Ireland
(State or other jurisdiction of
incorporation or organization)
|
|
98-0665416
(I.R.S. Employer Identification No.)
|
XL House, 8 St. Stephen's Green,
Dublin 2, Ireland
(Address of principal executive offices and zip code)
|
|
+353 (1) 400-5500
(Registrant’s telephone number, including area code) |
Title of each class
|
|
Name of each exchange on which registered
|
Ordinary Shares, Par Value $0.01 per Share
|
|
New York Stock Exchange
|
XLIT Ltd. 2.30% Senior Notes due 2018
|
|
New York Stock Exchange
|
XLIT Ltd. 5.75% Senior Notes due 2021
|
|
New York Stock Exchange
|
XLIT Ltd. 4.45% Subordinated Notes due 2025
|
|
New York Stock Exchange
|
XLIT Ltd. 5.25% Senior Notes due 2043
|
|
New York Stock Exchange
|
XLIT Ltd. 5.5% Subordinated Notes due 2045
|
|
New York Stock Exchange
|
|
|
Page
|
Business
|
||
Risk Factors
|
||
Unresolved Staff Comments
|
||
Properties
|
||
Legal Proceedings
|
||
Mine Safety Disclosures
|
||
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
||
Selected Financial Data
|
||
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
||
Quantitative and Qualitative Disclosures About Market Risk
|
||
Financial Statements and Supplementary Data
|
||
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
||
Controls and Procedures
|
||
Other Information
|
||
Directors, Executive Officers and Corporate Governance
|
||
Executive Compensation
|
||
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
||
Certain Relationships and Related Transactions, and Director Independence
|
||
Principal Accounting Fees and Services
|
||
Exhibits and Financial Statement Schedules
|
ITEM 1.
|
|
BUSINESS
|
(U.S. dollars in thousands)
|
Gross Premiums Written
|
|
Percentage Change
|
||||||||||||||
2015
|
|
2014
|
|
2013
|
|
2015 to 2014
|
|
2014 to 2013
|
|||||||||
Insurance
|
$
|
8,395,846
|
|
|
$
|
5,976,011
|
|
|
$
|
5,523,181
|
|
|
40.5
|
%
|
|
8.2
|
%
|
Reinsurance
|
2,273,163
|
|
|
1,785,479
|
|
|
1,893,611
|
|
|
27.3
|
%
|
|
(5.7
|
)%
|
|||
Corporate and Other
|
309,916
|
|
|
333,436
|
|
|
324,343
|
|
|
(7.1
|
)%
|
|
2.8
|
%
|
|||
Total
|
$
|
10,978,925
|
|
|
$
|
8,094,926
|
|
|
$
|
7,741,135
|
|
|
35.6
|
%
|
|
4.6
|
%
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||||
Gross
Premiums
Written
|
|
Net
Premiums
Written
|
|
Net
Premiums
Earned
|
|
Gross
Premiums
Written
|
|
Net
Premiums
Written
|
|
Net
Premiums
Earned
|
|
Gross
Premiums
Written
|
|
Net
Premiums
Written
|
|
Net
Premiums
Earned
|
|||||||||||||||||||
Professional
|
$
|
1,754,631
|
|
|
$
|
1,195,541
|
|
|
$
|
1,163,302
|
|
|
$
|
1,550,929
|
|
|
$
|
1,076,209
|
|
|
$
|
1,075,420
|
|
|
$
|
1,465,689
|
|
|
$
|
1,161,045
|
|
|
$
|
1,370,196
|
|
Casualty
|
2,677,828
|
|
|
1,771,705
|
|
|
1,685,748
|
|
|
2,150,302
|
|
|
1,437,889
|
|
|
1,422,684
|
|
|
1,975,330
|
|
|
1,434,967
|
|
|
1,389,851
|
|
|||||||||
Property
|
1,621,919
|
|
|
1,069,837
|
|
|
1,021,037
|
|
|
874,198
|
|
|
538,027
|
|
|
544,856
|
|
|
875,773
|
|
|
568,575
|
|
|
544,278
|
|
|||||||||
Specialty
|
1,934,034
|
|
|
1,514,958
|
|
|
1,473,929
|
|
|
1,013,592
|
|
|
791,024
|
|
|
737,281
|
|
|
906,650
|
|
|
746,517
|
|
|
732,042
|
|
|||||||||
Other (1)
|
407,434
|
|
|
307,893
|
|
|
304,466
|
|
|
386,990
|
|
|
291,002
|
|
|
246,472
|
|
|
299,739
|
|
|
242,989
|
|
|
231,310
|
|
|||||||||
Total
|
$
|
8,395,846
|
|
|
$
|
5,859,934
|
|
|
$
|
5,648,482
|
|
|
$
|
5,976,011
|
|
|
$
|
4,134,151
|
|
|
$
|
4,026,713
|
|
|
$
|
5,523,181
|
|
|
$
|
4,154,093
|
|
|
$
|
4,267,677
|
|
(1)
|
Other includes excess and surplus, surety, structured indemnity and certain other discontinued lines.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||||
Gross
Premiums
Written
|
|
Net
Premiums
Written
|
|
Net
Premiums
Earned
|
|
Gross
Premiums
Written
|
|
Net
Premiums
Written
|
|
Net
Premiums
Earned
|
|
Gross
Premiums
Written
|
|
Net
Premiums
Written
|
|
Net
Premiums
Earned
|
|||||||||||||||||||
Casualty - professional lines
|
$
|
148,964
|
|
|
$
|
147,103
|
|
|
$
|
168,367
|
|
|
$
|
126,876
|
|
|
$
|
126,873
|
|
|
$
|
181,223
|
|
|
$
|
199,159
|
|
|
$
|
199,153
|
|
|
$
|
206,169
|
|
Casualty - other lines
|
385,779
|
|
|
361,435
|
|
|
468,286
|
|
|
302,903
|
|
|
301,109
|
|
|
300,223
|
|
|
332,153
|
|
|
330,681
|
|
|
312,156
|
|
|||||||||
Property catastrophe
|
623,291
|
|
|
538,803
|
|
|
663,958
|
|
|
493,646
|
|
|
428,723
|
|
|
433,602
|
|
|
556,493
|
|
|
498,997
|
|
|
492,568
|
|
|||||||||
Other property
|
777,181
|
|
|
695,421
|
|
|
869,286
|
|
|
585,782
|
|
|
531,203
|
|
|
555,583
|
|
|
587,278
|
|
|
545,846
|
|
|
561,105
|
|
|||||||||
Specialty
|
106,629
|
|
|
93,176
|
|
|
127,797
|
|
|
112,039
|
|
|
104,718
|
|
|
95,745
|
|
|
91,997
|
|
|
76,241
|
|
|
94,797
|
|
|||||||||
Other (2)
|
231,319
|
|
|
192,952
|
|
|
218,008
|
|
|
164,233
|
|
|
140,432
|
|
|
124,349
|
|
|
126,531
|
|
|
98,971
|
|
|
79,627
|
|
|||||||||
Total
|
$
|
2,273,163
|
|
|
$
|
2,028,890
|
|
|
$
|
2,515,702
|
|
|
$
|
1,785,479
|
|
|
$
|
1,633,058
|
|
|
$
|
1,690,725
|
|
|
$
|
1,893,611
|
|
|
$
|
1,749,889
|
|
|
$
|
1,746,422
|
|
(1)
|
Other includes whole account contracts, credit and surety, accident and health and other lines.
|
Analysis of P&C Losses and Loss Expenses Reserve Development Gross of Reinsurance Recoverables
|
|||||||||||||||||||||||||||||||||||||||||||
(U.S. dollars in millions)
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015 (1)
|
||||||||||||||||||||||
ESTIMATED GROSS LIABILITY FOR UNPAID LOSSES AND LOSS EXPENSES
|
$
|
23,598
|
|
|
$
|
22,895
|
|
|
$
|
22,857
|
|
|
$
|
21,650
|
|
|
$
|
20,824
|
|
|
$
|
20,532
|
|
|
$
|
20,614
|
|
|
$
|
20,484
|
|
|
$
|
20,481
|
|
|
$
|
19,353
|
|
|
$
|
25,440
|
|
LIABILITY RE-ESTIMATED AS OF:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
One year later
|
23,209
|
|
|
22,458
|
|
|
21,803
|
|
|
21,348
|
|
|
20,509
|
|
|
20,258
|
|
|
20,200
|
|
|
20,166
|
|
|
19,956
|
|
|
18,874
|
|
|
|
||||||||||||
Two years later
|
22,937
|
|
|
21,337
|
|
|
21,445
|
|
|
21,094
|
|
|
19,982
|
|
|
19,870
|
|
|
19,894
|
|
|
19,629
|
|
|
19,375
|
|
|
|
|
|
|||||||||||||
Three years later
|
22,139
|
|
|
21,057
|
|
|
21,305
|
|
|
20,605
|
|
|
19,689
|
|
|
19,540
|
|
|
19,372
|
|
|
19,090
|
|
|
|
|
|
|
|
||||||||||||||
Four years later
|
21,992
|
|
|
20,787
|
|
|
20,853
|
|
|
20,244
|
|
|
19,361
|
|
|
19,148
|
|
|
18,791
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Five years later
|
21,835
|
|
|
20,350
|
|
|
20,509
|
|
|
19,880
|
|
|
19,008
|
|
|
18,587
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Six years later
|
21,426
|
|
|
20,117
|
|
|
20,170
|
|
|
19,497
|
|
|
18,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Seven years later
|
21,186
|
|
|
19,823
|
|
|
19,851
|
|
|
19,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Eight years later
|
21,007
|
|
|
19,551
|
|
|
19,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Nine years later
|
20,860
|
|
|
19,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Ten years later
|
20,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
CUMULATIVE REDUNDANCY (DEFICIENCY)
|
2,981
|
|
|
3,575
|
|
|
3,351
|
|
|
2,554
|
|
|
2,318
|
|
|
1,945
|
|
|
1,823
|
|
|
1,394
|
|
|
1,106
|
|
|
479
|
|
|
|
|
Year ended December 31,
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Unpaid losses and loss expenses at the beginning of the year
|
$
|
19,353,243
|
|
|
$
|
20,481,065
|
|
|
$
|
20,484,121
|
|
Unpaid losses and loss expenses recoverable
|
3,411,528
|
|
|
3,414,735
|
|
|
3,361,703
|
|
|||
Net unpaid losses and loss expenses at the beginning of the year
|
$
|
15,941,715
|
|
|
$
|
17,066,330
|
|
|
$
|
17,122,418
|
|
Acquired reserves (1)
|
5,439,876
|
|
|
—
|
|
|
—
|
|
|||
Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
5,072,830
|
|
|
3,513,465
|
|
|
4,021,353
|
|
|||
Prior years
|
(306,630
|
)
|
|
(255,072
|
)
|
|
(289,889
|
)
|
|||
Total net incurred losses and loss expenses
|
$
|
4,766,200
|
|
|
$
|
3,258,393
|
|
|
$
|
3,731,464
|
|
Exchange rate effects
|
(582,300
|
)
|
|
(561,673
|
)
|
|
40,587
|
|
|||
Less net losses and loss expenses paid in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
1,047,277
|
|
|
381,008
|
|
|
425,254
|
|
|||
Prior years
|
4,327,375
|
|
|
3,440,327
|
|
|
3,402,885
|
|
|||
Total net paid losses
|
$
|
5,374,652
|
|
|
$
|
3,821,335
|
|
|
$
|
3,828,139
|
|
Net unpaid losses and loss expenses at the end of the year
|
20,190,839
|
|
|
15,941,715
|
|
|
17,066,330
|
|
|||
Unpaid losses and loss expenses recoverable
|
5,248,905
|
|
|
3,411,528
|
|
|
3,414,735
|
|
|||
Unpaid losses and loss expenses at the end of the year
|
$
|
25,439,744
|
|
|
$
|
19,353,243
|
|
|
$
|
20,481,065
|
|
(1)
|
Acquired reserves as of the Acquisition Date include
$6.9 billion
of unpaid loss and loss expenses and
$1.5 billion
of unpaid losses and loss expenses recoverable.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Insurance
|
$
|
13,652,129
|
|
|
$
|
10,967,738
|
|
Reinsurance
|
6,538,710
|
|
|
4,973,977
|
|
||
Net unpaid losses and loss expenses
|
$
|
20,190,839
|
|
|
$
|
15,941,715
|
|
Gross
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Unpaid losses and loss expenses at January 1
|
$
|
19,353,243
|
|
|
$
|
20,481,065
|
|
|
$
|
20,484,121
|
|
Gross (favorable) adverse development of those reserves during the year (1)
|
(478,834
|
)
|
|
(524,665
|
)
|
|
(317,753
|
)
|
|||
Unpaid losses and loss expenses reserves re-estimated at December 31
|
$
|
18,874,409
|
|
|
$
|
19,956,400
|
|
|
$
|
20,166,368
|
|
Net
(U.S. dollars in thousands)
|
|
|
|
|
|
||||||
Unpaid losses and loss expenses at January 1
|
$
|
15,941,715
|
|
|
$
|
17,066,330
|
|
|
$
|
17,122,418
|
|
Net (favorable) adverse development of those reserves during the year (1)
|
(339,414
|
)
|
|
(255,072
|
)
|
|
(289,889
|
)
|
|||
Unpaid losses and loss expenses reserves re-estimated at December 31
|
$
|
15,602,301
|
|
|
$
|
16,811,258
|
|
|
$
|
16,832,529
|
|
(1)
|
Gross and net reserve development shown excludes adverse development recorded during the year on acquired reserves totaling $61.1 million and $32.8 million, respectively. Overall, net beneficial reserve development recorded during the year was
$306.6 million
.
