XML 36 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
Segment Information (Tables)
 9 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
Schedule of segment reporting, by segment
The following tables summarize the segment results for the three and nine months ended September 30, 2017 and 2016:
Three Months Ended September 30, 2017
(U.S. dollars in thousands)
Insurance
 
Reinsurance
 
Total P&C
 
Corporate
and Other (1)
 
Total
Gross premiums written
$
2,311,090

 
$
704,641

 
$
3,015,731

 
$
59,830

 
$
3,075,561

Net premiums written
1,660,304

 
665,917

 
2,326,221

 
3,146

 
2,329,367

Net premiums earned
1,677,189

 
940,567

 
2,617,756

 
3,146

 
2,620,902

Less: Net losses and loss expenses (2)
1,724,755

 
1,341,968

 
3,066,723

 
10,592

 
3,077,315

Less: Acquisition costs
228,188

 
216,371

 
444,559

 
1,126

 
445,685

Less: Operating expenses (3)
269,727

 
63,723

 
333,450

 
186

 
333,636

Underwriting profit (loss)
$
(545,481
)
 
$
(681,495
)
 
$
(1,226,976
)
 
$
(8,758
)
 
$
(1,235,734
)
Net investment income - excluding Life Funds Withheld Assets (4)
 
 
 
 
152,132

 
7,533

 
159,665

Net investment income - Life Funds Withheld Assets
 
 
 
 
 
 
30,796

 
30,796

Net results from structured products (5)
1,862

 
16,046

 
17,908

 
—

 
17,908

Net fee income and other (6)
(1,578
)
 
863

 
(715
)
 
(1,304
)
 
(2,019
)
Extinguishment of debt
 
 
 
 
—

 
1,582

 
1,582

Net realized gains (losses) on investments - excluding Life Funds Withheld Assets
 

 
 

 
32,618

 
(892
)
 
31,726

Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading
 
 
 
 
—

 
11,548

 
11,548

Net realized and unrealized gains (losses) on derivative instruments
 

 
 

 
—

 
(20,434
)
 
(20,434
)
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
 
 
 
 
—

 
(31,662
)
 
(31,662
)
Net income (loss) from investment affiliates and operating affiliates
 

 
 

 
—

 
62,528

 
62,528

Less: Foreign exchange (gains) losses
 

 
 

 
—

 
55,017

 
55,017

Less: Corporate operating expenses
 

 
 

 
—

 
62,232

 
62,232

Contribution from P&C and Corporate and Other
 

 
 

 
(1,025,033
)
 
(69,476
)
 
(1,094,509
)
Less: Interest expense (7)
 

 
 

 
 

 
39,509

 
39,509

Less: Non-controlling interests
 

 
 

 
 

 
(30,197
)
 
(30,197
)
Less: Income tax expense
 

 
 

 
 

 
(60,132
)
 
(60,132
)
Net income (loss) attributable to common shareholders
 

 
 

 
 

 
 

 
$
(1,043,689
)
Ratios – P&C operations: (8)
 

 
 

 
 

 
 

 
 

Loss and loss expense ratio
102.8
%
 
142.7
%
 
117.2
%
 
 

 
 

Underwriting expense ratio
29.7
%
 
29.8
%
 
29.7
%
 
 

 
 

Combined ratio
132.5
%
 
172.5
%
 
146.9
%
 
 

 
 

____________
(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 (loss) 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 $12.3 million and $(5.6) million, respectively.
(6)
Net fee income and other includes operating expenses of $13.5 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 September 30, 2016
(U.S. dollars in thousands)
Insurance
 
Reinsurance
 
Total P&C
 
Corporate
and Other (1)
 
Total
Gross premiums written
$
2,153,379

 
$
565,541

 
$
2,718,920

 
$
64,683

 
$
2,783,603

Net premiums written
1,615,132

 
518,166

 
2,133,298

 
2,360

 
2,135,658

Net premiums earned
1,653,461

 
778,216

 
2,431,677

 
2,360

 
2,434,037

Less: Net losses and loss expenses (2)
1,068,268

 
423,535

 
1,491,803

 
5,875

 
1,497,678

Less: Acquisition costs (2)
221,137

 
181,749

 
402,886

 
1,002

 
403,888

Less: Operating expenses (3)
302,373

 
67,764

 
370,137

 
142

 
370,279

Underwriting profit (loss)
$
61,683

 
$
105,168

 
$
166,851

 
$
(4,659
)
 
