Bermuda | 001-31721 | 98-0395986 | ||
(State of Incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e(4)(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits |
99.1 | Press release dated October 25, 2017 |
99.2 | Third quarter 2017 Investor Financial Supplement |
AXIS CAPITAL HOLDINGS LIMITED | |||
By: | /s/ Conrad D. Brooks | ||
Conrad D. Brooks | |||
General Counsel |
Investor Contact | Media Contact |
Linda Ventresca | Joe Cohen |
AXIS Capital Holdings Limited | AXIS Capital Holdings Limited |
investorrelations@axiscapital.com | joseph.cohen@axiscapital.com |
(441) 405-2727 | (212) 715-3524 |
• | Net loss attributable to common shareholders of $468 million, or $(5.61) per diluted common share |
• | Non-GAAP operating loss1 of $446 million, or $(5.35) per diluted common share1 |
• | Diluted book value per common share of $55.33 |
• | Estimated catastrophe pre-tax net losses, net of reinstatement premiums, of $617 million, as pre-announced |
• | Gross premiums written increased by $226 million, or 24%, to $1.2 billion, with an increase of $157 million, or 55% (56% on a constant currency basis3), in our reinsurance segment and an increase of $69 million, or 10%, in our insurance segment; |
• | Net premiums written increased 40% to $833 million; |
• | Net premiums earned increased by 9% (10% on a constant currency basis) to $1 billion; |
• | Combined ratio of 152.9%, compared to 92.6%; |
• | Current accident year loss ratio of 126.2%, compared to 65.1%; |
• | Estimated catastrophe and weather-related pre-tax net losses, net of reinstatement premiums, of $617 million, or 61.4 points, on the current accident year loss ratio compared to $22 million, or 2.3 points; |
• | Favorable prior year net reserve development of $48 million (benefiting the combined ratio by 4.7 points), compared to $76 million (benefiting the combined ratio by 8.1 points); |
• | Net investment income decreased to $95 million, compared to $117 million; |
• | Pre-tax total return on cash and investments4 of 1.1%, including foreign exchange movements, or 0.9%, excluding foreign exchange movements5. The comparable prior period pre-tax total return was 1.1% including and excluding foreign exchange movements; |
• | Fee income from strategic capital partners6 of $6 million, compared to $8 million; |
• | Net loss attributable to common shareholders of $468 million, compared to net income of $177 million; |
• | Non-GAAP operating loss of $446 million, compared to non-GAAP operating income of $161 million; |
• | Net cash flows from operations of $163 million, compared to $203 million; |
• | Diluted book value per common share of $55.33, a decrease of 8% compared to the prior quarter, and a 7% decrease over the last 12 months; |
• | Dividends declared of $0.38 per common share, with the total common dividends declared of $1.52 per share over the past twelve months; |
• | Adjusted for dividends, diluted book value per common share decreased by $4.74, or 8%, for the quarter and $2.92, or 5%, over the past twelve months; and |
• | Total common shares repurchased during the quarter of $3 million. Following the offer to acquire Novae Group plc ("Novae") on July 5, 2017, the Company suspended its open market share repurchase program. |
2017 | 2016 | |||||||||
(in thousands) | ||||||||||
Assets | ||||||||||
Investments: | ||||||||||
Fixed maturities, available for sale, at fair value | $ | 11,086,386 | $ | 11,397,114 | ||||||
Equity securities, available for sale, at fair value | 659,751 | 638,744 | ||||||||
Mortgage loans, held for investment, at amortized cost and fair value | 360,381 | 349,969 | ||||||||
Other investments, at fair value | 830,253 | 830,219 | ||||||||
Equity method investments | 108,597 | 116,000 | ||||||||
Short-term investments, at amortized cost and fair value | 15,282 | 127,461 | ||||||||
Total investments | 13,060,650 | 13,459,507 | ||||||||
Cash and cash equivalents | 1,350,613 | 1,039,494 | ||||||||
Restricted cash and cash equivalents | 280,514 | 202,013 | ||||||||
Accrued interest receivable | 68,023 | 74,971 | ||||||||
Insurance and reinsurance premium balances receivable | 2,968,096 | 2,313,512 | ||||||||
Reinsurance recoverable on unpaid and paid losses | 2,360,821 | 2,334,922 | ||||||||
Deferred acquisition costs | 562,774 | 438,636 | ||||||||
Prepaid reinsurance premiums | 734,129 | 556,344 | ||||||||
Receivable for investments sold | 9,357 | 14,123 | ||||||||
Goodwill and intangible assets | 87,206 | 85,049 | ||||||||
Other assets | 335,967 | 295,120 | ||||||||
Total assets | $ | 21,818,150 | $ | 20,813,691 | ||||||
Liabilities | ||||||||||
Reserve for losses and loss expenses | $ | 10,787,575 | $ | 9,697,827 | ||||||
Unearned premiums | 3,521,063 | 2,969,498 | ||||||||
Insurance and reinsurance balances payable | 670,292 | 493,183 | ||||||||
Senior notes | 993,797 | 992,950 | ||||||||
Payable for investments purchased | 122,065 | 62,550 | ||||||||
Other liabilities | 268,659 | 325,313 | ||||||||
Total liabilities | 16,363,451 | 14,541,321 | ||||||||
Shareholders' equity | ||||||||||
Preferred shares | 775,000 | 1,126,074 | ||||||||
Common shares | 2,206 | 2,206 | ||||||||
Additional paid-in capital | 2,291,516 | 2,299,857 | ||||||||
Accumulated other comprehensive income (loss) | 141,613 | (121,841 | ) | |||||||
Retained earnings | 6,051,659 | 6,527,627 | ||||||||
Treasury shares, at cost | (3,807,295 | ) | (3,561,553 | ) | ||||||
Total shareholders' equity | 5,454,699 | 6,272,370 | ||||||||
Total liabilities and shareholders' equity | $ | 21,818,150 | $ | 20,813,691 |
Three months ended | Nine months ended | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||
Revenues | |||||||||||||||||
Net premiums earned | $ | 1,017,131 | $ | 934,415 | $ | 2,937,265 | $ | 2,783,746 | |||||||||
Net investment income | 95,169 | 116,923 | 299,899 | 257,818 | |||||||||||||
Net realized investment gains (losses) | 14,632 | 5,205 | (14,811 | ) | (40,295 | ) | |||||||||||
Other insurance related income (losses) | (3,197 | ) | 5,944 | (4,420 | ) | 4,850 | |||||||||||
Bargain purchase gain | — | — | 15,044 | — | |||||||||||||
Total revenues | 1,123,735 | 1,062,487 | 3,232,977 | 3,006,119 | |||||||||||||
Expenses | |||||||||||||||||
Net losses and loss expenses | 1,235,367 | 532,328 | 2,447,640 | 1,663,584 | |||||||||||||
Acquisition costs | 194,724 | 189,810 | 588,879 | 559,570 | |||||||||||||
General and administrative expenses | 124,629 | 142,906 | 433,704 | 439,554 | |||||||||||||
Foreign exchange losses (gains) | 32,510 | (13,795 | ) | 90,093 | (69,781 | ) | |||||||||||
Interest expense and financing costs | 12,835 | 12,839 | 38,377 | 38,586 | |||||||||||||
Transaction related expenses | 5,970 | — | 5,970 | — | |||||||||||||
Total expenses | 1,606,035 | 864,088 | 3,604,663 | 2,631,513 | |||||||||||||
Income (loss) before income taxes and interest in income (loss) of equity method investments | (482,300 | ) | 198,399 | (371,686 | ) | 374,606 | |||||||||||
Income tax (expense) benefit | 25,877 | 9,352 | 38,547 | 7,712 | |||||||||||||
Interest in loss of equity method investments | (661 | ) | (2,434 | ) | (8,402 | ) | (2,434 | ) | |||||||||
Net income (loss) | (457,084 | ) | 186,613 | (341,541 | ) | 364,460 | |||||||||||
Preferred shares dividends | 10,656 | 9,969 | 36,154 | 29,906 | |||||||||||||
Net income (loss) available to common shareholders | $ | (467,740 | ) | $ | 176,644 | $ | (377,695 | ) | $ | 334,554 | |||||||
Per share data | |||||||||||||||||
Net income (loss) per common share: | |||||||||||||||||
Basic net income (loss) | $ | (5.61 | ) | $ | 1.97 | $ | (4.47 | ) | $ | 3.64 | |||||||
Diluted net income (loss) | $ | (5.61 | ) | $ | 1.96 | $ | (4.47 | ) | $ | 3.61 | |||||||
Weighted average number of common shares outstanding - basic | 83,305 | 89,621 | 84,479 | 91,852 | |||||||||||||
Weighted average number of common shares outstanding - diluted | 83,305 | 90,351 | 84,479 | 92,579 | |||||||||||||
Cash dividends declared per common share | $ | 0.38 | $ | 0.35 | $ | 1.14 | $ | 1.05 |
2017 | 2016 | ||||||||||||||||||||||
Insurance | Reinsurance | Total | Insurance | Reinsurance | Total | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Gross premiums written | $ | 744,366 | $ | 441,208 | $ | 1,185,574 | $ | 675,430 | $ | 284,532 | $ | 959,962 | |||||||||||
Net premiums written | 500,022 | 332,721 | 832,743 | 433,131 | 162,300 | 595,431 | |||||||||||||||||
Net premiums earned | 496,004 | 521,127 | 1,017,131 | 444,691 | 489,724 | 934,415 | |||||||||||||||||
Other insurance related income (losses) | 526 | (3,723 | ) | (3,197 | ) | 39 | 5,905 | 5,944 | |||||||||||||||
Net losses and loss expenses | (628,865 | ) | (606,502 | ) | (1,235,367 | ) | (273,226 | ) | (259,102 | ) | (532,328 | ) | |||||||||||
Acquisition costs | (74,231 | ) | (120,493 | ) | (194,724 | ) | (61,755 | ) | (128,055 | ) | (189,810 | ) | |||||||||||
Underwriting-related general and | |||||||||||||||||||||||
administrative expenses(8) | (75,038 | ) | (21,658 | ) | (96,696 | ) | (84,588 | ) | (29,635 | ) | (114,223 | ) | |||||||||||
Underwriting income (loss)(9) | $ | (281,604 | ) | $ | (231,249 | ) | $ | (512,853 | ) | $ | 25,161 | $ | 78,837 | 103,998 | |||||||||
Corporate expenses(8) | (27,933 | ) | (28,683 | ) | |||||||||||||||||||
Net investment income | 95,169 | 116,923 | |||||||||||||||||||||
Net realized investment gains | 14,632 | 5,205 | |||||||||||||||||||||
Foreign exchange (losses) gains | (32,510 | ) | 13,795 | ||||||||||||||||||||
Interest expense and financing costs | (12,835 | ) | (12,839 | ) | |||||||||||||||||||
Transaction related expenses | (5,970 | ) | — | ||||||||||||||||||||
Income (loss) before income taxes and interest in income (loss) of equity method investments | $ | (482,300 | ) | $ | 198,399 | ||||||||||||||||||
Net loss and loss expense ratio | 126.8 | % | 116.4 | % | 121.5 | % | 61.4 | % | 52.9 | % | 57.0 | % | |||||||||||
Acquisition cost ratio | 15.0 | % | 23.1 | % | 19.1 | % | 13.9 | % | 26.1 | % | 20.3 | % | |||||||||||
General and administrative | |||||||||||||||||||||||
expense ratio | 15.1 | % | 4.2 | % | 12.3 | % | 19.1 | % | 6.1 | % | 15.3 | % | |||||||||||
Combined ratio | 156.9 | % | 143.7 | % | 152.9 | % | 94.4 | % | 85.1 | % | 92.6 | % | |||||||||||
Gross Premiums Written | Net Premiums Earned | ||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||
GAAP | $ | 1,185,574 | $ | 959,962 | 23.5 | % | $ | 1,017,131 | $ | 934,415 | 8.9 | % | |||||
Constant Currency3 | $ | 1,188,100 | $ | 959,962 | 23.8 | % | $ | 1,027,050 | $ | 934,415 | 9.9 | % |
2017 | 2016 | ||||||||||||||||||||||
Insurance | Reinsurance | Total | Insurance | Reinsurance | Total | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Gross premiums written | $ | 2,234,395 | $ | 2,225,377 | $ | 4,459,772 | $ | 2,112,796 | $ | 2,126,762 | $ | 4,239,558 | |||||||||||
