J. Robert Bredahl - Chief Financial Officer and Chief Operating Officer John Berger - Chairman & Chief Executive Officer Daniel Loeb - CEO, Third Point LLC.

Kai Pan - Morgan Stanley Jay Cohen - Bank of America-Merrill Lynch Brett Shirreffs - KBW.

Hello and thank you for standing by. Welcome to the Third Point Reinsurance Third Quarter 2014 Earnings Conference Call. As a reminder all participants are in a listen-only mode and the conference is being recorded. (Operator Instructions).

At this time I'd like to the conference over Rob Bredahl, Chief Financial Officer and Chief Operating Officer for Third Point Reinsurance. Please go ahead..

Thank you, operator. Welcome to Third Point Reinsurance Limited's earnings call for the third quarter of 2014. Last night we issued an earnings press release, which is available on our website www.thirdpointre.bm.

A replay of today's conference call will be available until November 14, 2014 by dialing the phone numbers provided in the earnings press release and through our website following this call. Leading today's call will be John Berger, Chairman and CEO of Third Point Re.

But before we begin, please note that management believes certain statements in the teleconference may constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include statements about expectations, estimates, and assumptions concerning future events and financial performance of the company and are subject to significant uncertainties and risks that could cause current plans, anticipated actions, and the company's future financial condition and results to differ materially from expectations.

The uncertainties and risks include those disclosed in the company's filings with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made and the company assumes no obligation to update or revise them in light of new information, future events, or otherwise.

In addition, management will refer to certain non-GAAP measures, such as diluted book value per share, which management believes allow for a more complete understanding of the company's financial results. A reconciliation of these measures to the most comparable GAAP measures is presented in the company's earnings press release.

At this time, I will turn the call over to John Berger..

Thanks, Rob. Good morning and thank you for taking the time to join our third quarter 2014 earnings call. In addition to Rob Bredahl, CFO and COO of Third Point Re, with me today is Daniel Loeb, CEO of Third Point LLC, our Investment Manager.

I will provide an overview of our financial results, Daniel will discuss the performance of our investment portfolio, and then Rob will discuss our financial results in more detail. We had a net loss of $6 million or $0.06 per diluted share, compared to net income $46.6 million or $0.51 per diluted share in last years third quarter.

While our Investment Manager, Third Point LLC outperform most of its peer hedge fund managers, investment returns on our investment portfolio managed by Third Point LLC were flat in the third quarter.

Given our strategy to balance our reinsurance risk with greater investment portfolio risk when compared to traditional reinsurance companies, variability in our investment returns is to be expected, including the occasional flat or even down quarter. Daniel Loeb will discuss these results in more detail in a couple of minutes.

The bright spots in our third quarter results were the continued improvement in our combined ratio and continued growth in gross written premiums. Our combined ratio for the PC segment improved to 101.7% in the latest quarter from 107.9% in last years third quarter.

The combined ratio was steadily improving due to growth in earned premium and a resulting decrease in our G&A expense ratio. In our third year of operations earned premium continues grow rapidly, while our G&A expenses are growing at a much more moderate rate.

Gross premiums for the quarter increased by $81 million or 178.4% to $126.4 million versus $45.4 million for the same period of the previous year. This increase was primarily due to strong new business production and one contract that was canceled and rewritten at a large allocation and extended terms.

I am very pleased with the flow of opportunities that we are seeing and the quality of our deal pipeline, especially given the competitiveness of the market. The reinsurance market is still one where relationships are important.

I think this due in part to the fact that reinsurance represents a lager portion of many companies capital base and most contracts renew each year. Reinsurance buyers therefore are very sensitive about their counterparties. They also value creative solutions when they are working to solve complex capital or risk management problems.

Our senior management team in those cases have spent decades in the reinsurance market are seeing a steady flow of opportunities from our former clients, former colleagues and other market contacts.

I need to stress however as I have on every earnings call, that we are still a young company and focus on larger deals and therefore quarter-over-quarter comparisons may not be meaningful. I will now hand the call over to Daniel Loeb, who will discuss the performance of our investment portfolio during the third quarter of 2014.

