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Third Point Reinsurance Ltd.




Financial Supplement
March 31, 2020



(UNAUDITED)



This financial supplement is for informational purposes only. It should be read in conjunction with documents filed with the Securities and Exchange Commission by Third Point Reinsurance Ltd., including the Company’s Quarterly Report on Form 10-Q.


                                                                                                                                                                                                                                                                                   


Point House
Christopher S. Coleman - Chief Financial Officer
3 Waterloo Lane
Tel: (441) 542-3333
Pembroke HM 08
Email: investorrelations@thirdpointre.bm
Bermuda
Website: www.thirdpointre.bm





Third Point Reinsurance Ltd.
Basis of Presentation and Non-GAAP Financial Measures:
Unless the context otherwise indicates or requires, as used in this financial supplement references to “we,” “our,” “us,” and the “Company,” refer to Third Point Reinsurance Ltd. (“Third Point Re”) and its directly and indirectly owned subsidiaries, including Third Point Reinsurance Company Ltd. (“Third Point Re BDA”) and Third Point Reinsurance (USA) Ltd. (“Third Point Re USA”), as a combined entity, except where otherwise stated or where it is clear that the terms mean only Third Point Reinsurance Ltd. exclusive of its subsidiaries. We have made rounding adjustments to reach some of the figures included in this financial supplement and, unless otherwise indicated, percentages presented in this financial supplement are approximate.
In presenting the Company’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including basic book value per share, diluted book value per share and return on beginning shareholders’ equity, are referred to as non-GAAP measures. These non-GAAP financial measures may be defined or calculated differently by other companies. Management believes these measures allow for a more complete understanding of the underlying business. These measures are used to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures, if any, are included in the attached financial information in accordance with Regulation G.
Safe Harbor Statement Regarding Forward-Looking Statements:
This Financial Supplement includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following:
results of operations fluctuate and may not be indicative of our prospects; a pandemic or other catastrophic event, including the recent outbreak of COVID-19, may adversely impact our financial condition or results of operations; more established competitors; losses exceeding reserves; highly cyclical property and casualty reinsurance industry; losses from catastrophe exposure; downgrade, withdrawal of ratings or change in rating outlook by rating agencies; significant decrease in our capital or surplus; dependence on key executives; inability to service our indebtedness; limited cash flow and liquidity due to our indebtedness; inability to raise necessary funds to pay principal or interest on debt; potential lack of availability of capital in the future; credit risk associated with the use of reinsurance brokers; future strategic transactions such as acquisitions, dispositions, mergers or joint ventures; technology breaches or failures, including cyber-attacks; lack of control over Third Point Enhanced LP (“TP Fund”); lack of control over the allocation and performance of TP Fund’s investment portfolio; dependence on Third Point LLC to implement TP Fund’s investment strategy; limited ability to withdraw our capital accounts from TP Fund; decline in revenue due to poor performance of TP Fund’s investment portfolio; TP Fund’s investment strategy involves risks that are greater than those faced by competitors; termination by Third Point LLC of our or TP Fund’s investment management agreements; potential conflicts of interest with Third Point LLC; losses resulting from significant investment positions; credit risk associated with the default on obligations of counterparties; ineffective investment risk management systems; fluctuations in the market value of TP Fund’s investment portfolio; trading restrictions being placed on TP Fund’s investments; limited termination provisions in our investment management agreements; limited liquidity and lack of valuation data on certain TP Fund’s investments; fluctuations in market value of our fixed-income securities; U.S. and global economic downturns; specific characteristics of investments in mortgage-backed securities and other asset-backed securities, in securities of issues based outside the U.S., and in special situation or distressed companies; loss of key employees at Third Point LLC; Third Point LLC’s compensation arrangements may incentivize investments that are risky or speculative; increased regulation or scrutiny of alternative investment advisers affecting our reputation; suspension or revocation of our reinsurance licenses; potentially being deemed an investment company under U.S. federal securities law; failure of reinsurance subsidiaries to meet minimum capital and surplus requirements; changes in Bermuda or other law and regulation that may have an adverse impact on our operations; Third Point Re and/or Third Point Re BDA potentially becoming subject to U.S. federal income taxation; potential characterization of Third Point Re and/or Third Point Re BDA as a passive foreign investment company; subjection of our affiliates to the base erosion and anti-abuse tax; potentially becoming subject to U.S. withholding and information reporting requirements under the Foreign Account Tax Compliance Act; and and other risks and factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and other periodic and current disclosures filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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Third Point Reinsurance Ltd.
Table of Contents

 
 
 
Key Performance Indicators
 
 
 
 
 
 
Consolidated Financial Statements
 
 
 
 
 
