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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Third Point Reinsurance Ltd | NYSE:TPRE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.21 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the quarterly period ended September 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
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
|
||||
Investment in related party investment fund, at fair value (cost - $1,629,850; 2017 - N/A) (1)
|
|
$
|
1,627,924
|
|
|
$
|
—
|
|
Equity securities, trading, at fair value (cost - N/A; 2017 - $1,868,735)
|
|
—
|
|
|
2,283,050
|
|
||
Debt securities, trading, at fair value (cost - $258,430; 2017 - $711,322)
|
|
244,876
|
|
|
675,158
|
|
||
Other investments, at fair value
|
|
196
|
|
|
37,731
|
|
||
Total investments in securities
|
|
1,872,996
|
|
|
2,995,939
|
|
||
Cash and cash equivalents
|
|
49,786
|
|
|
8,197
|
|
||
Restricted cash and cash equivalents
|
|
581,134
|
|
|
541,136
|
|
||
Subscription receivable from related party investment fund
|
|
30,000
|
|
|
—
|
|
||
Due from brokers
|
|
12,853
|
|
|
305,093
|
|
||
Derivative assets, at fair value
|
|
—
|
|
|
73,372
|
|
||
Interest and dividends receivable
|
|
1,975
|
|
|
3,774
|
|
||
Reinsurance balances receivable
|
|
577,382
|
|
|
476,008
|
|
||
Deferred acquisition costs, net
|
|
231,286
|
|
|
258,793
|
|
||
Unearned premiums ceded
|
|
16,772
|
|
|
1,049
|
|
||
Loss and loss adjustment expenses recoverable
|
|
1,576
|
|
|
1,113
|
|
||
Other assets
|
|
13,082
|
|
|
7,320
|
|
||
Total assets
|
|
$
|
3,388,842
|
|
|
$
|
4,671,794
|
|
Liabilities
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
9,200
|
|
|
$
|
34,632
|
|
Reinsurance balances payable
|
|
71,070
|
|
|
41,614
|
|
||
Deposit liabilities
|
|
146,961
|
|
|
129,133
|
|
||
Unearned premium reserves
|
|
693,333
|
|
|
649,518
|
|
||
Loss and loss adjustment expense reserves
|
|
822,180
|
|
|
720,570
|
|
||
Securities sold, not yet purchased, at fair value
|
|
—
|
|
|
394,278
|
|
||
Securities sold under an agreement to repurchase
|
|
—
|
|
|
29,618
|
|
||
Due to brokers
|
|
16
|
|
|
770,205
|
|
||
Derivative liabilities, at fair value
|
|
—
|
|
|
14,503
|
|
||
Participation agreement with related party investment fund
|
|
23,149
|
|
|
—
|
|
||
Interest and dividends payable
|
|
1,157
|
|
|
4,275
|
|
||
Senior notes payable, net of deferred costs
|
|
113,866
|
|
|
113,733
|
|
||
Total liabilities
|
|
1,880,932
|
|
|
2,902,079
|
|
||
Commitments and contingent liabilities
|
|
|
|
|
||||
Redeemable noncontrolling interests in related party
|
|
—
|
|
|
108,219
|
|
||
Shareholders’ equity
|
|
|
|
|
||||
Preference shares (par value $0.10; authorized, 30,000,000; none issued)
|
|
—
|
|
|
—
|
|
||
Common shares (Issued: 2018 - 94,169,725; 2017 - 107,227,347; Outstanding: 2018 - 94,169,725; 2017 - 103,282,427)
|
|
9,417
|
|
|
10,723
|
|
||
Treasury shares (2018 - 0; 2017 - 3,944,920)
|
|
—
|
|
|
(48,253
|
)
|
||
Additional paid-in capital
|
|
924,153
|
|
|
1,099,599
|
|
||
Retained earnings
|
|
574,340
|
|
|
594,020
|
|
||
Shareholders’ equity attributable to Third Point Re common shareholders
|
|
1,507,910
|
|
|
1,656,089
|
|
||
Noncontrolling interests in related party
|
|
—
|
|
|
5,407
|
|
||
Total shareholders’ equity
|
|
1,507,910
|
|
|
1,661,496
|
|
||
Total liabilities, noncontrolling interests and shareholders’ equity
|
|
$
|
3,388,842
|
|
|
$
|
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
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
$
|
30,064
|
|
|
$
|
174,539
|
|
|
$
|
458,189
|
|
|
$
|
477,457
|
|
Gross premiums ceded
|
—
|
|
|
—
|
|
|
(18,125
|
)
|
|
(2,550
|
)
|
||||
Net premiums written
|
30,064
|
|
|
174,539
|
|
|
440,064
|
|
|
474,907
|
|
||||
Change in net unearned premium reserves
|
97,929
|
|
|
(68,564
|
)
|
|
(28,092
|
)
|
|
(57,365
|
)
|
||||
Net premiums earned
|
127,993
|
|
|
105,975
|
|
|
411,972
|
|
|
417,542
|
|
||||
Net investment loss from investment in related party investment fund (1)
|
(1,926
|
)
|
|
—
|
|
|
(1,926
|
)
|
|
—
|
|
||||
Net investment income before management and performance fees to related parties
|
3,641
|
|
|
119,516
|
|
|
57,148
|
|
|
427,982
|
|
||||
Management and performance fees to related parties
|
(5,305
|
)
|
|
(30,548
|
)
|
|
(29,845
|
)
|
|
(103,179
|
)
|
||||
Net investment income (loss)
|
(3,590
|
)
|
|
88,968
|
|
|
25,377
|
|
|
324,803
|
|
||||
Total revenues
|
124,403
|
|
|
194,943
|
|
|
437,349
|
|
|
742,345
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Loss and loss adjustment expenses incurred, net
|
88,706
|
|
|
77,275
|
|
|
265,326
|
|
|
270,549
|
|
||||
Acquisition costs, net
|
40,841
|
|
|
33,974
|
|
|
149,830
|
|
|
157,067
|
|
||||
General and administrative expenses
|
9,511
|
|
|
13,218
|
|
|
28,688
|
|
|
38,804
|
|
||||
Other (income) expense
|
(1,362
|
)
|
|
3,846
|
|
|
6,616
|
|
|
8,852
|
|
||||
Interest expense
|
2,074
|
|
|
2,074
|
|
|
6,154
|
|
|
6,151
|
|
||||
Foreign exchange (gains) losses
|
(1,979
|
)
|
|
5,437
|
|
|
(4,215
|
)
|
|
10,233
|
|
||||
Total expenses
|
137,791
|
|
|
135,824
|
|
|
452,399
|
|
|
491,656
|
|
||||
Income (loss) before income tax (expense) benefit
|
(13,388
|
)
|
|
59,119
|
|
|
(15,050
|
)
|
|
250,689
|
|
||||
Income tax (expense) benefit
|
111
|
|
|
(3,475
|
)
|
|
(4,407
|
)
|
|
(14,080
|
)
|
||||
Net income (loss)
|
(13,277
|
)
|
|
55,644
|
|
|
(19,457
|
)
|
|
236,609
|
|
||||
Net income attributable to noncontrolling interests in related party
|
(4
|
)
|
|
(959
|
)
|
|
(223
|
)
|
|
(3,160
|
)
|
||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
(13,281
|
)
|
|
$
|
54,685
|
|
|
$
|
(19,680
|
)
|
|
$
|
233,449
|
|
Earnings (loss) per share available to Third Point Re common shareholders
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share available to Third Point Re common shareholders
|
$
|
(0.14
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.20
|
)
|
|
$
|
2.27
|
|
Diluted earnings (loss) per share available to Third Point Re common shareholders
|
$
|
(0.14
|
)
|
|
$
|
0.52
|
|
|
$
|
(0.20
|
)
|
|
$
|
2.22
|
|
Weighted average number of common shares used in the determination of earnings (loss) per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
95,671,385
|
|
|
101,391,145
|
|
|
98,768,442
|
|
|
102,553,346
|
|
||||
Diluted
|
95,671,385
|
|
|
104,679,574
|
|
|
98,768,442
|
|
|
105,040,251
|
|
||||
|
|
|
|
|
|
|
|
||||||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Common shares
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
$
|
9,963
|
|
|
$
|
10,733
|
|
|
$
|
10,723
|
|
|
$
|
10,650
|
|
Issuance of common shares, net
|
—
|
|
|
5
|
|
|
67
|
|
|
88
|
|
||||
Common shares repurchased and retired
|
(546
|
)
|
|
—
|
|
|
(1,373
|
)
|
|
—
|
|
||||
Balance, end of period
|
9,417
|
|
|
10,738
|
|
|
9,417
|
|
|
10,738
|
|
||||
Treasury shares
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
—
|
|
|
(48,253
|
)
|
|
(48,253
|
)
|
|
(7,389
|
)
|
||||
Repurchase of common shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,864
|
)
|
||||
Retirement of treasury shares
|
—
|
|
|
—
|
|
|
48,253
|
|
|
—
|
|
||||
Balance, end of period
|
—
|
|
|
(48,253
|
)
|
|
—
|
|
|
(48,253
|
)
|
||||
Additional paid-in capital
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
994,170
|
|
|
1,098,857
|
|
|
1,099,599
|
|
|
1,094,568
|
|
||||
Issuance of common shares, net
|
(1
|
)
|
|
501
|
|
|
(142
|
)
|
|
1,416
|
|
||||
Share compensation expense
|
2,398
|
|
|
640
|
|
|
4,956
|
|
|
4,014
|
|
||||
Common shares repurchased and retired
|
(72,414
|
)
|
|
—
|
|
|
(180,260
|
)
|
|
—
|
|
||||
Balance, end of period
|
924,153
|
|
|
1,099,998
|
|
|
924,153
|
|
|
1,099,998
|
|
||||
Retained earnings
|
|
|
|
|
|
|
|
||||||||
Balance, beginning of period
|
587,621
|
|
|
494,986
|
|
|
594,020
|
|
|
316,222
|
|
||||
Net income (loss)
|
(13,277
|
)
|
|
55,644
|
|
|
(19,457
|
)
|
|
236,609
|
|
||||
Net income attributable to noncontrolling interests in related party
|
(4
|
)
|
|
(959
|
)
|
|
(223
|
)
|
|
(3,160
|
)
|
||||
Balance, end of period
|
574,340
|
|
|
549,671
|
|
|
574,340
|
|
|
549,671
|
|
||||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,507,910
|
|
|
1,612,154
|
|
|
1,507,910
|
|
|
1,612,154
|
|
||||
Noncontrolling interests in related party
|
—
|
|
|
5,241
|
|
|
—
|
|
|
5,241
|
|
||||
Total shareholders' equity
|
$
|
1,507,910
|
|
|
$
|
1,617,395
|
|
|
$
|
1,507,910
|
|
|
$
|
1,617,395
|
|
|
|
|
|
|
|
|
|
||||||||
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)
|
$
|
(19,457
|
)
|
|
$
|
236,609
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Share compensation expense
|
4,956
|
|
|
4,014
|
|
||
Net interest (income) expense on deposit liabilities
|
(1,609
|
)
|
|
1,472
|
|
||
Net realized and unrealized gain on investments and derivatives
|
(32,373
|
)
|
|
(383,681
|
)
|
||
Net unrealized loss on investment in related party investment fund (1)
|
1,926
|
|
|
—
|
|
||
Net foreign exchange (gains) losses
|
(4,215
|
)
|
|
10,233
|
|
||
Amortization of premium and accretion of discount, net
|
2,674
|
|
|
(452
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Reinsurance balances receivable
|
(87,911
|
)
|
|
(77,444
|
)
|
||
Deferred acquisition costs, net
|
27,507
|
|
|
(1,473
|
)
|
||
Unearned premiums ceded
|
(15,723
|
)
|
|
(934
|
)
|
||
Loss and loss adjustment expenses recoverable
|
(463
|
)
|
|
(1,586
|
)
|
||
Other assets
|
(5,757
|
)
|
|
8,218
|
|
||
Interest and dividends receivable, net
|
(5,273
|
)
|
|
769
|
|
||
Unearned premium reserves
|
43,815
|
|
|
58,299
|
|
||
Loss and loss adjustment expense reserves
|
107,325
|
|
|
78,931
|
|
||
Accounts payable and accrued expenses
|
(22,761
|
)
|
|
14,173
|
|
||
Reinsurance balances payable
|
29,624
|
|
|
11,462
|
|
||
Performance fee payable to related party
|
—
|
|
|
73,210
|
|
||
Net cash provided by operating activities
|
22,285
|
|
|
31,820
|
|
||
Investing activities
|
|
|
|
||||
Contributions to related party investment fund, including subscription receivable (1)
|
(88,658
|
)
|
|
—
|
|
||
Purchases of investments
|
(3,235,659
|
)
|
|
(2,238,167
|
)
|
||
Proceeds from sales and maturities of investments
|
3,222,239
|
|
|
2,536,688
|
|
||
Purchases of investments to cover short sales
|
(853,798
|
)
|
|
(440,242
|
)
|
||
Proceeds from short sales of investments
|
800,508
|
|
|
735,132
|
|
||
Change in due to/from brokers, net
|
471,352
|
|
|
(400,566
|
)
|
||
Decrease in securities sold under an agreement to repurchase
|
(29,618
|
)
|
|
—
|
|
||
Net cash provided by investing activities
|
286,366
|
|
|
192,845
|
|
||
Financing activities
|
|
|
|
||||
Proceeds from issuance of Third Point Re common shares, net of costs
|
—
|
|
|
1,504
|
|
||
Taxes paid on withholding shares
|
(74
|
)
|
|
—
|
|
||
Purchases of Third Point Re common shares under share repurchase program
|
(133,380
|
)
|
|
(40,864
|
)
|
||
Increase in deposit liabilities, net
|
4,340
|
|
|
6,380
|
|
||
Change in total noncontrolling interests in related party, net
|
(97,950
|
)
|
|
(16,780
|
)
|
||
Net cash used in financing activities
|
(227,064
|
)
|
|
(49,760
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
81,587
|
|
|
174,905
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
549,333
|
|
|
308,891
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
630,920
|
|
|
$
|
483,796
|
|
Supplementary information
|
|
|
|
||||
Interest paid in cash
|
$
|
25,391
|
|
|
$
|
17,551
|
|
Income taxes paid in cash
|
7,026
|
|
|
5,996
|
|
||
Non-cash transfer of net investment assets to the related party investment fund (1)
|
$
|
1,571,191
|
|
|
$
|
—
|
|
|
|
|
|
||||
The accompanying Notes to the Condensed Consolidated Financial Statements are
an integral part of the Condensed Consolidated Financial Statements.
