x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Bermuda
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98-1039994
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3 Waterloo Lane
Pembroke, Bermuda
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|
HM 08
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Shares, $0.10 par value
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer (do not check if a smaller reporting company)
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¨
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Smaller reporting company
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¨
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Page
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•
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limited historical information about us;
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•
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fluctuation in results of operations;
|
•
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more established competitors;
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•
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losses exceeding reserves;
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•
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downgrades or withdrawal of ratings by rating agencies;
|
•
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dependence on key executives;
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•
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dependence on letter of credit facilities that may not be available on commercially acceptable terms;
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•
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potential inability to pay dividends;
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•
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inability to service our indebtedness;
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•
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limited cash flow and liquidity due to our indebtedness;
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•
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unavailability of capital in the future;
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•
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fluctuations in market price of our common shares;
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•
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dependence on clients’ evaluations of risks associated with such clients’ insurance underwriting;
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•
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suspension or revocation of our reinsurance licenses;
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•
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potentially being deemed an investment company under U.S. federal securities law;
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•
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potential characterization of Third Point Reinsurance Ltd. and/or Third Point Reinsurance Company Ltd. as
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•
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future strategic transactions such as acquisitions, dispositions, merger or joint ventures;
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•
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dependence on Third Point LLC to implement our investment strategy;
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•
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termination by Third Point LLC of our investment management agreements;
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•
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risks associated with our investment strategy being greater than those faced by competitors;
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•
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increased regulation or scrutiny of alternative investment advisers affecting our reputation;
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•
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Third Point Reinsurance Ltd. potentially becoming subject to U.S. federal income taxation;
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•
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potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act;
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•
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changes in Bermuda or other law and regulation that may have an adverse impact on our operations; and
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•
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other risks and factors listed under “Item 1A. Risk Factors” and elsewhere in this Annual Report.
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2015
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|
2014
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|
2013
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|||||||||||||||
|
Amount
|
|
Percentage of Total
|
|
Amount
|
|
Percentage of Total
|
|
Amount
|
|
Percentage of Total
|
|||||||||
|
($ in thousands)
|
|||||||||||||||||||
Property
|
$
|
114,215
|
|
|
16.2
|
%
|
|
$
|
106,834
|
|
|
17.4
|
%
|
|
$
|
67,612
|
|
|
16.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Workers’ Compensation
|
64,534
|
|
|
9.2
|
%
|
|
76,032
|
|
|
12.4
|
%
|
|
93,755
|
|
|
23.3
|
%
|
|||
Auto
|
156,385
|
|
|
22.3
|
%
|
|
136,246
|
|
|
22.2
|
%
|
|
116,262
|
|
|
28.9
|
%
|
|||
General Liability
|
97,145
|
|
|
13.8
|
%
|
|
54,485
|
|
|
8.9
|
%
|
|
—
|
|
|
—
|
%
|
|||
Professional Liability
|
9,000
|
|
|
1.3
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Casualty
|
327,064
|
|
|
46.6
|
%
|
|
266,763
|
|
|
43.5
|
%
|
|
210,017
|
|
|
52.2
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Agriculture
|
(1
|
)
|
|
—
|
%
|
|
110
|
|
|
—
|
%
|
|
31,843
|
|
|
7.9
|
%
|
|||
Credit & Financial lines
|
62,923
|
|
|
9.0
|
%
|
|
10,387
|
|
|
1.7
|
%
|
|
36,366
|
|
|
9.1
|
%
|
|||
Multi-line
|
198,257
|
|
|
28.2
|
%
|
|
217,211
|
|
|
35.4
|
%
|
|
47,750
|
|
|
11.9
|
%
|
|||
Specialty
|
261,179
|
|
|
37.2
|
%
|
|
227,708
|
|
|
37.1
|
%
|
|
115,959
|
|
|
28.9
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total property and casualty reinsurance
|
702,458
|
|
|
100.0
|
%
|
|
601,305
|
|
|
98.0
|
%
|
|
393,588
|
|
|
97.9
|
%
|
|||
Catastrophe risk management
|
(44
|
)
|
|
—
|
%
|
|
11,995
|
|
|
2.0
|
%
|
|
8,349
|
|
|
2.1
|
%
|
|||
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
$
|
401,937
|
|
|
100.0
|
%
|
•
|
target markets where capacity and alternatives are underserved or capacity constrained;
|
•
|
employ strict underwriting discipline;
|
•
|
select reinsurance opportunities with favorable economics over the life of the contract; and
|
•
|
potentially offer lines that are not identified in this Form 10-K.
|
•
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creative solutions that address the specific business needs of our clients;
|
•
|
rapid and substantive responses to structuring and pricing quote requests;
|
•
|
financial security; and
|
•
|
clear indication of risks we will and will not underwrite.
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Largest broker
|
$
|
198,209
|
|
|
28.2
|
%
|
|
$
|
199,563
|
|
|
32.5
|
%
|
|
$
|
111,865
|
|
|
27.8
|
%
|
Second largest broker
|
163,832
|
|
|
23.3
|
%
|
|
110,063
|
|
|
17.9
|
%
|
|
89,125
|
|
|
22.2
|
%
|
|||
Third largest broker
|
91,554
|
|
|
13.0
|
%
|
|
80,535
|
|
|
13.1
|
%
|
|
57,994
|
|
|
14.4
|
%
|
|||
Fourth largest broker
|
73,499
|
|
|
10.5
|
%
|
|
61,777
|
|
|
10.1
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other
|
175,320
|
|
|
25.0
|
%
|
|
161,362
|
|
|
26.4
|
%
|
|
142,953
|
|
|
35.6
|
%
|
|||
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
$
|
401,937
|
|
|
100.0
|
%
|
•
|
require our clients to maintain a meaningful risk position in their business;
|
•
|
pay our clients a commission based upon their actual expenses and offer an additional commission as an incentive based upon profitability;
|
•
|
include deficit carry-forward provisions in our multi-year contracts that allows us to potentially offset underwriting losses from one year to the next;
|
•
|
charge the client a premium for reinstatement of the amount of reinsurance coverage to the full amount reduced as a result of a reinsurance loss payment, which we refer to as a reinstatement premium;
|
•
|
require specific levels of rate increases on the underlying insurance policies; and
|
•
|
for contracts on which we offer an interest credit on funds we hold, credit interest income on actual cash received into a notional experience account whereby the experience account is credited to the ceding company at the maturity of the contract if underwriting results are realized as initially expected.
|
•
|
the client’s and industry historical loss data and current market conditions;
|
•
|
the business purpose served by a proposed contract;
|
•
|
the client’s pricing and underwriting strategies;
|
•
|
the expected duration for claims to fully develop;
|
•
|
the geographic areas in which the client is doing business and its market share;
|
•
|
the reputation and financial strength of the client;
|
•
|
the reputation and expertise of the broker;
|
•
|
proposed contract terms and conditions; and
|
•
|
reports provided by independent industry specialists.
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||
|
|
|
($ in thousands)
|
||||||||||||
Loss and loss adjustment expense reserves
|
$
|
67,271
|
|
|
$
|
134,331
|
|
|
$
|
277,362
|
|
|
$
|
466,047
|
|
Less: Loss and loss adjustment expenses recoverable
|
—
|
|
|
(9,277
|
)
|
|
(814
|
)
|
|
(125
|
)
|
||||
Loss and loss adjustment expense reserves, net of loss and loss adjustment expenses recoverable
|
67,271
|
|
|
125,054
|
|
|
276,548
|
|
|
465,922
|
|
||||
Net loss and loss adjustment expense reserves estimated as of (1):
|
|
|
|
|
|
|
|
||||||||
1 Year Later
|
62,574
|
|
|
121,495
|
|
|
272,680
|
|
|
—
|
|
||||
2 Years Later
|
63,401
|
|
|
126,099
|
|
|
—
|
|
|
—
|
|
||||
3 Years Later
|
63,815
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cumulative redundancy (deficiency) on net loss and loss adjustment expense reserves
|
3,456
|
|
|
(1,045
|
)
|
|
3,868
|
|
|
—
|
|
||||
Cumulative net loss and loss adjustments expenses paid:
|
|
|
|
|
|
|
|
||||||||
1 Year Later
|
54,501
|
|
|
61,091
|
|
|
121,665
|
|
|
—
|
|
||||
2 Years Later
|
60,554
|
|
|
89,679
|
|
|
—
|
|
|
—
|
|
||||
3 Years Later
|
$
|
62,219
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Net loss and loss adjustment expense reserves include deferred gains on retroactive reinsurance contracts.
|
•
|
Composition of Investments
: At least 60% of the applicable investment portfolio will be held in debt or equity securities (including swaps) of publicly traded companies (or their subsidiaries) and governments of the OECD high income countries, asset-backed securities, cash, cash equivalents and gold and other precious metals. Except with the prior written consent of the Investment and Finance committee, none of the assets in the investment portfolio will be held in illiquid investments traditionally considered “venture capital” or private equity investments. In addition, no investments in third party managed funds or other investment vehicles will be made without the consent of the Investment and Finance committee.
|
•
|
Concentration of Investments
: Other than cash, cash equivalents and United States government obligations, no single investment in the investment portfolio will constitute more than 15% of the portfolio.
|
•
|
Liquidity
: Assets will be invested in such fashion that Third Point Re and, with respect to our second investment management agreement, Third Point Re USA, has a reasonable expectation that it can meet any of its liabilities as they become due. We review the liquidity of the Third Point LLC portfolio on a periodic basis.
|
•
|
Net Exposure Limits
: The investment portfolio may not employ greater than 1.5 times portfolio assets managed for more than 10 trading days in any 30-trading day period.
|
•
|
a material violation of applicable law relating to Third Point LLC’s advisory business;
|
•
|
Third Point LLC’s fraud, gross negligence, willful misconduct or reckless disregard of its obligations under the investment management agreement;
|
•
|
a material breach by Third Point LLC of our investment guidelines that is not cured within a 15-day period;
|
•
|
a conviction or, a plea of guilty or nolo contendere to a felony or a crime affecting the asset management business of Third Point LLC by certain senior officers of Third Point LLC;
|
•
|
any act of fraud, material misappropriation, material dishonesty, embezzlement, or similar conduct against or involving us by senior officers of Third Point LLC; or
|
•
|
a formal administrative or other legal proceeding before the SEC, the CFTC, the FINRA, or any other U.S. or non-U.S. regulatory or self-regulatory organization against Third Point LLC; or certain key personnel which would likely have a material adverse effect on us.
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Management fees - Third Point LLC
|
$
|
6,362
|
|
|
$
|
5,037
|
|
|
$
|
3,651
|
|
Management fees - Founders
|
36,053
|
|
|
28,544
|
|
|
20,686
|
|
|||
Performance fees -
TP GP
|
862
|
|
|
19,935
|
|
|
62,996
|
|
|||
|
$
|
43,277
|
|
|
$
|
53,516
|
|
|
$
|
87,333
|
|
|
2015
|
|
2014
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Long/Short Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer
|
15
|
%
|
|
(3
|
)%
|
|
12
|
%
|
|
7
|
%
|
|
—
|
%
|
|
7
|
%
|
Energy & Utility
|
—
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
|
5
|
%
|
|
(1
|
)%
|
|
4
|
%
|
Financial
|
2
|
%
|
|
(1
|
)%
|
|
1
|
%
|
|
8
|
%
|
|
—
|
%
|
|
8
|
%
|
Healthcare
|
30
|
%
|
|
(3
|
)%
|
|
27
|
%
|
|
17
|
%
|
|
—
|
%
|
|
17
|
%
|
Industries & Commodities
|
17
|
%
|
|
(4
|
)%
|
|
13
|
%
|
|
18
|
%
|
|
(1
|
)%
|
|
17
|
%
|
Technology, Media and Telecommunications
|
5
|
%
|
|
(3
|
)%
|
|
2
|
%
|
|
13
|
%
|
|
(1
|
)%
|
|
12
|
%
|
Market Hedges
|
3
|
%
|
|
(9
|
)%
|
|
(6
|
)%
|
|
5
|
%
|
|
(8
|
)%
|
|
(3
|
)%
|
Total Long/Short Equity
|
72
|
%
|
|
(24
|
)%
|
|
48
|
%
|
|
73
|
%
|
|
(11
|
)%
|
|
62
|
%
|
Credit
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Distressed
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
|
3
|
%
|
|
—
|
%
|
|
3
|
%
|
Performing
|
6
|
%
|
|
(11
|
)%
|
|
(5
|
)%
|
|
5
|
%
|
|
(6
|
)%
|
|
(1
|
)%
|
Government
|
7
|
%
|
|
(1
|
)%
|
|
6
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Asset Backed Securities (1)
|
24
|
%
|
|
(3
|
)%
|
|
21
|
%
|
|
22
|
%
|
|
(1
|
)%
|
|
21
|
%
|
Total Credit
|
38
|
%
|
|
(15
|
)%
|
|
23
|
%
|
|
30
|
%
|
|
(7
|
)%
|
|
23
|
%
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Government
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
7
|
%
|
|
(3
|
)%
|
|
4
|
%
|
Tail Risk
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4
|
%
|
|
(8
|
)%
|
|
(4
|
)%
|
Macro
|
1
|
%
|
|
(6
|
)%
|
|
(5
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Risk Arbitrage
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Private
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Total Other
|
3
|
%
|
|
(6
|
)%
|
|
(3
|
)%
|
|
11
|
%
|
|
(11
|
)%
|
|
—
|
%
|
|
113
|
%
|
|
(45
|
)%
|
|
68
|
%
|
|
114
|
%
|
|
(29
|
)%
|
|
85
|
%
|
|
2015
|
|
2014
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Americas
|
103
|
%
|
|
(30
|
)%
|
|
73
|
%
|
|
92
|
%
|
|
(17
|
)%
|
|
75
|
%
|
Europe, Middle East and Africa
|
6
|
%
|
|
(10
|
)%
|
|
(4
|
)%
|
|
10
|
%
|
|
(8
|
)%
|
|
2
|
%
|
Asia
|
4
|
%
|
|
(5
|
)%
|
|
(1
|
)%
|
|
12
|
%
|
|
(4
|
)%
|
|
8
|
%
|
|
113
|
%
|
|
(45
|
)%
|
|
68
|
%
|
|
114
|
%
|
|
(29
|
)%
|
|
85
|
%
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net investment income (loss) by type
|
($ in thousands)
|
||||||||||
Net realized gains on investments and investment derivatives
|
$
|
14,398
|
|
|
$
|
193,957
|
|
|
$
|
236,333
|
|
Net unrealized gains (losses) on investments and investment derivatives
|
(34,181
|
)
|
|
(83,146
|
)
|
|
78,950
|
|
|||
Net gains on foreign currencies
|
933
|
|
|
2,581
|
|
|
21,106
|
|
|||
Dividend and interest income
|
45,103
|
|
|
31,750
|
|
|
14,233
|
|
|||
Dividends paid on securities sold, not yet purchased
|
(1,279
|
)
|
|
(120
|
)
|
|
(722
|
)
|
|||
Management and performance fees
|
(43,277
|
)
|
|
(53,516
|
)
|
|
(87,333
|
)
|
|||
Other expenses
|
(11,305
|
)
|
|
(7,151
|
)
|
|
(8,863
|
)
|
|||
Net investment income (loss) on investments managed by Third Point LLC
|
(29,608
|
)
|
|
84,355
|
|
|
253,704
|
|
|||
Investment income on cash held by the Catastrophe Reinsurer and Catastrophe Fund
|
29
|
|
|
101
|
|
|
86
|
|
|||
Net gain on catastrophe bond held by Catastrophe Reinsurer
|
10
|
|
|
144
|
|
|
—
|
|
|||
Net gain on investment in Kiskadee Fund
|
1,465
|
|
|
—
|
|
|
—
|
|
|||
Net gain on reinsurance contract derivatives written by the Catastrophe Reinsurer
|
30
|
|
|
982
|
|
|
4,335
|
|
|||
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
$
|
258,125
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Third Point Reinsurance Ltd.
|
(1.6
|
)%
|
|
5.1
|
%
|
|
23.9
|
%
|
S&P 500
|
1.4
|
%
|
|
13.7
|
%
|
|
32.4
|
%
|
(1)
|
Past performance is not necessarily indicative of future results.
|
•
|
our ability to attract clients;
|
•
|
our ability to attract and retain personnel with sufficient underwriting, actuarial, accounting and finance expertise;
|
•
|
our ability to maintain at least an A- (Excellent) rating from A.M. Best or a similar financial strength rating from one or more other ratings agencies;
|
•
|
our ability to evaluate the risks we assume under reinsurance contracts that we write;
|
•
|
our reliance on third parties, including Third Point LLC, to provide certain services; and
|
•
|
the risk of Third Point Reinsurance Ltd. and/or Third Point Re being deemed a passive foreign investment company or an investment company if we are deemed to not be in the active conduct of an insurance business or to not be predominantly engaged in an insurance business. See “Risks Relating to Insurance and Other Regulations -We are subject to the risk of becoming an investment company under U.S. federal securities law” and “Risks Relating to Taxation-United States persons who own our shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of shares.”
|
•
|
reinsurance contract pricing;
|
•
|
our assessment of the quality of available reinsurance opportunities;
|
•
|
the volume and mix of reinsurance products we underwrite;
|
•
|
loss experience on our reinsurance liabilities;
|
•
|
our ability to assess and integrate our risk management strategy properly; and
|
•
|
the performance of our investment portfolio.
|
•
|
price of reinsurance coverage;
|
•
|
the general reputation and perceived financial strength of the reinsurer;
|
•
|
relationships with reinsurance brokers;
|
•
|
terms and conditions of products offered;
|
•
|
ratings assigned by independent rating agencies;
|
•
|
speed of claims payment and reputation; and
|
•
|
the experience and reputation of the members of our underwriting team in the particular lines of reinsurance we seek to underwrite.
|
•
|
the lapse of time from the occurrence of an event to the reporting of the claim and the ultimate resolution or settlement of the claim;
|
•
|
the diversity of development patterns among different types of reinsurance treaties; and
|
•
|
heavier reliance on the client for information regarding claims.
|
•
|
if we change our business practices from our organizational business plan in a manner that no longer supports A.M. Best’s initial rating;
|
•
|
if unfavorable financial or market trends impact us;
|
•
|
if losses exceed loss reserves;
|
•
|
if we are unable to retain our senior management and other key personnel;
|
•
|
if our investment portfolio incurs significant losses; or
|
•
|
if A.M. Best alters its capital adequacy assessment methodology in a manner that would adversely affect the rating of Third Point Re or Third Point Re USA.
|
•
|
requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, and principal of, our debt, which will reduce the amounts available to fund working capital, the expansion of our business and other general corporate purposes;
|
•
|
increasing our vulnerability to adverse changes in general economic, industry and market conditions, and exposing us to the risk of increased interest rates;
|
•
|
obligating us to additional restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing;
|
•
|
making it more difficult for us to make payments on our existing or future obligations;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
|
•
|
placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
|
•
|
fund liquidity needs caused by underwriting or investment losses;
|
•
|
replace capital lost in the event of significant reinsurance losses or adverse reserve developments;
|
•
|
satisfy letters of credit, guarantee bond requirements or other capital requirements that may be imposed by our clients or by regulators;
|
•
|
meet rating agency or regulatory capital requirements; or
|
•
|
respond to competitive pressures.
|
•
|
the historical performance of funds managed by Third Point LLC should not be considered indicative of the future results that should be expected from our investment portfolio; and
|
•
|
the returns of funds managed by Third Point LLC have benefited historically from investment opportunities and general market conditions that currently may not exist and may not repeat themselves, and there can be no assurance that Third Point LLC will be able to avail itself of profitable investment opportunities in the future.
|
•
|
a material violation of applicable law relating to Third Point LLC’s advisory business;
|
•
|
Third Point LLC’s fraud, gross negligence, willful misconduct or reckless disregard of its obligations under the relevant investment management agreement;
|
•
|
a material breach by Third Point LLC of our investment guidelines that is not cured within a 15-day period;
|
•
|
a conviction or, a plea of guilty or nolo contendere to a felony or a crime affecting the asset management business of Third Point LLC by certain senior officers of Third Point LLC;
|
•
|
any act of fraud, material misappropriation, material dishonesty, embezzlement, or similar conduct against or involving us by senior officers of Third Point LLC; or
|
•
|
a formal administrative or other legal proceeding before the SEC, the CFTC, FINRA, or any other U.S. or non-U.S. regulatory or self-regulatory organization against Third Point LLC or certain key personnel which would likely have a material adverse effect on us.
|
•
|
Third Point LLC is entitled to a management fee of 2% annually (less the Founders payment paid to the Lead Investors and Dowling, each defined below, as described in each investment management agreement), charged monthly, based on net assets under management; and
|
•
|
TP GP is entitled to performance compensation based on the appreciation, including unrealized appreciation, in the value of our investment portfolio equal to 20% of net profits, subject to a loss carryforward provision.
|
•
|
maintain a minimum level of capital, surplus and liquidity;
|
•
|
satisfy solvency standards;
|
•
|
restrict dividends and distributions;
|
•
|
obtain prior approval of ownership and transfer of shares;
|
•
|
maintain a principal office and appoint and maintain a principal representative in Bermuda; and
|
•
|
provide for the performance of certain periodic examinations of Third Point Re and Third Point Re USA and their financial condition.
|
•
|
prepare and file periodic reports, and distribute other shareholder communications, in compliance with the federal securities laws and NYSE rules;
|
•
|
maintain comprehensive compliance, investor relations and internal audit functions; and
|
•
|
evaluate and maintain our system of internal control over financial reporting, and report on management’s assessment thereof, in compliance with rules and regulations of the SEC and the Public Company Accounting Oversight Board.
|
•
|
industry or general market conditions;
|
•
|
domestic and international economic factors unrelated to our performance;
|
•
|
changes in our clients’ needs;
|
•
|
new regulatory pronouncements and changes in regulatory guidelines;
|
•
|
lawsuits, enforcement actions and other claims by third parties or governmental authorities;
|
•
|
actual or anticipated fluctuations in our quarterly operating results;
|
•
|
changes in securities analysts' estimates of our financial performance or lack of research and reports by industry analysts;
|
•
|
action by institutional shareholders or other large shareholders (including the Founders), including future sales;
|
•
|
speculation in the press or investment community;
|
•
|
investor perception of us and our industry;
|
•
|
changes in market valuations or earnings of similar companies;
|
•
|
announcements by us or our competitors of significant contracts, acquisitions or strategic partnerships;
|
•
|
any future sales of our common shares or other securities; and
|
•
|
additions or departures of key personnel.
|
•
|
a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts against persons who reside in Bermuda based upon the civil liability provisions of the United States federal securities laws;
|
•
|
a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts based upon the civil liability provisions of the United States federal securities laws;
|
•
|
a holder of our shares would be able to bring an original action in the Bermuda courts to enforce liabilities against us or our directors and officers who reside outside the United States based solely upon United States federal securities laws.
|
•
|
the material facts as to such interested director’s relationship or interests were disclosed or were known to the board of directors and the board of directors had in good faith authorized the transaction by the affirmative vote of a majority of the disinterested directors;
|
•
|
such material facts were disclosed or were known to the shareholders entitled to vote on such transaction and the transaction were specifically approved in good faith by vote of the majority of shares entitled to vote thereon; or
|
•
|
the transaction were fair as to the corporation as of the time it was authorized, approved or ratified. Under Delaware law, the interested director could be held liable for a transaction in which the director derived an improper personal benefit.
|
•
|
provide the right of shareholders to act by majority written consent for so long as the Lead Investors and the Loeb Entities collectively hold at least 35% of our issued and outstanding common shares;
|
•
|
establish a classified board of directors;
|
•
|
require advance notice of shareholders’ proposals in connection with annual general meetings;
|
•
|
authorize our board to issue “blank cheque” preferred shares;
|
•
|
prohibit us from engaging in a business combination with a person who acquires at least 15% of our common shares for a period of three years from the date such person acquired such common shares unless board and shareholder approval is obtained prior to the acquisition;
|
•
|
require that directors only be removed from office for cause by majority shareholder vote once the Lead Investors and the Loeb Entities cease to collectively hold at least 35% of our issued and outstanding shares;
|
•
|
provide that vacancies on the board, including newly-created directorships, may be filled only by a majority vote of directors then in office;
|
•
|
allow each of Kelso and Pine Brook to appoint one director for so long as they hold not less than 25% of the number of shares respectively held as of December 22, 2011;
|
•
|
require a supermajority vote of shareholders to effect certain amendments to our memorandum of association and bye-laws; and
|
•
|
provide a consent right on the part of Kelso, Pine Brook and Daniel S. Loeb to any amendments to our bye-laws or memorandum of association which would have a material adverse effect on their rights for so long as they hold not less than 25% of the number of shares respectively held as of December 22, 2011.
