13. SEGMENT REPORTING

The Company, through its subsidiaries, operates in four segments: U.S. Reinsurance, Insurance, Specialty Underwriting and International. The U.S. Reinsurance operation writes property and casualty reinsurance, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies within the U.S. The Insurance operation writes property and casualty insurance directly and through general agents, brokers and surplus lines brokers within the U.S and Canada. The Specialty Underwriting operation writes accident and health ("A&H"), marine, aviation and surety business within the U.S. and worldwide through brokers and directly with ceding companies. The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada and Singapore and offices in Brazil, Miami and New Jersey.

These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations. Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.

Underwriting results include earned premium less losses and loss adjustment expenses ("LAE") incurred, commission and brokerage expenses and other underwriting expenses. Underwriting results are measured using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

The Company does not maintain separate balance sheet data for its operating segments. Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

The following tables present the underwriting results for the operating segments for the periods indicated:

	Three Months Ended					Six Months Ended
U.S. Reinsurance	June 30,					June 30,
(Dollars in thousands)	2011			2010		2011			2010
Gross written premiums	$	230,260		$	268,215	$	484,167		$	512,223
Net written premiums		123,797			150,462		260,348			278,924

Premiums earned	$	141,633		$	162,492	$	286,788		$	289,493
Incurred losses and LAE		112,650			84,346		236,077			174,454
Commission and brokerage		32,541			35,854		69,646			63,072
Other underwriting expenses		7,871			9,377		15,773			17,183
Underwriting gain (loss)	$	(11,429	)	$	32,915	$	(34,708	)	$	34,784

	Three Months Ended					Six Months Ended
Insurance	June 30,					June 30,
(Dollars in thousands)	2011		2010			2011			2010
Gross written premiums	$	226,132	$	204,941		$	480,607		$	433,178
Net written premiums		109,204		80,812			234,230			183,279

Premiums earned	$	114,937	$	86,187		$	220,265		$	187,353
Incurred losses and LAE		84,404		71,800			169,922			144,750
Commission and brokerage		7,377		6,098			13,698			7,739
Other underwriting expenses		22,401		16,279			44,273			32,856
Underwriting gain (loss)	$	755	$	(7,990	)	$	(7,628	)	$	2,008


	Three Months Ended						Six Months Ended
Specialty Underwriting	June 30,						June 30,
(Dollars in thousands)	2011			2010			2011		2010
Gross written premiums	$	66,367		$	65,855		$	135,537	$	131,742
Net written premiums		35,500			37,823			75,882		75,062

Premiums earned	$	33,057		$	39,342		$	75,451	$	78,240
Incurred losses and LAE		24,891			34,512			50,148		61,973
Commission and brokerage		7,439			8,972			15,404		17,507
Other underwriting expenses		2,001			2,407			4,005		4,358
Underwriting gain (loss)	$	(1,274	)	$	(6,549	)	$	5,894	$	(5,598	)

	Three Months Ended					Six Months Ended
International	June 30,					June 30,
(Dollars in thousands)	2011		2010			2011			2010
Gross written premiums	$	288,749	$	306,998		$	597,596		$	582,348
Net written premiums		141,501		166,046			299,625			311,255

Premiums earned	$	162,423	$	154,703		$	328,939		$	301,772
Incurred losses and LAE		90,864		124,091			409,690			360,576
Commission and brokerage		32,948		37,273			70,069			67,720
Other underwriting expenses		6,950		7,308			13,389			13,688
Underwriting gain (loss)	$	31,661	$	(13,969	)	$	(164,209	)	$	(140,212	)

The following table reconciles the underwriting results for the operating segments to income (loss) before taxes as reported in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2011			2010			2011			2010
Underwriting gain (loss)	$	19,713		$	4,407		$	(200,651	)	$	(109,018	)
Net investment income		84,459			89,346			171,591			174,453
Net realized capital gains (losses)		(68,184	)		(95,473	)		(27,708	)		(100,780	)
Corporate expense		(1,165	)		(1,463	)		(2,355	)		(3,689	)
Interest, fee and bond issue cost amortization expense		(12,695	)		(12,722	)		(25,377	)		(29,062	)
Other income (expense)		(11,568	)		8,709			(11,536	)		13,821
Income (loss) before taxes	$	10,560		$	(7,196	)	$	(96,036	)	$	(54,275	)

The Company produces business in the U.S. and internationally. The net income deriving from and assets residing in the individual foreign countries in which the Company writes business are not identifiable in the Company's financial records. Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(Dollars in thousands)	2011		2010		2011		2010
Canada	$	39,232	$	49,976	$	83,184	$	85,279

No other country represented more than 5% of the Company's revenue.