Note 2. Segment Information

During the first quarter of 2015, we realigned our reporting segments from Insurance Companies, Lloyd’s Operations and Corporate to U.S. Insurance, International Insurance (“Int’l Insurance”), Global Reinsurance (“GlobalRe”) and Corporate. The new segment presentation reflects an increase in the level of importance that the Chief Operating Decision Maker now places on the results of the underlying operating segments when aggregated and reported in alignment with the products and services offered to the marketplace versus when aggregated and reported in alignment with our legal entity structure. Over the past few years, we have been monitoring the growth and stability of our reinsurance business and in 2015 determined that reinsurance has become a stable and significant component of our Company. We are also increasing our focus on additional international insurance markets by establishing underwriting offices in Continental Europe. The offices were fully operational during our January 2015 renewal season. We considered these changes in conjunction with operating and reportable segments.

Our previously reported segments were consistent with our legal entity structure; however, our new reporting segments are now primarily reflective of where our business is written. We reclassified our international business from our previously reported Lloyd’s Operations segment to the Int’l Insurance segment. We also reclassified our non-Lloyd’s business written internationally (primarily business written by the U.K. Branch) into this segment and have excluded Assumed Reinsurance. Our new GlobalRe segment was previously reported within our U.S. Insurance and Lloyd’s Operations segments as Assumed Reinsurance. Our U.S. Insurance segment now excludes the U.K. Branch and Assumed Reinsurance. Our Corporate segment now includes Net investment income, Net realized gains (losses), Interest expense, Other income (loss) primarily consisting of foreign exchange gain (loss) and Income tax (expense) benefit, which are not allocated to the U.S. Insurance, Int’l Insurance and GlobalRe segments (together, “underwriting segments”). We do not allocate assets under the new reporting segments, as it is impracticable to do so.

As noted above, we classify our business into three underwriting segments (U.S. Insurance, Int’l Insurance and GlobalRe) and a Corporate Segment. Both the U.S. Insurance and Int’l Insurance reporting segments are each comprised of three operating segments: Marine, P&C and Professional Liability.

We evaluate the performance of each of the underwriting segments based on underwriting results. Underwriting results are measured based on underwriting profit or loss and the related Combined ratio, which are both non-GAAP measures of underwriting profitability. Underwriting profit or loss is calculated from Net earned premiums less the sum of Net losses and loss adjustment expenses (“LAE”), Commission expenses, Other operating expenses and Other underwriting income (expense). The Combined ratio is derived by dividing the sum of Net losses and LAE, Commission expenses, Other operating expenses and Other underwriting income (expense) by Net earned premiums. A Combined ratio of less than 100% indicates an underwriting profit and greater than 100% indicates an underwriting loss. Our underwriting performance is evaluated separately from the rest of our operations. The performance of our investment portfolios, our liquidity and capital resource needs, our foreign currency exposure and our tax planning strategies are evaluated on a consolidated basis within our Corporate segment.

The accounting policies used to prepare the segment reporting data for our reportable segments are the same as those described in Note 1 and Note 3 of our Annual Report on Form 10-K for the year ended December 31, 2014. In addition, 2014 data presented in this Quarterly Report has been recast to align with the new segment reporting described above.

Financial data by segment for the three and nine months ended September 30, 2015 and 2014 was as follows:

	Three Months Ended September 30, 2015
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	142,409		$	68,533		$	43,140		$	—		$	254,082
Net losses and LAE		(85,140	)		(39,182	)		(22,224	)		—			(146,546	)
Commission expenses		(15,157	)		(12,780	)		(7,705	)		1,389			(34,253	)
Other operating expenses		(32,948	)		(19,937	)		(3,714	)		—			(56,599	)
Other underwriting income (expense)		1,013			—			395			(1,389	)		19
Underwriting profit (loss)	$	10,177		$	(3,366	)	$	9,892		$	—		$	16,703
Net investment income											17,371			17,371
Net realized gains (losses)											(757	)		(757	)
Interest expense											(3,856	)		(3,856	)
Other income (loss)											(2,537	)		(2,537	)
Income before income taxes	$	10,177		$	(3,366	)	$	9,892		$	10,221		$	26,924
Income tax (expense) benefit											(8,723	)		(8,723	)
Net income (loss)													$	18,201
Losses and LAE ratio		59.8	%		57.2	%		51.5	%					57.7	%
Commission expense ratio		10.6	%		18.6	%		17.9	%					13.5	%
Other operating expense ratio ⁽²⁾		22.5	%		29.1	%		7.7	%					22.2	%
Combined ratio		92.9	%		104.9	%		77.1	%					93.4	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other operating expenses and Other underwriting income (expense).

