Attached files
| file | filename |
|---|---|
| 8-K - 8-K - SiriusPoint Ltd | form8-kmay52016.htm |
| EX-99.1 - EXHIBIT 99.1 - SiriusPoint Ltd | exhibit991-earningsrelease.htm |
Third Point Reinsurance Ltd.
Financial Supplement
March 31, 2016
(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 | Manoj Gupta - Head of Investor Relations and Business Development | |
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. and its directly and indirectly owned subsidiaries, including Third Point Reinsurance Company Ltd. (“Third Point Re”) 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 refer to Third Point Reinsurance Investment Management Ltd. as the “Catastrophe Fund Manager,” Third Point Reinsurance Opportunities Fund Ltd. as the “Catastrophe Fund” and Third Point Re Cat Ltd. as the “Catastrophe Reinsurer.” 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 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 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 the Company’s 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: (i) limited historical information about the Company; (ii) fluctuation in results of operations; (iii) more established competitors; (iv) losses exceeding reserves; (v) downgrades or withdrawal of ratings by rating agencies; (vi) dependence on key executives; (vii) dependence on letter of credit facilities that may not be available on commercially acceptable terms; (viii) potential inability to pay dividends; (ix) inability to service the Company’s indebtedness; (x) limited cash flow and liquidity due to indebtedness; (xi) unavailability of capital in the future; (xii) fluctuations in market price of the Company’s common shares; (xiii) dependence on clients’ evaluations of risks associated with such clients’ insurance underwriting; (xiv) suspension or revocation of reinsurance licenses; (xv) potentially being deemed an investment company under United States federal securities law; (xvi) potential characterization of Third Point Re and/or Third Point Reinsurance Company Ltd. as a passive foreign investment company; (xvii) future strategic transactions such as acquisitions, dispositions, merger or joint ventures; (xviii) dependence on Third Point LLC to implement the Company’s investment strategy; (xix) termination by Third Point LLC of the investment management agreements; (xx) risks associated with the Company’s investment strategy being greater than those faced by competitors; (xxi) increased regulation or scrutiny of alternative investment advisers affecting the Company’s reputation; (xxii) Third Point Reinsurance Ltd. potentially becoming subject to United States federal income taxation; (xxiii) potentially becoming subject to United States withholding and information reporting requirements under the Foreign Account Tax Compliance Act provisions; (xxiv) changes in Bermuda or other law regulation that may have an adverse impact on the Company's operations; and (xxv) other risks and factors listed under “Risk Factors” in our 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 the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Page 1 of 17
Third Point Reinsurance Ltd.
Table of Contents
Key Performance Indicators | ||
Consolidated Financial Statements | ||
Operating Segment Information | ||
Segment Reporting - Three months ended March 31, 2016 and 2015 | ||
Investments | ||
Investment Return by Investment Strategy - by Quarter | ||
Other | ||
General and Administrative Expenses - by Quarter | ||
Book Value per Share and Diluted Book Value per Share - by Quarter | ||
Earnings (Loss) per Share - by Quarter | ||
Return on Beginning Shareholders’ Equity - by Quarter | ||
Page 2 of 17
Third Point Reinsurance Ltd.
Key Performance Indicators
March 31, 2016 and 2015
(expressed in thousands of U.S. dollars, except per share data and ratios)
Three months ended | |||||||
March 31, 2016 | March 31, 2015 | ||||||
Key underwriting metrics for Property and Casualty Reinsurance segment: | |||||||
Net underwriting loss(1) | $ | (6,623 | ) | $ | (3,859 | ) | |
Combined ratio(1) | 104.9 | % | 102.8 | % | |||
Key investment return metrics: | |||||||
Net investment income (loss) | $ | (40,110 | ) | $ | 64,918 | ||
Net investment return on investments managed by Third Point LLC | (2.0 | )% | 3.0 | % | |||
Key shareholders’ value creation metrics: | |||||||
Book value per share(2) (3) | $ | 12.76 | $ | 13.23 | |||
Diluted book value per share(2) (3) | $ | 12.37 | $ | 12.85 | |||
Increase (decrease) in diluted book value per share(2) | (3.7 | )% | 3.1 | % | |||
Return on beginning shareholders’ equity(2) | (3.7 | )% | 3.5 | % | |||
(1) | Refer to accompanying “Segment Reporting - Three months ended March 31, 2016 and 2015” for a calculation of net underwriting loss and combined ratio. |
(2) | Book value per share, diluted book value per share and return on beginning shareholders’ equity are non-GAAP financial measures. Refer to accompanying “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. |
(3) | Prior year comparative represents amounts as of December 31, 2015. |
Page 3 of 17
Third Point Reinsurance Ltd.