|
Gross:
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Insurance
|
$
|
(215,008
|
)
|
|
$
|
(369,195
|
)
|
|
$
|
(132,825
|
)
|
Reinsurance
|
(202,732
|
)
|
|
(155,470
|
)
|
|
(184,928
|
)
|
|||
Total
|
$
|
(417,740
|
)
|
|
$
|
(524,665
|
)
|
|
$
|
(317,753
|
)
|
Net:
|
|
|
|
|
|
||||||
Insurance
|
$
|
(65,030
|
)
|
|
$
|
(99,758
|
)
|
|
$
|
(102,039
|
)
|
Reinsurance
|
(241,600
|
)
|
|
(155,314
|
)
|
|
(187,850
|
)
|
|||
Total
|
$
|
(306,630
|
)
|
|
$
|
(255,072
|
)
|
|
$
|
(289,889
|
)
|
•
|
reviews and approves the overall investment policies for the management of the Company’s investment portfolio, investment portfolio guidelines, the SAA framework, including setting appropriate risk tolerance levels and tactical allocation parameters, and overall investment benchmarks;
|
•
|
oversees compliance with the above investment portfolio policies and approves exceptions to such policies from time to time; and
|
•
|
reviews the Company’s investment performance against the approved benchmarks as well as other key investment performance metrics.
|
•
|
Oversees ERM activities, including the risk management framework employed by management. With respect to the overall risk management framework, the RFC (i) reviews the methodology for establishing our overall risk capacity; (ii) reviews the policies for the establishment of risk limit frameworks, and adherence to such limits; and (iii) reviews and approves enterprise risk limits.
|
•
|
Oversees our compliance with any significant enterprise risk limits, authorities and policies. The RFC evaluates what actions to take with respect to such enterprise limits, authorities and policies, and approves any exceptions thereto from time to time as necessary.
|
•
|
Reviews our overall risk profile and monitors key risks across our organization as a whole, which may involve coordination with other committees of the Board from time to time as appropriate.
|
•
|
Reviews our process controls over model use and development with respect to model risk and model effectiveness, accuracy, and propriety.
|
•
|
Monitors our risk management performance and obtains reasonable assurance from management that our risk management policies are effective and are being adhered to.
|
•
|
Asset Risk Committee: This subcommittee assists the ERC in its responsibilities in relation to governance and oversight of asset-related risks across the Company, including the investment portfolio. Among its activities are (a) involvement in policy decisions on modeling and quantification of risk measurements; and (b) providing an interpretation and assessment of asset-related risks, with a particular focus on market-related risks. Further, the subcommittee is responsible for coordinating on a regular basis with the Credit Risk Committee on asset-related credit risks.
|
•
|
Country Risk Committee: This subcommittee supports and assists the ERC's identification, measurement, management, monitoring and reporting of country risk to our underwriting activities and functional areas.
|
•
|
Credit Risk Committee: This subcommittee develops and implements the metrics and supporting framework for allocation of credit risk capacity across major business units and functions, including the amount and types of credit exposure.
|
•
|
Economic Capital Model Committee: This subcommittee oversees the development of economic capital models that support ERM activities, and helps set priorities and manage resources related to such models. It reviews assumptions and related methodologies used within our economic capital models, including assessments of model validation, model control and model risk.
|
•
|
Liability Risk Committee: This subcommittee supports and assists the ERC’s identification, measurement, management, monitoring and reporting of key underwriting liability and emerging risks.
|
•
|
Model Validation Committee: This subcommittee supports ERC's independent validation of the capital model.
|
•
|
Operational Risk Committee: This subcommittee supports the ERC’s identification, measurement, management and oversight of key operational risks through its oversight of key operational risk management processes and through its review of related operational risk indicators, trends and metrics.
|
1.
|
We impose limits for each natural catastrophe peril region at a 1% tail value at risk ("TVaR") probability. This statistic indicates the average amount of net loss expected to be incurred if a loss above the 1% exceedance probability level has occurred.
|
2.
|
For each event type other than natural catastrophes, we impose limits at a 1% exceedance probability. If we were to deploy the full limit, for any given event type, there would be a 1% probability that an event would occur during the next year that would result in a net underwriting loss in excess of the limit.
|
3.
|
We also impose limits for certain other event types at a 0.4% exceedance probability as described in further detail below. If we were to deploy the full limit, for any such given event type, there would be a 0.4% probability that an event would occur during the next year that would result in a net underwriting loss in excess of the limit.
|
•
|
Anticipated risk adjusted returns;
|
•
|
Strategic risk preferences;
|
•
|
Relativity to peers;
|
•
|
Shareholder expectations;
|
•
|
Robustness of exposure assessment methodology; and
|
•
|
Projected enterprise loss potential.
|
•
|
Correlation of underwriting risk with other risks (e.g., asset/investment risk, operational risk, etc.);
|
•
|
Model risk and robustness of data;
|
•
|
Geographical concentrations;
|
•
|
Exposures at lower return periods;
|
•
|
Expected payback period associated with losses;
|
•
|
Projected share of industry loss; and
|
•
|
Annual aggregate losses for natural catastrophes at various return periods, including a 1% exceedance probability and a 1% TVaR level on both a peril region basis and a portfolio basis.
|
•
|
Inaccurate assumptions of event frequency and severity;
|
•
|
Inaccurate or incomplete data;
|
•
|
Changing climate conditions that may add to the unpredictability of frequency and severity of natural catastrophes in certain parts of the world and create additional uncertainty as to future trends and exposures;
|
•
|
Future possible increases in property values and the effects of inflation that may increase the severity of catastrophic events to levels above the modeled levels;
|
•
|
Natural catastrophe models that incorporate and are critically dependent on meteorological, seismological and other earth science assumptions and related statistical relationships that may not be representative of prevailing conditions and risks, and may therefore misstate how particular events actually materialize, causing a material deviation between forecasted and actual damages associated with such events; and
|
•
|
A change in the judicial climate.
|
•
|
Pillar 1 of Solvency II sets out a number of capital requirements, such as an own funds requirement (including prescribing the type and nature of capital which is eligible to meet these capital requirements). It also specifies the obligation to have a Minimum Capital Requirement, which is the minimum amount of capital needed to be held by a firm and a Solvency Capital Requirement, which is the risk-based level of capital required to be held by a firm. Pillar 1 further sets out the various requirements of how a firm's capital is to be assessed, including the application of the standard and internal models and the manner in which assets and liabilities are to be valued.
|
•
|
Pillar 2 requires firms to develop and embed systems to identify, measure and proactively manage risks. In particular, it sets out the own risk and solvency assessment, which broadly requires a firm to assess, in a proportionate manner,
|
•
|
Pillar 3 sets out a number of requirements in relation to public disclosure and regulatory reporting. Firms are required to publish an annual report that sets out their solvency and financial condition, and must include information on the firm's capital management, its systems of governance and a description of each category of risk to which the firm is exposed.
|
Name
|
|
Age
|
|
Position
|
Michael S. McGavick
|
|
58
|
|
Chief Executive Officer and Director
|
Paul Brand
|
|
53
|
|
Executive Vice President, Chair of the Insurance Leadership Team and Chief Underwriting Officer, Insurance
|
Stephen J. O. Catlin
|
|
61
|
|
Executive Deputy Chairman
|
Susan L. Cross
|
|
55
|
|
Executive Vice President and Global Chief Actuary
|
Kirstin Gould
|
|
49
|
|
Executive Vice President, General Counsel and Secretary
|
Gregory S. Hendrick
|
|
50
|
|
Executive Vice President and Chief Executive of Reinsurance Operations
|
W. Myron Hendry
|
|
67
|
|
Executive Vice President and Chief Platform Officer
|
Paul Jardine
|
|
54
|
|
Executive Vice President and Chief Experience Officer
|
Kelly Lyles
|
|
52
|
|
Executive Vice President, Deputy Chair of the Insurance Leadership Team and Chief Regional Officer, Insurance
|
Benjamin Meuli
|
|
59
|
|
Executive Vice President and Chief Investment Officer
|
Peter R. Porrino
|
|
59
|
|
Executive Vice President and Chief Financial Officer
|
Jacob D. Rosengarten
|
|
60
|
|
Executive Vice President and Chief Enterprise Risk Officer
|
Eileen Whelley
|
|
61
|
|
Executive Vice President and Chief Human Resources Officer
|
ITEM 1A.
|
|
RISK FACTORS
|
▪
|
We may develop products that insure risks we have not previously insured or contain new coverage or coverage terms.
|
▪
|
We may refine our underwriting processes.
|
▪
|
We may seek to expand distribution channels.
|
▪
|
We may focus on geographic markets within or outside of the United States where we have had relatively little or no market share or operating history.
|
▪
|
We may engage in insurance-linked securities and other reinsurance capital markets transactions, either alone or with third party investors.
|
▪
|
Demand for new products or business generated in new markets may not meet our expectations.
|
▪
|
Pricing for new or enhanced products may be inadequate and may result in unprofitable business.
|
▪
|
To the extent we are able to market new products or expand into new markets, our risk exposures may change, and the data and models we use to manage such exposures may not be as sophisticated as those we use in existing markets or with existing products. This, in turn, could lead to losses in excess of our expectations.
|
▪
|
Efforts to develop new products or markets have the potential to create or increase distribution channel conflict.
|
▪
|
In connection with the addition of new products to existing coverages or the conversion of existing policyholders to a new product, some policyholders' pricing may increase, while the pricing for other policyholders may decrease, the net impact of which could negatively impact retention and margins.
|
▪
|
To develop new products or markets, we may encounter unanticipated operational issues or unanticipated coverage risks, or we may need to make substantial capital and operating expenditures, which may also negatively impact results.
|
▪
|
providing insurance and reinsurance capacity in markets and to consumers that we target, e.g., the creation or expansion of state or federal catastrophe funds such as those in the state of Florida;
|
▪
|
requiring our participation in industry pools and guarantee associations;
|
▪
|
expanding the scope of coverage or altering the enforceability of deductibles under existing policies;
|
▪
|
regulating the terms of insurance and reinsurance policies;
|
▪
|
ordering the suspension of or otherwise altering the application of insurance laws or regulations; or
|
▪
|
disproportionately benefiting the companies of one country over those of another.
|
▪
|
the judgment must be for a definite sum;
|
▪
|
the judgment must be final and conclusive; and
|
▪
|
the judgment must be provided by a court of competent jurisdiction.
|
▪
|
judgments of U.S. courts based upon the civil liability provisions of U.S. federal securities laws obtained in actions against XL-Cayman or its directors and officers who reside outside the United States; or
|
▪
|
original actions brought in the Cayman Islands against these persons or XL-Cayman predicated solely upon U.S. federal securities laws.
|
•
|
having exposure to the Council of Lloyd's (the "Council") wide discretionary powers to regulate members of Lloyd's, including the Council's power to vary the method by which the capital solvency ratio is calculated;
|
•
|
being subject to increased capital requirements due to changes in regulation;
|
•
|
facing reputational issues arising from the actions of other Lloyd's syndicates;
|
•
|
being subject to potential changes in business strategy due to requirements of the Lloyd's Franchise Board (which is responsible for the day-to-day management of the Lloyd's market);
|
•
|
reduced underwriting capacity due to a reduction in the funds held in trust at Lloyd's (as a result of changes in the market value of investments or otherwise) to support underwriting activities;
|
•
|
being required to cease or reduce underwriting if Lloyd's fails to satisfy the FCA's and the PRA's annual solvency test in any given year;
|
•
|
having a reduced ability to trade in certain classes of business at current levels as a consequence of a downgrading of the Lloyd's market;
|
•
|
being subject to additional or special levies imposed by the Council; and
|
•
|
as a Lloyd's syndicate transacting certain types of business in the United States, being required by U.S. regulators to increase the level of funding required as minimum deposits for the protection of U.S. policyholders and, as a consequence, being required to make cash calls to meet claims payments and deposit funding obligations.
|
ITEM 1B.
|
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
|
PROPERTIES
|
ITEM 3.
|
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
High
|
|
Low
|
|
Close
|
|
Dividends
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
1st Quarter
|
$
|
37.45
|
|
|
$
|
33.98
|
|
|
$
|
36.80
|
|
|
$
|
0.16
|
|
2nd Quarter
|
$
|
38.78
|
|
|
$
|
36.33
|
|
|
$
|
37.20
|
|
|
$
|
0.16
|
|
3rd Quarter
|
$
|
40.41
|
|
|
$
|
25.56
|
|
|
$
|
36.32
|
|
|
$
|
0.20
|
|
4th Quarter
|
$
|
40.48
|
|
|
$
|
34.44
|
|
|
$
|
39.18
|
|
|
$
|
0.20
|
|
2014
|
|
|
|
|
|
|
|
||||||||
1st Quarter
|
$
|
31.85
|
|
|
$
|
27.79
|
|
|
$
|
31.25
|
|
|
$
|
0.16
|
|
2nd Quarter
|
$
|
33.41
|
|
|
$
|
30.54
|
|
|
$
|
32.73
|
|
|
$
|
0.16
|
|
3rd Quarter
|
$
|
35.52
|
|
|
$
|
31.83
|
|
|
$
|
33.17
|
|
|
$
|
0.16
|
|
4th Quarter
|
$
|
36.35
|
|
|
$
|
30.83
|
|
|
$
|
34.37
|
|
|
$
|
0.16
|
|
|
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available
for Future Issuance
Under Share-Based
Compensation Plans
(Excluding Securities
in column (a))
|
||||
Plan Category
|
(a)
|
|
(b)
|
|
(c)
|
||||
Share-based compensation plans approved by security holders (1)
|
10,748,604
|
|
|
$
|
28.59
|
|
|
6,907,136
|
|
Share-based compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
10,748,604
|
|
|
$
|
28.59
|
|
|
6,907,136
|
|
(1)
|
Pertains to our 1991 Performance Incentive Program and the Directors Stock & Option Plan. Includes for the 1991 Performance Incentive Program, 10,602,114 ordinary shares to be issued upon the exercise of outstanding options, warrants and rights, a $28.65 weighted average exercise price of outstanding options, warrants and rights, and 6,632,650 ordinary shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column a). Includes for the Directors Stock & Option Plan, 146,490 ordinary shares to be issued upon exercise of outstanding options, warrants and rights, a $24.53 weighted average exercise price of outstanding options, warrants and rights, and 274,486 ordinary shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column a).