|
|
High
|
|
Low
|
2015
|
|
|
|
1st Quarter
|
$14.50
|
|
$13.21
|
2nd Quarter
|
$15.33
|
|
$13.48
|
3rd Quarter
|
$15.06
|
|
$13.29
|
4th Quarter
|
$14.27
|
|
$13.11
|
2014
|
|
|
|
1st Quarter
|
$18.26
|
|
$15.00
|
2nd Quarter
|
$16.84
|
|
$14.77
|
3rd Quarter
|
$16.02
|
|
$14.55
|
4th Quarter
|
$15.35
|
|
$13.77
|
|
Number of Securities to Be Issued Upon Exercise of Outstanding Options Warrants and Rights (1)
|
|
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (2)
|
|
Number of Securities Available for Future Issuance Under Equity Compensation Plans (excluding Securities Reflected in Column 1) (3)
|
||||
Equity compensation plans approved by shareholders
|
10,250,586
|
|
|
$
|
13.52
|
|
|
9,786,902
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
N/A
|
|
—
|
|
||
Total
|
10,250,586
|
|
|
$
|
13.52
|
|
|
9,786,902
|
|
|
Base Period
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Company Name/Index
|
15-Aug-13
|
30-Sep-13
|
31-Dec-13
|
31-Mar-14
|
30-Jun-14
|
30-Sep-14
|
31-Dec-14
|
31-Mar-15
|
30-Jun-15
|
30-Sep-15
|
31-Dec-15
|
||||||||||||||||||||||
t
Third Point Reinsurance Ltd - TPRE
|
$
|
100.00
|
|
$
|
115.92
|
|
$
|
148.24
|
|
$
|
126.80
|
|
$
|
122.08
|
|
$
|
116.40
|
|
$
|
115.97
|
|
$
|
113.20
|
|
$
|
118.00
|
|
$
|
107.60
|
|
$
|
107.28
|
|
■
S&P 500 Index
|
$
|
100.00
|
|
$
|
101.22
|
|
$
|
111.26
|
|
$
|
112.70
|
|
$
|
117.99
|
|
$
|
118.72
|
|
$
|
123.93
|
|
$
|
124.47
|
|
$
|
124.18
|
|
$
|
115.57
|
|
$
|
123.03
|
|
p
Dow Jones U.S. P & C Insurance Index
|
$
|
100.00
|
|
$
|
102.60
|
|
$
|
110.31
|
|
$
|
106.50
|
|
$
|
110.87
|
|
$
|
110.30
|
|
$
|
121.12
|
|
$
|
122.76
|
|
$
|
119.21
|
|
$
|
121.67
|
|
$
|
129.63
|
|
1.
|
The above graph assumes that the value of the investment was $100 on August 15, 2013.
|
2.
|
This graph is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference in any filing by us under the Securities Act of 1933 or the Securities and Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
($ in thousands, except share and per share data)
|
||||||||||||||||||
Selected Statement of Income (Loss) Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums written
|
$
|
700,538
|
|
|
$
|
613,150
|
|
|
$
|
391,962
|
|
|
$
|
190,374
|
|
|
$
|
—
|
|
Net premiums earned
|
602,824
|
|
|
444,532
|
|
|
220,667
|
|
|
96,481
|
|
|
—
|
|
|||||
Net investment income (loss)
|
(28,074
|
)
|
|
85,582
|
|
|
258,125
|
|
|
136,868
|
|
|
—
|
|
|||||
Loss and loss adjustment expenses incurred, net
|
415,191
|
|
|
283,147
|
|
|
139,812
|
|
|
80,306
|
|
|
—
|
|
|||||
Acquisition costs, net
|
191,216
|
|
|
137,206
|
|
|
67,944
|
|
|
24,604
|
|
|
—
|
|
|||||
General and administrative expenses
|
46,033
|
|
|
40,008
|
|
|
33,036
|
|
|
27,376
|
|
|
1,130
|
|
|||||
Other expenses
|
8,614
|
|
|
7,395
|
|
|
4,922
|
|
|
446
|
|
|
—
|
|
|||||
Interest expense
|
7,236
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange gains
|
3,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Income tax (expense) benefit
|
2,905
|
|
|
(5,648
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
$
|
227,311
|
|
|
$
|
99,401
|
|
|
$
|
(1,130
|
)
|
Earnings (loss) per share (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.84
|
)
|
|
$
|
0.48
|
|
|
$
|
2.58
|
|
|
$
|
1.26
|
|
|
$
|
(0.01
|
)
|
Diluted
|
$
|
(0.84
|
)
|
|
$
|
0.47
|
|
|
$
|
2.54
|
|
|
$
|
1.26
|
|
|
$
|
(0.01
|
)
|
Property and Casualty Reinsurance Segment - Selected Ratios (2):
|
|||||||||||||||||||
Loss ratio
|
68.9
|
%
|
|
65.5
|
%
|
|
65.7
|
%
|
|
83.2
|
%
|
|
n/a
|
|
|||||
Acquisition cost ratio
|
31.7
|
%
|
|
31.5
|
%
|
|
31.5
|
%
|
|
25.5
|
%
|
|
n/a
|
|
|||||
Composite ratio
|
100.6
|
%
|
|
97.0
|
%
|
|
97.2
|
%
|
|
108.7
|
%
|
|
—
|
%
|
|||||
General and administrative expense ratio
|
4.1
|
%
|
|
5.2
|
%
|
|
10.3
|
%
|
|
21.0
|
%
|
|
n/a
|
|
|||||
Combined ratio
|
104.7
|
%
|
|
102.2
|
%
|
|
107.5
|
%
|
|
129.7
|
%
|
|
n/a
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net investment return on investments managed by TP LLC (3)
|
(1.6
|
)%
|
|
5.1
|
%
|
|
23.9
|
%
|
|
17.7
|
%
|
|
n/a
|
(1)
|
See
Note 2
to our consolidated financial statements for additional information regarding our accounting policy for computing earnings (loss) per share.
|
(2)
|
Underwriting ratios are for the property and casualty reinsurance segment only. See additional information in
Note 22
of the Notes to consolidated financial statements. Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
(3)
|
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 interests. The stated return is net of withholding taxes, which are presented as a component of income tax expense (benefit) in our
consolidated statements of income (loss)
. Net investment return is the key indicator by which we measure the performance of Third Point LLC, our investment manager.
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
$ in thousands, except per share data)
|
||||||||||||||||||
Selected Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments in securities
|
$
|
2,317,244
|
|
|
$
|
1,830,838
|
|
|
$
|
1,460,864
|
|
|
$
|
937,690
|
|
|
—
|
|
|
Cash and cash equivalents (1)
|
20,407
|
|
|
28,734
|
|
|
31,625
|
|
|
34,005
|
|
|
603,841
|
|
|||||
Restricted cash and cash equivalents
|
330,915
|
|
|
417,307
|
|
|
193,577
|
|
|
77,627
|
|
|
—
|
|
|||||
Reinsurance balances receivable, net
|
294,313
|
|
|
303,649
|
|
|
191,763
|
|
|
84,280
|
|
|
—
|
|
|||||
Deferred acquisition costs, net
|
197,093
|
|
|
155,901
|
|
|
91,193
|
|
|
45,383
|
|
|
—
|
|
|||||
Total assets
|
3,545,108
|
|
|
2,852,580
|
|
|
2,159,890
|
|
|
1,402,017
|
|
|
605,263
|
|
|||||
Reinsurance balances payable
|
24,119
|
|
|
27,040
|
|
|
9,081
|
|
|
—
|
|
|
—
|
|
|||||
Deposit liabilities (2)
|
83,955
|
|
|
145,430
|
|
|
120,946
|
|
|
50,446
|
|
|
—
|
|
|||||
Unearned premium reserves
|
531,710
|
|
|
433,809
|
|
|
265,187
|
|
|
93,893
|
|
|
—
|
|
|||||
Loss and loss adjustment expense reserves
|
466,047
|
|
|
277,362
|
|
|
134,331
|
|
|
67,271
|
|
|
—
|
|
|||||
Total liabilities
|
2,149,225
|
|
|
1,300,532
|
|
|
649,494
|
|
|
473,696
|
|
|
19,838
|
|
|||||
Shareholders’ equity attributable to shareholders (3)
|
1,379,726
|
|
|
1,451,913
|
|
|
1,391,661
|
|
|
868,544
|
|
|
585,425
|
|
|||||
Non-controlling interests
|
16,157
|
|
|
100,135
|
|
|
118,735
|
|
|
59,777
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
$
|
1,395,883
|
|
|
$
|
1,552,048
|
|
|
$
|
1,510,396
|
|
|
$
|
928,321
|
|
|
585,425
|
|
|
Book value per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Book value per share (4)
|
$
|
13.23
|
|
|
$
|
14.04
|
|
|
$
|
13.48
|
|
|
$
|
11.07
|
|
|
$
|
9.73
|
|
Diluted book value per share (5)
|
$
|
12.85
|
|
|
$
|
13.55
|
|
|
$
|
13.12
|
|
|
$
|
10.89
|
|
|
$
|
9.73
|
|
Selected ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Growth in diluted book value per share (6)
|
(5.2
|
)%
|
|
3.3
|
%
|
|
20.5
|
%
|
|
11.9
|
%
|
|
n/a
|
|
|||||
Return on beginning shareholders’ equity (7)
|
(6.0
|
)%
|
|
3.6
|
%
|
|
23.4
|
%
|
|
13.0
|
%
|
|
n/a
|
|
(1)
|
Cash and cash equivalents consists of cash held in banks and other short-term, highly liquid investments with original maturity dates of ninety days or less.
|
(2)
|
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.
|
(3)
|
Shareholders’ equity attributable to shareholders and total shareholders’ equity as of December 31, 2011 is reflected net of subscriptions receivable of $177.5 million in accordance with SEC Regulation S-X.
|
(4)
|
Book value per share is a non-GAAP financial measure. Book value per share is calculated by dividing shareholders’ equity attributable to shareholders, adjusted for subscriptions receivable, by the number of issued and outstanding shares at period end. See the reconciliation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Book Value Per Share and Diluted Book Value Per Share.”
|
(5)
|
Diluted book value per share is a non-GAAP financial measure. Diluted book value per share is calculated by dividing shareholders’ equity attributable to shareholders, adjusted for subscriptions receivable, and adjusted to include unvested restricted shares and the exercise of all in-the-money options and warrants. See the reconciliation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Book Value Per Share and Diluted Book Value Per Share.”
|
(6)
|
Growth in diluted book value per share is calculated by taking the change in diluted book value per share divided by the beginning of period diluted book value per share.
|
(7)
|
Return on beginning shareholders’ equity as presented is a non-GAAP financial measure. Return on beginning shareholders’ equity is calculated by dividing
net income (loss)
by the beginning of year shareholders’ equity attributable to shareholders. For purposes of determining December 31, 2011 shareholders’ equity attributable to shareholders, we add back the impact of subscriptions receivable to shareholders’ equity attributable to shareholders. For the year ended December 31, 2013, we have also adjusted the beginning shareholders’ equity for the impact of the issuance of shares in our IPO on a weighted average basis. These adjustments lower the stated returns on beginning shareholders’ equity. See the reconciliation under “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Return on Beginning Shareholders’ Equity.”
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands, except for per share data and ratios)
|
||||||||||
Key underwriting metrics for Property and Casualty Reinsurance segment:
|
|
|
|
|
|
||||||
Net underwriting loss (1)
|
$
|
(28,257
|
)
|
|
$
|
(9,552
|
)
|
|
$
|
(15,828
|
)
|
Combined ratio (1)
|
104.7
|
%
|
|
102.2
|
%
|
|
107.5
|
%
|
|||
|
|
|
|
|
|
||||||
Key investment return metrics:
|
|
|
|
|
|
||||||
Net investment income (loss)
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
$
|
258,125
|
|
Net investment return on investments managed by Third Point LLC
|
(1.6
|
)%
|
|
5.1
|
%
|
|
23.9
|
%
|
|||
|
|
|
|
|
|
||||||
Key shareholders’ value creation metrics:
|
|
|
|
|
|
||||||
Book value per share (2)
|
$
|
13.23
|
|
|
$
|
14.04
|
|
|
$
|
13.48
|
|
Diluted book value per share (2)
|
$
|
12.85
|
|
|
$
|
13.55
|
|
|
$
|
13.12
|
|
Increase (decrease) in diluted book value per share (2)
|
(5.2
|
)%
|
|
3.3
|
%
|
|
20.5
|
%
|
|||
Return on beginning shareholders’ equity (2)
|
(6.0
|
)%
|
|
3.6
|
%
|
|
23.4
|
%
|
(1)
|
See
Note 22
to the accompanying consolidated financial statements for a calculation of net underwriting loss and combined ratio.
|
(2)
|
Book value per share, diluted book value per share and return on beginning shareholders’ equity are non-GAAP financial measures. See reconciliations below.
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Net investment income (loss) on float
|
$
|
(10,810
|
)
|
|
$
|
11,305
|
|
|
$
|
26,953
|
|
Net investment income (loss) on capital
|
(18,798
|
)
|
|
73,050
|
|
|
226,751
|
|
|||
Net investment income (loss) on investments managed by Third Point LLC
|
(29,608
|
)
|
|
84,355
|
|
|
253,704
|
|
|||
Investment income on cash held by the Catastrophe Reinsurer and Catastrophe Fund
|
29
|
|
|
101
|
|
|
86
|
|
|||
Net gain on catastrophe bond held by Catastrophe Reinsurer
|
10
|
|
|
144
|
|
|
—
|
|
|||
Net gain on investment in Kiskadee Fund
|
1,465
|
|
|
—
|
|
|
—
|
|
|||
Net gain on reinsurance contract derivatives written by the Catastrophe Reinsurer
|
30
|
|
|
982
|
|
|
4,335
|
|
|||
Net investment income (loss)
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
$
|
258,125
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Basic and diluted book value per share numerator:
|
($ in thousands, except share and per share amounts)
|
||||||||||
Total shareholders’ equity
|
$
|
1,395,883
|
|
|
$
|
1,552,048
|
|
|
$
|
1,510,396
|
|
Less: non-controlling interests
|
(16,157
|
)
|
|
(100,135
|
)
|
|
(118,735
|
)
|
|||
Shareholders’ equity attributable to shareholders
|
1,379,726
|
|
|
1,451,913
|
|
|
1,391,661
|
|
|||
Effect of dilutive warrants issued to Founders and an advisor
|
46,512
|
|
|
46,512
|
|
|
46,512
|
|
|||
Effect of dilutive share options issued to directors and employees
|
58,070
|
|
|
61,705
|
|
|
101,274
|
|
|||
Diluted book value per share numerator:
|
$
|
1,484,308
|
|
|
$
|
1,560,130
|
|
|
$
|
1,539,447
|
|
Basic and diluted book value per share denominator:
|
|
|
|
||||||||
Issued and outstanding shares
|
104,256,745
|
|
|
103,397,542
|
|
|
103,264,616
|
|
|||
Effect of dilutive warrants issued to Founders and an advisor
|
4,651,163
|
|
|
4,651,163
|
|
|
4,651,163
|
|
|||
Effect of dilutive share options issued to directors and employees
|
5,788,391
|
|
|
6,151,903
|
|
|
8,784,861
|
|
|||
Effect of dilutive restricted shares issued to directors and employees (1)
|
837,277
|
|
|
922,610
|
|
|
657,156
|
|
|||
Diluted book value per share denominator:
|
115,533,576
|
|
|
115,123,218
|
|
|
117,357,796
|
|
|||
|
|
|
|
|
|
||||||
Basic book value per share
|
$
|
13.23
|
|
|
$
|
14.04
|
|
|
$
|
13.48
|
|
Diluted book value per share
|
$
|
12.85
|
|
|
$
|
13.55
|
|
|
$
|
13.12
|
|
(1)
|
As of
December 31, 2015
, the effect of dilutive restricted shares issued to directors and employees was comprised of
301,043
restricted shares with a service condition only and
536,234
of restricted shares with a service and performance condition that were considered probable of vesting.
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Net income (loss)
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
$
|
227,311
|
|
Shareholders’ equity attributable to shareholders - beginning of year
|
1,451,913
|
|
|
1,391,661
|
|
|
868,544
|
|
|||
Impact of weighting related to shareholders’ equity from IPO
|
—
|
|
|
—
|
|
|
104,502
|
|
|||
Adjusted shareholders’ equity attributable to shareholders - beginning of year
|
$
|
1,451,913
|
|
|
$
|
1,391,661
|
|
|
$
|
973,046
|
|
Return on beginning shareholders’ equity
|
(6.0
|
)%
|
|
3.6
|
%
|
|
23.4
|
%
|
•
|
premiums from property and casualty reinsurance business assumed; and
|
•
|
income from investments.
|
•
|
loss and loss adjustment expenses;
|
•
|
acquisition costs;
|
•
|
investment-related expenses;
|
•
|
general and administrative expenses;
|
•
|
other expenses;
|
•
|
interest expense; and
|
•
|
income taxes.
|
|
10% increase in ultimate loss and loss adjustment expenses, net
|
|
10% decrease in ultimate loss and loss adjustment expenses, net
|
||||
|
($ in thousands)
|
||||||
Impact on:
|
|
|
|
||||
Loss and loss adjustment expense reserves, net
|
$
|
55,995
|
|
|
$
|
(67,074
|
)
|
Acquisition costs, net
|
(15,183
|
)
|
|
38,352
|
|
||
Increase (decrease) in net underwriting loss
|
40,812
|
|
|
(28,722
|
)
|
||
Total shareholders’ equity
|
$
|
1,395,883
|
|
|
$
|
1,395,883
|
|
Increase (decrease) in shareholders’ equity
|
(2.9
|
)%
|
|
2.1
|
%
|
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
2013
|
|
Increase (decrease)
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net underwriting loss (1)
|
$
|
(28,257
|
)
|
|
$
|
(9,552
|
)
|
|
$
|
(18,705
|
)
|
|
$
|
(15,828
|
)
|
|
$
|
6,276
|
|
Net investment income (loss)
|
(28,074
|
)
|
|
85,582
|
|
|
(113,656
|
)
|
|
258,125
|
|
|
(172,543
|
)
|
|||||
Net investment return on investments managed by Third Point LLC
|
(1.6
|
)%
|
|
5.1
|
%
|
|
(6.7
|
)%
|
|
23.9
|
%
|
|
(18.8
|
)%
|
|||||
General and administrative expenses (2)
|
(20,771
|
)
|
|
(14,380
|
)
|
|
6,391
|
|
|
(7,346
|
)
|
|
7,034
|
|
|||||
Interest expense
|
(7,236
|
)
|
|
—
|
|
|
7,236
|
|
|
—
|
|
|
—
|
|
|||||
Income tax (expense) benefit
|
2,905
|
|
|
(5,648
|
)
|
|
(8,553
|
)
|
|
—
|
|
|
5,648
|
|
|||||
Net income (loss)
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
$
|
(137,785
|
)
|
|
$
|
227,311
|
|
|
$
|
(176,916
|
)
|
(1)
|
Property and Casualty Reinsurance segment only.
|
(2)
|
Corporate function only.
|
•
|
The increase in net underwriting loss includes developments on prior years’ contracts resulting in an increase in the net underwriting loss of
$7.8 million
for the year ended
December 31, 2015
. In addition, we recorded $2.7 million in current year net underwriting losses in the year ended
December 31, 2015
as a result of windstorms and other storm activity in Texas. The remaining increase in net underwriting loss was due to a higher combined ratio on a larger in-force underwriting portfolio reflecting a deterioration of underwriting conditions.
|
•
|
The increase in general and administrative expenses related to corporate activities for the year ended
December 31, 2015
compared to 2014 was primarily due to greater payroll and related expenses as a result of expansion in the U.S., separation costs and increased share compensation expense.
|
•
|
In February 2015, TPRUSA issued $115.0 million of senior notes bearing 7.0% interest. As a result, our consolidated results of operations for 2015 includes interest expense.
|
•
|
As a result of the net loss generated by our U.S. subsidiaries, we recorded an income tax benefit in the year ended December 31, 2015.
|
•
|
The decrease in net investment income for the year ended
December 31, 2014
was a result of lower investment returns partially offset by higher average investments managed by Third Point LLC. See the discussion of
net investment income (loss)
under “Corporate Function” below for explanations of the investment returns on investments managed by Third Point LLC and total
net investment income (loss)
for the years presented.
|
•
|
The improvement in the net underwriting loss was due to a higher in-force book of business for 2014 and a lower combined ratio. The lower combined ratio was primarily due to a lower general and administrative expense ratio, which continued to decrease due to proportionately higher net premiums earned in 2014.
|
•
|
The increase in general and administrative expenses related to corporate activities for the year ended
December 31, 2014
was primarily due to greater payroll and related expenses as a result of increased headcount and increased legal and other professional advisor expenses as a result of operating as a public company, partially offset by lower stock compensation expense as a result of the IPO which occurred in the year ended December 31, 2013.
|
•
|
The increase in income tax expense for the year ended December 31, 2014 was a result of withholding taxes and uncertain provisions related to certain investment transactions in certain foreign jurisdictions.
|
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
2013
|
|
Increase (decrease)
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Gross premiums written
|
$
|
702,458
|
|
|
$
|
601,305
|
|
|
$
|
101,153
|
|
|
$
|
393,588
|
|
|
$
|
207,717
|
|
Net premiums earned
|
602,816
|
|
|
432,297
|
|
|
170,519
|
|
|
212,607
|
|
|
219,690
|
|
|||||
Loss and loss adjustment expenses incurred, net
|
415,041
|
|
|
283,180
|
|
|
131,861
|
|
|
139,616
|
|
|
143,564
|
|
|||||
Acquisition costs, net
|
191,217
|
|
|
136,154
|
|
|
55,063
|
|
|
66,981
|
|
|
69,173
|
|
|||||
General and administrative expenses
|
24,815
|
|
|
22,515
|
|
|
2,300
|
|
|
21,838
|
|
|
677
|
|
|||||
Net underwriting loss
|
(28,257
|
)
|
|
(9,552
|
)
|
|
(18,705
|
)
|
|
(15,828
|
)
|
|
6,276
|
|
|||||
Net investment income (loss) on float
|
(10,810
|
)
|
|
11,305
|
|
|
(22,115
|
)
|
|
26,953
|
|
|
(15,648
|
)
|
|||||
Other expenses
|
(8,614
|
)
|
|
(7,395
|
)
|
|
1,219
|
|
|
(4,922
|
)
|
|
2,473
|
|
|||||
Segment income (loss)
|
$
|
(47,681
|
)
|
|
$
|
(5,642
|
)
|
|
$
|
(42,039
|
)
|
|
$
|
6,203
|
|
|
$
|
(11,845
|
)
|
Underwriting ratios (1):
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio
|
68.9
|
%
|
|
65.5
|
%
|
|
3.4
|
%
|
|
65.7
|
%
|
|
(0.2
|
)%
|
|||||
Acquisition cost ratio
|
31.7
|
%
|
|
31.5
|
%
|
|
0.2
|
%
|
|
31.5
|
%
|
|
—
|
%
|
|||||
Composite ratio
|
100.6
|
%
|
|
97.0
|
%
|
|
3.6
|
%
|
|
97.2
|
%
|
|
(0.2
|
)%
|
|||||
General and administrative expense ratio
|
4.1
|
%
|
|
5.2
|
%
|
|
(1.1
|
)%
|
|
10.3
|
%
|
|
(5.1
|
)%
|
|||||
Combined ratio
|
104.7
|
%
|
|
102.2
|
%
|
|
2.5
|
%
|
|
107.5
|
%
|
|
(5.3
|
)%
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
•
|
We write a small number of large contracts so individual renewals or new business can have a significant impact on premiums recognized in a period;
|
•
|
We offer customized solutions to our clients, including reserve covers, on which we will not have a regular renewal opportunity;
|
•
|
We record gross premiums written and earned for reserve covers, which are considered retroactive reinsurance contracts, at the inception of the contract;
|
•
|
We write multi-year contracts that do not necessarily renew in a comparable period; and
|
•
|
Our reinsurance contracts are subject to significant judgment in the amount of premiums that we expect to recognize and changes in premium estimates are recorded in the period they are determined.