Consolidated Balance Sheets - by Quarter
(expressed in thousands of U.S. dollars)
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Assets | ||||||||||||||||||||
Equity securities, trading, at fair value | $ | 1,483,076 | $ | 1,231,077 | $ | 1,289,840 | $ | 1,332,489 | $ | 1,239,988 | ||||||||||
Debt securities, trading, at fair value | 1,185,102 | 1,034,247 | 737,039 | 801,725 | 736,243 | |||||||||||||||
Other investments, at fair value | 49,965 | 51,920 | 52,882 | 72,699 | 61,466 | |||||||||||||||
Total investments in securities | 2,718,143 | 2,317,244 | 2,079,761 | 2,206,913 | 2,037,697 | |||||||||||||||
Cash and cash equivalents | 7,658 | 20,407 | 10,819 | 46,800 | 12,348 | |||||||||||||||
Restricted cash and cash equivalents | 316,923 | 330,915 | 604,428 | 589,231 | 583,474 | |||||||||||||||
Due from brokers | 424,205 | 326,971 | 303,597 | 263,440 | 228,793 | |||||||||||||||
Securities purchased under an agreement to sell | — | — | — | 17,963 | 17,630 | |||||||||||||||
Derivative assets, at fair value | 26,877 | 35,337 | 27,337 | 27,995 | 25,223 | |||||||||||||||
Interest and dividends receivable | 14,092 | 10,687 | 10,030 | 5,508 | 5,902 | |||||||||||||||
Reinsurance balances receivable | 326,066 | 294,313 | 314,693 | 291,226 | 250,154 | |||||||||||||||
Deferred acquisition costs, net | 216,689 | 197,093 | 192,451 | 180,452 | 164,096 | |||||||||||||||
Unearned premiums ceded | 94 | 187 | 808 | 1,226 | — | |||||||||||||||
Loss and loss adjustment expenses recoverable | 1 | 125 | 184 | 184 | 408 | |||||||||||||||
Other assets | 16,499 | 11,829 | 14,231 | 5,923 | 6,857 | |||||||||||||||
Total assets | $ | 4,067,247 | $ | 3,545,108 | $ | 3,558,339 | $ | 3,636,861 | $ | 3,332,582 | ||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Accounts payable and accrued expenses | $ | 9,639 | $ | 11,966 | $ | 12,298 | $ | 12,356 | $ | 8,792 | ||||||||||
Reinsurance balances payable | 30,733 | 24,119 | 34,833 | 32,662 | 53,798 | |||||||||||||||
Deposit liabilities | 86,594 | 83,955 | 167,210 | 147,161 | 146,719 | |||||||||||||||
Unearned premium reserves | 591,970 | 531,710 | 567,565 | 571,580 | 508,014 | |||||||||||||||
Loss and loss adjustment expense reserves | 489,907 | 466,047 | 420,649 | 312,945 | 273,937 | |||||||||||||||
Securities sold, not yet purchased, at fair value | 235,919 | 314,353 | 172,074 | 151,115 | 104,857 | |||||||||||||||
Securities sold under an agreement to repurchase | 170,305 | 8,944 | — | 10,992 | 61,939 | |||||||||||||||
Due to brokers | 960,703 | 574,962 | 695,019 | 681,280 | 465,558 | |||||||||||||||
Derivative liabilities, at fair value | 28,524 | 15,392 | 22,495 | 19,139 | 17,020 | |||||||||||||||
Performance fee payable to related party | — | — | — | 25,059 | 15,844 | |||||||||||||||
Interest and dividends payable | 2,397 | 4,400 | 1,673 | 3,678 | 1,617 | |||||||||||||||
Senior notes payable, net of deferred costs | 113,421 | 113,377 | 113,332 | 113,290 | 113,315 | |||||||||||||||
Total liabilities | 2,720,112 | 2,149,225 | 2,207,148 | 2,081,257 | 1,771,410 | |||||||||||||||
Commitments and contingent liabilities | ||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||
Preference shares | — | — | — | — | — | |||||||||||||||
Common shares | 10,621 | 10,548 | 10,548 | 10,526 | 10,517 | |||||||||||||||
Additional paid-in capital | 1,083,168 | 1,080,591 | 1,078,327 | 1,073,369 | 1,069,617 | |||||||||||||||
Retained earnings | 237,458 | 288,587 | 246,394 | 442,109 | 426,447 | |||||||||||||||
Shareholders’ equity attributable to shareholders | 1,331,247 | 1,379,726 | 1,335,269 | 1,526,004 | 1,506,581 | |||||||||||||||
Non-controlling interests | 15,888 | 16,157 | 15,922 | 29,600 | 54,591 | |||||||||||||||
Total shareholders’ equity | 1,347,135 | 1,395,883 | 1,351,191 | 1,555,604 | 1,561,172 | |||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,067,247 | $ | 3,545,108 | $ | 3,558,339 | $ | 3,636,861 | $ | 3,332,582 | ||||||||||
Page 4 of 17
Third Point Reinsurance Ltd.
