Chris Coleman – Chief Financial Officer Rob Bredahl – President and Chief Executive Officer Daniel Loeb – Chief Executive Officer-Third Point LLC.

Kai Pan – Morgan Stanley Jay Cohen – Bank of America Merrill Lynch Christopher Campbell – KBW.

Greetings and welcome to the Third Point Reinsurance Second Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Mr.

Chris Coleman, Chief Financial Officer. Thank you. You may begin..

Thank you, operator. Welcome to the Third Point Reinsurance Limited earnings call for the second quarter of 2017. Last night, we issued an earnings press release and a financial supplement which is available on our website www.thirdpointre.bm. Leading today’s call will be Rob Bredahl, President and CEO.

But before we begin, I would like to remind you that many of the remarks today will contain forward-looking statements based on current expectations. Actual results may differ materially from those projected as a result of certain risks and uncertainties.

Please refer to the second quarter 2017 earnings press release and the company’s other public filings including the risks factors in the company’s 10-K where you will find factors that could cause actual results to differ materially from these forward-looking statements.

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, 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 measure is presented in the company’s earnings press release. At this time, I will turn the call over to Rob Bredahl.

Rob?.

Thanks Chris. Good morning and thank you for taking the time to join our second quarter 2017 earnings call. In addition to Chris Coleman, Chief Financial Officer of Third Point Re with me today is Daniel Loeb, CEO of Third Point LLC our Investment Manager.

Here’s the plan for the call, I’ll provide a brief overview of our results, Daniel will discuss the performance of our investment portfolio, Chris will discuss our financial results in more detail. And then we’ll open up the call for your questions.

Our strong results in 2017 have continued with $75 million of net income in the second quarter, which brings our six month profits up to $179 million. This was our best six month period since our inception 5.5 years ago, and compared to net income of $53 million in last year’s second quarter and $2.2 million in last year’s first half.

Earnings per diluted share were $0.71 in the second quarter, and $1.70 for the first six months of this year. Our diluted book value per share is now up to $14.74. The good results were driven by strong investment returns delivered by our investment manager, Third Point LLC.

The investment return for the quarter was 4.5% and 10.6% for the first half of the year. We had a few periods with higher quarterly investment returns in 2012 and 2013, but this is before we generated a meaningful amount of flow and therefore we had very little investment leverage.

With an invested asset leverage ratio that now have 1.53 times, we can take full advantage of strong investment results. Our return on beginning equity for the quarter was 5.0% and 12.8% for the first half of the year. We believe the ideal range for invested asset leverage ratio is 1.5 to 1.75 and therefore we have some room to increase it further.

Now let’s talk about our underwriting results. Our combined ratio for the second quarter was 107.0%, which is in line with our expectations given current market conditions. This compares to a combined ratio of 119.2% at last year’s second quarter and 106.3% for the first quarter of this year.

The combined ratio in the second quarter was a little higher than our combined ratio in the first quarter due to additional incentive compensation. And this added about 2 percentage points to our combined ratio. The bonus funding is based on return on shareholders equity and with another strong quarter of results we added to the bonus accrual.

Turning to reinsurance market conditions. Well, they remain very challenging. The good news is that our total return business model can deliver strong results in any type of reinsurance market as it has in the first half of this year.

With stable long-term float and investment leverage in our target range, we can push for better terms and conditions and tolerate decreases in premium without diminishing our earnings potential.

To combat the challenging market, we are pushing for improved pricing on treaty renewals and allowing under price deals trade away, we are carefully and slowly repositioning our portfolio towards higher margin lines of business. And we are focusing on structured surplus relief transactions such as reserve covers.

We’ve established ourselves as providers of innovative solutions for capital needs and have seen a good flow of business especially from the UK. As we enter the heart of the hurricane season there’s another point I’d like to make about our reinsurance portfolio.

Hopefully this is just a reminder, we do not write any property cat excess or loss and therefore we have only a very small amount of residual cat exposure. Now we have not benefited from the very lucky multi-year period of low cat activity, by the same time, we have not had to worry about and manage this type of volatile exposure.

Before I conclude I will provide you with an update on our share buyback program. As we have advised, we intend to buyback shares whenever our share price is 90% of diluted book value or lower. During the second quarter our share traded below 90% of book for most of the quarter and therefore we actively bought back shares.

We repurchased 1.77 million of our common shares for an aggregate cost of $22.0 million at a weighted average cost of $12.44 per share. Most days we maxed out our buying availability within our trading window given daily volume restrictions.

