x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended June 30, 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
|
¨
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
|
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
|
|
Item 4.
Controls and Procedures
|
|
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
|
|
Item
5. Other Information
|
|
Item
6. Exhibits
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
|
||||
Equity securities, trading, at fair value (cost - $2,065,215; 2017 - $1,868,735)
|
|
$
|
2,427,768
|
|
|
$
|
2,283,050
|
|
Debt securities, trading, at fair value (cost - $674,673; 2017 - $711,322)
|
|
617,913
|
|
|
675,158
|
|
||
Other investments, at fair value
|
|
52,444
|
|
|
37,731
|
|
||
Total investments in securities
|
|
3,098,125
|
|
|
2,995,939
|
|
||
Cash and cash equivalents
|
|
17,451
|
|
|
8,197
|
|
||
Restricted cash and cash equivalents
|
|
569,968
|
|
|
541,136
|
|
||
Due from brokers
|
|
258,764
|
|
|
305,093
|
|
||
Derivative assets, at fair value
|
|
34,738
|
|
|
73,372
|
|
||
Interest and dividends receivable
|
|
4,385
|
|
|
3,774
|
|
||
Reinsurance balances receivable
|
|
631,952
|
|
|
476,008
|
|
||
Deferred acquisition costs, net
|
|
264,408
|
|
|
258,793
|
|
||
Unearned premiums ceded
|
|
17,606
|
|
|
1,049
|
|
||
Loss and loss adjustment expenses recoverable
|
|
1,414
|
|
|
1,113
|
|
||
Other assets
|
|
10,808
|
|
|
7,320
|
|
||
Total assets
|
|
$
|
4,909,619
|
|
|
$
|
4,671,794
|
|
Liabilities
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
12,044
|
|
|
$
|
34,632
|
|
Reinsurance balances payable
|
|
74,013
|
|
|
41,614
|
|
||
Deposit liabilities
|
|
129,700
|
|
|
129,133
|
|
||
Unearned premium reserves
|
|
792,096
|
|
|
649,518
|
|
||
Loss and loss adjustment expense reserves
|
|
791,313
|
|
|
720,570
|
|
||
Securities sold, not yet purchased, at fair value
|
|
443,216
|
|
|
394,278
|
|
||
Securities sold under an agreement to repurchase
|
|
—
|
|
|
29,618
|
|
||
Due to brokers
|
|
926,588
|
|
|
770,205
|
|
||
Derivative liabilities, at fair value
|
|
12,380
|
|
|
14,503
|
|
||
Performance fee payable to related party
|
|
4,641
|
|
|
—
|
|
||
Interest and dividends payable
|
|
5,718
|
|
|
4,275
|
|
||
Senior notes payable, net of deferred costs
|
|
113,821
|
|
|
113,733
|
|
||
Total liabilities
|
|
3,305,530
|
|
|
2,902,079
|
|
||
Commitments and contingent liabilities
|
|
|
|
|
||||
Redeemable noncontrolling interests in related party
|
|
7,179
|
|
|
108,219
|
|
||
Shareholders’ equity
|
|
|
|
|
||||
Preference shares (par value $0.10; authorized, 30,000,000; none issued)
|
|
—
|
|
|
—
|
|
||
Common shares (Issued: 2018 - 99,627,399; 2017 - 107,227,347; Outstanding: 2018 - 99,627,399; 2017 - 103,282,427)
|
|
9,963
|
|
|
10,723
|
|
||
Treasury shares (2018 - 0; 2017 - 3,944,920)
|
|
—
|
|
|
(48,253
|
)
|
||
Additional paid-in capital
|
|
994,170
|
|
|
1,099,599
|
|
||
Retained earnings
|
|
587,621
|
|
|
594,020
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
|
1,591,754
|
|
|
1,656,089
|
|
||
Noncontrolling interests in related party
|
|
5,156
|
|
|
5,407
|
|
||
Total shareholders’ equity
|
|
1,596,910
|
|
|
1,661,496
|
|
||
Total liabilities, noncontrolling interests and shareholders’ equity
|
|
$
|
4,909,619
|
|
|
$
|
4,671,794
|
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
$
|
49,765
|
|
|
$
|
156,564
|
|
|
$
|
428,125
|
|
|
$
|
302,918
|
|
Gross premiums ceded
|
(3,479
|
)
|
|
(1,425
|
)
|
|
(18,125
|
)
|
|
(2,550
|
)
|
||||
Net premiums written
|
46,286
|
|
|
155,139
|
|
|
410,000
|
|
|
300,368
|
|
||||
Change in net unearned premium reserves
|
95,207
|
|
|
18,419
|
|
|
(126,021
|
)
|
|
11,199
|
|
||||
Net premiums earned
|
141,493
|
|
|
173,558
|
|
|
283,979
|
|
|
311,567
|
|
||||
Net investment income before management and performance fees to related parties
|
45,668
|
|
|
140,631
|
|
|
53,507
|
|
|
308,466
|
|
||||
Management and performance fees to related parties
|
(14,493
|
)
|
|
(33,306
|
)
|
|
(24,540
|
)
|
|
(72,631
|
)
|
||||
Net investment income
|
31,175
|
|
|
107,325
|
|
|
28,967
|
|
|
235,835
|
|
||||
Total revenues
|
172,668
|
|
|
280,883
|
|
|
312,946
|
|
|
547,402
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
84,000
|
|
|
107,379
|
|
|
176,620
|
|
|
193,274
|
|
||||
Acquisition costs, net
|
57,584
|
|
|
68,641
|
|
|
108,989
|
|
|
123,093
|
|
||||
General and administrative expenses
|
9,696
|
|
|
15,014
|
|
|
19,177
|
|
|
25,586
|
|
||||
Other expenses
|
3,983
|
|
|
2,105
|
|
|
7,978
|
|
|
5,006
|
|
||||
Interest expense
|
2,051
|
|
|
2,051
|
|
|
4,080
|
|
|
4,077
|
|
||||
Foreign exchange (gains) losses
|
(8,847
|
)
|
|
4,781
|
|
|
(2,236
|
)
|
|
4,796
|
|
||||
Total expenses
|
148,467
|
|
|
199,971
|
|
|
314,608
|
|
|
355,832
|
|
||||
Income (loss) before income tax expense
|
24,201
|
|
|
80,912
|
|
|
(1,662
|
)
|
|
191,570
|
|
||||
Income tax expense
|
(4,390
|
)
|
|
(5,307
|
)
|
|
(4,518
|
)
|
|
(10,605
|
)
|
||||
Net income (loss)
|
19,811
|
|
|
75,605
|
|
|
(6,180
|
)
|
|
180,965
|
|
||||
Net income attributable to noncontrolling interests in related party
|
(209
|
)
|
|
(1,027
|
)
|
|
(219
|
)
|
|
(2,201
|
)
|
||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
19,602
|
|
|
$
|
74,578
|
|
|
$
|
(6,399
|
)
|
|
$
|
178,764
|
|
Earnings (loss) per share available to Third Point Re common shareholders
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share available to Third Point Re common shareholders
|
$
|
0.20
|
|
|
$
|
0.73
|
|
|
$
|
(0.06
|
)
|
|
$
|
1.73
|
|
Diluted earnings (loss) per share available to Third Point Re common shareholders
|
$
|
0.19
|
|
|
$
|
0.71
|
|
|
$
|
(0.06
|
)
|
|
$
|
1.70
|
|
Weighted average number of common shares used in the determination of earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
99,498,901
|
|
|
102,283,844
|
|
|
100,342,636
|
|
|
103,144,078
|
|
||||
Diluted
|
102,032,485
|
|
|
104,569,226
|
|
|
100,342,636
|
|
|
105,149,710
|
|
||||
|
|
|
|
|
|
|
|
||||||||
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
|
67
|
|
|
83
|
|
||
Common shares repurchased and retired
|
(827
|
)
|
|
—
|
|
||
Balance, end of period
|
9,963
|
|
|
10,733
|
|
||
Treasury shares
|
|
|
|
||||
Balance, beginning of period
|
(48,253
|
)
|
|
(7,389
|
)
|
||
Repurchase of common shares
|
—
|
|
|
(40,864
|
)
|
||
Retirement of treasury shares
|
48,253
|
|
|
—
|
|
||
Balance, end of period
|
—
|
|
|
(48,253
|
)
|
||
Additional paid-in capital
|
|
|
|
||||
Balance, beginning of period
|
1,099,599
|
|
|
1,094,568
|
|
||
Issuance of common shares, net
|
(141
|
)
|
|
915
|
|
||
Share compensation expense
|
2,558
|
|
|
3,374
|
|
||
Common shares repurchased and retired
|
(107,846
|
)
|
|
—
|
|
||
Balance, end of period
|
994,170
|
|
|
1,098,857
|
|
||
Retained earnings
|
|
|
|
||||
Balance, beginning of period
|
594,020
|
|
|
316,222
|
|
||
Net income (loss)
|
(6,180
|
)
|
|
180,965
|
|
||
Net income attributable to noncontrolling interests in related party
|
(219
|
)
|
|
(2,201
|
)
|
||
Balance, end of period
|
587,621
|
|
|
494,986
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,591,754
|
|
|
1,556,323
|
|
||
Noncontrolling interests in related party
|
5,156
|
|
|
19,809
|
|
||
Total shareholders' equity
|
$
|
1,596,910
|
|
|
$
|
1,576,132
|
|
|
|
|
|
||||
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)
|
$
|
(6,180
|
)
|
|
$
|
180,965
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Share compensation expense
|
2,558
|
|
|
3,374
|
|
||
Net interest expense on deposit liabilities
|
2,449
|
|
|
312
|
|
||
Net unrealized (gain) loss on investments and derivatives
|
95,513
|
|
|
(128,168
|
)
|
||
Net realized gain on investments and derivatives
|
(130,500
|
)
|
|
(154,504
|
)
|
||
Net foreign exchange (gains) losses
|
(2,236
|
)
|
|
4,796
|
|
||
Amortization of premium and accretion of discount, net
|
2,913
|
|
|
(122
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Reinsurance balances receivable
|
(157,498
|
)
|
|
(85,733
|
)
|
||
Deferred acquisition costs, net
|
(5,615
|
)
|
|
18,425
|
|
||
Unearned premiums ceded
|
(16,557
|
)
|
|
(1,938
|
)
|
||
Loss and loss adjustment expenses recoverable
|
(301
|
)
|
|
(1,712
|
)
|
||
Other assets
|
(3,537
|
)
|
|
6,158
|
|
||
Interest and dividends receivable, net
|
832
|
|
|
2,953
|
|
||
Unearned premium reserves
|
142,578
|
|
|
(9,261
|
)
|
||
Loss and loss adjustment expense reserves
|
74,655
|
|
|
63,769
|
|
||
Accounts payable and accrued expenses
|
(22,564
|
)
|
|
7,549
|
|
||
Reinsurance balances payable
|
32,208
|
|
|
22,237
|
|
||
Performance fee payable to related party
|
4,641
|
|
|
53,455
|
|
||
Net cash provided by (used in) operating activities
|
13,359
|
|
|
(17,445
|
)
|
||
Investing activities
|
|
|
|
||||
Purchases of investments
|
(2,180,138
|
)
|
|
(1,712,929
|
)
|
||
Proceeds from sales of investments
|
2,156,754
|
|
|
1,966,027
|
|
||
Purchases of investments to cover short sales
|
(590,113
|
)
|
|
(306,237
|
)
|
||
Proceeds from short sales of investments
|
628,913
|
|
|
462,066
|
|
||
Change in due to/from brokers, net
|
202,712
|
|
|
(261,994
|
)
|
||
Decrease in securities sold under an agreement to repurchase
|
(29,618
|
)
|
|
—
|
|
||
Net cash provided by investing activities
|
188,510
|
|
|
146,933
|
|
||
Financing activities
|
|
|
|
||||
Proceeds from issuance of Third Point Re common shares, net of costs
|
—
|
|
|
998
|
|
||
Taxes paid on withholding shares
|
(74
|
)
|
|
—
|
|
||
Purchases of Third Point Re common shares under share repurchase program
|
(60,420
|
)
|
|
(40,864
|
)
|
||
Decrease in deposit liabilities, net
|
(1,779
|
)
|
|
(124
|
)
|
||
Change in total noncontrolling interests in related party, net
|
(101,510
|
)
|
|
(18,066
|
)
|
||
Net cash used in financing activities
|
(163,783
|
)
|
|
(58,056
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
38,086
|
|
|
71,432
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
549,333
|
|
|
308,891
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
587,419
|
|
|
$
|
380,323
|
|
Supplementary information
|
|
|
|
||||
Interest paid in cash
|
$
|
13,939
|
|
|
$
|
10,262
|
|
Income taxes paid in cash
|
$
|
5,852
|
|
|
$
|
4,954
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
$
|
17,451
|
|
|
$
|
8,197
|
|
Restricted cash securing letter of credit facilities (1)
|
240,545
|
|
|
250,487
|
|
||
Restricted cash securing other reinsurance contracts (2)
|
329,423
|
|
|
290,649
|
|
||
Total cash, cash equivalents and restricted cash (3)
|
587,419
|
|
|
549,333
|
|
||
Restricted investments securing other reinsurance contracts (2)
|
310,205
|
|
|
326,429
|
|
||
Total cash, cash equivalents, restricted cash and restricted investments
|
$
|
897,624
|
|
|
$
|
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.
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Total investments in securities
|
$
|
3,097,918
|
|
|
$
|
2,995,097
|
|
Cash and cash equivalents
|
43
|
|
|
8
|
|
||
Restricted cash and cash equivalents
|
569,968
|
|
|
541,136
|
|
||
Due from brokers
|
258,764
|
|
|
305,093
|
|
||
Derivative assets, at fair value
|
34,738
|
|
|
73,372
|
|
||
Interest and dividends receivable
|
4,385
|
|
|
3,774
|
|
||
Total assets
|
3,965,816
|
|
|
3,918,480
|
|
||
Liabilities and noncontrolling interests in related party
|
|
|
|
||||
Accounts payable and accrued expenses
|
3,070
|
|
|
5,137
|
|
||
Securities sold, not yet purchased
|
443,216
|
|
|
394,278
|
|
||
Securities sold under an agreement to repurchase
|
—
|
|
|
29,618
|
|
||
Due to brokers
|
926,588
|
|
|
770,205
|
|
||
Derivative liabilities, at fair value
|
12,380
|
|
|
14,503
|
|
||
Performance fee payable to related party
|
4,641
|
|
|
—
|
|
||
Interest and dividends payable
|
2,696
|
|
|
1,218
|
|
||
Total noncontrolling interests in related party
(1)
|
12,335
|
|
|
113,626
|
|
||
Total liabilities and noncontrolling interests in related party
|
1,404,926
|
|
|
1,328,585
|
|
||
Total net investments managed by Third Point LLC
|
$
|
2,560,890
|
|
|
$
|
2,589,895
|
|
(1)
|
See
Note 17
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.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
Reperforming loans
|
$
|
109,117
|
|
|
60.4
|
%
|
|
$
|
160,354
|
|
|
71.1
|
%
|
Market place loans
|
60,664
|
|
|
33.6
|
%
|
|
52,584
|
|
|
23.3
|
%
|
||
Other (1)
|
10,990
|
|
|
6.0
|
%
|
|
12,561
|
|
|
5.6
|
%
|
||
|
$
|
180,771
|
|
|
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.
|
|
June 30, 2018
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
2,360,825
|
|
|
$
|
5,812
|
|
|
$
|
—
|
|
|
$
|
2,366,637
|
|
Private common equity securities
|
—
|
|
|
—
|
|
|
4,362
|
|
|
4,362
|
|
||||
Private preferred equity securities
|
—
|
|
|
—
|
|
|
56,769
|
|
|
56,769
|
|
||||
Total equities
|
2,360,825
|
|
|
5,812
|
|
|
61,131
|
|
|
2,427,768
|
|
||||
Asset-backed securities
|
—
|
|
|
152,632
|
|
|
28,139
|
|
|
180,771
|
|
||||
Bank debt
|
—
|
|
|
22,566
|
|
|
—
|
|
|
22,566
|
|
||||
Corporate bonds
|
—
|
|
|
43,207
|
|
|
9,968
|
|
|
53,175
|
|
||||
Municipal bonds
|
—
|
|
|
40,432
|
|
|
—
|
|
|
40,432
|
|
||||
U.S. Treasury securities
|
—
|
|
|
236,600
|
|
|
—
|
|
|
236,600
|
|
||||
Sovereign debt
|
—
|
|
|
83,244
|
|
|
—
|
|
|
83,244
|
|
||||
Other debt securities
|
—
|
|
|
1,125
|
|
|
—
|
|
|
1,125
|
|
||||
Total debt securities
|
—
|
|
|
579,806
|
|
|
38,107
|
|
|
617,913
|
|
||||
Options
|
962
|
|
|
8,443
|
|
|
—
|
|
|
9,405
|
|
||||
Rights and warrants
|
214
|
|
|
1
|
|
|
424
|
|
|
639
|
|
||||
Real estate
|
—
|
|
|
—
|
|
|
7,351
|
|
|
7,351
|
|
||||
Trade claims
|
—
|
|
|
3,068
|
|
|
—
|
|
|
3,068
|
|
||||
Total other investments
|
1,176
|
|
|
11,512
|
|
|
7,775
|
|
|
20,463
|
|
||||
Derivative assets (free standing)
|
—
|
|
|
27,852
|
|
|
6,886
|
|
|
34,738
|
|
||||
|
$
|
2,362,001
|
|
|
$
|
624,982
|
|
|
$
|
113,899
|
|
|
3,100,882
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
31,981
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
3,132,863
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
$
|
417,577
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
417,577
|
|
Corporate bonds
|
—
|
|
|
20,181
|
|
|
—
|
|
|
20,181
|
|
||||
Options
|
1,396
|
|
|
4,062
|
|
|
—
|
|
|
5,458
|
|
||||
Total securities sold, not yet purchased
|
418,973
|
|
|
24,243
|
|
|
—
|
|
|
443,216
|
|
||||
Derivative liabilities (free standing)
|
—
|
|
|
10,541
|
|
|
1,839
|
|
|
12,380
|
|
||||
Derivative liabilities (embedded)
|
—
|
|
|
—
|
|
|
164
|
|
|
164
|
|
||||
Total liabilities
|
$
|
418,973
|
|
|
$
|
34,784
|
|
|
$
|
2,003
|
|
|
$
|
455,760
|
|
|
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
|
|
|
April 1,
2018 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses) (1)
|
|
June 30,
2018 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,352
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
4,362
|
|
Private preferred equity securities
|
55,231
|
|
|
—
|
|
|
2,350
|
|
|
(977
|
)
|
|
165
|
|
|
56,769
|
|
||||||
Asset-backed securities
|
27,256
|
|
|
3,622
|
|
|
18,350
|
|
|
(21,188
|
)
|
|
99
|
|
|
28,139
|
|
||||||
Corporate bonds
|
10,081
|
|
|
—
|
|
|
512
|
|
|
(817
|
)
|
|
192
|
|
|
9,968
|
|
||||||
Rights and warrants
|
819
|
|
|
(1
|
)
|
|
—
|
|
|
(388
|
)
|
|
(6
|
)
|
|
424
|
|
||||||
Real estate
|
6,937
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
414
|
|
|
7,351
|
|
||||||
Derivative assets (free standing)
|
—
|
|
|
8,397
|
|
|
—
|
|
|
390
|
|
|
(1,901
|
)
|
|
6,886
|
|
||||||
Total assets
|
$
|
104,676
|
|
|
$
|
12,018
|
|
|
$
|
21,233
|
|
|
$
|
(22,980
|
)
|
|
$
|
(1,048
|
)
|
|
$
|
113,899
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,996
|
)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
$
|
(1,839
|
)
|
Derivative liabilities (embedded)
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
(164
|
)
|
||||||
Total liabilities
|
$
|
(2,120
|
)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107
|
|
|
$
|
(2,003
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 1,
2018 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses) (1)
|
|
June 30,
2018 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,794
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
(454
|
)
|
|
$
|
4,362
|
|
Private preferred equity securities
|
57,126
|
|
|
—
|
|
|
2,509
|
|
|
(992
|
)
|
|
(1,874
|
)
|
|
56,769
|
|
||||||
Asset-backed securities
|
27,308
|
|
|
6,104
|
|
|
30,610
|
|
|
(35,522
|
)
|
|
(361
|
)
|
|
28,139
|
|
||||||
Corporate bonds
|
9,868
|
|
|
—
|
|
|
532
|
|
|
(817
|
)
|
|
385
|
|
|
9,968
|
|
||||||
Other debt securities
|
713
|
|
|
—
|
|
|
—
|
|
|
(913
|
)
|
|
200
|
|
|
—
|
|
||||||
Rights and warrants
|
435
|
|
|
(1
|
)
|
|
582
|
|
|
(593
|
)
|
|
1
|
|
|
424
|
|
||||||
Real estate
|
6,831
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
|
673
|
|
|
7,351
|
|
||||||
Derivative assets (free standing)
|
—
|
|
|
7,701
|
|
|
—
|
|
|
1,499
|
|
|
(2,314
|
)
|
|
6,886
|
|
||||||
Total assets
|
$
|
107,075
|
|
|
$
|
13,804
|
|
|
$
|
34,255
|
|
|
$
|
(37,491
|
)
|
|
$
|
(3,744
|
)
|
|
$
|
113,899
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(2,085
|
)
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
233
|
|
|
$
|
(1,839
|
)
|
Derivative liabilities (embedded)
|
(171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(164
|
)
|
||||||
Total liabilities
|
$
|
(2,256
|
)
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
240
|
|
|
$
|
(2,003
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 1,
2017 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses) (1)
|
|
June 30,
2017 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,745
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
4,775
|
|
Private preferred equity securities
|
48,350
|
|
|
—
|
|
|
939
|
|
|
(123
|
)
|
|
1,593
|
|
|
50,759
|
|
||||||
Asset-backed securities
|
20,785
|
|
|
15,642
|
|
|
22,038
|
|
|
(20,545
|
)
|
|
(2,209
|
)
|
|
35,711
|
|
||||||
Bank debt
|
8,722
|
|
|
(189
|
)
|
|
3
|
|
|
(23
|
)
|
|
1,733
|
|
|
10,246
|
|
||||||
Corporate bonds
|
8,984
|
|
|
—
|
|
|
92
|
|
|
(320
|
)
|
|
339
|
|
|
9,095
|
|
||||||
Other debt securities
|
—
|
|
|
—
|
|
|
3,312
|
|
|
—
|
|
|
—
|
|
|
3,312
|
|
||||||
Total assets
|
$
|
91,586
|
|
|
$
|
15,453
|
|
|
$
|
26,384
|
|
|
$
|
(21,011
|
)
|
|
$
|
1,486
|
|
|
$
|
113,898
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,326
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
—
|
|
|
$
|
(1,367
|
)
|
Derivative liabilities (embedded)
|
(111
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|
(180
|
)
|
||||||
Total liabilities
|
$
|
(1,437
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
(69
|
)
|
|
$
|
(1,547
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 1,
2017 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses)
(1)
|
|
June 30,
2017 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
4,775
|
|
Private preferred equity securities
|
48,834
|
|
|
—
|
|
|
939
|
|
|
(495
|
)
|
|
1,481
|
|
|
50,759
|
|
||||||
Asset-backed securities
|
17,628
|
|
|
20,016
|
|
|
31,958
|
|
|
(32,237
|
)
|
|
(1,654
|
)
|
|
35,711
|
|
||||||
Bank debt
|
8,350
|
|
|
(446
|
)
|
|
4
|
|
|
(272
|
)
|
|
2,610
|
|
|
10,246
|
|
||||||
Corporate bonds
|
9,255
|
|
|
—
|
|
|
93
|
|
|
(587
|
)
|
|
334
|
|
|
9,095
|
|
||||||
Other debt securities
|
—
|
|
|
—
|
|
|
3,312
|
|
|
—
|
|
|
—
|
|
|
3,312
|
|
||||||
Total assets
|
$
|
88,866
|
|
|
$
|
19,570
|
|
|
$
|
36,306
|
|
|
$
|
(33,591
|
)
|
|
$
|
2,747
|
|
|
$
|
113,898
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,326
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
—
|
|
|
$
|
(1,367
|
)
|
Derivative liabilities (embedded)
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
(180
|
)
|
||||||
Total liabilities
|
$
|
(1,418
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
(88
|
)
|
|
$
|
(1,547
|
)
|
(1)
|
Total change in realized and unrealized gains (losses) recorded on Level 3 financial instruments is included in
net investment income
in the
condensed consolidated statements of income (loss)
.