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Value of Shares that May Yet Be Purchased Under the Publicly Announced Plans or Programs (1) (2)
|
||||||
October 1, 2015 to October 31, 2015
|
1,621,733
|
|
|
$
|
37.00
|
|
|
1,621,733
|
|
|
$
|
820.0
|
million
|
November 1, 2015 to November 30, 2015
|
1,326,624
|
|
|
$
|
37.61
|
|
|
1,326,624
|
|
|
$
|
770.1
|
million
|
December 1, 2015 to December 31, 2015
|
1,744,046
|
|
|
$
|
38.28
|
|
|
1,744,046
|
|
|
$
|
703.3
|
million
|
Total
|
4,692,403
|
|
|
$
|
37.65
|
|
|
4,692,403
|
|
|
$
|
703.3
|
million
|
(1)
|
Shares purchased in connection with the vesting of restricted shares granted under our equity compensation programs do not represent shares purchased as part of publicly announced plans or programs. All such purchases were made in connection with satisfying tax withholding obligations of those employees. These shares were not purchased as part of our share buyback program noted below.
|
(2)
|
For information regarding our share buyback activity, see Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Other Key Focuses of Management - Buybacks of Ordinary Shares," included herein.
|
ITEM 6.
|
|
SELECTED FINANCIAL DATA
|
(U.S. dollars in thousands, except per share amounts)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
8,226,425
|
|
|
$
|
5,895,070
|
|
|
$
|
6,309,521
|
|
|
$
|
6,090,437
|
|
|
$
|
5,690,130
|
|
Net investment income
|
$
|
872,370
|
|
|
$
|
918,625
|
|
|
$
|
957,716
|
|
|
$
|
1,012,348
|
|
|
$
|
1,137,769
|
|
Net realized gains (losses) on investments
|
$
|
19,997
|
|
|
$
|
122,991
|
|
|
$
|
87,777
|
|
|
$
|
14,098
|
|
|
$
|
(188,359
|
)
|
Net realized gains (losses) on investments - Life Funds Withheld Assets
|
$
|
209,915
|
|
|
$
|
(15,520
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net unrealized gains (losses) on investments, trading securities ("Trading") - Life Funds Withheld Assets
|
$
|
(27,734
|
)
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net realized and unrealized gains (losses) on derivative instruments
|
$
|
53,123
|
|
|
$
|
29,886
|
|
|
$
|
7,798
|
|
|
$
|
5,221
|
|
|
$
|
(10,738
|
)
|
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
$
|
(151,691
|
)
|
|
$
|
(488,222
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net income (loss) from investment fund affiliates
|
$
|
73,320
|
|
|
$
|
95,816
|
|
|
$
|
138,391
|
|
|
$
|
58,504
|
|
|
$
|
26,253
|
|
Fee income and other
|
$
|
33,201
|
|
|
$
|
43,630
|
|
|
$
|
40,031
|
|
|
$
|
51,789
|
|
|
$
|
41,748
|
|
Net losses and loss expenses incurred
|
$
|
4,766,200
|
|
|
$
|
3,258,393
|
|
|
$
|
3,731,464
|
|
|
$
|
3,765,482
|
|
|
$
|
4,078,391
|
|
Claims and policy benefits – life operations
|
$
|
115,997
|
|
|
$
|
242,963
|
|
|
$
|
465,702
|
|
|
$
|
486,195
|
|
|
$
|
535,074
|
|
Acquisition costs, operating expenses and foreign exchange gains and losses
|
$
|
3,306,891
|
|
|
$
|
2,041,865
|
|
|
$
|
2,094,258
|
|
|
$
|
2,097,992
|
|
|
$
|
1,869,688
|
|
Interest expense
|
$
|
205,215
|
|
|
$
|
134,106
|
|
|
$
|
155,462
|
|
|
$
|
172,204
|
|
|
$
|
205,592
|
|
Loss on sale of life reinsurance subsidiary
|
$
|
—
|
|
|
$
|
666,423
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Extinguishment of debt
|
$
|
5,592
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Impairment of goodwill
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
429,020
|
|
Income (loss) before non-controlling interests, net income from operating affiliates, gain on sale of operating affiliate and income tax expense
|
$
|
909,031
|
|
|
$
|
258,517
|
|
|
$
|
1,094,348
|
|
|
$
|
710,524
|
|
|
$
|
(420,962
|
)
|
Income (loss) from operating affiliates
|
$
|
44,740
|
|
|
$
|
107,218
|
|
|
$
|
119,804
|
|
|
$
|
53,887
|
|
|
$
|
76,786
|
|
Gain on sale of operating affiliate
|
$
|
340,407
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Preference share dividends (1)
|
$
|
98,721
|
|
|
$
|
76,743
|
|
|
$
|
77,187
|
|
|
$
|
79,087
|
|
|
$
|
72,278
|
|
Net income (loss) attributable to ordinary shareholders
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
|
$
|
651,128
|
|
|
$
|
(474,760
|
)
|
(U.S. dollars in thousands, except per share amounts)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Per Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per ordinary share and ordinary share equivalent – basic
|
$
|
4.22
|
|
|
$
|
0.71
|
|
|
$
|
3.68
|
|
|
$
|
2.12
|
|
|
$
|
(1.52
|
)
|
Earnings (loss) per ordinary share and ordinary share equivalent – diluted
|
$
|
4.15
|
|
|
$
|
0.69
|
|
|
$
|
3.63
|
|
|
$
|
2.10
|
|
|
$
|
(1.52
|
)
|
Weighted average ordinary shares and ordinary share equivalents outstanding – diluted
|
290,999
|
|
|
271,527
|
|
|
292,069
|
|
|
310,282
|
|
|
312,896
|
|
|||||
Cash dividends per ordinary share
|
$
|
0.72
|
|
|
$
|
0.64
|
|
|
$
|
0.56
|
|
|
$
|
0.44
|
|
|
$
|
0.44
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total investments – available for sale ("AFS")
|
$
|
33,753,898
|
|
|
$
|
30,484,053
|
|
|
$
|
28,996,661
|
|
|
$
|
28,818,982
|
|
|
$
|
27,017,285
|
|
Total investments – held to maturity ("HTM")
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,858,695
|
|
|
$
|
2,814,447
|
|
|
$
|
2,668,978
|
|
Cash and cash equivalents
|
$
|
3,256,236
|
|
|
$
|
2,521,814
|
|
|
$
|
1,800,832
|
|
|
$
|
2,618,378
|
|
|
$
|
3,825,125
|
|
Restricted cash
|
$
|
154,992
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Investments in affiliates
|
$
|
1,708,899
|
|
|
$
|
1,637,620
|
|
|
$
|
1,370,943
|
|
|
$
|
1,126,875
|
|
|
$
|
1,052,729
|
|
Unpaid losses and loss expenses recoverable
|
$
|
5,262,706
|
|
|
$
|
3,429,368
|
|
|
$
|
3,435,230
|
|
|
$
|
3,382,102
|
|
|
$
|
3,654,948
|
|
Premiums receivable
|
$
|
4,712,493
|
|
|
$
|
2,473,736
|
|
|
$
|
2,612,602
|
|
|
$
|
2,568,862
|
|
|
$
|
2,411,611
|
|
Total assets
|
$
|
58,682,938
|
|
|
$
|
45,046,819
|
|
|
$
|
45,652,887
|
|
|
$
|
45,386,895
|
|
|
$
|
44,665,265
|
|
Unpaid losses and loss expenses
|
$
|
25,439,744
|
|
|
$
|
19,353,243
|
|
|
$
|
20,481,065
|
|
|
$
|
20,484,121
|
|
|
$
|
20,613,901
|
|
Future policy benefit reserves
|
$
|
4,163,500
|
|
|
$
|
4,707,199
|
|
|
$
|
4,803,816
|
|
|
$
|
4,812,046
|
|
|
$
|
4,845,394
|
|
Funds withheld on GreyCastle life retrocession arrangements (net of future policy benefit reserves recoverable)
|
$
|
914,629
|
|
|
$
|
1,155,016
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unearned premiums
|
$
|
7,043,358
|
|
|
$
|
3,973,132
|
|
|
$
|
3,846,526
|
|
|
$
|
3,755,086
|
|
|
$
|
3,555,310
|
|
Notes payable and debt
|
$
|
2,644,970
|
|
|
$
|
1,662,580
|
|
|
$
|
2,263,203
|
|
|
$
|
1,672,778
|
|
|
$
|
2,275,327
|
|
Shareholders’ equity
|
$
|
13,654,463
|
|
|
$
|
11,435,766
|
|
|
$
|
11,349,298
|
|
|
$
|
11,856,403
|
|
|
$
|
10,756,130
|
|
Fully diluted tangible book value per ordinary share
|
$
|
31.52
|
|
|
$
|
36.79
|
|
|
$
|
33.86
|
|
|
$
|
33.35
|
|
|
$
|
28.31
|
|
Operating Ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss expense ratio (2)
|
58.4
|
%
|
|
57.0
|
%
|
|
62.0
|
%
|
|
65.3
|
%
|
|
76.6
|
%
|
|||||
Underwriting expense ratio (3)
|
33.6
|
%
|
|
31.2
|
%
|
|
30.5
|
%
|
|
31.0
|
%
|
|
30.9
|
%
|
|||||
Combined ratio (4)
|
92.0
|
%
|
|
88.2
|
%
|
|
92.5
|
%
|
|
96.3
|
%
|
|
107.5
|
%
|
(1)
|
Preference share dividends represent dividends on the Redeemable Series C preference ordinary shares and the Series D and E preference ordinary shares. Following our Redomestication, subsequent to July 1, 2010, the Redeemable Series C preference ordinary shares and the Series D and E preference ordinary shares represent non-controlling interests in our consolidated financial statements. For additional information see Item 8,
Note 18, "Share Capital
," to the Consolidated Financial Statements.
|
(2)
|
The loss and loss expense ratio related to the property and casualty operations is calculated by dividing the losses and loss expenses incurred by the net premiums earned for the Insurance and Reinsurance segments.
|
(3)
|
The underwriting expense ratio related to the property and casualty operations is the sum of acquisition expenses and operating expenses for the Insurance and Reinsurance segments divided by net premiums earned for the Insurance and Reinsurance segments. See Item 8,
Note 5, "Segment Information
," to the Consolidated Financial Statements included herein, for further information.
|
(4)
|
The combined ratio related to the property and casualty operations is the sum of the loss and loss expense ratio and the underwriting expense ratio. A combined ratio under 100% represents an underwriting profit and over 100% represents an underwriting loss.
|
ITEM 7.
