tpre-20210223

Third Point Re Announces Fourth Quarter 2020 Earnings Results

Net income of $134.4 million, or $1.43 per diluted common share, for the fourth quarter of 2020

Return on beginning shareholders’ equity of 9.4% for the fourth quarter of 2020

HAMILTON, Bermuda, February 23, 2021, Third Point Reinsurance Ltd. (“Third Point Re” or the “Company”) (NYSE:TPRE) today announced results for its fourth quarter ended December 31, 2020.

Earnings Summary

Third Point Re reported net income available to common shareholders of $134.4 million, or $1.43 per diluted common share, for the three months ended December 31, 2020, compared to net income available to common shareholders of $29.7 million, or $0.32 per diluted common share, for the three months ended December 31, 2019. For the year ended December 31, 2020, Third Point Re reported net income available to common shareholders of $143.5 million, or $1.53 per diluted common share, compared to net income available to common shareholders of $200.6 million, or $2.16 per diluted common share, for the year ended December 31, 2019.

“For the fourth quarter, we produced a return on equity of 9.4% driven by strong investment performance. Our diluted book value per share at the end of the quarter was $16.42. The combined ratio for the fourth quarter was 123.0%, which included $37.2 million, or 20.4 percentage points on the combined ratio related to prior year reserve development where we increased certain casualty reserves in response to our accumulated loss experience and the broader industry trends of social inflation. Our fourth quarter results also included $18.6 million attributable to catastrophe losses and the ongoing impacts of COVID-19, for a total impact of 10.2 percentage points on the combined ratio,” commented Dan Malloy, Chief Executive Officer. “Our previously announced merger with Sirius Group is expected to close on February 26 and we are looking forward to welcoming our new colleagues."

Sid Sankaran, Chairman of the Company commented, “While we are not satisfied with the underwriting results in 2020, with the exceptional talent, global footprint and robust balance sheet of the combined company, we will have a strong base for building an innovative, disciplined and sustainable business. We are aiming to enhance our existing relationships and improve the economics of our key lines of business, while looking at ways that we can grow intelligently and leverage technology to improve how we manage risk, use data and develop new strategic opportunities.”

Additional Information on Financial Results

The following table shows certain key financial metrics for the three and twelve months ended December 31, 2020 and 2019:


	Three months ended						Twelve months ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
	($ in millions, except for per share data and ratios)
Gross premiums written	$	165.6		$	134.2		$	588.0		$	631.8
Net premiums earned	$	182.0		$	198.4		$	610.9		$	700.1
Net underwriting loss (1)	$	(41.9)		$	(9.6)		$	(63.2)		$	(22.3)
Combined ratio (1)	123.0		%	104.8		%	110.3		%	103.2		%
Net investment return on investments managed by Third Point LLC	7.6		%	2.4		%	10.6		%	12.8		%
Net investment income	$	204.8		$	61.6		$	278.9		$	282.6
Net income available to Third Point Re common shareholders	$	134.4		$	29.7		$	143.5		$	200.6
Diluted earnings per share available to Third Point Re common shareholders	$	1.43		$	0.32		$	1.53		$	2.16
Change in diluted book value per share (2)	9.0		%	1.9		%	9.2		%	15.9		%
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (2)	9.4		%	2.1		%	10.1		%	16.7		%
Net investments managed by Third Point LLC	$	2,878.5		$	2,590.1		$	2,878.5		$	2,590.1

(1)See the accompanying Segment Reporting for a calculation of net underwriting loss and combined ratio.

(2)Change in diluted book value per share and return on beginning shareholders’ equity attributable to Third Point Re common shareholders are non-GAAP financial measures. There are no comparable GAAP measures. See the accompanying Reconciliation of Non-GAAP Measures and Key Performance Indicators for an explanation and calculation of diluted book value per share and return on beginning shareholders’ equity attributable to Third Point Re common shareholders.

Property and Casualty Reinsurance Segment

Gross premiums written

Gross premiums written increased by $31.4 million, or 23.4%, to $165.6 million for the three months ended December 31, 2020 from $134.2 million for the three months ended December 31, 2019. The increase in gross premiums written was primarily due to $45.5 million of new casualty premium written in the period, including $19.0 million from Arcadian.

Gross premiums written decreased by $43.8 million, or 6.9%, to $588.0 million for the twelve months ended December 31, 2020 from $631.8 million for the twelve months ended December 31, 2019. The decrease in gross premiums written was primarily due to certain contracts that we did not renew, including certain contracts which no longer fit our underwriting criteria as a result of our shift in underwriting strategy. This decrease was partially offset by new contracts bound in the current year.

Net underwriting results

For the three months ended December 31, 2020, we incurred net catastrophe losses of $7.0 million, net of reinstatement premiums and profit commission adjustments, or 3.8 percentage points on the combined ratio, primarily related to Hurricane Delta and Hurricane Zeta, compared to $16.3 million in the three months ended December 31, 2019, or 8.2 percentage points on the combined ratio, primarily related to Typhoon Hagibis.

For the year ended December 31, 2020, we incurred net catastrophe losses of $36.6 million, net of reinstatement premiums and profit commission adjustments, or 6.0 percentage points on the combined ratio, related to Hurricane Laura and other 2020 catastrophes, compared to $29.0 million in the year ended December 31, 2019, or 4.1 percentage points on the combined ratio, primarily related to Hurricane Dorian, Typhoon Faxai and Typhoon Hagibis.

The COVID-19 outbreak is causing unprecedented social disruption, global economic volatility, reduced liquidity of capital markets and intervention by various governments around the world. For the three and twelve months ended December 31, 2020, we recognized net losses of $11.6 million and $46.7 million, respectively, net of additional premiums, or 6.4 and 7.6 percentage points, respectively, on the combined ratio, relating to COVID-19. These losses were driven primarily by event cancellation, property business interruption, and certain casualty and multi-line quota share contracts.