$
162,192

Net investment income - excluding Life Funds Withheld Assets (4)
 
 
 
 
148,579

 
8,127

 
156,706

Net investment income - Life Funds Withheld Assets
 
 
 
 
 
 
38,937

 
38,937

Net results from structured products (5)
2,353

 
5,355

 
7,708

 
—

 
7,708

Net fee income and other (6)
(4,486
)
 
620

 
(3,866
)
 
595

 
(3,271
)
Loss (gain) on sale of subsidiary
 
 
 
 
—

 
(3,670
)
 
(3,670
)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets
 

 
 

 
60,401

 
(2,006
)
 
58,395

Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading
 

 
 

 
68

 
85,213

 
85,281

Net realized and unrealized gains (losses) on derivative instruments
 

 
 

 
—

 
5,490

 
5,490

Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
 
 
 
 
—

 
(225,610
)
 
(225,610
)
Net income (loss) from investment affiliates and operating affiliates
 

 
 

 
—

 
24,566

 
24,566

Less: Foreign exchange (gains) losses
 

 
 

 
—

 
(1,695
)
 
(1,695
)
Less: Corporate operating expenses
 

 
 

 
—

 
126,308

 
126,308

Contribution from P&C and Corporate and Other
 

 
 

 
379,741

 
(190,290
)
 
189,451

Less: Interest expense (7)
 

 
 

 
 

 
43,025

 
43,025

Less: Non-controlling interests
 
 
 

 
 

 
58,076

 
58,076

Less: Income tax expense
 

 
 

 
 

 
17,749

 
17,749

Net income (loss) attributable to common shareholders
 

 
 

 
 

 
 

 
$
70,601

Ratios – P&C operations: (8)
 

 
 

 
 

 
 

 
 

Loss and loss expense ratio
64.6
%
 
54.4
%
 
61.3
%
 
 

 
 

Underwriting expense ratio
31.7
%
 
32.1
%
 
31.8
%
 
 

 
 

Combined ratio
96.3
%
 
86.5
%
 
93.1
%
 
 

 
 

____________
(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 (loss) 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 $6.4 million, respectively.
(6)
Net fee income and other includes operating expenses of $11.9 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.

Nine Months Ended September 30, 2017
(U.S. dollars in thousands)
Insurance
 
Reinsurance
 
Total P&C
 
Corporate
and Other (1)
 
Total
Gross premiums written
$
7,582,060

 
$
3,609,707

 
$
11,191,767

 
$
175,160

 
$
11,366,927

Net premiums written
4,910,096

 
3,042,326

 
7,952,422

 
9,280

 
7,961,702

Net premiums earned
4,964,808

 
2,686,522

 
7,651,330

 
9,280

 
7,660,610

Less: Net losses and loss expenses (2)
3,862,205

 
2,317,057

 
6,179,262

 
25,478

 
6,204,740

Less: Acquisition costs (2)
670,579

 
640,844

 
1,311,423

 
3,715

 
1,315,138

Less: Operating expenses (3)
844,137

 
204,915

 
1,049,052

 
697

 
1,049,749

Underwriting profit (loss)
$
(412,113
)
 
$
(476,294
)
 
$
(888,407
)
 
$
(20,610
)
 
$
(909,017
)
Net investment income - excluding Life Funds Withheld Assets (4)
 
 
 
 
454,257

 
22,917

 
477,174

Net investment income - Life Funds Withheld Assets
 
 
 
 
 
 
95,599

 
95,599

Net results from structured products (5)
6,112

 
17,633

 
23,745

 
—

 
23,745

Net fee income and other (6)
(2,437
)
 
2,243

 
(194
)
 
(1,607
)
 
(1,801
)
Extinguishment of debt
 
 
 
 
—

 
1,582

 
1,582

Net realized gains (losses) on investments - excluding Life Funds Withheld Assets
 

 
 

 
94,589

 
(9,476
)
 
85,113

Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading
 

 
 

 
—

 
52,075

 
52,075

Net realized and unrealized gains (losses) on derivative instruments
 

 
 

 
—

 
(28,409
)
 
(28,409
)
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
 
 
 
 
—

 
(116,359
)
 
(116,359
)
Net income (loss) from investment affiliates and operating affiliates
 

 
 

 
—

 
187,920

 
187,920

Less: Foreign exchange (gains) losses
 

 
 

 
—

 
46,038

 
46,038

Less: Corporate operating expenses
 

 
 

 
—

 
263,267

 
263,267

Contribution from P&C and Corporate and Other
 

 
 