 
 
 
Operating Segment Information
 
 
Segment Reporting - Three months ended March 31, 2020 and 2019
 
 
Gross Premiums Written by Lines and Type of Business - by Quarter
 
Underwriting Ratios - by Quarter
 
 
 
 
Investments
 
 
 
Net Investment Return by Investment Strategy - by Quarter
 
 
 
 
Other
 
 
Basic and Diluted Book Value per Share - by Quarter
 
Earnings (Loss) per Share - by Quarter
 
Return on Beginning Shareholders’ Equity - by Quarter
 


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Third Point Reinsurance Ltd.
Key Performance Indicators
March 31, 2020 and 2019
(expressed in thousands of U.S. dollars, except per share data and ratios)

 
Three months ended
 
March 31,
2020
 
March 31,
2019
 
 
 
 
Key underwriting metrics for Property and Casualty Reinsurance segment:
 
 
 
Net underwriting income (loss) (1)
$
4,396

 
$
(5,740
)
Combined ratio (1)
97.0
 %
 
103.8
%
 
 
 
 
Key investment return metrics:
 
 
 
Net investment income (loss)
$
(185,027
)
 
$
154,953

Net investment return on net investments managed by Third Point LLC
(7.3
)%
 
7.2
%
 
 
 
 
Key shareholders’ value creation metrics:
 
 
 
Basic book value per share (2) (3)
$
13.31

 
$
15.37

Diluted book value per share (2) (3)
$
13.05

 
$
15.04

Increase (decrease) in diluted book value per share (2)
(13.2
)%
 
9.8
%
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (2)
(13.0
)%
 
11.0
%

(1)
Refer to accompanying “Segment Reporting - Three months ended March 31, 2020 and 2019” for a calculation of net underwriting loss and combined ratio.
(2)
Basic book value per share, 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. Refer to accompanying “Basic book value per share and diluted book value per share - by Quarter” for calculation of basic and diluted book value per share and “Return on beginning shareholders’ equity - by Quarter” for calculation of return on beginning shareholders' equity attributable to Third Point Re common shareholders.
(3)
Prior year comparatives represent amounts as of December 31, 2019.




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Third Point Reinsurance Ltd.
Condensed Consolidated Balance Sheets - by Quarter
(expressed in thousands of U.S. dollars)
 
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Assets
 
 
 
 
 
 
 
 
 
 
Investment in related party investment fund, at fair value
 
$
659,815

 
$
860,630

 
$
818,600

 
$
824,352

 
$
1,475,995

Debt securities, trading, at fair value
 
363,121

 
125,071

 
220,045

 
567,354

 
241,059

Other investments, at fair value
 
4,000

 
4,000

 
3,500

 
3,010

 
3,087

Total investments
 
1,026,936

 
989,701

 
1,042,145

 
1,394,716

 
1,720,141

Cash and cash equivalents
 
445,776

 
639,415

 
693,105

 
93,757

 
54,319

Restricted cash and cash equivalents
 
975,109

 
1,014,543

 
816,519

 
656,146

 
616,844

Subscription receivable from related party investment fund
 
—

 
—

 
—

 
—

 
15,000

Redemption receivable from related party investment fund
 
—

 
—

 
—

 
400,000

 
—

Due from brokers
 
57,929

 
—

 
—

 
—

 
637

Interest and dividends receivable
 
3,732

 
2,178

 
2,932

 
1,792

 
1,891

Reinsurance balances receivable, net
 
622,883

 
596,120

 
680,630

 
696,170

 
758,816

Deferred acquisition costs, net
 
168,505

 
154,717

 
166,968

 
208,027

 
233,108

Unearned premiums ceded
 
13,411

 
16,945

 
14,370

 
15,473

 
16,139

Loss and loss adjustment expenses recoverable, net
 
6,865

 
5,520

 
4,270

 
3,655

 
2,751

Other assets
 
21,388

 
20,555

 
17,808

 
19,715

 
20,488

Total assets
 
$
3,342,534

 
$
3,439,694

 
$
3,438,747

 
$
3,489,451

 
$
3,440,134

Liabilities
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
8,868

 
$
17,816

 
$
14,607

 
$
14,843

 
$
9,225

Reinsurance balances payable
 
78,323

 
81,941

 
98,766

 
88,670

 
76,766

Deposit liabilities
 
170,402

 
172,259

 
174,405

 
148,845

 
144,782

Unearned premium reserves
 
579,315

 
524,768

 
592,319

 
702,398

 
767,352

Loss and loss adjustment expense reserves
 
1,107,911

 
1,111,692

 
1,060,000

 
1,021,776

 
986,639

Securities sold, not yet purchased, at fair value
 
47,427

 
—

 
—

 
—

 
—

Due to brokers
 
3,150

 
—

 
—

 
—

 
—

Participation agreement with related party investment fund
 
—

 
—

 
—

 
—

 
1,521

Interest and dividends payable
 
1,304

 
3,055

 
1,026

 
3,022

 
1,015

Senior notes payable, net of deferred costs
 
114,133

 
114,089

 
114,044

 
113,999

 
113,955

Total liabilities
 
2,110,833

 
2,025,620

 
2,055,167

 
2,093,553

 
2,101,255

Commitments and contingent liabilities
 
 
 