The economic impact of the ongoing pandemic will continue to create uncertainty around the ultimate scope of claims and potential for additional insurance losses. Our estimate is based on currently available information provided by cedents. These estimates include losses only related to our estimate of claims incurred as of December 31, 2020.

For the three and twelve months ended December 31, 2020, we recorded an increase in net underwriting loss of $37.2 million and $34.6 million, respectively, related to net adverse development of prior years’ loss reserves net of the related impact of acquisition costs. The adverse underwriting loss development is a result of accumulated loss experience and cedent reserving increases, indicating that underlying casualty loss trends are higher than initial pricing and reserving, consistent with the industry impact of social inflation. In addition, the current elevated level of uncertainty makes historical data less applicable for future projections, and has contributed to an increase in the estimate of ultimate losses on certain accounts.

For the three and twelve months ended December 31, 2019, we recorded a net $1.1 million and $5.4 million improvement in the net underwriting results, respectively, related to net favorable development of prior years’ loss reserves net of the related impact of acquisition costs.

Investments

The following is a summary of our total net investments managed by Third Point LLC as of December 31, 2020 and 2019:


	December 31, 2020		December 31, 2019

	($ in thousands)
TP Fund	$	1,055,618	$	860,630
Collateral and other investment assets (1)	1,822,850		1,729,497


Total net investments managed by Third Point LLC	$	2,878,468	$	2,590,127

(1)Collateral assets primarily consist of fixed income securities such as U.S. Treasuries, money markets funds, and sovereign debt. Other investment assets primarily consist of U.S Treasuries, structured and corporate credit fixed income securities such as corporate bonds, asset-backed securities and bank debt.

The following is a summary of the net investment return for our total net investments managed by Third Point LLC for the three and twelve months ended December 31, 2020 and 2019:


	Three months ended				Twelve months ended
	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019

TP Fund	21.5	%	5.1	%	22.7	%	22.9	%
Collateral and other investments	1.0	%	1.1	%	4.9	%	2.3	%
Net investment return on investments managed by Third Point LLC (1)	7.6	%	2.4	%	10.6	%	12.8	%

(1)Refer to “Non-GAAP Financial Measures and Other Financial Metrics” for a description of the net investment return on investments managed by Third Point LLC.

The following is a summary of the net investment income for our total net investments managed by Third Point LLC for the three and twelve months ended December 31, 2020 and 2019:


	Three months ended				Twelve months ended
	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
	($ in thousands)

TP Fund	$	186,647	$	42,029	$	194,988	$	249,626
Collateral and other investments (1)	18,027		18,450		83,301		30,902
Net investment income on investments managed by Third Point LLC (2)	$	204,674	$	60,479	$	278,289	$	280,528

(1)Includes foreign exchange gains of $10.0 million and $5.9 million in the three and twelve months ended December 31, 2020, respectively (2019 - $12.3 million and $6.4 million, respectively) resulting from the revaluation of foreign currency reinsurance collateral held in trust accounts. Non-U.S. dollar reinsurance assets, or balances held in trust accounts securing reinsurance liabilities generally offset reinsurance liabilities in the same non-U.S. dollar currencies resulting in minimal net exposure. As a result, the foreign exchange gains from the revaluation of foreign currency reinsurance collateral held in trust accounts are offset by corresponding foreign exchange losses from the revaluation of foreign currency loss and loss adjustment expense reserves.

(2)Refer to “Non-GAAP Financial Measures and Other Financial Metrics” for a description of the net investment return on investments managed by Third Point LLC.

The following is a summary of the net investment return by investment strategy on total net investments managed by Third Point LLC for the three and twelve months ended December 31, 2020 and 2019:


	Three months ended
	December 31, 2020						December 31, 2019
	Long		Short		Net		Long		Short		Net
Equity	7.8	%	(3.0)	%	4.8	%	3.3	%	(1.8)	%	1.5	%
Credit	1.4	%	—	%	1.4	%	0.1	%	—	%	0.1	%
Other	0.9	%	0.5	%	1.4	%	0.7	%	0.1	%	0.8	%
Net investment return on investments managed by Third Point LLC	10.1	%	(2.5)	%	7.6	%	4.1	%	(1.7)	%	2.4	%



	Twelve months ended
	December 31, 2020						December 31, 2019
	Long		Short		Net		Long		Short		Net
Equity	6.7	%	(3.7)	%	3.0	%	16.6	%	(6.1)	%	10.5	%
Credit	5.9	%	(0.1)	%	5.8	%	1.1	%	(0.5)	%	0.6	%
Other	1.3	%	0.5	%	1.8	%	1.7	%	—	%	1.7	%
Net investment return on investments managed by Third Point LLC	13.9	%	(3.3)	%	10.6	%	19.4	%	(6.6)	%	12.8	%

For the three months ended December 31, 2020, the net investment results were primarily attributable to long event/fundamental equities. Activist positions also performed strongly, helping offset losses earlier in the year in this category. The credit strategy contributed gains from both the corporate credit and structured credit portfolios. In the other strategy, gains were driven by private investments.

For the year ended December 31, 2020, the net investment results were primarily attributable to long event/fundamental equities, in particular a renewed focus on growth and technology positions. Short equity investments and hedges partially offset overall gains for the equity strategy. Investments in investment grade corporate credit and residential mortgage backed

securities contributed strong performance in the credit strategy. The other strategy contributed modestly to net gains for the year due to private investments.

Sirius Merger

On August 6, 2020, Third Point Re, entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Sirius International Insurance Group, Ltd. (“Sirius”), a Bermuda exempted company limited by shares, and Yoga Merger Sub Limited (“Merger Sub”), a Bermuda exempted company limited by shares and wholly owned subsidiary of the Company. Pursuant to the Merger Agreement, Merger Sub will be merged with and into Sirius (the “Merger”), with Sirius continuing as the surviving company in the Merger, as a wholly owned subsidiary of the Company. The Company is to be renamed SiriusPoint Ltd. following the Merger.

The total deal consideration was estimated at the time of announcement as $788.0 million, which comprises stock, cash, and other contingent value components.

