x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended March 31, 2019
|
|
¨
|
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
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Investment in related party investment fund, at fair value (cost - $1,609,850; 2018 - $1,564,850)
|
$
|
1,475,995
|
|
|
$
|
1,284,004
|
|
Debt securities, trading, at fair value (cost - $252,084; 2018 - $252,362)
|
241,059
|
|
|
239,640
|
|
||
Other investments, at fair value
|
3,087
|
|
|
84
|
|
||
Total investments
|
1,720,141
|
|
|
1,523,728
|
|
||
Cash and cash equivalents
|
54,319
|
|
|
104,183
|
|
||
Restricted cash and cash equivalents
|
616,844
|
|
|
609,154
|
|
||
Subscription receivable from related party investment fund
|
15,000
|
|
|
—
|
|
||
Due from brokers
|
637
|
|
|
1,411
|
|
||
Interest and dividends receivable
|
1,891
|
|
|
1,316
|
|
||
Reinsurance balances receivable
|
758,816
|
|
|
602,448
|
|
||
Deferred acquisition costs, net
|
233,108
|
|
|
203,842
|
|
||
Unearned premiums ceded
|
16,139
|
|
|
17,552
|
|
||
Loss and loss adjustment expenses recoverable
|
2,751
|
|
|
2,031
|
|
||
Other assets
|
20,488
|
|
|
20,569
|
|
||
Total assets
|
$
|
3,440,134
|
|
|
$
|
3,086,234
|
|
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
9,225
|
|
|
$
|
7,261
|
|
Reinsurance balances payable
|
76,766
|
|
|
69,701
|
|
||
Deposit liabilities
|
144,782
|
|
|
145,342
|
|
||
Unearned premium reserves
|
767,352
|
|
|
602,936
|
|
||
Loss and loss adjustment expense reserves
|
986,639
|
|
|
937,157
|
|
||
Participation agreement with related party investment fund
|
1,521
|
|
|
2,297
|
|
||
Interest and dividends payable
|
1,015
|
|
|
3,055
|
|
||
Senior notes payable, net of deferred costs
|
113,955
|
|
|
113,911
|
|
||
Total liabilities
|
2,101,255
|
|
|
1,881,660
|
|
||
Commitments and contingent liabilities
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Preference shares (par value $0.10; authorized, 30,000,000; none issued)
|
—
|
|
|
—
|
|
||
Common shares (issued and outstanding: 94,292,914; 2018 - 93,639,610)
|
9,429
|
|
|
9,364
|
|
||
Additional paid-in capital
|
920,207
|
|
|
918,882
|
|
||
Retained earnings
|
409,243
|
|
|
276,328
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,338,879
|
|
|
1,204,574
|
|
||
Total liabilities and shareholders’ equity
|
$
|
3,440,134
|
|
|
$
|
3,086,234
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
2019
|
|
2018
|
||||
Revenues
|
|
|
|
||||
Gross premiums written
|
$
|
319,591
|
|
|
$
|
378,360
|
|
Gross premiums ceded
|
(712
|
)
|
|
(14,646
|
)
|
||
Net premiums written
|
318,879
|
|
|
363,714
|
|
||
Change in net unearned premium reserves
|
(165,829
|
)
|
|
(221,228
|
)
|
||
Net premiums earned
|
153,050
|
|
|
142,486
|
|
||
Net investment income from investment in related party investment fund
|
146,991
|
|
|
—
|
|
||
Net investment income before management and performance fees to related parties
|
7,962
|
|
|
7,839
|
|
||
Management and performance fees to related parties (1)
|
—
|
|
|
(10,047
|
)
|
||
Net investment income (loss)
|
154,953
|
|
|
(2,208
|
)
|
||
Total revenues
|
308,003
|
|
|
140,278
|
|
||
Expenses
|
|
|
|
||||
Loss and loss adjustment expenses incurred, net
|
95,068
|
|
|
92,620
|
|
||
Acquisition costs, net
|
57,498
|
|
|
51,405
|
|
||
General and administrative expenses
|
12,132
|
|
|
9,481
|
|
||
Other expenses
|
4,125
|
|
|
3,995
|
|
||
Interest expense
|
2,029
|
|
|
2,029
|
|
||
Foreign exchange losses
|
2,518
|
|
|
6,611
|
|
||
Total expenses
|
173,370
|
|
|
166,141
|
|
||
Income (loss) before income tax expense
|
134,633
|
|
|
(25,863
|
)
|
||
Income tax expense
|
(1,718
|
)
|
|
(128
|
)
|
||
Net income (loss)
|
132,915
|
|
|
(25,991
|
)
|
||
Net income attributable to noncontrolling interests in related party
|
—
|
|
|
(10
|
)
|
||
Net income (loss) available to Third Point Re common shareholders
|
$
|
132,915
|
|
|
$
|
(26,001
|
)
|
Earnings (loss) per share available to Third Point Re common shareholders
|
|
|
|
||||
Basic earnings (loss) per share available to Third Point Re common shareholders
|
$
|
1.45
|
|
|
$
|
(0.26
|
)
|
Diluted earnings (loss) per share available to Third Point Re common shareholders
|
$
|
1.43
|
|
|
$
|
(0.26
|
)
|
Weighted average number of common shares used in the determination of earnings (loss) per share
|
|
|
|
||||
Basic
|
91,669,810
|
|
|
101,195,747
|
|
||
Diluted
|
92,578,933
|
|
|
101,195,747
|
|
||
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
2019
|
|
2018
|
||||
Common shares
|
|
|
|
||||
Balance, beginning of period
|
$
|
9,364
|
|
|
$
|
10,723
|
|
Issuance of common shares, net
|
65
|
|
|
59
|
|
||
Common shares repurchased and retired
|
—
|
|
|
(558
|
)
|
||
Balance, end of period
|
9,429
|
|
|
10,224
|
|
||
Treasury shares
|
|
|
|
||||
Balance, beginning of period
|
—
|
|
|
(48,253
|
)
|
||
Retirement of treasury shares
|
—
|
|
|
48,253
|
|
||
Balance, end of period
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
|
|
||||
Balance, beginning of period
|
918,882
|
|
|
1,099,599
|
|
||
Issuance of common shares, net
|
(133
|
)
|
|
(133
|
)
|
||
Share compensation expense
|
1,458
|
|
|
1,245
|
|
||
Common shares repurchased and retired
|
—
|
|
|
(71,532
|
)
|
||
Balance, end of period
|
920,207
|
|
|
1,029,179
|
|
||
Retained earnings
|
|
|
|
||||
Balance, beginning of period
|
276,328
|
|
|
594,020
|
|
||
Net income (loss)
|
132,915
|
|
|
(25,991
|
)
|
||
Net income attributable to noncontrolling interests in related party
|
—
|
|
|
(10
|
)
|
||
Balance, end of period
|
409,243
|
|
|
568,019
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,338,879
|
|
|
1,607,422
|
|
||
Noncontrolling interests in related party
|
—
|
|
|
5,089
|
|
||
Total shareholders' equity
|
$
|
1,338,879
|
|
|
$
|
1,612,511
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
132,915
|
|
|
$
|
(25,991
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Share compensation expense
|
1,458
|
|
|
1,245
|
|
||
Net interest expense on deposit liabilities
|
1,500
|
|
|
1,261
|
|
||
Net realized and unrealized gain on investments and derivatives
|
(1,692
|
)
|
|
(2,830
|
)
|
||
Net realized and unrealized gain on investment in related party investment fund
|
(146,991
|
)
|
|
—
|
|
||
Net foreign exchange losses
|
2,518
|
|
|
6,611
|
|
||
Amortization of premium and accretion of discount, net
|
322
|
|
|
2,622
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Reinsurance balances receivable
|
(154,205
|
)
|
|
(208,414
|
)
|
||
Deferred acquisition costs, net
|
(29,266
|
)
|
|
(50,110
|
)
|
||
Unearned premiums ceded
|
1,413
|
|
|
(14,012
|
)
|
||
Loss and loss adjustment expenses recoverable
|
(720
|
)
|
|
(219
|
)
|
||
Other assets
|
415
|
|
|
(559
|
)
|
||
Interest and dividends receivable, net
|
(2,615
|
)
|
|
(1,619
|
)
|
||
Unearned premium reserves
|
164,416
|
|
|
235,240
|
|
||
Loss and loss adjustment expense reserves
|
44,838
|
|
|
34,392
|
|
||
Accounts payable and accrued expenses
|
1,964
|
|
|
(23,382
|
)
|
||
Reinsurance balances payable
|
6,720
|
|
|
9,025
|
|
||
Performance fee payable to related party
|
—
|
|
|
20
|
|
||
Net cash provided by (used in) operating activities
|
22,990
|
|
|
(36,720
|
)
|
||
Investing activities
|
|
|
|
||||
Proceeds from redemptions from related party investment fund
|
10,000
|
|
|
—
|
|
||
Contributions to related party investment fund, including subscription receivable
|
(70,000
|
)
|
|
—
|
|
||
Change in participation agreement with related party investment fund
|
(776
|
)
|
|
—
|
|
||
Purchases of investments
|
(3,000
|
)
|
|
(1,032,890
|
)
|
||
Proceeds from sales and maturities of investments
|
—
|
|
|
1,221,157
|
|
||
Purchases of investments to cover short sales
|
—
|
|
|
(300,467
|
)
|
||
Proceeds from short sales of investments
|
—
|
|
|
277,174
|
|
||
Change in due to/from brokers, net
|
774
|
|
|
8,818
|
|
||
Decrease in securities sold under an agreement to repurchase
|
—
|
|
|
(10,551
|
)
|
||
Net cash provided by (used in) investing activities
|
(63,002
|
)
|
|
163,241
|
|
||
Financing activities
|
|
|
|
||||
Taxes paid on withholding shares
|
(68
|
)
|
|
(74
|
)
|
||
Purchases of Third Point Re common shares under share repurchase program
|
—
|
|
|
(23,837
|
)
|
||
Decrease in deposit liabilities, net
|
(2,094
|
)
|
|
(614
|
)
|
||
Change in total noncontrolling interests in related party, net
|
—
|
|
|
(101,746
|
)
|
||
Net cash used in financing activities
|
(2,162
|
)
|
|
(126,271
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(42,174
|
)
|
|
250
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
713,337
|
|
|
549,333
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
671,163
|
|
|
$
|
549,583
|
|
Supplementary information
|
|
|
|
||||
Interest paid in cash
|
$
|
4,025
|
|
|
$
|
8,523
|
|
Income taxes paid in cash
|
$
|
—
|
|
|
$
|
1,226
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Cash and cash equivalents
|
$
|
54,319
|
|
|
$
|
104,183
|
|
Restricted cash securing letter of credit facilities (1)
|
208,480
|
|
|
203,953
|
|
||
Restricted cash securing reinsurance contracts (2)
|
408,364
|
|
|
405,201
|
|
||
Total cash, cash equivalents and restricted cash (3)
|
671,163
|
|
|
713,337
|
|
||
Restricted investments securing reinsurance contracts (2)
|
241,059
|
|
|
239,640
|
|
||
Total cash, cash equivalents, restricted cash and restricted investments
|
$
|
912,222
|
|
|
$
|
952,977
|
|
(1)
|
Restricted cash securing letter of credit facilities primarily pertains to letters of credit that have been issued to the Company’s clients in support of our obligations under reinsurance contracts. The Company will not be released from the obligation to provide these letters of credit until the reserves underlying the reinsurance contracts have been settled. The time period for which the Company expects each letter of credit to be in place varies from contract to contract but can last several years.
