Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 EARNINGS PRESS RELEASE - SiriusPoint Ltd | exhibit991-earningspre.htm |
| 8-K - 8-K - SiriusPoint Ltd | tpre-20201105.htm |
Third Point Reinsurance Ltd.
Financial Supplement
September 30, 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, such as the ongoing COVID-19 outbreak, 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; risks associated with the failure to complete, or the failure to realize the expected benefits of the merger with Sirius International Insurance Group, Ltd.; and and other risks and factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, as updated by our Quarterly Report on Form 10-Q for the periods ended March 31, 2020 and June 30, 2020, 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.
Page 1 of 15
Third Point Reinsurance Ltd.
Table of Contents
| Key Performance Indicators | ||||||||
| Consolidated Financial Statements | ||||||||
| Operating Segment Information | ||||||||
| Segment Reporting - Three and nine months ended September 30, 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 | ||||||||
Page 2 of 15
Third Point Reinsurance Ltd.
Key Performance Indicators
September 30, 2020 and 2019
(expressed in thousands of U.S. dollars, except per share data and ratios)
| Three months ended | Nine months ended | ||||||||||||||||||||||
| September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||||||||||||||
| Key underwriting metrics for Property and Casualty Reinsurance segment: | |||||||||||||||||||||||
Net underwriting loss (1) | $ | (28,148) | $ | (5,495) | $ | (21,314) | $ | (12,892) | |||||||||||||||
Combined ratio (1) | 119.9 | % | 102.7 | % | 105.0 | % | 102.6 | % | |||||||||||||||
| Key investment return metrics: | |||||||||||||||||||||||
| Net investment income (loss) | $ | 121,956 | $ | (3,138) | $ | 74,140 | $ | 220,946 | |||||||||||||||
| Net investment return on net investments managed by Third Point LLC | 4.8 | % | (0.2) | % | 2.8 | % | 10.2 | % | |||||||||||||||
| Key shareholders’ value creation metrics: | |||||||||||||||||||||||
Basic book value per share (2) (3) | $ | 15.41 | $ | 15.37 | $ | 15.41 | $ | 15.37 | |||||||||||||||
Diluted book value per share (2) (3) | $ | 15.06 | $ | 15.04 | $ | 15.06 | $ | 15.04 | |||||||||||||||
Increase (decrease) in diluted book value per share (2) | 4.8 | % | (0.8) | % | 0.1 | % | 13.7 | % | |||||||||||||||
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (2) | 5.1 | % | (1.1) | % | 0.6 | % | 14.2 | % | |||||||||||||||
(1)Refer to accompanying “Segment Reporting - Three and nine months ended September 30, 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.
Page 3 of 15
Third Point Reinsurance Ltd.
Condensed Consolidated Balance Sheets - by Quarter
(expressed in thousands of U.S. dollars)
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Investment in related party investment fund, at fair value | $ | 868,971 | $ | 758,419 | $ | 659,815 | $ | 860,630 | $ | 818,600 | ||||||||||||||||||||||
| Debt securities, trading, at fair value | 186,260 | 238,574 | 363,121 | 125,071 | 220,045 | |||||||||||||||||||||||||||
| Other investments, at fair value | 4,000 | 4,000 | 4,000 | 4,000 | 3,500 | |||||||||||||||||||||||||||
| Total investments | 1,059,231 | 1,000,993 | 1,026,936 | 989,701 | 1,042,145 | |||||||||||||||||||||||||||
| Cash and cash equivalents | 513,783 | 584,809 | 445,776 | 639,415 | 693,105 | |||||||||||||||||||||||||||
| Restricted cash and cash equivalents | 1,101,693 | 887,308 | 975,109 | 1,014,543 | 816,519 | |||||||||||||||||||||||||||
| Due from brokers | 81,142 | 169,078 | 57,929 | — | — | |||||||||||||||||||||||||||
| Interest and dividends receivable | 1,835 | 2,195 | 3,732 | 2,178 | 2,932 | |||||||||||||||||||||||||||
| Reinsurance balances receivable, net | 572,672 | 613,204 | 622,883 | 596,120 | 680,630 | |||||||||||||||||||||||||||
| Deferred acquisition costs, net | 142,846 | 172,288 | 168,505 | 154,717 | 166,968 | |||||||||||||||||||||||||||
| Unearned premiums ceded | 27,463 | 35,817 | 13,411 | 16,945 | 14,370 | |||||||||||||||||||||||||||
| Loss and loss adjustment expenses recoverable, net | 13,626 | 10,064 | 6,865 | 5,520 | 4,270 | |||||||||||||||||||||||||||
| Other assets | 20,171 | 17,807 | 21,388 | 20,555 | 17,808 | |||||||||||||||||||||||||||