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Cautionary Note Regarding Forward-Looking Statements
|
|
Executive Overview
|
|
Results of Operations and Key Financial Measures
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
Significant Items Affecting the Results of Operations
|
|
Other Key Focuses of Management
|
|
Critical Accounting Policies and Estimates
|
|
Segments
|
|
Income Statement Analysis
|
|
Insurance
|
|
Reinsurance
|
|
Corporate and Other (Including Run-Off Life Operations)
|
|
Investment Performance (Excluding Life Funds Withheld Assets)
|
|
Investment Activities (Excluding Life Funds Withheld Assets)
|
|
Net Realized Gains and Losses on Investments and Other-Than-Temporary Declines in the Value Of Investments
|
|
Net Realized and Unrealized Gains and Losses on Derivative Instruments
|
|
Other Revenues and Expenses
|
|
Balance Sheet Analysis
|
|
Investments (Excluding Life Funds Withheld Assets)
|
|
Gross and Net Unrealized Gains and Losses on Investments
|
|
Fair Value Measurements of Assets and Liabilities
|
|
Unpaid Losses and Loss Expenses
|
|
Unpaid Losses and Loss Expenses Recoverable and Reinsurance Balances Receivable
|
|
Liquidity and Capital Resources
|
|
Holding Company Liquidity
|
|
Sources of Liquidity
|
|
Capital Resources
|
|
Covenants
|
|
Cross-Default and Other Provisions in Debt Instruments
|
|
Long-Term Contractual Obligations
|
|
Variable Interest Entities and Other Off-Balance Sheet Arrangements
|
|
Recent Accounting Pronouncements
|
▪
|
changes in the size of our claims relating to unpredictable natural or man-made catastrophe losses, such as hurricanes, typhoons, floods, nuclear accidents or terrorism, due to the preliminary nature of some reports and estimates of loss and damage to date;
|
▪
|
the continuation of downward trends in rates for property and casualty insurance and reinsurance;
|
▪
|
The availability, cost or quality of ceded reinsurance, and the timely and full recoverability of such reinsurance, or other amounts due to us, or changes to our projections relating to such recoverables;
|
▪
|
actual loss experience from insured or reinsured events and the timing of claims payments being faster or the receipt of reinsurance recoverables being slower than we anticipated;
|
▪
|
increased competition on the basis of pricing, capacity, coverage terms or other factors, such as the increased inflow of third-party capital into reinsurance markets, which could harm our ability to maintain or increase our business volumes or profitability;
|
▪
|
greater frequency or severity of claims and loss activity than our underwriting, reserving or investment practices anticipate based on historical experience or industry data;
|
▪
|
the impact of changes in the global financial markets, such as the effects of inflation on our business including on pricing and reserving, changes in interest rates, credit spreads and foreign currency exchange rates and future volatility in the world's credit, financial and capital markets that adversely affect the performance and valuation of our investments, future financing activities and access to such markets, our ability to pay claims or general financial condition;
|
▪
|
The effects of climate change (such as changes to weather patterns, sea levels or temperatures) on our business, which our modeling or risk management practices may not adequately address due to the uncertain nature of climate change;
|
▪
|
our ability to successfully implement our business strategy;
|
▪
|
our ability to successfully attract and raise additional third party capital for existing or new investment vehicles;
|
▪
|
changes in credit ratings or rating agency policies or practices, which could trigger cancelation provisions in our assumed reinsurance agreements or an event of default under our credit facilities;
|
▪
|
the potential for changes to methodologies, estimations and assumptions that underlie the valuation of our financial instruments, that could result in changes to investment valuations;
|
▪
|
changes to our assessment as to whether it is more likely than not that we will be required to sell, or have the intent to sell, available for sale fixed maturity securities before their anticipated recovery;
|
▪
|
unanticipated constraints on our liquidity, including the availability of borrowings and letters of credit under our credit facilities, that inhibit our ability to support our operations, including our ability to underwrite policies and pay claims;
|
▪
|
the ability of our subsidiaries to pay dividends to XL-Ireland and XL-Cayman and Catlin Insurance Company Ltd;
|
▪
|
changes in regulators or regulation applicable to us, such as changes in regulatory capital balances that our operating subsidiaries must maintain, or to our brokers or customers;
|
▪
|
the effects of business disruption, economic contraction or economic sanctions due to unpredictable global political and social conditions such as war, terrorism or other hostilities, or pandemics;
|
▪
|
the actual amount of new and renewal business and acceptance of our products and services, including new products and services and the materialization of risks related to such products and services;
|
▪
|
changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurance brokers;
|
▪
|
bankruptcies or other financial concerns of companies insofar as they affect P&C insurance and reinsurance coverages or claims that we may have as a counterparty;
|
▪
|
the loss of key personnel;
|
▪
|
the effects of mergers, acquisitions and divestitures, including our ability to modify our internal control over financial reporting, changes to our risk appetite and our ability to realize the strategic value or financial benefits expected, in each case, as a result such transactions;
|
▪
|
changes in general economic conditions, including new or continued sovereign debt concerns in Euro-Zone countries or emerging markets such as Brazil or China, or governmental actions for the purpose of stabilizing financial markets;
|
▪
|
changes in applicable tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof;
|
▪
|
judicial decisions and rulings, new theories of liability or emerging claims coverage issues, legal tactics and settlement terms;
|
▪
|
the other factors set forth in Item 1A, "Risk Factors," and our other documents on file with the SEC.
|
(U.S. dollars in thousands, except share and per share amounts)
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss) attributable to ordinary shareholders
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
Earnings (loss) per ordinary share – basic
|
$
|
4.22
|
|
|
$
|
0.71
|
|
|
$
|
3.68
|
|
Earnings (loss) per ordinary share – diluted
|
$
|
4.15
|
|
|
$
|
0.69
|
|
|
$
|
3.63
|
|
Weighted average number of ordinary shares and ordinary share equivalents outstanding, in thousands – basic
|
286,194
|
|
|
267,103
|
|
|
287,801
|
|
|||
Weighted average number of ordinary shares and ordinary share equivalents outstanding, in thousands – diluted
|
290,999
|
|
|
271,527
|
|
|
292,069
|
|
(U.S. dollars in thousands, except ratios and per share amounts)
|
2015
|
|
2014
|
|
2013
|
|
Change
2015 to 2014
|
|
Change
2014 to 2013
|
||||||||||
Underwriting profit (loss) - P&C operations
|
$
|
653,191
|
|
|
$
|
676,046
|
|
|
$
|
451,062
|
|
|
(3.4
|
)%
|
|
49.9
|
%
|
||
Combined ratio - P&C operations
|
92.0
|
%
|
|
88.2
|
%
|
|
92.5
|
%
|
|
3.8pts
|
|
|
(4.3)pts
|
|
|||||
Net investment income - P&C operations (1)
|
$
|
644,312
|
|
|
$
|
642,492
|
|
|
$
|
671,071
|
|
|
0.3
|
%
|
|
(4.3
|
)%
|
||
Operating net income (2)
|
$
|
705,994
|
|
|
$
|
999,241
|
|
|
$
|
942,968
|
|
|
(29.3
|
)%
|
|
6.0
|
%
|
||
Operating net income per share (2)
|
$
|
2.43
|
|
|
$
|
3.68
|
|
|
$
|
3.23
|
|
|
$
|
(1.25
|
)
|
|
$
|
0.45
|
|
Return on average ordinary shareholders’ equity (2)
|
11.1
|
%
|
|
1.9
|
%
|
|
10.3
|
%
|
|
9.2pts
|
|
|
(8.4)pts
|
|
|||||
Operating return on average ordinary shareholders’ equity (2)
|
6.5
|
%
|
|
10.0
|
%
|
|
9.2
|
%
|
|
(3.5)pts
|
|
|
0.8pts
|
|
|||||
Operating return on average ordinary shareholders’ equity excluding unrealized gains and losses on investments (2)
|
7.3
|
%
|
|
11.2
|
%
|
|
10.3
|
%
|
|
(3.9)pts
|
|
|
0.9pts
|
|
|||||
Book value per ordinary share (2)
|
$
|
39.61
|
|
|
$
|
39.31
|
|
|
$
|
35.92
|
|
|
$
|
0.30
|
|
|
$
|
3.39
|
|
Fully diluted tangible book value per ordinary share (2)
|
$
|
31.52
|
|
|
$
|
36.79
|
|
|
$
|
33.86
|
|
|
$
|
(5.27
|
)
|
|
$
|
2.93
|
|
(1)
|
Net investment income - P&C operations includes: Net investment income - excluding Life Funds Withheld Assets and net investment income related to the net results from structured products.
|
(2)
|
Represents a non-GAAP financial measure as discussed further below.
|
▪
|
The combined ratio related to the P&C operations is the sum of the loss and loss expense ratio and the underwriting expense ratio. A combined ratio under 100% represents an underwriting profit and over 100% represents an underwriting loss. In the P&C industry, the combined ratio is a widely used measure of underwriting profitability.
|
▪
|
The loss and loss expense ratio related to the P&C operations is calculated by dividing the losses and loss expenses incurred by the net premiums earned for the Insurance and Reinsurance segments.
|
▪
|
The underwriting expense ratio related to the P&C operations is the sum of acquisition costs and operating expenses for the Insurance and Reinsurance segments divided by net premiums earned for the Insurance and Reinsurance segments.
|
▪
|
The acquisition expense ratio related to the P&C operations is calculated by dividing the acquisition costs incurred by the net premiums earned for the Insurance and Reinsurance segments.
|
▪
|
The operating expense ratio related to the P&C operations is calculated by dividing the operating expenses incurred by the net premiums earned for the Insurance and Reinsurance segments.
|
|
2015
|
|
2014
|
|
2013
|
|
Percentage Point
Change
|
|||||||
2015 to 2014
|
2014 to 2013
|
|||||||||||||
Loss and loss expense ratio
|
58.4
|
%
|
|
57.0
|
%
|
|
62.0
|
%
|
|
1.4
|
|
|
(5.0
|
)
|
Acquisition expense ratio
|
16.0
|
%
|
|
12.7
|
%
|
|
14.7
|
%
|
|
3.3
|
|
|
(2.0
|
)
|
Operating expense ratio
|
17.6
|
%
|
|
18.5
|
%
|
|
15.8
|
%
|
|
(0.9
|
)
|
|
2.7
|
|
Underwriting expense ratio
|
33.6
|
%
|
|
31.2
|
%
|
|
30.5
|
%
|
|
2.4
|
|
|
0.7
|
|
Combined ratio
|
92.0
|
%
|
|
88.2
|
%
|
|
92.5
|
%
|
|
3.8
|
|
|
(4.3
|
)
|
|
2015
|
|
2014
|
|
2013
|
|
Change
2015 to 2014 |
|
Change
2014 to 2013 |
||||
ROE
|
11.1
|
%
|
|
1.9
|
%
|
|
10.3
|
%
|
|
9.2pts
|
|
(8.4)pts
|
|
|
2015
|
|
2014
|
|
2013
|
|
Change
2015 to 2014 |
|
Change
2014 to 2013 |
||||
Operating ROE
|
6.5
|
%
|
|
10.0
|
%
|
|
9.2
|
%
|
|
(3.5)pts
|
|
|
0.8pts
|
|
2015
|
|
2014
|
|
2013
|
|
Change
2015 to 2014 |
|
Change
2014 to 2013 |
||||
Operating ROE ex-UGL
|
7.3
|
%
|
|
11.2
|
%
|
|
10.3
|
%
|
|
(3.9)pts
|
|
|
0.9pts
|
(U.S. dollars)
|
2015
|
|
2014
|
|
2013
|
|
Change
2015 to 2014 |
|
Change
2014 to 2013 |
||||||||||
Book value per ordinary share
|
$
|
39.61
|
|
|
$
|
39.31
|
|
|
$
|
35.92
|
|
|
$
|
0.30
|
|
|
$
|
3.39
|
|
(U.S. dollars)
|
2015
|
|
2014
|
|
2013
|
|
Change
2015 to 2014 |
|
Change
2014 to 2013 |
||||||||||
Fully diluted tangible book value per ordinary share
|
$
|
31.52
|
|
|
$
|
36.79
|
|
|
$
|
33.86
|
|
|
$
|
(5.27
|
)
|
|
$
|
2.93
|
|
(U.S. dollars in thousands, except share and per share amounts)
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss) attributable to ordinary shareholders
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
Net realized and unrealized (gains) losses on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets (1)
|
151,691
|
|
|
488,222
|
|
|
—
|
|
|||
Net realized (gains) losses on investments and net unrealized (gains) losses on investments, Trading - Life Funds Withheld Assets
|
(182,181
|
)
|
|
15,529
|
|
|
—
|
|
|||
Net investment income - Life Funds Withheld Assets, net of tax
|
(187,489
|
)
|
|
(129,575
|
)
|
|
—
|
|
|||
Foreign exchange revaluation (gains) losses on and other income and expense items related to Life Funds Withheld Assets
|
(7,068
|
)
|
|
(8,489
|
)
|
|
—
|
|
|||
Loss on sale of life reinsurance subsidiary, net of tax
|
—
|
|
|
621,323
|
|
|
—
|
|
|||
Net income (loss) attributable to ordinary shareholders excluding Contribution from GreyCastle Life Retrocession Arrangements
|
$
|
982,105
|
|
|
$
|
1,175,350
|
|
|
$
|
1,059,916
|
|
Net realized (gains) losses on investments sold - excluding Life Funds Withheld Assets, net of tax
|
(12,432
|
)
|
|
(124,759
|
)
|
|
(82,605
|
)
|
|||
Net realized and unrealized (gains) losses on derivatives, net of tax
|
(53,577
|
)
|
|
(29,884
|
)
|
|
(7,798
|
)
|
|||
Net realized and unrealized (gains) losses on investments and derivatives related to the Company's insurance company affiliates, net of tax
|
2,732
|
|
|
(985
|
)
|
|
6,556
|
|
|||
Exchange (gains) losses, net of tax
|
23,347
|
|
|
(20,481
|
)
|
|
(33,101
|
)
|
|||
Expenses related to Catlin acquisition, net of tax
|
64,748
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of operating affiliate
|
(340,407
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on U.S. Term Life Retro Arrangements, net of tax
|
34,986
|
|
|
—
|
|
|
—
|
|
|||
Extinguishment of debt, net of tax
|
4,492
|
|
|
—
|
|
|
—
|
|
|||
Operating net income (loss)
|
$
|
705,994
|
|
|
$
|
999,241
|
|
|
$
|
942,968
|
|
|
|
|
|
|
|
||||||
Per ordinary share results:
|
|
|
|
|
|
||||||
Net income (loss) attributable to ordinary shareholders
|
$
|
4.15
|
|
|
$
|
0.69
|
|
|
$
|
3.63
|
|
Operating net income (loss)
|
$
|
2.43
|
|
|
$
|
3.68
|
|
|
$
|
3.23
|
|
|
|
|
|
|
|
||||||
Weighted average ordinary shares outstanding, in thousands:
|
|
|
|
|
|
||||||
Basic
|
286,194
|
|
|
267,103
|
|
|
287,801
|
|
|||
Diluted - Net income
|
290,999
|
|
|
271,527
|
|
|
292,069
|
|
|||
Diluted - Operating net income
|
290,999
|
|
|
271,527
|
|
|
292,069
|
|
|||
|
|
|
|
|
|
||||||
Return on ordinary shareholders' equity:
|
|
|
|
|
|
||||||
Closing ordinary shareholders' equity (at period end)
|
$
|
11,677,079
|
|
|
$
|
10,033,751
|
|
|
$
|
9,997,633
|
|
Unrealized (gain) loss on investments, net of tax
|
$
|
(745,592
|
)
|
|
$
|
(1,514,067
|
)
|
|
$
|
(733,242
|
)
|
Average ordinary shareholders' equity for the period excluding unrealized gains and losses on investments
|
$
|
9,725,585
|
|
|
$
|
8,892,037
|
|
|
$
|
9,152,315
|
|
Average ordinary shareholders' equity for the period
|
$
|
10,855,415
|
|
|
$
|
10,015,692
|
|
|
$
|
10,253,856
|
|
Operating net income (loss)
|
$
|
705,994
|
|
|
$
|
999,241
|
|
|
$
|
942,968
|
|
|
|
|
|
|
|
||||||
Operating ROE
|
6.5
|
%
|
|
10.0
|
%
|
|
9.2
|
%
|
|||
Operating ROE ex-UGL
|
7.3
|
%
|
|
11.2
|
%
|
|
10.3
|
%
|
(1)
|
Investment results for the Life Funds Withheld Assets - including interest income, unrealized gains and losses, and gains and losses from sales - are passed directly to the reinsurer pursuant to a contractual arrangement which is accounted for as a derivative. Changes in the fair value of the embedded derivative associated with the GreyCastle Life Retro Arrangements are grouped within "Net realized and unrealized (gains) losses on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets" in the reconciliation above.