|
(2)
|
Restricted cash and restricted investments securing 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 the underlying risks have expired or have been settled. Restricted investments include certain investments in debt securities including U.S. Treasury securities and sovereign debt. The time period for which the Company expects these trust accounts to be in place varies from contract to contract, but can last several years.
|
(3)
|
Cash, cash equivalents and restricted cash as reported in the Company’s condensed consolidated statements of cash flows.
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Total investments, including investment in related party investment fund
|
$
|
1,717,054
|
|
|
$
|
1,523,644
|
|
Cash and cash equivalents
|
3,647
|
|
|
1,017
|
|
||
Restricted cash and cash equivalents
|
616,844
|
|
|
609,154
|
|
||
Due from brokers
|
637
|
|
|
1,411
|
|
||
Interest and dividends receivable
|
1,891
|
|
|
1,316
|
|
||
Total assets
|
2,340,073
|
|
|
2,136,542
|
|
||
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
188
|
|
|
114
|
|
||
Participation agreement with related party investment fund
|
1,521
|
|
|
2,297
|
|
||
Total liabilities
|
1,709
|
|
|
2,411
|
|
||
Total net investments managed by Third Point LLC
|
$
|
2,338,364
|
|
|
$
|
2,134,131
|
|
•
|
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.
|
|
March 31, 2019
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Private preferred equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
$
|
3,000
|
|
Total equities
|
—
|
|
|
—
|
|
|
3,000
|
|
|
3,000
|
|
||||
U.S. Treasury securities
|
—
|
|
|
198,158
|
|
|
—
|
|
|
198,158
|
|
||||
Sovereign debt
|
—
|
|
|
42,901
|
|
|
—
|
|
|
42,901
|
|
||||
Total debt securities
|
—
|
|
|
241,059
|
|
|
—
|
|
|
241,059
|
|
||||
|
$
|
—
|
|
|
$
|
241,059
|
|
|
$
|
3,000
|
|
|
244,059
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
1,476,082
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
1,720,141
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities (embedded)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
32
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
32
|
|
|
December 31, 2018
|
||||||||||||||
|
Quoted prices in active markets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Total
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
—
|
|
|
$
|
197,312
|
|
|
$
|
—
|
|
|
$
|
197,312
|
|
Sovereign debt
|
—
|
|
|
42,328
|
|
|
—
|
|
|
42,328
|
|
||||
Total debt securities
|
$
|
—
|
|
|
$
|
239,640
|
|
|
$
|
—
|
|
|
239,640
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
1,284,088
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
1,523,728
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities (embedded)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
22
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
January 1,
2019 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses)
(1)
|
|
March 31,
2019 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private preferred equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
Total assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (embedded)
|
$
|
(22
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
(32
|
)
|
Total liabilities
|
$
|
(22
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
(32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 1,
2018 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses)
(1)
|
|
March 31,
2018 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,794
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(442
|
)
|
|
$
|
4,352
|
|
Private preferred equity securities
|
57,126
|
|
|
—
|
|
|
161
|
|
|
(15
|
)
|
|
(2,041
|
)
|
|
55,231
|
|
||||||
Asset-backed securities
|
27,308
|
|
|
1,839
|
|
|
12,197
|
|
|
(12,446
|
)
|
|
(1,642
|
)
|
|
27,256
|
|
||||||
Corporate bonds
|
9,868
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
193
|
|
|
10,081
|
|
||||||
Other debt securities
|
713
|
|
|
—
|
|
|
—
|
|
|
(892
|
)
|
|
179
|
|
|
—
|
|
||||||
Rights and warrants
|
435
|
|
|
—
|
|
|
582
|
|
|
(204
|
)
|
|
6
|
|
|
819
|
|
||||||
Real estate
|
6,831
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
|
259
|
|
|
6,937
|
|
||||||
Total assets
|
$
|
107,075
|
|
|
$
|
1,839
|
|
|
$
|
12,960
|
|
|
$
|
(13,710
|
)
|
|
$
|
(3,488
|
)
|
|
$
|
104,676
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(2,085
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89
|
|
|
$
|
(1,996
|
)
|
Derivative liabilities (embedded)
|
(171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
(124
|
)
|
||||||
Total liabilities
|
$
|
(2,256
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136
|
|
|
$
|
(2,120
|
)
|
(1)
|
Total change in realized and unrealized gains (losses) recorded on Level 3 financial instruments is included in
net investment income (loss)
in the
condensed consolidated statements of income (loss)
. Realized and unrealized gains (losses) related to embedded derivatives are included in other expenses in the
condensed consolidated statements of income (loss)
.
|
|
2019
|
|
2018
|
||||||||||||
Free standing Derivatives - Primary Underlying Risk
|
Realized Gain (Loss)
|
|
Unrealized Gain (Loss)
|
|
Realized Gain (Loss)
|
|
Unrealized Gain (Loss)
|
||||||||
Credit
|
|
|
|
|
|
|
|
||||||||
Credit Default Swaps - Protection Purchased
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,248
|
)
|
|
$
|
559
|
|
Credit Default Swaps - Protection Sold
|
—
|
|
|
—
|
|
|
848
|
|
|
(761
|
)
|
||||
Total Return Swaps - Long Contracts
|
—
|
|
|
—
|
|
|
442
|
|
|
805
|
|
||||
Equity Price
|
|
|
|
|
|
|
|
||||||||
Contracts for Differences - Long Contracts
|
—
|
|
|
—
|
|
|
14,200
|
|
|
(8,578
|
)
|
||||
Contracts for Differences - Short Contracts
|
—
|
|
|
—
|
|
|
4,060
|
|
|
(81
|
)
|
||||
Total Return Swaps - Long Contracts
|
—
|
|
|
—
|
|
|
19,191
|
|
|
(15,077
|
)
|
||||
Total Return Swaps - Short Contracts
|
—
|
|
|
—
|
|
|
(6,856
|
)
|
|
1,765
|
|
||||
Interest Rates
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaptions
|
—
|
|
|
—
|
|
|
—
|
|
|
(221
|
)
|
||||
Sovereign Futures - Short Contracts
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(24
|
)
|
||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Forward Contracts
|
—
|
|
|
—
|
|
|
(13,816
|
)
|
|
2,665
|
|
||||
Foreign Currency Options - Purchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(576
|
)
|
||||
Foreign Currency Options - Sold
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,820
|
|
|
$
|
(19,441
|
)
|
Embedded Derivatives
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives in reinsurance contracts
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
47
|
|
Total Derivative Liabilities (embedded)
|
$
|
—
|
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
47
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Case loss and loss adjustment expense reserves
|
$
|
127,827
|
|
|
$
|
125,456
|
|
Incurred but not reported loss and loss adjustment expense reserves
|
858,107
|
|
|
811,280
|
|
||
Deferred gains on retroactive reinsurance contracts
|
705
|
|
|
421
|
|
||
|
$
|
986,639
|
|
|
$
|
937,157
|
|
|
2019
|
|
2018
|
||||
Gross reserves for loss and loss adjustment expenses, beginning of period
|
$
|
937,157
|
|
|
$
|
720,570
|
|
Less: loss and loss adjustment expenses recoverable, beginning of period
|
(2,031
|
)
|
|
(1,113
|
)
|
||
Less: deferred charges on retroactive reinsurance contracts
|
(3,847
|
)
|
|
—
|
|
||
Net reserves for loss and loss adjustment expenses, beginning of period
|
931,279
|
|
|
719,457
|
|
||
Increase (decrease) in net loss and loss adjustment expenses incurred in respect of losses occurring in:
|
|
|
|
||||
Current year
|
97,794
|
|
|
75,759
|
|
||
Prior years
|
(2,726
|
)
|
|
16,861
|
|
||
Total incurred loss and loss adjustment expenses
|
95,068
|
|
|
92,620
|
|
||
Net loss and loss adjustment expenses paid in respect of losses occurring in:
|
|
|
|
||||
Current year
|
(13,047
|
)
|
|
(11,988
|
)
|
||
Prior years
|
(37,578
|
)
|
|
(46,459
|
)
|
||
Total net paid losses
|
(50,625
|
)
|
|
(58,447
|
)
|
||
Foreign currency translation
|
4,644
|
|
|
6,669
|
|
||
Net reserves for loss and loss adjustment expenses, end of period
|
980,366
|
|
|
760,299
|
|
||
Plus: loss and loss adjustment expenses recoverable, end of period
|
2,751
|
|
|
1,332
|
|
||
Plus: deferred charges on retroactive reinsurance contracts
|
3,522
|
|
|
—
|
|
||
Gross reserves for loss and loss adjustment expenses, end of period
|
$
|
986,639
|
|
|
$
|
761,631
|
|
•
|
The
$4.0 million
of net
favorable
prior years’ reserve development for the
three
months ended
March 31, 2019
was accompanied by net
increase
s of
$3.7 million
in acquisition costs, resulting in a
$0.3 million
improvement in the net underwriting results
, primarily due to:
|
•
|
$7.7 million
of net favorable underwriting loss development relating to workers’ compensation contracts. The favorable development was the result of better than expected loss experience and was partially offset by;
|
•
|
$7.1 million
of net adverse underwriting loss development primarily relating to our general liability and multi-line contracts, as a result of worse than expected loss experience.