Consolidated Statements of Income (Loss)
(expressed in thousands of U.S. dollars, except share and per share data)
Three months ended | ||||||||
March 31, 2016 | March 31, 2015 | |||||||
Revenues | ||||||||
Gross premiums written | $ | 197,156 | $ | 213,334 | ||||
Gross premiums ceded | — | (52 | ) | |||||
Net premiums written | 197,156 | 213,282 | ||||||
Change in net unearned premium reserves | (60,354 | ) | (74,207 | ) | ||||
Net premiums earned | 136,802 | 139,075 | ||||||
Net investment income (loss) | (40,110 | ) | 64,918 | |||||
Total revenues | 96,692 | 203,993 | ||||||
Expenses | ||||||||
Loss and loss adjustment expenses incurred, net | 84,676 | 81,746 | ||||||
Acquisition costs, net | 51,687 | 54,657 | ||||||
General and administrative expenses | 11,288 | 11,708 | ||||||
Other expenses | 2,706 | 2,701 | ||||||
Interest expense | 2,048 | 1,036 | ||||||
Foreign exchange gains | (2,386 | ) | (193 | ) | ||||
Total expenses | 150,019 | 151,655 | ||||||
Income (loss) before income tax (expense) benefit | (53,327 | ) | 52,338 | |||||
Income tax (expense) benefit | 1,929 | (1,305 | ) | |||||
Income (loss) including non-controlling interests | (51,398 | ) | 51,033 | |||||
(Income) loss attributable to non-controlling interests | 269 | (563 | ) | |||||
Net income (loss) | $ | (51,129 | ) | $ | 50,470 | |||
Earnings (loss) per share | ||||||||
Basic | $ | (0.49 | ) | $ | 0.48 | |||
Diluted | $ | (0.49 | ) | $ | 0.47 | |||
Weighted average number of ordinary shares used in the determination of earnings (loss) per share | ||||||||
Basic | 104,257,874 | 103,753,065 | ||||||
Diluted | 104,257,874 | 106,144,183 | ||||||
(1) | Basic earnings (loss) 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 (loss) 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. |
Page 5 of 17
Third Point Reinsurance Ltd.
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, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Revenues | ||||||||||||||||||||
Gross premiums written | $ | 197,156 | $ | 99,155 | $ | 205,583 | $ | 184,342 | $ | 213,334 | ||||||||||
Gross premiums ceded | — | (24 | ) | (375 | ) | (1,425 | ) | (52 | ) | |||||||||||
Net premiums written | 197,156 | 99,131 | 205,208 | 182,917 | 213,282 | |||||||||||||||
Change in net unearned premium reserves | (60,354 | ) | 35,235 | 3,597 | (62,339 | ) | (74,207 | ) | ||||||||||||
Net premiums earned | 136,802 | 134,366 | 208,805 | 120,578 | 139,075 | |||||||||||||||
Net investment income (loss) | (40,110 | ) | 61,553 | (193,156 | ) | 38,611 | 64,918 | |||||||||||||
Total revenues | 96,692 | 195,919 | 15,649 | 159,189 | 203,993 | |||||||||||||||
Expenses | ||||||||||||||||||||
Loss and loss adjustment expenses incurred, net | 84,676 | 98,855 | 158,537 | 76,053 | 81,746 | |||||||||||||||
Acquisition costs, net | 51,687 | 38,552 | 50,509 | 47,498 | 54,657 | |||||||||||||||
General and administrative expenses | 11,288 | 10,236 | 9,822 | 14,267 | 11,708 | |||||||||||||||
Other expenses | 2,706 | 2,928 | 670 | 2,315 | 2,701 | |||||||||||||||
Interest expense | 2,048 | 2,074 | 2,074 | 2,052 | 1,036 | |||||||||||||||
Foreign exchange (gains) losses | (2,386 | ) | (2,396 | ) | (746 | ) | 139 | (193 | ) | |||||||||||
Total expenses | 150,019 | 150,249 | 220,866 | 142,324 | 151,655 | |||||||||||||||
Income (loss) before income tax (expense) benefit | (53,327 | ) | 45,670 | (205,217 | ) | 16,865 | 52,338 | |||||||||||||
Income tax (expense) benefit | 1,929 | (2,863 | ) | 7,781 | (708 | ) | (1,305 | ) | ||||||||||||
Income (loss) including non-controlling interests | (51,398 | ) | 42,807 | (197,436 | ) | 16,157 | 51,033 | |||||||||||||
(Income) loss attributable to non-controlling interests | 269 | (614 | ) | 1,721 | (495 | ) | (563 | ) | ||||||||||||
Net income (loss) | $ | (51,129 | ) | $ | 42,193 | $ | (195,715 | ) | $ | 15,662 | $ | 50,470 | ||||||||
Earnings (loss) per share | ||||||||||||||||||||
Basic | $ | (0.49 | ) | $ | 0.40 | $ | (1.88 | ) | $ | 0.15 | $ | 0.48 | ||||||||
Diluted | $ | (0.49 | ) | $ | 0.39 | $ | (1.88 | ) | $ | 0.15 | $ | 0.47 | ||||||||
Weighted average number of ordinary shares used in the determination of earnings (loss) per share | ||||||||||||||||||||
Basic | 104,257,874 | 104,217,321 | 104,117,448 | 103,927,761 | 103,753,065 | |||||||||||||||
Diluted | 104,257,874 | 106,635,451 | 104,117,448 | 106,696,874 | 106,144,183 | |||||||||||||||
(1) | Basic earnings (loss) 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 (loss) 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. |
Page 6 of 17
Third Point Reinsurance Ltd.