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
$
|
49,786
|
|
|
$
|
8,197
|
|
Restricted cash securing letter of credit facilities (1)
|
180,524
|
|
|
250,487
|
|
||
Restricted cash securing reinsurance contracts (2)
|
400,610
|
|
|
290,649
|
|
||
Total cash, cash equivalents and restricted cash (3)
|
630,920
|
|
|
549,333
|
|
||
Restricted investments securing reinsurance contracts (2)
|
244,876
|
|
|
326,429
|
|
||
Total cash, cash equivalents, restricted cash and restricted investments
|
$
|
875,796
|
|
|
$
|
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.
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Total investments in securities, including investment in related party investment fund
|
$
|
1,872,800
|
|
|
$
|
2,995,097
|
|
Cash and cash equivalents
|
10,387
|
|
|
8
|
|
||
Restricted cash and cash equivalents
|
581,134
|
|
|
541,136
|
|
||
Due from brokers
|
12,853
|
|
|
305,093
|
|
||
Derivative assets, at fair value
|
—
|
|
|
73,372
|
|
||
Interest and dividends receivable
|
1,975
|
|
|
3,774
|
|
||
Total assets
|
2,479,149
|
|
|
3,918,480
|
|
||
Liabilities and noncontrolling interests in related party
|
|
|
|
||||
Accounts payable and accrued expenses
|
740
|
|
|
5,137
|
|
||
Securities sold, not yet purchased
|
—
|
|
|
394,278
|
|
||
Securities sold under an agreement to repurchase
|
—
|
|
|
29,618
|
|
||
Due to brokers
|
16
|
|
|
770,205
|
|
||
Derivative liabilities, at fair value
|
—
|
|
|
14,503
|
|
||
Participation agreement with related party investment fund
|
23,149
|
|
|
—
|
|
||
Interest and dividends payable
|
131
|
|
|
1,218
|
|
||
Total noncontrolling interests in related party
(1)
|
—
|
|
|
113,626
|
|
||
Total liabilities and noncontrolling interests in related party
|
24,036
|
|
|
1,328,585
|
|
||
Total net investments managed by Third Point LLC
|
$
|
2,455,113
|
|
|
$
|
2,589,895
|
|
(1)
|
See
Note 19
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.
|
|
September 30, 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
|
$
|
—
|
|
|
$
|
201,319
|
|
|
$
|
—
|
|
|
$
|
201,319
|
|
Sovereign debt
|
—
|
|
|
43,557
|
|
|
—
|
|
|
43,557
|
|
||||
Total debt securities
|
$
|
—
|
|
|
$
|
244,876
|
|
|
$
|
—
|
|
|
244,876
|
|
|
Investments in funds valued at NAV
|
|
|
|
|
|
|
1,628,120
|
|
|||||||
Total assets
|
|
|
|
|
|
|
$
|
1,872,996
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities (embedded)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
110
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
110
|
|
•
|
The key inputs for most OTC option contracts included 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 included notional, maturity, forward rate, spot rate, various interest rate curves and discount factor.
|
•
|
The key inputs for swap valuation varied based on the type of underlying security on which the contract was written. Generally, the key inputs for most swap contracts included notional, swap period, fixed rate, credit or interest rate curves, current market or spot price of the underlying security and the volatility of the underlying security.
|
|
December 31, 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
|
|
|
July 1,
2018 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
(1)
|
|
Realized and Unrealized Gains (Losses)
(2)
|
|
September 30,
2018 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,362
|
|
|
$
|
—
|
|
|
$
|
533
|
|
|
$
|
(4,714
|
)
|
|
$
|
(181
|
)
|
|
$
|
—
|
|
Private preferred equity securities
|
56,769
|
|
|
—
|
|
|
37,774
|
|
|
(93,666
|
)
|
|
(877
|
)
|
|
—
|
|
||||||
Asset-backed securities
|
28,139
|
|
|
—
|
|
|
7,348
|
|
|
(35,515
|
)
|
|
28
|
|
|
—
|
|
||||||
Corporate bonds
|
9,968
|
|
|
—
|
|
|
869
|
|
|
(10,976
|
)
|
|
139
|
|
|
—
|
|
||||||
Rights and warrants
|
424
|
|
|
—
|
|
|
97
|
|
|
(712
|
)
|
|
191
|
|
|
—
|
|
||||||
Real estate
|
7,351
|
|
|
—
|
|
|
—
|
|
|
(6,664
|
)
|
|
(687
|
)
|
|
—
|
|
||||||
Derivative assets (free standing)
|
6,886
|
|
|
—
|
|
|
—
|
|
|
(7,646
|
)
|
|
760
|
|
|
—
|
|
||||||
Total assets
|
$
|
113,899
|
|
|
$
|
—
|
|
|
$
|
46,621
|
|
|
$
|
(159,893
|
)
|
|
$
|
(627
|
)
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,839
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,823
|
|
|
$
|
16
|
|
|
$
|
—
|
|
Derivative liabilities (embedded)
|
(164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|
(110
|
)
|
||||||
Total liabilities
|
$
|
(2,003
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,823
|
|
|
$
|
70
|
|
|
$
|
(110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 1,
2018 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
(1)
|
|
Realized and Unrealized Gains (Losses)
(2)
|
|
September 30,
2018 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,794
|
|
|
$
|
—
|
|
|
$
|
567
|
|
|
$
|
(4,726
|
)
|
|
$
|
(635
|
)
|
|
$
|
—
|
|
Private preferred equity securities
|
57,126
|
|
|
—
|
|
|
38,376
|
|
|
(91,065
|
)
|
|
(4,437
|
)
|
|
—
|
|
||||||
Asset-backed securities
|
27,308
|
|
|
—
|
|
|
35,905
|
|
|
(60,906
|
)
|
|
(2,307
|
)
|
|
—
|
|
||||||
Corporate bonds
|
9,868
|
|
|
—
|
|
|
1,372
|
|
|
(11,763
|
)
|
|
523
|
|
|
—
|
|
||||||
Other debt securities
|
713
|
|
|
—
|
|
|
—
|
|
|
(913
|
)
|
|
200
|
|
|
—
|
|
||||||
Rights and warrants
|
435
|
|
|
—
|
|
|
753
|
|
|
(1,380
|
)
|
|
192
|
|
|
—
|
|
||||||
Real estate
|
6,831
|
|
|
—
|
|
|
—
|
|
|
(6,817
|
)
|
|
(14
|
)
|
|
—
|
|
||||||
Total assets
|
$
|
107,075
|
|
|
$
|
—
|
|
|
$
|
76,973
|
|
|
$
|
(177,570
|
)
|
|
$
|
(6,478
|
)
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(2,085
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,797
|
|
|
$
|
288
|
|
|
$
|
—
|
|
Derivative liabilities (embedded)
|
(171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
(110
|
)
|
||||||
Total liabilities
|
$
|
(2,256
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,797
|
|
|
$
|
349
|
|
|
$
|
(110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 1,
2017 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses)
(2)
|
|
September 30,
2017 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,775
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
4,774
|
|
Private preferred equity securities
|
50,759
|
|
|
—
|
|
|
2,095
|
|
|
(1,607
|
)
|
|
1,439
|
|
|
52,686
|
|
||||||
Asset-backed securities
|
35,711
|
|
|
(8,759
|
)
|
|
23,320
|
|
|
(24,581
|
)
|
|
(3,899
|
)
|
|
21,792
|
|
||||||
Bank debt
|
10,246
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475
|
|
|
10,721
|
|
||||||
Corporate bonds
|
9,095
|
|
|
(236
|
)
|
|
1,183
|
|
|
(198
|
)
|
|
(159
|
)
|
|
9,685
|
|
||||||
Other debt securities
|
3,312
|
|
|
—
|
|
|
5,120
|
|
|
(3,307
|
)
|
|
2,143
|
|
|
7,268
|
|
||||||
Rights and warrants
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Real estate
|
—
|
|
|
—
|
|
|
2,357
|
|
|
—
|
|
|
398
|
|
|
2,755
|
|
||||||
Total assets
|
$
|
113,898
|
|
|
$
|
(8,993
|
)
|
|
$
|
34,075
|
|
|
$
|
(29,693
|
)
|
|
$
|
396
|
|
|
$
|
109,683
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,367
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(798
|
)
|
|
$
|
(2,165
|
)
|
Derivative liabilities (embedded)
|
(180
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(180
|
)
|
||||||
Total liabilities
|
$
|
(1,547
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(798
|
)
|
|
$
|
(2,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
January 1,
2017 |
|
Transfers in to (out of) Level 3
|
|
Purchases
|
|
Sales
|
|
Realized and Unrealized Gains (Losses)
(2)
|
|
September 30,
2017 |
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private common equity securities
|
$
|
4,799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
|
$
|
4,774
|
|
Private preferred equity securities
|
48,834
|
|
|
—
|
|
|
3,034
|
|
|
(2,102
|
)
|
|
2,920
|
|
|
52,686
|
|
||||||
Asset-backed securities
|
17,628
|
|
|
16,437
|
|
|
57,346
|
|
|
(56,947
|
)
|
|
(12,672
|
)
|
|
21,792
|
|
||||||
Bank debt
|
8,350
|
|
|
—
|
|
|
4
|
|
|
(310
|
)
|
|
2,677
|
|
|
10,721
|
|
||||||
Corporate bonds
|
9,255
|
|
|
(262
|
)
|
|
1,211
|
|
|
(719
|
)
|
|
200
|
|
|
9,685
|
|
||||||
Other debt securities
|
—
|
|
|
—
|
|
|
5,120
|
|
|
—
|
|
|
2,148
|
|
|
7,268
|
|
||||||
Rights and warrants
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Real estate
|
—
|
|
|
—
|
|
|
2,357
|
|
|
—
|
|
|
398
|
|
|
2,755
|
|
||||||
Total assets
|
$
|
88,866
|
|
|
$
|
16,177
|
|
|
$
|
69,072
|
|
|
$
|
(60,078
|
)
|
|
$
|
(4,354
|
)
|
|
$
|
109,683
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities (free standing)
|
$
|
(1,326
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
(801
|
)
|
|
$
|
(2,165
|
)
|
Derivative liabilities (embedded)
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
(180
|
)
|
||||||
Total liabilities
|
$
|
(1,418
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
(889
|
)
|
|
$
|
(2,345
|
)
|
(1)
|
Sales of investments measured at fair value using Level 3 inputs include the impact of the LP Transaction as described in Note 4.
