains by counterparty inherent in such contracts which are recognised in the consolidated balance sheets. As of December 31, 2013 , the Company’s maximum counterparty credit risk exposure was $19.0 million ( December 31, 2012 - $17.0 million).


21.	Commitments and Contingencies

Operating lease

The Company leases office space at Chesney House in Bermuda. The lease expires on November 30, 2015. The lease has been accounted for as an operating lease. Total rent expense for the year ended December 31, 2013 was $ 0.4 million ( 2012 : $ 0.4 million , 2011: $0.03 million ).

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Future minimum rental commitments as of December 31, 2013 under this lease are expected to be as follows:



	($ in thousands)
2014	402
2015	368
2016	—
2017	—
	$	770

Agreements

Third Point LLC

The Company and Third Point Re (together, the "Companies") entered into a 5 year investment management agreement with Third Point LLC on December 22, 2011. The Companies are parties to an Investment Agreement with Third Point LLC under which the Companies, Third Point LLC and Third Point Advisors LLC formed a joint venture for the purpose of managing certain jointly held assets. The non-controlling interest in the consolidated balance sheets includes Third Point Advisors LLC’s share of assets in the investment joint venture.

Netjets

On December 20, 2011, Third Point Re acquired from Netjets Sales Inc. (“Netjets”) an undivided 12.5% interest in two aircraft for a five year period. The agreement with NetJets provides for monthly management fees, occupied hourly fees and other fees. Future minimum management fee commitments as of December 31, 2013 under the existing lease are expected to be as follows:



	($ in thousands)
2014	547
2015	567
2016	539
2017	—
	$	1,653

Letters of credit

As of December 31, 2013 , the Company had entered into the following letter of credit facilities, which automatically renew annually unless terminated by either party in accordance with the required notice period:



	Facility		Renewal date	Notice period (Unused Facility Portion)
	($ in thousands)
BNP Paribas	$	100,000	February 15, 2015	60 days prior to termination date
Citibank (1)	150,000		January 23, 2015	90 days prior to termination date
J.P. Morgan	50,000		August 22, 2014	60 days prior to termination date
	$	300,000


(1)	Effective January 1, 2013, the Citibank facility was reduced from $250.0 million to $150.0 million .

As of December 31, 2013 , $ 127.3 million ( December 31, 2012 - $ 60.9 million ) of letters of credit, representing 42.4% ( December 31, 2012 – 15.3% (based on total available facilities of $400 million )) of the total available facilities, had been drawn upon.

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Under the facilities, the Company provides collateral that may consist of equity securities, repurchase agreements and cash and cash equivalents. As of December 31, 2013 , cash and cash equivalents with a fair value of $ 100.6 million ( December 31, 2012 - $ 64.8 million ) were pledged as security against the letters of credit issued. These amounts are included in restricted cash and cash equivalents in the consolidated balance sheets. Each of the facilities contain customary events of default and restrictive covenants, including but not limited to, limitations on liens on collateral, transactions with affiliates, mergers and sales of assets, as well as solvency and maintenance of certain minimum pledged equity requirements, A.M. Best Company rating of “A-” or higher, and restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, as defined in the letter of credit facilities, the Company will be prohibited from paying dividends. The Company was in compliance with all of the covenants as of December 31, 2013 .

Investments

Loan and other participation interests purchased by the Company, such as bank debt, may include revolving credit arrangements or other financing commitments obligating the Company to advance additional amounts on demand. As of December 31, 2013 , the Company had no unfunded capital commitments.

In the normal course of business, the Company, as part of its investment strategy, enters into contracts that contain a variety of indemnifications and warranties. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. Thus, no amounts have been accrued related to such indemnifications. The Company also indemnifies Third Point Advisors LLC, Third Point LLC and its employees from and against any loss or expense, including, without limitation any judgment, settlement, legal fees and other costs. Any expenses related to this indemnification are reflected in net investment income in the consolidated statements of income (loss).

Litigation

From time to time in the normal course of business, the Company may be involved in formal and informal dispute resolution procedures, which may include arbitration or litigation, the outcomes of which determine the rights and obligations under the Company's reinsurance contracts and other contractual agreements. In some disputes, the Company may seek to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company may resist attempts by others to collect funds or enforce alleged rights. While the final outcome of legal disputes that may arise cannot be predicted with certainty, the Company is not currently involved in any formal or informal dispute resolution procedures.

22. Segment reporting

The determination of the Company’s business segments is based on the manner in which management monitors the performance of its operations. The Company reports two operating segments – Property and Casualty Reinsurance and Catastrophe Risk Management. The Company has also identified a corporate function that includes the Company’s investment results and certain general and administrative expenses related to corporate activities.

The following is a summary of the Company’s operating segments results for the years ended December 31, 2013 and 2012 :

F- 39



	Year Ended December 31, 2013
	Property and Casualty Reinsurance			Catastrophe Risk Management			Corporate			Total
Revenues	($ in thousands)
Gross premiums written	$	393,588		$	8,349		$	—		$	401,937
Gross premiums ceded	(9,975		)	—			—			(9,975		)
Net premiums written	383,613			8,349			—			391,962
Change in net unearned premium reserves	(171,006		)	(289		)	—			(171,295		)
Net premiums earned	212,607			8,060			—			220,667
Net investment income	—			4,421			248,782			253,203
Total revenues	212,607			12,481			248,782			473,870
Expenses
Loss and loss adjustment expenses incurred, net	139,616			196			—			139,812
Acquisition costs, net	66,981			963			—			67,944
General and administrative expenses	21,838			3,852			7,346			33,036
Total expenses	228,435			5,011			7,346			240,792
Underwriting loss	(15,828		)	n/a			n/a			n/a
Income including non-controlling interests	n/a			7,470			241,436			233,078
Income attributable to non-controlling interests	n/a			(4,046		)	(1,721		)	(5,767		)
Net income (loss)	$	(15,828	)	$	3,424		$	239,715		$	227,311

Property and Casualty Reinsurance - Underwriting Ratios:
Loss ratio (1)	65.7		%
Acquisition cost ratio (2)	31.5		%
General and administrative expense ratio (3)	10.3		%
Combined ratio (4)	107.5		%


(1)	Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.


(2)	Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.


(3)	General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.


(4)	Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.

F- 40



	Year Ended December 31, 2012
	Property and Casualty Reinsurance			Catastrophe Risk Management			Corporate			Total
Revenues	($ in thousands)
Gross premiums written	$	190,374		$	—		$	—		$	190,374
Gross premiums ceded	—			—			—			—
Net premiums written	190,374			—			—			190,374
Change in net unearned premium reserves	(93,893		)	—			—			(93,893		)
Net premiums earned	96,481			—			—			96,481
Net investment income	—			—			136,422			136,422
Total revenues	96,481			—			136,422			232,903
Expenses
Loss and loss adjustment expenses incurred, net	80,306			—			—			80,306
Acquisition costs, net	24,604			—			—			24,604
General and administrative expenses	20,290			1,534			5,552			27,376
Total expenses	125,200			1,534			5,552			132,286
Underwriting loss	(28,719		)	n/a			n/a			n/a
Income (loss) including non-controlling interests	n/a			(1,534		)	130,870			100,617
Income attributable to non-controlling interests	n/a			—			(1,216		)	(1,216		)
Net income (loss)	$	(28,719	)	$	(1,534	)	$	129,654		$	99,401

Property and Casualty Reinsurance - Underwriting Ratios:

Loss ratio (1)	83.2		%
Acquisition cost ratio (2)	25.5		%
General and administrative expense ratio (3)	21.0		%
Combined ratio (4)	129.7		%


(1)	Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.


(2)	Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.


(3)	General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.


(4)	Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.

For the year ended December 31, 2013 , three contracts individually contributed greater than 10% of total gross premiums written. These three contracts individually contributed 14.9% , 11.2% and 10.5% , respectively, of total gross premiums written for the year ended December 31, 2013 . For the year ended December 31, 2012 , three contracts each contributed greater than 10% of total gross premiums written. These three contracts contributed 22.3% , 20.0% and 11.8% , respectively, of total gross premiums written for the year ended December 31, 2012 .

F- 41

The following table provides a breakdown of the Company’s gross premiums written by line of business for the

years ended December 31, 2013 and 2012:



	2013				2012
	($ in thousands)
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	%
Total property and casualty reinsurance	393,588		97.9	%	190,374		100.0	%
Catastrophe risk management	8,349		2.1	%	—		—	%
	$	401,937	100.0	%	$	190,374	100.0	%

The following table provides a breakdown of the Company’s gross premiums written by prospective and retroactive reinsurance contracts for the years ended December 31, 2013 and 2012:



	2013				2012
	($ in thousands)
Prospective	$	362,151	90.1	%	$	190,374	100.0	%
Retroactive	39,786		9.9	%	—		—	%
	$	401,937	100.0	%	$	190,374	100.0	%

The Company records the gross premium written and earned at the inception of the contract for retroactive reinsurance contracts.

Substantially all of the Company’s business is sourced through reinsurance brokers. The following table provides a breakdown of the Company’s gross premiums written from brokers for the years ended December 31, 2013 and 2012 :



	2013				2012
	($ in thousands)
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	%

The following table provides a breakdown of the Company’s gross premiums written by domicile of the ceding companies for the years ended December 31, 2013 and 2012 :



	2013				2012
	($ in thousands)
United States	$	304,141	75.7	%	$	190,374	100.0	%
Bermuda	96,396		24.0	%	—		—	%
Other	1,400		0.3	%	—		—	%
	$	401,937	100.0	%	$	190,374	100.0	%

F- 42

23. Statutory requirements

The following is a summary of actual and required statutory capital and surplus and statutory net income as of December 31, 2013 and 2012 and for the years then ended:



	December 31, 2013		December 31, 2012
	($ in thousands)
Actual statutory capital	$	1,303,487	$	824,453
Required statutory capital and surplus	526,933		116,416
Statutory net income	229,974		101,347

Under the Bermuda Insurance Act, 1978 and related regulations, Third Point Re is subject to capital requirements calculated using the Bermuda Solvency and Capital Requirement, or BSCR model, which is a standardized statutory risk-based capital model used to measure the risk associated with Third Point Re’s assets, liabilities and premiums. Third Point Re’s required statutory capital and surplus under the BSCR model is referred to as the enhanced capital requirement, or ECR. Third Point Re is required to calculate and submit the ECR to the Bermuda Monetary Authority, or the BMA, annually. Following receipt of the submission of Third Point Re’s ECR the BMA has the authority to impose additional capital requirements (capital add-ons) if it deems necessary. If a company fails to maintain or meet its ECR, the BMA may take various degrees of regulatory action. As of December 31, 2013 and 2012, Third Point Re met its ECR.

The principal difference between statutory capital and surplus and shareholders' equity presented in accordance with GAAP is deferred acquisition costs and prepaid expenses, which are non-admitted assets for statutory purposes.

Third Point Re is also required under its Class 4 license to maintain a minimum liquidity ratio whereby the value of its relevant assets is not less than 75% of the amount of its relevant liabilities for general business. As of December 31, 2013 and 2012, Third Point Re met the minimum liquidity ratio requirement.

Third Point Re may declare dividends subject to it continuing to meet its solvency and capital requirements, which includes continuing to hold statutory capital and surplus equal to or exceeding its ECR. Third Point Re is prohibited from declaring or paying in any fiscal year dividends of more than 25% of its prior year's statutory capital and surplus unless Third Point Re files with the BMA a signed affidavit by at least two members of the Board of Directors attesting that a dividend would not cause the company to fail to meet its relevant margins. As of December 31, 2013, Third Point Re could pay dividends in 2014 of approximately $325.9 million (2012 - $206.1 million ) without providing an affidavit to the BMA.

F- 43

24. Quarterly financial results (UNAUDITED)



	Quarters ended
	December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013
	($ in thousands)
Revenues
Gross premiums written	$	162,277		$	45,425		$	98,215		$	96,020
Gross premiums ceded	—			—			—			(9,975		)
Net premiums written	162,277			45,425			98,215			86,045
Change in net unearned premium reserves	(103,767		)	20,904			(35,928		)	(52,504		)
Net premiums earned	58,510			66,329			62,287			33,541
Net investment income	87,074			53,371			32,067			80,691
Total revenues	145,584			119,700			94,354			114,232
Expenses
Loss and loss adjustment expenses incurred, net	36,133			39,349			45,692			18,638
Acquisition costs, net	18,833			21,117			14,921			13,073
General and administrative expense	8,965			9,846			7,217			7,008
Total expenses	63,931			70,312			67,830			38,719
Income including non-controlling interests	81,653			49,388			26,524			75,513
Income attributable to non-controlling interests	(1,565		)	(2,818		)	(301		)	(1,083		)
Net income	$	80,088		$	46,570		$	26,223		$	74,430

Earnings per share
Basic	$	0.77		$	0.52		$	0.33		$	0.94
Diluted (1)	$	0.75		$	0.51		$	0.33		$	0.93

Weighted average number of common shares used in the determination of earnings per share

Basic	103,264,616			89,620,394			78,432,132			78,432,132
Diluted (1)	106,390,339			90,915,805			79,254,268			79,083,675
(1) - During the quarter, it was determined that diluted earnings per share for the prior periods had been calculated incorrectly, which resulted in an understatement of diluted earnings per share. See Note 2 to the Consolidated Financial Statements.

F- 44



	Quarters ended
	December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
	($ in thousands)
Revenues
Gross premiums written	$	27,895		$	41,651		$	28,178		$	92,650
Gross premiums ceded	—			—			—			—
Net premiums written	27,895			41,651			28,178			92,650
Change in net unearned premium reserves	5,590			(7,333		)	(13,337		)	(78,813		)
Net premiums earned	33,485			34,318			14,841			13,837
Net investment income	72,511			47,686			(17,623		)	33,848
Total revenues	105,996			82,004			(2,782		)	47,685
Expenses
Loss and loss adjustment expenses incurred, net	26,626			24,709			16,686			12,285
Acquisition costs, net	10,898			10,856			2,138			712
General and administrative expense	7,155			6,440			9,621			4,160
Total expenses	44,679			42,005			28,445			17,157
Income (loss) including non-controlling interests	61,317			39,999			(31,227		)	30,528
(Income) loss attributable to non-controlling interests	(607		)	(423		)	120			(306		)
Net income (loss)	$	60,710		$	39,576		$	(31,107	)	$	30,222

Earnings (loss) per share
Basic	$	0.77		$	0.50		$	(0.40	)	$	0.38
Diluted (1)	$	0.76		$	0.50		$	(0.40	)	$	0.38

Weighted average number of common shares used in the determination of earnings (loss) per share

Basic	78,432,132			78,432,132			78,432,132			78,432,132
Diluted (1)	78,820,844			78,551,830			78,432,132			78,432,132
(1) - During the quarter, it was determined that diluted earnings per share for the prior periods had been calculated incorrectly, which resulted in an understatement of diluted earnings per share. See Note 2 to the Consolidated Financial Statements.

F- 45

25. Supplemental guarantor information

The following tables present historical, supplemental guarantor financial information as if new debt was issued by a subsidiary of Third Point Reinsurance Ltd. with Third Point Reinsurance Ltd. serving as a parent guarantor. The subsidiary presented as the issuer of debt is Third Point Re (USA) Holdings Inc., a wholly-owned subsidiary, incorporated on November 21, 2014.

The following information sets forth the Company’s condensed consolidating balance sheets as of December 31, 2013 and 2012 and the condensed consolidating statements of income (loss) and cash flows for the years ended December 31, 2013 and 2012 and for the period from October 6, 2011 (date of incorporation) to December 31, 2011. Investments in subsidiaries are accounted for on the equity method; accordingly, entries necessary to consolidate the parent guarantor, issuer of debt and all other subsidiaries are reflected in the eliminations column.

F- 46



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2013
(expressed in thousands of U.S. dollars)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Equity securities	$	—	$	—	$	954,111		$	—		$	954,111
Debt securities	—		—		441,424			—			441,424
Other investments	—		—		65,329			—			65,329
Total investments in securities and commodities	—		—		1,460,864			—			1,460,864
Cash and cash equivalents	294		—		31,331			—			31,625
Restricted cash and cash equivalents	—		—		193,577			—			193,577
Investment in subsidiaries	1,394,644		—		—			(1,394,644		)	—
Due from brokers	—		—		98,386			—			98,386
Securities purchased under an agreement to sell	—		—		38,147			—			38,147
Derivative assets, at fair value	—		—		39,045			—			39,045
Interest and dividends receivable	—		—		2,615			—			2,615
Reinsurance balances receivable	—		—		191,763			—			191,763
Deferred acquisition costs, net	—		—		91,193			—			91,193
Loss and loss adjustment expenses recoverable	—		—		9,277			—			9,277
Other assets	720		—		2,678			—			3,398
Amounts due from affiliates	417		—		(417		)	—			—
Total assets	$	1,396,075	$	—	$	2,158,459		$	(1,394,644	)	$	2,159,890
Liabilities and shareholders' equity
Liabilities
Accounts payable and accrued expenses	$	242	$	—	$	9,214		$	—		$	9,456
Reinsurance balances payable	—		—		9,081			—			9,081
Deposit liabilities	—		—		120,946			—			120,946
Unearned premium reserves	—		—		265,187			—			265,187
Loss and loss adjustment expense reserves	—		—		134,331			—			134,331
Securities sold, not yet purchased, at fair value	—		—		56,056			—			56,056
Due to brokers	—		—		44,870			—			44,870
Derivative liabilities, at fair value	—		—		8,819			—			8,819
Interest and dividends payable	—		—		748			—			748
Amounts due to affiliates	4,172		—		(4,172		)	—			—
Total liabilities	4,414		—		645,080			—			649,494
Shareholders' equity
Common shares	10,389		—		1,251			(1,251		)	10,389
Additional paid-in capital	1,055,690		—		1,064,493			(1,064,493		)	1,055,690
Retained earnings	325,582		—		328,900			(328,900		)	325,582
Shareholders' equity attributable to shareholders	1,391,661		—		1,394,644			(1,394,644		)	1,391,661
Non-controlling interests	—		—		118,735			—			118,735
Total shareholders' equity	1,391,661		—		1,513,379			(1,394,644		)	1,510,396
Total liabilities and shareholders' equity	$	1,396,075	$	—	$	2,158,459		$	(1,394,644	)	$	2,159,890

F- 47



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2012
(expressed in thousands of U.S. dollars)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Equity securities	$	—	$	—	$	500,929		$	—		$	500,929
Debt securities	—		—		279,331			—			279,331
Other investments	—		—		157,430			—			157,430
Total investments in securities and commodities	—		—		937,690			—			937,690
Cash and cash equivalents	169		—		33,836			—			34,005
Restricted cash and cash equivalents	—		—		77,627			—			77,627
Investment in subsidiaries	870,116		—		—			(870,116		)	—
Due from brokers	—		—		131,785			—			131,785
Securities purchased under an agreement to sell	—		—		60,408			—			60,408
Derivative assets, at fair value	—		—		25,628			—			25,628
Interest and dividends receivable	—		—		2,088			—			2,088
Reinsurance balances receivable	—		—		84,280			—			84,280
Deferred acquisition costs, net	—		—		45,383			—			45,383
Other assets	35		—		3,088			—			3,123
Amounts due from affiliates	770		—		(770		)	—			—
Total assets	$	871,090	$	—	$	1,401,043		$	(870,116	)	$	1,402,017
Liabilities and shareholders' equity
Liabilities
Accounts payable and accrued expenses	$	394	$	—	$	4,884		$	—		$	5,278
Deposit liabilities	—		—		50,446			—			50,446
Unearned premium reserves	—		—		93,893			—			93,893
Loss and loss adjustment expense reserves	—		—		67,271			—			67,271
Securities sold, not yet purchased, at fair value	—		—		176,454			—			176,454
Due to brokers	—		—		66,107			—			66,107
Derivative liabilities, at fair value	—		—		12,992			—			12,992
Interest and dividends payable	—		—		1,255			—			1,255
Amounts due to affiliates	2,152		—		(2,152		)	—			—
Total liabilities	2,546		—		471,150			—			473,696
Shareholders' equity
Common shares	7,843		—		1,012			(1,012		)	7,843
Additional paid-in capital	762,430		—		768,850			(768,850		)	762,430
Retained earnings	98,271		—		100,254			(100,254		)	98,271
Shareholders' equity attributable to shareholders	868,544		—		870,116			(870,116		)	868,544
Non-controlling interests	—		—		59,777			—			59,777
Total shareholders' equity	868,544		—		929,893			(870,116		)	928,321
Total liabilities and shareholders' equity	$	871,090	$	—	$	1,401,043		$	(870,116	)	$	1,402,017

