x
|
Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2016
|
|
or
|
¨
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
|
Bermuda
|
|
98-1039994
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
3 Waterloo Lane
Pembroke, Bermuda, HM 08
|
|
(441) 542 3300
|
(Address of principal executive offices and zip code)
|
|
(Registrant’s telephone number)
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Shares, $0.10 par value
|
|
New York Stock Exchange
|
Large accelerated filer
|
x
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
|
Page
|
|
|
•
|
fluctuation in results of operations;
|
•
|
more established competitors;
|
•
|
losses exceeding reserves;
|
•
|
downgrades or withdrawal of ratings by rating agencies;
|
•
|
dependence on key executives;
|
•
|
dependence on letter of credit facilities that may not be available on commercially acceptable terms;
|
•
|
dependence on financing available through our investment accounts to secure letters of credit and collateral for reinsurance contracts;
|
•
|
potential inability to pay dividends;
|
•
|
inability to service our indebtedness;
|
•
|
limited cash flow and liquidity due to our indebtedness;
|
•
|
unavailability of capital in the future;
|
•
|
fluctuations in market price of our common shares;
|
•
|
dependence on clients’ evaluations of risks associated with such clients’ insurance underwriting;
|
•
|
suspension or revocation of our reinsurance licenses;
|
•
|
potentially being deemed an investment company under U.S. federal securities law;
|
•
|
potential characterization of Third Point Reinsurance Ltd. and/or Third Point Re as a passive foreign investment company;
|
•
|
future strategic transactions such as acquisitions, dispositions, merger or joint ventures;
|
•
|
dependence on Third Point LLC to implement our investment strategy;
|
•
|
termination by Third Point LLC of our investment management agreements;
|
•
|
risks associated with our investment strategy being greater than those faced by competitors;
|
•
|
increased regulation or scrutiny of alternative investment advisers affecting our reputation;
|
•
|
Third Point Reinsurance Ltd. and/or Third Point Re potentially becoming subject to U.S. federal income taxation;
|
•
|
potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act;
|
•
|
changes in Bermuda or other law and regulation that may have an adverse impact on our operations; and
|
•
|
other risks and factors listed under “Item 1A. Risk Factors” and elsewhere in this Annual Report.
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Amount
|
|
Percentage of Total
|
|
Amount
|
|
Percentage of Total
|
|
Amount
|
|
Percentage of Total
|
|||||||||
|
($ in thousands)
|
|||||||||||||||||||
Property
|
$
|
98,334
|
|
|
15.9
|
%
|
|
$
|
114,215
|
|
|
16.2
|
%
|
|
$
|
106,834
|
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Workers’ Compensation
|
56,069
|
|
|
9.1
|
%
|
|
64,534
|
|
|
9.2
|
%
|
|
76,032
|
|
|
12.4
|
%
|
|||
Auto
|
91,626
|
|
|
14.9
|
%
|
|
156,385
|
|
|
22.3
|
%
|
|
136,246
|
|
|
22.2
|
%
|
|||
General Liability
|
47,911
|
|
|
7.8
|
%
|
|
97,145
|
|
|
13.8
|
%
|
|
54,485
|
|
|
8.9
|
%
|
|||
Professional Liability
|
17,444
|
|
|
2.8
|
%
|
|
9,000
|
|
|
1.3
|
%
|
|
—
|
|
|
—
|
%
|
|||
Casualty
|
213,050
|
|
|
34.6
|
%
|
|
327,064
|
|
|
46.6
|
%
|
|
266,763
|
|
|
43.5
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Agriculture
|
—
|
|
|
—
|
%
|
|
(1
|
)
|
|
—
|
%
|
|
110
|
|
|
—
|
%
|
|||
Credit & Financial Lines
|
118,707
|
|
|
19.2
|
%
|
|
62,923
|
|
|
9.0
|
%
|
|
10,387
|
|
|
1.7
|
%
|
|||
Multi-line
|
187,283
|
|
|
30.3
|
%
|
|
198,257
|
|
|
28.2
|
%
|
|
217,211
|
|
|
35.4
|
%
|
|||
Specialty
|
305,990
|
|
|
49.5
|
%
|
|
261,179
|
|
|
37.2
|
%
|
|
227,708
|
|
|
37.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total property and casualty reinsurance
|
617,374
|
|
|
100.0
|
%
|
|
702,458
|
|
|
100.0
|
%
|
|
601,305
|
|
|
98.0
|
%
|
|||
Catastrophe risk management
|
—
|
|
|
—
|
%
|
|
(44
|
)
|
|
—
|
%
|
|
11,995
|
|
|
2.0
|
%
|
|||
|
$
|
617,374
|
|
|
100.0
|
%
|
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
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.
|
•
|
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.
|
•
|
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.
|
•
|
Composition of Investments
: At least 60% of the investment portfolio will be held in debt or equity securities (including swaps) of publicly traded companies (or their subsidiaries) and governments of 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 Third Point Re USA have a reasonable expectation that it can meet any of its liabilities as they become due. We review the liquidity of the portfolio on a periodic basis.
|
•
|
Net Exposure Limits
: The net position (long positions less short positions) may not exceed 1.5 times net asset value for more than 10 trading days in any 30-trading day period.
|
•
|
a material violation of applicable law relating to Third Point LLC’s investment related business;
|
•
|
Third Point LLC’s fraud, gross negligence, willful misconduct or reckless disregard of its obligations under the Agreement;
|
•
|
a material breach by Third Point LLC of our investment guidelines or any other material breach of the Agreement, which, in either case, if such breach is reasonably capable of being cured, 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 investment related 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 relating to Third Point LLC’s investment related business; 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.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Management fees - Third Point LLC
|
$
|
7,110
|
|
|
$
|
6,362
|
|
|
$
|
5,037
|
|
Management fees - Founders (1)
|
35,321
|
|
|
36,053
|
|
|
28,544
|
|
|||
Performance fees - Third Point Advisors LLC
|
17,276
|
|
|
862
|
|
|
19,935
|
|
|||
|
$
|
59,707
|
|
|
$
|
43,277
|
|
|
$
|
53,516
|
|
|
2016
|
|
2015
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Long/Short Equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer
|
7
|
%
|
|
—
|
%
|
|
7
|
%
|
|
15
|
%
|
|
(3
|
)%
|
|
12
|
%
|
Energy & Utility
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
|
—
|
%
|
|
(1
|
)%
|
|
(1
|
)%
|
Financial
|
10
|
%
|
|
(1
|
)%
|
|
9
|
%
|
|
2
|
%
|
|
(1
|
)%
|
|
1
|
%
|
Healthcare
|
16
|
%
|
|
(1
|
)%
|
|
15
|
%
|
|
30
|
%
|
|
(3
|
)%
|
|
27
|
%
|
Industries & Commodities
|
16
|
%
|
|
(1
|
)%
|
|
15
|
%
|
|
17
|
%
|
|
(4
|
)%
|
|
13
|
%
|
Technology, Media and Telecommunications
|
10
|
%
|
|
(3
|
)%
|
|
7
|
%
|
|
5
|
%
|
|
(3
|
)%
|
|
2
|
%
|
Market Hedges
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
|
3
|
%
|
|
(9
|
)%
|
|
(6
|
)%
|
Total Long/Short Equity
|
63
|
%
|
|
(6
|
)%
|
|
57
|
%
|
|
72
|
%
|
|
(24
|
)%
|
|
48
|
%
|
Credit
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Distressed
|
3
|
%
|
|
—
|
%
|
|
3
|
%
|
|
1
|
%
|
|
—
|
%
|
|
1
|
%
|
Performing
|
10
|
%
|
|
(4
|
)%
|
|
6
|
%
|
|
6
|
%
|
|
(11
|
)%
|
|
(5
|
)%
|
Government
|
6
|
%
|
|
—
|
%
|
|
6
|
%
|
|
7
|
%
|
|
(1
|
)%
|
|
6
|
%
|
Asset Backed Securities (1)
|
12
|
%
|
|
(3
|
)%
|
|
9
|
%
|
|
24
|
%
|
|
(3
|
)%
|
|
21
|
%
|
Total Credit
|
31
|
%
|
|
(7
|
)%
|
|
24
|
%
|
|
38
|
%
|
|
(15
|
)%
|
|
23
|
%
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Risk Arbitrage
|
9
|
%
|
|
—
|
%
|
|
9
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Macro
|
1
|
%
|
|
(17
|
)%
|
|
(16
|
)%
|
|
1
|
%
|
|
(6
|
)%
|
|
(5
|
)%
|
Private (2)
|
3
|
%
|
|
—
|
%
|
|
3
|
%
|
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
Total Other
|
13
|
%
|
|
(17
|
)%
|
|
(4
|
)%
|
|
3
|
%
|
|
(6
|
)%
|
|
(3
|
)%
|
|
107
|
%
|
|
(30
|
)%
|
|
77
|
%
|
|
113
|
%
|
|
(45
|
)%
|
|
68
|
%
|
|
2016
|
|
2015
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Americas
|
98
|
%
|
|
(10
|
)%
|
|
88
|
%
|
|
103
|
%
|
|
(30
|
)%
|
|
73
|
%
|
Europe, Middle East and Africa
|
6
|
%
|
|
(11
|
)%
|
|
(5
|
)%
|
|
6
|
%
|
|
(10
|
)%
|
|
(4
|
)%
|
Asia
|
3
|
%
|
|
(9
|
)%
|
|
(6
|
)%
|
|
4
|
%
|
|
(5
|
)%
|
|
(1
|
)%
|
|
107
|
%
|
|
(30
|
)%
|
|
77
|
%
|
|
113
|
%
|
|
(45
|
)%
|
|
68
|
%
|
|
2016
|
|
2015
|
|
2014
|
|||
Long/short equities
|
(1.4
|
)%
|
|
(3.3
|
)%
|
|
2.7
|
%
|
Credit
|
6.0
|
%
|
|
2
|
%
|
|
3
|
%
|
Other
|
(0.4
|
)%
|
|
(0.3
|
)%
|
|
(0.6
|
)%
|
Net investment return on investments managed by Third Point LLC
|
4.2
|
%
|
|
(1.6
|
)%
|
|
5.1
|
%
|
|
|
|
|
|
|
|||
S&P 500
|
12.0
|
%
|
|
1.4
|
%
|
|
13.7
|
%
|
(1)
|
Past performance is not necessarily indicative of future results.
|
•
|
Our investment accounts include collateral accounts securing letters of credit and reinsurance trust accounts securing various reinsurance contract obligations. These collateral assets include cash and cash equivalents and government securities and may be invested in foreign currencies other than U.S. dollar. The unrealized gains and losses on these investments, net investment income from the interest earned as well as foreign exchange gains and losses on these assets will contribute to differences in our returns compared to other funds that Third Point LLC manages.
|
•
|
Our investment guidelines contain restrictions on our ability to investment in private securities as compared to the investment guidelines of other funds that Third Point LLC manages. Our ability to invest in private securities is subject to approval by the Investment and Finance Committee of the Board of Directors. As a result, we may have different exposures to certain private investments compared to other funds that Third Point LLC manages.
|
•
|
We invest in certain securities whereby Third Point LLC has a board position in the company or may otherwise be restricted from trading in the particular security that can prohibit Third Point LLC from re-balancing our investment accounts, which may result in different returns in our investment accounts compared to other funds that Third Point LLC manages.
|
•
|
the performance of our investment portfolio;
|
•
|
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; and
|
•
|
our ability to assess and integrate our risk management strategy properly.
|
•
|
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 1.5% annually, 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.
|
•
|
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
|
2016
|
|
|
|
1st Quarter
|
$12.95
|
|
$10.48
|
2nd Quarter
|
$11.96
|
|
$10.81
|
3rd Quarter
|
$13.02
|
|
$11.48
|
4th Quarter
|
$12.65
|
|
$11.30
|
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
|
|
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
|
9,596,993
|
|
|
$
|
13.64
|
|
|
9,418,538
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
n/a
|
|
|
—
|
|
|
Total
|
9,596,993
|
|
|
$
|
13.64
|
|
|
9,418,538
|
|
|
2013
|
2014
|
2015
|
2016
|
|||||||||||||||||||||||||||||||||||||||||
|
15-Aug
|
30-Sep
|
31-Dec
|
31-Mar
|
30-Jun
|
30-Sep
|
31-Dec
|
31-Mar
|
30-Jun
|
30-Sep
|
31-Dec
|
31-Mar
|
30-Jun
|
30-Sep
|
31-Dec
|
||||||||||||||||||||||||||||||
t
TPRE
|
$
|
100.00
|
|
$
|
115.92
|
|
$
|
148.24
|
|
$
|
126.80
|
|
$
|
122.08
|
|
$
|
116.40
|
|
$
|
115.97
|
|
$
|
113.20
|
|
$
|
118.00
|
|
$
|
107.60
|
|
$
|
107.28
|
|
$
|
90.96
|
|
$
|
93.76
|
|
$
|
96.00
|
|
$
|
92.40
|
|
■S&P 500
|
$
|
100.00
|
|
$
|
101.22
|
|
$
|
111.26
|
|
$
|
112.70
|
|
$
|
117.99
|
|
$
|
118.72
|
|
$
|
123.93
|
|
$
|
124.47
|
|
$
|
124.18
|
|
$
|
115.57
|
|
$
|
123.03
|
|
$
|
123.98
|
|
$
|
126.34
|
|
$
|
130.51
|
|
$
|
134.76
|
|
p
Dow Jones P&C
|
$
|
100.00
|
|
$
|
102.60
|
|
$
|
110.31
|
|
$
|
106.50
|
|
$
|
110.87
|
|
$
|
110.30
|
|
$
|
121.12
|
|
$
|
122.76
|
|
$
|
119.21
|
|
$
|
121.67
|
|
$
|
129.63
|
|
$
|
133.73
|
|
$
|
138.76
|
|
$
|
137.02
|
|
$
|
149.01
|
|
1.
|
The above graph assumes that the value of the investment was $100 on August 15, 2013.
|
2.
|
This graph is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference in any filing by us under the Securities Act of 1933 or the Securities and Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
($ in thousands, except share and per share data)
|
||||||||||||||||||
Selected Statement of Income (Loss) Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums written
|
$
|
615,049
|
|
|
$
|
700,538
|
|
|
$
|
613,150
|
|
|
$
|
391,962
|
|
|
$
|
190,374
|
|
Net premiums earned
|
590,190
|
|
|
602,824
|
|
|
444,532
|
|
|
220,667
|
|
|
96,481
|
|
|||||
Net investment income (loss)
|
98,825
|
|
|
(28,074
|
)
|
|
85,582
|
|
|
258,125
|
|
|
136,868
|
|
|||||
Loss and loss adjustment expenses incurred, net
|
395,932
|
|
|
415,191
|
|
|
283,147
|
|
|
139,812
|
|
|
80,306
|
|
|||||
Acquisition costs, net
|
222,150
|
|
|
191,216
|
|
|
137,206
|
|
|
67,944
|
|
|
24,604
|
|
|||||
General and administrative expenses
|
39,367
|
|
|
46,033
|
|
|
40,008
|
|
|
33,036
|
|
|
27,376
|
|
|||||
Other expenses
|
8,387
|
|
|
8,614
|
|
|
7,395
|
|
|
4,922
|
|
|
446
|
|
|||||
Interest expense
|
8,231
|
|
|
7,236
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange gains
|
19,521
|
|
|
3,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Income tax (expense) benefit
|
(5,593
|
)
|
|
2,905
|
|
|
(5,648
|
)
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
27,635
|
|
|
$
|
(93,782
|
)
|
|
$
|
50,395
|
|
|
$
|
227,311
|
|
|
$
|
99,401
|
|
Earnings (loss) per share (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.26
|
|
|
$
|
(0.84
|
)
|
|
$
|
0.48
|
|
|
$
|
2.58
|
|
|
$
|
1.26
|
|
Diluted
|
$
|
0.26
|
|
|
$
|
(0.84
|
)
|
|
$
|
0.47
|
|
|
$
|
2.54
|
|
|
$
|
1.26
|
|
Property and Casualty Reinsurance Segment - Selected Ratios (2):
|
|||||||||||||||||||
Loss ratio
|
67.1
|
%
|
|
68.9
|
%
|
|
65.5
|
%
|
|
65.7
|
%
|
|
83.2
|
%
|
|||||
Acquisition cost ratio
|
37.6
|
%
|
|
31.7
|
%
|
|
31.5
|
%
|
|
31.5
|
%
|
|
25.5
|
%
|
|||||
Composite ratio
|
104.7
|
%
|
|
100.6
|
%
|
|
97.0
|
%
|
|
97.2
|
%
|
|
108.7
|
%
|
|||||
General and administrative expense ratio
|
3.8
|
%
|
|
4.1
|
%
|
|
5.2
|
%
|
|
10.3
|
%
|
|
21.0
|
%
|
|||||
Combined ratio
|
108.5
|
%
|
|
104.7
|
%
|
|
102.2
|
%
|
|
107.5
|
%
|
|
129.7
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net investment return on investments managed by TP LLC (3)
|
4.2
|
%
|
|
(1.6
|
)%
|
|
5.1
|
%
|
|
23.9
|
%
|
|
17.7%
|
(1)
|
See
Note 2
to our audited consolidated financial statements included elsewhere in this Annual Report 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
to our audited consolidated financial statements included elsewhere in this Annual Report. 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.