Net premiums written | 1,533,029 | 1,764,689 | 3,297,718 | 1,433,058 | 1,855,529 | 3,288,587 | |||||||||||||||||
Net premiums earned | 1,448,270 | 1,488,995 | 2,937,265 | 1,322,649 | 1,461,097 | 2,783,746 | |||||||||||||||||
Other insurance related income (losses) | 1,077 | (5,497 | ) | (4,420 | ) | (57 | ) | 4,907 | 4,850 | ||||||||||||||
Net losses and loss expenses | (1,241,495 | ) | (1,206,145 | ) | (2,447,640 | ) | (853,771 | ) | (809,813 | ) | (1,663,584 | ) | |||||||||||
Acquisition costs | (223,665 | ) | (365,214 | ) | (588,879 | ) | (184,982 | ) | (374,588 | ) | (559,570 | ) | |||||||||||
Underwriting-related general and | |||||||||||||||||||||||
administrative expenses(8) | (253,308 | ) | (82,474 | ) | (335,782 | ) | (252,652 | ) | (99,980 | ) | (352,632 | ) | |||||||||||
Underwriting income (loss)(9) | $ | (269,121 | ) | $ | (170,335 | ) | $ | (439,456 | ) | $ | 31,187 | $ | 181,623 | 212,810 | |||||||||
Corporate expenses(8) | (97,922 | ) | (86,922 | ) | |||||||||||||||||||
Net investment income | 299,899 | 257,818 | |||||||||||||||||||||
Net realized investment losses | (14,811 | ) | (40,295 | ) | |||||||||||||||||||
Foreign exchange (losses) gains | (90,093 | ) | 69,781 | ||||||||||||||||||||
Interest expense and financing costs | (38,377 | ) | (38,586 | ) | |||||||||||||||||||
Bargain purchase gain | 15,044 | — | |||||||||||||||||||||
Transaction related expenses | (5,970 | ) | — | ||||||||||||||||||||
Income (loss) before income taxes and interest in income (loss) of equity method investments | $ | (371,686 | ) | $ | 374,606 | ||||||||||||||||||
Net loss and loss expense ratio | 85.7 | % | 81.0 | % | 83.3 | % | 64.6 | % | 55.4 | % | 59.8 | % | |||||||||||
Acquisition cost ratio | 15.4 | % | 24.5 | % | 20.0 | % | 14.0 | % | 25.6 | % | 20.1 | % | |||||||||||
General and administrative | |||||||||||||||||||||||
expense ratio | 17.6 | % | 5.6 | % | 14.8 | % | 19.0 | % | 6.9 | % | 15.8 | % | |||||||||||
Combined ratio | 118.7 | % | 111.1 | % | 118.1 | % | 97.6 | % | 87.9 | % | 95.7 | % |
Gross Premiums Written | Net Premiums Earned | ||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||
GAAP | $ | 4,459,772 | $ | 4,239,558 | 5.2 | % | $ | 2,937,265 | $ | 2,783,746 | 5.5 | % | |||||
Constant Currency3 | $ | 4,522,500 | $ | 4,239,558 | 6.7 | % | $ | 2,999,050 | $ | 2,783,746 | 7.7 | % |
Three months ended | Nine months ended | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Net income (loss) available to common shareholders | $ | (467,740 | ) | $ | 176,644 | $ | (377,695 | ) | $ | 334,554 | |||||
Net realized investment (gains) losses, net of tax(10) | (11,975 | ) | (2,726 | ) | 16,703 | 42,667 | |||||||||
Foreign exchange losses (gains), net of tax(11) | 28,071 | (13,229 | ) | 85,851 | (67,771 | ) | |||||||||
Bargain purchase gain(12) | — | — | (15,044 | ) | — | ||||||||||
Transaction related expenses, net of tax(13) | 5,749 | — | 5,749 | — | |||||||||||
Non-GAAP operating income (loss) | $ | (445,895 | ) | $ | 160,689 | $ | (284,436 | ) | $ | 309,450 | |||||
Earnings (loss) per common share - diluted | $ | (5.61 | ) | $ | 1.96 | $ | (4.47 | ) | $ | 3.61 | |||||
Net realized investment (gains) losses, net of tax | (0.15 | ) | (0.03 | ) | 0.20 | 0.46 | |||||||||
Foreign exchange losses (gains), net of tax | 0.34 | (0.15 | ) | 1.01 | (0.73 | ) | |||||||||
Bargain purchase gain | — | — | (0.18 | ) | — | ||||||||||
Transaction related expenses, net of tax | 0.07 | — | 0.07 | — | |||||||||||
Non-GAAP operating income (loss) per common share - diluted | $ | (5.35 | ) | $ | 1.78 | $ | (3.37 | ) | $ | 3.34 | |||||
Weighted average common shares and common share equivalents - diluted | 83,305 | 90,351 | 84,479 | 92,579 | |||||||||||
Average common shareholders' equity | 4,898,698 | 5,369,921 | 4,912,998 | 5,319,849 | |||||||||||
Annualized return on average common equity | nm | 13.2 | % | (10.3 | )% | 8.4 | % | ||||||||
Annualized non-GAAP operating return on average common equity(14) | nm | 12.0 | % | (7.7 | )% | 7.8 | % | ||||||||
AXIS Capital Holdings Limited | |||||
92 Pitts Bay Road | |||||
Pembroke HM 08 Bermuda | |||||
Contact Information: | |||||
Linda Ventresca | |||||
Investor Relations | |||||
441 405 2727 | |||||
investorrelations@axiscapital.com | |||||
Website Information: | |||||
www.axiscapital.com | |||||
This report is for informational purposes only. It should be read in conjunction with the documents that we file with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934. | |||||
Page(s) | ||
II. Income Statements | ||
III. Balance Sheets | ||
b. Cash and Invested Assets: | ||
IV. Losses Reserve Analysis | ||
V. Share Analysis | ||
VI. Non-GAAP Financial Measures | ||
Unless otherwise noted, all data is in thousands, except for per share amounts and ratio information. |
• | All financial information contained herein is unaudited, except for the consolidated balance sheets at December 31, 2016 and December 31, 2015 and consolidated statements of income for the years then ended. |
• | Amounts may not reconcile exactly due to rounding differences. |
• | NM - Not meaningful; NA - Not applicable |
• | the cyclical nature of the re(insurance) business leading to periods with excess underwriting capacity and unfavorable premium rates, |
• | the occurrence and magnitude of natural and man-made disasters, |
• | losses from war, terrorism and political unrest or other unanticipated losses, |
• | actual claims exceeding our loss reserves, |
• | general economic, capital and credit market conditions, |
• | the failure of any of the loss limitation methods we employ, |
• | the effects of emerging claims, coverage and regulatory issues, including uncertainty related to coverage definitions, limits, terms and conditions, |
• | our inability to purchase reinsurance or collect amounts due to us, |
• | the breach by third parties in our program business of their obligations to us, |
• | difficulties with technology and/or data security, |
• | the failure of our policyholders and intermediaries to pay premiums, |
• | the failure of our cedants to adequately evaluate risks, |
• | inability to obtain additional capital on favorable terms, or at all, |
• | the loss of one or more key executives, |
• | a decline in our ratings with rating agencies, |
• | loss of business provided to us by our major brokers and credit risk due to our reliance on brokers, |
• | changes in accounting policies or practices, |
• | the use of industry catastrophe models and changes to these models, |
• | changes in governmental regulations and potential government intervention in our industry, |
• | failure to comply with certain laws and regulations relating to sanctions and foreign corrupt practices, |
• | increased competition, |
• | changes in the political environment of certain countries in which we operate or underwrite business including the United Kingdom's expected withdrawal from the European Union, |
• | fluctuations in interest rates, credit spreads, equity securities' prices and/or currency values, |
• | the failure to successfully integrate acquired businesses or realize the expected synergies resulting from such acquisitions, and |
• | the other factors set forth in our most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC"), as such factors may be updated from time to time in our periodic and other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. |
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | |||||||||||||||||||||
HIGHLIGHTS | Gross premiums written | $ | 1,185,574 | $ | 959,962 | 23.5 | % | $ | 4,459,772 | $ | 4,239,558 | 5.2 | % | |||||||||||||
Gross premiums written - Insurance | 62.8 | % | 70.4 | % | (7.6 | ) | pts | 50.1 | % | 49.8 | % | 0.3 | pts | |||||||||||||
Gross premiums written - Reinsurance | 37.2 | % | 29.6 | % | 7.6 | pts | 49.9 | % | 50.2 | % | (0.3 | ) | pts | |||||||||||||
Net premiums written | $ | 832,743 | $ | 595,431 | 39.9 | % | $ | 3,297,718 | $ | 3,288,587 | 0.3 | % | ||||||||||||||
Net premiums earned | $ | 1,017,131 | $ | 934,415 | 8.9 | % | $ | 2,937,265 | $ | 2,783,746 | 5.5 | % | ||||||||||||||
Net premiums earned - Insurance | 48.8 | % | 47.6 | % | 1.2 | pts | 49.3 | % | 47.5 | % | 1.8 | pts | ||||||||||||||
Net premiums earned - Reinsurance | 51.2 | % | 52.4 | % | (1.2 | ) | pts | 50.7 | % | 52.5 | % | (1.8 | ) | pts | ||||||||||||
Net income (loss) available to common shareholders | $ | (467,740 | ) | $ | 176,644 | nm | $ | (377,695 | ) | $ | 334,554 | nm | ||||||||||||||
Non-GAAP Operating income (loss) [a] | (445,895 | ) | 160,689 | nm | (284,436 | ) | 309,450 | nm | ||||||||||||||||||
Reserve for losses and loss expenses | 10,787,575 | 9,874,807 | 9.2 | % | 10,787,575 | 9,874,807 | 9.2 | % | ||||||||||||||||||
Total shareholders’ equity | $ | 5,454,699 | $ | 6,025,658 | (9.5 | %) | $ | 5,454,699 | $ | 6,025,658 | (9.5 | %) | ||||||||||||||
PER COMMON SHARE AND COMMON SHARE DATA | Basic earnings (loss) per common share | ($5.61 | ) | $1.97 | nm | ($4.47 | ) | $3.64 | nm | |||||||||||||||||
Diluted earnings (loss) per common share | (5.61 | ) | 1.96 | nm | (4.47 | ) | 3.61 | nm | ||||||||||||||||||
Non-GAAP operating income (loss) per common share - diluted [b] | ($5.35 | ) | $1.78 | nm | ($3.37 | ) | $3.34 | nm | ||||||||||||||||||
Weighted average common shares outstanding | 83,305 | 89,621 | (7.0 | %) | 84,479 | 91,852 | (8.0 | %) | ||||||||||||||||||
Diluted weighted average common shares outstanding | 83,305 | 90,351 | (7.8 | %) | 84,479 | 92,579 | (8.7 | %) | ||||||||||||||||||
Book value per common share | $56.28 | $61.07 | (7.8 | %) | $56.28 | $61.07 | (7.8 | %) | ||||||||||||||||||
Diluted book value per common share (treasury stock method) | 55.33 | 59.77 | (7.4 | %) | 55.33 | 59.77 | (7.4 | %) | ||||||||||||||||||
Diluted tangible book value per common share (treasury stock method) [a] | 54.30 | 58.82 | (7.7 | %) | 54.30 | 58.82 | (7.7 | %) | ||||||||||||||||||
Accumulated dividends declared per common share | $12.77 | $11.25 | 13.5 | % | $12.77 | $11.25 | 13.5 | % | ||||||||||||||||||
FINANCIAL RATIOS | ROACE [c] | nm | 13.2 | % | nm | pts | (10.3 | %) | 8.4 | % | (18.7 | ) | pts | |||||||||||||
Non-GAAP operating ROACE [d] | nm | 12.0 | % | nm | pts | (7.7 | %) | 7.8 | % | (15.5 | ) | pts | ||||||||||||||
Net loss and loss expense ratio | 121.5 | % | 57.0 | % | 64.5 | pts | 83.3 | % | 59.8 | % | 23.5 | pts | ||||||||||||||
Acquisition cost ratio | 19.1 | % | 20.3 | % | (1.2 | ) | pts | 20.0 | % | 20.1 | % | (0.1 | ) | pts | ||||||||||||
General and administrative expense ratio | 12.3 | % | 15.3 | % | (3.0 | ) | pts | 14.8 | % | 15.8 | % | (1.0 | ) | pts | ||||||||||||
Combined ratio | 152.9 | % | 92.6 | % | 60.3 | pts | 118.1 | % | 95.7 | % | 22.4 | pts | ||||||||||||||