Daniel?.

Thanks, John, and good morning everyone. The Third Point Reinsurance investment portfolio managed by Third Point LLC was flat for the third quarter of 2014, net of fees and expenses, versus returns for the S&P and Credit Suisse event driven indices of 1.1% and minus 1.8% respectively for the quarter.

The Third Point Reinsurance account represents about 10% of assets managed by Third Point LLC. Profits in August offset losses in both July and September, gains in the third quarter were driven by continued success in structured credit and several large equity positions.

During the quarter the equity portfolio returned 1.3% on average exposures, slightly outpacing the S&P and bringing the 2014 return on average exposure to 4.8%. Gains in equities were driven by strength in several core positions, some of which were added following our recent capital raise.

Healthcare, industrials and energy have been our strongest performing sectors in 2014, despite a rally in Q3, TMT remains the largest attractor. Consistent with the first half of the year, performance varied significantly across geographies versus from several key positions drove a return of 20% for investments in Asia.

During the quarter the overall year-to-date performance in the region remains negative. The United States and Latin America have been our strongest performing regions to date returning 13% and 24% for the year respectively.

During the quarter corporate credit was down 5% on average exposure bringing the year-to-date return on average exposure to 11.7% versus 2.5% performance from the iBoxx high-yield index. in 2014. Our performing credit portfolio was 22% in the third quarter largely attributable to significant losses in the European subordinated credit position.

We continue to see strength in our distress credit book as strong contributions from several liquidations brought year-to-date returns 20%. Our macro portfolio was slightly down for the quarter led by volatility in our two largest government credit positions.

These sovereign debt investments remain high conviction positions with meaningful expected upside. Our mortgage portfolio continued to perform well in Q3, returning 3% on average exposure and adding to year-to-date returns of 22%. In 2014 mortgages have contributed 50% of profits and roughly 20% of NAV exposure.

We shifted the portfolio to capture gains across markets in the third quarter, opportunistically adding subprime exposure and further decreasing our already moderate CMBS exposure. Now, I’d like to turn the call over to Rob to discuss our financial results..

Thanks, Daniel. As John mentioned, we generated a $6 million net loss in the second quarter which translates to a loss per diluted share of $0.06. Diluted book value per share as of September 30, 2014, was $13.68, a decrease of 0.3% for the quarter and increase of 4.3% for the first nine months of the year.

In our Property and Casualty reinsurance segment, gross premiums written were $124.9 million for the three-months ended June 30, 2014, a 185.8% increase from the $43.7 million reported during the previous year's third quarter.

The increase in gross premiums written was due to $58 million of new business written in the quarter and $76.5 million from the contract that was cancelled and rewritten in the quarter at a large allocation percentage and for a longer term.

These increases of premium were partially offset by contract that were written in the third quarter of 2013 and not subject to renew in the current quarter and to lesser extent downward premium estimated adjustments on existing contracts.

Net premiums earned in the P&C segment during the third quarter of 2014 increased 64.3% to $101.5 million reflecting the fact that our in-force portfolio continues to grow.

Our net loss and loss adjustment expense ratio dropped to 59.2% in the current quarter from 63.7% in last years third quarter and was offset by an increase in the acquisition cost ratio to 37.0% from 33.3%. While the contracts that we write have somewhere composite ratios, this is combined [inaudible] and ratio before overhead expenses.

The breakdown between loss and acquisition ratio estimates can vary significantly depending on the line of business and type of deals. For example reserve covers have high initial loss ratio estimates often 100% and very low with zero acquisition cost ratios.

Movements in our relative loss acquisition cost ratios therefore are usually due to primarily to a change of business mix from one quarter to the next. G&A expenses were $5.6million in the quarter versus $6.7 million in the third quarter of 2013. The decrease is due primarily to lower stock compensation expense in the current quarter.