|
•
|
The
$1.3 million
net
increase
in loss and loss adjustment expenses incurred resulting from
increase
s in premium earnings estimates was accompanied by a
$1.0 million
increase
in acquisition costs, for a total of
$2.3 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
$2.2 million
. The
increase
in prior period earned premium was the result of changes in ultimate premium and
|
•
|
In total, the change in net underwriting loss for prior periods due to loss reserve development and adjustments to premium earnings estimates resulted in a
$0.2 million
improvement in the net underwriting results
for the
three
months ended
March 31, 2019
.
|
•
|
The
$0.6 million
of net favorable prior years’ reserve development for the
three
months ended
March 31, 2018
was accompanied by net increases of
$0.1 million
in acquisition costs, resulting in a
$0.5 million
improvement in the net underwriting results, primarily due to:
|
•
|
$2.4 million
of net favorable underwriting loss development relating to several workers’ compensation contracts written from 2012 to 2014, driven by better than expected loss experience;
|
•
|
$2.1 million
of net favorable underwriting loss development from several other contracts, including amortization of deferred gains, as a result of better than expected loss experience; partially offset by
|
•
|
$4.0 million
of net adverse underwriting loss development relating to our Florida homeowners’ reinsurance contracts. This development is a result of higher than anticipated water damage claims and an increase in the practice of assignment of benefits whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters. This practice has led to increases in the frequency of claims reported as well as the severity of losses and loss adjustment expenses.
|
•
|
The
$17.5 million
net increase in loss and loss adjustment expenses incurred resulting from increases in premium earnings estimates was accompanied by a
$5.1 million
increase in acquisition costs, for a total of
$22.6 million
increase in loss and loss adjustment expenses incurred and acquisition costs. The increase in loss and loss adjustment expenses incurred and acquisition costs was due to an increase in prior period earned premium of
$22.9 million
. The increase in prior period earned premium was the result of changes in ultimate premium and earning pattern estimates. The net impact was a
$0.3 million
improvement in the net underwriting results for the three months ended
March 31, 2018
.
|
•
|
In total, the change in net underwriting loss for prior periods due to loss reserve development and adjustments to premium earnings estimates resulted in a
$0.8 million
improvement in the net underwriting results for the three months ended
March 31, 2018
.
|
|
2019
|
|
2018
|
||||
Management fees - Third Point LLC
|
$
|
—
|
|
|
$
|
9,775
|
|
Performance fees - Third Point Advisors LLC
|
—
|
|
|
272
|
|
||
Management and performance fees to related parties as reported in the Company’s condensed consolidated statement of income (loss)
|
—
|
|
|
10,047
|
|
||
Management and performance fees included in net investment income from investment in related party investment fund (before loss carryforward)
|
34,241
|
|
|
—
|
|
||
Performance fees - Loss carryforward
|
(29,398
|
)
|
|
—
|
|
||
Total management and performance fees to related parties
|
$
|
4,843
|
|
|
$
|
10,047
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Balance, beginning of period
|
$
|
145,342
|
|
|
$
|
129,133
|
|
Consideration received
|
571
|
|
|
17,879
|
|
||
Consideration receivable
|
—
|
|
|
7,390
|
|
||
Net investment expense (income) allocation
|
1,500
|
|
|
(1,273
|
)
|
||
Payments
|
(2,665
|
)
|
|
(8,089
|
)
|
||
Foreign currency translation
|
34
|
|
|
302
|
|
||
Balance, end of period
|
$
|
144,782
|
|
|
$
|
145,342
|
|
|
Letters of Credit
|
|
Collateral
|
||||||||
|
Committed Capacity
|
|
Issued
|
|
Cash and Cash Equivalents
|
||||||
Unsecured syndicated credit facility
|
$
|
200,000
|
|
|
$
|
158,027
|
|
|
n/a
|
|
|
Committed - Secured letters of credit facilities
|
125,000
|
|
|
61,624
|
|
|
61,624
|
|
|||
Uncommitted - Secured letters of credit facilities
|
n/a
|
|
|
146,856
|
|
|
146,856
|
|
|||
|
|
|
$
|
366,507
|
|
|
$
|
208,480
|
|
|
2019
|
|
2018
|
||||
Net investment income (loss) by type
|
|
|
|
||||
Net realized gains on investments and investment derivatives
|
$
|
—
|
|
|
$
|
65,770
|
|
Net change in unrealized gains (losses) on investments and investment derivatives
|
1,702
|
|
|
(62,987
|
)
|
||
Net gains (losses) on foreign currencies
|
3,765
|
|
|
(787
|
)
|
||
Dividend and interest income
|
2,685
|
|
|
13,224
|
|
||
Dividends paid on securities sold, not yet purchased
|
—
|
|
|
(1,892
|
)
|
||
Other expenses
|
(190
|
)
|
|
(5,489
|
)
|
||
Management and performance fees to related parties
|
—
|
|
|
(10,047
|
)
|
||
Net investment income from investment in related party investment fund (1)
|
146,991
|
|
|
—
|
|
||
Net investment income (loss)
|
$
|
154,953
|
|
|
$
|
(2,208
|
)
|
(1)
|
Effective August 31, 2018, Third Point Re, Third Point Re BDA and Third Point Re USA entered into the 2018 LPA to invest in TP Fund. As a result, the management and performance fees are presented within net investment income from investment in related party investment fund from the effective date of the transition. See Note
8
for additional information regarding management and performance fees.
|
|
2019
|
|
2018
|
||||
Net investment income (loss) by asset type
|
|
||||||
Equity securities
|
$
|
—
|
|
|
$
|
(18,325
|
)
|
Private common equity securities
|
—
|
|
|
(442
|
)
|
||
Private preferred equity securities
|
—
|
|
|
(2,040
|
)
|
||
Total equities
|
—
|
|
|
(20,807
|
)
|
||
Asset-backed securities
|
—
|
|
|
12,449
|
|
||
Bank debt
|
—
|
|
|
2,521
|
|
||
Corporate bonds
|
—
|
|
|
(2,676
|
)
|
||
Municipal bonds
|
—
|
|
|
3,778
|
|
||
U.S. Treasury securities
|
1,798
|
|
|
(637
|
)
|
||
Sovereign debt
|
966
|
|
|
4,131
|
|
||
Other debt securities
|
—
|
|
|
438
|
|
||
Total debt securities
|
2,764
|
|
|
20,004
|
|
||
Options
|
—
|
|
|
(1,057
|
)
|
||
Rights and warrants
|
—
|
|
|
(16
|
)
|
||
Real estate
|
—
|
|
|
87
|
|
||
Trade claims
|
—
|
|
|
(3
|
)
|
||
Total other investments
|
—
|
|
|
(989
|
)
|
||
Net investment income (loss) in funds valued at NAV, excluding TP Fund
|
3
|
|
|
(908
|
)
|
||
Total net investment income (loss) from invested assets
|
2,767
|
|
|
(2,700
|
)
|
||
Net investment income (loss) by liability type
|
|
|
|
||||
Equity securities
|
—
|
|
|
12,918
|
|
||
Corporate bonds
|
—
|
|
|
(35
|
)
|
||
Options
|
—
|
|
|
3,733
|
|
||
Total net investment income from securities sold, not yet purchased
|
—
|
|
|
16,616
|
|
||
Other investment income (losses) and other expenses not presented above
|
|
|
|
||||
Other investment expenses
|
(190
|
)
|
|
(352
|
)
|
||
Net investment loss on derivative contracts
|
—
|
|
|
(2,621
|
)
|
||
Net investment income (loss) on cash, including foreign exchange gain (loss)
|
5,385
|
|
|
(3,860
|
)
|
||
Net investment losses on securities purchased under an agreement to sell and securities sold under an agreement to repurchase
|
—
|
|
|
(209
|
)
|
||
Withholding taxes reclassified to income tax expense
|
—
|
|
|
965
|
|
||
Total other investment income (losses) and other expenses
|
5,195
|
|
|
(6,077
|
)
|
||
Management and performance fees to related parties
|
—
|
|
|
(10,047
|
)
|
||
Net investment income from investment in related party investment fund (1)
|
146,991
|
|
|
—
|
|
||
Net investment income (loss)
|
$
|
154,953
|
|
|
$
|
(2,208
|
)
|
(1)
|
Effective August 31, 2018, Third Point Re, Third Point Re BDA and Third Point Re USA entered into the 2018 LPA to invest in TP Fund. As a result, the management and performance fees are presented within net investment income from investment in related party investment fund from the effective date of the transition. See Note
8
for additional information regarding management and performance fees.