|
1)
|
The Catlin Acquisition;
|
2)
|
The impact of significant large loss events, including the Tianjin, China port explosion;
|
3)
|
The sale of our interest in our operating affiliate, ARX;
|
4)
|
Continuing competitive factors impacting the underwriting environment;
|
5)
|
Net favorable prior year loss development; and
|
6)
|
Market movement impacts on our investment portfolio.
|
2)
|
The impact of significant large loss events
|
|
Natural Catastrophe Underwriting Losses
|
|
Natural Catastrophe Loss Ratio Impact
|
|||||||||||||||||
(U.S. dollars in thousands, except ratios)
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|||||||||
Insurance
|
$
|
150,389
|
|
|
$
|
68,251
|
|
|
$
|
119,161
|
|
|
2.6
|
%
|
|
1.7
|
%
|
|
2.8
|
%
|
Reinsurance
|
62,813
|
|
|
45,098
|
|
|
198,202
|
|
|
2.6
|
%
|
|
2.8
|
%
|
|
11.9
|
%
|
|||
Total P&C
|
$
|
213,202
|
|
|
$
|
113,349
|
|
|
$
|
317,363
|
|
|
2.6
|
%
|
|
2.1
|
%
|
|
5.4
|
%
|
▪
|
2015 - included a hailstorm in Sydney, Australia ($40.9 million), flooding in the U.K. ($35.1 million), winter storms in the U.S. ($31.4 million), flooding in Chennai, India ($21.7 million), the Australia bush fire and hailstorm ($13.4 million), as well as a number of U.S. storms, Mid-Atlantic rainfall and flooding, and the Texas and Oklahoma tornadoes.
|
▪
|
2014 - included hailstorms in Europe ($28.3 million), Hurricane Odile in Mexico ($14.5 million), India Floods ($9.8 million), Brisbane, Australia Superstorm Cells and several U.S. wind and thunderstorms.
|
▪
|
2013 - included flooding in Europe ($55.9 million), Argentina and Canada (Calgary), a cyclone in Australia, tornadoes and hailstorms in the U.S., the series of hailstorms in Germany and France in late July 2013 ($75.3 million), Hurricane Ingrid, flooding events in the United States (Colorado) and Canada (Toronto) and Typhoons Fitow and Haiyan.
|
3)
|
Sale of Operating Affiliate
|
4)
|
Continuing competitive factors impacting the underwriting environment
|
5)
|
Net favorable prior year loss development
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Insurance
|
$
|
(65,030
|
)
|
|
$
|
(99,758
|
)
|
|
$
|
(102,039
|
)
|
Reinsurance
|
(241,600
|
)
|
|
(155,314
|
)
|
|
(187,850
|
)
|
|||
Total
|
$
|
(306,630
|
)
|
|
$
|
(255,072
|
)
|
|
$
|
(289,889
|
)
|
6)
|
Market movement impacts on the Company’s investment portfolio (Excluding Life Funds Withheld Assets)
|
|
Interest Rate Movement for the year ended December 31, 2015 (1)
(‘+’/‘-’ represents increases / decreases in interest rates) |
|
Credit Spread Movement for the year ended December 31, 2015 (2)
(‘+’/‘-’ represents widening / tightening of credit spreads) |
|
Equity Indices Price Movement for the year
ended December 31, 2015 (1) (‘+’/‘-’ represents increases / decreases in the equity index price) |
United States
|
+11 basis points (5 year Treasury)
|
|
+14 basis points (US Corporate A rated)
|
|
-4.3% (MSCI All Countries World Index)
|
|
|
|
-3 basis points (US Mortgage Master Index)
|
|
-0.7% (S&P500 Index)
|
|
|
|
+18 basis points (US CMBS, AAA rated)
|
|
|
United Kingdom
|
+18 basis points (10 year Gilt)
|
|
+17 basis points (U.K. Corporate, AA rated)
|
|
|
Euro-zone
|
-6 basis points (5 year Bund)
|
|
+32 basis points (Europe Corporate, A rated)
|
|
|
(1)
|
Source: Bloomberg Finance L.P.
|
(2)
|
Source: Merrill Lynch Global Indices.
|
Geographical Zone
(U.S. dollars in millions)
|
Peril
|
|
Measurement
Date
of In-Force
Exposures (1)
|
|
1% Exceedance
Probability
|
|
0.4% Exceedance
Probability
|
||||||||||
Probable
Maximum
Loss (2)
|
|
Percentage of
Adjusted Tangible Capital at December 31, 2015 |
|
Probable
Maximum
Loss (2)
|
|
Percentage of
Adjusted Tangible Capital at December 31, 2015 |
|||||||||||
North Atlantic
|
Windstorm
|
|
October 1, 2015
|
|
$
|
1,873
|
|
|
15.7
|
%
|
|
$
|
2,734
|
|
|
22.9
|
%
|
North America
|
Earthquake
|
|
October 1, 2015
|
|
$
|
1,030
|
|
|
8.6
|
%
|
|
$
|
1,779
|
|
|
14.9
|
%
|
Europe
|
Windstorm
|
|
October 1, 2015
|
|
$
|
778
|
|
|
6.5
|
%
|
|
$
|
1,033
|
|
|
8.7
|
%
|
Japan
|
Earthquake
|
|
October 1, 2015
|
|
$
|
409
|
|
|
3.4
|
%
|
|
$
|
518
|
|
|
4.3
|
%
|
Japan
|
Windstorm
|
|
October 1, 2015
|
|
$
|
320
|
|
|
2.7
|
%
|
|
$
|
390
|
|
|
3.3
|
%
|
(1)
|
Detailed analyses of aggregated in-force exposures and maximum loss levels are done periodically. The measurement dates represent the date of the last completed detailed analysis by geographical zone.
|
(2)
|
Probable maximum losses, which include secondary uncertainty that incorporates variability around the expected probable maximum loss for each event, do not represent our maximum potential exposures and are pre-tax.
|
1)
|
Unpaid Loss and Loss Expenses and Unpaid Loss and Loss Expenses Recoverable
|
a)
|
Case reserves - reserves for reported losses and loss expenses that have not yet been settled; and
|
b)
|
IBNR reserves – reserves for incurred but not reported losses or for reported losses over and above the amount of case reserves.
|
|
Net Unpaid Losses and Loss Expenses
|
||||||||||||||||||||||
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||||||||||||||||||
Case
Reserves
|
|
IBNR
Reserves
|
|
Total
Reserves
|
|
Case
Reserves
|
|
IBNR
Reserves
|
|
Total
Reserves
|
|||||||||||||
Insurance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Professional
|
$
|
1,505,337
|
|
|
$
|
2,769,425
|
|
|
$
|
4,274,764
|
|
|
$
|
1,415,510
|
|
|
$
|
2,800,020
|
|
|
$
|
4,215,530
|
|
Casualty
|
1,894,342
|
|
|
3,935,142
|
|
|
5,808,546
|
|
|
1,412,787
|
|
|
3,213,599
|
|
|
4,626,386
|
|
||||||
Property
|
679,637
|
|
|
404,832
|
|
|
1,084,469
|
|
|
382,375
|
|
|
126,264
|
|
|
508,639
|
|
||||||
Specialty
|
1,194,392
|
|
|
695,221
|
|
|
1,889,613
|
|
|
620,704
|
|
|
395,449
|
|
|
1,016,153
|
|
||||||
Other (1)
|
224,912
|
|
|
376,073
|
|
|
594,737
|
|
|
193,088
|
|
|
407,942
|
|
|
601,030
|
|
||||||
Total
|
$
|
5,498,620
|
|
|
$
|
8,180,693
|
|
|
$
|
13,652,129
|
|
|
$
|
4,024,464
|
|
|
$
|
6,943,274
|
|
|
$
|
10,967,738
|
|
Reinsurance:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Casualty
|
$
|
1,606,988
|
|
|
$
|
2,441,820
|
|
|
$
|
4,045,582
|
|
|
$
|
1,322,739
|
|
|
$
|
1,853,339
|
|
|
$
|
3,176,078
|
|
Property catastrophe
|
284,175
|
|
|
302,967
|
|
|
587,142
|
|
|
194,185
|
|
|
177,037
|
|
|
371,222
|
|
||||||
Other property
|
472,927
|
|
|
551,113
|
|
|
1,024,040
|
|
|
334,836
|
|
|
385,432
|
|
|
720,268
|
|
||||||
Specialty
|
392,551
|
|
|
79,890
|
|
|
472,441
|
|
|
344,301
|
|
|
43,564
|
|
|
387,865
|
|
||||||
Other (1)
|
165,418
|
|
|
244,087
|
|
|
409,505
|
|
|
124,744
|
|
|
193,800
|
|
|
318,544
|
|
||||||
Total
|
$
|
2,922,059
|
|
|
$
|
3,619,877
|
|
|
$
|
6,538,710
|
|
|
$
|
2,320,805
|
|
|
$
|
2,653,172
|
|
|
$
|
4,973,977
|
|
TOTAL
|
$
|
8,420,679
|
|
|
$
|
11,800,570
|
|
|
$
|
20,190,839
|
|
|
$
|
6,345,269
|
|
|
$
|
9,596,446
|
|
|
$
|
15,941,715
|
|
(1)
|
Other within the Insurance segment includes: excess and surplus, programs, surety, structured indemnity and certain discontinued lines. Other within the Reinsurance segment includes: whole account contracts, surety, structured indemnity and other lines.
|
a)
|
high layer excess casualty insurance;
|
b)
|
casualty reinsurance; and
|
c)
|
discontinued asbestos and run-off environmental insurance and reinsurance liabilities.