Stock compensation expense was higher in the three months ended September 30, 2013 due to performance conditions being met related to completion of our IPO.

As a result the significant growth in earned premium and a small drop in our G&A expenses, our general and administrative expense ratio decreased to 5.5% this years third quarter compared to 10.9% in last years third quarter and our combined ratio dropped to 101.7% from 107.9%.

Our Cat fund continues to perform well, but due to challenge in market conditions we have blended the size of the fund to ensure we target appropriate returns for our investors.

After attributing income to non-controlling interest, the net income from the catastrophe risk management segment was $3.6 million for the third quarter of 2014 compared to net income of $2.7 million in the third quarter of 2013. Net assets under management for the catastrophe fund were $117.9 million as of September 30, 2014.

As Daniel mentioned, the return on investments managed by Third Point LLC was flat during the third quarter of 2014 compared to 4.3% for the same period in 2013. And the net loss for the quarter was $6 million versus net income of $46.6 million from last years third quarter. I'll now hand the call back to John Berger..

Thanks, Rob. Investment returns were flat in the quarter due to challenging investment market conditions, but we continue to make progress developing our reinsurance underwriting platform and improved our combined ratio to 101.7.

Our strategy remains constant, to write reinsurance contracts with attractive risk adjusted returns and invested flow generated from this activity in a separate investment account managed by Third Point LLC. I remain optimistic for the remainder of 2014 and our continued long-term success. I will now open the call up to questions.

Operator?.

(Operator Instructions) The first question today comes from Kai Pan of Morgan Stanley. Please go ahead..

Thank you and good morning. First, congratulations to Rob, Chris and Nicholas for the promotion.

And I just wonder if you talk a little bit more about your Chief Actuary and Chief Risk Officers departure?.

Yes. You know, Mike McKnight first of all did a terrific job for us. He was onboard virtually from the beginning, built a terrific actuarial team and our systems, our risk management systems and processes are in terrific shape and great work, did a fabulous job for us. I am really sorry to see him leave.

He left for personal reasons and I'll just leave it at that..

Okay. That’s great. Then my second question for Dan. Dan, you have reduced your portfolio exposure in those gross at nat [ph] in October in your ladder signaling that you are establishing some positions.

So I just I wondered, could you elaborate a little bit more about how do you positioned in each of the strategy in the current marketing environment, including the large [inaudible].

Sorry, the question is to how are we – I don’t understand what you mean by how are we positioned. I mean, we don’t go beyond whatever disclosure we give you in our regular results in terms of our net exposures and industry exposures, I just have to refer you to those..

Okay.

But you'd get sort of like increase in the exposure like that, right, in you know, third quarter ladder?.

Yes. No, I mean, that we increased our exposure in part and it wasn’t due to the new capital that came in, but the new capital that came in we took into invest in a couple of new situations Amgen and we've talked about these Amgen, Alibaba and eBay were three of those larger situations that we used the capital to invest in..

Okay. That’s great. So those are new capital you raised, is that still in the same fund or were the [inaudible] also participating or separated, sorry separated….

To fund….

Say that again Dan, that the capital raise recently are they in separate fund or….

No, no, that was just, that was new capital that came into, that was new capital that came into Third Point's managed funds, whatever positions we took the TPRE portfolio participated in on a pro rata basis..

Okay. That’s great. Good to hear. And lastly the latest things about – it seems like the other strategy outside loans for credit mark has a – there is relative small exposure, but the P&L seems from time-to-time have some swings, especially in October.

So I just wonder what's in the other strategy?.

Sometimes we'll have – and these are things that TPRE does not participate in, sometimes those are the private investments that we make. They are under a couple of percent, but occasionally they will – there will be a company in our other bucket that goes public or you know something that happens. So that will – that accounts for the swings..

Okay. Great. Well, thank you so much for that. Then for John, just you have great top line growth over the year.

Just wonder where exactly do you see opportunities in that and could it be more detail in term what line of best things riding and to how big those contract are, are they in you typical $10 to $20 million like range?.

