Related Party Transactions |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Related Party Transactions The Company engages in certain related party transactions in the normal course of business at arm's length. Within the Company's insurance-linked securities operations, the Company provides investment and insurance management services through MCIM and Nephila. See note 16 for details regarding operations conducted through MCIM. Nephila serves as the investment manager to several Bermuda, Ireland and U.S. based private funds (the Nephila Funds). To provide access for the Nephila Funds to the insurance, reinsurance and weather markets, Nephila also provides managing general agent services and acts as an insurance manager to certain Bermuda Class 3 and 3A reinsurance companies and Lloyd’s Syndicate 2357 (Syndicate 2357) (collectively, the Nephila Reinsurers). The Company receives management fees for investment and insurance management services provided through its insurance-linked securities operations based on the net asset value of the accounts managed, and, for certain funds, incentive fees based on the annual performance of the funds managed. Nephila also receives commissions from the Nephila Reinsurers, which are based on the direct written premiums of the insurance contracts placed. Total revenues from the Company's insurance-linked securities operations for the years ended December 31, 2019, 2018 and 2017 were $225.6 million, $91.5 million and $28.7 million, respectively, of which $200.8 million, $90.6 million and $28.7 million, respectively, were attributed to unconsolidated entities managed by Nephila and MCIM. Other related party transactions with the Company's insurance-linked securities operations are described below. Nephila Within the Company’s program services business, the Company has a program with Nephila through which the Company writes insurance policies that are ceded to Syndicate 2357 and certain other Nephila Reinsurers. Through this arrangement, Nephila utilizes certain of the Company’s licensed insurance companies to write U.S. catastrophe exposed property risk that is then ceded to Nephila Reinsurers. For the years ended December 31, 2019 and 2018, gross premiums written through the Company’s program with Nephila were $425.0 million and $322.1 million, respectively, all of which were ceded to Nephila Reinsurers. As of December 31, 2019 and 2018, reinsurance recoverables on the consolidated balance sheets included $238.8 million and $179.8 million, respectively, due from Nephila Reinsurers. Under this program, the Company bears underwriting risk for annual aggregate agreement year losses in excess of a limit the Company believes is unlikely to be exceeded. To the extent losses under this program exceed the prescribed limit, the Company is obligated to pay such losses to the cedents without recourse to Nephila Reinsurers. While the Company believes losses under this program are unlikely, those losses, if incurred, could be material to the Company’s consolidated results of operations and financial condition. The Company has also entered into both assumed and ceded reinsurance transactions with the Nephila Reinsurers in the normal course of business, which are not material to the Company's consolidated financial statements. Markel CATCo During the first quarter of 2019, the Company entered into various reinsurance contracts with third parties that were ceded to Markel CATCo Re, an unconsolidated subsidiary, in exchange for ceding fees. These reinsurance contracts primarily cover losses for events that occurred during 2019, however, in some instances, coverage is also provided for adverse development on 2018 and prior accident years’ loss events. Incurred losses on these contracts are fully ceded to Markel CATCo Re. The loss exposures on these contracts are fully collateralized by Markel CATCo Re up to an amount that the Company believes is unlikely to be exceeded. For the year ended December 31, 2019, the Company earned $8.8 million of ceding fees attributed to these contracts, which was included in services and other revenues in the Company's consolidated statement of income and other comprehensive income. As of December 31, 2019, the Company's estimate of ultimate incurred losses and loss adjustment expenses on these reinsurance contracts totaled $4.9 million, all of which was ceded to Markel CATCo Re. The corresponding reinsurance recoverables due from Markel CATCo Re are fully collateralized. Results attributed to these contracts are not included in a reportable segment. Within the Company's underwriting operations, the Company also enters into reinsurance contracts that are ceded to Markel CATCo Re. Under this program, the Company retains underwriting risk for annual aggregate agreement year losses in excess of a limit the Company believes is unlikely to be exceeded. To the extent losses under this program exceed the prescribed limit, the Company is obligated to pay such losses to the cedents without recourse to Markel CATCo Re. For the years ended December 31, 2019, 2018 and 2017, gross premiums written and ceded to Markel CATCo Re were $5.5 million, $10.9 million and $9.7 million, respectively.
|