|
(2)
|
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)
.
|
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
|
|
December 31, 2017
|
Overnights and continuous
|
|
Up to 30 days
|
|
30 - 90 days
|
|
Greater than 90 days
|
|
Total
|
||||||||||
Repurchase agreements
|
|||||||||||||||||||
Asset-backed securities
|
$
|
—
|
|
|
$
|
10,774
|
|
|
$
|
18,844
|
|
|
$
|
—
|
|
|
$
|
29,618
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Due from brokers
|
|
|
|
||||
Cash held at brokers
|
$
|
8,316
|
|
|
$
|
295,467
|
|
Receivable from unsettled trades (1)
|
4,537
|
|
|
9,626
|
|
||
|
$
|
12,853
|
|
|
$
|
305,093
|
|
Due to brokers
|
|
|
|
||||
Borrowing from prime brokers
|
$
|
16
|
|
|
$
|
759,267
|
|
Payable from unsettled trades
|
—
|
|
|
10,938
|
|
||
|
$
|
16
|
|
|
$
|
770,205
|
|
|
As of September 30, 2018
|
||||||||
|
Listing currency (1)
|
|
Fair Value
|
|
Notional Amounts (2)
|
||||
Derivative Liabilities by Primary Underlying Risk
|
|
|
|
|
|
||||
Embedded derivative liabilities in reinsurance contracts (3)
|
USD
|
|
$
|
110
|
|
|
$
|
20,000
|
|
Total Derivative Liabilities (embedded)
|
|
|
$
|
110
|
|
|
$
|
20,000
|
|
|
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
September 30, 2018
and
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
|
||||||||||||||
|
September 30, 2018
|
|
September 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
|
$
|
(2,439
|
)
|
|
$
|
2,943
|
|
|
$
|
2,824
|
|
|
$
|
(4,059
|
)
|
Credit Default Swaps - Protection Sold
|
(463
|
)
|
|
452
|
|
|
(26
|
)
|
|
(288
|
)
|
||||
Total Return Swaps - Long Contracts
|
1,667
|
|
|
(824
|
)
|
|
—
|
|
|
1,506
|
|
||||
Equity Price
|
|
|
|
|
|
|
|
||||||||
Contracts for Differences - Long Contracts
|
7,164
|
|
|
(5,914
|
)
|
|
5,021
|
|
|
13,949
|
|
||||
Contracts for Differences - Short Contracts
|
(1,141
|
)
|
|
(1,533
|
)
|
|
(511
|
)
|
|
(1,219
|
)
|
||||
Total Return Swaps - Long Contracts
|
(768
|
)
|
|
—
|
|
|
4,655
|
|
|
5,455
|
|
||||
Total Return Swaps - Short Contracts
|
(956
|
)
|
|
—
|
|
|
(2,732
|
)
|
|
(4,519
|
)
|
||||
Interest Rates
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||
Interest Rate Swaptions
|
(1,819
|
)
|
|
1,629
|
|
|
—
|
|
|
(512
|
)
|
||||
Sovereign Futures - Short Contracts
|
(605
|
)
|
|
644
|
|
|
(139
|
)
|
|
1,284
|
|
||||
Total Return Swaps - Long Contracts
|
(7,569
|
)
|
|
3,277
|
|
|
—
|
|
|
—
|
|
||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Forward Contracts
|
6,785
|
|
|
(6,038
|
)
|
|
(1,863
|
)
|
|
(609
|
)
|
||||
Foreign Currency Options - Purchased
|
567
|
|
|
(469
|
)
|
|
(529
|
)
|
|
3
|
|
||||
Foreign Currency Options - Sold
|
(286
|
)
|
|
292
|
|
|
1
|
|
|
(2
|
)
|
||||
|
$
|
137
|
|
|
$
|
(5,541
|
)
|
|
$
|
6,694
|
|
|
$
|
10,989
|
|
Embedded Derivatives
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives in reinsurance contracts
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Derivative Liabilities (embedded)
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
Nine months ended
|
||||||||||||||
|
September 30, 2018
|
|
September 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
|
$
|
(3,557
|
)
|
|
$
|
921
|
|
|
$
|
359
|
|
|
$
|
(4,029
|
)
|
Credit Default Swaps - Protection Sold
|
(333
|
)
|
|
744
|
|
|
11
|
|
|
(347
|
)
|
||||
Total Return Swaps - Long Contracts
|
3,486
|
|
|
(2,000
|
)
|
|
(29
|
)
|
|
1,469
|
|
||||
Equity Price
|
|
|
|
|
|
|
|
||||||||
Contracts for Differences - Long Contracts
|
32,471
|
|
|
(15,098
|
)
|
|
51,946
|
|
|
20,636
|
|
||||
Contracts for Differences - Short Contracts
|
4,569
|
|
|
(3,608
|
)
|
|
(4,716
|
)
|
|
1,726
|
|
||||
Total Return Swaps - Long Contracts
|
16,791
|
|
|
(15,864
|
)
|
|
8,517
|
|
|
14,002
|
|
||||
Total Return Swaps - Short Contracts
|
(17,329
|
)
|
|
1,883
|
|
|
(6,475
|
)
|
|
(3,731
|
)
|
||||
Interest Rates
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps
|
—
|
|
|
—
|
|
|
(3,104
|
)
|
|
(1,740
|
)
|
||||
Interest Rate Swaptions
|
(1,819
|
)
|
|
1,228
|
|
|
522
|
|
|
(2,854
|
)
|
||||
Sovereign Future Options - Long Contracts
|
403
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Future Options - Short Contracts
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Futures - Long Contracts
|
639
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign Futures - Short Contracts
|
(1,166
|
)
|
|
—
|
|
|
(8,795
|
)
|
|
1,942
|
|
||||
Total Return Swaps - Long Contracts
|
(7,569
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign Currency Exchange Rates
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Forward Contracts
|
(2,849
|
)
|
|
4,403
|
|
|
(11,898
|
)
|
|
(1,877
|
)
|
||||
Foreign Currency Future Options - Purchased
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign Currency Options - Purchased
|
5,138
|
|
|
—
|
|
|
(6,716
|
)
|
|
1,165
|
|
||||
Foreign Currency Options - Sold
|
(771
|
)
|
|
—
|
|
|
2,185
|
|
|
(82
|
)
|
||||
|
$
|
28,046
|
|
|
$
|
(27,391
|
)
|
|
$
|
21,807
|
|
|
$
|
26,280
|
|
Embedded Derivatives
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives in reinsurance contracts
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
Total Derivative Liabilities (embedded)
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
(88
|
)
|
|
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
|
|
|
|
|
|
|
|
|
|
||||||||
|
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.
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Case loss and loss adjustment expense reserves
|
$
|
120,714
|
|
|
$
|
115,622
|
|
Incurred but not reported loss and loss adjustment expense reserves
|
701,005
|
|
|
604,260
|
|
||
Deferred gains on retroactive reinsurance contracts
|
461
|
|
|
688
|
|
||
|
$
|
822,180
|
|
|
$
|
720,570
|
|
|
September 30,
2018 |
|
September 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
|
254,265
|
|
|
295,379
|
|
||
Prior years (1)
|
11,061
|
|
|
(24,830
|
)
|
||
Total incurred loss and loss adjustment expenses
|
265,326
|
|
|
270,549
|
|
||
Net loss and loss adjustment expenses paid in respect of losses occurring in:
|
|
|
|
||||
Current year
|
(58,652
|
)
|
|
(47,655
|
)
|
||
Prior years
|
(103,572
|
)
|
|
(145,550
|
)
|
||
Total net paid losses
|
(162,224
|
)
|
|
(193,205
|
)
|
||
Foreign currency translation
|
(5,715
|
)
|
|
15,310
|
|
||
Net reserves for loss and loss adjustment expenses, end of period
|
816,844
|
|
|
697,782
|
|
||
Plus: loss and loss adjustment expenses recoverable, end of period
|
1,576
|
|
|
1,587
|
|
||
Plus: deferred charges on retroactive reinsurance contracts
|
3,760
|
|
|
—
|
|
||
Gross reserves for loss and loss adjustment expenses, end of period
|
$
|
822,180
|
|
|
$
|
699,369
|
|
•
|
The
$18.2 million
net
increase
in loss and loss adjustment expenses incurred resulting from
increase
s in premium earnings estimates was accompanied by a
$6.1 million
increase
in acquisition costs, for a total of
$24.3 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
$25.6 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
$1.3 million
improvement in the net underwriting results
for the
nine
months ended
September 30, 2018
.
|
•
|
The
$7.1 million
of net
favorable
prior years’ reserve development for the
nine
months ended
September 30, 2018
was accompanied by net
increase
s of
$2.3 million
in acquisition costs, resulting in a
$4.8 million
improvement in the net underwriting results
, primarily due to:
|
•
|
$12.7 million
of net favorable underwriting loss development relating to workers’ compensation contracts, multi-line contracts and credit and financial lines contracts. The favorable development was the result of better than expected loss experience and was 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
$6.1 million
improvement in the net underwriting results
for the
nine
months ended
September 30, 2018
.
|
•
|
The
$31.7 million
of net favorable prior years’ reserve development for the
nine
months ended
September 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 nine months ended
September 30, 2017
was
$31.7 million
, resulting in minimal impact in the net underwriting loss.
|
•
|
The
$6.9 million
increase in loss and loss adjustment expenses incurred related to the increase in premium earnings estimates on certain contracts was accompanied by minimal increases in acquisition costs. The related increase in earned premium related to the increase in premium earnings estimates was
$8.1 million
, resulting in a
$1.2 million
improvement in the net underwriting results
for the
nine
months ended
September 30, 2017
.