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Property
|
$
|
114,215
|
|
|
16.2
|
%
|
|
$
|
106,834
|
|
|
17.8
|
%
|
|
$
|
67,612
|
|
|
17.2
|
%
|
Casualty
|
327,064
|
|
|
46.6
|
%
|
|
266,763
|
|
|
44.4
|
%
|
|
210,017
|
|
|
53.4
|
%
|
|||
Specialty
|
261,179
|
|
|
37.2
|
%
|
|
227,708
|
|
|
37.8
|
%
|
|
115,959
|
|
|
29.4
|
%
|
|||
|
$
|
702,458
|
|
|
100.0
|
%
|
|
$
|
601,305
|
|
|
100.0
|
%
|
|
$
|
393,588
|
|
|
100.0
|
%
|
•
|
We wrote $214.2 million of new business for the year ended
December 31, 2015
, consisting of $165.2 million of casualty business, $27.0 million of property business and $22.0 million of specialty business. A total of $97.3 million of our new business for the year ended December 31, 2015 was written by Third Point Re USA, where we have seen new opportunities as a result of our U.S. presence. Additionally, we wrote one new reserve cover for $91.6 million in 2015.
|
•
|
Increases in premium estimates relating to prior years’ contracts were
$39.3 million
for the year ended December 31, 2015 compared to decreases of $12.1 million for the year ended December 31, 2014. The increases in premium estimates for the year ended
December 31, 2015
were primarily due to two contracts where the client reported writing significantly more business than initially estimated.
|
•
|
Changes in renewal premiums during the year ended
December 31, 2015
resulted in a net increase in premiums of $12.9 million primarily due to increases in participations and underlying premium volume on contracts that renewed in the year. Premiums can change on renewals of contracts due to a number of factors, including: changes in our line size or participation, changes in the underlying premium volume and pricing trends of the client’s program as well as other contractual terms and conditions.
|
•
|
We recorded $93.6 million of premium in 2015 that did not have a comparable premium in 2014. We recorded $77.0 million of premium in 2014 that did not have a comparable premium in 2015. These timing
|
•
|
We recognized $100.4 million of premium in 2014 that did not renew in 2015, consisting of $55.4 million for contracts that we made a decision not to renew in 2015 due to changes in pricing and/or terms and conditions and $45.0 million for one reserve cover that was not subject to renewal in 2015.
|
•
|
Contracts that were canceled and re-written in 2015 resulted in $34.6 million of additional premiums compared to $79.2 million in 2014.
|
•
|
Additionally, two contracts were commuted in the year ended December 31, 2015, which resulted in return premium of $48.9 million, compared to none in the year ended December 31, 2014.
|
•
|
We wrote $370.1 million of new business for the year ended
December 31, 2014
, consisting of $221.5 million of new specialty business, $105.7 million of new casualty business and $42.9 million of new property business.
|
•
|
Changes in renewal premiums during the year ended
December 31, 2014
resulted in increased premiums of $34.5 million.
|
•
|
One contract written in the year ended
December 31, 2013
was canceled and re-written in 2014 with increased participation and an extended coverage period, resulting in $16.5 million of additional premiums recognized in 2014.
|
•
|
Other changes, such as amendments to existing contracts to increase coverage or to add other terms resulted in additional premiums of $12.9 million in the year ended December 31, 2014 compared to additional premiums of $8.0 million for similar reasons for the year ended
December 31, 2013
.
|
•
|
Reductions in premium estimates relating to prior years’ contracts were $12.1 million and $35.7 million for the years ended
December 31, 2014
and
2013
, respectively. The changes in estimates for the year ended December 31, 2014 were primarily due to clients writing less business than expected. For the year ended December 31, 2013, the decrease in premium was primarily due to return premiums on contracts that expired during the period, which included provisions within the contract to return the unearned premiums at expiration. For contracts that renewed or were written in 2013 and 2014 with these provisions, we considered the expected return premium in determining our initial premium estimates.
|
•
|
We recorded $140.9 million of premium in 2013 that did not have a comparable premium in 2014, primarily due to a multi-year contract written in 2013.
|
•
|
We did not renew five reinsurance contracts accounting for $101.0 million of premiums for the year ended
December 31, 2013
, primarily as a result of pricing and other changes in reinsurance contract structure, terms and conditions.
|
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
2013
|
|
Increase (decrease)
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Net investment income (loss) on capital
|
$
|
(17,333
|
)
|
|
$
|
73,050
|
|
|
$
|
(90,383
|
)
|
|
$
|
226,751
|
|
|
$
|
(153,701
|
)
|
General and administrative expenses
|
(20,771
|
)
|
|
(14,380
|
)
|
|
6,391
|
|
|
(7,346
|
)
|
|
7,034
|
|
|||||
Interest expense
|
(7,236
|
)
|
|
—
|
|
|
7,236
|
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange gains
|
3,196
|
|
|
—
|
|
|
3,196
|
|
|
—
|
|
|
—
|
|
|||||
Income tax (expense) benefit
|
2,905
|
|
|
(5,648
|
)
|
|
(8,553
|
)
|
|
—
|
|
|
5,648
|
|
|||||
Segment income attributable to non-controlling interests
|
(53
|
)
|
|
(1,590
|
)
|
|
1,537
|
|
|
(1,721
|
)
|
|
131
|
|
|||||
|
$
|
(39,292
|
)
|
|
$
|
51,432
|
|
|
$
|
(90,724
|
)
|
|
$
|
217,684
|
|
|
$
|
(166,252
|
)
|
|
2015
|
|
2014
|
|
2013
|
|||
Long/short equities
|
(3.3
|
)%
|
|
2.7
|
%
|
|
17.5
|
%
|
Asset-backed securities
|
2.7
|
%
|
|
2.5
|
%
|
|
3.0
|
%
|
Corporate and sovereign credit (1)
|
(0.7
|
)%
|
|
0.4
|
%
|
|
2.9
|
%
|
Macro and other
|
(0.3
|
)%
|
|
(0.5
|
)%
|
|
0.5
|
%
|
|
(1.6
|
)%
|
|
5.1
|
%
|
|
23.9
|
%
|
|
|
|
|
|
|
|||
S&P 500
|
1.4
|
%
|
|
13.7
|
%
|
|
32.4
|
%
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Income tax expense (benefit) related to U.S. and U.K. subsidiaries (1)
|
$
|
(6,633
|
)
|
|
$
|
24
|
|
|
$
|
—
|
|
Change in uncertain tax positions
|
(1,100
|
)
|
|
2,600
|
|
|
—
|
|
|||
Withholding taxes on certain investment transactions
|
4,828
|
|
|
3,024
|
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
(2,905
|
)
|
|
$
|
5,648
|
|
|
$
|
—
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
($ in thousands)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
187,776
|
|
|
$
|
122,430
|
|
|
$
|
19,709
|
|
Net cash used in investing activities
|
|
(163,884
|
)
|
|
(119,053
|
)
|
|
(427,144
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
(32,219
|
)
|
|
(6,268
|
)
|
|
405,055
|
|
|||
Net decrease in cash and cash equivalents
|
|
(8,327
|
)
|
|
(2,891
|
)
|
|
(2,380
|
)
|
|||
Cash and cash equivalents at beginning of year
|
|
28,734
|
|
|
31,625
|
|
|
34,005
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
20,407
|
|
|
$
|
28,734
|
|
|
$
|
31,625
|
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Senior Notes due 2025 (1)
|
$
|
115,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
115,000
|
|
Scheduled interest payments (1)
|
76,475
|
|
|
8,050
|
|
|
16,100
|
|
|
16,100
|
|
|
36,225
|
|
|||||
Subtotal - Debt obligations
|
191,475
|
|
|
8,050
|
|
|
16,100
|
|
|
16,100
|
|
|
151,225
|
|
|||||
Loss and loss adjustment expense reserves (2)
|
466,047
|
|
|
165,761
|
|
|
119,722
|
|
|
145,801
|
|
|
34,763
|
|
|||||
Other operating agreements (3)
|
718
|
|
|
694
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|||||
Rental leases (4)
|
4,548
|
|
|
861
|
|
|
1,802
|
|
|
1,841
|
|
|
44
|
|
|||||
Deposit liabilities (5)
|
83,955
|
|
|
703
|
|
|
8,651
|
|
|
17,433
|
|
|
57,168
|
|
|||||
|
$
|
746,743
|
|
|
$
|
176,069
|
|
|
$
|
146,299
|
|
|
$
|
181,175
|
|
|
$
|
243,200
|
|
(1)
|
See
Note 11
to our consolidated financial statements for detailed information on our Senior Notes.
|
(2)
|
We have estimated the expected payout pattern of the loss and loss adjustment expense reserves by applying estimated payout patterns by contract. The amount and timing of actual loss payments could differ materially from the estimated payouts in the table above. Refer to “Critical Policies and Accounting Estimates - Loss and Loss Adjustment Expense Reserves” for additional information.
|
(3)
|
In December 2011, Third Point Re acquired from NetJets Sales Inc. (“NetJets”), two 12.5%, five year, undivided interests in two aircraft. In September 2014, Third Point Re acquired an undivided 6.25% interest in one additional aircraft for a five year period, with a minimum commitment period of two and a half years. The agreement with NetJets provides for monthly management fees, occupied hourly fees and other fees.
|
(4)
|
We lease office space at Point House in Bermuda. This five year lease expires on November 30, 2020. We also lease office space in New Jersey, U.S.A. We have entered into a five year lease that will commence on March 1, 2016, with an option to renew for an additional five years.
|
(5)
|
See
Note 10
to our consolidated financial statements for detailed information on deposit liability contracts. For purposes of this contractual obligations table, we have included estimates of future interest accruals and what we expect the deposit liability contracts would settle for at their probable commutation dates.
|
•
|
equity price risk;
|
•
|
foreign currency risk;
|
•
|
interest rate risk;
|
•
|
commodity price risk;
|
•
|
credit risk;
|
•
|
liquidity risk; and
|
•
|
political risk.
|
|
10% increase in U.S. dollar
|
|
10% decrease in U.S. dollar
|
||||||||||
December 31, 2015
|
Change in fair value
|
|
Change in fair value as % of investment portfolio
|
|
Change in fair value
|
|
Change in fair value as % of investment portfolio
|
||||||
|
($ in thousands)
|
||||||||||||
Saudi Arabian Riyal
|
$
|
10,575
|
|
|
0.51
|
%
|
|
$
|
(10,575
|
)
|
|
(0.51
|
)%
|
Euro
|
636
|
|
|
0.03
|
%
|
|
(636
|
)
|
|
(0.03
|
)%
|
||
Japanese Yen
|
159
|
|
|
0.01
|
%
|
|
(159
|
)
|
|
(0.01
|
)%
|
||
British Pound
|
132
|
|
|
0.01
|
%
|
|
(132
|
)
|
|
(0.01
|
)%
|
||
Other
|
3,036
|
|
|
0.15
|
%
|
|
(3,036
|
)
|
|
(0.15
|
)%
|
||
Total
|
$
|
14,538
|
|
|
0.71
|
%
|
|
$
|
(14,538
|
)
|
|
(0.71
|
)%
|
|
100 basis point increase in interest rates
|
|
100 basis point decrease in interest rates
|
||||||||||
December 31, 2015
|
Change in fair value
|
|
Change in fair value as % of investment portfolio
|
|
Change in fair value
|
|
Change in fair value as % of investment portfolio
|
||||||
|
($ in thousands)
|
||||||||||||
Corporate and Sovereign Debt Instruments
|
$
|
(8,665
|
)
|
|
(0.4
|
)%
|
|
$
|
9,483
|
|
|
0.5
|
%
|
Asset Backed Securities
(1)
|
(13,406
|
)
|
|
(0.6
|
)%
|
|
14,624
|
|
|
0.7
|
%
|
||
Net exposure to interest rate risk
|
$
|
(22,071
|
)
|
|
(1.0
|
)%
|
|
$
|
24,107
|
|
|
1.2
|
%
|
(1)
|
Includes instruments for which durations are available on
December 31, 2015
. Includes a convexity adjustment if convexity is available. Not included are mortgage hedges which would reduce the impact of interest rate changes.
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
|
($ in thousands)
|
||||||||||||
Re-REMIC (1)
|
$
|
195,889
|
|
|
39.6
|
%
|
|
$
|
131,568
|
|
|
32.9
|
%
|
Subprime RMBS
|
174,777
|
|
|
35.3
|
%
|
|
198,046
|
|
|
49.5
|
%
|
||
Collateralized debt obligations
|
50,455
|
|
|
10.2
|
%
|
|
9,397
|
|
|
2.3
|
%
|
||
Other (2)
|
73,602
|
|
|
14.9
|
%
|
|
61,223
|
|
|
15.3
|
%
|
||
|
$
|
494,723
|
|
|
100.0
|
%
|
|
$
|
400,234
|
|
|
100.0
|
%
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
3.1*
|
Memorandum of Association of Third Point Reinsurance Ltd.
|
3.1.1
|
Certificate of Deposit of Memorandum of Increase of Share Capital of Third Point Reinsurance Ltd. (incorporated by reference to Exhibit 3.1.1 to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2014)
|
3.2
|
Bye-laws of Third Point Reinsurance Ltd. (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2014)
|
3.3
|
Certificate of Incorporation of Third Point Re (USA) Holdings Inc. (incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
3.4
|
Bylaws of Third Point Re (USA) Holdings Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 20, 2015)
|
4.1*
|
Specimen Common Share Certificate
|
4.2*
|
Registration Rights Agreement, by and among the Third Point Reinsurance Ltd. and each of the Members, dated as of December 22, 2011
|
4.3*
|
Warrant to Purchase Common Shares issued to KEP TP Holdings, L.P., dated as of December 22, 2011
|
4.4*
|
Warrant to Purchase Common Shares issued to KIA TP Holdings, L.P., dated as of December 22, 2011
|
4.5*
|
Warrant to Purchase Common Shares issued to Pine Brook LVR, L.P., dated as of December 22, 2011
|
4.6*
|
Warrant to Purchase Common Shares issued to P RE Opportunities Ltd., dated as of December 22, 2011
|
4.7*
|
Warrant Subscription Agreement, by and among Third Point Reinsurance Ltd. and each of the signatories thereto, dated as of December 22, 2011
|
4.8*
|
Agreement among Members by and among Third Point Reinsurance Ltd. and each of the Members, dated as of December 22, 2011
|
4.9
|
Amended and Restated Founders Agreement, by and among Third Point Reinsurance Company Ltd., Third Point Reinsurance (USA) Ltd., KEP TP Bermuda Ltd., KIA TP Bermuda Ltd., Pine Brook LVR, L.P., P RE Opportunities Ltd. and Dowling Capital Partners I, L.P. dated as of February 25, 2015 (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
4.10
|
Senior Indenture, dated as of February 13, 2015, among Third Point Re (USA) Holdings Inc., as issuer, Third Point Reinsurance Ltd., as guarantor, and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 13, 2015)
|
4.11
|
First Supplemental Indenture, dated as of February 13, 2015, among Third Point Re (USA) Holdings Inc., as issuer, Third Point Reinsurance Ltd., as guarantor, and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on From 8-K filed with the SEC on February 13, 2015)
|
4.12
|
7.00% Senior Note due 2025 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on From 8-K filed with the SEC on February 13, 2015)
|
10.1*
|
Joint Venture and Investment Management Agreement, by and among Third Point Reinsurance Ltd., Third Point Reinsurance Company, Ltd., Third Point Advisors LLC and Third Point LLC, dated as of December 22, 2011
|
10.1.1
|
Joint Venture and Investment Management Agreement by and among Third Point Reinsurance (USA) Ltd., Third Point Advisors LLC and Third Point LLC, dated as of January 28, 2015 (incorporated by reference to Exhibit 10.1.1 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
10.2*
&
**
|
Employment Agreement between Third Point Reinsurance Ltd. and John R. Berger, dated as of December 22, 2011
|
10.2.1**
|
Amendment No. 1 to Employment Agreement between Third Point Reinsurance Ltd. and John Berger, dated as of December 22, 2014 (incorporated by reference to Exhibit 10.2.1 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
10.2.2**
|
Amendment No. 2 to Employment Agreement between Third Point Reinsurance Ltd. and John Berger, dated as of March 1, 2015 (incorporated by reference to Exhibit 10.2.2 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2015)
|
10.2.3**
|
Amendment No. 3 to Employment Agreement between Third Point Reinsurance Ltd. and John Berger, dated as of November 24, 2015
|
10.3*
&
**
|
Employment Agreement between Third Point Reinsurance Ltd. and J. Robert Bredahl, dated as of January 26, 2012
|
10.3.1**
|
Amendment No. 1 to Employment Agreement between Third Point Reinsurance Ltd. and J. Robert Bredahl, dated as of November 10, 2014 (incorporated by reference to Exhibit 10.3.1 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
10.3.2**
|
Amendment No. 2 to Employment Agreement between Third Point Reinsurance Ltd. and J. Robert Bredahl, dated as of March 1, 2015 (incorporated by reference to Exhibit 10.3.2 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2015)
|
10.3.3**
|
Amendment No. 3 to Employment Agreement between Third Point Reinsurance Ltd. and J. Robert Bredahl, dated as of November 24, 2015
|
10.4*
&
**
|
Employment Agreement between Third Point Reinsurance Ltd. and Daniel Victor Malloy III, dated as of January 23, 2012
|
10.4.1**
|
Amendment No. 1 to Employment Agreement between Third Point Reinsurance Ltd. and Daniel Victor Malloy III, dated as of April 1, 2015 (incorporated by reference to Exhibit 10.4.1 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2015)
|
10.5*
&
**
|
Share Incentive Plan
|
10.6*
&
**
|
Form of Restricted Share Award Agreement
|
10.6.1**
|
Form of Director Service Restricted Share Award Agreement (incorporated by reference to Exhibit 10.6.1 to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2014)
|
10.6.2**
|
Form of Employee Restricted Share Award Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on January 6, 2015)
|
10.6.3**
|
Form of Employee Performance Restricted Shares Agreement (incorporated by reference to Exhibit 10.6.3 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
10.6.4**
|
Amendment to Form of Employee Performance Restricted Shares Agreement
|
10.6.5**
|
Form of Employee Performance Restricted Shares Agreement
|
10.7*
&
**
|
Form of Nonqualified Share Option Agreement under the Share Incentive Plan
|
10.8**
|
Form of Director Service Agreement (Adopted November 2013) (incorporated by reference to Exhibit 10.8.1 to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2014)
|
10.8.1**
|
Schedule of Signatories to the Director Service Agreement
|
10.9*
&
**
|
Management Compensation Cash Bonus Pool
|
10.10*
&
**
|
Third Point Reinsurance Ltd. 2013 Omnibus Incentive Plan
|
10.11*
&
**
|
Third Point Reinsurance Ltd. Annual Incentive Plan
|
10.22*
|
Trademark License Agreement between Third Point LLC and Third Point Reinsurance Ltd., dated as of December 22, 2011
|
10.23*
|
Trademark License Agreement between Third Point LLC and Third Point Reinsurance Company Ltd., dated as of December 22, 2011
|
10.24
|
Trademark License Agreement - Joinder Agreement between Third Point LLC, Third Point Reinsurance Company Ltd., Third Point Re (USA) Holdings Inc. and Third Point Reinsurance (USA) Ltd. dated as of February 17, 2016.
|
10.29**
|
Amended and Restated Director Compensation Policy (incorporated by reference to Exhibit 10.29 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2015)
|
10.26*†
|
Letter Agreement dated as of December 22, 2011
|
10.27*
&
**
|
Section 409A Specified Employee Policy
|
10.28*
&
**
|
Director and Officer Indemnification Agreement
|
10.28.1**
|
Schedule of Signatories to the Director and Officer Indemnification Agreement
|
10.29**
|
Director Compensation Policy (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2014)
|
10.30**
|
Amended and Restated Employment Agreement between Third Point Reinsurance Ltd. and Christopher S. Coleman, dated as of November 10, 2014 (incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K filed on February 27, 2015
)
|
10.31**
|
Employment Agreement between Third Point Reinsurance Ltd. and Anthony Urban, dated as of October 28, 2011 (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
10.32**
|
Employment Agreement between Third Point Reinsurance Ltd. and Manoj Gupta, dated as of March 27, 2012 (incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed on February 27, 2015)
|
10.32.1**
|
Amendment No. 1 to Employment Agreement between Third Point Reinsurance Ltd. and Manoj Gupta, dated as of February 26, 2015 (incorporated by reference to Exhibit 10.32.1 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2015)
|
10.33**
|
Resignation Agreement and Release Agreement between Third Point Reinsurance Ltd. and Tonya L. Marshall, dated as of May 1, 2015
|
12.1
|
Computation of Ratio of Earnings to Fixed Charges
|
21.1
|
List of Subsidiaries
|
23.1
|
Consent of Independent Registered Public Accounting Firm
|
24.1
|
Power of Attorney signed by each of the members of the Board of Directors on February 26, 2015
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1±
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2±
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
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
|
*
|
Incorporated by reference to the exhibit of the same number filed as part of the Company’s registration statement on Form S-1 (File No. 333-189960) which was declared effective by the Securities and Exchange Commission on August 14, 2013.
|
**
|
Management contracts or compensatory plans or arrangements
|
±
|
This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.
|
†
|
Registrant has omitted portions of the referenced exhibit pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933, as amended (Securities Act).