 
(316,010
)
 
(128,837
)
 
(444,847
)
Less: Interest expense (7)
 

 
 

 
 

 
123,181

 
123,181

Less: Non-controlling interests
 

 
 

 
 

 
39,232

 
39,232

Less: Income tax expense
 

 
 

 
 

 
(18,034
)
 
(18,034
)
Net income (loss) attributable to common shareholders
 

 
 

 
 

 
 
 
$
(589,226
)
Ratios – P&C operations: (8)
 

 
 

 
 

 
 

 
 

Loss and loss expense ratio
77.8
%
 
86.2
%
 
80.8
%
 
 

 
 

Underwriting expense ratio
30.5
%
 
31.5
%
 
30.8
%
 
 

 
 

Combined ratio
108.3
%
 
117.7
%
 
111.6
%
 
 

 
 


____________
(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 (loss) 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 $39.2 million and $15.5 million, respectively.
(6)
Net fee income and other includes operating expenses of $37.2 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.

Nine Months Ended September 30, 2016
(U.S. dollars in thousands)
Insurance
 
Reinsurance
 
Total P&C
 
Corporate
and Other (1)
 
Total
Gross premiums written
$
7,169,363

 
$
3,439,650

 
$
10,609,013

 
$
202,139

 
$
10,811,152

Net premiums written
4,899,258

 
3,018,246

 
7,917,504

 
9,032

 
7,926,536

Net premiums earned
4,944,055

 
2,367,772

 
7,311,827

 
9,032

 
7,320,859

Less: Net losses and loss expenses (2)
3,163,599

 
1,343,075

 
4,506,674

 
16,294

 
4,522,968

Less: Acquisition costs (2)
679,009

 
544,380

 
1,223,389

 
4,286

 
1,227,675

Less: Operating expenses (3)
922,273

 
215,258

 
1,137,531

 
765

 
1,138,296

Underwriting profit (loss)
$
179,174

 
$
265,059

 
$
444,233

 
$
(12,313
)
 
$
431,920

Net investment income - excluding Life Funds Withheld Assets (4)
 
 
 
 
446,352

 
24,185

 
470,537

Net investment income - Life Funds Withheld Assets
 
 
 
 
 
 
119,643

 
119,643

Net results from structured products (5)
6,340

 
5,397

 
11,737

 
—

 
11,737

Net fee income and other (6)
(12,097
)
 
2,705

 
(9,392
)
 
1,068

 
(8,324
)
Loss (gain) on sale of subsidiary
 
 
 
 
—

 
(3,670
)
 
(3,670
)
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets
 

 
 

 
77,189

 
(7,742
)
 
69,447

Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading
 

 
 

 
(3
)
 
271,599

 
271,596

Net realized and unrealized gains (losses) on derivative instruments
 

 
 

 
—

 
2,774

 
2,774

Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
 
 
 
 
—

 
(691,432
)
 
(691,432
)
Net income (loss) from investment affiliates and operating affiliates
 

 
 

 
—

 
67,234

 
67,234

Less: Foreign exchange (gains) losses
 

 
 

 
—

 
(54,614
)
 
(54,614
)
Less: Corporate operating expenses
 

 
 

 
—

 
372,003

 
372,003

Contribution from P&C and Corporate and Other
 

 
 

 
970,116

 
(538,703
)
 
431,413

Less: Interest expense (7)
 

 
 

 
 

 
128,371

 
128,371

Less: Non-controlling interests
 

 
 

 
 

 
124,263

 
124,263

Less: Income tax expense
 

 
 

 
 

 
42,511

 
42,511

Net income (loss) attributable to common shareholders
 

 
 

 
 

 
 
 
$
136,268

Ratios – P&C operations: (8)
 

 
 

 
 

 
 

 
 

Loss and loss expense ratio
64.0
%
 
56.7
%
 
61.6
%
 
 

 
 

Underwriting expense ratio
32.4
%
 
32.1
%
 
32.3
%
 
 

 
 

Combined ratio
96.4
%
 
88.8
%
 
93.9
%
 
 

 
 

____________
(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 (loss) 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 $40.9 million and $29.1 million, respectively.
(6)
Net fee income and other includes operating expenses of $36.0 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 nine months ended September 30, 2017 and 2016:
Three Months Ended September 30, 2017
(U.S. dollars in thousands)
Insurance
 
Reinsurance
 
Corporate
and Other
 
Total
P&C Operations:
 

 
 

 
 

