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 and six months ended June 30, 2016 and 2015 was as follows:

	Three Months Ended June 30, 2016
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	152,384		$	77,833		$	37,775		$	—		$	267,992
Net losses and LAE		(93,428	)		(48,066	)		(25,712	)		—			(167,206	)
Commission expenses		(16,894	)		(16,821	)		(7,492	)		481			(40,726	)
Other operating expenses		(31,570	)		(23,043	)		(4,461	)		—			(59,074	)
Other underwriting income (expense)		342			—			203			(481	)		64
Underwriting profit (loss)	$	10,834		$	(10,097	)	$	313		$	—		$	1,050
Net investment income											19,875			19,875
Net realized gains (losses)											1,810			1,810
Interest expense											(3,858	)		(3,858	)
Other income (loss)											4,366			4,366

Income before income taxes	$	10,834		$	(10,097	)	$	313		$	22,193		$	23,243
Income tax (expense) benefit											(7,053	)		(7,053	)
Net income (loss)													$	16,190

Losses and LAE ratio		61.3	%		61.8	%		68.1	%					62.4	%
Commission expense ratio		11.1	%		21.6	%		19.8	%					15.2	%
Other operating expense ratio ⁽²⁾		20.5	%		29.6	%		11.3	%					22.0	%
Combined ratio		92.9	%		113.0	%		99.2	%					99.6	%

(1) - Includes Corporate segment intercompany eliminations.

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

	Three Months Ended June 30, 2015
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	137,304		$	63,186		$	41,838		$	—		$	242,328
Net losses and LAE		(84,155	)		(32,363	)		(25,455	)		—			(141,973	)
Commission expenses		(12,275	)		(11,298	)		(8,039	)		132			(31,480	)
Other operating expenses		(31,374	)		(17,366	)		(4,049	)		—			(52,789	)
Other underwriting income (expense)		121			—			36			(132	)		25
Underwriting profit (loss)	$	9,621		$	2,159		$	4,331		$	—		$	16,111
Net investment income											16,595			16,595
Net realized gains (losses)											3,916			3,916
Interest expense											(3,856	)		(3,856	)
Other income (loss)											(4,387	)		(4,387	)

Income before income taxes	$	9,621		$	2,159		$	4,331		$	12,268		$	28,379
Income tax (expense) benefit											(9,195	)		(9,195	)
Net income (loss)													$	19,184

Losses and LAE ratio		61.3	%		51.2	%		60.8	%					58.6	%
Commission expense ratio		8.9	%		17.9	%		19.2	%					13.0	%
Other operating expense ratio ⁽²⁾		22.8	%		27.5	%		9.6	%					21.8	%
Combined ratio		93.0	%		96.6	%		89.6	%					93.4	%

(1) - Includes Corporate segment intercompany eliminations.

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

	Six Months Ended June 30, 2016
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	300,724		$	155,841		$	75,785		$	—		$	532,350
Net losses and LAE		(184,940	)		(88,476	)		(46,746	)		—			(320,162	)
Commission expenses		(31,749	)		(32,176	)		(15,237	)		882			(78,280	)
Other operating expenses		(65,331	)		(44,814	)		(9,738	)		—			(119,883	)
Other underwriting income (expense)		703			—			252			(882	)		73
Underwriting profit (loss)	$	19,407		$	(9,625	)	$	4,316		$	—		$	14,098
Net investment income											39,469			39,469
Net realized gains (losses)											3,407			3,407
Interest expense											(7,716	)		(7,716	)
Other income (loss)											6,906			6,906

Income (loss) before income taxes	$	19,407		$	(9,625	)	$	4,316		$	42,066		$	56,164
Income tax (expense) benefit											(17,042	)		(17,042	)
Net income (loss)													$	39,122

Losses and LAE ratio		61.5	%		56.8	%		61.7	%					60.1	%
Commission expense ratio		10.6	%		20.6	%		20.1	%					14.7	%
Other operating expense ratio ⁽²⁾		21.4	%		28.8	%		12.5	%					22.6	%
Combined ratio		93.5	%		106.2	%		94.3	%					97.4	%

(1) - Includes Corporate segment intercompany eliminations.

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

	Six Months Ended June 30, 2015
	U.S.			Int'l
amounts in thousands	Insurance			Insurance			GlobalRe			Corporate ⁽¹⁾			Total
Net earned premiums	$	268,395		$	128,711		$	81,354		$	—		$	478,460
Net losses and LAE		(161,954	)		(62,054	)		(48,163	)		—			(272,171	)
Commission expenses		(26,620	)		(22,711	)		(15,337	)		283			(64,385	)
Other operating expenses		(65,062	)		(34,375	)		(8,261	)		—			(107,698	)
Other underwriting income (expense)		317			—			46			(283	)		80
Underwriting profit (loss)	$	15,076		$	9,571		$	9,639		$	—		$	34,286
Net investment income											32,848			32,848
Net realized gains (losses)											9,512			9,512
Interest expense											(7,711	)		(7,711	)
Other income (loss)											(2,200	)		(2,200	)

Income (loss) before income taxes	$	15,076		$	9,571		$	9,639		$	32,449		$	66,735
Income tax (expense) benefit											(21,622	)		(21,622	)
Net income (loss)													$	45,113

Losses and LAE ratio		60.3	%		48.2	%		59.2	%					56.9	%
Commission expense ratio		9.9	%		17.6	%		18.9	%					13.5	%
Other operating expense ratio ⁽²⁾		24.2	%		26.8	%		10.1	%					22.4	%
Combined ratio		94.4	%		92.6	%		88.2	%					92.8	%

(1) - Includes Corporate segment intercompany eliminations.