INVESTMENT DATA | Total assets | $ | 21,818,150 | $ | 21,222,391 | 2.8 | % | $ | 21,818,150 | $ | 21,222,391 | 2.8 | % | |||||||||||||
Total cash and invested assets [e] | 14,647,092 | 14,551,790 | 0.7 | % | 14,647,092 | 14,551,790 | 0.7 | % | ||||||||||||||||||
Net investment income | 95,169 | 116,923 | (18.6 | %) | 299,899 | 257,818 | 16.3 | % | ||||||||||||||||||
Net realized investment gains (losses) | $ | 14,632 | $ | 5,205 | 181.1 | % | $ | (14,811 | ) | $ | (40,295 | ) | (63.2 | %) | ||||||||||||
Total return on cash and investments (inclusive of investment related foreign exchange movements) [f] | 1.1 | % | 1.1 | % | — | pts | 3.4 | % | 3.6 | % | (0.2 | ) | pts | |||||||||||||
Total return on cash and investments (exclusive of investment related foreign exchange movements) [f] [h] | 0.9 | % | 1.1 | % | (0.2 | ) | pts | 3.0 | % | 3.9 | % | (0.9 | ) | pts | ||||||||||||
Return on other investments [g] | 2.1 | % | 4.5 | % | (2.4 | ) | pts | 7.5 | % | 3.1 | % | 4.4 | pts | |||||||||||||
Book yield of fixed maturities | 2.6 | % | 2.6 | % | — | pts | 2.6 | % | 2.6 | % | — | pts | ||||||||||||||
[a] | Non-GAAP Operating income (loss) and diluted tangible book value per common share are “non-GAAP financial measures” as defined by Regulation G. See page 28 for reconciliation of non-GAAP operating income to net income (loss) available to common shareholders and page 29 for diluted tangible book value per common share to diluted book value per common share. |
[b] | Non-GAAP Operating income (loss) per common share - diluted, is calculated by dividing non-GAAP operating income (loss) for the period by diluted weighted average common shares and share equivalents. |
[c] | Return on average common equity (“ROACE”) is calculated by dividing net income (loss) available to common shareholders for the period by the average common shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the period. Net income (loss) for the quarter-periods is annualized. |
[d] | Non-GAAP Operating ROACE, also a “non-GAAP financial measure”, is calculated by dividing non-GAAP operating income (loss) for the period by the average common shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the period. Non-GAAP Operating income (loss) for the quarter-periods is annualized. |
[e] | Total cash and invested assets represents the total cash, available for sale investments, mortgage loans, other investments, equity method investments, short-term investments, accrued interest receivable and net receivable (payable) for investments sold (purchased). |
[f] | In calculating total return, we include net investment income, net realized investment gains (losses), interest in income (loss) of equity method investments and the change in unrealized gains (losses) generated by our average cash and investment balances. |
[g] | Return on other investments is calculated by dividing other investment income by the average month-end other investment balances for the period. |
[h] | Pre-tax total return on cash and investments excluding foreign exchange movements is a "non-GAAP financial measure" as defined in SEC Regulation G. The reconciliation to pre-tax total return on cash and investments, the most comparable GAAP financial measure, also included foreign exchange gains (losses) of $22m and $(8)m for the three months ended September 30, 2017 and 2016, respectively, and foreign exchange gains (losses) of $62m and $(39)m for the nine months ended September 30, 2017 and 2016, respectively. |
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | ||||||||||||||||||
UNDERWRITING REVENUES | |||||||||||||||||||||||
Gross premiums written | $ | 1,185,574 | $ | 1,362,327 | $ | 1,911,871 | $ | 730,650 | $ | 959,962 | $ | 936,583 | |||||||||||
Premiums ceded | (352,831 | ) | (406,310 | ) | (402,912 | ) | (266,263 | ) | (364,531 | ) | (259,366 | ) | |||||||||||
Net premiums written | 832,743 | 956,017 | 1,508,959 | 464,387 | 595,431 | 677,217 | |||||||||||||||||
Gross premiums earned | 1,370,035 | 1,300,648 | 1,245,669 | 1,213,623 | 1,214,826 | 1,148,356 | |||||||||||||||||
Ceded premiums expensed | (352,904 | ) | (319,217 | ) | (306,966 | ) | (291,744 | ) | (280,411 | ) | (229,015 | ) | |||||||||||
Net premiums earned | 1,017,131 | 981,431 | 938,703 | 921,879 | 934,415 | 919,341 | |||||||||||||||||
Other insurance related income (loss) | (3,197 | ) | 2,560 | (3,783 | ) | 2,372 | 5,944 | 1,158 | |||||||||||||||
Total underwriting revenues | 1,013,934 | 983,991 | 934,920 | 924,251 | 940,359 | 920,499 | |||||||||||||||||
UNDERWRITING EXPENSES | |||||||||||||||||||||||
Net losses and loss expenses | 1,235,367 | 605,332 | 606,942 | 540,612 | 532,328 | 560,387 | |||||||||||||||||
Acquisition costs | 194,724 | 204,361 | 189,792 | 187,305 | 189,810 | 182,744 | |||||||||||||||||
Underwriting-related general and administrative expenses [a] | 96,696 | 117,286 | 121,801 | 130,069 | 114,223 | 121,123 | |||||||||||||||||
Total underwriting expenses | 1,526,787 | 926,979 | 918,535 | 857,986 | 836,361 | 864,254 | |||||||||||||||||
UNDERWRITING INCOME (LOSS) [b] | (512,853 | ) | 57,012 | 16,385 | 66,265 | 103,998 | 56,245 | ||||||||||||||||
OTHER OPERATING REVENUE (EXPENSES) | |||||||||||||||||||||||
Net investment income | 95,169 | 106,063 | 98,664 | 95,517 | 116,923 | 45,685 | |||||||||||||||||
Net realized investment gains (losses) | 14,632 | (4,392 | ) | (25,050 | ) | (20,229 | ) | 5,205 | (69,957 | ) | |||||||||||||
Interest expense and financing costs | (12,835 | ) | (12,751 | ) | (12,791 | ) | (12,774 | ) | (12,839 | ) | (12,918 | ) | |||||||||||
Total other operating revenues (expenses) | 96,966 | 88,920 | 60,823 | 62,514 | 109,289 | (37,190 | ) | ||||||||||||||||
OTHER (EXPENSES) REVENUE | |||||||||||||||||||||||
Foreign exchange (losses) gains | (32,510 | ) | (36,118 | ) | (21,465 | ) | 51,514 | 13,795 | 28,088 | ||||||||||||||
Termination fee received | — | — | — | — | — | 280,000 | |||||||||||||||||
Corporate expenses [a] | (27,933 | ) | (30,530 | ) | (39,459 | ) | (33,095 | ) | (28,683 | ) | (23,604 | ) | |||||||||||
Transaction related expenses | (5,970 | ) | — | — | — | — | — | ||||||||||||||||
Reorganization and related expenses | — | — | — | — | — | (45,867 | ) | ||||||||||||||||
Bargain purchase gain | — | 15,044 | — | — | — | — | |||||||||||||||||
Total other (expenses) revenues | (66,413 | ) | (51,604 | ) | (60,924 | ) | 18,419 | (14,888 | ) | 238,617 | |||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND INTEREST IN INCOME (LOSS) OF EQUITY METHOD INVESTMENTS | (482,300 | ) | 94,328 | 16,284 | 147,198 | 198,399 | 257,672 | ||||||||||||||||
Income tax (expense) benefit | 25,877 | 3,333 | 9,337 | 1,373 | (9,352 | ) | (30 | ) | |||||||||||||||
Interest in income (loss) of equity method investments | (661 | ) | (1,975 | ) | (5,766 | ) | 340 | (2,434 | ) | — | |||||||||||||
NET INCOME (LOSS) | (457,084 | ) | 95,686 | 19,855 | 148,911 | 186,613 | 257,642 | ||||||||||||||||
Preferred share dividends | (10,656 | ) | (10,656 | ) | (14,841 | ) | (16,690 | ) | (9,969 | ) | (10,022 | ) | |||||||||||
Loss on repurchase of preferred shares | — | — | — | (1,309 | ) | — | — | ||||||||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (467,740 | ) | $ | 85,030 | $ | 5,014 | $ | 130,912 | $ | 176,644 | $ | 247,620 | ||||||||||
KEY RATIOS/PER SHARE DATA | |||||||||||||||||||||||
Net loss and loss expense ratio | 121.5 | % | 61.7 | % | 64.7 | % | 58.6 | % | 57.0 | % | 61.0 | % | |||||||||||
Acquisition cost ratio | 19.1 | % | 20.8 | % | 20.2 | % | 20.3 | % | 20.3 | % | 19.9 | % | |||||||||||
General and administrative expense ratio [a] | 12.3 | % | 15.1 | % | 17.2 | % | 17.8 | % | 15.3 | % | 15.7 | % | |||||||||||
Combined ratio | 152.9 | % | 97.6 | % | 102.1 | % | 96.7 | % | 92.6 | % | 96.6 | % | |||||||||||
Weighted average basic shares outstanding | 83,305 | 84,141 | 86,022 | 87,552 | 89,621 | 98,226 | |||||||||||||||||
Weighted average diluted shares outstanding | 83,305 | 84,511 | 86,793 | 88,474 | 90,351 | 99,124 | |||||||||||||||||
Basic earnings (loss) per common share | ($5.61 | ) | $1.01 | $0.06 | $1.50 | $1.97 | $2.52 | ||||||||||||||||
Diluted earnings (loss) per common share | ($5.61 | ) | $1.01 | $0.06 | $1.48 | $1.96 | $2.50 | ||||||||||||||||
ROACE (annualized) | nm | 6.7 | % | 0.4 | % | 9.9 | % | 13.2 | % | 18.8 | % | ||||||||||||
Non-GAAP operating ROACE (annualized) | nm | 8.6 | % | 4.0 | % | 7.6 | % | 12.0 | % | 3.9 | % |
[a] | Underwriting-related general and administrative expenses is a "non-GAAP financial measure" as defined in SEC Regulation G. Our total general and administrative expenses also include corporate expenses. Both underwriting-related general and administrative expenses and corporate expenses are included in the general and administrative expense ratio. |
[b] | Group (or consolidated) underwriting income is also a "non-GAAP financial measure". Reconciliations of consolidated underwriting income to the nearest GAAP financial measure (income (loss) before income taxes and interest in income (loss) of equity method investments) are presented above and on the following page. |
Nine months ended September 30, | Year ended December 31, | ||||||||||||||||||
2017 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
UNDERWRITING REVENUES | |||||||||||||||||||
Gross premiums written | $ | 4,459,772 | $ | 4,239,558 | $ | 3,803,928 | $ | 4,970,208 | $ | 4,603,730 | |||||||||
Premiums ceded | (1,162,054 | ) | (950,971 | ) | (724,621 | ) | (1,217,234 | ) | (929,064 | ) | |||||||||
Net premiums written | 3,297,718 | 3,288,587 | 3,079,307 | 3,752,974 | 3,674,666 | ||||||||||||||
Gross premiums earned | 3,916,352 | 3,548,771 | 3,421,422 | 4,762,394 | 4,567,953 | ||||||||||||||
Ceded premiums expensed | (979,087 | ) | (765,025 | ) | (656,817 | ) | (1,056,769 | ) | (881,536 | ) | |||||||||
Net premiums earned | 2,937,265 | 2,783,746 | 2,764,605 | 3,705,625 | 3,686,417 | ||||||||||||||
Other insurance related income (loss) | (4,420 | ) | 4,850 | 12,319 | 7,222 | (2,953 | ) | ||||||||||||
Total underwriting revenues | 2,932,845 | 2,788,596 | 2,776,924 | 3,712,847 | 3,683,464 | ||||||||||||||
UNDERWRITING EXPENSES | |||||||||||||||||||
Net losses and loss expenses | 2,447,640 | 1,663,584 | 1,652,868 | 2,204,197 | 2,176,199 | ||||||||||||||
Acquisition costs | 588,879 | 559,570 | 537,549 | 746,876 | 718,112 | ||||||||||||||
Underwriting-related general and administrative expenses [a] | 335,782 | 352,632 | 372,625 | 482,701 | 486,911 | ||||||||||||||
Total underwriting expenses | 3,372,301 | 2,575,786 | 2,563,042 | 3,433,774 | 3,381,222 | ||||||||||||||
UNDERWRITING INCOME (LOSS) | (439,456 | ) | 212,810 | 213,882 | 279,073 | 302,242 | |||||||||||||
OTHER OPERATING REVENUE (EXPENSES) | |||||||||||||||||||