|
June 30, 2018
|
|||||||||||
Assets
|
|
Fair value
|
|
Valuation technique
|
|
Unobservable input
|
|
Range
|
|||
Private equity investments
|
|
$
|
4,969
|
|
|
Market approach
|
|
Volatility
|
|
40.0% - 45.0%
|
|
|
|
|
|
|
|
Multiple
|
|
6.5 - 10.0x
|
|
||
Real estate
|
|
7,054
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
9.5
|
%
|
|
|
|
|
|
|
|
Capitalization rate
|
|
6.5
|
%
|
||
Rights and warrants
|
|
424
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
15.5
|
%
|
|
|
|
|
|
|
|
Time to exit
|
|
5.0 years
|
|
||
|
|
|
|
Market approach
|
|
Multiple
|
|
3.0 - 3.6x
|
|
||
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
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Due from brokers
|
|
|
|
||||
Cash held at brokers
|
$
|
247,145
|
|
|
$
|
295,467
|
|
Receivable from unsettled trades (1)
|
11,619
|
|
|
9,626
|
|
||
|
$
|
258,764
|
|
|
$
|
305,093
|
|
Due to brokers
|
|
|
|
||||
Borrowing from prime brokers
|
$
|
862,774
|
|
|
$
|
759,267
|
|
Payable from unsettled trades
|
63,814
|
|
|
10,938
|
|
||
|
$
|
926,588
|
|
|
$
|
770,205
|
|
|
As of June 30, 2018
|
||||||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Assets by Primary Underlying Risk
|
|
|
|
|
|
||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
EUR/USD
|
|
$
|
7,426
|
|
|
$
|
72,960
|
|
Total Return Swaps - Long Contracts
|
EGP
|
|
6,681
|
|
|
6,681
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
BRL/EUR/USD
|
|
9,641
|
|
|
104,549
|
|
||
Contracts for Differences - Short Contracts
|
CHF/EUR/JPY
|
|
3,062
|
|
|
19,382
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaptions
|
JPY/USD
|
|
452
|
|
|
488,780
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
BRL/CHF/CNH/EUR/HKD/JPY
|
|
6,386
|
|
|
613,867
|
|
||
Foreign Currency Options - Purchased
|
USD
|
|
1,090
|
|
|
69,438
|
|
||
Total Derivative Assets
|
|
|
$
|
34,738
|
|
|
$
|
1,375,657
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Liabilities by Primary Underlying Risk
|
|
|
|
|
|
||||
Credit
|
|
|
|
|
|
||||
Credit Default Swaps - Protection Purchased
|
USD
|
|
$
|
95
|
|
|
$
|
17,004
|
|
Credit Default Swaps - Protection Sold
|
USD
|
|
2,147
|
|
|
5,003
|
|
||
Equity Price
|
|
|
|
|
|
||||
Contracts for Differences - Long Contracts
|
BRL/EUR/GBP
|
|
3,726
|
|
|
79,109
|
|
||
Contracts for Differences - Short Contracts
|
CHF/EUR/GBP/JPY/SEK/USD
|
|
1,528
|
|
|
58,391
|
|
||
Interest Rates
|
|
|
|
|
|
||||
Interest Rate Swaptions
|
JPY/USD
|
|
89
|
|
|
488,417
|
|
||
Sovereign Debt Futures - Short Contracts
|
EUR
|
|
644
|
|
|
106,600
|
|
||
Total Return Swaps - Long Contracts
|
ARS
|
|
3,277
|
|
|
19,175
|
|
||
Foreign Currency Exchange Rates
|
|
|
|
|
|
||||
Foreign Currency Forward Contracts
|
ARS/HKD/SAR
|
|
347
|
|
|
221,008
|
|
||
Foreign Currency Options - Sold
|
USD
|
|
527
|
|
|
107,312
|
|
||
Total Derivative Liabilities (free standing)
|
|
|
$
|
12,380
|
|
|
$
|
1,102,019
|
|
|
|
|
|
|
|
||||
Embedded derivative liabilities in reinsurance contracts (3)
|
USD
|
|
$
|
164
|
|
|
$
|
20,000
|
|
Total Derivative Liabilities (embedded)
|
|
|
$
|
164
|
|
|
$
|
20,000
|
|
(1)
|
ARS = Argentine peso, 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
June 30, 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.
|
|
Three months ended
|
||||||||||||||
|
June 30, 2018
|
|
June 30, 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
|
$
|
130
|
|
|
$
|
(2,581
|
)
|
|
$
|
(1,137
|
)
|
|
$
|
(1,590
|
)
|
Credit Default Swaps - Protection Sold
|
(718
|
)
|
|
1,053
|
|
|
18
|
|
|
(35
|
)
|
||||
Total Return Swaps - Long Contracts
|
1,377
|
|
|
(1,981
|
)
|
|
(29
|
)
|
|
(37
|
)
|
||||
Equity Price
|
|
|
|
|
|
|
|
||||||||
Contracts for Differences - Long Contracts
|
11,107
|
|
|
(606
|
)
|
|
39,055
|
|
|
1,211
|
|
||||
Contracts for Differences - Short Contracts
|
1,650
|
|
|
(1,994
|
)
|
|
(993
|
)
|
|
1,821
|
|
||||
Total Return Swaps - Long Contracts
|
(1,632
|
)
|
|
(787
|
)
|
|
61
|
|
|
3,545
|
|
||||
Total Return Swaps - Short Contracts
|
(9,517
|
)
|
|
118
|
|
|
(1,014
|
)
|
|
1,201
|
|
||||
Interest Rates
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps
|
—
|
|
|
—
|
|
|
(4,550
|
)
|
|
(2,105
|
)
|
||||
Interest Rate Swaptions
|
—
|
|
|
(180
|
)
|
|
(720
|
)
|
|
(573
|
)
|
||||
Sovereign Future Options - Long Contracts
|
403
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Future Options - Short Contracts
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Futures - Long Contracts
|
639
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Debt Futures - Short Contracts
|
(560
|
)
|
|
(620
|
)
|
|
(6,874
|
)
|
|
(106
|
)
|
||||
Total Return Swaps - Long Contracts
|
—
|
|
|
(3,277
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Forward Contracts
|
4,182
|
|
|
7,776
|
|
|
(4,161
|
)
|
|
(2,653
|
)
|
||||
Foreign Currency Future Options - Purchased
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign Currency Options - Purchased
|
4,571
|
|
|
1,045
|
|
|
(1,318
|
)
|
|
661
|
|
||||
Foreign Currency Options - Sold
|
(485
|
)
|
|
(375
|
)
|
|
(1
|
)
|
|
—
|
|
||||
|
$
|
11,089
|
|
|
$
|
(2,409
|
)
|
|
$
|
18,337
|
|
|
$
|
1,340
|
|
Embedded Derivatives
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives in reinsurance contracts
|
$
|
—
|
|
|
$
|
(40
|
)
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
Total Derivative Liabilities (embedded)
|
$
|
—
|
|
|
$
|
(40
|
)
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||||||||||
|
June 30, 2018
|
|
June 30, 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
|
$
|
(1,118
|
)
|
|
$
|
(2,022
|
)
|
|
$
|
(2,465
|
)
|
|
$
|
30
|
|
Credit Default Swaps - Protection Sold
|
130
|
|
|
292
|
|
|
37
|
|
|
(59
|
)
|
||||
Total Return Swaps - Long Contracts
|
1,819
|
|
|
(1,176
|
)
|
|
(29
|
)
|
|
(37
|
)
|
||||
Equity Price
|
|
|
|
|
|
|
|
||||||||
Contracts for Differences - Long Contracts
|
25,307
|
|
|
(9,184
|
)
|
|
46,925
|
|
|
6,687
|
|
||||
Contracts for Differences - Short Contracts
|
5,710
|
|
|
(2,075
|
)
|
|
(4,205
|
)
|
|
2,945
|
|
||||
Total Return Swaps - Long Contracts
|
17,559
|
|
|
(15,864
|
)
|
|
3,862
|
|
|
8,547
|
|
||||
Total Return Swaps - Short Contracts
|
(16,373
|
)
|
|
1,883
|
|
|
(3,743
|
)
|
|
788
|
|
||||
Interest Rates
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps
|
—
|
|
|
—
|
|
|
(3,097
|
)
|
|
(1,740
|
)
|
||||
Interest Rate Swaptions
|
—
|
|
|
(401
|
)
|
|
522
|
|
|
(2,342
|
)
|
||||
Sovereign Future Options - Long Contracts
|
403
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Future Options - Short Contracts
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Futures - Long Contracts
|
639
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Debt Futures - Short Contracts
|
(561
|
)
|
|
(644
|
)
|
|
(8,656
|
)
|
|
658
|
|
||||
Total Return Swaps - Long Contracts
|
—
|
|
|
(3,277
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Forward Contracts
|
(9,634
|
)
|
|
10,441
|
|
|
(10,035
|
)
|
|
(1,268
|
)
|
||||
Foreign Currency Future Options - Purchased
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign Currency Options - Purchased
|
4,571
|
|
|
469
|
|
|
(6,187
|
)
|
|
1,163
|
|
||||
Foreign Currency Options - Sold
|
(485
|
)
|
|
(292
|
)
|
|
2,184
|
|
|
(80
|
)
|
||||
|
$
|
27,909
|
|
|
$
|
(21,850
|
)
|
|
$
|
15,113
|
|
|
$
|
15,292
|
|
Embedded Derivatives
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives in reinsurance contracts
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
Total Derivative Liabilities (embedded)
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
|
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet
|
||||||||||||||
June 30, 2018
Derivative Contracts |
Gross Amount (1)
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Financial assets, derivative assets and collateral received
|
|
||||||||||||||
Counterparty 1
|
$
|
190
|
|
|
$
|
190
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Counterparty 2
|
1,197
|
|
|
1,197
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 3
|
17,207
|
|
|
4,303
|
|
|
—
|
|
|
12,904
|
|
||||
Counterparty 4
|
2,926
|
|
|
2,889
|
|
|
—
|
|
|
37
|
|
||||
Counterparty 5
|
6,477
|
|
|
1,345
|
|
|
40
|
|
|
5,092
|
|
||||
Counterparty 6
|
3,713
|
|
|
33
|
|
|
1,314
|
|
|
2,366
|
|
||||
Counterparty 7
|
1,059
|
|
|
—
|
|
|
850
|
|
|
209
|
|
||||
Counterparty 8
|
8,233
|
|
|
1,222
|
|
|
—
|
|
|
7,011
|
|
||||
Counterparty 9
|
2,180
|
|
|
2,180
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
43,182
|
|
|
$
|
13,359
|
|
|
$
|
2,204
|
|
|
$
|
27,619
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross Amounts not Offset in the Condensed Consolidated Balance Sheet
|
||||||||||||||
June 30, 2018
Derivative Contracts |
Gross Amount (2)
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
Financial liabilities, derivative liabilities and collateral pledged
|
|
||||||||||||||
Counterparty 1
|
$
|
539
|
|
|
$
|
190
|
|
|
$
|
349
|
|
|
$
|
—
|
|
Counterparty 2
|
1,482
|
|
|
1,197
|
|
|
285
|
|
|
—
|
|
||||
Counterparty 3
|
4,303
|
|
|
4,303
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 4
|
3,000
|
|
|
2,889
|
|
|
111
|
|
|
—
|
|
||||
Counterparty 5
|
1,345
|
|
|
1,345
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 6
|
33
|
|
|
33
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 8
|
1,222
|
|
|
1,222
|
|
|
—
|
|
|
—
|
|
||||
Counterparty 9
|
4,520
|
|
|
2,180
|
|
|
2,340
|
|
|
—
|
|
||||
|
$
|
16,444
|
|
|
$
|
13,359
|
|
|
$
|
3,085
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Securities lending transactions
|
|
|
|
|
|
|
|
||||||||
Counterparty 5
|
$
|
7,341
|
|
|
$
|
7,341
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,341
|
|
|
$
|
7,341
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(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
$8.5 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
$4.1 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.
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Case loss and loss adjustment expense reserves
|
$
|
116,957
|
|
|
$
|
115,622
|
|
Incurred but not reported loss and loss adjustment expense reserves
|
673,840
|
|
|
604,260
|
|
||
Deferred gains on retroactive reinsurance contracts
|
516
|
|
|
688
|
|
||
|
$
|
791,313
|
|
|
$
|
720,570
|
|
|
June 30,
2018 |
|
June 30,
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
|
167,419
|
|
|
218,559
|
|
||
Prior years (1)
|
9,201
|
|
|
(25,285
|
)
|
||
Total incurred loss and loss adjustment expenses
|
176,620
|
|
|
193,274
|
|
||
Net loss and loss adjustment expenses paid in respect of losses occurring in:
|
|
|
|
||||
Current year
|
(35,471
|
)
|
|
(19,737
|
)
|
||
Prior years
|
(70,781
|
)
|
|
(111,480
|
)
|
||
Total net paid losses
|
(106,252
|
)
|
|
(131,217
|
)
|
||
Foreign currency translation
|
(3,912
|
)
|
|
9,561
|
|
||
Net reserves for loss and loss adjustment expenses, end of period
|
785,913
|
|
|
676,746
|
|
||
Plus: loss and loss adjustment expenses recoverable, end of period
|
1,414
|
|
|
1,713
|
|
||
Plus: deferred charges on retroactive reinsurance contracts
|
3,986
|
|
|
—
|
|
||
Gross reserves for loss and loss adjustment expenses, end of period
|
$
|
791,313
|
|
|
$
|
678,459
|
|
•
|
The
$17.7 million
net
increase
in loss and loss adjustment expenses incurred resulting from
increase
s in premium earnings estimates was accompanied by a
$5.2 million
increase
in acquisition costs, for a total of
$22.9 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
$23.2 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
six
months ended
June 30, 2018
.
|
•
|
The
$8.5 million
of net
favorable
prior years’ reserve development for the
six
months ended
June 30, 2018
was accompanied by net
increase
s of
$5.7 million
in acquisition costs, resulting in a
$2.8 million
improvement in the net underwriting results
, primarily due to:
|
•
|
$5.4 million
of net favorable underwriting loss development relating to several workers’ compensation contracts written from 2012 to 2017, driven by better than expected loss experience;
|
•
|
$2.9 million
of net favorable underwriting loss development primarily relating to one multi-line contract written from 2014 to 2017, driven by better than expected loss experience;
|
•
|
$1.9 million
of net favorable underwriting loss development from several other contracts as a result of better than expected loss experience; partially offset by
|
•
|
$7.4 million
of net adverse underwriting loss development primarily relating to our Florida homeowners’ quota share 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.
|
•
|
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
$3.1 million
improvement in the net underwriting results
for the
six
months ended
June 30, 2018
.
|
•
|
The
$32.5 million
of net favorable prior years’ reserve development for the
six
months ended
June 30, 2017
was primarily a result of having favorable loss development on certain retroactive reinsurance contracts. These retroactive reinsurance contracts had profit commission terms such that the favorable reserve development associated with these contracts was offset by similar increases in acquisition costs. The total net increases in acquisition costs associated with the prior year loss development for the six months ended
June 30, 2017
was
$32.5 million
, resulting in minimal impact in the net underwriting loss.
|
•
|
The
$7.2 million
increase in loss and loss adjustment expenses incurred related to the increase in premium earnings estimates on certain contracts was accompanied by a
$0.4 million
increase in acquisition costs, for a total of
$7.6 million
increase in loss and loss adjustment expenses incurred and acquisition costs. The related increase in earned premium related to the increase in premium earnings estimates was
$7.6 million
, resulting in minimal impact in net underwriting loss for the
six
months ended
June 30, 2017
.
