| Deferred Policy Acquisition Costs |
Deferred Policy Acquisition Costs
The following table presents the amounts of policy acquisition costs deferred and amortized.
| | | | | | | | | | | | | | Years Ended December 31, | (dollars in thousands) | 2014 | | 2013 | | 2012 | Balance, beginning of year | $ | 260,967 |
| | $ | 157,465 |
| | $ | 194,674 |
| Policy acquisition costs deferred | 754,303 |
| | 577,620 |
| | 390,360 |
| Amortization of policy acquisition costs | (654,916 | ) | | (471,915 | ) | | (428,109 | ) | Foreign currency movements | (6,944 | ) | | (2,203 | ) | | 540 |
| Deferred policy acquisition costs | $ | 353,410 |
| | $ | 260,967 |
| | $ | 157,465 |
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The following table presents the components of underwriting, acquisition and insurance expenses.
| | | | | | | | | | | | | | Years Ended December 31, | (dollars in thousands) | 2014 | | 2013 | | 2012 | Transaction costs and other acquisition-related expenses (1) | $ | — |
| | $ | 75,140 |
| | $ | — |
| Prospective adoption of FASB ASU No. 2010-26 (2) | — |
| | — |
| | 43,093 |
| Other amortization of policy acquisition costs | 654,916 |
| | 471,915 |
| | 385,016 |
| Other operating expenses | 805,966 |
| | 765,257 |
| | 501,363 |
| Underwriting, acquisition and insurance expenses | $ | 1,460,882 |
| | $ | 1,312,312 |
| | $ | 929,472 |
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| | (1) | In connection with the acquisition of Alterra, the Company incurred transaction costs of $16.0 million for the year ended December 31, 2013, which primarily consist of due diligence, legal and investment banking costs. Additionally, the Company incurred severance costs of $31.7 million, stay bonuses of $14.8 million and other compensation costs totaling $12.6 million related to the acceleration of certain long-term incentive compensation awards and restricted stock awards that were granted by Alterra prior to the acquisition. |
| | (2) | Effective January 1, 2012, the Company prospectively adopted FASB ASU No. 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. At December 31, 2011, deferred policy acquisition costs included $43.1 million of costs that no longer met the criteria for deferral as of January 1, 2012 and were recognized into income during 2012, consistent with policy terms. |
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