Segment Information

The Company is organized into two operating segments: Insurance and Reinsurance. Subsequent to the transaction described in Note 3(a), "Acquisition and Disposals - Catlin Acquisition," the underwriting results of the acquired businesses from the Acquisition Date through June 30, 2015 are included in the Company's Insurance or Reinsurance segment, as appropriate.

The Company’s general investment and financing operations are reflected in "Corporate and Other". Subsequent to the transaction described in Note 3(c), "Acquisition and Disposals - Sale of Life Reinsurance Subsidiary," GCLR reinsures the majority of the Company's life reinsurance business through the Life Retro Arrangements. The results of the Run-Off Life Operations not subject to the Life Retro Arrangements are also reported within Corporate and Other.

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 three and six months ended June 30, 2015 and 2014:



Three Months Ended June 30, 2015 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	2,219,444		$	782,248		$	3,001,692		$	79,443		$	3,081,135
Net premiums written	1,401,772			698,301			2,100,073			18,258			2,118,331
Net premiums earned	1,412,906			650,889			2,063,795			18,258			2,082,053
Net losses and loss expenses (2)	896,370			254,825			1,151,195			22,081			1,173,276
Acquisition costs (2)	181,716			158,217			339,933			1,684			341,617
Operating expenses (3)	292,161			71,727			363,888			(59		)	363,829
Underwriting profit (loss)	$	42,659		$	166,120		$	208,779		$	(5,448	)	$	203,331
Net investment income - excluding Life Funds Withheld Assets (4)							149,461			10,831			160,292
Net investment income - Life Funds Withheld Assets										46,864			46,864
Net results from structured products (5)	3,401			1,856			5,257			—			5,257
Net fee income and other (6)	(2,033		)	623			(1,410		)	46			(1,364		)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							4,223			128			4,351
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			45,616			45,616
Net realized and unrealized gains (losses) on derivative instruments							—			48,509			48,509
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			239,174			239,174
Net income (loss) from investment fund affiliates and operating affiliates (7)							—			40,839			40,839
Gain on sale of operating affiliate							—			340,407			340,407
Exchange (gains) losses							—			10,374			10,374
Corporate operating expenses							—			130,987			130,987
Contribution from P&C and Corporate and Other							366,310			625,605			991,915
Interest expense (8)										39,038			39,038
Non-controlling interests										4,879			4,879
Income tax expense										32,959			32,959
Net income (loss) attributable to ordinary shareholders													$	915,039
Ratios – P&C operations: (9)
Loss and loss expense ratio	63.4		%	39.2		%	55.8		%
Underwriting expense ratio	33.6		%	35.3		%	34.1		%
Combined ratio	97.0		%	74.5		%	89.9		%

____________


(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)	The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Catlin Acquisition within the respective segments.


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


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


(5)	The net results from P&C structured products include net investment income and interest expense of $16.0 million and $10.6 million, respectively.


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


(7)	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.


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


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



Three Months Ended June 30, 2014 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	1,618,405		$	493,124		$	2,111,529		$	86,710		$	2,198,239
Net premiums written	996,880			436,446			1,433,326			58,518			1,491,844
Net premiums earned	1,003,990			434,086			1,438,076			58,518			1,496,594
Net losses and loss expenses (2)	627,627			200,253			827,880			85,299			913,179
Acquisition costs (2)	99,863			80,874			180,737			3,882			184,619
Operating expenses (3)	213,930			47,582			261,512			2,209			263,721
Underwriting profit (loss)	$	62,570		$	105,377		$	167,947		$	(32,872	)	$	135,075
Net investment income - excluding Life Funds Withheld Assets (4)							144,555			52,118			196,673
Net investment income - Life Funds Withheld Assets										19,165			19,165
Net results from structured products (5)	31,645			3,240			34,885			—			34,885
Net fee income and other (6)	(3,567		)	664			(2,903		)	45			(2,858		)
Loss on sale of life reinsurance subsidiary							—			666,423			666,423
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							78,505			2,339			80,844
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			(8,147		)	(8,147		)
Net realized and unrealized gains (losses) on derivative instruments							—			11,599			11,599
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(17,546		)	(17,546		)
Net income (loss) from investment fund affiliates and operating affiliates (7)							—			45,421			45,421
Exchange (gains) losses							—			21,141			21,141
Corporate operating expenses							—			56,495			56,495
Contribution from P&C and Corporate and Other							422,989			(671,937		)	(248,948		)
Interest expense (8)										32,284			32,284
Non-controlling interests										3,682			3,682
Income tax expense										(5,654		)	(5,654		)
Net income (loss) attributable to ordinary shareholders													$	(279,260	)
Ratios – P&C operations: (9)
Loss and loss expense ratio	62.5		%	46.1		%	57.6		%
Underwriting expense ratio	31.3		%	29.6		%	30.7		%
Combined ratio	93.8		%	75.7		%	88.3		%

____________


(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)	The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Catlin Acquisition within the respective segments.