| Total assets | $ | 3,534,462 | $ | 3,493,563 | $ | 3,342,534 | $ | 3,439,694 | $ | 3,438,747 | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 13,963 | $ | 12,167 | $ | 8,868 | $ | 17,816 | $ | 14,607 | ||||||||||||||||||||||
| Reinsurance balances payable | 120,469 | 94,810 | 78,323 | 81,941 | 98,766 | |||||||||||||||||||||||||||
| Deposit liabilities | 155,697 | 168,910 | 170,402 | 172,259 | 174,405 | |||||||||||||||||||||||||||
| Unearned premium reserves | 498,893 | 587,995 | 579,315 | 524,768 | 592,319 | |||||||||||||||||||||||||||
| Loss and loss adjustment expense reserves | 1,186,149 | 1,133,983 | 1,107,911 | 1,111,692 | 1,060,000 | |||||||||||||||||||||||||||
| Securities sold, not yet purchased, at fair value | 15,389 | 19,597 | 47,427 | — | — | |||||||||||||||||||||||||||
| Due to brokers | — | 1,456 | 3,150 | — | — | |||||||||||||||||||||||||||
| Interest and dividends payable | 1,110 | 3,164 | 1,304 | 3,055 | 1,026 | |||||||||||||||||||||||||||
| Senior notes payable, net of deferred costs | 114,222 | 114,177 | 114,133 | 114,089 | 114,044 | |||||||||||||||||||||||||||
| Total liabilities | 2,105,892 | 2,136,259 | 2,110,833 | 2,025,620 | 2,055,167 | |||||||||||||||||||||||||||
| Commitments and contingent liabilities | ||||||||||||||||||||||||||||||||
| Shareholders’ equity | ||||||||||||||||||||||||||||||||
| Preference shares | — | — | — | — | — | |||||||||||||||||||||||||||
| Common shares | 9,531 | 9,492 | 9,488 | 9,423 | 9,422 | |||||||||||||||||||||||||||
| Additional paid-in capital | 931,972 | 930,487 | 928,903 | 927,704 | 926,949 | |||||||||||||||||||||||||||
| Retained earnings | 486,068 | 417,325 | 293,310 | 476,947 | 447,209 | |||||||||||||||||||||||||||
| Shareholders’ equity attributable to Third Point Re common shareholders | 1,427,571 | 1,357,304 | 1,231,701 | 1,414,074 | 1,383,580 | |||||||||||||||||||||||||||
| Noncontrolling interests | 999 | — | — | — | — | |||||||||||||||||||||||||||
| Total shareholders’ equity | 1,428,570 | 1,357,304 | 1,231,701 | 1,414,074 | 1,383,580 | |||||||||||||||||||||||||||
| Total liabilities, noncontrolling interests and and shareholders’ equity | $ | 3,534,462 | $ | 3,493,563 | $ | 3,342,534 | $ | 3,439,694 | $ | 3,438,747 | ||||||||||||||||||||||
Page 4 of 15
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 | Nine months ended | ||||||||||||||||||||||
| September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Gross premiums written | $ | 60,779 | $ | 95,388 | $ | 422,481 | $ | 497,616 | |||||||||||||||
| Gross premiums ceded | 185 | (1,116) | (30,037) | (3,301) | |||||||||||||||||||
| Net premiums written | 60,964 | 94,272 | 392,444 | 494,315 | |||||||||||||||||||
| Change in net unearned premium reserves | 80,748 | 108,976 | 36,393 | 7,435 | |||||||||||||||||||
| Net premiums earned | 141,712 | 203,248 | 428,837 | 501,750 | |||||||||||||||||||
| Net investment income (loss) from investment in related party investment fund | 110,552 | (5,751) | 8,341 | 207,597 | |||||||||||||||||||
| Net realized and unrealized investment gains (losses) (1) | 6,965 | (2,646) | 54,554 | 2,700 | |||||||||||||||||||
| Other net investment income | 4,439 | 5,259 | 11,245 | 10,649 | |||||||||||||||||||
| Net investment income (loss) | 121,956 | (3,138) | 74,140 | 220,946 | |||||||||||||||||||
| Total revenues | 263,668 | 200,110 | 502,977 | 722,696 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Loss and loss adjustment expenses incurred, net | 110,487 | 85,703 | 287,379 | 263,105 | |||||||||||||||||||
| Acquisition costs, net | 54,817 | 118,271 | 147,741 | 233,775 | |||||||||||||||||||
| General and administrative expenses | 21,320 | 9,237 | 44,934 | 41,019 | |||||||||||||||||||
| Other (income) expenses | (283) | 5,058 | 6,410 | 12,994 | |||||||||||||||||||
| Interest expense | 2,068 | 2,074 | 6,162 | 6,154 | |||||||||||||||||||
| Foreign exchange (gains) losses | 5,885 | (4,921) | (3,129) | (6,663) | |||||||||||||||||||
| Total expenses | 194,294 | 215,422 | 489,497 | 550,384 | |||||||||||||||||||
| Income (loss) before income tax (expense) benefit | 69,374 | (15,312) | 13,480 | 172,312 | |||||||||||||||||||
| Income tax (expense) benefit | (652) | 213 | (4,380) | (1,431) | |||||||||||||||||||
| Net income (loss) | 68,722 | (15,099) | 9,100 | 170,881 | |||||||||||||||||||