F- 48



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the year ended December 31, 2013
(expressed in thousands of U.S. dollars)
	Parent Guarantor				Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross premiums written	$	—	$	—	$	—	$	401,937		$	—		$	401,937
Gross premiums ceded	—				—		(9,975		)	—			(9,975		)
Net premiums written	—				—		391,962			—			391,962
Change in net unearned premium reserves	—				—		(171,295		)	—			(171,295		)
Net premiums earned	—				—		220,667			—			220,667
Net investment income	—				—		253,203			—			253,203
Equity in earnings of subsidiaries	228,646				—		—			(228,646		)	—
Total revenues	228,646				—		473,870			(228,646		)	473,870
Expenses
Loss and loss adjustment expenses incurred, net	—				—		139,812			—			139,812
Acquisition costs, net	—				—		67,944			—			67,944
General and administrative expenses	1,335				—		31,701			—			33,036
Total expenses	1,335				—		239,457			—			240,792
Income including non-controlling interests	227,311				—		234,413			(228,646		)	233,078
Income attributable to non-controlling interests	—				—		(5,767		)	—			(5,767		)
Net income	$	227,311			$	—	$	228,646		$	(228,646	)	$	227,311



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the year ended December 31, 2012
(expressed in thousands of U.S. dollars)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross premiums written	$	—	$	—	$	190,374		$	—		$	190,374
Gross premiums ceded	—		—		—			—			—
Net premiums written	—		—		190,374			—			190,374
Change in net unearned premium reserves	—		—		(93,893		)	—			(93,893		)
Net premiums earned	—		—		96,481			—			96,481
Net investment income	—		—		136,422			—			136,422
Equity in earnings of subsidiaries	101,346		—		—			(101,346		)	—
Total revenues	101,346		—		232,903			(101,346		)	232,903
Expenses
Loss and loss adjustment expenses incurred, net	—		—		80,306			—			80,306
Acquisition costs, net	—		—		24,604			—			24,604
General and administrative expenses	1,945		—		25,431			—			27,376
Total expenses	1,945		—		130,341			—			132,286
Income including non-controlling interests	99,401		—		102,562			(101,346		)	100,617
Income attributable to non-controlling interests	—		—		(1,216		)	—			(1,216		)
Net income	$	99,401	$	—	$	101,346		$	(101,346	)	$	99,401

F- 49



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
For the period from October 6, 2011 (date of incorporation) to December 31, 2011
(expressed in thousands of U.S. dollars)
	Parent Guarantor			Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations		Consolidated
Revenues
Gross premiums written	$	—		$	—	$	—		$	—	$	—
Gross premiums ceded	—			—		—			—		—
Net premiums written	—			—		—			—		—
Change in net unearned premium reserves	—			—		—			—		—
Net premiums earned	—			—		—			—		—
Net investment income	—			—		—			—		—
Equity in earnings of subsidiaries	(1,092		)	—		—			1,092		—
Total revenues	(1,092		)	—		—			1,092		—
Expenses
Other underwriting income	—			—		—			—		—
Loss and loss adjustment expenses incurred, net	—			—		—			—		—
Acquisition costs, net	—			—		—			—		—
General and administrative expenses	38			—		1,092			—		1,130
Total expenses	38			—		1,092			—		1,130
Loss including non-controlling interests	(1,130		)	—		(1,092		)	1,092		(1,130		)
Loss attributable to non-controlling interests	—			—		—			—		—
Net loss	$	(1,130	)	$	—	$	(1,092	)	$	1,092	$	(1,130	)

F- 50



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the year ended December 31, 2013
(expressed in thousands of U.S. dollars)
	Parent Guarantor			Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income	$	227,311		$	—	$	228,646		$	(228,646	)	$	227,311
Adjustments to reconcile net income to net cash provided by operating activities
Equity in earnings of subsidiaries	(228,646		)	—		—			228,646			—
Share compensation expense	—			—		9,800			—			9,800
Net unrealized gain on investments and derivatives	—			—		(78,950		)	—			(78,950		)
Net realized gain on investments and derivatives	—			—		(236,333		)	—			(236,333		)
Amortization of premium and accretion of discount, net	—			—		(262		)	—			(262		)
Changes in assets and liabilities:
Reinsurance balances receivable	—			—		(107,483		)	—			(107,483		)
Deferred acquisition costs, net	—			—		(45,810		)	—			(45,810		)
Loss and loss adjustment expenses recoverable	—			—		(9,277		)	—			(9,277		)
Other assets	(686		)	—		411			—			(275		)
Interest and dividends receivable, net	—			—		(1,034		)	—			(1,034		)
Unearned premium reserves	—			—		171,294			—			171,294
Loss and loss adjustment expense reserves	—			—		67,060			—			67,060
Accounts payable and accrued expenses	(65		)	—		4,154			—			4,089
Reinsurance balances payable	—			—		9,081			—			9,081
Amounts due from affiliates	353			—		(353		)	—			—
Amounts due to affiliates	2,020			—		(2,020		)	—			—
Net cash provided by operating activities	287			—		8,924			—			9,211
Investing activities
Purchases of investments	—			—		(2,172,077		)	—			(2,172,077		)
Proceeds from sales of investments	—			—		1,943,655			—			1,943,655
Purchases of investments to cover short sales	—			—		(407,965		)	—			(407,965		)
Proceeds from short sales of investments	—			—		290,770			—			290,770
Change in due to/from brokers, net	—			—		12,162			—			12,162
Increase in securities purchased under agreement to sell	—			—		22,261			—			22,261
Non-controlling interest in investment affiliate	—			—		29,588			—			29,588
Change in restricted cash and cash equivalents	—			—		(115,950		)	—			(115,950		)
Contributed capital (to) from subsidiaries	(286,257		)	—		286,257			—			—
Net cash used in investing activities	(286,257		)	—		(111,299		)	—			(397,556		)
Financing activities
Proceeds from issuance of common shares, net of costs	286,095			—		—			—			286,095
Increase in deposit liabilities	—			—		70,500			—			70,500
Non-controlling interest in Catastrophe Fund	—			—		29,608			—			29,608
Non-controlling interest in Catastrophe Manager	—			—		(238		)	—			(238		)
Net cash provided by financing activities	286,095			—		99,870			—			385,965
Net (decrease) increase in cash and cash equivalents	125			—		(2,505		)	—			(2,380		)
Cash and cash equivalents at beginning of period	169			—		33,836			—			34,005
Cash and cash equivalents at end of period	$	294		$	—	$	31,331		$	—		$	31,625

F- 51



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the year ended December 31, 2012
(expressed in thousands of U.S. dollars)
	Parent Guarantor			Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income	$	99,401		$	—	$	101,346		$	(101,346	)	$	99,401
Adjustments to reconcile net income to net cash provided by (used in) operating activities												—
Equity in earnings of subsidiaries	(101,346		)	—		—			101,346			—
Share compensation expense	—			—		6,408			—			6,408
Net unrealized gain on investments and derivatives	—			—		(113,421		)	—			(113,421		)
Net realized gain on investments and derivatives	—			—		(55,632		)	—			(55,632		)
Amortization of premium and accretion of discount, net	—			—		(2,434		)	—			(2,434		)
Changes in assets and liabilities:
Reinsurance balances receivable	—			—		(84,280		)	—			(84,280		)
Deferred acquisition costs, net	—			—		(45,383		)	—			(45,383		)
Other assets	(33		)	—		(1,668		)	—			(1,701		)
Interest and dividends receivable, net	—			—		(833		)	—			(833		)
Unearned premium reserves	—			—		93,893			—			93,893
Loss and loss adjustment expense reserves	—			—		67,271			—			67,271
Accounts payable and accrued expenses	682			—		3,475			—			4,157
Amounts due from affiliates	(770		)	—		770			—			—
Amounts due to affiliates	2,152			—		(2,152		)	—			—
Net cash provided by (used in) operating activities	86			—		(32,640		)	—			(32,554		)
Investing activities
Purchases of investments	—			—		(2,317,234		)	—			(2,317,234		)
Proceeds from sales of investments	—			—		1,521,110			—			1,521,110
Purchases of investments to cover short sales	—			—		(535,443		)	—			(535,443		)
Proceeds from short sales of investments	—			—		729,182			—			729,182
Change in due to/from brokers, net	—			—		(65,678		)	—			(65,678		)
Increase in securities purchased under agreement to sell	—			—		(60,408		)	—			(60,408		)
Non-controlling interest in investment affiliate	—			—		40,129			—			40,129
Change in restricted cash and cash equivalents	—			—		(77,627		)	—			(77,627		)
Contributed capital (to) from subsidiaries	(170,110		)	—		170,110			—			—
Net cash used in investing activities	(170,110		)	—		(595,859		)	—			(765,969		)
Financing activities
Proceeds from issuance of common shares, net of costs	158,593			—		—			—			158,593
Increase in deposit liabilities	—			—		50,446						50,446
Non-controlling interest in Catastrophe Fund	—			—		19,646			—			19,646
Non-controlling interest in Catastrophe Manager	—			—		2			—			2
Net cash provided by financing activities	158,593			—		70,094			—			228,687
Net (decrease) increase in cash and cash equivalents	(11,431		)	—		(558,405		)	—			(569,836		)
Cash and cash equivalents at beginning of period	11,600			—		592,241			—			603,841
Cash and cash equivalents at end of period	$	169		$	—	$	33,836		$	—		$	34,005

F- 52



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the period from October 6, 2011 (date of incorporation) to December 31, 2011
(expressed in thousands of U.S. dollars)
	Parent Guarantor			Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net loss	$	(1,130	)	—		$	(1,092	)	$	1,092		$	(1,130	)
Adjustments to reconcile net loss to net cash used in operating activities
Equity in earnings of subsidiaries	1,092			—		—			(1,092		)	—
Changes in assets and liabilities:
Other assets	(2		)	—		(1,418		)	—			(1,420		)
Accounts payable and accrued expenses	(413		)	—		1,408			—			995
Net cash used in operating activities	(453		)	—		(1,102		)	—			(1,555		)
Investing activities
Contributed capital (to) from subsidiaries	(593,343		)	—		593,343			—			—
Net cash provided by (used in) investing activities	(593,343		)	—		593,343			—			—
Financing activities
Proceeds from issuance of common shares, net of costs	605,396			—		—			—			605,396
Net cash provided by financing activities	605,396			—		—			—			605,396
Net increase in cash and cash equivalents	11,600			—		592,241			—			603,841
Cash and cash equivalents at beginning of period	—			—		—			—			—
Cash and cash equivalents at end of period	$	11,600		$	—	$	592,241		$	—		$	603,841

26. Subsequent events

In December 2014, the Company announced that it would no longer accept investments in the Catastrophe Fund and that no new business would be written in the Catastrophe Reinsurer. The Catastrophe Fund Manager will continue to manage the run off of the remaining exposure in the Catastrophe Fund.

On January 5, 2015, the shareholders agreement between Third Point Re, Hiscox, and the Catastrophe Fund Manager was terminated by agreement of the parties that the Catastrophe Fund Manager would repurchase for cancellation Hiscox’s common shares, representing 15% , of the Catastrophe Fund Manager.

F- 53

THIRD POINT REINSURANCE LTD.

Schedule I - Summary of Investments - Other than Investments in Related Parties

(expressed in thousands of U.S. dollars)



	Cost		Fair value		Balance sheet value
Assets
Equity securities	$	743,528	$	857,817	$	857,817
Private common equity securities	81,195		96,294		96,294
Total equities	824,723		954,111		954,111
Asset-backed securities	309,509		325,533		325,533
Bank debts	7,885		8,017		8,017
Corporate bonds	69,570		86,749		86,749
Municipal bonds	12,025		10,486		10,486
Sovereign debt	9,765		10,639		10,639
Total debt securities	408,754		441,424		441,424
Investments in limited partnerships	24,666		34,578		34,578
Rights and warrants	1		1		1
Options	11,458		13,069		13,069
Trade claims	11,805		17,681		17,681
Total other investments	47,930		65,329		65,329
Total investments	$	1,281,407	$	1,460,864	$	1,460,864

F- 54

THIRD POINT REINSURANCE LTD.

Schedule II - Condensed Financial Information of Registrant

Condensed Balance Sheets - Parent company only

(expressed in thousands of U.S. dollars)



	December 31, 2013		December 31, 2012
Assets
Cash and cash equivalents	$	294	$	169
Investments in subsidiaries	1,394,644		870,116
Prepaid expenses	720		35
Amounts due from affiliates	417		770
Total assets	$	1,396,075	$	871,090
Liabilities and shareholders' equity
Liabilities
Accounts payable and accrued expenses	$	242	$	394
Amounts due to affiliates	4,172		2,152
Total liabilities	4,414		2,546
Commitments and contingent liabilities	—		—
Shareholders' equity
Preference shares (par value $0.10; authorized, 30,000,000; none issued)	—		—
Common shares (par value $0.10; authorized, 300,000,000; issued and outstanding, 103,888,916 (2012: 78,432,132))	10,389		7,843
Additional paid-in capital	1,055,690		762,430
Retained earnings	325,582		98,271
Total shareholders' equity	1,391,661		868,544
Total liabilities and shareholders' equity	$	1,396,075	$	871,090

F- 55

THIRD POINT REINSURANCE LTD.

Schedule II - Condensed Financial Information of Registrant

Condensed Statements of Income (Loss) - Parent company only

For the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation)

to December 31, 2011

(expressed in thousands of U.S. dollars)



	2013		2012		2011
Revenues
Equity in earnings of consolidated subsidiaries	$	228,646	$	101,346	$	(1,092	)
Total revenues	228,646		101,346		(1,092		)
Expenses
General and administrative expenses	1,335		1,945		38
Total expenses	1,335		1,945		38
Net income (loss)	$	227,311	$	99,401	$	(1,130	)

F- 56

THIRD POINT REINSURANCE LTD.

Schedule II - Condensed Financial Information of Registrant

Condensed Statements of Cashflows - Parent company only

For the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation)

to December 31, 2011

(expressed in thousands of U.S. dollars)



	2013			2012			2011
Operating activities
Net income (loss)	$	227,311		$	99,401		$	(1,130	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Equity in earnings of subsidiaries	(228,646		)	(101,346		)	1,092
Changes in assets and liabilities:
Prepaid expenses	(686		)	(33		)	(2		)
Accounts payable and accrued expenses	(66		)	682			(413		)
Amounts due from affiliates	353			(770		)	—
Amounts due to affiliates	2,020			2,152			—
Net cash provided by (used in) operating activities	286			86			(453		)
Investing activities
Contributed capital to subsidiaries	(286,257		)	(170,110		)	(593,343		)
Net cash used in investing activities	(286,257		)	(170,110		)	(593,343		)
Financing activities
Proceeds from issuance of common shares, net	286,096			158,593			605,396
Net cash provided by financing activities	286,096			158,593			605,396
Net increase (decrease) in cash and cash equivalents	125			(11,431		)	11,600
Cash and cash equivalents at beginning of period	169			11,600			—
Cash and cash equivalents at end of period	$	294		$	169		$	11,600

Supplemental information:
Dividends received from subsidiaries	$	—		$	—		$	—

F- 57

THIRD POINT REINSURANCE LTD.

Schedule III - Supplementary Insurance Information

For the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation)

to December 31, 2011

(expressed in thousands of U.S. dollars)



	As of and for the year ended December 31, 2013
	Deferred acquisition costs, net		Loss and loss adjustment expense reserves		Unearned premium		Net premiums earned		Net investment income		Loss and loss adjustment expenses incurred, net		Amortization of deferred acquisition costs, net		Other operating expenses		Net premiums written
Property and Casualty Reinsurance	$	91,141	$	134,221	$	264,898	$	212,607	$	—	$	139,616	$	66,981	$	21,838	$	383,613
Catastrophe Risk Management	52		110		289		8,060		4,421		196		963		3,852		8,349
Corporate	—		—		—		—		248,782		—		—		7,346		—
	$	91,193	$	134,331	$	265,187	$	220,667	$	253,203	$	139,812	$	67,944	$	33,036	$	391,962

	As of and for the year ended December 31, 2012
	Deferred acquisition costs, net		Loss and loss adjustment expense reserves		Unearned premium		Net premiums earned		Net investment income		Loss and loss adjustment expenses incurred, net		Amortization of deferred acquisition costs, net		Other operating expenses		Net premiums written
Property and Casualty Reinsurance	$	45,383	$	67,271	$	93,893	$	96,481	$	—	$	80,306	$	24,604	$	20,290	$	190,374
Catastrophe Risk Management	—		—		—		—		—		—		—		1,534		—
Corporate	—		—		—		—		136,422		—		—		5,552		—
	$	45,383	$	67,271	$	93,893	$	96,481	$	136,422	$	80,306	$	24,604	$	27,376	$	190,374

	As of and for the period from October 6, 2011 (date of incorporation) to December 31, 2011
	Deferred acquisition costs, net		Loss and loss adjustment expense reserves		Unearned premium		Net premiums earned		Net investment income		Loss and loss adjustment expenses incurred, net		Amortization of deferred acquisition costs, net		Other operating expenses		Net premiums written
Property and Casualty Reinsurance	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Catastrophe Risk Management	—		—		—		—		—		—		—		—		—
Corporate	—		—		—		—		—		—		—		1,130		—
	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,130	$	—

F- 58

THIRD POINT REINSURANCE LTD.

