Segment Information

The Company is organized into two operating segments: Insurance and Reinsurance. Subsequent to the transaction as described in Note 3, "Sale of Life Reinsurance Subsidiary," GCLR reinsures the majority of the Company's life reinsurance business through the Life Retro Arrangements. The Company no longer considers the Life Operations to be a separate operating segment and the results of the Run-Off Life Operations are reported within “Corporate and Other.” The Company’s general investment and financing operations are also reflected in Corporate and Other. The run-off business subject to the Life Retro Arrangements was, prior to June 30, 2014, reported within the Company’s Life operations segment. Prior period information has been recast to reflect the current presentation.

The Company evaluates the performance of both the Insurance and Reinsurance segments based on underwriting profit. Other items of revenue and expenditure of the Company are not evaluated at the segment level. In addition, the Company does not allocate investment assets used to support its Property and Casualty (“P&C”) operations to the individual segments, except as noted below. Investment assets related to the Company’s Run-Off 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 or in Corporate and Other. The following tables summarize the segment results for the indicated years ended:



Year Ended December 31, 2014 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	5,976,011		$	1,785,479		$	7,761,490		$	333,436		$	8,094,926
Net premiums written	4,134,151			1,633,058			5,767,209			177,632			5,944,841
Net premiums earned	4,026,713			1,690,725			5,717,438			177,632			5,895,070
Net losses and loss expenses	2,543,108			715,285			3,258,393			242,963			3,501,356
Acquisition costs	393,319			330,684			724,003			14,115			738,118
Operating expenses (2)	865,592			193,404			1,058,996			10,693			1,069,689
Underwriting profit (loss)	$	224,694		$	451,352		$	676,046		$	(90,139	)	$	585,907
Net investment income - excluding Life Funds Withheld Assets (3)							574,458			146,558			721,016
Net investment income - Life Funds Withheld Assets										129,575			129,575
Net results from structured products (4)	43,710			10,499			54,209			—			54,209
Net fee income and other (5)	(10,051		)	2,800			(7,251		)	360			(6,891		)
Loss on sale of life reinsurance subsidiary							—			666,423			666,423
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							119,366			3,625			122,991
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			(15,529		)	(15,529		)
Net realized and unrealized gains (losses) on derivative instruments							—			29,886			29,886
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(488,222		)	(488,222		)
Net income (loss) from investment fund affiliates and operating affiliates (6)							—			203,034			203,034
Exchange (gains) losses							—			(37,568		)	(37,568		)
Corporate operating expenses							—			220,165			220,165
Contribution from P&C and Corporate and Other							1,416,828			(929,872		)	486,956
Interest expense (7)										121,221			121,221
Non-controlling interests										80,498			80,498
Income tax expense										96,897			96,897
Net income (loss) attributable to ordinary shareholders													$	188,340
Ratios – P&C operations: (8)
Loss and loss expense ratio	63.2		%	42.3		%	57.0		%
Underwriting expense ratio	31.2		%	31.0		%	31.2		%
Combined ratio	94.4		%	73.3		%	88.2		%

____________


(1)	Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes, as well as the Company's Run-Off Life Operations.


(2)	Operating expenses of the segments exclude Corporate operating expenses, shown separately.


(3)	Net investment income - excluding Life Funds Withheld Assets does not include net investment income related to the net results from structured products.


(4)	The net results from P&C structured products include net investment income and interest expense of $68.0 million and $12.9 million, respectively.


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


(6)	The Company generally 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.


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


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



Year Ended December 31, 2013 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate & Other (1)			Total
Gross premiums written	$	5,523,181		$	1,893,611		$	7,416,792		$	324,343		$	7,741,135
Net premiums written	4,154,093			1,749,889			5,903,982			295,422			6,199,404
Net premiums earned	4,267,677			1,746,422			6,014,099			295,422			6,309,521
Net losses and loss expenses	2,829,999			901,465			3,731,464			465,702			4,197,166
Acquisition costs	529,270			353,388			882,658			26,665			909,323
Operating expenses (2)	782,677			166,238			948,915			8,926			957,841
Underwriting profit (loss)	$	125,731		$	325,331		$	451,062		$	(205,871	)	$	245,191
Net investment income (3)							599,144			286,645			885,789
Net results from structured products (4)	15,562			8,229			23,791			—			23,791
Net fee income and other (5)	(9,317		)	2,320			(6,997		)	1,305			(5,692		)
Net realized gains (losses) on investments							85,792			1,985			87,777
Net realized and unrealized gains (losses) on derivative instruments							—			7,798			7,798
Net income (loss) from investment fund affiliates and operating affiliates (6)							—			258,195			258,195
Exchange (gains) losses							—			(28,243		)	(28,243		)
Corporate operating expenses							—			209,454			209,454
Contribution from P&C and Corporate and Other							1,152,792			168,846			1,321,638
Interest expense (7)										107,486			107,486
Non-controlling interests										76,731			76,731
Income tax expense										77,505			77,505
Net income (loss) attributable to ordinary shareholders													$	1,059,916
Ratios – P&C operations: (8)
Loss and loss expense ratio	66.3		%	51.6		%	62.0		%
Underwriting expense ratio	30.8		%	29.8		%	30.5		%
Combined ratio	97.1		%	81.4		%	92.5		%

____________


(1)	Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes, as well as the Company's Run-Off Life Operations.


(2)	Operating expenses of the segments exclude Corporate operating expenses, shown separately.


(3)	Net investment income does not include net investment income related to the net results from structured products.