| Net loss attributable to noncontrolling interests | 21 | — | 21 | — | |||||||||||||||||||
| Net income (loss) available to Third Point Re common shareholders | $ | 68,743 | $ | (15,099) | $ | 9,121 | $ | 170,881 | |||||||||||||||
| Earnings (loss) per share available to Third Point Re common shareholders | |||||||||||||||||||||||
| Basic earnings (loss) per share available to Third Point Re common shareholders (2) | $ | 0.74 | $ | (0.16) | $ | 0.10 | $ | 1.86 | |||||||||||||||
| Diluted earnings (loss) per share available to Third Point Re common shareholders (2) | $ | 0.73 | $ | (0.16) | $ | 0.10 | $ | 1.84 | |||||||||||||||
| Weighted average number of common shares used in the determination of earnings (loss) per share | |||||||||||||||||||||||
| Basic | 92,613,393 | 91,903,556 | 92,466,813 | 91,784,268 | |||||||||||||||||||
| Diluted | 92,969,646 | 91,903,556 | 92,877,674 | 92,709,421 | |||||||||||||||||||
(1) The Company previously included net realized and unrealized investment gains (losses) in other net investment income (loss) in the condensed consolidated statements of income (loss). These balances are now shown as a separate line item.
(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.
Page 5 of 15
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 | ||||||||||||||||||||||||||||||||
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||
| Gross premiums written | $ | 60,779 | $ | 157,571 | $ | 204,131 | $ | 134,230 | $ | 95,388 | ||||||||||||||||||||||
| Gross premiums ceded | 185 | (30,487) | 265 | (5,964) | (1,116) | |||||||||||||||||||||||||||
| Net premiums written | 60,964 | 127,084 | 204,396 | 128,266 | 94,272 | |||||||||||||||||||||||||||
| Change in net unearned premium reserves | 80,748 | 13,726 | (58,081) | 70,126 | 108,976 | |||||||||||||||||||||||||||
| Net premiums earned | 141,712 | 140,810 | 146,315 | 198,392 | 203,248 | |||||||||||||||||||||||||||
| Net investment income (loss) from investment in related party investment fund | 110,552 | 98,604 | (200,815) | 42,029 | (5,751) | |||||||||||||||||||||||||||
| Net realized and unrealized investment gains (losses) (1) | 6,965 | 35,992 | 11,597 | 12,637 | (2,646) | |||||||||||||||||||||||||||
| Other net investment income | 4,439 | 2,615 | 4,191 | 6,948 | 5,259 | |||||||||||||||||||||||||||
| Net investment income (loss) | 121,956 | 137,211 | (185,027) | 61,614 | (3,138) | |||||||||||||||||||||||||||
| Total revenues | 263,668 | 278,021 | (38,712) | 260,006 | 200,110 | |||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||
| Loss and loss adjustment expenses incurred, net | 110,487 | 89,106 | 87,786 | 140,394 | 85,703 | |||||||||||||||||||||||||||
| Acquisition costs, net | 54,817 | 43,671 | 49,253 | 61,851 | 118,271 | |||||||||||||||||||||||||||
| General and administrative expenses | 21,320 | 13,455 | 10,159 | 12,744 | 9,237 | |||||||||||||||||||||||||||
| Other (income) expenses | (283) | 3,216 | 3,477 | 3,625 | 5,058 | |||||||||||||||||||||||||||
| Interest expense | 2,068 | 2,046 | 2,048 | 2,074 | 2,074 | |||||||||||||||||||||||||||
| Foreign exchange (gains) losses | 5,885 | (797) | (8,217) | 10,298 | (4,921) | |||||||||||||||||||||||||||
| Total expenses | 194,294 | 150,697 | 144,506 | 230,986 | 215,422 | |||||||||||||||||||||||||||
| Income (loss) before income tax (expense) benefit | 69,374 | 127,324 | (183,218) | 29,020 | (15,312) | |||||||||||||||||||||||||||
| Income tax (expense) benefit | (652) | (3,309) | (419) | 718 | 213 | |||||||||||||||||||||||||||
| Net income (loss) | 68,722 | 124,015 | (183,637) | 29,738 | (15,099) | |||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interests | 21 | — | — | — | — | |||||||||||||||||||||||||||
| Net income (loss) available to Third Point Re common shareholders | $ | 68,743 | $ | 124,015 | $ | (183,637) | $ | 29,738 | $ | (15,099) | ||||||||||||||||||||||
| Earnings (loss) per share available to Third Point Re common shareholders | ||||||||||||||||||||||||||||||||
| Basic earnings (loss) per share available to Third Point Re common shareholders (2) | $ | 0.74 | $ | 1.33 | $ | (1.99) | $ | 0.32 | $ | (0.16) | ||||||||||||||||||||||
| Diluted earnings (loss) per share available to Third Point Re common shareholders (2) | $ | 0.73 | $ | 1.33 | $ | (1.99) | $ | 0.32 | $ | (0.16) | ||||||||||||||||||||||