|
††
|
In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
By:
|
/s/ John R. Berger
|
Title:
|
Chief Executive Officer and Chairman
|
|
Page
|
Audited Consolidated Financial Statements
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
F-3
|
Consolidated Statements of Income (Loss) for the years ended December 31, 2015, 2014 and 2013
|
F-4
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2015, 2014 and 2013
|
F-5
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
|
F-6
|
Notes to the Consolidated Financial Statements
|
F-7
|
Schedule I - Summary of Investments - Other than Investments in Related Parties
|
F-61
|
Schedule III - Supplementary Insurance Information
|
F-62
|
Schedule IV - Reinsurance
|
F-63
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Assets
|
|
|
|
||||
Equity securities, trading, at fair value (cost - $1,156,369; 2014 - $1,078,859)
|
$
|
1,231,077
|
|
|
$
|
1,177,796
|
|
Debt securities, trading, at fair value (cost - $1,049,652; 2014 - $546,933)
|
1,034,247
|
|
|
569,648
|
|
||
Other investments, at fair value
|
51,920
|
|
|
83,394
|
|
||
Total investments in securities
|
2,317,244
|
|
|
1,830,838
|
|
||
Cash and cash equivalents
|
20,407
|
|
|
28,734
|
|
||
Restricted cash and cash equivalents
|
330,915
|
|
|
417,307
|
|
||
Due from brokers
|
326,971
|
|
|
58,241
|
|
||
Securities purchased under an agreement to sell
|
—
|
|
|
29,852
|
|
||
Derivative assets, at fair value
|
35,337
|
|
|
21,130
|
|
||
Interest and dividends receivable
|
10,687
|
|
|
2,602
|
|
||
Reinsurance balances receivable
|
294,313
|
|
|
303,649
|
|
||
Deferred acquisition costs, net
|
197,093
|
|
|
155,901
|
|
||
Unearned premiums ceded
|
187
|
|
|
—
|
|
||
Loss and loss adjustment expenses recoverable
|
125
|
|
|
814
|
|
||
Other assets
|
11,829
|
|
|
3,512
|
|
||
Total assets
|
$
|
3,545,108
|
|
|
$
|
2,852,580
|
|
Liabilities and shareholders’ equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
11,966
|
|
|
$
|
10,085
|
|
Reinsurance balances payable
|
24,119
|
|
|
27,040
|
|
||
Deposit liabilities
|
83,955
|
|
|
145,430
|
|
||
Unearned premium reserves
|
531,710
|
|
|
433,809
|
|
||
Loss and loss adjustment expense reserves
|
466,047
|
|
|
277,362
|
|
||
Securities sold, not yet purchased, at fair value
|
314,353
|
|
|
82,485
|
|
||
Securities sold under an agreement to repurchase
|
8,944
|
|
|
—
|
|
||
Due to brokers
|
574,962
|
|
|
312,609
|
|
||
Derivative liabilities, at fair value
|
15,392
|
|
|
11,015
|
|
||
Interest and dividends payable
|
4,400
|
|
|
697
|
|
||
Senior notes payable, net of deferred costs
|
113,377
|
|
|
—
|
|
||
Total liabilities
|
2,149,225
|
|
|
1,300,532
|
|
||
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, 105,479,341 (2014: 104,473,402))
|
10,548
|
|
|
10,447
|
|
||
Additional paid-in capital
|
1,080,591
|
|
|
1,065,489
|
|
||
Retained earnings
|
288,587
|
|
|
375,977
|
|
||
Shareholders’ equity attributable to shareholders
|
1,379,726
|
|
|
1,451,913
|
|
||
Non-controlling interests
|
16,157
|
|
|
100,135
|
|
||
Total shareholders’ equity
|
1,395,883
|
|
|
1,552,048
|
|
||
Total liabilities and shareholders’ equity
|
$
|
3,545,108
|
|
|
$
|
2,852,580
|
|
|
|
|
|
||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||
an integral part of the Consolidated Financial Statements.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gross premiums written
|
$
|
702,414
|
|
|
$
|
613,300
|
|
|
$
|
401,937
|
|
Gross premiums ceded
|
(1,876
|
)
|
|
(150
|
)
|
|
(9,975
|
)
|
|||
Net premiums written
|
700,538
|
|
|
613,150
|
|
|
391,962
|
|
|||
Change in net unearned premium reserves
|
(97,714
|
)
|
|
(168,618
|
)
|
|
(171,295
|
)
|
|||
Net premiums earned
|
602,824
|
|
|
444,532
|
|
|
220,667
|
|
|||
Net investment income (loss)
|
(28,074
|
)
|
|
85,582
|
|
|
258,125
|
|
|||
Total revenues
|
574,750
|
|
|
530,114
|
|
|
478,792
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses incurred, net
|
415,191
|
|
|
283,147
|
|
|
139,812
|
|
|||
Acquisition costs, net
|
191,216
|
|
|
137,206
|
|
|
67,944
|
|
|||
General and administrative expenses
|
46,033
|
|
|
40,008
|
|
|
33,036
|
|
|||
Other expenses
|
8,614
|
|
|
7,395
|
|
|
4,922
|
|
|||
Interest expense
|
7,236
|
|
|
—
|
|
|
—
|
|
|||
Foreign exchange gains
|
(3,196
|
)
|
|
—
|
|
|
—
|
|
|||
Total expenses
|
665,094
|
|
|
467,756
|
|
|
245,714
|
|
|||
Income (loss) before income tax (expense) benefit
|
(90,344
|
)
|
|
62,358
|
|
|
233,078
|
|
|||
Income tax (expense) benefit
|
2,905
|
|
|
(5,648
|
)
|
|
—
|
|
|||
Income (loss) including non-controlling interests
|
(87,439
|
)
|
|
56,710
|
|
|
233,078
|
|
|||
(Income) loss attributable to non-controlling interests
|
49
|
|
|
(6,315
|
)
|
|
(5,767
|
)
|
|||
Net income (loss)
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
$
|
227,311
|
|
Earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.84
|
)
|
|
$
|
0.48
|
|
|
$
|
2.58
|
|
Diluted
|
$
|
(0.84
|
)
|
|
$
|
0.47
|
|
|
$
|
2.54
|
|
Weighted average number of ordinary shares used in the determination of earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
104,003,820
|
|
|
103,287,693
|
|
|
87,505,540
|
|
|||
Diluted
|
104,003,820
|
|
|
106,391,059
|
|
|
88,970,531
|
|
|||
|
|
|
|
|
|
||||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||||||
an integral part of the Consolidated Financial Statements.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Common shares
|
|
|
|
|
|
||||||
Balance, beginning of year
|
104,473,402
|
|
|
103,888,916
|
|
|
78,432,132
|
|
|||
Issuance of common shares
|
1,005,939
|
|
|
584,486
|
|
|
25,456,784
|
|
|||
Balance, end of year
|
105,479,341
|
|
|
104,473,402
|
|
|
103,888,916
|
|
|||
Common shares
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
10,447
|
|
|
$
|
10,389
|
|
|
$
|
7,843
|
|
Issuance of common shares
|
101
|
|
|
58
|
|
|
2,546
|
|
|||
Balance, end of year
|
10,548
|
|
|
10,447
|
|
|
10,389
|
|
|||
Additional paid-in capital
|
|
|
|
|
|
||||||
Balance, beginning of year
|
1,065,489
|
|
|
1,055,690
|
|
|
762,430
|
|
|||
Issuance of common shares, net
|
4,231
|
|
|
541
|
|
|
283,460
|
|
|||
Fair value of Founder and advisor warrants
|
—
|
|
|
—
|
|
|
3,747
|
|
|||
Fair value of warrants qualifying as shareholders’ equity
|
—
|
|
|
—
|
|
|
(3,747
|
)
|
|||
Share compensation expense
|
10,871
|
|
|
9,258
|
|
|
9,800
|
|
|||
Balance, end of year
|
1,080,591
|
|
|
1,065,489
|
|
|
1,055,690
|
|
|||
Retained earnings
|
|
|
|
|
|
||||||
Balance, beginning of year
|
375,977
|
|
|
325,582
|
|
|
98,271
|
|
|||
Income (loss) including non-controlling interests
|
(87,439
|
)
|
|
56,710
|
|
|
233,078
|
|
|||
(Income) loss attributable to non-controlling interests
|
49
|
|
|
(6,315
|
)
|
|
(5,767
|
)
|
|||
Balance, end of year
|
288,587
|
|
|
375,977
|
|
|
325,582
|
|
|||
Shareholders’ equity attributable to shareholders
|
1,379,726
|
|
|
1,451,913
|
|
|
1,391,661
|
|
|||
Non-controlling interests
|
|
|
|
|
|
||||||
Balance, beginning of year
|
100,135
|
|
|
118,735
|
|
|
59,777
|
|
|||
Non-controlling interest in investment affiliate, net
|
(24,137
|
)
|
|
(31,066
|
)
|
|
27,867
|
|
|||
Non-controlling interest in Catastrophe Fund
|
(60,032
|
)
|
|
6,151
|
|
|
25,324
|
|
|||
Non-controlling interest in Catastrophe Fund Manager
|
240
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) attributable to non-controlling interests
|
(49
|
)
|
|
6,315
|
|
|
5,767
|
|
|||
Balance, end of year
|
16,157
|
|
|
100,135
|
|
|
118,735
|
|
|||
Total shareholders’ equity
|
$
|
1,395,883
|
|
|
$
|
1,552,048
|
|
|
$
|
1,510,396
|
|
|
|
|
|
|
|
||||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||||||
an integral part of the Consolidated Financial Statements.
|
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Income (loss) including non-controlling interests
|
$
|
(87,439
|
)
|
|
$
|
56,710
|
|
|
$
|
233,078
|
|
Adjustments to reconcile income (loss) including non-controlling interests to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Share compensation expense
|
10,871
|
|
|
9,258
|
|
|
9,800
|
|
|||
Interest expense on deposit liabilities
|
6,471
|
|
|
4,346
|
|
|
4,271
|
|
|||
Net unrealized (gain) loss on investments and derivatives
|
32,354
|
|
|
85,057
|
|
|
(78,490
|
)
|
|||
Net realized gain on investments and derivatives
|
(16,655
|
)
|
|
(193,957
|
)
|
|
(236,333
|
)
|
|||
Foreign exchange gains included in income (loss) including non-controlling interests
|
(3,196
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of premium and accretion of discount, net
|
324
|
|
|
(1,044
|
)
|
|
(262
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Reinsurance balances receivable
|
8,768
|
|
|
(111,886
|
)
|
|
(107,483
|
)
|
|||
Deferred acquisition costs, net
|
(41,192
|
)
|
|
(64,708
|
)
|
|
(45,810
|
)
|
|||
Unearned premiums ceded
|
(187
|
)
|
|
—
|
|
|
—
|
|
|||
Loss and loss adjustment expenses recoverable
|
689
|
|
|
8,463
|
|
|
(9,277
|
)
|
|||
Other assets
|
(8,317
|
)
|
|
(114
|
)
|
|
(275
|
)
|
|||
Interest and dividends receivable, net
|
(4,382
|
)
|
|
(38
|
)
|
|
(1,034
|
)
|
|||
Unearned premium reserves
|
97,901
|
|
|
168,622
|
|
|
171,294
|
|
|||
Loss and loss adjustment expense reserves
|
192,433
|
|
|
143,031
|
|
|
67,060
|
|
|||
Accounts payable and accrued expenses
|
1,881
|
|
|
629
|
|
|
4,089
|
|
|||
Reinsurance balances payable
|
(2,548
|
)
|
|
18,061
|
|
|
9,081
|
|
|||
Net cash provided by operating activities
|
187,776
|
|
|
122,430
|
|
|
19,709
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of investments
|
(3,360,626
|
)
|
|
(3,114,906
|
)
|
|
(2,172,077
|
)
|
|||
Proceeds from sales of investments
|
2,829,523
|
|
|
2,857,404
|
|
|
1,943,655
|
|
|||
Purchases of investments to cover short sales
|
(543,936
|
)
|
|
(232,568
|
)
|
|
(407,965
|
)
|
|||
Proceeds from short sales of investments
|
792,344
|
|
|
278,569
|
|
|
290,770
|
|
|||
Change in due to/from brokers, net
|
(6,377
|
)
|
|
307,884
|
|
|
12,162
|
|
|||
Decrease in securities purchased under an agreement to sell
|
29,852
|
|
|
8,294
|
|
|
22,261
|
|
|||
Increase in securities sold under an agreement to repurchase
|
8,944
|
|
|
—
|
|
|
—
|
|
|||
Change in restricted cash and cash equivalents
|
86,392
|
|
|
(223,730
|
)
|
|
(115,950
|
)
|
|||
Net cash used in investing activities
|
(163,884
|
)
|
|
(119,053
|
)
|
|
(427,144
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of common shares, net of costs
|
4,332
|
|
|
599
|
|
|
286,095
|
|
|||
Proceeds from issuance of senior notes payable, net of costs
|
113,220
|
|
|
—
|
|
|
—
|
|
|||
Increase (decrease) in deposit liabilities
|
(65,842
|
)
|
|
18,048
|
|
|
65,769
|
|
|||
Non-controlling interest in investment affiliate, net
|
(24,137
|
)
|
|
(31,066
|
)
|
|
27,867
|
|
|||
Non-controlling interest in Catastrophe Fund
|
(60,032
|
)
|
|
6,151
|
|
|
25,324
|
|
|||
Non-controlling interest in Catastrophe Fund Manager
|
240
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
(32,219
|
)
|
|
(6,268
|
)
|
|
405,055
|
|
|||
Net decrease in cash and cash equivalents
|
(8,327
|
)
|
|
(2,891
|
)
|
|
(2,380
|
)
|
|||
Cash and cash equivalents at beginning of year
|
28,734
|
|
|
31,625
|
|
|
34,005
|
|
|||
Cash and cash equivalents at end of year
|
$
|
20,407
|
|
|
$
|
28,734
|
|
|
$
|
31,625
|
|
Supplementary information
|
|
|
|
|
|
||||||
Interest paid in cash
|
$
|
9,311
|
|
|
$
|
3,237
|
|
|
$
|
4,221
|
|
Income taxes paid in cash
|
$
|
4,531
|
|
|
$
|
3,056
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||||||
an integral part of the Consolidated Financial Statements.
|
|
2015
|
|
2014
|
||||
|
($ in thousands)
|
||||||
Restricted cash securing collateralized reinsurance contracts written by the Catastrophe Reinsurer (1)
|
$
|
—
|
|
|
$
|
108,544
|
|
Restricted cash securing letter of credit facilities (2)
|
270,755
|
|
|
218,963
|
|
||
Restricted cash securing other reinsurance contracts (3)
|
60,160
|
|
|
89,800
|
|
||
Total restricted cash and cash equivalents
|
330,915
|
|
|
417,307
|
|
||
Restricted investments securing other reinsurance contracts (3)
|
292,111
|
|
|
—
|
|
||
Total restricted cash and cash equivalents and restricted investments
|
$
|
623,026
|
|
|
$
|
417,307
|
|
(1)
|
Restricted cash securing collateralized reinsurance contracts written by the Catastrophe Reinsurer cannot be released until the contract’s exposure has expired. The remaining collateralized reinsurance contracts written by the Catastrophe Reinsurer expired in 2015 and the cedents agreed to release the collateral.
|
(2)
|
Restricted cash securing letter of credit facilities pertains to letters of credit issued to clients and cash securing these obligations that the Company will not be released from until the underlying reserves have been settled. The time period for which the Company expects these letters of credit to be in place varies from contract to contract, but can last at least several years.
|
(3)
|
Restricted cash and restricted investments securing other reinsurance contracts pertain to trust accounts securing the Company’s contractual obligations under certain reinsurance contracts that the Company will not be released from until all underlying risks have expired or have been settled. Restricted investments include certain investments in debt securities including investments in U.S. Treasury securities and sovereign debt. The time period for which the Company expects these trust accounts to be in place varies from contract to contract, but can last at least several years.
|
|
2015
|
|
2014
|
||||
Assets
|
($ in thousands)
|
||||||
Total investments in securities
|
$
|
2,290,779
|
|
|
$
|
1,828,761
|
|
Cash and cash equivalents
|
57
|
|
|
3
|
|
||
Restricted cash and cash equivalents
|
330,915
|
|
|
308,763
|
|
||
Due from brokers
|
326,971
|
|
|
58,241
|
|
||
Securities purchased under an agreement to sell
|
—
|
|
|
29,852
|
|
||
Derivative assets
|
35,337
|
|
|
21,130
|
|
||
Interest and dividends receivable
|
10,687
|
|
|
2,590
|
|
||
Other assets
|
—
|
|
|
325
|
|
||
Total assets
|
2,994,746
|
|
|
2,249,665
|
|
||
Liabilities and non-controlling interest
|
|
|
|
||||
Accounts payable and accrued expenses
|
770
|
|
|
464
|
|
||
Securities sold, not yet purchased
|
314,353
|
|
|
82,485
|
|
||
Securities sold under an agreement to repurchase
|
8,944
|
|
|
—
|
|
||
Due to brokers
|
574,962
|
|
|
312,609
|
|
||
Derivative liabilities
|
15,392
|
|
|
10,985
|
|
||
Interest and dividends payable
|
1,345
|
|
|
697
|
|
||
Non-controlling interest
|
16,157
|
|
|
40,241
|
|
||
Total liabilities and non-controlling interest
|
931,923
|
|
|
447,481
|
|
||
Total net investments managed by Third Point LLC
|
$
|
2,062,823
|
|
|
$
|
1,802,184
|
|
|
2015
|
|
2014
|
||||||||||
|
($ in thousands)
|
||||||||||||
Re-REMIC (1)
|
$
|
195,889
|
|
|
39.6
|
%
|
|
$
|
131,568
|
|
|
32.9
|
%
|
Subprime RMBS
|
174,777
|
|
|
35.3
|
%
|
|
198,046
|
|
|
49.5
|
%
|
||
Collateralized debt obligations
|
50,455
|
|
|
10.2
|
%
|
|
9,397
|
|
|
2.3
|
%
|
||
Other (2)
|
73,602
|
|
|
14.9
|
%
|
|
61,223
|
|
|
15.3
|
%
|
||
|
$
|
494,723
|
|
|
100.0
|
%
|
|
$
|
400,234
|
|
|
100.0
|
%
|
•
|
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.
|
•
|
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 the underlying security and volatility of the underlying security.
|
•
|
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 security and the volatility of the underlying security.
|
|
December 31, 2015
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
($ in thousands)
|
||||||||||||||
Equity securities
|
$
|
1,181,865
|
|
|
$
|
19,758
|
|
|
$
|
—
|
|
|
$
|
1,201,623
|
|
Private common equity securities
|
—
|
|
|
919
|
|
|
4,357
|
|
|
5,276
|
|
||||
Private preferred equity securities
|
—
|
|
|
—
|
|
|
24,178
|
|
|
24,178
|
|
||||
Total equities
|
1,181,865
|
|
|
20,677
|
|
|
28,535
|
|
|
1,231,077
|
|
||||
Asset-backed securities
|
—
|
|
|
492,106
|
|
|
2,617
|
|
|
494,723
|
|
||||
Bank debts
|
—
|
|
|
2,158
|
|
|
7,660
|
|
|
9,818
|
|
||||
Corporate bonds
|
—
|
|
|
79,938
|
|
|
3,252
|
|
|
83,190
|
|
||||
U.S. Treasury securities
|
—
|
|
|
186,471
|
|
|
—
|
|
|
186,471
|
|
||||
Sovereign debt
|
—
|
|
|
260,024
|
|
|
21
|
|
|
260,045
|
|
||||
Total debt securities
|
—
|
|
|
1,020,697
|
|
|
13,550
|
|
|
1,034,247
|
|
||||
Investments in limited partnerships
|
—
|
|
|
2,362
|
|
|
5,437
|
|
|
7,799
|
|
||||
Options
|
—
|
|
|
8,911
|
|
|
—
|
|
|
8,911
|
|
||||
Rights and warrants
|
416
|
|
|
—
|
|
|
—
|
|
|
416
|
|
||||
Trade claims
|
—
|
|
|
8,329
|
|
|
—
|
|
|
8,329
|
|
||||
Investment in Kiskadee Fund
|
—
|
|
|
—
|
|
|
26,465
|
|
|
26,465
|
|
||||
Total other investments
|
416
|
|
|
19,602
|
|
|
31,902
|
|
|
51,920
|
|
||||
Derivative assets (free standing)
|
—
|
|
|
35,337
|
|
|
—
|
|
|
35,337
|
|
||||
Total assets
|
$
|
1,182,281
|
|
|
$
|
1,096,313
|
|
|
$
|
73,987
|
|
|
$
|
2,352,581
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
228,009
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
228,009
|
|
Sovereign debt
|
—
|
|
|
5,856
|
|
|
—
|
|
|
5,856
|
|
||||
Corporate bonds
|
—
|
|
|
76,131
|
|
|
—
|
|
|
76,131
|
|
||||
Options
|
690
|
|
|
3,667
|
|
|
—
|
|
|
4,357
|
|
||||
Total securities sold, not yet purchased
|
228,699
|
|
|
85,654
|
|
|
—
|
|
|
314,353
|
|
||||
Derivative liabilities (free standing)
|
—
|
|
|
14,372
|
|
|
1,020
|
|
|
15,392
|
|
||||
Derivative liabilities (embedded)
|
—
|
|
|
—
|
|
|
5,563
|
|
|
5,563
|
|
||||
Total liabilities
|
$
|
228,699
|
|
|
$
|
100,026
|
|
|
$
|
6,583
|
|
|
$
|
335,308
|
|
|
December 31, 2014
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
($ in thousands)
|
||||||||||||||
Equity securities
|
$
|
1,158,428
|
|
|
$
|
15,207
|
|
|
$
|
—
|
|
|
$
|
1,173,635
|
|
Private common equity securities
|
—
|
|
|
2,718
|
|
|
1,443
|
|
|
4,161
|
|
||||
Total equities
|
1,158,428
|
|
|
17,925
|
|
|
1,443
|
|
|
1,177,796
|
|
||||
Asset-backed securities
|
—
|
|
|
395,514
|
|
|
4,720
|
|
|
400,234
|
|
||||
Bank debts
|
—
|
|
|
2,395
|
|
|
—
|
|
|
2,395
|
|
||||
Corporate bonds
|
—
|
|
|
56,795
|
|
|
3,799
|
|
|
60,594
|
|
||||
Municipal bonds
|
—
|
|
|
3,094
|
|
|
—
|
|
|
3,094
|
|
||||
Sovereign debt
|
—
|
|
|
103,331
|
|
|
—
|
|
|
103,331
|
|
||||
Total debt securities
|
—
|
|
|
561,129
|
|
|
8,519
|
|
|
569,648
|
|
||||
Investments in limited partnerships
|
—
|
|
|
55,756
|
|
|
6,354
|
|
|
62,110
|
|
||||
Options
|
3,205
|
|
|
3,791
|
|
|
—
|
|
|
6,996
|
|
||||
Rights and warrants
|
1,843
|
|
|
—
|
|
|
—
|
|
|
1,843
|
|
||||
Trade claims
|
—
|
|
|
10,368
|
|
|
—
|
|
|
10,368
|
|
||||
Catastrophe bond
|
—
|
|
|
2,077
|
|
|
—
|
|
|
2,077
|
|
||||
Total other investments
|
5,048
|
|
|
71,992
|
|
|
6,354
|
|
|
83,394
|
|
||||
Derivative assets (free standing)
|
380
|
|
|
20,750
|
|
|
—
|
|
|
21,130
|
|
||||
Total assets
|
$
|
1,163,856
|
|
|
$
|
671,796
|
|
|
$
|
16,316
|
|
|
$
|
1,851,968
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
33,222
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,222
|
|
Sovereign debt
|
—
|
|
|
29,350
|
|
|
—
|
|
|
29,350
|
|
||||
Corporate bonds
|
—
|
|
|
13,312
|
|
|
—
|
|
|
13,312
|
|
||||
Options
|
3,755
|
|
|
2,846
|
|
|
—
|
|
|
6,601
|
|
||||
Total securities sold, not yet purchased
|
36,977
|
|
|
45,508
|
|
|
—
|
|
|
82,485
|
|
||||
Derivative liabilities (free standing)
|
505
|
|
|
9,548
|
|
|
962
|
|
|
11,015
|
|
||||
Derivative liabilities (embedded)
|
—
|
|
|
—
|
|
|
9,289
|
|
|
9,289
|
|
||||
Total liabilities
|
$
|
37,482
|
|
|
$
|
55,056
|
|
|
$
|
10,251
|
|
|
$
|
102,789
|
|
|
January 1,
2015 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains(Losses) (1)
|
|
December 31,
2015 |
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
1,443
|
|
|
$
|
—
|
|
|
$
|
4,384
|
|
|
$
|
(192
|
)
|
|
$
|
(1,278
|
)
|
|
$
|
4,357
|
|
Private preferred equity securities
|
—
|
|
|
—
|
|
|
18,991
|
|
|
—
|
|
|
5,187
|
|
|
24,178
|
|
||||||
Asset-backed securities
|
4,720
|
|
|
(2,212
|
)
|
|
4,929
|
|
|
(2,563
|
)
|
|
(2,257
|
)
|
|
2,617
|
|
||||||
Bank debts
|
—
|
|
|
—
|
|
|
8,123
|
|
|
—
|
|
|
(463
|
)
|
|
7,660
|
|
||||||
Corporate bonds
|
3,799
|
|
|
—
|
|
|
—
|
|
|
(372
|
)
|
|
(175
|
)
|
|
3,252
|
|
||||||
Sovereign debt
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
21
|
|
||||||
Investments in limited partnerships
|
6,354
|
|
|
—
|
|
|
724
|
|
|
(267
|
)
|
|
(1,374
|
)
|
|
5,437
|
|
||||||
Investment in Kiskadee Fund
|
—
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
1,465
|
|
|
26,465
|
|
||||||
Total assets
|
$
|
16,316
|
|
|
$
|
(2,193
|
)
|
|
$
|
62,151
|
|
|
$
|
(3,394
|
)
|
|
$
|
1,107
|
|
|
$
|
73,987
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(962
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(173
|
)
|
|
$
|
115
|
|
|
$
|
(1,020
|
)
|
Derivative liabilities (embedded)
|
(9,289
|
)
|
|
—
|
|
|
4,417
|
|
|
(3,152
|
)
|
|
2,461
|
|
|
(5,563
|
)
|
||||||
Total liabilities
|
$
|
(10,251
|
)
|
|
$
|
—
|
|
|
$
|
4,417
|
|
|
$
|
(3,325
|
)
|
|
$
|
2,576
|
|
|
$
|
(6,583
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 1,
2014 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains(Losses) (1)
|
|
December 31,
2014 |
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
2,012
|
|
|
$
|
393
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(962
|
)
|
|
$
|
1,443
|
|
Asset-backed securities
|
400
|
|
|
2,062
|
|
|
5,257
|
|
|
(2,898
|
)
|
|
(101
|
)
|
|
4,720
|
|
||||||
Corporate bonds
|
4,610
|
|
|
—
|
|
|
822
|
|
|
(776
|
)
|
|
(857
|
)
|
|
3,799
|
|
||||||
Investments in limited partnerships
|
5,292
|
|
|
—
|
|
|
2,916
|
|
|
—
|
|
|
(1,854
|
)
|
|
6,354
|
|
||||||
Total assets
|
$
|
12,314
|
|
|
$
|
2,455
|
|
|
$
|
8,995
|
|
|
$
|
(3,674
|
)
|
|
$
|
(3,774
|
)
|
|
$
|
16,316
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,135
|
)
|
|
$
|
173
|
|
|
$
|
(962
|
)
|
Derivative liabilities (embedded)
|
(4,430
|
)
|
|
—
|
|
|
—
|
|
|
(2,871
|
)
|
|
(1,988
|
)
|
|
(9,289
|
)
|
||||||
Total liabilities
|
$
|
(4,430
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(4,006
|
)
|
|
$
|
(1,815
|
)
|
|
$
|
(10,251
|
)
|
(1)
|
Total change in realized and unrealized gain (loss) recorded on Level 3 financial instruments is included in
net investment income (loss)
in the
consolidated statements of income (loss)
.