As of June 30, 2017, we had $51.7 million of remaining capacity on our buyback program, which we plan to use if our share price again drops below 90% of book. I’ll now hand the call over to Daniel Loeb, who will discuss our investment performance in more detail..

Thanks Rob and good morning. The Third Point Reinsurance investment portfolio managed by Third Point LLC returned 4.5% in the second quarter of 2017, net of fees and expenses versus returns for the S&P and CS event-driven indices of 3.1% and 1.1% respectively for the quarter.

The account has returned 10.6% for the first half of 2017 net of fees and expenses. The Third Point Reinsurance account represents approximately 14% of assets managed by Third Point LLC. During the second quarter, our portfolio composition shifted in response to an evolving market environment. Prospects for a significant near-term change in U.S.

healthcare traded tax policies have dimmed and reflation trade we expect to drive markets higher this year has not materialized.

However, synchronized global economic growth has given us a continued reason to be positive on markets and to maintain significant long-term equity exposure to more defensive sectors in Europe, and in constructive investments.

We have found more opportunities to take short positions and single names in companies that we think are overvalued at this peak markets and in sectors undergoing structural declines. Third Point’s equity portfolio return 9.1% in Q2, which is 3 times greater than returns for the S&P 500 during the same period.

Year-to-date returns on average exposure are 19.2% in equities, our most profitable sectors for both the year and the quarter have been healthcare and consumer. And we generated positive results for each sector in the equity book. In credit, we are patiently waiting for the next cycle, and a produced exposure across each vertical.

In Q2 corporate credit including both distressed and performing investments detracted 3.2% on average exposure, but is up slightly for the year. ABS and sovereign credit returned 0.1% and 3.5% respectively on average exposure for the quarter.

We will be carefully watching central bank activity as we approach year end as we expect this will be the major driver of market sentiment. In the interim, we remain excited about our well balanced equity portfolio and its mix of event-driven situations higher multiple defensive companies and activist opportunities.

Now, I’d like to turn the call over to Chris to discuss our financial results..

Thanks, Daniel. For the three months ended June 30, 2017 diluted book value per share increased by $0.70 per share or 5% to $14.74 per share. For the six months ended June 30, 2017 diluted book value per share increased by $1.58 per share or 12%.

Gross written premium decreased by $40 million or 21% to $157 million from $197 million in the prior years quarter. Gross written premiums decreased by $91 million or 23% to $303 million from $394 million in the prior years six months.

The decrease in the three and six months ended June 30, 2017, compared to the prior year periods was primarily due to contracts that we did not renew as a result of underlying terms and conditions, lower premium adjustments in the current year periods and other timing differences partially offset by new premium.

The increase in net premiums earned was primarily due to the addition of $84 million of new retroactive exposures in reinsurance contracts included in that premiums earned in the three and six months ended June 30, 2017 partially offset by a lower in-force underwriting portfolio.

We did not write any retroactive reinsurance contracts in the prior year period. We generated a $12.1 million net underwriting loss for the three months ended June 30, 2017 compared to an underwriting loss of $25.6 million in the prior year period. And our combined ratio was 107.0% compared to 119.2%.

We generated a $20.8 million net underwriting loss for the six months ended June 30, 2017, compared to an underwriting loss of $32.2 million in the prior year period. And our combined ratio was 106.6% compared to 111.9%.

The net underwriting loss and combined ratio for the three and six months ended June 30, 2017 included an insignificant amount related to prior year loss development. The prior year periods included $12.9 million and $12.5 million respectively related to the net impact of adverse reserve development.

For the three months ended June 30, 2017 we recognize net investment income of $107 million compared to $86 million for the prior year period. For the six months ended June 30, 2017, we recognize net investment income of $236 million, compared to $46 million for the prior year period.

The changes in the net investment income were primarily driven by the returns in the respective periods that Daniel discussed in detail. General and administrative expenses in the second quarter of 2017 were $15 million compared to $10 million for the prior year period.

General and administrative expenses in the first half of 2017 were $26 million compared to $22 million for the prior year period. The increase was primarily due to an increase in accruals for our annual incentive compensation expense driven by the higher returns in 2017 to date partially offset by lower stock compensation expense.

The increase in income tax expense for the six months ended June 30, 2017 compared to the six months ended June 30, 2016 was primarily due to higher taxable income generated by our U.S. subsidiary.