We have received all required regulatory approvals, and we expect the Merger to close on February 26, 2021. Please refer to our Current Report on Form 8-K filed with the SEC on August 7, 2020, for additional description of the Merger and related transactions.

Conference Call Details

The Company will hold a conference call to discuss its fourth quarter 2020 results at 8:30 a.m. Eastern Time on February 24, 2021. The call will be webcast live over the Internet from the Company’s website at www.thirdpointre.bm under the “Investors” section. Participants should follow the instructions provided on the website to download and install any necessary audio applications. The conference call will also be available by dialing 1-877-407-0789 (domestic) or 1-201-689-8562 (international). Participants should ask for the Third Point Reinsurance Ltd. fourth quarter earnings conference call.

A replay of the live conference call will be available approximately two hours after the call. The replay will be available on the Company’s website or by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the replay passcode 13716402. The telephonic replay will be available until 11:59 p.m. (Eastern Time) on March 3, 2021.

Safe Harbor Statement Regarding Forward-Looking Statements

This press release 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: 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 Reinsurance Company Ltd. (“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.; Arcadian Risk Capital Ltd.’s ability to, and success at, writing the business indicated, its expansion plans and the Company’s ability to place quota share reinsurance on the portfolio; 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.

Non-GAAP Financial Measures and Other Financial Metrics

In presenting Third Point Re’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 and diluted book value per share and return on beginning shareholders’ equity attributable to Third Point Re common shareholders, are referred to as non-GAAP measures. These non-GAAP 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.

About Third Point Re

Third Point Re is a Bermuda-headquartered holding Company listed on the New York Stock Exchange (TPRE). The Company underwrites Specialty, Property and Casualty business through its wholly-owned subsidiaries, Third Point Reinsurance Company Ltd. and Third Point Reinsurance (USA) Ltd., which both have ‘A-’ (Excellent) financial strength ratings from AM Best. With offices in Bermuda, New Jersey and London, the Third Point Re companies specialize in finding innovative solutions for niche and complex risks.

Contact

Third Point Reinsurance Ltd.

Christopher S. Coleman - Chief Financial Officer

[email protected]

+1 441-542-3333

THIRD POINT REINSURANCE LTD.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2020 and December 31, 2019

(expressed in thousands of U.S. dollars, except per share and share amounts)


	(Unaudited)		(Audited)
	December 31, 2020		December 31, 2019
Assets
Investment in related party investment fund, at fair value (cost - $891,850; 2019 - $891,850)	$	1,055,618	$	860,630

Debt securities, trading, at fair value (cost - $91,452; 2019 - $129,330)	101,311		125,071
Other investments, at fair value	4,000		4,000
Total investments	1,160,929		989,701
Cash and cash equivalents	525,991		639,415
Restricted cash and cash equivalents	1,187,948		1,014,543


Due from brokers	94,902		—
Interest and dividends receivable	909		2,178
Reinsurance balances receivable, net	559,388		596,120
Deferred acquisition costs, net	134,308		154,717
Unearned premiums ceded	27,659		16,945
Loss and loss adjustment expenses recoverable, net	14,375		5,520
Other assets	19,185		20,555
Total assets	$	3,725,594	$	3,439,694
Liabilities
Accounts payable and accrued expenses	$	14,588	$	17,816
Reinsurance balances payable	80,408		81,941
Deposit liabilities	152,961		172,259
Unearned premium reserves	472,948		524,768
Loss and loss adjustment expense reserves	1,310,068		1,111,692
Securities sold, not yet purchased, at fair value	11,990		—

Interest and dividends payable	3,078		3,055
Senior notes payable, net of deferred costs	114,267		114,089
Total liabilities	2,160,308		2,025,620
Commitments and contingent liabilities
Shareholders' equity
Preference shares (par value $0.10; authorized, 30,000,000; none issued)	—		—
Common shares (issued and outstanding: 95,582,733; 2019 - 94,225,498)	9,558		9,423
Additional paid-in capital	933,903		927,704
Retained earnings	620,464		476,947
Shareholders’ equity attributable to Third Point Re common shareholders	1,563,925		1,414,074
Noncontrolling interests	1,361		—
Total shareholders' equity	1,565,286		1,414,074
Total liabilities, noncontrolling interests and shareholders’ equity	$	3,725,594	$	3,439,694

THIRD POINT REINSURANCE LTD.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

For the three and twelve months ended December 31, 2020 and 2019

(expressed in thousands of U.S. dollars, except per share and share amounts)


	Three months ended				Twelve months ended
	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Revenues
Gross premiums written	$	165,554	$	134,230	$	588,035	$	631,846
Gross premiums ceded	(9,680)		(5,964)		(39,717)		(9,265)
Net premiums written	155,874		128,266		548,318		622,581
Change in net unearned premium reserves	26,141		70,126		62,534		77,561
Net premiums earned	182,015		198,392		610,852		700,142
Net investment income from investment in related party investment fund	186,647		42,029		194,988		249,626
Net realized and unrealized investment gains	14,694		12,637		69,248		15,337
Other net investment income	3,457		6,948		14,702		17,597

Net investment income	204,798		61,614		278,938		282,560
Total revenues	386,813		260,006		889,790		982,702
Expenses
Loss and loss adjustment expenses incurred, net	177,919		140,394		465,298		403,499
Acquisition costs, net	39,321		61,851		187,062		295,626
General and administrative expenses	16,508		12,744		61,442		53,763
Other expenses	4,163		3,625		10,573		16,619
Interest expense	2,068		2,074		8,230		8,228
Foreign exchange losses	8,348		10,298		5,219		3,635
Total expenses	248,327		230,986		737,824		781,370
Income before income tax (expense) benefit	138,486		29,020		151,966		201,332
Income tax (expense) benefit	(3,728)		718		(8,108)		(713)
Net income	134,758		29,738		143,858		200,619
Net income attributable to noncontrolling interests	(362)		—		(341)		—
Net income available to Third Point Re common shareholders	$	134,396	$	29,738	$	143,517	$	200,619
Earnings per share available to Third Point Re common shareholders
Basic earnings per share available to Third Point Re common shareholders	$	1.43	$	0.32	$	1.54	$	2.18
Diluted earnings per share available to Third Point Re common shareholders	$	1.43	$	0.32	$	1.53	$	2.16
Weighted average number of common shares used in the determination of earnings per share
Basic	92,638,978		91,989,469		92,510,090		91,835,990
Diluted	93,165,559		92,696,491		92,957,799		92,652,316

THIRD POINT REINSURANCE LTD.