We are – Kai, one of them was a non-standard auto deal that we were already on. That cancelled and rewrote and we took a bigger percentage on that and that was a quite a big deal about $70 million.

We also did one new casualty deal, the US casualty deal that was of a substantial size and then we did a smaller about $17 million workers comp for this year. So three contracts make up that total..

Okay.

And so how big is that new US casualty?.

Its going to be somewhere between $30 and $40 million..

Okay. That’s great.

And do you think that you're [inaudible] advertise will, do you think this kind of one off issues or like a contracts or you think your advertise could be sort of – and it’s larger these like going forward?.

We've said it all along Kai that, you know, we don’t do that many deals and once we do it tend to be large. The old saying you know, a small deal takes as much time as a big deal, so let’s put the effort into big deals. We have a small staff here.

So we're going to continue to see variability of size of deals and one thing we always try to stress is that quarter-to-quarter comparisons will be tough because we write a deal. We're actively looking for reserve deals. We're optimistic about that flow and those are easily 50 million plus size.

So it’s hard to generalize about what we're going to see, except that we're shooting at relatively large premium items on most of the deals we're trying to execute..

Okay. That’s great. And lastly is that – are you still sort of like, it looks like you're getting closer to breakeven.

So are you still shooting for a like a breakeven by year end or into 2015?.

Yes. I think sometime in 2015 and lot of that is the make up of the book of business, you know, if we do more reserve deals, those we book immediately at a 100% loss ratio. So that drives it a little bit above a 100 combined. If we do more the opportunistic type things we're looking at. So it really depends on the mix, but we're making great progress.

The biggest variable there is just the – our margins are remaining pretty constant on our deals, but as the earned premium grows our G&A expense ratio come down, and that’s what really driving the reduction in our combined ratio..

And maybe Kai just to make one point, if we – if the mix moves towards more reserve covers and therefore a higher combined ratio, that means we'll have more investment income because votes [ph] grow more rapidly in the future..

Yes, and if that segment becomes big enough we'll give more specifics on that..

Okay. Great. Well, thank you so much and good luck..

Thank you..

The next question comes from Jay Cohen of Bank of America-Merrill Lynch. Please go ahead..

Yes, thank you. A couple of questions.

First on the rewritten contract, I think you had said you were to extend it the duration of the contract, I assume that’s a two or three year deal now?.

No, it’s a 12 month deal, but it ended after 6 and then we extended it for 12. So its not – it is not a multi year deal..

That’s a good clarification, thank you.

Secondly, on the earnings from the Cat fund, should we expect some seasonality there, the earnings there were relevant like they were in the first half and I didn’t know if it was seasonality or luck?.

No, its 12, there were no Cat [ph] but its seasonality. We earn the premium based on the profitability and covenant [ph] debt happening. And so in the third quarter there is lot of earned premium related to Atlantic Hurricane. And so that’s what you see coming to in the portfolio this quarter..

Got it. That make sense. And then I guess the last question, we are hearing about a number of other companies attempting to start up, call it a hedge fund reinsurance company, it could be hedge fund starting it or an insurance company starting it.

Do you expect to see a lot more player’s kind of attacking the same market that you are at this point?.

I don’t, I think our model and you put Greenlight was the first ourselves and Hamilton Re to a certain extent, although they seem to be concentrating more on the insurance side. But through independent reinsurance companies with assets managed by hedge fund, I don’t believe we'll see that model again.

But I think the Ace BlackRock announcement, there is now news about Transatlantic doing something with Blackstone….

Provenance….

Provenance access doing some thing with Blackstone, Allied World and Pine River.

I think those kind of companies sponsor deals will happen and then is it going to be the Arch , Watford model where they you know, Watford does reinsure Arch but they are also out looking for new deals, you know, that clearly that model does represent more competition for us or maybe more of the Ace BlackRock which apparently will – that model will only reinsure Ace, in that case that represents no competition for us.