| Weighted average number of common shares used in the determination of earnings (loss) per share | ||||||||||||||||||||||||||||||||
| Basic | 92,613,393 | 92,593,599 | 92,191,837 | 91,989,469 | 91,903,556 | |||||||||||||||||||||||||||
| Diluted | 92,969,646 | 92,738,293 | 92,191,837 | 92,696,491 | 91,903,556 | |||||||||||||||||||||||||||
(1) The Company previously included net realized and unrealized investment gains (losses) in other net investment income (loss) in the condensed consolidated statements of income (loss). These balances are now shown as a separate line item.
(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.
Page 6 of 15
Third Point Reinsurance Ltd.
Segment Reporting - Three and nine months ended September 30, 2020 and 2019
(expressed in thousands of U.S. dollars)
| Three months ended | Nine months ended | ||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||
| Property and Casualty Reinsurance | Total (1) | Property and Casualty Reinsurance | Total (1) | Property and Casualty Reinsurance | Total (1) | Property and Casualty Reinsurance | Total (1) | ||||||||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross premiums written | $ | 60,779 | $ | 60,779 | $ | 95,388 | $ | 95,388 | $ | 422,481 | $ | 422,481 | $ | 497,616 | $ | 497,616 | |||||||||||||||||||||||||||||||
| Gross premiums ceded | 185 | 185 | (1,116) | (1,116) | (30,037) | (30,037) | (3,301) | (3,301) | |||||||||||||||||||||||||||||||||||||||
| Net premiums written | 60,964 | 60,964 | 94,272 | 94,272 | 392,444 | 392,444 | 494,315 | 494,315 | |||||||||||||||||||||||||||||||||||||||
| Change in net unearned premium reserves | 80,748 | 80,748 | 108,976 | 108,976 | 36,393 | 36,393 | 7,435 | 7,435 | |||||||||||||||||||||||||||||||||||||||
| Net premiums earned | 141,712 | 141,712 | 203,248 | 203,248 | 428,837 | 428,837 | 501,750 | 501,750 | |||||||||||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss and loss adjustment expenses incurred, net | 110,487 | 110,487 | 85,703 | 85,703 | 287,379 | 287,379 | 263,105 | 263,105 | |||||||||||||||||||||||||||||||||||||||
| Acquisition costs, net | 54,817 | 54,817 | 118,271 | 118,271 | 147,741 | 147,741 | 233,775 | 233,775 | |||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 4,556 | 4,556 | 4,769 | 4,769 | 15,031 | 15,031 | 17,762 | 17,762 | |||||||||||||||||||||||||||||||||||||||
| Total expenses | 169,860 | 169,860 | 208,743 | 208,743 | 450,151 | 450,151 | 514,642 | 514,642 | |||||||||||||||||||||||||||||||||||||||
| Net underwriting loss | $ | (28,148) | (28,148) | $ | (5,495) | (5,495) | $ | (21,314) | (21,314) | $ | (12,892) | (12,892) | |||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 121,956 | (3,138) | 74,140 | 220,946 | |||||||||||||||||||||||||||||||||||||||||||
| Corporate expenses | (16,764) | (4,468) | (29,903) | (23,257) | |||||||||||||||||||||||||||||||||||||||||||
| Other income (expense) | 283 | (5,058) | (6,410) | (12,994) | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (2,068) | (2,074) | (6,162) | (6,154) | |||||||||||||||||||||||||||||||||||||||||||
| Foreign exchange gains (losses) | (5,885) | 4,921 | 3,129 | 6,663 | |||||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | (652) | 213 | (4,380) | (1,431) | |||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interests | 21 | — | 21 | — | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) available to Third Point Re common shareholders | $ | 68,743 | $ | (15,099) | $ | 9,121 | $ | 170,881 | |||||||||||||||||||||||||||||||||||||||
| Property and Casualty Reinsurance - Underwriting Ratios (1): | |||||||||||||||||||||||||||||||||||||||||||||||
| Loss ratio | 78.0 | % | 42.2 | % | 67.0 | % | 52.4 | % | |||||||||||||||||||||||||||||||||||||||
| Acquisition cost ratio | 38.7 | % | 58.2 | % | 34.5 | % | 46.6 | % | |||||||||||||||||||||||||||||||||||||||
| Composite ratio | 116.7 | % | 100.4 | % | 101.5 | % | 99.0 | % | |||||||||||||||||||||||||||||||||||||||
| General and administrative expense ratio | 3.2 | % | 2.3 | % | 3.5 | % | 3.6 | % | |||||||||||||||||||||||||||||||||||||||
| Combined ratio | 119.9 | % | 102.7 | % | 105.0 | % | 102.6 | % | |||||||||||||||||||||||||||||||||||||||
(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.