SEGMENT REPORTING


	Three months ended December 31, 2020					Three months ended December 31, 2019
	Property and Casualty Reinsurance			Total		Property and Casualty Reinsurance			Total
Revenues	($ in thousands)					($ in thousands)
Gross premiums written	$	165,554		$	165,554	$	134,230		$	134,230
Gross premiums ceded	(9,680)			(9,680)		(5,964)			(5,964)
Net premiums written	155,874			155,874		128,266			128,266
Change in net unearned premium reserves	26,141			26,141		70,126			70,126
Net premiums earned	182,015			182,015		198,392			198,392
Expenses
Loss and loss adjustment expenses incurred, net	177,919			177,919		140,394			140,394
Acquisition costs, net	39,321			39,321		61,851			61,851
General and administrative expenses	6,628			6,628		5,724			5,724
Total expenses	223,868			223,868		207,969			207,969
Net underwriting loss	$	(41,853)		(41,853)		$	(9,577)		(9,577)
Net investment income				204,798					61,614
Corporate expenses				(9,880)					(7,020)
Other expenses				(4,163)					(3,625)
Interest expense				(2,068)					(2,074)
Foreign exchange losses				(8,348)					(10,298)
Income tax (expense) benefit				(3,728)					718
Net income attributable to noncontrolling interests				(362)					—
Net income available to Third Point Re common shareholders				$	134,396				$	29,738
Property and Casualty Reinsurance - Underwriting Ratios (1):
Loss ratio	97.8		%			70.7		%
Acquisition cost ratio	21.6		%			31.2		%
Composite ratio	119.4		%			101.9		%
General and administrative expense ratio	3.6		%			2.9		%
Combined ratio	123.0		%			104.8		%


	Twelve months ended December 31, 2020					Twelve months ended December 31, 2019
	Property and Casualty Reinsurance			Total		Property and Casualty Reinsurance			Total
Revenues	($ in thousands)					($ in thousands)
Gross premiums written	$	588,035		$	588,035	$	631,846		$	631,846
Gross premiums ceded	(39,717)			(39,717)		(9,265)			(9,265)
Net premiums written	548,318			548,318		622,581			622,581
Change in net unearned premium reserves	62,534			62,534		77,561			77,561
Net premiums earned	610,852			610,852		700,142			700,142
Expenses
Loss and loss adjustment expenses incurred, net	465,298			465,298		403,499			403,499
Acquisition costs, net	187,062			187,062		295,626			295,626
General and administrative expenses	21,677			21,677		23,366			23,366
Total expenses	674,037			674,037		722,491			722,491
Net underwriting loss	$	(63,185)		(63,185)		$	(22,349)		(22,349)
Net investment income				278,938					282,560
Corporate expenses				(39,765)					(30,397)
Other expenses				(10,573)					(16,619)
Interest expense				(8,230)					(8,228)
Foreign exchange losses				(5,219)					(3,635)
Income tax expense				(8,108)					(713)
Net income attributable to noncontrolling interests				(341)					—
Net income available to Third Point Re common shareholders				$	143,517				$	200,619
Property and Casualty Reinsurance - Underwriting Ratios (1):
Loss ratio	76.2		%			57.6		%
Acquisition cost ratio	30.6		%			42.2		%
Composite ratio	106.8		%			99.8		%
General and administrative expense ratio	3.5		%			3.4		%
Combined ratio	110.3		%			103.2		%

(1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.

THIRD POINT REINSURANCE LTD.

NON-GAAP MEASURES AND RECONCILIATIONS & KEY PERFORMANCE INDICATORS

Non-GAAP Measures

Basic Book Value per Share and Diluted Book Value per Share

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.


	December 31, 2020		December 31, 2019
Basic and diluted book value per share numerator:	($ in thousands, except share and per share amounts)


Shareholders’ equity attributable to Third Point Re common shareholders	$	1,563,925	$	1,414,074



Basic and diluted book value per share denominator:
Common shares outstanding	95,582,733		94,225,498
Unvested restricted shares	(2,933,993)		(2,231,296)
Basic book value per share denominator:	92,648,740		91,994,202
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	2,573,638		1,654,803
Diluted book value per share denominator	95,222,378		94,047,427

Basic book value per share	$	16.88	$	15.37
Diluted book value per share	$	16.42	$	15.04

(1)As of December 31, 2020, there was no dilution as a result of the Company’s share price being under the lowest exercise price for warrants and options.

Return on Beginning Shareholders’ Equity Attributable to Third Point Re Common Shareholders

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 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.


	Three months ended						Twelve months ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019
	($ in thousands)
Net income available to Third Point Re common shareholders	$	134,396		$	29,738		$	143,517		$	200,619
Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period	$	1,427,571		$	1,383,580		$	1,414,074		$	1,204,574


Return on beginning shareholders’ equity attributable to Third Point Re common shareholders	9.4		%	2.1		%	10.1		%	16.7		%

Key Performance Indicator

Net Investment Return on Investments Managed by Third Point LLC

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.

Third Point Reinsurance Ltd.

Financial Supplement

December 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 Annual Report on Form 10-K.


Point House						Christopher S. Coleman - Chief Financial Officer
3 Waterloo Lane						Tel: (441) 542-3333
Pembroke HM 08						Email: [email protected]
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.; Arcadian Risk Capital Ltd.’s ability to, and success at, writing the business indicated, its expansion plans and the Company’s ability to place quota share reinsurance on the portfolio; 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.