|
TP Fund summarized income statement (1)
|
2019
|
||
Investment income
|
|
||
Net realized loss from securities, derivative contracts and foreign currency translations
|
$
|
(23,101
|
)
|
Net change in unrealized gain on securities, derivative contracts and foreign currency translations
|
190,038
|
|
|
Net loss from currencies
|
(482
|
)
|
|
Dividend and interest income
|
12,324
|
|
|
Other income
|
2,108
|
|
|
Total investment income
|
180,887
|
|
|
Expenses
|
|
||
Management fees
|
4,842
|
|
|
Interest
|
3,623
|
|
|
Dividends on securities sold, not yet purchased
|
2,355
|
|
|
Administrative and professional fees
|
402
|
|
|
Other expenses
|
1,598
|
|
|
Total expenses
|
12,820
|
|
|
Net income
|
$
|
168,067
|
|
TP Fund summarized balance sheet
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Total investments in securities
|
$
|
2,122,433
|
|
|
$
|
1,561,636
|
|
Cash and cash equivalents
|
15,010
|
|
|
6
|
|
||
Due from brokers
|
162,353
|
|
|
375,469
|
|
||
Derivative assets, at fair value
|
16,334
|
|
|
20,533
|
|
||
Interest and dividends receivable
|
4,530
|
|
|
3,693
|
|
||
Participation agreement with related party
|
1,522
|
|
|
2,296
|
|
||
Other assets
|
401
|
|
|
422
|
|
||
Total assets
|
$
|
2,322,583
|
|
|
$
|
1,964,055
|
|
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
2,370
|
|
|
$
|
1,754
|
|
Securities sold, not yet purchased, at fair value
|
413,090
|
|
|
355,233
|
|
||
Due to brokers
|
192,985
|
|
|
107,116
|
|
||
Derivative liabilities, at fair value
|
13,732
|
|
|
27,483
|
|
||
Interest and dividends payable
|
1,709
|
|
|
1,881
|
|
||
Subscriptions received in advance
|
15,000
|
|
|
—
|
|
||
Management fee payable
|
224
|
|
|
182
|
|
||
Total liabilities
|
639,110
|
|
|
493,649
|
|
||
Total partners' capital
|
$
|
1,683,473
|
|
|
$
|
1,470,406
|
|
|
2019
|
|
2018
|
||||
Income tax expense (benefit) related to U.S. and U.K. subsidiaries (1)
|
$
|
1,718
|
|
|
$
|
(849
|
)
|
Change in uncertain tax positions (2)
|
—
|
|
|
12
|
|
||
Withholding taxes on certain investment transactions (2)
|
—
|
|
|
965
|
|
||
|
$
|
1,718
|
|
|
$
|
128
|
|
Common shares
|
2019
|
|
2018
|
||
Common shares issued, beginning of period
|
93,639,610
|
|
|
107,227,347
|
|
Restricted shares granted, net of forfeitures
|
281,221
|
|
|
2,516
|
|
Performance restricted shares granted, net of forfeitures and shares withheld
|
372,083
|
|
|
236,057
|
|
Retirement of treasury shares and shares repurchased (1)
|
—
|
|
|
(5,583,228
|
)
|
Warrants exercised, net (2)
|
—
|
|
|
361,556
|
|
Common shares issued, end of period
|
94,292,914
|
|
|
102,244,248
|
|
(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 subsequent shares repurchased are retired.
|
(2)
|
During the
three
months ended March 31, 2018,
1,156,184
warrants were exercised. As a result of the warrant holder electing net settlement,
794,628
of those common shares were withheld by the Company and were subsequently retired, resulting in a net issuance of
361,556
common shares.
|
|
2019
|
|
2018
|
||||
Management and director options
|
$
|
—
|
|
|
$
|
95
|
|
Restricted shares with service condition
|
194
|
|
|
140
|
|
||
Restricted shares with service and performance condition
|
1,264
|
|
|
1,010
|
|
||
|
$
|
1,458
|
|
|
$
|
1,245
|
|
Range of exercise prices
|
Number of
options
|
|
Weighted average
exercise price
|
|
Remaining contractual life
|
|||
$10.00 - $10.89
|
5,123,531
|
|
|
$
|
10.04
|
|
|
2.8 years
|
$15.05 - $16.89
|
1,917,145
|
|
|
15.93
|
|
|
3.0 years
|
|
$20.00 - $25.05
|
1,847,377
|
|
|
20.26
|
|
|
3.0 years
|
|
|
8,888,053
|
|
|
$
|
13.43
|
|
|
2.9 years
|
|
Number of non-
vested restricted
shares
|
|
Weighted
average grant
date fair value
|
|||
Balance as of January 1, 2018
|
18,209
|
|
|
$
|
12.15
|
|
Granted
|
50,644
|
|
|
13.45
|
|
|
Vested
|
(44,788
|
)
|
|
12.97
|
|
|
Balance as of January 1, 2019
|
24,065
|
|
|
13.35
|
|
|
Granted
|
281,221
|
|
|
11.21
|
|
|
Vested
|
(12,032
|
)
|
|
13.35
|
|
|
Balance as of March 31, 2019
|
293,254
|
|
|
$
|
11.52
|
|
|
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, 2018
|
1,855,379
|
|
|
887,203
|
|
|
$
|
12.60
|
|
Granted
|
556,403
|
|
|
370,931
|
|
|
14.01
|
|
|
Forfeited
|
(294,977
|
)
|
|
(4,102
|
)
|
|
13.98
|
|
|
Vested
|
(115,757
|
)
|
|
(115,757
|
)
|
|
14.00
|
|
|
Change in estimated restricted shares considered probable of vesting
|
n/a
|
|
|
46,945
|
|
|
13.35
|
|
|
Balance as of January 1, 2019
|
2,001,048
|
|
|
1,185,220
|
|
|
12.80
|
|
|
Granted
|
781,789
|
|
|
521,193
|
|
|
11.21
|
|
|
Forfeited
|
(403,264
|
)
|
|
—
|
|
|
11.40
|
|
|
Vested
|
(148,718
|
)
|
|
(148,718
|
)
|
|
11.40
|
|
|
Change in estimated restricted shares considered probable of vesting
|
n/a
|
|
|
(2,158
|
)
|
|
11.40
|
|
|
Balance as of March 31, 2019
|
2,230,855
|
|
|
1,555,537
|
|
|
$
|
12.41
|
|
|
Redeemable noncontrolling interests in related party
|
|
Noncontrolling interests in related party
|
|
Total noncontrolling interests in related party
|
||||||
|
March 31,
2018 |
|
March 31,
2018 |
|
March 31,
2018 |
||||||
Balance, beginning of period
|
$
|
108,219
|
|
|
$
|
5,407
|
|
|
$
|
113,626
|
|
Changes in capital account allocation (1)
|
(101,418
|
)
|
|
(318
|
)
|
|
(101,736
|
)
|
|||
Balance, end of period
|
$
|
6,801
|
|
|
$
|
5,089
|
|
|
$
|
11,890
|
|
(1)
|
Changes in capital account allocation include TP GP's redemption in conjunction with the change in the investment account structure as described in the Company’s 2018 Form 10-K.
|
|
Third Point Re BDA
|
|
Third Point Re USA
|
|
Total
|
||||||
|
March 31,
2018 |
|
March 31,
2018 |
|
March 31,
2018 |
||||||
Balance, beginning of period
|
$
|
97,619
|
|
|
$
|
16,007
|
|
|
$
|
113,626
|
|
Net income attributable to total noncontrolling interests in related party
|
(7
|
)
|
|
17
|
|
|
10
|
|
|||
Contributions (1)
|
240
|
|
|
14
|
|
|
254
|
|
|||
Redemptions (2)
|
(89,000
|
)
|
|
(13,000
|
)
|
|
(102,000
|
)
|
|||
Balance, end of period
|
$
|
8,852
|
|
|
$
|
3,038
|
|
|
$
|
11,890
|
|
(1)
|
Contributions include performance fees earned during the period. See
Note 8
for additional information.
|
(2)
|
Redemptions include TP GP's redemption in conjunction with the change in the investment account structure as described in the Company’s 2018 Form 10-K.
|
|
|
2019
|
|
2018
|
||||
Weighted-average number of common shares outstanding:
|
($ in thousands, except share and per share amounts)
|
|||||||
|
Basic number of common shares outstanding
|
91,669,810
|
|
|
101,195,747
|
|
||
|
Dilutive effect of options
|
291,248
|
|
|
—
|
|
||
|
Dilutive effect of warrants
|
207,134
|
|
|
—
|
|
||
|
Dilutive effect of restricted shares with service and performance condition
|
410,741
|
|
|
—
|
|
||
|
Diluted number of common shares outstanding
|
92,578,933
|
|
|
101,195,747
|
|
||
Basic earnings (loss) per common share:
|
|
|
|
|||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
132,915
|
|
|
$
|
(26,001
|
)
|
|
Net income allocated to Third Point Re participating common shareholders
|
(173
|
)
|
|
—
|
|
||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
132,742
|
|
|
$
|
(26,001
|
)
|
|
Basic earnings (loss) per share available to Third Point Re common shareholders
|
$
|
1.45
|
|
|
$
|
(0.26
|
)
|
Diluted earnings (loss) per common share:
|
|
|
|
|||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
132,915
|
|
|
$
|
(26,001
|
)
|
|
Net income allocated to Third Point Re participating common shareholders
|
(171
|
)
|
|
—
|
|
||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
132,744
|
|
|
$
|
(26,001
|
)
|
|
Diluted earnings (loss) per share available to Third Point Re common shareholders
|
$
|
1.43
|
|
|
$
|
(0.26
|
)
|
|
2019
|
|
2018
|
||||||||||||
|
Property and Casualty Reinsurance
|
|
Total
|
|
Property and Casualty Reinsurance
|
|
Total
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
$
|
319,591
|
|
|
$
|
319,591
|
|
|
$
|
378,360
|
|
|
$
|
378,360
|
|
Gross premiums ceded
|
(712
|
)
|
|
(712
|
)
|
|
(14,646
|
)
|
|
(14,646
|
)
|
||||
Net premiums written
|
318,879
|
|
|
318,879
|
|
|
363,714
|
|
|
363,714
|
|
||||
Change in net unearned premium reserves
|
(165,829
|
)
|
|
(165,829
|
)
|
|
(221,228
|
)
|
|
(221,228
|
)
|
||||
Net premiums earned
|
153,050
|
|
|
153,050
|
|
|
142,486
|
|
|
142,486
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
95,068
|
|
|
95,068
|
|
|
92,620
|
|
|
92,620
|
|
||||
Acquisition costs, net
|
57,498
|
|
|
57,498
|
|
|
51,405
|
|
|
51,405
|
|
||||
General and administrative expenses
|
6,224
|
|
|
6,224
|
|
|
4,824
|
|
|
4,824
|
|
||||
Total expenses
|
158,790
|
|
|
158,790
|
|
|
148,849
|
|
|
148,849
|
|
||||
Net underwriting loss
|
$
|
(5,740
|
)
|
|
(5,740
|
)
|
|
$
|
(6,363
|
)
|
|
(6,363
|
)
|
||
Net investment income (loss)
|
|
|
154,953
|
|
|
|
|
(2,208
|
)
|
||||||
Corporate expenses
|
|
|
(5,908
|
)
|
|
|
|
(4,657
|
)
|
||||||
Other expenses
|
|
|
(4,125
|
)
|
|
|
|
(3,995
|
)
|
||||||
Interest expense
|
|
|
(2,029
|
)
|
|
|
|
(2,029
|
)
|
||||||
Foreign exchange losses
|
|
|
(2,518
|
)
|
|
|
|
(6,611
|
)
|
||||||
Income tax expense
|
|
|
(1,718
|
)
|
|
|
|
(128
|
)
|
||||||
Net income attributable to noncontrolling interests in related party
|
|
|
—
|
|
|
|
|
(10
|
)
|
||||||
Net income (loss) available to Third Point Re common shareholders
|
|
|
$
|
132,915
|
|
|
|
|
$
|
(26,001
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Property and Casualty Reinsurance - Underwriting Ratios (1):
|
|
|
|
|
|
|
|||||||||
Loss ratio
|
62.1
|
%
|
|
|
|
65.0
|
%
|
|
|
||||||
Acquisition cost ratio
|
37.6
|
%
|
|
|
|
36.1
|
%
|
|
|
||||||
Composite ratio
|
99.7
|
%
|
|
|
|
101.1
|
%
|
|
|
||||||
General and administrative expense ratio
|
4.1
|
%
|
|
|
|
3.4
|
%
|
|
|
||||||
Combined ratio
|
103.8
|
%
|
|
|
|
104.5
|
%
|
|
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
|
2019
|
|
2018
|
||||||||||
Property
|
$
|
53,981
|
|
|
16.9
|
%
|
|
$
|
369
|
|
|
0.1
|
%
|
Casualty
|
77,892
|
|
|
24.4
|
%
|
|
153,220
|
|
|
40.5
|
%
|
||
Specialty
|
193,071
|
|
|
60.4
|
%
|
|
224,771
|
|
|
59.4
|
%
|
||
Total prospective reinsurance contracts
|
324,944
|
|
|
101.7
|
%
|
|
378,360
|
|
|
100.0
|
%
|
||
Retroactive reinsurance contracts
(1)
|
(5,353
|
)
|
|
(1.7
|
)%
|
|
—
|
|
|
—
|
%
|
||
|
$
|
319,591
|
|
|
100.0
|
%
|
|
$
|
378,360
|
|
|
100.0
|
%
|
(1)
|
The negative gross premiums written amount for the retroactive reinsurance contracts lines of business was the result of a reduction in premium estimate on one contract during the period.