|
•
|
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
six
months ended
June 30, 2017
.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Management fees - Third Point LLC
|
$
|
9,635
|
|
|
$
|
8,777
|
|
|
$
|
19,410
|
|
|
$
|
17,244
|
|
Performance fees - Third Point Advisors LLC
|
4,858
|
|
|
24,529
|
|
|
5,130
|
|
|
55,387
|
|
||||
|
$
|
14,493
|
|
|
$
|
33,306
|
|
|
$
|
24,540
|
|
|
$
|
72,631
|
|
|
June 30,
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
|
2,449
|
|
|
2,800
|
|
||
Payments
|
(2,893
|
)
|
|
(3,545
|
)
|
||
Foreign currency translation
|
(103
|
)
|
|
235
|
|
||
Balance, end of period
|
$
|
129,700
|
|
|
$
|
129,133
|
|
|
Facility
|
|
Utilized
|
|
Collateral
|
||||||
Citibank
|
$
|
300,000
|
|
|
$
|
158,312
|
|
|
$
|
158,312
|
|
Lloyds Bank
|
125,000
|
|
|
82,233
|
|
|
82,233
|
|
|||
|
$
|
425,000
|
|
|
$
|
240,545
|
|
|
$
|
240,545
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Net investment income by type
|
|
|
|
|
|
|
|
||||||||
Net realized gains on investments and investment derivatives
|
$
|
64,731
|
|
|
$
|
96,869
|
|
|
$
|
130,500
|
|
|
$
|
157,945
|
|
Net change in unrealized gains (losses) on investments and investment derivatives
|
(32,532
|
)
|
|
29,140
|
|
|
(95,520
|
)
|
|
124,814
|
|
||||
Net losses on foreign currencies
|
(1,830
|
)
|
|
(1,601
|
)
|
|
(2,617
|
)
|
|
(2,153
|
)
|
||||
Dividend and interest income
|
24,493
|
|
|
22,440
|
|
|
37,717
|
|
|
39,707
|
|
||||
Dividends paid on securities sold, not yet purchased
|
(2,329
|
)
|
|
(1,143
|
)
|
|
(4,221
|
)
|
|
(1,668
|
)
|
||||
Other expenses
|
(6,865
|
)
|
|
(5,074
|
)
|
|
(12,352
|
)
|
|
(10,179
|
)
|
||||
Net investment income before management and performance fees to related parties
|
45,668
|
|
|
140,631
|
|
|
53,507
|
|
|
308,466
|
|
||||
Management and performance fees to related parties
|
(14,493
|
)
|
|
(33,306
|
)
|
|
(24,540
|
)
|
|
(72,631
|
)
|
||||
Net investment income
|
$
|
31,175
|
|
|
$
|
107,325
|
|
|
$
|
28,967
|
|
|
$
|
235,835
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||
Net investment income (loss) by asset type
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
58,881
|
|
|
$
|
111,622
|
|
|
$
|
40,556
|
|
|
$
|
261,891
|
|
Private common equity securities
|
(11
|
)
|
|
3
|
|
|
(453
|
)
|
|
(24
|
)
|
||||
Private preferred equity securities
|
166
|
|
|
1,362
|
|
|
(1,874
|
)
|
|
1,624
|
|
||||
Total equities
|
59,036
|
|
|
112,987
|
|
|
38,229
|
|
|
263,491
|
|
||||
Asset-backed securities
|
7,033
|
|
|
2,300
|
|
|
19,482
|
|
|
5,133
|
|
||||
Bank debt
|
800
|
|
|
2,072
|
|
|
3,321
|
|
|
6,214
|
|
||||
Corporate bonds
|
(737
|
)
|
|
2,335
|
|
|
(3,413
|
)
|
|
11,250
|
|
||||
Municipal bonds
|
2,470
|
|
|
—
|
|
|
6,248
|
|
|
—
|
|
||||
U.S. Treasury securities
|
478
|
|
|
1,205
|
|
|
(159
|
)
|
|
2,365
|
|
||||
Sovereign debt
|
(8,533
|
)
|
|
5,396
|
|
|
(4,402
|
)
|
|
11,848
|
|
||||
Other debt securities
|
31
|
|
|
—
|
|
|
469
|
|
|
—
|
|
||||
Total debt securities
|
1,542
|
|
|
13,308
|
|
|
21,546
|
|
|
36,810
|
|
||||
Options
|
(5,562
|
)
|
|
(10,383
|
)
|
|
(6,619
|
)
|
|
(17,848
|
)
|
||||
Rights and warrants
|
63
|
|
|
(6
|
)
|
|
47
|
|
|
38
|
|
||||
Real estate
|
414
|
|
|
—
|
|
|
501
|
|
|
—
|
|
||||
Trade claims
|
(284
|
)
|
|
56
|
|
|
(287
|
)
|
|
219
|
|
||||
Total other investments
|
(5,369
|
)
|
|
(10,333
|
)
|
|
(6,358
|
)
|
|
(17,591
|
)
|
||||
Net investment income (loss) in funds valued at NAV
|
282
|
|
|
3,394
|
|
|
(625
|
)
|
|
7,017
|
|
||||
Total net investment income from invested assets
|
55,491
|
|
|
119,356
|
|
|
52,792
|
|
|
289,727
|
|
||||
Net investment income (loss) by liability type
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
(23,844
|
)
|
|
(1,469
|
)
|
|
(10,926
|
)
|
|
(7,467
|
)
|
||||
Sovereign debt
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Corporate bonds
|
(1,934
|
)
|
|
(1,221
|
)
|
|
(1,969
|
)
|
|
(2,914
|
)
|
||||
Options
|
9,174
|
|
|
6,056
|
|
|
12,907
|
|
|
4,363
|
|
||||
Total net investment income (loss) from securities sold, not yet purchased
|
(16,604
|
)
|
|
3,368
|
|
|
12
|
|
|
(6,016
|
)
|
||||
Other investment income (losses) and other expenses not presented above
|
|
|
|
|
|
|
|
||||||||
Other investment expenses
|
(673
|
)
|
|
(2,098
|
)
|
|
(1,026
|
)
|
|
(4,012
|
)
|
||||
Net investment income on derivative contracts
|
8,680
|
|
|
19,677
|
|
|
6,059
|
|
|
30,405
|
|
||||
Net investment loss on cash, including foreign exchange loss
|
(5,485
|
)
|
|
(3,057
|
)
|
|
(9,345
|
)
|
|
(5,993
|
)
|
||||
Net investment losses on securities purchased under an agreement to sell and securities sold under an agreement to repurchase
|
(32
|
)
|
|
(19
|
)
|
|
(241
|
)
|
|
(39
|
)
|
||||
Withholding taxes reclassified to income tax expense
|
4,291
|
|
|
3,404
|
|
|
5,256
|
|
|
4,394
|
|
||||
Total other investment income and other expenses
|
6,781
|
|
|
17,907
|
|
|
703
|
|
|
24,755
|
|
||||
Net investment income before management and performance fees to related parties
|
45,668
|
|
|
140,631
|
|
|
53,507
|
|
|
308,466
|
|
||||
Management and performance fees to related parties
|
(14,493
|
)
|
|
(33,306
|
)
|
|
(24,540
|
)
|
|
(72,631
|
)
|
||||
Net investment income
|
$
|
31,175
|
|
|
$
|
107,325
|
|
|
$
|
28,967
|
|
|
$
|
235,835
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Investment expense (income) on deposit liabilities
|
$
|
1,188
|
|
|
$
|
(97
|
)
|
|
$
|
2,449
|
|
|
$
|
312
|
|
Investment expense and change in fair value of embedded derivatives in reinsurance contracts
|
2,795
|
|
|
2,202
|
|
|
5,529
|
|
|
4,694
|
|
||||
|
$
|
3,983
|
|
|
$
|
2,105
|
|
|
$
|
7,978
|
|
|
$
|
5,006
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Income tax expense (benefit) related to U.S. and U.K. subsidiaries
|
$
|
61
|
|
|
$
|
1,844
|
|
|
$
|
(788
|
)
|
|
$
|
6,027
|
|
Change in uncertain tax positions
|
38
|
|
|
59
|
|
|
50
|
|
|
184
|
|
||||
Withholding taxes on certain investment transactions
|
4,291
|
|
|
3,404
|
|
|
5,256
|
|
|
4,394
|
|
||||
|
$
|
4,390
|
|
|
$
|
5,307
|
|
|
$
|
4,518
|
|
|
$
|
10,605
|
|
Common shares
|
2018
|
|
2017
|
||
Common shares issued, beginning of period
|
107,227,347
|
|
|
106,501,299
|
|
Options exercised
|
—
|
|
|
100,000
|
|
Restricted shares granted, net of forfeitures
|
50,644
|
|
|
36,418
|
|
Performance restricted shares granted, net of forfeitures and shares withheld
|
257,045
|
|
|
694,886
|
|
Retirement of treasury shares and shares repurchased (1)
|
(8,269,193
|
)
|
|
—
|
|
Warrants exercised, net (2)
|
361,556
|
|
|
—
|
|
Common shares issued, end of period
|
99,627,399
|
|
|
107,332,603
|
|
Treasury shares, end of period
|
—
|
|
|
(3,944,920
|
)
|
Common shares outstanding, end of period
|
99,627,399
|
|
|
103,387,683
|
|
(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
six
months ended
June 30, 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.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Management and director options
|
$
|
60
|
|
|
$
|
111
|
|
|
$
|
155
|
|
|
$
|
459
|
|
Restricted shares with service condition
|
139
|
|
|
154
|
|
|
279
|
|
|
278
|
|
||||
Restricted shares with service and performance condition
|
1,114
|
|
|
1,279
|
|
|
2,124
|
|
|
2,637
|
|
||||
|
$
|
1,313
|
|
|
$
|
1,544
|
|
|
$
|
2,558
|
|
|
$
|
3,374
|
|
|
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 June 30, 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
|
|
|
3.6 years
|
|
5,123,531
|
|
|
$
|
10.04
|
|
$15.05 - $16.89
|
1,917,145
|
|
|
15.93
|
|
|
3.8 years
|
|
1,875,285
|
|
|
15.95
|
|
||
$20.00 - $25.05
|
1,847,376
|
|
|
20.26
|
|
|
3.7 years
|
|
1,819,471
|
|
|
20.22
|
|
||
|
8,888,053
|
|
|
$
|
13.43
|
|
|
3.7 years
|
|
8,818,287
|
|
|
$
|
13.40
|
|
|
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
|
50,644
|
|
|
13.45
|
|
|
Vested
|
(20,724
|
)
|
|
12.53
|
|
|
Balance as of June 30, 2018
|
48,129
|
|
|
$
|
13.35
|
|
|
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
|
551,065
|
|
|
353,380
|
|
|
14.03
|
|
|
Forfeited
|
(288,700
|
)
|
|
—
|
|
|
14.00
|
|
|
Vested
|
(115,757
|
)
|
|
(115,757
|
)
|
|
14.00
|
|
|
Change in estimated restricted shares considered probable of vesting
|
n/a
|
|
|
29,509
|
|
|
12.39
|
|
|
Balance as of June 30, 2018
|
2,001,987
|
|
|
1,154,335
|
|
|
$
|
12.65
|
|
|
Redeemable noncontrolling interests in related party
|
|
Noncontrolling interests in related party
|
|
Total noncontrolling interests in related party
|
||||||||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||||||
Balance, beginning of period
|
$
|
108,219
|
|
|
$
|
—
|
|
|
$
|
5,407
|
|
|
$
|
35,674
|
|
|
$
|
113,626
|
|
|
$
|
35,674
|
|
Changes in capital account allocation
|
(101,040
|
)
|
|
—
|
|
|
(251
|
)
|
|
(15,865
|
)
|
|
(101,291
|
)
|
|
(15,865
|
)
|
||||||
Balance, end of period
|
$
|
7,179
|
|
|
$
|
—
|
|
|
$
|
5,156
|
|
|
$
|
19,809
|
|
|
$
|
12,335
|
|
|
$
|
19,809
|
|
|
Third Point Re BDA
|
|
Third Point Re USA
|
|
Total
|
||||||||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||||||
Balance, beginning of period
|
$
|
97,619
|
|
|
$
|
30,358
|
|
|
$
|
16,007
|
|
|
$
|
5,316
|
|
|
$
|
113,626
|
|
|
$
|
35,674
|
|
Net income attributable to total noncontrolling interests in related party
|
137
|
|
|
1,764
|
|
|
82
|
|
|
437
|
|
|
219
|
|
|
2,201
|
|
||||||
Contributions (1)
|
476
|
|
|
1,818
|
|
|
14
|
|
|
115
|
|
|
490
|
|
|
1,933
|
|
||||||
Redemptions
|
(89,000
|
)
|
|
(17,999
|
)
|
|
(13,000
|
)
|
|
(2,000
|
)
|
|
(102,000
|
)
|
|
(19,999
|
)
|
||||||
Balance, end of period
|
$
|
9,232
|
|
|
$
|
15,941
|
|
|
$
|
3,103
|
|
|
$
|
3,868
|
|
|
$
|
12,335
|
|
|
$
|
19,809
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Weighted-average number of common shares outstanding:
|
($ in thousands, except share and per share amounts)
|
|||||||||||||||
|
Basic number of common shares outstanding
|
99,498,901
|
|
|
102,283,844
|
|
|
100,342,636
|
|
|
103,144,078
|
|
||||
|
Dilutive effect of options
|
1,274,609
|
|
|
1,084,217
|
|
|
—
|
|
|
937,864
|
|
||||
|
Dilutive effect of warrants
|
878,977
|
|
|
988,830
|
|
|
—
|
|
|
860,484
|
|
||||
|
Dilutive effect of restricted shares with service and performance condition
|
379,998
|
|
|
212,335
|
|
|
—
|
|
|
207,284
|
|
||||
|
Diluted number of common shares outstanding
|
102,032,485
|
|
|
104,569,226
|
|
|
100,342,636
|
|
|
105,149,710
|
|
||||
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|
|||||||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
19,602
|
|
|
$
|
74,578
|
|
|
$
|
(6,399
|
)
|
|
$
|
178,764
|
|
|
Net income allocated to Third Point Re participating common shareholders
|
(6
|
)
|
|
(71
|
)
|
|
—
|
|
|
(204
|
)
|
||||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
19,596
|
|
|
$
|
74,507
|
|
|
$
|
(6,399
|
)
|
|
$
|
178,560
|
|
|
Basic earnings (loss) per common share
|
$
|
0.20
|
|
|
$
|
0.73
|
|
|
$
|
(0.06
|
)
|
|
$
|
1.73
|
|
Diluted earnings (loss) per common share:
|
|
|
|
|
|
|
|
|||||||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
19,602
|
|
|
$
|
74,578
|
|
|
$
|
(6,399
|
)
|
|
$
|
178,764
|
|
|
Net income allocated to Third Point Re participating common shareholders
|
(6
|
)
|
|
(69
|
)
|
|
—
|
|
|
(200
|
)
|
||||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
19,596
|
|
|
$
|
74,509
|
|
|
$
|
(6,399
|
)
|
|
$
|
178,564
|
|
|
Diluted earnings (loss) per common share
|
$
|
0.19
|
|
|
$
|
0.71
|
|
|
$
|
(0.06
|
)
|
|
$
|
1.70
|
|
June 30, 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)
|
$
|
2,375
|
|
|
$
|
2,628
|
|
|
$
|
5,003
|
|
|
$
|
—
|
|
|
$
|
2,147
|
|
|
$
|
(2,147
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
June 30, 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
|
|
Six months ended
|
||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||
Largest contract
|
32.8
|
%
|
|
65.9
|
%
|
|
21.4
|
%
|
|
34.0
|
%
|
Second largest contract
|
15.4
|
%
|
|
12.9
|
%
|
|
n/a
|
|
|
17.9
|
%
|
Third largest contract
|
13.8
|
%
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
Total for contracts contributing greater than 10% each
|
62.0
|
%
|
|
78.8
|
%
|
|
21.4
|
%
|
|
51.9
|
%
|
Total for contracts contributing less than 10% each
|
38.0
|
%
|
|
21.2
|
%
|
|
78.6
|
%
|
|
48.1
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||
Property
|
$
|
1,660
|
|
|
3.3
|
%
|
|
$
|
(8,827
|
)
|
|
(5.6
|
)%
|
|
$
|
2,029
|
|
|
0.5
|
%
|
|
$
|
(8,815
|
)
|
|
(2.9
|
)%
|
Casualty
|
43,510
|
|
|
87.4
|
%
|
|
15,008
|
|
|
9.6
|
%
|
|
196,730
|
|
|
46.0
|
%
|
|
102,213
|
|
|
33.7
|
%
|
||||
Specialty
|
254
|
|
|
0.6
|
%
|
|
41,032
|
|
|
26.2
|
%
|
|
225,025
|
|
|
52.5
|
%
|
|
100,169
|
|
|
33.1
|
%
|
||||
Total prospective reinsurance contracts
|
45,424
|
|
|
91.3
|
%
|
|
47,213
|
|
|
30.2
|
%
|
|
423,784
|
|
|
99.0
|
%
|
|
193,567
|
|
|
63.9
|
%
|
||||
Retroactive reinsurance contracts
|
4,341
|
|
|
8.7
|
%
|
|
109,351
|
|
|
69.8
|
%
|
|
4,341
|
|
|
1.0
|
%
|
|
109,351
|
|
|
36.1
|
%
|
||||
|
$
|
49,765
|
|
|
100.0
|
%
|
|
$
|
156,564
|
|
|
100.0
|
%
|
|
$
|
428,125
|
|
|
100.0
|
%
|
|
$
|
302,918
|
|
|
100.0
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||
Largest broker
|
$
|
19,858
|
|
|
39.9
|
%
|
|
$
|
107,612
|
|
|
68.7
|
%
|
|
$
|
165,582
|
|
|
38.7
|
%
|
|
$
|
107,612
|
|
|
35.5
|
%
|
Second largest broker
|
n/a
|
|
|
n/a
|
|
|
22,448
|
|
|
14.3
|
%
|
|
159,413
|
|
|
37.2
|
%
|
|
73,499
|
|
|
24.3
|
%
|
||||
Third largest broker
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
52,982
|
|
|
12.4
|
%
|
|
35,269
|
|
|
11.6
|
%
|
||||
Fourth largest broker
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
31,853
|
|
|
10.5
|
%
|
||||
Other
|
29,907
|
|
|
60.1
|
%
|
|
26,504
|
|
|
17.0
|
%
|
|
50,148
|
|
|
11.7
|
%
|
|
54,685
|
|
|
18.1
|
%
|
||||
|
$
|
49,765
|
|
|
100.0
|
%
|
|
$
|
156,564
|
|
|
100.0
|
%
|
|
$
|
428,125
|
|
|
100.0
|
%
|
|
$
|
302,918
|
|
|
100.0
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||
United States
|
$
|
31,400
|
|
|
63.1
|
%
|
|
$
|
1,340
|
|
|
0.8
|
%
|
|
$
|
264,271
|
|
|
61.7
|
%
|
|
$
|
43,769
|
|
|
14.4
|
%
|
Bermuda
|
3,357
|
|
|
6.7
|
%
|
|
—
|
|
|
—
|
%
|
|
73,710
|
|
|
17.2
|
%
|
|
54,075
|
|
|
17.9
|
%
|
||||
United Kingdom
|
15,008
|
|
|
30.2
|
%
|
|
150,744
|
|
|
96.3
|
%
|
|
66,993
|
|
|
15.7
|
%
|
|
200,594
|
|
|
66.2
|
%
|
||||
Other
|
—
|
|
|
—
|
%
|
|
4,480
|
|
|
2.9
|
%
|
|
23,151
|
|
|
5.4
|
%
|
|
4,480
|
|
|
1.5
|
%
|
||||
|
$
|
49,765
|
|
|
100.0
|
%
|
|
$
|
156,564
|
|
|
100.0
|
%
|
|
$
|
428,125
|
|
|
100.0
|
%
|
|
$
|
302,918
|
|
|
100.0
|
%
|
|
June 30, 2018
|
||||||
|
As previously reported
|
|
Pro-forma under new investment structure
|
||||
Selected Consolidated Balance Sheets Data:
|
|
||||||
Total investments in securities
(1)
|
$
|
3,098,125
|
|
|
$
|
1,991,129
|
|
Total assets
|
4,909,619
|
|
|
3,504,693
|
|
||
Total liabilities
|
3,305,530
|
|
|
1,912,939
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,591,754
|
|
|
1,591,754
|
|
||
Total shareholders’ equity
|
$
|
1,596,910
|
|
|
$
|
1,591,754
|
|
(i)
|
the requirement that the Company initially maintain a minimum level of consolidated net worth of at least
$1,114.2
million,
|
(ii)
|
the requirement that the Company maintain at all times a consolidated total debt to consolidated total capital ratio not greater than
0.35
:
1.00
, and
|
(iii)
|
the requirement that Third Point Re BDA and Third Point Re USA both maintain a financial strength rating of at least “A-” through November 30, 2018 and “B++” thereafter by A.M. Best.
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of June 30, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,427,768
|
|
|
$
|
—
|
|
|
$
|
2,427,768
|
|
Debt securities
|
—
|
|
|
—
|
|
|
617,913
|
|
|
—
|
|
|
617,913
|
|
|||||
Other investments
|
—
|
|
|
—
|
|
|
52,444
|
|
|
—
|
|
|
52,444
|
|
|||||
Total investments in securities
|
—
|
|
|
—
|
|
|
3,098,125
|
|
|
—
|
|
|
3,098,125
|
|
|||||
Cash and cash equivalents
|
1
|
|
|
190
|
|
|
17,260
|
|
|
—
|
|
|
17,451
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
569,968
|
|
|
—
|
|
|
569,968
|
|
|||||
Investment in subsidiaries
|
1,630,308
|
|
|
271,249
|
|
|
165,315
|
|
|
(2,066,872
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
258,764
|
|
|
—
|
|
|
258,764
|
|
|||||
Derivative assets, at fair value
|
—
|
|
|
—
|
|
|
34,738
|
|
|
—
|
|
|
34,738
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
4,385
|
|
|
—
|
|
|
4,385
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
631,952
|
|
|
—
|
|
|
631,952
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
264,408
|
|
|
—
|
|
|
264,408
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
17,606
|
|
|
—
|
|
|
17,606
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
1,414
|
|
|
—
|
|
|
1,414
|
|
|||||
Amounts due from (to) affiliates
|
(37,588
|
)
|
|
77
|
|
|
37,511
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
254
|
|
|
—
|
|
|
10,554
|
|
|
—
|
|
|
10,808
|
|
|||||
Total assets
|
$
|
1,592,975
|
|
|
$
|
271,516
|
|
|
$
|
5,112,000
|
|
|
$
|
(2,066,872
|
)
|
|
$
|
4,909,619
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses (1)
|
$
|
1,221
|
|
|
$
|
(9,663
|
)
|
|
$
|
20,486
|
|
|
$
|
—
|
|
|
$
|
12,044
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
74,013
|
|
|
—
|
|
|
74,013
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
129,700
|
|
|
—
|
|
|
129,700
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
792,096
|
|
|
—
|
|
|
792,096
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
791,313
|
|
|
—
|
|
|
791,313
|
|
|||||
Securities sold, not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
443,216
|
|
|
—
|
|
|
443,216
|
|
|||||
Due to brokers
|
—
|
|
|
—
|
|
|
926,588
|
|
|
—
|
|
|
926,588
|
|
|||||
Derivative liabilities, at fair value
|
—
|
|
|
—
|
|
|
12,380
|
|
|
—
|
|
|
12,380
|
|
|||||
Performance fee payable to related party
|
—
|
|
|
—
|
|
|
4,641
|
|
|
—
|
|
|
4,641
|
|
|||||
Interest and dividends payable
|
—
|
|
|
3,022
|
|
|
2,696
|
|
|
—
|
|
|
5,718
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,821
|
|
|
—
|
|
|
—
|
|
|
113,821
|
|
|||||
Total liabilities
|
1,221
|
|
|
107,180
|
|
|
3,197,129
|
|
|
—
|
|
|
3,305,530
|
|
|||||
Redeemable noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
7,179
|
|
|
—
|
|
|
7,179
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
9,963
|
|
|
—
|
|
|
1,239
|
|
|
(1,239
|
)
|
|
9,963
|
|
|||||
Additional paid-in capital
|
994,170
|
|
|
165,535
|
|
|
1,534,496
|
|
|
(1,700,031
|
)
|
|
994,170
|
|
|||||
Retained earnings (deficit)
|
587,621
|
|
|
(1,199
|
)
|
|
366,801
|
|
|
(365,602
|
)
|
|
587,621
|
|
|||||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,591,754
|
|
|
164,336
|
|
|
1,902,536
|
|
|
(2,066,872
|
)
|
|
1,591,754
|
|
|||||
Noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
5,156
|
|
|
—
|
|
|
5,156
|
|
|||||
Total shareholders’ equity
|
1,591,754
|
|
|
164,336
|
|
|
1,907,692
|
|
|
(2,066,872
|
)
|
|
1,596,910
|
|
|||||
Total liabilities, noncontrolling interests and shareholders’ equity
|
$
|
1,592,975
|
|
|
$
|
271,516
|
|
|
$
|
5,112,000
|
|
|
$
|
(2,066,872
|
)
|
|
$
|
4,909,619
|
|
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 (1)
|
$
|
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 INCOME (LOSS)
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended June 30, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,765
|
|
|
$
|
—
|
|
|
$
|
49,765