Segment Reporting - Three months ended March 31, 2016 and 2015
(expressed in thousands of U.S. dollars)
Three months ended March 31, 2016 | Three months ended March 31, 2015 | ||||||||||||||||||||||||||||||
Property and Casualty Reinsurance | Catastrophe Risk Management(2) | Corporate | Total | Property and Casualty Reinsurance | Catastrophe Risk Management | Corporate | Total | ||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||
Gross premiums written | $ | 197,156 | $ | — | $ | — | $ | 197,156 | $ | 213,383 | $ | (49 | ) | $ | — | $ | 213,334 | ||||||||||||||
Gross premiums ceded | — | — | — | — | (52 | ) | — | — | (52 | ) | |||||||||||||||||||||
Net premiums written | 197,156 | — | — | 197,156 | 213,331 | (49 | ) | — | 213,282 | ||||||||||||||||||||||
Change in net unearned premium reserves | (60,354 | ) | — | — | (60,354 | ) | (74,214 | ) | 7 | — | (74,207 | ) | |||||||||||||||||||
Net premiums earned | 136,802 | — | — | 136,802 | 139,117 | (42 | ) | — | 139,075 | ||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||
Loss and loss adjustment expenses incurred, net | 84,676 | — | — | 84,676 | 81,746 | — | — | 81,746 | |||||||||||||||||||||||
Acquisition costs, net | 51,687 | — | — | 51,687 | 54,663 | (6 | ) | — | 54,657 | ||||||||||||||||||||||
General and administrative expenses | 7,062 | — | 4,226 | 11,288 | 6,567 | 233 | 4,908 | 11,708 | |||||||||||||||||||||||
Total expenses | 143,425 | — | 4,226 | 147,651 | 142,976 | 227 | 4,908 | 148,111 | |||||||||||||||||||||||
Net underwriting loss | (6,623 | ) | n/a | n/a | n/a | (3,859 | ) | n/a | n/a | n/a | |||||||||||||||||||||
Net investment income (loss) | (8,261 | ) | — | (31,849 | ) | (40,110 | ) | 18,575 | 25 | 46,318 | 64,918 | ||||||||||||||||||||
Other expenses | (2,706 | ) | — | — | (2,706 | ) | (2,701 | ) | — | — | (2,701 | ) | |||||||||||||||||||
Interest expense | — | — | (2,048 | ) | (2,048 | ) | — | — | (1,036 | ) | (1,036 | ) | |||||||||||||||||||
Foreign exchange gains | — | — | 2,386 | 2,386 | — | — | 193 | 193 | |||||||||||||||||||||||
Income tax (expense) benefit | — | — | 1,929 | 1,929 | — | — | (1,305 | ) | (1,305 | ) | |||||||||||||||||||||
Segment income (loss) including non-controlling interests | (17,590 | ) | — | (33,808 | ) | (51,398 | ) | 12,015 | (244 | ) | 39,262 | 51,033 | |||||||||||||||||||
Segment (income) loss attributable to non-controlling interests | — | — | 269 | 269 | — | 80 | (643 | ) | (563 | ) | |||||||||||||||||||||
Segment income (loss) | $ | (17,590 | ) | $ | — | $ | (33,539 | ) | $ | (51,129 | ) | $ | 12,015 | $ | (164 | ) | $ | 38,619 | $ | 50,470 | |||||||||||
Property and Casualty Reinsurance - Underwriting Ratios (1): | |||||||||||||||||||||||||||||||
Loss ratio | 61.9 | % | 58.8 | % | |||||||||||||||||||||||||||
Acquisition cost ratio | 37.8 | % | 39.3 | % | |||||||||||||||||||||||||||
Composite ratio | 99.7 | % | 98.1 | % | |||||||||||||||||||||||||||
General and administrative expense ratio | 5.2 | % | 4.7 | % | |||||||||||||||||||||||||||
Combined ratio | 104.9 | % | 102.8 | % | |||||||||||||||||||||||||||
(1) | Underwriting ratios are calculated by dividing the related expense by net premiums earned. |
(2) | As of December 31, 2015, all investments in the Catastrophe Fund had been redeemed. In February 2016, the Company completed the dissolution of the Catastrophe Fund and Catastrophe Reinsurer. As a result, there is no further activity in the Catastrophe Risk Management segment |
Page 7 of 17
Third Point Reinsurance Ltd.
