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THIRD POINT REINSURANCE LTD. (Exact Name of Registrant As Specified in Its Charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2018 or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 001-35039 THIRD POINT REINSURANCE LTD. (Exact name of registrant as specified in its charter) Bermuda 98-1039994 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 3 Waterloo Lane Pembroke, Bermuda, HM 08 (441) 542 3300 (Address of principal executive offices and zip code) (Registrant’s telephone number) (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Shares, $0.10 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of the shares of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2018 was $963.2 million. As of February 25, 2019, there were 93,639,610 common shares of the registrant’s common shares outstanding, including 2,013,080 restricted shares. DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates information from certain portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended December 31, 2018. ____________________________________________________________________________________________________________________________________________________________ Third Point Reinsurance Ltd. INDEX Page INTRODUCTORY NOTE 1 PART I 2 Item 1. Business. 2 Item 1A. Risk Factors 25 Item 1B. Unresolved Staff Comments 54 Item 2. Properties 54 Item 3. Legal Proceedings 54 Item 4. Mine Safety Disclosures 54 PART II 54 Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 54 Item 6. Selected Financial Data 57 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 58 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 81 Item 8. Financial Statements and Supplementary Data 85 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 85 Item 9A. Controls and Procedures 85 Item 9B. Other Information 89 PART III 89 Item 10. Directors, Executive Officers and Corporate Governance 89 Item 11. Executive Compensation 89 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 89 Item 13. Certain Relationships and Related Transactions, and Director Independence 89 Item 14. Principal Accounting Fees and Services 90 PART IV E-1 Item 15. Exhibits and Financial Statement Schedules E-1 SIGNATURES E-5 Consolidated Financial Statements F-1 INTRODUCTORY NOTE Unless the context otherwise indicates or requires, as used in this Annual Report on Form 10-K references to “we,” “our,” “us,” and the “Company,” refer to Third Point Reinsurance Ltd. (“Third Point Re” or “TPRE”) 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 Re exclusive of its subsidiaries. We refer to Third Point Re (USA) Holdings, Inc. as “TPRUSA”, “Fiscal,” when used in reference to any twelve-month period ended December 31, refers to our fiscal years ended December 31. We also refer to Third Point Enhanced LP as “TP Fund”. Unless otherwise indicated, information contained in this Annual Report is as of December 31, 2018. Cautionary Note Regarding Forward-Looking Statements Certain statements contained or incorporated in this Annual Report include forward-looking statements. These forward- looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our market position, international expansion, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this Annual Report on Form 10-K. Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. 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; • more established competitors; • losses exceeding reserves; • highly cyclical property and casualty reinsurance industry; • downgrade or withdrawal of ratings by rating agencies; • significant decrease in our capital or surplus; • dependence on key executives; • dependence on letter of credit facilities that may not be available on commercially acceptable terms; • inability to service our indebtedness; • limited cash flow and liquidity due to our indebtedness; • inability to raise necessary funds to pay principal or interest on debt; • potential lack of availability of capital in the future; • credit risk associated with the use of reinsurance brokers; • future strategic transactions such as acquisitions, dispositions, mergers or joint ventures; • technology breaches or failures, including cyber-attacks; • lack of control over 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; 1 • termination by Third Point LLC of our or TP Fund’s investment management agreements; • potential conflicts of interest with Third Point LLC; • losses resulting from significant investment positions; • credit risk associated with the default on obligations of counterparties; • ineffective investment risk management systems; • fluctuations in the market value of TP Fund’s investment portfolio; • trading restrictions being placed on TP Fund’s investments; • limited termination provisions in our investment management agreements; • limited liquidity and lack of valuation data on certain TP Fund’s investments; • U.S. and global economic downturns; • specific
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