Schedule IV - Reinsurance

For the years ended December 31, 2013 and 2012 and period from October 6, 2011 (date of incorporation)

to December 31, 2011

(expressed in thousands of U.S. dollars)



	Direct gross premiums written		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount assumed to net
Year ended December 31, 2013	$	—	$	9,975	$	401,937	$	391,962	98	%
Year ended December 31, 2012	—		—		190,374		190,374		100	%
Period from October 6, 2011 (date of incorporation) to December 31, 2011	—		—		—		—		n/a

F- 59

Exhibit 99.3

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

THIRD POINT REINSURANCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

As of September 30, 2014 and December 31, 2013

(expressed in thousands of U.S. dollars, except per share and share amounts)



	September 30, 2014		December 31, 2013
Assets
Equity securities, trading, at fair value (cost - $875,503; 2013 - $824,723)	$	956,604	$	954,111
Debt securities, trading, at fair value (cost - $615,576; 2013 - $408,754)	660,677		441,424
Other investments, at fair value	97,765		65,329
Total investments in securities and commodities	1,715,046		1,460,864
Cash and cash equivalents	32,693		31,625
Restricted cash and cash equivalents	261,966		193,577
Due from brokers	182,927		98,386
Securities purchased under an agreement to sell	19,897		38,147
Derivative assets, at fair value	37,260		39,045
Interest and dividends receivable	5,032		2,615
Reinsurance balances receivable	269,747		191,763
Deferred acquisition costs, net	124,373		91,193
Unearned premiums ceded	91		—
Loss and loss adjustment expenses recoverable	1,412		9,277
Other assets	3,701		3,398
Total assets	$	2,654,145	$	2,159,890
Liabilities and shareholders' equity
Liabilities
Accounts payable and accrued expenses	$	7,521	$	9,456
Reinsurance balances payable	21,651		9,081
Deposit liabilities	142,990		120,946
Unearned premium reserves	363,666		265,187
Loss and loss adjustment expense reserves	187,313		134,331
Securities sold, not yet purchased, at fair value	45,667		56,056
Due to brokers	306,927		44,870
Derivative liabilities, at fair value	12,346		8,819
Performance fee payable to related party	21,837		—
Interest and dividends payable	589		748
Total liabilities	1,110,507		649,494
Commitments and contingent liabilities
Shareholders' equity
Preference shares (par value $0.10; authorized, 30,000,000; none issued)	—		—
Common shares (par value $0.10; authorized, 300,000,000; issued and outstanding, 104,031,456 (2013: 103,888,916))	10,403		10,389
Additional paid-in capital	1,063,254		1,055,690
Retained earnings	390,656		325,582
Shareholders’ equity attributable to shareholders	1,464,313		1,391,661
Non-controlling interests	79,325		118,735
Total shareholders' equity	1,543,638		1,510,396
Total liabilities and shareholders' equity	$	2,654,145	$	2,159,890

The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.

THIRD POINT REINSURANCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

For the three and nine months ended September 30, 2014 and 2013

(expressed in thousands of U.S. dollars, except per share and share amounts)



	Three months ended						Nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Revenues
Gross premiums written	$	126,403		$	45,425		$	359,498		$	239,660
Gross premiums ceded	(150		)	—			(150		)	(9,975		)
Net premiums written	126,253			45,425			359,348			229,685
Change in net unearned premium reserves	(17,305		)	20,904			(98,388		)	(67,528		)
Net premiums earned	108,948			66,329			260,960			162,157
Net investment income	1,552			54,617			92,072			168,804
Total revenues	110,500			120,946			353,032			330,961
Expenses
Loss and loss adjustment expenses incurred, net	60,115			39,349			150,783			103,679
Acquisition costs, net	38,317			21,117			93,331			49,111
General and administrative expenses	10,124			9,846			29,698			24,071
Other expenses	2,982			1,246			4,789			2,675
Total expenses	111,538			71,558			278,601			179,536
Income (loss) before income tax expense	(1,038		)	49,388			74,431			151,425
Income tax expense	(1,542		)	—			(3,917		)	—
Income (loss) including non-controlling interests	(2,580		)	49,388			70,514			151,425
Income (loss) attributable to non-controlling interests	(3,417		)	(2,818		)	(5,440		)	(4,202		)
Net income (loss)	$	(5,997	)	$	46,570		$	65,074		$	147,223
Earnings (loss) per share
Basic	$	(0.06	)	$	0.52		$	0.63		$	1.77
Diluted	$	(0.06	)	$	0.51		$	0.61		$	1.75
Weighted average number of common shares used in the determination of earnings (loss) per share
Basic	103,295,920			89,620,394			103,275,204			82,630,430
Diluted	103,295,920			90,915,805			106,454,775			83,453,835

The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.

THIRD POINT REINSURANCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(UNAUDITED)

For the nine months ended September 30, 2014 and 2013

(expressed in thousands of U.S. dollars, except share amounts)



	2014			2013
Common shares
Balance, beginning of period	103,888,916			78,432,132
Issuance of common shares	142,540			25,456,784
Balance, end of period	104,031,456			103,888,916
Common shares
Balance, beginning of period	$	10,389		$	7,843
Issuance of common shares	14			2,546
Balance, end of period	10,403			10,389
Additional paid-in capital
Balance, beginning of period	1,055,690			762,430
Issuance of common shares, net	585			283,460
Fair value of Founder and advisor warrants	—			3,747
Fair value of warrants qualifying as shareholders' equity	—			(3,747		)
Share compensation expense	6,979			7,611
Balance, end of period	1,063,254			1,053,501
Retained earnings
Balance, beginning of period	325,582			98,271
Net income	65,074			147,223
Balance, end of period	390,656			245,494
Shareholders' equity attributable to shareholders	1,464,313			1,309,384
Non-controlling interests
Balance, beginning of period	118,735			59,777
Contributions	6,151			26,164
Distributions	(51,001		)	(35,129		)
Income attributable to non-controlling interests	5,440			4,202
Balance, end of period	79,325			55,014
Total shareholders' equity	$	1,543,638		$	1,364,398

The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.

THIRD POINT REINSURANCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the nine months ended September 30, 2014 and 2013

(expressed in thousands of U.S. dollars, except per share and share amounts)



	2014			2013
Operating activities
Net income	$	65,074		$	147,223
Adjustments to reconcile net income to net cash provided by operating activities:
Share compensation expense	6,979			7,611
Interest expense on deposit liabilities	3,687			—
Net unrealized loss (gain) on investments and derivatives	68,107			(30,541		)
Net realized gain on investments and derivatives	(184,133		)	(176,673		)
Amortization of premium and accretion of discount, net	1,031			(2,868		)
Changes in assets and liabilities:
Reinsurance balances receivable	(65,718		)	(57,669		)
Deferred acquisition costs, net	(33,180		)	(13,180		)
Unearned premiums ceded	(91		)	(2,494		)
Loss and loss adjustment expenses recoverable	7,865			(6,284		)
Other assets	(303		)	(931		)
Interest and dividends receivable, net	(2,576		)	(775		)
Unearned premium reserves	98,479			70,022
Loss and loss adjustment expense reserves	52,982			76,436
Accounts payable and accrued expenses	(1,935		)	(500		)
Reinsurance balances payable	12,133			8,579
Performance fee payable to related party	21,837			40,264
Net cash provided by operating activities	50,238			58,220
Investing activities
Purchases of investments	(2,150,821		)	(1,475,391		)
Proceeds from sales of investments	1,998,673			1,539,990
Purchases of investments to cover short sales	(141,468		)	(342,282		)
Proceeds from short sales of investments	150,098			251,085
Change in due to/from brokers, net	177,516			(311,503		)
Increase in securities purchased under an agreement to sell	18,250			22,487
Non-controlling interest in investment affiliate	(49,415		)	(33,114		)
Change in restricted cash and cash equivalents	(68,389		)	(81,663		)
Net cash used in investing activities	(65,556		)	(430,391		)
Financing activities
Proceeds from issuance of common shares, net of costs	599			286,685
Increase in deposit liabilities	5,782			41,793
Non-controlling interest in Catastrophe Fund	10,023			28,515
Non-controlling interest in Catastrophe Fund Manager	(18		)	(164		)
Net cash provided by financing activities	16,386			356,829
Net increase (decrease) in cash and cash equivalents	1,068			(15,342		)
Cash and cash equivalents at beginning of period	31,625			34,005
Cash and cash equivalents at end of period	$	32,693		$	18,663
Supplementary information
Interest paid in cash	$	2,780		$	3,369
Income tax paid in cash	$	2,286		$	—

The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.

Third Point Reinsurance Ltd.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

(Expressed in United States Dollars)


1.	Organization

On August 2, 2012, the Company established a wholly-owned subsidiary in the United Kingdom, Third Point Re Marketing (UK) Limited (“TPRUK”). On May 20, 2013, TPRUK was licensed as an insurance intermediary by the UK Financial Conduct Authority.

These unaudited condensed consolidated financial statements include the results of the Company and its wholly and majority owned subsidiaries (together, the “Company”) and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 in Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In addition, the year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. This Quarterly Report should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the U.S. Securities and Exchange Commission on February 28, 2014.

In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company's financial position and results of operations as at the end of and for the periods presented. All significant intercompany accounts and transactions have been eliminated.

The results for the nine months ended September 30, 2014 are not necessarily indicative of the results expected for the full calendar year.


2.	Significant accounting policies

The following is a summary of the significant accounting and reporting policies adopted by the Company:

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported and disclosed amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The major estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, the loss and loss adjustment expense reserves, estimates of written and earned premiums and fair value of financial instruments.

Cash and restricted cash and cash equivalents

Cash and cash equivalents consist of cash held in banks and other short-term, highly liquid investments with original maturity dates of ninety days or less.

Premium revenue recognition

To the extent that the amount of written premium is estimable, the Company estimates the ultimate premiums for the entire contract period and records this estimate at the inception of the contract. For contracts where the full written premium is not estimable at inception, the Company records written premium for the portion of the contract period for which the amount is estimable. These estimates are based primarily on information in the underlying contracts as well as information provided by clients and/or brokers.

Premiums for retroactive reinsurance contracts are earned at the inception of the contract, as all of the underlying loss events covered by these contracts occurred in the past. Any underwriting profit at inception of a retroactive reinsurance contract is deferred and recognised over the estimated future payout of the loss and loss adjustment expenses reserves. Any underwriting loss at inception of a retroactive reinsurance contract is recognised immediately.

Reinsurance premiums ceded

From time to time the Company reduces the risk of losses on business written by reinsuring certain risks and exposures with other reinsurers. The Company remains liable to the extent that any retrocessionaire fails to meet its obligations and to the extent that the Company does not hold sufficient security for their unpaid obligations. Ceded premiums are written during the period in which the risks incept and are expensed over the contract period in proportion to the period of risk covered. Unearned premiums ceded consist of the unexpired portion of reinsurance ceded.

Deferred acquisition costs

premiums are earned. The Company evaluates the recoverability of deferred acquisition costs by determining if the sum of future earned premiums and anticipated investment income is greater than expected future loss and loss adjustment expenses and acquisition costs. If a loss is probable on the unexpired portion of contracts in force, a premium deficiency loss is recognized. As of September 30, 2014 , deferred acquisition costs are considered to be fully recoverable and no premium deficiency has been recorded.

Loss and loss adjustment expense reserves

Inherent in the estimate of ultimate loss and loss adjustment expenses are expected trends in claim severity and frequency and other factors that may vary significantly as claims are settled. Accordingly, ultimate loss and loss adjustment expenses may differ materially from the amounts recorded in the condensed consolidated financial statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are recorded in the condensed consolidated statements of income (loss) in the period in which they become known.

Deposit liabilities

Certain contracts do not transfer sufficient insurance risk to be deemed reinsurance contracts and are accounted for using the deposit method of accounting. Management exercises judgment in determining whether contracts transfer sufficient risk to be accounted for as reinsurance contracts. Using the deposit method of accounting, a deposit liability, rather than written premium, is initially recorded based upon the consideration received less any explicitly identified premiums or fees. In subsequent periods, the deposit liability is adjusted by calculating the effective yield on the deposit to reflect actual payments to date and future expected payments.

Fair value measurement

The Company determines the fair value of financial instruments in accordance with current accounting guidance, which defines fair value and establishes a three level fair value hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Fair value is defined as the price the Company would receive to sell an asset or would pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Company determines the estimated fair value of each individual security utilizing the highest level inputs available.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments, approximates the carrying amounts presented in the condensed consolidated balance sheets.

Investments

The Company’s investments are classified as “trading securities” and are carried at fair value with changes in fair value included in earnings in the condensed consolidated statements of income (loss).

The fair value of the Company’s investments are based on quoted market prices, or when such prices are not available, by reference to broker or underwriter bid indications, industry recognized pricing vendors and/or internal pricing

valuation techniques. Investment transactions are recorded on a trade date basis with balances pending settlement included in due to/from brokers in the condensed consolidated balance sheets.

Realized gains and losses are determined using cost calculated on the specific identification basis. Dividends are recorded on the ex-dividend date. Income and expense are recorded on the accrual basis including interest and premiums amortized and discounts accreted.

Derivatives

Underwriting

The Catastrophe Reinsurer enters into certain contracts for which the potential loss payments are triggered exclusively by reference to a specified index, such as an industry loss. These contracts are accounted for as derivatives. The Company records the fair value of these contracts in derivative liabilities, at fair value, in the condensed consolidated balance sheets. Changes in the fair value of these contracts are recorded in net investment income in the condensed consolidated statements of income (loss).

Investments

Derivative instruments within our separate account managed by our investment manager, Third Point LLC, are recorded in the condensed consolidated balance sheets at fair value, with changes in fair values and realized gains and losses recognized in net investment income in the condensed consolidated statements of income (loss).

Derivatives serve as a key component of the Company’s investment strategy and are utilized primarily to structure the portfolio, or individual investments, and to economically match the investment objectives of the Company. The Company's derivatives do not qualify as hedges for financial reporting purposes and are recorded in the condensed consolidated balance sheets on a gross basis and not offset against any collateral pledged or received. Pursuant to the International Swaps and Derivatives Association ("ISDA") master agreements, securities lending agreements and other derivatives agreements, the Company and its counterparties typically have the ability to net certain payments owed to each other in specified circumstances. In addition, in the event a party to one of the ISDA master agreements, securities lending agreements or other derivatives agreements defaults, or a transaction is otherwise subject to termination, the non-defaulting party generally has the right to set off against payments owed to the defaulting party or collateral held by the non defaulting party.

Fair values of derivatives are determined by using quoted market prices, industry recognized pricing vendors and broker quotes when available; otherwise fair values are based on pricing models that consider the time value of money, volatility, and the current market and contractual prices of underlying financial instruments.

Embedded derivatives

Certain of the Company’s deposit and reinsurance contracts contain interest crediting features that vary based on the net investment return on investments managed by Third Point LLC. These contractual features are considered embedded derivatives in accordance with U.S. GAAP. We include the estimated fair value of these embedded derivatives in the condensed consolidated balance sheets with the host contract in order to reflect the expected settlement of these features with the host contract. Prior to 2014, the changes in estimated fair value of these embedded derivatives were recorded in net investment income. As these embedded derivatives have become more prominent, the presentation has been modified and changes in the estimated fair value of embedded derivatives are now recorded in other expenses in the condensed consolidated statements of income (loss). In addition, fixed interest crediting features on these contracts that were recorded in net investment income are now classified in other expenses in the condensed consolidated statements of income (loss). As a result, investment expense of $1.2 million and $2.7 million that was previously

reported in net investment income for the three and nine months ended September 30, 2013, respectively, is now being reported in other expenses to conform to the current year presentation.

Share-based compensation

Warrants

The Company accounts for warrant contracts issued to certain of its founding investors ("Founders") in conjunction with the initial capitalization of the Company by using either the physical settlement or net-share settlement methods. The fair value of these warrants was recorded in equity as additional paid-in capital. The fair value of warrants issued are estimated on the grant date using the Black-Scholes option-pricing model.

Offering costs

Offering costs incurred in connection with the IPO, which included underwriters’ fees, legal and accounting fees, printing and other fees were deducted from the gross proceeds of the offering. The proceeds from the issuance of shares net of offering costs is included in additional paid in capital in the condensed consolidated statements of shareholders’ equity.

Foreign currency transactions

The Company’s functional currency is the U.S. dollar. Transactions in foreign currencies are recorded in U.S. dollars at the exchange rate in effect on the transaction date. Monetary assets and liabilities in foreign currencies are remeasured at the exchange rates in effect at the reporting date and foreign exchange gains and losses are included in the condensed consolidated statements of income (loss).

Income taxes and uncertain tax positions

Under current Bermuda law, the Company and its Bermuda subsidiaries are not subject to any income or capital gains taxes. In the event that such taxes are imposed, the Company and its Bermuda subsidiaries would be exempted from any such taxes until March 2035 under the Tax Assurance Certificates issued to such entities pursuant to the Bermuda Exempted Undertakings Tax Protection Act of 1966, as amended.

The Company has an operating subsidiary in the United Kingdom, TPRUK, which is subject to relevant taxes in that jurisdiction. On July 17, 2013, the United Kingdom government passed the Finance Act 2013, which reduced the corporate income tax rate from 23% to 21% (effective April 1, 2014) and provided for a further reduction in the corporate income tax rate from 21% to 20% (effective April 1, 2015). For the three and nine months ended September 30, 2014, the Company recorded $0.003 million and $0.02 million , respectively, for income taxes relating to TPRUK.

The Company is subject to withholding tax obligations related to dividends, capital gains and interest on certain investments. Prior to the second quarter of 2014, these withholding tax obligations were recorded as deductions to net investment income. As these withholding tax obligations have increased, the Company began presenting the relevant amounts in income tax expense in the condensed consolidated statements of income (loss). As a result, withholding taxes of $1.2 million and $2.2 million have been recorded in income tax expense for the three and nine months ended September 30, 2014, respectively. Withholding taxes of $0.3 million and $0.7 million were previously recorded as deductions to net investment income for the three and nine months ended September 30, 2013, respectively.

As of September 30, 2014 , the Company had recorded a $1.7 million provision for uncertain tax positions related to investment transactions in certain foreign countries. The Company has recognized income tax expense related to uncertain tax positions of $0.3 million and $1.7 million for the three and nine months ended September 30, 2014, respectively (2013 - nil ).

Non-controlling interests

The Company consolidates the results of entities in which it has a controlling financial interest. The Company records the portion of shareholders’ equity attributable to non-controlling interests as a separate line within shareholders’ equity in the condensed consolidated balance sheets. The Company records the portion of income attributable to non-controlling interests as a separate line within the condensed consolidated statements of income (loss).

Earnings per share

Leases

Leases in which substantially all of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognized in the condensed consolidated statements of income (loss) on a straight-line basis over the term of the lease.

Comprehensive income

The Company has no comprehensive income other than net income disclosed in the condensed consolidated statements of income (loss).

Segment information

Casualty Reinsurance and Catastrophe Risk Management. The Company has also identified a corporate function that includes net investment income on capital and certain general and administrative expenses related to corporate activities.

Recently issued accounting standards

Issued and effective as of September 30, 2014

In January 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). The objective of ASU 2013-01 is to address implementation issues about the scope of ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments clarify that the scope of ASU 2011-11 applies to derivatives, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. Entities with other types of financial assets and financial liabilities subject to a master netting arrangement or similar agreement also are affected because these amendments make them no longer subject to the disclosure requirements in ASU 2011-11. ASU 2013-01 is effective for interim and annual periods beginning on or after January 1, 2013. The Company adopted ASU 2013-01 effective with its IPO and has included the required disclosures in Note 8 of the notes to the condensed consolidated financial statements.

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Comprehensive Income (ASU 2013-02). The objective of ASU 2013-02 is to improve the reporting of reclassifications out of other comprehensive income. ASU 2013-02 is effective for periods subsequent to December 15, 2012. The adoption of this guidance had no impact on the Company’s condensed consolidated financial statements.

In June 2013, the FASB issued Accounting Standards Update No. 2013-08, Financial Services - Investment Companies - Amendments to the Scope, Measurement, and Disclosure Requirements (ASU 2013-08). The amendments in this update change the assessment of whether an entity is an investment company by developing a new two-tiered approach for that assessment, which requires an entity to possess certain fundamental characteristics while allowing judgment in assessing other typical characteristics. The new approach requires an entity to assess all of the characteristics of an investment company and consider its purpose and design to determine whether it is an investment company. ASU 2013-08 is effective prospectively for periods subsequent to December 15, 2013. Early adoption is prohibited. The Company adopted ASU 2013-08 in the first quarter of 2014, and the adoption of this guidance did not have a material impact on the Company's condensed consolidated financial statements.