Page 7 of 15
Third Point Reinsurance Ltd.
Property and Casualty Reinsurance Segment - by Quarter (1)
(expressed in thousands of U.S. dollars)
| Three months ended | ||||||||||||||||||||||||||||||||
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||
| Gross premiums written | $ | 60,779 | $ | 157,571 | $ | 204,131 | $ | 134,230 | $ | 95,388 | ||||||||||||||||||||||
| Gross premiums ceded | 185 | (30,487) | 265 | (5,964) | (1,116) | |||||||||||||||||||||||||||
| Net premiums written | 60,964 | 127,084 | 204,396 | 128,266 | 94,272 | |||||||||||||||||||||||||||
| Change in net unearned premium reserves | 80,748 | 13,726 | (58,081) | 70,126 | 108,976 | |||||||||||||||||||||||||||
| Net premiums earned | 141,712 | 140,810 | 146,315 | 198,392 | 203,248 | |||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||
| Loss and loss adjustment expenses incurred, net | 110,487 | 89,106 | 87,786 | 140,394 | 85,703 | |||||||||||||||||||||||||||
| Acquisition costs, net | 54,817 | 43,671 | 49,253 | 61,851 | 118,271 | |||||||||||||||||||||||||||
| General and administrative expenses | 4,556 | 5,596 | 4,880 | 5,724 | 4,769 | |||||||||||||||||||||||||||
| Total expenses | 169,860 | 138,373 | 141,919 | 207,969 | 208,743 | |||||||||||||||||||||||||||
| Net underwriting income (loss) | $ | (28,148) | $ | 2,437 | $ | 4,396 | $ | (9,577) | $ | (5,495) | ||||||||||||||||||||||
Underwriting ratios (1) | ||||||||||||||||||||||||||||||||
| Loss ratio | 78.0 | % | 63.3 | % | 60.0 | % | 70.7 | % | 42.2 | % | ||||||||||||||||||||||
| Acquisition cost ratio | 38.7 | % | 31.0 | % | 33.7 | % | 31.2 | % | 58.2 | % | ||||||||||||||||||||||
| Composite ratio | 116.7 | % | 94.3 | % | 93.7 | % | 101.9 | % | 100.4 | % | ||||||||||||||||||||||
| General and administrative expense ratio | 3.2 | % | 4.0 | % | 3.3 | % | 2.9 | % | 2.3 | % | ||||||||||||||||||||||
| Combined ratio | 119.9 | % | 98.3 | % | 97.0 | % | 104.8 | % | 102.7 | % | ||||||||||||||||||||||
(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.
