Segment Information (Tables)

6 Months Ended

Jun. 30, 2017

Schedule of segment reporting, by segment

The following tables summarize the segment results for the three and six months ended June 30, 2017 and 2016:



Three Months Ended June 30, 2017 (U.S. dollars in thousands)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	2,576,754		$	977,676		$	3,554,430		$	58,519		$	3,612,949
Net premiums written	1,741,201			905,240			2,646,441			2,824			2,649,265
Net premiums earned	1,652,304			861,789			2,514,093			2,824			2,516,917
Less: Net losses and loss expenses (2)	1,077,087			451,996			1,529,083			7,595			1,536,678
Less: Acquisition costs (2)	231,908			200,394			432,302			1,282			433,584
Less: Operating expenses (3)	288,681			69,435			358,116			278			358,394
Underwriting profit (loss)	$	54,628		$	139,964		$	194,592		$	(6,331	)	$	188,261
Net investment income - excluding Life Funds Withheld Assets (4)							155,559			8,157			163,716
Net investment income - Life Funds Withheld Assets										31,439			31,439
Net results from structured products (5)	1,981			942			2,923			—			2,923
Net fee income and other (6)	(2,826		)	694			(2,132		)	135			(1,997		)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							57,140			(7,971		)	49,169
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading							—			7,459			7,459
Net realized and unrealized gains (losses) on derivative instruments							—			(906		)	(906		)
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(34,596		)	(34,596		)
Net income (loss) from investment fund affiliates and operating affiliates							—			73,522			73,522
Less: Exchange (gains) losses							—			(5,643		)	(5,643		)
Less: Corporate operating expenses							—			102,162			102,162
Contribution from P&C and Corporate and Other							408,082			(25,611		)	382,471
Less: Interest expense (7)										43,422			43,422
Less: Non-controlling interests										8,423			8,423
Less: Income tax expense										29,006			29,006
Net income (loss) attributable to common shareholders													$	301,620
Ratios – P&C operations: (8)
Loss and loss expense ratio	65.2		%	52.4		%	60.8		%
Underwriting expense ratio	31.5		%	31.4		%	31.5		%
Combined ratio	96.7		%	83.8		%	92.3		%

____________


(1)	Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit and its components within this section are predominantly driven from 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 $13.5 million and $10.6 million, respectively.


(6)	Net fee income and other includes operating expenses of $12.2 million 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 June 30, 2016 (U.S. dollars in thousands)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	2,512,012		$	1,018,766		$	3,530,778		$	68,545		$	3,599,323
Net premiums written	1,780,192			942,419			2,722,611			3,508			2,726,119
Net premiums earned	1,696,720			831,984			2,528,704			3,508			2,532,212
Less: Net losses and loss expenses (2)	1,095,739			536,647			1,632,386			5,482			1,637,868
Less: Acquisition costs (2)	232,414			186,283			418,697			1,823			420,520
Less: Operating expenses (3)	307,468			68,260			375,728			405			376,133
Underwriting profit (loss)	$	61,099		$	40,794		$	101,893		$	(4,202	)	$	97,691
Net investment income - excluding Life Funds Withheld Assets (4)							154,642			7,525			162,167
Net investment income - Life Funds Withheld Assets										39,146			39,146
Net results from structured products (5)	2,765			(706		)	2,059			—			2,059
Net fee income and other (6)	(3,749		)	1,248			(2,501		)	171			(2,330		)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							27,948			(8,480		)	19,468
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading							(71		)	85,220			85,149
Net realized and unrealized gains (losses) on derivative instruments							—			906			906
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(229,742		)	(229,742		)
Net income (loss) from investment fund affiliates and operating affiliates							—			34,597			34,597
Less: Exchange (gains) losses							—			(19,100		)	(19,100		)
Less: Corporate operating expenses							—			133,185			133,185
Contribution from P&C and Corporate and Other							283,970			(188,944		)	95,026
Less: Interest expense (7)										43,733			43,733
Less: Non-controlling interests										5,044			5,044
Less: Income tax expense										2,467			2,467
Net income (loss) attributable to common shareholders													$	43,782
Ratios – P&C operations: (8)
Loss and loss expense ratio	64.6		%	64.5		%	64.6		%
Underwriting expense ratio	31.8		%	30.6		%	31.4		%
Combined ratio	96.4		%	95.1		%	96.0		%

____________


(1)	Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit and its components within this section are predominantly driven from 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 $14.1 million and $12.0 million, respectively.