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(3,479
|
)
|
|
—
|
|
|
(3,479
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
46,286
|
|
|
—
|
|
|
46,286
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
95,207
|
|
|
—
|
|
|
95,207
|
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
141,493
|
|
|
—
|
|
|
141,493
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
31,175
|
|
|
—
|
|
|
31,175
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
|
21,319
|
|
|
1,847
|
|
|
(13
|
)
|
|
(23,153
|
)
|
|
—
|
|
|||||
Total revenues
|
|
21,319
|
|
|
1,847
|
|
|
172,655
|
|
|
(23,153
|
)
|
|
172,668
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
84,000
|
|
|
—
|
|
|
84,000
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
57,584
|
|
|
—
|
|
|
57,584
|
|
|||||
General and administrative expenses
|
|
1,717
|
|
|
19
|
|
|
7,960
|
|
|
—
|
|
|
9,696
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
3,983
|
|
|
—
|
|
|
3,983
|
|
|||||
Interest expense
|
|
—
|
|
|
2,051
|
|
|
—
|
|
|
—
|
|
|
2,051
|
|
|||||
Foreign exchange gains
|
|
—
|
|
|
—
|
|
|
(8,847
|
)
|
|
—
|
|
|
(8,847
|
)
|
|||||
Total expenses
|
|
1,717
|
|
|
2,070
|
|
|
144,680
|
|
|
—
|
|
|
148,467
|
|
|||||
Income (loss) before income tax (expense) benefit
|
|
19,602
|
|
|
(223
|
)
|
|
27,975
|
|
|
(23,153
|
)
|
|
24,201
|
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
435
|
|
|
(4,825
|
)
|
|
—
|
|
|
(4,390
|
)
|
|||||
Net income
|
|
19,602
|
|
|
212
|
|
|
23,150
|
|
|
(23,153
|
)
|
|
19,811
|
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(209
|
)
|
|
—
|
|
|
(209
|
)
|
|||||
Net income available to Third Point Re common shareholders
|
|
$
|
19,602
|
|
|
$
|
212
|
|
|
$
|
22,941
|
|
|
$
|
(23,153
|
)
|
|
$
|
19,602
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the six months ended June 30, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
428,125
|
|
|
$
|
—
|
|
|
$
|
428,125
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(18,125
|
)
|
|
—
|
|
|
(18,125
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
410,000
|
|
|
—
|
|
|
410,000
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(126,021
|
)
|
|
—
|
|
|
(126,021
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
283,979
|
|
|
—
|
|
|
283,979
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
28,967
|
|
|
—
|
|
|
28,967
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
|
(3,038
|
)
|
|
239
|
|
|
(30
|
)
|
|
2,829
|
|
|
—
|
|
|||||
Total revenues
|
|
(3,038
|
)
|
|
239
|
|
|
312,916
|
|
|
2,829
|
|
|
312,946
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
176,620
|
|
|
—
|
|
|
176,620
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
108,989
|
|
|
—
|
|
|
108,989
|
|
|||||
General and administrative expenses
|
|
3,361
|
|
|
22
|
|
|
15,794
|
|
|
—
|
|
|
19,177
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
7,978
|
|
|
—
|
|
|
7,978
|
|
|||||
Interest expense
|
|
—
|
|
|
4,080
|
|
|
—
|
|
|
—
|
|
|
4,080
|
|
|||||
Foreign exchange gains
|
|
—
|
|
|
—
|
|
|
(2,236
|
)
|
|
—
|
|
|
(2,236
|
)
|
|||||
Total expenses
|
|
3,361
|
|
|
4,102
|
|
|
307,145
|
|
|
—
|
|
|
314,608
|
|
|||||
Income (loss) before income tax (expense) benefit
|
|
(6,399
|
)
|
|
(3,863
|
)
|
|
5,771
|
|
|
2,829
|
|
|
(1,662
|
)
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
861
|
|
|
(5,379
|
)
|
|
—
|
|
|
(4,518
|
)
|
|||||
Net income (loss)
|
|
(6,399
|
)
|
|
(3,002
|
)
|
|
392
|
|
|
2,829
|
|
|
(6,180
|
)
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(219
|
)
|
|
—
|
|
|
(219
|
)
|
|||||
Net income (loss) available (attributable) to Third Point Re common shareholders
|
|
$
|
(6,399
|
)
|
|
$
|
(3,002
|
)
|
|
$
|
173
|
|
|
$
|
2,829
|
|
|
$
|
(6,399
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended June 30, 2017
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
156,564
|
|
|
$
|
—
|
|
|
$
|
156,564
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(1,425
|
)
|
|
—
|
|
|
(1,425
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
155,139
|
|
|
—
|
|
|
155,139
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
18,419
|
|
|
—
|
|
|
18,419
|
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
173,558
|
|
|
—
|
|
|
173,558
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
107,325
|
|
|
—
|
|
|
107,325
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
|
75,843
|
|
|
4,843
|
|
|
(10
|
)
|
|
(80,676
|
)
|
|
—
|
|
|||||
Total revenues
|
|
75,843
|
|
|
4,843
|
|
|
280,873
|
|
|
(80,676
|
)
|
|
280,883
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
107,379
|
|
|
—
|
|
|
107,379
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
68,641
|
|
|
—
|
|
|
68,641
|
|
|||||
General and administrative expenses
|
|
1,265
|
|
|
12
|
|
|
13,737
|
|
|
—
|
|
|
15,014
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
2,105
|
|
|
—
|
|
|
2,105
|
|
|||||
Interest expense
|
|
—
|
|
|
2,051
|
|
|
—
|
|
|
—
|
|
|
2,051
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
4,781
|
|
|
—
|
|
|
4,781
|
|
|||||
Total expenses
|
|
1,265
|
|
|
2,063
|
|
|
196,643
|
|
|
—
|
|
|
199,971
|
|
|||||
Income before income tax (expense) benefit
|
|
74,578
|
|
|
2,780
|
|
|
84,230
|
|
|
(80,676
|
)
|
|
80,912
|
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
722
|
|
|
(6,029
|
)
|
|
—
|
|
|
(5,307
|
)
|
|||||
Net income
|
|
74,578
|
|
|
3,502
|
|
|
78,201
|
|
|
(80,676
|
)
|
|
75,605
|
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(1,027
|
)
|
|
—
|
|
|
(1,027
|
)
|
|||||
Net income available to Third Point Re common shareholders
|
|
$
|
74,578
|
|
|
$
|
3,502
|
|
|
$
|
77,174
|
|
|
$
|
(80,676
|
)
|
|
$
|
74,578
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the six months ended June 30, 2017
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302,918
|
|
|
$
|
—
|
|
|
$
|
302,918
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(2,550
|
)
|
|
—
|
|
|
(2,550
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
300,368
|
|
|
—
|
|
|
300,368
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
11,199
|
|
|
—
|
|
|
11,199
|
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
311,567
|
|
|
—
|
|
|
311,567
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
235,835
|
|
|
—
|
|
|
235,835
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
|
181,213
|
|
|
13,832
|
|
|
(5
|
)
|
|
(195,040
|
)
|
|
—
|
|
|||||
Total revenues
|
|
181,213
|
|
|
13,832
|
|
|
547,397
|
|
|
(195,040
|
)
|
|
547,402
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
193,274
|
|
|
—
|
|
|
193,274
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
123,093
|
|
|
—
|
|
|
123,093
|
|
|||||
General and administrative expenses
|
|
2,449
|
|
|
20
|
|
|
23,117
|
|
|
—
|
|
|
25,586
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
5,006
|
|
|
—
|
|
|
5,006
|
|
|||||
Interest expense
|
|
—
|
|
|
4,077
|
|
|
—
|
|
|
—
|
|
|
4,077
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
4,796
|
|
|
—
|
|
|
4,796
|
|
|||||
Total expenses
|
|
2,449
|
|
|
4,097
|
|
|
349,286
|
|
|
—
|
|
|
355,832
|
|
|||||
Income before income tax (expense) benefit
|
|
178,764
|
|
|
9,735
|
|
|
198,111
|
|
|
(195,040
|
)
|
|
191,570
|
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
1,434
|
|
|
(12,039
|
)
|
|
—
|
|
|
(10,605
|
)
|
|||||
Net income
|
|
178,764
|
|
|
11,169
|
|
|
186,072
|
|
|
(195,040
|
)
|
|
180,965
|
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(2,201
|
)
|
|
—
|
|
|
(2,201
|
)
|
|||||
Net income available to Third Point Re common shareholders
|
|
$
|
178,764
|
|
|
$
|
11,169
|
|
|
$
|
183,871
|
|
|
$
|
(195,040
|
)
|
|
$
|
178,764
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the six months ended June 30, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
|
$
|
(6,399
|
)
|
|
$
|
(3,002
|
)
|
|
$
|
392
|
|
|
$
|
2,829
|
|
|
$
|
(6,180
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
|
3,038
|
|
|
(239
|
)
|
|
30
|
|
|
(2,829
|
)
|
|
—
|
|
|||||
Share compensation expense
|
|
279
|
|
|
—
|
|
|
2,279
|
|
|
—
|
|
|
2,558
|
|
|||||
Net interest expense on deposit liabilities
|
|
—
|
|
|
—
|
|
|
2,449
|
|
|
—
|
|
|
2,449
|
|
|||||
Net unrealized loss on investments and derivatives
|
|
—
|
|
|
—
|
|
|
95,513
|
|
|
—
|
|
|
95,513
|
|
|||||
Net realized gain on investments and derivatives
|
|
—
|
|
|
—
|
|
|
(130,500
|
)
|
|
—
|
|
|
(130,500
|
)
|
|||||
Net foreign exchange gains
|
|
—
|
|
|
—
|
|
|
(2,236
|
)
|
|
—
|
|
|
(2,236
|
)
|
|||||
Amortization of premium and accretion of discount, net
|
|
—
|
|
|
88
|
|
|
2,825
|
|
|
—
|
|
|
2,913
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
|
—
|
|
|
—
|
|
|
(157,498
|
)
|
|
—
|
|
|
(157,498
|
)
|
|||||
Deferred acquisition costs, net
|
|
—
|
|
|
—
|
|
|
(5,615
|
)
|
|
—
|
|
|
(5,615
|
)
|
|||||
Unearned premiums ceded
|
|
—
|
|
|
—
|
|
|
(16,557
|
)
|
|
—
|
|
|
(16,557
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
|
—
|
|
|
—
|
|
|
(301
|
)
|
|
—
|
|
|
(301
|
)
|
|||||
Other assets
|
|
410
|
|
|
—
|
|
|
(3,947
|
)
|
|
—
|
|
|
(3,537
|
)
|
|||||
Interest and dividends receivable, net
|
|
—
|
|
|
(33
|
)
|
|
865
|
|
|
—
|
|
|
832
|
|
|||||
Unearned premium reserves
|
|
—
|
|
|
—
|
|
|
142,578
|
|
|
—
|
|
|
142,578
|
|
|||||
Loss and loss adjustment expense reserves
|
|
—
|
|
|
—
|
|
|
74,655
|
|
|
—
|
|
|
74,655
|
|
|||||
Accounts payable and accrued expenses
|
|
458
|
|
|
(858
|
)
|
|
(22,164
|
)
|
|
—
|
|
|
(22,564
|
)
|
|||||
Reinsurance balances payable
|
|
—
|
|
|
—
|
|
|
32,208
|
|
|
—
|
|
|
32,208
|
|
|||||
Performance fees payable to related party
|
|
—
|
|
|
—
|
|
|
4,641
|
|
|
—
|
|
|
4,641
|
|
|||||
Amounts due from (to) affiliates
|
|
36,300
|
|
|
335
|
|
|
(36,635
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
|
34,086
|
|
|
(3,709
|
)
|
|
(17,018
|
)
|
|
—
|
|
|
13,359
|
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
|
—
|
|
|
—
|
|
|
(2,180,138
|
)
|
|
—
|
|
|
(2,180,138
|
)
|
|||||
Proceeds from sales of investments
|
|
—
|
|
|
—
|
|
|
2,156,754
|
|
|
—
|
|
|
2,156,754
|
|
|||||
Purchases of investments to cover short sales
|
|
—
|
|
|
—
|
|
|
(590,113
|
)
|
|
—
|
|
|
(590,113
|
)
|
|||||
Proceeds from short sales of investments
|
|
—
|
|
|
—
|
|
|
628,913
|
|
|
—
|
|
|
628,913
|
|
|||||
Change in due to/from brokers, net
|
|
—
|
|
|
—
|
|
|
202,712
|
|
|
—
|
|
|
202,712
|
|
|||||
Decrease in securities sold under an agreement to repurchase
|
|
—
|
|
|
—
|
|
|
(29,618
|
)
|
|
—
|
|
|
(29,618
|
)
|
|||||
Net cash provided by investing activities
|
|
—
|
|
|
—
|
|
|
188,510
|
|
|
—
|
|
|
188,510
|
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of Third Point Re common shares, net of costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Taxes paid on withholding shares
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||
Purchases of Third Point Re common shares under share repurchase program
|
|
(60,420
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,420
|
)
|
|||||
Decrease in deposit liabilities, net
|
|
—
|
|
|
—
|
|
|
(1,779
|
)
|
|
—
|
|
|
(1,779
|
)
|
|||||
Change in total noncontrolling interests in related party, net
|
|
—
|
|
|
—
|
|
|
(101,510
|
)
|
|
—
|
|
|
(101,510
|
)
|
|||||
Dividend received by (paid to) parent
|
|
26,400
|
|
|
3,700
|
|
|
(30,100
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
(34,094
|
)
|
|
3,700
|
|
|
(133,389
|
)
|
|
—
|
|
|
(163,783
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(8
|
)
|
|
(9
|
)
|
|
38,103
|
|
|
—
|
|
|
38,086
|
|
|||||
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
|
|
|
$
|
190
|
|
|
$
|
587,228
|
|
|
$
|
—
|
|
|
$
|
587,419
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the six months ended June 30, 2017
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
178,764
|
|
|
$
|
11,169
|
|
|
$
|
186,072
|
|
|
$
|
(195,040
|
)
|
|
$
|
180,965
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
|
(181,213
|
)
|
|
(13,832
|
)
|
|
5
|
|
|
195,040
|
|
|
—
|
|
|||||
Share compensation expense
|
|
73
|
|
|
—
|
|
|
3,301
|
|
|
—
|
|
|
3,374
|
|
|||||
Net interest expense on deposit liabilities
|
|
—
|
|
|
—
|
|
|
312
|
|
|
—
|
|
|
312
|
|
|||||
Net unrealized gain on investments and derivatives
|
|
—
|
|
|
—
|
|
|
(128,168
|
)
|
|
—
|
|
|
(128,168
|
)
|
|||||
Net realized gain on investments and derivatives
|
|
—
|
|
|
—
|
|
|
(154,504
|
)
|
|
—
|
|
|
(154,504
|
)
|
|||||
Net foreign exchange losses
|
|
—
|
|
|
—
|
|
|
4,796
|
|
|
—
|
|
|
4,796
|
|
|||||
Amortization of premium and accretion of discount, net
|
|
—
|
|
|
88
|
|
|
(210
|
)
|
|
—
|
|
|
(122
|
)
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
|
—
|
|
|
—
|
|
|
(85,733
|
)
|
|
—
|
|
|
(85,733
|
)
|
|||||
Deferred acquisition costs, net
|
|
—
|
|
|
—
|
|
|
18,425
|
|
|
—
|
|
|
18,425
|
|
|||||
Unearned premiums ceded
|
|
—
|
|
|
—
|
|
|
(1,938
|
)
|
|
—
|
|
|
(1,938
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
|
—
|
|
|
—
|
|
|
(1,712
|
)
|
|
—
|
|
|
(1,712
|
)
|
|||||
Other assets
|
|
302
|
|
|
(1,663
|
)
|
|
7,519
|
|
|
—
|
|
|
6,158
|
|
|||||
Interest and dividends receivable, net
|
|
—
|
|
|
(35
|
)
|
|
2,988
|
|
|
—
|
|
|
2,953
|
|
|||||
Unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(9,261
|
)
|
|
—
|
|
|
(9,261
|
)
|
|||||
Loss and loss adjustment expense reserves
|
|
—
|
|
|
—
|
|
|
63,769
|
|
|
—
|
|
|
63,769
|
|
|||||
Accounts payable and accrued expenses
|
|
67
|
|
|
—
|
|
|
7,482
|
|
|
—
|
|
|
7,549
|
|
|||||
Reinsurance balances payable
|
|
—
|
|
|
—
|
|
|
22,237
|
|
|
—
|
|
|
22,237
|
|
|||||
Performance fees payable to related party
|
|
—
|
|
|
—
|
|
|
53,455
|
|
|
—
|
|
|
53,455
|
|
|||||
Amounts due from (to) affiliates
|
|
40,523
|
|
|
(3,831
|
)
|
|
(36,692
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
|
38,516
|
|
|
(8,104
|
)
|
|
(47,857
|
)
|
|
—
|
|
|
(17,445
|
)
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
|
—
|
|
|
—
|
|
|
(1,712,929
|
)
|
|
—
|
|
|
(1,712,929
|
)
|
|||||
Proceeds from sales of investments
|
|
—
|
|
|
—
|
|
|
1,966,027
|
|
|
—
|
|
|
1,966,027
|
|
|||||
Purchases of investments to cover short sales
|
|
—
|
|
|
—
|
|
|
(306,237
|
)
|
|
—
|
|
|
(306,237
|
)
|
|||||
Proceeds from short sales of investments
|
|
—
|
|
|
—
|
|
|
462,066
|
|
|
—
|
|
|
462,066
|
|
|||||
Change in due to/from brokers, net
|
|
—
|
|
|
—
|
|
|
(261,994
|
)
|
|
—
|
|
|
(261,994
|
)
|
|||||
Net cash provided by investing activities
|
|
—
|
|
|
—
|
|
|
146,933
|
|
|
—
|
|
|
146,933
|
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of Third Point Re common shares, net of costs
|
|
998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
998
|
|
|||||
Purchases of Third Point Re common shares under share repurchase program
|
|
(40,864
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,864
|
)
|
|||||
Decrease in deposit liabilities, net
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
|
—
|
|
|
(124
|
)
|
|||||
Change in total noncontrolling interests in related party, net
|
|
—
|
|
|
—
|
|
|
(18,066
|
)
|
|
—
|
|
|
(18,066
|
)
|
|||||
Dividend received by (paid to) parent
|
|
—
|
|
|
8,300
|
|
|
(8,300
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
(39,866
|
)
|
|
8,300
|
|
|
(26,490
|
)
|
|
—
|
|
|
(58,056
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(1,350
|
)
|
|
196
|
|
|
72,586
|
|
|
—
|
|
|
71,432
|
|
|||||
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
|
|
$
|
279
|
|
|
$
|
275
|
|
|
$
|
379,769
|
|
|
$
|
—
|
|
|
$
|
380,323
|
|
•
|
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;
|
•
|
risks associated with the expected change in our investment management structure;
and
|
•
|
other risks and factors listed under “Risk Factors” in our most recent Annual Report on Form 10-K, as updated by this Quarterly Report on Form 10-Q, and other periodic reports filed with the Securities and Exchange Commission.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
Key underwriting metrics for Property and Casualty Reinsurance segment:
|
($ in thousands, except for per share data and ratios)
|
||||||||||||||
Net underwriting loss
(1)
|
$
|
(5,054
|
)
|
|
$
|
(12,111
|
)
|
|
$
|
(11,417
|
)
|
|
$
|
(20,761
|
)
|
Combined ratio
(1)
|
103.6
|
%
|
|
107.0
|
%
|
|
104.0
|
%
|
|
106.6
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Key investment return metrics:
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
$
|
31,175
|
|
|
$
|
107,325
|
|
|
$
|
28,967
|
|
|
$
|
235,835
|
|
Net investment return on investments managed by Third Point LLC
|
1.0
|
%
|
|
4.5
|
%
|
|
0.8
|
%
|
|
10.6
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Key shareholders’ value creation metrics:
|
|
|
|
|
|
|
|||||||||
Basic book value per share
(2) (3)
|
$
|
16.31
|
|
|
$
|
16.33
|
|
|
$
|
16.31
|
|
|
$
|
16.33
|
|
Diluted book value per share
(2) (3)
|
$
|
15.63
|
|
|
$
|
15.65
|
|
|
$
|
15.63
|
|
|
$
|
15.65
|
|
Change in diluted book value per share
(2)
|
1.6
|
%
|
|
5.0
|
%
|
|
(0.1
|
)%
|
|
12.0
|
%
|
||||
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders
(2)
|
1.2
|
%
|
|
5.0
|
%
|
|
(0.4
|
)%
|
|
12.8
|
%
|
||||
Invested asset leverage
(3)
|
1.6
|
|
|
1.6
|
|
|
1.6
|
|
|
1.6
|
|
(1)
|
See
Note 22
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
.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
Change
|
|
June 30,
2018 |
|
June 30,
2017 |
|
Change
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Net underwriting income (loss) (1)
|
$
|
(5,054
|
)
|
|
$
|
(12,111
|
)
|
|
$
|
7,057
|
|
|
$
|
(11,417
|
)
|
|
$
|
(20,761
|
)
|
|
$
|
9,344
|
|
Net investment income
|
31,175
|
|
|
107,325
|
|
|
(76,150
|
)
|
|
28,967
|
|
|
235,835
|
|
|
(206,868
|
)
|
||||||
Net investment return on investments managed by Third Point LLC
|
1.0
|
%
|
|
4.5
|
%
|
|
(3.5
|
)%
|
|
0.8
|
%
|
|
10.6
|
%
|
|
(9.8
|
)%
|
||||||
General and administrative expenses
(2)
|
(4,733
|
)
|
|
(5,365
|
)
|
|
632
|
|
|
(9,390
|
)
|
|
(9,625
|
)
|
|
235
|
|
||||||
Other expenses
|
(3,983
|
)
|
|
(2,105
|
)
|
|
(1,878
|
)
|
|
(7,978
|
)
|
|
(5,006
|
)
|
|
(2,972
|
)
|
||||||
Interest expense
|
(2,051
|
)
|
|
(2,051
|
)
|
|
—
|
|
|
(4,080
|
)
|
|
(4,077
|
)
|
|
(3
|
)
|
||||||
Foreign exchange gains (losses)
|
8,847
|
|
|
(4,781
|
)
|
|
13,628
|
|
|
2,236
|
|
|
(4,796
|
)
|
|
7,032
|
|
||||||
Income tax expense
|
(4,390
|
)
|
|
(5,307
|
)
|
|
917
|
|
|
(4,518
|
)
|
|
(10,605
|
)
|
|
6,087
|
|
||||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
19,602
|
|
|
$
|
74,578
|
|
|
$
|
(54,976
|
)
|
|
$
|
(6,399
|
)
|
|
$
|
178,764
|
|
|
$
|
(185,163
|
)
|
•
|
The improvement in our net underwriting results for the three and
six
months ended
June 30, 2018
compared to three and
six
months ended
June 30, 2017
was primarily due to a decrease in general and administrative expenses allocated to underwriting activities in the three and
six
months ended
June 30, 2018
. The decrease in our general and administrative expenses allocated to underwriting activities was due to lower payroll related costs as result of lower annual incentive plan compensation expense accruals and lower stock compensation expense in the current year
periods
. Our annual incentive plan is based on a formula derived from certain financial performance metrics and as a result of the Company’s lower performance in the three and
six
months ended
June 30, 2018
, the incentive plan compensation accrual was lower then the prior year periods.
