Investments

12 Months Ended

Dec. 31, 2013

Disclosure - Investments [Abstract]

Investments Disclosure

4. Investments

(a) Fixed Maturities, Short-Term Investments and Equities

The cost, gross unrealized gains, gross unrealized losses and fair value of investments classified as trading securities at December 31, 2013 and 2012 were as follows (in thousands of U.S. dollars):

						Gross		Gross
						Unrealized		Unrealized		Fair
December 31, 2013			Cost (1)		Gains		Losses		Value
Fixed maturities
	U.S. government and government sponsored enterprises		$	1,635,578	$	7,211	$	(18,930)	$	1,623,859
	U.S. states, territories and municipalities			121,697		4,395		(1,505)		124,587
	Non-U.S. sovereign government, supranational and
		government related		2,295,608		67,453		(9,362)		2,353,699
	Corporate			5,866,991		243,522		(61,850)		6,048,663
	Asset-backed securities			1,126,812		15,232		(3,813)		1,138,231
	Residential mortgage-backed securities			2,294,870		31,810		(58,163)		2,268,517
	Other mortgage-backed securities			34,899		1,590		(742)		35,747
Fixed maturities				13,376,455		371,213		(154,365)		13,593,303
Short-term investments				13,543		4		(1)		13,546
Equities				1,009,286		250,288		(38,521)		1,221,053
Total			$	14,399,284	$	621,505	$	(192,887)	$	14,827,902
						Gross		Gross
						Unrealized		Unrealized		Fair
December 31, 2012			Cost (1)		Gains		Losses		Value
Fixed maturities
	U.S. government and government sponsored enterprises		$	1,108,513	$	23,173	$	(762)	$	1,130,924
	U.S. states, territories and municipalities			232,433		11,057		(104)		243,386
	Non-U.S. sovereign government, supranational and
		government related		2,221,272		155,144		(743)		2,375,673
	Corporate			6,197,594		463,221		(4,977)		6,655,838
	Asset-backed securities			701,264		23,972		(1,766)		723,470
	Residential mortgage-backed securities			3,128,618		118,988		(47,682)		3,199,924
	Other mortgage-backed securities			63,921		2,850		(671)		66,100
Fixed maturities				13,653,615		798,405		(56,705)		14,395,315
Short-term investments				150,634		9		(91)		150,552
Equities				1,000,326		115,351		(21,675)		1,094,002
Total			$	14,804,575	$	913,765	$	(78,471)	$	15,639,869
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(1)Cost is amortized cost for fixed maturities and short-term investments and cost for equity securities.

(b) Maturity Distribution of Fixed Maturities and Short-Term Investments

The distribution of fixed maturities and short-term investments at December 31, 2013, by contractual maturity date, is shown below (in thousands of U.S. dollars). Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

		Cost		Fair Value
One year or less	$	373,899	$	377,568
More than one year through five years		4,915,255		5,056,690
More than five years through ten years		3,920,421		3,961,736
More than ten years		723,842		768,360
Subtotal		9,933,417		10,164,354
Mortgage/asset-backed securities		3,456,581		3,442,495
Total	$	13,389,998	$	13,606,849

(c) Net Realized and Unrealized Investment (Losses) Gains

The components of the net realized and unrealized investment (losses) gains for the years ended December 31, 2013, 2012 and 2011wereas follows (in thousands of U.S. dollars):

		2013		2012		2011
Net realized investment gains on fixed maturities and short-term investments	$	118,575	$	172,987	$	157,207
Net realized investment gains on equities		75,217		72,155		90,866
Net realized gains (losses) on other invested assets		20,497		(16,691)		(176,295)
Change in net unrealized gains (losses) on other invested assets		56,652		(9,568)		(46,278)
Change in net unrealized investment (losses) gains on fixed maturities and short-term investments		(525,787)		186,063		128,224
Change in net unrealized investment gains (losses) on equities		118,010		66,253		(101,860)
Net other realized and unrealized investment (losses) gains		(2,107)		5,843		3,617
Net realized and unrealized investment (losses) gains on funds held – directly managed		(21,792)		16,367		11,211
Total net realized and unrealized investment (losses) gains	$	(160,735)	$	493,409	$	66,692

(d) Net Investment Income

The components of net investment income for the years ended December 31, 2013, 2012 and 2011 were as follows (in thousands of U.S. dollars):

		2013		2012		2011
Fixed maturities	$	446,299	$	512,833	$	561,576
Short-term investments, cash and cash equivalents		1,886		2,905		3,843
Equities		32,989		26,207		19,815
Funds held and other		34,215		44,109		49,502
Funds held – directly managed		20,502		29,031		37,919
Investment expenses		(51,524)		(43,747)		(43,507)
Net investment income	$	484,367	$	571,338	$	629,148

Other than the funds held – directly managed account, the Company generally earns investment income on funds held by reinsured companies based upon a predetermined interest rate, either fixed contractually at the inception of the contract or based upon a recognized index (e.g., LIBOR). Interest rates ranged from 1.8% to 4.3%for the year endedDecember 31, 2013and from2.0% to 5.0% for the years endedDecember 31, 2012 and 2011. See Note 5 for additional information on the funds held – directly managed account.

(e) Pledged and Restricted Assets

At December 31, 2013 and 2012, approximately $200.6million and $167.5 million, respectively, of cash and cash equivalents and approximately $2,477.8million and $2,532.0 million, respectively, of securities were deposited, pledged or held in escrow accounts in favor of ceding companies and other counterparties or government authorities to comply with reinsurance contract provisions and insurance laws.

The Company has agreed, subject to certain exceptions, not to dispose of or hedge any of the common shares in an investment with a fair value of $121 million, which is included in equities, prior to April 28, 2014.

(f) Net Receivable (Payable)for Securities Sold/Purchased

Included within Other assets in the Consolidated Balance Sheet at December 31, 2013 and Accounts payable, accrued expenses and other in the Consolidated Balance Sheet at December 31, 2012 were amounts of gross receivable balances for securities sold and gross payable balances for securities purchased as follows (in thousands of U.S. dollars):

		2013		2012
Receivable for securities sold	$	150,816	$	22,133
Payable for securities purchased		(60,153)		(32,944)
Net receivable (payable) for securities sold/purchased	$	90,663	$	(10,811)