But I think that as I said that that – the single company are model effectively, I don’t think we'll see again the company sponsored model. There is certainly a lot of noise about that picking up and I think once Ace did it you know, every company out there has to consider some thing like that..

John, why don’t you think you'd see other hedge funds starting reinsurance companies, I mean, it seems like the reasons that Third Point is that – they were pretty sound and I would think others would find the same reasons to be appealing?.

I think there are bunch of factors and this will sound a little bit self serving, but I'll say it anyway, you need a good management team, right, and they are hard to find, you need people with a track record. Their hedge fund has to have a good track record and the rating agencies like to see how they did during 2008.

And the market is competitive, you have to have a good management team with a credible business plan that has a chance to succeed, been a brand new re-insurer today is its tougher than it was three years ago when we did it..

Yes. All fair points. Thanks, John..

Thank you..

(Operator Instructions). The next question comes from Brett Shirreffs of KBW. Please go ahead..

Yes, good morning. Thanks for taking my questions.

First, just want to follow up a question Jay had there, are you seeing a lot of opportunities to write multi year deals in the market and is that marry [ph] a particular industry, it seems like you're investment strategy will?.

Not, not, you know, the preponderance of our deals are one year deals. We do see multi year deals, but almost more by exception than and I think what's hard for buyers to commit to three year deals. Things are changing and then so if they want a three year deal, they want a lot of optimality in it which makes it less attractive to us.

So looking for three year deals is not a priority for us..

And Brett, I think you're seeing a much higher percentage of multi year deals in the Cat space versus the surplus release closure space that we operate in..

Okay. That makes sense. On the composite ratio, it was down on a year-to-date basis a little bit year-over-year. I am just kind of wondering where you think you are relative to your longer term targets..

We've said all along that, first of all two things. We don’t have a Cat book. We have small Cat fund that contribute this quarter, but overall we're not in the Cat space.

So in the loss for year we don’t have that big margin business helping our results and given that we're only three years old, we don’t and we haven’t really written the long tail casually book of business. We don’t have redundant reserves.

So overall if you strip those two out of the industry results, the industry on an accident year basis is up over 100%. So we really think in that kind of market, if we can hub around a 100, no surprises and create the asset leverage for our investments that we will be in really good shape..

Okay. And then just lastly.

John I was wondering if you had any update on the US physical presence initiatives and maybe you could just touch on that, that strategy again?.

We're still looking at options. We – clearly the goal is to be just closer to sources of production. I think we – our people have done a terrific job accessing opportunities in the United States and we have a very restrictive policy on travel and the types of things we can do in United States because we are Bermuda company.

So having boots on the ground we think longer term will really help us. So we're still exploring the options there..

Okay. Thanks, and congrats on the quarter..

Thank you..

Thanks..

We have a follow up question from Jay Cohen of Bank of America-Merrill Lynch. Please go ahead..

Yes. Thank you. As a new company I would expect your G&A expense, the absolute level of expenses to gradually rise. Throughout this year it looks like it’s been actually coming down just a tab, its really flat.

I am wondering should we expect that number over time to rise because of the newness of the company?.

Yes. And Jay, I think its flat so from – on last year and we had expenses related to the IPO and so there is a little bit of a blip by the ordinary last year sort of about flat. I think you can expect our G&A expenses to grow at a moderate rate.

We're about built out in terms of infrastructure, but we will be adding people and maybe another platform for the US. But the growth in the G&A expenses will be much lower than the near term growth in earned premium..

Absolutely. Great. Thanks, John..

(Operator Instructions). We have a follow up question from Kai Pan of Morgan Stanley. Please go ahead..

Yes, just quick number question, what's the quarter end flow number?.

Its, Kai, its very close to $300 million..

$300, okay. Well, thanks so much..

Thank you..

There are no further questions at this time. I'll hand the call back over John Berger for any closing comments. .

Yes. Thank you very much. We're in the midst of fourth quarter activity and we look forward to our next earnings call with you. Thank you..

This concludes today's conference call. You may now disconnect your lines. Thank you for your participating and have a pleasant day..