|
December 31, 2015
|
|||||||||||
Assets
|
|
Fair value ($ in thousands)
|
|
Valuation technique
|
|
Unobservable (U) and
observable inputs (O)
|
|
Range
|
|||
Corporate bond
|
|
$
|
2,444
|
|
|
Discounted cash flow
|
|
Yield (U)
|
|
10.4 - 11.4%
|
|
|
|
|
|
|
|
Duration (U)
|
|
3 years
|
|
||
|
|
|
|
|
|
Credit spread (U)
|
|
986 bps
|
|
||
|
|
|
|
|
|
Volatility (U)
|
|
25.0 - 35.0%
|
|
||
Derivative liabilities (embedded)
|
|
$
|
5,563
|
|
|
Discounted cash flow
|
|
Contractual variable annual investment credit (U)
|
|
0.0 - 2.5%
|
|
|
|
|
|
|
|
Mean monthly investment return (U)
|
|
1.2
|
%
|
||
|
|
|
|
|
|
Duration from inception of contracts (U)
|
|
5.0 - 5.5 years
|
|
||
|
|
|
|
|
|
Duration from valuation date (U)
|
|
4.0 - 5.0 years
|
|
||
|
|
|
|
|
|
Interest rates (O)
|
|
U.S. Treasury Spot Rates
|
|
||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
December 31, 2014
|
|||||||||||
Assets
|
|
Fair value ($ in thousands)
|
|
Valuation technique
|
|
Unobservable (U) and
observable inputs (O) |
|
Range
|
|||
Corporate bond
|
|
$
|
2,346
|
|
|
Discounted cash flow
|
|
Yield (U)
|
|
14.9% - 16.9%
|
|
|
|
|
|
|
|
Duration (U)
|
|
3 years
|
|
||
|
|
|
|
|
|
Credit spreads (U)
|
|
1,376 - 1,576 bps
|
|
||
|
|
|
|
|
|
Volatility (U)
|
|
20.0 - 30.0%
|
|
||
Derivative liabilities (embedded)
|
|
$
|
9,289
|
|
|
Discounted cash flow
|
|
Contractual variable annual investment credit (U)
|
|
0.0 - 3.5%
|
|
|
|
|
|
|
|
Mean monthly investment return (U)
|
|
1.2
|
%
|
||
|
|
|
|
|
|
Duration from inception of contracts (U)
|
|
4.0 - 5.5 years
|
|
||
|
|
|
|
|
|
Duration from valuation date (U)
|
|
1.8 - 5.0 years
|
|
||
|
|
|
|
|
|
Interest rates (O)
|
|
U.S. Treasury Spot Rates
|
|
|
|
Overnights and continuous
|
|
Up to 30 days
|
|
30 - 90 days
|
|
Greater than 90 days
|
|
Total
|
||||||||||
|
|
($ in thousands)
|
||||||||||||||||||
Repurchase agreements
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-U.S. sovereign debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,944
|
|
|
$
|
—
|
|
|
$
|
8,944
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,944
|
|
|
$
|
—
|
|
|
$
|
8,944
|
|
Securities lending transactions
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate bonds
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Total
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
As of December 31, 2015
|
||||||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Assets by Primary Underlying Risk
|
($ in thousands)
|
||||||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
EUR/USD
|
|
$
|
21,692
|
|
|
$
|
183,125
|
|
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
EUR/GBP/USD
|
|
631
|
|
|
41,686
|
|
||
Contracts for Differences - Short Contracts
|
CHF/EUR/GBP/JPY/NOK/USD
|
|
5,884
|
|
|
80,027
|
|
||
Total Return Swaps - Long Contracts
|
USD
|
|
415
|
|
|
58,799
|
|
||
Total Return Swaps - Short Contracts
|
JPY/USD
|
|
466
|
|
|
9,457
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Commodity Futures - Short Contracts
|
USD
|
|
71
|
|
|
17,501
|
|
||
Interest Rate Swaptions
|
JPY/USD
|
|
90
|
|
|
43,831
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
CAD/EUR/GBP/MXN/SAR
|
|
1,947
|
|
|
155,518
|
|
||
Foreign Currency Options - Purchased
|
CNH/EUR/SAR
|
|
4,141
|
|
|
193,613
|
|
||
Total Derivative Assets
|
|
|
$
|
35,337
|
|
|
$
|
783,557
|
|
|
|
|
|
|
|
||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Liabilities by Primary Underlying Risk
|
($ in thousands)
|
||||||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
EUR/USD
|
|
$
|
3,449
|
|
|
$
|
38,455
|
|
Credit Default Swaps - Protection Sold
|
GBP/EUR/USD
|
|
2,054
|
|
|
6,436
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
EUR/GBP/USD
|
|
1,111
|
|
|
2,311
|
|
||
Contracts for Differences - Short Contracts
|
EUR/GBP/USD
|
|
3,411
|
|
|
50,471
|
|
||
Total Return Swaps - Long Contracts
|
JPY/USD
|
|
3,430
|
|
|
163,224
|
|
||
Total Return Swaps - Short Contracts
|
AUD/JPY/USD
|
|
386
|
|
|
19,318
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Commodity Futures - Short Contracts
|
USD
|
|
18
|
|
|
13,069
|
|
||
Interest Rate Swaptions
|
USD
|
|
17
|
|
|
87,499
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
JPY/SAR
|
|
1,041
|
|
|
87,127
|
|
||
Foreign Currency Options - Sold
|
CNH/SAR
|
|
475
|
|
|
118,415
|
|
||
Total Derivative Liabilities (free standing)
|
|
|
$
|
15,392
|
|
|
$
|
586,325
|
|
|
|
|
|
|
|
||||
Embedded derivative liabilities in reinsurance contracts (3)
|
USD
|
|
$
|
5,563
|
|
|
$
|
20,000
|
|
Total Derivative Liabilities (embedded)
|
|
|
$
|
5,563
|
|
|
$
|
20,000
|
|
(1)
|
AUD = Australian Dollar, CAD = Canadian Dollar, CHF = Swiss Franc, CNH = Chinese Yuan, EUR = Euro, GBP = British Pound, JPY = Japanese Yen, MXN = Mexican Peso, NOK = Norwegian Krone, SAR = Saudi Arabian Riyal, USD = US Dollar
|
(2)
|
The absolute notional exposure represents the Company’s derivative activity as of
December 31, 2015
, 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 consolidated balance sheets.
|
|
As of December 31, 2014
|
||||||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Assets by Primary Underlying Risk
|
($ in thousands)
|
||||||||
Commodity Price
|
|
|
|
|
|
||||
Commodity Future Options - Sold
|
USD
|
|
$
|
269
|
|
|
$
|
25,168
|
|
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
USD
|
|
9,456
|
|
|
89,772
|
|
||
Credit Default Swaps - Protection Sold
|
USD
|
|
205
|
|
|
2,084
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
USD
|
|
263
|
|
|
3,080
|
|
||
Contracts for Differences - Short Contracts
|
AUD/EUR
|
|
186
|
|
|
6,428
|
|
||
Total Return Swaps - Long Contracts
|
USD
|
|
43
|
|
|
1,874
|
|
||
Total Return Swaps - Short Contracts
|
USD
|
|
34
|
|
|
9,763
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Commodity Futures - Short Contracts
|
USD
|
|
78
|
|
|
186,280
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward
|
CAD/EUR/GBP/JPY
|
|
4,241
|
|
|
228,416
|
|
||
Foreign Currency Options - Purchased
|
EUR/JPY/KRW/SAR
|
|
6,355
|
|
|
283,439
|
|
||
Total Derivative Assets
|
|
|
$
|
21,130
|
|
|
$
|
836,304
|
|
|
|
|
|
|
|
||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Liabilities by Primary Underlying Risk
|
($ in thousands)
|
||||||||
Commodity Price
|
|
|
|
|
|
||||
Commodity Future Options - Purchased
|
USD
|
|
$
|
285
|
|
|
$
|
12,012
|
|
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
USD
|
|
3,230
|
|
|
49,465
|
|
||
Credit Default Swaps - Protection Sold
|
USD
|
|
1,319
|
|
|
5,142
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
EUR/GBP/USD
|
|
1,404
|
|
|
48,152
|
|
||
Contracts for Differences - Short Contracts
|
AUD/NOK
|
|
130
|
|
|
3,070
|
|
||
Total Return Swaps - Long Contracts
|
USD
|
|
590
|
|
|
11,233
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Commodity Futures - Short Contracts
|
USD
|
|
220
|
|
|
467,956
|
|
||
Treasury Futures - Short Contracts
|
USD
|
|
280
|
|
|
10,119
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Options - Sold
|
EUR/JPY/KRW
|
|
3,527
|
|
|
144,257
|
|
||
Catastrophe Risk derivatives
|
USD
|
|
30
|
|
|
6,000
|
|
||
Total Derivative Liabilities (free standing)
|
|
|
$
|
11,015
|
|
|
$
|
757,406
|
|
|
|
|
|
|
|
||||
Embedded derivative liabilities in reinsurance contracts (3)
|
USD
|
|
$
|
2,769
|
|
|
$
|
15,000
|
|
Embedded derivative liabilities in deposit contracts (4)
|
USD
|
|
6,520
|
|
|
75,000
|
|
||
Total Derivative Liabilities (embedded)
|
|
|
$
|
9,289
|
|
|
$
|
90,000
|
|
(1)
|
AUD = Australian Dollar, CAD = Canadian Dollar, EUR = Euro, GBP = British Pound, JPY = Japanese Yen, KRW = South Korean Won, NOK = Norwegian Krone, SAR = Saudi Arabian Riyal, USD = US Dollar
|
(2)
|
The absolute notional exposure represents the Company’s derivative activity as of
December 31, 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 consolidated balance sheets.
|
(4)
|
The fair value of embedded derivatives in deposit contracts is included in deposit liabilities in the consolidated balance sheets.
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
Primary Underlying Risk
|
Realized Gain (Loss)
|
|
Unrealized Gain (Loss)*
|
|
Realized Gain (Loss)
|
|
Unrealized Gain (Loss)*
|
|
Realized Gain (Loss)
|
|
Unrealized Gain (Loss)*
|
||||||||||||
Commodity Price
|
($ in thousands)
|
||||||||||||||||||||||
Commodities Futures - Long Contracts
|
$
|
(1,515
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity Future Options - Purchased
|
(286
|
)
|
|
285
|
|
|
(470
|
)
|
|
(289
|
)
|
|
264
|
|
|
15
|
|
||||||
Commodity Future Options - Sold
|
272
|
|
|
(269
|
)
|
|
364
|
|
|
101
|
|
|
(81
|
)
|
|
168
|
|
||||||
Credit
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Credit Default Swaps - Protection Purchased
|
1,282
|
|
|
4,839
|
|
|
(5,627
|
)
|
|
1,018
|
|
|
4,243
|
|
|
(10,943
|
)
|
||||||
Credit Default Swaps - Protection Sold
|
2,071
|
|
|
(2,098
|
)
|
|
1,362
|
|
|
(830
|
)
|
|
(4,845
|
)
|
|
10,690
|
|
||||||
Equity Price
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Contracts for Differences - Long Contracts
|
(6,101
|
)
|
|
660
|
|
|
(1,869
|
)
|
|
(11,621
|
)
|
|
8,900
|
|
|
6,172
|
|
||||||
Contracts for Differences - Short Contracts
|
8,459
|
|
|
2,418
|
|
|
(3,873
|
)
|
|
413
|
|
|
1,219
|
|
|
(341
|
)
|
||||||
Total Return Swaps - Long Contracts
|
1,410
|
|
|
(2,469
|
)
|
|
18,782
|
|
|
(2,112
|
)
|
|
1,026
|
|
|
1,786
|
|
||||||
Total Return Swaps - Short Contracts
|
(1,395
|
)
|
|
45
|
|
|
(795
|
)
|
|
171
|
|
|
(557
|
)
|
|
76
|
|
||||||
Index
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Index Futures - Long Contracts
|
1,144
|
|
|
—
|
|
|
(840
|
)
|
|
—
|
|
|
(2,413
|
)
|
|
—
|
|
||||||
Index Futures - Short Contracts
|
—
|
|
|
—
|
|
|
(253
|
)
|
|
441
|
|
|
1,169
|
|
|
(441
|
)
|
||||||
Interest Rates
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bond Futures - Short Contracts
|
(2,584
|
)
|
|
—
|
|
|
(1,077
|
)
|
|
(212
|
)
|
|
(289
|
)
|
|
(36
|
)
|
||||||
Commodities Futures - Short Contracts
|
(580
|
)
|
|
194
|
|
|
(11
|
)
|
|
(143
|
)
|
|
437
|
|
|
(212
|
)
|
||||||
Interest Rate Swaps
|
119
|
|
|
—
|
|
|
(743
|
)
|
|
639
|
|
|
949
|
|
|
(255
|
)
|
||||||
Interest Rate Swaptions
|
(771
|
)
|
|
(39
|
)
|
|
(455
|
)
|
|
(918
|
)
|
|
(170
|
)
|
|
913
|
|
||||||
Treasury Futures - Long Contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
||||||
Treasury Futures - Short Contracts
|
(2,734
|
)
|
|
280
|
|
|
(1,163
|
)
|
|
(388
|
)
|
|
830
|
|
|
(456
|
)
|
||||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign Currency Forward
|
21,429
|
|
|
(3,334
|
)
|
|
16,891
|
|
|
3,617
|
|
|
5,385
|
|
|
(1,255
|
)
|
||||||
Foreign Currency Options - Purchased
|
318
|
|
|
(1,144
|
)
|
|
(265
|
)
|
|
941
|
|
|
5,920
|
|
|
1,069
|
|
||||||
Foreign Currency Options - Sold
|
1,214
|
|
|
316
|
|
|
(1,438
|
)
|
|
63
|
|
|
(3,787
|
)
|
|
(109
|
)
|
||||||
Reinsurance contract derivatives
|
30
|
|
|
—
|
|
|
—
|
|
|
982
|
|
|
1,250
|
|
|
3,085
|
|
||||||
|
$
|
21,782
|
|
|
$
|
(316
|
)
|
|
$
|
18,520
|
|
|
$
|
(8,127
|
)
|
|
$
|
19,331
|
|
|
$
|
9,926
|
|
Embedded Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Embedded derivatives in reinsurance contracts
|
$
|
(5
|
)
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Embedded derivatives in deposit contracts
|
2,104
|
|
|
—
|
|
|
—
|
|
|
(2,090
|
)
|
|
—
|
|
|
(460
|
)
|
||||||
Total Derivative Liabilities (embedded)
|
$
|
2,099
|
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
(1,988
|
)
|
|
$
|
—
|
|
|
$
|
(460
|
)
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet
|
||||||||||||||
December 31, 2015
Derivative Contracts
|
|
Gross Amounts of Assets Presented in the Consolidated Balance Sheet (1)
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Financial assets, derivative assets and collateral received
|
|
($ in thousands)
|
||||||||||||||
Counterparty 1
|
|
$
|
2,171
|
|
|
$
|
2,171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Counterparty 2
|
|
4,959
|
|
|
1,243
|
|
|
—
|
|
|
3,716
|
|
||||
Counterparty 3
|
|
6,347
|
|
|
2,335
|
|
|
—
|
|
|
4,012
|
|
||||
Counterparty 4
|
|
3,679
|
|
|
2,656
|
|
|
—
|
|
|
1,023
|
|
||||
Counterparty 5
|
|
14,181
|
|
|
4,027
|
|
|
—
|
|
|
10,154
|
|
||||
Counterparty 6
|
|
7,351
|
|
|
1,657
|
|
|
1,993
|
|
|
3,701
|
|
||||
Counterparty 7
|
|
882
|
|
|
—
|
|
|
194
|
|
|
688
|
|
||||
Counterparty 8
|
|
2,669
|
|
|
2,669
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 9
|
|
2,009
|
|
|
542
|
|
|
—
|
|
|
1,467
|
|
||||
Total
|
|
$
|
44,248
|
|
|
$
|
17,300
|
|
|
$
|
2,187
|
|
|
$
|
24,761
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loaned securities
|
|
|
|
|
|
|
|
|
||||||||
Counterparty 3
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
2
|
|
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet
|
||||||||||||||
December 31, 2015
Derivative Contracts
|
|
Gross Amounts of Liabilities Presented in the Consolidated Balance Sheet (2)
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
Financial liabilities, derivative liabilities and collateral pledged
|
|
($ in thousands)
|
||||||||||||||
Counterparty 1
|
|
$
|
2,626
|
|
|
$
|
2,171
|
|
|
$
|
455
|
|
|
$
|
—
|
|
Counterparty 2
|
|
1,243
|
|
|
1,243
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 3
|
|
2,335
|
|
|
2,335
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 4
|
|
2,816
|
|
|
2,656
|
|
|
160
|
|
|
—
|
|
||||
Counterparty 5
|
|
4,028
|
|
|
4,028
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 6
|
|
1,657
|
|
|
1,657
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 7
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 8
|
|
3,659
|
|
|
2,669
|
|
|
—
|
|
|
990
|
|
||||
Counterparty 9
|
|
542
|
|
|
542
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 15
|
|
153
|
|
|
6
|
|
|
147
|
|
|
—
|
|
||||
Total
|
|
$
|
19,059
|
|
|
$
|
17,307
|
|
|
$
|
762
|
|
|
$
|
990
|
|
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under an agreement to repurchase
|
|
|
|
|
|
|
|
|
||||||||
Counterparty 4
|
|
$
|
8,944
|
|
|
$
|
8,944
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
8,944
|
|
|
$
|
8,944
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
The Gross Amounts of Assets Presented in the consolidated balance sheets presented above includes the fair value of Derivative Contract assets as well as gross OTC option contract assets of
$8.9 million
included in Other Investments in the consolidated balance sheets.
|
(2)
|
The Gross Amounts of Liabilities Presented in the consolidated balance sheets presented above includes the fair value of Derivative Contract liabilities as well as gross OTC option contract liabilities of
$3.7 million
included in Securities sold, not yet purchased in the consolidated balance sheets.
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet
|
||||||||||||||
December 31, 2014
Derivative Contracts
|
|
Gross Amounts of Assets Presented in the Consolidated Balance Sheet (1)
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Financial assets, derivative assets and collateral received
|
|
($ in thousands)
|
||||||||||||||
Counterparty 1
|
|
$
|
1,624
|
|
|
$
|
1,613
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Counterparty 2
|
|
2,199
|
|
|
539
|
|
|
—
|
|
|
1,660
|
|
||||
Counterparty 3
|
|
10,558
|
|
|
4,802
|
|
|
—
|
|
|
5,756
|
|
||||
Counterparty 4
|
|
368
|
|
|
368
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 5
|
|
2,218
|
|
|
133
|
|
|
—
|
|
|
2,085
|
|
||||
Counterparty 6
|
|
5,832
|
|
|
2,866
|
|
|
2,420
|
|
|
546
|
|
||||
Counterparty 7
|
|
745
|
|
|
440
|
|
|
—
|
|
|
305
|
|
||||
Counterparty 8
|
|
699
|
|
|
699
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 9
|
|
655
|
|
|
461
|
|
|
—
|
|
|
194
|
|
||||
Counterparty 10
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Total
|
|
$
|
24,921
|
|
|
$
|
11,921
|
|
|
$
|
2,420
|
|
|
$
|
10,580
|
|
|
|
|
|
|
|
|
|
|
||||||||
Securities purchased under an agreement to sell
|
|
|
|
|
|
|
|
|
||||||||
Counterparty 11
|
|
$
|
29,852
|
|
|
$
|
29,350
|
|
|
$
|
247
|
|
|
$
|
255
|
|
Total
|
|
$
|
29,852
|
|
|
$
|
29,350
|
|
|
$
|
247
|
|
|
$
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet
|
||||||||||||||
December 31, 2014
Derivative Contracts
|
|
Gross Amounts of Liabilities Presented in the Consolidated Balance Sheet (2)
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
Financial liabilities, derivative liabilities and collateral pledged
|
|
($ in thousands)
|
||||||||||||||
Counterparty 1
|
|
$
|
1,613
|
|
|
$
|
1,613
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Counterparty 2
|
|
539
|
|
|
539
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 3
|
|
4,802
|
|
|
4,802
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 4
|
|
932
|
|
|
368
|
|
|
564
|
|
|
—
|
|
||||
Counterparty 5
|
|
133
|
|
|
133
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 6
|
|
2,866
|
|
|
2,866
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 7
|
|
440
|
|
|
440
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 8
|
|
2,001
|
|
|
699
|
|
|
1,302
|
|
|
—
|
|
||||
Counterparty 9
|
|
461
|
|
|
461
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
13,787
|
|
|
$
|
11,921
|
|
|
$
|
1,866
|
|
|
$
|
—
|
|
(1)
|
The Gross Amounts of Assets Presented in the consolidated balance sheets presented above includes the fair value of Derivative Contract assets as well as gross OTC option contract assets of
$3.8 million
included in Other Investments in the consolidated balance sheets.
|
(2)
|
The Gross Amounts of Liabilities Presented in the consolidated balance sheets presented above includes the fair value of Derivative Contract liabilities as well as gross OTC option contract liabilities of
$2.8 million
included in Securities sold, not yet purchased in the consolidated balance sheets.