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of March 31, 2019
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments in securities
|
$
|
3,000
|
|
|
$
|
—
|
|
|
$
|
1,717,141
|
|
|
$
|
—
|
|
|
$
|
1,720,141
|
|
Cash and cash equivalents
|
—
|
|
|
186
|
|
|
54,133
|
|
|
—
|
|
|
54,319
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
616,844
|
|
|
—
|
|
|
616,844
|
|
|||||
Subscription receivable from related party investment fund
|
—
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
|
15,000
|
|
|||||
Investment in subsidiaries
|
1,343,997
|
|
|
270,553
|
|
|
191,043
|
|
|
(1,805,593
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
637
|
|
|
—
|
|
|
637
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
1,891
|
|
|
—
|
|
|
1,891
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
758,816
|
|
|
—
|
|
|
758,816
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
233,108
|
|
|
—
|
|
|
233,108
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
16,139
|
|
|
—
|
|
|
16,139
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
2,751
|
|
|
—
|
|
|
2,751
|
|
|||||
Amounts due from (to) affiliates
|
(7,897
|
)
|
|
127
|
|
|
7,770
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
1,088
|
|
|
5,487
|
|
|
13,913
|
|
|
—
|
|
|
20,488
|
|
|||||
Total assets
|
$
|
1,340,188
|
|
|
$
|
276,353
|
|
|
$
|
3,629,186
|
|
|
$
|
(1,805,593
|
)
|
|
$
|
3,440,134
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
1,309
|
|
|
$
|
30
|
|
|
$
|
7,886
|
|
|
$
|
—
|
|
|
$
|
9,225
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
76,766
|
|
|
—
|
|
|
76,766
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
144,782
|
|
|
—
|
|
|
144,782
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
767,352
|
|
|
—
|
|
|
767,352
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
986,639
|
|
|
—
|
|
|
986,639
|
|
|||||
Participation agreement with related party investment fund
|
—
|
|
|
—
|
|
|
1,521
|
|
|
—
|
|
|
1,521
|
|
|||||
Interest and dividends payable
|
—
|
|
|
1,015
|
|
|
—
|
|
|
—
|
|
|
1,015
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,955
|
|
|
—
|
|
|
—
|
|
|
113,955
|
|
|||||
Total liabilities
|
1,309
|
|
|
115,000
|
|
|
1,984,946
|
|
|
—
|
|
|
2,101,255
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
9,429
|
|
|
—
|
|
|
1,239
|
|
|
(1,239
|
)
|
|
9,429
|
|
|||||
Additional paid-in capital
|
920,207
|
|
|
191,296
|
|
|
1,588,608
|
|
|
(1,779,904
|
)
|
|
920,207
|
|
|||||
Retained earnings (deficit)
|
409,243
|
|
|
(29,943
|
)
|
|
54,393
|
|
|
(24,450
|
)
|
|
409,243
|
|
|||||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,338,879
|
|
|
161,353
|
|
|
1,644,240
|
|
|
(1,805,593
|
)
|
|
1,338,879
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,340,188
|
|
|
$
|
276,353
|
|
|
$
|
3,629,186
|
|
|
$
|
(1,805,593
|
)
|
|
$
|
3,440,134
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of December 31, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments in securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,523,728
|
|
|
$
|
—
|
|
|
$
|
1,523,728
|
|
Cash and cash equivalents
|
—
|
|
|
187
|
|
|
103,996
|
|
|
—
|
|
|
104,183
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
609,154
|
|
|
—
|
|
|
609,154
|
|
|||||
Investment in subsidiaries
|
1,207,161
|
|
|
251,350
|
|
|
175,758
|
|
|
(1,634,269
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
1,411
|
|
|
—
|
|
|
1,411
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
1,316
|
|
|
—
|
|
|
1,316
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
602,448
|
|
|
—
|
|
|
602,448
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
203,842
|
|
|
—
|
|
|
203,842
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
17,552
|
|
|
—
|
|
|
17,552
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
2,031
|
|
|
—
|
|
|
2,031
|
|
|||||
Amounts due from (to) affiliates
|
(3,522
|
)
|
|
52
|
|
|
3,470
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
1,673
|
|
|
5,069
|
|
|
13,827
|
|
|
—
|
|
|
20,569
|
|
|||||
Total assets
|
$
|
1,205,312
|
|
|
$
|
256,658
|
|
|
$
|
3,258,533
|
|
|
$
|
(1,634,269
|
)
|
|
$
|
3,086,234
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
738
|
|
|
$
|
70
|
|
|
$
|
6,453
|
|
|
$
|
—
|
|
|
$
|
7,261
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
69,701
|
|
|
—
|
|
|
69,701
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
145,342
|
|
|
—
|
|
|
145,342
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
602,936
|
|
|
—
|
|
|
602,936
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
937,157
|
|
|
—
|
|
|
937,157
|
|
|||||
Participation agreement with related party investment fund
|
—
|
|
|
—
|
|
|
2,297
|
|
|
—
|
|
|
2,297
|
|
|||||
Interest and dividends payable
|
—
|
|
|
3,055
|
|
|
—
|
|
|
—
|
|
|
3,055
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,911
|
|
|
—
|
|
|
—
|
|
|
113,911
|
|
|||||
Total liabilities
|
738
|
|
|
117,036
|
|
|
1,763,886
|
|
|
—
|
|
|
1,881,660
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
9,364
|
|
|
—
|
|
|
1,239
|
|
|
(1,239
|
)
|
|
9,364
|
|
|||||
Additional paid-in capital
|
918,882
|
|
|
176,005
|
|
|
1,557,016
|
|
|
(1,733,021
|
)
|
|
918,882
|
|
|||||
Retained earnings (deficit)
|
276,328
|
|
|
(36,383
|
)
|
|
(63,608
|
)
|
|
99,991
|
|
|
276,328
|
|
|||||
Shareholders' equity attributable to Third Point Re common shareholders
|
1,204,574
|
|
|
139,622
|
|
|
1,494,647
|
|
|
(1,634,269
|
)
|
|
1,204,574
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
1,205,312
|
|
|
$
|
256,658
|
|
|
$
|
3,258,533
|
|
|
$
|
(1,634,269
|
)
|
|
$
|
3,086,234
|
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended March 31, 2019
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
319,591
|
|
|
$
|
—
|
|
|
$
|
319,591
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(712
|
)
|
|
—
|
|
|
(712
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
318,879
|
|
|
—
|
|
|
318,879
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(165,829
|
)
|
|
—
|
|
|
(165,829
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
153,050
|
|
|
—
|
|
|
153,050
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
154,953
|
|
|
—
|
|
|
154,953
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
|
135,541
|
|
|
8,012
|
|
|
(8
|
)
|
|
(143,545
|
)
|
|
—
|
|
|||||
Total revenues
|
|
135,541
|
|
|
8,012
|
|
|
307,995
|
|
|
(143,545
|
)
|
|
308,003
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
95,068
|
|
|
—
|
|
|
95,068
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
57,498
|
|
|
—
|
|
|
57,498
|
|
|||||
General and administrative expenses
|
|
2,626
|
|
|
(39
|
)
|
|
9,545
|
|
|
—
|
|
|
12,132
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
4,125
|
|
|
—
|
|
|
4,125
|
|
|||||
Interest expense
|
|
—
|
|
|
2,029
|
|
|
—
|
|
|
—
|
|
|
2,029
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
2,518
|
|
|
—
|
|
|
2,518
|
|
|||||
Total expenses
|
|
2,626
|
|
|
1,990
|
|
|
168,754
|
|
|
—
|
|
|
173,370
|
|
|||||
Income before income tax (expense) benefit
|
|
132,915
|
|
|
6,022
|
|
|
139,241
|
|
|
(143,545
|
)
|
|
134,633
|
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
418
|
|
|
(2,136
|
)
|
|
—
|
|
|
(1,718
|
)
|
|||||
Net income
|
|
132,915
|
|
|
6,440
|
|
|
137,105
|
|
|
(143,545
|
)
|
|
132,915
|
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income available to Third Point Re common shareholders
|
|
$
|
132,915
|
|
|
$
|
6,440
|
|
|
$
|
137,105
|
|
|
$
|
(143,545
|
)
|
|
$
|
132,915
|
|
CONDENSED CONSOLIDATING STATEMENTS OF LOSS
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended March 31, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
378,360
|
|
|
$
|
—
|
|
|
$
|
378,360
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(14,646
|
)
|
|
—
|
|
|
(14,646
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
363,714
|
|
|
—
|
|
|
363,714
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(221,228
