Investments (Tables)

12 Months Ended

Dec. 31, 2014

Original or amortized cost, estimated fair value and gross unrealized gains and losses of available-for-sale and other investments

The original or amortized cost, estimated fair value and gross unrealized gains and losses of AFS fixed maturities and other investments at December 31, 2014 and 2013, are as follows:



December 31, 2014	Original or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
AFS fixed maturities:
U.S. treasury bonds	$	8,937	$	423	$	—		$	9,360
U.S. agency bonds – mortgage-backed	1,313,834		19,197		(10,588		)	1,322,443
U.S. agency bonds – other	7,213		775		—			7,988
Non-U.S. government and supranational bonds	54,467		304		(3,128		)	51,643
Other mortgage-backed securities	52,337		2,443		—			54,780
Corporate bonds	1,831,431		89,243		(25,295		)	1,895,379
Municipal bonds - other	62,153		3,666		—			65,819
Short-term investments	49,492		—		—			49,492
Total AFS fixed maturities	3,379,864		116,051		(39,011		)	3,456,904
Other investments	10,862		1,709		—			12,571
Total investments	$	3,390,726	$	117,760	$	(39,011	)	$	3,469,475

4. Investments (continued)



December 31, 2013	Original or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
AFS fixed maturities:
U.S. treasury bonds	$	16,622	$	587	$	—		$	17,209
U.S. agency bonds – mortgage-backed	1,292,032		11,727		(41,104		)	1,262,655
U.S. agency bonds – other	7,207		901		—			8,108
Non-U.S. government and supranational bonds	70,377		3,547		(712		)	73,212
Other mortgage-backed securities	33,676		—		(232		)	33,444
Corporate bonds	1,546,578		82,952		(22,830		)	1,606,700
Municipal bonds - auction rate	99,170		—		—			99,170
Municipal bonds - other	62,130		934		(1,495		)	61,569
Total AFS fixed maturities	3,127,792		100,648		(66,373		)	3,162,067
Other investments	4,522		570		—			5,092
Total investments	$	3,132,314	$	101,218	$	(66,373	)	$	3,167,159

Contractual maturities of fixed maturities, available-for-sale

The contractual maturities of our fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



December 31, 2014	Amortized cost		Fair value		% of Total fair value
Maturity
Due in one year or less	$	75,844	$	74,563	2.2	%
Due after one year through five years	530,598		563,048		16.3	%
Due after five years through ten years	1,372,071		1,403,395		40.6	%
Due after ten years	35,180		38,675		1.1	%
	2,013,693		2,079,681		60.2	%
U.S. agency bonds - mortgage-backed	1,313,834		1,322,443		38.3	%
Other mortgage-backed securities	52,337		54,780		1.5	%
Total AFS fixed maturities	$	3,379,864	$	3,456,904	100.0	%

Summary of available-for-sale securities and other investments in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the securities have continuously been in an unrealized loss position

The following tables summarize fixed maturities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:



	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
AFS fixed maturities:
U.S. agency bonds – mortgage-backed	$	84,264	$	(806	)	$	441,601	$	(9,782	)	$	525,865	$	(10,588	)
Non–U.S. government and supranational bonds	43,712		(2,822		)	2,522		(306		)	46,234		(3,128		)
Corporate bonds	397,173		(14,485		)	143,894		(10,810		)	541,067		(25,295		)
Total temporarily impaired AFS fixed maturities	$	525,149	$	(18,113	)	$	588,017	$	(20,898	)	$	1,113,166	$	(39,011	)

At December 31, 2014, there were approximately 141 securities in an unrealized loss position with a fair value of $1,113,166 and unrealized losses of $39,011. Of these securities, there were 46 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $588,017 and unrealized losses of $20,898.

4. Investments (continued)



	Less than 12 Months					12 Months or More					Total
December 31, 2013	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
AFS fixed maturities:
U.S. agency bonds – mortgage-backed	$	795,439	$	(38,421	)	$	60,602	$	(2,683	)	$	856,041	$	(41,104	)
Non-U.S. government and supranational bonds	9,946		(712		)	—		—			9,946		(712		)
Other mortgage-backed securities	33,444		(232		)	—		—			33,444		(232		)
Corporate bonds	463,469		(16,687		)	169,294		(6,143		)	632,763		(22,830		)
Municipal bonds - other	50,545		(1,495		)	—		—			50,545		(1,495		)
Total temporarily impaired AFS fixed maturities	$	1,352,843	$	(57,547	)	$	229,896	$	(8,826	)	$	1,582,739	$	(66,373	)

Summary of the credit ratings of fixed maturities

The following summarizes the credit ratings of our AFS fixed maturities:



Rating* at December 31, 2014	Amortized cost		Fair value		% of Total fair value
U.S. treasury bonds	$	8,937	$	9,360	0.3	%
U.S. agency bonds	1,321,047		1,330,431		38.5	%
AAA	193,280		202,973		5.9	%
AA+, AA, AA-	116,936		120,679		3.5	%
A+, A, A-	883,092		917,544		26.5	%
BBB+, BBB, BBB-	794,244		814,039		23.5	%
BB+ or lower	62,328		61,878		1.8	%
Total	$	3,379,864	$	3,456,904	100.0	%

4. Investments (continued)



Rating* at December 31, 2013	Amortized cost		Fair value		% of Total fair value
U.S. treasury bonds	$	16,622	$	17,209	0.5	%
U.S. agency bonds	1,299,239		1,270,763		40.2	%
AAA	210,872		222,417		7.0	%
AA+, AA, AA-	236,424		242,986		7.7	%
A+, A, A-	619,148		651,248		20.6	%
BBB+, BBB, BBB-	689,532		701,529		22.2	%
BB+ or lower	55,955		55,915		1.8	%
Total	$	3,127,792	$	3,162,067	100.0	%

*Ratings as assigned by Standard & Poor's ("S&P")

Portfolio of other investments

The table below shows our portfolio of other investments:



December 31,	2014				2013
	Fair value		% of Total fair value		Fair value		% of Total fair value
Investment in limited partnerships	$	5,581	44.4	%	$	4,092	80.4	%
Investment in quoted equity	5,990		47.6	%	—		—	%
Other	1,000		8.0	%	1,000		19.6	%
Total other investments	$	12,571	100.0	%	$	5,092	100.0	%

Net investment income

Net investment income was derived from the following sources:



For the Year Ended December 31,	2014			2013			2012
Fixed maturities	$	118,203		$	89,350		$	79,891
Cash and cash equivalents	2,224			3,120			1,439
Funds withheld	246			1,452			1,648
Loan to related party	1,797			1,857			1,945
	122,470			95,779			84,923
Less:
Investment expenses	(5,255		)	(4,427		)	(3,735		)
Total	$	117,215		$	91,352		$	81,188

Analysis of realized and unrealized gains on investment

The following provides an analysis of net realized gains on investment included in the Consolidated Statements of Income:



For the Year Ended December 31, 2014	Gross gains		Gross losses		Net
AFS fixed maturities	$	724	$	—	$	724
Other investments	439		—		439
Net realized gains on investment	$	1,163	$	—	$	1,163



For the Year Ended December 31, 2013	Gross gains		Gross losses			Net
AFS fixed maturities	$	5,598	$	(2,201	)	$	3,397
Other investments	188		—			188
Net realized gains on investment	$	5,786	$	(2,201	)	$	3,585



For the Year Ended December 31, 2012	Gross gains		Gross losses			Net
AFS fixed maturities	$	3,468	$	(13	)	$	3,455
Trading securities and short sales	—		(1,592		)	(1,592		)
Other investments	55		(11		)	44
Net realized gains on investment	$	3,523	$	(1,616	)	$	1,907

Net unrealized gains on available-for-sale securities and other investments

Net unrealized gains were as follows:



December 31,	2014			2013			2012
AFS fixed maturities	$	77,040		$	34,275		$	143,495
Other investments	1,709			570			302
Total net unrealized gains	78,749			34,845			143,797
Deferred income tax	(170		)	(117		)	(132		)
Net unrealized gains, net of deferred income tax	$	78,579		$	34,728		$	143,665
Change in net unrealized gains, net of deferred income tax	$	43,851		$	(108,937	)	$	79,928

Fair value of restricted assets

The fair value of our restricted assets was as follows:



December 31,	2014		2013
Restricted cash and cash equivalents – third party agreements	$	107,884	$	72,877
Restricted cash and cash equivalents – related party agreements	175,817		4,429
Restricted cash and cash equivalents – U.S. state regulatory authorities	680		54
Total restricted cash and cash equivalents	284,381		77,360
Restricted investments – in trust for third party agreements at fair value (Amortized cost: 2014 – $993,974; 2013 – $933,897)	1,014,878		939,800
Restricted investments – in trust for related party agreements at fair value (Amortized cost: 2014 – $1,769,083; 2013 – $1,183,156)	1,814,478		1,201,473
Restricted investments – in trust for U.S. state regulatory authorities (Amortized cost: 2014 – $7,269; 2013 – $12,730)	7,606		13,065
Total restricted investments	2,836,962		2,154,338
Total restricted cash and cash equivalents and investments	$	3,121,343	$	2,231,698