Segment Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company is organized into three operating segments: Insurance, Reinsurance and Life operations. The Company’s general investment and financing operations are reflected in Corporate.

The Company evaluates the performance of both the Insurance and Reinsurance segments based on underwriting profit while the Life operations segment's performance is based on contribution to net income. Other items of revenue and expenditure of the Company are not evaluated at the segment level. In addition, the Company does not allocate to the individual segments investment assets used to support its Property and Casualty (“P&C”) operations, except as noted below. Investment assets related to the Company’s Life operations and certain structured products included in the Insurance and Reinsurance segments are held in separately identified portfolios. As such, net investment income from these assets is included in the contribution from the applicable segment. The following tables summarize the segment results for the three months ended March 31, 2014 and 2013:

Three Months Ended March 31, 2014 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Life Operations			Total
Gross premiums written	$	1,570,926		$	857,713		$	2,428,639		$	84,297		$	2,512,936
Net premiums written	1,127,367			792,173			1,919,540			76,311			1,995,851
Net premiums earned	992,440			420,088			1,412,528			76,311			1,488,839
Net losses and loss expenses	639,193			192,312			831,505			113,587			945,092
Acquisition costs	105,000			87,235			192,235			7,179			199,414
Operating expenses (1)	203,053			40,861			243,914			3,188			247,102
Underwriting profit (loss)	$	45,194		$	99,680		$	144,874		$	(47,643	)	$	97,231
Net investment income							143,527			70,892			214,419
Net results from structured products (2)	4,890			3,063			7,953						7,953
Net fee income and other (3)	(1,212		)	673			(539		)	45			(494		)
Net realized gains (losses) on investments							17,666			1,563			19,229
Contribution from P&C and Life Operations							$	313,481		$	24,857		$	338,338
Corporate & other:
Net realized & unrealized gains (losses) on derivative instruments													1,810
Net income (loss) from investment fund affiliates and operating affiliates (4)													79,588
Exchange (gains) losses													10,441
Corporate operating expenses													51,338
Interest expense (5)													32,160
Non-controlling interests													35,759
Income tax expense													34,321
Net income (loss) attributable to ordinary shareholders													$	255,717
Ratios – P&C operations: (6)
Loss and loss expense ratio	64.4		%	45.8		%	58.9		%
Underwriting expense ratio	31.0		%	30.5		%	30.8		%
Combined ratio	95.4		%	76.3		%	89.7		%

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(1) Operating expenses exclude Corporate operating expenses, shown separately.

(2) The net results from structured products include net investment income and interest expense of $18.8 million and $10.8 million, respectively.

(3) Net fee income and other includes operating expenses from the Company's loss prevention consulting services business.

(4) The Company records the income related to the alternative funds and to the private investment and operating fund affiliates on a one-month and three-month lag, respectively.

(5) Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments.

(6) Ratios are based on net premiums earned from P&C operations.

Three Months Ended March 31, 2013 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Life Operations			Total
Gross premiums written	$	1,497,787		$	907,129		$	2,404,916		$	72,970		$	2,477,886
Net premiums written	1,189,188			853,021			2,042,209			65,445			2,107,654
Net premiums earned	1,039,092			425,154			1,464,246			65,445			1,529,691
Net losses and loss expenses	650,517			192,567			843,084			110,953			954,037
Acquisition costs	130,622			85,534			216,156			4,103			220,259
Operating expenses (1)	183,997			40,421			224,418			2,595			227,013
Underwriting profit (loss)	$	73,956		$	106,632		$	180,588		$	(52,206	)	$	128,382
Net investment income							157,039			71,688			228,727
Net results from structured products (2)	4,185			991			5,176						5,176
Net fee income and other (3)	(1,939		)	632			(1,307		)	1,043			(264		)
Net realized gains (losses) on investments							45,578			(9,069		)	36,509
Contribution from P&C and Life Operations							$	387,074		$	11,456		$	398,530
Corporate & other:
Net realized & unrealized gains (losses) on derivative instruments													7,885
Net income (loss) from investment fund affiliates and operating affiliates (4)													63,219
Exchange (gains) losses													(33,435		)
Corporate operating expenses													46,922
Interest expense (5)													26,136
Non-controlling interests													35,742
Income tax expense													43,479
Net income (loss) attributable to ordinary shareholders													$	350,790
Ratios – P&C operations: (6)
Loss and loss expense ratio	62.6		%	45.3		%	57.6		%
Underwriting expense ratio	30.3		%	29.6		%	30.1		%
Combined ratio	92.9		%	74.9		%	87.7		%

____________

(1) Operating expenses exclude Corporate operating expenses, shown separately.

(2) The net results from structured products include net investment income and interest expense of $17.7 million and $12.6 million, respectively.

(3) Net fee income and other includes operating expenses from the Company's loss prevention consulting services business.

(4) The Company records the income related to the alternative funds and to the private investment and operating fund affiliates on a one-month and three-month lag, respectively.

(5) Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments.

(6) Ratios are based on net premiums earned from P&C operations.

The following tables summarize the Company’s net premiums earned by line of business for the three months ended March 31, 2014 and 2013:

Three Months Ended March 31, 2014 (U.S. dollars in thousands)	Insurance		Reinsurance		Life Operations		Total
P&C Operations:
Professional	$	275,427	$	50,104	$	—	$	325,531
Casualty	344,004		76,721		—		420,725
Property catastrophe	—		108,437		—		108,437
Property	139,733		135,239		—		274,972
Marine, energy, aviation and satellite	—		23,514		—		23,514
Specialty	176,909		—		—		176,909
Other (1)	56,367		26,073		—		82,440
Total P&C Operations	$	992,440	$	420,088	$	—	$	1,412,528
Life Operations:
Annuity	$	—	$	—	$	31,797	$	31,797
Other Life	—		—		44,514		44,514
Total Life Operations	$	—	$	—	$	76,311	$	76,311
Total	$	992,440	$	420,088	$	76,311	$	1,488,839
Three Months Ended March 31, 2013 (U.S. dollars in thousands)	Insurance		Reinsurance		Life Operations		Total
P&C Operations:
Professional	$	350,838	$	45,436	$	—	$	396,274
Casualty	327,418		76,981		—		404,399
Property catastrophe	—		113,642		—		113,642
Property	124,450		141,269		—		265,719
Marine, energy, aviation and satellite	—		27,840		—		27,840
Specialty	182,965		—		—		182,965
Other (1)	53,421		19,986		—		73,407
Total P&C Operations	$	1,039,092	$	425,154	$	—	$	1,464,246
Life Operations:
Annuity	$	—	$	—	$	29,684	$	29,684
Other Life	—		—		35,761		35,761
Total Life Operations	$	—	$	—	$	65,445	$	65,445
Total	$	1,039,092	$	425,154	$	65,445	$	1,529,691

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(1) Other within the Insurance segment includes: excess and surplus, programs, surety, structured indemnity and certain other discontinued lines. Other within the Reinsurance segment includes: whole account contracts, surety and other lines.