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
($ in thousands, except per share data)
|
||||||||||||||||||
Selected Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments in securities
|
$
|
2,647,512
|
|
|
$
|
2,317,244
|
|
|
$
|
1,830,838
|
|
|
$
|
1,460,864
|
|
|
$
|
937,690
|
|
Cash and cash equivalents (1)
|
9,951
|
|
|
20,407
|
|
|
28,734
|
|
|
31,625
|
|
|
34,005
|
|
|||||
Restricted cash and cash equivalents
|
298,940
|
|
|
330,915
|
|
|
417,307
|
|
|
193,577
|
|
|
77,627
|
|
|||||
Reinsurance balances receivable, net
|
381,951
|
|
|
294,313
|
|
|
303,649
|
|
|
191,763
|
|
|
84,280
|
|
|||||
Deferred acquisition costs, net
|
221,618
|
|
|
197,093
|
|
|
155,901
|
|
|
91,193
|
|
|
45,383
|
|
|||||
Total assets
|
3,895,644
|
|
|
3,545,108
|
|
|
2,852,580
|
|
|
2,159,890
|
|
|
1,402,017
|
|
|||||
Reinsurance balances payable
|
43,171
|
|
|
24,119
|
|
|
27,040
|
|
|
9,081
|
|
|
—
|
|
|||||
Deposit liabilities (2)
|
104,905
|
|
|
83,955
|
|
|
145,430
|
|
|
120,946
|
|
|
50,446
|
|
|||||
Unearned premium reserves
|
557,076
|
|
|
531,710
|
|
|
433,809
|
|
|
265,187
|
|
|
93,893
|
|
|||||
Loss and loss adjustment expense reserves
|
605,129
|
|
|
466,047
|
|
|
277,362
|
|
|
134,331
|
|
|
67,271
|
|
|||||
Total liabilities
|
2,445,919
|
|
|
2,149,225
|
|
|
1,300,532
|
|
|
649,494
|
|
|
473,696
|
|
|||||
Shareholders’ equity attributable to shareholders
|
1,414,051
|
|
|
1,379,726
|
|
|
1,451,913
|
|
|
1,391,661
|
|
|
868,544
|
|
|||||
Non-controlling interests
|
35,674
|
|
|
16,157
|
|
|
100,135
|
|
|
118,735
|
|
|
59,777
|
|
|||||
Total shareholders’ equity
|
$
|
1,449,725
|
|
|
$
|
1,395,883
|
|
|
$
|
1,552,048
|
|
|
$
|
1,510,396
|
|
|
$
|
928,321
|
|
Book value per share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Book value per share (3)
|
$
|
13.57
|
|
|
$
|
13.23
|
|
|
$
|
14.04
|
|
|
$
|
13.48
|
|
|
$
|
11.07
|
|
Diluted book value per share (3)
|
$
|
13.16
|
|
|
$
|
12.85
|
|
|
$
|
13.55
|
|
|
$
|
13.12
|
|
|
$
|
10.89
|
|
Selected ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in diluted book value per share (3)
|
2.4
|
%
|
|
(5.2
|
)%
|
|
3.3
|
%
|
|
20.5
|
%
|
|
11.9
|
%
|
|||||
Return on beginning shareholders’ equity (3)
|
2.0
|
%
|
|
(6.0
|
)%
|
|
3.6
|
%
|
|
23.4
|
%
|
|
13.0
|
%
|
(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)
|
Book value per share, diluted book value per share, change in diluted book value per share and return on beginning shareholders’ equity are non-GAAP financial measures. There are no comparable GAAP measures. See the reconciliations under “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures.”
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands, except for per share data and ratios)
|
||||||||||
Key underwriting metrics for Property and Casualty Reinsurance segment:
|
|
|
|
|
|
||||||
Net underwriting loss (1)
|
$
|
(50,052
|
)
|
|
$
|
(28,257
|
)
|
|
$
|
(9,552
|
)
|
Combined ratio (1)
|
108.5
|
%
|
|
104.7
|
%
|
|
102.2
|
%
|
|||
|
|
|
|
|
|
||||||
Key investment return metrics:
|
|
|
|
|
|
||||||
Net investment income (loss)
|
$
|
98,825
|
|
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
Net investment return on investments managed by Third Point LLC
|
4.2
|
%
|
|
(1.6
|
)%
|
|
5.1
|
%
|
|||
|
|
|
|
|
|
||||||
Key shareholders’ value creation metrics:
|
|
|
|
|
|
||||||
Book value per share (2)
|
$
|
13.57
|
|
|
$
|
13.23
|
|
|
$
|
14.04
|
|
Diluted book value per share (2)
|
$
|
13.16
|
|
|
$
|
12.85
|
|
|
$
|
13.55
|
|
Change in diluted book value per share (2)
|
2.4
|
%
|
|
(5.2
|
)%
|
|
3.3
|
%
|
|||
Return on beginning shareholders’ equity (2)
|
2.0
|
%
|
|
(6.0
|
)%
|
|
3.6
|
%
|
(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,
change in diluted book value per share
and return on beginning shareholders’ equity are non-GAAP financial measures. See reconciliations below.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Net investment income (loss) on float
|
$
|
16,931
|
|
|
$
|
(10,810
|
)
|
|
$
|
11,305
|
|
Net investment income (loss) on capital
|
80,361
|
|
|
(18,798
|
)
|
|
73,050
|
|
|||
Net investment income (loss) on investments managed by Third Point LLC
|
97,292
|
|
|
(29,608
|
)
|
|
84,355
|
|
|||
Net gain on investment in Kiskadee Fund
|
1,533
|
|
|
1,465
|
|
|
—
|
|
|||
Net investment income related to Catastrophe Reinsurer and Catastrophe Fund
|
—
|
|
|
69
|
|
|
1,227
|
|
|||
Net investment income (loss)
|
$
|
98,825
|
|
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Basic and diluted book value per share numerator:
|
($ in thousands, except share and per share amounts)
|
||||||||||
Total shareholders' equity
|
$
|
1,449,725
|
|
|
$
|
1,395,883
|
|
|
$
|
1,552,048
|
|
Less: non-controlling interests
|
(35,674
|
)
|
|
(16,157
|
)
|
|
(100,135
|
)
|
|||
Shareholders' equity attributable to shareholders
|
1,414,051
|
|
|
1,379,726
|
|
|
1,451,913
|
|
|||
Effect of dilutive warrants issued to founders and an advisor
|
46,512
|
|
|
46,512
|
|
|
46,512
|
|
|||
Effect of dilutive stock options issued to directors and employees
|
52,930
|
|
|
58,070
|
|
|
61,705
|
|
|||
Diluted book value per share numerator:
|
$
|
1,513,493
|
|
|
$
|
1,484,308
|
|
|
$
|
1,560,130
|
|
Basic and diluted book value per share denominator:
|
|
|
|
||||||||
Issued and outstanding shares, net of treasury shares
|
104,173,748
|
|
|
104,256,745
|
|
|
103,397,542
|
|
|||
Effect of dilutive warrants issued to founders and an advisor
|
4,651,163
|
|
|
4,651,163
|
|
|
4,651,163
|
|
|||
Effect of dilutive stock options issued to directors and employees
|
5,274,333
|
|
|
5,788,391
|
|
|
6,151,903
|
|
|||
Effect of dilutive restricted shares issued to employees (1)
|
878,529
|
|
|
837,277
|
|
|
922,610
|
|
|||
Diluted book value per share denominator:
|
114,977,773
|
|
|
115,533,576
|
|
|
115,123,218
|
|
|||
|
|
|
|
|
|
||||||
Basic book value per share
|
$
|
13.57
|
|
|
$
|
13.23
|
|
|
$
|
14.04
|
|
Diluted book value per share
|
$
|
13.16
|
|
|
$
|
12.85
|
|
|
$
|
13.55
|
|
(1)
|
As of
December 31, 2016
, the effect of dilutive restricted shares issued to directors and employees was comprised of
301,043
restricted shares with a service condition only and
577,486
restricted shares with a service and performance condition that were considered probable of vesting.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Net income (loss)
|
$
|
27,635
|
|
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
Shareholders’ equity attributable to shareholders - beginning of year
|
1,379,726
|
|
|
1,451,913
|
|
|
1,391,661
|
|
|||
Impact of weighting related to shareholders’ equity from shares repurchased
|
(4,363
|
)
|
|
—
|
|
|
—
|
|
|||
Adjusted shareholders’ equity attributable to shareholders - beginning of year
|
$
|
1,375,363
|
|
|
$
|
1,451,913
|
|
|
$
|
1,391,661
|
|
Return on beginning shareholders’ equity
|
2.0
|
%
|
|
(6.0
|
)%
|
|
3.6
|
%
|
•
|
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;
|
•
|
foreign exchange; and
|
•
|
income taxes.
|
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
2014
|
|
Increase (decrease)
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Net underwriting income (loss) (1)
|
$
|
(50,052
|
)
|
|
$
|
(28,257
|
)
|
|
$
|
(21,795
|
)
|
|
$
|
(9,552
|
)
|
|
$
|
(18,705
|
)
|
Net investment income (loss)
|
98,825
|
|
|
(28,074
|
)
|
|
126,899
|
|
|
85,582
|
|
|
(113,656
|
)
|
|||||
Net investment return on investments managed by Third Point LLC
|
4.2
|
%
|
|
(1.6
|
)%
|
|
5.8
|
%
|
|
5.1
|
%
|
|
(6.7
|
)%
|
|||||
General and administrative expenses (2)
|
17,207
|
|
|
20,771
|
|
|
(3,564
|
)
|
|
14,380
|
|
|
6,391
|
|
|||||
Interest expense
|
8,231
|
|
|
7,236
|
|
|
995
|
|
|
—
|
|
|
7,236
|
|
|||||
Foreign exchange gains
|
19,521
|
|
|
3,196
|
|
|
16,325
|
|
|
—
|
|
|
3,196
|
|
|||||
Income tax (expense) benefit
|
(5,593
|
)
|
|
2,905
|
|
|
8,498
|
|
|
(5,648
|
)
|
|
(8,553
|
)
|
|||||
Net income (loss)
|
$
|
27,635
|
|
|
$
|
(87,390
|
)
|
|
$
|
115,025
|
|
|
$
|
50,395
|
|
|
$
|
(137,785
|
)
|
(1)
|
Property and Casualty Reinsurance segment only.
|
(2)
|
Corporate function only.
|
•
|
The increase in net underwriting loss and related combined ratio primarily reflects adverse development for the year ended
December 31, 2016
on certain contracts and continued deterioration in market conditions. See “Segment Results” below for additional details.
|
•
|
The decrease in general and administrative expenses related to corporate activities for the year ended
December 31, 2016
compared to
2015
was primarily due to a decrease in our annual incentive plan compensation expense where we did not achieve the threshold performance target, lower share compensation expense in the current year due to forfeitures and fewer restricted shares with performance and service conditions considered probable of vesting.
|
•
|
In February 2015, TPRUSA issued $115.0 million of senior notes bearing 7.0% interest. As a result, our consolidated results of operations for the current year include a full year of interest expense.
|
•
|
The foreign exchange gains were primarily due to the revaluation of foreign currency loss and loss adjustment expense reserves denominated in British pounds to the United States dollar, which had strengthened during the year.
|
•
|
Income tax expense for the year ended December 31, 2016 is primarily due to withholding taxes on our investment portfolio, partially offset by tax benefit as a result of a pre-tax loss generated by our U.S. subsidiaries.
|
•
|
The increase in net underwriting loss and related combined ratio primarily reflects adverse development for the year ended
December 31, 2015
on certain contracts and deterioration in market conditions. See “Segment Results” below for additional details.
|
•
|
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 $115.0 million of senior notes bearing 7.0% interest. As a result, our consolidated results of operations for 2015 includes interest expense.
|
•
|
As a result of the net loss generated by our U.S. subsidiaries, we recorded an income tax benefit in the year ended
December 31, 2015
.
|
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
2014
|
|
Increase (decrease)
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Gross premiums written
|
$
|
617,374
|
|
|
$
|
702,458
|
|
|
$
|
(85,084
|
)
|
|
$
|
601,305
|
|
|
$
|
101,153
|
|
Net premiums earned
|
590,190
|
|
|
602,816
|
|
|
(12,626
|
)
|
|
432,297
|
|
|
170,519
|
|
|||||
Loss and loss adjustment expenses incurred, net
|
395,932
|
|
|
415,041
|
|
|
(19,109
|
)
|
|
283,180
|
|
|
131,861
|
|
|||||
Acquisition costs, net
|
222,150
|
|
|
191,217
|
|
|
30,933
|
|
|
136,154
|
|
|
55,063
|
|
|||||
General and administrative expenses
|
22,160
|
|
|
24,815
|
|
|
(2,655
|
)
|
|
22,515
|
|
|
2,300
|
|
|||||
Net underwriting loss
|
(50,052
|
)
|
|
(28,257
|
)
|
|
(21,795
|
)
|
|
(9,552
|
)
|
|
(18,705
|
)
|
|||||
Net investment income (loss) on float
|
16,931
|
|
|
(10,810
|
)
|
|
27,741
|
|
|
11,305
|
|
|
(22,115
|
)
|
|||||
Other expenses
|
8,387
|
|
|
8,614
|
|
|
(227
|
)
|
|
7,395
|
|
|
1,219
|
|
|||||
Segment loss
|
$
|
(41,508
|
)
|
|
$
|
(47,681
|
)
|
|
$
|
6,173
|
|
|
$
|
(5,642
|
)
|
|
$
|
(42,039
|
)
|
Underwriting ratios (1):
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio
|
67.1
|
%
|
|
68.9
|
%
|
|
(1.8
|
)%
|
|
65.5
|
%
|
|
3.4
|
%
|
|||||
Acquisition cost ratio
|
37.6
|
%
|
|
31.7
|
%
|
|
5.9
|
%
|
|
31.5
|
%
|
|
0.2
|
%
|
|||||
Composite ratio
|
104.7
|
%
|
|
100.6
|
%
|
|
4.1
|
%
|
|
97.0
|
%
|
|
3.6
|
%
|
|||||
General and administrative expense ratio
|
3.8
|
%
|
|
4.1
|
%
|
|
(0.3
|
)%
|
|
5.2
|
%
|
|
(1.1
|
)%
|
|||||
Combined ratio
|
108.5
|
%
|
|
104.7
|
%
|
|
3.8
|
%
|
|
102.2
|
%
|
|
2.5
|
%
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
•
|
We write a small number of large contracts; therefore 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 will not necessarily renew in a comparable period;
|
•
|
We may extend and/or amend contracts resulting in premium that will not necessarily renew in a comparable period;
|
•
|
Our reinsurance contracts often contain commutation provisions or can be canceled or terminated upon agreement from both parties; and
|
•
|
Our quota share 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.