|
•
|
The foreign exchange gains were primarily due to the revaluation of foreign currency loss and loss adjustment expense reserves denominated in British pounds to the United States dollar, which had strengthened during the 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 gains on loss and loss adjustment expense reserves in the current year
periods
were offset by corresponding foreign exchange losses 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 and six
months ended
June 30, 2018
was primarily the result of a decrease in taxable income generated by our U.S. subsidiaries in the current year
periods
.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
Change
|
|
June 30,
2018 |
|
June 30,
2017 |
|
Change
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Gross premiums written
|
$
|
49,765
|
|
|
$
|
156,564
|
|
|
$
|
(106,799
|
)
|
|
$
|
428,125
|
|
|
$
|
302,918
|
|
|
$
|
125,207
|
|
Gross premiums ceded
|
(3,479
|
)
|
|
(1,425
|
)
|
|
(2,054
|
)
|
|
(18,125
|
)
|
|
(2,550
|
)
|
|
(15,575
|
)
|
||||||
Net premiums earned
|
141,493
|
|
|
173,558
|
|
|
(32,065
|
)
|
|
283,979
|
|
|
311,567
|
|
|
(27,588
|
)
|
||||||
Loss and loss adjustment expenses incurred, net
|
84,000
|
|
|
107,379
|
|
|
(23,379
|
)
|
|
176,620
|
|
|
193,274
|
|
|
(16,654
|
)
|
||||||
Acquisition costs, net
|
57,584
|
|
|
68,641
|
|
|
(11,057
|
)
|
|
108,989
|
|
|
123,093
|
|
|
(14,104
|
)
|
||||||
General and administrative expenses
|
4,963
|
|
|
9,649
|
|
|
(4,686
|
)
|
|
9,787
|
|
|
15,961
|
|
|
(6,174
|
)
|
||||||
Net underwriting income (loss)
|
(5,054
|
)
|
|
(12,111
|
)
|
|
7,057
|
|
|
(11,417
|
)
|
|
(20,761
|
)
|
|
9,344
|
|
||||||
Net investment income on float
|
4,922
|
|
|
31,206
|
|
|
(26,284
|
)
|
|
7,521
|
|
|
67,326
|
|
|
(59,805
|
)
|
||||||
Other expenses
|
(3,983
|
)
|
|
(2,105
|
)
|
|
(1,878
|
)
|
|
(7,978
|
)
|
|
(5,006
|
)
|
|
(2,972
|
)
|
||||||
Foreign exchange gains (losses)
|
8,847
|
|
|
(4,781
|
)
|
|
13,628
|
|
|
2,236
|
|
|
(4,796
|
)
|
|
7,032
|
|
||||||
Segment income (loss)
|
$
|
4,732
|
|
|
$
|
12,209
|
|
|
$
|
(7,477
|
)
|
|
$
|
(9,638
|
)
|
|
$
|
36,763
|
|
|
$
|
(46,401
|
)
|
Underwriting ratios (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss ratio
|
59.4
|
%
|
|
61.9
|
%
|
|
(2.5
|
)%
|
|
62.2
|
%
|
|
62.0
|
%
|
|
0.2
|
%
|
||||||
Acquisition cost ratio
|
40.7
|
%
|
|
39.5
|
%
|
|
1.2
|
%
|
|
38.4
|
%
|
|
39.5
|
%
|
|
(1.1
|
)%
|
||||||
Composite ratio
|
100.1
|
%
|
|
101.4
|
%
|
|
(1.3
|
)%
|
|
100.6
|
%
|
|
101.5
|
%
|
|
(0.9
|
)%
|
||||||
General and administrative expense ratio
|
3.5
|
%
|
|
5.6
|
%
|
|
(2.1
|
)%
|
|
3.4
|
%
|
|
5.1
|
%
|
|
(1.7
|
)%
|
||||||
Combined ratio
|
103.6
|
%
|
|
107.0
|
%
|
|
(3.4
|
)%
|
|
104.0
|
%
|
|
106.6
|
%
|
|
(2.6
|
)%
|
(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 may 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.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||
Property
|
$
|
1,660
|
|
|
3.3
|
%
|
|
$
|
(8,827
|
)
|
|
(5.6
|
)%
|
|
$
|
2,029
|
|
|
0.5
|
%
|
|
$
|
(8,815
|
)
|
|
(2.9
|
)%
|
Casualty
|
43,510
|
|
|
87.4
|
%
|
|
15,008
|
|
|
9.6
|
%
|
|
196,730
|
|
|
46.0
|
%
|
|
102,213
|
|
|
33.7
|
%
|
||||
Specialty
|
254
|
|
|
0.6
|
%
|
|
41,032
|
|
|
26.2
|
%
|
|
225,025
|
|
|
52.5
|
%
|
|
100,169
|
|
|
33.1
|
%
|
||||
Total prospective reinsurance contracts
|
$
|
45,424
|
|
|
91.3
|
%
|
|
$
|
47,213
|
|
|
30.2
|
%
|
|
$
|
423,784
|
|
|
99.0
|
%
|
|
$
|
193,567
|
|
|
63.9
|
%
|
Retroactive reinsurance contracts
|
4,341
|
|
|
8.7
|
%
|
|
109,351
|
|
|
69.8
|
%
|
|
4,341
|
|
|
1.0
|
%
|
|
109,351
|
|
|
36.1
|
%
|
||||
|
$
|
49,765
|
|
|
100.0
|
%
|
|
$
|
156,564
|
|
|
100.0
|
%
|
|
$
|
428,125
|
|
|
100.0
|
%
|
|
$
|
302,918
|
|
|
100.0
|
%
|
•
|
We recognized a net increase in premium of $35.5 million in the three months ended
June 30, 2018
compared to a net increase of $110.8 million in the three months ended
June 30, 2017
related to the net impact of contract extensions, cancellations and contracts renewed with no comparable premium in the comparable period. In addition, the three months ended June 30, 2017 included $109.4 million of premium related to new retroactive exposures in reinsurance contracts compared to only $4.3 million in the current year period.
|
•
|
Changes in renewal premiums for the three months ended
June 30, 2018
resulted in a net decrease in premiums of $22.6 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 recorded net increases in premium estimates relating to prior periods of $0.4 million and $14.3 million for the three months ended
June 30, 2018
and
2017
, respectively. The increases in premium estimates for the three months ended
June 30, 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.
|
•
|
We recognized $11.2 million of premium in the three months ended
June 30, 2017
related to contracts that we did not renew in the three months ended
June 30, 2018
as a result of underlying terms and conditions.
|
•
|
For the three months ended
June 30, 2018
, we wrote $16.2 million of new premium, of which $8.2 million was casualty business, $7.7 million was specialty business and $0.3 million was property business.
|
•
|
For the
six
months ended
June 30, 2018
, we wrote $122.6 million of new premium, of which $110.7 million was specialty business, including one multi-line contract covering casualty and specialty risks for $91.6 million, $11.6 million was casualty business and $0.3 million was property business.
|
•
|
We recognized a net increase in premium of $162.6 million in the
six
months ended
June 30, 2018
compared to a net increase of $118.3 million in the
six
months ended
June 30, 2017
related to the net impact of contract extensions, cancellations and contracts renewed with no comparable premium in the comparable period.
|
•
|
We recognized $26.1 million of premium in the
six
months ended
June 30, 2017
related to contracts that we did not renew in the
six
months ended
June 30, 2018
as a result of underlying terms and conditions.
|
•
|
Changes in renewal premiums for the
six
months ended
June 30, 2018
resulted in a net decrease in premiums of $14.5 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 recorded net increases in premium estimates relating to prior periods of $14.5 million and $15.6 million for the
six
months ended
June 30, 2018
and
2017
, respectively. The increases in premium estimates for the
six
months ended
June 30, 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.
|
•
|
$3.1 million of net favorable underwriting loss development relating to several workers’ compensation contracts written from 2012 to 2017, driven by better than expected loss experience;
|
•
|
$2.7 million of net favorable underwriting loss development from several other contracts, as a result of better than expected loss experience; partially offset by
|
•
|
$3.4 million of net adverse underwriting loss development primarily 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.
|
•
|
$5.4 million
of net favorable underwriting loss development relating to several workers’ compensation contracts written from 2012 to 2017, driven by better than expected loss experience;
|
•
|
$2.9 million
of net favorable underwriting loss development primarily relating to one multi-line contract written from 2014 to 2017, driven by better than expected loss experience;
|
•
|
$1.9 million
of net favorable underwriting loss development from several other contracts, as a result of better than expected loss experience; partially offset by
|
•
|
$7.4 million
of net adverse underwriting loss development primarily relating to our Florida homeowners’ quota share reinsurance contracts. This development is a result of higher than anticipated water damage claims and an increase in the practice of assignment of benefits whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters. This practice has led to increases in the frequency of claims reported as well as the severity of losses and loss adjustment expenses.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
Change
|
|
June 30,
2018 |
|
June 30,
2017 |
|
Change
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Less: net investment income on capital
|
$
|
26,253
|
|
|
$
|
76,119
|
|
|
$
|
(49,866
|
)
|
|
$
|
21,446
|
|
|
$
|
168,509
|
|
|
$
|
(147,063
|
)
|
General and administrative expenses
|
(4,733
|
)
|
|
(5,365
|
)
|
|
632
|
|
|
(9,390
|
)
|
|
(9,625
|
)
|
|
235
|
|
||||||
Interest expense
|
(2,051
|
)
|
|
(2,051
|
)
|
|
—
|
|
|
(4,080
|
)
|
|
(4,077
|
)
|
|
(3
|
)
|
||||||
Income tax expense
|
(4,390
|
)
|
|
(5,307
|
)
|
|
917
|
|
|
(4,518
|
)
|
|
(10,605
|
)
|
|
6,087
|
|
||||||
Segment income attributable to noncontrolling interests in related party
|
(209
|
)
|
|
(1,027
|
)
|
|
818
|
|
|
(219
|
)
|
|
(2,201
|
)
|
|
1,982
|
|
||||||
Segment income
|
$
|
14,870
|
|
|
$
|
62,369
|
|
|
$
|
(47,499
|
)
|
|
$
|
3,239
|
|
|
$
|
142,001
|
|
|
$
|
(138,762
|
)
|
|
Three months ended
|
||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
3.4
|
%
|
|
(1.9
|
)%
|
|
1.5
|
%
|
|
6.5
|
%
|
|
(1.1
|
)%
|
|
5.4
|
%
|
Credit
|
0.3
|
%
|
|
(0.2
|
)%
|
|
0.1
|
%
|
|
(0.3
|
)%
|
|
(0.3
|
)%
|
|
(0.6
|
)%
|
Other
|
(1.3
|
)%
|
|
0.7
|
%
|
|
(0.6
|
)%
|
|
0.2
|
%
|
|
(0.5
|
)%
|
|
(0.3
|
)%
|
Net investment return on investments managed by Third Point LLC
|
2.4
|
%
|
|
(1.4
|
)%
|
|
1.0
|
%
|
|
6.4
|
%
|
|
(1.9
|
)%
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
S&P 500 Total Return Index
|
|
|
|
|
3.4
|
%
|
|
|
|
|
|
3.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Six months ended
|
||||||||||||||||
|
June 30, 2018
|
|
June 30, 2017
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
2.7
|
%
|
|
(2.0
|
)%
|
|
0.7
|
%
|
|
13.0
|
%
|
|
(2.2
|
)%
|
|
10.8
|
%
|
Credit
|
0.7
|
%
|
|
(0.2
|
)%
|
|
0.5
|
%
|
|
0.1
|
%
|
|
(0.4
|
)%
|
|
(0.3
|
)%
|
Other
|
(0.9
|
)%
|
|
0.5
|
%
|
|
(0.4
|
)%
|
|
1.0
|
%
|
|
(0.9
|
)%
|
|
0.1
|
%
|
Net investment return on investments managed by Third Point LLC
|
2.5
|
%
|
|
(1.7
|
)%
|
|
0.8
|
%
|
|
14.1
|
%
|
|
(3.5
|
)%
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
S&P 500 Total Return Index
|
|
|
|
|
2.6
|
%
|
|
|
|
|
|
9.3
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
|
($ in thousands)
|
||||||||||||||
Net investment income
|
$
|
31,175
|
|
|
$
|
107,325
|
|
|
$
|
28,967
|
|
|
$
|
235,835
|
|
Less: other investment income (loss)
|
(9
|
)
|
|
193
|
|
|
(12
|
)
|
|
460
|
|
||||
Net investment income on investments managed by Third Point LLC
|
31,184
|
|
|
107,132
|
|
|
28,979
|
|
|
235,375
|
|
||||
Less: net investment income on capital
|
26,262
|
|
|
75,926
|
|
|
21,458
|
|
|
168,049
|
|
||||
Net investment income on float
|
$
|
4,922
|
|
|
$
|
31,206
|
|
|
$
|
7,521
|
|
|
$
|
67,326
|
|
|
June 30,
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
|
$
|
1,591,754
|
|
|
$
|
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:
|
$
|
1,678,126
|
|
|
$
|
1,754,023
|
|
Basic and diluted book value per share denominator:
|
|
|
|
||||
Common shares outstanding
|
99,627,399
|
|
|
103,282,427
|
|
||
Unvested restricted shares
|
(2,050,115
|
)
|
|
(1,873,588
|
)
|
||
Basic book value per share denominator:
|
97,577,284
|
|
|
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)
|
1,202,464
|
|
|
905,412
|
|
||
Diluted book value per share denominator:
|
107,398,258
|
|
|
112,088,945
|
|
||
|
|
|
|
||||
Basic book value per share
|
$
|
16.31
|
|
|
$
|
16.33
|
|
Diluted book value per share
|
$
|
15.63
|
|
|
$
|
15.65
|
|
(1)
|
As of
June 30, 2018
, the effect of dilutive restricted shares issued to directors and employees was comprised of
48,129
restricted shares with a service condition only and
1,154,335
restricted shares with a service and performance condition that were considered probable of vesting.
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2018 |
|
June 30,
2017 |
||||||||
|
($ in thousands)
|
||||||||||||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
19,602
|
|
|
$
|
74,578
|
|
|
$
|
(6,399
|
)
|
|
$
|
178,764
|
|
Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
1,607,422
|
|
|
1,501,681
|
|
|
1,656,089
|
|
|
1,414,051
|
|
||||
Impact of weighting related to shareholders’ equity from shares repurchased
|
(7,606
|
)
|
|
(9,863
|
)
|
|
(13,673
|
)
|
|
(16,882
|
)
|
||||
Adjusted shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
$
|
1,599,816
|
|
|
$
|
1,491,818
|
|
|
$
|
1,642,416
|
|
|
$
|
1,397,169
|
|
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders
|
1.2
|
%
|
|
5.0
|
%
|
|
(0.4
|
)%
|
|
12.8
|
%
|
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Net cash provided by (used in) operating activities
|
$
|
13,359
|
|
|
$
|
(17,445
|
)
|
Net cash provided by investing activities
|
188,510
|
|
|
146,933
|
|
||
Net cash used in financing activities
|
(163,783
|
)
|
|
(58,056
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
38,086
|
|
|
71,432
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
549,333
|
|
|
308,891
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
587,419
|
|
|
$
|
380,323
|
|
•
|
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
|
$
|
52,617
|
|
|
2.0
|
%
|
|
$
|
(52,617
|
)
|
|
(2.0
|
)%
|
Saudi Arabian Riyal
|
11,406
|
|
|
0.4
|
%
|
|
(11,406
|
)
|
|
(0.4
|
)%
|
||
Swiss Franc
|
(7,413
|
)
|
|
(0.3
|
)%
|
|
7,413
|
|
|
0.3
|
%
|
||
Other
|
1,166
|
|
|
0.1
|
%
|
|
(1,166
|
)
|
|
(0.1
|
)%
|
||
Total
|
$
|
57,776
|
|
|
2.2
|
%
|
|
$
|
(57,776
|
)
|
|
(2.2
|
)%
|
|
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)
|
$
|
(1,297
|
)
|
|
—
|
%
|
|
$
|
2,946
|
|
|
—
|
%
|
Asset-backed securities
(2)
|
(2,473
|
)
|
|
(0.1
|
)%
|
|
2,498
|
|
|
(0.1
|
)%
|
||
Interest rate swaps and derivatives
|
857
|
|
|
—
|
%
|
|
(857
|
)
|
|
—
|
%
|
||
Net exposure to interest rate risk
|
$
|
(2,913
|
)
|
|
(0.1
|
)%
|
|
$
|
4,587
|
|
|
(0.1
|
)%
|
(1)
|
Includes interest rate risk associated with investments held in reinsurance trust accounts.
|
(2)
|
Includes instruments for which durations are available on
June 30, 2018
. Includes a convexity adjustment if convexity is available. Not included are mortgage hedges which would reduce the impact of interest rate changes.
|
|
June 30,
2018 |
|
December 31, 2017
|
||||
|
($ in thousands)
|
||||||
Assets:
|
|
|
|
||||
Asset-backed securities
|
$
|
180,771
|
|
|
$
|
225,499
|
|
Bank debt
|
22,566
|
|
|
14,550
|
|
||
Corporate bonds
|
53,175
|
|
|
77,086
|
|
||
Municipal bonds
|
40,432
|
|
|
—
|
|
||
Sovereign debt
|
9,638
|
|
|
26,134
|
|
||
Trade claims
|
3,068
|
|
|
7,496
|
|
||
Other debt securities
|
1,125
|
|
|
5,460
|
|
||
|
$
|
310,775
|
|
|
$
|
356,225
|
|
Liabilities:
|
|
|
|
||||
Corporate bonds
|
$
|
20,181
|
|
|
$
|
21,699
|
|
|
$
|
20,181
|
|
|
$
|
21,699
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
|
($ in thousands)
|
||||||||||||
Reperforming loans
|
$
|
109,117
|
|
|
60.4
|
%
|
|
$
|
160,354
|
|
|
71.1
|
%
|
Market place loans
|
60,664
|
|
|
33.6
|
%
|
|
52,584
|
|
|
23.3
|
%
|
||
Other (1)
|
10,990
|
|
|
6.0
|
%
|
|
12,561
|
|
|
5.6
|
%
|
||
|
$
|
180,771
|
|
|
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)
|
||||||
April 1, 2018 - April 30, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
176,162,892
|
|
May 1, 2018 - May 31, 2018
|
1,080,056
|
|
|
13.37
|
|
|
1,080,056
|
|
|
161,725,228
|
|
||
June 1, 2018 - June 30, 2018
|
1,605,909
|
|
|
13.79
|
|
|
1,605,909
|
|
|
139,579,994
|
|
||
Total
|
2,685,965
|
|
|
$
|
13.62
|
|
|
2,685,965
|
|
|
$
|
139,579,994
|
|
3.2.1
|
|
10.33
|
|
10.34
|
|
10.35
|
|
10.36
|
|
10.37
|
|
10.38
|
|
10.4.5
|
|
10.9.1
|
|
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: July 31, 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.
|
Definitions
|
2.
|
Power to Issue Shares
|
3.
|
Power and Obligation of the Company to Purchase its Shares
|
4.
|
Rights Attaching to Shares
|
5.
|
Adjustment to Voting Power
|
6.
|
Certain Subsidiaries
|
7.
|
Special Actions
|
8.
|
Calls on Shares
|
9.
|
Forfeiture of Shares
|
10.
|
Share Certificates
|
11.
|
Fractional Shares
|
12.
|
Register of Members
|
13.
|
Registered Holder Absolute Owner
|
14.
|
Transfer of Registered Shares
|
15.
|
Transmission of Registered Shares
|
16.
|
Power to Alter Capital
|
17.
|
Variation of Rights Attaching to Shares
|
18.
|
Dividends
|
19.
|
Power to Set Aside Profits
|
20.
|
Method of Payment
|
21.
|
Capitalisation
|
22.
|
Annual General Meetings
|
23.
|
Special General Meetings
|
24.
|
Requisitioned General Meetings
|
25.
|
Notice
|
26.
|
Giving Notice and Access
|
27.
|
Notice of Nominations and Member Business
|
28.
|
Postponement or Cancellation of General Meeting
|
29.
|
Electronic Participation and Security in Meetings
|
30.
|
Quorum at General Meetings
|
31.
|
Chairman to Preside at General Meetings
|
32.
|
Voting on Resolutions
|
33.
|
Power to Demand a Vote on a Poll
|
34.
|
Voting by Joint Holders of Shares
|
35.
|
Instrument of Proxy
|
36.
|
Representation of Corporate Member
|
37.
|
Adjournment of General Meeting
|
38.
|
Written Resolutions
|
39.
|
Directors Attendance at General Meetings
|
40.
|
Election of Directors
|
41.
|
Number of Directors
|
42.
|
Term of Office of Directors
|
43.
|
Alternate Directors; Board Observers
|
44.
|
Removal of Directors
|
45.
|
Vacancy in the Office of Director
|
46.
|
Remuneration of Directors
|
47.
|
Defect in Appointment
|
48.
|
Directors to Manage Business
|
49.
|
Powers of the Board of Directors
|
50.
|
[
Intentionally Omitted
]
|
51.
|
Register of Directors and Officers
|
52.
|
Appointment of Officers
|
53.
|
Appointment of Secretary
|
54.
|
Duties of Officers
|
55.
|
Remuneration of Officers
|
56.
|
Conflicts of Interest
|
57.
|
Indemnification and Exculpation of Directors and Officers
|
58.
|
Board Meetings
|
59.
|
Notice of Board Meetings
|
60.
|
Electronic Participation in Meetings
|
61.
|
Quorum at Board Meetings
|
62.
|
Board to Continue in the Event of Vacancy
|
63.
|
Chairman to Preside
|
64.
|
Written Resolutions
|
65.
|
Validity of Prior Acts of the Board
|
66.
|
Minutes
|
67.
|
Place Where Corporate Records Kept
|
68.
|
Form and Use of Seal
|
69.
|
Records of Account
|
70.
|
Financial Year End
|
71.
|
Annual Audit
|
72.
|
Appointment of Auditor
|
73.
|
Remuneration of Auditor
|
74.
|
Duties of Auditor
|
75.
|
Access to Records
|
76.
|
Financial Statements
|
77.
|
Distribution of Auditor’s Report
|
78.
|
Vacancy in the Office of Auditor
|
79.
|
Business Combinations
|
80.
|
Winding-Up
|
81.
|
Changes to Bye-laws
|
82.
|
Changes to the Memorandum of Association
|
83.
|
Discontinuance
|
1.
|
Definitions
|
1.1
|
In these Bye-laws, the following words and expressions shall, where not inconsistent with the context, have the following meanings, respectively:
|
9.5% Shareholder
|
a U.S. Person that (a) owns (within the meaning of Section 958(a) of the Code) any shares and (b) owns, is deemed to own, or constructively owns Controlled Shares which confer votes in excess of 9.5% of the votes conferred by all of the issued and outstanding shares;
|
Act
|
the Companies Act 1981 as amended from time to time;
|
Affiliate
|
with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.
|
Alternate Director
|
an alternate director appointed in accordance with these Bye-laws;
|
Auditor
|
includes an individual or partnership;
|
Board
|
the board of directors appointed or elected pursuant to these Bye-laws and acting by resolution in accordance with the Act and these Bye-laws or the directors present at a meeting of directors at which there is a quorum;
|
Book Value
|
as of any date of determination, the fully diluted tangible book value per share of the Company, as reflected on the then most recent quarterly consolidated balance sheet of the Company and its consolidated subsidiaries, prepared in accordance with U.S. generally accepted accounting principles; provided that the Board shall have the authority to determine Book Value with reference to a then more recent balance sheet of the Company prepared in accordance with U.S. generally accepted accounting principles;
|
Code
|
The Internal Revenue Code of 1986, as amended, of the United States of America;
|
Company
|
Third Point Reinsurance Ltd., the company for which these Bye-laws are approved and confirmed;
|
Company Sale
|
the sale of all or substantially all of the issued and outstanding Shares of the Company and/or TP Re.
