x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended March 31, 2018
|
|
¨
|
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.)
|
Large accelerated filer
|
x
|
Accelerated filer
|
¨
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Non-accelerated filer
|
¨
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Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
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Page
|
PART I
. FINANCIAL INFORMATION
|
|
Item 1.
Financial Statements
|
|
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
|
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Item 4.
Controls and Procedures
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PART II
. OTHER INFORMATION
|
|
Item
1. Legal Proceedings
|
|
Item
1A. Risk Factors
|
|
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Item
3. Defaults Upon Senior Securities
|
|
Item
4. Mine Safety Disclosures
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|
Item
5. Other Information
|
|
Item
6. Exhibits
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
|
||||
Equity securities, trading, at fair value (cost - $1,786,551; 2017 - $1,868,735)
|
|
$
|
2,133,170
|
|
|
$
|
2,283,050
|
|
Debt securities, trading, at fair value (cost - $669,752; 2017 - $711,322)
|
|
635,322
|
|
|
675,158
|
|
||
Other investments, at fair value
|
|
43,109
|
|
|
37,731
|
|
||
Total investments in securities
|
|
2,811,601
|
|
|
2,995,939
|
|
||
Cash and cash equivalents
|
|
6,410
|
|
|
8,197
|
|
||
Restricted cash and cash equivalents
|
|
543,173
|
|
|
541,136
|
|
||
Due from brokers
|
|
318,703
|
|
|
305,093
|
|
||
Derivative assets, at fair value
|
|
54,114
|
|
|
73,372
|
|
||
Interest and dividends receivable
|
|
4,167
|
|
|
3,774
|
|
||
Reinsurance balances receivable
|
|
684,897
|
|
|
476,008
|
|
||
Deferred acquisition costs, net
|
|
308,903
|
|
|
258,793
|
|
||
Unearned premiums ceded
|
|
15,061
|
|
|
1,049
|
|
||
Loss and loss adjustment expenses recoverable
|
|
1,332
|
|
|
1,113
|
|
||
Other assets
|
|
7,872
|
|
|
7,320
|
|
||
Total assets
|
|
$
|
4,756,233
|
|
|
$
|
4,671,794
|
|
Liabilities
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
11,273
|
|
|
$
|
34,632
|
|
Reinsurance balances payable
|
|
50,799
|
|
|
41,614
|
|
||
Deposit liabilities
|
|
129,957
|
|
|
129,133
|
|
||
Unearned premium reserves
|
|
884,758
|
|
|
649,518
|
|
||
Loss and loss adjustment expense reserves
|
|
761,631
|
|
|
720,570
|
|
||
Securities sold, not yet purchased, at fair value
|
|
355,447
|
|
|
394,278
|
|
||
Securities sold under an agreement to repurchase
|
|
19,067
|
|
|
29,618
|
|
||
Due to brokers
|
|
792,633
|
|
|
770,205
|
|
||
Derivative liabilities, at fair value
|
|
14,510
|
|
|
14,503
|
|
||
Performance fee payable to related party
|
|
20
|
|
|
—
|
|
||
Interest and dividends payable
|
|
3,049
|
|
|
4,275
|
|
||
Senior notes payable, net of deferred costs
|
|
113,777
|
|
|
113,733
|
|
||
Total liabilities
|
|
3,136,921
|
|
|
2,902,079
|
|
||
Commitments and contingent liabilities
|
|
|
|
|
||||
Redeemable noncontrolling interests in related party
|
|
6,801
|
|
|
108,219
|
|
||
Shareholders’ equity
|
|
|
|
|
||||
Preference shares (par value $0.10; authorized, 30,000,000; none issued)
|
|
—
|
|
|
—
|
|
||
Common shares (Issued: 2018 - 102,244,248; 2017 - 107,227,347; Outstanding: 2018 - 102,244,248; 2017 - 103,282,427)
|
|
10,224
|
|
|
10,723
|
|
||
Treasury shares (2018 - 0; 2017 - 3,944,920)
|
|
—
|
|
|
(48,253
|
)
|
||
Additional paid-in capital
|
|
1,029,179
|
|
|
1,099,599
|
|
||
Retained earnings
|
|
568,019
|
|
|
594,020
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
|
1,607,422
|
|
|
1,656,089
|
|
||
Noncontrolling interests in related party
|
|
5,089
|
|
|
5,407
|
|
||
Total shareholders’ equity
|
|
1,612,511
|
|
|
1,661,496
|
|
||
Total liabilities, noncontrolling interests and shareholders’ equity
|
|
$
|
4,756,233
|
|
|
$
|
4,671,794
|
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
2018
|
|
2017
|
||||
Revenues
|
|
|
|
||||
Gross premiums written
|
$
|
378,360
|
|
|
$
|
146,354
|
|
Gross premiums ceded
|
(14,646
|
)
|
|
(1,125
|
)
|
||
Net premiums written
|
363,714
|
|
|
145,229
|
|
||
Change in net unearned premium reserves
|
(221,228
|
)
|
|
(7,220
|
)
|
||
Net premiums earned
|
142,486
|
|
|
138,009
|
|
||
Net investment income before management and performance fees to related parties
|
7,839
|
|
|
167,835
|
|
||
Management and performance fees to related parties
|
(10,047
|
)
|
|
(39,325
|
)
|
||
Net investment income (loss)
|
(2,208
|
)
|
|
128,510
|
|
||
Total revenues
|
140,278
|
|
|
266,519
|
|
||
Expenses
|
|
|
|
||||
Loss and loss adjustment expenses incurred, net
|
92,620
|
|
|
85,895
|
|
||
Acquisition costs, net
|
51,405
|
|
|
54,452
|
|
||
General and administrative expenses
|
9,481
|
|
|
10,572
|
|
||
Other expenses
|
3,995
|
|
|
2,901
|
|
||
Interest expense
|
2,029
|
|
|
2,026
|
|
||
Foreign exchange losses
|
6,611
|
|
|
15
|
|
||
Total expenses
|
166,141
|
|
|
155,861
|
|
||
Income (loss) before income tax expense
|
(25,863
|
)
|
|
110,658
|
|
||
Income tax expense
|
(128
|
)
|
|
(5,298
|
)
|
||
Net income (loss)
|
(25,991
|
)
|
|
105,360
|
|
||
Net income attributable to noncontrolling interests in related party
|
(10
|
)
|
|
(1,174
|
)
|
||
Net income (loss) available to Third Point Re common shareholders
|
$
|
(26,001
|
)
|
|
$
|
104,186
|
|
Earnings (loss) per share available to Third Point Re common shareholders
|
|
|
|
||||
Basic earnings (loss) per share available to Third Point Re common shareholders
|
$
|
(0.26
|
)
|
|
$
|
1.00
|
|
Diluted earnings (loss) per share available to Third Point Re common shareholders
|
$
|
(0.26
|
)
|
|
$
|
0.98
|
|
Weighted average number of common shares used in the determination of earnings (loss) per share
|
|
|
|
||||
Basic
|
101,195,747
|
|
|
104,013,871
|
|
||
Diluted
|
101,195,747
|
|
|
105,701,599
|
|
||
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
2018
|
|
2017
|
||||
Common shares
|
|
|
|
||||
Balance, beginning of period
|
$
|
10,723
|
|
|
$
|
10,650
|
|
Issuance of common shares, net
|
59
|
|
|
68
|
|
||
Common shares repurchased and retired
|
(558
|
)
|
|
—
|
|
||
Balance, end of period
|
10,224
|
|
|
10,718
|
|
||
Treasury shares
|
|
|
|
||||
Balance, beginning of period
|
(48,253
|
)
|
|
(7,389
|
)
|
||
Repurchase of common shares
|
—
|
|
|
(18,884
|
)
|
||
Retirement of treasury shares
|
48,253
|
|
|
—
|
|
||
Balance, end of period
|
—
|
|
|
(26,273
|
)
|
||
Additional paid-in capital
|
|
|
|
||||
Balance, beginning of period
|
1,099,599
|
|
|
1,094,568
|
|
||
Issuance of common shares, net
|
(133
|
)
|
|
430
|
|
||
Share compensation expense
|
1,245
|
|
|
1,830
|
|
||
Common shares repurchased and retired
|
(71,532
|
)
|
|
—
|
|
||
Balance, end of period
|
1,029,179
|
|
|
1,096,828
|
|
||
Retained earnings
|
|
|
|
||||
Balance, beginning of period
|
594,020
|
|
|
316,222
|
|
||
Net income (loss)
|
(25,991
|
)
|
|
105,360
|
|
||
Net income attributable to noncontrolling interests in related party
|
(10
|
)
|
|
(1,174
|
)
|
||
Balance, end of period
|
568,019
|
|
|
420,408
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,607,422
|
|
|
1,501,681
|
|
||
Noncontrolling interests in related party
|
5,089
|
|
|
16,849
|
|
||
Total shareholders’ equity
|
$
|
1,612,511
|
|
|
$
|
1,518,530
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(25,991
|
)
|
|
$
|
105,360
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Share compensation expense
|
1,245
|
|
|
1,830
|
|
||
Net interest expense on deposit liabilities
|
1,261
|
|
|
409
|
|
||
Net unrealized (gain) loss on investments and derivatives
|
62,940
|
|
|
(95,703
|
)
|
||
Net realized gain on investments and derivatives
|
(65,770
|
)
|
|
(61,028
|
)
|
||
Net foreign exchange losses
|
6,611
|
|
|
15
|
|
||
Amortization of premium and accretion of discount, net
|
2,622
|
|
|
(665
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Reinsurance balances receivable
|
(208,414
|
)
|
|
(37,281
|
)
|
||
Deferred acquisition costs, net
|
(50,110
|
)
|
|
864
|
|
||
Unearned premiums ceded
|
(14,012
|
)
|
|
(946
|
)
|
||
Loss and loss adjustment expenses recoverable
|
(219
|
)
|
|
(51
|
)
|
||
Other assets
|
(559
|
)
|
|
4,072
|
|
||
Interest and dividends receivable, net
|
(1,619
|
)
|
|
(2,580
|
)
|
||
Unearned premium reserves
|
235,240
|
|
|
8,167
|
|
||
Loss and loss adjustment expense reserves
|
34,392
|
|
|
18,798
|
|
||
Accounts payable and accrued expenses
|
(23,382
|
)
|
|
1,179
|
|
||
Reinsurance balances payable
|
9,025
|
|
|
8,051
|
|
||
Performance fee payable to related party
|
20
|
|
|
30,857
|
|
||
Net cash used in operating activities
|
(36,720
|
)
|
|
(18,652
|
)
|
||
Investing activities
|
|
|
|
||||
Purchases of investments
|
(1,032,890
|
)
|
|
(613,020
|
)
|
||
Proceeds from sales of investments
|
1,221,157
|
|
|
940,797
|
|
||
Purchases of investments to cover short sales
|
(300,467
|
)
|
|
(120,014
|
)
|
||
Proceeds from short sales of investments
|
277,174
|
|
|
232,856
|
|
||
Change in due to/from brokers, net
|
8,818
|
|
|
(362,792
|
)
|
||
Increase (decrease) in securities sold under an agreement to repurchase
|
(10,551
|
)
|
|
16,524
|
|
||
Net cash provided by investing activities
|
163,241
|
|
|
94,351
|
|
||
Financing activities
|
|
|
|
||||
Proceeds from issuance of Third Point Re common shares, net of costs
|
—
|
|
|
498
|
|
||
Taxes paid on withholding shares
|
(74
|
)
|
|
—
|
|
||
Purchases of Third Point Re common shares under share repurchase program
|
(23,837
|
)
|
|
(18,884
|
)
|
||
Increase (decrease) in deposit liabilities, net
|
(614
|
)
|
|
437
|
|
||
Change in total noncontrolling interests in related party, net
|
(101,746
|
)
|
|
(19,999
|
)
|
||
Net cash used in financing activities
|
(126,271
|
)
|
|
(37,948
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
250
|
|
|
37,751
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
549,333
|
|
|
308,891
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
549,583
|
|
|
$
|
346,642
|
|
Supplementary information
|
|
|
|
||||
Interest paid in cash
|
$
|
8,523
|
|
|
$
|
6,773
|
|
Income taxes paid in cash
|
$
|
1,226
|
|
|
$
|
1,355
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
$
|
6,410
|
|
|
$
|
8,197
|
|
Restricted cash securing letter of credit facilities (1)
|
236,994
|
|
|
250,487
|
|
||
Restricted cash securing other reinsurance contracts (2)
|
306,179
|
|
|
290,649
|
|
||
Total cash, cash equivalents and restricted cash (3)
|
549,583
|
|
|
549,333
|
|
||
Restricted investments securing other reinsurance contracts (2)
|
323,928
|
|
|
326,429
|
|
||
Total cash, cash equivalents, restricted cash and restricted investments
|
$
|
873,511
|
|
|
$
|
875,762
|
|
(1)
|
Restricted cash securing letter of credit facilities primarily pertains to letters of credit issued to clients and cash securing these obligations that the Company will not be released 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.
|
(3)
|
Cash, cash equivalents and restricted cash as reported in the Company’s condensed consolidated statements of cash flows.