Page 1 of 15

Third Point Reinsurance Ltd.

Table of Contents



Key Performance Indicators
Key Performance Indicators						3

Consolidated Financial Statements
Condensed Consolidated Balance Sheets - by Quarter						4
Condensed Consolidated Statements of Income						5
Condensed Consolidated Statements of Income (Loss) - by Quarter						6

Operating Segment Information
Segment Reporting - Three and twelve months ended December 31, 2020 and 2019						7


Property and Casualty Reinsurance Segment - by Quarter						8
Gross Premiums Written by Lines and Type of Business - by Quarter						9
Underwriting Ratios - by Quarter						10

Investments
Net Investments Managed by Third Point LLC - by Quarter						11
Net Investment Return by Investment Strategy - by Quarter						12

Other

Basic and Diluted Book Value per Share - by Quarter						13
Earnings (Loss) per Share - by Quarter						14
Return on Beginning Shareholders’ Equity - by Quarter						15

Page 2 of 15

Third Point Reinsurance Ltd.

Key Performance Indicators

December 31, 2020 and 2019

(expressed in thousands of U.S. dollars, except per share data and ratios)


	Three months ended						Twelve months ended
	December 31, 2020			December 31, 2019			December 31, 2020			December 31, 2019

Key underwriting metrics for Property and Casualty Reinsurance segment:
Net underwriting loss (1)	$	(41,853)		$	(9,577)		$	(63,185)		$	(22,349)
Combined ratio (1)	123.0		%	104.8		%	110.3		%	103.2		%

Key investment return metrics:
Net investment income	$	204,798		$	61,614		$	278,938		$	282,560
Net investment return on net investments managed by Third Point LLC	7.6		%	2.4		%	10.6		%	12.8		%

Key shareholders’ value creation metrics:
Basic book value per share (2)	$	16.88		$	15.37		$	16.88		$	15.37
Diluted book value per share (2)	$	16.42		$	15.04		$	16.42		$	15.04
Increase in diluted book value per share (2)	9.0		%	1.9		%	9.2		%	15.9		%
Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (2)	9.4		%	2.1		%	10.1		%	16.7		%

(1)Refer to accompanying “Segment Reporting - Three and twelve months ended December 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.

Page 3 of 15

Third Point Reinsurance Ltd.

Condensed Consolidated Balance Sheets - by Quarter

(expressed in thousands of U.S. dollars)


	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019
Assets
Investment in related party investment fund, at fair value	$	1,055,618	$	868,971	$	758,419	$	659,815	$	860,630

Debt securities, trading, at fair value	101,311		186,260		238,574		363,121		125,071
Other investments, at fair value	4,000		4,000		4,000		4,000		4,000
Total investments	1,160,929		1,059,231		1,000,993		1,026,936		989,701
Cash and cash equivalents	525,991		513,783		584,809		445,776		639,415
Restricted cash and cash equivalents	1,187,948		1,101,693		887,308		975,109		1,014,543


Due from brokers	94,902		81,142		169,078		57,929		—
Interest and dividends receivable	909		1,835		2,195		3,732		2,178
Reinsurance balances receivable, net	559,388		572,672		613,204		622,883		596,120
Deferred acquisition costs, net	134,308		142,846		172,288		168,505		154,717
Unearned premiums ceded	27,659		27,463		35,817		13,411		16,945
Loss and loss adjustment expenses recoverable, net	14,375		13,626		10,064		6,865		5,520
Other assets	19,185		20,171		17,807		21,388		20,555
Total assets	$	3,725,594	$	3,534,462	$	3,493,563	$	3,342,534	$	3,439,694
Liabilities
Accounts payable and accrued expenses	$	14,588	$	13,963	$	12,167	$	8,868	$	17,816
Reinsurance balances payable	80,408		120,469		94,810		78,323		81,941
Deposit liabilities	152,961		155,697		168,910		170,402		172,259
Unearned premium reserves	472,948		498,893		587,995		579,315		524,768
Loss and loss adjustment expense reserves	1,310,068		1,186,149		1,133,983		1,107,911		1,111,692
Securities sold, not yet purchased, at fair value	11,990		15,389		19,597		47,427		—
Due to brokers	—		—		1,456		3,150		—

Interest and dividends payable	3,078		1,110		3,164		1,304		3,055
Senior notes payable, net of deferred costs	114,267		114,222		114,177		114,133		114,089
Total liabilities	2,160,308		2,105,892		2,136,259		2,110,833		2,025,620
Commitments and contingent liabilities
Shareholders’ equity
Preference shares	—		—		—		—		—
Common shares	9,558		9,531		9,492		9,488		9,423
Additional paid-in capital	933,903		931,972		930,487		928,903		927,704
Retained earnings	620,464		486,068		417,325		293,310		476,947
Shareholders’ equity attributable to Third Point Re common shareholders	1,563,925		1,427,571		1,357,304		1,231,701		1,414,074
Noncontrolling interests	1,361		999		—		—		—
Total shareholders’ equity	1,565,286		1,428,570		1,357,304		1,231,701		1,414,074
Total liabilities, noncontrolling interests and shareholders’ equity	$	3,725,594	$	3,534,462	$	3,493,563	$	3,342,534	$	3,439,694

Page 4 of 15

Third Point Reinsurance Ltd.