Net investment income | 299,899 | 257,818 | 226,336 | 353,335 | 305,336 | ||||||||||||||
Net realized investment losses | (14,811 | ) | (40,295 | ) | (123,618 | ) | (60,525 | ) | (138,491 | ) | |||||||||
Interest expense and financing costs | (38,377 | ) | (38,586 | ) | (38,114 | ) | (51,360 | ) | (50,963 | ) | |||||||||
Total other operating revenues | 246,711 | 178,937 | 64,604 | 241,450 | 115,882 | ||||||||||||||
OTHER (EXPENSES) REVENUE | |||||||||||||||||||
Foreign exchange (losses) gains | (90,093 | ) | 69,781 | 69,200 | 121,295 | 102,312 | |||||||||||||
Termination fee received | — | — | 280,000 | — | 280,000 | ||||||||||||||
Corporate expenses [a] | (97,922 | ) | (86,922 | ) | (83,826 | ) | (120,016 | ) | (109,910 | ) | |||||||||
Transaction related expenses | (5,970 | ) | — | — | — | — | |||||||||||||
Reorganization and related expenses | — | — | (45,867 | ) | — | (45,867 | ) | ||||||||||||
Bargain purchase gain | 15,044 | — | — | — | — | ||||||||||||||
Total other (expenses) revenue | (178,941 | ) | (17,141 | ) | 219,507 | 1,279 | 226,535 | ||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES AND INTEREST IN INCOME (LOSS) OF EQUITY METHOD INVESTMENTS | (371,686 | ) | 374,606 | 497,993 | 521,802 | 644,659 | |||||||||||||
Income tax (expense) benefit | 38,547 | (7,712 | ) | (1,155 | ) | (6,340 | ) | (3,028 | ) | ||||||||||
Interest in loss of equity method investments | (8,402 | ) | (2,434 | ) | — | (2,094 | ) | — | |||||||||||
NET INCOME (LOSS) | (341,541 | ) | 364,460 | 496,838 | 513,368 | 641,631 | |||||||||||||
Preferred share dividends | (36,154 | ) | (29,906 | ) | (30,066 | ) | (46,597 | ) | (40,069 | ) | |||||||||
Loss on repurchase of preferred shares | — | — | — | (1,309 | ) | — | |||||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (377,695 | ) | $ | 334,554 | $ | 466,772 | $ | 465,462 | $ | 601,562 | ||||||||
KEY RATIOS/PER SHARE DATA | |||||||||||||||||||
Net loss and loss expense ratio | 83.3 | % | 59.8 | % | 59.8 | % | 59.5 | % | 59.0 | % | |||||||||
Acquisition cost ratio | 20.0 | % | 20.1 | % | 19.4 | % | 20.2 | % | 19.5 | % | |||||||||
General and administrative expense ratio [a] | 14.8 | % | 15.8 | % | 16.5 | % | 16.2 | % | 16.2 | % | |||||||||
Combined ratio | 118.1 | % | 95.7 | % | 95.7 | % | 95.9 | % | 94.7 | % | |||||||||
Weighted average basic shares outstanding | 84,479 | 91,852 | 99,464 | 90,772 | 98,609 | ||||||||||||||
Weighted average diluted shares outstanding | 84,479 | 92,579 | 100,468 | 91,547 | 99,629 | ||||||||||||||
Basic earnings per common share | ($4.47 | ) | $3.64 | $4.69 | $5.13 | $6.10 | |||||||||||||
Diluted earnings per common share | ($4.47 | ) | $3.61 | $4.65 | $5.08 | $6.04 | |||||||||||||
ROACE [b] | (10.3 | %) | 8.4 | % | 12.0 | % | 9.0 | % | 11.5 | % | |||||||||
Operating ROACE [b] | (7.7 | %) | 7.8 | % | 7.2 | % | 7.9 | % | 7.7 | % |
[a] | Both underwriting-related general and administrative expenses and corporate expenses are included in the general and administrative expense ratio. |
[b] | Annualized for the nine-month periods. |
Quarter ended September 30, 2017 | Nine months ended September 30, 2017 | |||||||||||||||||||||||
Insurance | Reinsurance | Total | Insurance | Reinsurance | Total | |||||||||||||||||||
UNDERWRITING REVENUES | ||||||||||||||||||||||||
Gross premiums written | $ | 744,366 | $ | 441,208 | $ | 1,185,574 | $ | 2,234,395 | $ | 2,225,377 | $ | 4,459,772 | ||||||||||||
Net premiums written | 500,022 | 332,721 | 832,743 | 1,533,029 | 1,764,689 | 3,297,718 | ||||||||||||||||||
Gross premiums earned | 723,648 | 646,387 | 1,370,035 | 2,118,929 | 1,797,423 | 3,916,352 | ||||||||||||||||||
Ceded premiums expensed | (227,644 | ) | (125,260 | ) | (352,904 | ) | (670,659 | ) | (308,428 | ) | (979,087 | ) | ||||||||||||
Net premiums earned | 496,004 | 521,127 | 1,017,131 | 1,448,270 | 1,488,995 | 2,937,265 | ||||||||||||||||||
Other insurance related income (loss) | 526 | (3,723 | ) | (3,197 | ) | 1,077 | (5,497 | ) | (4,420 | ) | ||||||||||||||
Total underwriting revenues | 496,530 | 517,404 | 1,013,934 | 1,449,347 | 1,483,498 | 2,932,845 | ||||||||||||||||||
UNDERWRITING EXPENSES | ||||||||||||||||||||||||
Net losses and loss expenses | 628,865 | 606,502 | 1,235,367 | 1,241,495 | 1,206,145 | 2,447,640 | ||||||||||||||||||
Acquisition costs | 74,231 | 120,493 | 194,724 | 223,665 | 365,214 | 588,879 | ||||||||||||||||||
Underwriting-related general and administrative expenses | 75,038 | 21,658 | 96,696 | 253,308 | 82,474 | 335,782 | ||||||||||||||||||
Total underwriting expenses | 778,134 | 748,653 | 1,526,787 | 1,718,468 | 1,653,833 | 3,372,301 | ||||||||||||||||||
UNDERWRITING INCOME (LOSS) | $ | (281,604 | ) | $ | (231,249 | ) | $ | (512,853 | ) | $ | (269,121 | ) | $ | (170,335 | ) | $ | (439,456 | ) | ||||||
KEY RATIOS | ||||||||||||||||||||||||
Current accident year loss ratio | 127.3 | % | 125.0 | % | 126.2 | % | 87.8 | % | 88.6 | % | 88.2 | % | ||||||||||||
Prior period reserve development | (0.5 | %) | (8.6 | %) | (4.7 | %) | (2.1 | %) | (7.6 | %) | (4.9 | %) | ||||||||||||
Net loss and loss expense ratio | 126.8 | % | 116.4 | % | 121.5 | % | 85.7 | % | 81.0 | % | 83.3 | % | ||||||||||||
Acquisition cost ratio | 15.0 | % | 23.1 | % | 19.1 | % | 15.4 | % | 24.5 | % | 20.0 | % | ||||||||||||
Underwriting-related general and administrative expense ratio | 15.1 | % | 4.2 | % | 9.6 | % | 17.6 | % | 5.6 | % | 11.5 | % | ||||||||||||
Corporate expense ratio | 2.7 | % | 3.3 | % | ||||||||||||||||||||
Combined ratio | 156.9 | % | 143.7 | % | 152.9 | % | 118.7 | % | 111.1 | % | 118.1 | % |
Nine months ended September 30, | ||||||||||||||||||||||||||||||||
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | 2017 | 2016 | |||||||||||||||||||||||||
INSURANCE SEGMENT | ||||||||||||||||||||||||||||||||
Property | $ | 154,882 | $ | 198,681 | $ | 144,564 | $ | 150,511 | $ | 164,605 | $ | 139,488 | $ | 498,127 | $ | 522,380 | ||||||||||||||||
Marine | 42,483 | 73,921 | 65,601 | 34,311 | 33,677 | 38,817 | 182,005 | 191,298 | ||||||||||||||||||||||||
Terrorism | 12,147 | 10,509 | 11,814 | 10,056 | 9,394 | 11,192 | 34,470 | 28,090 | ||||||||||||||||||||||||
Aviation | 23,814 | 21,037 | 14,583 | 16,062 | 9,684 | 10,222 | 59,434 | 37,111 | ||||||||||||||||||||||||
Credit and Political Risk | 19,793 | 15,139 | 16,172 | 15,631 | 5,423 | 8,542 | 51,105 | 34,299 | ||||||||||||||||||||||||
Professional Lines | 213,009 | 244,119 | 155,469 | 254,942 | 204,926 | 196,218 | 612,597 | 590,417 | ||||||||||||||||||||||||
Liability | 131,975 | 136,725 | 90,603 | 94,233 | 108,447 | 104,666 | 359,304 | 310,797 | ||||||||||||||||||||||||
Accident and Health | 146,263 | 95,892 | 195,200 | 31,700 | 139,274 | 97,559 | 437,353 | 398,404 | ||||||||||||||||||||||||
TOTAL INSURANCE SEGMENT | 744,366 | 796,023 | 694,006 | 607,446 | 675,430 | 606,704 | 2,234,395 | 2,112,796 | ||||||||||||||||||||||||
REINSURANCE SEGMENT | ||||||||||||||||||||||||||||||||
Catastrophe | 89,510 | 135,560 | 185,935 | 8,193 | 46,338 | 56,693 | 411,004 | 316,692 | ||||||||||||||||||||||||
Property | 90,001 | 56,723 | 194,541 | (1,020 | ) | 61,957 | 67,539 | 341,265 | 283,555 | |||||||||||||||||||||||
Professional Lines | 20,175 | 120,584 | 77,012 | 33,309 | 19,479 | 45,509 | 217,772 | 235,094 | ||||||||||||||||||||||||
Credit and Surety | 38,216 | 25,143 | 119,925 | 3,975 | 36,174 | 23,390 | 183,284 | 315,102 | ||||||||||||||||||||||||
Motor | 40,385 | 42,093 | 291,423 | 7,683 | 13,344 | 21,359 | 373,901 | 338,403 | ||||||||||||||||||||||||
Liability | 139,083 | 118,095 | 111,821 | 57,109 | 91,387 | 111,361 | 368,999 | 365,380 | ||||||||||||||||||||||||
Agriculture | 11,152 | 58,094 | 149,191 | 6,963 | 1,286 | (3,303 | ) | 218,437 | 151,315 | |||||||||||||||||||||||
Engineering | 10,120 | 7,347 | 40,533 | 12,173 | 13,588 | 4,397 | 58,000 | 56,719 | ||||||||||||||||||||||||
Marine and Other | 2,566 | 2,665 | 47,484 | (5,181 | ) | 979 | 2,934 | 52,715 | 64,502 | |||||||||||||||||||||||
TOTAL REINSURANCE SEGMENT | 441,208 | 566,304 | 1,217,865 | 123,204 | 284,532 | 329,879 | 2,225,377 | 2,126,762 | ||||||||||||||||||||||||
CONSOLIDATED TOTAL | $ | 1,185,574 | $ | 1,362,327 | $ | 1,911,871 | $ | 730,650 | $ | 959,962 | $ | 936,583 | $ | 4,459,772 | $ | 4,239,558 |
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | |||||||||||||||||||
UNDERWRITING REVENUES | ||||||||||||||||||||||||
Gross premiums written | $ | 744,366 | $ | 796,023 | $ | 694,006 | $ | 607,446 | $ | 675,430 | $ | 606,704 | ||||||||||||
Net premiums written | 500,022 | 527,678 | 505,329 | 374,068 | 433,131 | 381,118 | ||||||||||||||||||
Gross premiums earned | 723,648 | 716,176 | 679,105 | 680,000 | 668,820 | 647,024 | ||||||||||||||||||
Ceded premiums expensed | (227,644 | ) | (222,340 | ) | (220,675 | ) | (225,328 | ) | (224,129 | ) | (202,474 | ) | ||||||||||||
Net premiums earned | 496,004 | 493,836 | 458,430 | 454,672 | 444,691 | 444,550 | ||||||||||||||||||
Other insurance related income | 526 | 508 | 42 | 146 | 39 | 542 | ||||||||||||||||||
Total underwriting revenues | 496,530 | 494,344 | 458,472 | 454,818 | 444,730 | 445,092 | ||||||||||||||||||
UNDERWRITING EXPENSES | ||||||||||||||||||||||||
Net losses and loss expenses | 628,865 | 325,728 | 286,903 | 288,161 | 273,226 | 283,272 | ||||||||||||||||||
Acquisition costs | 74,231 | 81,276 | 68,157 | 66,138 | 61,755 | 69,118 | ||||||||||||||||||
General and administrative expenses | 75,038 | 87,822 | 90,448 | 94,205 | 84,588 | 85,814 | ||||||||||||||||||
Total underwriting expenses | 778,134 | 494,826 | 445,508 | 448,504 | 419,569 | 438,204 | ||||||||||||||||||
UNDERWRITING INCOME (LOSS) | $ | (281,604 | ) | $ | (482 | ) | $ | 12,964 | $ | 6,314 | $ | 25,161 | $ | 6,888 | ||||||||||
KEY RATIOS | ||||||||||||||||||||||||
Current accident year loss ratio | 127.3 | % | 69.9 | % | 64.5 | % | 66.2 | % | 66.1 | % | 64.3 | % | ||||||||||||
Prior period reserve development | (0.5 | %) | (3.9 | %) | (1.9 | %) | (2.8 | %) | (4.7 | %) | (0.6 | %) | ||||||||||||
Net loss and loss expense ratio | 126.8 | % | 66.0 | % | 62.6 | % | 63.4 | % | 61.4 | % | 63.7 | % | ||||||||||||
Acquisition cost ratio | 15.0 | % | 16.5 | % | 14.9 | % | 14.5 | % | 13.9 | % | 15.5 | % | ||||||||||||
General and administrative expense ratio | 15.1 | % | 17.7 | % | 19.7 | % | 20.7 | % | 19.1 | % | 19.4 | % | ||||||||||||
Combined ratio | 156.9 | % | 100.2 | % | 97.2 | % | 98.6 | % | 94.4 | % | 98.6 | % |
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | |||||||||||||||||||
UNDERWRITING REVENUES | ||||||||||||||||||||||||
Gross premiums written | $ | 441,208 | $ | 566,304 | $ | 1,217,865 | $ | 123,204 | $ | 284,532 | $ | 329,879 | ||||||||||||
Net premiums written | 332,721 | 428,339 | 1,003,630 | 90,319 | 162,300 | 296,099 | ||||||||||||||||||