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Total investments in securities
|
$
|
2,811,372
|
|
|
$
|
2,995,097
|
|
Cash and cash equivalents
|
476
|
|
|
8
|
|
||
Restricted cash and cash equivalents
|
543,173
|
|
|
541,136
|
|
||
Due from brokers
|
318,703
|
|
|
305,093
|
|
||
Derivative assets, at fair value
|
54,114
|
|
|
73,372
|
|
||
Interest and dividends receivable
|
4,167
|
|
|
3,774
|
|
||
Total assets
|
3,732,005
|
|
|
3,918,480
|
|
||
Liabilities and noncontrolling interests in related party
|
|
|
|
||||
Accounts payable and accrued expenses
|
3,616
|
|
|
5,137
|
|
||
Securities sold, not yet purchased
|
355,447
|
|
|
394,278
|
|
||
Securities sold under an agreement to repurchase
|
19,067
|
|
|
29,618
|
|
||
Due to brokers
|
792,633
|
|
|
770,205
|
|
||
Derivative liabilities, at fair value
|
14,510
|
|
|
14,503
|
|
||
Performance fee payable to related party
|
20
|
|
|
—
|
|
||
Interest and dividends payable
|
2,034
|
|
|
1,218
|
|
||
Total noncontrolling interests in related party
(1)
|
11,890
|
|
|
113,626
|
|
||
Total liabilities and noncontrolling interests in related party
|
1,199,217
|
|
|
1,328,585
|
|
||
Total net investments managed by Third Point LLC
|
$
|
2,532,788
|
|
|
$
|
2,589,895
|
|
(1)
|
See
Note 18
for additional information.
|
•
|
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 security 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.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
Reperforming loans
|
$
|
133,481
|
|
|
70.5
|
%
|
|
$
|
160,354
|
|
|
71.1
|
%
|
Market place loans
|
43,164
|
|
|
22.8
|
%
|
|
52,584
|
|
|
23.3
|
%
|
||
Other (1)
|
12,676
|
|
|
6.7
|
%
|
|
12,561
|
|
|
5.6
|
%
|
||
|
$
|
189,321
|
|
|
100.0
|
%
|
|
$
|
225,499
|
|
|
100.0
|
%
|
(1)
|
Other includes: U.S. Alt-A positions, collateralized debt obligations, commercial mortgage-backed securities, non-U.S. RMBS and aircraft ABS.
|
|
March 31, 2018
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
2,064,380
|
|
|
$
|
9,207
|
|
|
$
|
—
|
|
|
$
|
2,073,587
|
|
Private common equity securities
|
—
|
|
|
—
|
|
|
4,352
|
|
|
4,352
|
|
||||
Private preferred equity securities
|
—
|
|
|
—
|
|
|
55,231
|
|
|
55,231
|
|
||||
Total equities
|
2,064,380
|
|
|
9,207
|
|
|
59,583
|
|
|
2,133,170
|
|
||||
Asset-backed securities
|
—
|
|
|
162,065
|
|
|
27,256
|
|
|
189,321
|
|
||||
Bank debt
|
—
|
|
|
19,794
|
|
|
—
|
|
|
19,794
|
|
||||
Corporate bonds
|
—
|
|
|
55,637
|
|
|
10,081
|
|
|
65,718
|
|
||||
Municipal bonds
|
—
|
|
|
27,452
|
|
|
—
|
|
|
27,452
|
|
||||
U.S. Treasury securities
|
—
|
|
|
240,549
|
|
|
—
|
|
|
240,549
|
|
||||
Sovereign debt
|
—
|
|
|
87,485
|
|
|
—
|
|
|
87,485
|
|
||||
Other debt securities
|
—
|
|
|
5,003
|
|
|
—
|
|
|
5,003
|
|
||||
Total debt securities
|
—
|
|
|
597,985
|
|
|
37,337
|
|
|
635,322
|
|
||||
Options
|
3,148
|
|
|
11,965
|
|
|
—
|
|
|
15,113
|
|
||||
Rights and warrants
|
—
|
|
|
143
|
|
|
819
|
|
|
962
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
6,937
|
|
|
6,937
|
|
||||
Trade claims
|
—
|
|
|
3,423
|
|
|
—
|
|
|
3,423
|
|
||||
Total other investments
|
3,148
|
|
|
15,531
|
|
|
7,756
|
|
|
26,435
|
|
||||
Derivative assets (free standing)
|
—
|
|
|
54,114
|
|
|
—
|
|
|
54,114
|
|
||||
|
$
|
2,067,528
|
|
|
$
|
676,837
|
|
|
$
|
104,676
|
|
|
2,849,041
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
16,674
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
2,865,715
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
330,043
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
330,043
|
|
Corporate bonds
|
—
|
|
|
16,949
|
|
|
—
|
|
|
16,949
|
|
||||
Options
|
2,973
|
|
|
5,413
|
|
|
—
|
|
|
8,386
|
|
||||
Trade claims
|
—
|
|
|
69
|
|
|
—
|
|
|
69
|
|
||||
Total securities sold, not yet purchased
|
333,016
|
|
|
22,431
|
|
|
—
|
|
|
355,447
|
|
||||
Derivative liabilities (free standing)
|
—
|
|
|
12,514
|
|
|
1,996
|
|
|
14,510
|
|
||||
Derivative liabilities (embedded)
|
—
|
|
|
—
|
|
|
124
|
|
|
124
|
|
||||
Total liabilities
|
$
|
333,016
|
|
|
$
|
34,945
|
|
|
$
|
2,120
|
|
|
$
|
370,081
|
|
|
December 31, 2017
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
2,200,379
|
|
|
$
|
20,751
|
|
|
$
|
—
|
|
|
$
|
2,221,130
|
|
Private common equity securities
|
—
|
|
|
—
|
|
|
4,794
|
|
|
4,794
|
|
||||
Private preferred equity securities
|
—
|
|
|
—
|
|
|
57,126
|
|
|
57,126
|
|
||||
Total equities
|
2,200,379
|
|
|
20,751
|
|
|
61,920
|
|
|
2,283,050
|
|
||||
Asset-backed securities
|
—
|
|
|
198,191
|
|
|
27,308
|
|
|
225,499
|
|
||||
Bank debt
|
—
|
|
|
14,550
|
|
|
—
|
|
|
14,550
|
|
||||
Corporate bonds
|
—
|
|
|
67,218
|
|
|
9,868
|
|
|
77,086
|
|
||||
U.S. Treasury securities
|
—
|
|
|
249,994
|
|
|
—
|
|
|
249,994
|
|
||||
Sovereign debt
|
—
|
|
|
102,569
|
|
|
—
|
|
|
102,569
|
|
||||
Other debt securities
|
—
|
|
|
4,747
|
|
|
713
|
|
|
5,460
|
|
||||
Total debt securities
|
—
|
|
|
637,269
|
|
|
37,889
|
|
|
675,158
|
|
||||
Options
|
1,973
|
|
|
2,978
|
|
|
—
|
|
|
4,951
|
|
||||
Rights and warrants
|
—
|
|
|
168
|
|
|
435
|
|
|
603
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
6,831
|
|
|
6,831
|
|
||||
Trade claims
|
—
|
|
|
7,496
|
|
|
—
|
|
|
7,496
|
|
||||
Total other investments
|
1,973
|
|
|
10,642
|
|
|
7,266
|
|
|
19,881
|
|
||||
Derivative assets (free standing)
|
—
|
|
|
73,372
|
|
|
—
|
|
|
73,372
|
|
||||
|
$
|
2,202,352
|
|
|
$
|
742,034
|
|
|
$
|
107,075
|
|
|
3,051,461
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
17,850
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
3,069,311
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
364,215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
364,215
|
|
Corporate bonds
|
—
|
|
|
21,699
|
|
|
—
|
|
|
21,699
|
|
||||
Options
|
2,668
|
|
|
5,696
|
|
|
—
|
|
|
8,364
|
|
||||
Total securities sold, not yet purchased
|
366,883
|
|
|
27,395
|
|
|
—
|
|
|
394,278
|
|
||||
Derivative liabilities (free standing)
|
—
|
|
|
12,418
|
|
|
2,085
|
|
|
14,503
|
|
||||
Derivative liabilities (embedded)
|
—
|
|
|
—
|
|
|
171
|
|
|
171
|
|
||||
Total liabilities
|
$
|
366,883
|
|
|
$
|
39,813
|
|
|
$
|
2,256
|
|
|
$
|
408,952
|
|
|
January 1,
2018 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses) (1)
|
|
March 31,
2018 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,794
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(442
|
)
|
|
$
|
4,352
|
|
Private preferred equity securities
|
57,126
|
|
|
—
|
|
|
161
|
|
|
(15
|
)
|
|
(2,041
|
)
|
|
55,231
|
|
||||||
Asset-backed securities
|
27,308
|
|
|
1,839
|
|
|
12,197
|
|
|
(12,446
|
)
|
|
(1,642
|
)
|
|
27,256
|
|
||||||
Corporate bonds
|
9,868
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
193
|
|
|
10,081
|
|
||||||
Other debt securities
|
713
|
|
|
—
|
|
|
—
|
|
|
(892
|
)
|
|
179
|
|
|
—
|
|
||||||
Rights and warrants
|
435
|
|
|
—
|
|
|
582
|
|
|
(204
|
)
|
|
6
|
|
|
819
|
|
||||||
Real estate
|
6,831
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
|
259
|
|
|
6,937
|
|
||||||
Total assets
|
$
|
107,075
|
|
|
$
|
1,839
|
|
|
$
|
12,960
|
|
|
$
|
(13,710
|
)
|
|
$
|
(3,488
|
)
|
|
$
|
104,676
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(2,085
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89
|
|
|
$
|
(1,996
|
)
|
Derivative liabilities (embedded)
|
(171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
(124
|
)
|
||||||
Total liabilities
|
$
|
(2,256
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136
|
|
|
$
|
(2,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 1,
2017 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses) (1)
|
|
March 31,
2017 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(54
|
)
|
|
$
|
4,745
|
|
Private preferred equity securities
|
48,834
|
|
|
—
|
|
|
—
|
|
|
(371
|
)
|
|
(113
|
)
|
|
48,350
|
|
||||||
Asset-backed securities
|
17,628
|
|
|
1,347
|
|
|
13,252
|
|
|
(10,796
|
)
|
|
(646
|
)
|
|
20,785
|
|
||||||
Bank debt
|
8,350
|
|
|
—
|
|
|
—
|
|
|
(254
|
)
|
|
626
|
|
|
8,722
|
|
||||||
Corporate bonds
|
9,255
|
|
|
—
|
|
|
—
|
|
|
(266
|
)
|
|
(5
|
)
|
|
8,984
|
|
||||||
Total assets
|
$
|
88,866
|
|
|
$
|
1,347
|
|
|
$
|
13,252
|
|
|
$
|
(11,687
|
)
|
|
$
|
(192
|
)
|
|
$
|
91,586
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,326
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,326
|
)
|
Derivative liabilities (embedded)
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(111
|
)
|
||||||
Total liabilities
|
$
|
(1,418
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
(1,437
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total change in realized and unrealized gains (losses) recorded on Level 3 financial instruments is included in
net investment income (loss)
in the
condensed consolidated statements of income (loss)
.
|
March 31, 2018
|
|||||||||||
Assets
|
|
Fair value
|
|
Valuation technique
|
|
Unobservable input
|
|
Range
|
|||
Private equity investments
|
|
$
|
6,357
|
|
|
Market approach
|
|
Volatility
|
|
35.0% - 65.0%
|
|
|
|
|
|
|
|
Time to exit
|
|
1 - 1.5 years
|
|
||
|
|
|
|
|
|
Multiple
|
|
6.5 - 8.8x
|
|
||
Real estate
|
|
6,937
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
9.5
|
%
|
|
|
|
|
|
|
|
Capitalization rate
|
|
6.5% - 10.0%
|
|
||
Rights and warrants
|
|
818
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
15.8
|
%
|
|
|
|
|
|
|
|
Time to exit
|
|
5 years
|
|
||
|
|
|
|
Market approach
|
|
Multiple
|
|
3 - 3.5x
|
|
||
|
|
|
|
|
|
|
|
|
|||
December 31, 2017
|
|||||||||||
Assets
|
|
Fair value
|
|
Valuation technique
|
|
Unobservable input
|
|
Range
|
|||
Private equity investments
|
|
$
|
37,507
|
|
|
Market approach
|
|
Volatility
|
|
35.0% - 65.0%
|
|
|
|
|
|
|
|
Time to exit
|
|
0.5 - 1.8 years
|
|
||
|
|
|
|
|
|
Multiple
|
|
7.8 - 24.4x
|
|
||
Real estate
|
|
6,831
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
9.5
|
%
|
|
|
|
|
|
|
|
Capitalization rate
|
|
6.5% - 10.0%
|
|
||
Other debt securities
|
|
713
|
|
|
Discounted cash flow
|
|
Capitalization rate
|
|
10.0
|
%
|
|
Rights and warrants
|
|
433
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
13.5
|
%
|
|
|
|
|
|
|
|
Time to exit
|
|
5.0 years
|
|
||
|
|
|
|
Market approach
|
|
Multiple
|
|
3.8 - 4.6x
|
|
March 31, 2018
|
Overnights and continuous
|
|
Up to 30 days
|
|
30 - 90 days
|
|
Greater than 90 days
|
|
Total
|
||||||||||
Repurchase agreements
|
|||||||||||||||||||
Asset-backed securities
|
$
|
—
|
|
|
$
|
18,673
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,673
|
|
Corporate securities
|
—
|
|
|
—
|
|
|
—
|
|
|
394
|
|
|
394
|
|
|||||
|
$
|
—
|
|
|
$
|
18,673
|
|
|
$
|
—
|
|
|
$
|
394
|
|
|
$
|
19,067
|
|
Securities lending transactions
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency securities
|
$
|
843
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
843
|
|
December 31, 2017
|
Overnights and continuous
|
|
Up to 30 days
|
|
30 - 90 days
|
|
Greater than 90 days
|
|
Total
|
||||||||||
Repurchase agreements
|
|||||||||||||||||||
Asset-backed securities
|
$
|
—
|
|
|
$
|
10,774
|
|
|
$
|
18,844
|
|
|
$
|
—
|
|
|
$
|
29,618
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Due from brokers
|
|
|
|
||||
Cash held at brokers
|
$
|
260,002
|
|
|
$
|
295,467
|
|
Receivable from unsettled trades (1)
|
58,701
|
|
|
9,626
|
|
||
|
$
|
318,703
|
|
|
$
|
305,093
|
|
Due to brokers
|
|
|
|
||||
Borrowing from prime brokers
|
$
|
751,494
|
|
|
$
|
759,267
|
|
Payable from unsettled trades
|
41,139
|
|
|
10,938
|
|
||
|
$
|
792,633
|
|
|
$
|
770,205
|
|
|
As of March 31, 2018
|
||||||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Assets by Primary Underlying Risk
|
|
|
|
|
|
||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
USD
|
|
$
|
9,020
|
|
|
$
|
56,381
|
|
Total Return Swaps - Long Contracts
|
EGP
|
|
23,013
|
|
|
23,013
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
BRL/EUR/USD
|
|
10,817
|
|
|
115,267
|
|
||
Contracts for Differences - Short Contracts
|
EUR/SEK/USD
|
|
3,709
|
|
|
28,931
|
|
||
Total Return Swaps - Long Contracts
|
BRL
|
|
787
|
|
|
17,315
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaptions
|
JPY
|
|
273
|
|
|
68,591
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
BRL/CHF/EUR/HKD/JPY
|
|
5,548
|
|
|
716,389
|
|
||
Foreign Currency Options - Purchased
|
CNH/EUR/JPY
|
|
947
|
|
|
76,977
|
|
||
Total Derivative Assets
|
|
|
$
|
54,114
|
|
|
$
|
1,102,864
|
|
|
|
|
|
|
|
||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Liabilities by Primary Underlying Risk
|
|
|
|
|
|
||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
USD
|
|
$
|
86
|
|
|
$
|
12,928
|
|
Credit Default Swaps - Protection Sold
|
USD
|
|
2,448
|
|
|
4,703
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
BRL/EUR/GBP/USD
|
|
4,297
|
|
|
66,894
|
|
||
Contracts for Differences - Short Contracts
|
EUR/GBP/JPY
|
|
182
|
|
|
9,257
|
|
||
Total Return Swaps - Short Contracts
|
USD
|
|
119
|
|
|
86,050
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaptions
|
JPY
|
|
26
|
|
|
68,344
|
|
||
Sovereign Debt Futures - Short Contracts
|
EUR
|
|
24
|
|
|
125,774
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
CNH/SAR
|
|
7,287
|
|
|
210,796
|
|
||
Foreign Currency Options - Sold
|
CNH
|
|
41
|
|
|
71,084
|
|
||
Total Derivative Liabilities (free standing)
|
|
|
$
|
14,510
|
|
|
$
|
655,830
|
|
|
|
|
|
|
|
||||
Embedded derivative liabilities in reinsurance contracts (3)
|
USD
|
|
$
|
124
|
|
|
$
|
20,000
|
|
Total Derivative Liabilities (embedded)
|
|
|
$
|
124
|
|
|
$
|
20,000
|
|
(1)
|
BRL = Brazilian Real, CHF = Swiss Franc, CNH = Chinese Yuan, EGP = Egyptian Pound, EUR = Euro, HKD = Hong Kong Dollar, GBP = British Pound, JPY = Japanese Yen, SAR = Saudi Arabian Riyal, SEK = Swedish Krona, USD = US Dollar.