Condensed Consolidated Statements of Income

(expressed in thousands of U.S. dollars, except share and per share data)


	Three months ended				Twelve months ended
	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Revenues
Gross premiums written	$	165,554	$	134,230	$	588,035	$	631,846
Gross premiums ceded	(9,680)		(5,964)		(39,717)		(9,265)
Net premiums written	155,874		128,266		548,318		622,581
Change in net unearned premium reserves	26,141		70,126		62,534		77,561
Net premiums earned	182,015		198,392		610,852		700,142
Net investment income from investment in related party investment fund	186,647		42,029		194,988		249,626
Net realized and unrealized investment gains	14,694		12,637		69,248		15,337
Other net investment income	3,457		6,948		14,702		17,597

Net investment income	204,798		61,614		278,938		282,560
Total revenues	386,813		260,006		889,790		982,702
Expenses
Loss and loss adjustment expenses incurred, net	177,919		140,394		465,298		403,499
Acquisition costs, net	39,321		61,851		187,062		295,626
General and administrative expenses	16,508		12,744		61,442		53,763
Other expenses	4,163		3,625		10,573		16,619
Interest expense	2,068		2,074		8,230		8,228
Foreign exchange losses	8,348		10,298		5,219		3,635
Total expenses	248,327		230,986		737,824		781,370
Income before income tax (expense) benefit	138,486		29,020		151,966		201,332
Income tax (expense) benefit	(3,728)		718		(8,108)		(713)
Net income	134,758		29,738		143,858		200,619
Net income attributable to noncontrolling interests	(362)		—		(341)		—
Net income available to Third Point Re common shareholders	$	134,396	$	29,738	$	143,517	$	200,619
Earnings per share available to Third Point Re common shareholders
Basic earnings per share available to Third Point Re common shareholders (1)	$	1.43	$	0.32	$	1.54	$	2.18
Diluted earnings per share available to Third Point Re common shareholders (1)	$	1.43	$	0.32	$	1.53	$	2.16
Weighted average number of common shares used in the determination of earnings per share
Basic	92,638,978		91,989,469		92,510,090		91,835,990
Diluted	93,165,559		92,696,491		92,957,799		92,652,316

(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.

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
	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019
Revenues
Gross premiums written	$	165,554	$	60,779	$	157,571	$	204,131	$	134,230
Gross premiums ceded	(9,680)		185		(30,487)		265		(5,964)
Net premiums written	155,874		60,964		127,084		204,396		128,266
Change in net unearned premium reserves	26,141		80,748		13,726		(58,081)		70,126
Net premiums earned	182,015		141,712		140,810		146,315		198,392
Net investment income (loss) from investment in related party investment fund	186,647		110,552		98,604		(200,815)		42,029
Net realized and unrealized investment gains	14,694		6,965		35,992		11,597		12,637
Other net investment income	3,457		4,439		2,615		4,191		6,948

Net investment income (loss)	204,798		121,956		137,211		(185,027)		61,614
Total revenues	386,813		263,668		278,021		(38,712)		260,006
Expenses
Loss and loss adjustment expenses incurred, net	177,919		110,487		89,106		87,786		140,394
Acquisition costs, net	39,321		54,817		43,671		49,253		61,851
General and administrative expenses	16,508		21,320		13,455		10,159		12,744
Other (income) expenses	4,163		(283)		3,216		3,477		3,625
Interest expense	2,068		2,068		2,046		2,048		2,074
Foreign exchange (gains) losses	8,348		5,885		(797)		(8,217)		10,298
Total expenses	248,327		194,294		150,697		144,506		230,986
Income (loss) before income tax (expense) benefit	138,486		69,374		127,324		(183,218)		29,020
Income tax (expense) benefit	(3,728)		(652)		(3,309)		(419)		718
Net income (loss)	134,758		68,722		124,015		(183,637)		29,738
Net (income) loss attributable to noncontrolling interests	(362)		21		—		—		—
Net income (loss) available to Third Point Re common shareholders	$	134,396	$	68,743	$	124,015	$	(183,637)	$	29,738
Earnings (loss) per share available to Third Point Re common shareholders
Basic earnings (loss) per share available to Third Point Re common shareholders (1)	$	1.43	$	0.74	$	1.33	$	(1.99)	$	0.32
Diluted earnings (loss) per share available to Third Point Re common shareholders (1)	$	1.43	$	0.73	$	1.33	$	(1.99)	$	0.32
Weighted average number of common shares used in the determination of earnings (loss) per share
Basic	92,638,978		92,613,393		92,593,599		92,191,837		91,989,469
Diluted	93,165,559		92,969,646		92,738,293		92,191,837		92,696,491

Page 6 of 15

Third Point Reinsurance Ltd.

Segment Reporting - Three and twelve months ended December 31, 2020 and 2019

(expressed in thousands of U.S. dollars)


	Three months ended										Twelve months ended
	December 31, 2020					December 31, 2019					December 31, 2020					December 31, 2019
	Property and Casualty Reinsurance			Total		Property and Casualty Reinsurance			Total		Property and Casualty Reinsurance			Total		Property and Casualty Reinsurance			Total
Revenues
Gross premiums written	$	165,554		$	165,554	$	134,230		$	134,230	$	588,035		$	588,035	$	631,846		$	631,846
Gross premiums ceded	(9,680)			(9,680)		(5,964)			(5,964)		(39,717)			(39,717)		(9,265)			(9,265)
Net premiums written	155,874			155,874		128,266			128,266		548,318			548,318		622,581			622,581
Change in net unearned premium reserves	26,141			26,141		70,126			70,126		62,534			62,534		77,561			77,561
Net premiums earned	182,015			182,015		198,392			198,392		610,852			610,852		700,142			700,142
Expenses
Loss and loss adjustment expenses incurred, net	177,919			177,919		140,394			140,394		465,298			465,298		403,499			403,499
Acquisition costs, net	39,321			39,321		61,851			61,851		187,062			187,062		295,626			295,626
General and administrative expenses	6,628			6,628		5,724			5,724		21,677			21,677		23,366			23,366
Total expenses	223,868			223,868		207,969			207,969		674,037			674,037		722,491			722,491
Net underwriting loss	$	(41,853)		(41,853)		$	(9,577)		(9,577)		$	(63,185)		(63,185)		$	(22,349)		(22,349)
Net investment income				204,798					61,614					278,938					282,560
Corporate expenses				(9,880)					(7,020)					(39,765)					(30,397)
Other expenses				(4,163)					(3,625)					(10,573)					(16,619)
Interest expense				(2,068)					(2,074)					(8,230)					(8,228)
Foreign exchange losses				(8,348)					(10,298)					(5,219)					(3,635)
Income tax (expense) benefit				(3,728)					718					(8,108)					(713)
Net income attributable to noncontrolling interests				(362)					—					(341)					—
Net income available to Third Point Re common shareholders				$	134,396				$	29,738				$	143,517				$	200,619