 
 
 
 
 
 
 
Shareholders’ equity
 
 
 
 
 
 
 
 
 
 
Preference shares
 
—

 
—

 
—

 
—

 
—

Common shares
 
9,488

 
9,423

 
9,422

 
9,399

 
9,429

Additional paid-in capital
 
928,903

 
927,704

 
926,949

 
924,191

 
920,207

Retained earnings
 
293,310

 
476,947

 
447,209

 
462,308

 
409,243

Shareholders’ equity attributable to Third Point Re common shareholders
 
1,231,701

 
1,414,074

 
1,383,580

 
1,395,898

 
1,338,879

Total liabilities and shareholders’ equity
 
$
3,342,534

 
$
3,439,694

 
$
3,438,747

 
$
3,489,451

 
$
3,440,134


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Third Point Reinsurance Ltd.
Condensed Consolidated Statements of Income (Loss)
(expressed in thousands of U.S. dollars, except share and per share data)
 
Three months ended
 
March 31,
2020
 
March 31,
2019
Revenues
 
 
 
Gross premiums written
$
204,131

 
$
319,591

Gross premiums ceded
265

 
(712
)
Net premiums written
204,396

 
318,879

Change in net unearned premium reserves
(58,081
)
 
(165,829
)
Net premiums earned
146,315

 
153,050

Net investment income (loss) from investment in related party investment fund
(200,815
)
 
146,991

Other net investment income
15,788

 
7,962

Net investment income (loss)
(185,027
)
 
154,953

Total revenues
(38,712
)
 
308,003

Expenses
 
 
 
Loss and loss adjustment expenses incurred, net
87,786

 
95,068

Acquisition costs, net
49,253

 
57,498

General and administrative expenses
10,159

 
12,132

Other expenses
3,477

 
4,125

Interest expense
2,048

 
2,029

Foreign exchange (gains) losses
(8,217
)
 
2,518

Total expenses
144,506

 
173,370

Income (loss) before income tax expense
(183,218
)
 
134,633

Income tax expense
(419
)
 
(1,718
)
Net income (loss) available to Third Point Re common shareholders
$
(183,637
)
 
$
132,915

Earnings (loss) per share available to Third Point Re common shareholders
 
 
 
Basic earnings (loss) per share available to Third Point Re common shareholders (1)
$
(1.99
)
 
$
1.45

Diluted earnings (loss) per share available to Third Point Re common shareholders (1)
$
(1.99
)
 
$
1.43

Weighted average number of common shares used in the determination of earnings (loss) per share
 
 
 
Basic
92,191,837

 
91,669,810

Diluted
92,191,837

 
92,578,933

(1)
Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and unvested restricted shares. Diluted earnings per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined using the treasury stock method. U.S. GAAP requires that unvested share awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (referred to as “participating securities”), be treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.

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Third Point Reinsurance Ltd.
Condensed Consolidated Statements of Income (Loss) - by Quarter
(expressed in thousands of U.S. dollars, except share and per share data)
 
 
Three months ended
 
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Revenues
 
 
 
 
 
 
 
 
 
 
Gross premiums written
 
$
204,131

 
$
134,230

 
$
95,388

 
$
82,637

 
$
319,591

Gross premiums ceded
 
265

 
(5,964
)
 
(1,116
)
 
(1,473
)
 
(712
)
Net premiums written
 
204,396

 
128,266

 
94,272

 
81,164

 
318,879

Change in net unearned premium reserves
 
(58,081
)
 
70,126

 
108,976

 
64,288

 
(165,829
)
Net premiums earned
 
146,315

 
198,392

 
203,248

 
145,452

 
153,050

Net investment income (loss) from investment in related party investment fund
 
(200,815
)
 
42,029

 
(5,751
)
 
66,357

 
146,991

Other net investment income
 
15,788

 
19,585

 
2,613

 
2,774

 
7,962

Net investment income (loss)
 
(185,027
)
 
61,614

 
(3,138
)
 
69,131

 
154,953

Total revenues
 
(38,712
)
 
260,006

 
200,110

 
214,583

 
308,003

Expenses
 
 
 