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Property
|
$
|
98,334
|
|
|
15.9
|
%
|
|
$
|
114,215
|
|
|
16.2
|
%
|
|
$
|
106,834
|
|
|
17.8
|
%
|
Casualty
|
213,050
|
|
|
34.5
|
%
|
|
327,064
|
|
|
46.6
|
%
|
|
266,763
|
|
|
44.4
|
%
|
|||
Specialty
|
305,990
|
|
|
49.6
|
%
|
|
261,179
|
|
|
37.2
|
%
|
|
227,708
|
|
|
37.8
|
%
|
|||
|
$
|
617,374
|
|
|
100.0
|
%
|
|
$
|
702,458
|
|
|
100.0
|
%
|
|
$
|
601,305
|
|
|
100.0
|
%
|
•
|
We recognized $193.1 million of premium in the year ended
December 31, 2015
that did not renew in the year ended
December 31, 2016
, consisting of $107.5 million for contracts that were not subject to renewal in
2016
and $85.6 million for contracts that we made a decision not to renew in
2016
due to changes in pricing and/or terms and conditions.
|
•
|
We recognized a net increase in premium of $90.5 million in the year ended
December 31, 2016
compared to a net increase of $188.3 million in the year ended
December 31, 2015
related to the net impact of contract extensions, cancellations and contracts written in the prior year with no comparable premium in the current year period.
|
•
|
We wrote $111.4 million of new business for the year ended
December 31, 2016
, of which $83.9 million was specialty business and $27.5 million was casualty business.
|
•
|
Changes in renewal premiums for the year ended
December 31, 2016
resulted in a net increase in premiums of $27.1 million primarily due to increases in participations and underlying premium volume on contracts that renewed in the period. 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 increases in premium estimates relating to prior periods of $106.6 million and $39.3 million for the years ended
December 31, 2016
and
2015
, respectively. The
2016
increases in premium estimates were primarily due to the following factors:
|
◦
|
We wrote one large credit and financial lines quota share, covering primarily mortgage business, whereby the ceding company significantly increased their writings, which resulted in a $46.9 million premium estimate increase during the year on this contract;
|
◦
|
We wrote a multi-line contract for several underwriting years covering commercial auto physical damage and auto extended warranty. As this was a new and growing program, we initially recorded the cedent’s estimate of expected written premium at a lower amount than their initial estimate. The ceding company exceeded their premium projections resulting in an increase of $23.6 million related to that contract;
|
◦
|
We wrote a general liability quota share whereby the ceding company increased their writings, which resulted in a $20.8 million premium estimate increase during the year on this contract; and
|
◦
|
The remaining net increase in premium estimates related to several contracts where the cedents reported writing more business than initially expected.
|
•
|
The increases in premium estimates for the year ended December 31,
2015
were due to several contracts for which clients provided updated projections indicating that they expected to write more business than initially estimated.
|
•
|
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 differences can be caused by a number of factors, including contract amendments or extensions that result in additional premiums and contracts written on a multi-year basis that did not renew in the comparable period.
|
•
|
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.
|
•
|
$4.8 million of net adverse underwriting loss development relating to one multi-line contract written since 2014. This contract contains underlying commercial auto physical damage and auto extended warranty exposure. The adverse loss experience was a result of an increase in the number of reported claims and inadequate pricing in certain segments of the underlying business;
|
•
|
$4.0 million of net adverse underwriting loss development relating to non-standard auto contracts, primarily due to the inability of cedents to promptly react to increasing frequency and severity trends, resulting in underpriced business and adverse selection;
|
•
|
$3.7 million of net adverse underwriting loss development relating to our Florida homeowners’ contracts primarily as a result of higher than anticipated water damage claims and an increase in the practice of assignment of benefits whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters, which we believe has led to an increase in the frequency of claims reported as well as the severity of losses and loss adjustment expenses;
|
•
|
$3.3 million of net adverse underwriting loss development relating to a workers’ compensation contract written from 2012 to 2014 under which we have been experiencing higher than expected claims development that led to an increase in our previous loss assumptions on this contract; and
|
•
|
$2.1 million
of net favorable underwriting loss development from several other contracts.
|
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
2014
|
|
Increase (decrease)
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Net investment income (loss) on capital
|
$
|
81,894
|
|
|
$
|
(17,333
|
)
|
|
$
|
99,227
|
|
|
$
|
73,050
|
|
|
$
|
(90,383
|
)
|
General and administrative expenses
|
17,207
|
|
|
20,771
|
|
|
(3,564
|
)
|
|
14,380
|
|
|
6,391
|
|
|||||
Interest expense
|
8,231
|
|
|
7,236
|
|
|
995
|
|
|
—
|
|
|
7,236
|
|
|||||
Foreign exchange gains
|
19,521
|
|
|
3,196
|
|
|
16,325
|
|
|
—
|
|
|
3,196
|
|
|||||
Income tax (expense) benefit
|
(5,593
|
)
|
|
2,905
|
|
|
8,498
|
|
|
(5,648
|
)
|
|
(8,553
|
)
|
|||||
Income attributable to non-controlling interests
|
(1,241
|
)
|
|
(53
|
)
|
|
(1,188
|
)
|
|
(1,590
|
)
|
|
1,537
|
|
|||||
|
$
|
69,143
|
|
|
$
|
(39,292
|
)
|
|
$
|
108,435
|
|
|
$
|
51,432
|
|
|
$
|
(90,724
|
)
|
|
2016
|
|
2015
|
|
2014
|
|||
Long/short equities
|
(1.4
|
)%
|
|
(3.3
|
)%
|
|
2.7
|
%
|
Credit
|
6.0
|
%
|
|
2.0
|
%
|
|
3.0
|
%
|
Other
|
(0.4
|
)%
|
|
(0.3
|
)%
|
|
(0.6
|
)%
|
Net investment return on investments managed by Third Point LLC
|
4.2
|
%
|
|
(1.6
|
)%
|
|
5.1
|
%
|
|
|
|
|
|
|
|||
S&P 500 Total Return Index
|
12.0
|
%
|
|
1.4
|
%
|
|
13.7
|
%
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
4,771
|
|
|
$
|
187,776
|
|
|
$
|
122,430
|
|
Net cash used in investing activities
|
(53,278
|
)
|
|
(163,884
|
)
|
|
(119,053
|
)
|
|||
Net cash provided by (used in) financing activities
|
38,051
|
|
|
(32,219
|
)
|
|
(6,268
|
)
|
|||
Net decrease in cash and cash equivalents
|
(10,456
|
)
|
|
(8,327
|
)
|
|
(2,891
|
)
|
|||
Cash and cash equivalents at beginning of year
|
20,407
|
|
|
28,734
|
|
|
31,625
|
|
|||
Cash and cash equivalents at end of year
|
$
|
9,951
|
|
|
$
|
20,407
|
|
|
$
|
28,734
|
|
|
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)
|
68,425
|
|
|
8,050
|
|
|
16,100
|
|
|
16,100
|
|
|
28,175
|
|
|||||
Subtotal - Debt obligations
|
183,425
|
|
|
8,050
|
|
|
16,100
|
|
|
16,100
|
|
|
143,175
|
|
|||||
Loss and loss adjustment expense reserves (2)
|
605,128
|
|
|
193,861
|
|
|
238,477
|
|
|
96,373
|
|
|
76,417
|
|
|||||
Other operating agreements (3)
|
3,548
|
|
|
709
|
|
|
1,499
|
|
|
1,340
|
|
|
—
|
|
|||||
Rental leases (4)
|
3,545
|
|
|
864
|
|
|
1,779
|
|
|
902
|
|
|
—
|
|
|||||
Deposit liabilities (5)
|
104,905
|
|
|
6,745
|
|
|
15,536
|
|
|
19,433
|
|
|
63,191
|
|
|||||
|
$
|
900,551
|
|
|
$
|
210,229
|
|
|
$
|
273,391
|
|
|
$
|
134,148
|
|
|
$
|
282,783
|
|
(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 September 2016, the Company acquired from NetJets Sales Inc. (“NetJets”) an undivided
31.25%
interest in an aircraft for a
five
year period. The agreement with NetJets provides for monthly management fees, occupied hourly fees and other fees.
|
(4)
|
We lease office space at Point House in Pembroke, Bermuda. This five year lease expires on November 30, 2020. We also lease office space in Summit, New Jersey, U.S.A. This five year lease expires on February 28, 2021.
|
(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 the amount we expect the deposit liability contracts would settle for at their probable settlement dates.
|
|
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
|
$
|
94,364
|
|
|
$
|
(95,645
|
)
|
Acquisition costs, net
|
(12,076
|
)
|
|
23,998
|
|
||
Increase (decrease) in net underwriting loss
|
82,288
|
|
|
(71,647
|
)
|
||
Total shareholders’ equity
|
$
|
1,449,725
|
|
|
$
|
1,449,725
|
|
Increase (decrease) in shareholders’ equity
|
(5.7
|
)%
|
|
4.9
|
%
|
•
|
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
|
||||||||||
|
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)
|
||||||||||||
Japanese Yen
|
$
|
6,858
|
|
|
0.31
|
%
|
|
$
|
(6,858
|
)
|
|
(0.31
|
)%
|
Saudi Arabian Riyal
|
6,569
|
|
|
0.30
|
%
|
|
(6,569
|
)
|
|
(0.30
|
)%
|
||
Chinese Yuan
|
4,205
|
|
|
0.19
|
%
|
|
(4,205
|
)
|
|
(0.19
|
)%
|
||
Euro
|
3,371
|
|
|
0.15
|
%
|
|
(3,371
|
)
|
|
(0.15
|
)%
|
||
Hong Kong Dollar
|
2,811
|
|
|
0.12
|
%
|
|
(2,811
|
)
|
|
(0.12
|
)%
|
||
Other
|
(274
|
)
|
|
(0.01
|
)%
|
|
274
|
|
|
0.01
|
%
|
||
Total
|
$
|
23,540
|
|
|
1.06
|
%
|
|
$
|
(23,540
|
)
|
|
(1.06
|
)%
|
|
100 basis point increase in interest rates
|
|
100 basis point decrease in interest rates
|
||||||||||
|
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
|
$
|
(3,114
|
)
|
|
(0.1
|
)%
|
|
$
|
5,624
|
|
|
0.3
|
%
|
Asset Backed Securities
(1)
|
(9,114
|
)
|
|
(0.4
|
)%
|
|
9,419
|
|
|
0.4
|
%
|
||
Net exposure to interest rate risk
|
$
|
(12,228
|
)
|
|
(0.5
|
)%
|
|
$
|
15,043
|
|
|
0.7
|
%
|
(1)
|
Includes instruments for which durations are available on
December 31, 2016
. Includes a convexity adjustment if convexity is available. Not included are mortgage hedges which would reduce the impact of interest rate changes.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
|
($ in thousands)
|
||||||||||||
Re-REMIC (1)
|
$
|
44,359
|
|
|
17.4
|
%
|
|
$
|
195,889
|
|
|
39.6
|
%
|
Subprime RMBS
|
117,152
|
|
|
46.0
|
%
|
|
174,777
|
|
|
35.3
|
%
|
||
Collateralized debt obligations
|
3,433
|
|
|
1.3
|
%
|
|
50,455
|
|
|
10.2
|
%
|
||
Market place loans
|
44,143
|
|
|
17.3
|
%
|
|
13,247
|
|
|
2.7
|
%
|
||
Other (2)
|
45,765
|
|
|
18.0
|
%
|
|
60,355
|
|
|
12.2
|
%
|
||
|
$
|
254,852
|
|
|
100.0
|
%
|
|
$
|
494,723
|
|
|
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
|
•
|
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 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*
|
Amended and Restated Joint Venture and Investment Management Agreement, dated as of June 22, 2016, by and among Third Point Reinsurance Ltd., Third Point Reinsurance Company, Ltd., Third Point Advisors LLC and Third Point LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016)
|
10.1.1
|
Amended and Restated Joint Venture and Investment Management Agreement, dated as of June 22, 2016, by and among Third Point Reinsurance (USA) Ltd., Third Point Re (USA) Holdings Inc., Third Point LLC and Third Point Advisors LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016)
|
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 with the SEC 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 (incorporated by reference to Exhibit 10.3.3 to the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2016)
|
10.3.4**
|
Amendment No. 4 to Employment Agreement between Third Point Reinsurance Ltd. and J. Robert Bredahl, dated as of May 4, 2016 (incorporated by reference to Exhibit 10.3.4 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2016)
|
10.3.5**
|
Amendment No. 5 to Employment Agreement between Third Point Reinsurance Ltd. and J. Robert Bredahl, dated as September 26, 2016 (incorporated by reference to Exhibit 10.3.5 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 4, 2016)
|
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)
|
10.4.2**
|
Amendment No. 2 to Employment Agreement between Third Point Reinsurance Ltd. and Daniel Victor Malloy III dated as of May 4, 2016 (incorporated by reference to Exhibit 10.4.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2016)
|
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 (incorporated by reference to Exhibit 10.6.4 to the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2016)
|
10.6.5**
|
Form of Employee Performance Restricted Shares Agreement (incorporated by reference to Exhibit 10.6.5 to the Company’s Annual Report on Form 10-K filed on February 26, 2016)
|
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
|
10.10**
|
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. (incorporated by reference to Exhibit 10.8.1 to the Company’s Annual Report on Form 10-K filed on February 26, 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
)
|
10.32**
|
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)
|
10.32.2**
|
Amendment No. 2 to Employment Agreement between Third Point Reinsurance Ltd. and Manoj K. Gupta dated as of April 1, 2016 (incorporated by reference to Exhibit 10.32.2 to the Company’s Quarterly Report on Form 10-Q filed on August 5, 2016)
|
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
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Income (Loss) for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
Notes to the Consolidated Financial Statements
|
|
Schedule I - Summary of Investments - Other than Investments in Related Parties
|
|
Schedule III - Supplementary Insurance Information
|
|
Schedule IV - Reinsurance
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Equity securities, trading, at fair value (cost - $1,385,866; 2015 - $1,
156,369)
|
$
|
1,506,854
|
|
|
$
|
1,231,077
|
|
Debt securities, trading, at fair value (cost - $1,036,716; 2015 - $1,
049,652)
|
1,057,957
|
|
|
1,034,247
|
|
||
Other investments, at fair value
|
82,701
|
|
|
51,920
|
|
||
Total investments in securities
|
2,647,512
|
|
|
2,317,244
|
|
||
Cash and cash equivalents
|
9,951
|
|
|
20,407
|
|
||
Restricted cash and cash equivalents
|
298,940
|
|
|
330,915
|
|
||
Due from brokers
|
284,591
|
|
|
326,971
|
|
||
Derivative assets, at fair value
|
27,432
|
|
|
35,337
|
|
||
Interest and dividends receivable
|
6,505
|
|
|
10,687
|
|
||
Reinsurance balances receivable
|
381,951
|
|
|
294,313
|
|
||
Deferred acquisition costs, net
|
221,618
|
|
|
197,093
|
|
||
Other assets
|
17,144
|
|
|
12,141
|
|
||
Total assets
|
$
|
3,895,644
|
|
|
$
|
3,545,108
|
|
Liabilities and shareholders’ equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
10,321
|
|
|
$
|
11,966
|
|
Reinsurance balances payable
|
43,171
|
|
|
24,119
|
|
||
Deposit liabilities
|
104,905
|
|
|
83,955
|
|
||
Unearned premium reserves
|
557,076
|
|
|
531,710
|
|
||
Loss and loss adjustment expense reserves
|
605,129
|
|
|
466,047
|
|
||
Securities sold, not yet purchased, at fair value
|
92,668
|
|
|
314,353
|
|
||
Securities sold under an agreement to repurchase
|
—
|
|
|
8,944
|
|
||
Due to brokers
|
899,601
|
|
|
574,962
|
|
||
Derivative liabilities, at fair value
|
16,050
|
|
|
15,392
|
|
||
Interest and dividends payable
|
3,443
|
|
|
4,400
|
|
||
Senior notes payable, net of deferred costs
|
113,555
|
|
|
113,377
|
|
||
Total liabilities
|
2,445,919
|
|
|
2,149,225
|
|
||
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, 106,501,299 (2015 - 105,479,341))
|
10,650
|
|
|
10,548
|
|
||
Treasury shares (644,768 shares (2015 - nil shares))
|
(7,389
|
)
|
|
—
|
|
||
Additional paid-in capital
|
1,094,568