	Three Months Ended September 30, 2014
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	130,420		$	66,278		$	48,669		$	—		$	245,367
Net losses and LAE		(80,722	)		(24,910	)		(29,652	)		—			(135,284	)
Commission expenses		(12,870	)		(12,792	)		(8,831	)		550			(33,943	)
Other operating expenses		(29,160	)		(17,288	)		(3,940	)		—			(50,388	)
Other underwriting income (expense)		534			1			122			(550	)		107
Underwriting profit (loss)	$	8,202		$	11,289		$	6,368		$	—		$	25,859
Net investment income											15,839			15,839
Net realized gains (losses)											6,718			6,718
Interest expense											(3,388	)		(3,388	)
Other income (loss)											1,229			1,229
Income before income taxes	$	8,202		$	11,289		$	6,368		$	20,398		$	46,257
Income tax (expense) benefit											(15,032	)		(15,032	)
Net income (loss)													$	31,225
Losses and LAE ratio		61.9	%		37.6	%		60.9	%					55.1	%
Commission expense ratio		9.9	%		19.3	%		18.1	%					13.8	%
Other operating expense ratio ⁽²⁾		21.9	%		26.1	%		7.9	%					20.6	%
Combined ratio		93.7	%		83.0	%		86.9	%					89.5	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other operating expenses and Other underwriting income (expense).

	Nine Months Ended September 30, 2015
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	410,804		$	197,244		$	124,494		$	—		$	732,542
Net losses and LAE		(247,094	)		(101,236	)		(70,387	)		—			(418,717	)
Commission expenses		(41,777	)		(35,491	)		(23,042	)		1,672			(98,638	)
Other operating expenses		(98,010	)		(54,312	)		(11,975	)		—			(164,297	)
Other underwriting income (expense)		1,330			—			441			(1,672	)		99
Underwriting profit (loss)	$	25,253		$	6,205		$	19,531		$	—		$	50,989
Net investment income											50,219			50,219
Net realized gains (losses)											8,755			8,755
Interest expense											(11,567	)		(11,567	)
Other income (loss)											(4,737	)		(4,737	)
Income (loss) before income taxes	$	25,253		$	6,205		$	19,531		$	42,670		$	93,659
Income tax (expense) benefit											(30,345	)		(30,345	)
Net income (loss)													$	63,314
Losses and LAE ratio		60.1	%		51.3	%		56.5	%					57.2	%
Commission expense ratio		10.2	%		18.0	%		18.5	%					13.5	%
Other operating expense ratio ⁽²⁾		23.6	%		27.6	%		9.3	%					22.3	%
Combined ratio		93.9	%		96.9	%		84.3	%					93.0	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other operating expenses and Other underwriting income (expense).

	Nine Months Ended September 30, 2014
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	370,864		$	187,993		$	142,866		$	—		$	701,723
Net losses and LAE		(226,817	)		(91,423	)		(92,331	)		—			(410,571	)
Commission expenses		(35,598	)		(32,656	)		(25,171	)		1,605			(91,820	)
Other operating expenses		(85,993	)		(47,783	)		(11,750	)		—			(145,526	)
Other underwriting income (expense)		1,783			18			301			(1,605	)		497
Underwriting profit (loss)	$	24,239		$	16,149		$	13,915		$	—		$	54,303
Net investment income											48,097			48,097
Net realized gains (losses)											12,024			12,024
Interest expense											(11,559	)		(11,559	)
Other income (loss)											9,573			9,573
Income (loss) before income taxes	$	24,239		$	16,149		$	13,915		$	58,135		$	112,438
Income tax (expense) benefit											(36,384	)		(36,384	)
Net income (loss)													$	76,054
Losses and LAE ratio		61.2	%		48.6	%		64.6	%					58.5	%
Commission expense ratio		9.6	%		17.4	%		17.6	%					13.1	%
Other operating expense ratio ⁽²⁾		22.7	%		25.4	%		8.1	%					20.7	%
Combined ratio		93.5	%		91.4	%		90.3	%					92.3	%

(1) - Includes Corporate segment intercompany eliminations.

(2) - Includes Other operating expenses and Other underwriting income (expense).