Gross premiums earned | 646,387 | 584,472 | 566,564 | 533,623 | 546,006 | 501,332 | ||||||||||||||||||
Ceded premiums expensed | (125,260 | ) | (96,877 | ) | (86,291 | ) | (66,416 | ) | (56,282 | ) | (26,541 | ) | ||||||||||||
Net premiums earned | 521,127 | 487,595 | 480,273 | 467,207 | 489,724 | 474,791 | ||||||||||||||||||
Other insurance related (loss) income | (3,723 | ) | 2,052 | (3,825 | ) | 2,226 | 5,905 | 616 | ||||||||||||||||
Total underwriting revenues | 517,404 | 489,647 | 476,448 | 469,433 | 495,629 | 475,407 | ||||||||||||||||||
UNDERWRITING EXPENSES | ||||||||||||||||||||||||
Net losses and loss expenses | 606,502 | 279,604 | 320,039 | 252,451 | 259,102 | 277,115 | ||||||||||||||||||
Acquisition costs | 120,493 | 123,085 | 121,635 | 121,167 | 128,055 | 113,626 | ||||||||||||||||||
General and administrative expenses | 21,658 | 29,464 | 31,353 | 35,864 | 29,635 | 35,309 | ||||||||||||||||||
Total underwriting expenses | 748,653 | 432,153 | 473,027 | 409,482 | 416,792 | 426,050 | ||||||||||||||||||
UNDERWRITING INCOME (LOSS) | $ | (231,249 | ) | $ | 57,494 | $ | 3,421 | $ | 59,951 | $ | 78,837 | $ | 49,357 | |||||||||||
KEY RATIOS | ||||||||||||||||||||||||
Current accident year loss ratio | 125.0 | % | 67.9 | % | 70.0 | % | 65.9 | % | 64.2 | % | 67.4 | % | ||||||||||||
Prior period reserve development | (8.6 | %) | (10.6 | %) | (3.4 | %) | (11.9 | %) | (11.3 | %) | (9.0 | %) | ||||||||||||
Net loss and loss expense ratio | 116.4 | % | 57.3 | % | 66.6 | % | 54.0 | % | 52.9 | % | 58.4 | % | ||||||||||||
Acquisition cost ratio | 23.1 | % | 25.2 | % | 25.3 | % | 25.9 | % | 26.1 | % | 23.9 | % | ||||||||||||
General and administrative expense ratio | 4.2 | % | 6.1 | % | 6.6 | % | 7.7 | % | 6.1 | % | 7.4 | % | ||||||||||||
Combined ratio | 143.7 | % | 88.6 | % | 98.5 | % | 87.6 | % | 85.1 | % | 89.7 | % |
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||
TOTAL MANAGED PREMIUMS [a] | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Total Managed Premiums | $ | 441,208 | $ | 284,532 | $ | 2,225,377 | $ | 2,126,762 | ||||||||
Premiums ceded to Harrington Re | 55,900 | 101,689 | 178,574 | 101,689 | ||||||||||||
Premiums ceded to Other Strategic Capital Partners | 52,587 | 20,543 | 282,114 | 169,544 | ||||||||||||
Net premiums written | $ | 332,721 | $ | 162,300 | $ | 1,764,689 | $ | 1,855,529 | ||||||||
FEE INCOME FROM STRATEGIC CAPITAL PARTNERS [b] | ||||||||||||||||
Fee income | $ | 5,516 | $ | 8,072 | $ | 28,261 | $ | 15,007 | ||||||||
[a] | Total managed premiums represented gross premiums written by the AXIS Reinsurance segment of $441,208 and $284,532 for the three months ended September 30, 2017 and 2016, respectively, and $2,225,377 and $2,126,762 for the nine months ended September 30, 2017 and 2016, respectively, including premiums written on behalf of our strategic capital partners. |
[b] | Fee income (loss) from strategic capital partners represents service fees and reimbursement of expenses due to the AXIS Reinsurance segment from its strategic capital partners. Fee income (loss) from strategic capital partners included $(4,301) and $4,924 included in other insurance related income (expense) for the three and nine months ended September 30, 2017, respectively, and $3,399 for the three and nine months ended September 30, 2016. It also included $9,816 and $23,337 as an offset to general and administrative expenses for the three and nine months ended September 30, 2017, respectively, and $4,673 for the three and nine months ended September 30, 2016 . Fee income from strategic capital partners for periods prior to June 30, 2016 were included in acquisition costs. |
Nine months ended September 30, | ||||||||||||||||||||||||||||||||
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | 2017 | 2016 | |||||||||||||||||||||||||
Fixed maturities | $ | 74,978 | $ | 78,218 | $ | 77,407 | $ | 76,036 | $ | 75,827 | $ | 75,980 | $ | 230,603 | $ | 229,423 | ||||||||||||||||
Other investments | 17,373 | 23,639 | 18,962 | 16,744 | 38,248 | (27,421 | ) | 59,973 | 25,770 | |||||||||||||||||||||||
Equity securities | 3,223 | 4,347 | 3,478 | 3,462 | 4,633 | 3,445 | 11,048 | 12,843 | ||||||||||||||||||||||||
Mortgage loans | 2,895 | 2,597 | 2,477 | 2,313 | 2,191 | 482 | 7,970 | 5,683 | ||||||||||||||||||||||||
Cash and cash equivalents | 3,111 | 3,433 | 3,095 | 2,138 | 3,768 | 993 | 9,640 | 7,071 | ||||||||||||||||||||||||
Short-term investments | 698 | 660 | 438 | 1,353 | 337 | 83 | 1,797 | 708 | ||||||||||||||||||||||||
Gross investment income | 102,278 | 112,894 | 105,857 | 102,046 | 125,004 | 53,562 | 321,031 | 281,498 | ||||||||||||||||||||||||
Investment expenses | (7,109 | ) | (6,831 | ) | (7,193 | ) | (6,529 | ) | (8,081 | ) | (7,877 | ) | (21,132 | ) | (23,680 | ) | ||||||||||||||||
Net investment income | $ | 95,169 | $ | 106,063 | $ | 98,664 | $ | 95,517 | $ | 116,923 | $ | 45,685 | $ | 299,899 | $ | 257,818 |
September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | |||||||||||||||||||
2017 | 2017 | 2017 | 2016 | 2016 | 2015 | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Investments: | ||||||||||||||||||||||||
Fixed maturities, available for sale, at fair value | $ | 11,086,386 | $ | 11,424,295 | $ | 11,191,529 | $ | 11,397,114 | $ | 11,566,860 | $ | 12,139,595 | ||||||||||||
Equity securities, available for sale, at fair value | 659,751 | 738,489 | 653,419 | 638,744 | 644,344 | 689,157 | ||||||||||||||||||
Mortgage loans, held for investment, at amortized cost and fair value | 360,381 | 349,916 | 339,855 | 349,969 | 332,753 | 129,431 | ||||||||||||||||||
Other investments, at fair value | 830,253 | 813,617 | 780,395 | 830,219 | 847,262 | 800,319 | ||||||||||||||||||
Equity method investments | 108,597 | 109,258 | 111,233 | 116,000 | 111,295 | 10,805 | ||||||||||||||||||
Short-term investments, at amortized cost and fair value | 15,282 | 10,146 | 13,338 | 127,461 | 39,877 | 7,152 | ||||||||||||||||||
Total investments | 13,060,650 | 13,445,721 | 13,089,769 | 13,459,507 | 13,542,391 | 13,776,459 | ||||||||||||||||||
Cash and cash equivalents | 1,631,127 | 1,015,270 | 1,451,570 | 1,241,507 | 1,077,263 | 1,180,473 | ||||||||||||||||||
Accrued interest receivable | 68,023 | 72,626 | 69,649 | 74,971 | 71,096 | 75,375 | ||||||||||||||||||
Insurance and reinsurance premium balances receivable | 2,968,096 | 3,050,222 | 2,891,811 | 2,313,512 | 2,694,976 | 2,169,581 | ||||||||||||||||||
Reinsurance recoverable on paid and unpaid losses | 2,360,821 | 2,184,934 | 2,070,341 | 2,334,922 | 2,336,741 | 2,036,099 | ||||||||||||||||||
Deferred acquisition costs | 562,774 | 591,397 | 609,773 | 438,636 | 545,618 | 544,178 | ||||||||||||||||||
Prepaid reinsurance premiums | 734,129 | 733,836 | 645,663 | 556,344 | 582,551 | 416,451 | ||||||||||||||||||
Receivable for investments sold | 9,357 | 18,754 | 40,448 | 14,123 | 2,285 | 7,220 | ||||||||||||||||||
Goodwill and intangible assets | 87,206 | 86,220 | 84,613 | 85,049 | 85,501 | 87,329 | ||||||||||||||||||
Other assets | 335,967 | 300,658 | 293,330 | 295,120 | 283,969 | 264,176 | ||||||||||||||||||
TOTAL ASSETS | $ | 21,818,150 | $ | 21,499,638 | $ | 21,246,967 | $ | 20,813,691 | $ | 21,222,391 | $ | 20,557,341 | ||||||||||||
LIABILITIES | ||||||||||||||||||||||||
Reserve for losses and loss expenses | $ | 10,787,575 | $ | 9,878,662 | $ | 9,541,963 | $ | 9,697,827 | $ | 9,874,807 | $ | 9,703,583 | ||||||||||||
Unearned premiums | 3,521,063 | 3,704,003 | 3,629,354 | 2,969,498 | 3,453,655 | 3,107,348 | ||||||||||||||||||
Insurance and reinsurance balances payable | 670,292 | 677,204 | 514,356 | 493,183 | 461,519 | 301,830 | ||||||||||||||||||
Senior notes | 993,797 | 993,511 | 993,229 | 992,950 | 992,633 | 991,562 | ||||||||||||||||||
Payable for investments purchased | 122,065 | 95,865 | 83,783 | 62,550 | 141,245 | 303,916 | ||||||||||||||||||
Other liabilities | 268,659 | 257,698 | 253,917 | 325,313 | 272,874 | 322,736 | ||||||||||||||||||
TOTAL LIABILITIES | 16,363,451 | 15,606,943 | 15,016,602 | 14,541,321 | 15,196,733 | 14,730,975 | ||||||||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||
Preferred shares | 775,000 | 775,000 | 1,126,074 | 1,126,074 | 625,000 | 627,843 | ||||||||||||||||||
Common shares | 2,206 | 2,206 | 2,206 | 2,206 | 2,206 | 2,202 | ||||||||||||||||||
Additional paid-in capital | 2,291,516 | 2,283,523 | 2,276,671 | 2,299,857 | 2,307,866 | 2,230,278 | ||||||||||||||||||
Accumulated other comprehensive income (loss) | 141,613 | 84,306 | 699 | (121,841 | ) | 98,505 | (117,593 | ) | ||||||||||||||||
Retained earnings | 6,051,659 | 6,551,801 | 6,499,262 | 6,527,627 | 6,430,573 | 6,093,897 | ||||||||||||||||||
Treasury shares, at cost | (3,807,295 | ) | (3,804,141 | ) | (3,674,547 | ) | (3,561,553 | ) | (3,438,492 | ) | (3,010,261 | ) | ||||||||||||
TOTAL SHAREHOLDERS' EQUITY | 5,454,699 | 5,892,695 | 6,230,365 | 6,272,370 | 6,025,658 | 5,826,366 | ||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 21,818,150 | $ | 21,499,638 | $ | 21,246,967 | $ | 20,813,691 | $ | 21,222,391 | $ | 20,557,341 | ||||||||||||
Basic common shares outstanding | 83,157 | 83,203 | 85,170 | 86,441 | 88,439 | 96,049 | ||||||||||||||||||
Diluted common shares outstanding | 84,575 | 84,655 | 86,670 | 88,317 | 90,363 | 98,213 | ||||||||||||||||||
Book value per common share | $56.28 | $61.51 | $59.93 | $59.54 | $61.07 | $54.91 | ||||||||||||||||||
Diluted book value per common share | 55.33 | 60.45 | 58.89 | 58.27 | 59.77 | 53.68 | ||||||||||||||||||
Diluted tangible book value per common share | $54.30 | $59.44 | $57.92 | $57.31 | $58.82 | $52.78 | ||||||||||||||||||
Debt to total capital [a] | 15.4 | % | 14.4 | % | 13.7 | % | 13.7 | % | 14.1 | % | 14.5 | % | ||||||||||||
Debt and preferred equity to total capital | 27.4 | % | 25.7 | % | 29.3 | % | 29.2 | % | 23.0 | % | 23.8 | % |
[a] | The debt to total capital ratio is calculated by dividing our senior notes by total capital. Total capital represents the sum of total shareholders’ equity and our senior notes. |
Cost or Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | Percentage | |||||||||||||||
Fixed Maturities, available for sale | |||||||||||||||||||
U.S. government and agency | $ | 1,556,963 | $ | 2,729 | $ | (12,374 | ) | $ | 1,547,318 | 10.7 | % | ||||||||
Non-U.S. government | 568,223 | 13,961 | (8,544 | ) | 573,640 | 3.9 | % | ||||||||||||
Corporate debt | 4,460,337 | 65,230 | (21,600 | ) | 4,503,967 | 30.7 | % | ||||||||||||
Agency RMBS | 2,313,096 | 12,218 | (18,492 | ) | 2,306,822 | 15.7 | % | ||||||||||||
CMBS | 665,520 | 5,954 | (1,738 | ) | 669,736 | 4.6 | % | ||||||||||||
Non-Agency RMBS | 42,653 | 1,968 | (804 | ) | 43,817 | 0.3 | % | ||||||||||||
ABS | 1,285,080 | 4,572 | (782 | ) | 1,288,870 | 8.8 | % | ||||||||||||
Municipals | 151,522 | 1,379 | (685 | ) | 152,216 | 1.0 | % | ||||||||||||