|
(2)
|
The absolute notional exposure represents the Company’s derivative activity as of
March 31, 2018
, which is representative of the volume of derivatives held during the period.
|
(3)
|
The fair value of embedded derivatives in reinsurance contracts is included in reinsurance balances payable in the condensed consolidated balance sheets.
|
|
As of December 31, 2017
|
||||||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Assets by Primary Underlying Risk
|
|
||||||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
USD
|
|
$
|
8,205
|
|
|
$
|
50,593
|
|
Total Return Swaps - Long Contracts
|
EGP
|
|
25,245
|
|
|
25,245
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
BRL / CHF / EUR / USD
|
|
17,298
|
|
|
163,868
|
|
||
Contracts for Differences - Short Contracts
|
DKK / NOK / SEK / USD
|
|
4,384
|
|
|
31,992
|
|
||
Total Return Swaps - Long Contracts
|
BRL / USD
|
|
15,936
|
|
|
96,388
|
|
||
Total Return Swaps - Short Contracts
|
USD
|
|
1
|
|
|
—
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaptions
|
JPY
|
|
539
|
|
|
64,950
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
HKD / JPY
|
|
1,764
|
|
|
511,937
|
|
||
Total Derivative Assets
|
|
|
$
|
73,372
|
|
|
$
|
944,973
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Liabilities by Primary Underlying Risk
|
|
||||||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
USD
|
|
$
|
1,250
|
|
|
$
|
19,418
|
|
Credit Default Swaps - Protection Sold
|
USD
|
|
2,085
|
|
|
2,351
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
BRL / EUR / USD
|
|
2,200
|
|
|
93,200
|
|
||
Contracts for Differences - Short Contracts
|
DKK / EUR / USD
|
|
776
|
|
|
8,483
|
|
||
Total Return Swaps - Long Contracts
|
BRL / USD
|
|
73
|
|
|
50,858
|
|
||
Total Return Swaps - Short Contracts
|
USD
|
|
1,885
|
|
|
52,657
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaptions
|
JPY
|
|
70
|
|
|
64,482
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
BRL / CHF / CNH / EUR / HKD / SAR
|
|
6,164
|
|
|
573,498
|
|
||
Total Derivative Liabilities (free standing)
|
|
|
$
|
14,503
|
|
|
$
|
864,947
|
|
|
|
|
|
|
|
||||
Embedded derivative liabilities in reinsurance contracts (3)
|
USD
|
|
$
|
171
|
|
|
$
|
20,000
|
|
Total Derivative Liabilities (embedded)
|
|
|
$
|
171
|
|
|
$
|
20,000
|
|
(1)
|
BRL = Brazilian Real, CHF = Swiss Franc, CNH = Chinese Yuan, DKK = Danish Krone, EGP = Egyptian Pound, EUR = Euro, HKD = Hong Kong Dollar, JPY = Japanese Yen, NOK = Norwegian Krone, SAR = Saudi Arabian Riyal, SEK = Swedish Krona, USD = US Dollar.
|
(2)
|
The absolute notional exposure represents the Company’s derivative activity as of
December 31, 2017
, which is representative of the volume of derivatives held during the period.
|
(3)
|
The fair value of embedded derivatives in reinsurance contracts is included in reinsurance balances payable in the condensed consolidated balance sheets.
|
|
2018
|
|
2017
|
||||||||||||
Free standing Derivatives - Primary Underlying Risk
|
Realized Gain (Loss)
|
|
Unrealized Gain (Loss)*
|
|
Realized Gain (Loss)
|
|
Unrealized Gain (Loss)*
|
||||||||
Credit
|
|
|
|
|
|
|
|
||||||||
Credit Default Swaps - Protection Purchased
|
$
|
(1,248
|
)
|
|
$
|
559
|
|
|
$
|
(1,328
|
)
|
|
$
|
1,620
|
|
Credit Default Swaps - Protection Sold
|
848
|
|
|
(761
|
)
|
|
19
|
|
|
(24
|
)
|
||||
Total Return Swaps - Long Contracts
|
442
|
|
|
805
|
|
|
—
|
|
|
—
|
|
||||
Equity Price
|
|
|
|
|
|
|
|
||||||||
Contracts for Differences - Long Contracts
|
14,200
|
|
|
(8,578
|
)
|
|
7,870
|
|
|
5,476
|
|
||||
Contracts for Differences - Short Contracts
|
4,060
|
|
|
(81
|
)
|
|
(3,212
|
)
|
|
1,124
|
|
||||
Total Return Swaps - Long Contracts
|
19,191
|
|
|
(15,077
|
)
|
|
3,801
|
|
|
5,002
|
|
||||
Total Return Swaps - Short Contracts
|
(6,856
|
)
|
|
1,765
|
|
|
(2,729
|
)
|
|
(413
|
)
|
||||
Interest Rates
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps
|
—
|
|
|
—
|
|
|
1,453
|
|
|
365
|
|
||||
Interest Rate Swaptions
|
—
|
|
|
(221
|
)
|
|
1,242
|
|
|
(1,769
|
)
|
||||
Sovereign Debt Futures - Short Contracts
|
(1
|
)
|
|
(24
|
)
|
|
(1,782
|
)
|
|
764
|
|
||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Forward Contracts
|
(13,816
|
)
|
|
2,665
|
|
|
(5,874
|
)
|
|
1,385
|
|
||||
Foreign Currency Options - Purchased
|
—
|
|
|
(576
|
)
|
|
(4,869
|
)
|
|
502
|
|
||||
Foreign Currency Options - Sold
|
—
|
|
|
83
|
|
|
2,185
|
|
|
(80
|
)
|
||||
|
$
|
16,820
|
|
|
$
|
(19,441
|
)
|
|
$
|
(3,224
|
)
|
|
$
|
13,952
|
|
Embedded Derivatives
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives in reinsurance contracts
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
Total Derivative Liabilities (embedded)
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet
|
||||||||||||||
March 31, 2018
Derivative Contracts |
Gross Amount (1)
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Financial assets, derivative assets and collateral received
|
|
||||||||||||||
Counterparty 1
|
$
|
157
|
|
|
$
|
157
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Counterparty 2
|
2,639
|
|
|
215
|
|
|
—
|
|
|
2,424
|
|
||||
Counterparty 3
|
30,666
|
|
|
1,285
|
|
|
—
|
|
|
29,381
|
|
||||
Counterparty 4
|
3,036
|
|
|
3,036
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 5
|
10,601
|
|
|
5,829
|
|
|
—
|
|
|
4,772
|
|
||||
Counterparty 6
|
3,650
|
|
|
109
|
|
|
1,312
|
|
|
2,229
|
|
||||
Counterparty 7
|
1,811
|
|
|
442
|
|
|
1,217
|
|
|
152
|
|
||||
Counterparty 8
|
12,117
|
|
|
7,228
|
|
|
—
|
|
|
4,889
|
|
||||
Counterparty 9
|
1,402
|
|
|
246
|
|
|
—
|
|
|
1,156
|
|
||||
|
$
|
66,079
|
|
|
$
|
18,547
|
|
|
$
|
2,529
|
|
|
$
|
45,003
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet
|
||||||||||||||
March 31, 2018
Derivative Contracts |
Gross Amount (2)
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
Financial liabilities, derivative liabilities and collateral pledged
|
|
||||||||||||||
Counterparty 1
|
$
|
452
|
|
|
$
|
158
|
|
|
$
|
294
|
|
|
$
|
—
|
|
Counterparty 2
|
215
|
|
|
215
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 3
|
1,285
|
|
|
1,285
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 4
|
4,117
|
|
|
3,037
|
|
|
1,080
|
|
|
—
|
|
||||
Counterparty 5
|
5,829
|
|
|
5,829
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 6
|
109
|
|
|
109
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 7
|
442
|
|
|
442
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 8
|
7,228
|
|
|
7,228
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 9
|
246
|
|
|
246
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
19,923
|
|
|
$
|
18,549
|
|
|
$
|
1,374
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under an agreement to repurchase and securities lending transactions
|
|
|
|
|
|
|
|
||||||||
Counterparty 3
|
$
|
833
|
|
|
$
|
833
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Counterparty 4
|
19,067
|
|
|
19,067
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
19,900
|
|
|
$
|
19,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
The gross amounts of assets presented in the condensed consolidated balance sheets presented above includes the fair value of derivative contract assets as well as gross OTC option contract assets of
$12.0 million
included in other investments in the condensed consolidated balance sheets.
|
(2)
|
The gross amounts of liabilities presented in the condensed consolidated balance sheets presented above includes the fair value of derivative contract liabilities as well as gross OTC option contract liabilities of
$5.4 million
included in securities sold, not yet purchased in the condensed consolidated balance sheets.
|
|
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet
|
||||||||||||||
December 31, 2017
Derivative Contracts
|
Gross Amount (1)
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Financial assets, derivative assets and collateral received
|
|
||||||||||||||
Counterparty 1
|
$
|
167
|
|
|
$
|
167
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Counterparty 2
|
1,343
|
|
|
706
|
|
|
—
|
|
|
637
|
|
||||
Counterparty 3
|
37,313
|
|
|
2,705
|
|
|
—
|
|
|
34,608
|
|
||||
Counterparty 4
|
2,683
|
|
|
2,683
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 5
|
14,798
|
|
|
6,647
|
|
|
—
|
|
|
8,151
|
|
||||
Counterparty 6
|
5,338
|
|
|
9
|
|
|
2,122
|
|
|
3,207
|
|
||||
Counterparty 7
|
1,377
|
|
|
—
|
|
|
1,100
|
|
|
277
|
|
||||
Counterparty 8
|
12,628
|
|
|
2,963
|
|
|
—
|
|
|
9,665
|
|
||||
Counterparty 9
|
703
|
|
|
703
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
76,350
|
|
|
$
|
16,583
|
|
|
$
|
3,222
|
|
|
$
|
56,545
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet
|
||||||||||||||
December 31, 2017
Derivative Contracts
|
Gross Amount (2)
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
Financial liabilities, derivative liabilities and collateral pledged
|
|
||||||||||||||
Counterparty 1
|
$
|
1,340
|
|
|
$
|
167
|
|
|
$
|
1,173
|
|
|
$
|
—
|
|
Counterparty 2
|
706
|
|
|
706
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 3
|
2,705
|
|
|
2,705
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 4
|
3,812
|
|
|
2,683
|
|
|
1,129
|
|
|
—
|
|
||||
Counterparty 5
|
6,647
|
|
|
6,647
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 6
|
9
|
|
|
9
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 8
|
2,963
|
|
|
2,963
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 9
|
1,181
|
|
|
703
|
|
|
478
|
|
|
—
|
|
||||
Counterparty 15
|
836
|
|
|
—
|
|
|
732
|
|
|
104
|
|
||||
|
$
|
20,199
|
|
|
$
|
16,583
|
|
|
$
|
3,512
|
|
|
$
|
104
|
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under an agreement to repurchase
|
|
|
|
|
|
|
|
||||||||
Counterparty 4
|
$
|
29,618
|
|
|
$
|
29,618
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,618
|
|
|
$
|
29,618
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
The gross amounts of assets presented in the condensed consolidated balance sheets presented above includes the fair value of derivative contract assets as well as gross OTC option contract assets of
$3.0 million
included in other investments in the condensed consolidated balance sheets.
|
(2)
|
The gross amounts of liabilities presented in the condensed consolidated balance sheets presented above includes the fair value of derivative contract liabilities as well as gross OTC option contract liabilities of
$5.7 million
included in securities sold, not yet purchased in the condensed consolidated balance sheets.