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
|
($ in thousands)
|
||||||
Case loss and loss adjustment expense reserves
|
$
|
87,186
|
|
|
$
|
64,343
|
|
Incurred but not reported loss and loss adjustment expense reserves
|
375,690
|
|
|
210,777
|
|
||
Deferred gains on retroactive reinsurance contracts
|
3,171
|
|
|
2,242
|
|
||
|
$
|
466,047
|
|
|
$
|
277,362
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Gross reserves for loss and loss adjustment expenses, beginning of year
|
$
|
277,362
|
|
|
$
|
134,331
|
|
|
$
|
67,271
|
|
Less: loss and loss adjustment expenses recoverable, beginning of year
|
(814
|
)
|
|
(9,277
|
)
|
|
—
|
|
|||
Net reserves for loss and loss adjustment expenses, beginning of year
|
276,548
|
|
|
125,054
|
|
|
67,271
|
|
|||
Increase (decrease) in net loss and loss adjustment expenses incurred in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
419,377
|
|
|
286,787
|
|
|
144,509
|
|
|||
Prior years
|
(3,330
|
)
|
|
(3,559
|
)
|
|
(4,697
|
)
|
|||
Amortization of deferred gains on retroactive reinsurance contracts
|
(856
|
)
|
|
(81
|
)
|
|
—
|
|
|||
Total incurred loss and loss adjustment expenses
|
415,191
|
|
|
283,147
|
|
|
139,812
|
|
|||
Net loss and loss adjustment expenses paid in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
(100,403
|
)
|
|
(70,562
|
)
|
|
(27,528
|
)
|
|||
Prior years
|
(121,665
|
)
|
|
(61,091
|
)
|
|
(54,501
|
)
|
|||
Total net paid losses
|
(222,068
|
)
|
|
(131,653
|
)
|
|
(82,029
|
)
|
|||
Foreign currency translation
|
(3,749
|
)
|
|
—
|
|
|
—
|
|
|||
Net reserve for loss and loss adjustment expenses, end of year
|
465,922
|
|
|
276,548
|
|
|
125,054
|
|
|||
Plus: loss and loss adjustment expenses recoverable, end of year
|
125
|
|
|
814
|
|
|
9,277
|
|
|||
Gross reserve for loss and loss adjustment expenses, end of year
|
$
|
466,047
|
|
|
$
|
277,362
|
|
|
$
|
134,331
|
|
•
|
The net
$5.4 million
of favorable prior years’ reserve development for the year ended
December 31, 2015
was accompanied by net increases of
$13.2 million
in acquisition costs, resulting in a net increase of
$7.8 million
in net underwriting loss. The
$7.8 million
net increase in net underwriting loss was a result of having favorable loss reserve development on certain contracts that was either fully or partially offset by increases in sliding scale or profit commissions whereas certain other contracts with adverse loss development did not have offsetting decreases in acquisition costs to the same degree resulting in the net favorable development being more than offset by acquisition costs in the current period. The net adverse development was primarily a result of deterioration in attritional loss experience on certain workers’ compensation and auto contracts that did not result in offsetting changes in acquisition costs.
|
•
|
The change in loss and loss adjustment expense reserves related to premium estimate changes of
$2.1 million
was accompanied by similar changes in the net premiums earned and acquisition costs for those contracts, resulting in a net decrease of
$0.3 million
in net underwriting loss for that period.
|
•
|
In total, loss reserve development related to re-estimating loss reserves and increases in premium estimates for prior years resulted in an increase in net underwriting loss of
$7.5 million
for the year ended December 31, 2015.
|
•
|
The net
$0.7 million
of favorable prior years’ reserve development for the year ended
December 31, 2014
was accompanied by net increases of
$0.3 million
in acquisition costs, resulting in a net decrease of
$0.4 million
in net underwriting loss. The net adverse development was primarily a result of deterioration in attritional loss experience on certain workers’ compensation, auto and property contracts that did not result in offsetting changes in acquisition costs.
|
•
|
The
$2.9 million
of favorable development related to the decreases in premium estimates on certain contracts was accompanied by a
$0.4 million
decrease in acquisition costs, for a total of
$3.3 million
decrease in loss and loss adjustment expenses incurred and acquisition costs. The decrease in earned premium related to the decrease in premium estimates was
$3.7 million
, resulting in an increase in net underwriting loss of
$0.4 million
for the year ended December 31, 2014.
|
•
|
In total, loss reserve development related to re-estimating loss reserves and increases in premium estimates for prior years resulted in minimal impact to net underwriting loss for the year ended December 31, 2014.
|
•
|
The net
$1.3 million
of favorable prior years’ reserve development for the year ended
December 31, 2013
was accompanied by net increases of
$2.3 million
in acquisition costs, resulting in a net increase of
$1.0 million
in net underwriting loss. The net adverse development was primarily a result of deterioration in attritional loss experience on certain workers’ compensation, auto and property contracts that did not result in offsetting changes in acquisition costs.
|
•
|
The
$3.4 million
of favorable development related to the decrease in premium estimates was accompanied by a
$1.3 million
decrease in acquisition costs, for a total of
$4.7 million
decrease in loss and loss adjustment expenses incurred and acquisition costs. The decrease in earned premium related to the decrease in premium estimates was
$3.9 million
, resulting in a
$0.8 million
decrease in net underwriting loss for the year ended December 31, 2013.
|
•
|
In total, loss reserve development related to re-estimating loss reserves and decreases in premium estimates for prior years resulted in an increase in net underwriting loss of
$0.2 million
for the year ended December 31, 2013.
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Management fees - Third Point LLC
|
$
|
6,362
|
|
|
$
|
5,037
|
|
|
$
|
3,651
|
|
Management fees - Founders
|
36,053
|
|
|
28,544
|
|
|
20,686
|
|
|||
Performance fees -
TP GP
|
862
|
|
|
19,935
|
|
|
62,996
|
|
|||
|
$
|
43,277
|
|
|
$
|
53,516
|
|
|
$
|
87,333
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Balance, beginning of year
|
$
|
145,430
|
|
|
$
|
120,946
|
|
|
$
|
50,446
|
|
Consideration received
|
21,246
|
|
|
18,398
|
|
|
66,369
|
|
|||
Net investment expense allocation and change in fair value of embedded derivatives
|
2,207
|
|
|
6,436
|
|
|
4,731
|
|
|||
Payments
|
(84,928
|
)
|
|
(350
|
)
|
|
(600
|
)
|
|||
Balance, end of year
|
$
|
83,955
|
|
|
$
|
145,430
|
|
|
$
|
120,946
|
|
|
Facility
|
|
Utilized
|
|
Collateral
|
||||||
December 31, 2015
|
($ in thousands)
|
||||||||||
BNP Paribas
|
$
|
50,000
|
|
|
$
|
17,959
|
|
|
$
|
17,959
|
|
Citibank (1)
|
300,000
|
|
|
189,056
|
|
|
189,056
|
|
|||
J.P. Morgan
|
50,000
|
|
|
37,551
|
|
|
37,926
|
|
|||
Lloyds Bank (2)
|
150,000
|
|
|
25,814
|
|
|
25,814
|
|
|||
|
$
|
550,000
|
|
|
$
|
270,380
|
|
|
$
|
270,755
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net investment income (loss) by type
|
($ in thousands)
|
||||||||||
Net realized gains on investments and investment derivatives
|
$
|
14,398
|
|
|
$
|
193,957
|
|
|
$
|
236,333
|
|
Net unrealized gains (losses) on investments and investment derivatives
|
(34,181
|
)
|
|
(83,146
|
)
|
|
78,950
|
|
|||
Net gains on foreign currencies
|
933
|
|
|
2,581
|
|
|
21,106
|
|
|||
Dividend and interest income
|
45,103
|
|
|
31,750
|
|
|
14,233
|
|
|||
Dividends paid on securities sold, not yet purchased
|
(1,279
|
)
|
|
(120
|
)
|
|
(722
|
)
|
|||
Management and performance fees
|
(43,277
|
)
|
|
(53,516
|
)
|
|
(87,333
|
)
|
|||
Other expenses
|
(11,305
|
)
|
|
(7,151
|
)
|
|
(8,863
|
)
|
|||
Net investment income (loss) on investments managed by Third Point LLC
|
(29,608
|
)
|
|
84,355
|
|
|
253,704
|
|
|||
Investment income on cash held by the Catastrophe Reinsurer and Catastrophe Fund
|
29
|
|
|
101
|
|
|
86
|
|
|||
Net gain on catastrophe bond held by Catastrophe Reinsurer
|
10
|
|
|
144
|
|
|
—
|
|
|||
Net gain on investment in Kiskadee Fund
|
1,465
|
|
|
—
|
|
|
—
|
|
|||
Net gain on reinsurance contract derivatives written by the Catastrophe Reinsurer
|
30
|
|
|
982
|
|
|
4,335
|
|
|||
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
$
|
258,125
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net investment income (loss) by asset class
|
($ in thousands)
|
||||||||||
Net investment gains (losses) on equity securities
|
$
|
(31,224
|
)
|
|
$
|
82,902
|
|
|
$
|
243,449
|
|
Net investment gains on debt securities
|
35,502
|
|
|
80,285
|
|
|
69,194
|
|
|||
Net investment losses on other investments
|
(35,917
|
)
|
|
(35,491
|
)
|
|
(5,045
|
)
|
|||
Net investment gains on investment derivatives
|
21,466
|
|
|
10,393
|
|
|
29,257
|
|
|||
Net investment gains (losses) on securities sold, not yet purchased
|
33,086
|
|
|
4,334
|
|
|
(5,974
|
)
|
|||
Net investment income on cash, including foreign exchange gains (losses)
|
149
|
|
|
4,992
|
|
|
17,961
|
|
|||
Net investment gains (losses) on securities purchased under an agreement to resell
|
(147
|
)
|
|
(4,099
|
)
|
|
1,863
|
|
|||
Net investment losses on securities sold under an agreement to repurchase
|
(2,226
|
)
|
|
—
|
|
|
—
|
|
|||
Management and performance fees
|
(43,277
|
)
|
|
(53,516
|
)
|
|
(87,333
|
)
|
|||
Other investment expenses
|
(5,486
|
)
|
|
(4,218
|
)
|
|
(5,247
|
)
|
|||
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
$
|
258,125
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Deposit liabilities investment expense
|
$
|
6,471
|
|
|
$
|
4,346
|
|
|
4,271
|
|
|
Reinsurance contracts investment expense
|
6,764
|
|
|
1,061
|
|
|
191
|
|
|||
Change in fair value of embedded derivatives in deposit and reinsurance contracts
|
(4,621
|
)
|
|
1,988
|
|
|
460
|
|
|||
|
$
|
8,614
|
|
|
$
|
7,395
|
|
|
$
|
4,922
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Bermuda
|
$
|
(71,416
|
)
|
|
$
|
62,649
|
|
|
233,058
|
|
|
United States
|
(18,981
|
)
|
|
(255
|
)
|
|
—
|
|
|||
United Kingdom
|
53
|
|
|
(36
|
)
|
|
20
|
|
|||
Income (loss) before income tax expense (benefit)
|
$
|
(90,344
|
)
|
|
$
|
62,358
|
|
|
$
|
233,078
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Bermuda (expected tax expense at 0%)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign taxes at local expected rates:
|
|
|
|
|
|
||||||
United States
|
(6,644
|
)
|
|
—
|
|
|
—
|
|
|||
United Kingdom
|
11
|
|
|
24
|
|
|
—
|
|
|||
Withholding taxes related to dividend and interest income
|
4,828
|
|
|
3,024
|
|
|
—
|
|
|||
Uncertain tax positions
|
(1,100
|
)
|
|
2,600
|
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
(2,905
|
)
|
|
$
|
5,648
|
|
|
$
|
—
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Current tax expense (benefit)
|
$
|
3,728
|
|
|
$
|
3,048
|
|
|
$
|
—
|
|
Deferred tax expense (benefit)
|
(6,633
|
)
|
|
2,600
|
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
(2,905
|
)
|
|
$
|
5,648
|
|
|
$
|
—
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Discounting of loss and loss adjustment expense reserves
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unearned premiums
|
2,329
|
|
|
—
|
|
|
—
|
|
|||
Temporary differences in recognition of expenses
|
573
|
|
|
—
|
|
|
—
|
|
|||
Net operating loss carryforward
|
7,839
|
|
|
—
|
|
|
—
|
|
|||
Total deferred tax assets
|
10,860
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Deferred tax liabilities:
|
|
|
|
|
|
||||||
Deferred acquisition costs
|
3,515
|
|
|
—
|
|
|
—
|
|
|||
Unrealized losses on investments
|
712
|
|
|
—
|
|
|
—
|
|
|||
Total deferred tax liabilities
|
4,227
|
|
|
—
|
|
|
—
|
|
|||
Net deferred tax assets
|
$
|
6,633
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
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
|
|
|
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
|
5,788,392
|
|
|
$10.03
|
|
5.97
|
|
3,946,530
|
|
|
$10.02
|
$15.05 - $16.89
|
2,265,981
|
|
|
$15.94
|
|
6.06
|
|
1,526,448
|
|
|
$15.96
|
$20.00 - $25.05
|
2,196,213
|
|
|
$20.22
|
|
6.00
|
|
1,498,541
|
|
|
$20.13
|
|
10,250,586
|
|
|
$13.52
|
|
5.99
|
|
6,971,519
|
|
|
$13.49
|
|
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
|
|
|
Forfeited
|
(17,800
|
)
|
|
10.00
|
|
|
Vested
|
(72,926
|
)
|
|
15.56
|
|
|
Balance as of December 31, 2014
|
616,114
|
|
|
10.10
|
|
|
Granted
|
118,120
|
|
|
13.06
|
|
|
Forfeited
|
(7,267
|
)
|
|
13.76
|
|
|
Vested
|
(425,924
|
)
|
|
10.37
|
|
|
Balance as of December 31, 2015
|
301,043
|
|
|
$
|
11.31
|
|
|
Number of non-
vested restricted
shares
|
|
Number of non-
vested restricted
shares probable of vesting
|
|
Weighted average grant date fair value
|
||||
Balance as of January 1, 2014
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
459,746
|
|
|
306,496
|
|
|
14.60
|
|
|
Balance as of December 31, 2014
|
459,746
|
|
|
306,496
|
|
|
14.60
|
|
|
Granted
|
514,276
|
|
|
342,846
|
|
|
14.00
|
|
|
Forfeited
|
(52,469
|
)
|
|
(34,980
|
)
|
|
14.29
|
|
|
Change in estimated restricted shares considered probable of vesting
|
—
|
|
|
(78,128
|
)
|
|
14.60
|
|
|
Balance as of December 31, 2015
|
921,553
|
|
|
536,234
|
|
|
$
|
14.24
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
|
($ in thousands)
|
||||||
Catastrophe Fund
|
$
|
—
|
|
|
$
|
60,153
|
|
Catastrophe Fund Manager
|
—
|
|
|
(259
|
)
|
||
Joint Venture - Third Point Advisors LLC share
|
16,157
|
|
|
40,241
|
|
||
|
$
|
16,157
|
|
|
$
|
100,135
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Catastrophe Fund
|
$
|
(121
|
)
|
|
$
|
4,748
|
|
|
$
|
4,284
|
|
Catastrophe Fund Manager
|
19
|
|
|
(23
|
)
|
|
(238
|
)
|
|||
Joint Venture - Third Point Advisors LLC share
|
53
|
|
|
1,590
|
|
|
1,721
|
|
|||
|
$
|
(49
|
)
|
|
$
|
6,315
|
|
|
$
|
5,767
|
|
a)
|
Third Point Reinsurance Opportunities Fund Ltd. and Third Point Re Cat Ltd.
|
b)
|
Third Point Reinsurance Investment Management Ltd. (the “Catastrophe Fund Manager”)
|
c)
|
Investment in Joint Ventures
|
a)
|
TP Lux Holdco LP
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Weighted-average number of common shares outstanding:
|
|
($ in thousands, except share and per share amounts)
|
|||||||||||
|
Basic number of common shares outstanding
|
|
104,003,820
|
|
|
103,287,693
|
|
|
87,505,540
|
|
|||
|
Dilutive effect of options
|
|
—
|
|
|
1,468,521
|
|
|
400,149
|
|
|||
|
Dilutive effect of warrants
|
|
—
|
|
|
1,634,845
|
|
|
1,064,842
|
|
|||
|
Diluted number of common shares outstanding
|
|
104,003,820
|
|
|
106,391,059
|
|
|
88,970,531
|
|
|||
Basic net income (loss) per common share:
|
|
|
|
|
|
|
|||||||
|
Net income (loss)
|
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
$
|
227,311
|
|
|
Income allocated to participating shares
|
|
—
|
|
|
(328
|
)
|
|
(1,618
|
)
|
|||
|
Net income (loss) available to common shareholders
|
|
$
|
(87,390
|
)
|
|
$
|
50,067
|
|
|
$
|
225,693
|
|
|
Basic net income (loss) per common share
|
|
$
|
(0.84
|
)
|
|
$
|
0.48
|
|
|
$
|
2.58
|
|
Diluted net income (loss) per common share
|
|
|
|
|
|
|
|||||||
|
Net income (loss)
|
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
$
|
227,311
|
|
|
Income allocated to participating shares
|
|
—
|
|
|
(319
|
)
|
|
(1,592
|
)
|
|||
|
Net income (loss) available to common shareholders
|
|
$
|
(87,390
|
)
|
|
$
|
50,076
|
|
|
$
|
225,719
|
|
|
Diluted net income (loss) per common share
|
|
$
|
(0.84
|
)
|
|
$
|
0.47
|
|
|
$
|
2.54
|
|
December 31, 2015
|
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)
|
$
|
—
|
|
|
$
|
2,878
|
|
|
$
|
2,878
|
|
|
$
|
—
|
|
|
$
|
1,480
|
|
|
$
|
(1,480
|
)
|
Single name (251-500)
|
3,558
|
|
|
—
|
|
|
3,558
|
|
|
—
|
|
|
574
|
|
|
(574
|
)
|
||||||
|
$
|
3,558
|
|
|
$
|
2,878
|
|
|
$
|
6,436
|
|
|
$
|
—
|
|
|
$
|
2,054
|
|
|
$
|
(2,054
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 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 2046 |
|
Total Written
Credit Default Swaps (1) |
|
Asset
|
|
Liability
|
|
Net Asset/(Liability)
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Single name (0 - 250)
|
$
|
—
|
|
|
$
|
5,142
|
|
|
$
|
5,142
|
|
|
$
|
—
|
|
|
$
|
1,319
|
|
|
$
|
(1,319
|
)
|
Single name (251-500)
|
—
|
|
|
2,084
|
|
|
2,084
|
|
|
205
|
|
|
—
|
|
|
205
|
|
||||||
|
$
|
—
|
|
|
$
|
7,226
|
|
|
$
|
7,226
|
|
|
$
|
205
|
|
|
$
|
1,319
|
|
|
$
|
(1,114
|
)
|
(1)
|
As of
December 31, 2015
and
2014
, 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.
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
Property and Casualty Reinsurance
|
|
Catastrophe Risk Management
|
|
Corporate
|
|
Total
|
||||||||
Revenues
|
($ in thousands)
|
||||||||||||||
Gross premiums written
|
$
|
702,458
|
|
|
$
|
(44
|
)
|
|
$
|
—
|
|
|
$
|
702,414
|
|
Gross premiums ceded
|
(1,876
|
)
|
|
—
|
|
|
—
|
|
|
(1,876
|
)
|
||||
Net premiums written
|
700,582
|
|
|
(44
|
)
|
|
—
|
|
|
700,538
|
|
||||
Change in net unearned premium reserves
|
(97,766
|
)
|
|
52
|
|
|
—
|
|
|
(97,714
|
)
|
||||
Net premiums earned
|
602,816
|
|
|
8
|
|
|
—
|
|
|
602,824
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
415,041
|
|
|
150
|
|
|
—
|
|
|
415,191
|
|
||||
Acquisition costs, net
|
191,217
|
|
|
(1
|
)
|
|
—
|
|
|
191,216
|
|
||||
General and administrative expenses
|
24,815
|
|
|
447
|
|
|
20,771
|
|
|
46,033
|
|
||||
Total expenses
|
631,073
|
|
|
596
|
|
|
20,771
|
|
|
652,440
|
|
||||
Net underwriting loss
|
(28,257
|
)
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
||||
Net investment income (loss)
|
(10,810
|
)
|
|
69
|
|
|
(17,333
|
)
|
|
(28,074
|
)
|
||||
Other expenses
|
(8,614
|
)
|
|
—
|
|
|
—
|
|
|
(8,614
|
)
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
(7,236
|
)
|
|
(7,236
|
)
|
||||
Foreign exchange gains
|
—
|
|
|
—
|
|
|
3,196
|
|
|
3,196
|
|
||||
Income tax benefit
|
—
|
|
|
—
|
|
|
2,905
|
|
|
2,905
|
|
||||
Segment loss including non-controlling interests
|
(47,681
|
)
|
|
(519
|
)
|
|
(39,239
|
)
|
|
(87,439
|
)
|
||||
Segment loss attributable to non-controlling interests
|
—
|
|
|
102
|
|
|
(53
|
)
|
|
49
|
|
||||
Segment loss
|
$
|
(47,681
|
)
|
|
$
|
(417
|
)
|
|
$
|
(39,292
|
)
|
|
$
|
(87,390
|
)
|
|
|
|
|
|
|
|
|
||||||||
Property and Casualty Reinsurance - Underwriting Ratios (1):
|
|
|
|
|
|
|
|||||||||
Loss ratio
|
68.9
|
%
|
|
|
|
|
|
|
|||||||
Acquisition cost ratio
|
31.7
|
%
|
|
|
|
|
|
|
|||||||
Composite ratio
|
100.6
|
%
|
|
|
|
|
|
|
|||||||
General and administrative expense ratio
|
4.1
|
%
|
|
|
|
|
|
|
|||||||
Combined ratio
|
104.7
|
%
|
|
|
|
|
|
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
|
Year Ended December 31, 2014
|
||||||||||||||
|
Property and Casualty Reinsurance
|
|
Catastrophe Risk Management
|
|
Corporate
|
|
Total
|
||||||||
Revenues
|
($ in thousands)
|
||||||||||||||
Gross premiums written
|
$
|
601,305
|
|
|
$
|
11,995
|
|
|
$
|
—
|
|
|
$
|
613,300
|
|
Gross premiums ceded
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
||||
Net premiums written
|
601,155
|
|
|
11,995
|
|
|
—
|
|
|
613,150
|
|
||||
Change in net unearned premium reserves
|
(168,858
|
)
|
|
240
|
|
|
—
|
|
|
(168,618
|
)
|
||||
Net premiums earned
|
432,297
|
|
|
12,235
|
|
|
—
|
|
|
444,532
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
283,180
|
|
|
(33
|
)
|
|
—
|
|
|
283,147
|
|
||||
Acquisition costs, net
|
136,154
|
|
|
1,052
|
|
|
—
|
|
|
137,206
|
|
||||
General and administrative expenses
|
22,515
|
|
|
3,113
|
|
|
14,380
|
|
|
40,008
|
|
||||
Total expenses
|
441,849
|
|
|
4,132
|
|
|
14,380
|
|
|
460,361
|
|
||||
Net underwriting loss
|
(9,552
|
)
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
||||
Net investment income
|
11,305
|
|
|
1,227
|
|
|
73,050
|
|
|
85,582
|
|
||||
Other expenses
|
(7,395
|
)
|
|
—
|
|
|
—
|
|
|
(7,395
|
)
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
(5,648
|
)
|
|
(5,648
|
)
|
||||
Segment income (loss) including non-controlling interests
|
(5,642
|
)
|
|
9,330
|
|
|
53,022
|
|
|
56,710
|
|
||||
Segment income attributable to non-controlling interests
|
—
|
|
|
(4,725
|
)
|
|
(1,590
|
)
|
|
(6,315
|
)
|
||||
Segment income (loss)
|
$
|
(5,642
|
)
|
|
$
|
4,605
|
|
|
$
|
51,432
|
|
|
$
|
50,395
|
|
|
|
|
|
|
|
|
|
||||||||
Property and Casualty Reinsurance - Underwriting Ratios (1):
|
|
|
|
|
|
|
|||||||||
Loss ratio
|
65.5
|
%
|
|
|
|
|
|
|
|||||||
Acquisition cost ratio
|
31.5
|
%
|
|
|
|
|
|
|
|||||||
Composite ratio
|
97.0
|
%
|
|
|
|
|
|
|
|||||||
General and administrative expense ratio
|
5.2
|
%
|
|
|
|
|
|
|
|||||||
Combined ratio
|
102.2
|
%
|
|
|
|
|
|
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
|
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
|
|
||||
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
|
|
||||
Net underwriting loss
|
(15,828
|
)
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
||||
Net investment income
|
26,953
|
|
|
4,421
|
|
|
226,751
|
|
|
258,125
|
|
||||
Other expenses
|
(4,922
|
)
|
|
—
|
|
|
—
|
|
|
(4,922
|
)
|
||||
Segment income including non-controlling interests
|
6,203
|
|
|
7,470
|
|
|
219,405
|
|
|
233,078
|
|
||||
Segment income attributable to non-controlling interests
|
—
|
|
|
(4,046
|
)
|
|
(1,721
|
)
|
|
(5,767
|
)
|
||||
Segment income
|
$
|
6,203
|
|
|
$
|
3,424
|
|
|
$
|
217,684
|
|
|
$
|
227,311
|
|
|
|
|
|
|
|
|
|
||||||||
Property and Casualty Reinsurance - Underwriting Ratios (1):
|
|
|
|
|
|
|
|||||||||
Loss ratio
|
65.7
|
%
|
|
|
|
|
|
|
|||||||
Acquisition cost ratio
|
31.5
|
%
|
|
|
|
|
|
|
|||||||
Composite ratio
|
97.2
|
%
|
|
|
|
|
|
|
|||||||
General and administrative expense ratio
|
10.3
|
%
|
|
|
|
|
|
|
|||||||
Combined ratio
|
107.5
|
%
|
|
|
|
|
|
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
|
2015
|
|
2014
|
|
2013
|
|||
Largest contract
|
16.1
|
%
|
|
20.4
|
%
|
|
14.9
|
%
|
Second largest contract
|
13.0
|
%
|
|
17.1
|
%
|
|
11.2
|
%
|
Third largest contract
|
—
|
%
|
|
—
|
%
|
|
10.5
|
%
|
Total for contracts contributing greater than 10% each
|
29.1
|
%
|
|
37.5
|
%
|
|
36.6
|
%
|
Total for contracts contributing less than 10% each
|
70.9
|
%
|
|
62.5
|
%
|
|
63.4
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
|
($ in thousands)
|
||||||||||||
Counterparty 1
|
$
|
87,044
|
|
|
29.6
|
%
|
|
$
|
72,613
|
|
|
23.9
|
%
|
Counterparty 2
|
—
|
|
|
—
|
%
|
|
55,636
|
|
|
18.3
|
%
|
||
Counterparty 3
|
—
|
|
|
—
|
%
|
|
37,062
|
|
|
12.2
|
%
|
||
|
87,044
|
|
|
29.6
|
%
|
|
165,311
|
|
|
54.4
|
%
|
||
Other counterparties representing less than 10% each
|
207,269
|
|
|
70.4
|
%
|
|
138,338
|
|
|
45.6
|
%
|
||
Reinsurance balances receivable
|
$
|
294,313
|
|
|
100.0
|
%
|
|
$
|
303,649
|
|
|
100.0
|
%
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Property
|
$
|
114,215
|
|
|
16.2
|
%
|
|
$
|
106,834
|
|
|
17.4
|
%
|
|
$
|
67,612
|
|
|
16.8
|
%
|
Casualty
|
327,064
|
|
|
46.6
|
%
|
|
266,763
|
|
|
43.5
|
%
|
|
210,017
|
|
|
52.2
|
%
|
|||
Specialty
|
261,179
|
|
|
37.2
|
%
|
|
227,708
|
|
|
37.1
|
%
|
|
115,959
|
|
|
28.9
|
%
|
|||
Total property and casualty reinsurance
|
702,458
|
|
|
100.0
|
%
|
|
601,305
|
|
|
98.0
|
%
|
|
393,588
|
|
|
97.9
|
%
|
|||
Catastrophe risk management
|
(44
|
)
|
|
—
|
%
|
|
11,995
|
|
|
2.0
|
%
|
|
8,349
|
|
|
2.1
|
%
|
|||
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
$
|
401,937
|
|
|
100.0
|
%
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Prospective
|
$
|
594,350
|
|
|
84.6
|
%
|
|
$
|
530,169
|
|
|
86.4
|
%
|
|
$
|
362,151
|
|
|
90.1
|
%
|
Retroactive (1)
|
108,064
|
|
|
15.4
|
%
|
|
83,131
|
|
|
13.6
|
%
|
|
39,786
|
|
|
9.9
|
%
|
|||
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
$
|
401,937
|
|
|
100.0
|
%
|
(1)
|
Includes all retroactive exposure in reinsurance contracts.