|
Controlled Group
|
with respect to any person, all shares directly owned by such person and all shares directly owned by each other Member any of whose shares are included in the Controlled Shares of such person;
|
Controlled Shares
|
in reference to any person, all shares that such person is deemed to own directly, indirectly (within the meaning of Section 958(a) of the Code) or, in the case of any U.S. Person, constructively (within the meaning of Section 958(b) of the Code);
|
Daily Share Price
|
with respect to the shares of the Company as of any Trading Day, the closing price of the shares of the Company on the New York Stock Exchange (or such other principal stock exchange or automated quotation system on which the shares of the Company are then traded) on such Trading Day;
|
Director
|
a director of the Company and shall include an Alternate Director;
|
Disinterested Board Members
|
Directors, other than Daniel S. Loeb or any other Director affiliated with or employed by the Sponsor or its Affiliates;
|
Effective Date
|
the first date on which Kelso (as defined in Bye-law 7.1) and their affiliates, Pine Brook (as defined in Bye-law 7.1) and their affiliates, and Daniel S. Loeb and his affiliates (collectively, “Daniel S. Loeb”), taken together, no longer beneficially own more than 35% of the voting power of the Company;
|
Fair Market Value
|
with respect to a repurchase of any shares of the Company in accordance with these Bye-laws, (i) if such shares are listed on a securities exchange (or quoted in a securities quotation system), the average closing sale price of such shares on such exchange (or in such quotation system), or, if such shares are listed on (or quoted in) more than one exchange (or quotation system), the average closing sale price of the shares on the principal securities exchange (or quotation system) on which such shares are then traded, or, if such shares are not then listed on a securities exchange (or quotation system) but are traded in the over-the-counter market, the average of the latest bid and asked quotations for such shares in such market, in each case for the last five trading days immediately preceding the day on which notice of the repurchase of such shares is sent pursuant to these Bye-laws or (ii) if no such closing sales prices or quotations are available because such shares are not publicly traded or otherwise, the fair value of such shares as determined by one independent nationally recognised investment banking firm chosen by the Board and reasonably satisfactory to the Member whose shares are to be so repurchased by the Company,
provided
, that the calculation of the Fair Market Value of the shares made by such appointed investment banking firm (i) shall not include any discount relating to the absence of a public trading market for, or any transfer restrictions on, such shares, and (ii) such calculation shall be final and the fees and expenses stemming from such calculation shall be borne by the Company or its assignee, as the case may be;
|
Initial Public Offering
|
the first registered public offering of any class of common shares of the Company or TP Re under the United States securities laws or any amalgamation, scheme of arrangement or consolidation as a result of which the Members receive, as the consideration in such amalgamation, scheme of arrangement or consolidation, equity securities of a class that (i) has been registered as part of a public offering under the United States securities laws and (ii) is publicly traded on the New York Stock Exchange (or such other principal stock exchange or automated quotation system on which the shares of the Company or TP Re are then traded);
|
Investment Manager
|
the Person appointed to manage the assets of TP Re pursuant to an investment management agreement;
|
Member
|
a person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons, as the context so requires;
|
Notice
|
written notice as further provided in these Bye-laws unless otherwise specifically stated;
|
Officer
|
any person appointed by the Board to hold an office in the Company;
|
Person
|
any individual, corporation, association, partnership, limited liability company, joint venture, joint stock or other company, business trust, trust, organization, governmental authority or other entity of any kind;
|
Qualified Initial Public Offering
|
(i) a registered public offering or registered public offerings on a national securities exchange of any class of common shares of the Company or TP Re under the United States securities laws, or (ii) any amalgamation, scheme of arrangement or consolidation as a result of which the Members receive, as the consideration in such amalgamation, scheme of arrangement or consolidation, equity securities of a class that (a) has been registered as part of a public offering under the United States securities laws and (b) is publicly traded on a national securities exchange, in either of case (i) or (ii), immediately following which the Company and TP Re together shall have received no less than U.S. $150,000,000;
|
Register of Directors and Officers
|
the register of directors and officers referred to in these Bye-laws;
|
Register of Members
|
the register of members referred to in these Bye-laws;
|
Regulatory Authority
|
any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization;
|
Resident Representative
|
any person appointed to act as resident representative and includes any deputy or assistant resident representative;
|
Secretary
|
the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the Secretary;
|
Shares
|
shall be deemed to include the authorized shares of the Company, and other common shares of the Company and any options, warrants or securities exercisable for, or convertible or redeemable into, common shares of the Company;
|
Sponsor
|
Third Point LLC;
|
Subsidiary
|
with respect to any Person, means a company, more than fifty percent (50%) (or, in the case of a wholly owned subsidiary, one hundred percent (100%)) of the outstanding voting shares of which are owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person, or any such Person and one or more other Subsidiaries;
|
TP Re
|
Third Point Reinsurance Company Ltd.;
|
Trading Day
|
any day on which the New York Stock Exchange (or such other principal stock exchange or automated quotation system on which the shares of the Company are then traded) is open for trading in securities listed thereon;
|
Treasury Share
|
a share of the Company that was or is treated as having been acquired and held by the Company and has been held continuously by the Company since it was so acquired and has not been cancelled;
|
United States
|
the United States of America and its dependent territories or any part thereof;
|
U.S. Person
|
a “United States person” as defined in Section 957(c) of the Code; and
|
1.2
|
In these Bye-laws, where not inconsistent with the context:
|
(a)
|
words denoting the plural number include the singular number and vice versa;
|
(b)
|
words denoting the masculine gender include the feminine and neuter genders;
|
(c)
|
words importing persons include companies, associations or bodies of persons whether corporate or not;
|
(d)
|
the words:
|
(i)
|
"may" shall be construed as permissive; and
|
(ii)
|
"shall" shall be construed as imperative; and
|
(e)
|
a reference to statutory provision shall be deemed to include any amendment or re-enactment thereof;
|
(f)
|
the word “corporation” means a corporation whether or not a company within the meaning of the Act;
|
(g)
|
unless otherwise provided herein, words or expressions defined in the Act shall bear the same meaning in these Bye-laws.
|
1.3
|
In these Bye-laws expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in visible form.
|
1.4
|
Headings used in these Bye-laws are for convenience only and are not to be used or relied upon in the construction hereof.
|
2.
|
Power to Issue Shares
|
2.1
|
Subject to these Bye-laws and to any resolution of the Members to the contrary, and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have the power to issue any unissued shares on such terms and conditions as it may determine and any shares or class of shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital, or otherwise as the Company may by resolution of the Members prescribe.
|
2.2
|
Subject to the Act, any preference shares may be issued or converted into shares that (at a determinable date or at the option of the Company or the holder) are liable to be redeemed on such terms and in such manner as may be determined by the Board (before the issue or conversion).
|
3.
|
Power and Obligation of the Company to Purchase its Shares
|
3.1
|
The Company may purchase its own shares for cancellation or acquire them as Treasury Shares in accordance with the Act on such terms as the Board shall think fit.
|
3.2
|
The Board may exercise all the powers of the Company to purchase or acquire all or any part of its own shares in accordance with the Act.
|
3.3
|
If at any time following the first anniversary of an Initial Public Offering, the average of the Daily Share Price for each Trading Day in the then most recent 12 month period is 90% or less of the Book Value, then the Company shall make an offer to repurchase a number of shares of the Company that, when combined with all prior repurchases pursuant to this Bye-Law 3.3, does not exceed 15% of the sum of (a) the number of shares of the Company outstanding after such repurchase and (b) the aggregate number of shares repurchased, provided that the majority of the Disinterested Board Members may, in its sole discretion, determine not to offer to make such a repurchase. Any offer to repurchase the Repurchase Offer Shares pursuant to Bye-law 3.3 shall be for a price per share determined by the Board, but in no event greater than Book Value.
|
3.4
|
No repurchase offer pursuant to Bye-law 3.3 shall be required if such repurchase does not comply with the Act or would result in (i) an adverse ratings action against the Company or TP Re by A.M. Best & Company, or (ii) any adverse action against the Company or TP Re by any Regulatory Authority.
|
3.5
|
Subject to the Act, if the Board in its sole discretion determines that ownership of shares of the Company by any Person may result in adverse tax consequences or materially adverse legal or regulatory treatment to the Company, any Subsidiary of the Company or any other Person (including if such consequence arises as a result of any U.S. Person owning Controlled Shares of 9.5% or more of the value of the Company or the voting shares of the Company after giving effect to any adjustment to voting power required by Bye-law 5), the Company will have the option, but not the obligation, to purchase all or part of the shares of the Company held by such Person to the extent the Board, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences) for
immediately
available funds in an amount equal to the Fair Market Value of such shares on the business day immediately prior to the date the Company sends the Repurchase Notice referred to below (the “Repurchase Price”);
provided
, that the Board will use reasonable efforts to exercise this option equally among similarly situated Persons (to the extent possible under the circumstances). In the event that the Company determines to purchase any such shares, the Company will be entitled to assign its purchase right to a third party or parties, including one or more of the other Persons, with the consent of such assignee. Each Person shall be bound by the determination by the Company to purchase or assign its right to purchase such Person’s shares and, if so required by the Company, shall sell the number of shares of the Company that the Company requires it to sell.
|
3.6
|
In the event that the Company or its assignee(s) determines to purchase any such shares, the Company shall provide each Member concerned with written notice of such determination (a “Repurchase Notice”) at least seven (7) calendar days prior to such purchase or such shorter period as each such Member may authorise, specifying the date on which any such shares are to be purchased and the Repurchase Price. The Company may revoke the Repurchase Notice at any time before it (or its assignee(s)) pays for the shares. Neither the Company nor its assignee(s) shall be obligated to give general notice to any Person of any intention to purchase or the conclusion of any purchase of shares of the Company. The closing of any such purchase of shares of the Company shall be no less than seven (7) calendar days after receipt of the Repurchase Notice by the Member, unless such Member agrees to a shorter period, and payment of the Repurchase Price by the Company or its assignee(s) shall be by wire transfer or certified check.
|
3.7
|
If the Company purchases any shares pursuant to Bye-laws 3.5 and 3.6, it shall do so only in a manner that the Board believes would not result, upon consummation of such transaction, in any U.S. Person owning Controlled Shares of 9.5% or more of the value of the Company or the voting shares of the Company (after giving effect to any adjustment to voting power required by Bye-law 5). Notwithstanding the foregoing, the Board, in its sole discretion and by unanimous consent of all of the Directors then in office, may waive the provisions of Bye-laws 3.5 and 3.6.
|
4.
|
Rights Attaching to Shares
|
4.1
|
At the date these Bye-laws are adopted, the share capital of the Company is divided into two classes: (i) common shares (the “Common Shares”) and (ii) preference shares (the “Preference Shares”).
|
4.2
|
The holders of the Common Shares shall, subject to these Bye-laws (including, without limitation, the rights attaching to Preference Shares):
|
(a)
|
be entitled to one vote per share;
|
(b)
|
be entitled to such dividends as the Board may from time to time declare;
|
(c)
|
in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganisation or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company; and
|
(d)
|
generally be entitled to enjoy all of the rights attaching to shares.
|
4.3
|
The Board is authorised to provide for the issuance of the Preference Shares in one or more series, and to establish from time to time the number of shares to be included in each such series, and to establish from time to time the number of shares to be included in each series, and to fix the terms, including designation, powers, preferences, rights, qualifications, limitations and
restrictions of the shares of each such series (and, for the avoidance of doubt, such matters and the issuance of such Preference Shares shall not be deemed to vary the rights attached to the Common Shares or, subject to the terms of any other series of Preference Shares, to vary the rights attached to any other series of Preference Shares). The authority of the Board with respect to each series shall include, but not be limited to, determination of the following:
|
(a)
|
the number of shares constituting that series and the distinctive designation of that series;
|
(b)
|
the dividend rate on the shares of that series, whether dividends shall be cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of the payment of dividends on shares of that series;
|
(c)
|
whether the series shall have voting rights, in addition to the voting rights provided by law and, if so, the terms of such voting rights;
|
(d)
|
whether the series shall have conversion or exchange privileges (including, without limitation, conversion into Common Shares) and, if so, the terms and conditions of such conversion or exchange, including provision for adjustment of the conversion or exchange rate in such events as the Board shall determine;
|
(e)
|
whether or not the shares of that series shall be redeemable or repurchaseable and, if so, the terms and conditions of such redemption or repurchase, including the manner of selecting shares for redemption or repurchase if less than all shares are to be redeemed or repurchased, the date or dates upon or after which they shall be redeemable or repurchaseable, and the amount per share payable in case of redemption or repurchase, which amount may vary under different conditions and at different redemption or repurchase dates;
|
(f)
|
whether that series shall have a sinking fund for the redemption or repurchase of shares of that series and, if so, the terms and amount of such sinking fund;
|
(g)
|
the right of the shares of that series to the benefit of conditions and restrictions upon the creation of indebtedness of the Company or any Subsidiary, upon the issue of any additional shares (including additional shares of such series or any other series) and upon the payment of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Company or any Subsidiary of any issued shares of the Company;
|
(h)
|
the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Company, and the relative rights of priority, if any, of payment in respect of shares of that series; and
|
(i)
|
any other relative participating, optional or other special rights, qualifications, limitations or restrictions of that series.
|
4.4
|
Any Preference Shares of any series which have been redeemed (whether through the operation of a sinking fund or otherwise) or which, if convertible or exchangeable, have been converted into or exchanged for shares of any other class or classes shall have the status of authorised and unissued Preference Shares of the same series and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preference Shares to be created by resolution or resolutions of the Board or as part of any other series of Preference Shares, all subject to the conditions and the restrictions on issuance set forth in the resolution or resolutions adopted by the Board providing for the issue of any series of Preference Shares.
|
4.5
|
At the discretion of the Board, whether or not in connection with the issuance and sale of any shares or other securities of the Company, the Company may issue securities, contracts, warrants or other instruments evidencing any shares, option rights, securities having conversion or option rights, or obligations on such terms, conditions and other provisions as are fixed by the Board including, without limiting the generality of this authority, conditions that preclude or limit any person or persons owning or offering to acquire a specified number or percentage of the issued Common Shares, other shares, option rights, securities having conversion or option rights, or obligations of the Company or transferee of the person or persons from exercising, converting, transferring or receiving the shares, option rights, securities having conversion or option rights, or obligations.
|
4.6
|
All the rights attaching to a Treasury Share shall be suspended and shall not be exercised by the Company while it holds such Treasury Share and, except where required by the Act, all Treasury Shares shall be excluded from the calculation of any percentage or fraction of the share capital, or shares, of the Company.
|
5.
|
Adjustment to Voting Power
|
5.1
|
If the votes conferred by the Controlled Shares of any Person would otherwise cause such Person or any other Person to be treated as a 9.5% Shareholder with respect to any matter (including, without limitation, election of directors), the votes with respect to such matter conferred by the shares of such Person’s Controlled Group are hereby reduced (and shall be automatically reduced in the future) by whatever amount is necessary so that, after any such reduction, the votes conferred by the Controlled Shares of such Person shall not result in such Person or any other Person being treated as a 9.5% Shareholder with respect to the vote on such matter.
|
5.2
|
The reduction in votes pursuant to the preceding Bye-law shall be determined as follows:
|
(a)
|
Beginning with the Controlled Group of the Person whose Controlled Shares have the largest number of votes and continuing, as required, with the Controlled Group of each Person whose Controlled Shares successively have a smaller number of votes (after giving effect to prior reductions), the reduction in votes conferred by the shares of a Controlled Group shall be effected proportionately among all the shares of such Controlled Group in accordance with the relative voting power of such shares. Generally, the Board will effectuate the reduction of votes in the manner and order described in the preceding sentence. If varying the order in which votes are reduced would result in a more equitable allocation of the reduction of votes as determined by the Board, the Board shall have the discretion to vary the order in which votes are reduced.
|
(b)
|
If there is a Person whose activities have been determined by the Board to have caused the application of subparagraph (a), after all required reductions in votes conferred on shares of Controlled Groups are effected pursuant to subparagraph (a), (i) the amount of any reduction in the votes of the shares of each Controlled Group effected by application of subparagraph (a) above shall be reallocated within such Controlled Group and conferred on the shares held directly by the Person whose actions have been determined by the Board to have caused the application of such subparagraph and (ii) the voting power of the shares held by each other Person holding shares in such Controlled Group shall be increased by such Person’s proportionate share of such reduction, in each case, to the extent that so doing does not cause any Person to be treated as a 9.5% Shareholder.
|
5.3
|
The Board shall implement the foregoing in the manner set forth in this Bye-law 5. In addition to any other provision of this Bye-law 5, any shares shall not carry rights to vote or shall have reduced voting rights to the extent that the Board reasonably determines, by the affirmative vote of a majority of the Directors, that it is reasonably necessary that such shares should not carry the right to vote or shall have reduced voting rights in order to avoid adverse tax consequences or materially adverse legal or regulatory treatment to the Company, any Subsidiary of the Company or any Person or its Affiliates; provided that the Board will use reasonable efforts to ensure equal treatment to similarly situated Persons to the extent possible under the circumstances and; provided further that the Board shall reallocate the amount of any reduction in vote in the manner described in Bye-law 5.2(b).
|
5.4
|
The Board shall have the authority to request from any Member such information as the Board may reasonably request for the purpose of determining whether any Member’s voting rights are to be adjusted. If any Member fails to respond to such a request, or submits incomplete or inaccurate information in response to such a request, the Board may in its sole discretion determine that such Member’s shares shall carry no voting rights, in which case such shares shall not carry any voting rights until otherwise determined by the Board in its absolute discretion.
|
6.
|
Certain Subsidiaries
|
6.1
|
Notwithstanding any other provision of these Bye-laws to the contrary, if the Company is required or entitled to vote at a general meeting of any subsidiary of the Company that is not a corporation organized under the laws of the United States or any state (or limited liability company organized under the laws of the United States or any state that is taxable as a corporation for United States Federal income tax purposes) or that is not treated as a pass-through vehicle or disregarded entity for United States federal income tax purposes (unless such disregarded entity owns, directly or indirectly, any subsidiary organized under the laws of a jurisdiction outside the United States that is treated as a corporation for United States federal income tax purposes) (together, the “Designated Companies”), the Board shall refer the subject matter of the vote (other than the removal and remuneration of auditors, the approval of financial statements and reports thereon, and the remuneration of Directors) to the Members of the Company on a poll (subject to Bye-law 5) and seek authority from the Members for the Company's corporate representative or proxy to vote in favour of the resolution proposed by the Designated Company. The Board shall cause the Company's corporate representative or proxy to vote the Company's shares in the Designated Company pro rata to the votes received at the general meeting of the Company, with votes for or against the directing resolution being taken, respectively, as an instruction for the Company's corporate representative or proxy to vote the appropriate proportion of its shares for and the appropriate proportion of its shares against the resolution proposed by the Designated Company. The Board shall have authority to resolve any ambiguity.
|
6.2
|
The Board in its discretion shall require that the Bye-laws or Articles of Association or similar organizational documents of each Designated Company shall contain provisions substantially similar to this Bye-law 6. The Company shall enter into agreements, as and when determined by the Board, with each such Designated Company, only if and to the extent reasonably necessary and permitted under applicable law, to effectuate or implement this Bye-law 6.
|
7.
|
Special Actions
|
7.1
|
Notwithstanding anything to the contrary in these Bye-laws, the Company shall not and shall cause TP Re not to subject to Bye-Law 7.2 without the prior and express written consent of each of Daniel S. Loeb, KEP TP Holdings, L.P. and KIA TP Holdings, L.P. (collectively, “Kelso”) and Pine Brook LVR, L.P. (“Pine Brook” and together with Kelso (the “Lead Investors”) and together with Daniel S. Loeb, the “Founders”) enter into any transaction with any (i) Affiliate of the Company, (ii) Member and/or director, officer, employee, and/or Affiliate of any Member, and/or (iii) director, officer, employee, and/or Affiliate of any of the foregoing.
|
7.2
|
Notwithstanding anything to the contrary in these Bye-Laws, the consent right of each Founder set forth in Bye-Law 7.1 shall survive an Initial Public Offering until such time as such Founder holds shares representing less than 25% of the shares held by such Founder on December 22, 2011.
|
8.
|
Calls on Shares
|
8.1
|
The Board may make such calls as it thinks fit upon the Members in respect of any moneys (whether in respect of nominal value or premium) unpaid on the shares allotted to or held by such Members (and not made payable at fixed times by the terms and conditions of issue) and, if a call is not paid on or before the day appointed for payment thereof, the Member may at the discretion of the Board be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment. The Board may differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls.
|
8.2
|
Any amount which, by the terms of allotment of a share, becomes payable upon issue or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these Bye-laws be deemed to be an amount on which a call has been duly made and payable on the date on which, by the terms of issue, the same becomes payable, and in case of non-payment all the relevant provisions of these Bye-laws as to payment of interest, costs and expenses, forfeiture or otherwise shall apply as if such amount had become payable by virtue of a duly made and notified call.
|
8.3
|
The joint holders of a share shall be jointly and severally liable to pay all calls and any interest, costs and expenses in respect thereof.
|
8.4
|
The Company may accept from any Member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up or become payable.
|
9.
|
Forfeiture of Shares
|
9.1
|
If any Member fails to pay, on the day appointed for payment thereof, any call pursuant to Bye-law 8 in respect of any share allotted to or held by such Member, the Board may, at any time thereafter during such time as the call remains unpaid, direct the Secretary to forward such Member a notice in writing in the form, or as near thereto as circumstances admit, of the following:
|
9.2
|
If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and such share shall thereupon become the property of the Company and may be disposed of as the Board shall determine. Without limiting the generality of the foregoing, the disposal may take place by sale, repurchase, redemption or any other method of disposal permitted by and consistent with these Bye-laws and the Act.
|
9.3
|
A Member whose share or shares have been so forfeited shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture, together with all interest due thereon and any costs and expenses incurred by the Company in connection therewith.
|
9.4
|
The Board may accept the surrender of any shares which it is in a position to forfeit on such terms and conditions as may be agreed. Subject to those terms and conditions, a surrendered share shall be treated as if it had been forfeited.
|
10.
|
Share Certificates
|
10.1
|
Every Member shall be entitled to a certificate under the common seal (or a facsimile thereof) of the Company or bearing the signature (or a facsimile thereof) of a Director or the Secretary or a person expressly authorised to sign specifying the number and, where appropriate, the class of shares held by such Member and whether the same are fully paid up and, if not, specifying the amount paid on such shares. The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means.
|
10.2
|
The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom the shares have been allotted.
|
10.3
|
If any share certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid, or destroyed the Board may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit.
|
10.4
|
Notwithstanding any provisions of these Bye-laws:
|
(a)
|
the Board shall, subject always to the Act and any other applicable laws and regulations and the facilities and requirements of any relevant system concerned, have power to implement any arrangements it may, in its absolute discretion, think fit in relation to the evidencing of title to and transfer of uncertificated shares and to the extent such arrangements are so implemented, no provision of these Bye-laws shall apply or have effect to the extent that it is in any respect inconsistent with the holding or transfer of shares in uncertificated form; and
|
(b)
|
unless otherwise determined by the Board and as permitted by the Act and any other applicable laws and regulations including applicable rules of the New York Stock Exchange, no person shall be entitled to receive a certificate in respect of any share for so long as the title to that share is evidenced otherwise than by a certificate and for so long as transfers of that share may be made otherwise than by a written instrument.
|
11.
|
Fractional Shares
|
12.
|
Register of Members
|
12.1
|
The Board shall cause to be kept in one or more books a Register of Members and shall enter therein the particulars required by the Act.