(6)	Net fee income and other includes operating expenses of $13.2 million 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.



Six Months Ended June 30, 2017 (U.S. dollars in thousands)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	5,270,970		$	2,905,066		$	8,176,036		$	115,330		$	8,291,366
Net premiums written	3,249,792			2,376,409			5,626,201			6,134			5,632,335
Net premiums earned	3,287,619			1,745,955			5,033,574			6,134			5,039,708
Less: Net losses and loss expenses (2)	2,137,450			975,089			3,112,539			14,886			3,127,425
Less: Acquisition costs (2)	442,391			424,473			866,864			2,589			869,453
Less: Operating expenses (3)	574,410			141,192			715,602			511			716,113
Underwriting profit (loss)	$	133,368		$	205,201		$	338,569		$	(11,852	)	$	326,717
Net investment income - excluding Life Funds Withheld Assets (4)							302,125			15,384			317,509
Net investment income - Life Funds Withheld Assets										64,803			64,803
Net results from structured products (5)	4,250			1,587			5,837			—			5,837
Net fee income and other (6)	(859		)	1,380			521			(303		)	218
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							61,971			(8,584		)	53,387
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading							—			40,527			40,527
Net realized and unrealized gains (losses) on derivative instruments							—			(7,975		)	(7,975		)
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(84,697		)	(84,697		)
Net income (loss) from investment fund affiliates and operating affiliates							—			125,392			125,392
Less: Exchange (gains) losses							—			(8,979		)	(8,979		)
Less: Corporate operating expenses							—			201,035			201,035
Contribution from P&C and Corporate and Other							709,023			(59,361		)	649,662
Less: Interest expense (7)										83,672			83,672
Less: Non-controlling interests										69,429			69,429
Less: Income tax expense										42,098			42,098
Net income (loss) attributable to common shareholders													$	454,463
Ratios – P&C operations: (8)
Loss and loss expense ratio	65.0		%	55.8		%	61.8		%
Underwriting expense ratio	30.9		%	32.4		%	31.5		%
Combined ratio	95.9		%	88.2		%	93.3		%

____________


(1)	Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit and its components within this section are predominantly driven from 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 $26.9 million and $21.1 million, respectively.


(6)	Net fee income and other includes operating expenses of $23.7 million 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.



Six Months Ended June 30, 2016 (U.S. dollars in thousands)	Insurance			Reinsurance			Total P&C			Corporate and Other (1)			Total
Gross premiums written	$	5,015,984		$	2,874,109		$	7,890,093		$	137,456		$	8,027,549
Net premiums written	3,284,126			2,500,080			5,784,206			6,672			5,790,878
Net premiums earned	3,290,594			1,589,556			4,880,150			6,672			4,886,822
Less: Net losses and loss expenses (2)	2,095,331			919,540			3,014,871			10,419			3,025,290
Less: Acquisition costs (2)	457,872			362,631			820,503			3,284			823,787
Less: Operating expenses (3)	619,900			147,494			767,394			623			768,017
Underwriting profit (loss)	$	117,491		$	159,891		$	277,382		$	(7,654	)	$	269,728
Net investment income - excluding Life Funds Withheld Assets (4)							297,773			16,058			313,831
Net investment income - Life Funds Withheld Assets										80,706			80,706
Net results from structured products (5)	3,987			42			4,029			—			4,029
Net fee income and other (6)	(7,611		)	2,085			(5,526		)	473			(5,053		)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets							16,788			(5,736		)	11,052
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading							(71		)	186,386			186,315
Net realized and unrealized gains (losses) on derivative instruments							—			(2,716		)	(2,716		)
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets							—			(465,822		)	(465,822		)
Net income (loss) from investment fund affiliates and operating affiliates							—			42,668			42,668
Less: Exchange (gains) losses							—			(52,919		)	(52,919		)
Less: Corporate operating expenses							—			245,695			245,695
Contribution from P&C and Corporate and Other							590,375			(348,413		)	241,962
Less: Interest expense (7)										85,346			85,346
Less: Non-controlling interests										66,187			66,187
Less: Income tax expense										24,762			24,762
Net income (loss) attributable to common shareholders													$	65,667
Ratios – P&C operations: (8)
Loss and loss expense ratio	63.7		%	57.8		%	61.8		%
Underwriting expense ratio	32.7		%	32.1		%	32.5		%
Combined ratio	96.4		%	89.9		%	94.3		%

____________


(1)	Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes. The underwriting profit and its components within this section are predominantly driven from 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 $26.7 million and $22.7 million, respectively.