Page 8 of 15
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 | ||||||||||||||||||||||||||||||||
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||||||
| Line and Type of Business | ||||||||||||||||||||||||||||||||
| Property Catastrophe | $ | 11,246 | $ | 39,706 | $ | 31,164 | $ | 4,831 | $ | 6,127 | ||||||||||||||||||||||
| Other Property | 5,608 | 45,745 | 15,209 | 36,892 | 578 | |||||||||||||||||||||||||||
| Property | 16,854 | 85,451 | 46,373 | 41,723 | 6,705 | |||||||||||||||||||||||||||
| Workers Compensation | 12,572 | 7,915 | 21,320 | 121 | 3,519 | |||||||||||||||||||||||||||
| Auto | 12,308 | (3,817) | 21,249 | (2,897) | 10,574 | |||||||||||||||||||||||||||
| Other Casualty | 6,398 | 23,045 | 24,371 | 35,315 | 2,931 | |||||||||||||||||||||||||||
| Casualty | 31,278 | 27,143 | 66,940 | 32,539 | 17,024 | |||||||||||||||||||||||||||
| Credit & Financial Lines | 12,682 | 38,653 | 9,012 | 3,633 | 7,265 | |||||||||||||||||||||||||||
| Multi-line | (4,163) | 4,726 | 66,746 | 16,268 | 2,345 | |||||||||||||||||||||||||||
| Other Specialty | 1,208 | 1,598 | 15,060 | 5,768 | 3,357 | |||||||||||||||||||||||||||
| Specialty | 9,727 | 44,977 | 90,818 | 25,669 | 12,967 | |||||||||||||||||||||||||||
| Total prospective reinsurance contracts | $ | 57,859 | $ | 157,571 | $ | 204,131 | $ | 99,931 | $ | 36,696 | ||||||||||||||||||||||
| Retroactive reinsurance contracts | 2,920 | — | — | 34,299 | 58,692 | |||||||||||||||||||||||||||
| Total property and casualty reinsurance segment | $ | 60,779 | $ | 157,571 | $ | 204,131 | $ | 134,230 | $ | 95,388 | ||||||||||||||||||||||
Page 9 of 15
Third Point Reinsurance Ltd.
Underwriting Ratios - by Quarter (1)
(expressed in thousands of U.S. dollars)
| Three months ended | ||||||||||||||||||||||||||||||||
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||||||
Underwriting ratios (1) | ||||||||||||||||||||||||||||||||
| Loss ratio | 78.0 | % | 63.3 | % | 60.0 | % | 70.7 | % | 42.2 | % | ||||||||||||||||||||||
| Acquisition cost ratio | 38.7 | % | 31.0 | % | 33.7 | % | 31.2 | % | 58.2 | % | ||||||||||||||||||||||
| Composite ratio | 116.7 | % | 94.3 | % | 93.7 | % | 101.9 | % | 100.4 | % | ||||||||||||||||||||||
| General and administrative expense ratio | 3.2 | % | 4.0 | % | 3.3 | % | 2.9 | % | 2.3 | % | ||||||||||||||||||||||
| Combined ratio | 119.9 | % | 98.3 | % | 97.0 | % | 104.8 | % | 102.7 | % | ||||||||||||||||||||||
Impact of catastrophe losses (2) | ||||||||||||||||||||||||||||||||
| Loss ratio | 21.3 | % | — | % | — | % | 9.1 | % | 7.1 | % | ||||||||||||||||||||||
| Acquisition cost ratio | (0.4) | % | — | % | — | % | (0.9) | % | (0.9) | % | ||||||||||||||||||||||
| Composite ratio | 20.9 | % | — | % | — | % | 8.2 | % | 6.2 | % | ||||||||||||||||||||||
Impact of reserve developments (2) | ||||||||||||||||||||||||||||||||
| Loss ratio | (14.3) | % | 0.7 | % | (7.5) | % | (4.9) | % | (37.6) | % | ||||||||||||||||||||||
| Acquisition cost ratio | 14.2 | % | (0.8) | % | 6.0 | % | 4.3 | % | 35.7 | % | ||||||||||||||||||||||
| Composite ratio | (0.1) | % | (0.1) | % | (1.5) | % | (0.6) | % | (1.9) | % | ||||||||||||||||||||||
Accident year ex-CAT underwriting ratios (3) | ||||||||||||||||||||||||||||||||
| Loss ratio | 71.0 | % | 62.6 | % | 67.5 | % | 66.5 | % | 72.7 | % | ||||||||||||||||||||||
| Acquisition cost ratio | 24.9 | % | 31.8 | % | 27.7 | % | 27.8 | % | 23.4 | % | ||||||||||||||||||||||
| Composite ratio | 95.9 | % | 94.4 | % | 95.2 | % | 94.3 | % | 96.1 | % | ||||||||||||||||||||||
| General and administrative expense ratio | 3.2 | % | 4.0 | % | 3.3 | % | 2.9 | % | 2.3 | % | ||||||||||||||||||||||
| Combined ratio | 99.1 | % | 98.4 | % | 98.5 | % | 97.2 | % | 98.4 | % | ||||||||||||||||||||||
(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.
Page 10 of 15
Third Point Reinsurance Ltd.