|
12.2
|
The Register of Members shall be open to inspection without charge at the registered office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection. The Register of Members may, after notice has been given in accordance with the Act, be closed for any time or times not exceeding in the whole thirty days in each year.
|
13.
|
Registered Holder Absolute Owner
|
14.
|
Transfer of Registered Shares
|
14.1
|
An instrument of transfer shall be in writing in the form of the following, or as near thereto as circumstances admit, or in such other form as the Board may accept:
|
14.2
|
Such instrument of transfer shall be signed by (or in the case of a party that is a corporation, on behalf of) the transferor and transferee, provided that, in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone. The transferor shall be deemed to remain the holder of such share until the same has been registered as having been transferred to the transferee in the Register of Members.
|
14.3
|
The Board may refuse to recognise any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require showing the right of the transferor to make the transfer.
|
14.4
|
The joint holders of any share may transfer such share to one or more of such joint holders, and the surviving holder or holders of any share previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member.
|
14.5
|
The Board may in its absolute discretion and without assigning any reason therefore refuse to register the transfer of a share which is not fully paid up. The Board shall refuse to register a transfer unless all applicable consents, authorisations and permissions of any governmental body or agency in Bermuda have been obtained. If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.
|
14.6
|
Shares may be transferred without a written instrument if transferred by an appointed agent or otherwise in accordance with the Act.
|
15.
|
Transmission of Registered Shares
|
15.1
|
In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder, shall be the only persons recognised by the Company as having any title to the deceased Member's interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Member with other persons. Subject to the Act, for the purpose of this Bye-law, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may, in its absolute discretion, decide as being properly authorised to deal with the shares of a deceased Member.
|
15.2
|
Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in writing in the form, or as near thereto as circumstances admit, of the following:
|
15.3
|
On the presentation of the foregoing materials to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Member. Notwithstanding the foregoing, the Board shall, in any case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Member before such Member's death or bankruptcy, as the case may be.
|
15.4
|
Where two or more persons are registered as joint holders of a share or shares, then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to such share or shares and the Company shall recognise no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.
|
16.
|
Power to Alter Capital
|
16.1
|
The Company may if authorised by resolution of the Members increase, divide, consolidate, subdivide, change the currency denomination of, diminish or otherwise alter or reduce its share capital in any manner permitted by the Act.
|
16.2
|
Where, on any alteration or reduction of share capital, fractions of shares or some other difficulty would arise, the Board may deal with or resolve the same in such manner as it thinks fit.
|
17.
|
Variation of Rights Attaching to Shares
|
18.
|
Dividends
|
18.1
|
The Board may, subject to these Bye-laws and in accordance with the Act, declare a dividend to be paid to the Members, in proportion to the number of shares held by them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets. No unpaid dividend shall bear interest as against the Company.
|
18.2
|
The Board may fix any date as the record date for determining the Members entitled to receive any dividend.
|
18.3
|
The Company may pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
|
18.4
|
The Board may declare and make such other distributions (in cash or in specie) to the Members as may be lawfully made out of the assets of the Company. No unpaid distribution shall bear interest as against the Company.
|
19.
|
Power to Set Aside Profits
|
20.
|
Method of Payment
|
20.1
|
Any dividend, interest, or other moneys payable in cash in respect of the shares may be paid by cheque or draft sent through the post directed to the Member at such Member's address in the Register of Members, or to such person and to such address as the holder may in writing direct.
|
20.2
|
In the case of joint holders of shares, any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the address of the holder first named in the Register of Members, or to such person and to such address as the joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.
|
20.3
|
The Board may deduct from the dividends or distributions payable to any Member all moneys due from such Member to the Company on account of calls or otherwise.
|
20.4
|
The Company shall be entitled to cease sending dividend cheques and warrants by post or otherwise to a Member if those instruments have been returned undelivered to, or left uncashed by, that Member on at least two consecutive occasions or, following one such occasion, reasonable enquiries have failed to establish the Member’s new address. The entitlement conferred on the Company by this Bye-law in respect of any Member shall cease if the Member claims a dividend or cashes a dividend cheque or warrant.
|
21.
|
Capitalisation
|
21.1
|
The Board may capitalise any amount for the time being standing to the credit of any of the Company's share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such amount in paying up unissued shares to be allotted as fully paid bonus shares pro rata
(except in connection with the conversion of shares of one class to shares of another class
)
to the Members.
|
21.2
|
The Board may capitalise any amount for the time being standing to the credit of a reserve account or amounts otherwise available for dividend or distribution by applying such amounts in paying up in full, partly or nil paid shares of those Members who would have been entitled to such amounts if they were distributed by way of dividend or distribution.
|
22.
|
Annual General Meetings
|
23.
|
Special General Meetings
|
24.
|
Requisitioned General Meetings
|
25.
|
Notice
|
25.1
|
At least 21 days' notice of an annual general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, place and time which shall not be in the United States at which the meeting is to be held, that the election of Directors will take place thereat, and as far as practicable, the other business to be conducted at the meeting.
|
25.2
|
At least 21 days' notice of a special general meeting shall be given to each Member entitled to attend and vote thereat, stating the date, time, place which shall not be in the United States and the general nature of the business to be considered at the meeting.
|
25.3
|
The Board may fix any date as the record date for determining the Members entitled to receive notice of and to vote at any general meeting.
|
25.4
|
A general meeting shall, notwithstanding that it is called on shorter notice than that specified in these Bye-laws, be deemed to have been properly called if it is so agreed by (i) all the Members entitled to attend and vote thereat in the case of an annual general meeting; and (ii) by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than 95% in nominal value of the shares giving a right to attend and vote thereat in the case of a special general meeting.
|
25.5
|
The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
|
26.
|
Giving Notice and Access
|
26.1
|
A notice may be given by the Company to a Member:
|
(a)
|
by delivering it to such Member in person, in which case the notice shall be deemed to have been served upon such delivery; or
|
(b)
|
by sending it by letter mail or courier to such Member's address in the Register of Members, in which case the notice shall be deemed to have been served seven days after the date on which it is deposited, with postage prepaid, in the mail; or
|
(c)
|
by sending it by courier to such Member’s address in the Register of Members, in which case the notice shall be deemed to have been served two days after the date on which it is deposited, with courier fees paid, with the courier service; or
|
(d)
|
by transmitting it by electronic means (including facsimile and electronic mail, but not telephone) in accordance with such directions as may be given by such Member to the Company for such purpose in which case the notice shall be deemed to have been served at the time that it would in the ordinary course be transmitted; or
|
(e)
|
by delivering it in accordance with the provisions of the Act pertaining to delivery of electronic records by publication on a website, in which case the notice shall be deemed to have been served at the time when the requirements of the Act in that regard have been met.
|
26.2
|
Any notice required to be given to a Member shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Members and notice so given shall be sufficient notice to all the holders of such shares.
|
26.3
|
In proving service under paragraphs 26.1 (b), (c) and (d), it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted or sent by courier, and the time when it was posted, deposited with the courier, or transmitted by electronic means.
|
27.
|
Notice of Nominations and Member Business
|
27.1
|
Annual General Meetings
|
(a)
|
Nominations of persons for election to the Board or the proposal of other business to be transacted by the Members may be made at an annual general meeting only (A) pursuant to the Company’s notice of meeting (or any supplement thereto), (B) by or at the direction of the Board or (C) subject to any applicable law, by Members of record at the time of giving of notice as provided for in this Bye-law 27.1 and who comply with the notice procedures set forth in this Bye-law 27.1;
|
(b)
|
For nominations or other business to be properly brought before an annual general meeting by a Member pursuant to clause (C) of Bye-law 27.1(a), the Member must have given timely notice thereof in writing to the Secretary and any such proposed business must constitute a proper matter for Member action. To be timely, a Member’s notice shall be delivered to or mailed and received by the Secretary at the registered office of the Company not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual general meeting;
provided
, that in the event that the date of the annual general meeting is advanced more than 30 days prior to such anniversary date or delayed more than 30 days after such anniversary date then to be timely such notice must be received at the registered office of the Company no earlier than 120 days prior to such annual general meeting and no later than the later of 70 days prior to the date of the general meeting or the 10th day following the day on which public announcement of the date of the general meeting was first made by the Company. In no event shall the public announcement of an adjournment or postponement of an annual general meeting commence a new time period (or extend any time period) for the giving of a Member’s notice as described above. For purposes of Bye-laws 27.1(b) and 27.2, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, the Associated Press, PR Newswire, Businesswire, Bloomberg or any comparable news service in the United States or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934;
|
(c)
|
A Member’s notice to the Secretary shall set forth (A) as to each person whom the Member proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Section 14(a) of the Securities Exchange Act of 1934 (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (B) as to any other business that the Member proposes to bring before the general meeting, a brief description of the business desired to be brought before the general meeting, the text of the proposal or business, the reasons for conducting such business at the general meeting and any material interest in such business of such Member and the beneficial owner, if any, on whose behalf the proposal is made, and (C) as to the Member giving the notice and the beneficial owner, if any, on whose behalf the proposal is made:
|
(i)
|
the name and address of such Member (as they appear in the Register of Members) and any such beneficial owner;
|
(ii)
|
the class or series and number of shares of the Company which are held of record or are beneficially owned by such Member and by any such beneficial owner;
|
(iii)
|
a description of any agreement, arrangement or understanding between or among such Member and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;
|
(iv)
|
a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, share appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such Member or any such beneficial owner or any such nominee with respect to the Company’s securities (a “Derivative Instrument”);
|
(v)
|
to the extent not disclosed pursuant to clause (iv) above, the principal amount of any indebtedness of the Company or any of its subsidiaries beneficially owned by such Member or by any such beneficial owner, together with the title of the instrument under which such indebtedness was issued and a description of any Derivative Instrument entered into by or on behalf of such Member or such beneficial owner relating to the value or payment of any indebtedness of the Company or any such Subsidiary;
|
(vi)
|
a representation that the Member is a holder of record of shares of the Company entitled to vote at such general meeting and intends to appear in person or by proxy at the general meeting to bring such nomination or other business before the general meeting; and
|
(vii)
|
a representation as to whether such Member or any such beneficial owner intends or is part of a group that intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Company’s outstanding shares required to approve or adopt the proposal or to elect each such nominee and/or (ii) otherwise to solicit proxies from Members in support of such proposal or nomination;
|
(d)
|
If requested by the Company, the information required under clauses (ii), (iii), (iv) and (v) of Bye-law 27.1(c) shall be supplemented by such Member and any such beneficial owner not later than 10 days after the record date for notice of the general meeting to disclose such information as of such record date;
|
(e)
|
Notwithstanding anything to the contrary, the notice requirements set forth herein with respect to the proposal of any business pursuant to this Bye-law 27.1 other than a nomination shall be deemed satisfied by a Member if such Member has submitted a proposal to the Company in compliance with Rule 14a-8 promulgated under the Securities and Exchange Act of 1934 and such Member’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for the general meeting.
|
27.2
|
Special General Meetings
|
(a)
|
Only such business shall be conducted at a special general meeting as shall have been brought before the general meeting in accordance with the Company’s notice of meeting pursuant to Bye-laws 25 and 26.
|
(b)
|
Nominations of persons for election to the Board at a special general meeting may be made (i) by or at the direction of the Board or (ii) provided that the Board has determined that Members may nominate persons for election to the Board at such general meeting, by any Member of the Company who is a Member of record at the time of giving of notice provided for in this Bye-law 27.2(b), who shall be entitled to vote at the general meeting and who complies with the notice procedures set forth in this Bye-law 27.
|
(c)
|
For nominations to be properly brought before a special general meeting by a Member pursuant to this Bye-law 27.2(b)(ii), the Member must have given timely notice thereof in writing to the Secretary. To be timely, a Member’s notice shall be delivered to or mailed and received at the registered office of the Company (A) not earlier than 120 days prior to the date of the special general meeting nor (B) later than the later of 90 days prior to the date of the special general meeting or the 10th day following the day on which public announcement of the date of the special general meeting was first made.
|
(d)
|
A Member’s notice to the Secretary, including any notice of requisition pursuant to Bye-law 24, shall comply with the notice requirements of Bye-law 27.1(c) and (d).
|
27.3
|
General
|
(a)
|
At the request of the Board, any person nominated by the Board for election as a director shall furnish to the Secretary the information that is required to be set forth in a Member’s notice of nomination pursuant to Bye-law 27.1(c).
|
(b)
|
No person shall be eligible to be nominated by a Member to serve as a director of the Company unless nominated in accordance with the procedures set forth in this Bye-law 27.
|
(c)
|
The chairman of the general meeting shall, if the facts warrant, determine and declare to the general meeting that a nomination was not made in accordance with the procedures prescribed by these Bye-laws or that business was not properly brought before the general meeting, and if he should so determine and declare, the defective nomination shall be disregarded or such business shall not be transacted, as the case may be.
|
(d)
|
Notwithstanding the foregoing provisions of this Bye-law 27, unless otherwise required by the Act, if the Member (or a qualified representative of the Member) does not appear at the annual or special general meeting to present a nomination or other proposed business, such nomination shall be disregarded or such proposed business shall not be transacted, as the case may be, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this Bye-law 27.3, to be considered a qualified representative of the Member, a person must be a duly authorized officer, manager or partner of such Member or must be authorized by a writing executed by such Member or an electronic transmission delivered by such Member to act for such Member as proxy at the general meeting and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the general meeting.
|
27.4
|
Without limiting the foregoing provisions of this Bye-law 27, a Member shall also comply with all applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder with respect to the matters set forth in this Bye-law 27;
provided
, that any references in these Bye-laws to the Securities Exchange Act of 1934 or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Bye-law, and compliance with Bye-law 27.1 or 27.2 shall be the exclusive means for a Member to make nominations or submit other business (other than as provided in Bye-law 27.1(e)).
|
28.
|
Postponement or Cancellation of General Meeting
|
29.
|
Electronic Participation and Security in Meetings
|
29.1
|
Members may participate in any general meeting by such telephonic, electronic or other communication facilities or means as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.
|
29.2
|
The Board may, and at any general meeting, the Chairman of such meeting may, make any arrangement and impose any requirement or restriction it or he considers appropriate to ensure the security of the general meeting including, without limitation, requirements for evidence of identity to be produced by those attending the meeting, the searching of their personal property and the restriction of items that may be taken into the meeting place. The Board and, at any general meeting, the chairman of such meeting are entitled to refuse entry to a person who refuses to comply with any such arrangements, requirements or restrictions.
|
30.
|
Quorum at General Meetings
|
30.1
|
At any general meeting two or more persons present in person throughout the meeting and representing in person or by proxy in excess of 50% of the total issued voting shares in the Company throughout the meeting shall form a quorum for the transaction of business, provided, however that no Member may participate in any general meeting during which that Member (or, if any Member is an entity, its representative) is physically present in the United States.
|
30.2
|
If within half an hour from the time appointed for the meeting a quorum is not present, then, in the case of a meeting convened on a requisition, the meeting shall be deemed cancelled and, in any other case, the meeting shall stand adjourned to the same day one week later, at the same time and place (which shall not be in the United States) or to such other day, time or place (which shall not be in the United States) as the Secretary may determine. Unless the meeting is adjourned to a specific date, time and place (which shall not be in the United States) announced at the meeting being adjourned, fresh notice of the resumption of the meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws.
|
31.
|
Chairman to Preside at General Meetings
|
32.
|
Voting on Resolutions
|
32.1
|
Subject to the Act and these Bye-laws, any question proposed for the consideration of the Members at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with these Bye-laws and in the case of an equality of votes the resolution shall fail.
|
32.2
|
No Member shall be entitled to vote at a general meeting unless such Member has paid all the calls on all shares held by such Member.
|
32.3
|
At any general meeting a resolution put to the vote of the meeting shall, in the first instance, be voted upon by a show of hands and, subject to any rights or restrictions for the time being lawfully attached to any class of shares and subject to these Bye-laws, every Member present in person and every person holding a valid proxy at such meeting shall be entitled to one vote and shall cast such vote by raising his hand.
|
32.4
|
In the event that a Member participates in a general meeting by telephone, electronic or other communication facilities or means, the chairman of the meeting shall direct the manner in which such Member may cast his vote on a show of hands.
|
32.5
|
At any general meeting if an amendment is proposed to any resolution under consideration and the chairman of the meeting rules on whether or not the proposed amendment is out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling.
|
32.6
|
At any general meeting a declaration by the chairman of the meeting that a question proposed for consideration has, on a show of hands, been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in a book containing the minutes of the proceedings of the Company shall, subject to these Bye-laws, be conclusive evidence of that fact.
|
33.
|
Power to Demand a Vote on a Poll
|
33.1
|
Notwithstanding the foregoing, a poll may be demanded by any of the following persons:
|
(a)
|
the chairman of such meeting; or
|
(b)
|
at least three Members present in person or represented by proxy; or
|
(c)
|
any Member or Members present in person or represented by proxy and holding between them not less than one-tenth of the total voting rights of all the Members having the right to vote at such meeting; or
|
(d)
|
any Member or Members present in person or represented by proxy holding shares in the Company conferring the right to vote at such meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total amount paid up on all such shares conferring such right.
|
33.2
|
Where a poll is demanded, subject to any rights or restrictions for the time being lawfully attached to any class of shares, every person present at such meeting shall have one vote for each share of which such person is the holder or for which such person holds a proxy and such vote shall be counted by ballot as described herein, or in the case of a general meeting at which one or more Members are present by telephone, electronic or other communication facilities or means, in such manner as the chairman of the meeting may direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded and shall replace any previous resolution upon the same matter which has been the subject of a show of hands. A person entitled to more than one vote need not use all his votes or cast all the votes he uses in the same way.
|
33.3
|
A poll demanded for the purpose of electing a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time and in such manner during such meeting as the chairman (or acting chairman) of the meeting may direct. Any business other than that upon which a poll has been demanded may be conducted pending the taking of the poll.
|
33.4
|
Where a vote is taken by poll, each person physically present and entitled to vote shall be furnished with a ballot paper on which such person shall record his vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialled or otherwise marked so as to identify the voter and the registered holder in the case of a proxy. Each person present by telephone, electronic or other communication facilities or means shall cast his vote in such manner as the chairman of the meeting shall direct. At the conclusion of the poll, the ballot papers and votes cast in accordance with such directions shall be examined and counted by a committee of not less than two Members or proxy holders appointed by the chairman of the meeting for the purpose and the result of the poll shall be declared by the chairman of the meeting.
|
34.
|
Voting by Joint Holders of Shares
|
35.
|
Instrument of Proxy
|
35.1
|
An instrument appointing a proxy shall be in writing in substantially the following form or such other form as the chairman of the meeting shall accept:
|
35.2
|
The instrument appointing a proxy must be received by the Company at the registered office or at such other place or in such manner as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Company in relation to the meeting at which the person named in the instrument appointing a proxy proposes to vote, and an instrument appointing a proxy which is not received in the manner so prescribed shall be invalid.
|
35.3
|
A Member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf in respect of different shares.
|
35.4
|
Subject to Bye-law 34.5, the decision of the chairman of any general meeting as to the validity of any appointment of a proxy shall be final.
|
35.5
|
Any Member may irrevocably appoint a proxy and in such case: (i) such appointment shall be irrevocable in accordance with the terms of the instrument of appointment; (ii) the Company shall be given notice of the appointment, such notice to include the name, address, telephone number and electronic mail address of the proxy, and the Company shall give to such proxy notice of all meetings of shareholders of the Company; (iii) such proxy shall be the only person entitled to vote the relevant Shares at any meeting at which such proxy is present; and (iv) the Company shall be obliged to recognise the proxy until such time as such proxy shall notify the Company in writing that the appointment of such proxy is no longer in force.
|
36.
|
Representation of Corporate Member
|
36.1
|
A corporation which is a Member may, by written instrument, authorise such person or persons as it thinks fit to act as its representative at any meeting and any person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member, and that Member shall be deemed to be present in person at any such meeting attended by its authorised representative or representatives.
|
36.2
|
Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Member.
|
37.
|
Adjournment of General Meeting
|
37.1
|
The chairman of a general meeting at which quorum is present may, with the consent of the Members holding a majority of the voting rights of those Members present in person or by proxy (and shall if so directed by Members holding a majority of the voting rights of those Members present in person or by proxy) adjourn the meeting.
|
37.2
|
The chairman of a general meeting may
may adjourn a meeting to another time and place without the consent or direction of the Members if it appears to him that:
|
(a)
|
it is likely to be impractical to hold or continue that meeting because of the number of Members wishing to attend who are not present; or
|
(b)
|
The unruly conduct of persons attending the meeting prevents, or is likely to prevent, the orderly continuation of the business of the meeting; or
|
(c)
|
An adjournment is otherwise necessary so that the business of the meeting may be properly conducted.
|
37.3
|
Unless the meeting is adjourned to a specific date, place and time announced at the meeting being adjourned, fresh notice of the date, place and time for the resumption of the adjourned meeting shall be given to each Member entitled to attend and vote thereat in accordance with these Bye-laws.
|
38.
|
Written Resolutions
|
38.1
|
Subject to these Bye-laws, anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Members may be done without a meeting by written resolution signed by or, in the case of a Member that is a corporation whether or not a company within the meaning of the Act, on behalf of all the Members who at the date of the resolution would be entitled to attend the meeting and vote on the resolution.
|
38.2
|
Notice of a written resolution shall be given, and a copy of the resolution shall be circulated, to all Members who would be entitled to attend a meeting and vote thereon. The accidental omission to give notice to, or the non-receipt of a notice by, any Member does not invalidate the passing of a resolution.
|
38.3
|
A written resolution is passed when it is signed by, or in the case of a Member that is a corporation, on behalf of, the Members who at the date that the notice is given represent such majority of votes as would be required if the resolution was voted on at a meeting of Members at which all Members entitled to attend and vote thereat were present and voting.
|
38.4
|
A resolution in writing may be signed in any number of counterparts.
|
38.5
|
A resolution in writing made in accordance with this Bye-law is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Members, as the case may be, and any reference in any Bye-law to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly.
|
38.6
|
A resolution in writing made in accordance with this Bye-law shall constitute minutes for the purposes of the Act.
|
38.7
|
This Bye-law shall not apply to:
|
(a)
|
(a) a resolution passed to remove an Auditor from office before the expiration of his term of office; or
|
(b)
|
(b) a resolution passed for the purpose of removing a Director before the expiration of his term of office.
|
38.8
|
For the purposes of this Bye-law, the effective date of the resolution is the date when the resolution is signed by, or in the case of a Member that is a corporation, on behalf of, the last Member whose signature results in the necessary voting majority being achieved and any reference in any Bye-law to the date of passing of a resolution is, in relation to a resolution made in accordance with this Bye-law, a reference to such date.
|
38.9
|
This Bye-law 38 shall no longer apply or have effect from and after the Effective Date, and, from and after the Effective Date, no resolution of the Company may be adopted by written resolution.
|
39.