 
 
 
 
 
 
 
Loss and loss adjustment expenses incurred, net
 
87,786

 
140,394

 
85,703

 
82,334

 
95,068

Acquisition costs, net
 
49,253

 
61,851

 
118,271

 
58,006

 
57,498

General and administrative expenses
 
10,159

 
12,744

 
9,237

 
19,650

 
12,132

Other expenses
 
3,477

 
3,625

 
5,058

 
3,811

 
4,125

Interest expense
 
2,048

 
2,074

 
2,074

 
2,051

 
2,029

Foreign exchange (gains) losses
 
(8,217
)
 
10,298

 
(4,921
)
 
(4,260
)
 
2,518

Total expenses
 
144,506

 
230,986

 
215,422

 
161,592

 
173,370

Income (loss) before income tax (expense) benefit
 
(183,218
)
 
29,020

 
(15,312
)
 
52,991

 
134,633

Income tax (expense) benefit
 
(419
)
 
718

 
213

 
74

 
(1,718
)
Net income (loss) available to Third Point Re common shareholders
 
$
(183,637
)
 
$
29,738

 
$
(15,099
)
 
$
53,065

 
$
132,915

Earnings (loss) per share available to Third Point Re common shareholders
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share available to Third Point Re common shareholders (1)
 
$
(1.99
)
 
$
0.32

 
$
(0.16
)
 
$
0.58

 
$
1.45

Diluted earnings (loss) per share available to Third Point Re common shareholders (1)
 
$
(1.99
)
 
$
0.32

 
$
(0.16
)
 
$
0.57

 
$
1.43

Weighted average number of common shares used in the determination of earnings (loss) per common share
 
 
 
 
 
 
 
 
 
 
Basic
 
92,191,837

 
91,989,469

 
91,903,556

 
91,776,870

 
91,669,810

Diluted
 
92,191,837

 
92,696,491

 
91,903,556

 
92,801,799

 
92,578,933

(1)
Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and unvested restricted shares. Diluted earnings per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined using the treasury stock method. U.S. GAAP requires that unvested share awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (referred to as “participating securities”), be treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.

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Third Point Reinsurance Ltd.
Segment Reporting - Three months ended March 31, 2020 and 2019
(expressed in thousands of U.S. dollars)
 
Three months ended
 
2020
 
2019
 
Property and Casualty Reinsurance
 
Total
 
Property and Casualty Reinsurance
 
Total
Revenues
 
 
 
 
 
Gross premiums written
$
204,131

 
$
204,131

 
$
319,591

 
$
319,591

Gross premiums ceded
265

 
265

 
(712
)
 
(712
)
Net premiums written
204,396

 
204,396

 
318,879

 
318,879

Change in net unearned premium reserves
(58,081
)
 
(58,081
)
 
(165,829
)
 
(165,829
)
Net premiums earned
146,315

 
146,315

 
153,050

 
153,050

Expenses
 
 
 
 
 
 
 
Loss and loss adjustment expenses incurred, net
87,786

 
87,786

 
95,068

 
95,068

Acquisition costs, net
49,253

 
49,253

 
57,498

 
57,498

General and administrative expenses
4,880

 
4,880

 
6,224

 
6,224

Total expenses
141,919

 
141,919

 
158,790

 
158,790

Net underwriting income (loss)
$
4,396

 
4,396

 
$
(5,740
)
 
(5,740
)
Net investment income (loss)
 
 
(185,027
)
 
 
 
154,953

Corporate expenses
 
 
(5,279
)
 
 
 
(5,908
)
Other expenses
 
 
(3,477
)
 
 
 
(4,125
)
Interest expense
 
 
(2,048
)
 
 
 
(2,029
)
Foreign exchange gains (losses)
 
 
8,217

 
 
 
(2,518
)
Income tax expense
 
 
(419
)
 
 
 
(1,718
)
Net income (loss) available to Third Point Re common shareholders
 
 
$
(183,637
)
 
 
 
$
132,915

 
 
 
 
 
 
 
 
Property and Casualty Reinsurance - Underwriting Ratios (1):
 
 
 
 
 
 
 
Loss ratio
60.0
%
 
 
 
62.1
%
 
 
Acquisition cost ratio
33.7
%
 
 
 
37.6
%
 
 
Composite ratio
93.7
%
 
 
 
99.7
%
 
 
General and administrative expense ratio
3.3
%
 
 
 
4.1
%
 
 
Combined ratio
97.0
%
 
 
 
103.8
%
 
 
(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.