Net Investments Managed by Third Point LLC - by Quarter(1)
(expressed in thousands of U.S. dollars)
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| TP Fund | $ | 868,971 | $ | 758,419 | $ | 659,815 | $ | 860,630 | $ | 818,600 | |||||||||||||||||||
| Debt securities, trading, at fair value | 186,260 | 238,574 | 363,121 | 125,071 | 220,045 | ||||||||||||||||||||||||
| Total investments | 1,055,231 | 996,993 | 1,022,936 | 985,701 | 1,038,645 | ||||||||||||||||||||||||
| Cash and cash equivalents | 450,018 | 502,937 | 366,894 | 588,196 | 611,442 | ||||||||||||||||||||||||
| Restricted cash and cash equivalents | 1,101,693 | 887,308 | 975,109 | 1,014,543 | 816,519 | ||||||||||||||||||||||||
| Due from brokers | 81,142 | 169,078 | 57,929 | — | — | ||||||||||||||||||||||||
| Interest and dividends receivable | 1,650 | 2,195 | 3,732 | 2,178 | 2,932 | ||||||||||||||||||||||||
| Other assets | — | — | — | 18 | 6 | ||||||||||||||||||||||||
| Total assets | $ | 2,689,734 | $ | 2,558,511 | $ | 2,426,600 | $ | 2,590,636 | $ | 2,469,544 | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 1,245 | $ | 933 | $ | 761 | $ | 509 | $ | 324 | |||||||||||||||||||
| Securities sold, not yet purchased | 15,389 | 19,597 | 47,427 | — | — | ||||||||||||||||||||||||
| Due to brokers | — | 1,456 | 3,150 | — | — | ||||||||||||||||||||||||
| Interest and dividends payable | 76 | 129 | 270 | — | — | ||||||||||||||||||||||||
| Total liabilities | 16,710 | 22,115 | 51,608 | 509 | 324 | ||||||||||||||||||||||||
| Total net investments managed by Third Point LLC | $ | 2,673,024 | $ | 2,536,396 | $ | 2,374,992 | $ | 2,590,127 | $ | 2,469,220 | |||||||||||||||||||
Page 11 of 15
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) | September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||
| Long | |||||||||||||||||||||||||||||
| Equity | 4.2 | % | 6.1 | % | (11.2) | % | 3.3 | % | 1.4 | % | |||||||||||||||||||
| Credit | 0.8 | % | 3.8 | % | 0.1 | % | 0.1 | % | (0.7) | % | |||||||||||||||||||
| Other | 0.9 | % | — | % | (0.3) | % | 0.7 | % | (0.1) | % | |||||||||||||||||||
| 5.9 | % | 9.9 | % | (11.4) | % | 4.1 | % | 0.6 | % | ||||||||||||||||||||
| Short | |||||||||||||||||||||||||||||
| Equity | (1.2) | % | (4.0) | % | 4.4 | % | (1.8) | % | (0.7) | % | |||||||||||||||||||
| Credit | — | % | — | % | (0.1) | % | — | % | — | % | |||||||||||||||||||
| Other | 0.1 | % | (0.1) | % | (0.2) | % | 0.1 | % | (0.1) | % | |||||||||||||||||||
| (1.1) | % | (4.1) | % | 4.1 | % | (1.7) | % | (0.8) | % | ||||||||||||||||||||
| Net | |||||||||||||||||||||||||||||
| Equity | 3.0 | % | 2.1 | % | (6.8) | % | 1.5 | % | 0.7 | % | |||||||||||||||||||
| Credit | 0.8 | % | 3.8 | % | — | % | 0.1 | % | (0.7) | % | |||||||||||||||||||
| Other | 1.0 | % | (0.1) | % | (0.5) | % | 0.8 | % | (0.2) | % | |||||||||||||||||||
| 4.8 | % | 5.8 | % | (7.3) | % | 2.4 | % | (0.2) | % | ||||||||||||||||||||
(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.
Page 12 of 15
Third Point Reinsurance Ltd.