Property and Casualty Reinsurance - Underwriting Ratios (1):
Loss ratio	97.8		%			70.7		%			76.2		%			57.6		%
Acquisition cost ratio	21.6		%			31.2		%			30.6		%			42.2		%
Composite ratio	119.4		%			101.9		%			106.8		%			99.8		%
General and administrative expense ratio	3.6		%			2.9		%			3.5		%			3.4		%
Combined ratio	123.0		%			104.8		%			110.3		%			103.2		%

(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
	December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Revenues
Gross premiums written	$	165,554		$	60,779		$	157,571		$	204,131		$	134,230
Gross premiums ceded	(9,680)			185			(30,487)			265			(5,964)
Net premiums written	155,874			60,964			127,084			204,396			128,266
Change in net unearned premium reserves	26,141			80,748			13,726			(58,081)			70,126
Net premiums earned	182,015			141,712			140,810			146,315			198,392
Expenses
Loss and loss adjustment expenses incurred, net	177,919			110,487			89,106			87,786			140,394
Acquisition costs, net	39,321			54,817			43,671			49,253			61,851
General and administrative expenses	6,628			4,556			5,596			4,880			5,724
Total expenses	223,868			169,860			138,373			141,919			207,969
Net underwriting income (loss)	$	(41,853)		$	(28,148)		$	2,437		$	4,396		$	(9,577)

Underwriting ratios (1)
Loss ratio	97.8		%	78.0		%	63.3		%	60.0		%	70.7		%
Acquisition cost ratio	21.6		%	38.7		%	31.0		%	33.7		%	31.2		%
Composite ratio	119.4		%	116.7		%	94.3		%	93.7		%	101.9		%
General and administrative expense ratio	3.6		%	3.2		%	4.0		%	3.3		%	2.9		%
Combined ratio	123.0		%	119.9		%	98.3		%	97.0		%	104.8		%

(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
	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019
Line and Type of Business
Property Catastrophe	$	1,336	$	11,246	$	39,706	$	31,164	$	4,831
Other Property	22,316		5,608		45,745		15,209		36,892
Property	23,652		16,854		85,451		46,373		41,723

Workers Compensation	17,122		12,572		7,915		21,320		121
Auto	7,668		12,308		(3,817)		21,249		(2,897)
Other Casualty	57,862		6,398		23,045		24,371		35,315
Casualty	82,652		31,278		27,143		66,940		32,539


Credit & Financial Lines	12,096		12,682		38,653		9,012		3,633
Multi-line	19,591		(4,163)		4,726		66,746		16,268
Other Specialty	1,537		1,208		1,598		15,060		5,768
Specialty	33,224		9,727		44,977		90,818		25,669

Total prospective reinsurance contracts	$	139,528	$	57,859	$	157,571	$	204,131	$	99,931
Retroactive reinsurance contracts	26,026		2,920		—		—		34,299
Total property and casualty reinsurance segment	$	165,554	$	60,779	$	157,571	$	204,131	$	134,230

Page 9 of 15

Third Point Reinsurance Ltd.

Underwriting Ratios - by Quarter (1)

(expressed in thousands of U.S. dollars)


	Three months ended
	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019
Underwriting ratios (1)
Loss ratio	97.8	%	78.0	%	63.3	%	60.0	%	70.7	%
Acquisition cost ratio	21.6	%	38.7	%	31.0	%	33.7	%	31.2	%
Composite ratio	119.4	%	116.7	%	94.3	%	93.7	%	101.9	%
General and administrative expense ratio	3.6	%	3.2	%	4.0	%	3.3	%	2.9	%
Combined ratio	123.0	%	119.9	%	98.3	%	97.0	%	104.8	%

Impact of catastrophe losses (2)
Loss ratio	3.9	%	21.3	%	—	%	—	%	9.1	%
Acquisition cost ratio	(0.1)	%	(0.4)	%	—	%	—	%	(0.9)	%
Composite ratio	3.8	%	20.9	%	—	%	—	%	8.2	%



Impact of reserve developments (2)
Loss ratio	24.9	%	(14.3)	%	0.7	%	(7.5)	%	(4.9)	%
Acquisition cost ratio	(4.5)	%	14.2	%	(0.8)	%	6.0	%	4.3	%
Composite ratio	20.4	%	(0.1)	%	(0.1)	%	(1.5)	%	(0.6)	%



Accident year ex-CAT underwriting ratios (3)
Loss ratio	69.0	%	71.0	%	62.6	%	67.5	%	66.5	%
Acquisition cost ratio	26.2	%	24.9	%	31.8	%	27.7	%	27.8	%
Composite ratio	95.2	%	95.9	%	94.4	%	95.2	%	94.3	%
General and administrative expense ratio	3.6	%	3.2	%	4.0	%	3.3	%	2.9	%
Combined ratio	98.8	%	99.1	%	98.4	%	98.5	%	97.2	%

(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

(expressed in thousands of U.S. dollars)


	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019
Assets
TP Fund	$	1,055,618	$	868,971	$	758,419	$	659,815	$	860,630
Debt securities, trading, at fair value	101,311		186,260		238,574		363,121		125,071
Total investments	1,156,929		1,055,231		996,993		1,022,936		985,701
Cash and cash equivalents	451,239		450,018		502,937		366,894		588,196
Restricted cash and cash equivalents	1,187,948		1,101,693		887,308		975,109		1,014,543