|
Directors Attendance at General Meetings
|
40.
|
Election of Directors
|
40.1
|
Only persons who are proposed or nominated in accordance with Bye-law 27 shall be eligible for election as Directors.
|
40.2
|
Where persons are validly proposed for re-election or election as a Director, the persons receiving the most votes (up to the number of Directors to be elected) shall be elected as Directors, and an absolute majority of the votes cast shall not be a prerequisite to the election of such Directors.
|
40.3
|
For so long as a Lead Investor holds Shares representing at least 25% of the total number of Shares held by such Lead Investor on December 22, 2011, such Lead Investor shall have the right to appoint one Class III director to the Board of Directors of the Company at each annual general meeting at which the term of such Lead Investor’s appointee expires.
|
40.4
|
At any general meeting the Members may authorise the Board to fill any vacancy in their number left unfilled at a general meeting.
|
41.
|
Number of Directors
|
42.
|
Term of Office of Directors
|
42.1
|
The Directors shall be classified with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class (“Class I”) whose initial term expires at the 2014 annual general meeting of the Members will be elected for a three year term, another class (“Class II”) whose initial term expires at the 2015 annual general meeting of the Members will be elected for a three year term, and another class (“Class III”) whose initial term expires at the 2016 annual general meeting of the Members will be elected for a three year term, with each class to hold office until its successors are elected and qualified.
|
42.2
|
At each succeeding annual general meeting, successors to the class of Directors whose term expires at that annual general meeting shall be elected for a three year term. If the number of Directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as possible, and any Director of any class elected to fill a vacancy shall hold office for a term that shall coincide with the remaining term of the other Directors of that class, but in no case shall a decrease in the number of Directors shorten the term of any Director then in office. A Director shall hold office until the annual general meeting for the year in which his term expires, subject to his office being vacated pursuant to Bye-law 45.1.
|
43.
|
Alternate Directors; Board Observers
|
43.1
|
At any general meeting, the Members may elect a person or persons to act as a Director in the alternative to any one or more Directors or may authorise the Board to appoint such Alternate Directors.
|
43.2
|
Unless the Members otherwise resolve, any Director may appoint a person or persons to act as a Director in the alternative to himself by notice deposited with the Secretary. Any person so elected or appointed shall have all the rights and powers of the Director or Directors for whom such person is elected or appointed in the alternative provided that such person shall not be counted more than once in determining whether or not a quorum is present.
|
43.3
|
An Alternate Director shall be entitled to receive notice of all Board meetings and to attend and vote at any such meeting at which a Director for whom such Alternate Director was appointed in the alternative is not personally present and generally to perform at such meeting all the functions of such Director for whom such Alternate Director was appointed.
|
43.4
|
An Alternate Director shall cease to be such if the Director for whom he was appointed to act as a Director in the alternative ceases for any reason to be a Director, but he may be re-appointed by the Board as an alternate to the person appointed to fill the vacancy in accordance with these Bye-laws.
|
43.5
|
The Company shall permit one representative of each of Daniel S. Loeb, Kelso, Pine Brook and P RE Opportunities Ltd. (“PROL”) (but only for so long as Daniel S. Loeb, Kelso, Pine Brook or PROL, as applicable, hold Shares) to attend all meetings of the Board of Directors as observers, and shall provide such person with such notice and other information with respect to such meetings as are delivered to the directors of the Company. Notwithstanding the foregoing, the Company (i) may condition the right of any such person to attend meetings of the Board of Directors and receive notice and other information with respect to such meetings on the execution of a confidentiality agreement reasonably satisfactory to the Company, and (ii) may prevent such person from attending a meeting of the Board of Directors (or portion thereof) or receiving certain information with respect thereto if the Company believes, after consultation with counsel, that it is necessary to do so to ensure preservation of the attorney-client privilege.
|
44.
|
Removal of Directors
|
44.1
|
From the date of the adoption of these Bye-laws until the Effective Date, subject to any provision to the contrary in these Bye-laws, the Members holding a majority of the voting shares of the Company may, at any special general meeting convened and held in accordance with these Bye-laws, by the affirmative vote of all such Members, remove a Director, provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting the Director shall be entitled to be heard on the motion for such Director's removal.
|
44.2
|
From the Effective Date, subject to any provision to the contrary in these Bye-laws, the Members holding a majority of the voting shares of the Company may, at any special general meeting convened and held in accordance with these Bye-laws, by the affirmative vote of all such Members, remove a Director only with cause, provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention so to do and be served on such Director not less than 14 days before the meeting and at such meeting the Director shall be entitled to be heard on the motion for such Director's removal.
|
44.3
|
If a Director is removed from the Board under this Bye-law the Members may fill the vacancy at the meeting at which such Director is removed. In the absence of such election or appointment, the Board may fill the vacancy.
|
44.4
|
For the purposes of this Bye-law, “cause” shall mean a conviction for a criminal offence involving dishonesty or engaging in conduct which brings the Director or the Company into disrepute and which results in material financial detriment to the Company.
|
45.
|
Vacancy in the Office of Director
|
45.1
|
The office of Director shall be vacated if the Director:
|
(a)
|
is removed from office pursuant to these Bye-laws or is prohibited from being a Director by law;
|
(b)
|
is or becomes bankrupt, or makes any arrangement or composition with his creditors generally;
|
(c)
|
is or becomes of unsound mind or dies; or
|
(d)
|
resigns his office by notice to the Company.
|
45.2
|
The Members in general meeting or the Board shall have the power to appoint any person as a Director to fill a vacancy on the Board occurring as a result of the death, disability, disqualification or resignation of any Director or as a result of an increase in the size of the Board and to appoint an Alternate Director to any Director so appointed, provided that in the event the vacancy to be filled is for a Lead Investor’s appointee and such Lead Investor meets the qualifications set forth in Bye-Law 40.3 for its entitlement to appoint a Director, then such Lead Investor shall appoint the Director to fill such vacancy.
|
46.
|
Remuneration of Directors
|
47.
|
Defect in Appointment
|
48.
|
Directors to Manage Business
|
49.
|
Powers of the Board of Directors
|
(a)
|
appoint, suspend, or remove any manager, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties;
|
(b)
|
exercise all the powers of the Company to borrow money and to mortgage or charge or otherwise grant a security interest in its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party;
|
(c)
|
appoint one or more Directors to the office of managing director or chief executive office of the Company, who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company;
|
(d)
|
appoint a person to act as manager of the Company's day-to-day business and may entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business;
|
(e)
|
by power of attorney, appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions so vested in the attorney;
|
(f)
|
procure that the Company pays all expenses incurred in promoting and incorporating the Company;
|
(g)
|
delegate any of its powers (including the power to sub-delegate) to a committee of one or more persons appointed by the Board which may consist partly or entirely of non-Directors, provided that every such committee shall conform to such directions as the Board shall impose on them and provided further that the meetings and proceedings of any such committee shall be governed by the provisions of these Bye-laws regulating the meetings and proceedings of the Board, so far as the same are applicable and are not superseded by directions imposed by the Board;
|
(h)
|
delegate any of its powers (including the power to sub-delegate) to any person on such terms and in such manner as the Board may see fit;
|
(i)
|
present any petition and make any application in connection with the liquidation or reorganisation of the Company;
|
(j)
|
in connection with the issue of any share, pay such commission and brokerage as may be permitted by law; and
|
(k)
|
authorise any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any deed, agreement, document or instrument on behalf of the Company.
|
50.
|
[
Intentionally Omitted
]
|
51.
|
Register of Directors and Officers
|
52.
|
Appointment of Officers
|
53.
|
Appointment of Secretary
|
54.
|
Duties of Officers
|
55.
|
Remuneration of Officers
|
56.
|
Conflicts of Interest
|
56.1
|
Any Director, or any Director's firm, partner or any company with whom any Director is associated, may act in any capacity for, be employed by or render services to the Company on such terms, including with respect to remuneration, as may be agreed between the parties. Nothing herein contained shall authorise a Director or Director's firm, partner or company to act as Auditor to the Company.
|
56.2
|
A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall declare the nature of such interest as required by the Act and such Director shall be required to recuse himself from any board meeting at which such contract or arrangement is to be considered.
|
56.3
|
Following a declaration being made pursuant to this Bye-law, a Director shall not vote in respect of any contract or proposed contract or arrangement in which such Director is interested, shall not be counted in the quorum for such meeting and shall be required to recuse himself from any discussion, provided that such restrictions shall not apply to the investment management agreement, dated December 22, 2011, by and between the Company, TP Re or any of their respective affiliates (including, without limitation, the Joint Venture and Investment Management Agreement but except as expressly set forth in such Joint Venture and Investment Management Agreement), and the Sponsor, or any of its affiliates, or any amendment, modifications or waivers thereof or any successor agreement thereto. For the avoidance of doubt, no Director shall be considered "interested" with respect to any transactions in which all the Members participate or are offered to participate.
|
57.
|
Indemnification and Exculpation of Directors and Officers
|
57.1
|
The Directors, Resident Representative, Secretary and other Officers (such term to include any person appointed to any committee by the Board) for the time being acting in relation to any of the affairs of the Company or any Subsidiary thereof and the liquidator or trustees (if any) for the time being acting in relation to any of the affairs of the Company or any Subsidiary thereof and every one of them, and their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, or in their respective offices or trusts, and none of them shall be answerable for the acts, receipts, neglects or defaults of the others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto, PROVIDED THAT this indemnity shall not extend to any matter in respect of any fraud, gross negligence or wilful misconduct which may attach to any of the said persons. Each Member agrees to waive any claim or right of action such Member might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or the failure of such Director or Officer to take any action in the performance of his duties with or for the Company or any Subsidiary thereof, PROVIDED THAT such waiver shall not extend to any matter in respect of any fraud, gross negligence or wilful misconduct which may attach to such Director or Officer.
|
57.2
|
The Company may purchase and maintain insurance for the benefit of any Director or Officer against any liability incurred by him under the Act in his capacity as a Director or Officer or indemnifying such Director or Officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Director or Officer may be guilty in relation to the Company or any Subsidiary thereof.
|
57.3
|
The Company may advance moneys to a Director or Officer for the costs, charges and expenses incurred by the Director or Officer in defending any civil or criminal proceedings against him, on condition that the Director or Officer shall repay the advance if any allegation of fraud or dishonesty is proved against him.
|
58.
|
Board Meetings
|
59.
|
Notice of Board Meetings
|
60.
|
Electronic Participation in Meetings
|
61.
|
Quorum at Board Meetings
|
62.
|
Board to Continue in the Event of Vacancy
|
63.
|
Chairman to Preside
|
64.
|
Written Resolutions
|
65.
|
Validity of Prior Acts of the Board
|
66.
|
Minutes
|
(a)
|
of all elections and appointments of Officers;
|
(b)
|
of the names of the Directors present at each Board meeting and of any committee appointed by the Board; and
|
(c)
|
of all resolutions and proceedings of general meetings of the Members, Board meetings, meetings of managers and meetings of committees appointed by the Board.
|
67.
|
Place Where Corporate Records Kept
|
68.
|
Form and Use of Seal
|
68.1
|
The Company may adopt a seal in such form as the Board may determine. The Board may adopt one or more duplicate seals for use in or outside Bermuda.
|
68.2
|
A seal may, but need not, be affixed to any deed, instrument or document, and if the seal is to be affixed thereto, it shall be attested by the signature of (i) any Director, or (ii) any Officer, or (iii) the Secretary, or (iv) any person authorised by the Board for that purpose.
|
68.3
|
A Resident Representative may, but need not, affix the seal of the Company to certify the authenticity of any copies of documents.
|
69.
|
Records of Account
|
69.1
|
The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to:
|
(a)
|
all amounts of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;
|
(b)
|
all sales and purchases of goods by the Company; and
|
(c)
|
all assets and liabilities of the Company.
|
69.2
|
Such records of account shall be kept at the registered office of the Company, or subject to the Act, at such other place as the Board thinks fit and shall be available for inspection by the Directors during normal business hours.
|
69.3
|
Such records of account shall be retained for a minimum period of five years from the date on which they are prepared.
|
70.
|
Financial Year End
|
71.
|
Annual Audit
|
72.
|
Appointment of Auditor
|
72.1
|
Subject to the Act, at the annual general meeting or at a subsequent special general meeting in each year, an independent representative of the Members shall be appointed by them as Auditor of the accounts of the Company.
|
72.2
|
The Auditor may be a Member but no Director, Officer or employee of the Company shall, during his continuance in office, be eligible to act as an Auditor of the Company.
|
73.
|
Remuneration of Auditor
|
73.1
|
The remuneration of an Auditor appointed by the Members shall be fixed by the Company in general meeting or in such manner as the Members may determine.
|
73.2
|
The remuneration of an Auditor appointed by the Board to fill a casual vacancy in accordance with these Bye-laws shall be fixed by the Board.
|
74.
|
Duties of Auditor
|
74.1
|
The financial statements provided for by these Bye-laws shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards.
|
74.2
|
The generally accepted auditing standards referred to in this Bye-law may be those of a country or jurisdiction other than Bermuda or such other generally accepted auditing standards as may be provided for in the Act. If so, the financial statements and the report of the Auditor shall identify the generally accepted auditing standards used.
|
75.
|
Access to Records
|
76.
|
Financial Statements
|
76.1
|
Subject to any rights to waive laying of accounts pursuant to the Act, financial statements, as required by the Act, shall be laid before the Members in a general meeting annually. A resolution in writing made in accordance with Bye-law 37 receiving, accepting, adopting, approving or otherwise acknowledging financial statements shall be deemed to be the laying of such statements before the Members in general meeting.
|
77.
|
Distribution of Auditor’s Report
|
78.
|
Vacancy in the Office of Auditor
|
79.
|
Business Combinations
|
79.1
|
Any Business Combination with any Interested Shareholder within a period of three years following the time of the transaction in which the person became an Interested Shareholder must be approved by the Board and authorised at an annual or special general meeting, by the affirmative vote of at least 66.67% of the issued and outstanding voting shares of the Company that are not owned by the Interested Shareholder, unless:
|
(a)
|
prior to the time that the person became an Interested Shareholder, the Board approved either the Business Combination or the transaction which resulted in the person becoming an Interested Shareholder; or
|
(b)
|
upon consummation of the transaction which resulted in the person becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the number of issued and outstanding voting shares of the Company at the time the transaction commenced, excluding for the purposes of determining the number of shares issued and outstanding those shares owned (i) by persons who are directors and also officers and (ii) employee share plans in which employee participants do not have the right to determine whether shares held subject to the plan will be tendered in a tender or exchange offer.
|
79.2
|
The restrictions contained in this Bye-law 79 shall not apply if:
|
(a)
|
a Member becomes an Interested Shareholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the Member ceases to be an Interested Shareholder; and (ii) would not, at any time within the three-year period immediately prior to a Business Combination between the Company and such Member, have been an Interested Shareholder but for the inadvertent acquisition of ownership; or
|
(b)
|
the Business Combination is proposed prior to the consummation
or abandonment of, and subsequent to the earlier of the public announcement or the notice required hereunder of, a proposed transaction which (i) constitutes one of the transactions described in the following sentence; (ii) is with or by a person who either was not an Interested Shareholder during the previous three years or who became an Interested Shareholder with the approval of the Board; and (iii) is approved or not opposed by a majority of the members of the Board then in office who were Directors prior to any person becoming an Interested Shareholder during the previous three years or were recommended for election or elected to succeed such Directors by resolution of the Board approved by a majority of such Directors. The proposed transactions referred to in the preceding sentence are limited to:
|
(i)
|
a merger, amalgamation or consolidation of the Company (except an amalgamation in respect of which, pursuant to the Act, no vote of the shareholders of the Company is required);
|
(ii)
|
a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Company or of any entity directly or indirectly wholly-owned or majority-owned by the Company (other than to the Company or any entity directly or indirectly wholly-owned by the Company) having an aggregate market value equal to 50% or more of either the aggregate market value of all of the assets of the Company determined on a consolidated basis or the aggregate market value of all the issued and outstanding shares of the Company; or
|
(iii)
|
a proposed tender or exchange offer for 50% or more of the issued and outstanding voting shares of the Company.
|
(c)
|
For the purposes of this Bye-law 79.2 only, the term:
|
(i)
|
"affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another person;
|
(ii)
|
“associate," when used to indicate a relationship with any person, means: (i) any company, partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting shares; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who has the same residence as such person;
|
(iii)
|
"Business Combination," when used in reference to the Company and any Interested Shareholder of the Company, means:
|
(a)
|
any merger, amalgamation or consolidation of the Company or any entity directly or indirectly wholly-owned or majority-owned by the Company, wherever incorporated, with (A) the Interested Shareholder or any of its affiliates, or (B) with any other company, partnership, unincorporated association or other entity if the merger, amalgamation or consolidation is caused by the Interested Shareholder;
|
(b)
|
any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a shareholder of the Company, to or with the Interested Shareholder, whether as part of a dissolution or otherwise, of assets of the Company or of any entity directly or indirectly wholly-owned or majority-owned by the Company which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Company determined on a consolidated basis or the aggregate market value of all the issued and outstanding shares of the Company;
|
(c)
|
any transaction which results in the issuance or transfer by the Company or by any entity directly or indirectly wholly-owned or majority-owned by the Company of any shares of the Company, or any share of such entity, to the Interested Shareholder, except: (A) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares of the Company, or shares of any such entity, which securities were issued and outstanding prior to the time that the Interested Shareholder became such; (B) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares of the Company, or shares of any such entity, which security is distributed, pro rata to all holders of a class or series of shares subsequent to the time the Interested Shareholder became such; (C) pursuant to an exchange offer by the Company to purchase shares made on the same terms to all holders of such shares; or (D) any issuance or transfer of shares by the Company; provided however, that in no case under items (B)-(D) of this subparagraph shall there be an increase in the Interested Shareholder's proportionate share of the any class or series of shares;
|
(d)
|
any transaction involving the Company or any entity directly or indirectly wholly-owned or majority-owned by the Company which has the effect, directly or indirectly, of increasing the proportionate share of any class or series of shares, or securities convertible into any class or series of shares of the Company, or shares of any such entity, or securities convertible into such shares, which is owned by the Interested Shareholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any repurchase or redemption of any shares not caused, directly or indirectly, by the Interested Shareholder; or
|
(e)
|
any receipt by the Interested Shareholder of the benefit, directly or indirectly (except proportionately as a shareholder of the Company), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted in subparagraphs (a)-(d) of this paragraph) provided by or through the Company or any entity directly or indirectly wholly-owned or majority-owned by the Company;
|
(iv)
|
“control”, including the terms "controlling," "controlled by" and "under common control with," means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract or otherwise. A person who is the owner of 20% or more of the issued and outstanding voting shares of any company, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary; provided that notwithstanding the foregoing, such presumption of control shall not apply where such person holds voting shares, in good faith and not for the purpose of circumventing this provision, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity;
|
(v)
|
"Interested Shareholder" means any person (other than the Company and any entity directly or indirectly wholly-owned or majority-owned by the Company) that (i) is the owner of 15% or more of the issued and outstanding voting shares of the Company, (ii) is an affiliate or associate of the Company and was the owner of 15% or more of the issued and outstanding voting shares of the Company at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Shareholder or (iii) is an affiliate or associate of any person listed in (i) or (ii) above; provided, however, that the term "Interested Shareholder" shall not include any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by the Company unless such person referred to in this proviso acquires additional voting shares of the Company otherwise than as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an Interested Shareholder, the voting shares of the Company deemed to be issued and outstanding shall include voting shares deemed to be owned by the person through application of paragraph (viii) below, but shall not include any other unissued shares which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise;
|
(vi)
|
"person" means any individual, company, partnership, unincorporated association or other entity;
|
(vii)
|
"voting shares" means, with respect to any company, shares of any class or series entitled to vote generally in the election of directors and, with respect to any entity that is not a company, any equity interest entitled to vote generally in the election of the governing body of such entity;
|
(viii)
|
"owner," including the terms "own" and "owned," when used with respect to any shares, means a person that individually or with or through any of its affiliates or associates:
|
(a)
|
beneficially owns such shares, directly or indirectly; or
|
(b)
|
has (A) the right to acquire such shares (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of shares tendered pursuant to a tender or exchange offer made by such person or any of such person's affiliates or associates until such tendered shares are accepted for purchase or exchange; or (B) the right to vote such shares pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any shares because of such person's right to vote such shares if the agreement, arrangement or understanding to vote such shares arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more persons; or
|
(c)
|
has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in item (B) of subparagraph (b) of this paragraph), or disposing of such shares with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such shares.
|
79.3
|
In respect of any Business Combination to which the restrictions contained in Bye-law 79.1 do not apply but which the Act requires to be approved by the Members, the necessary general meeting quorum and Members’ approval shall be as set out in Bye-laws 30 and 32 respectively.
|
79.4
|
The Board shall ensure that the bye-laws or other constitutional documents of each entity wholly-owned or majority-owned by the Company shall contain any provisions necessary to ensure that the intent of Bye-law 79.1, as it relates to the actions of such entities, is achieved.
|
80.
|
Winding-Up
|
81.
|
Changes to Bye-laws
|
81.1
|
No Bye-law may be rescinded, altered or amended and no new Bye-law may be made save in accordance with the Act and until the same has been approved by a resolution of the Board and by a resolution of the Members. In addition, no amendment to these Bye-laws which would have a material adverse effect on the rights of Kelso, Pine Brook or Daniel S. Loeb may be made without such party’s consent but only for so long as such party holds a number of Shares equal to at least 25% of the total number of Shares held by such party on December 22, 2011.
|
81.2
|
Bye-laws 32, 40, 42.1, 44 and 81 may not be rescinded, altered or amended and no new Bye-law may be made which would have the effect of rescinding, altering or amending the provisions of such Bye-laws, until the same has been approved by a resolution of the Board including the affirmative vote of not less than 66.67% of the Directors then in office and by a resolution of the Members including the affirmative vote of not less than 66.67% of the votes attaching to all shares in issue.
|
82.
|
Changes to the Memorandum of Association
|
83.
|
Discontinuance
|
1.
|
Section 3(a), Base Salary, of the Employment Agreement shall be amended to read as follows:
|
1.
|
Section 6, Termination Payments, sub-section (c) Termination without Cause or for Good Reason, shall be amended to read in its entirety as follows:
|
2.
|
Section 7,
Executive Covenants, (g) Certain Definitions, sub-section (i) shall be amended to read in its entirety as follows:
|
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
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5.
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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):
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(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
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(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.
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/s/ Christopher S. Coleman
|
|
Christopher S. Coleman
|
|
Chief Financial Officer
|
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(Principal Financial and Accounting Officer)
|
|
(1)
|
the
Quarterly Report on Form 10-Q
of the Company for the fiscal
period
ended
June 30, 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
June 30, 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)
|
|