Property and Casualty Reinsurance Segment - by Quarter
(expressed in thousands of U.S. dollars)
Three Months Ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Revenues | ||||||||||||||||||||
Gross premiums written | $ | 197,156 | $ | 99,155 | $ | 205,729 | $ | 184,191 | $ | 213,383 | ||||||||||
Gross premiums ceded | — | (24 | ) | (375 | ) | (1,425 | ) | (52 | ) | |||||||||||
Net premiums written | 197,156 | 99,131 | 205,354 | 182,766 | 213,331 | |||||||||||||||
Change in net unearned premium reserves | (60,354 | ) | 35,235 | 3,597 | (62,384 | ) | (74,214 | ) | ||||||||||||
Net premiums earned | 136,802 | 134,366 | 208,951 | 120,382 | 139,117 | |||||||||||||||
Expenses | ||||||||||||||||||||
Loss and loss adjustment expenses incurred, net | 84,676 | 98,855 | 158,387 | 76,053 | 81,746 | |||||||||||||||
Acquisition costs, net | 51,687 | 38,552 | 50,527 | 47,475 | 54,663 | |||||||||||||||
General and administrative expenses | 7,062 | 6,134 | 5,872 | 6,242 | 6,567 | |||||||||||||||
Total expenses | 143,425 | 143,541 | 214,786 | 129,770 | 142,976 | |||||||||||||||
Net underwriting loss | (6,623 | ) | (9,175 | ) | (5,835 | ) | (9,388 | ) | (3,859 | ) | ||||||||||
Net investment income (loss) | (8,261 | ) | 12,813 | (51,988 | ) | 9,790 | 18,575 | |||||||||||||
Other expenses | (2,706 | ) | (2,928 | ) | (670 | ) | (2,315 | ) | (2,701 | ) | ||||||||||
Segment income (loss) | $ | (17,590 | ) | $ | 710 | $ | (58,493 | ) | $ | (1,913 | ) | $ | 12,015 | |||||||
Underwriting ratios (1): | ||||||||||||||||||||
Loss ratio | 61.9 | % | 73.6 | % | 75.8 | % | 63.2 | % | 58.8 | % | ||||||||||
Acquisition cost ratio | 37.8 | % | 28.7 | % | 24.2 | % | 39.4 | % | 39.3 | % | ||||||||||
Composite ratio | 99.7 | % | 102.3 | % | 100.0 | % | 102.6 | % | 98.1 | % | ||||||||||
General and administrative expense ratio | 5.2 | % | 4.6 | % | 2.8 | % | 5.2 | % | 4.7 | % | ||||||||||
Combined ratio | 104.9 | % | 106.9 | % | 102.8 | % | 107.8 | % | 102.8 | % | ||||||||||
(1) | Underwriting ratios are calculated by dividing the related expense by net premiums earned. |
Page 8 of 17
Third Point Reinsurance Ltd.
Catastrophe Risk Management Segment - by Quarter
(expressed in thousands of U.S. dollars)
Three Months Ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Revenues | ||||||||||||||||||||
Gross premiums written | $ | — | $ | — | $ | (146 | ) | $ | 151 | $ | (49 | ) | ||||||||
Gross premiums ceded | — | — | — | — | — | |||||||||||||||
Net premiums written | — | — | (146 | ) | 151 | (49 | ) | |||||||||||||
Change in net unearned premium reserves | — | — | — | 45 | 7 | |||||||||||||||
Net premiums earned | — | — | (146 | ) | 196 | (42 | ) | |||||||||||||
Expenses | ||||||||||||||||||||
Loss and loss adjustment expenses incurred, net | — | — | 150 | — | — | |||||||||||||||
Acquisition costs, net | — | — | (18 | ) | 23 | (6 | ) | |||||||||||||
General and administrative expenses | — | (16 | ) | 32 | 198 | 233 | ||||||||||||||
Total expenses | — | (16 | ) | 164 | 221 | 227 | ||||||||||||||
Net investment income | — | — | 1 | 43 | 25 | |||||||||||||||
Segment income (loss) including non-controlling interests | — | 16 | (309 | ) | 18 | (244 | ) | |||||||||||||
Segment income attributable to non-controlling interests | — | (54 | ) | 140 | (64 | ) | 80 | |||||||||||||
Segment income (loss) | $ | — | $ | (38 | ) | $ | (169 | ) | $ | (46 | ) | $ | (164 | ) | ||||||
Note: As of December 31, 2015, all investments in the Catastrophe Fund had been redeemed. In February 2016, the Company completed the dissolution of the Catastrophe Fund and Catastrophe Reinsurer. As a result, there is no further activity in the Catastrophe Risk Management segment
Page 9 of 17
Third Point Reinsurance Ltd.