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Third Point Reinsurance Ltd.
Property and Casualty Reinsurance Segment - by Quarter (1) 
(expressed in thousands of U.S. dollars)
 
 
Three months ended
 
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Revenues
 
 
 
 
 
 
 
 
 
 
Gross premiums written
 
$
204,131

 
$
134,230

 
$
95,388

 
$
82,637

 
$
319,591

Gross premiums ceded
 
265

 
(5,964
)
 
(1,116
)
 
(1,473
)
 
(712
)
Net premiums written
 
204,396

 
128,266

 
94,272

 
81,164

 
318,879

Change in net unearned premium reserves
 
(58,081
)
 
70,126

 
108,976

 
64,288

 
(165,829
)
Net premiums earned
 
146,315

 
198,392

 
203,248

 
145,452

 
153,050

Expenses
 
 
 
 
 
 
 
 
 
 
Loss and loss adjustment expenses incurred, net
 
87,786

 
140,394

 
85,703

 
82,334

 
95,068

Acquisition costs, net
 
49,253

 
61,851

 
118,271

 
58,006

 
57,498

General and administrative expenses
 
4,880

 
5,724

 
4,769

 
6,769

 
6,224

Total expenses
 
141,919

 
207,969

 
208,743

 
147,109

 
158,790

Net underwriting income (loss)
 
$
4,396

 
$
(9,577
)
 
$
(5,495
)
 
$
(1,657
)
 
$
(5,740
)
 
 
 
 
 
 
 
 
 
 
 
Underwriting ratios (1)
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
60.0
%
 
70.7
%
 
42.2
%
 
56.6
%
 
62.1
%
Acquisition cost ratio
 
33.7
%
 
31.2
%
 
58.2
%
 
39.9
%
 
37.6
%
Composite ratio
 
93.7
%
 
101.9
%
 
100.4
%
 
96.5
%
 
99.7
%
General and administrative expense ratio
 
3.3
%
 
2.9
%
 
2.3
%
 
4.6
%
 
4.1
%
Combined ratio
 
97.0
%
 
104.8
%
 
102.7
%
 
101.1
%
 
103.8
%
(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.




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Third Point Reinsurance Ltd.
Gross Premiums Written by Lines and Type of Business - by Quarter
(expressed in thousands of U.S. dollars)

 
 
Three months ended
 
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Line and Type of Business
 
 
 
 
 
 
 
 
 
 
Property Catastrophe
 
$
31,164

 
$
4,831

 
$
6,127

 
$
15,843

 
$
41,514

Other Property
 
15,209

 
36,892

 
578

 
26,019

 
12,467

Property
 
46,373

 
41,723

 
6,705

 
41,862

 
53,981

 
 
 
 
 
 
 
 
 
 
 
Workers Compensation
 
21,320

 
121

 
3,519

 
1,221

 
22,810

Auto
 
21,249

 
(2,897
)
 
10,574

 
14,136

 
26,568

Other Casualty
 
24,371

 
35,315

 
2,931

 
9,081

 
28,514

Casualty
 
66,940

 
32,539

 
17,024

 
24,438

 
77,892

 
 
 
 
 
 
 
 
 
 
 
Credit & Financial Lines
 
9,012

 
3,633

 
7,265

 
16,417

 
17,310

Multi-line
 
66,746

 
16,268

 
2,345

 
(1,028
)
 
174,130

Other Specialty
 
15,060

 
5,768

 
3,357

 
948

 
1,631

Specialty
 
90,818

 
25,669

 
12,967

 
16,337

 
193,071

 
 
 
 
 
 
 
 
 
 
 
Total prospective reinsurance contracts
 
$
204,131

 
$
99,931

 
$
36,696

 
$
82,637

 
$
324,944

Retroactive reinsurance contracts
 
—

 
34,299

 
58,692

 
—

 
(5,353
)
Total property and casualty reinsurance segment
 
$
204,131

 
$
134,230

 
$
95,388

 
$
82,637

 
$
319,591

 
 
 
 
 
 
 
 
 
 
 






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Third Point Reinsurance Ltd.
Underwriting Ratios - by Quarter (1) 
(expressed in thousands of U.S. dollars)

 
 
Three months ended
 
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Underwriting ratios (1)
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
60.0
 %
 
70.7
 %
 
42.2
 %
 
56.6
 %
 
62.1
 %
Acquisition cost ratio
 
33.7
 %
 
31.2
 %
 
58.2
 %
 
39.9
 %
 
37.6
 %
Composite ratio
 
93.7
 %
 
101.9
 %
 
100.4
 %
 
96.5
 %
 
99.7
 %
General and administrative expense ratio
 
3.3
 %
 
2.9
 %
 
2.3
 %
 
4.6
 %
 
4.1
 %
Combined ratio
 
97.0
 %
 
104.8
 %
 
102.7
 %
 
101.1
 %
 
103.8
 %
 
 
 