Issued but not yet effective as of September 30, 2014

In April 2014, the FASB issued Accounting Standards Update 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU 2014-08). ASU 2014-08 changes the requirements for reporting discontinued operations, such that a disposal of a component of the Company's operations is required to be reported as discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on the Company's operations and financial results. ASU 2014-08 is effective for all disposals that occur after January 1, 2015. The Company does not expect this new pronouncement to have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 provides a framework, through a five-step process, for recognizing revenue from customers, improves comparability and consistency of recognizing revenue across entities, industries, jurisdictions and capital markets, and requires enhanced disclosures. Certain contracts with customers are specifically excluded from the scope of ASU 2014-09, including amongst others, insurance contracts accounted for under Accounting Standard Codification 944, Financial Services - Insurance . ASU 2014-09 is effective on January 1, 2017 with retrospective adoption required for the comparative periods. The Company is currently evaluating the impact of this guidance, however, it is not expected to have a material impact on the Company's consolidated financial statements.

In June 2014, the FASB issued Accounting Standards Update No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to Maturity Transactions, Repurchase Financings, and Disclosures (ASU 2014-11) . ASU 2014-11 amends

the accounting guidance for “repo-to-maturity” transactions and repurchase agreements executed as repurchase financings. In addition, the new standard requires a transferor to disclose more information about certain transactions, including those in which it retains substantially all of the exposure to the economic returns of the underlying transferred asset over the transaction’s term. For repurchase agreements and securities lending agreements accounted for as secured borrowings as of a reporting date, the new standard requires obligors (transferors of collateral) to disaggregate the related gross obligation by class of collateral pledged, and to disclose the remaining contractual maturity of the agreements, and to discuss the potential risks of these arrangements and related collateral pledged, including the risks stemming from a decline in the value of the pledged collateral and how such risks are managed. Additionally, as a result of the new accounting guidance, repo-to-maturity transactions will be reported as secured borrowings. Transferors will also no longer apply the current “linked” accounting model to repurchase agreements executed contemporaneously with the initial transfer of the underlying financial asset with the same counterparty. ASU 2014-11 is effective prospectively for periods subsequent to December 15, 2014. The Company is currently evaluating the impact of this guidance, however, it is not expected to have a material impact on the Company's consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements- Going Concern (ASU 2014-15). ASU 2014-15 requires management to evaluate, for each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity's ability to continue as a going concern, the entity will be required to disclose information that enables the users of the financial statements to understand the principal conditions or events, management's evaluation of the significance of those events or conditions and management's plans that alleviate substantial doubt about the entity's ability to continue as a going concern. ASU 2014-1 becomes effective for the annual period ending after December 15, 2016. The Company does not expect this new guidance to have a material impact on the Company’s condensed consolidated financial statements.


3.	Restricted cash and cash equivalents

Restricted cash and cash equivalents as of September 30, 2014 and December 31, 2013 consisted of the following:



	September 30, 2014		December 31, 2013
	($ in thousands)
Restricted cash securing collateralized reinsurance contracts written by the Catastrophe Reinsurer	$	101,348	$	93,014
Restricted cash securing credit facilities	160,618		100,563
	$	261,966	$	193,577


4.	Reinsurance premiums ceded

From time to time, the Company purchases retrocessional coverage for one or more of the following reasons: to manage its overall exposure, to reduce its net liability on individual risks, to obtain additional underwriting capacity and to balance its underwriting portfolio. Additionally, retrocession can be used as a mechanism to share the risks and rewards of business written and therefore can be used as a tool to align the Company’s interests with those of its counterparties. The Company currently has coverage that provides for recovery of a portion of loss and loss adjustment expenses incurred on one crop contract written in 2013 and one new contract entered into in the third quarter of 2014. Premiums ceded for the three and nine months ended September 30, 2014 were $ 0.2 million , compared to $ nil and $10.0 million for three and nine month ended September 30, 2013, respectively. Loss and loss adjustment expenses recoverable from the retrocessionaire are recorded as assets. For the three and nine months ended September 30, 2014 , loss and loss adjustment expenses incurred and reported on the condensed consolidated statements of income (loss) are net of loss and loss expenses recovered of $ nil and $1.0 million , respectively, compared to $ 2.1 million and $6.3 million for three and nine months ended September 30, 2013, respectively. Retrocession contracts do not relieve the Company from its obligations to the insureds. Failure of retrocessionaires to honor their obligations could result in losses to the Company. As of September 30, 2014 , the Company had loss and loss adjustment expenses recoverable of $ 1.4 million ( December 31, 2013 - $ 9.3 million ) with one retrocessionaire who was rated “A (Excellent)” by A.M. Best Company.

The Company regularly evaluates the financial condition of its retrocessionaires to assess the ability of the retrocessionaires to honor their obligations.

5. Investments

The Company’s investments are managed by its investment manager, Third Point LLC (“Third Point LLC” or the “Investment Manager”), under a long-term investment management contract. The Company directly owns the investments, which are held in a separate account and managed by Third Point LLC. The following is a summary of the separate account managed by Third Point LLC:



	September 30, 2014		December 31, 2013
Assets	($ in thousands)
Total investments in securities and commodities	$	1,713,000	$	1,460,864
Cash and cash equivalents	10,003		869
Restricted cash and cash equivalents	160,618		100,563
Due from brokers	182,927		98,386
Securities purchased under an agreement to sell	19,897		38,147
Derivative assets	37,260		39,045
Interest and dividends receivable	5,021		2,604
Other assets	799		933
Total assets	2,129,525		1,741,411
Liabilities and non-controlling interest
Accounts payable and accrued expenses	299		1,759
Securities sold, not yet purchased, at fair value	45,667		56,056
Due to brokers	306,927		44,870
Derivative liabilities	12,113		8,819
Performance fee payable to related party	21,837		—
Interest and dividends payable	589		748
Capital contribution received in advance	10,000		—
Non-controlling interest	20,302		69,717
Total liabilities and non-controlling interest	417,734		181,969
Total net investments managed by Third Point LLC	$	1,711,791	$	1,559,442

The Company’s Investment Manager has a formal valuation policy that sets forth the pricing methodology for investments to be used in determining the fair value of each security in the Company’s portfolio. The valuation policy is updated and approved annually by Third Point LLC’s valuation committee (the “Committee”), which is comprised of officers and employees who are senior business management personnel of Third Point LLC. The Committee meets monthly. The Committee’s role is to review and verify the propriety and consistency of the valuation methodology to determine the fair value of investments. The Committee also reviews any due diligence performed and approves any changes to current or potential external pricing vendors.

Investments are carried at fair value. The fair values of investments are estimated using prices obtained from either third-party pricing services or broker quotes. The methodology for valuation is generally determined based on the investment's asset class per the Company's Investment Manager's valuation policy. For investments that the Company is unable to obtain fair values from a pricing service or broker, fair values are estimated using information obtained from the Company’s Investment Manager.

and over-the-counter (“OTC”) securities are valued at their last closing bid price if held long by the Company, and last closing ask price if held short by the Company. As of September 30, 2014 , securities valued at $445.4 million ( December 31, 2013 - $483.2 million ), representing 25.4% ( December 31, 2013 – 33.1% ) of investments in securities and commodities and derivative assets, and $1.5 million ( December 31, 2013 - $41.0 million ), representing 2.6% ( December 31, 2013 – 73.1% ) of securities sold, not yet purchased, and derivative liabilities are valued based on broker quotes or other quoted market prices for similar securities.

As of September 30, 2014 , the Company had $2.8 million ( December 31, 2013 - $3.3 million ) of private securities fair valued by a third party valuation firm using information obtained from the Company's Investment Manager, which represented less than 1.0% (December 31, 2013 - 1.0% ) of total investments in securities and commodities and derivative assets. The value at which these securities could be sold or settled with a willing buyer or seller may differ materially from the Company’s estimated fair values depending on a number of factors including, but not limited to, current and future economic conditions, the quantity sold or settled, the presence of an active market and the availability of a willing buyer or seller.

The Company’s free standing derivatives are recorded at fair value, and are included in the condensed consolidated balance sheets in derivative assets and derivative liabilities. The Company values exchange-traded derivatives at their last sales price on the exchange where it is primarily traded. OTC derivatives, which include swap, option, swaption, forward, future and contract for differences, are valued by third party sources when available; otherwise, fair values are obtained from broker quotes that are based on pricing models that consider the time value of money, volatility, and the current market and contractual prices of the underlying financial instruments.

As an extension of its underwriting activities, the Catastrophe Reinsurer may sell derivative instruments that provide reinsurance-like protection to third parties for specific loss events associated with certain lines of business. These derivatives are recorded in the condensed consolidated balance sheets at fair value, with changes in the fair value of these derivatives recorded in net investment income in the condensed consolidated statements of income (loss). These contracts are valued on the basis of models developed by the Company, which approximates fair value.

In the second quarter of 2014, the Catastrophe Reinsurer purchased a catastrophe bond. This catastrophe bond is recorded in the condensed consolidated balance sheet at fair value, with changes in the fair value recorded in net investment income in the condensed consolidated statements of income (loss). This catastrophe bond is valued using the average of the bids from a minimum of two broker-dealers or other market makers.

The Company also has derivatives embedded in non-derivative host contracts that are required to be separated from the host contracts and accounted for at fair value with changes in fair value of the embedded derivative reported in net investment income. The Company's embedded derivatives relate to interest crediting features in certain reinsurance and deposit contracts that vary based on the returns on our investments managed by Third Point LLC. The Company determines the fair value of the embedded derivatives using models developed by the Company, which approximates fair value. See discussion of accounting policy for embedded derivatives in Note 2 for additional information.

The Company’s holdings in asset-backed securities (“ABS”) are substantially invested in residential mortgage-backed securities (“RMBS”). The balance of the Company's holdings in ABS is in commercial mortgage-backed securities, collateralized debt obligations and student loan asset-backed securities. These investments are valued using broker quotes or a recognized third-party pricing vendor. All of these classes of ABS are sensitive to changes in interest rates and any resulting change in the rate at which borrowers sell their properties, refinance, or otherwise pre-pay their loans. As an investor in these classes of ABS, the Company may be exposed to the credit risk of underlying borrowers not

being able to make timely payments on loans or the likelihood of borrowers defaulting on their loans. In addition, the Company may be exposed to significant market and liquidity risks.

The Company values its investments in limited partnerships at fair value, which are estimated based on the Company's share of the net asset value ("NAV") of the limited partnerships as provided by the investment managers of the underlying investment funds. The resulting net gains or net losses are reflected in the condensed consolidated statements of income (loss).

The Company performs several processes to ascertain the reasonableness of the valuation of all of the Company’s investments comprising the Company’s investment portfolio, including securities that are categorized as Level 2 and Level 3 within the fair value hierarchy described below. These processes include i) obtaining and reviewing weekly and monthly investment portfolio reports from the Company's Investment Manager, ii) obtaining and reviewing monthly NAV and investment return reports received directly from the Company’s third-party fund administrator which are compared to the reports noted in (i), and iii) monthly update discussions with the Company’s Investment Manager regarding the investment portfolio, including, their process for reviewing and validating pricing obtained from third-party service providers.

For the nine months ended September 30, 2014 and 2013 , there were no changes in the valuation techniques as it relates to the above.

Monetary assets and liabilities denominated in foreign currencies are remeasured at the closing rates of exchange. Transactions during the period are translated at the rate of exchange prevailing on the date of the transaction. The Company does not isolate that portion of the net investment income resulting from changes in foreign exchange rates on investments, dividends and interest from the fluctuations arising from changes in fair values of securities and derivatives held. Periodic payments received or paid on swap agreements are recorded as realized gain or loss on investment transactions. Such fluctuations are included within net investment income in the condensed consolidated statements of income (loss).


•	Level 1 – Quoted prices available in active markets/exchanges for identical investments as of the reporting date.

•

Level 2 – Observable inputs to the valuation methodology other than unadjusted quoted market prices for identical assets or liabilities in active markets. Level 2 inputs include, but are not limited to, prices quoted for similar assets or liabilities in active markets/exchanges, prices quoted for identical or similar assets or liabilities in markets that are not active and fair values determined through the use of models or other valuation methodologies.


•	Level 3 – Pricing inputs unobservable for the investment and include activities where there is little, if any, market activity for the investment. The inputs applied in the determination of fair value require significant management judgment and estimation.

Key inputs for over-the-counter (“OTC”) valuations vary based on the type of underlying security on which the contract was written:


•	The key inputs for most OTC option contracts include notional, strike price, maturity, payout structure, current foreign exchange forward and spot rates, current market price of underlying and volatility of underlying.


•	The key inputs for most forward contracts include notional, maturity, forward rate, spot rate, various interest rate curves and discount factor.


•	The key inputs for swap valuation will vary based on the type of underlying on which the contract was written. Generally, the key inputs for most swap contracts include notional, swap period, fixed rate, credit or interest rate curves, current market or spot price of the underlying and the volatility of the underlying.

The following tables present the Company’s investments, categorized by the level of the fair value hierarchy as of September 30, 2014 and December 31, 2013 :



	September 30, 2014
	Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Total
Assets	($ in thousands)
Equity securities	$	929,946	$	18,721	$	—	$	948,667
Private common equity securities	—		7,937		—		7,937
Total equities	929,946		26,658		—		956,604
Asset-backed securities	—		425,160		2,434		427,594
Bank debts	—		17,584		—		17,584
Corporate bonds	—		103,092		3,964		107,056
Municipal bonds	—		3,623		—		3,623
Sovereign debt	—		104,801		19		104,820
Total debt securities	—		654,260		6,417		660,677
Investments in limited partnerships	—		66,799		6,770		73,569
Options	8,112		2,709		—		10,821
Rights and warrants	271		—		—		271
Trade claims	—		11,058		—		11,058
Catastrophe bond	—		2,046		—		2,046
Total other investments	8,383		82,612		6,770		97,765
Derivative assets (free standing)	170		37,090		—		37,260
Total assets	$	938,499	$	800,620	$	13,187	$	1,752,306
Liabilities
Equity securities	$	8,682	$	—	$	—	$	8,682
Sovereign debt	—		19,440		—		19,440
Corporate bonds	—		4,368		—		4,368
Options	8,096		5,081		—		13,177
Total securities sold, not yet purchased	16,778		28,889		—		45,667
Derivative liabilities (free standing)	121		11,992		233		12,346
Derivative liabilities (embedded)	—		—		7,913		7,913
Total liabilities	$	16,899	$	40,881	$	8,146	$	65,926



	December 31, 2013
	Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Total
Assets	($ in thousands)
Equity securities	$	839,903	$	17,914	$	—	$	857,817
Private common equity securities	—		94,282		2,012		96,294
Total equities	839,903		112,196		2,012		954,111
Asset-backed securities	—		325,133		400		325,533
Bank debts	—		8,017		—		8,017
Corporate bonds	—		82,139		4,610		86,749
Municipal bonds	—		10,486		—		10,486
Sovereign debt	—		10,639		—		10,639
Total debt securities	—		436,414		5,010		441,424
Investments in limited partnerships	—		29,286		5,292		34,578
Options	6,284		6,785		—		13,069
Rights and warrants	1		—		—		1
Trade claims	—		17,681		—		17,681
Total other investments	6,285		53,752		5,292		65,329
Derivative assets	321		38,724		—		39,045
Total assets	$	846,509	$	641,086	$	12,314	$	1,499,909
Liabilities
Equity securities	$	5,207	$	—	$	—	$	5,207
Sovereign debt	—		37,592		—		37,592
Corporate bonds	—		3,372		—		3,372
Options	4,714		5,171		—		9,885
Total securities sold, not yet purchased	9,921		46,135		—		56,056
Derivative liabilities (free standing)	441		8,378		—		8,819
Derivative liabilities (embedded)	—		—		4,430		4,430
Total liabilities	$	10,362	$	54,513	$	4,430	$	69,305

During the three months ended September 30, 2014 and 2013 , the Company made no reclassifications of assets or liabilities between Levels 1 and 2. During the nine months ended September 30, 2014 , the Company reclassified $86.6 million (2013 - nil) of private common equity securities from Level 2 to Level 1 equity securities. This reclassification is the result of the issuer's IPO, with quoted prices having become available in an active market as of the reporting date.

The following table presents the reconciliation for all investments measured at fair value using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2014 and 2013 :



	January 1, 2014			Transfers in to (out of) Level 3			Purchases		Sales			Realized and Unrealized Gains(Losses) (1)			September 30, 2014
	($ in thousands)
Assets
Private common equity securities	$	2,012		$	(2,300	)	$	—	$	—		$	288		$	—
Asset-backed securities	400			(2,151		)	4,093		(1,921		)	2,013			2,434
Corporate bonds	4,610			(811		)	821		(484		)	(172		)	3,964
Sovereign Debt	—			(11		)	30		—			—			19
Investments in limited partnerships	5,292			—			1,579		—			(101		)	6,770
Total assets	$	12,314		$	(5,273	)	$	6,523	$	(2,405	)	$	2,028		$	13,187
Liabilities
Derivative liabilities (free standing)	$	—		$	—		$	—	$	(1,013	)	$	780		$	(233	)
Derivative liabilities (embedded)	(4,430		)	—			—		(3,046		)	(437		)	(7,913		)
Total liabilities	$	(4,430	)	$	—		$	—	$	(4,059	)	$	343		$	(8,146	)

	July 1, 2014			Transfers in to (out of) Level 3			Purchases		Sales			Realized and Unrealized Gains(Losses) (1)			September 30, 2014
	($ in thousands)
Assets
Private common equity securities	$	2,300		$	(2,300	)	$	—	$	—		$	—		$	—
Asset-backed securities	2,441			(520		)	288		(18		)	243			2,434
Corporate bonds	5,153			(811		)	—		(152		)	(226		)	3,964
Sovereign Debt	30			(11		)	—		—			—			19
Investment in limited partnership	5,771			—			1,525		—			(526		)	6,770
Total assets	$	15,695		$	(3,642	)	$	1,813	$	(170	)	$	(509	)	$	13,187
Liabilities
Derivative liabilities (free standing)	$	—		$	—		$	—	$	(1,013	)	$	780		$	(233	)
Derivative liabilities (embedded)	(5,538		)	—			—		(2,264		)	(111		)	(7,913		)
Total liabilities	$	(5,538	)	$	—		$	—	$	(3,277	)	$	669		$	(8,146	)



	January 1, 2013			Transfers in to (out of) Level 3			Purchases		Sales			Realized and Unrealized Gains(Losses) (1)			September 30, 2013
	($ in thousands)
Assets
Private common equity securities	$	2,757		$	(1,905	)	$	2,032	$	(1,795	)	$	828		$	1,917
Asset-backed securities	—			196			196		—			(249		)	143
Bank debt	54			(54		)	—		—			—			—
Corporate bonds	1,046			(1,302		)	4,287		(1,311		)	1,795			4,515
Investment in limited partnership	—			—			1,959		(342		)	(71		)	1,546
Total assets	$	3,857		$	(3,065	)	$	8,474	$	(3,448	)	$	2,303		$	8,121
Liabilities
Derivative liabilities (free standing)	$	—		$	—		$	—	$	(4,335	)	$	3,167		$	(1,168	)
Derivative liabilities (embedded)	(2,510		)	—			—		(1,460		)	(310		)	(4,280		)
Total liabilities	$	(2,510	)	$	—		$	—	$	(5,795	)	$	2,857		$	(5,448	)

	July 1, 2013			Transfers in to (out of) Level 3			Purchases		Sales			Realized and Unrealized Gains(Losses) (1)			September 30, 2013
	($ in thousands)
Assets
Private common equity securities	$	3,473		$	(1,906	)	$	379	$	—		$	(29	)	$	1,917
Asset-backed securities	194			(112		)	47		—			14			143
Corporate bonds	4,304			—			303		(192		)	100			4,515
Investment in limited partnership	903			—			671		—			(28		)	1,546
Total assets	$	8,874		$	(2,018	)	$	1,400	$	(192	)	$	57		$	8,121
Liabilities
Derivative liabilities (free standing)	$	(2,240	)	$	—		$	—	$	(990	)	$	2,062		$	(1,168	)
Derivative liabilities (embedded)	(4,180		)	—			—		—			(100		)	(4,280		)
Total liabilities	$	(6,420	)	$	—		$	—	$	(990	)	$	1,962		$	(5,448	)

(1) Total net change in realized and unrealized gain (loss) recorded on Level 3 financial instruments are included in net investment income in the condensed consolidated statements of income (loss).