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


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


(5)	The net results from P&C structured products include net investment income and interest credit of $16.9 million and $18.2 million, respectively.


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


(7)	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.


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


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



Six Months Ended June 30, 2015 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	3,874,191		$	1,607,910		$	5,482,101		$	154,394		$	5,636,495
Net premiums written	2,490,880			1,445,936			3,936,816			32,764			3,969,580
Net premiums earned	2,375,212			1,008,077			3,383,289			32,764			3,416,053
Net losses and loss expenses (2)	1,513,317			407,705			1,921,022			41,468			1,962,490
Acquisition costs (2)	262,103			229,709			491,812			3,501			495,313
Operating expenses (3)	500,618			114,222			614,840			872			615,712
Underwriting profit (loss)	$	99,174		$	256,441		$	355,615		$	(13,077	)	$	342,538
Net investment income - excluding Life Funds Withheld Assets (4)							282,269			21,041			303,310
Net investment income - Life Funds Withheld Assets										97,283			97,283
Net results from structured products (5)	6,306			3,976			10,282			—			10,282
Net fee income and other (6)	(9,498		)	1,448			(8,050		)	178			(7,872		)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							10,030			(1,077		)	8,953
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			93,905			93,905
Net realized and unrealized gains (losses) on derivative instruments							—			65,030			65,030
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			9,807			9,807
Net income (loss) from investment fund affiliates and operating affiliates (7)							—			98,836			98,836
Gain on sale of operating affiliate										340,407			340,407
Exchange (gains) losses							—			37,764			37,764
Corporate operating expenses							—			193,430			193,430
Contribution from P&C and Corporate and Other							650,146			481,139			1,131,285
Interest expense (8)										80,519			80,519
Non-controlling interests										42,269			42,269
Income tax expense										57,177			57,177
Net income (loss) attributable to ordinary shareholders													$	951,320
Ratios – P&C operations: (9)
Loss and loss expense ratio	63.7		%	40.4		%	56.8		%
Underwriting expense ratio	32.1		%	34.2		%	32.7		%
Combined ratio	95.8		%	74.6		%	89.5		%

____________


(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)	The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Catlin Acquisition within the respective segments.


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


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


(5)	The net results from P&C structured products include net investment income and interest expense of $31.1 million and $20.6 million, respectively.


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


(7)	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.


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


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



Six Months Ended June 30, 2014 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	3,189,331		$	1,350,837		$	4,540,168		$	171,007		$	4,711,175
Net premiums written	2,124,247			1,228,619			3,352,866			134,829			3,487,695
Net premiums earned	1,996,430			854,174			2,850,604			134,829			2,985,433
Net losses and loss expenses (2)	1,266,820			392,565			1,659,385			198,886			1,858,271
Acquisition costs (2)	204,863			168,109			372,972			11,061			384,033
Operating expenses (3)	416,983			88,443			505,426			5,397			510,823
Underwriting profit (loss)	$	107,764		$	205,057		$	312,821		$	(80,515	)	$	232,306
Net investment income - excluding Life Funds Withheld Assets (4)							288,082			123,010			411,092
Net investment income - Life Funds Withheld Assets										19,165			19,165
Net results from structured products (5)	36,535			6,303			42,838			—			42,838
Net fee income and other (6)	(4,779		)	1,337			(3,442		)	90			(3,352		)
Loss on sale of life reinsurance subsidiary							—			666,423			666,423
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							96,171			3,902			100,073
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			(8,147		)	(8,147		)
Net realized and unrealized gains (losses) on derivative instruments							—			13,409			13,409
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(17,546		)	(17,546		)
Net income (loss) from investment fund affiliates and operating affiliates (7)							—			125,009			125,009
Exchange (gains) losses							—			31,582			31,582
Corporate operating expenses							—			107,833			107,833
Contribution from P&C and Corporate and Other							736,470			(627,461		)	109,009
Interest expense (8)										64,444			64,444
Non-controlling interests										39,441			39,441
Income tax expense										28,667			28,667
Net income (loss) attributable to ordinary shareholders													$	(23,543	)
Ratios – P&C operations: (9)
Loss and loss expense ratio	63.5		%	46.0		%	58.2		%
Underwriting expense ratio	31.1		%	30.0		%	30.8		%
Combined ratio	94.6		%	76.0		%	89.0		%