|
)
|
|
—
|
|
|
(221,228
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
142,486
|
|
|
—
|
|
|
142,486
|
|
|||||
Net investment loss
|
|
—
|
|
|
—
|
|
|
(2,208
|
)
|
|
—
|
|
|
(2,208
|
)
|
|||||
Equity in losses of subsidiaries
|
|
(24,358
|
)
|
|
(1,609
|
)
|
|
(18
|
)
|
|
25,985
|
|
|
—
|
|
|||||
Total revenues
|
|
(24,358
|
)
|
|
(1,609
|
)
|
|
140,260
|
|
|
25,985
|
|
|
140,278
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
92,620
|
|
|
—
|
|
|
92,620
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
51,405
|
|
|
—
|
|
|
51,405
|
|
|||||
General and administrative expenses
|
|
1,643
|
|
|
3
|
|
|
7,835
|
|
|
—
|
|
|
9,481
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
3,995
|
|
|
—
|
|
|
3,995
|
|
|||||
Interest expense
|
|
—
|
|
|
2,029
|
|
|
—
|
|
|
—
|
|
|
2,029
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
6,611
|
|
|
—
|
|
|
6,611
|
|
|||||
Total expenses
|
|
1,643
|
|
|
2,032
|
|
|
162,466
|
|
|
—
|
|
|
166,141
|
|
|||||
Loss before income tax (expense) benefit
|
|
(26,001
|
)
|
|
(3,641
|
)
|
|
(22,206
|
)
|
|
25,985
|
|
|
(25,863
|
)
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
427
|
|
|
(555
|
)
|
|
—
|
|
|
(128
|
)
|
|||||
Net loss
|
|
(26,001
|
)
|
|
(3,214
|
)
|
|
(22,761
|
)
|
|
25,985
|
|
|
(25,991
|
)
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Net loss attributable to Third Point Re common shareholders
|
|
$
|
(26,001
|
)
|
|
$
|
(3,214
|
)
|
|
$
|
(22,771
|
)
|
|
$
|
25,985
|
|
|
$
|
(26,001
|
)
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the three months ended March 31, 2019
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
132,915
|
|
|
$
|
6,440
|
|
|
$
|
137,105
|
|
|
$
|
(143,545
|
)
|
|
$
|
132,915
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in losses of subsidiaries
|
|
(135,541
|
)
|
|
(8,012
|
)
|
|
8
|
|
|
143,545
|
|
|
—
|
|
|||||
Share compensation expense
|
|
163
|
|
|
—
|
|
|
1,295
|
|
|
—
|
|
|
1,458
|
|
|||||
Net interest expense on deposit liabilities
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
—
|
|
|
1,500
|
|
|||||
Net realized and unrealized gain on investments and derivatives
|
|
—
|
|
|
—
|
|
|
(1,692
|
)
|
|
—
|
|
|
(1,692
|
)
|
|||||
Net unrealized gain on investment in related party investment fund
|
|
—
|
|
|
—
|
|
|
(146,991
|
)
|
|
—
|
|
|
(146,991
|
)
|
|||||
Net foreign exchange losses
|
|
—
|
|
|
—
|
|
|
2,518
|
|
|
—
|
|
|
2,518
|
|
|||||
Amortization of premium and accretion of discount, net
|
|
—
|
|
|
44
|
|
|
278
|
|
|
—
|
|
|
322
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
|
—
|
|
|
—
|
|
|
(154,205
|
)
|
|
—
|
|
|
(154,205
|
)
|
|||||
Deferred acquisition costs, net
|
|
—
|
|
|
—
|
|
|
(29,266
|
)
|
|
—
|
|
|
(29,266
|
)
|
|||||
Unearned premiums ceded
|
|
—
|
|
|
—
|
|
|
1,413
|
|
|
—
|
|
|
1,413
|
|
|||||
Loss and loss adjustment expenses recoverable
|
|
—
|
|
|
—
|
|
|
(720
|
)
|
|
—
|
|
|
(720
|
)
|
|||||
Other assets
|
|
585
|
|
|
(418
|
)
|
|
248
|
|
|
—
|
|
|
415
|
|
|||||
Interest and dividends receivable, net
|
|
—
|
|
|
(2,040
|
)
|
|
(575
|
)
|
|
—
|
|
|
(2,615
|
)
|
|||||
Unearned premium reserves
|
|
—
|
|
|
—
|
|
|
164,416
|
|
|
—
|
|
|
164,416
|
|
|||||
Loss and loss adjustment expense reserves
|
|
—
|
|
|
—
|
|
|
44,838
|
|
|
—
|
|
|
44,838
|
|
|||||
Accounts payable and accrued expenses
|
|
571
|
|
|
(40
|
)
|
|
1,433
|
|
|
—
|
|
|
1,964
|
|
|||||
Reinsurance balances payable
|
|
—
|
|
|
—
|
|
|
6,720
|
|
|
—
|
|
|
6,720
|
|
|||||
Amounts due from (to) affiliates
|
|
4,375
|
|
|
(75
|
)
|
|
(4,300
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
|
3,068
|
|
|
(4,101
|
)
|
|
24,023
|
|
|
—
|
|
|
22,990
|
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from redemptions from related party investment fund
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
|||||
Contributions to related party investment fund, including subscription receivable
|
|
—
|
|
|
—
|
|
|
(70,000
|
)
|
|
—
|
|
|
(70,000
|
)
|
|||||
Change in participation agreement with related party investment fund
|
|
—
|
|
|
—
|
|
|
(776
|
)
|
|
—
|
|
|
(776
|
)
|
|||||
Purchases of investments
|
|
(3,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
|||||
Change in due to/from brokers, net
|
|
—
|
|
|
—
|
|
|
774
|
|
|
—
|
|
|
774
|
|
|||||
Contributed capital to subsidiaries
|
|
(15,000
|
)
|
|
15,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Contributed capital from parent and/or subsidiaries
|
|
—
|
|
|
(15,000
|
)
|
|
15,000
|
|
|
—
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
|
(18,000
|
)
|
|
—
|
|
|
(45,002
|
)
|
|
—
|
|
|
(63,002
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxes paid on withholding shares
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|||||
Decrease in deposit liabilities, net
|
|
—
|
|
|
—
|
|
|
(2,094
|
)
|
|
—
|
|
|
(2,094
|
)
|
|||||
Dividend received by (paid to) parent
|
|
15,000
|
|
|
4,100
|
|
|
(19,100
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
14,932
|
|
|
4,100
|
|
|
(21,194
|
)
|
|
—
|
|
|
(2,162
|
)
|
|||||
Net decrease in cash, cash equivalents and restricted cash
|
|
—
|
|
|
(1
|
)
|
|
(42,173
|
)
|
|
—
|
|
|
(42,174
|
)
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
—
|
|
|
187
|
|
|
713,150
|
|
|
—
|
|
|
713,337
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
670,977
|
|
|
$
|
—
|
|
|
$
|
671,163
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the three months ended March 31, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
$
|
(26,001
|
)
|
|
$
|
(3,214
|
)
|
|
$
|
(22,761
|
)
|
|
$
|
25,985
|
|
|
$
|
(25,991
|
)
|
Adjustments to reconcile net loss to net cash provided by (used) in operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
|
24,358
|
|
|
1,609
|
|
|
18
|
|
|
(25,985
|
)
|
|
—
|
|
|||||
Share compensation expense
|
|
141
|
|
|
—
|
|
|
1,104
|
|
|
—
|
|
|
1,245
|
|
|||||
Net interest expense on deposit liabilities
|
|
—
|
|
|
—
|
|
|
1,261
|
|
|
—
|
|
|
1,261
|
|
|||||
Net realized and unrealized gain on investments and derivatives
|
|
—
|
|
|
—
|
|
|
(2,830
|
)
|
|
—
|
|
|
(2,830
|
)
|
|||||
Net foreign exchange losses
|
|
—
|
|
|
—
|
|
|
6,611
|
|
|
—
|
|
|
6,611
|
|
|||||
Amortization of premium and accretion of discount, net
|
|
—
|
|
|
44
|
|
|
2,578
|
|
|
—
|
|
|
2,622
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
|
—
|
|
|
—
|
|
|
(208,414
|
)
|
|
—
|
|
|
(208,414
|
)
|
|||||
Deferred acquisition costs, net
|
|
—
|
|
|
—
|
|
|
(50,110
|
)
|
|
—
|
|
|
(50,110
|
)
|
|||||
Unearned premiums ceded
|
|
—
|
|
|
—
|
|
|
(14,012
|
)
|
|
—
|
|
|
(14,012
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
|
—
|
|
|
—
|
|
|
(219
|
)
|
|
—
|
|
|
(219
|
)
|
|||||
Other assets
|
|
144
|
|
|
—
|
|
|
(703
|
)
|
|
—
|
|
|
(559
|
)
|
|||||
Interest and dividends receivable, net
|
|
—
|
|
|
(2,040
|
)
|
|
421
|
|
|
—
|
|
|
(1,619
|
)
|
|||||
Unearned premium reserves
|
|
—
|
|
|
—
|
|
|
235,240
|
|
|
—
|
|
|
235,240
|
|
|||||
Loss and loss adjustment expense reserves
|
|
—
|
|
|
—
|
|
|
34,392
|
|
|
—
|
|
|
34,392
|
|
|||||
Accounts payable and accrued expenses
|
|
281
|
|
|
(435
|
)
|
|
(23,228
|
)
|
|
—
|
|
|
(23,382
|
)
|
|||||
Reinsurance balances payable
|
|
—
|
|
|
—
|
|
|
9,025
|
|
|
—
|
|
|
9,025
|
|
|||||
Performance fees payable to related party
|
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
|||||
Amounts due from (to) affiliates
|
|
24,980
|
|
|
4,035
|
|
|
(29,015
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
|
23,903
|
|
|
(1
|
)
|
|
(60,622
|
)
|
|
—
|
|
|
(36,720
|
)
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
|
—
|
|
|
—
|
|
|
(1,032,890
|
)
|
|
—
|
|
|
(1,032,890
|
)
|
|||||
Proceeds from sales and maturities of investments
|
|
—
|
|
|
—
|
|
|
1,221,157
|
|
|
—
|
|
|
1,221,157
|
|
|||||
Purchases of investments to cover short sales
|
|
—
|
|
|
—
|
|
|
(300,467
|
)
|
|
—
|
|
|
(300,467
|
)
|
|||||
Proceeds from short sales of investments