|
•
|
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
$1.2 million
improvement in the net underwriting results
for the
nine
months ended
September 30, 2017
.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Management fees - Third Point LLC
|
$
|
6,387
|
|
|
$
|
9,507
|
|
|
$
|
25,797
|
|
|
$
|
26,751
|
|
Performance fees - Third Point Advisors LLC
|
(1,082
|
)
|
|
21,041
|
|
|
4,048
|
|
|
76,428
|
|
||||
Management and performance fees to related parties as reported in the Company’s condensed consolidated statement of income
|
5,305
|
|
|
30,548
|
|
|
29,845
|
|
|
103,179
|
|
||||
Management and performance fees included in net investment income from investment in related party investment fund
|
2,352
|
|
|
—
|
|
|
2,352
|
|
|
—
|
|
||||
Total management and performance fees to related parties
|
$
|
7,657
|
|
|
$
|
30,548
|
|
|
$
|
32,197
|
|
|
$
|
103,179
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Balance, beginning of period
|
$
|
129,133
|
|
|
$
|
104,905
|
|
Consideration received
|
9,057
|
|
|
22,658
|
|
||
Consideration receivable
|
14,781
|
|
|
2,080
|
|
||
Net investment expense (income) allocation
|
(1,609
|
)
|
|
2,800
|
|
||
Payments
|
(4,718
|
)
|
|
(3,545
|
)
|
||
Foreign currency translation
|
317
|
|
|
235
|
|
||
Balance, end of period
|
$
|
146,961
|
|
|
$
|
129,133
|
|
|
Letters of Credit
|
|
Collateral
|
||||||||
|
Committed Capacity
|
|
Issued
|
|
Cash and Cash Equivalents
|
||||||
Unsecured syndicated credit facility (1)
|
$
|
200,000
|
|
|
$
|
138,087
|
|
|
n/a
|
|
|
Secured letters of credit facilities
|
425,000
|
|
|
124,543
|
|
|
180,524
|
|
|||
|
$
|
625,000
|
|
|
$
|
262,630
|
|
|
$
|
180,524
|
|
(1)
|
On July 31, 2018, Third Point Re, Third Point Re BDA and Third Point Re USA entered into an Unsecured Revolving Credit and Letter of Credit Facility Agreement (the “Credit Agreement”) with SunTrust Bank, SunTrust Robinson Humphrey, Inc., RBC Capital Markets and ING Capital. The Credit Agreement provides for the issuance of up to
$200.0 million
of letters of credit to support obligations in connection with the reinsurance business of Third Point Re BDA and Third Point Re USA. The Credit Agreement is fully and unconditionally guaranteed by Third Point Reinsurance Ltd.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Net investment income (loss) by type
|
|
|
|
|
|
|
|
||||||||
Net realized gains on investments and investment derivatives
|
$
|
315,181
|
|
|
$
|
25,993
|
|
|
$
|
445,682
|
|
|
$
|
183,939
|
|
Net change in unrealized gains (losses) on investments and investment derivatives
|
(317,849
|
)
|
|
75,016
|
|
|
(413,370
|
)
|
|
199,830
|
|
||||
Net gains (losses) on foreign currencies
|
(3,144
|
)
|
|
7,572
|
|
|
(5,761
|
)
|
|
5,419
|
|
||||
Dividend and interest income
|
13,757
|
|
|
17,355
|
|
|
51,474
|
|
|
57,062
|
|
||||
Dividends paid on securities sold, not yet purchased
|
(1,038
|
)
|
|
(1,537
|
)
|
|
(5,259
|
)
|
|
(3,205
|
)
|
||||
Other expenses
|
(3,266
|
)
|
|
(4,883
|
)
|
|
(15,618
|
)
|
|
(15,063
|
)
|
||||
Management and performance fees to related parties
|
(5,305
|
)
|
|
(30,548
|
)
|
|
(29,845
|
)
|
|
(103,179
|
)
|
||||
Net investment loss from investment in related party investment fund (1)
|
(1,926
|
)
|
|
—
|
|
|
(1,926
|
)
|
|
—
|
|
||||
Net investment income (loss)
|
$
|
(3,590
|
)
|
|
$
|
88,968
|
|
|
$
|
25,377
|
|
|
$
|
324,803
|
|
(1)
|
Effective August 31, 2018, Third Point Re, Third Point RE BDA and Third Point Re USA entered into a 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 Notes
4
and
11
for additional information regarding the LPA and related management and performance fees.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
||||||||
Net investment income (loss) by asset type
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
30,317
|
|
|
$
|
81,778
|
|
|
$
|
70,873
|
|
|
$
|
343,605
|
|
Private common equity securities
|
(175
|
)
|
|
(65
|
)
|
|
(628
|
)
|
|
(26
|
)
|
||||
Private preferred equity securities
|
(806
|
)
|
|
1,439
|
|
|
(2,680
|
)
|
|
3,066
|
|
||||
Total equities
|
29,336
|
|
|
83,152
|
|
|
67,565
|
|
|
346,645
|
|
||||
Asset-backed securities
|
1,178
|
|
|
6,532
|
|
|
20,660
|
|
|
11,665
|
|
||||
Bank debt
|
2,005
|
|
|
1,277
|
|
|
5,326
|
|
|
7,491
|
|
||||
Corporate bonds
|
455
|
|
|
999
|
|
|
(2,958
|
)
|
|
6,707
|
|
||||
Municipal bonds
|
3,742
|
|
|
—
|
|
|
9,990
|
|
|
—
|
|
||||
U.S. Treasury securities
|
494
|
|
|
806
|
|
|
335
|
|
|
3,171
|
|
||||
Sovereign debt
|
(2,136
|
)
|
|
9,835
|
|
|
(6,538
|
)
|
|
21,683
|
|
||||
Other debt securities
|
(63
|
)
|
|
2,417
|
|
|
406
|
|
|
2,417
|
|
||||
Total debt securities
|
5,675
|
|
|
21,866
|
|
|
27,221
|
|
|
53,134
|
|
||||
Options
|
(8,908
|
)
|
|
(9,343
|
)
|
|
(15,527
|
)
|
|
(26,409
|
)
|
||||
Rights and warrants
|
191
|
|
|
(16
|
)
|
|
238
|
|
|
22
|
|
||||
Real estate
|
(687
|
)
|
|
398
|
|
|
(186
|
)
|
|
398
|
|
||||
Trade claims
|
(293
|
)
|
|
(716
|
)
|
|
(580
|
)
|
|
(497
|
)
|
||||
Total other investments
|
(9,697
|
)
|
|
(9,677
|
)
|
|
(16,055
|
)
|
|
(26,486
|
)
|
||||
Net investment income (loss) in funds valued at NAV, excluding Third Point Enhanced LP
|
(95
|
)
|
|
2,216
|
|
|
(721
|
)
|
|
8,939
|
|
||||
Total net investment income from invested assets
|
25,219
|
|
|
97,557
|
|
|
78,010
|
|
|
382,232
|
|
||||
Net investment income (loss) by liability type
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
(21,481
|
)
|
|
(6,144
|
)
|
|
(32,407
|
)
|
|
(13,611
|
)
|
||||
Sovereign debt
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Corporate bonds
|
(483
|
)
|
|
350
|
|
|
(2,452
|
)
|
|
(1,819
|
)
|
||||
Options
|
8,790
|
|
|
4,593
|
|
|
21,697
|
|
|
8,175
|
|
||||
Total net investment loss from securities sold, not yet purchased
|
(13,174
|
)
|
|
(1,201
|
)
|
|
(13,162
|
)
|
|
(7,253
|
)
|
||||
Other investment income (losses) and other expenses not presented above
|
|
|
|
|
|
|
|
||||||||
Other investment expenses
|
1,949
|
|
|
(1,477
|
)
|
|
924
|
|
|
(400
|
)
|
||||
Net investment income (loss) on derivative contracts
|
(5,404
|
)
|
|
17,683
|
|
|
655
|
|
|
48,087
|
|
||||
Net investment income (loss) on cash, including foreign exchange gain (loss)
|
(6,021
|
)
|
|
5,738
|
|
|
(15,366
|
)
|
|
(255
|
)
|
||||
Net investment income (losses) on securities purchased under an agreement to sell and securities sold under an agreement to repurchase
|
3
|
|
|
—
|
|
|
(238
|
)
|
|
(39
|
)
|
||||
Withholding taxes reclassified to income tax expense
|
1,069
|
|
|
1,216
|
|
|
6,325
|
|
|
5,610
|
|
||||
Total other investment income (losses) and other expenses
|
(8,404
|
)
|
|
23,160
|
|
|
(7,700
|
)
|
|
53,003
|
|
||||
Management and performance fees to related parties
|
(5,305
|
)
|
|
(30,548
|
)
|
|
(29,845
|
)
|
|
(103,179
|
)
|
||||
Net investment loss from investment in related party investment fund (1)
|
(1,926
|
)
|
|
—
|
|
|
(1,926
|
)
|
|
—
|
|
||||
Net investment income (loss)
|
$
|
(3,590
|
)
|
|
$
|
88,968
|
|
|
$
|
25,377
|
|
|
$
|
324,803
|
|
(1)
|
Effective August 31, 2018, Third Point Re, Third Point RE BDA and Third Point Re USA entered into a 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 4
and
Note 11
for additional information regarding the LPA and related management and performance fees.
|
|
Three and nine months ended
|
||
TP Fund summarized income statement
|
September 30, 2018
|
||
Investment loss
|
|
||
Net realized loss from securities, derivative contracts and foreign currency translations
|
$
|
(4,113
|
)
|
Net change in unrealized gain on securities, derivative contracts and foreign currency translations
|
3,654
|
|
|
Net income from currencies
|
2,606
|
|
|
Dividend and interest income
|
3,818
|
|
|
Total investment income
|
5,965
|
|
|
Expenses
|
|
||
Management fees
|
(2,834
|
)
|
|
Other expenses
|
(5,685
|
)
|
|
Total expenses
|
(8,519
|
)
|
|
Net loss
|
$
|
(2,554
|
)
|
TP Fund summarized balance sheet
|
September 30, 2018
|
||
Assets
|
|
||
Total investments in securities
|
$
|
2,962,324
|
|
Cash and cash equivalents
|
30,001
|
|
|
Due from brokers
|
199,675
|
|
|
Derivative assets, at fair value
|
13,689
|
|
|
Interest and dividends receivable
|
3,472
|
|
|
Other assets
|
370
|
|
|
Total assets
|
3,209,531
|
|
|
Liabilities
|
|
||
Accounts payable and accrued expenses
|
5,284
|
|
|
Securities sold, not yet purchased, at fair value
|
355,600
|
|
|
Due to brokers
|
945,603
|
|
|
Derivative liabilities, at fair value
|
13,375
|
|
|
Interest and dividends payable
|
2,476
|
|
|
Subscriptions received in advance
|
30,000
|
|
|
Total liabilities
|
1,352,338
|
|
|
Total partners' capital
|
$
|
1,857,193
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Investment expense (income) on deposit liabilities
|
$
|
(4,058
|
)
|
|
$
|
1,160
|
|
|
$
|
(1,609
|
)
|
|
$
|
1,472
|
|
Investment expense and change in fair value of embedded derivatives in reinsurance contracts
|
2,696
|
|
|
2,686
|
|
|
8,225
|
|
|
7,380
|
|
||||
|
$
|
(1,362
|
)
|
|
$
|
3,846
|
|
|
$
|
6,616
|
|
|
$
|
8,852
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Income tax expense (benefit) related to U.S. and U.K. subsidiaries (1)
|
$
|
(1,180
|
)
|
|
$
|
2,219
|
|
|
$
|
(1,968
|
)
|
|
$
|
8,246
|
|
Change in uncertain tax positions (2)
|
—
|
|
|
40
|
|
|
50
|
|
|
224
|
|
||||
Withholding taxes on certain investment transactions (2)
|
1,069
|
|
|
1,216
|
|
|
6,325
|
|
|
5,610
|
|
||||
|
$
|
(111
|
)
|
|
$
|
3,475
|
|
|
$
|
4,407
|
|
|
$
|
14,080
|
|
Common shares
|
2018
|
|
2017
|
||
Common shares issued, beginning of period
|
107,227,347
|
|
|
106,501,299
|
|
Options exercised
|
—
|
|
|
150,802
|
|
Restricted shares granted, net of forfeitures
|
50,644
|
|
|
36,418
|
|
Performance restricted shares granted, net of forfeitures and shares withheld
|
260,436
|
|
|
694,886
|
|
Retirement of treasury shares and shares repurchased (1)
|
(13,730,258
|
)
|
|
—
|
|
Warrants exercised, net (2)
|
361,556
|
|
|
—
|
|
Common shares issued, end of period
|
94,169,725
|
|
|
107,383,405
|
|
Treasury shares, end of period
|
—
|
|
|
(3,944,920
|
)
|
Common shares outstanding, end of period
|
94,169,725
|
|
|
103,438,485
|
|
(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
nine
months ended
September 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
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Management and director options
|
$
|
60
|
|
|
$
|
94
|
|
|
$
|
215
|
|
|
$
|
553
|
|
Restricted shares with service condition
|
166
|
|
|
196
|
|
|
445
|
|
|
474
|
|
||||
Restricted shares with service and performance condition
|
2,172
|
|
|
350
|
|
|
4,296
|
|
|
2,987
|
|
||||
|
$
|
2,398
|
|
|
$
|
640
|
|
|
$
|
4,956
|
|
|
$
|
4,014
|
|
|
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
|
5,123,531
|
|
|
$
|
10.04
|
|
|
3.3 years
|
|
5,123,531
|
|
|
$
|
10.04
|
|
$15.05 - $16.89
|
1,917,145
|
|
|
15.93
|
|
|
3.5 years
|
|
1,875,285
|
|
|
15.95
|
|
||
$20.00 - $25.05
|
1,847,377
|
|
|
20.26
|
|
|
3.5 years
|
|
1,819,471
|
|
|
20.22
|
|
||
|
8,888,053
|
|
|
$
|
13.43
|
|
|
3.4 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
|
(32,756
|
)
|
|
12.83
|
|
|
Balance as of September 30, 2018
|
36,097
|
|
|
$
|
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
|
554,456
|
|
|
369,633
|
|
|
14.02
|
|
|
Forfeited
|
(288,700
|
)
|
|
—
|
|
|
14.00
|
|
|
Vested
|
(115,757
|
)
|
|
(115,757
|
)
|
|
14.00
|
|
|
Change in estimated restricted shares considered probable of vesting
|
n/a
|
|
|
285,182
|
|
|
13.34
|
|
|
Balance as of September 30, 2018
|
2,005,378
|
|
|
1,426,261
|
|
|
$
|
12.81
|
|
|
Redeemable noncontrolling interests in related party
|
|
Noncontrolling interests in related party
|
|
Total noncontrolling interests in related party
|
||||||||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||||||
Balance, beginning of period
|
$
|
108,219
|
|
|
$
|
—
|
|
|
$
|
5,407
|
|
|
$
|
35,674
|
|
|
$
|
113,626
|
|
|
$
|
35,674
|
|
Changes in capital account allocation (1)
|
(108,219
|
)
|
|
16,813
|
|
|
(5,407
|
)
|
|
(30,433
|
)
|
|
(113,626
|
)
|
|
(13,620
|
)
|
||||||
Balance, end of period
|
$
|
—
|
|
|
$
|
16,813
|
|
|
$
|
—
|
|
|
$
|
5,241
|
|
|
$
|
—
|
|
|
$
|
22,054
|
|
(1)
|
Changes in capital account allocation include TP GP's redemption in conjunction with the change in the investment account structure. See
Note 4
for additional information.