|
|
|
1,080,591
|
|
||
Retained earnings
|
316,222
|
|
|
288,587
|
|
||
Shareholders’ equity attributable to shareholders
|
1,414,051
|
|
|
1,379,726
|
|
||
Non-controlling interests
|
35,674
|
|
|
16,157
|
|
||
Total shareholders’ equity
|
1,449,725
|
|
|
1,395,883
|
|
||
Total liabilities and shareholders’ equity
|
$
|
3,895,644
|
|
|
$
|
3,545,108
|
|
|
|
|
|
||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||
an integral part of the Consolidated Financial Statements.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gross premiums written
|
$
|
617,374
|
|
|
$
|
702,414
|
|
|
$
|
613,300
|
|
Gross premiums ceded
|
(2,325
|
)
|
|
(1,876
|
)
|
|
(150
|
)
|
|||
Net premiums written
|
615,049
|
|
|
700,538
|
|
|
613,150
|
|
|||
Change in net unearned premium reserves
|
(24,859
|
)
|
|
(97,714
|
)
|
|
(168,618
|
)
|
|||
Net premiums earned
|
590,190
|
|
|
602,824
|
|
|
444,532
|
|
|||
Net investment income (loss)
|
98,825
|
|
|
(28,074
|
)
|
|
85,582
|
|
|||
Total revenues
|
689,015
|
|
|
574,750
|
|
|
530,114
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses incurred, net
|
395,932
|
|
|
415,191
|
|
|
283,147
|
|
|||
Acquisition costs, net
|
222,150
|
|
|
191,216
|
|
|
137,206
|
|
|||
General and administrative expenses
|
39,367
|
|
|
46,033
|
|
|
40,008
|
|
|||
Other expenses
|
8,387
|
|
|
8,614
|
|
|
7,395
|
|
|||
Interest expense
|
8,231
|
|
|
7,236
|
|
|
—
|
|
|||
Foreign exchange gains
|
(19,521
|
)
|
|
(3,196
|
)
|
|
—
|
|
|||
Total expenses
|
654,546
|
|
|
665,094
|
|
|
467,756
|
|
|||
Income (loss) before income tax (expense) benefit
|
34,469
|
|
|
(90,344
|
)
|
|
62,358
|
|
|||
Income tax (expense) benefit
|
(5,593
|
)
|
|
2,905
|
|
|
(5,648
|
)
|
|||
Income (loss) including non-controlling interests
|
28,876
|
|
|
(87,439
|
)
|
|
56,710
|
|
|||
(Income) loss attributable to non-controlling interests
|
(1,241
|
)
|
|
49
|
|
|
(6,315
|
)
|
|||
Net income (loss)
|
$
|
27,635
|
|
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
Earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.26
|
|
|
$
|
(0.84
|
)
|
|
$
|
0.48
|
|
Diluted
|
$
|
0.26
|
|
|
$
|
(0.84
|
)
|
|
$
|
0.47
|
|
Weighted average number of ordinary shares used in the determination of earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
104,060,052
|
|
|
104,003,820
|
|
|
103,287,693
|
|
|||
Diluted
|
105,563,784
|
|
|
104,003,820
|
|
|
106,391,059
|
|
|||
|
|
|
|
|
|
||||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||||||
an integral part of the Consolidated Financial Statements.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Common shares
|
|
|
|
|
|
||||||
Balance, beginning of year
|
$
|
10,548
|
|
|
$
|
10,447
|
|
|
$
|
10,389
|
|
Issuance of common shares
|
102
|
|
|
101
|
|
|
58
|
|
|||
Balance, end of year
|
10,650
|
|
|
10,548
|
|
|
10,447
|
|
|||
Treasury shares
|
|
|
|
|
|
||||||
Balance, beginning of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of common shares
|
(7,389
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, end of year
|
(7,389
|
)
|
|
—
|
|
|
—
|
|
|||
Additional paid-in capital
|
|
|
|
|
|
||||||
Balance, beginning of year
|
1,080,591
|
|
|
1,065,489
|
|
|
1,055,690
|
|
|||
Issuance of common shares, net
|
5,039
|
|
|
4,231
|
|
|
541
|
|
|||
Share compensation expense
|
8,938
|
|
|
10,871
|
|
|
9,258
|
|
|||
Balance, end of year
|
1,094,568
|
|
|
1,080,591
|
|
|
1,065,489
|
|
|||
Retained earnings
|
|
|
|
|
|
||||||
Balance, beginning of year
|
288,587
|
|
|
375,977
|
|
|
325,582
|
|
|||
Income (loss) including non-controlling interests
|
28,876
|
|
|
(87,439
|
)
|
|
56,710
|
|
|||
(Income) loss attributable to non-controlling interests
|
(1,241
|
)
|
|
49
|
|
|
(6,315
|
)
|
|||
Balance, end of year
|
316,222
|
|
|
288,587
|
|
|
375,977
|
|
|||
Shareholders’ equity attributable to shareholders
|
1,414,051
|
|
|
1,379,726
|
|
|
1,451,913
|
|
|||
Non-controlling interests
|
|
|
|
|
|
||||||
Balance, beginning of year
|
16,157
|
|
|
100,135
|
|
|
118,735
|
|
|||
Non-controlling interest in investment affiliate, net
|
18,276
|
|
|
(24,137
|
)
|
|
(31,066
|
)
|
|||
Non-controlling interest in Catastrophe Fund
|
—
|
|
|
(60,032
|
)
|
|
6,151
|
|
|||
Non-controlling interest in Catastrophe Fund Manager
|
—
|
|
|
240
|
|
|
—
|
|
|||
Income (loss) attributable to non-controlling interests
|
1,241
|
|
|
(49
|
)
|
|
6,315
|
|
|||
Balance, end of year
|
35,674
|
|
|
16,157
|
|
|
100,135
|
|
|||
Total shareholders’ equity
|
$
|
1,449,725
|
|
|
$
|
1,395,883
|
|
|
$
|
1,552,048
|
|
|
|
|
|
|
|
||||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||||||
an integral part of the Consolidated Financial Statements.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Income (loss) including non-controlling interests
|
$
|
28,876
|
|
|
$
|
(87,439
|
)
|
|
$
|
56,710
|
|
Adjustments to reconcile income (loss) including non-controlling interests to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Share compensation expense
|
8,938
|
|
|
10,871
|
|
|
9,258
|
|
|||
Net interest (income) expense on deposit liabilities
|
(164
|
)
|
|
6,471
|
|
|
4,346
|
|
|||
Net unrealized (gain) loss on investments and derivatives
|
(72,083
|
)
|
|
32,354
|
|
|
85,057
|
|
|||
Net realized gain on investments and derivatives
|
(33,179
|
)
|
|
(16,655
|
)
|
|
(193,957
|
)
|
|||
Net foreign exchange gains
|
(19,521
|
)
|
|
(3,196
|
)
|
|
—
|
|
|||
Amortization of premium and accretion of discount, net
|
5,118
|
|
|
324
|
|
|
(1,044
|
)
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Reinsurance balances receivable
|
(86,612
|
)
|
|
8,768
|
|
|
(111,886
|
)
|
|||
Deferred acquisition costs, net
|
(24,525
|
)
|
|
(41,192
|
)
|
|
(64,708
|
)
|
|||
Other assets
|
(5,003
|
)
|
|
(7,815
|
)
|
|
8,349
|
|
|||
Interest and dividends receivable, net
|
3,225
|
|
|
(4,382
|
)
|
|
(38
|
)
|
|||
Unearned premium reserves
|
25,366
|
|
|
97,901
|
|
|
168,622
|
|
|||
Loss and loss adjustment expense reserves
|
156,644
|
|
|
192,433
|
|
|
143,031
|
|
|||
Accounts payable and accrued expenses
|
(2,095
|
)
|
|
1,881
|
|
|
629
|
|
|||
Reinsurance balances payable
|
19,786
|
|
|
(2,548
|
)
|
|
18,061
|
|
|||
Net cash provided by operating activities
|
4,771
|
|
|
187,776
|
|
|
122,430
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Purchases of investments
|
(3,729,944
|
)
|
|
(3,360,626
|
)
|
|
(3,114,906
|
)
|
|||
Proceeds from sales of investments
|
3,504,598
|
|
|
2,829,523
|
|
|
2,857,404
|
|
|||
Purchases of investments to cover short sales
|
(1,264,404
|
)
|
|
(543,936
|
)
|
|
(232,568
|
)
|
|||
Proceeds from short sales of investments
|
1,046,422
|
|
|
792,344
|
|
|
278,569
|
|
|||
Change in due to/from brokers, net
|
367,019
|
|
|
(6,377
|
)
|
|
307,884
|
|
|||
Decrease in securities purchased under an agreement to sell
|
—
|
|
|
29,852
|
|
|
8,294
|
|
|||
Increase (decrease) in securities sold under an agreement to repurchase
|
(8,944
|
)
|
|
8,944
|
|
|
—
|
|
|||
Change in restricted cash and cash equivalents
|
31,975
|
|
|
86,392
|
|
|
(223,730
|
)
|
|||
Net cash used in investing activities
|
(53,278
|
)
|
|
(163,884
|
)
|
|
(119,053
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of common shares, net of costs
|
5,141
|
|
|
4,332
|
|
|
599
|
|
|||
Purchases of common shares under share repurchase program
|
(7,389
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of senior notes payable, net of costs
|
—
|
|
|
113,220
|
|
|
—
|
|
|||
Increase (decrease) in deposit liabilities, net
|
22,023
|
|
|
(65,842
|
)
|
|
18,048
|
|
|||
Non-controlling interest in investment affiliate, net
|
18,276
|
|
|
(24,137
|
)
|
|
(31,066
|
)
|
|||
Non-controlling interest in Catastrophe Fund
|
—
|
|
|
(60,032
|
)
|
|
6,151
|
|
|||
Non-controlling interest in Catastrophe Fund Manager
|
—
|
|
|
240
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
38,051
|
|
|
(32,219
|
)
|
|
(6,268
|
)
|
|||
Net decrease in cash and cash equivalents
|
(10,456
|
)
|
|
(8,327
|
)
|
|
(2,891
|
)
|
|||
Cash and cash equivalents at beginning of year
|
20,407
|
|
|
28,734
|
|
|
31,625
|
|
|||
Cash and cash equivalents at end of year
|
$
|
9,951
|
|
|
$
|
20,407
|
|
|
$
|
28,734
|
|
Supplementary information
|
|
|
|
|
|
||||||
Interest paid in cash
|
$
|
23,027
|
|
|
$
|
9,311
|
|
|
$
|
3,237
|
|
Income taxes paid in cash
|
$
|
5,950
|
|
|
$
|
4,429
|
|
|
$
|
3,056
|
|
|
|
|
|
|
|
||||||
The accompanying Notes to the Consolidated Financial Statements are
|
|||||||||||
an integral part of the Consolidated Financial Statements.
|
|
2016
|
|
2015
|
||||
|
($ in thousands)
|
||||||
Restricted cash securing letter of credit facilities (1)
|
$
|
231,822
|
|
|
$
|
270,755
|
|
Restricted cash securing other reinsurance contracts (2)
|
67,118
|
|
|
60,160
|
|
||
Total restricted cash and cash equivalents
|
298,940
|
|
|
330,915
|
|
||
Restricted investments securing other reinsurance contracts (2)
|
427,308
|
|
|
292,111
|
|
||
Total restricted cash and cash equivalents and restricted investments
|
$
|
726,248
|
|
|
$
|
623,026
|
|
(1)
|
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 several years.
|
(2)
|
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 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 several years.
|
|
2016
|
|
2015
|
||||
Assets
|
($ in thousands)
|
||||||
Total investments in securities
|
$
|
2,619,839
|
|
|
$
|
2,290,779
|
|
Cash and cash equivalents
|
5
|
|
|
57
|
|
||
Restricted cash and cash equivalents
|
298,940
|
|
|
330,915
|
|
||
Due from brokers
|
284,591
|
|
|
326,971
|
|
||
Derivative assets
|
27,432
|
|
|
35,337
|
|
||
Interest and dividends receivable
|
6,505
|
|
|
10,687
|
|
||
Total assets
|
3,237,312
|
|
|
2,994,746
|
|
||
Liabilities and non-controlling interest
|
|
|
|
||||
Accounts payable and accrued expenses
|
1,374
|
|
|
770
|
|
||
Securities sold, not yet purchased
|
92,668
|
|
|
314,353
|
|
||
Securities sold under an agreement to repurchase
|
—
|
|
|
8,944
|
|
||
Due to brokers
|
899,601
|
|
|
574,962
|
|
||
Derivative liabilities
|
16,050
|
|
|
15,392
|
|
||
Interest and dividends payable
|
386
|
|
|
1,345
|
|
||
Non-controlling interest
|
35,674
|
|
|
16,157
|
|
||
Total liabilities and non-controlling interest
|
1,045,753
|
|
|
931,923
|
|
||
Total net investments managed by Third Point LLC
|
$
|
2,191,559
|
|
|
$
|
2,062,823
|
|
|
2016
|
|
2015
|
||||||||||
|
($ in thousands)
|
||||||||||||
Re-REMIC (1)
|
$
|
44,359
|
|
|
17.4
|
%
|
|
$
|
195,889
|
|
|
39.6
|
%
|
Subprime RMBS
|
117,152
|
|
|
46.0
|
%
|
|
174,777
|
|
|
35.3
|
%
|
||
Collateralized debt obligations
|
3,433
|
|
|
1.3
|
%
|
|
50,455
|
|
|
10.2
|
%
|
||
Market place loans
|
44,143
|
|
|
17.3
|
%
|
|
13,247
|
|
|
2.7
|
%
|
||
Other (2)
|
45,765
|
|
|
18.0
|
%
|
|
60,355
|
|
|
12.2
|
%
|
||
|
$
|
254,852
|
|
|
100.0
|
%
|
|
$
|
494,723
|
|
|
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, 2016
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
($ in thousands)
|
||||||||||||||
Equity securities
|
$
|
1,450,966
|
|
|
$
|
2,255
|
|
|
$
|
—
|
|
|
$
|
1,453,221
|
|
Private common equity securities
|
—
|
|
|
—
|
|
|
4,799
|
|
|
4,799
|
|
||||
Private preferred equity securities
|
—
|
|
|
—
|
|
|
48,834
|
|
|
48,834
|
|
||||
Total equities
|
1,450,966
|
|
|
2,255
|
|
|
53,633
|
|
|
1,506,854
|
|
||||
Asset-backed securities
|
—
|
|
|
237,224
|
|
|
17,628
|
|
|
254,852
|
|
||||
Bank debt
|
—
|
|
|
48,546
|
|
|
8,350
|
|
|
56,896
|
|
||||
Corporate bonds
|
—
|
|
|
209,025
|
|
|
9,255
|
|
|
218,280
|
|
||||
U.S. Treasury securities
|
—
|
|
|
327,016
|
|
|
—
|
|
|
327,016
|
|
||||
Sovereign debt
|
—
|
|
|
200,913
|
|
|
—
|
|
|
200,913
|
|
||||
Total debt securities
|
—
|
|
|
1,022,724
|
|
|
35,233
|
|
|
1,057,957
|
|
||||
Options
|
343
|
|
|
681
|
|
|
—
|
|
|
1,024
|
|
||||
Trade claims
|
—
|
|
|
9,022
|
|
|
—
|
|
|
9,022
|
|
||||
Total other investments
|
343
|
|
|
9,703
|
|
|
—
|
|
|
10,046
|
|
||||
Derivative assets (free standing)
|
961
|
|
|
26,471
|
|
|
—
|
|
|
27,432
|
|
||||
|
$
|
1,452,270
|
|
|
$
|
1,061,153
|
|
|
$
|
88,866
|
|
|
2,602,289
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
72,655
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
2,674,944
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
71,457
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,457
|
|
Corporate bonds
|
—
|
|
|
17,683
|
|
|
—
|
|
|
17,683
|
|
||||
Options
|
—
|
|
|
3,528
|
|
|
—
|
|
|
3,528
|
|
||||
Total securities sold, not yet purchased
|
71,457
|
|
|
21,211
|
|
|
—
|
|
|
92,668
|
|
||||
Derivative liabilities (free standing)
|
1,608
|
|
|
13,116
|
|
|
1,326
|
|
|
16,050
|
|
||||
Derivative liabilities (embedded)
|
—
|
|
|
—
|
|
|
92
|
|
|
92
|
|
||||
Total liabilities
|
$
|
73,065
|
|
|
$
|
34,327
|
|
|
$
|
1,418
|
|
|
$
|
108,810
|
|
|
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 debt
|
—
|
|
|
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
|
|
||||
Options
|
—
|
|
|
8,911
|
|
|
—
|
|
|
8,911
|
|
||||
Rights and warrants
|
416
|
|
|
—
|
|
|
—
|
|
|
416
|
|
||||
Trade claims
|
—
|
|
|
8,329
|
|
|
—
|
|
|
8,329
|
|
||||
Total other investments
|
416
|
|
|
17,240
|
|
|
—
|
|
|
17,656
|
|
||||
Derivative assets (free standing)
|
—
|
|
|
35,337
|
|
|
—
|
|
|
35,337
|
|
||||
|
$
|
1,182,281
|
|
|
$
|
1,093,951
|
|
|
$
|
42,085
|
|
|
2,318,317
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
34,264
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
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
|
|
|
January 1,
2016 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains(Losses) (1)
|
|
December 31,
2016 |
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,357
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
382
|
|
|
$
|
4,799
|
|
Private preferred equity securities
|
24,178
|
|
|
—
|
|
|
20,574
|
|
|
(60
|
)
|
|
4,142
|
|
|
48,834
|
|
||||||
Asset-backed securities
|
2,617
|
|
|
17,390
|
|
|
5,433
|
|
|
(3,527
|
)
|
|
(4,285
|
)
|
|
17,628
|
|
||||||
Bank debt
|
7,660
|
|
|
—
|
|
|
3,248
|
|
|
(928
|
)
|
|
(1,630
|
)
|
|
8,350
|
|
||||||
Corporate bonds
|
3,252
|
|
|
—
|
|
|
12,651
|
|
|
(7,288
|
)
|
|
640
|
|
|
9,255
|
|
||||||
Sovereign debt
|
21
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(1
|
)
|
|
—
|
|
||||||
Total assets
|
$
|
42,085
|
|
|
$
|
17,390
|
|
|
$
|
41,966
|
|
|
$
|
(11,823
|
)
|
|
$
|
(752
|
)
|
|
$
|
88,866
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,020
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(306
|
)
|
|
$
|
—
|
|
|
$
|
(1,326
|
)
|
Derivative liabilities (embedded)
|
(5,563
|
)
|
|
—
|
|
|
6,072
|
|
|
(861
|
)
|
|
260
|
|
|
(92
|
)
|
||||||
Total liabilities
|
$
|
(6,583
|
)
|
|
$
|
—
|
|
|
$
|
6,072
|
|
|
$
|
(1,167
|
)
|
|
$
|
260
|
|
|
$
|
(1,418
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
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 debt
|
—
|
|
|
—
|
|
|
8,123
|
|
|
—
|
|
|
(463
|
)
|
|
7,660
|
|
||||||
Corporate bonds
|
3,799
|
|
|
—
|
|
|
—
|
|
|
(372
|
)
|
|
(175
|
)
|
|
3,252
|
|
||||||
Sovereign debt
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
21
|
|
||||||
Total assets
|
$
|
9,962
|
|
|
$
|
(2,193
|
)
|
|
$
|
36,427
|
|
|
$
|
(3,127
|
)
|
|
$
|
1,016
|
|
|
$
|
42,085
|
|
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
|
)
|
(1)
|
Total change in realized and unrealized gains (losses) recorded on Level 3 financial instruments is included in
net investment income (loss)
in the
consolidated statements of income (loss)
.