Total unrealized loss related to fair value assets using significant unobservable inputs (Level 3) for the nine months ended September 30, 2014 was $0.4 million (2013 - gains of $1.8 million ).

For assets and liabilities that were transferred into Level 3 during the period, gains (losses) are presented as if the assets or liabilities had been transferred into Level 3 at the beginning of the period; similarly, for assets and liabilities that were transferred out of Level 3 during the period, gains (losses) are presented as if the assets or liabilities had been transferred out of Level 3 at the beginning of the period. The Company did not hold Level 3 investments where quantitative unobservable inputs are produced by the Company itself when estimating fair value.

6. Securities purchased under an agreement to sell

The Company may enter into repurchase and reverse repurchase agreements with financial institutions in which the financial institution agrees to resell or repurchase and the Company agrees to repurchase or resell such securities at a mutually agreed price upon maturity. As of September 30, 2014 , the Company held outstanding reverse repurchase agreements valued at $19.9 million ( December 31, 2013 - $38.1 million ). As of September 30, 2014 , the total value of securities received as collateral by the Company was $19.4 million ( December 31, 2013 - $37.6 million ). As the Company held only reverse repurchase agreements as of September 30, 2014 , these positions are not impacted by master netting agreements. Interest expense and income related to these transactions are included in interest payable and receivable in the condensed consolidated balance sheets. For the three months ended September 30, 2014 , there was a foreign currency loss of $2.4 million ( 2013 – gain of $1.2 million ) on reverse repurchase agreements included in net investment income in the condensed consolidated statements of income (loss). For the nine months ended September 30, 2014 , there was a foreign currency loss of $2.6 million ( 2013 - gain of $1.3 million ) on reverse repurchase agreements included in net investment income in the condensed consolidated statements of income (loss). Generally, reverse repurchase agreements mature within 30 to 90 days .

7. Due from/to brokers

The Company holds substantially all of its investments through its prime brokers pursuant to various agreements between the Company and each prime broker. The brokerage arrangements differ from broker to broker, but generally cash and investments in securities and commodities balances are available as collateral against investment in securities sold, not yet purchased and derivative positions, if required.

Margin debt balances are collateralized by cash held by the prime brokers and certain of the Company’s securities. Margin interest was paid either at the daily broker call rate or based on LIBOR.

Due from/to brokers include cash balances maintained with the Company’s prime brokers, receivables and payables from unsettled trades and proceeds from securities sold, not yet purchased. In addition, due from and to brokers includes cash collateral received and posted from OTC and repurchase agreement counterparties. As of September 30, 2014 , the Company’s due from/to brokers includes a total non-U.S. currency payable balance of $ 14.4 million ( December 31, 2013 - $268.5 million ).

8. Derivatives

The following tables identify the listing currency, fair value and notional amounts of derivative instruments included in the condensed consolidated balance sheets, categorized by primary underlying risk. Balances are presented on a gross basis.



	As of September 30, 2014
	Listing currency (1)	Fair Value		Notional Amounts (2)
Derivative Assets by Primary Underlying Risk	($ in thousands)
Credit
Credit Default Swaps - Protection Purchased	USD	$	9,110	$	106,908
Credit Default Swaps - Protection Sold	USD	158		2,318
Equity Price
Contracts for Differences - Long Contracts	GBP/USD	5,145		40,331
Contracts for Differences - Short Contracts	NOK	3		2,580
Total Return Swaps - Long Contracts	MXN/USD	11,888		179,657
Total Return Swaps - Short Contracts	USD	290		3,950
Interest Rates
Interest Rate Swaps	EUR	250		194,906
Interest Rate Swaptions	USD	624		511,971
Treasury Futures - Short Contracts	USD	170		9,929
Foreign Currency Exchange Rates
Foreign Currency Forward	AUD/CAD/EUR/GBP/JPY/TRY	5,501		319,597
Foreign Currency Options - Purchased	JPY/KRW/SAR	4,121		192,944
Total Derivative Assets		$	37,260	$	1,565,091

	Listing currency (1)	Fair Value		Notional Amounts (2)
Derivative Liabilities by Primary Underlying Risk	($ in thousands)
Commodity Price
Commodity Future Options - Short	USD	$	80	$	120,080
Credit
Credit Default Swaps - Protection Purchased	EUR/USD	2,240		64,465
Credit Default Swaps - Protection Sold	USD	1,503		5,437
Equity Price
Contracts for Differences - Long Contracts	EUR/GBP	5,418		57,363
Total Return Swaps - Long Contracts	USD	—		365
Total Return Swaps - Short Contracts	USD	129		1,532
Interest Rates
Bond Futures - Short Contracts	JPY	41		41,211
Interest Rate Swaps	EUR	621		194,035
Interest Rate Swaptions	USD	142		354,139
Foreign Currency Exchange Rates
Foreign Currency Options - Sold	JPY/KRW	1,939		100,950
Catastrophe Risk Derivatives	USD	233		6,000
Total Derivative Liabilities (free standing)		$	12,346	$	945,577

Embedded derivative liabilities in reinsurance contracts (3)	USD	$	3,173	$	15,000
Embedded derivative liabilities in deposit contracts (4)	USD	4,740		75,000
Total Derivative Liabilities (embedded)		$	7,913	$	90,000

(1) AUD = Australian Dollar, CAD = Canadian Dollar, EUR = Euro, GBP = British Pound, HKD = Hong Kong Dollar, JPY = Japanese Yen, KRW = South Korean Won, MXN = Mexican Peso, NOK = Norwegian Krone, SAR = Saudi Arabian Riyal, TRY = Turkish Lira, USD = US Dollar

(2) The absolute notional exposure represents the Company's derivative activity as of September 30, 2014 , which is representative of the volume of derivatives held during the period.

(3) The fair value of embedded derivatives in reinsurance contracts is included in reinsurance balances payable in the condensed consolidated balance sheet.

(4) The fair value of embedded derivatives in deposit contracts is included in deposit liabilities in the condensed consolidated balance sheet.



	As of December 31, 2013
	Listing currency (1)	Fair Value		Notional Amounts (2)
Derivative Assets by Primary Underlying Risk	($ in thousands)
Commodity Price
Commodity Future Options - Purchased	USD	$	256	$	12,325
Credit
Credit Default Swaps - Protection Purchased	USD	15,397		109,520
Credit Default Swaps - Protection Sold	USD	1,157		9,557
Equity Price
Contracts for Differences - Long Contracts	CHF/EUR/GBP/USD	10,549		62,847
Contracts for Differences - Short Contracts	NOK	67		2,758
Total Return Swaps - Long Contracts	BRL/JPY/USD	2,950		68,044
Total Return Swaps - Short Contracts	USD	3		290
Interest Rates
Bond Futures - Short Contracts	JPY	212		40,847
Interest Rate Swaps	EUR	182		212,594
Interest Rate Swaptions	EUR/JPY/USD	1,269		54,884
Treasury Futures - Short Contracts	USD	108		6,544
Foreign Currency Exchange Rates
Foreign Currency Forward	AUD/CAD/JPY/TRY	1,332		59,925
Foreign Currency Options - Purchased	USD	5,563		240,062
Total Derivative Assets		$	39,045	$	880,197

	Listing currency (1)	Fair Value		Notional Amounts (2)
Derivative Liabilities by Primary Underlying Risk	($ in thousands)
Commodity Price
Commodity Future Options - Sold	USD	$	148	$	35,484
Credit
Credit Default Swaps - Protection Purchased	EUR/USD	2,634		59,446
Credit Default Swaps - Protection Sold	USD	348		875
Equity Price
Contracts for Differences - Long Contracts	EUR	66		14,607
Contracts for Differences - Short Contracts	DKK	425		7,253
Total Return Swaps - Long Contracts	BRL/JPY/USD	1,385		24,807
Total Return Swaps - Short Contracts	USD	140		5,037
Index
Index Futures - Short Contracts	USD	441		8,888
Interest Rates
Interest Rate Swaps	EUR/USD	821		465,560
Interest Rate Swaptions	USD/JPY	174		99,587
Foreign Currency Exchange Rates
Foreign Currency Forward	EUR/GBP	709		189,030
Foreign Currency Options - Sold	USD	1,528		178,476
Total Derivative Liabilities		$	8,819	$	1,089,050

Embedded derivative liabilities in deposit contracts (3)	USD	$	4,430	$	75,000
Total Derivative Liabilities (embedded)		$	4,430	$	75,000

(1) AUD = Australian dollar, BRL = Brazilian real, CAD = Canadian dollar, CHF = Swiss franc, DKK = Danish krone EUR = Euro, GBP = British pound, JPY = Japanese yen, NOK = Norwegian krone, TRY=Turkish lira, USD = US dollar

(2) The absolute notional exposure represents the Company's derivative activity as of December 31, 2013, which is representative of the volume of derivatives held during the period.

(3) The fair value of embedded derivatives in deposit contracts is included in deposit liabilities in the condensed consolidated balance sheet.

(4) The fair value of embedded derivatives in deposit contracts is included in deposit liabilities in the condensed consolidated balance sheet.

The following tables set forth, by major risk type, the Company’s realized and unrealized gains (losses) relating to derivatives for the three and nine months ended September 30, 2014 and 2013 . Realized and unrealized gains (losses) related to free standing derivatives are included in net investment income in the condensed consolidated statements of income (loss). Realized and unrealized gains (losses) related to embedded derivatives are included in other expenses in the condensed consolidated statements of income (loss).



	For the three months ended
	September 30, 2014						September 30, 2013
Free standing Derivatives - Primary Underlying Risk	Realized Gain (Loss)			Unrealized Gain (Loss)*			Realized Gain (Loss)			Unrealized Gain (Loss)*
Commodity Price	($ in thousands)
Commodities Futures - Short Contracts	$	(6	)	$	(80	)	$	(273	)	$	—
Commodity Future Options - Purchased	—			—			(25		)	(44		)
Credit
Credit Default Swaps - Protection Purchased	(1,479		)	2,843			346			(1,751		)
Credit Default Swaps - Protection Sold	1,081			(1,181		)	(1,337		)	3,774
Equity Price
Contracts for Differences - Long Contracts	(1,397		)	(5,837		)	(1,984		)	5,229
Contracts for Differences - Short Contracts	(1,396		)	310			11			(183		)
Total Return Swaps - Long Contracts	2,488			9,990			1,712			3,665
Total Return Swaps - Short Contracts	(1,112		)	795			(836		)	(664		)
Index
Index Futures - Long Contracts	(840		)	—			—			—
Index Futures - Short Contracts	79			369			—			—
Interest Rates
Bond Futures - Short Contracts	(273		)	101			(320		)	(382		)
Interest Rate Swaps	107			(82		)	723			(896		)
Interest Rate Swaptions	(42		)	(272		)	(75		)	218
Treasury Futures - Short Contracts	(399		)	191			73			(195		)
Foreign Currency Exchange Rates
Foreign Currency Forward	5,037			7,417			1,223			(5,750		)
Foreign Currency Options - Purchased	256			1,539			(1,794		)	(1,493		)
Foreign Currency Options - Sold	(78		)	(463		)	352			(636		)
Reinsurance contract derivatives	—			780			—			2,062
	$	2,026		$	16,420		$	(2,204	)	$	2,954
Embedded Derivatives
Embedded derivatives in reinsurance contracts	$	—		$	(21	)	$	—		$	—
Embedded derivatives in deposit contracts	—			(90		)	—			(100		)
	$	—		$	(111	)	$	—		$	(100	)



	For the nine months ended
	September 30, 2014						September 30, 2013
Free standing Derivatives - Primary Underlying Risk	Realized Gain (Loss)			Unrealized Gain (Loss)*			Realized Gain (Loss)			Unrealized Gain (Loss)*
Commodity Price	($ in thousands)
Commodities Futures - Long Contracts	$	—		$	—		$	(2,455	)	$	—
Commodities Futures - Short Contracts	(6		)	(80		)	290			(212		)
Commodity Future Options - Purchased	(271		)	(5		)	(166		)	(45		)
Commodity Future Options - Sold	316			(168		)
Credit
Credit Default Swaps - Protection Purchased	(3,793		)	(678		)	(8,469		)	3,579
Credit Default Swaps - Protection Sold	1,266			(977		)	6,814			(4,017		)
Equity Price
Contracts for Differences - Long Contracts	3,639			(12,972		)	6,706			987
Contracts for Differences - Short Contracts	(3,734		)	361			1,000			254
Total Return Swaps - Long Contracts	12,279			10,323			2,717			2,732
Total Return Swaps - Short Contracts	(588		)	298			418			(500		)
Index
Index Futures - Long Contracts	(840		)	—			—			—
Index Futures - Short Contracts	(253		)	441			19			—
Interest Rates
Bond Futures - Short Contracts	(817		)	(253		)	242			(630		)
Interest Rate Swaps	(350		)	267			1,352			(409		)
Interest Rate Swaptions	487			(1,848		)	(244		)	251
Treasury Futures - Short Contracts	(1,040		)	62			508			(625		)

Foreign Currency Exchange Rates
Foreign Currency Forward	5,256			4,877			7,533			(3,756		)
Foreign Currency Options - Purchased	(1,484		)	(613		)	6,823			(1,031		)
Foreign Currency Options - Sold	608			(78		)	(2,844		)	(848		)
Reinsurance contract derivatives	—			780			—			3,167
	$	10,675		$	(263	)	$	20,244		$	(1,103	)
Embedded Derivatives
Embedded derivatives in reinsurance contracts	$	—		$	(127	)	$	—		$	—
Embedded derivatives in deposit contracts	—			(310		)	—			(310		)
Total Derivative Liabilities (embedded)	$	—		$	(437	)	$	—		$	(310	)

* Unrealized gain (loss) relates to derivatives still held at reporting date.

The Company’s ISDA agreements with its counterparties provide for various termination events including decline in the NAV of the Company’s investments over a certain period, key-man provisions, document delivery schedules, and Employment Retirement Income Security Act and bankruptcy provisions. Upon the triggering of a termination event, a counterparty may avail itself of various remedies including, but not limited to, waiver of the termination event, request for additional collateral, renegotiation of the ISDA agreement, or immediate settlement of positions.

The Company obtains/provides collateral from/to various counterparties for OTC derivative contracts in accordance with bilateral collateral agreements. As of September 30, 2014 , the Company posted collateral in the form of cash of $60.4 million ( December 31, 2013 - $35.4 million ) to certain counterparties to cover collateral requirements for open OTC derivatives.

The Company does not offset its derivative instruments and presents all amounts in the condensed consolidated balance sheets on a gross basis. The Company has pledged cash collateral to counterparties to support the current value of amounts due to the counterparties based on the value of the underlying security. As of September 30, 2014 and December 31, 2013, the gross and net amounts of derivative instruments that are subject to enforceable master netting arrangements or similar agreements were as follows:



	Gross Amounts not offset in the condensed consolidated balance sheet
September 30, 2014 Counterparty	Gross Amounts of Assets Presented in the condensed consolidated balance sheet		Financial Instruments		Cash Collateral Received		Net Amount
	($ in thousands)
Counterparty 1	$	493	$	493	$	—	$	—
Counterparty 2	1,262		1,262		—		—
Counterparty 3	16,935		3,135		—		13,800
Counterparty 4	857		857		—		—
Counterparty 5	4,078		630		—		3,448
Counterparty 6	9,820		1,014		4,039		4,767
Counterparty 7	408		151		—		257
Counterparty 8	—		—		—		—
Counterparty 9	3,407		384		—		3,023
Total	$	37,260	$	7,926	$	4,039	$	25,295

	Gross Amounts not offset in the condensed consolidated balance sheet
September 30, 2014 Counterparty	Gross Amounts of Liabilities Presented in the condensed consolidated balance sheet		Financial Instruments		Cash Collateral Pledged		Net Amount
	($ in thousands)
Counterparty 1	$	1,149	$	493	$	656	$	—
Counterparty 2	3,788		1,262		2,526		—
Counterparty 3	3,135		3,135		—		—
Counterparty 4	1,132		857		275		—
Counterparty 5	630		630		—		—
Counterparty 6	1,014		1,014		—		—
Counterparty 7	151		151		—		—
Counterparty 8	730		—		730		—
Counterparty 9	384		384		—		—
Total	$	12,113	$	7,926	$	4,187	$	—



	Gross Amounts not offset in the condensed consolidated balance sheet
December 31, 2013 Counterparty	Gross Amounts of Assets Presented in the condensed consolidated balance sheet		Financial Instruments		Cash Collateral Received		Net Amount
	($ in thousands)
Counterparty 1	$	1,128	$	1,041	$	—	$	87
Counterparty 2	4,998		400		1,629		2,969
Counterparty 3	16,066		3,509		—		12,557
Counterparty 4	1,351		1,351		—		—
Counterparty 5	3,198		1,054		—		2,144
Counterparty 6	12,234		492		10,465		1,277
Counterparty 7	2		2		—		—
Counterparty 8	—		—		—		—
Counterparty 9	68		68		—		—
Total	$	39,045	$	7,917	$	12,094	$	19,034

	Gross Amounts not offset in the condensed consolidated balance sheet
December 31, 2013 Counterparty	Gross Amounts of Liabilities Presented in the condensed consolidated balance sheet		Financial Instruments		Cash Collateral Pledged		Net Amount
	($ in thousands)
Counterparty 1	$	1,041	$	1,041	$	—	$	—
Counterparty 2	400		400		—		—
Counterparty 3	3,509		3,509		—		—
Counterparty 4	1,360		1,351		9		—
Counterparty 5	1,054		1,054		—		—
Counterparty 6	492		492		—		—
Counterparty 7	59		2		57		—
Counterparty 8	—		—		—		—
Counterparty 9	904		68		836		—
Total	$	8,819	$	7,917	$	902	$	—

9. Loss and loss adjustment expense reserves

As of September 30, 2014 and December 31, 2013, loss and loss adjustment expense reserves in the condensed consolidated balance sheets was comprised of the following:



	September 30, 2014		December 31, 2013
	($ in thousands)
Case loss and loss adjustment expense reserves	$	50,868	$	34,307
Incurred but not reported loss and loss adjustment expense reserves	136,445		100,024
	$	187,313	$	134,331

The following table represents the activity in the reserve for losses and loss adjustment expenses for the nine months ended September 30, 2014 and 2013:



	September 30, 2014			September 30, 2013
	($ in thousands)
Gross reserves for loss and loss adjustment expenses, beginning of period	$	134,331		$	67,271
Less: loss and loss adjustment expenses recoverable, beginning of period	(9,277		)	—
Net reserves for loss and loss adjustment expenses, beginning of period	125,054			67,271
Increase (decrease) in net loss and loss adjustment expenses incurred in respect of losses occurring in:
Current year	149,325			107,279
Prior years'	1,458			(3,600		)
Total incurred loss and loss adjustment expenses	150,783			103,679
Net loss and loss adjustment expenses paid in respect of losses occurring in:
Current year	(41,538		)	(14,951		)
Prior years'	(48,398		)	(18,576		)
Total net paid losses	(89,936		)	(33,527		)
Net reserve for loss and loss adjustment expenses, end of period	185,901			137,423
Plus: loss and loss adjustment expenses recoverable, end of period	1,412			6,284
Gross reserve for loss and loss adjustment expenses, end of period	$	187,313		$	143,707

The $1.5 million increase in prior years' reserves for the nine months ended September 30, 2014 reflects $0.9 million of net adverse reserve development and $0.6 million of additional reserves for loss and loss adjustment expenses resulting from premium increases on certain contracts. The changes in loss and loss adjustment expense reserves related to premium estimate changes were accompanied by similar changes in the premium earned for those contracts, resulting in minimal impact to net underwriting income in both periods. The $3.6 million decrease in prior years' reserves recorded in the nine months ended September 30, 2013 related primarily to one crop contract, which was accompanied by an equal decrease in the premium written and earned for that contract, resulting in a minimal impact to underwriting income.