Corporate Function - by Quarter
(expressed in thousands of U.S. dollars)
Three Months Ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Revenues | ||||||||||||||||||||
Gross premiums written | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Gross premiums ceded | — | — | — | — | — | |||||||||||||||
Net premiums written | — | — | — | — | — | |||||||||||||||
Change in net unearned premium reserves | — | — | — | — | — | |||||||||||||||
Net premiums earned | — | — | — | — | — | |||||||||||||||
Expenses | ||||||||||||||||||||
Loss and loss adjustment expenses incurred, net | — | — | — | — | — | |||||||||||||||
Acquisition costs, net | — | — | — | — | — | |||||||||||||||
General and administrative expenses | 4,226 | 4,118 | 3,918 | 7,827 | 4,908 | |||||||||||||||
Total expenses | 4,226 | 4,118 | 3,918 | 7,827 | 4,908 | |||||||||||||||
Net investment income (loss) | (31,849 | ) | 48,740 | (141,169 | ) | 28,778 | 46,318 | |||||||||||||
Interest expense | (2,048 | ) | (2,074 | ) | (2,074 | ) | (2,052 | ) | (1,036 | ) | ||||||||||
Foreign exchange gains (losses) | 2,386 | 2,396 | 746 | (139 | ) | 193 | ||||||||||||||
Income tax (expense) benefit | 1,929 | (2,863 | ) | 7,781 | (708 | ) | (1,305 | ) | ||||||||||||
Segment income (loss) including non-controlling interests | (33,808 | ) | 42,081 | (138,634 | ) | 18,052 | 39,262 | |||||||||||||
Segment (income) loss attributable to non-controlling interests | 269 | (560 | ) | 1,581 | (431 | ) | (643 | ) | ||||||||||||
Segment income (loss) | $ | (33,539 | ) | $ | 41,521 | $ | (137,053 | ) | $ | 17,621 | $ | 38,619 | ||||||||
Page 10 of 17
Third Point Reinsurance Ltd.
Gross Premiums Written by Lines of Business - by Quarter
(expressed in thousands of U.S. dollars)
Three Months Ended | ||||||||||||||||||||
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Property | $ | (175 | ) | $ | 43,361 | $ | 21,863 | $ | 27,535 | $ | 21,456 | |||||||||
Workers Compensation | 1,240 | (321 | ) | 14,769 | 44,357 | 5,729 | ||||||||||||||
Auto | 10,137 | 7,395 | 91,565 | 73,666 | (16,241 | ) | ||||||||||||||
General Liability | — | — | 55,646 | 21,134 | 20,365 | |||||||||||||||
Professional Liability | — | (1,000 | ) | — | 10,000 | — | ||||||||||||||
Casualty | 11,377 | 6,074 | 161,980 | 149,157 | 9,853 | |||||||||||||||
Agriculture | — | — | — | (1 | ) | — | ||||||||||||||
Credit & Financial lines | 32,091 | 15,937 | 20,611 | 7,500 | 18,875 | |||||||||||||||
Multi-line | 153,863 | 33,783 | 1,275 | — | 163,199 | |||||||||||||||
Specialty | 185,954 | 49,720 | 21,886 | 7,499 | 182,074 | |||||||||||||||
Total property and casualty reinsurance segment | 197,156 | 99,155 | 205,729 | 184,191 | 213,383 | |||||||||||||||
Catastrophe risk management | — | — | (146 | ) | 151 | (49 | ) | |||||||||||||
$ | 197,156 | $ | 99,155 | $ | 205,583 | $ | 184,342 | $ | 213,334 | |||||||||||
Page 11 of 17
Third Point Reinsurance Ltd.
Investments Managed by Third Point LLC - by Quarter
(expressed in thousands of U.S. dollars)
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
Assets | |||||||||||||||||||
Total investments in securities | $ | 2,691,431 | $ | 2,290,779 | $ | 2,053,777 | $ | 2,181,728 | $ | 2,032,653 | |||||||||
Cash and cash equivalents | 11 | 57 | 10 | 25,221 | 29 | ||||||||||||||
Restricted cash and cash equivalents | 316,923 | 330,915 | 604,428 | 566,716 | 508,049 | ||||||||||||||
Due from brokers | 424,205 | 326,971 | 303,597 | 263,440 | 228,793 | ||||||||||||||
Securities purchased under an agreement to sell | — | — | — | 17,963 | 17,630 | ||||||||||||||
Derivative assets | 26,877 | 35,337 | 27,337 | 27,995 | 25,223 | ||||||||||||||
Interest and dividends receivable | 14,092 | 10,687 | 10,030 | 5,505 | 5,898 | ||||||||||||||
Total assets | $ | 3,473,539 | $ | 2,994,746 | $ | 2,999,179 | $ | 3,088,568 | $ | 2,818,275 | |||||||||
Liabilities and non-controlling interest | |||||||||||||||||||
Accounts payable and accrued expenses | $ | 1,102 | $ | 770 | $ | 714 | $ | 846 | $ | 506 | |||||||||
Securities sold, not yet purchased | 235,919 | 314,353 | 172,074 | 151,115 | 104,857 | ||||||||||||||
Securities sold under an agreement to repurchase | 170,305 | 8,944 | — | 10,992 | 61,939 | ||||||||||||||
Due to brokers | 960,703 | 574,962 | 695,019 | 681,280 | 465,558 | ||||||||||||||
Derivative liabilities | 28,524 | 15,392 | 22,495 | 19,139 | 16,990 | ||||||||||||||
Performance fee payable to related party | — | — | — | 25,059 | 15,844 | ||||||||||||||
Interest and dividends payable | 1,363 | 1,345 | 647 | 657 | 602 | ||||||||||||||
Capital contributions received in advance | — | — | — | 25,214 | — | ||||||||||||||
Non-controlling interest | 15,888 | 16,157 | 15,597 | 16,317 | 15,885 | ||||||||||||||
Total liabilities and non-controlling interest | 1,413,804 | 931,923 | 906,546 | 930,619 | 682,181 | ||||||||||||||
Total net investments managed by Third Point LLC | $ | 2,059,735 | $ | 2,062,823 | $ | 2,092,633 | $ | 2,157,949 | $ | 2,136,094 | |||||||||
Net investments - Capital | $ | 1,504,321 | $ | 1,537,349 | $ | 1,491,118 | $ | 1,573,864 | $ | 1,566,798 | |||||||||
Net investments - Float | 555,414 | 525,474 | 601,515 | 584,085 | 569,296 | ||||||||||||||
Total net investments managed by Third Point LLC | $ | 2,059,735 | $ | 2,062,823 | $ | 2,092,633 | $ | 2,157,949 | $ | 2,136,094 | |||||||||
Page 12 of 17
Third Point Reinsurance Ltd.