 
 
 
 
 
 
 
 
Impact of catastrophe losses (2)
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
—
 %
 
9.1
 %
 
7.1
 %
 
—
 %
 
—
 %
Acquisition cost ratio
 
—
 %
 
(0.9
)%
 
(0.9
)%
 
—
 %
 
—
 %
Composite ratio
 
—
 %
 
8.2
 %
 
6.2
 %
 
—
 %
 
—
 %
 
 
 
 
 
 
 
 
 
 
 
Impact of reserve developments (2)
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
(7.5
)%
 
(4.9
)%
 
(37.6
)%
 
(5.6
)%
 
(2.6
)%
Acquisition cost ratio
 
6.0
 %
 
4.3
 %
 
35.7
 %
 
5.5
 %
 
2.4
 %
Composite ratio
 
(1.5
)%
 
(0.6
)%
 
(1.9
)%
 
(0.1
)%
 
(0.2
)%
 
 
 
 
 
 
 
 
 
 
 
Accident year ex-CAT underwriting ratios (3)
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
67.5
 %
 
66.5
 %
 
72.7
 %
 
62.2
 %
 
64.7
 %
Acquisition cost ratio
 
27.7
 %
 
27.8
 %
 
23.4
 %
 
34.4
 %
 
35.2
 %
Composite ratio
 
95.2
 %
 
94.3
 %
 
96.1
 %
 
96.6
 %
 
99.9
 %
General and administrative expense ratio
 
3.3
 %
 
2.9
 %
 
2.3
 %
 
4.6
 %
 
4.1
 %
Combined ratio
 
98.5
 %
 
97.2
 %
 
98.4
 %
 
101.2
 %
 
104.0
 %
 
 
 
 
 
 
 
 
 
 
 
(1)
Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)
General and administrative expense ratio excluded because catastrophe losses and impact of reserve developments do not impact this ratio.
(3)
The accident year ex-CAT underwriting ratios exclude catastrophe losses, net of reinstatement premiums and profit commission adjustments, and prior year loss development. We believe that the adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes losses which are outside of management’s control. We also exclude prior year development to provide transparency related to current accident year results.

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Third Point Reinsurance Ltd.
Net Investments Managed by Third Point LLC - by Quarter(1) 
(expressed in thousands of U.S. dollars)


 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Assets
 
 
 
 
 
 
 
 
 
TP Fund
$
659,815

 
$
860,630

 
$
818,600

 
$
824,352

 
$
1,475,995

Debt securities, trading, at fair value
363,121

 
125,071

 
220,045

 
567,354

 
241,059

Total investments
1,022,936

 
985,701

 
1,038,645

 
1,391,706

 
1,717,054

Cash and cash equivalents
366,894

 
588,196

 
611,442

 
22,563

 
3,647

Restricted cash and cash equivalents
975,109

 
1,014,543

 
816,519

 
656,146

 
616,844

Redemption receivable from related party investment fund
—

 
—

 
—

 
400,000

 
—

Due from brokers
57,929

 
—

 
—

 
—

 
637

Interest and dividends receivable
3,732

 
2,178

 
2,932

 
1,792

 
1,891

Other assets
—

 
18

 
6

 
7

 
—

Total assets
$
2,426,600

 
$
2,590,636

 
$
2,469,544

 
$
2,472,214

 
$
2,340,073

Liabilities
 
 
 
 
 
 
 
 
 
Accounts payable and accrued expenses
$
761

 
$
509

 
$
324

 
$
227

 
$
188

Securities sold, not yet purchased
47,427

 
—

 
—

 
—

 
—

Due to brokers
3,150

 
—

 
—

 
—

 
—

Participation agreement with related party investment fund
—

 
—

 
—

 
—

 
1,521

Interest and dividends payable
270

 
—

 
—

 
—

 
—

Total liabilities
51,608

 
509

 
324

 
227

 
1,709

Total net investments managed by Third Point LLC
$
2,374,992

 
$
2,590,127

 
$
2,469,220

 
$
2,471,987

 
$
2,338,364

 
 
 
 
 
 
 
 
 
 



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Third Point Reinsurance Ltd.
Net Investment Return by Investment Strategy - by Quarter

Summary of net investment return on investments managed by Third Point LLC (1)
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
 
 
 
 
 
 
 
 
 
Long
 
 
 
 
 
 
 
 
 