|
December 31, 2016
|
|||||||||||
Assets
|
|
Fair value ($ in thousands)
|
|
Valuation technique
|
|
Unobservable (U) and
observable inputs (O) |
|
Range
|
|||
Derivative liabilities (embedded)
|
|
$
|
92
|
|
|
Discounted cash flow
|
|
Contractual variable annual investment credit (U)
|
|
0.0% - 2.5%
|
|
|
|
|
|
|
|
Mean monthly investment return (U)
|
|
0.8
|
%
|
||
|
|
|
|
|
|
Duration from inception of contracts (U)
|
|
5.0 years
|
|
||
|
|
|
|
|
|
Duration from valuation date (U)
|
|
3.0 years
|
|
||
|
|
|
|
|
|
Interest rates (O)
|
|
U.S. Treasury spot rates
|
|
||
Private equity investments
|
|
47,608
|
|
|
Market approach
|
|
Discount (U)
|
|
5.0% - 25.0%
|
|
|
|
|
|
|
|
|
Volatility (U)
|
|
40.0% - 60.0%
|
|
||
|
|
|
|
|
|
Time to exit (U)
|
|
0.4 - 2.8 years
|
|
||
|
|
|
|
|
|
Multiple (U)
|
|
2.0 - 3.8x
|
|
||
|
|
|
|
|
|
|
|
|
|||
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)
|
|
3.0 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, 2016
|
Overnights and continuous
|
|
Up to 30 days
|
|
30 - 90 days
|
|
Greater than 90 days
|
|
Total
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Securities lending transactions
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency securities
|
$
|
310
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
310
|
|
December 31, 2015
|
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
|
|
Securities lending transactions
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate bonds
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
2016
|
|
2015
|
||||
|
($ in thousands)
|
||||||
Due from brokers
|
|
|
|
||||
Cash held at brokers
|
$
|
240,205
|
|
|
$
|
249,871
|
|
Receivable from unsettled trades (1)
|
44,386
|
|
|
77,100
|
|
||
|
$
|
284,591
|
|
|
$
|
326,971
|
|
Due to brokers
|
|
|
|
||||
Borrowing from prime brokers (2)
|
$
|
855,576
|
|
|
$
|
572,688
|
|
Payable from unsettled trades
|
44,025
|
|
|
2,274
|
|
||
|
$
|
899,601
|
|
|
$
|
574,962
|
|
|
As of December 31, 2016
|
||||||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Assets by Primary Underlying Risk
|
($ in thousands)
|
||||||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
E
UR/ USD
|
|
$
|
10,905
|
|
|
$
|
84,327
|
|
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
E
UR/ GBP
|
|
1,765
|
|
|
36,879
|
|
||
Total Return Swaps - Long Contracts
|
B
RL/ USD
|
|
617
|
|
|
19,140
|
|
||
Total Return Swaps - Short Contracts
|
J
PY
|
|
183
|
|
|
8,696
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaps
|
GBP/USD
|
|
2,462
|
|
|
195,571
|
|
||
Interest Rate Swaptions
|
J
PY / USD
|
|
5,354
|
|
|
424,816
|
|
||
Sovereign Debt Futures - Short Contracts
|
U
SD
|
|
961
|
|
|
107,591
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
CAD/ CNH/ GBP/ MXN
|
|
653
|
|
|
47,754
|
|
||
Foreign Currency Options - Purchased
|
CNH/EUR/HKD/JPY/SAR
|
|
4,532
|
|
|
501,465
|
|
||
Total Derivative Assets
|
|
|
$
|
27,432
|
|
|
$
|
1,426,239
|
|
|
|
|
|
|
|
||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Liabilities by Primary Underlying Risk
|
($ in thousands)
|
||||||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
U
SD
|
|
$
|
3,286
|
|
|
$
|
43,184
|
|
Credit Default Swaps - Protection Sold
|
U
SD
|
|
1,952
|
|
|
3,943
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
G
BP
|
|
—
|
|
|
67
|
|
||
Contracts for Differences - Short Contracts
|
E
UR / ZAR
|
|
1,106
|
|
|
11,424
|
|
||
Total Return Swaps - Long Contracts
|
U
SD
|
|
1,675
|
|
|
26,800
|
|
||
Total Return Swaps - Short Contracts
|
J
PY / USD
|
|
1,302
|
|
|
10,095
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaps
|
G
BP
|
|
722
|
|
|
59,115
|
|
||
Interest Rate Swaptions
|
J
PY/USD
|
|
1,056
|
|
|
417,052
|
|
||
Sovereign Debt Futures - Short Contracts
|
E
UR / GBP
|
|
1,608
|
|
|
159,923
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
E
UR /JPY /SAR
|
|
2,009
|
|
|
214,854
|
|
||
Foreign Currency Options - Sold
|
CNH/JPY
|
|
1,334
|
|
|
363,840
|
|
||
Total Derivative Liabilities (free standing)
|
|
|
$
|
16,050
|
|
|
$
|
1,310,297
|
|
|
|
|
|
|
|
||||
Embedded derivative liabilities in reinsurance contracts (3)
|
USD
|
|
$
|
92
|
|
|
$
|
20,000
|
|
Total Derivative Liabilities (embedded)
|
|
|
$
|
92
|
|
|
$
|
20,000
|
|
(1)
|
BRL = Brazilian Real, CAD = Canadian Dollar, CNH = Chinese Yuan, EUR = Euro, GBP = British Pound, HKD = Hong Kong Dollar, JPY = Japanese Yen, MXN = Mexican Peso, SAR = Saudi Arabian Riyal, USD = US Dollar, ZAR = South African Rand
|
(2)
|
The absolute notional exposure represents the Company’s derivative activity as of
December 31, 2016
, 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, 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.
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
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
|
651
|
|
|
—
|
|
|
(286
|
)
|
|
285
|
|
|
(470
|
)
|
|
(289
|
)
|
||||||
Commodity Future Options - Sold
|
—
|
|
|
—
|
|
|
272
|
|
|
(269
|
)
|
|
364
|
|
|
101
|
|
||||||
Credit
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Credit Default Swaps - Protection Purchased
|
4,311
|
|
|
(6,841
|
)
|
|
1,282
|
|
|
4,839
|
|
|
(5,627
|
)
|
|
1,018
|
|
||||||
Credit Default Swaps - Protection Sold
|
(4,009
|
)
|
|
4,149
|
|
|
2,071
|
|
|
(2,098
|
)
|
|
1,362
|
|
|
(830
|
)
|
||||||
Equity Price
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Contracts for Differences - Long Contracts
|
(4,123
|
)
|
|
2,245
|
|
|
(6,101
|
)
|
|
660
|
|
|
(1,869
|
)
|
|
(11,621
|
)
|
||||||
Contracts for Differences - Short Contracts
|
(253
|
)
|
|
(3,579
|
)
|
|
8,459
|
|
|
2,418
|
|
|
(3,873
|
)
|
|
413
|
|
||||||
Total Return Swaps - Long Contracts
|
(6,835
|
)
|
|
1,957
|
|
|
1,410
|
|
|
(2,469
|
)
|
|
18,782
|
|
|
(2,112
|
)
|
||||||
Total Return Swaps - Short Contracts
|
(4,812
|
)
|
|
(1,198
|
)
|
|
(1,395
|
)
|
|
45
|
|
|
(795
|
)
|
|
171
|
|
||||||
Index
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Index Futures - Long Contracts
|
—
|
|
|
—
|
|
|
1,144
|
|
|
—
|
|
|
(840
|
)
|
|
—
|
|
||||||
Index Futures - Short Contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(253
|
)
|
|
441
|
|
||||||
Interest Rates
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bond Futures - Short Contracts
|
—
|
|
|
—
|
|
|
(2,584
|
)
|
|
—
|
|
|
(1,077
|
)
|
|
(212
|
)
|
||||||
Commodities Futures - Short Contracts
|
(281
|
)
|
|
(52
|
)
|
|
(580
|
)
|
|
194
|
|
|
(11
|
)
|
|
(143
|
)
|
||||||
Fixed Income Swap - Short Contracts
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest Rate Swaps
|
205
|
|
|
1,740
|
|
|
119
|
|
|
—
|
|
|
(743
|
)
|
|
639
|
|
||||||
Interest Rate Swaptions
|
(340
|
)
|
|
869
|
|
|
(771
|
)
|
|
(39
|
)
|
|
(455
|
)
|
|
(918
|
)
|
||||||
Sovereign Debt Futures - Short Contracts
|
10,519
|
|
|
(647
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Treasury Futures - Short Contracts
|
—
|
|
|
—
|
|
|
(2,734
|
)
|
|
280
|
|
|
(1,163
|
)
|
|
(388
|
)
|
||||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign Currency Forward
|
(2,747
|
)
|
|
(2,261
|
)
|
|
21,429
|
|
|
(3,334
|
)
|
|
16,891
|
|
|
3,617
|
|
||||||
Foreign Currency Options - Purchased
|
(2,338
|
)
|
|
(2,229
|
)
|
|
318
|
|
|
(1,144
|
)
|
|
(265
|
)
|
|
941
|
|
||||||
Foreign Currency Options - Sold
|
617
|
|
|
(103
|
)
|
|
1,214
|
|
|
316
|
|
|
(1,438
|
)
|
|
63
|
|
||||||
Reinsurance contract derivatives
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
982
|
|
||||||
|
$
|
(9,529
|
)
|
|
$
|
(5,950
|
)
|
|
$
|
21,782
|
|
|
$
|
(316
|
)
|
|
$
|
18,520
|
|
|
$
|
(8,127
|
)
|
Embedded Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Embedded derivatives in reinsurance contracts
|
$
|
—
|
|
|
$
|
260
|
|
|
$
|
(5
|
)
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
102
|
|
Embedded derivatives in deposit contracts
|
—
|
|
|
—
|
|
|
2,104
|
|
|
—
|
|
|
—
|
|
|
(2,090
|
)
|
||||||
Total Derivative Liabilities (embedded)
|
$
|
—
|
|
|
$
|
260
|
|
|
$
|
2,099
|
|
|
$
|
362
|
|
|
$
|
—
|
|
|
$
|
(1,988
|
)
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet
|
||||||||||||||
December 31, 2016
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
|
$
|
535
|
|
|
$
|
535
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Counterparty 2
|
3,147
|
|
|
607
|
|
|
—
|
|
|
2,540
|
|
||||
Counterparty 3
|
8,652
|
|
|
4,760
|
|
|
—
|
|
|
3,892
|
|
||||
Counterparty 4
|
1,639
|
|
|
1,639
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 5
|
7,336
|
|
|
3,027
|
|
|
—
|
|
|
4,309
|
|
||||
Counterparty 6
|
6,262
|
|
|
2,599
|
|
|
3,383
|
|
|
280
|
|
||||
Counterparty 7
|
227
|
|
|
—
|
|
|
197
|
|
|
30
|
|
||||
Counterparty 8
|
277
|
|
|
277
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 9
|
37
|
|
|
37
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
28,112
|
|
|
$
|
13,481
|
|
|
$
|
3,580
|
|
|
$
|
11,051
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet
|
||||||||||||||
December 31, 2016
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
|
$
|
2,959
|
|
|
$
|
535
|
|
|
$
|
2,424
|
|
|
$
|
—
|
|
Counterparty 2
|
607
|
|
|
607
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 3
|
4,760
|
|
|
4,760
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 4
|
3,827
|
|
|
1,639
|
|
|
2,188
|
|
|
—
|
|
||||
Counterparty 5
|
3,027
|
|
|
3,027
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 6
|
2,599
|
|
|
2,599
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 8
|
977
|
|
|
277
|
|
|
—
|
|
|
700
|
|
||||
Counterparty 9
|
822
|
|
|
37
|
|
|
785
|
|
|
—
|
|
||||
Total
|
$
|
19,578
|
|
|
$
|
13,481
|
|
|
$
|
5,397
|
|
|
$
|
700
|
|
|
|
|
|
|
|
|
|
||||||||
Securities lending transactions
|
|
|
|
|
|
|
|
||||||||
Counterparty 3
|
$
|
302
|
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302
|
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(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
$0.7 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
$3.5 million
included in Securities sold, not yet purchased in the consolidated balance sheets.
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet
|
||||||||||||||
December 31, 2015
Derivative Contracts
|
Gross Amounts of Assets Presented in the Consolidated Balance Sheet (1)
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Financial assets, derivative assets and collateral received
|
($ 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
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 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 and securities lending transactions
|
|
|
|
|
|
|
|
||||||||
Counterparty 3
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
2
|
|
Counterparty 4
|
8,944
|
|
|
8,944
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
9,058
|
|
|
$
|
8,944
|
|
|
$
|
112
|
|
|
$
|
2
|
|
(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
$3.7 million
included in Securities sold, not yet purchased in the consolidated balance sheets.
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
($ in thousands)
|
||||||
Case loss and loss adjustment expense reserves
|
$
|
80,370
|
|
|
$
|
87,186
|
|
Incurred but not reported loss and loss adjustment expense reserves
|
522,818
|
|
|
375,690
|
|
||
Deferred gains on retroactive reinsurance contracts
|
1,941
|
|
|
3,171
|
|
||
|
$
|
605,129
|
|
|
$
|
466,047
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Gross reserves for loss and loss adjustment expenses, beginning of year
|
$
|
466,047
|
|
|
$
|
277,362
|
|
|
$
|
134,331
|
|
Less: loss and loss adjustment expenses recoverable, beginning of year
|
(125
|
)
|
|
(814
|
)
|
|
(9,277
|
)
|
|||
Net reserves for loss and loss adjustment expenses, beginning of year
|
465,922
|
|
|
276,548
|
|
|
125,054
|
|
|||
Increase (decrease) in net loss and loss adjustment expenses incurred in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
373,048
|
|
|
419,377
|
|
|
286,787
|
|
|||
Prior years
|
23,930
|
|
|
(3,330
|
)
|
|
(3,559
|
)
|
|||
Amortization of deferred gains on retroactive reinsurance contracts
|
(1,046
|
)
|
|
(856
|
)
|
|
(81
|
)
|
|||
Total incurred loss and loss adjustment expenses
|
395,932
|
|
|
415,191
|
|
|
283,147
|
|
|||
Net loss and loss adjustment expenses paid in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
(105,921
|
)
|
|
(100,403
|
)
|
|
(70,562
|
)
|
|||
Prior years
|
(133,241
|
)
|
|
(121,665
|
)
|
|
(61,091
|
)
|
|||
Total net paid losses
|
(239,162
|
)
|
|
(222,068
|
)
|
|
(131,653
|
)
|
|||
Foreign currency translation
|
(17,564
|
)
|
|
(3,749
|
)
|
|
—
|
|
|||
Net reserve for loss and loss adjustment expenses, end of year
|
605,128
|
|
|
465,922
|
|
|
276,548
|
|
|||
Plus: loss and loss adjustment expenses recoverable, end of year
|
1
|
|
|
125
|
|
|
814
|
|
|||
Gross reserve for loss and loss adjustment expenses, end of year
|
$
|
605,129
|
|
|
$
|
466,047
|
|
|
$
|
277,362
|
|
•
|
The
$10.5 million
of net
adverse
prior years’ reserve development for the year ended
December 31, 2016
was accompanied by net
increase
s of
$2.0 million
in acquisition costs, resulting in a net
increase
of
$12.5 million
in net underwriting loss, primarily due to:
|
◦
|
$4.8 million
of net adverse underwriting loss development relating to one multi-line contract written since 2014. This contract contains underlying commercial auto physical damage and auto extended warranty exposure. The adverse loss experience is a result of an increase in the number of reported claims and inadequate pricing in certain segments of the underlying business;
|
◦
|
$4.0 million
of net adverse underwriting loss development relating to non-standard auto contracts, primarily due to the inability of cedents to promptly react to increasing frequency and severity trends, resulting in underpriced business and adverse selection;
|
◦
|
$3.7 million
of net adverse underwriting loss development relating to our Florida homeowners’ reinsurance contracts primarily as a result of higher than anticipated water damage claims and an increase in the practice of assignment of benefits whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters, which has led to increases in the frequency of claims reported as well as the severity of losses and loss adjustment expenses. Contracts for which we experienced this adverse loss development have not been renewed;
|
◦
|
$3.3 million
of net adverse underwriting loss development relating to a workers’ compensation contract written from 2012 to 2014 under which we have been experiencing higher than expected reported claims development that led to an increase in our previous loss assumptions on this contract; and
|
◦
|
$2.1 million
of net favorable underwriting loss development from several other contracts.