|
|
—
|
|
|
—
|
|
|
277,174
|
|
|
—
|
|
|
277,174
|
|
|||||
Change in due to/from brokers, net
|
|
—
|
|
|
—
|
|
|
8,818
|
|
|
—
|
|
|
8,818
|
|
|||||
Decrease in securities sold under an agreement to repurchase
|
|
—
|
|
|
—
|
|
|
(10,551
|
)
|
|
—
|
|
|
(10,551
|
)
|
|||||
Net cash provided by investing activities
|
|
—
|
|
|
—
|
|
|
163,241
|
|
|
—
|
|
|
163,241
|
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxes paid on withholding shares
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||
Purchases of Third Point Re common shares under share repurchase program
|
|
(23,837
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,837
|
)
|
|||||
Decrease in deposit liabilities, net
|
|
—
|
|
|
—
|
|
|
(614
|
)
|
|
—
|
|
|
(614
|
)
|
|||||
Change in total noncontrolling interests in related party, net
|
|
—
|
|
|
—
|
|
|
(101,746
|
)
|
|
—
|
|
|
(101,746
|
)
|
|||||
Net cash used in financing activities
|
|
(23,911
|
)
|
|
—
|
|
|
(102,360
|
)
|
|
—
|
|
|
(126,271
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(8
|
)
|
|
(1
|
)
|
|
259
|
|
|
—
|
|
|
250
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
9
|
|
|
199
|
|
|
549,125
|
|
|
—
|
|
|
549,333
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
1
|
|
|
$
|
198
|
|
|
$
|
549,384
|
|
|
$
|
—
|
|
|
$
|
549,583
|
|
•
|
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, withdrawal of ratings or change in rating outlook 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;
|
•
|
technology breaches or failures, including cyber-attacks;
|
•
|
lack of control over TP Fund;
|
•
|
lack of control over the allocation and performance of TP Fund’s investment portfolio;
|
•
|
dependence on Third Point LLC to implement TP Fund’s investment strategy;
|
•
|
limited ability to withdraw our capital accounts from TP Fund;
|
•
|
decline in revenue due to poor performance of TP Fund’s investment portfolio;
|
•
|
TP Fund’s investment strategy involves risks that are greater than those faced by competitors;
|
•
|
termination by Third Point LLC of our or TP Fund’s 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 TP Fund’s investment portfolio;
|
•
|
trading restrictions being placed on TP Fund’s investments;
|
•
|
limited termination provisions in our investment management agreements;
|
•
|
limited liquidity and lack of valuation data on certain TP Fund’s investments;
|
•
|
U.S. and global economic downturns;
|
•
|
specific characteristics of investments in mortgage-backed securities and other asset-backed securities, in securities of issues based outside the U.S., and in special situation or distressed companies;
|
•
|
loss of key employees at Third Point LLC;
|
•
|
Third Point LLC’s compensation arrangements may incentivize investments that are risky or speculative;
|
•
|
increased regulation or scrutiny of alternative investment advisers affecting our reputation;
|
•
|
suspension or revocation of our reinsurance licenses;
|
•
|
potentially being deemed an investment company under U.S. federal securities law;
|
•
|
failure of reinsurance subsidiaries to meet minimum capital and surplus requirements;
|
•
|
changes in Bermuda or other law and regulation that may have an adverse impact on our operations;
|
•
|
Third Point Re and/or Third Point Re BDA potentially becoming subject to U.S. federal income taxation;
|
•
|
potential characterization of Third Point Re and/or Third Point Re BDA as a passive foreign investment company;
|
•
|
subjection of our affiliates to the base erosion and anti-abuse tax;
|
•
|
potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act; and
|
•
|
other risks and factors listed under “Risk Factors” in our most recent Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.
|
|
2019
|
|
2018
|
||||
Key underwriting metrics for Property and Casualty Reinsurance segment:
|
($ in thousands, except for per share data and ratios)
|
||||||
Net underwriting loss
(1)
|
$
|
(5,740
|
)
|
|
$
|
(6,363
|
)
|
Combined ratio
(1)
|
103.8
|
%
|
|
104.5
|
%
|
||
|
|
|
|
||||
Key investment return metrics:
|
|
|
|
||||
Net investment income (loss)
|
$
|
154,953
|
|
|
$
|
(2,208
|
)
|
Net investment return on investments managed by Third Point LLC
|
7.2
|
%
|
|
(0.2
|
)%
|
||
|
|
|
|
||||
Key shareholders’ value creation metrics:
|
|
|
|||||
Basic book value per share
(2) (3)
|
$
|
14.59
|
|
|
$
|
13.15
|
|
Diluted book value per share
(2) (3)
|
$
|
13.95
|
|
|
$
|
12.98
|
|
Change in diluted book value per share
(2)
|
7.5
|
%
|
|
(1.7
|
)%
|
||
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders
(2)
|
11.0
|
%
|
|
(1.6
|
)%
|
(1)
|
See
Note 18
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,
2018
.
|
|
2019
|
|
2018
|
|
Change
|
||||||
|
($ in thousands)
|
||||||||||
Net underwriting loss
|
$
|
(5,740
|
)
|
|
$
|
(6,363
|
)
|
|
$
|
623
|
|
Net investment income (loss)
|
154,953
|
|
|
(2,208
|
)
|
|
157,161
|
|
|||
Net investment return on investments managed by Third Point LLC
|
7.2
|
%
|
|
(0.2
|
)%
|
|
7.4
|
%
|
|||
Corporate expenses
|
(5,908
|
)
|
|
(4,657
|
)
|
|
(1,251
|
)
|
|||
Other expenses
|
(4,125
|
)
|
|
(3,995
|
)
|
|
(130
|
)
|
|||
Interest expense
|
(2,029
|
)
|
|
(2,029
|
)
|
|
—
|
|
|||
Foreign exchange losses
|
(2,518
|
)
|
|
(6,611
|
)
|
|
4,093
|
|
|||
Income tax expense
|
(1,718
|
)
|
|
(128
|
)
|
|
(1,590
|
)
|
|||
Net income (loss) available to Third Point Re common shareholders
|
$
|
132,915
|
|
|
$
|
(26,001
|
)
|
|
$
|
158,916
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
59
|
%
|
|
(26
|
)%
|
|
33
|
%
|
|
54
|
%
|
|
(22
|
)%
|
|
32
|
%
|
Credit
|
20
|
%
|
|
(2
|
)%
|
|
18
|
%
|
|
18
|
%
|
|
(4
|
)%
|
|
14
|
%
|
Other
|
7
|
%
|
|
—
|
%
|
|
7
|
%
|
|
9
|
%
|
|
(1
|
)%
|
|
8
|
%
|
|
86
|
%
|
|
(28
|
)%
|
|
58
|
%
|
|
81
|
%
|
|
(27
|
)%
|
|
54
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Americas
|
72
|
%
|
|
(20
|
)%
|
|
52
|
%
|
|
70
|
%
|
|
(21
|
)%
|
|
49
|
%
|
Europe, Middle East and Africa
|
9
|
%
|
|
(3
|
)%
|
|
6
|
%
|
|
11
|
%
|
|
(3
|
)%
|
|
8
|
%
|
Asia
|
5
|
%
|
|
(5
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
(3
|
)%
|
|
(3
|
)%
|
|
86
|
%
|
|
(28
|
)%
|
|
58
|
%
|
|
81
|
%
|
|
(27
|
)%
|
|
54
|
%
|
|
2019
|
|
2018
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
8.4
|
%
|
|
(2.4
|
)%
|
|
6.0
|
%
|
|
(0.7
|
)%
|
|
—
|
%
|
|
(0.7
|
)%
|
Credit
|
0.9
|
%
|
|
(0.3
|
)%
|
|
0.6
|
%
|
|
0.4
|
%
|
|
(0.1
|
)%
|
|
0.3
|
%
|
Other
|
0.7
|
%
|
|
(0.1
|
)%
|
|
0.6
|
%
|
|
0.5
|
%
|
|
(0.3
|
)%
|
|
0.2
|
%
|
Net investment return on investments managed by Third Point LLC
|
10.0
|
%
|
|
(2.8
|
)%
|
|
7.2
|
%
|
|
0.2
|
%
|
|
(0.4
|
)%
|
|
(0.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
S&P 500 Total Return Index
|
|
|
|
|
13.6
|
%
|
|
|
|
|
|
(2.5
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
||||||
|
($ in thousands)
|
||||||||||
Gross premiums written
|
$
|
319,591
|
|
|
$
|
378,360
|
|
|
$
|
(58,769
|
)
|
Gross premiums ceded
|
(712
|
)
|
|
(14,646
|
)
|
|
13,934
|
|
|||
Net premiums earned
|
153,050
|
|
|
142,486
|
|
|
10,564
|
|
|||
Loss and loss adjustment expenses incurred, net
|
95,068
|
|
|
92,620
|
|
|
2,448
|
|
|||
Acquisition costs, net
|
57,498
|
|
|
51,405
|
|
|
6,093
|
|
|||
General and administrative expenses
|
6,224
|
|
|
4,824
|
|
|
1,400
|
|
|||
Net underwriting income (loss)
|
$
|
(5,740
|
)
|
|
$
|
(6,363
|
)
|
|
$
|
623
|
|
Underwriting ratios (1):
|
|
|
|
|
|
||||||
Loss ratio
|
62.1
|
%
|
|
65.0
|
%
|
|
(2.9
|
)%
|
|||
Acquisition cost ratio
|
37.6
|
%
|
|
36.1
|
%
|
|
1.5
|
%
|
|||
Composite ratio
|
99.7
|
%
|
|
101.1
|
%
|
|
(1.4
|
)%
|
|||
General and administrative expense ratio
|
4.1
|
%
|
|
3.4
|
%
|
|
0.7
|
%
|
|||
Combined ratio
|
103.8
|
%
|
|
104.5
|
%
|
|
(0.7
|
)%
|
(1)
|
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
|
•
|
The majority of our gross written premium is derived from 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.