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Case loss and loss adjustment expense reserves
|
$
|
115,243
|
|
|
$
|
115,622
|
|
Incurred but not reported loss and loss adjustment expense reserves
|
645,786
|
|
|
604,260
|
|
||
Deferred gains on retroactive reinsurance contracts
|
602
|
|
|
688
|
|
||
|
$
|
761,631
|
|
|
$
|
720,570
|
|
|
2018
|
|
2017
|
||||
Gross reserves for loss and loss adjustment expenses, beginning of period
|
$
|
720,570
|
|
|
$
|
605,129
|
|
Less: loss and loss adjustment expenses recoverable, beginning of period
|
(1,113
|
)
|
|
(1
|
)
|
||
Net reserves for loss and loss adjustment expenses, beginning of period
|
719,457
|
|
|
605,128
|
|
||
Increase (decrease) in net loss and loss adjustment expenses incurred in respect of losses occurring in:
|
|
|
|
||||
Current year
|
75,759
|
|
|
85,123
|
|
||
Prior years
|
16,947
|
|
|
933
|
|
||
Amortization of deferred gains on retroactive reinsurance contracts
|
(86
|
)
|
|
(161
|
)
|
||
Total incurred loss and loss adjustment expenses
|
92,620
|
|
|
85,895
|
|
||
Net loss and loss adjustment expenses paid in respect of losses occurring in:
|
|
|
|
||||
Current year
|
(11,988
|
)
|
|
(5,101
|
)
|
||
Prior years
|
(46,459
|
)
|
|
(62,046
|
)
|
||
Total net paid losses
|
(58,447
|
)
|
|
(67,147
|
)
|
||
Foreign currency translation
|
6,669
|
|
|
1,858
|
|
||
Net reserves for loss and loss adjustment expenses, end of period
|
760,299
|
|
|
625,734
|
|
||
Plus: loss and loss adjustment expenses recoverable, end of period
|
1,332
|
|
|
52
|
|
||
Gross reserves for loss and loss adjustment expenses, end of period
|
$
|
761,631
|
|
|
$
|
625,786
|
|
•
|
The
$0.6 million
of net
favorable
prior years’ reserve development for the
three
months ended
March 31, 2018
was accompanied by net
increase
s of
$0.1 million
in acquisition costs, resulting in a
$0.5 million
improvement in the net underwriting results
, primarily due to:
|
•
|
$2.4 million
of net favorable underwriting loss development relating to several workers’ compensation contracts written from 2012 to 2014, driven by better than expected loss experience;
|
•
|
$2.1 million
of net favorable underwriting loss development from several other contracts, including amortization of deferred gains, as a result of better than expected loss experience; partially offset by
|
•
|
$4.0 million
of net adverse underwriting loss development relating to our Florida homeowners’ reinsurance contracts. This development is 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. This practice has led to increases in the frequency of claims reported as well as the severity of losses and loss adjustment expenses.
|
•
|
The
$17.5 million
net
increase
in loss and loss adjustment expenses incurred resulting from
increase
s in premium earnings estimates was accompanied by a
$5.1 million
increase
in acquisition costs, for a total of
$22.6 million
increase
in loss and loss adjustment expenses incurred and acquisition costs. The
increase
in loss and loss adjustment expenses incurred and acquisition costs was due to
an increase
in prior period earned premium of
$22.9 million
. The
increase
in prior period earned premium was the result of changes in ultimate premium and earning pattern estimates. The net impact was a
$0.3 million
improvement in the net underwriting results
for the
three
months ended
March 31, 2018
.
|
•
|
In total, the change in net underwriting loss for prior periods due to loss reserve development and adjustments to premium earnings estimates resulted in a
$0.8 million
improvement in the net underwriting results
for the
three
months ended
March 31, 2018
.
|
•
|
The
$2.4 million
increase in loss and loss adjustment expenses incurred related to the increase in premium earnings estimates on certain contracts was accompanied by a
$1.0 million
increase in acquisition costs, for a total of
$3.4 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
$3.4 million
, resulting in minimal impact in net underwriting loss for the
three
months ended
March 31, 2017
.
|
•
|
The
$1.6 million
of net favorable prior years’ reserve development for the
three
months ended
March 31, 2017
was accompanied by net increases of
$1.6 million
in acquisition costs, resulting in minimal impact in net underwriting loss.
|
•
|
In total, there was minimal change in net underwriting loss for prior periods due to loss reserve development and adjustments to premium earnings estimates for the
three
months ended
March 31, 2017
.
|
|
2018
|
|
2017
|
||||
Management fees - Third Point LLC
|
$
|
9,775
|
|
|
$
|
8,467
|
|
Performance fees - Third Point Advisors LLC (before loss carryforward)
|
2,380
|
|
|
30,858
|
|
||
Performance fees - Loss carryforward
|
(2,108
|
)
|
|
—
|
|
||
|
$
|
10,047
|
|
|
$
|
39,325
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Balance, beginning of period
|
$
|
129,133
|
|
|
$
|
104,905
|
|
Consideration received
|
1,114
|
|
|
22,658
|
|
||
Consideration receivable
|
—
|
|
|
2,080
|
|
||
Net investment expense allocation
|
1,261
|
|
|
2,800
|
|
||
Payments
|
(1,729
|
)
|
|
(3,545
|
)
|
||
Foreign currency translation
|
178
|
|
|
235
|
|
||
Balance, end of period
|
$
|
129,957
|
|
|
$
|
129,133
|
|
|
Facility
|
|
Utilized
|
|
Collateral
|
||||||
Citibank
|
$
|
300,000
|
|
|
$
|
161,024
|
|
|
$
|
161,024
|
|
Lloyds Bank
|
125,000
|
|
|
75,970
|
|
|
75,970
|
|
|||
|
$
|
425,000
|
|
|
$
|
236,994
|
|
|
$
|
236,994
|
|
|
2018
|
|
2017
|
||||
Net investment income (loss) by type
|
|
|
|
||||
Net realized gains on investments and investment derivatives
|
$
|
65,770
|
|
|
$
|
61,074
|
|
Net unrealized gains (losses) on investments and investment derivatives
|
(62,987
|
)
|
|
95,674
|
|
||
Net losses on foreign currencies
|
(787
|
)
|
|
(552
|
)
|
||
Dividend and interest income
|
13,224
|
|
|
17,267
|
|
||
Dividends paid on securities sold, not yet purchased
|
(1,892
|
)
|
|
(525
|
)
|
||
Other expenses
|
(5,489
|
)
|
|
(5,103
|
)
|
||
Net investment income before management and performance fees to related parties
|
7,839
|
|
|
167,835
|
|
||
Management and performance fees to related parties
|
(10,047
|
)
|
|
(39,325
|
)
|
||
Net investment income (loss)
|
$
|
(2,208
|
)
|
|
$
|
128,510
|
|
|
2018
|
|
2017
|
||||
Net investment income (loss) by asset type
|
|
||||||
Equity securities
|
$
|
(18,325
|
)
|
|
$
|
150,269
|
|
Private common equity securities
|
(442
|
)
|
|
(27
|
)
|
||
Private preferred equity securities
|
(2,040
|
)
|
|
262
|
|
||
Total equities
|
(20,807
|
)
|
|
150,504
|
|
||
Asset-backed securities
|
12,449
|
|
|
2,833
|
|
||
Bank debt
|
2,521
|
|
|
4,142
|
|
||
Corporate bonds
|
(2,676
|
)
|
|
8,915
|
|
||
Municipal bonds
|
3,778
|
|
|
—
|
|
||
U.S. Treasury securities
|
(637
|
)
|
|
1,160
|
|
||
Sovereign debt
|
4,131
|
|
|
6,452
|
|
||
Other debt securities
|
438
|
|
|
—
|
|
||
Total debt securities
|
20,004
|
|
|
23,502
|
|
||
Options
|
(1,057
|
)
|
|
(7,465
|
)
|
||
Rights and warrants
|
(16
|
)
|
|
44
|
|
||
Real estate
|
87
|
|
|
—
|
|
||
Trade claims
|
(3
|
)
|
|
163
|
|
||
Total other investments
|
(989
|
)
|
|
(7,258
|
)
|
||
Net investment income (loss) in funds valued at NAV
|
(908
|
)
|
|
3,623
|
|
||
Total net investment income (loss) from invested assets
|
(2,700
|
)
|
|
170,371
|
|
||
Net investment income (loss) by liability type
|
|
|
|
||||
Equity securities
|
12,918
|
|
|
(5,998
|
)
|
||
Corporate bonds
|
(35
|
)
|
|
(1,693
|
)
|
||
Options
|
3,733
|
|
|
(1,693
|
)
|
||
Total net investment income (loss) from securities sold, not yet purchased
|
16,616
|
|
|
(9,384
|
)
|
||
Other investment income (losses) and other expenses not presented above
|
|
|
|
||||
Other investment expenses
|
(352
|
)
|
|
(1,914
|
)
|
||
Net investment income (loss) on derivative contracts
|
(2,621
|
)
|
|
10,728
|
|
||
Net investment loss on cash, including foreign exchange loss
|
(3,860
|
)
|
|
(2,936
|
)
|
||
Net investment losses on securities purchased under an agreement to sell and securities sold under and agreement to repurchase
|
(209
|
)
|
|
(20
|
)
|
||
Withholding taxes reclassified to income tax expense
|
965
|
|
|
990
|
|
||
Total other investment income (losses) and other expenses
|
(6,077
|
)
|
|
6,848
|
|
||
Net investment income before management and performance fees to related parties
|
7,839
|
|
|
167,835
|
|
||
Management and performance fees to related parties
|
(10,047
|
)
|
|
(39,325
|
)
|
||
Net investment income (loss)
|
$
|
(2,208
|
)
|
|
$
|
128,510
|
|
|
2018
|
|
2017
|
||||
Investment expense on deposit liabilities
|
$
|
1,261
|
|
|
$
|
409
|
|
Investment expense and change in fair value of embedded derivatives in reinsurance contracts
|
2,734
|
|
|
2,492
|
|
||
|
$
|
3,995
|
|
|
$
|
2,901
|
|
|
2018
|
|
2017
|
||||
Income tax expense (benefit) related to U.S. and U.K. subsidiaries
|
$
|
(849
|
)
|
|
$
|
4,182
|
|
Change in uncertain tax positions
|
12
|
|
|
126
|
|
||
Withholding taxes on certain investment transactions
|
965
|
|
|
990
|
|
||
|
$
|
128
|
|
|
$
|
5,298
|
|
Common shares
|
2018
|
|
2017
|
||
Common shares issued, beginning of period
|
107,227,347
|
|
|
106,501,299
|
|
Options exercised
|
—
|
|
|
50,000
|
|
Restricted shares granted, net of forfeitures
|
2,516
|
|
|
—
|
|
Performance restricted shares granted, net of forfeitures and shares withheld
|
236,057
|
|
|
630,784
|
|
Retirement of treasury shares and shares repurchased (1)
|
(5,583,228
|
)
|
|
—
|
|
Warrants exercised, net (2)
|
361,556
|
|
|
—
|
|
Common shares issued, end of period
|
102,244,248
|
|
|
107,182,083
|
|
Treasury shares, end of period
|
—
|
|
|
(2,177,639
|
)
|
Common shares outstanding, end of period
|
102,244,248
|
|
|
105,004,444
|
|
(1)
|
Prior to December 31, 2017, common shares repurchased by the Company were not canceled and were classified as treasury shares. Effective January 1, 2018, all treasury shares were retired and future shares repurchased will be retired.
|
(2)
|
During the
three
months ended
March 31, 2018
,
1,156,184
warrants were exercised. As a result of the warrant holder electing net settlement,
794,628
of those common shares were withheld by the Company and were subsequently retired, resulting in a net issuance of
361,556
common shares.