|
•
|
The
$13.4 million
increase
in loss and loss adjustment expenses incurred related to the increase in premium estimates on certain contracts was accompanied by a
$6.4 million
increase
in acquisition costs, for a total of
$19.8 million
increase
in loss and loss adjustment expenses incurred and acquisition costs. The related
increase
in earned premium related to the increase in premium estimates was
$19.5 million
, resulting in a
$0.3 million
increase
to the net underwriting loss for the year ended
December 31, 2016
.
|
•
|
In total, the change in net underwriting loss for prior periods due to loss reserve development and adjustments to premium estimates was an
increase
in net underwriting loss of
$12.8 million
for the year ended
December 31, 2016
.
|
•
|
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 workers’ compensation, auto and property 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 period.
|
•
|
The
$2.1 million
increase in loss and loss adjustment expenses incurred related to the increase in premium estimates on certain contracts 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
increase to the net underwriting loss for the year ended December 31, 2015.
|
•
|
In total, loss reserve development related to re-estimating loss reserves and increases in premium estimates for prior years resulted in an increase of
$7.5 million
in net underwriting loss 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
$2.9 million
of favorable development related to the decrease 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
$0.4 million
for the year ended December 31, 2014.
|
•
|
In total, loss reserve development related to re-estimating loss reserves and decreases in premium estimates for prior years resulted in minimal impact to net underwriting loss for the year ended December 31, 2014
|
Loss and loss adjustment expenses incurred, net
(1)(2)
|
|
|
||||||||||||||||||||||
Accident year
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
IBNR loss and loss adjustment expense reserves, net
|
||||||||||||
|
|
($ in thousands)
|
||||||||||||||||||||||
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
||||||||||||
2012
|
|
$
|
80,306
|
|
|
$
|
75,413
|
|
|
$
|
76,273
|
|
|
$
|
76,538
|
|
|
$
|
76,628
|
|
|
$
|
290
|
|
2013
|
|
—
|
|
|
144,508
|
|
|
140,123
|
|
|
144,312
|
|
|
144,058
|
|
|
10,404
|
|
||||||
2014
|
|
—
|
|
|
—
|
|
|
284,464
|
|
|
275,622
|
|
|
274,910
|
|
|
74,768
|
|
||||||
2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
396,635
|
|
|
421,923
|
|
|
204,039
|
|
||||||
2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
366,725
|
|
|
233,317
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
$
|
1,284,244
|
|
|
|
Year 1
|
|
Year 2
|
|
Year 3
|
|
Year 4
|
|
Year 5
|
|||||
(Unaudited)
|
|||||||||||||
22.7
|
%
|
|
41.6
|
%
|
|
11.6
|
%
|
|
4.1
|
%
|
|
1.1
|
%
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Management fees - Third Point LLC
|
$
|
7,110
|
|
|
$
|
6,362
|
|
|
$
|
5,037
|
|
Management fees - Founders (1)
|
35,321
|
|
|
36,053
|
|
|
28,544
|
|
|||
Performance fees - Third Point Advisors LLC
|
17,276
|
|
|
862
|
|
|
19,935
|
|
|||
|
$
|
59,707
|
|
|
$
|
43,277
|
|
|
$
|
53,516
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Balance, beginning of year
|
$
|
83,955
|
|
|
$
|
145,430
|
|
|
$
|
120,946
|
|
Consideration received
|
22,463
|
|
|
21,246
|
|
|
18,398
|
|
|||
Net investment expense (income) allocation and change in fair value of embedded derivatives
|
(164
|
)
|
|
2,207
|
|
|
6,436
|
|
|||
Payments
|
(915
|
)
|
|
(84,928
|
)
|
|
(350
|
)
|
|||
Foreign currency translation
|
(434
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, end of year
|
$
|
104,905
|
|
|
$
|
83,955
|
|
|
$
|
145,430
|
|
|
Facility
|
|
Utilized
|
|
Collateral
|
||||||
December 31, 2016
|
($ in thousands)
|
||||||||||
BNP Paribas
|
$
|
50,000
|
|
|
$
|
7,976
|
|
|
$
|
7,976
|
|
Citibank
|
300,000
|
|
|
157,070
|
|
|
157,070
|
|
|||
J.P. Morgan
|
50,000
|
|
|
9
|
|
|
9
|
|
|||
Lloyds Bank (1)
|
125,000
|
|
|
66,767
|
|
|
66,767
|
|
|||
|
$
|
525,000
|
|
|
$
|
231,822
|
|
|
$
|
231,822
|
|
(1)
|
During the year, the Lloyds Bank facility of
$100.0 million
with Third Point Re was terminated and
two
new facilities were entered into,
$75.0 million
with Third Point Re and
$50.0 million
with Third Point Re USA.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net investment income (loss) by type
|
($ in thousands)
|
||||||||||
Net realized gains on investments and investment derivatives
|
$
|
33,505
|
|
|
$
|
14,398
|
|
|
$
|
193,957
|
|
Net unrealized gains (losses) on investments and investment derivatives
|
70,290
|
|
|
(34,181
|
)
|
|
(83,146
|
)
|
|||
Net gains (losses) on foreign currencies
|
(2,557
|
)
|
|
933
|
|
|
2,581
|
|
|||
Dividend and interest income
|
77,160
|
|
|
45,103
|
|
|
31,750
|
|
|||
Dividends paid on securities sold, not yet purchased
|
(1,977
|
)
|
|
(1,279
|
)
|
|
(120
|
)
|
|||
Management and performance fees
|
(59,707
|
)
|
|
(43,277
|
)
|
|
(53,516
|
)
|
|||
Other expenses
|
(19,422
|
)
|
|
(11,305
|
)
|
|
(7,151
|
)
|
|||
Net investment income (loss) on investments managed by Third Point LLC
|
97,292
|
|
|
(29,608
|
)
|
|
84,355
|
|
|||
Net gain on investment in Kiskadee Fund
|
1,533
|
|
|
1,465
|
|
|
—
|
|
|||
Net investment income related to Catastrophe Reinsurer and Catastrophe Fund
|
—
|
|
|
69
|
|
|
1,227
|
|
|||
|
$
|
98,825
|
|
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net investment income (loss) by asset class
|
($ in thousands)
|
||||||||||
Net investment gains (losses) on equity securities
|
$
|
90,089
|
|
|
$
|
(31,224
|
)
|
|
$
|
82,902
|
|
Net investment gains on debt securities
|
134,512
|
|
|
35,502
|
|
|
80,285
|
|
|||
Net investment losses on other investments
|
(27,349
|
)
|
|
(35,917
|
)
|
|
(35,491
|
)
|
|||
Net investment gains (losses) on investment derivatives
|
(15,479
|
)
|
|
21,466
|
|
|
10,393
|
|
|||
Net investment gains (losses) on securities sold, not yet purchased
|
(5,030
|
)
|
|
33,086
|
|
|
4,334
|
|
|||
Net investment income (loss) on cash, including foreign exchange gains (losses)
|
(10,173
|
)
|
|
149
|
|
|
4,992
|
|
|||
Net investment losses on securities purchased under an agreement to resell
|
—
|
|
|
(147
|
)
|
|
(4,099
|
)
|
|||
Net investment losses on securities sold under an agreement to repurchase
|
(1,970
|
)
|
|
(2,226
|
)
|
|
—
|
|
|||
Management and performance fees
|
(59,707
|
)
|
|
(43,277
|
)
|
|
(53,516
|
)
|
|||
Other investment expenses
|
(6,068
|
)
|
|
(5,486
|
)
|
|
(4,218
|
)
|
|||
|
$
|
98,825
|
|
|
$
|
(28,074
|
)
|
|
$
|
85,582
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Deposit liabilities investment expense (income)
|
$
|
(164
|
)
|
|
$
|
6,471
|
|
|
$
|
4,346
|
|
Reinsurance contracts investment expense
|
8,811
|
|
|
6,764
|
|
|
1,061
|
|
|||
Change in fair value of embedded derivatives in deposit and reinsurance contracts
|
(260
|
)
|
|
(4,621
|
)
|
|
1,988
|
|
|||
|
$
|
8,387
|
|
|
$
|
8,614
|
|
|
$
|
7,395
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Income tax expense (benefit) related to U.S. and U.K. subsidiaries
|
$
|
(1,232
|
)
|
|
$
|
(6,633
|
)
|
|
$
|
24
|
|
Change in uncertain tax positions
|
147
|
|
|
(1,100
|
)
|
|
2,600
|
|
|||
Withholding taxes on certain investment transactions
|
6,678
|
|
|
4,828
|
|
|
3,024
|
|
|||
Income tax expense (benefit)
|
$
|
5,593
|
|
|
$
|
(2,905
|
)
|
|
$
|
5,648
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Bermuda
|
$
|
38,243
|
|
|
$
|
(71,416
|
)
|
|
$
|
62,649
|
|
United States
|
(3,687
|
)
|
|
(18,981
|
)
|
|
(255
|
)
|
|||
United Kingdom
|
(87
|
)
|
|
53
|
|
|
(36
|
)
|
|||
Income (loss) before income tax expense (benefit)
|
$
|
34,469
|
|
|
$
|
(90,344
|
)
|
|
$
|
62,358
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Bermuda (expected tax expense at 0%)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign taxes at local expected rates:
|
|
|
|
|
|
||||||
United States
|
(1,290
|
)
|
|
(6,644
|
)
|
|
—
|
|
|||
United Kingdom
|
(17
|
)
|
|
11
|
|
|
24
|
|
|||
Withholding taxes related to dividend and interest income
|
6,678
|
|
|
4,828
|
|
|
3,024
|
|
|||
Uncertain tax positions
|
147
|
|
|
(1,100
|
)
|
|
2,600
|
|
|||
Non-deductible expenses and other
|
75
|
|
|
—
|
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
5,593
|
|
|
$
|
(2,905
|
)
|
|
$
|
5,648
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Current tax expense
|
$
|
6,825
|
|
|
$
|
3,728
|
|
|
$
|
5,648
|
|
Deferred tax expense (benefit)
|
(1,232
|
)
|
|
(6,633
|
)
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
5,593
|
|
|
$
|
(2,905
|
)
|
|
$
|
5,648
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Discounting of loss and loss adjustment expense reserves
|
$
|
451
|
|
|
$
|
119
|
|
|
$
|
—
|
|
Unearned premiums
|
2,486
|
|
|
2,329
|
|
|
—
|
|
|||
Temporary differences in recognition of expenses
|
1,134
|
|
|
573
|
|
|
—
|
|
|||
Net operating loss carryforward
|
13,326
|
|
|
7,839
|
|
|
—
|
|
|||
Total deferred tax assets
|
17,397
|
|
|
10,860
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Deferred tax liabilities:
|
|
|
|
|
|
||||||
Deferred acquisition costs
|
4,079
|
|
|
3,515
|
|
|
—
|
|
|||
Unrealized gains on investments
|
5,438
|
|
|
712
|
|
|
—
|
|
|||
Total deferred tax liabilities
|
9,517
|
|
|
4,227
|
|
|
—
|
|
|||
Net deferred tax assets
|
$
|
7,880
|
|
|
$
|
6,633
|
|
|
$
|
—
|
|
Common shares
|
2016
|
|
2015
|
||
Balance, beginning of period
|
105,479,341
|
|
|
104,473,402
|
|
Options exercised
|
514,059
|
|
|
433,279
|
|
Restricted shares granted, net of forfeitures
|
47,712
|
|
|
110,853
|
|
Performance restricted shares granted, net of forfeitures
|
460,187
|
|
|
461,807
|
|
Balance, end of period
|
106,501,299
|
|
|
105,479,341
|
|
Treasury shares
|
2016
|
|
2015
|
||
Balance, beginning of period
|
—
|
|
|
—
|
|
Repurchase of common shares
|
644,768
|
|
|
—
|
|
Balance, end of period
|
644,768
|
|
|
—
|
|
|
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
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Management and director options
|
$
|
6,054
|
|
|
$
|
6,264
|
|
|
$
|
6,600
|
|
Restricted shares with service condition
|
1,365
|
|
|
1,953
|
|
|
2,591
|
|
|||
Restricted shares with service and performance condition
|
1,519
|
|
|
2,654
|
|
|
67
|
|
|||
|
$
|
8,938
|
|
|
$
|
10,871
|
|
|
$
|
9,258
|
|
|
Number of
options
|
|
Weighted
average exercise
price
|
|||
Balances as of January 1, 2014
|
10,981,075
|
|
|
$
|
13.23
|
|
Granted
|
348,836
|
|
|
18.25
|
|
|
Forfeited
|
(279,070
|
)
|
|
13.20
|
|
|
Exercised
|
(60,000
|
)
|
|
10.00
|
|
|
Balances as of January 1, 2015
|
10,990,841
|
|
|
13.41
|
|
|
Forfeited
|
(306,976
|
)
|
|
14.36
|
|
|
Exercised
|
(433,279
|
)
|
|
10.00
|
|
|
Balances as of January 1, 2016
|
10,250,586
|
|
|
13.52
|
|
|
Forfeited
|
(139,534
|
)
|
|
18.00
|
|
|
Exercised
|
(514,059
|
)
|
|
10.00
|
|
|
Balances as of December 31, 2016
|
9,596,993
|
|
|
$
|
13.64
|
|
|
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
|
5,274,334
|
|
|
$
|
10.04
|
|
|
5.0 years
|
|
4,660,380
|
|
|
$
|
10.02
|
|
$15.05 - $16.89
|
2,196,214
|
|
|
$
|
15.94
|
|
|
4.8 years
|
|
1,907,842
|
|
|
$
|
15.96
|
|
$20.00 - $25.05
|
2,126,445
|
|
|
$
|
20.23
|
|
|
4.7 years
|
|
1,865,981
|
|
|
$
|
20.16
|
|
|
9,596,993
|
|
|
$
|
13.64
|
|
|
4.9 years
|
|
8,434,203
|
|
|
$
|
13.61
|
|
|
Number of non-
vested restricted
shares
|
|
Weighted
average grant
date fair value
|
|||
Balance as of January 1, 2014
|
657,156
|
|
|
$
|
10.30
|
|
Granted
|
49,684
|
|
|
15.39
|
|
|
Forfeited
|
(17,800
|
)
|
|
10.00
|
|
|
Vested
|
(72,926
|
)
|
|
15.56
|
|
|
Balance as of January 1, 2015
|
616,114
|
|
|
10.10
|
|
|
Granted
|
118,120
|
|
|
13.06
|
|
|
Forfeited
|
(7,267
|
)
|
|
13.76
|
|
|
Vested
|
(425,924
|
)
|
|
10.37
|
|
|
Balance as of January 1, 2016
|
301,043
|
|
|
11.12
|
|
|
Granted
|
47,712
|
|
|
11.37
|
|
|
Vested
|
(47,712
|
)
|
|
11.37
|
|
|
Balance as of December 31, 2016
|
301,043
|
|
|
$
|
11.12
|
|
|
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 January 1, 2015
|
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
|
n/a
|
|
|
(78,128
|
)
|
|
14.60
|
|
|
Balance as of January 1, 2016
|
921,553
|
|
|
536,234
|
|
|
14.24
|
|
|
Granted
|
653,958
|
|
|
435,974
|
|
|
11.40
|
|
|
Forfeited
|
(193,771
|
)
|
|
(119,009
|
)
|
|
13.16
|
|
|
Change in estimated restricted shares considered probable of vesting
|
n/a
|
|
|
(275,713
|
)
|
|
13.06
|
|
|
Balance as of December 31, 2016
|
1,381,740
|
|
|
577,486
|
|
|
$
|
12.91
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Catastrophe Fund
|
$
|
—
|
|
|
$
|
(121
|
)
|
|
$
|
4,748
|
|
Catastrophe Fund Manager
|
—
|
|
|
19
|
|
|
(23
|
)
|
|||
Joint Venture - Third Point Advisors LLC share
|
1,241
|
|
|
53
|
|
|
1,590
|
|
|||
|
$
|
1,241
|
|
|
$
|
(49
|
)
|
|
$
|
6,315
|
|
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
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Weighted-average number of common shares outstanding:
|
|
($ in thousands, except share and per share amounts)
|
|||||||||||
|
Basic number of common shares outstanding
|
|
104,060,052
|
|
|
104,003,820
|
|
|
103,287,693
|
|
|||
|
Dilutive effect of options
|
|
633,955
|
|
|
—
|
|
|
1,468,521
|
|
|||
|
Dilutive effect of warrants
|
|
709,499
|
|
|
—
|
|
|
1,634,845
|
|
|||
|
Dilutive effect of restricted shares with service and performance condition
|
|
160,278
|
|
|
—
|
|
|
—
|
|
|||
|
Diluted number of common shares outstanding
|
|
105,563,784
|
|
|
104,003,820
|
|
|
106,391,059
|
|
|||
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|||||||
|
Net income (loss)
|
|
$
|
27,635
|
|
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
Income allocated to participating shares
|
|
(88
|
)
|
|
—
|
|
|
(328
|
)
|
|||
|
Net income (loss) available to common shareholders
|
|
$
|
27,547
|
|
|
$
|
(87,390
|
)
|
|
$
|
50,067
|
|
|
Basic earnings (loss) per common share
|
|
$
|
0.26
|
|
|
$
|
(0.84
|
)
|
|
$
|
0.48
|
|
Diluted earnings (loss) per common share
|
|
|
|
|
|
|
|||||||
|
Net income (loss)
|
|
$
|
27,635
|
|
|
$
|
(87,390
|
)
|
|
$
|
50,395
|
|
|
Income allocated to participating shares
|
|
(87
|
)
|
|
—
|
|
|
(319
|
)
|
|||
|
Net income (loss) available to common shareholders
|
|
$
|
27,548
|
|
|
$
|
(87,390
|
)
|
|
$
|
50,076
|
|
|
Diluted earnings (loss) per common share
|
|
$
|
0.26
|
|
|
$
|
(0.84
|
)
|
|
$
|
0.47
|
|
December 31, 2016
|
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)
|
$
|
—
|
|
|
$
|
3,943
|
|
|
$
|
3,943
|
|
|
$
|
—
|
|
|
$
|
1,952
|
|
|
$
|
(1,952
|
)
|
|
$
|
—
|
|
|
$
|
3,943
|
|
|
$
|
3,943
|
|
|
$
|
—
|
|
|
$
|
1,952
|
|
|
$
|
(1,952
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
)
|
(1)
|
As of
December 31, 2016
and
2015
, 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, 2016
|
||||||||||||||
|
Property and Casualty Reinsurance
|
|
Catastrophe Risk Management
|
|
Corporate
|
|
Total
|
||||||||
Revenues
|
($ in thousands)
|
||||||||||||||
Gross premiums written
|
$
|
617,374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
617,374
|
|
Gross premiums ceded
|
(2,325
|
)
|
|
—
|
|
|
—
|
|
|
(2,325
|
)
|
||||
Net premiums written
|
615,049
|
|
|
—
|
|
|
—
|
|
|
615,049
|
|
||||
Change in net unearned premium reserves
|
(24,859
|
)
|
|
—
|
|
|
—
|
|
|
(24,859
|
)
|
||||
Net premiums earned
|
590,190
|
|
|
—
|
|
|
—
|
|
|
590,190
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
395,932
|
|
|
—
|
|
|
—
|
|
|
395,932
|
|
||||
Acquisition costs, net
|
222,150
|
|
|
—
|
|
|
—
|
|
|
222,150
|
|
||||
General and administrative expenses
|
22,160
|
|
|
—
|
|
|
17,207
|
|
|
39,367
|
|
||||
Total expenses
|
640,242
|
|
|
—
|
|
|
17,207
|
|
|
657,449
|
|
||||
Net underwriting loss
|
(50,052
|
)
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
||||
Net investment inco
me
|
16,931
|
|
|
—
|
|
|
81,894
|
|
|
98,825
|
|
||||
Other expenses
|
(8,387
|
)
|
|
—
|
|
|
—
|
|
|
(8,387
|
)
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
(8,231
|
)
|
|
(8,231
|
)
|
||||
Foreign exchange gains
|
—
|
|
|
—
|
|
|
19,521
|
|
|
19,521
|
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
(5,593
|
)
|
|
(5,593
|
)
|
||||
Segment income (loss) including non-controlling interests
|
(41,508
|
)
|
|
—
|
|
|
70,384
|
|
|
28,876
|
|
||||
Segment income attributable to non-controlling interes
ts
|
—
|
|
|
—
|
|
|
(1,241
|
)
|
|
(1,241
|
)
|
||||
Segment income (loss)
|
$
|
(41,508
|
)
|
|
$
|
—
|
|
|
$
|
69,143
|
|
|
$
|
27,635
|
|
|
|
|
|
|
|
|
|
||||||||
Property and Casualty Reinsurance - Underwriting Ratios (1):
|
|
|
|
|
|
|
|||||||||
Loss ratio
|
67.1
|
%
|
|
|
|
|
|
|
|||||||
Acquisition cost ratio
|
37.6
|
%
|
|
|
|
|
|
|
|||||||
Composite ratio
|
104.7
|
%
|
|
|
|
|
|
|
|||||||
General and administrative expense ratio
|
3.8
|
%
|
|
|
|
|
|
|
|||||||
Combined ratio
|
108.5
|
%
|
|
|
|
|
|
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
|
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 (income) 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 in
terests
|
(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.
