Segment Information

The Company is organized into two operating segments: Insurance and Reinsurance. Subsequent to the transaction described in Note 3(c), "Acquisitions and Disposals - Catlin Acquisition," the underwriting results of the acquired businesses from the Acquisition Date through December 31, 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(e), "Acquisitions and Disposals - Sale of Life Reinsurance Subsidiary," GCLR reinsures the majority of the Company's life reinsurance business through the GreyCastle 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 revenues and expenditures 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. The following tables summarize the segment results for the indicated years ended:



Year Ended December 31, 2015 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	8,395,846		$	2,273,163		$	10,669,009		$	309,916		$	10,978,925
Net premiums written	5,859,934			2,028,890			7,888,824			62,239			7,951,063
Net premiums earned	5,648,482			2,515,702			8,164,184			62,241			8,226,425
Net losses and loss expenses (2)	3,614,048			1,152,152			4,766,200			115,997			4,882,197
Acquisition costs (2)	704,364			602,290			1,306,654			10,794			1,317,448
Operating expenses (3)	1,154,760			283,379			1,438,139			1,232			1,439,371
Underwriting profit (loss)	$	175,310		$	477,881		$	653,191		$	(65,782	)	$	587,409
Net investment income - excluding Life Funds Withheld Assets (4)							583,871			40,569			624,440
Net investment income - Life Funds Withheld Assets										187,489			187,489
Net results from structured products (5)	12,185			5,806			17,991			—			17,991
Net fee income and other (6)	(16,936		)	2,958			(13,978		)	622			(13,356		)
Extinguishment of debt							—			5,592			5,592
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							14,586			5,411			19,997
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			182,181			182,181
Net realized and unrealized gains (losses) on derivative instruments							—			53,123			53,123
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(151,691		)	(151,691		)
Net income (loss) from investment fund affiliates and operating affiliates							—			118,060			118,060
Gain on sale of operating affiliate										340,407			340,407
Exchange (gains) losses							—			22,504			22,504
Corporate operating expenses							—			480,755			480,755
Contribution from P&C and Corporate and Other							1,255,661			201,538			1,457,199
Interest expense (7)										163,021			163,021
Non-controlling interests										106,187			106,187
Income tax expense										(19,161		)	(19,161		)
Net income (loss) attributable to ordinary shareholders													$	1,207,152
Ratios – P&C operations: (8)
Loss and loss expense ratio	64.0		%	45.8		%	58.4		%
Underwriting expense ratio	32.9		%	35.2		%	33.6		%
Combined ratio	96.9		%	81.0		%	92.0		%

____________


(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 expense of $60.4 million and $42.2 million, respectively.


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


(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, 2014 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate & 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							119,366			3,625			122,991
Net realized gains (losses) on investments - 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							—			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 (6)										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: (7)
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 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)	Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments.


(7)	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 and 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							—			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 (6)										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: (7)
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 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)	Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments.


(7)	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, 2015 (U.S. dollars in thousands)	Insurance		Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	1,163,302	$	168,367	$	—	$	1,331,669
Casualty	1,685,748		468,286		—		2,154,034
Property catastrophe	—		663,958		—		663,958
Property	1,021,037		869,286		—		1,890,323
Specialty	1,473,929		127,797		—		1,601,726
Other (1)	304,466		218,008		—		522,474
Total P&C Operations	$	5,648,482	$	2,515,702	$	—	$	8,164,184
Corporate and Other:
Run-off life operations - Annuity	—		—		1		1
Run-off life operations - Other life	—		—		62,240		62,240
Total Corporate and Other	$	—	$	—	$	62,241	$	62,241
Total	$	5,648,482	$	2,515,702	$	62,241	$	8,226,425
Year Ended December 31, 2014
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
Specialty	737,281		95,745		—		833,026
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
Specialty	732,042		94,797		—		826,839
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

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(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)	2015			2014		2013
P&C Operations:
Bermuda	$	781,618		$	636,109	$	658,041
United States	3,045,031			2,528,196		2,650,916
Europe	3,628,258			2,124,117		2,111,065
Other	433,917			478,787		483,960
Total P&C Operations	$	7,888,824		$	5,767,209	$	5,903,982
Corporate and Other:
Bermuda	$	62,276		$	91,979	$	117,948
Europe	(37		)	85,653		177,474
Total Corporate and Other	$	62,239		$	177,632	$	295,422