10. Management, performance and Founders fees

Pursuant to the Investment Agreement, Third Point Advisors LLC receives an annual performance fee allocation equal to 20% of the net investment income of the Company’s share of the investment assets managed by Third Point LLC, subject to a loss carry-forward provision. Additionally, a total management fee equal to 2% annually of the Company’s share of the investment assets managed by Third Point LLC is paid to Third Point LLC and certain of the Founders. Management fees are paid monthly, in arrears, whereas performance fees are paid annually, in arrears.

Investment fee expenses related to the Investment Agreement, which are included in net investment income in the condensed consolidated statements of income (loss) for the three and nine months ended September 30, 2014 and 2013 are as follows:



	For the three months ended					For the nine months ended
	September 30, 2014			September 30, 2013		September 30, 2014		September 30, 2013
	($ in thousands)
Management fees - Third Point LLC	$	1,290		$	978	$	3,718	$	2,497
Management fees - Founders	7,315			5,545		21,075		14,149
Performance fees - Third Point Advisors LLC	(165		)	13,035		21,837		41,104
	$	8,440		$	19,558	$	46,630	$	57,750

As of September 30, 2014 , $21.8 million related to performance fees due under the Investment Agreement was included in performance fee payable to related party in the condensed consolidated balance sheets. As of December 31, 2013, $63.0 million related to the performance fee payable to Third Point Advisors LLC was included in non-controlling interests. Since the performance fee allocation is based on annual performance, in accordance with the Investment Agreement, the performance fees are included in total liabilities until the performance fee is determined at year end and allocated to Third Point Advisors LLC's capital account.

11. Deposit contracts

Deposit liability contracts each contain a fixed interest crediting rate, which ranges from 2.5% to 3.0% . Certain deposit contracts also contain a variable interest crediting feature based on actual investment returns realized by the Company that can increase the overall effective interest crediting rate on those contracts to 6.1% to 6.5% . These variable interest crediting features are considered embedded derivatives. We include the estimated fair value of these embedded derivatives with the host deposit liability contracts. Changes in the estimated fair value of these embedded derivatives are recorded in other expenses in the condensed consolidated statements of income (loss).

The following table represents activity in the deposit liabilities for the nine months ended September 30, 2014 and the year ended December 31, 2013:



	September 30, 2014			December 31, 2013
	($ in thousands)
Balance, beginning of period	$	120,946		$	50,446
Consideration received	6,132			66,369
Consideration receivable	12,266			—
Net investment expense allocation and change in fair value of embedded derivatives	3,996			4,731
Payments	(350		)	(600		)
Balance, end of period	$	142,990		$	120,946

12. General and administrative expenses

General and administrative expenses for the three and nine months ended September 30, 2014 and 2013 are as follows:



	For the three months ended				For the nine months ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
	($ in thousands)
Payroll and related	$	4,184	$	3,382	$	12,409	$	10,086
Share compensation expenses	2,481		4,143		6,979		7,611
Legal and accounting	1,462		905		3,559		1,900
Travel and entertainment	672		548		2,247		1,618
IT related	329		320		1,121		904
Corporate insurance	273		275		862		487
Credit facility fees	200		84		606		444
Director and board costs	193		28		489		86
Occupancy	124		123		409		348
Other general and administrative expenses	206		38		1,017		587
	$	10,124	$	9,846	$	29,698	$	24,071

13. Net investment income

Net investment income for the three and nine months ended September 30, 2014 and 2013 consisted of the following:



	For the three months ended						For the nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Net investment income by type	($ in thousands)
Net realized gains on investments and investment derivatives	$	53,378		$	63,778		$	184,686		$	176,673
Net unrealized gains (losses) on investments and investment derivatives	(62,448		)	7,404			(67,407		)	31,709
Net realized gain (loss) on foreign currencies	13,125			(1,353		)	4,851			4,364
Dividend and interest income	6,628			4,287			22,405			15,587
Dividends paid on securities sold, not yet purchased	—			(171		)	(34		)	(607		)
Management and performance fees	(8,440		)	(19,558		)	(46,630		)	(57,750		)
Other expenses	(1,573		)	(1,860		)	(6,743		)	(4,383		)
Net investment income on investments managed by Third Point LLC	670			52,527			91,128			165,593
Investment income on cash held by the Catastrophe Reinsurer and Catastrophe Fund	27			28			84			44
Net gain on catastrophe bond held by Catastrophe Reinsurer	75			—			80			—
Net gain on reinsurance contract derivatives written by the Catastrophe Reinsurer	780			2,062			780			3,167
	$	1,552		$	54,617		$	92,072		$	168,804



	For the three months ended						For the nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Net investment income by asset class	($ in thousands)
Net investment gains on equity securities	$	6,282		$	60,042		$	56,927		$	167,364
Net investment gains (losses) on debt securities	(5,435		)	14,950			81,540			57,549
Net investment gains (loss) on other investments	(25,807		)	(4,595		)	(30,787		)	(1,517		)
Net investment gains on investment derivatives	18,446			751			10,412			19,143
Net investment gains (losses) on securities sold, not yet purchased	4,861			5,857			20,245			(16,017		)
Net investment income (loss) on cash, including foreign exchange gains (losses)	15,095			(2,906		)	5,921			2,243
Net investment gains (losses) on securities purchased under and agreement to resell	(2,381		)	1,207			(2,592		)	1,228
Management and performance fees	(8,440		)	(19,558		)	(46,630		)	(57,750		)
Other investment expenses	(1,069		)	(1,131		)	(2,964		)	(3,439		)
	$	1,552		$	54,617		$	92,072		$	168,804

14. Other expenses

Other expenses for the three and nine months ended September 30, 2014 and 2013 consisted of the following:



	For the three months ended				For the nine months ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
	($ in thousands)
Deposit liabilities and reinsurance contracts investment expense	$	2,871	$	1,146	$	4,352	$	2,365
Change in fair value of embedded derivatives in deposit and reinsurance contracts (1)	111		100		437		310
	$	2,982	$	1,246	$	4,789	$	2,675

(1) See discussion of accounting policy for embedded derivatives in Note 2 for additional information.

15. Share capital

Authorized and issued

The Company's authorized share capital of $33.0 million is comprised of 300,000,000 common shares with a par value of $0.10 each and 30,000,000 preference shares with a par value of $0.10 each. As of September 30, 2014 , 104,031,456 common shares (December 31, 2013 - 103,888,916 ) were issued and outstanding. No preference shares have been issued to date.

Warrants

maximum of $1 billion of subscribed shares) provided that the Founders and the advisor will not be issued any warrants for common shares issued in consideration for any capital raised by the Company in excess of $1 billion . The following is a summary of warrants as of September 30, 2014 :



	Exercise price		Authorized and issued	Aggregate fair value of warrants
	($ in thousands, except for share and per share amounts)
Founders	$	10.00	4,069,768	$	15,203
Advisor	$	10.00	581,395	2,171
			4,651,163	$	17,374

The warrants were subject to a performance condition that was met as a result of the IPO. Prior to the IPO, 3,648,006 of the warrants outstanding had met the performance condition. After the IPO, the remaining 1,003,157 warrants met the performance condition. These amounts have been recorded as a component of capital raise costs in additional paid in capital resulting in no net impact to total shareholders’ equity.

16. Share-based compensation

On July 15, 2013, the Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan (“Omnibus Plan”) was approved by the Board of Directors and subsequently on August 2, 2013 by the shareholders of the Company. An aggregate of 21,627,906 common shares were made available under the Omnibus Plan. This number of shares includes the shares available under the Third Point Reinsurance Ltd. Share Incentive Plan ("Share Incentive Plan"). Awards under the Omnibus Plan may be made in the form of performance awards, restricted shares, restricted share units, share options, share appreciation rights and other share-based awards.

As of September 30, 2014 , 10,215,455 (December 31, 2013 - 10,613,975 ) of the Company's common shares were available for future issuance under the equity incentive compensation plans.

Share based compensation expense of $2.5 million for the three months ended September 30, 2014 ( 2013 - $4.1 million ) was included in general and administrative expenses. Share based compensation expense of $7.0 million for the nine months ended September 30, 2014 ( 2013 - $7.6 million ) was included in general and administrative expenses.

As of September 30, 2014 , the Company had $18.8 million (December 31, 2013 - $23.8 million ) of unamortized share compensation expense that is expected to be amortized over a weighted average period of 1.7 years (December 31, 2013 - 2.0 years).


(a)	Management and director options

The share options issued to management under the Share Incentive Plan prior to the IPO are subject to a service condition and a performance condition. The service condition will be met with respect to 20% of the management options on each of the first five anniversary dates following the grant date of the management options. The performance condition with respect to the management options was met as a result of the IPO. Prior to the IPO, 8,572,594 of the management options outstanding had met the performance condition. After the IPO, the remaining 2,357,633 management options had met the performance condition.

The management and director options activity for the nine months ended September 30, 2014 and the year ended December 31, 2013 were as follows:



	Number of options		Weighted average exercise price
Balance as of January 1, 2013	10,956,838		$	13.20
Granted - employees	348,836		14.09
Forfeited	(324,599	)	13.20
Balance as of December 31, 2013	10,981,075		13.23
Granted - employees	348,836		18.25
Exercised	(60,000	)	10.00
Balance as of September 30, 2014	11,269,911		$	13.40

The fair value of share options issued were estimated on the grant date using the Black-Scholes option-pricing model. The share price used for purposes of determining the fair value of share options that were granted in the nine months ended September 30, 2014 was $15.05 . The estimated share price used for purposes of determining the fair value of share options that were granted in the second quarter of 2013 (prior to the IPO) was $10.89 . The volatility assumption used was 23.1% (2013 - 22.0% ). The other assumptions used in the option-pricing model were as follows: risk free interest rate of 2.2% (2013 - 1.2% ), expected life of 6.5 years (2013 - 6.5 years ) and a 0.0% dividend yield (2013 - 0.0% ). As of September 30, 2014 , the weighted average remaining contractual term for options outstanding was 7.4 years (2013 - 6.5 years ).

The following table summarizes information about the Company’s management and director share options outstanding as of September 30, 2014 :



	Options outstanding		Options exercisable
Range of exercise prices	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price
$10.00-$10.89	6,528,647	$10.03	2,226,787	$10.02
$15.05-$16.89	2,405,516	$15.94	782,262	$16.02
$20.00-$25.05	2,335,748	$20.21	782,262	$20.02
	11,269,911	$13.40	3,791,311	$13.22

For the three months ended September 30, 2014 , the Company recorded $1.7 million ( 2013 - $3.7 million ) of share compensation expense related to share options. For the nine months ended September 30, 2014 , the Company recorded $5.1 million ( 2013 - $6.5 million ) of share compensation expense related to share options.

The aggregate intrinsic value of options outstanding and options exercisable as of September 30, 2014 was $29.4 million and $10.1 million , respectively (December 31, 2013 - $61.5 million and $17.6 million , respectively).


(b)	Restricted shares

Restricted share award activity for the nine months ended September 30, 2014 and year ended December 31, 2013 was as follows:



	Number of non- vested restricted shares	Weighted average grant date fair value
Balance as of January 1, 2013	619,300	$	10.00
Granted	37,856	15.22
Balance as of December 31, 2013	657,156	10.30
Granted	49,684	15.39
Balance as of September 30, 2014	706,840	$	10.66

For the three months ended September 30, 2014, the Company issued 40,070 (2013 - nil ) restricted shares to directors. For the nine months ended September 30, 2014, the Company issued 9,614 (2013 - 5,000 ) restricted shares to employees and 40,070 (2013 - nil ) to directors. The restricted shares issued to employees in 2014 will vest after three years from the date of issuance, subject to the grantee's continued service with the Company. The restricted shares issued in 2013 to employees vest two years from the date of grant.

The restricted shares issued to directors in 2014 will vest on December 31, 2014, subject to the grantee's continued service with the Company. The restricted shares issued in 2013 to directors vest on December 31, 2014 subject to the grantee's continued service with the Company.

For the three months ended September 30, 2014 , the Company recorded $0.8 million ( 2013 - $0.4 million ) compensation expense related to restricted share awards. For the nine months ended September 30, 2014 , the Company recorded $1.8 million ( 2013 - $1.1 million ) compensation expense related to restricted share awards.

17. Non-controlling interests

Non-controlling interests represent the portion of equity in consolidated subsidiaries not attributable, directly or indirectly, to the Company. The ownership interests in consolidated subsidiaries held by parties other than the Company have been presented in the condensed consolidated balance sheets, as a separate component of shareholders’ equity. Non-controlling interests as of September 30, 2014 and December 31, 2013 are as follows:



	September 30, 2014			December 31, 2013
	($ in thousands)
Catastrophe Fund	$	59,277		$	49,254
Catastrophe Fund Manager	(254		)	(236		)
Joint Venture - Third Point Advisors LLC share	20,302			69,717
	$	79,325		$	118,735

Income (loss) attributable to non-controlling interests for the three and nine months ended September 30, 2014 and 2013 was:



	For the three months ended					For the nine months ended
	September 30, 2014		September 30, 2013			September 30, 2014			September 30, 2013
	($ in thousands)
Catastrophe Fund	$	3,253	$	2,434		$	3,872		$	3,191
Catastrophe Fund Manager	72		(2		)	(18		)	(164		)
Joint Venture - Third Point Advisors LLC share	92		386			1,586			1,175
	$	3,417	$	2,818		$	5,440		$	4,202

As of September 30, 2014 , the following entities were consolidated in accordance with the voting model per ASC 810: Consolidation:

• Third Point Reinsurance Opportunities Fund Ltd.

• Third Point Re Cat Ltd.

• Third Point Reinsurance Investment Management Ltd.

As of September 30, 2014 , the following entities were consolidated in accordance with the variable interest model as per ASC 810: Consolidation:

• Investment Joint Venture


a)	Third Point Reinsurance Opportunities Fund Ltd. and Third Point Re Cat Ltd.

As of September 30, 2014 , Third Point Re's investment in the Catastrophe Fund was $58.6 million ( December 31, 2013 - $54.8 million ), representing approximately 49.9% ( December 31, 2013 - 53.0% ) of the Catastrophe Fund’s issued, non-voting, participating share capital. The objective of the Catastrophe Fund is to achieve positive uncorrelated investment returns by investing, through the Catastrophe Reinsurer, in a portfolio of collateralized reinsurance transactions and other insurance-linked investments, including catastrophe bonds and industry loss warranties.


b)	Third Point Reinsurance Investment Management Ltd. (the “Catastrophe Fund Manager”)


•	The investment activities of the Catastrophe Fund, and


•	The underwriting activities of the Catastrophe Reinsurer.


c)	Investment in Joint Venture

The joint venture created through the Investment Agreement (Note 10) has been considered a variable interest entity in accordance with U.S. GAAP. Since the Company was deemed to be the primary beneficiary, the Company has consolidated the joint venture and has recorded Third Point Advisors LLC’s minority interest as a non-controlling interest in the condensed consolidated statements of shareholders’ equity.

For the nine months ended September 30, 2014 , $51.0 million (2013 - $35.1 million ) was distributed to Third Point Advisors LLC and reduced the amount of the non-controlling interest.

As of September 30, 2014 , the following entities were not consolidated as per ASC 810: Consolidation:


•	TP Lux Holdco LP


•	Third Point Hellenic Recovery US Feeder Fund, L.P.


a)	TP Lux Holdco LP

Third Point Re is a limited partner in TP Lux Holdco LP (the “Cayman HoldCo”), which is an affiliate of the Investment Manager. The Cayman HoldCo was formed as a limited partnership under the laws of the Cayman Islands and invests and holds debt and equity interests in TP Lux HoldCo S.a.r.l, a Luxembourg private limited liability company (the “LuxCo”) established under the laws of the Grand-Duchy of Luxembourg, which is also an affiliate of the Investment Manager.

LuxCo's principal objective is to act as a collective investment vehicle to purchase Euro debt and equity investments. Third Point Re invests in the Cayman HoldCo alongside other investment funds managed by the Investment Manager. As of September 30, 2014 , Third Point Re held a 10.5% (December 31, 2013 - 10.0% ) interest in the Cayman Holdco. Third Point Re accounts for its investment in the limited partnership under the variable interest model, in which Third Point Re is not the primary beneficiary, at fair value in the condensed consolidated balance sheets and records changes in fair value in the condensed consolidated statements of income (loss).

As of September 30, 2014 , the estimated fair value of the investment in the limited partnership was $66.8 million ( December 31, 2013 - $29.3 million). The valuation policy with respect to this investment in a limited partnership is further described in Note 5. Third Point Re's maximum exposure to loss as a result of its involvement with this investment is limited to the carrying value of the investment.

b) Third Point Hellenic Recovery US Feeder Fund, L.P.

Third Point Re committed $11.4 million to the Hellenic Fund, of which $1.6 million was called and $0.7 million was distributed during the nine months ended September 30, 2014 .

As of September 30, 2014 , Third Point Re held less than a 2.0% (December 31, 2013 - 2.0% ) interest in the Hellenic Fund. Third Point Re accounts for its investment in limited partnership under the variable interest model, in which Third Point Re is not the primary beneficiary, at fair value in the condensed consolidated balance sheets and records the change in the fair value in the condensed consolidated statements of income (loss).

As of September 30, 2014 , the estimated fair value of the investment in the limited partnership was $6.8 million (December 31, 2013 - $5.3 million ). The valuation policy with respect to this investment in a limited partnership is further described in Note 5. Third Point Re's maximum exposure to loss as a result of its involvement with this investment is limited to the carrying value of the investment.