(4)	The net results from P&C structured products include net investment income and interest expense of $71.9 million and $48.0 million, respectively.


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


(6)	The Company generally 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.


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


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



Year Ended December 31, 2012 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	5,166,973		$	2,008,157		$	7,175,130		$	355,753		$	7,530,883
Net premiums written	4,072,511			1,884,508			5,957,019			324,432			6,281,451
Net premiums earned	3,924,636			1,841,342			5,765,978			324,459			6,090,437
Net losses and loss expenses	2,691,056			1,074,426			3,765,482			486,195			4,251,677
Acquisition costs	504,227			368,172			872,399			41,093			913,492
Operating expenses (2)	754,308			157,657			911,965			9,335			921,300
Underwriting profit (loss)	$	(24,955	)	$	241,087		$	216,132		$	(212,164	)	$	3,968
Net investment income (3)							641,237			299,443			940,680
Net results from structured products (4)	20,978			(15,721		)	5,257			—			5,257
Net fee income and other (5)	850			2,492			3,342			426			3,768
Net realized gains (losses) on investments							35,101			(21,003		)	14,098
Net realized and unrealized gains (losses) on derivative instruments							—			5,221			5,221
Net income (loss) from investment fund affiliates and operating affiliates (6)							—			112,391			112,391
Exchange (gains) losses							—			10,545			10,545
Corporate operating expenses							—			204,502			204,502
Contribution from P&C and Corporate and Other							901,069			(30,733		)	870,336
Interest expense (7)										105,925			105,925
Non-controlling interests										79,255			79,255
Income tax expense										34,028			34,028
Net income (loss) attributable to ordinary shareholders													$	651,128
Ratios – P&C operations: (8)
Loss and loss expense ratio	68.6		%	58.4		%	65.3		%
Underwriting expense ratio	32.0		%	28.5		%	31.0		%
Combined ratio	100.6		%	86.9		%	96.3		%

____________


(1)	Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes, as well as the Company's Run-Off Life Operations.


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


(3)	Net investment income does not include net investment income related to the net results from structured products.


(4)	The net results from P&C structured products include net investment income and interest expense of $71.7 million and $66.3 million, respectively.


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


(6)	The Company generally 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.


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


(8)	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:



Year Ended December 31, 2014 (U.S. dollars in thousands)	Insurance		Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	1,075,420	$	181,223	$	—	$	1,256,643
Casualty	1,422,684		300,223		—		1,722,907
Property catastrophe	—		433,602		—		433,602
Property	544,856		555,583		—		1,100,439
Marine, energy, aviation and satellite	—		95,745		—		95,745
Specialty	737,281		—		—		737,281
Other (1)	246,472		124,349		—		370,821
Total P&C Operations	$	4,026,713	$	1,690,725	$	—	$	5,717,438
Corporate and Other:
Run-Off Life Operations - Annuity	—		—		53,363		53,363
Run-Off Life Operations - Other Life	—		—		124,269		124,269
Total Corporate and Other	$	—	$	—	$	177,632	$	177,632
Total	$	4,026,713	$	1,690,725	$	177,632	$	5,895,070
Year Ended December 31, 2013
P&C Operations:
Professional	$	1,370,196	$	206,169	$	—	$	1,576,365
Casualty	1,389,851		312,156		—		1,702,007
Property catastrophe	—		492,568		—		492,568
Property	544,278		561,105		—		1,105,383
Marine, energy, aviation and satellite	—		94,797		—		94,797
Specialty	732,042		—		—		732,042
Other (1)	231,310		79,627		—		310,937
Total P&C Operations	$	4,267,677	$	1,746,422	$	—	$	6,014,099
Corporate and Other:
Run-Off Life Operations - Annuity	$	—	$	—	$	122,715	$	122,715
Run-Off Life Operations - Other Life	—		—		172,707		172,707
Total Corporate and Other	$	—	$	—	$	295,422	$	295,422
Total	$	4,267,677	$	1,746,422	$	295,422	$	6,309,521
Year Ended December 31, 2012
P&C Operations:
Professional	$	1,350,319	$	213,324	$	—	$	1,563,643
Casualty	1,165,753		311,166		—		1,476,919
Property catastrophe	—		463,975		—		463,975
Property	489,739		613,291		—		1,103,030
Marine, energy, aviation and satellite	—		147,362		—		147,362
Specialty	708,568		—		—		708,568
Other (1)	210,257		92,224		—		302,481
Total P&C Operations	$	3,924,636	$	1,841,342	$	—	$	5,765,978
Corporate and Other:
Run-Off Life Operations - Annuity	$	—	$	—	$	126,912	$	126,912
Run-Off Life Operations - Other Life	—		—		197,547		197,547
Total Corporate and Other	$	—	$	—	$	324,459	$	324,459
Total	$	3,924,636	$	1,841,342	$	324,459	$	6,090,437

____________


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

The following table shows an analysis of the Company’s net premiums written by geographical location of subsidiary where the premium is written for the years ended December 31:



(U.S. dollars in thousands)	2014		2013		2012
P&C Operations:
Bermuda	$	636,109	$	658,041	$	644,566
United States	2,528,196		2,650,916		2,626,855
Europe	2,124,117		2,111,065		2,202,209
Other	478,787		483,960		483,389
Total P&C Operations	$	5,767,209	$	5,903,982	$	5,957,019
Corporate and Other:
Bermuda	$	91,979	$	117,948	$	129,997
Europe	85,653		177,474		194,435
Total Corporate and Other	$	177,632	$	295,422	$	324,432