Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

NOTE 2.  SEGMENT INFORMATION

We report our results of operations consistent with the manner in which our Chief Operating Decision Maker reviews the business to assess performance through our reportable segments: U.S. Insurance, International Insurance (“Int’l Insurance”), Global Reinsurance (“GlobalRe”) and Corporate. 

We classify our business into three underwriting segments: U.S. Insurance, Int’l Insurance and GlobalRe.  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 2 of our Annual Report on Form 10-K for the year ended December 31, 2015.  

Financial data by segment for the three months ended March 31, 2016 and 2015 was as follows:

	Three Months Ended March 31, 2016
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net earned premiums	$	148,340		$	78,008		$	38,010		$	—		$	264,358
Net losses and LAE		(91,512	)		(40,410	)		(21,034	)		—			(152,956	)
Commission expenses		(14,855	)		(15,355	)		(7,745	)		401			(37,554	)
Other operating expenses		(33,761	)		(21,771	)		(5,277	)		—			(60,809	)
Other underwriting income (expense)		361			—			49			(401	)		9
Underwriting profit (loss)	$	8,573		$	472		$	4,003		$	—		$	13,048
Net investment income											19,594			19,594
Net realized gains (losses)											1,597			1,597
Interest expense											(3,858	)		(3,858	)
Other income (loss)											2,540			2,540
Income before income taxes	$	8,573		$	472		$	4,003		$	19,873		$	32,921
Income tax (expense) benefit											(9,989	)		(9,989	)
Net income (loss)													$	22,932
Losses and LAE ratio		61.7	%		51.8	%		55.3	%					57.9	%
Commission expense ratio		10.0	%		19.7	%		20.4	%					14.2	%
Other operating expense ratio (2)		22.5	%		27.9	%		13.8	%					23.0	%
Combined ratio		94.2	%		99.4	%		89.5	%					95.1	%

(1) - Includes Corporate segment intercompany eliminations.

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

	Three Months Ended March 31, 2015
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate (1)			Total
Net earned premiums	$	131,091		$	65,525		$	39,516		$	—		$	236,132
Net losses and LAE		(77,799	)		(29,691	)		(22,708	)		—			(130,198	)
Commission expenses		(14,345	)		(11,413	)		(7,298	)		151			(32,905	)
Other operating expenses		(33,688	)		(17,009	)		(4,212	)		—			(54,909	)
Other underwriting income (expense)		196			—			10			(151	)		55
Underwriting profit (loss)	$	5,455		$	7,412		$	5,308		$	—		$	18,175
Net investment income											16,253			16,253
Net realized gains (losses)											5,596			5,596
Interest expense											(3,855	)		(3,855	)
Other income (loss)											2,187			2,187
Income before income taxes	$	5,455		$	7,412		$	5,308		$	20,181		$	38,356
Income tax (expense) benefit											(12,427	)		(12,427	)
Net income (loss)													$	25,929
Losses and LAE ratio		59.3	%		45.3	%		57.5	%					55.1	%
Commission expense ratio		10.9	%		17.4	%		18.5	%					13.9	%
Other operating expense ratio (2)		25.6	%		26.0	%		10.6	%					23.3	%
Combined ratio		95.8	%		88.7	%		86.6	%					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 months ended March 31, 2016 and 2015 was as follows:

	Three Months Ended March 31, 2016									Three Months Ended March 31, 2015									% Change
amounts in thousands	Gross written premiums		Ceded written premiums			Netwritten 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	$	43,163	$	(17,647	)	$	25,516	$	23,250	$	40,835	$	(16,286	)	$	24,549	$	23,924		5.7	%		8.4	%		3.9	%		(2.8	%)
P&C		141,278		(30,507	)		110,771		109,159		134,146		(39,558	)		94,588		90,735		5.3	%		(22.9	%)		17.1	%		20.3	%
Professional Liability		26,206		(6,343	)		19,863		15,931		24,346		(12,886	)		11,460		16,432		7.6	%		(50.8	%)		73.3	%		(3.0	%)
Total	$	210,647	$	(54,497	)	$	156,150	$	148,340	$	199,327	$	(68,730	)	$	130,597	$	131,091		5.7	%		(20.7	%)		19.6	%		13.2	%
Int'l Insurance
Marine	$	71,948	$	(11,089	)	$	60,859	$	38,856	$	67,410	$	(10,822	)	$	56,588	$	37,792		6.7	%		2.5	%		7.5	%		2.8	%
P&C		44,046		(17,229	)		26,817		21,209		32,950		(16,129	)		16,821		16,034		33.7	%		6.8	%		59.4	%		32.3	%
Professional Liability		28,149		(6,653	)		21,496		17,943		22,067		(7,305	)		14,762		11,699		27.6	%		(8.9	%)		45.6	%		53.4	%
Total	$	144,143	$	(34,971	)	$	109,172	$	78,008	$	122,427	$	(34,256	)	$	88,171	$	65,525		17.7	%		2.1	%		23.8	%		19.1	%
GlobalRe	$	59,087	$	(4,589	)	$	54,498	$	38,010	$	74,706	$	(4,516	)	$	70,190	$	39,516		(20.9	%)		1.6	%		(22.4	%)		(3.8	%)
Total	$	413,877	$	(94,057	)	$	319,820	$	264,358	$	396,460	$	(107,502	)	$	288,958	$	236,132		4.4	%		(12.5	%)		10.7	%		12.0	%