____________


(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)	The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Catlin Acquisition within the respective segments.


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


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


(5)	The net results from P&C structured products include net investment income and interest credit of $35.7 million and $7.4 million, respectively.


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


(7)	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.


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


(9)	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 and six months ended June 30, 2015 and 2014:



Three Months Ended June 30, 2015 (U.S. dollars in thousands)	Insurance			Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	286,348		$	43,225	$	—	$	329,573
Casualty	420,472			125,787		—		546,259
Property catastrophe	—			163,453		—		163,453
Property	215,128			231,897		—		447,025
Marine, energy, aviation and satellite	(16		)	32,549		—		32,533
Specialty	411,438			—		—		411,438
Other (1)	79,536			53,978		—		133,514
Total P&C Operations	$	1,412,906		$	650,889	$	—	$	2,063,795
Corporate and Other:
Run-off Life operations - Annuity	$	—		$	—	$	1	$	1
Run-off Life operations - Other Life	—			—		18,257		18,257
Total Corporate and Other	$	—		$	—	$	18,258	$	18,258
Total	$	1,412,906		$	650,889	$	18,258	$	2,082,053

Three Months Ended June 30, 2014 (U.S. dollars in thousands)	Insurance			Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	267,509		$	44,239	$	—	$	311,748
Casualty	358,990			82,929		—		441,919
Property catastrophe	—			112,562		—		112,562
Property	142,874			142,337		—		285,211
Marine, energy, aviation and satellite	—			21,065		—		21,065
Specialty	179,948			—		—		179,948
Other (1)	54,669			30,954		—		85,623
Total P&C Operations	$	1,003,990		$	434,086	$	—	$	1,438,076
Corporate and Other:
Run-off Life operations - Annuity	$	—		$	—	$	21,564	$	21,564
Run-off Life operations - Other Life	—			—		36,954		36,954
Total Corporate and Other	$	—		$	—	$	58,518	$	58,518
Total	$	1,003,990		$	434,086	$	58,518	$	1,496,594

____________


(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.



Six Months Ended June 30, 2015 (U.S. dollars in thousands)	Insurance			Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	552,759		$	78,233	$	—	$	630,992
Casualty	729,807			183,995		—		913,802
Property catastrophe	—			257,526		—		257,526
Property	343,369			363,121		—		706,490
Marine, energy, aviation and satellite	(16		)	50,624		—		50,608
Specialty	596,162			—		—		596,162
Other (1)	153,131			74,578		—		227,709
Total P&C Operations	$	2,375,212		$	1,008,077	$	—	$	3,383,289
Corporate and Other:
Run-off Life operations - Annuity	$	—		$	—	$	—	$	—
Run-off Life operations - Other Life	—			—		32,764		32,764
Total Corporate and Other	$	—		$	—	$	32,764	$	32,764
Total	$	2,375,212		$	1,008,077	$	32,764	$	3,416,053

Six Months Ended June 30, 2014 (U.S. dollars in thousands)	Insurance			Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	542,936		$	94,343	$	—	$	637,279
Casualty	702,994			159,650		—		862,644
Property catastrophe	—			220,999		—		220,999
Property	282,607			277,576		—		560,183
Marine, energy, aviation and satellite	—			44,579		—		44,579
Specialty	356,857			—		—		356,857
Other (1)	111,036			57,027		—		168,063
Total P&C Operations	$	1,996,430		$	854,174	$	—	$	2,850,604
Corporate and Other:
Run-off Life operations - Annuity	$	—		$	—	$	53,361	$	53,361
Run-off Life operations - Other Life	—			—		81,468		81,468
Total Corporate and Other	$	—		$	—	$	134,829	$	134,829
Total	$	1,996,430		$	854,174	$	134,829	$	2,985,433

____________


(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.