|
|
2018
|
|
2017
|
||||
Management and director options
|
$
|
95
|
|
|
$
|
347
|
|
Restricted shares with service condition
|
140
|
|
|
124
|
|
||
Restricted shares with service and performance condition
|
1,010
|
|
|
1,359
|
|
||
|
$
|
1,245
|
|
|
$
|
1,830
|
|
|
Number of
options
|
|
Weighted
average exercise
price
|
|||
Balance as of January 1, 2017
|
9,596,993
|
|
|
$
|
13.64
|
|
Forfeited
|
(558,138
|
)
|
|
18.00
|
|
|
Exercised
|
(150,802
|
)
|
|
10.00
|
|
|
Balance as of January 1, 2018
|
8,888,053
|
|
|
13.43
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Exercised
|
—
|
|
|
—
|
|
|
Balance as of March 31, 2018
|
8,888,053
|
|
|
$
|
13.43
|
|
|
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
|
5,123,532
|
|
|
$
|
10.04
|
|
|
3.8 years
|
|
5,081,671
|
|
|
$
|
10.03
|
|
$15.05 - $16.89
|
1,917,145
|
|
|
15.93
|
|
|
4.0 years
|
|
1,861,332
|
|
|
15.94
|
|
||
$20.00 - $25.05
|
1,847,376
|
|
|
20.26
|
|
|
4.0 years
|
|
1,805,518
|
|
|
20.22
|
|
||
|
8,888,053
|
|
|
$
|
13.43
|
|
|
3.9 years
|
|
8,748,521
|
|
|
$
|
13.39
|
|
|
Number of non-
vested restricted
shares
|
|
Weighted
average grant
date fair value
|
|||
Balance as of January 1, 2017
|
301,043
|
|
|
$
|
11.12
|
|
Granted
|
36,418
|
|
|
12.15
|
|
|
Forfeited
|
(71,429
|
)
|
|
14.00
|
|
|
Vested
|
(247,823
|
)
|
|
10.36
|
|
|
Balance as of January 1, 2018
|
18,209
|
|
|
12.15
|
|
|
Granted
|
2,516
|
|
|
15.30
|
|
|
Vested
|
(9,561
|
)
|
|
12.30
|
|
|
Balance as of March 31, 2018
|
11,164
|
|
|
$
|
12.73
|
|
|
Number of non-
vested restricted
shares
|
|
Number of non-
vested restricted
shares probable of vesting
|
|
Weighted average grant date fair value of shares probable of vesting
|
||||
Balance as of January 1, 2017
|
1,381,740
|
|
|
577,486
|
|
|
$
|
12.91
|
|
Granted
|
935,825
|
|
|
623,882
|
|
|
12.66
|
|
|
Forfeited
|
(325,568
|
)
|
|
(45,617
|
)
|
|
12.57
|
|
|
Vested
|
(136,618
|
)
|
|
(136,618
|
)
|
|
14.60
|
|
|
Change in estimated restricted shares considered probable of vesting
|
n/a
|
|
|
(131,930
|
)
|
|
12.17
|
|
|
Balance as of January 1, 2018
|
1,855,379
|
|
|
887,203
|
|
|
12.60
|
|
|
Granted
|
530,077
|
|
|
353,380
|
|
|
14.05
|
|
|
Forfeited
|
(288,700
|
)
|
|
—
|
|
|
14.00
|
|
|
Vested
|
(115,757
|
)
|
|
(115,757
|
)
|
|
14.00
|
|
|
Change in estimated restricted shares considered probable of vesting
|
n/a
|
|
|
19,197
|
|
|
11.70
|
|
|
Balance as of March 31, 2018
|
1,980,999
|
|
|
1,144,023
|
|
|
$
|
12.64
|
|
|
Redeemable noncontrolling interests in related party
|
|
Noncontrolling interests in related party
|
|
Total noncontrolling interests in related party
|
||||||||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||||||
Balance, beginning of period
|
$
|
108,219
|
|
|
$
|
—
|
|
|
$
|
5,407
|
|
|
$
|
35,674
|
|
|
$
|
113,626
|
|
|
$
|
35,674
|
|
Changes in capital account allocation
|
(101,418
|
)
|
|
—
|
|
|
(318
|
)
|
|
(18,825
|
)
|
|
(101,736
|
)
|
|
(18,825
|
)
|
||||||
Balance, end of period
|
$
|
6,801
|
|
|
$
|
—
|
|
|
$
|
5,089
|
|
|
$
|
16,849
|
|
|
$
|
11,890
|
|
|
$
|
16,849
|
|
|
Third Point Re BDA
|
|
Third Point Re USA
|
|
Total
|
||||||||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
|
March 31, 2018
|
|
March 31, 2017
|
||||||||||||
Balance, beginning of period
|
$
|
97,619
|
|
|
$
|
30,358
|
|
|
$
|
16,007
|
|
|
$
|
5,316
|
|
|
$
|
113,626
|
|
|
$
|
35,674
|
|
Net income (loss) attributable to total noncontrolling interests in related party
|
(7
|
)
|
|
932
|
|
|
17
|
|
|
242
|
|
|
10
|
|
|
1,174
|
|
||||||
Contributions (1)
|
240
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
254
|
|
|
—
|
|
||||||
Redemptions
|
(89,000
|
)
|
|
(17,999
|
)
|
|
(13,000
|
)
|
|
(2,000
|
)
|
|
(102,000
|
)
|
|
(19,999
|
)
|
||||||
Balance, end of period
|
$
|
8,852
|
|
|
$
|
13,291
|
|
|
$
|
3,038
|
|
|
$
|
3,558
|
|
|
$
|
11,890
|
|
|
$
|
16,849
|
|
|
|
2018
|
|
2017
|
||||
Weighted-average number of common shares outstanding:
|
($ in thousands, except share and per share amounts)
|
|||||||
|
Basic number of common shares outstanding
|
101,195,747
|
|
|
104,013,871
|
|
||
|
Dilutive effect of options
|
—
|
|
|
781,568
|
|
||
|
Dilutive effect of warrants
|
—
|
|
|
722,816
|
|
||
|
Dilutive effect of restricted shares with service and performance condition
|
—
|
|
|
183,344
|
|
||
|
Diluted number of common shares outstanding
|
101,195,747
|
|
|
105,701,599
|
|
||
Basic earnings (loss) per common share:
|
|
|
|
|||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
(26,001
|
)
|
|
$
|
104,186
|
|
|
Net income allocated to Third Point Re participating common shareholders
|
—
|
|
|
(139
|
)
|
||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
(26,001
|
)
|
|
$
|
104,047
|
|
|
Basic earnings (loss) per common share
|
$
|
(0.26
|
)
|
|
$
|
1.00
|
|
Diluted earnings (loss) per common share:
|
|
|
|
|||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
(26,001
|
)
|
|
$
|
104,186
|
|
|
Net income allocated to Third Point Re participating common shareholders
|
—
|
|
|
(136
|
)
|
||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
(26,001
|
)
|
|
$
|
104,050
|
|
|
Diluted earnings (loss) per common share
|
$
|
(0.26
|
)
|
|
$
|
0.98
|
|
March 31, 2018
|
Maximum Payout/ Notional Amount
(by period of expiration) |
|
Fair Value of Written Credit Derivatives
(2)
|
||||||||||||||||||||
Credit Spreads on underlying (basis points)
|
0-5 years
|
|
5 years or
Greater Expiring Through 2047 |
|
Total Written
Credit Default Swaps (1) |
|
Asset
|
|
Liability
|
|
Net Asset/(Liability)
|
||||||||||||
Single name (0 - 250)
|
$
|
2,263
|
|
|
$
|
2,440
|
|
|
$
|
4,703
|
|
|
$
|
—
|
|
|
$
|
2,448
|
|
|
$
|
(2,448
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2017
|
Maximum Payout/ Notional Amount
(by period of expiration) |
|
Fair Value of Written Credit Derivatives
(2)
|
||||||||||||||||||||
Credit Spreads on underlying (basis points)
|
0-5 years
|
|
5 years or
Greater Expiring Through 2047 |
|
Total Written
Credit Default Swaps (1) |
|
Asset
|
|
Liability
|
|
Net Asset/(Liability)
|
||||||||||||
Single name (0 - 250)
|
$
|
—
|
|
|
$
|
2,351
|
|
|
$
|
2,351
|
|
|
$
|
—
|
|
|
$
|
2,085
|
|
|
$
|
(2,085
|
)
|
(1)
|
As of
March 31, 2018
and
December 31, 2017
, 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.
|
|
Three months ended March 31, 2018
|
||||||||||
|
Property and Casualty Reinsurance
|
|
Corporate
|
|
Total
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gross premiums written
|
$
|
378,360
|
|
|
$
|
—
|
|
|
$
|
378,360
|
|
Gross premiums ceded
|
(14,646
|
)
|
|
—
|
|
|
(14,646
|
)
|
|||
Net premiums written
|
363,714
|
|
|
—
|
|
|
363,714
|
|
|||
Change in net unearned premium reserves
|
(221,228
|
)
|
|
—
|
|
|
(221,228
|
)
|
|||
Net premiums earned
|
142,486
|
|
|
—
|
|
|
142,486
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses incurred, net
|
92,620
|
|
|
—
|
|
|
92,620
|
|
|||
Acquisition costs, net
|
51,405
|
|
|
—
|
|
|
51,405
|
|
|||
General and administrative expenses
|
4,824
|
|
|
4,657
|
|
|
9,481
|
|
|||
Total expenses
|
148,849
|
|
|
4,657
|
|
|
153,506
|
|
|||
Net underwriting loss
|
(6,363
|
)
|
|
n/a
|
|
|
n/a
|
|
|||
Net investment income (loss)
|
2,599
|
|
|
(4,807
|
)
|
|
(2,208
|
)
|
|||
Other expenses
|
(3,995
|
)
|
|
—
|
|
|
(3,995
|
)
|
|||
Interest expense
|
—
|
|
|
(2,029
|
)
|
|
(2,029
|
)
|
|||
Foreign exchange losses (1)
|
(6,611
|
)
|
|
—
|
|
|
(6,611
|
)
|
|||
Income tax expense
|
—
|
|
|
(128
|
)
|
|
(128
|
)
|
|||
Net income attributable to noncontrolling interests in related party
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||
Segment loss
|
$
|
(14,370
|
)
|
|
$
|
(11,631
|
)
|
|
|
||
Net loss attributable to Third Point Re common shareholders
|
|
|
|
|
|
$
|
(26,001
|
)
|
|||
|
|
|
|
|
|
||||||
Property and Casualty Reinsurance - Underwriting Ratios (2):
|
|
|
|
|
|||||||
Loss ratio
|
65.0
|
%
|
|
|
|
|
|||||
Acquisition cost ratio
|
36.1
|
%
|
|
|
|
|
|||||
Composite ratio
|
101.1
|
%
|
|
|
|
|
|||||
General and administrative expense ratio
|
3.4
|
%
|
|
|
|
|
|||||
Combined ratio
|
104.5
|
%
|
|
|
|
|
(1)
|
Foreign exchange losses primarily result from the revaluation of foreign currency loss and loss adjustment expense reserves denominated in non-U.S. dollar. Non-U.S. dollar reinsurance assets, or balances held in trust accounts securing reinsurance liabilities generally offset reinsurance liabilities in the same non-U.S. dollar currencies resulting in minimal net exposure. As a result, the foreign exchange losses on loss and loss adjustment expense reserves in the period are offset by corresponding foreign exchange gains included in net investment income resulting from the revaluation of foreign currency reinsurance collateral held in trust accounts, which is presented as part of the Property and Casualty segment. For the three months ended March 31, 2018, the Company modified the presentation of its operating segment to allocate foreign exchange losses to the Property and Casualty Reinsurance Segment to better align with the reinsurance activities that result in these foreign exchange gains and losses. These amounts had previously been presented as part of the Company’s corporate function. Prior period segment results have been adjusted to conform to this presentation.
|
(2)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
|
Three months ended March 31, 2017
|
||||||||||
|
Property and Casualty Reinsurance
|
|
Corporate
|
|
Total
|
||||||
Revenues
|
|
|
|
|
|
||||||
Gross premiums written
|
$
|
146,354
|
|
|
$
|
—
|
|
|
$
|
146,354
|
|
Gross premiums ceded
|
(1,125
|
)
|
|
—
|
|
|
(1,125
|
)
|
|||
Net premiums written
|
145,229
|
|
|
—
|
|
|
145,229
|
|
|||
Change in net unearned premium reserves
|
(7,220
|
)
|
|
—
|
|
|
(7,220
|
)
|
|||
Net premiums earned
|
138,009
|
|
|
—
|
|
|
138,009
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Loss and loss adjustment expenses incurred, net
|
85,895
|
|
|
—
|
|
|
85,895
|
|
|||
Acquisition costs, net
|
54,452
|
|
|
—
|
|
|
54,452
|
|
|||
General and administrative expenses
|
6,312
|
|
|
4,260
|
|
|
10,572
|
|
|||
Total expenses
|
146,659
|
|
|
4,260
|
|
|
150,919
|
|
|||
Net underwriting loss
|
(8,650
|
)
|
|
n/a
|
|
|
n/a
|
|
|||
Net investment income
|
36,120
|
|
|
92,390
|
|
|
128,510
|
|
|||
Other expenses
|
(2,901
|
)
|
|
—
|
|
|
(2,901
|
)
|
|||
Interest expense
|
—
|
|
|
(2,026
|
)
|
|
(2,026
|
)
|
|||
Foreign exchange losses (1)
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||
Income tax expense
|
—
|
|
|
(5,298
|
)
|
|
(5,298
|
)
|
|||
Net income attributable to noncontrolling interests in related party
|
—
|
|
|
(1,174
|
)
|
|
(1,174
|
)
|
|||
Segment income
|
$
|
24,554
|
|
|
$
|
79,632
|
|
|
|
||
Net income available to Third Point Re common shareholders
|
|
|
|
|
$
|
104,186
|
|
||||
|
|
|
|
|
|
||||||
Property and Casualty Reinsurance - Underwriting Ratios (2):
|
|
|
|
|
|||||||
Loss ratio
|
62.2
|
%
|
|
|
|
|
|||||
Acquisition cost ratio
|
39.5
|
%
|
|
|
|
|
|||||
Composite ratio
|
101.7
|
%
|
|
|
|
|
|||||
General and administrative expense ratio
|
4.6
|
%
|
|
|
|
|
|||||
Combined ratio
|
106.3
|
%
|
|
|
|
|
(1)
|
Foreign exchange losses primarily result from the revaluation of foreign currency loss and loss adjustment expense reserves denominated in non-U.S. dollar. Non-U.S. dollar reinsurance assets, or balances held in trust accounts securing reinsurance liabilities generally offset reinsurance liabilities in the same non-U.S. dollar currencies resulting in minimal net exposure. As a result, the foreign exchange losses on loss and loss adjustment expense reserves in the period are offset by corresponding foreign exchange gains included in net investment income resulting from the revaluation of foreign currency reinsurance collateral held in trust accounts, which is presented as part of the Property and Casualty segment. For the three months ended March 31, 2018, the Company modified the presentation of its operating segment to allocate foreign exchange losses to the Property and Casualty Reinsurance Segment to better align with the reinsurance activities that result in these foreign exchange gains and losses. These amounts had previously been presented as part of the Company’s corporate function. Prior period segment results have been adjusted to conform to this presentation.