 
 

Professional
$
328,253

 
$
58,304

 
$
—

 
$
386,557

Casualty
522,564

 
136,532

 
—

 
659,096

Property catastrophe
—

 
221,023

 
—

 
221,023

Property
390,156

 
278,651

 
—

 
668,807

Specialty
437,350

 
53,611

 
—

 
490,961

Other (1)
(1,134
)
 
192,446

 
—

 
191,312

Total P&C Operations
$
1,677,189

 
$
940,567

 
$
—

 
$
2,617,756

Corporate and Other:
 
 
 
 
 

 
 

Run-off Life operations - Annuity
$
—

 
$
—

 
$
—

 
$
—

Run-off Life operations - Other Life
—

 
—

 
3,146

 
3,146

Total Corporate and Other
$
—

 
$
—

 
$
3,146

 
$
3,146

Total
$
1,677,189

 
$
940,567

 
$
3,146

 
$
2,620,902

 
 
 
 
 
 
 
 
Three Months Ended September 30, 2016
(U.S. dollars in thousands)
Insurance (2)
 
Reinsurance
 
Corporate
and Other
 
Total
P&C Operations:
 

 
 

 
 

 
 

Professional
$
287,039

 
$
39,029

 
$
—

 
$
326,068

Casualty
553,223

 
163,845

 
—

 
717,068

Property catastrophe
—

 
183,381

 
—

 
183,381

Property
414,888

 
263,324

 
—

 
678,212

Specialty
408,857

 
43,712

 
—

 
452,569

Other (1)
(10,546
)
 
84,925

 
—

 
74,379

Total P&C Operations
$
1,653,461

 
$
778,216

 
$
—

 
$
2,431,677

Corporate and Other:
 
 
 
 
 

 
 

Run-off Life operations - Annuity
$
—

 
$
—

 
$
—

 
$
—

Run-off Life operations - Other Life
—

 
—

 
2,360

 
2,360

Total Corporate and Other
$
—

 
$
—

 
$
2,360

 
$
2,360

Total
$
1,653,461

 
$
778,216

 
$
2,360

 
$
2,434,037

____________
(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 movements 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.

Nine Months Ended September 30, 2017
(U.S. dollars in thousands)
Insurance
 
Reinsurance
 
Corporate
and Other
 
Total
P&C Operations:
 

 
 

 
 

 
 

Professional
$
939,809

 
$
165,534

 
$
—

 
$
1,105,343

Casualty
1,595,356

 
442,793

 
—

 
2,038,149

Property catastrophe
—

 
533,486

 
—

 
533,486

Property
1,185,946

 
837,490

 
—

 
2,023,436

Specialty
1,243,137

 
137,913

 
—

 
1,381,050

Other (1)
560

 
569,306

 
—

 
569,866

Total P&C Operations
$
4,964,808

 
$
2,686,522

 
$
—

 
$
7,651,330

Corporate and Other:
 

 
 

 
 

 
 

Run-off Life operations - Annuity
$
—

 
$
—

 
$
—

 
$
—

Run-off Life operations - Other Life
—

 
—

 
9,280

 
9,280

Total Corporate and Other
$
—

 
$
—

 
$
9,280

 
$
9,280

Total
$
4,964,808

 
$
2,686,522

 
$
9,280

 
$
7,660,610

 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2016
(U.S. dollars in thousands)
Insurance (2)
 
Reinsurance
 
Corporate
and Other
 
Total
P&C Operations:
 

 
 

 
 

 
 

Professional
$
884,081

 
$
121,982

 
$
—

 
$
1,006,063

Casualty
1,636,808

 
510,031

 
—

 
2,146,839

Property catastrophe
—

 
602,995

 
—

 
602,995

Property
1,137,609

 
777,993

 
—

 
1,915,602

Specialty
1,287,221

 
125,717

 
—

 
1,412,938

Other (1)
(1,664
)
 
229,054

 
—

 
227,390

Total P&C Operations
$
4,944,055

 
$
2,367,772

 
$
—

 
$
7,311,827

Corporate and Other:
 

 
 

 
 

 
 

Run-off Life operations - Annuity
$
—

 
$
—

 
$
—

 
$
—

Run-off Life operations - Other Life
—

 
—

 
9,032

 
9,032

Total Corporate and Other
$
—

 
$
—

 
$
9,032

 
$
9,032

Total
$
4,944,055

 
$
2,367,772

 
$
9,032

 
$
7,320,859

____________
(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 movements 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.