Total fixed maturities | 11,043,394 | 108,011 | (65,019 | ) | 11,086,386 | 75.7 | % | ||||||||||||
Equity securities, available for sale | |||||||||||||||||||
Common stocks | 13,980 | 1,415 | (569 | ) | 14,826 | 0.1 | % | ||||||||||||
Exchange traded funds | 365,412 | 88,782 | — | 454,194 | 3.1 | % | |||||||||||||
Bond mutual funds | 183,718 | 8,686 | (1,673 | ) | 190,731 | 1.3 | % | ||||||||||||
Total equity securities | 563,110 | 98,883 | (2,242 | ) | 659,751 | 4.5 | % | ||||||||||||
Total available for sale investments | $ | 11,606,504 | $ | 206,894 | $ | (67,261 | ) | 11,746,137 | 80.2 | % | |||||||||
Mortgage loans, held for investment | 360,381 | 2.5 | % | ||||||||||||||||
Other investments (see below) | 830,253 | 5.7 | % | ||||||||||||||||
Equity method investments | 108,597 | 0.7 | % | ||||||||||||||||
Short-term investments | 15,282 | 0.1 | % | ||||||||||||||||
Total investments | 13,060,650 | 89.2 | % | ||||||||||||||||
Cash and cash equivalents [a] | 1,631,127 | 11.1 | % | ||||||||||||||||
Accrued interest receivable | 68,023 | 0.5 | % | ||||||||||||||||
Net receivable/(payable) for investments sold (purchased) | (112,708 | ) | (0.8 | %) | |||||||||||||||
Total cash and invested assets | $ | 14,647,092 | 100.0 | % | |||||||||||||||
Fair Value | Percentage | ||||||||||||||||||
Other Investments: | |||||||||||||||||||
Long/short equity funds | $ | 64,067 | 7.7 | % | |||||||||||||||
Multi-strategy funds | 286,452 | 34.5 | % | ||||||||||||||||
Event-driven funds | 48,578 | 5.9 | % | ||||||||||||||||
Direct lending funds | 232,389 | 28.0 | % | ||||||||||||||||
Real estate funds | 46,691 | 5.6 | % | ||||||||||||||||
Private equity funds | 71,896 | 8.7 | % | ||||||||||||||||
Other privately held investments | 43,398 | 5.2 | % | ||||||||||||||||
Collateralized loan obligations - equity tranches | 36,782 | 4.4 | % | ||||||||||||||||
Total | $ | 830,253 | 100.0 | % | |||||||||||||||
[a] | Includes $281 million of restricted cash and cash equivalents. |
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | |||||||||||||
Fair Value % | Fair Value % | Fair Value % | Fair Value % | Fair Value % | Fair Value % | |||||||||||||
CASH AND INVESTED ASSETS PORTFOLIO | ||||||||||||||||||
Fixed Maturities: | ||||||||||||||||||
U.S. government and agency | 10.7 | % | 11.3 | % | 11.5 | % | 11.4 | % | 10.8 | % | 12.7 | % | ||||||
Non-U.S. government | 3.9 | % | 3.7 | % | 3.8 | % | 3.8 | % | 4.0 | % | 5.2 | % | ||||||
Corporate debt | 30.7 | % | 32.8 | % | 30.5 | % | 31.2 | % | 31.4 | % | 30.4 | % | ||||||
MBS: | ||||||||||||||||||
Agency RMBS | 15.7 | % | 15.9 | % | 15.6 | % | 16.7 | % | 17.3 | % | 15.0 | % | ||||||
CMBS | 4.6 | % | 4.5 | % | 4.7 | % | 4.5 | % | 6.1 | % | 7.3 | % | ||||||
Non-agency RMBS | 0.3 | % | 0.3 | % | 0.4 | % | 0.4 | % | 0.5 | % | 0.7 | % | ||||||
ABS | 8.8 | % | 9.5 | % | 9.4 | % | 8.3 | % | 8.5 | % | 9.8 | % | ||||||
Municipals | 1.0 | % | 1.0 | % | 0.9 | % | 1.1 | % | 0.9 | % | 1.2 | % | ||||||
Total Fixed Maturities | 75.7 | % | 79.0 | % | 76.8 | % | 77.4 | % | 79.5 | % | 82.3 | % | ||||||
Equity securities | 4.5 | % | 5.1 | % | 4.5 | % | 4.3 | % | 4.4 | % | 4.7 | % | ||||||
Mortgage loans | 2.5 | % | 2.4 | % | 2.3 | % | 2.4 | % | 2.3 | % | 0.9 | % | ||||||
Other investments | 5.7 | % | 5.6 | % | 5.4 | % | 5.6 | % | 5.8 | % | 5.4 | % | ||||||
Equity method investments | 0.7 | % | 0.8 | % | 0.8 | % | 0.8 | % | 0.8 | % | 0.1 | % | ||||||
Short-term investments | 0.1 | % | 0.1 | % | 0.1 | % | 0.9 | % | 0.3 | % | 0.1 | % | ||||||
Total Investments | 89.2 | % | 93.0 | % | 89.9 | % | 91.4 | % | 93.1 | % | 93.5 | % | ||||||
Cash and cash equivalents | 11.1 | % | 7.0 | % | 10.0 | % | 8.4 | % | 7.4 | % | 8.0 | % | ||||||
Accrued interest receivable | 0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | 0.5 | % | ||||||
Net receivable/(payable) for investments sold or purchased | (0.8 | %) | (0.5 | %) | (0.4 | %) | (0.3 | %) | (1.0 | %) | (2.0 | %) | ||||||
Total Cash and Invested Assets | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
CREDIT QUALITY OF FIXED MATURITIES | Fair Value % | Fair Value % | Fair Value % | Fair Value % | Fair Value % | Fair Value % | ||||||||||||
U.S. government and agency | 14.0 | % | 14.3 | % | 15.2 | % | 14.5 | % | 13.5 | % | 15.4 | % | ||||||
AAA | 39.5 | % | 38.1 | % | 37.8 | % | 36.5 | % | 37.7 | % | 35.0 | % | ||||||
AA | 7.9 | % | 8.1 | % | 8.7 | % | 9.9 | % | 10.1 | % | 10.9 | % | ||||||
A | 15.0 | % | 15.8 | % | 14.7 | % | 15.3 | % | 15.3 | % | 18.7 | % | ||||||
BBB | 14.5 | % | 14.7 | % | 14.1 | % | 13.7 | % | 13.9 | % | 11.6 | % | ||||||
Below BBB | 9.1 | % | 9.0 | % | 9.5 | % | 10.1 | % | 9.5 | % | 8.4 | % | ||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
MATURITY PROFILE OF FIXED MATURITIES | Fair Value % | Fair Value % | Fair Value % | Fair Value % | Fair Value % | Fair Value % | ||||||||||||
Within one year | 3.9 | % | 3.5 | % | 2.9 | % | 2.7 | % | 3.0 | % | 3.5 | % | ||||||
From one to five years | 34.7 | % | 36.2 | % | 35.8 | % | 33.8 | % | 32.9 | % | 36.5 | % | ||||||
From five to ten years | 20.5 | % | 20.0 | % | 19.7 | % | 22.0 | % | 20.2 | % | 17.7 | % | ||||||
Above ten years | 2.0 | % | 2.0 | % | 2.6 | % | 2.8 | % | 3.1 | % | 2.5 | % | ||||||
Asset-backed and mortgage-backed securities | 38.9 | % | 38.3 | % | 39.0 | % | 38.7 | % | 40.8 | % | 39.8 | % | ||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
CASH AND INVESTED ASSETS PORTFOLIO CHARACTERISTICS | ||||||||||||||||||
Book yield of fixed maturities | 2.6 | % | 2.6 | % | 2.7 | % | 2.6 | % | 2.6 | % | 2.5 | % | ||||||
Yield to maturity of fixed maturities | 2.6 | % | 2.6 | % | 2.7 | % | 2.8 | % | 2.3 | % | 2.5 | % | ||||||
Average duration of fixed maturities (inclusive of duration hedges) | 3.2 yrs | 3.1 yrs | 3.3 yrs | 3.5 yrs | 3.2 yrs | 3.1 yrs | ||||||||||||
Average credit quality | AA- | AA- | AA- | AA- | AA- | AA- | ||||||||||||
Corporate Debt | |||||||||||||||||||||||||||||||||||||||||||
Governments and Agencies | Financials | Non-Financials | Government Guaranteed | Total | Agency RMBS | Non-Agency RMBS/CMBS | ABS | Total Fixed Maturities | Equities | Total Fixed Maturities and Equities | |||||||||||||||||||||||||||||||||
Composition by country | |||||||||||||||||||||||||||||||||||||||||||
Eurozone countries: | |||||||||||||||||||||||||||||||||||||||||||
Netherlands | $ | 21,001 | $ | 14,951 | $ | 76,402 | $ | — | $ | 91,353 | $ | — | $ | — | $ | — | $ | 112,354 | $ | 1,423 | $ | 113,777 | |||||||||||||||||||||
Germany | 45,633 | 6,130 | 19,837 | — | 25,967 | — | — | — | 71,600 | 1,577 | 73,177 | ||||||||||||||||||||||||||||||||
Belgium | 31,748 | 427 | 20,115 | — | 20,542 | — | — | — | 52,290 | 531 | 52,821 | ||||||||||||||||||||||||||||||||
France | — | 10,162 | 31,556 | — | 41,718 | — | — | — | 41,718 | 4,409 | 46,127 | ||||||||||||||||||||||||||||||||
Luxembourg | — | — | 45,518 | — | 45,518 | — | — | — | 45,518 | — | 45,518 | ||||||||||||||||||||||||||||||||
Ireland | — | 22,139 | 11,724 | — | 33,863 | — | — | 4,241 | 38,104 | 81 | 38,185 | ||||||||||||||||||||||||||||||||
Italy | 7,241 | 406 | 6,914 | — | 7,320 | — | — | — | 14,561 | 810 | 15,371 | ||||||||||||||||||||||||||||||||
Spain | 2,885 | 7,320 | 4,300 | — | 11,620 | — | — | — | 14,505 | 436 | 14,941 | ||||||||||||||||||||||||||||||||
Supranational [a] | 9,661 | — | — | — | — | — | — | — | 9,661 | — | 9,661 | ||||||||||||||||||||||||||||||||
Austria | — | 791 | 1,221 | — | 2,012 | — | — | — | 2,012 | 261 | 2,273 | ||||||||||||||||||||||||||||||||
Portugal | — | — | 949 | — | 949 | — | — | — | 949 | — | 949 | ||||||||||||||||||||||||||||||||
Finland | — | — | 693 | — | 693 | — | — | — | 693 | 227 | 920 | ||||||||||||||||||||||||||||||||
Other [b] | — | — | — | — | — | — | — | — | — | 88,617 | 88,617 | ||||||||||||||||||||||||||||||||
Total eurozone | 118,169 | 62,326 | 219,229 | — | 281,555 | — | — | 4,241 | 403,965 | 98,372 | 502,337 | ||||||||||||||||||||||||||||||||
Other concentrations: | |||||||||||||||||||||||||||||||||||||||||||
United Kingdom | 184,220 | 50,872 | 119,005 | 20,755 | 190,632 | — | 12,621 | — | 387,473 | 11,918 | 399,391 | ||||||||||||||||||||||||||||||||
Canada | 91,259 | 122,380 | 96,385 | 77,884 | 296,649 | — | — | 6,814 | 394,722 | — | 394,722 | ||||||||||||||||||||||||||||||||
Japan | — | 93,025 | 2,999 | 5,914 | 101,938 | — | — | 7,351 | 109,289 | 22,665 | 131,954 | ||||||||||||||||||||||||||||||||
Australia | — | 62,674 | 12,074 | — | 74,748 | — | — | — | 74,748 | — | 74,748 | ||||||||||||||||||||||||||||||||
Mexico | 36,997 | — | 1,475 | — | 1,475 | — | — | — | 38,472 | — | 38,472 | ||||||||||||||||||||||||||||||||
Other | 142,995 | 18,127 | 68,737 | 16,665 | 103,529 | — | — | — | 246,524 | 27,792 | [c] | 274,316 | |||||||||||||||||||||||||||||||
Total other concentrations | 455,471 | 347,078 | 300,675 | 121,218 | 768,971 | — | 12,621 | 14,165 | 1,251,228 | 62,375 | 1,313,603 | ||||||||||||||||||||||||||||||||
Total Non-U.S. concentrations | 573,640 | 409,404 | 519,904 | 121,218 | 1,050,526 | — | 12,621 | 18,406 | 1,655,193 | 160,747 | 1,815,940 | ||||||||||||||||||||||||||||||||
United States | 1,495,423 | [d] | 1,372,278 | 2,080,359 | 804 | 3,453,441 | 2,306,822 | 700,932 | 1,270,464 | 9,227,082 | 499,004 | [e] | 9,726,086 | ||||||||||||||||||||||||||||||
United States agencies | 51,895 | — | — | — | — | — | — | — | 51,895 | — | 51,895 | ||||||||||||||||||||||||||||||||
United States local governments | 152,216 | — | — | — | — | — | — | — | 152,216 | — | 152,216 | ||||||||||||||||||||||||||||||||
Total U.S. concentrations | 1,699,534 | 1,372,278 | 2,080,359 | 804 | 3,453,441 | 2,306,822 | 700,932 | 1,270,464 | 9,431,193 | 499,004 | 9,930,197 | ||||||||||||||||||||||||||||||||
Totals | $ | 2,273,174 | $ | 1,781,682 | $ | 2,600,263 | $ | 122,022 | $ | 4,503,967 | $ | 2,306,822 | $ | 713,553 | $ | 1,288,870 | $ | 11,086,386 | $ | 659,751 | $ | 11,746,137 | |||||||||||||||||||||
[a] | Represents holdings of the European Investment Bank. |
[b] | Represents holdings in exchange-traded funds ("ETFs"). The primary countries of risk for these underlying securities are countries within the eurozone. |
[c] | Represents exchange-traded funds ("ETFs") designed to track indexes with primary underlying exposures to countries other than the United States and those within the eurozone. |
[d] | Represents United States Treasuries. |
[e] | Represents ETFs designed to track the S&P 500 and a U.S. bond mutual fund. |
Fair Value | % of Total Corporate Debt | % of Total Cash and Invested Assets | ||||||||
Composition by sector - Investment grade | ||||||||||
Financial institutions: | ||||||||||
U.S. banking | $ | 970,474 | 21.5 | % | 6.6 | % | ||||
Foreign banking [a] | 325,341 | 7.2 | % | 2.2 | % | |||||
Corporate/commercial finance | 211,157 | 4.7 | % | 1.4 | % | |||||