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

Revenue by operating segment for the three and six months ended June 30, 2016 and 2015 was as follows:

	Three Months Ended June 30, 2016									Three Months Ended June 30, 2015									% 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	$	46,187	$	(18,540	)	$	27,647	$	24,921	$	41,803	$	(15,026	)	$	26,777	$	25,977		10.5	%		23.4	%		3.2	%		(4.1	%)
P&C		168,654		(36,768	)		131,886		110,212		170,216		(49,305	)		120,911		96,440		(0.9	%)		(25.4	%)		9.1	%		14.3	%
Professional Liability		29,083		(7,310	)		21,773		17,251		27,968		(14,551	)		13,417		14,887		4.0	%		(49.8	%)		62.3	%		15.9	%
Total	$	243,924	$	(62,618	)	$	181,306	$	152,384	$	239,987	$	(78,882	)	$	161,105	$	137,304		1.6	%		(20.6	%)		12.5	%		11.0	%

Int'l Insurance
Marine	$	41,147	$	(9,554	)	$	31,593	$	36,096	$	41,432	$	(9,126	)	$	32,306	$	40,132		(0.7	%)		4.7	%		(2.2	%)		(10.1	%)
P&C		63,002		(24,465	)		38,537		23,815		41,615		(24,513	)		17,102		10,199		51.4	%		(0.2	%)		125.3	%		133.5	%
Professional Liability		31,591		(7,891	)		23,700		17,922		25,743		(7,982	)		17,761		12,855		22.7	%		(1.1	%)		33.4	%		39.4	%
Total	$	135,740	$	(41,910	)	$	93,830	$	77,833	$	108,790	$	(41,621	)	$	67,169	$	63,186		24.8	%		0.7	%		39.7	%		23.2	%

GlobalRe	$	32,901	$	(1,502	)	$	31,399	$	37,775	$	30,694	$	(724	)	$	29,970	$	41,838		7.2	%		107.5	%		4.8	%		(9.7	%)

Total	$	412,565	$	(106,030	)	$	306,535	$	267,992	$	379,471	$	(121,227	)	$	258,244	$	242,328		8.7	%		(12.5	%)		18.7	%		10.6	%

	Six Months Ended June 30, 2016									Six Months Ended June 30, 2015									% 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	$	89,350	$	(36,187	)	$	53,163	$	48,171	$	82,638	$	(31,312	)	$	51,326	$	49,901		8.1	%		15.6	%		3.6	%		(3.5	%)
P&C		309,932		(67,275	)		242,657		219,371		304,362		(88,863	)		215,499		187,175		1.8	%		(24.3	%)		12.6	%		17.2	%
Professional Liability		55,289		(13,653	)		41,636		33,182		52,314		(27,437	)		24,877		31,319		5.7	%		(50.2	%)		67.4	%		5.9	%
Total	$	454,571	$	(117,115	)	$	337,456	$	300,724	$	439,314	$	(147,612	)	$	291,702	$	268,395		3.5	%		(20.7	%)		15.7	%		12.0	%

Int'l Insurance
Marine	$	113,095	$	(20,643	)	$	92,452	$	74,952	$	108,842	$	(19,948	)	$	88,894	$	77,924		3.9	%		3.5	%		4.0	%		(3.8	%)
P&C		107,048		(41,694	)		65,354		45,024		74,565		(40,642	)		33,923		26,233		43.6	%		2.6	%		92.7	%		71.6	%
Professional Liability		59,740		(14,544	)		45,196		35,865		47,810		(15,287	)		32,523		24,554		25.0	%		(4.9	%)		39.0	%		46.1	%
Total	$	279,883	$	(76,881	)	$	203,002	$	155,841	$	231,217	$	(75,877	)	$	155,340	$	128,711		21.0	%		1.3	%		30.7	%		21.1	%

GlobalRe	$	91,988	$	(6,091	)	$	85,897	$	75,785	$	105,400	$	(5,240	)	$	100,160	$	81,354		(12.7	%)		16.2	%		(14.2	%)		(6.8	%)

Total	$	826,442	$	(200,087	)	$	626,355	$	532,350	$	775,931	$	(228,729	)	$	547,202	$	478,460		6.5	%		(12.5	%)		14.5	%		11.3	%