Segment Reporting

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Reporting

13. SEGMENT REPORTING

The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the United States as well as through branches in Canada and Singapore. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents within the United States.

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. We measure our underwriting results 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				Nine Months Ended
Reinsurance	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Gross written premiums	$	1,473,266	$	1,297,228	$	3,906,355	$	3,464,773
Net written premiums		1,296,107		1,141,437		3,403,090		2,955,349
Premiums earned	$	1,153,740	$	996,545	$	3,223,608	$	2,852,045
Incurred losses and LAE		936,904		800,711		2,250,270		1,935,706
Commission and brokerage		265,095		297,499		818,282		793,027
Other underwriting expenses		35,697		30,406		92,143		79,822
Underwriting gain (loss)	$	(83,956)	$	(132,071)	$	62,913	$	43,490

	Three Months Ended				Nine Months Ended
Insurance	September 30,				September 30,
(Dollars in thousands)	2020		2019		2020		2019
Gross written premiums	$	591,695	$	592,775	$	1,971,818	$	1,798,149
Net written premiums		429,594		428,518		1,462,869		1,326,714
Premiums earned	$	461,717	$	431,855	$	1,424,814	$	1,222,432
Incurred losses and LAE		340,947		297,382		1,032,926		801,705
Commission and brokerage		57,309		60,182		182,925		169,647
Other underwriting expenses		73,669		65,287		212,562		177,604
Underwriting gain (loss)	$	(10,208)	$	9,004	$	(3,599)	$	73,476

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)	2020		2019		2020		2019
Underwriting gain (loss)	$	(94,164)	$	(123,067)	$	59,314	$	116,966
Net investment income		135,428		95,592		244,782		270,835
Net realized capital gains (losses)		115,193		112,542		(107,300)		390,161
Corporate expense		(4,206)		(3,183)		(11,441)		(7,353)
Interest, fee and bond issue cost amortization expense		(6,535)		(7,802)		(20,917)		(27,314)
Other income (expense)		(1,790)		(2,673)		(11,410)		(8,459)
Income (loss) before taxes	$	143,926	$	71,409	$	153,028	$	734,836

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)	2020		2019		2020		2019
Canada gross written premiums	$	65,785	$	52,136	$	200,443	$	138,392

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