|
|
2016
|
|
2015
|
|
2014
|
|||
Largest contract
|
16.1
|
%
|
|
16.1
|
%
|
|
20.4
|
%
|
Second largest contract
|
n/a
|
|
|
13.0
|
%
|
|
17.1
|
%
|
Total for contracts contributing greater than 10% each
|
16.1
|
%
|
|
29.1
|
%
|
|
37.5
|
%
|
Total for contracts contributing less than 10% each
|
83.9
|
%
|
|
70.9
|
%
|
|
62.5
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||
|
($ in thousands)
|
||||||||||||
Counterparty 1
|
$
|
82,162
|
|
|
21.5
|
%
|
|
$
|
87,044
|
|
|
29.6
|
%
|
Other counterparties representing less than 10% each
|
299,789
|
|
|
78.5
|
%
|
|
207,269
|
|
|
70.4
|
%
|
||
Reinsurance balances receivable
|
$
|
381,951
|
|
|
100.0
|
%
|
|
$
|
294,313
|
|
|
100.0
|
%
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Property
|
$
|
98,334
|
|
|
15.9
|
%
|
|
$
|
114,215
|
|
|
16.2
|
%
|
|
$
|
106,834
|
|
|
17.4
|
%
|
Casualty
|
213,050
|
|
|
34.5
|
%
|
|
327,064
|
|
|
46.6
|
%
|
|
266,763
|
|
|
43.5
|
%
|
|||
Specialty
|
305,990
|
|
|
49.6
|
%
|
|
261,179
|
|
|
37.2
|
%
|
|
227,708
|
|
|
37.1
|
%
|
|||
Total property and casualty reinsurance
|
617,374
|
|
|
100.0
|
%
|
|
702,458
|
|
|
100.0
|
%
|
|
601,305
|
|
|
98.0
|
%
|
|||
Catastrophe risk management
|
—
|
|
|
—
|
%
|
|
(44
|
)
|
|
—
|
%
|
|
11,995
|
|
|
2.0
|
%
|
|||
|
$
|
617,374
|
|
|
100.0
|
%
|
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Prospective
|
$
|
617,374
|
|
|
100.0
|
%
|
|
$
|
594,350
|
|
|
84.6
|
%
|
|
$
|
530,169
|
|
|
86.4
|
%
|
Retroactive (1)
|
—
|
|
|
—
|
%
|
|
108,064
|
|
|
15.4
|
%
|
|
83,131
|
|
|
13.6
|
%
|
|||
|
$
|
617,374
|
|
|
100.0
|
%
|
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
(1)
|
Includes all retroactive exposure in reinsurance contracts.
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
Largest broker
|
$
|
240,172
|
|
|
38.9
|
%
|
|
$
|
198,209
|
|
|
28.2
|
%
|
|
$
|
199,563
|
|
|
32.5
|
%
|
Second largest broker
|
185,638
|
|
|
30.1
|
%
|
|
163,832
|
|
|
23.3
|
%
|
|
110,063
|
|
|
17.9
|
%
|
|||
Third largest broker
|
97,148
|
|
|
15.7
|
%
|
|
91,554
|
|
|
13.0
|
%
|
|
80,535
|
|
|
13.1
|
%
|
|||
Fourth largest broker
|
n/a
|
|
|
n/a
|
|
|
73,499
|
|
|
10.5
|
%
|
|
61,777
|
|
|
10.1
|
%
|
|||
Other
|
94,416
|
|
|
15.3
|
%
|
|
175,320
|
|
|
25.0
|
%
|
|
161,362
|
|
|
26.4
|
%
|
|||
|
$
|
617,374
|
|
|
100.0
|
%
|
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||
United States
|
$
|
332,849
|
|
|
53.9
|
%
|
|
$
|
283,626
|
|
|
40.4
|
%
|
|
$
|
339,061
|
|
|
55.3
|
%
|
United Kingdom
|
187,625
|
|
|
30.4
|
%
|
|
290,710
|
|
|
41.4
|
%
|
|
176,522
|
|
|
28.8
|
%
|
|||
Bermuda
|
96,900
|
|
|
15.7
|
%
|
|
128,078
|
|
|
18.2
|
%
|
|
97,717
|
|
|
15.9
|
%
|
|||
|
$
|
617,374
|
|
|
100.0
|
%
|
|
$
|
702,414
|
|
|
100.0
|
%
|
|
$
|
613,300
|
|
|
100.0
|
%
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
($ in thousands)
|
||||||
Actual statutory capital and surplus
|
|
|
|
||||
Third Point Re
|
$
|
1,259,876
|
|
|
$
|
1,044,340
|
|
Third Point Re USA
|
282,552
|
|
|
246,948
|
|
||
Required statutory capital and surplus
|
|
|
|
||||
Third Point Re
|
642,349
|
|
|
612,617
|
|
||
Third Point Re USA
|
$
|
89,557
|
|
|
$
|
83,617
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
($ in thousands)
|
||||||||||
Third Point Re
|
$
|
35,096
|
|
|
$
|
(68,188
|
)
|
|
$
|
56,686
|
|
Third Point Re USA
|
$
|
2,701
|
|
|
$
|
(7,510
|
)
|
|
n/a
|
|
CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of December 31, 2016
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,506,854
|
|
|
$
|
—
|
|
|
$
|
1,506,854
|
|
Debt securities
|
—
|
|
|
—
|
|
|
1,057,957
|
|
|
—
|
|
|
1,057,957
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
82,701
|
|
|
—
|
|
|
82,701
|
|
|||||
Total investments in securities
|
—
|
|
|
—
|
|
|
2,647,512
|
|
|
—
|
|
|
2,647,512
|
|
|||||
Cash and cash equivalents
|
1,629
|
|
|
79
|
|
|
8,243
|
|
|
—
|
|
|
9,951
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
298,940
|
|
|
—
|
|
|
298,940
|
|
|||||
Investment in subsidiaries
|
1,413,078
|
|
|
269,622
|
|
|
165,324
|
|
|
(1,848,024
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
284,591
|
|
|
—
|
|
|
284,591
|
|
|||||
Derivative assets, at fair value
|
—
|
|
|
—
|
|
|
27,432
|
|
|
—
|
|
|
27,432
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
6,505
|
|
|
—
|
|
|
6,505
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
381,951
|
|
|
—
|
|
|
381,951
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
221,618
|
|
|
—
|
|
|
221,618
|
|
|||||
Amounts due from (to) affiliates
|
(142
|
)
|
|
(8,394
|
)
|
|
8,536
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
637
|
|
|
5,507
|
|
|
11,000
|
|
|
—
|
|
|
17,144
|
|
|||||
Total assets
|
$
|
1,415,202
|
|
|
$
|
266,814
|
|
|
$
|
4,061,652
|
|
|
$
|
(1,848,024
|
)
|
|
$
|
3,895,644
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
1,151
|
|
|
$
|
40
|
|
|
$
|
9,130
|
|
|
$
|
—
|
|
|
$
|
10,321
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
43,171
|
|
|
—
|
|
|
43,171
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
104,905
|
|
|
—
|
|
|
104,905
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
557,076
|
|
|
—
|
|
|
557,076
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
605,129
|
|
|
—
|
|
|
605,129
|
|
|||||
Securities sold, not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
92,668
|
|
|
—
|
|
|
92,668
|
|
|||||
Due to brokers
|
—
|
|
|
—
|
|
|
899,601
|
|
|
—
|
|
|
899,601
|
|
|||||
Derivative liabilities, at fair value
|
—
|
|
|
—
|
|
|
16,050
|
|
|
—
|
|
|
16,050
|
|
|||||
Interest and dividends payable
|
—
|
|
|
3,057
|
|
|
386
|
|
|
—
|
|
|
3,443
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,555
|
|
|
—
|
|
|
—
|
|
|
113,555
|
|
|||||
Total liabilities
|
1,151
|
|
|
116,652
|
|
|
2,328,116
|
|
|
—
|
|
|
2,445,919
|
|
|||||
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
10,650
|
|
|
—
|
|
|
1,250
|
|
|
(1,250
|
)
|
|
10,650
|
|
|||||
Treasury shares
|
(7,389
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,389
|
)
|
|||||
Additional paid-in capital
|
1,094,568
|
|
|
165,456
|
|
|
1,528,827
|
|
|
(1,694,283
|
)
|
|
1,094,568
|
|
|||||
Retained earnings (deficit)
|
316,222
|
|
|
(15,294
|
)
|
|
167,785
|
|
|
(152,491
|
)
|
|
316,222
|
|
|||||
Shareholders’ equity attributable to shareholders
|
1,414,051
|
|
|
150,162
|
|
|
1,697,862
|
|
|
(1,848,024
|
)
|
|
1,414,051
|
|
|||||
Non-controlling interests
|
—
|
|
|
—
|
|
|
35,674
|
|
|
—
|
|
|
35,674
|
|
|||||
Total shareholders’ equity
|
1,414,051
|
|
|
150,162
|
|
|
1,733,536
|
|
|
(1,848,024
|
)
|
|
1,449,725
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,415,202
|
|
|
$
|
266,814
|
|
|
$
|
4,061,652
|
|
|
$
|
(1,848,024
|
)
|
|
$
|
3,895,644
|
|
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
|
|
|||||
Amounts due from (to) affiliates
|
(346
|
)
|
|
(230
|
)
|
|
576
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
564
|
|
|
2,613
|
|
|
8,964
|
|
|
—
|
|
|
12,141
|
|
|||||
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 STATEMENT OF INCOME (LOSS)
|
|||||||||||||||||||
Year Ended December 31, 2016
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
617,374
|
|
|
$
|
—
|
|
|
$
|
617,374
|
|
Gross premiums ceded
|
—
|
|
|
—
|
|
|
(2,325
|
)
|
|
—
|
|
|
(2,325
|
)
|
|||||
Net premiums written
|
—
|
|
|
—
|
|
|
615,049
|
|
|
—
|
|
|
615,049
|
|
|||||
Change in net unearned premium reserves
|
—
|
|
|
—
|
|
|
(24,859
|
)
|
|
—
|
|
|
(24,859
|
)
|
|||||
Net premiums earned
|
—
|
|
|
—
|
|
|
590,190
|
|
|
—
|
|
|
590,190
|
|
|||||
Net investment income
|
—
|
|
|
—
|
|
|
98,825
|
|
|
—
|
|
|
98,825
|
|
|||||
Equity in earnings (losses) of s
ubsidiaries
|
32,347
|
|
|
2,701
|
|
|
(107
|
)
|
|
(34,941
|
)
|
|
—
|
|
|||||
Total revenues
|
32,347
|
|
|
2,701
|
|
|
688,908
|
|
|
(34,941
|
)
|
|
689,015
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
—
|
|
|
—
|
|
|
395,932
|
|
|
—
|
|
|
395,932
|
|
|||||
Acquisition costs, net
|
—
|
|
|
—
|
|
|
222,150
|
|
|
—
|
|
|
222,150
|
|
|||||
General and administrative expenses
|
4,712
|
|
|
40
|
|
|
34,615
|
|
|
—
|
|
|
39,367
|
|
|||||
Other expenses
|
—
|
|
|
—
|
|
|
8,387
|
|
|
—
|
|
|
8,387
|
|
|||||
Interest expense
|
—
|
|
|
8,231
|
|
|
—
|
|
|
—
|
|
|
8,231
|
|
|||||
Foreign exchange gains
|
—
|
|
|
—
|
|
|
(19,521
|
)
|
|
—
|
|
|
(19,521
|
)
|
|||||
Total expenses
|
4,712
|
|
|
8,271
|
|
|
641,563
|
|
|
—
|
|
|
654,546
|
|
|||||
Income (loss) before income tax (expense) benefit
|
27,635
|
|
|
(5,570
|
)
|
|
47,345
|
|
|
(34,941
|
)
|
|
34,469
|
|
|||||
Income tax (expense) benefit
|
—
|
|
|
2,895
|
|
|
(8,488
|
)
|
|
—
|
|
|
(5,593
|
)
|
|||||
Income (loss) including non-controlling interests
|
27,635
|
|
|
(2,675
|
)
|
|
38,857
|
|
|
(34,941
|
)
|
|
28,876
|
|
|||||
Income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(1,241
|
)
|
|
—
|
|
|
(1,241
|
)
|
|||||
Net income (loss)
|
$
|
27,635
|
|
|
$
|
(2,675
|
)
|
|
$
|
37,616
|
|
|
$
|
(34,941
|
)
|
|
$
|
27,635
|
|
CONSOLIDATING STATEMENT OF LOSS
|
|||||||||||||||||||
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 loss
|
—
|
|
|
—
|
|
|
(28,074
|
)
|
|
—
|
|
|
(28,074
|
)
|
|||||
Equity in earnings 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)
|
|||||||||||||||||||
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 CASH FLOWS
|
|||||||||||||||||||
Year Ended December 31, 2016
|
|||||||||||||||||||
(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
|
$
|
27,635
|
|
|
$
|
(2,675
|
)
|
|
$
|
38,857
|
|
|
$
|
(34,941
|
)
|
|
$
|
28,876
|
|
Adjustments to reconcile income (loss) including non-controlling interests to net cash provided by (used in) operating activities
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
(32,347
|
)
|
|
(2,701
|
)
|
|
107
|
|
|
34,941
|
|
|
—
|
|
|||||
Share compensation expense
|
543
|
|
|
|
|
|
8,395
|
|
|
—
|
|
|
8,938
|
|
|||||
Net interest income on deposit liabilities
|
|
|
|
|
|
|
(164
|
)
|
|
—
|
|
|
(164
|
)
|
|||||
Net unrealized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(72,083
|
)
|
|
—
|
|
|
(72,083
|
)
|
|||||
Net realized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(33,179
|
)
|
|
—
|
|
|
(33,179
|
)
|
|||||
Net foreign exchange gains
|
—
|
|
|
—
|
|
|
(19,521
|
)
|
|
—
|
|
|
(19,521
|
)
|
|||||
Amortization of premium and accretion of discount, net
|
—
|
|
|
178
|
|
|
4,940
|
|
|
—
|
|
|
5,118
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
(86,612
|
)
|
|
—
|
|
|
(86,612
|
)
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
(24,525
|
)
|
|
—
|
|
|
(24,525
|
)
|
|||||
Other assets
|
(73
|
)
|
|
(2,894
|
)
|
|
(2,036
|
)
|
|
—
|
|
|
(5,003
|
)
|
|||||
Interest and dividends receivable, net
|
—
|
|
|
2
|
|
|
3,223
|
|
|
—
|
|
|
3,225
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
25,366
|
|
|
—
|
|
|
25,366
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
156,644
|
|
|
—
|
|
|
156,644
|
|
|||||
Accounts payable and accrued expenses
|
(1,985
|
)
|
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
(2,095
|
)
|
|||||
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
19,786
|
|
|
—
|
|
|
19,786
|
|
|||||
Amounts due from (to) affiliates
|
(204
|
)
|
|
8,164
|
|
|
(7,960
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
(6,431
|
)
|
|
74
|
|
|
11,128
|
|
|
—
|
|
|
4,771
|
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(3,729,944
|
)
|
|
—
|
|
|
(3,729,944
|
)
|
|||||
Proceeds from sales of investments
|
—
|
|
|
—
|
|
|
3,504,598
|
|
|
—
|
|
|
3,504,598
|
|
|||||
Purchases of investments to cover short sales
|
—
|
|
|
—
|
|
|
(1,264,404
|
)
|
|
—
|
|
|
(1,264,404
|
)
|