|
(2)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
|
2018
|
|
2017
|
||
Largest contract
|
24.2
|
%
|
|
36.9
|
%
|
Second largest contract
|
n/a
|
|
|
12.9
|
%
|
Third largest contract
|
n/a
|
|
|
11.5
|
%
|
Total for contracts contributing greater than 10% each
|
24.2
|
%
|
|
61.3
|
%
|
Total for contracts contributing less than 10% each
|
75.8
|
%
|
|
38.7
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
2018
|
|
2017
|
||||||||||
Property
|
$
|
369
|
|
|
0.1
|
%
|
|
$
|
12
|
|
|
—
|
%
|
Casualty
|
153,220
|
|
|
40.5
|
%
|
|
87,205
|
|
|
59.6
|
%
|
||
Specialty
|
224,771
|
|
|
59.4
|
%
|
|
59,137
|
|
|
40.4
|
%
|
||
Total prospective reinsurance contracts
|
378,360
|
|
|
100.0
|
%
|
|
146,354
|
|
|
100.0
|
%
|
||
Retroactive reinsurance contracts
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
|
$
|
378,360
|
|
|
100.0
|
%
|
|
$
|
146,354
|
|
|
100.0
|
%
|
|
2018
|
|
2017
|
||||||||||
Largest broker
|
$
|
169,261
|
|
|
44.7
|
%
|
|
$
|
67,689
|
|
|
46.3
|
%
|
Second largest broker
|
139,555
|
|
|
36.9
|
%
|
|
24,149
|
|
|
16.5
|
%
|
||
Third largest broker
|
n/a
|
|
|
n/a
|
|
|
16,029
|
|
|
11.0
|
%
|
||
Other
|
69,544
|
|
|
18.4
|
%
|
|
38,487
|
|
|
26.2
|
%
|
||
|
$
|
378,360
|
|
|
100.0
|
%
|
|
$
|
146,354
|
|
|
100.0
|
%
|
|
2018
|
|
2017
|
||||||||||
United States
|
$
|
232,871
|
|
|
61.6
|
%
|
|
$
|
42,430
|
|
|
29.0
|
%
|
Bermuda
|
70,353
|
|
|
18.6
|
%
|
|
54,075
|
|
|
36.9
|
%
|
||
United Kingdom
|
51,985
|
|
|
13.7
|
%
|
|
49,849
|
|
|
34.1
|
%
|
||
Other
|
23,151
|
|
|
6.1
|
%
|
|
—
|
|
|
—
|
%
|
||
|
$
|
378,360
|
|
|
100.0
|
%
|
|
$
|
146,354
|
|
|
100.0
|
%
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of March 31, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,133,170
|
|
|
$
|
—
|
|
|
$
|
2,133,170
|
|
Debt securities
|
—
|
|
|
—
|
|
|
635,322
|
|
|
—
|
|
|
635,322
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
43,109
|
|
|
—
|
|
|
43,109
|
|
|||||
Total investments in securities
|
—
|
|
|
—
|
|
|
2,811,601
|
|
|
—
|
|
|
2,811,601
|
|
|||||
Cash and cash equivalents
|
1
|
|
|
198
|
|
|
6,211
|
|
|
—
|
|
|
6,410
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
543,173
|
|
|
—
|
|
|
543,173
|
|
|||||
Investment in subsidiaries
|
1,634,213
|
|
|
272,856
|
|
|
165,082
|
|
|
(2,072,151
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
318,703
|
|
|
—
|
|
|
318,703
|
|
|||||
Derivative assets, at fair value
|
—
|
|
|
—
|
|
|
54,114
|
|
|
—
|
|
|
54,114
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
4,167
|
|
|
—
|
|
|
4,167
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
684,897
|
|
|
—
|
|
|
684,897
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
308,903
|
|
|
—
|
|
|
308,903
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
15,061
|
|
|
—
|
|
|
15,061
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
1,332
|
|
|
—
|
|
|
1,332
|
|
|||||
Amounts due from (to) affiliates
|
(26,268
|
)
|
|
(3,623
|
)
|
|
29,891
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
520
|
|
|
—
|
|
|
7,352
|
|
|
—
|
|
|
7,872
|
|
|||||
Total assets
|
$
|
1,608,466
|
|
|
$
|
269,431
|
|
|
$
|
4,950,487
|
|
|
$
|
(2,072,151
|
)
|
|
$
|
4,756,233
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses (1)
|
$
|
1,044
|
|
|
$
|
(9,240
|
)
|
|
$
|
19,469
|
|
|
$
|
—
|
|
|
$
|
11,273
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
50,799
|
|
|
—
|
|
|
50,799
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
129,957
|
|
|
—
|
|
|
129,957
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
884,758
|
|
|
—
|
|
|
884,758
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
761,631
|
|
|
—
|
|
|
761,631
|
|
|||||
Securities sold, not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
355,447
|
|
|
—
|
|
|
355,447
|
|
|||||
Securities sold under an agreement to repurchase
|
—
|
|
|
—
|
|
|
19,067
|
|
|
—
|
|
|
19,067
|
|
|||||
Due to brokers
|
—
|
|
|
—
|
|
|
792,633
|
|
|
—
|
|
|
792,633
|
|
|||||
Derivative liabilities, at fair value
|
—
|
|
|
—
|
|
|
14,510
|
|
|
—
|
|
|
14,510
|
|
|||||
Performance fee payable to related party
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||
Interest and dividends payable
|
—
|
|
|
1,015
|
|
|
2,034
|
|
|
—
|
|
|
3,049
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,777
|
|
|
—
|
|
|
—
|
|
|
113,777
|
|
|||||
Total liabilities
|
1,044
|
|
|
105,552
|
|
|
3,030,325
|
|
|
—
|
|
|
3,136,921
|
|
|||||
Redeemable noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
6,801
|
|
|
—
|
|
|
6,801
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
10,224
|
|
|
—
|
|
|
1,239
|
|
|
(1,239
|
)
|
|
10,224
|
|
|||||
Additional paid-in capital
|
1,029,179
|
|
|
165,290
|
|
|
1,533,076
|
|
|
(1,698,366
|
)
|
|
1,029,179
|
|
|||||
Retained earnings (deficit)
|
568,019
|
|
|
(1,411
|
)
|
|
373,957
|
|
|
(372,546
|
)
|
|
568,019
|
|
|||||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,607,422
|
|
|
163,879
|
|
|
1,908,272
|
|
|
(2,072,151
|
)
|
|
1,607,422
|
|
|||||
Noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
5,089
|
|
|
—
|
|
|
5,089
|
|
|||||
Total shareholders’ equity
|
1,607,422
|
|
|
163,879
|
|
|
1,913,361
|
|
|
(2,072,151
|
)
|
|
1,612,511
|
|
|||||
Total liabilities, noncontrolling interests and shareholders’ equity
|
$
|
1,608,466
|
|
|
$
|
269,431
|
|
|
$
|
4,950,487
|
|
|
$
|
(2,072,151
|
)
|
|
$
|
4,756,233
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of December 31, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,283,050
|
|
|
$
|
—
|
|
|
$
|
2,283,050
|
|
Debt securities
|
—
|
|
|
—
|
|
|
675,158
|
|
|
—
|
|
|
675,158
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
37,731
|
|
|
—
|
|
|
37,731
|
|
|||||
Total investments in securities
|
—
|
|
|
—
|
|
|
2,995,939
|
|
|
—
|
|
|
2,995,939
|
|
|||||
Cash and cash equivalents
|
9
|
|
|
199
|
|
|
7,989
|
|
|
—
|
|
|
8,197
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
541,136
|
|
|
—
|
|
|
541,136
|
|
|||||
Investment in subsidiaries
|
1,657,467
|
|
|
274,272
|
|
|
164,909
|
|
|
(2,096,648
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
305,093
|
|
|
—
|
|
|
305,093
|
|
|||||
Derivative assets, at fair value
|
—
|
|
|
—
|
|
|
73,372
|
|
|
—
|
|
|
73,372
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
3,774
|
|
|
—
|
|
|
3,774
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
476,008
|
|
|
—
|
|
|
476,008
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
258,793
|
|
|
—
|
|
|
258,793
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
1,049
|
|
|
—
|
|
|
1,049
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
1,113
|
|
|
—
|
|
|
1,113
|
|
|||||
Amounts due from (to) affiliates
|
(1,288
|
)
|
|
412
|
|
|
876
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
664
|
|
|
—
|
|
|
6,656
|
|
|
—
|
|
|
7,320
|
|
|||||
Total assets
|
$
|
1,656,852
|
|
|
$
|
274,883
|
|
|
$
|
4,836,707
|
|
|
$
|
(2,096,648
|
)
|
|
$
|
4,671,794
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
763
|
|
|
$
|
(8,805
|
)
|
|
$
|
42,674
|
|
|
$
|
—
|
|
|
$
|
34,632
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
41,614
|
|
|
—
|
|
|
41,614
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
129,133
|
|
|
—
|
|
|
129,133
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
649,518
|
|
|
—
|
|
|
649,518
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
720,570
|
|
|
—
|
|
|
720,570
|
|
|||||
Securities sold, not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
394,278
|
|
|
—
|
|
|
394,278
|
|
|||||
Securities sold under an agreement to repurchase
|
—
|
|
|
—
|
|
|
29,618
|
|
|
—
|
|
|
29,618
|
|
|||||
Due to brokers
|
—
|
|
|
—
|
|
|
770,205
|
|
|
—
|
|
|
770,205
|
|
|||||
Derivative liabilities, at fair value
|
—
|
|
|
—
|
|
|
14,503
|
|
|
—
|
|
|
14,503
|
|
|||||
Interest and dividends payable
|
—
|
|
|
3,055
|
|
|
1,220
|
|
|
—
|
|
|
4,275
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,733
|
|
|
—
|
|
|
—
|
|
|
113,733
|
|
|||||
Total liabilities
|
763
|
|
|
107,983
|
|
|
2,793,333
|
|
|
—
|
|
|
2,902,079
|
|
|||||
Redeemable noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
108,219
|
|
|
—
|
|
|
108,219
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
10,723
|
|
|
—
|
|
|
1,250
|
|
|
(1,250
|
)
|
|
10,723
|
|
|||||
Treasury shares
|
(48,253
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,253
|
)
|
|||||
Additional paid-in capital
|
1,099,599
|
|
|
165,097
|
|
|
1,531,770
|
|
|
(1,696,867
|
)
|
|
1,099,599
|
|
|||||
Retained earnings (deficit)
|
594,020
|
|
|
1,803
|
|
|
396,728
|
|
|
(398,531
|
)
|
|
594,020
|
|
|||||
Shareholders' equity attributable to Third Point Re common shareholders
|
1,656,089
|
|
|
166,900
|
|
|
1,929,748
|
|
|
(2,096,648
|
)
|
|
1,656,089
|
|
|||||
Noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
5,407
|
|
|
—
|
|
|
5,407
|
|
|||||
Total shareholders' equity
|
1,656,089
|
|
|
166,900
|
|
|
1,935,155
|
|
|
(2,096,648
|
)
|
|
1,661,496
|
|
|||||
Total liabilities, noncontrolling interests and shareholders’ equity
|
$
|
1,656,852
|
|
|
$
|
274,883
|
|
|
$
|
4,836,707
|
|
|
$
|
(2,096,648
|
)
|
|
$
|
4,671,794
|
|
CONDENSED CONSOLIDATING STATEMENTS OF LOSS
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended March 31, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
378,360
|
|
|
$
|
—
|
|
|
$
|
378,360
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(14,646
|
)
|
|
—
|
|
|
(14,646
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
363,714
|
|
|
—
|
|
|
363,714
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(221,228
|
)
|
|
—
|
|
|
(221,228
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
142,486
|
|
|
—
|
|
|
142,486
|
|
|||||
Net investment loss
|
|
—
|
|
|
—
|
|
|
(2,208
|
)
|
|
—
|
|
|
(2,208
|
)
|
|||||
Equity in losses of subsidiaries
|
|
(24,358
|
)
|
|
(1,609
|
)
|
|
(18
|
)
|
|
25,985
|
|
|
—
|
|
|||||
Total revenues
|
|
(24,358
|
)
|
|
(1,609
|
)
|
|
140,260
|
|
|
25,985
|
|
|
140,278
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
92,620
|
|
|
—
|
|
|
92,620
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
51,405
|
|
|
—
|
|
|
51,405
|
|
|||||
General and administrative expenses
|
|
1,643
|
|
|
3
|
|
|
7,835
|
|
|
—
|
|
|
9,481
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
3,995
|
|
|
—
|
|
|
3,995
|
|
|||||
Interest expense
|
|
—
|
|
|
2,029
|
|
|
—
|
|
|
—
|
|
|
2,029
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
6,611
|
|
|
—
|
|
|
6,611
|
|
|||||
Total expenses
|
|
1,643
|
|
|
2,032
|
|
|
162,466
|
|
|
—
|
|
|
166,141
|
|
|||||
Loss before income tax benefit
|
|
(26,001
|
)
|
|
(3,641
|
)
|
|
(22,206
|
)
|
|
25,985
|
|
|
(25,863
|
)
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
427
|
|
|
(555
|
)
|
|
—
|
|
|
(128
|
)
|
|||||
Net loss
|
|
(26,001
|
)
|
|
(3,214
|
)
|
|
(22,761
|
)
|
|
25,985
|
|
|
(25,991
|
)
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Net loss attributable to Third Point Re common shareholders
|
|
$
|
(26,001
|
)
|
|
$
|
(3,214
|
)
|
|
$
|
(22,771
|
)
|
|
$
|
25,985
|
|
|
$
|
(26,001
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended March 31, 2017
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
146,354
|
|
|
$
|
—
|
|
|
$
|
146,354
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(1,125
|
)
|
|
—
|
|
|
(1,125
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
145,229
|
|
|
—
|
|
|
145,229
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(7,220
|
)
|
|
—
|
|
|
(7,220
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
138,009
|
|
|
—
|
|
|
138,009
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
128,510
|
|
|
—
|
|
|
128,510
|
|
|||||
Equity in earnings of subsidiaries
|
|
105,370
|
|
|
8,989
|
|
|
5
|
|
|
(114,364
|
)
|
|
—
|
|
|||||
Total revenues
|
|
105,370
|
|
|
8,989
|
|
|
266,524
|
|
|
(114,364
|
)
|
|
266,519
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
85,895
|
|
|
—
|
|
|
85,895
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
54,452
|
|
|
—
|
|
|
54,452
|
|
|||||
General and administrative expenses
|
|
1,184
|
|
|
8
|
|
|
9,380
|
|
|
—
|
|
|
10,572
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
2,901
|
|
|
—
|
|
|
2,901
|
|
|||||
Interest expense
|
|
—
|
|
|
2,026
|
|
|
—
|
|
|
—
|
|
|
2,026
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Total expenses
|
|
1,184
|
|
|
2,034
|
|
|
152,643
|
|
|
—
|
|
|
155,861
|
|
|||||
Income before income tax expense
|
|
104,186
|
|
|
6,955
|
|
|
113,881
|
|
|
(114,364
|
)
|
|
110,658
|
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
712
|
|
|
(6,010
|
)
|
|
—
|
|
|
(5,298
|
)
|
|||||
Net income
|
|
104,186
|
|
|
7,667
|
|
|
107,871
|
|
|
(114,364
|
)
|
|
105,360
|
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(1,174
|
)
|
|
—
|
|
|
(1,174
|
)
|
|||||
Net income available to Third Point Re common shareholders
|
|
$
|
104,186
|
|
|
$
|
7,667
|
|
|
$
|
106,697
|
|
|
$
|
(114,364
|
)
|
|
$
|
104,186
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||||||
For the three months ended March 31, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(26,001
|
)
|
|
$
|
(3,214
|
)
|
|
$
|
(22,761
|
)
|
|
$
|
25,985
|
|
|
$
|
(25,991
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
24,358
|
|
|
1,609
|
|
|
18
|
|
|
(25,985
|
)
|
|
—
|
|
|||||
Share compensation expense
|
141
|
|
|
—
|
|
|
1,104
|
|
|
—
|
|
|
1,245
|
|
|||||
Net interest expense on deposit liabilities
|
—
|
|
|
—
|
|
|
1,261
|
|
|
—
|
|
|
1,261
|
|
|||||
Net unrealized loss on investments and derivatives
|
—
|
|
|
—
|
|
|
62,940
|
|
|
—
|
|
|
62,940
|
|
|||||
Net realized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(65,770
|
)
|
|
—
|
|
|
(65,770
|
)
|
|||||
Net foreign exchange losses
|
—
|
|
|
—
|
|
|
6,611
|
|
|
—
|
|
|
6,611
|
|
|||||
Amortization of premium and accretion of discount, net
|
—
|
|
|
44
|
