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 March 31, 2016 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 1, "Basis of Preparation and Consolidation," 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 GreyCastle 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. 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 months ended March 31, 2016 and 2015:



Three Months Ended March 31, 2016 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	2,503,972		$	1,855,343		$	4,359,315		$	68,911		$	4,428,226
Net premiums written	1,503,934			1,557,661			3,061,595			3,164			3,064,759
Net premiums earned	1,593,874			757,572			2,351,446			3,164			2,354,610
Less: Net losses and loss expenses (2)	999,592			382,893			1,382,485			4,937			1,387,422
Less: Acquisition costs (2)	225,458			176,348			401,806			1,461			403,267
Less: Operating expenses (3)	312,432			79,234			391,666			218			391,884
Underwriting profit (loss)	$	56,392		$	119,097		$	175,489		$	(3,452	)	$	172,037
Net investment income - excluding Life Funds Withheld Assets (4)							143,131			8,533			151,664
Net investment income - Life Funds Withheld Assets										41,560			41,560
Net results from structured products (5)	1,222			748			1,970			—			1,970
Net fee income and other (6)	(3,862		)	837			(3,025		)	302			(2,723		)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							(11,160		)	2,744			(8,416		)
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			101,166			101,166
Net realized and unrealized gains (losses) on derivative instruments							—			(3,622		)	(3,622		)
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(236,080		)	(236,080		)
Net income (loss) from investment fund affiliates and operating affiliates							—			8,071			8,071
Gain on sale of operating affiliate										—			—
Less: Exchange (gains) losses							—			(33,819		)	(33,819		)
Less: Corporate operating expenses							—			112,510			112,510
Contribution from P&C and Corporate and Other							306,405			(159,469		)	146,936
Less: Interest expense (7)										41,613			41,613
Less: Non-controlling interests										61,143			61,143
Less: Income tax expense										22,295			22,295
Net income (loss) attributable to ordinary shareholders													$	21,885
Ratios – P&C operations: (8)
Loss and loss expense ratio	62.7		%	50.5		%	58.8		%
Underwriting expense ratio	33.8		%	33.8		%	33.7		%
Combined ratio	96.5		%	84.3		%	92.5		%

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(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 $12.7 million and $10.7 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 structured products recorded in the Insurance and Reinsurance segments.


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



Three Months Ended March 31, 2015 (U.S. dollars in thousands, except ratios)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	1,654,747		$	825,662		$	2,480,409		$	74,951		$	2,555,360
Net premiums written	1,089,108			747,635			1,836,743			14,506			1,851,249
Net premiums earned	962,306			357,188			1,319,494			14,506			1,334,000
Less: Net losses and loss expenses	616,947			152,880			769,827			19,387			789,214
Less: Acquisition costs	80,387			71,492			151,879			1,817			153,696
Less: Operating expenses (2)	208,457			42,495			250,952			931			251,883
Underwriting profit (loss)	$	56,515		$	90,321		$	146,836		$	(7,629	)	$	139,207
Net investment income - excluding Life Funds Withheld Assets (3)							132,808			10,210			143,018
Net investment income - Life Funds Withheld Assets										50,419			50,419
Net results from structured products (4)	2,905			2,120			5,025			—			5,025
Net fee income and other (5)	(7,465		)	825			(6,640		)	132			(6,508		)
Loss on sale of life reinsurance subsidiary							—			—			—
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							5,807			(1,205		)	4,602
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets							—			48,289			48,289
Net realized and unrealized gains (losses) on derivative instruments							—			16,521			16,521
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(229,367		)	(229,367		)
Net income (loss) from investment fund affiliates and operating affiliates							—			57,997			57,997
Less: Exchange (gains) losses							—			27,390			27,390
Less: Corporate operating expenses							—			62,443			62,443
Contribution from P&C and Corporate and Other							283,836			(144,466		)	139,370
Less: Interest expense (6)										41,481			41,481
Less: Non-controlling interests										37,390			37,390
Less: Income tax expense										24,218			24,218
Net income (loss) attributable to ordinary shareholders													$	36,281
Ratios – P&C operations: (7)
Loss and loss expense ratio	64.1		%	42.8		%	58.3		%
Underwriting expense ratio	30.0		%	31.9		%	30.6		%
Combined ratio	94.1		%	74.7		%	88.9		%

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(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 $15.1 million and $10.0 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 structured products 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 for the three months ended March 31, 2016 and 2015:



Three Months Ended March 31, 2016 (U.S. dollars in thousands)	Insurance		Reinsurance		Corporate and Other			Total
P&C Operations:
Professional	$	332,954	$	43,155	$	—		$	376,109
Casualty	420,212		154,739		—			574,951
Property catastrophe	—		205,301		—			205,301
Property	359,633		254,399		—			614,032
Specialty	367,352		36,193		—			403,545
Other (1)	113,723		63,785		—			177,508
Total P&C Operations	$	1,593,874	$	757,572	$	—		$	2,351,446
Corporate and Other:
Run-off Life operations - Annuity	$	—	$	—	$	—		$	—
Run-off Life operations - Other Life	—		—		3,164			3,164
Total Corporate and Other	$	—	$	—	$	3,164		$	3,164
Total	$	1,593,874	$	757,572	$	3,164		$	2,354,610

Three Months Ended March 31, 2015 (U.S. dollars in thousands)	Insurance		Reinsurance		Corporate and Other			Total
P&C Operations:
Professional	$	266,410	$	35,008	$	—		$	301,418
Casualty	341,317		58,208		—			399,525
Property catastrophe	—		94,073		—			94,073
Property	172,539		131,224		—			303,763
Specialty	171,878		18,075		—			189,953
Other (1)	10,162		20,600		—			30,762
Total P&C Operations	$	962,306	$	357,188	$	—		$	1,319,494
Corporate and Other:
Run-off Life operations - Annuity	$	—	$	—	$	(1	)	$	(1	)
Run-off Life operations - Other Life	—		—		14,507			14,507
Total Corporate and Other	$	—	$	—	$	14,506		$	14,506
Total	$	962,306	$	357,188	$	14,506		$	1,334,000

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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, structured indemnity and other lines.