|
(U.S. dollars in thousands)
|
Net Unpaid
Losses and Loss Expenses Recorded |
|
Range of Net
Unpaid Losses & Loss Expenses Estimated HIGH |
|
Range of Net
Unpaid Losses & Loss Expenses Estimated LOW |
||||||
Insurance
|
|
|
|
|
|
||||||
Professional
|
$
|
4,274,764
|
|
|
$
|
4,629,611
|
|
|
$
|
3,931,074
|
|
Casualty
|
5,808,546
|
|
|
$
|
6,243,966
|
|
|
$
|
5,385,528
|
|
|
Property
|
1,084,469
|
|
|
$
|
1,199,035
|
|
|
$
|
974,448
|
|
|
Specialty
|
1,889,613
|
|
|
$
|
2,036,232
|
|
|
$
|
1,747,313
|
|
|
Other (1)
|
594,737
|
|
|
$
|
689,945
|
|
|
$
|
505,137
|
|
|
Total (2)
|
$
|
13,652,129
|
|
|
$
|
14,489,457
|
|
|
$
|
12,834,416
|
|
Reinsurance
|
|
|
|
|
|
||||||
Casualty
|
$
|
4,045,582
|
|
|
$
|
4,342,977
|
|
|
$
|
3,756,498
|
|
Property catastrophe
|
587,142
|
|
|
$
|
663,133
|
|
|
$
|
514,811
|
|
|
Other property
|
1,024,040
|
|
|
$
|
1,221,007
|
|
|
$
|
840,847
|
|
|
Marine, energy, aviation and satellite
|
472,441
|
|
|
$
|
530,260
|
|
|
$
|
417,263
|
|
|
Other (1)
|
409,505
|
|
|
$
|
461,909
|
|
|
$
|
359,598
|
|
|
Total (2)
|
$
|
6,538,710
|
|
|
$
|
7,011,481
|
|
|
$
|
6,078,940
|
|
Total
|
$
|
20,190,839
|
|
|
|
|
|
(1)
|
Other within the Insurance segment includes: excess and surplus, surety, programs, structured indemnity and certain discontinued lines. Other within the Reinsurance segment includes: whole account contracts, surety, structured indemnity and other lines.
|
(2)
|
The range for the total Insurance and Reinsurance segment reserves is narrower than the sum of the ranges for the lines of business shown in the table due to diversification benefits across the lines of business.
|
3)
|
Other-Than-Temporary Declines in Investments
|
4)
|
Income Taxes
|
5)
|
Reinsurance Premium Estimates
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
Gross
Premiums
Written
|
|
Acquisition
Expenses (1)
|
|
Gross
Premiums
Written
|
|
Acquisition
Expenses
|
|
Gross
Premiums
Written
|
|
Acquisition
Expenses
|
|||||||||||||
Proportional Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Casualty – professional lines
|
$
|
73,179
|
|
|
$
|
22,214
|
|
|
$
|
32,784
|
|
|
$
|
17,347
|
|
|
$
|
59,213
|
|
|
$
|
17,383
|
|
Casualty – other lines
|
76,751
|
|
|
21,128
|
|
|
99,272
|
|
|
21,094
|
|
|
113,709
|
|
|
27,260
|
|
||||||
Other property
|
576,684
|
|
|
220,497
|
|
|
424,564
|
|
|
130,709
|
|
|
417,698
|
|
|
134,823
|
|
||||||
Specialty
|
50,843
|
|
|
10,560
|
|
|
52,535
|
|
|
11,726
|
|
|
34,202
|
|
|
11,165
|
|
||||||
Other (2)
|
190,093
|
|
|
55,732
|
|
|
139,321
|
|
|
21,911
|
|
|
106,331
|
|
|
18,643
|
|
||||||
Total proportional contracts
|
$
|
967,550
|
|
|
$
|
330,131
|
|
|
$
|
748,476
|
|
|
$
|
202,787
|
|
|
$
|
731,153
|
|
|
$
|
209,274
|
|
Excess of Loss Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Casualty – professional lines
|
$
|
75,785
|
|
|
$
|
22,232
|
|
|
$
|
94,092
|
|
|
$
|
27,367
|
|
|
$
|
139,946
|
|
|
$
|
28,997
|
|
Casualty – other lines
|
322,864
|
|
|
75,897
|
|
|
203,631
|
|
|
34,425
|
|
|
218,444
|
|
|
37,164
|
|
||||||
Property catastrophe
|
655,443
|
|
|
87,748
|
|
|
493,646
|
|
|
40,511
|
|
|
556,493
|
|
|
49,128
|
|
||||||
Other property
|
168,345
|
|
|
16,846
|
|
|
161,218
|
|
|
15,934
|
|
|
169,580
|
|
|
16,356
|
|
||||||
Specialty
|
55,786
|
|
|
9,486
|
|
|
59,504
|
|
|
4,962
|
|
|
57,795
|
|
|
7,557
|
|
||||||
Other (2)
|
27,390
|
|
|
4,323
|
|
|
24,912
|
|
|
4,698
|
|
|
20,200
|
|
|
4,912
|
|
||||||
Total excess of loss contracts
|
$
|
1,305,613
|
|
|
$
|
216,532
|
|
|
$
|
1,037,003
|
|
|
$
|
127,897
|
|
|
$
|
1,162,458
|
|
|
$
|
144,114
|
|
(1)
|
Excludes amortization of fair value adjustments related to the Catlin Acquisition in the amount of
$55.6 million
|
(2)
|
Other includes whole account contracts, credit and surety, accident and health and other lines.
|
6)
|
Goodwill
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
Percentage change
|
||||||||||
2015 to 2014
|
2014 to 2013
|
||||||||||||||||
Gross premiums written
|
$
|
8,395,846
|
|
|
$
|
5,976,011
|
|
|
$
|
5,523,181
|
|
|
40.5
|
%
|
|
8.2
|
%
|
Net premiums written
|
5,859,934
|
|
|
4,134,151
|
|
|
4,154,093
|
|
|
41.7
|
%
|
|
(0.5
|
)%
|
|||
Net premiums earned
|
5,648,482
|
|
|
4,026,713
|
|
|
4,267,677
|
|
|
40.3
|
%
|
|
(5.6
|
)%
|
|||
Net losses and loss expenses
|
3,614,048
|
|
|
2,543,108
|
|
|
2,829,999
|
|
|
42.1
|
%
|
|
(10.1
|
)%
|
|||
Acquisition costs
|
704,364
|
|
|
393,319
|
|
|
529,270
|
|
|
79.1
|
%
|
|
(25.7
|
)%
|
|||
Operating expenses
|
1,154,760
|
|
|
865,592
|
|
|
782,677
|
|
|
33.4
|
%
|
|
10.6
|
%
|
|||
Underwriting profit (loss)
|
$
|
175,310
|
|
|
$
|
224,694
|
|
|
$
|
125,731
|
|
|
(22.0
|
)%
|
|
78.7
|
%
|
Net results – structured products
|
12,185
|
|
|
43,710
|
|
|
15,562
|
|
|
(72.1
|
)%
|
|
N/M
|
|
|||
Net fee income and other (expense)
|
(16,936
|
)
|
|
(10,051
|
)
|
|
(9,317
|
)
|
|
68.5
|
%
|
|
7.9
|
%
|
*
|
N/M - Not Meaningful
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
Percentage change
|
||||||||||
2015 to 2014
|
2014 to 2013
|
||||||||||||||||
Professional
|
$
|
1,754,631
|
|
|
$
|
1,550,929
|
|
|
$
|
1,465,689
|
|
|
13.1
|
%
|
|
5.8
|
%
|
Casualty and Other
|
3,086,132
|
|
|
2,537,292
|
|
|
2,275,069
|
|
|
21.6
|
%
|
|
11.5
|
%
|
|||
EPC
|
1,621,169
|
|
|
874,198
|
|
|
875,773
|
|
|
85.4
|
%
|
|
(0.2
|
)%
|
|||
Specialty
|
1,933,914
|
|
|
1,013,592
|
|
|
906,650
|
|
|
90.8
|
%
|
|
11.8
|
%
|
|||
Total
|
$
|
8,395,846
|
|
|
$
|
5,976,011
|
|
|
$
|
5,523,181
|
|
|
40.5
|
%
|
|
8.2
|
%
|
▪
|
Professional - increase of
13.1%
driven mainly by the Catlin Acquisition. We also experienced increases in both new business and renewals in cybertech and international financial lines, as well as increased pricing in cybertech, partially offset by decreases in pricing in North America in most lines. The acquired Catlin business experienced decreases in premium during the current year, mainly due to decreases in renewals in international financial lines as a result of rate inadequacy.
|
▪
|
Casualty and Other - increase of
21.6%
largely due to the Catlin Acquisition. The increase also was due to increases in renewals in global risk management, international casualty, North American construction casualty, and casualty excess and surplus, partially offset by adverse foreign exchange in international casualty as noted above.
|
▪
|
EPC - increase of
85.4%
attributable to the Catlin Acquisition, partially offset by adverse foreign exchange affecting international property and international construction as noted above, as well as decreases in pricing in energy, international property and North American property. The acquired Catlin business also experienced a decrease in premiums during the current year as a result of decreases in renewal premiums in energy business, mainly due to decreases in pricing.
|
▪
|
Specialty - increase of
90.8%
mainly due to the Catlin Acquisition, plus new business in political risk and trade credit, and marine, as well as increased renewals in marine and crisis management, partially offset by a decrease in renewals in aerospace and adverse foreign exchange in marine and aerospace.
|
▪
|
Professional - increase of
5.8%
mainly attributable to increases in renewals and new business in international professional due to new underwriting teams in place during the year, as well as increased renewals in select professional and U.S. professional business lines, partially offset by a decrease in rates primarily in U.S. and international professional lines.
|
▪
|
Casualty and Other - increase of
11.5%
largely attributable to an increase in new and renewal business in International middle market, surplus lines and programs business lines. In addition, we experienced increases in new business in international schemes and primary casualty, as well as higher renewals in excess casualty, partially offset by pricing decreases in program business lines.
|
▪
|
EPC - decrease of
0.2%
driven by decreases in property and Lloyd's middle market business lines due in part to a decline in rates, mostly offset by increases in renewals and new business in construction, and new business in property.
|
▪
|
Specialty - increase of
11.8%
due to new and renewal business in crisis management, marine, and equine business lines and new business in political risk.
|
|
2015
|
|
2014
|
|
2013
|
|
Percentage Point
Change
|
|||||||
2015 to 2014
|
2014 to 2013
|
|||||||||||||
Loss and loss expense ratio
|
64.0
|
%
|
|
63.2
|
%
|
|
66.3
|
%
|
|
0.8
|
|
|
(3.1
|
)
|
Acquisition expense ratio
|
12.5
|
%
|
|
9.8
|
%
|
|
12.4
|
%
|
|
2.7
|
|
|
(2.6
|
)
|
Operating expense ratio
|
20.4
|
%
|
|
21.4
|
%
|
|
18.4
|
%
|
|
(1.0
|
)
|
|
3.0
|
|
Underwriting expense ratio
|
32.9
|
%
|
|
31.2
|
%
|
|
30.8
|
%
|
|
1.7
|
|
|
0.4
|
|
Combined ratio
|
96.9
|
%
|
|
94.4
|
%
|
|
97.1
|
%
|
|
2.5
|
|
|
(2.7
|
)
|
|
2015
|
|
2014
|
|
2013
|
|
Percentage Point
Change
|
|||||||
2015 to 2014
|
2014 to 2013
|
|||||||||||||
Loss and loss expense ratio
|
64.0
|
%
|
|
63.2
|
%
|
|
66.3
|
%
|
|
0.8
|
|
|
(3.1
|
)
|
Prior year reserve development
|
1.1
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
(1.3
|
)
|
|
—
|
|
Loss ratio - excluding prior year development
|
65.1
|
%
|
|
65.6
|
%
|
|
68.7
|
%
|
|
(0.5
|
)
|
|
(3.1
|
)
|
(U.S. dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
EPC
|
$
|
25,189
|
|
|
$
|
(57,470
|
)
|
|
$
|
(46,387
|
)
|
Casualty
|
(11,949
|
)
|
|
38,414
|
|
|
(21,829
|
)
|
|||
Professional
|
5,763
|
|
|
17,097
|
|
|
75,045
|
|
|||
Specialty
|
(120,879
|
)
|
|
(82,756
|
)
|
|
(140,740
|
)
|
|||
Other (1)
|
36,846
|
|
|
(15,043
|
)
|
|
31,872
|
|
|||
Total
|
$
|
(65,030
|
)
|
|
$
|
(99,758
|
)
|
|
$
|
(102,039
|
)
|
(1)
|
Other includes excess and surplus, programs, surety, structured indemnity and certain discontinued lines.
|
▪
|
Acquisition expense ratio - increased
2.7
percentage points mainly attributable to the EPC business acquired from Catlin, partially offset by the favorable impact of the modification of our reinsurance structure in 2014 and a change in the mix of business.
|
▪
|
Operating expense ratio - decreased
1.0
percentage points due to initial synergies realized from the Catlin Acquisition.
|
▪
|
Operating expense ratio - increased
3.0
percentage points largely due to the unfavorable impact of the modification of our reinsurance structure in late 2013 as mentioned above, as well as increased compensation expenses from business expansion and higher professional fees for 2014 compared to the same period of 2013.