Equity
(11.2
)%
 
3.3
 %
 
1.4
 %
 
3.2
 %
 
8.4
 %
Credit
0.1
 %
 
0.1
 %
 
(0.7
)%
 
0.6
 %
 
0.9
 %
Other
(0.3
)%
 
0.7
 %
 
(0.1
)%
 
0.5
 %
 
0.7
 %
 
(11.4
)%
 
4.1
 %
 
0.6
 %
 
4.3
 %
 
10.0
 %
 
 
 
 
 
 
 
 
 
 
Short
 
 
 
 
 
 
 
 
 
Equity
4.4
 %
 
(1.8
)%
 
(0.7
)%
 
(1.2
)%
 
(2.4
)%
Credit
(0.1
)%
 
—
 %
 
—
 %
 
—
 %
 
(0.3
)%
Other
(0.2
)%
 
0.1
 %
 
(0.1
)%
 
(0.2
)%
 
(0.1
)%
 
4.1
 %
 
(1.7
)%
 
(0.8
)%
 
(1.4
)%
 
(2.8
)%
 
 
 
 
 
 
 
 
 
 
Net
 
 
 
 
 
 
 
 
 
Equity
(6.8
)%
 
1.5
 %
 
0.7
 %
 
2.0
 %
 
6.0
 %
Credit
—
 %
 
0.1
 %
 
(0.7
)%
 
0.6
 %
 
0.6
 %
Other
(0.5
)%
 
0.8
 %
 
(0.2
)%
 
0.3
 %
 
0.6
 %
 
(7.3
)%
 
2.4
 %
 
(0.2
)%
 
2.9
 %
 
7.2
 %
 
 
 
 
 
 
 
 
 
 
(1) Net investment return represents the return on our net investments managed by Third Point LLC, net of fees. The net investment return on net investments managed by Third Point LLC is the percentage change in value of a dollar invested over the reporting period on our net investment assets managed by Third Point LLC. The net investment return reflects the combined results of our investments in TP Fund, collateral assets and certain other investment assets managed by Third Point LLC. Net investment return is the key indicator by which we measure the performance of Third Point LLC, our investment manager.




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Third Point Reinsurance Ltd.
Basic and Diluted Book Value per Share - by Quarter
(expressed in thousands of U.S. dollars)

 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Basic and diluted book value per share numerator:
 
 
 
 
 
 
 
 
 
Shareholders' equity attributable to Third Point Re common shareholders
$
1,231,701

 
$
1,414,074

 
$
1,383,580

 
$
1,395,898

 
$
1,338,879

Basic and diluted book value per share denominator:
 
 
 
 
 
 
 
 
 
Common shares outstanding
94,881,229

 
94,225,498

 
94,220,567

 
93,994,924

 
94,292,914

Unvested restricted shares
(2,315,172
)
 
(2,231,296
)
 
(2,240,410
)
 
(2,214,087
)
 
(2,524,109
)
Basic book value per share denominator:
92,566,057

 
91,994,202

 
91,980,157

 
91,780,837

 
91,768,805

Effect of dilutive warrants issued to founders and an advisor (1)
—

 
172,756

 
—

 
108,371

 
127,947

Effect of dilutive stock options issued to directors and employees (1)
—

 
225,666

 
—

 
152,379

 
179,904

Effect of dilutive restricted shares issued to directors and employees (2)
1,815,741

 
1,654,803

 
1,731,384

 
1,777,266

 
1,848,791

Diluted book value per share denominator:
94,381,798

 
94,047,427

 
93,711,541

 
93,818,853

 
93,925,447

 
 
 
 
 
 
 
 
 
 
Basic book value per share (2)
$
13.31

 
$
15.37

 
$
15.04

 
$
15.21

 
$
14.59

Diluted book value per share (2)
$
13.05

 
$
15.04

 
$
14.76

 
$
14.88

 
$
14.25

 
 
 
 
 
 
 
 
 
 
Increase (decrease) in diluted book value per share
(13.2
)%
 
1.9
%
 
(0.8
)%
 
4.4
%
 
9.8
%

(1)
As of March 31, 2020 and September 30, 2019, there was no dilution as a result of the Company’s share price being under the lowest exercise price for warrants and options.
(2)
Basic book value per share and diluted book value per share are non-GAAP financial measures and there are no comparable GAAP measures. Basic book value per share, as presented, is a non-GAAP financial measure and is calculated by dividing shareholders’ equity attributable to Third Point Re common shareholders by the number of common shares outstanding, excluding the total number of unvested restricted shares, at period end. Diluted book value per share, as presented, is a non-GAAP financial measure and is calculated using the treasury stock method. Under the treasury stock method, we assume that proceeds received from in-the-money options and/or warrants exercised are used to repurchase common shares in the market. For unvested restricted shares with a performance condition, we include the unvested restricted shares for which we consider vesting to be probable. Change in basic book value per share is calculated by taking the difference in basic book value per share for the periods presented divided by the beginning of period book value per share. Change in diluted book value per share is calculated by taking the difference in diluted book value per share for the periods presented divided by the beginning of period diluted book value per share. We believe that long-term growth in diluted book value per share is the most important measure of our financial performance because it allows our management and investors to track over time the value created by the retention of earnings. In addition, we believe this metric is used by investors because it provides a basis for comparison with other companies in our industry that also report a similar measure.