Revenue by operating segment for the three and nine months ended September 30, 2015 and 2014 was as follows:

	Three months ended September 30, 2015									Three months ended September 30, 2014									% Change
amounts in thousands	Gross written premiums		Ceded written premiums			Net written premiums		Net earned premiums		Gross written premiums		Ceded written premiums			Net written premiums		Net earned premiums		Gross written premiums			Ceded written premiums			Net written premiums			Net earned premiums
U.S. Insurance
Marine	$	35,529	$	(13,865	)	$	21,664	$	24,292	$	34,576	$	(13,338	)	$	21,238	$	27,207		2.8	%		4.0	%		2.0	%		(10.7	%)
P&C		154,009		(34,902	)		119,107		104,473		138,181		(41,180	)		97,001		82,635		11.5	%		(15.2	%)		22.8	%		26.4	%
Professional Liability		29,245		(14,986	)		14,259		13,644		26,966		(7,136	)		19,830		20,578		8.5	%		110.0	%		(28.1	%)		(33.7	%)
Total	$	218,783	$	(63,753	)	$	155,030	$	142,409	$	199,723	$	(61,654	)	$	138,069	$	130,420		9.5	%		3.4	%		12.3	%		9.2	%

Int'l Insurance
Marine	$	41,002	$	(10,985	)	$	30,017	$	36,792	$	41,593	$	(6,924	)	$	34,669	$	40,207		(1.4	%)		58.7	%		(13.4	%)		(8.5	%)
P&C		37,449		(20,034	)		17,415		16,879		35,399		(24,267	)		11,132		14,300		5.8	%		(17.4	%)		56.4	%		18.0	%
Professional Liability		20,337		(6,785	)		13,552		14,862		17,169		(5,416	)		11,753		11,771		18.5	%		25.3	%		15.3	%		26.3	%
Total	$	98,788	$	(37,804	)	$	60,984	$	68,533	$	94,161	$	(36,607	)	$	57,554	$	66,278		4.9	%		3.3	%		6.0	%		3.4	%

GlobalRe	$	36,491	$	(566	)	$	35,925	$	43,140	$	33,585	$	(791	)	$	32,794	$	48,669		8.7	%		(28.4	%)		9.5	%		(11.4	%)

Total	$	354,062	$	(102,123	)	$	251,939	$	254,082	$	327,469	$	(99,052	)	$	228,417	$	245,367		8.1	%		3.1	%		10.3	%		3.6	%

	Nine months ended September 30, 2015									Nine months ended September 30, 2014									% Change
amounts in thousands	Gross written premiums		Ceded written premiums			Net written premiums		Net earned premiums		Gross written premiums		Ceded written premiums			Net written premiums		Net earned premiums		Gross written premiums			Ceded written premiums			Net written premiums			Net earned premiums
U.S. Insurance
Marine	$	118,167	$	(45,177	)	$	72,990	$	74,193	$	120,149	$	(34,095	)	$	86,054	$	81,920		(1.6	%)		32.5	%		(15.2	%)		(9.4	%)
P&C		458,371		(123,765	)		334,606		291,648		400,437		(127,788	)		272,649		224,151		14.5	%		(3.1	%)		22.7	%		30.1	%
Professional Liability		81,559		(42,423	)		39,136		44,963		84,188		(24,841	)		59,347		64,793		(3.1	%)		70.8	%		(34.1	%)		(30.6	%)
Total	$	658,097	$	(211,365	)	$	446,732	$	410,804	$	604,774	$	(186,724	)	$	418,050	$	370,864		8.8	%		13.2	%		6.9	%		10.8	%

Int'l Insurance
Marine	$	149,844	$	(30,933	)	$	118,911	$	114,716	$	151,107	$	(36,351	)	$	114,756	$	112,428		(0.8	%)		(14.9	%)		3.6	%		2.0	%
P&C		112,014		(60,676	)		51,338		43,112		128,954		(80,015	)		48,939		47,207		(13.1	%)		(24.2	%)		4.9	%		(8.7	%)
Professional Liability		68,147		(22,072	)		46,075		39,416		54,024		(19,168	)		34,856		28,358		26.1	%		15.2	%		32.2	%		39.0	%
Total	$	330,005	$	(113,681	)	$	216,324	$	197,244	$	334,085	$	(135,534	)	$	198,551	$	187,993		(1.2	%)		(16.1	%)		9.0	%		4.9	%

GlobalRe	$	141,891	$	(5,806	)	$	136,085	$	124,494	$	160,195	$	(4,665	)	$	155,530	$	142,866		(11.4	%)		24.5	%		(12.5	%)		(12.9	%)

Total	$	1,129,993	$	(330,852	)	$	799,141	$	732,542	$	1,099,054	$	(326,923	)	$	772,131	$	701,723		2.8	%		1.2	%		3.5	%		4.4	%