|
|
Third Point Re BDA
|
|
Third Point Re USA
|
|
Total
|
||||||||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 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
|
141
|
|
|
2,503
|
|
|
82
|
|
|
657
|
|
|
223
|
|
|
3,160
|
|
||||||
Contributions (1)
|
564
|
|
|
2,865
|
|
|
80
|
|
|
354
|
|
|
644
|
|
|
3,219
|
|
||||||
Redemptions (2)
|
(98,324
|
)
|
|
(17,999
|
)
|
|
(16,169
|
)
|
|
(2,000
|
)
|
|
(114,493
|
)
|
|
(19,999
|
)
|
||||||
Balance, end of period
|
$
|
—
|
|
|
$
|
17,727
|
|
|
$
|
—
|
|
|
$
|
4,327
|
|
|
$
|
—
|
|
|
$
|
22,054
|
|
(1)
|
Contributions include performance fees earned during the period. See
Note 11
for additional information.
|
(2)
|
Redemptions include TP GP's redemption in conjunction with the change in the investment account structure. See
Note 4
for additional information.
|
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
Weighted-average number of common shares outstanding:
|
($ in thousands, except share and per share amounts)
|
|||||||||||||||
|
Basic number of common shares outstanding
|
95,671,385
|
|
|
101,391,145
|
|
|
98,768,442
|
|
|
102,553,346
|
|
||||
|
Dilutive effect of options
|
—
|
|
|
1,536,419
|
|
|
—
|
|
|
1,162,851
|
|
||||
|
Dilutive effect of warrants
|
—
|
|
|
1,416,696
|
|
|
—
|
|
|
1,067,832
|
|
||||
|
Dilutive effect of restricted shares with service and performance condition
|
—
|
|
|
335,314
|
|
|
—
|
|
|
256,222
|
|
||||
|
Diluted number of common shares outstanding
|
95,671,385
|
|
|
104,679,574
|
|
|
98,768,442
|
|
|
105,040,251
|
|
||||
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|
|||||||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
(13,281
|
)
|
|
$
|
54,685
|
|
|
$
|
(19,680
|
)
|
|
$
|
233,449
|
|
|
Net income allocated to Third Point Re participating common shareholders
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
(256
|
)
|
||||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
(13,281
|
)
|
|
$
|
54,630
|
|
|
$
|
(19,680
|
)
|
|
$
|
233,193
|
|
|
Basic earnings (loss) per common share
|
$
|
(0.14
|
)
|
|
$
|
0.54
|
|
|
$
|
(0.20
|
)
|
|
$
|
2.27
|
|
Diluted earnings (loss) per common share:
|
|
|
|
|
|
|
|
|||||||||
|
Net income (loss) available to Third Point Re common shareholders
|
$
|
(13,281
|
)
|
|
$
|
54,685
|
|
|
$
|
(19,680
|
)
|
|
$
|
233,449
|
|
|
Net income allocated to Third Point Re participating common shareholders
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
(250
|
)
|
||||
|
Net income (loss) allocated to Third Point Re common shareholders
|
$
|
(13,281
|
)
|
|
$
|
54,632
|
|
|
$
|
(19,680
|
)
|
|
$
|
233,199
|
|
|
Diluted earnings (loss) per common share
|
$
|
(0.14
|
)
|
|
$
|
0.52
|
|
|
$
|
(0.20
|
)
|
|
$
|
2.22
|
|
|
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
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
|
|
Nine months ended
|
||||||||||||||||||||||||
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
||||||||||||||||||||
Property (1)
|
$
|
(3,578
|
)
|
|
(11.9
|
)%
|
|
$
|
(3
|
)
|
|
—
|
%
|
|
$
|
(1,549
|
)
|
|
(0.3
|
)%
|
|
$
|
(8,818
|
)
|
|
(1.9
|
)%
|
Casualty
|
37,028
|
|
|
123.2
|
%
|
|
161,110
|
|
|
92.3
|
%
|
|
233,758
|
|
|
51.0
|
%
|
|
263,323
|
|
|
55.2
|
%
|
||||
Specialty (1)
|
(3,386
|
)
|
|
(11.3
|
)%
|
|
13,432
|
|
|
7.7
|
%
|
|
221,639
|
|
|
48.4
|
%
|
|
113,601
|
|
|
23.8
|
%
|
||||
Total prospective reinsurance contracts
|
30,064
|
|
|
100.0
|
%
|
|
174,539
|
|
|
100.0
|
%
|
|
453,848
|
|
|
99.1
|
%
|
|
368,106
|
|
|
77.1
|
%
|
||||
Retroactive reinsurance contracts
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
4,341
|
|
|
0.9
|
%
|
|
109,351
|
|
|
22.9
|
%
|
||||
|
$
|
30,064
|
|
|
100.0
|
%
|
|
$
|
174,539
|
|
|
100.0
|
%
|
|
$
|
458,189
|
|
|
100.0
|
%
|
|
$
|
477,457
|
|
|
100.0
|
%
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of September 30, 2018
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re
|
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments in securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,872,996
|
|
|
$
|
—
|
|
|
$
|
1,872,996
|
|
Cash and cash equivalents
|
—
|
|
|
189
|
|
|
49,597
|
|
|
—
|
|
|
49,786
|
|
|||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
581,134
|
|
|
—
|
|
|
581,134
|
|
|||||
Subscription receivable from related party investment fund
|
—
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
30,000
|
|
|||||
Investment in subsidiaries
|
1,503,740
|
|
|
268,883
|
|
|
165,758
|
|
|
(1,938,381
|
)
|
|
—
|
|
|||||
Due from brokers
|
—
|
|
|
—
|
|
|
12,853
|
|
|
—
|
|
|
12,853
|
|
|||||
Interest and dividends receivable
|
—
|
|
|
—
|
|
|
1,975
|
|
|
—
|
|
|
1,975
|
|
|||||
Reinsurance balances receivable
|
—
|
|
|
—
|
|
|
577,382
|
|
|
—
|
|
|
577,382
|
|
|||||
Deferred acquisition costs, net
|
—
|
|
|
—
|
|
|
231,286
|
|
|
—
|
|
|
231,286
|
|
|||||
Unearned premiums ceded
|
—
|
|
|
—
|
|
|
16,772
|
|
|
—
|
|
|
16,772
|
|
|||||
Loss and loss adjustment expenses recoverable
|
—
|
|
|
—
|
|
|
1,576
|
|
|
—
|
|
|
1,576
|
|
|||||
Amounts due from (to) affiliates
|
3,493
|
|
|
(3,948
|
)
|
|
455
|
|
|
—
|
|
|
—
|
|
|||||
Other assets
|
2,079
|
|
|
10,149
|
|
|
854
|
|
|
—
|
|
|
13,082
|
|
|||||
Total assets
|
$
|
1,509,312
|
|
|
$
|
275,273
|
|
|
$
|
3,542,638
|
|
|
$
|
(1,938,381
|
)
|
|
$
|
3,388,842
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
1,402
|
|
|
$
|
59
|
|
|
$
|
7,739
|
|
|
$
|
—
|
|
|
$
|
9,200
|
|
Reinsurance balances payable
|
—
|
|
|
—
|
|
|
71,070
|
|
|
—
|
|
|
71,070
|
|
|||||
Deposit liabilities
|
—
|
|
|
—
|
|
|
146,961
|
|
|
—
|
|
|
146,961
|
|
|||||
Unearned premium reserves
|
—
|
|
|
—
|
|
|
693,333
|
|
|
—
|
|
|
693,333
|
|
|||||
Loss and loss adjustment expense reserves
|
—
|
|
|
—
|
|
|
822,180
|
|
|
—
|
|
|
822,180
|
|
|||||
Due to brokers
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Participation agreement with related party investment fund
|
—
|
|
|
—
|
|
|
23,149
|
|
|
—
|
|
|
23,149
|
|
|||||
Interest and dividends payable
|
—
|
|
|
1,026
|
|
|
131
|
|
|
—
|
|
|
1,157
|
|
|||||
Senior notes payable, net of deferred costs
|
—
|
|
|
113,866
|
|
|
—
|
|
|
—
|
|
|
113,866
|
|
|||||
Total liabilities
|
1,402
|
|
|
114,951
|
|
|
1,764,579
|
|
|
—
|
|
|
1,880,932
|
|
|||||
Redeemable noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares
|
9,417
|
|
|
—
|
|
|
1,239
|
|
|
(1,239
|
)
|
|
9,417
|
|
|||||
Additional paid-in capital
|
924,153
|
|
|
165,990
|
|
|
1,537,183
|
|
|
(1,703,173
|
)
|
|
924,153
|
|
|||||
Retained earnings (deficit)
|
574,340
|
|
|
(5,668
|
)
|
|
239,637
|
|
|
(233,969
|
)
|
|
574,340
|
|
|||||
Shareholders’ equity attributable to Third Point Re common shareholders
|
1,507,910
|
|
|
160,322
|
|
|
1,778,059
|
|
|
(1,938,381
|
)
|
|
1,507,910
|
|
|||||
Noncontrolling interests in related party
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
1,507,910
|
|
|
160,322
|
|
|
1,778,059
|
|
|
(1,938,381
|
)
|
|
1,507,910
|
|
|||||
Total liabilities, noncontrolling interests and shareholders’ equity
|
$
|
1,509,312
|
|
|
$
|
275,273
|
|
|
$
|
3,542,638
|
|
|
$
|
(1,938,381
|
)
|
|
$
|
3,388,842
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||||||
As of December 31, 2017
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
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 LOSS
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended September 30, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,064
|
|
|
$
|
—
|
|
|
$
|
30,064
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
30,064
|
|
|
—
|
|
|
30,064
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
97,929
|
|
|
—
|
|
|
97,929
|
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
127,993
|
|
|
—
|
|
|
127,993
|
|
|||||
Net investment loss
|
|
—
|
|
|
—
|
|
|
(3,590
|
)
|
|
—
|
|
|
(3,590
|
)
|
|||||
Equity in losses of subsidiaries
|
|
(11,100
|
)
|
|
(2,821
|
)
|
|
(11
|
)
|
|
13,932
|
|
|
—
|
|
|||||
Total revenues
|
|
(11,100
|
)
|
|
(2,821
|
)
|
|
124,392
|
|
|
13,932
|
|
|
124,403
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
88,706
|
|
|
—
|
|
|
88,706
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
40,841
|
|
|
—
|
|
|
40,841
|
|
|||||
General and administrative expenses
|
|
2,181
|
|
|
13
|
|
|
7,317
|
|
|
—
|
|
|
9,511
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
(1,362
|
)
|
|
—
|
|
|
(1,362
|
)
|
|||||
Interest expense
|
|
—
|
|
|
2,074
|
|
|
—
|
|
|
—
|
|
|
2,074
|
|
|||||
Foreign exchange gains
|
|
—
|
|
|
—
|
|
|
(1,979
|
)
|
|
—
|
|
|
(1,979
|
)
|
|||||
Total expenses
|
|
2,181
|
|
|
2,087
|
|
|
133,523
|
|
|
—
|
|
|
137,791
|
|
|||||
Loss before income tax benefit
|
|
(13,281
|
)
|
|
(4,908
|
)
|
|
(9,131
|
)
|
|
13,932
|
|
|
(13,388
|
)
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
438
|
|
|
(327
|
)
|
|
—
|
|
|
111
|
|
|||||
Net loss
|
|
(13,281
|
)
|
|
(4,470
|
)
|
|
(9,458
|
)
|
|
13,932
|
|
|
(13,277
|
)
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Net loss attributable to Third Point Re common shareholders
|
|
$
|
(13,281
|
)
|
|
$
|
(4,470
|
)
|
|
$
|
(9,462
|
)
|
|
$
|
13,932
|
|
|
$
|
(13,281
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the nine months ended September 30, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
458,189
|
|
|
$
|
—
|
|
|
$
|
458,189
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(18,125
|
)
|
|
—
|
|
|
(18,125
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
440,064
|
|
|
—
|
|
|
440,064
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(28,092
|
)
|
|
—
|
|
|
(28,092
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
411,972
|