The change in foreign exchange gains and losses was primarily due to the revaluation of foreign currency loss and loss adjustment expense reserves denominated in British pounds where the U.S. dollar weakened in the current year periods compared to prior year periods where the U.S. dollar strengthened. I’ll now hand the call back over to Rob..

Thank you, Chris. Our strong results for 2017 continue through the second quarter as we produced our best six months of results since our inception. Reinsurance market conditions remain challenging and we are not benefiting from the current lucky period have historically low cat activity since we do not write any property cat.

Still our earnings potential is strong due to our total return business model. We’ve done a good job of generating stable long-term float. Our float has grown to $648 million, and we’ll grow further in coming quarters and our invested asset leverage ratio is slightly above 1.5 times within our target range.

We are reshaping the portfolio gradually towards higher margin business, but only where we believe we are being properly compensated for the increased risk. As a result we might experience a decrease in gross written premium again this year, as we continue to work towards improving our combined ratio. We thank you for your time.

And now we’ll open the call for questions? Operator?.

Thank you. The floor is now opened for questions. [Operator Instructions] Our first question is coming from Kai Pan with Morgan Stanley. Please go ahead..

Thank you and good morning. First a few questions for Dan. Dan in your quoted letter you’d mentioned that some of the expectation for the fiscal – even though it was tax form hasn’t come to federation. As well as in general the U.S. economy had generally been disappointing versus expectation.

But all the indices actually near all time high or add more time highs.

Do you worry about any downside risk to the market?.

I think what I said obviously there’s always downside risk to the market at any time for a number of reasons. Outside of our control and also outside of what’s going on economically. So it’s always something we think about. I think, what I was saying was that, we better – I guess in case of better lucky than right.

We expected the market to go up but for different reasons. We thought it would be based on generally positive growth oriented policies in acted by the administration, lower taxes, infrastructure spending, healthcare, reform et cetera, none of these things transpired.

But what has transpired has been kind of global synchronized economic growth and a very accommodative global monetary structure. So, I’m happy with the outcome the reason for it was different from what we anticipated, but we’ll take it. And we expect evaluations are getting a little more stretched.

We’re still finding lots – really good things to do in the areas of the market that we participate in, which is constructive investments where there’s a lot of upside potential in the companies that we’re invested in. Some of the higher growth companies that are way out growing the economy.

And some of the special situations as well as the short – our short book is performing very well..

Yes. On your short book you mentioned that you’re finding opportunities even in the rising markets, some single names you believe are overpriced. So there are certain areas you are focusing on in the short side..

Yes, certainly. We wrote about our fracs and that which have gone very well for us. So really what we’re focusing on is, structurally challenged companies that are just going to have a much more – that are having a very difficult time in the current environment.

So a lot of these are retail, retailers, consumer brands, I mentioned the energy related companies. And companies – and just some companies we think are have very low quality earnings, who we think might be playing accounting games to achieve their results..

Last one for Dan. You’re recent investment in Nestlé, so these are big advances for you. How different is activism investing outside the U.S.? How do you compare of that from your experience? Or maybe you can draw some you’re past experience for some investment you made in Japan..

Yes. I think that’s a good point that you just made. I think anytime you go into a different geography with a different set of securities laws and rules and different shareholder base and other social conditions you have to be really sensitive to the culture and society that you’re investing into the context.

I wouldn’t necessarily call Nestlé as an activist investment per se. I think we have a lot of respect for Mark Schneider the CEO. This is more a case of a company that we hope is going in the right direction, we think it is.

But we’ve articulated we would like them to articulate margin targets and to explore better capital allocation – better capital allocation plans along the lines of what we described in our letter. And we have very high hopes for their Investor Day on September 26.

They just reported earnings, which were I think had to be disappointing to them, they sounded disappointing. But we’re hopeful that in September, they will articulate more specific goals around margin improvement, portfolio optimization and hopefully address the L’Oreal stake..

Thanks Dan. If I may, just like a couple question on the underwriting side for Rob and Chris. So you mentioned the investment average in the past you could talk about 1.4 then raised to 1.5, now up to 1.75. I just wonder how our reading agencies comfort level with the rising investment average..

Yes. Kai, when we give those numbers we’re really backing into BCAR score. And overtime and that has lowered the asset charge a little bit and then there’s other factor. There’s growth charges that are certain to be reduced. And so the target range has gone up because we have more room with our BCAR score..

Okay. Last one, could you talk a little bit more about the retro deal and where do you find the opportunity. And do you think that will be continued to be your gross for you guys..