|
•
|
We recognized $81.6 million of premium in the three months ended
March 31, 2018
related to contracts that we did not renew in the three months ended
March 31, 2019
as a result of underlying pricing, terms and conditions.
|
•
|
We recognized a net decrease in premium of $2.8 million in the three months ended
March 31, 2019
compared to a net increase of $53.1 million in the three months ended
March 31, 2018
related to the net impact of contract extensions, cancellations and contracts renewed with no comparable premium in the comparable period.
|
•
|
Changes in renewal premiums for the three months ended
March 31, 2019
resulted in a net decrease in premiums of $0.7 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.
|
•
|
For the three months ended
March 31, 2019
, we wrote $74.1 million of new premium, of which $55.9 million was property business including $41.5 million of property catastrophe business, $13.6 million was casualty business and $4.6 million was specialty business.
|
•
|
We recorded net increases in premium estimates relating to prior periods of $18.4 million and $13.1 million for the three months ended
March 31, 2019
and
March 31, 2018
, respectively. The increases in premium estimates for the three months ended
March 31, 2019
and 2018 were due to several contracts for which clients provided updated projections indicating that they expected to write more business than initially estimated.
|
•
|
$7.7 million
of net favorable underwriting loss development relating to workers’ compensation contracts. The favorable development was the result of better than expected loss experience and was partially offset by;
|
•
|
$7.1 million
of net adverse underwriting loss development primarily relating to our general liability and multi-line contracts, as a result of worse than expected loss experience.
|
•
|
$2.4 million of net favorable underwriting loss development relating to several workers’ compensation contracts written from 2012 to 2014, driven by better than expected loss experience;
|
•
|
$2.1 million of net favorable underwriting loss development from several other contracts, including amortization of deferred gains, as a result of better than expected loss experience; partially offset by
|
•
|
$4.0 million of net adverse underwriting loss development relating to our Florida homeowners’ reinsurance contracts primarily as a result of higher than anticipated water damage claims and an increase in the practice of assignment of benefits whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters, which we believe has led to increases in the frequency of claims reported as well as the severity of losses and loss adjustment expenses.
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Basic and diluted book value per share numerator:
|
($ in thousands, except share and per share amounts)
|
||||||
Shareholders' equity attributable to Third Point Re common shareholders
|
$
|
1,338,879
|
|
|
$
|
1,204,574
|
|
Effect of dilutive warrants issued to founders and an advisor
|
34,950
|
|
|
—
|
|
||
Effect of dilutive stock options issued to directors and employees
|
49,142
|
|
|
—
|
|
||
Diluted book value per share numerator:
|
$
|
1,422,971
|
|
|
$
|
1,204,574
|
|
Basic and diluted book value per share denominator:
|
|
|
|
||||
Common shares outstanding
|
94,292,914
|
|
|
93,639,610
|
|
||
Unvested restricted shares
|
(2,524,109
|
)
|
|
(2,025,113
|
)
|
||
Basic book value per share denominator:
|
91,768,805
|
|
|
91,614,497
|
|
||
Effect of dilutive warrants issued to founders and an advisor
|
3,494,979
|
|
|
—
|
|
||
Effect of dilutive stock options issued to directors and employees
|
4,914,229
|
|
|
—
|
|
||
Effect of dilutive restricted shares issued to directors and employees (1)
|
1,848,791
|
|
|
1,209,285
|
|
||
Diluted book value per share denominator:
|
102,026,804
|
|
|
92,823,782
|
|
||
|
|
|
|
||||
Basic book value per share
|
$
|
14.59
|
|
|
$
|
13.15
|
|
Diluted book value per share
|
$
|
13.95
|
|
|
$
|
12.98
|
|
(1)
|
As of
March 31, 2019
, the effect of dilutive restricted shares issued to directors and employees was comprised of
293,254
restricted shares with a service condition only and
1,555,537
restricted shares with a service and performance condition that were considered probable of vesting.
|
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
132,915
|
|
|
$
|
(26,001
|
)
|
Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
1,204,574
|
|
|
1,656,089
|
|
||
Impact of weighting related to shareholders’ equity from shares repurchased
|
—
|
|
|
(3,243
|
)
|
||
Adjusted shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
$
|
1,204,574
|
|
|
$
|
1,652,846
|
|
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders
|
11.0
|
%
|
|
(1.6
|
)%
|
|
2019
|
|
2018
|
||||
|
($ in thousands)
|
||||||
Net cash provided by (used in) operating activities
|
$
|
22,990
|
|
|
$
|
(36,720
|
)
|
Net cash provided by (used in) investing activities
|
(63,002
|
)
|
|
163,241
|
|
||
Net cash used in financing activities
|
(2,162
|
)
|
|
(126,271
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(42,174
|
)
|
|
250
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
713,337
|
|
|
549,333
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
671,163
|
|
|
$
|
549,583
|
|
•
|
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
|
$
|
28,596
|
|
|
1.2
|
%
|
|
$
|
(28,596
|
)
|
|
(1.2
|
)%
|
Swiss Franc
|
(8,638
|
)
|
|
(0.4
|
)%
|
|
8,638
|
|
|
0.4
|
%
|
||
Other
|
1,562
|
|
|
0.1
|
%
|
|
(1,562
|
)
|
|
(0.1
|
)%
|
||
Total
|
$
|
21,520
|
|
|
0.9
|
%
|
|
$
|
(21,520
|
)
|
|
(0.9
|
)%
|
|
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)
|
$
|
(16,238
|
)
|
|
(0.7
|
)%
|
|
$
|
19,112
|
|
|
0.8
|
%
|
Asset-backed securities
(2)
|
(5,240
|
)
|
|
(0.2
|
)%
|
|
5,254
|
|
|
0.2
|
%
|
||
Interest rate swaps and derivatives
|
3,484
|
|
|
0.2
|
%
|
|
(3,484
|
)
|
|
(0.2
|
)%
|
||
Net exposure to interest rate risk
|
$
|
(17,994
|
)
|
|
(0.7
|
)%
|
|
$
|
20,882
|
|
|
0.8
|
%
|
(1)
|
Includes interest rate risk associated with investments held as collateral in reinsurance trust accounts.
|
(2)
|
Includes instruments for which durations are available on
March 31, 2019
. Includes a convexity adjustment if convexity is available. Not included are mortgage hedges which would reduce the impact of interest rate changes.
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
|
($ in thousands)
|
||||||
Assets:
|
|
|
|
||||
Asset-backed securities
|
$
|
212,116
|
|
|
$
|
180,458
|
|
Bank debt
|
28,158
|
|
|
24,299
|
|
||
Corporate bonds
|
86,497
|
|
|
75,131
|
|
||
Municipal bonds
|
21,986
|
|
|
25,505
|
|
||
Sovereign debt
|
27,230
|
|
|
3,864
|
|
||
Trade claims
|
151
|
|
|
167
|
|
||
|
$
|
376,138
|
|
|
$
|
309,424
|
|
Liabilities:
|
|
|
|
||||
Corporate bonds
|
$
|
7,481
|
|
|
$
|
11,141
|
|
|
$
|
7,481
|
|
|
$
|
11,141
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
($ in thousands)
|
||||||||||||
Reperforming loans
|
$
|
138,306
|
|
|
65.0
|
%
|
|
$
|
118,595
|
|
|
65.7
|
%
|
Market place loans
|
35,870
|
|
|
16.9
|
%
|
|
51,623
|
|
|
28.6
|
%
|
||
Other (1)
|
38,507
|
|
|
18.1
|
%
|
|
10,240
|
|
|
5.7
|
%
|
||
|
$
|
212,683
|
|
|
100.0
|
%
|
|
$
|
180,458
|
|
|
100.0
|
%
|
(1)
|
Other includes: U.S. Alt-A positions, collateralized debt obligations, commercial mortgage-backed securities, non-U.S. RMBS and aircraft ABS.
|
|
(a) Total number of shares purchased
|
|
(b) Average price paid per share (1)
|
|
(c) Total number of shares purchased as part of publicly announced plans or programs
|
|
(d) Maximum number of shares that may yet be purchased under the plans or programs (2)
|
||||||
January 1, 2019 - January 31, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
61,295,462
|
|
February 1, 2019 - February 28, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
61,295,462
|
|
||
March 1, 2019 - March 31, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
61,295,462
|
|
||
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
61,295,462
|
|
*
|
This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
|
|
Third Point Reinsurance Ltd.
|
Date: May 9, 2019
|
|
|
/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)
|
|
|
|
|
Restricted Shares
:
|
You have been awarded «Restricted_Shares_Awarded» shares of Restricted Shares of the Company, US$0.10 par value, subject to adjustment as provided in Section 5 of the Employee Restricted Shares Agreement.
|
Grant Date
:
|
«Grant_Date»
|
Vesting Schedule
:
|
The Restricted Shares shall vest and become exercisable on «Grant Vesting Schedule», provided you remain continuously providing services to the Company or one of its Affiliates through such vesting date.
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
of Third Point Reinsurance Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ J. Robert Bredahl
|
|
J. Robert Bredahl
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
of Third Point Reinsurance Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Christopher S. Coleman
|
|
Christopher S. Coleman
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
(1)
|
the
Quarterly Report on Form 10-Q
of the Company for the fiscal
period
ended
March 31, 2019
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ J. Robert Bredahl
|
|
J. Robert Bredahl
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
(1)
|
the
Quarterly Report on Form 10-Q
of the Company for the fiscal
period
ended
March 31, 2019
(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)
|
|