Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

The Company has goodwill and intangible assets of $2.2 billion and $448.0 million at June 30, 2015 and December 31, 2014, respectively.

In the second quarter of 2015, as a result of the transaction described in Note 3(a), "Acquisition and Disposals - Catlin Acquisition," the Company recognized additional intangible assets. The transaction was accounted for using the acquisition method under which the Company recorded the identifiable assets acquired, including indefinite-lived and definite-lived intangible assets, and liabilities assumed, at their acquisition fair values, and recorded the excess of consideration transferred over the net assets acquired as goodwill.

During the first quarter of 2014, goodwill and intangible assets increased as a result of the completion of an acquisition. The transaction was accounted for using the acquisition method under which the Company recorded the identifiable assets acquired - including definite-lived intangible assets, and liabilities assumed, at their acquisition date fair values, and recorded the excess of consideration transferred over the net assets acquired as goodwill.

The following table presents an analysis of intangible assets broken down between goodwill, intangible assets with an indefinite life and intangible assets with a definite life for the six months ended June 30, 2015:



(U.S. dollars in thousands)	Goodwill			Intangible assets with an indefinite life		Intangible assets with a definite life			Total
Balance at December 31, 2014	$	415,936		$	15,366	$	16,650		$	447,952
Additions	778,043			673,000		315,000			1,766,043
Amortization	—			—		(4,335		)	(4,335		)
Foreign Currency Translation	(3,749		)	—		—			(3,749		)
Balance at June 30, 2015	$	1,190,230		$	688,366	$	327,315		$	2,205,911

The following table summarizes the intangible assets and their related useful lives recorded in connection with the Catlin Acquisition as of the Acquisition Date:



(U.S. dollars in thousands)	Amount		Estimated Useful Life
Lloyd's - Syndicate capacity	$	660,000	Indefinite
Insurance licenses	13,000		Indefinite
Total identified indefinite life intangible assets	$	673,000
Lloyd's - Managing agent contracts	15,000		15 years
Distribution network	290,000		20 years
Trademarks / Trade names	10,000		2 years
Total identified definite life intangible assets	$	315,000
Total identified intangible assets	$	988,000

An explanation of the intangible assets is as follows:


•	Lloyd's - Syndicate capacity - The syndicate capacity of two Lloyd's syndicates, which will allow the Company to write insurance business in the Lloyd's market globally and realize the profits from that business. The value of the syndicate capacity includes the reputational value of participation in the Lloyd's market, and the value of trade names and licenses associated with syndicate ownership.


•	Insurance licenses - U.S. State insurance licenses owned by Catlin at the time of Catlin Acquisition.


•	Lloyds - Managing agent contracts - As the managing agent for certain Lloyd's syndicates, the Company has contracts with the syndicate members to provide underwriting services, for which it earns managing agent fees and a profit commission.


•	Distribution network - A network of hundreds of retail and wholesale brokers worldwide, including specialty and regional brokerages, which allow the Company to form closer relationships with clients and brokers worldwide, which aids business retention.


•	Trademarks / Trade names - The Catlin trademarks / trade names are utilized to attract customers for the turnkey solutions provided under the Company's managing agent contracts, and to generate premium from the non-Lloyd's platform underwriting products for which the Catlin brand is known.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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