Insurance | 117,361 | 2.6 | % | 0.8 | % | |||||
Investment brokerage | 11,779 | 0.3 | % | 0.1 | % | |||||
Total financial institutions | 1,636,112 | 36.3 | % | 11.1 | % | |||||
Consumer non-cyclicals | 516,251 | 11.5 | % | 3.5 | % | |||||
Consumer cyclical | 320,126 | 7.1 | % | 2.2 | % | |||||
Communications | 245,361 | 5.4 | % | 1.7 | % | |||||
Technology | 210,374 | 4.7 | % | 1.4 | % | |||||
Energy | 197,815 | 4.4 | % | 1.4 | % | |||||
Non-U.S. government guaranteed [b] | 121,218 | 2.7 | % | 0.8 | % | |||||
Transportation | 97,053 | 2.2 | % | 0.7 | % | |||||
Industrials | 89,186 | 2.0 | % | 0.6 | % | |||||
Utilities | 88,775 | 2.0 | % | 0.6 | % | |||||
Total investment grade | 3,522,271 | 78.3 | % | 24.0 | % | |||||
Total non-investment grade | 981,696 | 21.7 | % | 6.7 | % | |||||
Total corporate debt | $ | 4,503,967 | 100.0 | % | 30.7 | % | ||||
[a] | Located in Canada, Japan, Australia, United Kingdom, Switzerland, Norway, Denmark, Chile, Germany, France, Netherlands and Spain. |
[b] | No corporate debt guaranteed by a eurozone country. |
Amortized Cost | Net Unrealized Gain (Loss) | Fair Value | % of Total Fixed Maturities | ||||||||||||
ISSUER [a] | |||||||||||||||
MORGAN STANLEY | $ | 131,740 | $ | 812 | $ | 132,552 | 1.2 | % | |||||||
GOLDMAN SACHS GROUP | 122,539 | 727 | 123,266 | 1.1 | % | ||||||||||
JP MORGAN CHASE & CO | 118,202 | 749 | 118,951 | 1.1 | % | ||||||||||
WELLS FARGO & COMPANY | 112,131 | 761 | 112,892 | 1.0 | % | ||||||||||
BANK OF AMERICA CORP | 82,147 | 963 | 83,110 | 0.7 | % | ||||||||||
FORD MOTOR COMPANY | 60,628 | (313 | ) | 60,315 | 0.5 | % | |||||||||
AMERICAN EXPRESS COMPANY | 52,639 | 300 | 52,939 | 0.5 | % | ||||||||||
VERIZON COMMUNICATIONS INC | 53,006 | (114 | ) | 52,892 | 0.5 | % | |||||||||
AT&T INC | 49,267 | 545 | 49,812 | 0.4 | % | ||||||||||
GENERAL MOTORS COMPANY | 46,934 | 903 | 47,837 | 0.4 | % | ||||||||||
[a] | The holdings represent direct investments in fixed maturities of the parent issuer and its major subsidiaries. These investments exclude asset and mortgage backed securities that were issued, sponsored or serviced by the parent. |
Agencies | AAA | AA | A | BBB | Non-Investment Grade | Total | ||||||||||||||||||||||
Residential MBS | $ | 2,306,822 | $ | 18,073 | $ | 457 | $ | 1,995 | $ | 6,939 | $ | 16,353 | $ | 2,350,639 | ||||||||||||||
Commercial MBS | 130,401 | 441,160 | 65,968 | 24,091 | 8,116 | — | 669,736 | |||||||||||||||||||||
ABS | — | 1,091,864 | 138,219 | 36,309 | 16,029 | 6,449 | 1,288,870 | |||||||||||||||||||||
Total mortgage-backed and asset-backed securities | $ | 2,437,223 | $ | 1,551,097 | $ | 204,644 | $ | 62,395 | $ | 31,084 | $ | 22,802 | $ | 4,309,245 | ||||||||||||||
Percentage of total | 56.6 | % | 36.0 | % | 4.7 | % | 1.4 | % | 0.7 | % | 0.6 | % | 100.0 | % |
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | |||||||||||||||||||
Reinsurance recoverable on paid losses and loss expenses: | ||||||||||||||||||||||||
Insurance | $ | 38,654 | $ | 59,391 | $ | 26,009 | $ | 40,413 | $ | 32,853 | $ | 28,812 | ||||||||||||
Reinsurance | 24,145 | 14,674 | 15,301 | 18,400 | 27,096 | — | ||||||||||||||||||
Total | $ | 62,799 | $ | 74,065 | $ | 41,310 | $ | 58,813 | $ | 59,949 | $ | 28,812 | ||||||||||||
Reinsurance recoverable on unpaid losses and loss expenses: OSLR | ||||||||||||||||||||||||
Insurance | $ | 587,061 | $ | 563,510 | $ | 576,914 | $ | 723,265 | $ | 712,987 | $ | 660,861 | ||||||||||||
Reinsurance | 99,302 | 45,525 | 39,069 | 36,326 | 31,789 | 8,039 | ||||||||||||||||||
Total | $ | 686,363 | $ | 609,035 | $ | 615,983 | $ | 759,591 | $ | 744,776 | $ | 668,900 | ||||||||||||
Reinsurance recoverable on unpaid losses and loss expenses: IBNR | ||||||||||||||||||||||||
Insurance | $ | 1,406,026 | $ | 1,406,141 | $ | 1,366,078 | $ | 1,489,953 | $ | 1,523,537 | $ | 1,323,350 | ||||||||||||
Reinsurance | 221,872 | 113,483 | 67,121 | 46,955 | 28,700 | 32,457 | ||||||||||||||||||
Total | $ | 1,627,898 | $ | 1,519,624 | $ | 1,433,199 | $ | 1,536,908 | $ | 1,552,237 | $ | 1,355,807 | ||||||||||||
Provision against reinsurance recoverables: | ||||||||||||||||||||||||
Insurance | $ | (15,973 | ) | $ | (17,629 | ) | $ | (20,017 | ) | $ | (19,889 | ) | $ | (20,087 | ) | $ | (17,420 | ) | ||||||
Reinsurance | (266 | ) | (161 | ) | (134 | ) | (501 | ) | (134 | ) | — | |||||||||||||
Total | $ | (16,239 | ) | $ | (17,790 | ) | $ | (20,151 | ) | $ | (20,390 | ) | $ | (20,221 | ) | $ | (17,420 | ) | ||||||
Net reinsurance recoverables: | ||||||||||||||||||||||||
Insurance | $ | 2,015,768 | $ | 2,011,413 | $ | 1,948,984 | $ | 2,233,742 | $ | 2,249,290 | $ | 1,995,603 | ||||||||||||
Reinsurance | 345,053 | 173,521 | 121,357 | 101,180 | 87,451 | 40,496 | ||||||||||||||||||
Total | $ | 2,360,821 | $ | 2,184,934 | $ | 2,070,341 | $ | 2,334,922 | $ | 2,336,741 | $ | 2,036,099 |
Categories | Gross Recoverable | Collateral | Gross Recoverable Net of Collateral | % of Total Gross Recoverable Net of Collateral | % of Total Shareholders’ Equity | Provision Against Reinsurance Recoverable | Provision Against Reinsurance Recoverable as % of Gross Recoverable | Net Recoverable | ||||||||||||||||||
Top 10 reinsurers based on gross recoverables | $ | 1,442,169 | $ | (142,870 | ) | $ | 1,299,299 | 62.8% | 23.8% | $ | (9,195 | ) | 0.6% | $ | 1,432,974 | |||||||||||
Other reinsurers balances > $20 million | 609,352 | (91,510 | ) | 517,842 | 25.0% | 9.5% | (4,489 | ) | 0.7% | 604,863 | ||||||||||||||||
Other reinsurers balances < $20 million | 325,539 | (73,143 | ) | 252,396 | 12.2% | 4.6% | (2,555 | ) | 0.8% | 322,984 | ||||||||||||||||
Total | $ | 2,377,060 | $ | (307,523 | ) | $ | 2,069,537 | 100.0% | 37.9% | $ | (16,239 | ) | 0.7% | $ | 2,360,821 |
Top 10 Reinsurers (net of collateral) | % of Total Gross Recoverable Net of Collateral | % of Total Shareholders’ Equity | ||
Swiss Reinsurance America Corporation | 17.1% | 6.5% | ||
Transatlantic Reinsurance Company | 9.4% | 3.6% | ||
Partner Reinsurance Co of US | 9.0% | 3.4% | ||
Lloyds of London | 7.8% | 3.0% | ||
Hannover Ruck SE | 4.2% | 1.6% | ||
Berkley Insurance Company | 4.2% | 1.6% | ||
Harrington Re Ltd. | 3.8% | 1.4% | ||
Everest Reinsurance Company | 3.7% | 1.4% | ||
Munich Reinsurance America, Inc | 3.6% | 1.3% | ||
Liberty Mutual Insurance Company | 3.4% | 1.2% | ||
66.2% | 25.0% |
Quarter ended September 30, 2017 | Nine months ended September 30, 2017 | |||||||||||||||||||||||
Gross | Recoveries | Net | Gross | Recoveries | Net | |||||||||||||||||||
Reserve for unpaid losses and loss expenses | ||||||||||||||||||||||||
Beginning of period | $ | 9,878,662 | $ | (2,110,869 | ) | $ | 7,767,793 | $ | 9,697,827 | $ | (2,276,109 | ) | $ | 7,421,718 | ||||||||||
Incurred | 1,550,221 | (314,854 | ) | 1,235,367 | 3,122,745 | (675,105 | ) | 2,447,640 | ||||||||||||||||
Paid | (741,324 | ) | 137,234 | (604,090 | ) | (2,181,786 | ) | 468,525 | (1,713,261 | ) | ||||||||||||||
Foreign exchange and other | 100,016 | (9,533 | ) | 90,483 | 148,789 | 184,667 | 333,456 | |||||||||||||||||
End of period [a] | $ | 10,787,575 | $ | (2,298,022 | ) | $ | 8,489,553 | $ | 10,787,575 | $ | (2,298,022 | ) | $ | 8,489,553 | ||||||||||
[a] | At September 30, 2017, the gross reserve for losses and loss expenses included IBNR of $7,156 million, or 66%, of total gross reserves for loss and loss expenses. At December 31, 2016, the comparable amount was $6,339 million, or 65%. |
Quarter ended September 30, 2017 | Nine months ended September 30, 2017 | |||||||||||||||||||||||
Insurance | Reinsurance | Total | Insurance | Reinsurance | Total | |||||||||||||||||||
Gross losses paid | $ | 459,648 | $ | 281,676 | $ | 741,324 | $ | 1,401,987 | $ | 779,799 | $ | 2,181,786 | ||||||||||||
Reinsurance recoveries | (113,348 | ) | (23,886 | ) | (137,234 | ) | (435,345 | ) | (33,180 | ) | (468,525 | ) | ||||||||||||
Net losses paid | 346,300 | 257,790 | 604,090 | 966,642 | 746,619 | 1,713,261 | ||||||||||||||||||
Change in: | ||||||||||||||||||||||||
Reported case reserves | 34,012 | 158,461 | 192,473 | (95,802 | ) | 247,469 | 151,667 | |||||||||||||||||
IBNR | 266,928 | 349,496 | 616,424 | 343,197 | 446,095 | 789,292 | ||||||||||||||||||
Reinsurance recoveries on unpaid loss and loss expense reserves | (18,375 | ) | (159,245 | ) | (177,620 | ) | 27,458 | (234,038 | ) | (206,580 | ) | |||||||||||||
Total net incurred losses and loss expenses | $ | 628,865 | $ | 606,502 | $ | 1,235,367 | $ | 1,241,495 | $ | 1,206,145 | $ | 2,447,640 | ||||||||||||
Gross reserve for losses and loss expenses | $ | 5,525,000 | $ | 5,262,575 | $ | 10,787,575 | $ | 5,525,000 | $ | 5,262,575 | $ | 10,787,575 | ||||||||||||
Net favorable prior year reserve development | $ | 2,603 | $ | 45,165 | $ | 47,768 | $ | 30,740 | $ | 112,755 | $ | 143,495 | ||||||||||||
Key Ratios | ||||||||||||||||||||||||
Net paid to net incurred percentage | 55.1 | % | 42.5 | % | 48.9 | % | 77.9 | % | 61.9 | % | 70.0 | % | ||||||||||||
Net paid losses / Net premiums earned | 69.8 | % | 49.5 | % | 59.4 | % | 66.7 | % | 50.1 | % | 58.3 | % | ||||||||||||
Change in net loss and loss expense reserves / Net premiums earned | 57.0 | % | 66.9 | % | 62.1 | % | 19.0 | % | 30.9 | % | 25.0 | % | ||||||||||||
Net loss and loss expense ratio | 126.8 | % | 116.4 | % | 121.5 | % | 85.7 | % | 81.0 | % | 83.3 | % |
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | |||||||||||||||||||
Gross losses paid | $ | 459,648 | $ | 424,631 | $ | 517,708 | $ | 456,485 | $ | 365,160 | $ | 388,142 | ||||||||||||
Reinsurance recoveries | (113,348 | ) | (118,232 | ) | (203,766 | ) | (121,990 | ) | (102,625 | ) | (121,560 | ) | ||||||||||||
Net losses paid | 346,300 | 306,399 | 313,942 | 334,495 | 262,535 | 266,582 | ||||||||||||||||||
Change in: | ||||||||||||||||||||||||
Reported case reserves | 34,012 | (57,989 | ) | (71,825 | ) | 37,738 | (5,561 | ) | (29,415 | ) | ||||||||||||||
IBNR | 266,928 | 95,220 | (18,949 | ) | (88,366 | ) | 55,505 | 46,941 | ||||||||||||||||
Reinsurance recoveries on unpaid loss and loss expense reserves | (18,375 | ) | (17,902 | ) | 63,735 | 4,294 | (39,253 | ) | (836 | ) | ||||||||||||||
Total net incurred losses and loss expenses | $ | 628,865 | $ | 325,728 | $ | 286,903 | $ | 288,161 | $ | 273,226 | $ | 283,272 | ||||||||||||
Gross reserve for losses and loss expenses | $ | 5,525,000 | $ | 5,200,224 | $ | 5,055,410 | $ | 5,345,655 | $ | 5,430,238 | $ | 5,243,445 | ||||||||||||
Net favorable prior year reserve development | $ | 2,603 | $ | 19,517 | $ | 8,619 | $ | 12,725 | $ | 20,688 | $ | 2,444 | ||||||||||||
Key Ratios | ||||||||||||||||||||||||
Net paid to net incurred percentage | 55.1 | % | 94.1 | % | 109.4 | % | 116.1 | % | 96.1 | % | 94.1 | % | ||||||||||||
Net paid losses/Net premiums earned | 69.8 | % | 62.0 | % | 68.5 | % | 73.6 | % | 59.0 | % | 60.0 | % | ||||||||||||