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Third Point Reinsurance Ltd.
Earnings (Loss) per Share - by Quarter
(expressed in thousands of U.S. dollars)

 
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic number of common shares outstanding
 
92,191,837

 
91,989,469

 
91,903,556

 
91,776,870

 
91,669,810

Dilutive effect of options (1)
 
—

 
—

 
—

 
321,492

 
291,248

Dilutive effect of warrants (1)
 
—

 
—

 
—

 
228,643

 
207,134

Dilutive effect of restricted shares with service and performance condition
 
—

 
707,022

 
—

 
474,794

 
410,741

Diluted number of common shares outstanding
 
92,191,837

 
92,696,491

 
91,903,556

 
92,801,799

 
92,578,933

 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Net income (loss) available to Third Point Re common shareholders
 
$
(183,637
)
 
$
29,738

 
$
(15,099
)
 
$
53,065

 
$
132,915

Net income allocated to Third Point Re participating common shareholders
 
—

 
(111
)
 
—

 
(85
)
 
(173
)
Net income (loss) allocated to Third Point Re common shareholders
 
$
(183,637
)
 
$
29,627

 
$
(15,099
)
 
$
52,980

 
$
132,742

 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share available to Third Point Re common shareholders (2)
 
$
(1.99
)
 
$
0.32

 
$
(0.16
)
 
$
0.58

 
$
1.45

 
 
 
 
 
 
 
 
 
 
 
 Diluted earnings (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Net income (loss) available to Third Point Re common shareholders
 
$
(183,637
)
 
$
29,738

 
$
(15,099
)
 
$
53,065

 
$
132,915

Net income allocated to Third Point Re participating common shareholders
 
—

 
(110
)
 
—

 
(84
)
 
(171
)
Net income (loss) allocated to Third Point Re common shareholders
 
$
(183,637
)
 
$
29,628

 
$
(15,099
)
 
$
52,981

 
$
132,744

 
 
 
 
 
 
 
 
 
 
 
Diluted earnings (loss) per share available to Third Point Re common shareholders (2)
 
$
(1.99
)
 
$
0.32

 
$
(0.16
)
 
$
0.57

 
$
1.43


(1)
As of March 31, 2020 and September 30, 2019, there was no dilution as a result of the net loss allocated to Third Point Re common shareholders in the quarter. As of March 31, 2020 and December 31, 2019, there was no dilution as a result of the Company’s average share price for the quarter being under the lowest exercise price for warrants and options.
(2)
Basic earnings per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and unvested restricted shares. Diluted earnings per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined using the treasury stock method. U.S. GAAP requires that unvested share awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (referred to as “participating securities”), be treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.

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Third Point Reinsurance Ltd.
Return on Beginning Shareholders’ Equity - by Quarter
(expressed in thousands of U.S. dollars)


 
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Net income (loss) available to Third Point Re common shareholders
 
$
(183,637
)
 
$
29,738

 
$
(15,099
)
 
$
53,065

 
$
132,915

Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
 
1,414,074

 
1,383,580

 
1,395,898

 
1,338,879

 
1,204,574

Impact of weighting related to shareholders’ equity from shares repurchased
 
—

 
—

 
—

 
—

 
—

Adjusted shareholders’ equity attributable to Third Point Re common shareholders - beginning of period
 
$
1,414,074

 
$
1,383,580

 
$
1,395,898

 
$
1,338,879

 
$
1,204,574

Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (1)
 
(13.0
)%
 
2.1
%
 
(1.1
)%
 
4.0
%
 
11.0
%

(1)
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders, as presented, is a non-GAAP financial measure. Return on beginning shareholders’ equity attributable to Third Point Re common shareholders is calculated by dividing net income (loss) available to Third Point Re common shareholders by the beginning shareholders’ equity attributable to Third Point Re common shareholders. We believe that return on beginning shareholders’ equity attributable to Third Point Re common shareholders is an important measure because it assists our management and investors in evaluating the Company’s profitability. We adjust the beginning shareholders’ equity for the impact of the shares repurchased on a weighted average basis. For period where there is a loss, this adjustment decreased the stated returns on beginning shareholders’ equity and for period where there is a gain, this adjustment increased the stated returns on beginning shareholders’ equity.

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