|
▪
|
Acquisition expense ratio - decreased largely due to the favorable impact of the modification of our reinsurance structure mentioned above and a change in the mix of business.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
Percentage change
|
||||||||||
2015 to 2014
|
2014 to 2013
|
||||||||||||||||
Gross premiums written
|
$
|
2,273,163
|
|
|
$
|
1,785,479
|
|
|
$
|
1,893,611
|
|
|
27.3
|
%
|
|
(5.7
|
)%
|
Net premiums written
|
2,028,890
|
|
|
1,633,058
|
|
|
1,749,889
|
|
|
24.2
|
%
|
|
(6.7
|
)%
|
|||
Net premiums earned
|
2,515,702
|
|
|
1,690,725
|
|
|
1,746,422
|
|
|
48.8
|
%
|
|
(3.2
|
)%
|
|||
Net losses and loss expenses
|
1,152,152
|
|
|
715,285
|
|
|
901,465
|
|
|
61.1
|
%
|
|
(20.7
|
)%
|
|||
Acquisition costs
|
602,290
|
|
|
330,684
|
|
|
353,388
|
|
|
82.1
|
%
|
|
(6.4
|
)%
|
|||
Operating expenses
|
283,379
|
|
|
193,404
|
|
|
166,238
|
|
|
46.5
|
%
|
|
16.3
|
%
|
|||
Underwriting profit (loss)
|
$
|
477,881
|
|
|
$
|
451,352
|
|
|
$
|
325,331
|
|
|
5.9
|
%
|
|
38.7
|
%
|
Net results – structured products
|
5,806
|
|
|
10,499
|
|
|
8,229
|
|
|
(44.7
|
)%
|
|
27.6
|
%
|
|||
Net fee income and other
|
2,958
|
|
|
2,800
|
|
|
2,320
|
|
|
5.6
|
%
|
|
20.7
|
%
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
Percentage change
|
||||||||||
2015 to 2014
|
2014 to 2013
|
||||||||||||||||
Bermuda
|
$
|
782,033
|
|
|
$
|
575,386
|
|
|
$
|
556,905
|
|
|
35.9
|
%
|
|
3.3
|
%
|
North America
|
550,781
|
|
|
443,409
|
|
|
513,032
|
|
|
24.2
|
%
|
|
(13.6
|
)%
|
|||
London
|
268,925
|
|
|
138,309
|
|
|
152,407
|
|
|
94.4
|
%
|
|
(9.3
|
)%
|
|||
EMEA
|
359,112
|
|
|
445,110
|
|
|
456,148
|
|
|
(19.3
|
)%
|
|
(2.4
|
)%
|
|||
LAC
|
312,312
|
|
|
183,265
|
|
|
214,951
|
|
|
70.4
|
%
|
|
(14.7
|
)%
|
|||
Other (1)
|
—
|
|
|
—
|
|
|
168
|
|
|
—%
|
|
|
(100.0
|
)%
|
|||
Total
|
$
|
2,273,163
|
|
|
$
|
1,785,479
|
|
|
$
|
1,893,611
|
|
|
27.3
|
%
|
|
(5.7
|
)%
|
(1)
|
Other relates to discontinued structured indemnity.
|
▪
|
Bermuda - increase of
35.9%
due to the Catlin Acquisition, partially offset by reduced rates and cancellations on property catastrophe business plus the unfavorable impact of foreign exchange rates.
|
▪
|
North America - increase of
24.2%
as a result of the Catlin Acquisition, plus increased premium volume in our agricultural business, partially offset by reductions due to the competitive pricing environment, particularly on property treaty business.
|
▪
|
London - increase of
94.4%
due to the Catlin Acquisition, partially offset by unfavorable exchange rates, particularly on the casualty lines of business plus a decrease in reinstatement premiums due to a non-recurring favorable adjustment in the prior period.
|
▪
|
EMEA - decrease of
19.3%
is mainly attributable to unfavorable foreign exchange rates particularly on the property and casualty lines of business, as well as a decrease in reinstatement premiums due to a non-recurring favorable adjustment in the prior period, partially offset by the increase of premiums due to the Catlin Acquisition.
|
▪
|
LAC - increase of
70.4%
due to the Catlin Acquisition, partially offset by the impact of unfavorable foreign exchange rates.
|
▪
|
Bermuda - increase of
3.3%
due to new business and favorable renewals on whole account and property treaty businesses.
|
▪
|
North America - decrease of
13.6%
largely due to unfavorable renewal activity within casualty treaty and property treaty business lines, partially offset by increased agricultural premiums within our property treaty business.
|
▪
|
London - decrease of
9.3%
, mainly driven by lower property treaty renewals due to decreases in shares and competitive market conditions.
|
▪
|
EMEA - decrease of
2.4%
is mainly driven by lower casualty and property treaty renewals due to decreases in shares and competitive market conditions in Europe, partially offset by the impact of a reinstatement premium adjustment on prior period non-catastrophe losses.
|
▪
|
LAC - decrease of
14.7%
is mainly driven by lower property treaty renewals due to decreases in shares and competitive market conditions in Latin America.
|
|
2015
|
|
2014
|
|
2013
|
|
Percentage Point Change
|
|||||||
2015 to 2014
|
2014 to 2013
|
|||||||||||||
Loss and loss expense ratio
|
45.8
|
%
|
|
42.3
|
%
|
|
51.6
|
%
|
|
3.5
|
|
|
(9.3
|
)
|
Acquisition expense ratio
|
23.9
|
%
|
|
19.6
|
%
|
|
20.2
|
%
|
|
4.3
|
|
|
(0.6
|
)
|
Operating expense ratio
|
11.3
|
%
|
|
11.4
|
%
|
|
9.6
|
%
|
|
(0.1
|
)
|
|
1.8
|
|
Underwriting expense ratio
|
35.2
|
%
|
|
31.0
|
%
|
|
29.8
|
%
|
|
4.2
|
|
|
1.2
|
|
Combined ratio
|
81.0
|
%
|
|
73.3
|
%
|
|
81.4
|
%
|
|
7.7
|
|
|
(8.1
|
)
|
|
2015
|
|
2014
|
|
2013
|
|
Percentage Point Change
|
|||||||
2015 to 2014
|
2014 to 2013
|
|||||||||||||
Loss and loss expense ratio
|
45.8
|
%
|
|
42.3
|
%
|
|
51.6
|
%
|
|
3.5
|
|
|
(9.3
|
)
|
Prior year reserve development
|
9.6
|
%
|
|
9.2
|
%
|
|
10.8
|
%
|
|
0.4
|
|
|
(1.6
|
)
|
Loss ratio excluding prior year development
|
55.4
|
%
|
|
51.5
|
%
|
|
62.4
|
%
|
|
3.9
|
|
|
(10.9
|
)
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Property and other short-tail lines
|
$
|
(173,754
|
)
|
|
$
|
(85,324
|
)
|
|
$
|
(136,912
|
)
|
Casualty and other
|
(67,846
|
)
|
|
(69,990
|
)
|
|
(50,938
|
)
|
|||
Total
|
$
|
(241,600
|
)
|
|
$
|
(155,314
|
)
|
|
$
|
(187,850
|
)
|
▪
|
Operating expense ratio - increased in 2014 compared to the same period in 2013 due to higher compensation costs associated with the expansion of agricultural business in North America and capital markets in Bermuda in 2014, combined with the impact of lower net earned premiums in 2014.
|
▪
|
Acquisition expense ratio - decreased mainly due to a change in the EMEA business mix due to the expiration and non-renewal of a large motor quota share deal, and lower profit based commissions in LAC.
|
Impact of GreyCastle Life Retro Arrangements
|
|
|
|
||||
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Underwriting profit (loss) (1)
|
$
|
605
|
|
|
$
|
11,649
|
|
Net investment income - Life Funds Withheld Assets
|
187,489
|
|
|
129,575
|
|
||
Net realized gains (losses) on investments sold - Life Funds Withheld Assets
|
223,272
|
|
|
5,067
|
|
||
Net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets
|
(27,734
|
)
|
|
(9
|
)
|
||
OTTI on investments - Life Funds Withheld Assets
|
(13,357
|
)
|
|
(20,587
|
)
|
||
Exchange (gains) losses
|
4,788
|
|
|
10,099
|
|
||
Other income and expenses
|
2,280
|
|
|
(1,610
|
)
|
||
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
(151,691
|
)
|
|
(488,222
|
)
|
||
Net income (loss)
|
$
|
225,652
|
|
|
$
|
(354,038
|
)
|
Change in net unrealized gains (losses) on investments - Life Funds Withheld Assets, net of tax
|
(421,604
|
)
|
|
274,083
|
|
||
Change in adjustments related to future policy benefit reserves, net of tax
|
170,688
|
|
|
74,009
|
|
||
Change in cumulative translation adjustment - Life Funds Withheld Assets, net of tax
|
25,869
|
|
|
17,595
|
|
||
Total changes to other comprehensive income as a result of GreyCastle Life Retro Arrangements
|
$
|
(225,047
|
)
|
|
$
|
365,687
|
|
Comprehensive income (loss)
|
$
|
605
|
|
|
$
|
11,649
|
|
(1)
|
The underwriting profit of
$0.6 million
relates to a premium adjustment relating to the GreyCastle Life Retro Arrangements transaction, which was completed on May 30, 2014. Excluding this transaction, the impact to comprehensive income relating to the GreyCastle Life Retro Arrangements was
nil
for the year ended December 31, 2015.
|
(1)
|
The performance of investment portfolios is measured on a local currency basis. For the aggregate performance calculation, respective local currency balances are translated to U.S. dollars at quarter end rates to calculate composite portfolio results.
|
(2)
|
Performance on Other Portfolios is included in the Total Return on Investments.
|
(3)
|
Performance on the hedge fund portfolio reflects the twelve months ended November 30, 2015 and 2014, respectively, for both equity and non-equity hedge funds.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
Percentage change
|
||||||||||
2015 to 2014
|
2014 to 2013
|
||||||||||||||||
Net investment income
|
$
|
684,881
|
|
|
$
|
789,050
|
|
|
$
|
957,716
|
|
|
(13.2
|
)%
|
|
(17.6
|
)%
|
Net income (loss) from investment fund affiliates
|
$
|
73,320
|
|
|
$
|
95,816
|
|
|
$
|
138,391
|
|
|
(23.5
|
)%
|
|
(30.8
|
)%
|
Net realized gains (losses) on investments
|
$
|
19,997
|
|
|
$
|
122,991
|
|
|
$
|
87,777
|
|
|
(83.7
|
)%
|
|
40.1
|
%
|
Net realized and unrealized gains (losses) on derivative instruments (1)
|
$
|
53,123
|
|
|
$
|
29,886
|
|
|
$
|
7,798
|
|
|
77.8
|
%
|
|
N/M
|
|
(1)
|
For a summary of realized and unrealized gains and losses on all derivative instruments, see Item 8,
Note 15, "Derivative Instruments
," to the Consolidated Financial Statements included herein.
|
*
|
N/M - Not Meaningful
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
Percentage Change
|
||||||||||
2015 to 2014
|
2014 to 2013
|
||||||||||||||||
Net income (loss) from operating affiliates
|
$
|
44,740
|
|
|
$
|
107,218
|
|
|
$
|
119,804
|
|
|
(58.3
|
)%
|
|
(10.5
|
)%
|
Foreign exchange (gains) losses
|
$
|
22,504
|
|
|
$
|
(37,568
|
)
|
|
$
|
(28,243
|
)
|
|
N/M
|
|
|
33.0
|
%
|
Corporate operating expenses
|
$
|
480,755
|
|
|
$
|
220,165
|
|
|
$
|
209,454
|
|
|
N/M
|
|
|
5.1
|
%
|
Loss on sale of life reinsurance subsidiary
|
$
|
—
|
|
|
$
|
666,423
|
|
|
$
|
—
|
|
|
(100.0
|
)%
|
|
—%
|
|
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
$
|
(151,691
|
)
|
|
$
|
(488,222
|
)
|
|
$
|
—
|
|
|
(68.9
|
)%
|
|
—%
|
|
Interest expense (1)
|
$
|
163,021
|
|
|
$
|
121,221
|
|
|
$
|
107,486
|
|
|
34.5
|
%
|
|
12.8
|
%
|
Income tax expense
|
$
|
(19,161
|
)
|
|
$
|
96,897
|
|
|
$
|
77,505
|
|
|
N/M
|
|
|
25.0
|
%
|
(1)
|
Interest expense includes costs related to our debt and collateral facilities and does not include deposit liability accretion, which is included in Net investment results - structured products.