|
|
2,578
|
|
|
—
|
|
|
2,622
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
(208,414
|
)
|
|
—
|
|
|
(208,414
|
)
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
(50,110
|
)
|
|
—
|
|
|
(50,110
|
)
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
(14,012
|
)
|
|
—
|
|
|
(14,012
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
(219
|
)
|
|
—
|
|
|
(219
|
)
|
|||||
Other assets
|
144
|
|
|
—
|
|
|
(703
|
)
|
|
—
|
|
|
(559
|
)
|
|||||
Interest and dividends receivable, net
|
—
|
|
|
(2,040
|
)
|
|
421
|
|
|
—
|
|
|
(1,619
|
)
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
235,240
|
|
|
—
|
|
|
235,240
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
34,392
|
|
|
—
|
|
|
34,392
|
|
|||||
Accounts payable and accrued expenses
|
281
|
|
|
(435
|
)
|
|
(23,228
|
)
|
|
—
|
|
|
(23,382
|
)
|
|||||
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
9,025
|
|
|
—
|
|
|
9,025
|
|
|||||
Performance fees payable to related party
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||
Amounts due from (to) affiliates
|
24,980
|
|
|
4,035
|
|
|
(29,015
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
23,903
|
|
|
(1
|
)
|
|
(60,622
|
)
|
|
—
|
|
|
(36,720
|
)
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(1,032,890
|
)
|
|
—
|
|
|
(1,032,890
|
)
|
|||||
Proceeds from sales of investments
|
—
|
|
|
—
|
|
|
1,221,157
|
|
|
—
|
|
|
1,221,157
|
|
|||||
Purchases of investments to cover short sales
|
—
|
|
|
—
|
|
|
(300,467
|
)
|
|
—
|
|
|
(300,467
|
)
|
|||||
Proceeds from short sales of investments
|
—
|
|
|
—
|
|
|
277,174
|
|
|
—
|
|
|
277,174
|
|
|||||
Change in due to/from brokers, net
|
—
|
|
|
—
|
|
|
8,818
|
|
|
—
|
|
|
8,818
|
|
|||||
Increase in securities sold under an agreement to repurchase
|
—
|
|
|
—
|
|
|
(10,551
|
)
|
|
—
|
|
|
(10,551
|
)
|
|||||
Net cash provided by investing activities
|
—
|
|
|
—
|
|
|
163,241
|
|
|
—
|
|
|
163,241
|
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxes paid on withholding shares
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||
Purchases of Third Point Re common shares under share repurchase program
|
(23,837
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,837
|
)
|
|||||
Decrease in deposit liabilities, net
|
—
|
|
|
—
|
|
|
(614
|
)
|
|
—
|
|
|
(614
|
)
|
|||||
Change in total noncontrolling interests in related party, net
|
—
|
|
|
—
|
|
|
(101,746
|
)
|
|
—
|
|
|
(101,746
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(23,911
|
)
|
|
—
|
|
|
(102,360
|
)
|
|
—
|
|
|
(126,271
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(8
|
)
|
|
(1
|
)
|
|
259
|
|
|
—
|
|
|
250
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
9
|
|
|
199
|
|
|
549,125
|
|
|
—
|
|
|
549,333
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
1
|
|
|
$
|
198
|
|
|
$
|
549,384
|
|
|
$
|
—
|
|
|
$
|
549,583
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||||||
For the three months ended March 31, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
104,186
|
|
|
$
|
7,667
|
|
|
$
|
107,871
|
|
|
$
|
(114,364
|
)
|
|
$
|
105,360
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
(105,370
|
)
|
|
(8,989
|
)
|
|
(5
|
)
|
|
114,364
|
|
|
—
|
|
|||||
Share compensation expense
|
—
|
|
|
—
|
|
|
1,830
|
|
|
—
|
|
|
1,830
|
|
|||||
Net interest income on deposit liabilities
|
—
|
|
|
—
|
|
|
409
|
|
|
—
|
|
|
409
|
|
|||||
Net unrealized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(95,703
|
)
|
|
—
|
|
|
(95,703
|
)
|
|||||
Net realized gain on investments and derivatives
|
—
|
|
|
—
|
|
|
(61,028
|
)
|
|
—
|
|
|
(61,028
|
)
|
|||||
Net foreign exchange losses
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Amortization of premium and accretion of discount, net
|
—
|
|
|
44
|
|
|
(709
|
)
|
|
—
|
|
|
(665
|
)
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
(37,281
|
)
|
|
—
|
|
|
(37,281
|
)
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
864
|
|
|
—
|
|
|
864
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
(946
|
)
|
|
—
|
|
|
(946
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
(51
|
)
|
|||||
Other assets
|
144
|
|
|
(713
|
)
|
|
4,641
|
|
|
—
|
|
|
4,072
|
|
|||||
Interest and dividends receivable, net
|
—
|
|
|
(2,042
|
)
|
|
(538
|
)
|
|
—
|
|
|
(2,580
|
)
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
8,167
|
|
|
—
|
|
|
8,167
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
18,798
|
|
|
—
|
|
|
18,798
|
|
|||||
Accounts payable and accrued expenses
|
80
|
|
|
—
|
|
|
1,099
|
|
|
—
|
|
|
1,179
|
|
|||||
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
8,051
|
|
|
—
|
|
|
8,051
|
|
|||||
Performance fees payable to related party
|
—
|
|
|
—
|
|
|
30,857
|
|
|
—
|
|
|
30,857
|
|
|||||
Amounts due from (to) affiliates
|
17,777
|
|
|
(4,266
|
)
|
|
(13,511
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
16,817
|
|
|
(8,299
|
)
|
|
(27,170
|
)
|
|
—
|
|
|
(18,652
|
)
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
—
|
|
|
—
|
|
|
(613,020
|
)
|
|
—
|
|
|
(613,020
|
)
|
|||||
Proceeds from sales of investments
|
—
|
|
|
—
|
|
|
940,797
|
|
|
—
|
|
|
940,797
|
|
|||||
Purchases of investments to cover short sales
|
—
|
|
|
—
|
|
|
(120,014
|
)
|
|
—
|
|
|
(120,014
|
)
|
|||||
Proceeds from short sales of investments
|
—
|
|
|
—
|
|
|
232,856
|
|
|
—
|
|
|
232,856
|
|
|||||
Change in due to/from brokers, net
|
—
|
|
|
—
|
|
|
(362,792
|
)
|
|
—
|
|
|
(362,792
|
)
|
|||||
Increase in securities sold under an agreement to repurchase
|
—
|
|
|
—
|
|
|
16,524
|
|
|
—
|
|
|
16,524
|
|
|||||
Net cash provided by investing activities
|
—
|
|
|
—
|
|
|
94,351
|
|
|
—
|
|
|
94,351
|
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of Third Point Re common shares, net of costs
|
498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
498
|
|
|||||
Purchases of Third Point Re common shares under share repurchase program
|
(18,884
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,884
|
)
|
|||||
Increase in deposit liabilities, net
|
—
|
|
|
—
|
|
|
437
|
|
|
—
|
|
|
437
|
|
|||||
Change in total noncontrolling interests in related party, net
|
—
|
|
|
—
|
|
|
(19,999
|
)
|
|
—
|
|
|
(19,999
|
)
|
|||||
Dividend received by (paid to) parent
|
—
|
|
|
8,300
|
|
|
(8,300
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
(18,386
|
)
|
|
8,300
|
|
|
(27,862
|
)
|
|
—
|
|
|
(37,948
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(1,569
|
)
|
|
1
|
|
|
39,319
|
|
|
—
|
|
|
37,751
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,629
|
|
|
79
|
|
|
307,183
|
|
|
—
|
|
|
308,891
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
60
|
|
|
$
|
80
|
|
|
$
|
346,502
|
|
|
$
|
—
|
|
|
$
|
346,642
|
|
•
|
results of operations fluctuate and may not be indicative of our prospects;
|
•
|
more established competitors;
|
•
|
losses exceeding reserves;
|
•
|
highly cyclical property and casualty reinsurance industry;
|
•
|
downgrade or withdrawal of ratings by rating agencies;
|
•
|
significant decrease in our capital or surplus;
|
•
|
dependence on key executives;
|
•
|
dependence on letter of credit facilities that may not be available on commercially acceptable terms;
|
•
|
inability to service our indebtedness;
|
•
|
limited cash flow and liquidity due to our indebtedness;
|
•
|
inability to raise necessary funds to pay principal or interest on debt;
|
•
|
potential lack of availability of capital in the future;
|
•
|
credit risk associated with the use of reinsurance brokers;
|
•
|
future strategic transactions such as acquisitions, dispositions, mergers or joint ventures;
|
•
|
dependence on Third Point LLC to implement our investment strategy;
|
•
|
decline in revenue due to poor performance of our investment portfolio;
|
•
|
risks associated with our investment strategy being greater than those faced by competitors;
|
•
|
termination by Third Point LLC of our investment management agreements;
|
•
|
potential conflicts of interest with Third Point LLC;
|
•
|
losses resulting from significant investment positions;
|
•
|
credit risk associated with the default on obligations of counterparties;
|
•
|
ineffective investment risk management systems;
|
•
|
fluctuations in the market value of our investment portfolio;
|
•
|
trading restrictions being placed on our investments;
|
•
|
limited termination provisions in our investment management agreements;
|
•
|
limited liquidity and lack of valuation data on our investments;
|
•
|
U.S. and global economic downturns;
|
•
|
specific characteristics of investments in mortgage-backed securities and other asset-backed securities, in securities of issues based outside the U.S., and in special situation or distressed companies;
|
•
|
loss of key employees at Third Point LLC;
|
•
|
Third Point LLC’s compensation arrangements may incentivize investments that are risky or speculative;
|
•
|
increased regulation or scrutiny of alternative investment advisers affecting our reputation;
|
•
|
suspension or revocation of our reinsurance licenses;
|
•
|
potentially being deemed an investment company under U.S. federal securities law;
|
•
|
failure of reinsurance subsidiaries to meet minimum capital and surplus requirements;
|
•
|
changes in Bermuda or other law and regulation that may have an adverse impact on our operations;
|
•
|
Third Point Re and/or Third Point Re BDA potentially becoming subject to U.S. federal income taxation;
|
•
|
potential characterization of Third Point Re and/or Third Point Re BDA as a passive foreign investment company;
|
•
|
subjection of our affiliates to the base erosion and anti-abuse tax;
|
•
|
potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act; and
|
•
|
other risks and factors listed under “Risk Factors” in our most recent Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.
|
|
2018
|
|
2017
|
||||
Key underwriting metrics for Property and Casualty Reinsurance segment:
|
($ in thousands, except for per share data and ratios)
|
||||||
Net underwriting loss
(1)
|
$
|
(6,363
|
)
|
|
$
|
(8,650
|
)
|
Combined ratio
(1)
|
104.5
|
%
|
|
106.3
|
%
|
||
|
|
|
|
||||
Key investment return metrics:
|
|
|
|
||||
Net investment income (loss)
|
$
|
(2,208
|
)
|
|
$
|
128,510
|
|
Net investment return on investments managed by Third Point LLC
|
(0.2
|
)%
|
|
5.8
|
%
|
||
|
|
|
|
||||
Key shareholders’ value creation metrics:
|
|
|
|||||
Basic book value per share
(2) (3)
|
$
|
16.03
|
|
|
$
|
16.33
|
|
Diluted book value per share
(2) (3)
|
$
|
15.39
|
|
|
$
|
15.65
|
|
Change in diluted book value per share
(2)
|
(1.7
|
)%
|
|
6.7
|
%
|
||
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders
(2)
|
(1.6
|
)%
|
|
7.4
|
%
|
||
Invested asset leverage
(3)
|
1.58
|
|
|
1.56
|
|
(1)
|
See
Note 23
to the accompanying condensed consolidated financial statements for a calculation of net underwriting loss and combined ratio.
|
(2)
|
Basic book value per share, diluted book value per share, change in diluted book value per share and return on beginning shareholders’ equity attributable to Third Point Re common shareholders are non-GAAP financial measures. There are no comparable GAAP measures. See reconciliations in “Non-GAAP Financial Measures and Other Financial Metrics”.
|
(3)
|
Prior year comparatives represent amounts as of December 31,
2017
.
|
|
2018
|
|
2017
|
|
Change
|
||||||
|
($ in thousands)
|
||||||||||
Net underwriting income (loss)
(1)
|
$
|
(6,363
|
)
|
|
$
|
(8,650
|
)
|
|
$
|
2,287
|
|
Net investment income (loss)
|
(2,208
|
)
|
|
128,510
|
|
|
(130,718
|
)
|
|||
Net investment return on investments managed by Third Point LLC
|
(0.2
|
)%
|
|
5.8
|
%
|
|
(6.0
|
)%
|
|||
General and administrative expenses
(2)
|
(4,657
|
)
|
|
(4,260
|
)
|
|
(397
|
)
|
|||
Other expenses
|
(3,995
|
)
|
|
(2,901
|
)
|
|
(1,094
|
)
|
|||
Interest expense
|
(2,029
|
)
|
|
(2,026
|
)
|
|
(3
|
)
|
|||
Foreign exchange losses
|
(6,611
|
)
|
|
(15
|
)
|
|
(6,596
|
)
|
|||
Income tax expense
|
(128
|
)
|
|
(5,298
|
)
|
|
5,170
|
|
|||
Net income (loss) available to Third Point Re common shareholders
|
$
|
(26,001
|
)
|
|
$
|
104,186
|
|
|
$
|
(130,187
|
)
|
•
|
The improvement in our net underwriting results for the three months ended
March 31, 2018
compared to the three months ended
March 31, 2017
was primarily due to a decrease in general and administrative expenses allocated to underwriting activities in the three months ended
March 31, 2017
due to lower payroll related costs in the current year period.
|
•
|
The increase in other expenses for the
three
months ended
March 31, 2018
was primarily due to revised estimates of underlying assumptions on our deposit liability contracts as well as an increase in the amount of total deposit liabilities compared to the
three
months ended
March 31, 2017
.
|
•
|
The increase in foreign exchange losses was primarily due to the revaluation of foreign currency loss and loss adjustment expense reserves denominated in British pounds into the United States dollar, which had weakened during the current year period compared to the prior year period. For these contracts, non-U.S. dollar reinsurance assets, or balances held in trust accounts securing reinsurance liabilities generally offset reinsurance liabilities in the same non-U.S. dollar currencies resulting in minimal net exposure. As a result, the foreign exchange losses on loss and loss adjustment expense reserves in the period were offset by corresponding foreign exchange gains included in net investment income resulting from the revaluation of foreign currency reinsurance collateral held in trust accounts.
|
•
|
The decrease in income tax expense for the
three
months ended
March 31, 2018
was primarily the result of a decrease in taxable income generated by our U.S. subsidiaries.
