Segment Reporting

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Reporting

13.  SEGMENT REPORTING

During the quarter ended September 30, 2011, the Company realigned its reporting segments to reflect recent changes in the type and volume of business written. The Company previously reported the results of Marine & Aviation, Surety, Accident and Health ("A&H") Reinsurance and A&H Primary operations as a separate segment—Specialty Underwriting.  The A&H primary business, which is a relatively new line of business for the Company, has increased significantly, representing approximately 2% of premiums earned and is projected to continue to grow.  The A&H primary business is better aligned with the Insurance reporting segment based on the similarities of this business with those businesses already reflected in the Insurance segment.  The other operating units included in the Specialty Underwriting segment would have encompassed less than 5% of the Company's premiums earned and their volume is projected to remain approximately 6%.  As a result of the size of these remaining operating units and their similarity to the business reported within U.S. Reinsurance, they have been reclassified to the U.S. Reinsurance segment.  There has been no change to the International reporting segment.  The Company has restated all segment information for prior years to conform to the new reporting segment structure.

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S.  The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey.  The Insurance operation writes property and casualty insurance, including medical stop loss insurance, directly and through general agents, brokers and surplus lines brokers within the U.S. and Canada.

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 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.

	Three Months Ended				Nine Months Ended
U.S. Reinsurance	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	433,494	$	360,833	$	938,444	$	947,155
Net written premiums		219,884		167,469		475,271		486,032
Premiums earned	$	181,396	$	167,530	$	529,409	$	512,104
Incurred losses and LAE		108,153		97,197		321,397		371,638
Commission and brokerage		40,092		23,298		139,920		106,123
Other underwriting expenses		12,766		10,843		33,541		30,621
Underwriting gain (loss)	$	20,385	$	36,192	$	34,551	$	3,722

	Three Months Ended				Nine Months Ended
International	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Gross written premiums	$	248,459	$	326,053	$	878,637	$	923,649
Net written premiums		105,550		158,038		402,078		457,663
Premiums earned	$	121,611	$	151,050	$	426,419	$	479,989
Incurred losses and LAE		29,309		104,570		191,837		514,260
Commission and brokerage		19,692		35,686		88,432		105,755
Other underwriting expenses		8,246		7,549		21,532		20,938
Underwriting gain (loss)	$	64,364	$	3,245	$	124,618	$	(160,964	)

	Three Months Ended						Nine Months Ended
Insurance	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Gross written premiums	$	328,930		$	236,294		$	783,872		$	750,283
Net written premiums		133,432			114,328			348,328			366,223
Premiums earned	$	124,105		$	124,282		$	343,465		$	362,212
Incurred losses and LAE		105,415			120,332			273,617			302,038
Commission and brokerage		10,680			11,858			22,968			27,781
Other underwriting expenses		24,926			24,316			71,478			68,589
Underwriting gain (loss)	$	(16,916	)	$	(32,224	)	$	(24,598	)	$	(36,196	)

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						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Underwriting gain (loss)	$	67,833		$	7,213		$	134,571		$	(193,438	)
Net investment income		76,342			78,325			231,790			249,916
Net realized capital gains (losses)		95,943			(179,036	)		354,673			(206,744	)
Corporate expense		(2,019	)		(1,143	)		(5,317	)		(3,498	)
Interest, fee and bond issue cost amortization expense		(12,682	)		(12,706	)		(38,061	)		(38,083	)
Other income (expense)		425			(8,865	)		19,599			(20,401	)
Income (loss) before taxes	$	225,842		$	(116,212	)	$	697,255		$	(212,248	)

The Company produces business in the U.S. and internationally.  The net income deriving from 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				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Canada	$	33,891	$	73,543	$	109,166	$	156,727

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