Investment Return by Investment Strategy - by Quarter
Summary of investment return on investments managed by Third Point LLC | March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||
Long/short equities | (1.1 | )% | 2.9 | % | (8.2 | )% | 1.1 | % | 1.0 | % | ||||
Asset-backed securities | (0.8 | )% | (0.2 | )% | 0.4 | % | 1.1 | % | 1.8 | % | ||||
Corporate and sovereign credit | 0.8 | % | 0.3 | % | (1.0 | )% | (0.4 | )% | 0.3 | % | ||||
Macro and other | (0.9 | )% | (0.2 | )% | 0.1 | % | (0.1 | )% | (0.1 | )% | ||||
(2.0 | )% | 2.8 | % | (8.7 | )% | 1.7 | % | 3.0 | % | |||||
Page 13 of 17
Third Point Reinsurance Ltd.
General and Administrative Expenses - by Quarter
(expressed in thousands of U.S. dollars)
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
Payroll and related | $ | 5,001 | $ | 3,816 | $ | 3,500 | $ | 7,295 | $ | 4,663 | |||||||||
Share compensation expenses | 2,651 | 2,266 | 2,807 | 2,714 | 3,083 | ||||||||||||||
Legal and accounting | 928 | 1,115 | 1,090 | 1,385 | 1,290 | ||||||||||||||
Travel and entertainment | 676 | 722 | 649 | 789 | 985 | ||||||||||||||
Credit facility fees | 553 | 391 | 466 | 519 | 431 | ||||||||||||||
IT related | 457 | 888 | 366 | 347 | 366 | ||||||||||||||
Occupancy | 262 | 209 | 182 | 205 | 150 | ||||||||||||||
Corporate insurance | 247 | 229 | 222 | 276 | 295 | ||||||||||||||
Board of director and related | 163 | 169 | 192 | 239 | 170 | ||||||||||||||
Other general and administrative expenses | 350 | 431 | 348 | 498 | 275 | ||||||||||||||
$ | 11,288 | $ | 10,236 | $ | 9,822 | $ | 14,267 | $ | 11,708 | ||||||||||
Page 14 of 17
Third Point Reinsurance Ltd.