18. Earnings (loss) per share

The following sets forth the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2014 and 2013 :



		For the three months ended						For the nine months ended
		September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Weighted-average number of common shares outstanding:
	Basic number of common shares outstanding	103,295,920			89,620,394			103,275,204			82,630,430
	Dilutive effect of options	—			294,434			1,494,711			—
	Dilutive effect of warrants	—			1,000,977			1,684,860			823,405
	Diluted number of common shares outstanding	103,295,920			90,915,805			106,454,775			83,453,835

Basic net income (loss) per common share:
	Net income (loss)	$	(5,997	)	$	46,570		$	65,074		$	147,223
	Net income allocated to participating shares	—			(322		)	(420		)	(1,099		)
	Net income (loss) available to common shareholders	$	(5,997	)	$	46,248		$	64,654		$	146,124
	Basic net income (loss) per common share	$	(0.06	)	$	0.52		$	0.63		$	1.77
Diluted net income (loss) per common share:
	Net income (Loss)	$	(5,997	)	$	46,570		$	65,074		$	147,223
	Net income allocated to participating securities	—			(318		)	(408		)	(1,089		)
	Net income (loss) available to common shareholders	$	(5,997	)	$	46,252		$	64,666		$	146,134
	Diluted net income (loss) per common share	$	(0.06	)	$	0.51		$	0.61		$	1.75

For the three months ended September 30, 2014 , options of 11,327,302 and warrants of 4,651,163 were excluded from the computation of diluted loss per share. As a result of the net loss in the three months ended September 30, 2014 , no allocation of the net loss has been made to participating shares in the calculation of diluted net loss per common share. For the three months ended September 30, 2013, anti-dilutive options of 3,887,829 were excluded from the computation of diluted earnings per share.

For the nine months ended September 30, 2014 and 2013, anti-dilutive options of 4,553,159 and 3,579,271 , respectively, were excluded from the computation of diluted earnings per share.

19. Related party transactions

In addition to the transactions disclosed in Notes 5, 10 and 17 to these condensed consolidated financial statements, the following transactions are classified as related party transactions, as each counterparty has either a direct or indirect shareholding in the Company or the Company has an investment with such counterparty.


a)	Pine Brook Road Partners, LLC and Narragansett Bay Insurance Company

Third Point Re entered into a quota share reinsurance agreement with Narragansett Bay Insurance Company (“Narragansett Bay”) effective December 31, 2012, which was renewed on December 31, 2013. The Company recorded $5.3 million (2013 - $4.6 million) of net premiums earned related to these contracts for the nine months ended September 30, 2014. Pine Brook Road Partners, LLC ("Pine Brook") is the manager of various investment funds, one of which owns approximately 12.0% (December 31, 2013 - 12.0% ) of the Company's outstanding common shares. Pine Brook is also the manager of an investment fund that owns common shares in Narragansett Bay.


b)	Third Point Loan L.L.C.

Third Point Loan L.L.C. (“Loan LLC”) serves as nominee of Third Point Re and other affiliated investment management clients of the Investment Manager for certain investments. Loan LLC has appointed the Investment Manager as its true and lawful agent and attorney. As of September 30, 2014 , Loan LLC held $55.2 million ( December 31, 2013 - $147.2 million) of Third Point Re’s investments, which are included in investments in securities and commodities and in derivative contracts in the condensed consolidated balance sheets. Third Point Re’s pro rata interest in the underlying investments registered in the name of Loan LLC and the related income and expense are reflected accordingly in the condensed consolidated balance sheets and the condensed consolidated statements of income (loss).

20. Financial instruments with off-balance sheet risk or concentrations of credit risk

Off-balance sheet risk

Securities sold, not yet purchased are recorded as liabilities in the condensed consolidated balance sheets and have market risk to the extent that the Company, in satisfying its obligations, may be required to purchase securities at a higher value than that recorded in the condensed consolidated balance sheets. The Company’s investments in securities and commodities and amounts due from brokers are partially restricted until the Company satisfies the obligation to deliver securities sold, not yet purchased.

Option contracts give the purchaser the right, but not the obligation, to purchase from or sell to the option writer financial instruments, commodities or currencies within a defined time period for a specified price. The premium received by the Company upon writing an option contract is recorded as a liability, marked to market on a daily basis and is included in securities sold, not yet purchased in the condensed consolidated balance sheets. In writing an option, the Company bears the market risk of an unfavorable change in the financial instrument underlying the written option. Exercise of an option written by the Company could result in the Company selling or buying a financial instrument at a price different from the current fair value.

In the normal course of trading activities in its investment portfolio, the Company trades and holds certain derivative contracts, such as written options, which constitute guarantees. The maximum payout for written put options is limited to the number of contracts written and the related strike prices and the maximum payout for written call options is dependent upon the market price of the underlying security at the date of a payout event. As of September 30, 2014, the investment portfolio had a maximum payout amount of approximately $875.6 million (December 31, 2013 - $689.5 million ) relating to written put option contracts with expiration ranging from one month to 10 months from the balance sheet date. The maximum payout amount could be offset by the subsequent sale, if any, of assets obtained via the settlement of a payout event. The fair value of these written put options as of September 30, 2014 is $8.0 million (December 31, 2013 - $2.6 million ) and is included in securities sold, not yet purchased in the condensed consolidated balance sheets.

Credit derivatives

Upon selling credit default swap protection, the Company may expose itself to the risk of loss from related credit events specified in the contract. Credit spreads of the underlying together with the period of expiration is indicative of the likelihood of a credit event under the credit default swap contract and the Company’s risk of loss. Higher credit spreads and shorter expiration dates are indicative of a higher likelihood of a credit event resulting in the Company’s payment to the buyer of protection. Lower credit spreads and longer expiration dates would indicate the opposite and lowers the likelihood the Company needs to pay the buyer of protection. As of September 30, 2014 , there was no cash collateral received specifically related to written credit default swaps as collateral is based on the net exposure associated with all derivative instruments subject to applicable netting agreements with counterparties and may not be specific to any individual derivative contract.

The following table sets forth certain information related to the Company’s written credit derivatives as of September 30, 2014 and December 31, 2013:



September 30, 2014	Maximum Payout/ Notional Amount (by period of expiration)						Fair Value of Written Credit Derivatives (2)
Credit Spreads on underlying (basis points)	0-5 years		5 years or Greater Expiring Through 2047		Total Written Credit Default Swaps (1)		Asset		Liability		Net Asset/(Liability)
	($ in thousands)
Single name (0 - 250)	$	—	$	5,437	$	5,437	$	—	$	1,503	$	(1,503	)
Single name (251-500)	—		2,318		2,318		158		—		158
	$	—	$	7,755	$	7,755	$	158	$	1,503	$	(1,345	)



December 31, 2013	Maximum Payout/ Notional Amount (by period of expiration)						Fair Value of Written Credit Derivatives (2)
Credit Spreads on underlying (basis points)	0-5 years		5 years or Greater Expiring Through 2046		Total Written Credit Default Swaps (1)		Asset		Liability			Net Asset/(Liability)
	($ in thousands)
Single name (0 - 250)	$	368	$	—	$	368	$	—	$	(104	)	$	(104	)
Single name (251-500)	9,514		—		9,514		1,136		—			1,136
Index (0-250)	—		550		550		21		(244		)	(223		)
	$	9,882	$	550	$	10,432	$	1,157	$	(348	)	$	809


(1)	As of September 30, 2014 and December 31, 2013, the Company did not hold any offsetting buy protection credit derivatives with the same underlying reference obligation.


(2)	Fair value amounts of derivative contracts are shown on a gross basis prior to cash collateral or counterparty netting.

Concentrations of credit risk

In addition to off-balance sheet risks related to specific financial instruments, the Company may be subject to concentration of credit risk with particular counterparties. Substantially all securities transactions of the Company are cleared by several major securities firms. The Company had substantially all such individual counterparty concentration with these brokers or their affiliates as of September 30, 2014 . However, the Company reduces its credit risk with counterparties by entering into master netting agreements. Therefore, assets represent the Company’s greater unrealized gains less unrealized losses for derivative contracts in which the Company has master netting agreements. Similarly, liabilities represent the Company’s greater unrealized losses less unrealized gains for derivative contracts in which the joint venture created through the Investment Agreement (Note 10) has master netting agreements. Furthermore, the Company obtains collateral from counterparties to reduce its exposure to counterparty credit risk.

The Company’s maximum exposure to credit risk associated with counterparty nonperformance on derivative contracts is limited to the net unrealized gains by counterparty inherent in such contracts which are recognized in the condensed consolidated balance sheets. As of September 30, 2014 , the Company’s maximum counterparty credit risk exposure was $25.3 million ( December 31, 2013 - $19.0 million).

21. Commitments and Contingencies

Letters of credit

As of September 30, 2014 , the Company had entered into the following letter of credit facilities, which automatically renew annually unless terminated by either party in accordance with the required notice period:



	Facility		Renewal date	Notice period (Unused Facility Portion)
	($ in thousands)
BNP Paribas	$	100,000	February 15, 2015	60 days prior to termination date
Citibank (1)	250,000		January 23, 2015	90 days prior to termination date
J.P. Morgan	50,000		August 22, 2015	60 days prior to termination date
	$	400,000

(1) Effective July 9, 2014, we increased our Citibank facility from $150 million to $250 million . All other terms of the facility remained the same.

As of September 30, 2014 , $ 160.1 million ( December 31, 2013 - $ 127.3 million ) of letters of credit, representing 40.0% ( December 31, 2013 – 42.4% ) of the total available facilities, had been drawn upon.

Under the facilities, the Company provides collateral that may consist of equity securities, repurchase agreements and cash and cash equivalents. As of September 30, 2014 , cash and cash equivalents with a fair value of $ 160.6 million ( December 31, 2013 - $ 100.6 million ) were pledged as security against the letters of credit issued. These amounts are included in restricted cash and cash equivalents in the condensed consolidated balance sheets. Each of the facilities contain customary events of default and restrictive covenants, including but not limited to, limitations on liens on collateral, transactions with affiliates, mergers and sales of assets, as well as solvency and maintenance of certain minimum pledged equity requirements, A.M. Best Company rating of “A-” or higher, and restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, as defined in the letter of credit facilities, the Company will be prohibited from paying dividends. The Company was in compliance with all of the covenants as of September 30, 2014 .

Investments

Loan and other participation interests purchased by the Company, such as bank debt, may include revolving credit arrangements or other financing commitments obligating the Company to advance additional amounts on demand. As of September 30, 2014 , the Company had one unfunded capital commitment of $5.5 million related to its investment in the Hellenic Fund (see Note 17 for additional information).

Litigation

22. Segment reporting

The determination of the Company’s business segments is based on the manner in which management monitors the performance of its operations. The Company reports two operating segments - Property and Casualty Reinsurance and Catastrophe Risk Management. The Company has also identified a corporate function that includes net investment income on capital and certain general and administrative expenses related to corporate activities.

Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the property and casualty reinsurance segment. The property and casualty reinsurance operations generate excess cash flows, or float, which the Company tracks in managing the business. The Company considers net investment income on float in evaluating the overall contribution of the property and casualty reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.

The following is a summary of the Company’s operating segments results for the three and nine months ended September 30, 2014 and 2013 :



	Three months ended September 30, 2014
	Property and Casualty Reinsurance (6)			Catastrophe Risk Management			Corporate			Total
Revenues	($ in thousands)
Gross premiums written	$	124,931		$	1,472		$	—		$	126,403
Gross premiums ceded	(150		)	—			—			(150		)
Net premiums written	124,781			1,472			—			126,253
Change in net unearned premium reserves	(23,294		)	5,989			—			(17,305		)
Net premiums earned	101,487			7,461			—			108,948
Expenses
Loss and loss adjustment expenses incurred, net	60,121			(6		)	—			60,115
Acquisition costs, net	37,571			746			—			38,317
General and administrative expenses	5,556			648			3,920			10,124
Total expenses	103,248			1,388			3,920			108,556
Net underwriting loss	(1,761		)	n/a			n/a			n/a
Net investment income (loss)	(137		)	881			808			1,552
Other expenses	(2,982		)	—			—			(2,982		)
Income tax expense	—			—			(1,542		)	(1,542		)
Segment income (loss) including non-controlling interests	(4,880		)	6,954			(4,654		)	(2,580		)
Segment income attributable to non-controlling interests	—			(3,325		)	(92		)	(3,417		)
Segment income (loss)	$	(4,880	)	$	3,629		$	(4,746	)	$	(5,997	)

Property and Casualty Reinsurance - Underwriting Ratios:
Loss ratio (1)	59.2		%
Acquisition cost ratio (2)	37.0		%
Composite ratio (3)	96.2		%
General and administrative expense ratio (4)	5.5		%
Combined ratio (5)	101.7		%


(1)	Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.


(2)	Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.


(3)	Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.


(4)	General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.


(5)	Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.


(6)	Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.



	Three Months Ended September 30, 2013
	Property and Casualty Reinsurance (6)			Catastrophe Risk Management			Corporate			Total
Revenues	($ in thousands)
Gross premiums written	$	43,714		$	1,711		$	—		$	45,425
Gross premiums ceded	—			—			—			—
Net premiums written	43,714			1,711			—			45,425
Change in net unearned premium reserves	18,051			2,853			—			20,904
Net premiums earned	61,765			4,564			—			66,329
Expenses
Loss and loss adjustment expenses incurred, net	39,349			—			—			39,349
Acquisition costs, net	20,541			576			—			21,117
General and administrative expenses	6,739			949			2,158			9,846
Total expenses	66,629			1,525			2,158			70,312
Net underwriting loss	(4,864		)	n/a			n/a			n/a
Net investment income	7,072			2,089			45,456			54,617
Other expenses	(1,246		)	—			—			(1,246		)
Segment income including non-controlling interests	962			5,128			43,298			49,388
Segment income attributable to non-controlling interests	—			(2,432		)	(386		)	(2,818		)
Segment income	$	962		$	2,696		$	42,912		$	46,570

Property and Casualty Reinsurance - Underwriting Ratios:
Loss ratio (1)	63.7		%
Acquisition cost ratio (2)	33.3		%
Composite ratio (3)	97.0		%
General and administrative expense ratio (4)	10.9		%
Combined ratio (5)	107.9		%


(1)	Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.


(2)	Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.


(3)	Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.


(4)	General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.


(5)	Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.


(6)	Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.



	Nine months ended September 30, 2014
	Property and Casualty Reinsurance (6)			Catastrophe Risk Management			Corporate			Total
Revenues	($ in thousands)
Gross premiums written	$	347,495		$	12,003		$	—		$	359,498
Gross premiums ceded	(150		)	—			—			(150		)
Net premiums written	347,345			12,003			—			359,348
Change in net unearned premium reserves	(96,069		)	(2,319		)	—			(98,388		)
Net premiums earned	251,276			9,684			—			260,960
Expenses
Loss and loss adjustment expenses incurred, net	150,789			(6		)	—			150,783
Acquisition costs, net	92,477			854			—			93,331
General and administrative expenses	17,020			2,160			10,518			29,698
Total expenses	260,286			3,008			10,518			273,812
Net underwriting loss	(9,010		)	n/a			n/a			n/a
Net investment income	13,458			943			77,671			92,072
Other expenses	(4,789		)	—			—			(4,789		)
Income tax expense	—			—			(3,917		)	(3,917		)
Segment income (loss) including non-controlling interests	(341		)	7,619			63,236			70,514
Segment income attributable to non-controlling interests	—			(3,854		)	(1,586		)	(5,440		)
Segment income (loss)	$	(341	)	$	3,765		$	61,650		$	65,074

Property and Casualty Reinsurance - Underwriting Ratios:
Loss ratio (1)	60.0		%
Acquisition cost ratio (2)	36.8		%
Composite ratio (3)	96.8		%
General and administrative expense ratio (4)	6.8		%
Combined ratio (5)	103.6		%


(1)	Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.


(2)	Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.


(3)	Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.


(4)	General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.


(5)	Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.


(6)	Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.



	Nine months ended September 30, 2013
	Property and Casualty Reinsurance (6)			Catastrophe Risk Management			Corporate			Total
Revenues	($ in thousands)
Gross premiums written	$	231,229		$	8,431		$	—		$	239,660
Gross premiums ceded	(9,975		)	—			—			(9,975		)
Net premiums written	221,254			8,431			—			229,685
Change in net unearned premium reserves	(65,408		)	(2,120		)	—			(67,528		)
Net premiums earned	155,846			6,311			—			162,157
Expenses
Loss and loss adjustment expenses incurred, net	103,291			388			—			103,679
Acquisition costs, net	48,353			758			—			49,111
General and administrative expenses	16,265			2,721			5,085			24,071
Total expenses	167,909			3,867			5,085			176,861
Net underwriting loss	(12,063		)	n/a			n/a			n/a
Net investment income	15,128			3,210			150,466			168,804
Other expenses	(2,675		)	—			—			(2,675		)
Segment income including non-controlling interests	390			5,654			145,381			151,425
Segment income attributable to non-controlling interests	—			(3,027		)	(1,175		)	(4,202		)
Segment income	$	390		$	2,627		$	144,206		$	147,223

Property and Casualty Reinsurance - Underwriting Ratios:
Loss ratio (1)	66.3		%
Acquisition cost ratio (2)	31.0		%
Composite ratio (3)	97.3		%
General and administrative expense ratio (4)	10.4		%
Combined ratio (5)	107.7		%


(1)	Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.


(2)	Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.


(3)	Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.


(4)	General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.


(5)	Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.


(6)	Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.

For the three months ended September 30, 2014 , three contracts each contributed greater than 10.0% of total gross premiums written. These three contracts contributed 60.5% , 31.8% and 14.1% , respectively, of total gross premiums written for the three months ended September 30, 2014. For the three months ended September 30, 2013, four contracts each contributed greater than 10% of total gross premiums written. These four contracts contributed 61.0% , 22.0% , 13.1% and 12.3% , respectively, of total gross premiums written for the three months ended September 30, 2013.

For the nine months ended September 30, 2014 , three contracts each contributed greater than 10.0% of total gross premiums written. These three contracts contributed 29.2% , 12.4% and 11.2% , respectively, of total gross premiums written for the nine months ended September 30, 2014. For the nine months ended September 30, 2013, four contracts contributed greater than 10% of total gross premiums written. These four contracts contributed 18.8% , 14.6% , 11.6% and 11.5% , respectively, of total gross premiums written for the nine months ended September 30, 2013.

The following table provides a breakdown of the Company’s gross premiums written by line of business for the

three and nine months ended September 30, 2014 and 2013 :



	For the three months ended
	September 30, 2014					September 30, 2013
	($ in thousands)
Property	$	(2,810	)	(2.2	)%	$	(1,603	)	(3.5	)%
Casualty	128,469			101.6	%	9,426			20.7	%
Specialty	(728		)	(0.6	)%	35,891			79.0	%
Total property and casualty reinsurance	124,931			98.8	%	43,714			96.2	%
Catastrophe risk management	1,472			1.2	%	1,711			3.8	%
	$	126,403		100.0	%	$	45,425		100.0	%



	For the nine months ended
	September 30, 2014				September 30, 2013
	($ in thousands)
Property	$	78,577	21.9	%	$	26,635	11.1	%
Casualty	244,235		67.9	%	111,021		46.4	%
Specialty	24,683		6.9	%	93,573		39.0	%
Total property and casualty reinsurance	347,495		96.7	%	231,229		96.5	%
Catastrophe risk management	12,003		3.3	%	8,431		3.5	%
	$	359,498	100.0	%	$	239,660	100.0	%

The following table provides a breakdown of the Company’s gross premiums written by prospective and retroactive reinsurance contracts for the three and nine months ended September 30, 2014 and 2013 :



	For the three months ended								For the nine months ended
	September 30, 2014				September 30, 2013				September 30, 2014				September 30, 2013
	($ in thousands)
Prospective	$	126,403	100.0	%	$	27,981	61.6	%	$	356,822	99.3	%	$	199,916	83.4	%
Retroactive	—		—	%	17,444		38.4	%	2,676		0.7	%	39,744		16.6	%
	$	126,403	100.0	%	$	45,425	100.0	%	$	359,498	100.0	%	$	239,660	100.0	%

The Company records the gross premium written and earned at the inception of the contract for retroactive reinsurance contracts.