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Largest broker
|
$
|
198,209
|
|
|
28.2
|
%
|
|
$
|
199,563
|
|
|
32.5
|
%
|
|
$
|
111,865
|
|
|
27.8
|
%
|
Second largest broker
|
163,832
|
|
|
23.3
|
%
|
|
110,063
|
|
|
17.9
|
%
|
|
89,125
|
|
|
22.2
|
%
|
|||
Third largest broker
|
91,554
|
|
|
13.0
|
%
|
|
80,535
|
|
|
13.1
|
%
|
|
57,994
|
|
|
14.4
|
%
|
|||
Fourth largest broker
|
73,499
|
|
|
10.5
|
%
|
|
61,777
|
|
|
10.1
|
%
|
|
—
|
|
|
—
|
%
|
|||
Other
|
175,320
|
|
|
25.0
|
%
|
|
161,362
|
|
|
26.4
|
%
|
|
142,953
|
|
|
35.6
|
%
|
|||
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
$
|
401,937
|
|
|
100.0
|
%
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
United States
|
$
|
283,626
|
|
|
40.4
|
%
|
|
$
|
339,061
|
|
|
55.3
|
%
|
|
$
|
304,141
|
|
|
75.7
|
%
|
United Kingdom
|
290,710
|
|
|
41.4
|
%
|
|
176,522
|
|
|
28.8
|
%
|
|
—
|
|
|
—
|
%
|
|||
Bermuda
|
128,078
|
|
|
18.2
|
%
|
|
97,717
|
|
|
15.9
|
%
|
|
96,396
|
|
|
24.0
|
%
|
|||
Other
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
1,400
|
|
|
0.3
|
%
|
|||
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
$
|
401,937
|
|
|
100.0
|
%
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
|
($ in thousands)
|
||||||
Actual statutory capital and surplus
|
|
|
|
||||
Third Point Re
|
$
|
1,044,340
|
|
|
$
|
1,296,067
|
|
Third Point Re USA
|
250,993
|
|
|
—
|
|
||
Required statutory capital and surplus
|
|
|
|
||||
Third Point Re
|
612,620
|
|
|
622,624
|
|
||
Third Point Re USA
|
$
|
84,858
|
|
|
$
|
—
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
($ in thousands)
|
||||||||||
Third Point Re
|
$
|
(68,188
|
)
|
|
$
|
56,686
|
|
|
$
|
229,974
|
|
Third Point Re USA
|
$
|
(7,510
|
)
|
|
n/a
|
|
|
n/a
|
|
CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of December 31, 2015
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,231,077
|
|
|
$
|
—
|
|
|
$
|
1,231,077
|
|
Debt securities
|
—
|
|
|
—
|
|
|
1,034,247
|
|
|
—
|
|
|
1,034,247
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
51,920
|
|
|
—
|
|
|
51,920
|
|
|||||
Total investments in securities
|
—
|
|
|
—
|
|
|
2,317,244
|
|
|
—
|
|
|
2,317,244
|
|
|||||
Cash and cash equivalents
|
308
|
|
|
5
|
|
|
20,094
|
|
|
—
|
|
|
20,407
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
330,915
|
|
|
—
|
|
|
330,915
|
|
|||||
Investment in subsidiaries
|
1,382,336
|
|
|
261,083
|
|
|
159,593
|
|
|
(1,803,012
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
326,971
|
|
|
—
|
|
|
326,971
|
|
|||||
Derivative assets, at fair value
|
—
|
|
|
—
|
|
|
35,337
|
|
|
—
|
|
|
35,337
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
10,687
|
|
|
—
|
|
|
10,687
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
294,313
|
|
|
—
|
|
|
294,313
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
197,093
|
|
|
—
|
|
|
197,093
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
187
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
125
|
|
|||||
Amounts due from (to) affiliates
|
(346
|
)
|
|
(230
|
)
|
|
576
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
564
|
|
|
2,613
|
|
|
8,652
|
|
|
—
|
|
|
11,829
|
|
|||||
Total assets
|
$
|
1,382,862
|
|
|
$
|
263,471
|
|
|
$
|
3,701,787
|
|
|
$
|
(1,803,012
|
)
|
|
$
|
3,545,108
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
3,136
|
|
|
$
|
40
|
|
|
$
|
8,790
|
|
|
$
|
—
|
|
|
$
|
11,966
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
24,119
|
|
|
—
|
|
|
24,119
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
83,955
|
|
|
—
|
|
|
83,955
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
531,710
|
|
|
—
|
|
|
531,710
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
466,047
|
|
|
—
|
|
|
466,047
|
|
|||||
Securities sold, not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
314,353
|
|
|
—
|
|
|
314,353
|
|
|||||
Securities sold under an agreement to repurchase
|
—
|
|
|
—
|
|
|
8,944
|
|
|
—
|
|
|
8,944
|
|
|||||
Due to brokers
|
—
|
|
|
—
|
|
|
574,962
|
|
|
—
|
|
|
574,962
|
|
|||||
Derivative liabilities, at fair value
|
—
|
|
|
—
|
|
|
15,392
|
|
|
—
|
|
|
15,392
|
|
|||||
Interest and dividends payable
|
—
|
|
|
3,055
|
|
|
1,345
|
|
|
—
|
|
|
4,400
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,377
|
|
|
—
|
|
|
—
|
|
|
113,377
|
|
|||||
Total liabilities
|
3,136
|
|
|
116,472
|
|
|
2,029,617
|
|
|
—
|
|
|
2,149,225
|
|
|||||
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
10,548
|
|
|
—
|
|
|
1,250
|
|
|
(1,250
|
)
|
|
10,548
|
|
|||||
Additional paid-in capital
|
1,080,591
|
|
|
159,618
|
|
|
1,509,594
|
|
|
(1,669,212
|
)
|
|
1,080,591
|
|
|||||
Retained earnings (deficit)
|
288,587
|
|
|
(12,619
|
)
|
|
145,169
|
|
|
(132,550
|
)
|
|
288,587
|
|
|||||
Shareholders’ equity attributable to shareholders
|
1,379,726
|
|
|
146,999
|
|
|
1,656,013
|
|
|
(1,803,012
|
)
|
|
1,379,726
|
|
|||||
Non-controlling interests
|
—
|
|
|
—
|
|
|
16,157
|
|
|
—
|
|
|
16,157
|
|
|||||
Total shareholders’ equity
|
1,379,726
|
|
|
146,999
|
|
|
1,672,170
|
|
|
(1,803,012
|
)
|
|
1,395,883
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,382,862
|
|
|
$
|
263,471
|
|
|
$
|
3,701,787
|
|
|
$
|
(1,803,012
|
)
|
|
$
|
3,545,108
|
|
CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of December 31, 2014
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,177,796
|
|
|
$
|
—
|
|
|
$
|
1,177,796
|
|
Debt securities
|
—
|
|
|
—
|
|
|
569,648
|
|
|
—
|
|
|
569,648
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
83,394
|
|
|
—
|
|
|
83,394
|
|
|||||
Total investments in securities
|
—
|
|
|
—
|
|
|
1,830,838
|
|
|
—
|
|
|
1,830,838
|
|
|||||
Cash and cash equivalents
|
140
|
|
|
—
|
|
|
28,594
|
|
|
—
|
|
|
28,734
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
417,307
|
|
|
—
|
|
|
417,307
|
|
|||||
Investment in subsidiaries
|
1,451,060
|
|
|
—
|
|
|
—
|
|
|
(1,451,060
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
58,241
|
|
|
—
|
|
|
58,241
|
|
|||||
Securities purchased under an agreement to sell
|
—
|
|
|
—
|
|
|
29,852
|
|
|
—
|
|
|
29,852
|
|
|||||
Derivative assets, at fair value
|
—
|
|
|
—
|
|
|
21,130
|
|
|
—
|
|
|
21,130
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
2,602
|
|
|
—
|
|
|
2,602
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
303,649
|
|
|
—
|
|
|
303,649
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
155,901
|
|
|
—
|
|
|
155,901
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
814
|
|
|
—
|
|
|
814
|
|
|||||
Other assets
|
600
|
|
|
666
|
|
|
2,246
|
|
|
—
|
|
|
3,512
|
|
|||||
Amounts due from (to) affiliates
|
1,339
|
|
|
(403
|
)
|
|
(936
|
)
|
|
—
|
|
|
—
|
|
|||||
Total assets
|
$
|
1,453,139
|
|
|
$
|
263
|
|
|
$
|
2,850,238
|
|
|
$
|
(1,451,060
|
)
|
|
$
|
2,852,580
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
1,226
|
|
|
$
|
518
|
|
|
$
|
8,341
|
|
|
$
|
—
|
|
|
$
|
10,085
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
27,040
|
|
|
—
|
|
|
27,040
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
145,430
|
|
|
—
|
|
|
145,430
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
433,809
|
|
|
—
|
|
|
433,809
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
277,362
|
|
|
—
|
|
|
277,362
|
|
|||||
Securities sold, not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
82,485
|
|
|
—
|
|
|
82,485
|
|
|||||
Due to brokers
|
—
|
|
|
—
|
|
|
312,609
|
|
|
—
|
|
|
312,609
|
|
|||||
Derivative liabilities, at fair value
|
—
|
|
|
—
|
|
|
11,015
|
|
|
—
|
|
|
11,015
|
|
|||||
Interest and dividends payable
|
—
|
|
|
—
|
|
|
697
|
|
|
—
|
|
|
697
|
|
|||||
Total liabilities
|
1,226
|
|
|
518
|
|
|
1,298,788
|
|
|
—
|
|
|
1,300,532
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
10,447
|
|
|
—
|
|
|
1,251
|
|
|
(1,251
|
)
|
|
10,447
|
|
|||||
Additional paid-in capital
|
1,065,489
|
|
|
—
|
|
|
1,072,671
|
|
|
(1,072,671
|
)
|
|
1,065,489
|
|
|||||
Retained earnings (deficit)
|
375,977
|
|
|
(255
|
)
|
|
377,393
|
|
|
(377,138
|
)
|
|
375,977
|
|
|||||
Shareholders’ equity attributable to shareholders
|
1,451,913
|
|
|
(255
|
)
|
|
1,451,315
|
|
|
(1,451,060
|
)
|
|
1,451,913
|
|
|||||
Non-controlling interests
|
—
|
|
|
—
|
|
|
100,135
|
|
|
—
|
|
|
100,135
|
|
|||||
Total shareholders’ equity
|
1,451,913
|
|
|
(255
|
)
|
|
1,551,450
|
|
|
(1,451,060
|
)
|
|
1,552,048
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,453,139
|
|
|
$
|
263
|
|
|
$
|
2,850,238
|
|
|
$
|
(1,451,060
|
)
|
|
$
|
2,852,580
|
|
CONSOLIDATING STATEMENT OF INCOME LOSS
|
|||||||||||||||||||
For the year ended December 31, 2015
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
702,414
|
|
|
$
|
—
|
|
|
$
|
702,414
|
|
Gross premiums ceded
|
—
|
|
|
—
|
|
|
(1,876
|
)
|
|
—
|
|
|
(1,876
|
)
|
|||||
Net premiums written
|
—
|
|
|
—
|
|
|
700,538
|
|
|
—
|
|
|
700,538
|
|
|||||
Change in net unearned premium reserves
|
—
|
|
|
—
|
|
|
(97,714
|
)
|
|
—
|
|
|
(97,714
|
)
|
|||||
Net premiums earned
|
—
|
|
|
—
|
|
|
602,824
|
|
|
—
|
|
|
602,824
|
|
|||||
Net investment income (loss)
|
—
|
|
|
—
|
|
|
(28,074
|
)
|
|
—
|
|
|
(28,074
|
)
|
|||||
Equity in losses of subsidiaries
|
(79,053
|
)
|
|
(7,510
|
)
|
|
(25
|
)
|
|
86,588
|
|
|
—
|
|
|||||
Total revenues
|
(79,053
|
)
|
|
(7,510
|
)
|
|
574,725
|
|
|
86,588
|
|
|
574,750
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
—
|
|
|
—
|
|
|
415,191
|
|
|
—
|
|
|
415,191
|
|
|||||
Acquisition costs, net
|
—
|
|
|
—
|
|
|
191,216
|
|
|
—
|
|
|
191,216
|
|
|||||
General and administrative expenses
|
8,337
|
|
|
231
|
|
|
37,465
|
|
|
—
|
|
|
46,033
|
|
|||||
Other expenses
|
—
|
|
|
—
|
|
|
8,614
|
|
|
—
|
|
|
8,614
|
|
|||||
Interest expense
|
—
|
|
|
7,236
|
|
|
—
|
|
|
—
|
|
|
7,236
|
|
|||||
Foreign exchange gains
|
—
|
|
|
—
|
|
|
(3,196
|
)
|
|
—
|
|
|
(3,196
|
)
|
|||||
Total expenses
|
8,337
|
|
|
7,467
|
|
|
649,290
|
|
|
—
|
|
|
665,094
|
|
|||||
Loss before income tax benefit
|
(87,390
|
)
|
|
(14,977
|
)
|
|
(74,565
|
)
|
|
86,588
|
|
|
(90,344
|
)
|
|||||
Income tax benefit
|
—
|
|
|
2,613
|
|
|
292
|
|
|
—
|
|
|
2,905
|
|
|||||
Loss including non-controlling interests
|
(87,390
|
)
|
|
(12,364
|
)
|
|
(74,273
|
)
|
|
86,588
|
|
|
(87,439
|
)
|
|||||
Loss attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|
49
|
|
|||||
Net loss
|
$
|
(87,390
|
)
|
|
$
|
(12,364
|
)
|
|
$
|
(74,224
|
)
|
|
$
|
86,588
|
|
|
$
|
(87,390
|
)
|
CONSOLIDATING STATEMENT OF INCOME (LOSS)
|
|||||||||||||||||||
For the year ended December 31, 2014
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
613,300
|
|
|
$
|
—
|
|
|
$
|
613,300
|
|
Gross premiums ceded
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
(150
|
)
|
|||||
Net premiums written
|
—
|
|
|
—
|
|
|
613,150
|
|
|
—
|
|
|
613,150
|
|
|||||
Change in net unearned premium reserves
|
—
|
|
|
—
|
|
|
(168,618
|
)
|
|
—
|
|
|
(168,618
|
)
|
|||||
Net premiums earned
|
—
|
|
|
—
|
|
|
444,532
|
|
|
—
|
|
|
444,532
|
|
|||||
Net investment income
|
—
|
|
|
—
|
|
|
85,582
|
|
|
—
|
|
|
85,582
|
|
|||||
Equity in earnings of subsidiaries
|
56,238
|
|
|
—
|
|
|
—
|
|
|
(56,238
|
)
|
|
—
|
|
|||||
Total revenues
|
56,238
|
|
|
—
|
|
|
530,114
|
|
|
(56,238
|
)
|
|
530,114
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
—
|
|
|
—
|
|
|
283,147
|
|
|
—
|
|
|
283,147
|
|
|||||
Acquisition costs, net
|
—
|
|
|
—
|
|
|
137,206
|
|
|
—
|
|
|
137,206
|
|
|||||
General and administrative expenses
|
5,843
|
|
|
255
|
|
|
33,910
|
|
|
—
|
|
|
40,008
|
|
|||||
Other expenses
|
—
|
|
|
—
|
|
|
7,395
|
|
|
—
|
|
|
7,395
|
|
|||||
Total expenses
|
5,843
|
|
|
255
|
|
|
461,658
|
|
|
—
|
|
|
467,756
|
|
|||||
Income (loss) before income tax expense
|
50,395
|
|
|
(255
|
)
|
|
68,456
|
|
|
(56,238
|
)
|
|
62,358
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(5,648
|
)
|
|
—
|
|
|
(5,648
|
)
|
|||||
Income (loss) including non-controlling interests
|
50,395
|
|
|
(255
|
)
|
|
62,808
|
|
|
(56,238
|
)
|
|
56,710
|
|
|||||
Income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(6,315
|
)
|
|
—
|
|
|
(6,315
|
)
|
|||||
Net income (loss)
|
$
|
50,395
|
|
|
$
|
(255
|
)
|
|
$
|
56,493
|
|
|
$
|
(56,238
|
)
|
|
$
|
50,395
|
|
CONSOLIDATING STATEMENT OF INCOME
|
|||||||||||||||||||
For the year ended December 31, 2013
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
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
|
—
|
|
|
—
|
|
|
258,125
|
|
|
—
|
|
|
258,125
|
|
|||||
Equity in earnings of subsidiaries
|
228,646
|
|
|
—
|
|
|
—
|
|
|
(228,646
|
)
|
|
—
|
|
|||||
Total revenues
|
228,646
|
|
|
—
|
|
|
478,792
|
|
|
(228,646
|
)
|
|
478,792
|
|
|||||
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
|
|
|||||
Other expenses
|
—
|
|
|
—
|
|
|
4,922
|
|
|
—
|
|
|
4,922
|
|
|||||
Total expenses
|
1,335
|
|
|
—
|
|
|
244,379
|
|
|
—
|
|
|
245,714
|
|
|||||
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
|
|
CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||||||
For the year ended December 31, 2015
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) including non-controlling interests
|
$
|
(87,390
|
)
|
|
$
|
(12,364
|
)
|
|
$
|
(74,273
|
)
|
|
$
|
86,588
|
|
|
$
|
(87,439
|
)
|
Adjustments to reconcile income (loss) including non-controlling interests to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in losses of subsidiaries
|
79,053
|
|
|
7,510
|
|
|
25
|
|
|
(86,588
|
)
|
|
—
|
|
|||||
Share compensation expense
|
542
|
|
|
—
|
|
|
10,329
|
|
|
—
|
|
|
10,871
|
|
|||||
Interest expense on deposit liabilities
|
—
|
|
|
—
|
|
|
6,471
|
|
|
—
|
|
|
6,471
|
|
|||||
Net unrealized loss on investments and derivatives
|
—
|
|
|
—
|
|
|
32,354
|
|
|
—
|
|
|
32,354
|
|
|||||
Net realized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(16,655
|
)
|
|
—
|
|
|
(16,655
|
)
|
|||||
Foreign exchange gains included in net income
|
—
|
|
|
—
|
|
|
(3,196
|
)
|
|
—
|
|
|
(3,196
|
)
|
|||||
Amortization of premium and accretion of discount, net
|
—
|
|
|
157
|
|
|
167
|
|
|
—
|
|
|
324
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
8,768
|
|
|
—
|
|
|
8,768
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
(41,192
|
)
|
|
—
|
|
|
(41,192
|
)
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
(187
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
689
|
|
|
—
|
|
|
689
|
|
|||||
Other assets
|
36
|
|
|
(1,947
|
)
|
|
(6,406
|
)
|
|
—
|
|
|
(8,317
|
)
|
|||||
Interest and dividends receivable, net
|
—
|
|
|
3,055
|
|
|
(7,437
|
)
|
|
—
|
|
|
(4,382
|
)
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
97,901
|
|
|
—
|
|
|
97,901
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
192,433
|
|
|
—
|
|
|
192,433
|
|
|||||
Accounts payable and accrued expenses
|
1,910
|
|
|
(478
|
)
|
|
449
|
|
|
—
|
|
|
1,881
|
|
|||||
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
(2,548
|
)
|
|
—
|
|
|
(2,548
|
)
|
|||||
Amounts due from (to) affiliates
|
1,685
|
|
|
(173
|
)
|
|
(1,512
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash (used in) provided by operating activities
|
(4,164
|
)
|
|
(4,240
|
)
|
|
196,180
|
|
|
—
|
|
|
187,776
|
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(3,360,626
|
)
|
|
—
|
|
|
(3,360,626
|
)
|
|||||
Proceeds from sales of investments
|
—
|
|
|
—
|
|
|
2,829,523
|
|
|
—
|
|
|
2,829,523
|
|
|||||
Purchases of investments to cover short sales
|
—
|
|
|
—
|
|
|
(543,936
|
)
|
|
—
|
|
|
(543,936
|
)
|
|||||
Proceeds from short sales of investments
|
—
|
|
|
—
|
|
|
792,344
|
|
|
—
|
|
|
792,344
|
|
|||||
Change in due to/from brokers, net
|
—
|
|
|
—
|
|
|
(6,377
|
)
|
|
—
|
|
|
(6,377
|
)
|
|||||
Decrease in securities purchased under an agreement to sell
|
—
|
|
|
—
|
|
|
29,852
|
|
|
—
|
|
|
29,852
|
|
|||||
Increase in securities sold under an agreement to repurchase
|
—
|
|
|
—
|
|
|
8,944
|
|
|
—
|
|
|
8,944
|
|
|||||
Change in restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
86,392
|
|
|
—
|
|
|
86,392
|
|
|||||
Contributed capital to subsidiaries
|
(158,000
|
)
|
|
(266,975
|
)
|
|
(25
|
)
|
|
425,000
|
|
|
—
|
|
|||||
Contributed capital from parent and/or subsidiaries
|
—
|
|
|
158,000
|
|
|
267,000
|
|
|
(425,000
|
)
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
(158,000
|
)
|
|
(108,975
|
)
|
|
103,091
|
|
|
—
|
|
|
(163,884
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of common shares, net of costs
|
4,332
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,332
|
|
|||||
Proceeds from issuance of senior notes payable
|
—
|
|
|
113,220
|
|
|
—
|
|
|
—
|
|
|
113,220
|
|
|||||
Increase in deposit liabilities
|
—
|
|
|
—
|
|
|
(65,842
|
)
|
|
—
|
|
|
(65,842
|
)
|
|||||
Non-controlling interest in investment affiliate, net
|
—
|
|
|
—
|
|
|
(24,137
|
)
|
|
—
|
|
|
(24,137
|
)
|
|||||
Non-controlling interest in Catastrophe Fund
|
—
|
|
|
—
|
|
|
(60,032
|
)
|
|
—
|
|
|
(60,032
|
)
|
|||||
Non-controlling interest in Catastrophe Fund Manager
|
—
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
240
|
|
|||||
Dividend received by (paid to) parent
|
158,000
|
|
|
—
|
|
|
(158,000
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
162,332
|
|
|
113,220
|
|
|
(307,771
|
)
|
|
—
|
|
|
(32,219
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
168
|
|
|
5
|
|
|
(8,500
|
)
|
|
—
|
|
|
(8,327
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
140
|
|
|
—
|
|
|
28,594
|
|
|
—
|
|
|
28,734
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
308
|
|
|
$
|
5
|
|
|
$
|
20,094
|
|
|
$
|
—
|
|
|
$
|
20,407
|
|
CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||||||
For the year ended December 31, 2014
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Income including non-controlling interests
|
$
|
50,395
|
|
|
$
|
(255
|
)
|
|
$
|
62,808
|
|
|
$
|
(56,238
|
)
|
|
$
|
56,710
|
|
Adjustments to reconcile income including non-controlling interests to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