|
|
—
|
|
|
411,972
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
25,377
|
|
|
—
|
|
|
25,377
|
|
|||||
Equity in losses of subsidiaries
|
|
(14,138
|
)
|
|
(2,582
|
)
|
|
(42
|
)
|
|
16,762
|
|
|
—
|
|
|||||
Total revenues
|
|
(14,138
|
)
|
|
(2,582
|
)
|
|
437,307
|
|
|
16,762
|
|
|
437,349
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
265,326
|
|
|
—
|
|
|
265,326
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
149,830
|
|
|
—
|
|
|
149,830
|
|
|||||
General and administrative expenses
|
|
5,542
|
|
|
35
|
|
|
23,111
|
|
|
—
|
|
|
28,688
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
6,616
|
|
|
—
|
|
|
6,616
|
|
|||||
Interest expense
|
|
—
|
|
|
6,154
|
|
|
—
|
|
|
—
|
|
|
6,154
|
|
|||||
Foreign exchange gains
|
|
—
|
|
|
—
|
|
|
(4,215
|
)
|
|
—
|
|
|
(4,215
|
)
|
|||||
Total expenses
|
|
5,542
|
|
|
6,189
|
|
|
440,668
|
|
|
—
|
|
|
452,399
|
|
|||||
Loss before income tax benefit
|
|
(19,680
|
)
|
|
(8,771
|
)
|
|
(3,361
|
)
|
|
16,762
|
|
|
(15,050
|
)
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
1,300
|
|
|
(5,707
|
)
|
|
—
|
|
|
(4,407
|
)
|
|||||
Net loss
|
|
(19,680
|
)
|
|
(7,471
|
)
|
|
(9,068
|
)
|
|
16,762
|
|
|
(19,457
|
)
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(223
|
)
|
|
—
|
|
|
(223
|
)
|
|||||
Net loss attributable to Third Point Re common shareholders
|
|
$
|
(19,680
|
)
|
|
$
|
(7,471
|
)
|
|
$
|
(9,291
|
)
|
|
$
|
16,762
|
|
|
$
|
(19,680
|
)
|
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
|
||||||||||||||||||||
|
||||||||||||||||||||
For the three months ended September 30, 2017
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
174,539
|
|
|
$
|
—
|
|
|
$
|
174,539
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
174,539
|
|
|
—
|
|
|
174,539
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(68,564
|
)
|
|
—
|
|
|
(68,564
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
105,975
|
|
|
—
|
|
|
105,975
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
88,968
|
|
|
—
|
|
|
88,968
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
|
55,847
|
|
|
5,473
|
|
|
(30
|
)
|
|
(61,290
|
)
|
|
—
|
|
|||||
Total revenues
|
|
55,847
|
|
|
5,473
|
|
|
194,913
|
|
|
(61,290
|
)
|
|
194,943
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
77,275
|
|
|
—
|
|
|
77,275
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
33,974
|
|
|
—
|
|
|
33,974
|
|
|||||
General and administrative expenses
|
|
1,162
|
|
|
17
|
|
|
12,039
|
|
|
—
|
|
|
13,218
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
3,846
|
|
|
—
|
|
|
3,846
|
|
|||||
Interest expense
|
|
—
|
|
|
2,074
|
|
|
—
|
|
|
—
|
|
|
2,074
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
5,437
|
|
|
—
|
|
|
5,437
|
|
|||||
Total expenses
|
|
1,162
|
|
|
2,091
|
|
|
132,571
|
|
|
—
|
|
|
135,824
|
|
|||||
Income before income tax (expense) benefit
|
|
54,685
|
|
|
3,382
|
|
|
62,342
|
|
|
(61,290
|
)
|
|
59,119
|
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
732
|
|
|
(4,207
|
)
|
|
—
|
|
|
(3,475
|
)
|
|||||
Net income
|
|
54,685
|
|
|
4,114
|
|
|
58,135
|
|
|
(61,290
|
)
|
|
55,644
|
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(959
|
)
|
|
—
|
|
|
(959
|
)
|
|||||
Net income available to Third Point Re common shareholders
|
|
$
|
54,685
|
|
|
$
|
4,114
|
|
|
$
|
57,176
|
|
|
$
|
(61,290
|
)
|
|
$
|
54,685
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the nine months ended September 30, 2017
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross premiums written
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
477,457
|
|
|
$
|
—
|
|
|
$
|
477,457
|
|
Gross premiums ceded
|
|
—
|
|
|
—
|
|
|
(2,550
|
)
|
|
—
|
|
|
(2,550
|
)
|
|||||
Net premiums written
|
|
—
|
|
|
—
|
|
|
474,907
|
|
|
—
|
|
|
474,907
|
|
|||||
Change in net unearned premium reserves
|
|
—
|
|
|
—
|
|
|
(57,365
|
)
|
|
—
|
|
|
(57,365
|
)
|
|||||
Net premiums earned
|
|
—
|
|
|
—
|
|
|
417,542
|
|
|
—
|
|
|
417,542
|
|
|||||
Net investment income
|
|
—
|
|
|
—
|
|
|
324,803
|
|
|
—
|
|
|
324,803
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
|
237,060
|
|
|
19,305
|
|
|
(35
|
)
|
|
(256,330
|
)
|
|
—
|
|
|||||
Total revenues
|
|
237,060
|
|
|
19,305
|
|
|
742,310
|
|
|
(256,330
|
)
|
|
742,345
|
|
|||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses incurred, net
|
|
—
|
|
|
—
|
|
|
270,549
|
|
|
—
|
|
|
270,549
|
|
|||||
Acquisition costs, net
|
|
—
|
|
|
—
|
|
|
157,067
|
|
|
—
|
|
|
157,067
|
|
|||||
General and administrative expenses
|
|
3,611
|
|
|
37
|
|
|
35,156
|
|
|
—
|
|
|
38,804
|
|
|||||
Other expenses
|
|
—
|
|
|
—
|
|
|
8,852
|
|
|
—
|
|
|
8,852
|
|
|||||
Interest expense
|
|
—
|
|
|
6,151
|
|
|
—
|
|
|
—
|
|
|
6,151
|
|
|||||
Foreign exchange losses
|
|
—
|
|
|
—
|
|
|
10,233
|
|
|
—
|
|
|
10,233
|
|
|||||
Total expenses
|
|
3,611
|
|
|
6,188
|
|
|
481,857
|
|
|
—
|
|
|
491,656
|
|
|||||
Income before income tax (expense) benefit
|
|
233,449
|
|
|
13,117
|
|
|
260,453
|
|
|
(256,330
|
)
|
|
250,689
|
|
|||||
Income tax (expense) benefit
|
|
—
|
|
|
2,166
|
|
|
(16,246
|
)
|
|
—
|
|
|
(14,080
|
)
|
|||||
Net income
|
|
233,449
|
|
|
15,283
|
|
|
244,207
|
|
|
(256,330
|
)
|
|
236,609
|
|
|||||
Net income attributable to noncontrolling interests in related party
|
|
—
|
|
|
—
|
|
|
(3,160
|
)
|
|
—
|
|
|
(3,160
|
)
|
|||||
Net income available to Third Point Re common shareholders
|
|
$
|
233,449
|
|
|
$
|
15,283
|
|
|
$
|
241,047
|
|
|
$
|
(256,330
|
)
|
|
$
|
233,449
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the nine months ended September 30, 2018
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
|
$
|
(19,680
|
)
|
|
$
|
(7,471
|
)
|
|
$
|
(9,068
|
)
|
|
$
|
16,762
|
|
|
$
|
(19,457
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
|
14,138
|
|
|
2,582
|
|
|
42
|
|
|
(16,762
|
)
|
|
—
|
|
|||||
Share compensation expense
|
|
444
|
|
|
—
|
|
|
4,512
|
|
|
—
|
|
|
4,956
|
|
|||||
Net interest income on deposit liabilities
|
|
—
|
|
|
—
|
|
|
(1,609
|
)
|
|
—
|
|
|
(1,609
|
)
|
|||||
Net realized and unrealized gain on investments and derivatives
|
|
—
|
|
|
—
|
|
|
(32,373
|
)
|
|
—
|
|
|
(32,373
|
)
|
|||||
Net unrealized loss on investment in related party investment fund
|
|
—
|
|
|
—
|
|
|
1,926
|
|
|
—
|
|
|
1,926
|
|
|||||
Net foreign exchange gains
|
|
—
|
|
|
—
|
|
|
(4,215
|
)
|
|
—
|
|
|
(4,215
|
)
|
|||||
Amortization of premium and accretion of discount, net
|
|
—
|
|
|
133
|
|
|
2,541
|
|
|
—
|
|
|
2,674
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
|
—
|
|
|
—
|
|
|
(87,911
|
)
|
|
—
|
|
|
(87,911
|
)
|
|||||
Deferred acquisition costs, net
|
|
—
|
|
|
—
|
|
|
27,507
|
|
|
—
|
|
|
27,507
|
|
|||||
Unearned premiums ceded
|
|
—
|
|
|
—
|
|
|
(15,723
|
)
|
|
—
|
|
|
(15,723
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
|
—
|
|
|
—
|
|
|
(463
|
)
|
|
—
|
|
|
(463
|
)
|
|||||
Other assets
|
|
(1,415
|
)
|
|
(10,149
|
)
|
|
5,807
|
|
|
—
|
|
|
(5,757
|
)
|
|||||
Interest and dividends receivable, net
|
|
—
|
|
|
(2,029
|
)
|
|
(3,244
|
)
|
|
—
|
|
|
(5,273
|
)
|
|||||
Unearned premium reserves
|
|
—
|
|
|
—
|
|
|
43,815
|
|
|
—
|
|
|
43,815
|
|
|||||
Loss and loss adjustment expense reserves
|
|
—
|
|
|
—
|
|
|
107,325
|
|
|
—
|
|
|
107,325
|
|
|||||
Accounts payable and accrued expenses
|
|
639
|
|
|
8,864
|
|
|
(32,264
|
)
|
|
—
|
|
|
(22,761
|
)
|
|||||
Reinsurance balances payable
|
|
—
|
|
|
—
|
|
|
29,624
|
|
|
—
|
|
|
29,624
|
|
|||||
Amounts due from (to) affiliates
|
|
(4,781
|
)
|
|
4,360
|
|
|
421
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
|
(10,655
|
)
|
|
(3,710
|
)
|
|
36,650
|
|
|
—
|
|
|
22,285
|
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contributions to related party investment fund
|
|
—
|
|
|
—
|
|
|
(88,658
|
)
|
|
—
|
|
|
(88,658
|
)
|
|||||
Purchases of investments
|
|
—
|
|
|
—
|
|
|
(3,235,659
|
)
|
|
—
|
|
|
(3,235,659
|
)
|
|||||
Proceeds from sales and maturities of investments
|
|
—
|
|
|
—
|
|
|
3,222,239
|
|
|
—
|
|
|
3,222,239
|
|
|||||
Purchases of investments to cover short sales
|
|
—
|
|
|
—
|
|
|
(853,798
|
)
|
|
—
|
|
|
(853,798
|
)
|
|||||
Proceeds from short sales of investments
|
|
—
|
|
|
—
|
|
|
800,508
|
|
|
—
|
|
|
800,508
|
|
|||||
Change in due to/from brokers, net
|
|
—
|
|
|
—
|
|
|
471,352
|
|
|
—
|
|
|
471,352
|
|
|||||
Decrease in securities sold under an agreement to repurchase
|
|
—
|
|
|
—
|
|
|
(29,618
|
)
|
|
—
|
|
|
(29,618
|
)
|
|||||
Net cash provided by investing activities
|
|
—
|
|
|
—
|
|
|
286,366
|
|
|
—
|
|
|
286,366
|
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxes paid on withholding shares
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||
Purchases of Third Point Re common shares under share repurchase program
|
|
(133,380
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(133,380
|
)
|
|||||
Increase in deposit liabilities, net
|
|
—
|
|
|
—
|
|
|
4,340
|
|
|
—
|
|
|
4,340
|
|
|||||
Change in total noncontrolling interests in related party, net
|
|
—
|
|
|
—
|
|
|
(97,950
|
)
|
|
—
|
|
|
(97,950
|
)
|
|||||
Dividend received by (paid to) parent
|
|
144,100
|
|
|
3,700
|
|
|
(147,800
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
10,646
|
|
|
3,700
|
|
|
(241,410
|
)
|
|
—
|
|
|
(227,064
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(9
|
)
|
|
(10
|
)
|
|
81,606
|
|
|
—
|
|
|
81,587
|
|
|||||
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
|
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
630,731
|
|
|
$
|
—
|
|
|
$
|
630,920
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the nine months ended September 30, 2017