Due from brokers	94,902		81,142		169,078		57,929		—
Interest and dividends receivable	632		1,650		2,195		3,732		2,178
Other assets	—		—		—		—		18
Total assets	$	2,891,650	$	2,689,734	$	2,558,511	$	2,426,600	$	2,590,636
Liabilities
Accounts payable and accrued expenses	$	1,171	$	1,245	$	933	$	761	$	509
Securities sold, not yet purchased	11,990		15,389		19,597		47,427		—
Due to brokers	—		—		1,456		3,150		—

Interest and dividends payable	21		76		129		270		—
Total liabilities	13,182		16,710		22,115		51,608		509
Total net investments managed by Third Point LLC	$	2,878,468	$	2,673,024	$	2,536,396	$	2,374,992	$	2,590,127

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)	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019

Long
Equity	7.8	%	4.2	%	6.1	%	(11.2)	%	3.3	%
Credit	1.4	%	0.8	%	3.8	%	0.1	%	0.1	%
Other	0.9	%	0.9	%	—	%	(0.3)	%	0.7	%
	10.1	%	5.9	%	9.9	%	(11.4)	%	4.1	%

Short
Equity	(3.0)	%	(1.2)	%	(4.0)	%	4.4	%	(1.8)	%
Credit	—	%	—	%	—	%	(0.1)	%	—	%
Other	0.5	%	0.1	%	(0.1)	%	(0.2)	%	0.1	%
	(2.5)	%	(1.1)	%	(4.1)	%	4.1	%	(1.7)	%

Net
Equity	4.8	%	3.0	%	2.1	%	(6.8)	%	1.5	%
Credit	1.4	%	0.8	%	3.8	%	—	%	0.1	%
Other	1.4	%	1.0	%	(0.1)	%	(0.5)	%	0.8	%
	7.6	%	4.8	%	5.8	%	(7.3)	%	2.4	%

(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)


	December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Basic and diluted book value per share numerator:


Shareholders' equity attributable to Third Point Re common shareholders	$	1,563,925		$	1,427,571		$	1,357,304		$	1,231,701		$	1,414,074



Basic and diluted book value per share denominator:
Common shares outstanding	95,582,733			95,314,893			94,920,203			94,881,229			94,225,498
Unvested restricted shares	(2,933,993)			(2,695,127)			(2,319,354)			(2,315,172)			(2,231,296)
Basic book value per share denominator:	92,648,740			92,619,766			92,600,849			92,566,057			91,994,202
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)	2,573,638			2,182,214			1,825,128			1,815,741			1,654,803
Diluted book value per share denominator:	95,222,378			94,801,980			94,425,977			94,381,798			94,047,427

Basic book value per share (2)	$	16.88		$	15.41		$	14.66		$	13.31		$	15.37
Diluted book value per share (2)	$	16.42		$	15.06		$	14.37		$	13.05		$	15.04

Increase (decrease) in diluted book value per share	9.0		%	4.8		%	10.1		%	(13.2)		%	1.9		%

(1)As of December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, 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)


	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019
Weighted-average number of common shares outstanding:
Basic number of common shares outstanding	92,638,978		92,613,393		92,593,599		92,191,837		91,989,469
Dilutive effect of options (1)	—		—		—		—		—
Dilutive effect of warrants (1)	—		—		—		—		—
Dilutive effect of restricted shares with service and performance condition	526,581		356,253		144,694		—		707,022
Diluted number of common shares outstanding	93,165,559		92,969,646		92,738,293		92,191,837		92,696,491

Basic earnings (loss) per common share:
Net income (loss) available to Third Point Re common shareholders	$	134,396	$	68,743	$	124,015	$	(183,637)	$	29,738
Net income allocated to Third Point Re participating common shareholders	(1,644)		(574)		(721)		—		(111)
Net income (loss) allocated to Third Point Re common shareholders	$	132,752	$	68,169	$	123,294	$	(183,637)	$	29,627

Basic earnings (loss) per share available to Third Point Re common shareholders (2)	$	1.43	$	0.74	$	1.33	$	(1.99)	$	0.32

Diluted earnings (loss) per common share:
Net income (loss) available to Third Point Re common shareholders	$	134,396	$	68,743	$	124,015	$	(183,637)	$	29,738
Net income allocated to Third Point Re participating common shareholders	(1,635)		(572)		(720)		—		(110)
Net income (loss) allocated to Third Point Re common shareholders	$	132,761	$	68,171	$	123,295	$	(183,637)	$	29,628

Diluted earnings (loss) per share available to Third Point Re common shareholders (2)	$	1.43	$	0.73	$	1.33	$	(1.99)	$	0.32

(1)As of March 31, 2020, there was no dilution as a result of the net loss allocated to Third Point Re common shareholders in the quarter. As of December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, 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)


	December 31, 2020			September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019
Net income (loss) available to Third Point Re common shareholders	$	134,396		$	68,743		$	124,015		$	(183,637)		$	29,738
Shareholders’ equity attributable to Third Point Re common shareholders - beginning of period	$	1,427,571		$	1,357,304		$	1,231,701		$	1,414,074		$	1,383,580


Return on beginning shareholders’ equity attributable to Third Point Re common shareholders (1)	9.4		%	5.1		%	10.1		%	(13.0)		%	2.1		%

(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


Title of each class	Trading symbol	Name of each exchange on which registered
Common Shares, $0.10 par value	TPRE	New York Stock Exchange



Exhibit No.						Description

99.1						Earnings Press Release dated February 23, 2021.
99.2						Financial Supplement.
101						Pursuant to Rule 406 of Regulation S-T, the cover page information in formatted in Inline XBRL
104						Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)



Date: February 23, 2021	/s/ Christopher S. Coleman
	Name:	Christopher S. Coleman
	Title:	Chief Financial Officer



Exhibit No.						Description

99.1						Earnings Press Release dated February 23, 2021.
99.2						Financial Supplement.
101						Pursuant to Rule 406 of Regulation S-T, the cover page information in formatted in Inline XBRL
104						Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Item 2.02			Results of Operations and Financial Condition.


Item 9.01			Financial Statements and Exhibits.