Sure, yes. I think you mean the retroactive deals..

Yes..

So we did a large reserve cover in the quarter and it was for Lloyd’s syndicate. And it was a structure and rewrite of a deal we had done previously. And so it’s a Lloyd’s entity and this particular entity separate some losses from the Ogden rate change. And so their need for capital increase and the deal about doubled in size year-over-year.

And it’s one of several deals that we’ve completed in London and in fact the pipeline deals coming out of the UK for reserve covers, for capital relief reserve covers it is very big right..

Okay, great. Well, thank you so much..

Thank you. Our next question is coming from Jay Cohen of Bank of America Merrill Lynch. Please go ahead..

Thank you. Some of my questions were answered. I guess the other one you talked about repositioning the portfolio overtime. And I guess part of that is doing some of these retroactive deals.

But what else are you talking about when you say that?.

So over the past – really 18 months, we’ve pulled away from nonstandard auto into Florida home owners. In fact, I think we have two – actually three nonstandard auto deals lap, and that’s down from eight or so. And in Florida, we have two remaining deals. And so we’re down from about eight there.

And so there’s been a big shift away from that lower margin business. And we’re writing more reserve covers, we’ve written two larger retro casualty deals. And I would say that’s more traditional casualties the underlying portfolio where we’ve added structure around it. And then mortgages, we went from having a very small portfolio to writing.

I think in total about $270 million is mortgage premium. And that’s the high points on the shift in the portfolio..

Thanks. So any new mortgage deals this quarter..

Now nothing written in order Jay..

Great. Thanks guys..

Jay that’s just a function of the renewal cycle on the mortgage deals..

Got it, got it. That’s helpful. Thanks..

Thank you. [Operator Instructions] Our next question is coming from Christopher Campbell of KBW. Please go ahead..

Hi. Good morning..

Good morning..

Just, so you’d mentioned nonstandard auto and Florida home owners, are there any other lines of business that you are not renewing due to deteriorating terms and conditions?.

In the quarter we had a larger workers’ compensation deal that we done renewed, now is the deal we were on for probably four years. And it ran okay, we pushed for better pricing and the market just didn’t support at our pricing. So it traded away from us..

Got it.

The second one just any color behind the acquisition cost increase? It’s up about $20 million year-over-year?.

Yes, I mean on the – certainly on a ratio basis, relative to last quarter it’s actually exactly the same. Really, when you look at the components of our composite ratio, the main answer is always going to be a shift and mix of business that’s going to drive the component parts.

If you track our composite ratio overtime, it’s held relatively consistent and really it just becomes a function of mix. Extreme examples are when we do a reserve cover, those tend to have a much higher loss ratio and where we have earnings from home owners and other contracts, similar to that that have much higher acquisition cost.

They can skew the ratios on a quarter-to-quarter basis, but overall, our composites have held relatively consistent..

And I guess just maybe put an exclamation put on that. We managed to the all-in composite ratio, and the break down, the loss ratio versus acquisition costs just aren’t numbers that we spend much time, manage into..

Right. And just one final one, you’d mentioned the increased reserve covers, coming out of the UK, because of Ogden. But we are also seeing kind of weakening reserve position in the U.S.

Are you seeing any increased demand, domestically?.

Yes, it’s not only Ogden in the UK, the capital models that have been introduced by regulators and by Lloyd’s, now are very specific on how reserve covers generate capital. And so there used to be uncertainty and that uncertainty has been removed.

And because of that, reserve covers are being used in addition to quarter shares and other traditional forms of reinsurance to generate capital. In the U.S. yes, we’re seeing a flow of business from companies that reserve issues. The spot that we played in up until now, are really well reserved companies like these Lloyd’s entities.

We’re providing a reserve cover with a small amount of adverse development cover limit and where is that ABC limit fits in well for the capital models. The deals we’re seeing at the U.S. are companies looking for somebody put a patch reserving issue. And we’ll look at them, we’re less likely to do many of them.

We’re much more interested in the capital relief type reserve cover..

Great. Well, thanks for all the answers. And best of luck in the third quarter..

Thank you..

Thanks you. At this time I’d like to turn the floor back over to management for any additional or closing comments..

Well, thank you everybody for your time. I look forward to talking to you next quarter. In the mean time, please give us a call if you have any additional questions. Thank you..

Ladies and gentlemen, thank you for your participation. This concludes today’s teleconference. You may disconnect your lines at this time. And have a wonderful day..