|||||
Proceeds from short sales of investments
|
—
|
|
|
—
|
|
|
1,046,422
|
|
|
—
|
|
|
1,046,422
|
|
|||||
Change in due to/from brokers, net
|
—
|
|
|
—
|
|
|
367,019
|
|
|
—
|
|
|
367,019
|
|
|||||
Increase in securities sold under an agreement to repurchase
|
—
|
|
|
—
|
|
|
(8,944
|
)
|
|
—
|
|
|
(8,944
|
)
|
|||||
Change in restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
31,975
|
|
|
—
|
|
|
31,975
|
|
|||||
Contributed capital to subsidiaries
|
(5,000
|
)
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Contributed capital from parent and/or subsidiaries
|
—
|
|
|
(5,000
|
)
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
(5,000
|
)
|
|
—
|
|
|
(48,278
|
)
|
|
—
|
|
|
(53,278
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of common shares, net of costs
|
5,141
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,141
|
|
|||||
Purchases of common shares under share repurchase program
|
(7,389
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,389
|
)
|
|||||
Increase in deposit liabilities, net
|
—
|
|
|
—
|
|
|
22,023
|
|
|
—
|
|
|
22,023
|
|
|||||
Non-controlling interest in investment affiliate, net
|
—
|
|
|
—
|
|
|
18,276
|
|
|
—
|
|
|
18,276
|
|
|||||
Dividend received by (paid to) parent
|
15,000
|
|
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by financing activities
|
12,752
|
|
|
—
|
|
|
25,299
|
|
|
—
|
|
|
38,051
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
1,321
|
|
|
74
|
|
|
(11,851
|
)
|
|
—
|
|
|
(10,456
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
308
|
|
|
5
|
|
|
20,094
|
|
|
—
|
|
|
20,407
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
1,629
|
|
|
$
|
79
|
|
|
$
|
8,243
|
|
|
$
|
—
|
|
|
$
|
9,951
|
|
CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||||||
Year Ended December 31, 2015
|
|||||||||||||||||||
(expressed in thousands of U.S. dollars)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third Point Reinsurance Ltd.
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss including non-controlling interests
|
$
|
(87,390
|
)
|
|
$
|
(12,364
|
)
|
|
$
|
(74,273
|
)
|
|
$
|
86,588
|
|
|
$
|
(87,439
|
)
|
Adjustments to reconcile loss including non-controlling interests to net cash provided by (used in) operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
79,053
|
|
|
7,510
|
|
|
25
|
|
|
(86,588
|
)
|
|
—
|
|
|||||
Share compensation expense
|
542
|
|
|
—
|
|
|
10,329
|
|
|
—
|
|
|
10,871
|
|
|||||
Net 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 loss
|
—
|
|
|
—
|
|
|
(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
|
)
|
|||||
Other assets
|
36
|
|
|
(1,947
|
)
|
|
(5,904
|
)
|
|
—
|
|
|
(7,815
|
)
|
|||||
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 provided by (used in) 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) from subsidiaries
|
(158,000
|
)
|
|
(266,975
|
)
|
|
(25
|
)
|
|
425,000
|
|
|
—
|
|
|||||
Contributed capital from parent
|
—
|
|
|
158,000
|
|
|
267,000
|
|
|
(425,000
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) 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 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 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
|
|||||||||||||||||||
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
|
)
|
|||||
Other assets
|
120
|
|
|
(666
|
)
|
|
8,895
|
|
|
—
|
|
|
8,349
|
|
|||||
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
|
|
|
Three months ended
|
||||||||||||||
|
December 31,
2016 |
|
September 30,
2016 |
|
June 30,
2016 |
|
March 31,
2016 |
||||||||
|
($ in thousands, except per share and share amounts)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
$
|
80,779
|
|
|
$
|
142,573
|
|
|
$
|
196,866
|
|
|
$
|
197,156
|
|
Gross premiums ceded
|
27
|
|
|
(927
|
)
|
|
(1,425
|
)
|
|
—
|
|
||||
Net premiums written
|
80,806
|
|
|
141,646
|
|
|
195,441
|
|
|
197,156
|
|
||||
Change in net unearned premium reserves
|
111,277
|
|
|
(13,463
|
)
|
|
(62,319
|
)
|
|
(60,354
|
)
|
||||
Net premiums earned
|
192,083
|
|
|
128,183
|
|
|
133,122
|
|
|
136,802
|
|
||||
Net investment income (loss)
|
(35,767
|
)
|
|
88,356
|
|
|
86,346
|
|
|
(40,110
|
)
|
||||
Total revenues
|
156,316
|
|
|
216,539
|
|
|
219,468
|
|
|
96,692
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
122,110
|
|
|
85,015
|
|
|
104,131
|
|
|
84,676
|
|
||||
Acquisition costs, net
|
76,854
|
|
|
45,127
|
|
|
48,482
|
|
|
51,687
|
|
||||
General and administrative expenses
|
5,482
|
|
|
12,354
|
|
|
10,243
|
|
|
11,288
|
|
||||
Other expenses
|
2,161
|
|
|
347
|
|
|
3,173
|
|
|
2,706
|
|
||||
Interest expense
|
2,068
|
|
|
2,069
|
|
|
2,046
|
|
|
2,048
|
|
||||
Foreign exchange gains
|
(5,162
|
)
|
|
(3,905
|
)
|
|
(8,068
|
)
|
|
(2,386
|
)
|
||||
Total expenses
|
203,513
|
|
|
141,007
|
|
|
160,007
|
|
|
150,019
|
|
||||
Income (loss) before income tax (expense) benefit
|
(47,197
|
)
|
|
75,532
|
|
|
59,461
|
|
|
(53,327
|
)
|
||||
Income tax (expense) benefit
|
272
|
|
|
(2,484
|
)
|
|
(5,310
|
)
|
|
1,929
|
|
||||
Income (loss) including non-controlling interests
|
(46,925
|
)
|
|
73,048
|
|
|
54,151
|
|
|
(51,398
|
)
|
||||
(Income) loss attributable to non-controlling interests
|
232
|
|
|
(967
|
)
|
|
(775
|
)
|
|
269
|
|
||||
Net income (loss)
|
$
|
(46,693
|
)
|
|
$
|
72,081
|
|
|
$
|
53,376
|
|
|
$
|
(51,129
|
)
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.45
|
)
|
|
$
|
0.69
|
|
|
$
|
0.51
|
|
|
$
|
(0.49
|
)
|
Diluted
|
$
|
(0.45
|
)
|
|
$
|
0.68
|
|
|
$
|
0.51
|
|
|
$
|
(0.49
|
)
|
Weighted average number of ordinary shares used in the determination of earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
104,072,283
|
|
|
103,780,196
|
|
|
104,132,797
|
|
|
104,257,874
|
|
||||
Diluted
|
104,072,283
|
|
|
105,795,313
|
|
|
105,233,921
|
|
|
104,257,874
|
|
|
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
|
|
|
|
Cost
|
|
Fair value
|
|
Balance sheet value
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Equity securities
|
|
$
|
1,341,915
|
|
|
$
|
1,453,221
|
|
|
$
|
1,453,221
|
|
Private common equity securities
|
|
4,445
|
|
|
4,799
|
|
|
4,799
|
|
|||
Private preferred equity securities
|
|
39,506
|
|
|
48,834
|
|
|
48,834
|
|
|||
Total equities
|
|
1,385,866
|
|
|
1,506,854
|
|
|
1,506,854
|
|
|||
Asset-backed securities
|
|
275,784
|
|
|
254,852
|
|
|
254,852
|
|
|||
Bank debt
|
|
52,622
|
|
|
56,896
|
|
|
56,896
|
|
|||
Corporate bonds
|
|
169,257
|
|
|
218,280
|
|
|
218,280
|
|
|||
U.S. Treasury securities
|
|
331,137
|
|
|
327,016
|
|
|
327,016
|
|
|||
Sovereign debt
|
|
207,916
|
|
|
200,913
|
|
|
200,913
|
|
|||
Total debt securities
|
|
1,036,716
|
|
|
1,057,957
|
|
|
1,057,957
|
|
|||
Investments in limited partnerships
|
|
46,776
|
|
|
44,983
|
|
|
44,983
|
|
|||
Options
|
|
1,542
|
|
|
1,024
|
|
|
1,024
|
|
|||
Trade claims
|
|
3,090
|
|
|
9,022
|
|
|
9,022
|
|
|||
Investment in Kiskadee Fund
|
|
25,000
|
|
|
27,672
|
|
|
27,672
|
|
|||
Total other investments
|
|
76,408
|
|
|
82,701
|
|
|
82,701
|
|
|||
Total investments
|
|
$
|
2,498,990
|
|
|
$
|
2,647,512
|
|
|
$
|
2,647,512
|
|
|
As of and for the year ended December 31, 2016
|
|||||||||||||||||||||||||||||
|
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
|
$
|
221,618
|
|
$
|
605,129
|
|
$
|
557,076
|
|
$
|
590,190
|
|
$
|
16,931
|
|
$
|
(8,387
|
)
|
$
|
395,932
|
|
$
|
222,150
|
|
$
|
22,160
|
|
$
|
615,049
|
|
Catastrophe Risk Management
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Corporate
|
—
|
|
—
|
|
—
|
|
—
|
|
81,894
|
|
—
|
|
—
|
|
—
|
|
17,207
|
|
—
|
|
||||||||||
|
$
|
221,618
|
|
$
|
605,129
|
|
$
|
557,076
|
|
$
|
590,190
|
|
$
|
98,825
|
|
$
|
(8,387
|
)
|
$
|
395,932
|
|
$
|
222,150
|
|
$
|
39,367
|
|
$
|
615,049
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
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
|
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
|
|
|
Direct gross premiums written
|
|
Ceded to other companies
|
|
Assumed from other companies
|
|
Net amount
|
|
Percentage of amount assumed to net
|
|||||||||
Year ended December 31, 2016
|
$
|
—
|
|
|
$
|
2,325
|
|
|
$
|
617,374
|
|
|
$
|
615,049
|
|
|
100
|
%
|
Year ended December 31, 2015
|
$
|
—
|
|
|
$
|
1,876
|
|
|
$
|
702,414
|
|
|
$
|
700,538
|
|
|
100
|
%
|
Year ended December 31, 2014
|
$
|
—
|
|
|
$
|
150
|
|
|
$
|
613,300
|
|
|
$
|
613,150
|
|
|
100
|
%
|
(i)
|
if a Participant’s employment terminates as a result of death or disability, (
y
) awards that have not yet been paid as of the date of such termination shall, subject to the achievement of the applicable Performance Goals, be deemed vested to the extent of the portion of the award that would have been paid had the Participant’s employment continued until the first anniversary of the Participant’s termination of employment, and (
z
) the Participant shall forfeit all rights to any and all awards, or any portion thereof, which (
A
) have not yet been paid under the Plan and (
B
) do not become vested pursuant to this Section 4(c)(i); and
|
(ii)
|
if a Participant’s employment terminates for any reason other than as a result of death or disability prior to the date on which the award is paid hereunder, such Participants shall forfeit all rights to any and all awards which have not yet been paid under the Plan;
|
|
Name
|
|
Steven E. Fass
|
|
Rafe de la Gueronniere
|
|
Mary H. Hennessy
|
|
Mark Parkin
|
|
Gary D. Walters
|
|
Years ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Fixed charges:
|
($ in thousands)
|
||||||||||||||||||
Interest expense on deposit contracts and certain reinsurance contracts
|
$
|
8,387
|
|
|
$
|
8,614
|
|
|
$
|
7,395
|
|
|
$
|
4,922
|
|
|
$
|
446
|
|
Interest expense on senior notes
|
8,231
|
|
|
7,236
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed charges
|
$
|
16,618
|
|
|
$
|
15,850
|
|
|
$
|
7,395
|
|
|
$
|
4,922
|
|
|
$
|
446
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) before income tax expense (benefit)
|
$
|
28,876
|
|
|
$
|
(87,439
|
)
|
|
$
|
56,710
|
|
|
$
|
233,078
|
|
|
$
|
100,617
|
|
Add: Fixed charges
|
16,618
|
|
|
15,850
|
|
|
7,395
|
|
|
4,922
|
|
|
446
|
|
|||||
Less: Net (income) loss from non-controlling interests
|
(1,241
|
)
|
|
49
|
|
|
(6,315
|
)
|
|
(5,767
|
)
|
|
(1,216
|
)
|
|||||
Total earnings available for fixed charges
|
$
|
44,253
|
|
|
$
|
(71,540
|
)
|
|
$
|
57,790
|
|
|
$
|
232,233
|
|
|
$
|
99,847
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges (1)
|
2.7
|
|
|
—
|
|
|
7.8
|
|
|
47.2
|
|
|
223.9
|
|
|
|
|
Subsidiary
|
|
Jurisdiction of Incorporation/Formation
|
|
|
|
Third Point Reinsurance Company Ltd.
|
|
Bermuda
|
|
|
|
Third Point Re Marketing (UK) Limited
|
|
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 22, 2017
|
/s/ Steven E. Fass
Steven E. Fass
|
Director
|
February 22, 2017
|
/s/ Steven E. Fass
Rafe de la Gueronniere
|
Director
|
February 22, 2017
|
/s/ Mary R. Hennessy
Mary R. Hennessy
|
Director
|
February 22, 2017
|
/s/ Mark Parkin
Mark Parkin
|
Director
|
February 22, 2017
|
/s/ Joshua L. Targoff
Joshua L. Targoff
|
Director
|
February 22, 2017
|
/s/ Gary D. Walters
Gary D. Walters
|
Director
|
February 22, 2017
|
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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(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 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(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, 2016 (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, 2016 (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)
|
|