Substantially all of the Company's business is sourced through reinsurance brokers. The following table provides a breakdown of the Company's gross premiums written from brokers for the nine months ended September 30, 2014 and 2013 :



	2014				2013
	($ in thousands)
Guy Carpenter & Company, LLC	$	91,567	25.5	%	$	(11,927	)	(5.0	)%
Willis Re	55,589		15.5	%	13,421			5.6	%
Aon Benfield - a division of Aon plc	54,072		15.0	%	91,349			38.2	%
Advocate Reinsurance Partners, LLC	51,002		14.2	%	26,000			10.8	%
Stonehill Reinsurance Partners, LLC	44,744		12.4	%	—			—	%
TigerRisk Partners LLC	13,852		3.9	%	10,472			4.4	%
BMS Intermediaries	—		—	%	46,095			19.2	%
Other brokers	3,203		0.9	%	7,545			3.1	%
Total broker placed	314,029		87.4	%	182,955			76.3	%
Direct placements	45,469		12.6	%	56,705			23.7	%
	$	359,498	100.0	%	$	239,660		100.0	%

The following table provides a breakdown of the Company’s gross premiums written by domicile of the ceding companies for the three and nine months September 30, 2014 and 2013 :



	For the three months ended									For the nine months ended
	September 30, 2014					September 30, 2013				September 30, 2014				September 30, 2013
	($ in thousands)
United States	$	85,686		67.7	%	$	7,665	16.9	%	$	288,420	80.3	%	$	151,314	63.1	%
United Kingdom	(812		)	(0.6	)%	—		—	%	24,600		6.8	%	—		—	%
Bermuda	41,529			32.9	%	37,760		83.1	%	46,478		12.9	%	86,946		36.3	%
Other	—			—	%	—		—	%	—		—	%	1,400		0.6	%
	$	126,403		100.0	%	$	45,425	100.0	%	$	359,498	100.0	%	$	239,660	100.0	%

23. Supplemental guarantor information

The following information sets forth the Company’s condensed consolidating balance sheets as of September 30, 2014 and December 31, 2013 and the condensed consolidating statements of income (loss) for the three and nine months ended September 30, 2014 and 2013 and the condensed consolidating statements of cash flows for the nine ended September 30, 2014 and 2013. Investments in subsidiaries are accounted for on the equity method; accordingly, entries necessary to consolidate the parent guarantor, issuer of debt and all other subsidiaries are reflected in the eliminations column.



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING BALANCE SHEET
(UNAUDITED)
As of September 30, 2014
(expressed in thousands of U.S. dollars, except per share and share amounts)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Equity securities	$	—	$	—	$	956,604		$	—		$	956,604
Debt securities	—		—		660,677			—			660,677
Other investments	—		—		97,765			—			97,765
Total investments in securities and commodities	—		—		1,715,046			—			1,715,046
Cash and cash equivalents	492		—		32,201			—			32,693
Restricted cash and cash equivalents	—		—		261,966			—			261,966
Investment in subsidiaries	1,462,264		—		—			(1,462,264		)	—
Due from brokers	—		—		182,927			—			182,927
Securities purchased under an agreement to sell	—		—		19,897			—			19,897
Derivative assets, at fair value	—		—		37,260			—			37,260
Interest and dividends receivable	—		—		5,032			—			5,032
Reinsurance balances receivable	—		—		269,747			—			269,747
Deferred acquisition costs, net	—		—		124,373			—			124,373
Unearned premiums ceded	—		—		91			—			91
Loss and loss adjustment expenses recoverable	—		—		1,412			—			1,412
Other assets	838		—		2,863			—			3,701
Amounts due from affiliates	2,101				(2,101		)	—			—
Total assets	$	1,465,695	$	—	$	2,650,714		$	(1,462,264	)	$	2,654,145
Liabilities and shareholders' equity
Liabilities
Accounts payable and accrued expenses	$	1,382	$	—	$	6,139		$	—		$	7,521
Reinsurance balances payable	—		—		21,651			—			21,651
Deposit liabilities	—		—		142,990			—			142,990
Unearned premium reserves	—		—		363,666			—			363,666
Loss and loss adjustment expense reserves	—		—		187,313			—			187,313
Securities sold, not yet purchased, at fair value	—		—		45,667			—			45,667
Due to brokers	—		—		306,927			—			306,927
Derivative liabilities, at fair value	—		—		12,346			—			12,346
Performance fee payable to related party	—		—		21,837			—			21,837
Interest and dividends payable	—		—		589			—			589
Total liabilities	1,382		—		1,109,125			—			1,110,507
Shareholders' equity
Common shares	10,403		—		1,253			(1,253		)	10,403
Additional paid-in capital	1,063,254		—		1,070,887			(1,070,887		)	1,063,254
Retained earnings	390,656		—		390,124			(390,124		)	390,656
Shareholders' equity attributable to shareholders	1,464,313		—		1,462,264			(1,462,264		)	1,464,313
Non-controlling interests	—		—		79,325			—			79,325
Total shareholders' equity	1,464,313		—		1,541,589			(1,462,264		)	1,543,638
Total liabilities and shareholders' equity	$	1,465,695	$	—	$	2,650,714		$	(1,462,264	)	$	2,654,145



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2013
(expressed in thousands of U.S. dollars)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Equity securities	$	—	$	—	$	954,111		$	—		$	954,111
Debt securities	—		—		441,424			—			441,424
Other investments	—		—		65,329			—			65,329
Total investments in securities and commodities	—		—		1,460,864			—			1,460,864
Cash and cash equivalents	294		—		31,331			—			31,625
Restricted cash and cash equivalents	—		—		193,577			—			193,577
Investment in subsidiaries	1,394,644		—		—			(1,394,644		)	—
Due from brokers	—		—		98,386			—			98,386
Securities purchased under an agreement to sell	—		—		38,147			—			38,147
Derivative assets, at fair value	—		—		39,045			—			39,045
Interest and dividends receivable	—		—		2,615			—			2,615
Reinsurance balances receivable	—		—		191,763			—			191,763
Deferred acquisition costs, net	—		—		91,193			—			91,193
Loss and loss adjustment expenses recoverable	—		—		9,277			—			9,277
Other assets	720		—		2,678			—			3,398
Amounts due from affiliates	417				(417		)	—			—
Total assets	$	1,396,075	$	—	$	2,158,459		$	(1,394,644	)	$	2,159,890
Liabilities and shareholders' equity
Liabilities
Accounts payable and accrued expenses	$	242	$	—	$	9,214		$	—		$	9,456
Reinsurance balances payable	—		—		9,081			—			9,081
Deposit liabilities	—		—		120,946			—			120,946
Unearned premium reserves	—		—		265,187			—			265,187
Loss and loss adjustment expense reserves	—		—		134,331			—			134,331
Securities sold, not yet purchased, at fair value	—		—		56,056			—			56,056
Due to brokers	—		—		44,870			—			44,870
Derivative liabilities, at fair value	—		—		8,819			—			8,819
Interest and dividends payable	—		—		748			—			748
Amounts due to affiliate	4,172		—		(4,172		)	—			—
Total liabilities	4,414		—		645,080			—			649,494
Shareholders' equity
Common shares	10,389		—		1,251			(1,251		)	10,389
Additional paid-in capital	1,055,690		—		1,064,493			(1,064,493		)	1,055,690
Retained earnings	325,582		—		328,900			(328,900		)	325,582
Shareholders' equity attributable to shareholders	1,391,661		—		1,394,644			(1,394,644		)	1,391,661
Non-controlling interests	—		—		118,735			—			118,735
Total shareholders' equity	1,391,661		—		1,513,379			(1,394,644		)	1,510,396
Total liabilities and shareholders' equity	$	1,396,075	$	—	$	2,158,459		$	(1,394,644	)	$	2,159,890



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)
(UNAUDITED)
For the three months ended September 30, 2014
(expressed in thousands of U.S. dollars)
	Parent Guarantor			Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations		Consolidated
Revenues
Gross premiums written	$	—		$	—	$	126,403		$	—	$	126,403
Gross premiums ceded	—			—		(150		)	—		(150		)
Net premiums written	—			—		126,253			—		126,253
Change in net unearned premium reserves	—			—		(17,305		)	—		(17,305		)
Net premiums earned	—			—		108,948			—		108,948
Net investment income	—			—		1,552			—		1,552
Equity in earnings of subsidiaries	(4,070		)	—		—			4,070		—
Total revenues	(4,070		)	—		110,500			4,070		110,500
Expenses
Loss and loss adjustment expenses incurred, net	—			—		60,115			—		60,115
Acquisition costs, net	—			—		38,317			—		38,317
General and administrative expenses	1,927			—		8,197			—		10,124
Other expenses	—			—		2,982			—		2,982
Total expenses	1,927			—		109,611			—		111,538
Income (loss) before income tax expense	(5,997		)	—		889			4,070		(1,038		)
Income tax expense	—			—		(1,542		)	—		(1,542		)
Income (loss) including non-controlling interests	(5,997		)	—		(653		)	4,070		(2,580		)
Income (loss) attributable to non-controlling interests	—			—		(3,417		)	—		(3,417		)
Net income (loss)	$	(5,997	)	$	—	$	(4,070	)	$	4,070	$	(5,997	)



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
(UNAUDITED)
For the three months ended September 30, 2013
(expressed in thousands of U.S. dollars)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross premiums written	$	—	$	—	$	45,425		$	—		$	45,425
Gross premiums ceded	—		—		—			—			—
Net premiums written	—		—		45,425			—			45,425
Change in net unearned premium reserves	—		—		20,904			—			20,904
Net premiums earned	—		—		66,329			—			66,329
Net investment income	—		—		54,617			—			54,617
Equity in earnings of subsidiaries	46,849		—		—			(46,849		)	—
Total revenues	46,849		—		120,946			(46,849		)	120,946
Expenses
Loss and loss adjustment expenses incurred, net	—		—		39,349			—			39,349
Acquisition costs, net	—		—		21,117			—			21,117
General and administrative expenses	279		—		9,567			—			9,846
Other expenses	—		—		1,246			—			1,246
Total expenses	279		—		71,279			—			71,558
Income before income tax expense	46,570		—		49,667			(46,849		)	49,388
Income tax expense	—		—		—			—			—
Income including non-controlling interests	46,570		—		49,667			(46,849		)	49,388
Income attributable to non-controlling interests	—		—		(2,818		)	—			(2,818		)
Net income	$	46,570	$	—	$	46,849		$	(46,849	)	$	46,570



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
(UNAUDITED)
For the nine months ended September 30, 2014
(expressed in thousands of U.S. dollars)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross premiums written	$	—	$	—	$	359,498		$	—		$	359,498
Gross premiums ceded	—		—		(150		)	—			(150		)
Net premiums written	—		—		359,348			—			359,348
Change in net unearned premium reserves	—		—		(98,388		)	—			(98,388		)
Net premiums earned	—		—		260,960			—			260,960
Net investment income	—		—		92,072			—			92,072
Equity in earnings of subsidiaries	69,224		—		—			(69,224		)	—
Total revenues	69,224		—		353,032			(69,224		)	353,032
Expenses
Loss and loss adjustment expenses incurred, net	—		—		150,783			—			150,783
Acquisition costs, net	—		—		93,331			—			93,331
General and administrative expenses	4,150		—		25,548			—			29,698
Other expenses	—		—		4,789			—			4,789
Total expenses	4,150		—		274,451			—			278,601
Income before income tax expense	65,074		—		78,581			(69,224		)	74,431
Income tax expense	—		—		(3,917		)	—			(3,917		)
Income including non-controlling interests	65,074		—		74,664			(69,224		)	70,514
Income attributable to non-controlling interests	—		—		(5,440		)	—			(5,440		)
Net income	$	65,074	$	—	$	69,224		$	(69,224	)	$	65,074



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF INCOME
(UNAUDITED)
For the nine months ended September 30, 2013
(expressed in thousands of U.S. dollars)
	Parent Guarantor		Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues
Gross premiums written	$	—	$	—	$	239,660		$	—		$	239,660
Gross premiums ceded	—		—		(9,975		)	—			(9,975		)
Net premiums written	—		—		229,685			—			229,685
Change in net unearned premium reserves	—		—		(67,528		)	—			(67,528		)
Net premiums earned	—		—		162,157			—			162,157
Net investment income	—		—		168,804			—			168,804
Equity in earnings of subsidiaries	147,618		—		—			(147,618		)	—
Total revenues	147,618		—		330,961			(147,618		)	330,961
Expenses
Loss and loss adjustment expenses incurred, net	—		—		103,679			—			103,679
Acquisition costs, net	—		—		49,111			—			49,111
General and administrative expenses	395		—		23,676			—			24,071
Other expenses	—		—		2,675			—			2,675
Total expenses	395		—		179,141			—			179,536
Income before income tax expense	147,223		—		151,820			(147,618		)	151,425
Income tax expense	—		—		—			—			—
Income including non-controlling interests	147,223		—		151,820			(147,618		)	151,425
Income attributable to non-controlling interests	—		—		(4,202		)	—			(4,202		)
Net income	$	147,223	$	—	$	147,618		$	(147,618	)	$	147,223



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(UNAUDITED)
For the nine months ended September 30, 2014
(expressed in thousands of U.S. dollars)
	Parent Guarantor			Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income	$	65,074		$	—	$	69,224		$	(69,224	)	$	65,074
Adjustments to reconcile net income to net cash provided by operating activities
Equity in earnings of subsidiaries	(69,224		)	—		—			69,224			—
Share compensation expense	583			—		6,396			—			6,979
Interest expense on deposit liabilities	—			—		3,687			—			3,687
Net unrealized gain on investments and derivatives	—			—		68,107			—			68,107
Net realized gain on investments and derivatives	—			—		(184,133		)	—			(184,133		)
Amortization of premium and accretion of discount, net	—			—		1,031			—			1,031
Changes in assets and liabilities:
Reinsurance balances receivable	—			—		(65,718		)	—			(65,718		)
Deferred acquisition costs, net	—			—		(33,180		)	—			(33,180		)
Unearned premiums ceded	—			—		(91		)	—			(91		)
Loss and loss adjustment expenses recoverable	—			—		7,865						7,865
Other assets	(118		)	—		(185		)	—			(303		)
Interest and dividends receivable, net	—			—		(2,576		)	—			(2,576		)
Unearned premium reserves	—			—		98,479			—			98,479
Loss and loss adjustment expense reserves	—			—		52,982			—			52,982
Accounts payable and accrued expenses	1,140			—		(3,075		)	—			(1,935		)
Reinsurance balances payable	—			—		12,133			—			12,133
Performance fees payable to related party	—			—		21,837			—			21,837
Amounts due from affiliates	(1,684		)	—		1,684			—			—
Amounts due to affiliates	(4,172		)	—		4,172			—			—
Net cash provided by operating activities	(8,401		)	—		58,639			—			50,238
Investing activities
Purchases of investments	—			—		(2,150,821		)	—			(2,150,821		)
Proceeds from sales of investments	—			—		1,998,673			—			1,998,673
Purchases of investments to cover short sales	—			—		(141,468		)	—			(141,468		)
Proceeds from short sales of investments	—			—		150,098			—			150,098
Change in due to/from brokers, net	—			—		177,516			—			177,516
Increase in securities purchased under agreement to sell	—			—		18,250			—			18,250
Non-controlling interest related to joint venture	—			—		(49,415		)	—			(49,415		)
Change in restricted cash and cash equivalents	—			—		(68,389		)	—			(68,389		)
Net cash used in investing activities	—			—		(65,556		)	—			(65,556		)
Financing activities
Proceeds from issuance of common shares, net of costs	599			—		—			—			599
Increase in deposit liabilities	—			—		5,782			—			5,782
Non-controlling interest in Catastrophe Fund	—			—		10,023			—			10,023
Non-controlling interest in Catastrophe Manager	—			—		(18		)	—			(18		)
Dividend received by (paid to) parent	8,000			—		(8,000		)	—			—
Net cash provided by financing activities	8,599			—		7,787			—			16,386
Net increase in cash and cash equivalents	198			—		870			—			1,068
Cash and cash equivalents at beginning of period	294			—		31,331			—			31,625
Cash and cash equivalents at end of period	$	492		$	—	$	32,201		$	—		$	32,693



THIRD POINT REINSURANCE LTD.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(UNAUDITED)
For the nine months ended September 30, 2013
(expressed in thousands of U.S. dollars)
	Parent Guarantor			Issuer of Debt		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities
Net income	$	147,223		$	—	$	147,618		$	(147,618	)	$	147,223
Adjustments to reconcile net income to net cash (used in) provided by operating activities
Equity in earnings of subsidiaries	(147,618		)	—		—			147,618			—
Share compensation expense	—			—		7,611			—			7,611
Net unrealized gain on investments and derivatives	—			—		(30,541		)	—			(30,541		)
Net realized gain on investments and derivatives	—			—		(176,673		)	—			(176,673		)
Amortization of premium and accretion of discount, net	—			—		(2,868		)	—			(2,868		)
Changes in assets and liabilities:
Reinsurance balances receivable	—			—		(57,669		)	—			(57,669		)
Deferred acquisition costs, net	—			—		(13,180		)	—			(13,180		)
Unearned premiums ceded	—			—		(2,494		)	—			(2,494		)
Loss and loss adjustment expenses recoverable	—			—		(6,284		)	—			(6,284		)
Other assets	(858		)	—		(73		)	—			(931		)
Interest and dividends receivable, net	—			—		(775		)	—			(775		)
Unearned premium reserves	—			—		70,022			—			70,022
Losses and loss adjustment expense reserves	—			—		76,436			—			76,436
Accounts payable and accrued expenses	(364		)	—		(136		)	—			(500		)
Reinsurance balances payable	—			—		8,579			—			8,579
Performance fees payable to related party	—			—		40,264			—			40,264
Amounts due from affiliates	557			—		(557		)	—			—
Amounts due to affiliates	1,447			—		(1,447		)	—			—
Net cash (used in) provided by operating activities	387			—		57,833			—			58,220
Investing activities
Purchases of investments	—			—		(1,475,391		)	—			(1,475,391		)
Proceeds from sales of investments	—			—		1,539,990			—			1,539,990
Purchases of investments to cover short sales	—			—		(342,282		)	—			(342,282		)
Proceeds from short sales of investments	—			—		251,085			—			251,085
Change in due to/from brokers, net	—			—		(311,503		)	—			(311,503		)
Increase in securities purchased under agreement to sell	—			—		22,487			—			22,487
Non-controlling interest related to joint venture	—			—		(33,114		)	—			(33,114		)
Change in restricted cash and cash equivalents	—			—		(81,663		)	—			(81,663		)
Contributed capital (to) from subsidiaries	(286,246		)	—		286,246			—			—
Net cash used in investing activities	(286,246		)	—		(144,145		)	—			(430,391		)
Financing activities
Proceeds from issuance of common shares, net of costs	286,685			—		—			—			286,685
Increase in deposit liabilities	—			—		41,793			—			41,793
Non-controlling interest in Catastrophe Fund	—			—		28,515			—			28,515
Non-controlling interest in Catastrophe Manager	—			—		(164		)	—			(164		)
Net cash provided by financing activities	286,685			—		70,144			—			356,829
Net increase (decrease) in cash and cash equivalents	826			—		(16,168		)	—			(15,342		)
Cash and cash equivalents at beginning of period	169			—		33,836			—			34,005
Cash and cash equivalents at end of period	$	995		$	—	$	17,668		$	—		$	18,663

24. Subsequent events