(56,238
|
)
|
|
—
|
|
|
—
|
|
|
56,238
|
|
|
—
|
|
|||||
Share compensation expense
|
1,080
|
|
|
—
|
|
|
8,178
|
|
|
—
|
|
|
9,258
|
|
|||||
Interest expense on deposit liabilities
|
—
|
|
|
—
|
|
|
4,346
|
|
|
—
|
|
|
4,346
|
|
|||||
Net unrealized loss on investments and derivatives
|
—
|
|
|
—
|
|
|
85,057
|
|
|
—
|
|
|
85,057
|
|
|||||
Net realized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(193,957
|
)
|
|
—
|
|
|
(193,957
|
)
|
|||||
Amortization of premium and accretion of discount, net
|
—
|
|
|
—
|
|
|
(1,044
|
)
|
|
—
|
|
|
(1,044
|
)
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
(111,886
|
)
|
|
—
|
|
|
(111,886
|
)
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
(64,708
|
)
|
|
—
|
|
|
(64,708
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
8,463
|
|
|
—
|
|
|
8,463
|
|
|||||
Other assets
|
120
|
|
|
(666
|
)
|
|
432
|
|
|
—
|
|
|
(114
|
)
|
|||||
Interest and dividends receivable, net
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
168,622
|
|
|
—
|
|
|
168,622
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
143,031
|
|
|
—
|
|
|
143,031
|
|
|||||
Accounts payable and accrued expenses
|
984
|
|
|
518
|
|
|
(873
|
)
|
|
—
|
|
|
629
|
|
|||||
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
18,061
|
|
|
—
|
|
|
18,061
|
|
|||||
Amounts due from (to) affiliates
|
(5,094
|
)
|
|
403
|
|
|
4,691
|
|
|
—
|
|
|
—
|
|
|||||
Net cash (used in) provided by operating activities
|
(8,753
|
)
|
|
—
|
|
|
131,183
|
|
|
—
|
|
|
122,430
|
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(3,114,906
|
)
|
|
—
|
|
|
(3,114,906
|
)
|
|||||
Proceeds from sales of investments
|
—
|
|
|
—
|
|
|
2,857,404
|
|
|
—
|
|
|
2,857,404
|
|
|||||
Purchases of investments to cover short sales
|
—
|
|
|
—
|
|
|
(232,568
|
)
|
|
—
|
|
|
(232,568
|
)
|
|||||
Proceeds from short sales of investments
|
—
|
|
|
—
|
|
|
278,569
|
|
|
—
|
|
|
278,569
|
|
|||||
Change in due to/from brokers, net
|
—
|
|
|
—
|
|
|
307,884
|
|
|
—
|
|
|
307,884
|
|
|||||
Increase in securities purchased under agreement to sell
|
—
|
|
|
—
|
|
|
8,294
|
|
|
—
|
|
|
8,294
|
|
|||||
Change in restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
(223,730
|
)
|
|
—
|
|
|
(223,730
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
—
|
|
|
(119,053
|
)
|
|
—
|
|
|
(119,053
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of common shares, net of costs
|
599
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
599
|
|
|||||
Increase in deposit liabilities
|
—
|
|
|
—
|
|
|
18,048
|
|
|
—
|
|
|
18,048
|
|
|||||
Non-controlling interest in investment affiliate, net
|
—
|
|
|
—
|
|
|
(31,066
|
)
|
|
—
|
|
|
(31,066
|
)
|
|||||
Non-controlling interest in Catastrophe Fund
|
—
|
|
|
—
|
|
|
6,151
|
|
|
—
|
|
|
6,151
|
|
|||||
Dividend received by (paid to) parent
|
8,000
|
|
|
—
|
|
|
(8,000
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
8,599
|
|
|
—
|
|
|
(14,867
|
)
|
|
—
|
|
|
(6,268
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(154
|
)
|
|
—
|
|
|
(2,737
|
)
|
|
—
|
|
|
(2,891
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
294
|
|
|
—
|
|
|
31,331
|
|
|
—
|
|
|
31,625
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
140
|
|
|
$
|
—
|
|
|
$
|
28,594
|
|
|
$
|
—
|
|
|
$
|
28,734
|
|
CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||||||
For the year ended December 31, 2013
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Income including non-controlling interests
|
$
|
227,311
|
|
|
$
|
—
|
|
|
$
|
234,413
|
|
|
$
|
(228,646
|
)
|
|
$
|
233,078
|
|
Adjustments to reconcile income including non-controlling interests to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
(228,646
|
)
|
|
—
|
|
|
—
|
|
|
228,646
|
|
|
—
|
|
|||||
Share compensation expense
|
—
|
|
|
—
|
|
|
9,800
|
|
|
—
|
|
|
9,800
|
|
|||||
Interest expense on deposit liabilities
|
—
|
|
|
—
|
|
|
4,271
|
|
|
—
|
|
|
4,271
|
|
|||||
Net unrealized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(78,490
|
)
|
|
—
|
|
|
(78,490
|
)
|
|||||
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 to (from) affiliates
|
2,373
|
|
|
—
|
|
|
(2,373
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by operating activities
|
287
|
|
|
—
|
|
|
19,422
|
|
|
—
|
|
|
19,709
|
|
|||||
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
|
|
|||||
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
|
)
|
|
—
|
|
|
(140,887
|
)
|
|
—
|
|
|
(427,144
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of common shares, net of costs
|
286,095
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
286,095
|
|
|||||
Increase in deposit liabilities
|
—
|
|
|
—
|
|
|
65,769
|
|
|
—
|
|
|
65,769
|
|
|||||
Non-controlling interest in investment affiliate, net
|
—
|
|
|
—
|
|
|
27,867
|
|
|
—
|
|
|
27,867
|
|
|||||
Non-controlling interest in Catastrophe Fund
|
—
|
|
|
—
|
|
|
25,324
|
|
|
—
|
|
|
25,324
|
|
|||||
Net cash provided by financing activities
|
286,095
|
|
|
—
|
|
|
118,960
|
|
|
—
|
|
|
405,055
|
|
|||||
Net (decrease) increase in cash and cash equivalents
|
125
|
|
|
—
|
|
|
(2,505
|
)
|
|
—
|
|
|
(2,380
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
169
|
|
|
—
|
|
|
33,836
|
|
|
—
|
|
|
34,005
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
294
|
|
|
$
|
—
|
|
|
$
|
31,331
|
|
|
$
|
—
|
|
|
$
|
31,625
|
|
|
Three months ended
|
||||||||||||||
|
December 31,
2015 |
|
September 30,
2015 |
|
June 30,
2015 |
|
March 31,
2015 |
||||||||
|
($ in thousands, except per share and share amounts)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
$
|
99,155
|
|
|
$
|
205,583
|
|
|
$
|
184,342
|
|
|
$
|
213,334
|
|
Gross premiums ceded
|
(24
|
)
|
|
(375
|
)
|
|
(1,425
|
)
|
|
(52
|
)
|
||||
Net premiums written
|
99,131
|
|
|
205,208
|
|
|
182,917
|
|
|
213,282
|
|
||||
Change in net unearned premium reserves
|
35,235
|
|
|
3,597
|
|
|
(62,339
|
)
|
|
(74,207
|
)
|
||||
Net premiums earned
|
134,366
|
|
|
208,805
|
|
|
120,578
|
|
|
139,075
|
|
||||
Net investment income (loss)
|
61,553
|
|
|
(193,156
|
)
|
|
38,611
|
|
|
64,918
|
|
||||
Total revenues
|
195,919
|
|
|
15,649
|
|
|
159,189
|
|
|
203,993
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
98,855
|
|
|
158,537
|
|
|
76,053
|
|
|
81,746
|
|
||||
Acquisition costs, net
|
38,552
|
|
|
50,509
|
|
|
47,498
|
|
|
54,657
|
|
||||
General and administrative expenses
|
10,236
|
|
|
9,822
|
|
|
14,267
|
|
|
11,708
|
|
||||
Other expenses
|
2,928
|
|
|
670
|
|
|
2,315
|
|
|
2,701
|
|
||||
Interest expense
|
2,074
|
|
|
2,074
|
|
|
2,052
|
|
|
1,036
|
|
||||
Foreign exchange (gains) losses
|
(2,396
|
)
|
|
(746
|
)
|
|
139
|
|
|
(193
|
)
|
||||
Total expenses
|
150,249
|
|
|
220,866
|
|
|
142,324
|
|
|
151,655
|
|
||||
Income (loss) before income tax (expense) benefit
|
45,670
|
|
|
(205,217
|
)
|
|
16,865
|
|
|
52,338
|
|
||||
Income tax (expense) benefit
|
(2,863
|
)
|
|
7,781
|
|
|
(708
|
)
|
|
(1,305
|
)
|
||||
Income (loss) including non-controlling interests
|
42,807
|
|
|
(197,436
|
)
|
|
16,157
|
|
|
51,033
|
|
||||
(Income) loss attributable to non-controlling interests
|
(614
|
)
|
|
1,721
|
|
|
(495
|
)
|
|
(563
|
)
|
||||
Net income (loss)
|
$
|
42,193
|
|
|
$
|
(195,715
|
)
|
|
$
|
15,662
|
|
|
$
|
50,470
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.40
|
|
|
$
|
(1.88
|
)
|
|
$
|
0.15
|
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.39
|
|
|
$
|
(1.88
|
)
|
|
$
|
0.15
|
|
|
$
|
0.47
|
|
Weighted average number of ordinary shares used in the determination of earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
104,217,321
|
|
|
104,117,448
|
|
|
103,927,761
|
|
|
103,753,065
|
|
||||
Diluted
|
106,635,451
|
|
|
104,117,448
|
|
|
106,696,874
|
|
|
106,144,183
|
|
|
|
Three months ended
|
||||||||||||||
|
|
December 31,
2014 |
|
September 30,
2014 |
|
June 30,
2014 |
|
March 31,
2014 |
||||||||
|
|
($ in thousands, except per share and share amounts)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
253,802
|
|
|
$
|
126,403
|
|
|
$
|
145,508
|
|
|
$
|
87,587
|
|
Gross premiums ceded
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
||||
Net premiums written
|
|
253,802
|
|
|
126,253
|
|
|
145,508
|
|
|
87,587
|
|
||||
Change in net unearned premium reserves
|
|
(70,230
|
)
|
|
(17,305
|
)
|
|
(66,758
|
)
|
|
(14,325
|
)
|
||||
Net premiums earned
|
|
183,572
|
|
|
108,948
|
|
|
78,750
|
|
|
73,262
|
|
||||
Net investment income (loss)
|
|
(6,490
|
)
|
|
1,552
|
|
|
40,485
|
|
|
50,035
|
|
||||
Total revenues
|
|
177,082
|
|
|
110,500
|
|
|
119,235
|
|
|
123,297
|
|
||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
|
132,364
|
|
|
60,115
|
|
|
44,409
|
|
|
46,259
|
|
||||
Acquisition costs, net
|
|
43,875
|
|
|
38,317
|
|
|
29,583
|
|
|
25,431
|
|
||||
General and administrative expenses
|
|
10,310
|
|
|
10,124
|
|
|
9,549
|
|
|
10,025
|
|
||||
Other expenses
|
|
2,606
|
|
|
2,982
|
|
|
1,020
|
|
|
787
|
|
||||
Total expenses
|
|
189,155
|
|
|
111,538
|
|
|
84,561
|
|
|
82,502
|
|
||||
Income (loss) before income tax expense
|
|
(12,073
|
)
|
|
(1,038
|
)
|
|
34,674
|
|
|
40,795
|
|
||||
Income tax expense
|
|
(1,731
|
)
|
|
(1,542
|
)
|
|
(2,375
|
)
|
|
—
|
|
||||
Net income (loss) including non-controlling interests
|
|
(13,804
|
)
|
|
(2,580
|
)
|
|
32,299
|
|
|
40,795
|
|
||||
Income attributable to non-controlling interests
|
|
(875
|
)
|
|
(3,417
|
)
|
|
(1,007
|
)
|
|
(1,016
|
)
|
||||
Net income (loss)
|
|
$
|
(14,679
|
)
|
|
$
|
(5,997
|
)
|
|
$
|
31,292
|
|
|
$
|
39,779
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.14
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.30
|
|
|
$
|
0.38
|
|
Diluted
|
|
$
|
(0.14
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
0.29
|
|
|
$
|
0.37
|
|
Weighted average number of common shares used in the determination of earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
103,324,616
|
|
|
103,295,920
|
|
|
103,264,616
|
|
|
103,264,616
|
|
||||
Diluted
|
|
103,324,616
|
|
|
103,295,920
|
|
|
106,433,881
|
|
|
103,413,580
|
|
|
|
Cost
|
|
Fair value
|
|
Balance sheet value
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Equity securities
|
|
$
|
1,129,452
|
|
|
$
|
1,201,623
|
|
|
$
|
1,201,623
|
|
Private common equity securities
|
|
7,926
|
|
|
5,276
|
|
|
5,276
|
|
|||
Private preferred equity securities
|
|
18,991
|
|
|
24,178
|
|
|
24,178
|
|
|||
Total equities
|
|
1,156,369
|
|
|
1,231,077
|
|
|
1,231,077
|
|
|||
Asset-backed securities
|
|
500,902
|
|
|
494,723
|
|
|
494,723
|
|
|||
Bank debts
|
|
8,123
|
|
|
9,818
|
|
|
9,818
|
|
|||
Corporate bonds
|
|
107,540
|
|
|
83,190
|
|
|
83,190
|
|
|||
U.S. Treasury securities
|
|
188,993
|
|
|
186,471
|
|
|
186,471
|
|
|||
Sovereign debt
|
|
244,095
|
|
|
260,045
|
|
|
260,045
|
|
|||
Total debt securities
|
|
1,049,653
|
|
|
1,034,247
|
|
|
1,034,247
|
|
|||
Investments in limited partnerships
|
|
9,220
|
|
|
7,799
|
|
|
7,799
|
|
|||
Options
|
|
6,750
|
|
|
8,911
|
|
|
8,911
|
|
|||
Rights and warrants
|
|
2,005
|
|
|
416
|
|
|
416
|
|
|||
Trade claims
|
|
2,453
|
|
|
8,329
|
|
|
8,329
|
|
|||
Investment in Kiskadee Fund
|
|
25,000
|
|
|
26,465
|
|
|
26,465
|
|
|||
Total other investments
|
|
45,428
|
|
|
51,920
|
|
|
51,920
|
|
|||
Total investments
|
|
$
|
2,251,450
|
|
|
$
|
2,317,244
|
|
|
$
|
2,317,244
|
|
|
As of and for the year ended December 31, 2015
|
|||||||||||||||||||||||||||||
|
Deferred acquisition costs, net
|
Loss and loss adjustment expense reserves
|
Unearned premium
|
Net premiums earned
|
Net investment income (loss)
|
Other Expenses
|
Loss and loss adjustment expenses incurred, net
|
Amortization of deferred acquisition costs, net
|
Other operating expenses
|
Net premiums written
|
||||||||||||||||||||
Property and Casualty Reinsurance
|
$
|
197,093
|
|
$
|
466,047
|
|
$
|
531,710
|
|
$
|
602,816
|
|
$
|
(10,810
|
)
|
$
|
8,614
|
|
$
|
415,041
|
|
$
|
191,217
|
|
$
|
24,815
|
|
$
|
700,582
|
|
Catastrophe Risk Management
|
—
|
|
—
|
|
—
|
|
8
|
|
69
|
|
—
|
|
150
|
|
(1
|
)
|
447
|
|
(44
|
)
|
||||||||||
Corporate
|
—
|
|
—
|
|
—
|
|
—
|
|
(17,333
|
)
|
—
|
|
—
|
|
—
|
|
20,771
|
|
—
|
|
||||||||||
|
$
|
197,093
|
|
$
|
466,047
|
|
$
|
531,710
|
|
$
|
602,824
|
|
$
|
(28,074
|
)
|
$
|
8,614
|
|
$
|
415,191
|
|
$
|
191,216
|
|
$
|
46,033
|
|
$
|
700,538
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
As of and for the year ended December 31, 2014
|
|||||||||||||||||||||||||||||
|
Deferred acquisition costs, net
|
Loss and loss adjustment expense reserves
|
Unearned premium
|
Net premiums earned
|
Net investment income
|
Other Expenses
|
Loss and loss adjustment expenses incurred, net
|
Amortization of deferred acquisition costs, net
|
Other operating expenses
|
Net premiums written
|
||||||||||||||||||||
Property and Casualty Reinsurance
|
$
|
155,891
|
|
$
|
277,285
|
|
$
|
433,757
|
|
$
|
432,297
|
|
$
|
11,305
|
|
$
|
7,395
|
|
$
|
283,180
|
|
$
|
136,154
|
|
$
|
22,515
|
|
$
|
601,155
|
|
Catastrophe Risk Management
|
10
|
|
77
|
|
52
|
|
12,235
|
|
1,227
|
|
—
|
|
(33
|
)
|
1,052
|
|
3,113
|
|
11,995
|
|
||||||||||
Corporate
|
—
|
|
—
|
|
—
|
|
—
|
|
73,050
|
|
—
|
|
—
|
|
—
|
|
14,380
|
|
—
|
|
||||||||||
|
$
|
155,901
|
|
$
|
277,362
|
|
$
|
433,809
|
|
$
|
444,532
|
|
$
|
85,582
|
|
$
|
7,395
|
|
$
|
283,147
|
|
$
|
137,206
|
|
$
|
40,008
|
|
$
|
613,150
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
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
|
Other Expenses
|
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
|
|
$
|
26,953
|
|
$
|
4,922
|
|
$
|
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
|
—
|
|
—
|
|
—
|
|
—
|
|
226,751
|
|
—
|
|
—
|
|
—
|
|
7,346
|
|
—
|
|
||||||||||
|
$
|
91,193
|
|
$
|
134,331
|
|
$
|
265,187
|
|
$
|
220,667
|
|
$
|
258,125
|
|
$
|
4,922
|
|
$
|
139,812
|
|
$
|
67,944
|
|
$
|
33,036
|
|
$
|
391,962
|
|
|
Direct gross premiums written
|
|
Ceded to other companies
|
|
Assumed from other companies
|
|
Net amount
|
|
Percentage of amount assumed to net
|
|||||||||
Year ended December 31, 2015
|
$
|
—
|
|
|
$
|
1,876
|
|
|
$
|
702,414
|
|
|
$
|
700,538
|
|
|
100
|
%
|
Year ended December 31, 2014
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
613,300
|
|
|
$
|
613,150
|
|
|
100
|
%
|
Year ended December 31, 2013
|
$
|
—
|
|
|
$
|
9,975
|
|
|
$
|
401,937
|
|
|
$
|
391,962
|
|
|
98
|
%
|
|
Name
|
|
Steven Fass
|
|
Rafe de la Gueronniere
|
|
Mary H. Hennessy
|
|
Mark Parkin
|
|
Gary D. Walters
|
|
|
|
|
|
|
|
|
|
Period from October 6, 2011
|
||||||||||
|
Years ended December 31,
|
|
(date of incorporation) to
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
December 31, 2011
|
||||||||||
Fixed charges:
|
($ in thousands)
|
|
|
||||||||||||||||
Interest expense on deposit contracts and certain reinsurance contracts
|
$
|
8,614
|
|
|
$
|
7,395
|
|
|
$
|
4,922
|
|
|
$
|
446
|
|
|
$
|
—
|
|
Interest expense on senior notes
|
7,236
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed charges
|
$
|
15,850
|
|
|
$
|
7,395
|
|
|
$
|
4,922
|
|
|
$
|
446
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income tax expense (benefit)
|
$
|
(87,439
|
)
|
|
$
|
56,710
|
|
|
$
|
233,078
|
|
|
$
|
100,617
|
|
|
$
|
(1,130
|
)
|
Add: Fixed charges
|
15,850
|
|
|
7,395
|
|
|
4,922
|
|
|
446
|
|
|
—
|
|
|||||
Less: Net (income) loss from non-controlling interests
|
49
|
|
|
(6,315
|
)
|
|
(5,767
|
)
|
|
(1,216
|
)
|
|
—
|
|
|||||
Total earnings available for fixed charges
|
$
|
(71,540
|
)
|
|
$
|
57,790
|
|
|
$
|
232,233
|
|
|
$
|
99,847
|
|
|
$
|
(1,130
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
—
|
|
(1)
|
7.8
|
|
|
47.2
|
|
|
223.9
|
|
|
N/A
|
|
|
|
|
Subsidiary
|
|
Jurisdiction of Incorporation/Formation
|
|
|
|
Third Point Reinsurance Company Ltd.
|
|
Bermuda
|
Third Point Re Marketing (UK) Ltd.
|
|
United Kingdom
|
Third Point Reinsurance Investment Management Ltd.
|
|
Bermuda
|
Third Point Reinsurance (USA) Ltd.
|
|
Bermuda
|
Third Point Re (UK) Holdings Ltd.
|
|
United Kingdom
|
Third Point Re (USA) Holdings Inc.
|
|
Delaware
|
(1)
|
Registration Statement (Form S-3 Nos. 333-201598 and 333-201598-01) of Third Point Reinsurance Ltd. and Third Point Re (USA) Holdings Inc., and
|
(2)
|
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;
|
Signature
|
Title
|
Date
|
/s/ Christopher L. Collins
Christopher L. Collins
|
Director
|
February 26, 2016
|
/s/ Steven E. Fass
Steven E. Fass
|
Director
|
February 26, 2016
|
/s/ Rafe de la Gueronniere
Rafe de la Gueronniere
|
Director
|
February 26, 2016
|
/s/ Mary R. Hennessy
Mary R. Hennessy
|
Director
|
February 26, 2016
|
/s/ Mark Parkin
Mark Parkin
|
Director
|
February 26, 2016
|
/s/ William Spiegel
William Spiegel
|
Director
|
February 26, 2016
|
/s/ Joshua L. Targoff
Joshua L. Targoff
|
Director
|
February 26, 2016
|
/s/ Gary D. Walters
Gary D. Walters
|
Director
|
February 26, 2016
|
1.
|
I have reviewed this Annual Report on Form 10-K of Third Point Reinsurance Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Not applicable;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John R. Berger
|
|
John R. Berger
|
|
Chairman of the Board and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Third Point Reinsurance Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Not applicable;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Christopher S. Coleman
|
|
Christopher S. Coleman
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
(1)
|
the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John R. Berger
|
|
John R. Berger
|
|
Chairman of the Board and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
(1)
|
the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Christopher S. Coleman
|
|
Christopher S. Coleman
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|