Book Value per Share and Diluted Book Value per Share - by Quarter
(expressed in thousands of U.S. dollars)
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | |||||||||||||||
Basic and diluted book value per share numerator: | |||||||||||||||||||
Total shareholders’ equity | $ | 1,347,135 | $ | 1,395,883 | $ | 1,351,191 | $ | 1,555,604 | $ | 1,561,172 | |||||||||
Less: non-controlling interests | (15,888 | ) | (16,157 | ) | (15,922 | ) | (29,600 | ) | (54,591 | ) | |||||||||
Shareholders’ equity attributable to shareholders | 1,331,247 | 1,379,726 | 1,335,269 | 1,526,004 | 1,506,581 | ||||||||||||||
Effect of dilutive warrants issued to founders and an advisor | 46,512 | 46,512 | 46,512 | 46,512 | 46,512 | ||||||||||||||
Effect of dilutive stock options issued to directors and employees | 57,272 | 58,070 | 58,070 | 60,240 | 60,589 | ||||||||||||||
Fully diluted book value per share numerator: | $ | 1,435,031 | $ | 1,484,308 | $ | 1,439,851 | $ | 1,632,756 | $ | 1,613,682 | |||||||||
Basic and diluted book value per share denominator: | |||||||||||||||||||
Issued and outstanding shares | 104,336,577 | 104,256,745 | 104,217,321 | 104,000,321 | 103,890,670 | ||||||||||||||
Effect of dilutive warrants issued to founders and an advisor | 4,651,163 | 4,651,163 | 4,651,163 | 4,651,163 | 4,651,163 | ||||||||||||||
Effect of dilutive stock options issued to directors and employees | 5,708,559 | 5,788,391 | 5,788,391 | 6,005,391 | 6,040,275 | ||||||||||||||
Effect of dilutive restricted shares issued to employees | 1,273,248 | 837,277 | 954,829 | 954,829 | 955,385 | ||||||||||||||
Diluted book value per share denominator: | 115,969,547 | 115,533,576 | 115,611,704 | 115,611,704 | 115,537,493 | ||||||||||||||
Basic book value per share(1) | $ | 12.76 | $ | 13.23 | $ | 12.81 | $ | 14.67 | $ | 14.50 | |||||||||
Diluted book value per share(1) | $ | 12.37 | $ | 12.85 | $ | 12.45 | $ | 14.12 | $ | 13.97 | |||||||||
Increase (decrease) in diluted book value per share | (3.7 | )% | 3.2 | % | (11.8 | )% | 1.1 | % | 3.1 | % | |||||||||
(1) | Book value per share and diluted book value per share are non-GAAP financial measures. Book value per share is calculated by dividing shareholders’ equity attributable to shareholders by the number of issued and outstanding shares at period end. Diluted book value per share is calculated by dividing shareholders’ equity attributable to shareholders and adjusted to include unvested restricted shares and the exercise of all in-the-money options and warrants. For unvested restricted shares with a performance condition, we include the unvested restricted shares that we consider vesting to be probable. 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. |
Page 15 of 17
Third Point Reinsurance Ltd.
Earnings (Loss) per Share - by Quarter
(expressed in thousands of U.S. dollars)
March 31, 2016(1) | December 31, 2015 | September 30, 2015(1) | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Weighted-average number of common shares outstanding | ||||||||||||||||||||
Basic number of common shares outstanding | 104,257,874 | 104,217,321 | 104,117,448 | 103,927,761 | 103,753,065 | |||||||||||||||
Dilutive effect of options | — | 1,166,940 | — | 1,341,209 | 1,093,353 | |||||||||||||||
Dilutive effect of warrants | — | 1,251,190 | — | 1,427,904 | 1,297,765 | |||||||||||||||
Diluted number of common shares outstanding | 104,257,874 | 106,635,451 | 104,117,448 | 106,696,874 | 106,144,183 | |||||||||||||||
Basic earnings (loss) per common share: | ||||||||||||||||||||
Net income (loss) | $ | (51,129 | ) | $ | 42,193 | $ | (195,715 | ) | $ | 15,662 | $ | 50,470 | ||||||||
Income allocated to participating shares | — | (137 | ) | — | (50 | ) | (179 | ) | ||||||||||||
Net income (loss) available to common shareholders | $ | (51,129 | ) | $ | 42,056 | $ | (195,715 | ) | $ | 15,612 | $ | 50,291 | ||||||||
Basic earnings (loss) per common share | $ | (0.49 | ) | $ | 0.40 | $ | (1.88 | ) | $ | 0.15 | $ | 0.48 | ||||||||
Diluted earnings (loss) per common share | ||||||||||||||||||||
Net income (loss) | $ | (51,129 | ) | $ | 42,193 | $ | (195,715 | ) | $ | 15,662 | $ | 50,470 | ||||||||
Income allocated to participating shares | — | (134 | ) | — | (49 | ) | (175 | ) | ||||||||||||
Net income (loss) available to common shareholders | $ | (51,129 | ) | $ | 42,059 | $ | (195,715 | ) | $ | 15,613 | $ | 50,295 | ||||||||
Diluted earnings (loss) per common share | $ | (0.49 | ) | $ | 0.39 | $ | (1.88 | ) | $ | 0.15 | $ | 0.47 | ||||||||
(1) | Basic earnings (loss) 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 (loss) 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. |
Page 16 of 17
Third Point Reinsurance Ltd.
Return on Beginning Shareholders’ Equity - by Quarter
(expressed in thousands of U.S. dollars)
March 31, 2016 | December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||
Net income (loss) | $ | (51,129 | ) | $ | 42,193 | $ | (195,715 | ) | $ | 15,662 | $ | 50,470 | ||||||||
Shareholders’ equity attributable to shareholders - beginning of period | $ | 1,379,726 | $ | 1,335,269 | $ | 1,526,004 | $ | 1,506,581 | $ | 1,451,913 | ||||||||||
Return on beginning shareholders’ equity | (3.7 | )% | 3.2 | % | (12.8 | )% | 1.0 | % | 3.5 | % | ||||||||||
(1) | Return on beginning shareholders’ equity as presented is a non-GAAP financial measure. Return on beginning shareholders’ equity is calculated by dividing net income by the beginning of period shareholders’ equity attributable to shareholders. |
Page 17 of 17