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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill And Intangible Assets [Abstract]

7. Goodwill and Intangible Assets

Effective December 31, 2012, the Company completed the acquisition of Presidio by acquiring 100% of the outstanding common shares for $72 million plus tangible book value. In addition, the Company has estimated and recorded a liability for additional contingent payments, that are based upon the achievement of certain performance targets by Presidio, at the acquisition date in the Consolidated Balance Sheets. Subsequent changes in the estimated contingent payments will be recognized in the Consolidated Statements of Operations when incurred. The acquisition of Presidio is consistent with the Company's diversified strategy and provides an additional specialty risk class not previously written by the Company.

The Company recorded pre-tax intangible assets related to renewal rights of $48.2 million, customer relationships of $63.4 million and fronting arrangements of $0.6 million, and goodwill of $0.8 million related to the Presidio acquisition. The goodwill was allocated to the Company's Life segment. The amortization period related to the intangible assets for the renewal rights and customer relationships is thirteen years and related to the intangible asset for fronting arrangements is less than one year.

The following tables show the Company's goodwill and intangible assets at December 31, 2012 and 2011 (in thousands of U.S. dollars):

				Definite-		Indefinite-
				lived intangible		lived intangible
2012		Goodwill		assets		asset		Total
Balance at January 1, 2012	$	455,533	$	126,517	$	7,350	$	589,400
Acquired during the year		847		112,202		0		113,049
Intangible assets amortization		0		(31,799)		0		(31,799)

Balance at December 31, 2012	$	456,380	$	206,920	$	7,350	$	670,650

				Definite-		Indefinite-
				lived intangible		lived intangible
2011		Goodwill		assets		asset		Total
Balance at January 1, 2011	$	455,533	$	171,365	$	7,350	$	634,248
Intangible assets amortization		0		(44,848)		0		(44,848)

Balance at December 31, 2011	$	455,533	$	126,517	$	7,350	$	589,400

Intangible asset amortization during the years ended December 31, 2012, 2011 and 2010 totaled $31.8 million, $44.8 million and $68.6 million, respectively, of which $nil, $8.4 million and $37.1 million, respectively, is recorded within acquisition costs and $31.8 million, $36.4 million and $31.5 million, respectively, is recorded within amortization of intangible assets in the Consolidated Statements of Operations. The amounts recorded within acquisition costs in the Consolidated Statements of Operations approximates the amount of Paris Re's deferred acquisition costs that would have been recorded as acquisition costs had they not been fair valued under purchase accounting.

The gross carrying value and accumulated amortization of intangible assets by type at December 31, 2012 and 2011 is as follows (in thousands of U.S. dollars):

		2012				2011
			Gross carrying		Accumulated		Gross carrying		Accumulated
			value		amortization		value		amortization
Definite-lived intangible assets:
	Unpaid losses and loss expenses	$	191,196	$	96,478	$	191,196	$	72,854
	Renewal rights		80,863		32,700		32,700		24,525
	Customer relationships		63,408		0		0		0
	Fronting arrangements		631		0		0		0

Total definite-lived intangible assets		$	336,098	$	129,178	$	223,896	$	97,379

Indefinite-lived intangible asset:
	U.S. insurance licenses		7,350		0		7,350		0

Total intangible assets		$	343,448	$	129,178	$	231,246	$	97,379

At December 31, 2012 and 2011, the allocation of the goodwill to the Company's segments and sub-segments was as follows (in thousands of U.S. dollars):

			2012		2011
			2012		2011
Non-life segment:
	North America	$	82,026	$	82,026
	Global (Non-U.S.) P&C		149,895		149,895
	Global (Non-U.S.) Specialty		179,641		179,641
	Catastrophe		26,014		26,014
Life segment			18,804		17,957

Total goodwill		$	456,380	$	455,533

The estimated amortization expense for each of the five succeeding fiscal years related to the Company's definite-lived intangible assets is as follows (in thousands of U.S. dollars):

Period		Amount
2013	$	27,179
2014		27,486
2015		26,593
2016		25,919
2017		22,818

Total	$	129,995

- 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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