|
|
Third
Point Re |
|
TPRUSA
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
233,449
|
|
|
$
|
15,283
|
|
|
$
|
244,207
|
|
|
$
|
(256,330
|
)
|
|
$
|
236,609
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (earnings) losses of subsidiaries
|
|
(237,060
|
)
|
|
(19,305
|
)
|
|
35
|
|
|
256,330
|
|
|
—
|
|
|||||
Share compensation expense
|
|
184
|
|
|
—
|
|
|
3,830
|
|
|
—
|
|
|
4,014
|
|
|||||
Net interest expense on deposit liabilities
|
|
—
|
|
|
—
|
|
|
1,472
|
|
|
—
|
|
|
1,472
|
|
|||||
Net realized and unrealized gain on investments and derivatives
|
|
—
|
|
|
—
|
|
|
(383,681
|
)
|
|
—
|
|
|
(383,681
|
)
|
|||||
Net foreign exchange losses
|
|
—
|
|
|
—
|
|
|
10,233
|
|
|
—
|
|
|
10,233
|
|
|||||
Amortization of premium and accretion of discount, net
|
|
—
|
|
|
133
|
|
|
(585
|
)
|
|
—
|
|
|
(452
|
)
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances receivable
|
|
—
|
|
|
—
|
|
|
(77,444
|
)
|
|
—
|
|
|
(77,444
|
)
|
|||||
Deferred acquisition costs, net
|
|
—
|
|
|
—
|
|
|
(1,473
|
)
|
|
—
|
|
|
(1,473
|
)
|
|||||
Unearned premiums ceded
|
|
—
|
|
|
—
|
|
|
(934
|
)
|
|
—
|
|
|
(934
|
)
|
|||||
Loss and loss adjustment expenses recoverable
|
|
—
|
|
|
—
|
|
|
(1,586
|
)
|
|
—
|
|
|
(1,586
|
)
|
|||||
Other assets
|
|
(97
|
)
|
|
5,507
|
|
|
2,808
|
|
|
—
|
|
|
8,218
|
|
|||||
Interest and dividends receivable, net
|
|
—
|
|
|
(2,031
|
)
|
|
2,800
|
|
|
—
|
|
|
769
|
|
|||||
Unearned premium reserves
|
|
—
|
|
|
—
|
|
|
58,299
|
|
|
—
|
|
|
58,299
|
|
|||||
Loss and loss adjustment expense reserves
|
|
—
|
|
|
—
|
|
|
78,931
|
|
|
—
|
|
|
78,931
|
|
|||||
Accounts payable and accrued expenses
|
|
(96
|
)
|
|
(7,960
|
)
|
|
22,229
|
|
|
—
|
|
|
14,173
|
|
|||||
Reinsurance balances payable
|
|
—
|
|
|
—
|
|
|
11,462
|
|
|
—
|
|
|
11,462
|
|
|||||
Performance fees payable to related party
|
|
—
|
|
|
—
|
|
|
73,210
|
|
|
—
|
|
|
73,210
|
|
|||||
Amounts due from (to) affiliates
|
|
1,351
|
|
|
(4,806
|
)
|
|
3,455
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) operating activities
|
|
(2,269
|
)
|
|
(13,179
|
)
|
|
47,268
|
|
|
—
|
|
|
31,820
|
|
|||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
|
—
|
|
|
—
|
|
|
(2,238,167
|
)
|
|
—
|
|
|
(2,238,167
|
)
|
|||||
Proceeds from sales and maturities of investments
|
|
—
|
|
|
—
|
|
|
2,536,688
|
|
|
—
|
|
|
2,536,688
|
|
|||||
Purchases of investments to cover short sales
|
|
—
|
|
|
—
|
|
|
(440,242
|
)
|
|
—
|
|
|
(440,242
|
)
|
|||||
Proceeds from short sales of investments
|
|
—
|
|
|
—
|
|
|
735,132
|
|
|
—
|
|
|
735,132
|
|
|||||
Change in due to/from brokers, net
|
|
—
|
|
|
—
|
|
|
(400,566
|
)
|
|
—
|
|
|
(400,566
|
)
|
|||||
Net cash provided by investing activities
|
|
—
|
|
|
—
|
|
|
192,845
|
|
|
—
|
|
|
192,845
|
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of Third Point Re common shares, net of costs
|
|
1,504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,504
|
|
|||||
Purchases of Third Point Re common shares under share repurchase program
|
|
(40,864
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,864
|
)
|
|||||
Increase in deposit liabilities, net
|
|
—
|
|
|
—
|
|
|
6,380
|
|
|
—
|
|
|
6,380
|
|
|||||
Change in total noncontrolling interests in related party, net
|
|
—
|
|
|
—
|
|
|
(16,780
|
)
|
|
—
|
|
|
(16,780
|
)
|
|||||
Dividend received by (paid to) parent
|
|
40,000
|
|
|
13,300
|
|
|
(53,300
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
640
|
|
|
13,300
|
|
|
(63,700
|
)
|
|
—
|
|
|
(49,760
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(1,629
|
)
|
|
121
|
|
|
176,413
|
|
|
—
|
|
|
174,905
|
|
|||||
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
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
483,596
|
|
|
$
|
—
|
|
|
$
|
483,796
|
|
•
|
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 TP Fund’s investment strategy;
|
•
|
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;
|
•
|
risks associated with the 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 our Quarterly Report on Form 10-Q for the period ended June 30, 2018 (the “Q2 10-Q”), this Quarterly Report on Form 10-Q, and other periodic reports filed with the Securities and Exchange Commission.
|
(1)
|
See
Note 24
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
|
|
Nine months ended
|
||||||||||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
Change
|
|
September 30,
2018 |
|
September 30,
2017 |
|
Change
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Net underwriting loss
|
$
|
(6,317
|
)
|
|
$
|
(12,565
|
)
|
|
$
|
6,248
|
|
|
$
|
(17,734
|
)
|
|
$
|
(33,326
|
)
|
|
$
|
15,592
|
|
Net investment income (loss)
|
(3,590
|
)
|
|
88,968
|
|
|
(92,558
|
)
|
|
25,377
|
|
|
324,803
|
|
|
(299,426
|
)
|
||||||
Net investment return on investments managed by Third Point LLC
|
(0.2
|
)%
|
|
3.6
|
%
|
|
(3.8
|
)%
|
|
0.6
|
%
|
|
14.6
|
%
|
|
(14.0
|
)%
|
||||||
Corporate expenses
|
(4,748
|
)
|
|
(5,927
|
)
|
|
1,179
|
|
|
(14,138
|
)
|
|
(15,552
|
)
|
|
1,414
|
|
||||||
Other income (expense)
|
1,362
|
|
|
(3,846
|
)
|
|
5,208
|
|
|
(6,616
|
)
|
|
(8,852
|
)
|
|
2,236
|
|
||||||
Interest expense
|
(2,074
|
)
|
|
(2,074
|
)
|
|
—
|
|
|
(6,154
|
)
|
|
(6,151
|
)
|
|
(3
|
)
|
||||||
Foreign exchange gains (losses)
|
1,979
|
|
|
(5,437
|
)
|
|
7,416
|
|
|
4,215
|
|
|
(10,233
|
)
|
|
14,448
|
|
||||||
Income tax (expense) benefit
|
111
|
|
|
(3,475
|
)
|
|
3,586
|
|
|
(4,407
|
)
|
|
(14,080
|
)
|
|
9,673
|
|
||||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
(13,281
|
)
|
|
$
|
54,685
|
|
|
$
|
(67,966
|
)
|
|
$
|
(19,680
|
)
|
|
$
|
233,449
|
|
|
$
|
(253,129
|
)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
97
|
%
|
|
(24
|
)%
|
|
73
|
%
|
|
98
|
%
|
|
(25
|
)%
|
|
73
|
%
|
Credit
|
17
|
%
|
|
(3
|
)%
|
|
14
|
%
|
|
16
|
%
|
|
(4
|
)%
|
|
12
|
%
|
Other
|
8
|
%
|
|
(1
|
)%
|
|
7
|
%
|
|
10
|
%
|
|
(2
|
)%
|
|
8
|
%
|
|
122
|
%
|
|
(28
|
)%
|
|
94
|
%
|
|
124
|
%
|
|
(31
|
)%
|
|
93
|
%
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Americas
|
98
|
%
|
|
(24
|
)%
|
|
74
|
%
|
|
93
|
%
|
|
(29
|
)%
|
|
64
|
%
|
Europe, Middle East and Africa
|
20
|
%
|
|
(2
|
)%
|
|
18
|
%
|
|
7
|
%
|
|
—
|
%
|
|
7
|
%
|
Asia
|
4
|
%
|
|
(2
|
)%
|
|
2
|
%
|
|
24
|
%
|
|
(2
|
)%
|
|
22
|
%
|
|
122
|
%
|
|
(28
|
)%
|
|
94
|
%
|
|
124
|
%
|
|
(31
|
)%
|
|
93
|
%
|
|
Three months ended
|
||||||||||||||||
|
September 30, 2018
|
|
September 30, 2017
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
1.9
|
%
|
|
(1.1
|
)%
|
|
0.8
|
%
|
|
3.5
|
%
|
|
(0.9
|
)%
|
|
2.6
|
%
|
Credit
|
0.2
|
%
|
|
—
|
%
|
|
0.2
|
%
|
|
0.5
|
%
|
|
(0.1
|
)%
|
|
0.4
|
%
|
Other
|
(1.2
|
)%
|
|
—
|
%
|
|
(1.2
|
)%
|
|
0.9
|
%
|
|
(0.3
|
)%
|
|
0.6
|
%
|
Net investment return on investments managed by Third Point LLC
|
0.9
|
%
|
|
(1.1
|
)%
|
|
(0.2
|
)%
|
|
4.9
|
%
|
|
(1.3
|
)%
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
S&P 500 Total Return Index
|
|
|
|
|
7.7
|
%
|
|
|
|
|
|
4.5
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Nine months ended
|
||||||||||||||||
|
September 30, 2018
|
|
September 30, 2017
|
||||||||||||||
|
Long
|
|
Short
|
|
Net
|
|
Long
|
|
Short
|
|
Net
|
||||||
Equity
|
4.5
|
%
|
|
(3.1
|
)%
|
|
1.4
|
%
|
|
16.8
|
%
|
|
(3.0
|
)%
|
|
13.8
|
%
|
Credit
|
0.9
|
%
|
|
(0.2
|
)%
|
|
0.7
|
%
|
|
0.6
|
%
|
|
(0.5
|
)%
|
|
0.1
|
%
|
Other
|
(2.0
|
)%
|
|
0.5
|
%
|
|
(1.5
|
)%
|
|
1.9
|
%
|
|
(1.2
|
)%
|
|
0.7
|
%
|
Net investment return on investments managed by Third Point LLC
|
3.4
|
%
|
|
(2.8
|
)%
|
|
0.6
|
%
|
|
19.3
|
%
|
|
(4.7
|
)%
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
S&P 500 Total Return Index
|
|
|
|
|
10.6
|
%
|
|
|
|
|
|
14.2
|
%
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
Change
|
|
September 30,
2018 |
|
September 30,
2017 |
|
Change
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Gross premiums written
|
$
|
30,064
|
|
|
$
|
174,539
|
|
|
$
|
(144,475
|
)
|
|
$
|
458,189
|
|
|
$
|
477,457
|
|
|
$
|
(19,268
|
)
|
Gross premiums ceded
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,125
|
)
|
|
(2,550
|
)
|
|
(15,575
|
)
|
||||||
Net premiums earned
|
127,993
|
|
|
105,975
|
|
|
22,018
|
|
|
411,972
|
|
|
417,542
|
|
|
(5,570
|
)
|
||||||
Loss and loss adjustment expenses incurred, net
|
88,706
|
|
|
77,275
|
|
|
11,431
|
|
|
265,326
|
|
|
270,549
|
|
|
(5,223
|
)
|
||||||
Acquisition costs, net
|
40,841
|
|
|
33,974
|
|
|
6,867
|
|
|
149,830
|
|
|
157,067
|
|
|
(7,237
|
)
|
||||||
General and administrative expenses
|
4,763
|
|
|
7,291
|
|
|
(2,528
|
)
|
|
14,550
|
|
|
23,252
|
|
|
(8,702
|
)
|
||||||
Net underwriting income (loss)
|
$
|
(6,317
|
)
|
|
$
|
(12,565
|
)
|
|
$
|
6,248
|
|
|
$
|
(17,734
|
)
|
|
$
|
(33,326
|
)
|
|
$
|
15,592
|
|
Underwriting ratios (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss ratio
|
69.3
|
%
|
|
72.9
|
%
|
|
(3.6
|
)%
|
|
64.4
|
%
|
|
64.8
|
%
|
|
(0.4
|
)%
|
||||||
Acquisition cost ratio
|
31.9
|
%
|
|
32.1
|
%
|
|
(0.2
|
)%
|
|
36.4
|
%
|
|
37.6
|
%
|
|
(1.2
|
)%
|
||||||
Composite ratio
|
101.2
|
%
|
|
105.0
|
%
|
|
(3.8
|
)%
|
|
100.8
|
%
|
|
102.4
|
%
|
|
(1.6
|
)%
|
||||||
General and administrative expense ratio
|
3.7
|
%
|
|
6.9
|
%
|
|
(3.2
|
)%
|
|
3.5
|
%
|
|
5.6
|
%
|
|
(2.1
|
)%
|
||||||
Combined ratio
|
104.9
|
%
|
|
111.9
|
%
|
|
(7.0
|
)%
|
|
104.3
|
%
|
|
108.0
|
%
|
|
(3.7
|
)%
|
(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
|
|
Nine months ended
|
||||||||||||||||||||||||
|
September 30, 2018
|
|
September 30, 2017
|
|
September 30, 2018
|
|