Basic and Diluted Book Value per Share - by Quarter
(expressed in thousands of U.S. dollars)
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | |||||||||||||||||||||||||
| Basic and diluted book value per share numerator: | |||||||||||||||||||||||||||||
| Shareholders' equity attributable to Third Point Re common shareholders | $ | 1,427,571 | $ | 1,357,304 | $ | 1,231,701 | $ | 1,414,074 | $ | 1,383,580 | |||||||||||||||||||
| Basic and diluted book value per share denominator: | |||||||||||||||||||||||||||||
| Common shares outstanding | 95,314,893 | 94,920,203 | 94,881,229 | 94,225,498 | 94,220,567 | ||||||||||||||||||||||||
| Unvested restricted shares | (2,695,127) | (2,319,354) | (2,315,172) | (2,231,296) | (2,240,410) | ||||||||||||||||||||||||
| Basic book value per share denominator: | 92,619,766 | 92,600,849 | 92,566,057 | 91,994,202 | 91,980,157 | ||||||||||||||||||||||||
| Effect of dilutive warrants issued to founders and an advisor (1) | — | — | — | 172,756 | — | ||||||||||||||||||||||||
| Effect of dilutive stock options issued to directors and employees (1) | — | — | — | 225,666 | — | ||||||||||||||||||||||||
| Effect of dilutive restricted shares issued to directors and employees (2) | 2,182,214 | 1,825,128 | 1,815,741 | 1,654,803 | 1,731,384 | ||||||||||||||||||||||||
| Diluted book value per share denominator: | 94,801,980 | 94,425,977 | 94,381,798 | 94,047,427 | 93,711,541 | ||||||||||||||||||||||||
Basic book value per share (2) | $ | 15.41 | $ | 14.66 | $ | 13.31 | $ | 15.37 | $ | 15.04 | |||||||||||||||||||
Diluted book value per share (2) | $ | 15.06 | $ | 14.37 | $ | 13.05 | $ | 15.04 | $ | 14.76 | |||||||||||||||||||
| Increase (decrease) in diluted book value per share | 4.8 | % | 10.1 | % | (13.2) | % | 1.9 | % | (0.8) | % | |||||||||||||||||||
(1)As of September 30, 2020, June 30, 2020, 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.
Page 13 of 15
Third Point Reinsurance Ltd.
Earnings (Loss) per Share - by Quarter
(expressed in thousands of U.S. dollars)
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||||||
| Weighted-average number of common shares outstanding: | ||||||||||||||||||||||||||||||||
| Basic number of common shares outstanding | 92,613,393 | 92,593,599 | 92,191,837 | 91,989,469 | 91,903,556 | |||||||||||||||||||||||||||
Dilutive effect of options (1) | — | — | — | — | — | |||||||||||||||||||||||||||
Dilutive effect of warrants (1) | — | — | — | — | — | |||||||||||||||||||||||||||
| Dilutive effect of restricted shares with service and performance condition | 356,253 | 144,694 | — | 707,022 | — | |||||||||||||||||||||||||||
| Diluted number of common shares outstanding | 92,969,646 | 92,738,293 | 92,191,837 | 92,696,491 | 91,903,556 | |||||||||||||||||||||||||||
| Basic earnings (loss) per common share: | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Third Point Re common shareholders | $ | 68,743 | $ | 124,015 | $ | (183,637) | $ | 29,738 | $ | (15,099) | ||||||||||||||||||||||
| Net income allocated to Third Point Re participating common shareholders | (574) | (721) | — | (111) | — | |||||||||||||||||||||||||||
| Net income (loss) allocated to Third Point Re common shareholders | $ | 68,169 | $ | 123,294 | $ | (183,637) | $ | 29,627 | $ | (15,099) | ||||||||||||||||||||||
Basic earnings (loss) per share available to Third Point Re common shareholders (2) | $ | 0.74 | $ | 1.33 | $ | (1.99) | $ | 0.32 | $ | (0.16) | ||||||||||||||||||||||
| Diluted earnings (loss) per common share: | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Third Point Re common shareholders | $ | 68,743 | $ | 124,015 | $ | (183,637) | $ | 29,738 | $ | (15,099) | ||||||||||||||||||||||
| Net income allocated to Third Point Re participating common shareholders | (572) | (720) | — | (110) | — | |||||||||||||||||||||||||||
| Net income (loss) allocated to Third Point Re common shareholders | $ | 68,171 | $ | 123,295 | $ | (183,637) | $ | 29,628 | $ | (15,099) | ||||||||||||||||||||||
Diluted earnings (loss) per share available to Third Point Re common shareholders (2) | $ | 0.73 | $ | 1.33 | $ | (1.99) | $ | 0.32 | $ | (0.16) | ||||||||||||||||||||||
(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 September 30, 2020, June 30, 2020, March 31, 2020 and September 30, 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.
Page 14 of 15
Third Point Reinsurance Ltd.
Return on Beginning Shareholders’ Equity - by Quarter
(expressed in thousands of U.S. dollars)
| September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | ||||||||||||||||||||||||||||
| Net income (loss) available to Third Point Re common shareholders | $ | 68,743 | $ | 124,015 | $ | (183,637) | $ | 29,738 | $ | (15,099) | ||||||||||||||||||||||
| Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period | $ | 1,357,304 | $ | 1,231,701 | $ | 1,414,074 | $ | 1,383,580 | $ | 1,395,898 | ||||||||||||||||||||||
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (1) | 5.1 | % | 10.1 | % | (13.0) | % | 2.1 | % | (1.1) | % | ||||||||||||||||||||||
(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.
Page 15 of 15