|
|
2018
|
|
2017
|
|
Change
|
||||||
|
($ in thousands)
|
||||||||||
Gross premiums written
|
$
|
378,360
|
|
|
$
|
146,354
|
|
|
$
|
232,006
|
|
Gross premiums ceded
|
(14,646
|
)
|
|
(1,125
|
)
|
|
(13,521
|
)
|
|||
Net premiums earned
|
142,486
|
|
|
138,009
|
|
|
4,477
|
|
|||
Loss and loss adjustment expenses incurred, net
|
92,620
|
|
|
85,895
|
|
|
6,725
|
|
|||
Acquisition costs, net
|
51,405
|
|
|
54,452
|
|
|
(3,047
|
)
|
|||
General and administrative expenses
|
4,824
|
|
|
6,312
|
|
|
(1,488
|
)
|
|||
Net underwriting income (loss)
|
(6,363
|
)
|
|
(8,650
|
)
|
|
2,287
|
|
|||
Net investment income on float
|
2,599
|
|
|
36,120
|
|
|
(33,521
|
)
|
|||
Other expenses
|
(3,995
|
)
|
|
(2,901
|
)
|
|
(1,094
|
)
|
|||
Foreign exchange losses
|
(6,611
|
)
|
|
(15
|
)
|
|
(6,596
|
)
|
|||
Segment income (loss)
|
$
|
(14,370
|
)
|
|
$
|
24,554
|
|
|
$
|
(38,924
|
)
|
Underwriting ratios (1):
|
|
|
|
|
|
||||||
Loss ratio
|
65.0
|
%
|
|
62.2
|
%
|
|
2.8
|
%
|
|||
Acquisition cost ratio
|
36.1
|
%
|
|
39.5
|
%
|
|
(3.4
|
)%
|
|||
Composite ratio
|
101.1
|
%
|
|
101.7
|
%
|
|
(0.6
|
)%
|
|||
General and administrative expense ratio
|
3.4
|
%
|
|
4.6
|
%
|
|
(1.2
|
)%
|
|||
Combined ratio
|
104.5
|
%
|
|
106.3
|
%
|
|
(1.8
|
)%
|
(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 and/or cancellation provisions; 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.
|
|
2018
|
|
2017
|
||||||||||
|
($ in thousands)
|
||||||||||||
Property
|
$
|
369
|
|
|
0.1
|
%
|
|
$
|
12
|
|
|
—
|
%
|
Casualty
|
153,220
|
|
|
40.5
|
%
|
|
87,205
|
|
|
59.6
|
%
|
||
Specialty
|
224,771
|
|
|
59.4
|
%
|
|
59,137
|
|
|
40.4
|
%
|
||
Total prospective reinsurance contracts
|
$
|
378,360
|
|
|
100.0
|
%
|
|
$
|
146,354
|
|
|
100.0
|
%
|
Retroactive reinsurance contracts
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
|
$
|
378,360
|
|
|
100.0
|
%
|
|
$
|
146,354
|
|
|
100.0
|
%
|
•
|
For the three months ended
March 31, 2018
, we wrote $106.4 million of new premium, of which $102.9 million was specialty business, including one multi-line contract covering casualty and specialty risks for $91.6 million, and $3.5 million was casualty business.
|
•
|
We recognized net increases in premium of $136.8 million and $11.5 million in the three months ended
March 31, 2018
and
2017
, respectively, related to contracts renewed in the current year with no comparable premium in the prior year period. Certain of these contracts were previously written in 2016 and others in third quarter of 2017 and therefore did not have comparable premium in the first quarter of 2017.
|
•
|
We recorded net increases in premium estimates relating to prior periods of $13.1 million and $1.4 million for the three months ended
March 31, 2018
and
2017
, respectively. The increases in premium estimates for the three months ended
March 31, 2018
and
2017
were due to several contracts for which clients provided updated projections indicating that they expected to write more business than initially estimated.
|
•
|
Changes in renewal premiums for the three months ended
March 31, 2018
resulted in a net increase in premiums of $3.4 million. 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 recognized $14.8 million of premium in the three months ended
March 31, 2017
related to contracts that we did not renew in the three months ended
March 31, 2018
as a result of underlying terms and conditions.
|
•
|
$2.4 million
of net favorable underwriting loss development relating to several workers’ compensation contracts written from 2012 to 2014, driven by better than expected loss experience;
|
•
|
$2.1 million
of net favorable underwriting loss development from several other contracts, including amortization of deferred gains, as a result of better than expected loss experience; partially offset by
|
•
|
$4.0 million
of net adverse underwriting loss development relating to our Florida homeowners’ reinsurance contracts primarily as a result of higher than anticipated water damage claims and an increase in the practice of assignment of benefits whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters, which we believe has led to increases in the frequency of claims reported as well as the severity of losses and loss adjustment expenses.
|
|
Three months ended
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
|
($ in thousands)
|
||||||||||
Net investment income (loss) on capital
|
$
|
(4,807
|
)
|
|
$
|
92,390
|
|
|
$
|
(97,197
|
)
|
General and administrative expenses
|
(4,657
|
)
|
|
(4,260
|
)
|
|
(397
|
)
|
|||
Interest expense
|
(2,029
|
)
|
|
(2,026
|
)
|
|
(3
|
)
|
|||
Income tax expense
|
(128
|
)
|
|
(5,298
|
)
|
|
5,170
|
|
|||
Segment (income) loss attributable to noncontrolling interests in related party
|
(10
|
)
|
|
(1,174
|
)
|
|
1,164
|
|
|||
Segment income (loss)
|
$
|
(11,631
|
)
|
|
$
|
79,632
|
|
|
$
|
(91,263
|
)
|
|
2018
|
|
2017
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
(0.7
|
)%
|
|
—
|
%
|
|
(0.7
|
)%
|
|
6.4
|
%
|
|
(1.2
|
)%
|
|
5.2
|
%
|
Credit
|
0.4
|
%
|
|
(0.1
|
)%
|
|
0.3
|
%
|
|
0.4
|
%
|
|
(0.2
|
)%
|
|
0.2
|
%
|
Other
|
0.5
|
%
|
|
(0.3
|
)%
|
|
0.2
|
%
|
|
0.8
|
%
|
|
(0.4
|
)%
|
|
0.4
|
%
|
Net investment return on investments managed by Third Point LLC
|
0.2
|
%
|
|
(0.4
|
)%
|
|
(0.2
|
)%
|
|
7.6
|
%
|
|
(1.8
|
)%
|
|
5.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
S&P 500 Total Return Index
|
|
|
|
|
(2.5
|
)%
|
|
|
|
|
|
6.1
|
%
|
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Net investment income (loss)
|
$
|
(2,208
|
)
|
|
$
|
128,510
|
|
Less:
|
|
|
|
||||
Other investment income (loss)
|
(4
|
)
|
|
267
|
|
||
Net investment income (loss) on investments managed by Third Point LLC
|
$
|
(2,204
|
)
|
|
$
|
128,243
|
|
Less:
|
|
|
|
||||
Net investment income (loss) on capital
|
(4,803
|
)
|
|
92,123
|
|
||
Net investment income on float
|
$
|
2,599
|
|
|
$
|
36,120
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Basic and diluted book value per share numerator:
|
($ in thousands, except share and per share amounts)
|
||||||
Shareholders' equity attributable to Third Point Re common shareholders
|
$
|
1,607,422
|
|
|
$
|
1,656,089
|
|
Effect of dilutive warrants issued to founders and an advisor
|
34,950
|
|
|
46,512
|
|
||
Effect of dilutive stock options issued to directors and employees
|
51,422
|
|
|
51,422
|
|
||
Diluted book value per share numerator:
|
$
|
1,693,794
|
|
|
$
|
1,754,023
|
|
Basic and diluted book value per share denominator:
|
|
|
|
||||
Common shares outstanding
|
102,244,248
|
|
|
103,282,427
|
|
||
Unvested restricted shares
|
(1,992,162
|
)
|
|
(1,873,588
|
)
|
||
Basic book value per share denominator:
|
100,252,086
|
|
|
101,408,839
|
|
||
Effect of dilutive warrants issued to founders and an advisor
|
3,494,979
|
|
|
4,651,163
|
|
||
Effect of dilutive stock options issued to directors and employees
|
5,123,531
|
|
|
5,123,531
|
|
||
Effect of dilutive restricted shares issued to directors and employees (1)
|
1,155,187
|
|
|
905,412
|
|
||
Diluted book value per share denominator:
|
110,025,783
|
|
|
112,088,945
|
|
||
|
|
|
|
||||
Basic book value per share
|
$
|
16.03
|
|
|
$
|
16.33
|
|
Diluted book value per share
|
$
|
15.39
|
|
|
$
|
15.65
|
|
(1)
|
As of
March 31, 2018
, the effect of dilutive restricted shares issued to directors and employees was comprised of
11,164
restricted shares with a service condition only and
1,144,023
restricted shares with a service and performance condition that were considered probable of vesting.
|
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
(26,001
|
)
|
|
$
|
104,186
|
|
Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
1,656,089
|
|
|
1,414,051
|
|
||
Impact of weighting related to shareholders’ equity from shares repurchased
|
(3,243
|
)
|
|
(5,038
|
)
|
||
Adjusted shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
$
|
1,652,846
|
|
|
$
|
1,409,013
|
|
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders
|
(1.6
|
)%
|
|
7.4
|
%
|
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Net cash used in operating activities
|
$
|
(36,720
|
)
|
|
$
|
(18,652
|
)
|
Net cash provided by investing activities
|
163,241
|
|
|
94,351
|
|
||
Net cash used in financing activities
|
(126,271
|
)
|
|
(37,948
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
250
|
|
|
37,751
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
549,333
|
|
|
308,891
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
549,583
|
|
|
$
|
346,642
|
|
•
|
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)
|
||||||||||||
Hong Kong Dollar
|
$
|
51,711
|
|
|
2.3
|
%
|
|
$
|
(51,711
|
)
|
|
(2.3
|
)%
|
Saudi Arabian Riyal
|
10,869
|
|
|
0.5
|
%
|
|
(10,869
|
)
|
|
(0.5
|
)%
|
||
Swiss Franc
|
(4,957
|
)
|
|
(0.2
|
)%
|
|
4,957
|
|
|
0.2
|
%
|
||
Other
|
1,612
|
|
|
0.1
|
%
|
|
(1,612
|
)
|
|
(0.1
|
)%
|
||
Total
|
$
|
59,235
|
|
|
2.7
|
%
|
|
$
|
(59,235
|
)
|
|
(2.7
|
)%
|
|
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)
|
||||||||||||
U.S. treasuries and sovereign debt instruments
(1)
|
$
|
1,547
|
|
|
—
|
%
|
|
$
|
(633
|
)
|
|
—
|
%
|
Asset-backed securities
(2)
|
(2,578
|
)
|
|
(0.1
|
)%
|
|
2,607
|
|
|
0.1
|
%
|
||
Interest rate swaps and derivatives
|
1,714
|
|
|
0.1
|
%
|
|
(1,714
|
)
|
|
(0.1
|
)%
|
||
Net exposure to interest rate risk
|
$
|
683
|
|
|
—
|
%
|
|
$
|
260
|
|
|
—
|
%
|
(1)
|
Includes interest rate risk associated with investments held in reinsurance trust accounts.
|
(2)
|
Includes instruments for which durations are available on
March 31, 2018
. Includes a convexity adjustment if convexity is available. Not included are mortgage hedges which would reduce the impact of interest rate changes.
|
|
March 31,
2018 |
|
December 31, 2017
|
||||
|
($ in thousands)
|
||||||
Assets:
|
|
|
|
||||
Asset-backed securities
|
$
|
189,321
|
|
|
$
|
225,499
|
|
Bank debt
|
19,794
|
|
|
14,550
|
|
||
Corporate bonds
|
65,718
|
|
|
77,086
|
|
||
Municipal bonds
|
27,452
|
|
|
—
|
|
||
Sovereign debt
|
8,870
|
|
|
26,134
|
|
||
Trade claims
|
3,423
|
|
|
7,496
|
|
||
Other debt securities
|
5,003
|
|
|
5,460
|
|
||
|
$
|
319,581
|
|
|
$
|
356,225
|
|
Liabilities:
|
|
|
|
||||
Corporate bonds
|
$
|
16,949
|
|
|
$
|
21,699
|
|
Trade claims
|
69
|
|
|
—
|
|
||
|
$
|
17,018
|
|
|
$
|
21,699
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||
|
($ in thousands)
|
||||||||||||
Reperforming loans
|
$
|
133,481
|
|
|
70.5
|
%
|
|
$
|
160,354
|
|
|
71.1
|
%
|
Market place loans
|
43,164
|
|
|
22.8
|
%
|
|
52,584
|
|
|
23.3
|
%
|
||
Other (1)
|
12,676
|
|
|
6.7
|
%
|
|
12,561
|
|
|
5.6
|
%
|
||
|
$
|
189,321
|
|
|
100.0
|
%
|
|
$
|
225,499
|
|
|
100.0
|
%
|
(1)
|
Other includes: U.S. Alt-A positions, collateralized debt obligations, commercial mortgage-backed securities, non-U.S. RMBS and aircraft ABS.
|
|
(a) Total Number of Shares Purchased
|
|
(b) Average Price Paid per Share (1)
|
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
|
||||||
January 1, 2018 - January 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
51,747,060
|
|
February 1, 2018 - February 28, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000,000
|
|
||
March 1, 2018 - March 31, 2018
|
1,638,308
|
|
|
14.55
|
|
|
1,638,308
|
|
|
176,162,892
|
|
||
Total
|
1,638,308
|
|
|
$
|
14.55
|
|
|
1,638,308
|
|
|
$
|
176,162,892
|
|
10.6.4.1
|
|
10.29
|
|
31.1
|
|
31.2
|
|
32.1*
|
|
32.2*
|
|
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
|
*
|
This certification accompanies the Form 10-Q 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-Q), irrespective of any general incorporation language contained in such filing.
|
|
Third Point Reinsurance Ltd.
|
Date: May 10, 2018
|
|
|
/s/ J. Robert Bredahl
|
|
J. Robert Bredahl
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Christopher S. Coleman
|
|
Christopher S. Coleman
|
|
Chief Financial Officer
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
1.
|
Director Compensation
.
|
2.
|
This policy may be amended, revised or terminated by the Board at any time and from time to time.
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
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/ J. Robert Bredahl
|
|
J. Robert Bredahl
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
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
Quarterly Report on Form 10-Q
of the Company for the fiscal
period
ended
March 31, 2018
(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/ J. Robert Bredahl
|
|
J. Robert Bredahl
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
(1)
|
the
Quarterly Report on Form 10-Q
of the Company for the fiscal
period
ended
March 31, 2018
(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)
|
|