September 30, 2017
|
||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||
Property
|
$
|
(3,578
|
)
|
|
(11.9
|
)%
|
|
$
|
(3
|
)
|
|
—
|
%
|
|
$
|
(1,549
|
)
|
|
(0.3
|
)%
|
|
$
|
(8,818
|
)
|
|
(1.9
|
)%
|
Casualty
|
37,028
|
|
|
123.2
|
%
|
|
161,110
|
|
|
92.3
|
%
|
|
233,758
|
|
|
51.0
|
%
|
|
263,323
|
|
|
55.2
|
%
|
||||
Specialty
|
(3,386
|
)
|
|
(11.3
|
)%
|
|
13,432
|
|
|
7.7
|
%
|
|
221,639
|
|
|
48.4
|
%
|
|
113,601
|
|
|
23.8
|
%
|
||||
Total prospective reinsurance contracts
|
$
|
30,064
|
|
|
100.0
|
%
|
|
$
|
174,539
|
|
|
100.0
|
%
|
|
$
|
453,848
|
|
|
99.1
|
%
|
|
$
|
368,106
|
|
|
77.1
|
%
|
Retroactive reinsurance contracts
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
4,341
|
|
|
0.9
|
%
|
|
109,351
|
|
|
22.9
|
%
|
||||
|
$
|
30,064
|
|
|
100.0
|
%
|
|
$
|
174,539
|
|
|
100.0
|
%
|
|
$
|
458,189
|
|
|
100.0
|
%
|
|
$
|
477,457
|
|
|
100.0
|
%
|
•
|
We recognized $89.2 million of premium in the three months ended
September 30, 2017
related to a contract that we did not renew in the three months ended
September 30, 2018
as a result of underlying pricing, terms and conditions.
|
•
|
We recognized a net increase in premium of $7.1 million in the three months ended
September 30, 2018
compared to a net increase of $48.1 million in the three months ended
September 30, 2017
related to the net impact of contracts renewed with no comparable premium in the comparable period and contract extensions.
|
•
|
We recorded a net decrease in premium estimates of $0.3 million in the three months ended
September 30, 2018
compared to a net increase of $9.2 million in the three months ended
September 30, 2017
. The increase in premium estimates for the three months ended
September 30, 2017
was due to several contracts for which clients provided updated projections indicating that they expected to write more business than initially estimated.
|
•
|
Changes in renewal premiums for the three months ended
September 30, 2018
resulted in a net decrease in premiums of $8.3 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
September 30, 2018
, we wrote $3.5 million of new premium, of which $2.2 million was casualty business, $0.7 million was specialty business and $0.6 million was property business.
|
•
|
We recognized $115.3 million of premium in the
nine
months ended
September 30, 2017
related to contracts that we did not renew in the
nine
months ended
September 30, 2018
as a result of underlying terms and conditions.
|
•
|
Changes in renewal premiums for the
nine
months ended
September 30, 2018
resulted in a net decrease in premiums of $19.0 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 $12.9 million and $21.4 million for the
nine
months ended
September 30, 2018
and
2017
, respectively. The increases in premium estimates for the
nine
months ended
September 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 a net increase in premium of $137.7 million in the
nine
months ended
September 30, 2018
compared to a net increase of $140.4 million in the
nine
months ended
September 30, 2017
related to the net impact of contract extensions, cancellations and contracts renewed with no comparable premium in the comparable period.
|
•
|
For the
nine
months ended
September 30, 2018
, we wrote $126.2 million of new premium, of which $111.4 million was specialty business, including one multi-line contract covering casualty and specialty risks for $91.6 million, $13.9 million was casualty business and $0.9 million was property business.
|
•
|
$8.8 million of net adverse loss development as a result of worse than expected loss experience on one retroactive reinsurance contract.
|
•
|
$9.2 million of net favorable loss development relating to casualty contracts where cedants reported better than expected loss experience.
|
•
|
$12.7 million
of net favorable underwriting loss development relating to workers’ compensation contracts, multi-line contracts and credit and financial lines contracts. The favorable development was the result of better than expected loss experience and was partially offset by
|
•
|
$7.4 million
of net adverse underwriting loss development primarily relating to our Florida homeowners’ quota share reinsurance contracts. This development is a result of higher than anticipated water damage claims and an increase in the practice of assignment of benefits whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters. This practice has led to increases in the frequency of claims reported as well as the severity of losses and loss adjustment expenses.
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
Basic and diluted book value per share numerator:
|
($ in thousands, except share and per share amounts)
|
||||||
Shareholders' equity attributable to Third Point Re common shareholders
|
$
|
1,507,910
|
|
|
$
|
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:
|
$
|
1,594,282
|
|
|
$
|
1,754,023
|
|
Basic and diluted book value per share denominator:
|
|
|
|
||||
Common shares outstanding
|
94,169,725
|
|
|
103,282,427
|
|
||
Unvested restricted shares
|
(2,041,475
|
)
|
|
(1,873,588
|
)
|
||
Basic book value per share denominator:
|
92,128,250
|
|
|
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)
|
1,462,358
|
|
|
905,412
|
|
||
Diluted book value per share denominator:
|
102,209,118
|
|
|
112,088,945
|
|
||
|
|
|
|
||||
Basic book value per share
|
$
|
16.37
|
|
|
$
|
16.33
|
|
Diluted book value per share
|
$
|
15.60
|
|
|
$
|
15.65
|
|
(1)
|
As of
September 30, 2018
, the effect of dilutive restricted shares issued to directors and employees was comprised of
36,097
restricted shares with a service condition only and
1,426,261
restricted shares with a service and performance condition that were considered probable of vesting.
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30,
2018 |
|
September 30,
2017 |
|
September 30,
2018 |
|
September 30,
2017 |
||||||||
|
($ in thousands)
|
||||||||||||||
Net income (loss) available to Third Point Re common shareholders
|
$
|
(13,281
|
)
|
|
$
|
54,685
|
|
|
$
|
(19,680
|
)
|
|
$
|
233,449
|
|
Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
1,591,754
|
|
|
1,556,323
|
|
|
1,656,089
|
|
|
1,414,051
|
|
||||
Impact of weighting related to shareholders’ equity from shares repurchased
|
(24,447
|
)
|
|
—
|
|
|
(41,526
|
)
|
|
(25,023
|
)
|
||||
Adjusted shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
|
$
|
1,567,307
|
|
|
$
|
1,556,323
|
|
|
$
|
1,614,563
|
|
|
$
|
1,389,028
|
|
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders
|
(0.8
|
)%
|
|
3.5
|
%
|
|
(1.2
|
)%
|
|
16.8
|
%
|
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Net cash provided by operating activities
|
$
|
22,285
|
|
|
$
|
31,820
|
|
Net cash provided by investing activities
|
286,366
|
|
|
192,845
|
|
||
Net cash used in financing activities
|
(227,064
|
)
|
|
(49,760
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
81,587
|
|
|
174,905
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
549,333
|
|
|
308,891
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
630,920
|
|
|
$
|
483,796
|
|
•
|
equity price risk;
|
•
|
foreign currency risk;
|
•
|
interest rate risk;
|
•
|
commodity price risk;
|
•
|
credit risk;
|
•
|
liquidity risk; and
|
•
|
political risk.
|
|
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)
|
$
|
(12,655
|
)
|
|
(0.5
|
)%
|
|
$
|
14,598
|
|
|
0.6
|
%
|
Asset-backed securities
(2)
|
(2,536
|
)
|
|
(0.1
|
)%
|
|
2,552
|
|
|
0.1
|
%
|
||
Net exposure to interest rate risk
|
$
|
(15,191
|
)
|
|
(0.6
|
)%
|
|
$
|
17,150
|
|
|
0.7
|
%
|
(1)
|
Includes interest rate risk associated with investments held in reinsurance trust accounts.
|
(2)
|
Includes instruments for which durations are available on
September 30, 2018
. Includes a convexity adjustment if convexity is available. Not included are mortgage hedges which would reduce the impact of interest rate changes.
|
|
September 30,
2018 |
|
December 31, 2017
|
||||
|
($ in thousands)
|
||||||
Assets:
|
|
|
|
||||
Asset-backed securities
|
$
|
185,155
|
|
|
$
|
225,499
|
|
Bank debt
|
26,192
|
|
|
14,550
|
|
||
Corporate bonds
|
98,083
|
|
|
77,086
|
|
||
Municipal bonds
|
57,019
|
|
|
—
|
|
||
Sovereign debt
|
18,320
|
|
|
26,134
|
|
||
Trade claims
|
169
|
|
|
7,496
|
|
||
Other debt securities
|
—
|
|
|
5,460
|
|
||
|
$
|
384,938
|
|
|
$
|
356,225
|
|
Liabilities:
|
|
|
|
||||
Corporate bonds
|
$
|
11,901
|
|
|
$
|
21,699
|
|
|
$
|
11,901
|
|
|
$
|
21,699
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||
|
($ in thousands)
|
||||||||||||
Reperforming loans
|
$
|
114,149
|
|
|
61.7
|
%
|
|
$
|
160,354
|
|
|
71.1
|
%
|
Market place loans
|
63,248
|
|
|
34.2
|
%
|
|
52,584
|
|
|
23.3
|
%
|
||
Other (1)
|
7,758
|
|
|
4.1
|
%
|
|
12,561
|
|
|
5.6
|
%
|
||
|
$
|
185,155
|
|
|
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)
|
||||||
July 1, 2018 - July 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
139,579,994
|
|
August 1, 2018 - August 31, 2018
|
3,010,293
|
|
|
13.42
|
|
|
3,010,293
|
|
|
99,183,459
|
|
||
September 1, 2018 - September 30, 2018
|
2,450,772
|
|
|
13.29
|
|
|
2,450,772
|
|
|
66,620,294
|
|
||
Total
|
5,461,065
|
|
|
$
|
13.36
|
|
|
5,461,065
|
|
|
$
|
66,620,294
|
|
10.33
|
|
10.34
|
|
10.35
|
|
10.36
|
|
10.37
|
|
10.38
|
|
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: November 6, 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 Year Third Point Reinsurance Chart |
1 Month Third Point Reinsurance Chart |
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