(6)	Net fee income and other includes operating expenses of $24.2 million 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.

Schedule of net premiums earned by line of business

The following tables summarize the Company's net premiums earned by product type for the three and six months ended June 30, 2017 and 2016:



Three Months Ended June 30, 2017 (U.S. dollars in thousands)	Insurance			Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	306,072		$	54,304	$	—	$	360,376
Casualty	542,439			149,627		—		692,066
Property catastrophe				164,057		—		164,057
Property	401,446			286,493		—		687,939
Specialty	403,101			47,676		—		450,777
Other (1)	(754		)	159,632		—		158,878
Total P&C Operations	$	1,652,304		$	861,789	$	—	$	2,514,093
Corporate and Other:
Run-off Life operations - Annuity	$	—		$	—	$	—	$	—
Run-off Life operations - Other Life	—			—		2,824		2,824
Total Corporate and Other	$	—		$	—	$	2,824	$	2,824
Total	$	1,652,304		$	861,789	$	2,824	$	2,516,917

Three Months Ended June 30, 2016 (U.S. dollars in thousands)	Insurance (2)			Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	292,764		$	39,798	$	—	$	332,562
Casualty	563,159			191,447		—		754,606
Property catastrophe				214,313		—		214,313
Property	376,529			260,270		—		636,799
Specialty	454,688			45,812		—		500,500
Other (1)	9,580			80,344		—		89,924
Total P&C Operations	$	1,696,720		$	831,984	$	—	$	2,528,704
Corporate and Other:
Run-off Life operations - Annuity	$	—		$	—	$	1	$	1
Run-off Life operations - Other Life	—			—		3,507		3,507
Total Corporate and Other	$	—		$	—	$	3,508	$	3,508
Total	$	1,696,720		$	831,984	$	3,508	$	2,532,212

____________


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

(2)

Amounts from the prior year have been re-presented to reflect current mapping of underlying lines of business to be consistent with the manner in which they are reflected in the current period. The most significant movements include movement of certain items out of Other as follows: Programs business is now reflected in Property or Casualty, depending upon the predominant line for each program; Surplus lines is now reflected primarily in Casualty; and Accident & Health is now reflected in Specialty.



Six Months Ended June 30, 2017 (U.S. dollars in thousands)	Insurance		Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	611,556	$	107,230	$	—	$	718,786
Casualty	1,072,792		306,261		—		1,379,053
Property catastrophe			312,463		—		312,463
Property	795,790		558,839		—		1,354,629
Specialty	805,787		84,302		—		890,089
Other (1)	1,694		376,860		—		378,554
Total P&C Operations	$	3,287,619	$	1,745,955	$	—	$	5,033,574
Corporate and Other:
Run-off Life operations - Annuity	$	—	$	—	$	—	$	—
Run-off Life operations - Other Life	—		—		6,134		6,134
Total Corporate and Other	$	—	$	—	$	6,134	$	6,134
Total	$	3,287,619	$	1,745,955	$	6,134	$	5,039,708

Six Months Ended June 30, 2016 (U.S. dollars in thousands)	Insurance (2)		Reinsurance		Corporate and Other		Total
P&C Operations:
Professional	$	597,045	$	82,953	$	—	$	679,998
Casualty	1,083,586		346,186		—		1,429,772
Property catastrophe			419,614		—		419,614
Property	722,717		514,669		—		1,237,386
Specialty	878,364		82,005		—		960,369
Other (1)	8,882		144,129		—		153,011
Total P&C Operations	$	3,290,594	$	1,589,556	$	—	$	4,880,150
Corporate and Other:
Run-off Life operations - Annuity	$	—	$	—	$	1	$	1
Run-off Life operations - Other Life	—		—		6,671		6,671
Total Corporate and Other	$	—	$	—	$	6,672	$	6,672
Total	$	3,290,594	$	1,589,556	$	6,672	$	4,886,822

____________


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

(2)