Change in net loss and loss expense reserves / Net premiums earned | 57.0 | % | 4.0 | % | (5.9 | %) | (10.2 | %) | 2.4 | % | 3.7 | % | ||||||||||||
Net loss and loss expense ratio | 126.8 | % | 66.0 | % | 62.6 | % | 63.4 | % | 61.4 | % | 63.7 | % |
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | |||||||||||||||||||
Gross losses paid | $ | 281,676 | $ | 254,182 | $ | 243,941 | $ | 297,741 | $ | 231,506 | $ | 212,859 | ||||||||||||
Reinsurance recoveries | (23,886 | ) | (3,936 | ) | (5,358 | ) | (8,284 | ) | (5,463 | ) | (1,664 | ) | ||||||||||||
Net losses paid | 257,790 | 250,246 | 238,583 | 289,457 | 226,043 | 211,195 | ||||||||||||||||||
Change in: | ||||||||||||||||||||||||
Reported case reserves | 158,461 | 90,172 | (1,164 | ) | 37,735 | 20,139 | 22,545 | |||||||||||||||||
IBNR | 349,496 | (8,890 | ) | 105,490 | (50,686 | ) | 23,473 | 40,444 | ||||||||||||||||
Reinsurance recoveries on unpaid loss and loss expense reserves | (159,245 | ) | (51,924 | ) | (22,870 | ) | (24,055 | ) | (10,553 | ) | 2,931 | |||||||||||||
Total net incurred losses and loss expenses | $ | 606,502 | $ | 279,604 | $ | 320,039 | $ | 252,451 | $ | 259,102 | $ | 277,115 | ||||||||||||
Gross reserve for losses and loss expenses | $ | 5,262,575 | $ | 4,678,438 | $ | 4,486,553 | $ | 4,352,172 | $ | 4,444,569 | $ | 4,460,138 | ||||||||||||
Net favorable prior year reserve development | $ | 45,165 | $ | 51,416 | $ | 16,174 | $ | 55,522 | $ | 55,331 | $ | 42,681 | ||||||||||||
Key Ratios | ||||||||||||||||||||||||
Net paid to net incurred percentage | 42.5 | % | 89.5 | % | 74.5 | % | 114.7 | % | 87.2 | % | 76.2 | % | ||||||||||||
Net paid losses / Net premiums earned | 49.5 | % | 51.3 | % | 49.7 | % | 62.0 | % | 46.2 | % | 44.5 | % | ||||||||||||
Change in net loss and loss expense reserves / Net premiums earned | 66.9 | % | 6.0 | % | 16.9 | % | (8.0 | %) | 6.7 | % | 13.9 | % | ||||||||||||
Net loss and loss expense ratio | 116.4 | % | 57.3 | % | 66.6 | % | 54.0 | % | 52.9 | % | 58.4 | % |
Hurricane Harvey | Hurricane Irma | Hurricane Maria | Mexico Earthquakes | Total | |||||||||||||||
Gross loss and loss expenses | |||||||||||||||||||
Insurance | $ | 148 | $ | 137 | $ | 26 | $ | 10 | $ | 321 | |||||||||
Reinsurance | 139 | 158 | 126 | 35 | 458 | ||||||||||||||
Total | $ | 287 | $ | 295 | $ | 152 | $ | 45 | $ | 779 | |||||||||
Net loss and loss expenses | |||||||||||||||||||
Insurance | $ | 144 | $ | 136 | $ | 25 | $ | 10 | $ | 315 | |||||||||
Reinsurance | 99 | 104 | 96 | 23 | 322 | ||||||||||||||
Total | $ | 243 | $ | 240 | $ | 121 | $ | 33 | $ | 637 | |||||||||
Net reinstatement premiums | |||||||||||||||||||
Reinsurance | $ | 3 | $ | 12 | $ | 5 | $ | — | $ | 20 | |||||||||
Total impact before income tax | |||||||||||||||||||
Insurance | $ | 144 | $ | 136 | $ | 25 | $ | 10 | $ | 315 | |||||||||
Reinsurance | 96 | 92 | 91 | 23 | 302 | ||||||||||||||
Total | $ | 240 | $ | 228 | $ | 116 | $ | 33 | $ | 617 | |||||||||
Income tax benefit | 20 | 15 | 3 | 1 | 39 | ||||||||||||||
Total impact after income tax | $ | 220 | $ | 213 | $ | 113 | $ | 32 | $ | 578 |
Estimated Net Exposures (millions of U.S. dollars) | ||||||||||||||
Territory | Peril | 50 Year Return Period | 100 Year Return Period | 250 Year Return Period | ||||||||||
Single zone, single event | ||||||||||||||
Southeast | U.S. Hurricane | $ | 468 | $ | 530 | $ | 675 | |||||||
Northeast | U.S. Hurricane | 39 | 114 | 279 | ||||||||||
Mid-Atlantic | U.S. Hurricane | 103 | 298 | 538 | ||||||||||
Gulf of Mexico | U.S. Hurricane | 316 | 390 | 462 | ||||||||||
California | Earthquake | 318 | 437 | 516 | ||||||||||
Europe | Windstorm | 173 | 239 | 307 | ||||||||||
Japan | Earthquake | 143 | 183 | 294 | ||||||||||
Japan | Windstorm | 50 | 86 | 122 |
Quarter ended September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income (loss) available to common shareholders | $ | (467,740 | ) | $ | 176,644 | $ | (377,695 | ) | $ | 334,554 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
Weighted average shares outstanding - basic | 83,305 | 89,621 | 84,479 | 91,852 | ||||||||||||
Dilutive share equivalents: | ||||||||||||||||
Share-based compensation plans [a] | — | 730 | — | 727 | ||||||||||||
Weighted average shares outstanding - diluted | 83,305 | 90,351 | 84,479 | 92,579 | ||||||||||||
EARNINGS (LOSS) PER COMMON SHARE | ||||||||||||||||
Basic | ($5.61 | ) | $1.97 | ($4.47 | ) | $3.64 | ||||||||||
Diluted | ($5.61 | ) | $1.96 | ($4.47 | ) | $3.61 | ||||||||||
Q3 2017 | Q2 2017 | Q1 2017 | Q4 2016 | Q3 2016 | Q3 2015 | |||||||||||||||||||
Net income (loss) available to common shareholders | $ | (467,740 | ) | $ | 85,030 | $ | 5,014 | $ | 130,912 | $ | 176,644 | $ | 247,620 | |||||||||||
COMMON SHARES OUTSTANDING | ||||||||||||||||||||||||
Common shares - at beginning of period | 83,203 | 85,170 | 86,441 | 88,439 | 90,654 | 100,284 | ||||||||||||||||||
Shares issued, including those sourced from treasury | 5 | 37 | 958 | 11 | 37 | 22 | ||||||||||||||||||
Shares repurchased for treasury | (51 | ) | (2,004 | ) | (2,229 | ) | (2,009 | ) | (2,252 | ) | (4,257 | ) | ||||||||||||
Common shares - at end of period | 83,157 | 83,203 | 85,170 | 86,441 | 88,439 | 96,049 | ||||||||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||||||||||
Weighted average shares outstanding - basic | 83,305 | 84,141 | 86,022 | 87,552 | 89,621 | 98,226 | ||||||||||||||||||
Dilutive share equivalents: | ||||||||||||||||||||||||
Share-based compensation plans [a] | — | 370 | 771 | 922 | 730 | 898 | ||||||||||||||||||
Weighted average shares outstanding - diluted | 83,305 | 84,511 | 86,793 | 88,474 | 90,351 | 99,124 | ||||||||||||||||||
EARNINGS (LOSS) PER COMMON SHARE | ||||||||||||||||||||||||
Basic | ($5.61 | ) | $1.01 | $0.06 | $1.50 | $1.97 | $2.52 | |||||||||||||||||
Diluted | ($5.61 | ) | $1.01 | $0.06 | $1.48 | $1.96 | $2.50 | |||||||||||||||||
At September 30, 2017 | ||||||||||||
Common Shareholders’ Equity | Outstanding Common Shares net of Treasury Shares | Per share | ||||||||||
Closing stock price | $57.31 | |||||||||||
Book value per common share | $ | 4,679,699 | 83,157 | $56.28 | ||||||||
Dilutive securities: [b] | ||||||||||||
Restricted units | 1,418 | (0.95 | ) | |||||||||
Diluted book value per common share | $ | 4,679,699 | 84,575 | $55.33 | ||||||||
At December 31, 2016 | ||||||||||||
Common Shareholders’ Equity | Outstanding Common Shares net of Treasury Shares | Per share | ||||||||||
Closing stock price | $65.27 | |||||||||||
Book value per common share | $ | 5,146,296 | 86,441 | $59.54 | ||||||||
Dilutive securities: [b] | ||||||||||||
Restricted units | 1,876 | (1.27 | ) | |||||||||
Diluted book value per common share | $ | 5,146,296 | 88,317 | $58.27 | ||||||||
[a] | Under this method unvested restricted stock units are added to determine the diluted common shares outstanding. |
[b] | Excludes cash-settled restricted stock unit awards. |
NON-GAAP OPERATING INCOME | Quarter ended September 30, | Nine months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income (loss) available to common shareholders | $ | (467,740 | ) | $ | 176,644 | $ | (377,695 | ) | $ | 334,554 | ||||||
Adjustment for: | ||||||||||||||||
Net realized investment (gains) losses | (14,632 | ) | (5,205 | ) | 14,811 | 40,295 | ||||||||||
Associated tax impact | 2,657 | 2,479 | 1,892 | 2,372 | ||||||||||||
Foreign exchange losses (gains) | 32,510 | (13,795 | ) | 90,093 | (69,781 | ) | ||||||||||
Associated tax impact | (4,439 | ) | 566 | (4,242 | ) | 2,010 | ||||||||||
Bargain purchase gain | — | — | (15,044 | ) | — | |||||||||||
Associated tax impact | — | — | — | — | ||||||||||||
Transaction related expenses | 5,970 | — | 5,970 | — | ||||||||||||
Associated tax impact | (221 | ) | — | (221 | ) | — | ||||||||||
Non-GAAP operating income (loss) | $ | (445,895 | ) | $ | 160,689 | $ | (284,436 | ) | $ | 309,450 | ||||||
Net earnings (loss) per share - diluted | $ | (5.61 | ) | $ | 1.96 | $ | (4.47 | ) | $ | 3.61 | ||||||
Adjustment for: | ||||||||||||||||
Net realized investment (gains) losses | (0.18 | ) | (0.06 | ) | 0.16 | 0.44 | ||||||||||
Associated tax impact | 0.03 | 0.03 | 0.03 | 0.02 | ||||||||||||
Foreign exchange losses (gains) | 0.39 | (0.15 | ) | 1.07 | (0.75 | ) | ||||||||||
Associated tax impact | (0.05 | ) | — | (0.05 | ) | 0.02 | ||||||||||
Bargain purchase gain | — | — | (0.18 | ) | — | |||||||||||
Associated tax impact | — | $ | — | — | — | |||||||||||
Transaction related expenses | 0.07 | — | 0.07 | — | ||||||||||||
Associated tax impact | — | $ | — | — | — | |||||||||||
Non-GAAP operating income (loss) per share - diluted | $ | (5.35 | ) | $ | 1.78 | $ | (3.37 | ) | $ | 3.34 | ||||||
Weighted average common shares and common share equivalents - diluted | 83,305 | 90,351 | 84,479 | 92,579 | ||||||||||||
Average common shareholders' equity | $ | 4,898,698 | $ | 5,369,921 | $ | 4,912,998 | $ | 5,319,849 | ||||||||
Annualized return on average common equity | nm | 13.2 | % | (10.3 | )% | 8.4 | % | |||||||||
Annualized non-GAAP operating return on average common equity | nm | 12.0 | % | (7.7 | )% | 7.8 | % | |||||||||
[a] | Non-GAAP operating income is a “non-GAAP financial measure” as defined by Regulation G. A reconciliation of non-GAAP operating income to net income available to common shareholders is presented above. |
DILUTED TANGIBLE BOOK VALUE PER COMMON SHARE - TREASURY STOCK METHOD [a] | |||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | ||||||||||||||||||
2017 | 2017 | 2017 | 2016 | 2016 | 2015 | ||||||||||||||||||
Common shareholders' equity | $ | 4,679,699 | $ | 5,117,695 | $ | 5,104,291 | $ | 5,146,296 | $ | 5,400,658 | $ | 5,198,523 | |||||||||||
Less: goodwill and intangible assets | (87,206 | ) | (86,220 | ) | (84,613 | ) | (85,049 | ) | (85,501 | ) | (87,329 | ) | |||||||||||
Tangible common shareholders' equity | $ | 4,592,493 | $ | 5,031,475 | $ | 5,019,678 | $ | 5,061,247 | $ | 5,315,157 | $ | 5,111,194 | |||||||||||
Outstanding diluted common shares, net of treasury shares | 84,575 | 84,655 | 86,670 | 88,317 | 90,363 | 98,213 | |||||||||||||||||
Diluted book value per common share | $ | 55.33 | $ | 60.45 | $ | 58.89 | $ | 58.27 | $ | 59.77 | $ | 53.68 | |||||||||||
Diluted tangible book value per common share | $ | 54.30 | $ | 59.44 | $ | 57.92 | $ | 57.31 | $ | 58.82 | $ | 52.78 | |||||||||||
[a] | This method assumes that proceeds received upon exercise of options will be used to repurchase our common shares at the closing market price. Unvested restricted stocks and units and unrestricted phantom stock units are also added to determine the diluted common |
shares outstanding. Cash-settled restricted stock unit awards are excluded. |
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