|
*
|
N/M - Not Meaningful
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
Percentage Change
|
||||||||||
2015 to 2014
|
2014 to 2013
|
||||||||||||||||
Net income (loss) from investment manager affiliates
|
$
|
11,132
|
|
|
$
|
57,086
|
|
|
$
|
78,644
|
|
|
(80.5
|
)%
|
|
(27.4
|
)%
|
Net income (loss) from strategic and other operating affiliates
|
33,608
|
|
|
50,132
|
|
|
41,160
|
|
|
(33.0
|
)%
|
|
21.8
|
%
|
|||
Total
|
$
|
44,740
|
|
|
$
|
107,218
|
|
|
$
|
119,804
|
|
|
(58.3
|
)%
|
|
(10.5
|
)%
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||||||||
Carrying
Value (1)
|
|
Percent of
Total
|
|
Carrying
Value (1)
|
|
Percent of
Total
|
|||||||
Cash and cash equivalents
|
$
|
3,256,236
|
|
|
8.7
|
%
|
|
$
|
2,327,160
|
|
|
7.6
|
%
|
Restricted cash
|
$
|
41,860
|
|
|
0.1
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Net receivable/ (payable) for investments sold/ (purchased)
|
$
|
101,098
|
|
|
0.3
|
%
|
|
$
|
50,471
|
|
|
0.2
|
%
|
Accrued investment income
|
$
|
243,409
|
|
|
0.7
|
%
|
|
$
|
226,721
|
|
|
0.7
|
%
|
Short-term investments
|
$
|
617,390
|
|
|
1.7
|
%
|
|
$
|
256,727
|
|
|
0.8
|
%
|
Fixed maturities - AFS:
|
|
|
|
|
|
|
|
||||||
U.S. Government and Government-Related/Supported
|
$
|
5,065,637
|
|
|
13.5
|
%
|
|
$
|
2,171,953
|
|
|
7.1
|
%
|
Corporate - Financials
|
3,561,909
|
|
|
9.5
|
%
|
|
2,761,916
|
|
|
9.0
|
%
|
||
Corporate - Non Financials
|
6,900,447
|
|
|
18.5
|
%
|
|
6,016,457
|
|
|
19.4
|
%
|
||
RMBS – Agency
|
3,757,971
|
|
|
10.1
|
%
|
|
3,728,576
|
|
|
12.1
|
%
|
||
RMBS – Non-Agency
|
328,540
|
|
|
0.9
|
%
|
|
427,351
|
|
|
1.4
|
%
|
||
CMBS
|
405,316
|
|
|
1.1
|
%
|
|
1,052,544
|
|
|
3.4
|
%
|
||
CDO
|
32,410
|
|
|
0.1
|
%
|
|
692,034
|
|
|
2.2
|
%
|
||
Other asset-backed securities
|
1,168,572
|
|
|
3.1
|
%
|
|
1,065,293
|
|
|
3.5
|
%
|
||
U.S. States and political subdivisions of the States
|
2,632,070
|
|
|
7.0
|
%
|
|
2,021,272
|
|
|
6.6
|
%
|
||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
5,251,614
|
|
|
14.0
|
%
|
|
4,240,073
|
|
|
13.8
|
%
|
||
Total fixed maturities - AFS
|
$
|
29,104,486
|
|
|
77.8
|
%
|
|
$
|
24,177,469
|
|
|
78.5
|
%
|
Equity securities
|
878,919
|
|
|
2.4
|
%
|
|
868,292
|
|
|
2.8
|
%
|
||
Investments in affiliates
|
1,708,899
|
|
|
4.6
|
%
|
|
1,637,620
|
|
|
5.3
|
%
|
||
Other investments
|
1,433,057
|
|
|
3.7
|
%
|
|
1,248,439
|
|
|
4.1
|
%
|
||
Total investments and cash and cash equivalents
|
$
|
37,385,354
|
|
|
100.0
|
%
|
|
$
|
30,792,899
|
|
|
100.0
|
%
|
(1)
|
Carrying value represents the fair value for AFS fixed maturities.
|
Investments by Credit Rating (1)
|
2015
|
|
2014
|
||||||||||
(U.S. dollars in millions)
|
Carrying
Value
|
|
Percent of
Total
|
|
Carrying
Value
|
|
Percent of
Total
|
||||||
AAA
|
$
|
14,242
|
|
|
45.1
|
%
|
|
$
|
11,509
|
|
|
44.0
|
%
|
AA
|
7,005
|
|
|
22.3
|
%
|
|
5,334
|
|
|
20.4
|
%
|
||
A
|
7,316
|
|
|
23.2
|
%
|
|
6,158
|
|
|
23.6
|
%
|
||
BBB
|
2,343
|
|
|
7.4
|
%
|
|
2,321
|
|
|
8.9
|
%
|
||
BB and below
|
577
|
|
|
1.8
|
%
|
|
793
|
|
|
3.0
|
%
|
||
Not rated
|
65
|
|
|
0.2
|
%
|
|
15
|
|
|
0.1
|
%
|
||
Total
|
$
|
31,548
|
|
|
100.0
|
%
|
|
$
|
26,130
|
|
|
100.0
|
%
|
(1)
|
The credit rating for each asset reflected above was principally determined based on the weighted average rating of the individual securities from Standard & Poor's, Moody's Investors Service and Fitch Ratings (when available). U.S. Agency debt and related mortgage-backed securities, whether with implicit or explicit government support, reflect the credit quality rating of the U.S. government for the purpose of these calculations.
|
▪
|
gross unrealized losses of
$134.5 million
related to the Government and Government-Related holdings. Securities in a gross unrealized loss position had a fair value of
$6.2 billion
at
December 31, 2015
.
|
▪
|
gross unrealized losses of
$121.2 million
related to Corporate holdings. Securities in a gross unrealized loss position had a fair value of
$5.2 billion
at
December 31, 2015
. Of these gross unrealized losses,
$23.7 million
relate to financial institutions.
|
▪
|
gross unrealized losses of
$17.0 million
related to Non-Agency RMBS (which consists of our holdings of sub-prime Non-Agency RMBS, second liens, asset backed securities collateralized debt obligations ("ABS CDOs") with sub-prime collateral, Alt-A and Prime RMBS). Securities in gross unrealized loss position had a fair value of
$199.8 million
at
December 31, 2015
.
|
Security Type and Length of Time in a Continual Unrealized Loss Position
|
December 31, 2015
|
||||||
(U.S. dollars in thousands)
|
Amount of
Unrealized Loss
|
|
Fair Value of
Securities in an
Unrealized Loss
Position
|
||||
Fixed Maturities and Short-Term Investments
|
|
|
|
||||
Less than 6 months
|
$
|
(112,004
|
)
|
|
$
|
10,054,187
|
|
At least 6 months but less than 12 months
|
(82,212
|
)
|
|
2,899,570
|
|
||
At least 12 months but less than 2 years
|
(68,529
|
)
|
|
530,167
|
|
||
2 years and over
|
(62,077
|
)
|
|
933,350
|
|
||
Total
|
$
|
(324,822
|
)
|
|
$
|
14,417,274
|
|
Equities
|
|
|
|
||||
Less than 6 months
|
$
|
(21,200
|
)
|
|
$
|
215,564
|
|
At least 6 months but less than 12 months
|
(23,953
|
)
|
|
141,178
|
|
||
Total
|
$
|
(45,153
|
)
|
|
$
|
356,742
|
|
Maturity profile in years of AFS fixed income securities in a gross unrealized loss position
|
December 31, 2015
|
||||||
(U.S. dollars in thousands)
|
Amount of
Unrealized Loss
|
|
Fair Value of
Securities in an
Unrealized Loss
Position
|
||||
Less than 1 year remaining
|
$
|
(21,949
|
)
|
|
$
|
1,292,466
|
|
At least 1 year but less than 5 years remaining
|
(119,481
|
)
|
|
7,408,889
|
|
||
At least 5 years but less than 10 years remaining
|
(77,668
|
)
|
|
2,779,310
|
|
||
At least 10 years but less than 20 years remaining
|
(13,802
|
)
|
|
279,012
|
|
||
At least 20 years or more remaining
|
(30,258
|
)
|
|
311,674
|
|
||
RMBS – Agency
|
(17,561
|
)
|
|
1,286,266
|
|
||
RMBS – Non-Agency
|
(16,980
|
)
|
|
199,760
|
|
||
CMBS
|
(4,330
|
)
|
|
197,256
|
|
||
CDO
|
(9,273
|
)
|
|
32,407
|
|
||
Other asset-backed securities
|
(13,520
|
)
|
|
630,234
|
|
||
Total
|
$
|
(324,822
|
)
|
|
$
|
14,417,274
|
|
(U.S. dollars in thousands)
|
Total Assets and Liabilities Carried
at Fair Value at December 31, 2015
|
|
Fair Value of Level 3 Assets and Liabilities
|
|
Level 3 Assets and Liabilities as a Percentage of Total Assets and Liabilities Carried at Fair Value, by Class
|
|||||
Assets
|
|
|
|
|
|
|||||
Fixed maturities, at fair value
|
|
|
|
|
|
|||||
U.S. Government and Government Agency-Related/Supported
|
$
|
5,065,637
|
|
|
$
|
45,063
|
|
|
0.9
|
%
|
Corporate - Financials
|
3,561,909
|
|
|
53,685
|
|
|
1.5
|
%
|
||
Corporate - Non-Financials
|
6,900,447
|
|
|
188
|
|
|
—
|
%
|
||
RMBS – Agency
|
3,757,971
|
|
|
3,077
|
|
|
0.1
|
%
|
||
RMBS – Non-Agency
|
328,540
|
|
|
—
|
|
|
—
|
%
|
||
CMBS
|
405,316
|
|
|
—
|
|
|
—
|
%
|
||
CDO
|
32,410
|
|
|
32,408
|
|
|
100.0
|
%
|
||
Other asset-backed securities
|
1,168,572
|
|
|
17,857
|
|
|
1.5
|
%
|
||
U.S. States and political subdivisions of the States
|
2,632,070
|
|
|
—
|
|
|
—
|
%
|
||
Non-U.S. Sovereign Government, Supranational and Government-Related
|
5,251,614
|
|
|
—
|
|
|
—
|
%
|
||
Total Fixed maturities, at fair value
|
$
|
29,104,486
|
|
|
$
|
152,278
|
|
|
0.5
|
%
|
Equity securities, at fair value
|
878,919
|
|
|
—
|
|
|
—
|
%
|
||
Short-term investments, at fair value
|
617,390
|
|
|
—
|
|
|
—
|
%
|
||
Total investments available for sale
|
$
|
30,600,795
|
|
|
$
|
152,278
|
|
|
0.5
|
%
|
Cash equivalents (1)
|
1,268,666
|
|
|
—
|
|
|
—
|
%
|
||
Other investments (2)
|
1,291,726
|
|
|
283,550
|
|
|
22.0
|
%
|
||
Other assets (3)
|
86,227
|
|
|
19,400
|
|
|
22.5
|
%
|
||
Total assets carried at fair value
|
$
|
33,247,414
|
|
|
$
|
455,228
|
|
|
1.4
|
%
|
(U.S. dollars in thousands)
|
Total Assets and Liabilities Carried
at Fair Value at December 31, 2015
|
|
Fair Value of Level 3 Assets and Liabilities
|
|
Level 3 Assets and Liabilities as a Percentage of Total Assets and Liabilities Carried at Fair Value, by Class
|
|||||
Liabilities
|
|
|
|
|
|
|||||
Financial instruments sold, but not yet purchased (4)
|
$
|
347
|
|
|
$
|
—
|
|
|
—
|
%
|
Other liabilities (5)
|
42,408
|
|
|
29,191
|
|
|
68.8
|
%
|
||
Total liabilities carried at fair value
|
$
|
42,755
|
|
|
$
|
29,191
|
|
|
68.3
|
%
|
(1)
|
Cash equivalents balances subject to fair value measurements include certificates of deposit and money market funds.
|
(2)
|
The other investments balances exclude certain structured transactions (for further information, see Item 8,
Note 8, "Other Investments
," to the Consolidated Financial Statements included herein) carried at amortized cost, which totaled
$141.3 million
at
December 31, 2015
.
|
(3)
|
Other assets include derivative instruments, reported on a gross basis.
|
(4)
|
Financial instruments sold, but not yet purchased, are included within "Payable for investments purchased" on the balance sheets.
|
(5)
|
Other liabilities include derivative instruments, reported on a gross basis.
|
(U.S. dollars in thousands)
|
Gross unpaid
losses and loss
expenses
|
|
Unpaid
losses and
loss expenses
recoverable
|
|
Net
unpaid losses
and loss
expenses
|
||||||
Balance at December 31, 2014
|
$
|
19,353,243
|
|
|
$
|
(3,411,526
|
)
|
|
$
|
15,941,717
|
|
Losses and loss expenses incurred
|
6,336,812
|
|
|
(1,570,612
|
)
|
|
4,766,200
|
|
|||
Losses and loss expenses paid/recovered
|
(6,504,955
|
)
|
|
1,130,423
|
|
|
(5,374,532
|
)
|
|||
Loss and loss expense reserves acquired
|
6,933,143
|
|
|
(1,493,267
|
)
|
|
5,439,876
|
|
|||
Foreign exchange and other
|
(678,499
|
)
|
|
96,077
|
|
|
(582,422
|
)
|
|||
Balance at December 31, 2015
|
$
|
25,439,744
|
|
|
$
|
(5,248,905
|
)
|
|
$
|
20,190,839
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Reinsurance balances receivable
|
$
|
439,934
|
|
|
$
|
153,613
|
|
Reinsurance recoverable on future policy benefits (excluding balances related to the GreyCastle Life Retro Arrangements and U.S. Term Life Retro Arrangements)
|
13,801
|
|
|
17,840
|
|
||
Reinsurance recoverable on unpaid losses and loss expenses
|
5,309,782
|
|
|
3,453,873
|
|
||
Bad debt reserve on unpaid losses and loss expenses recoverable and reinsurance balances receivable
|
(82,145
|
)
|
|
(64,439
|
)
|
||
Net paid and unpaid losses and loss expenses recoverable and reinsurance balances receivable
|
$
|
5,681,372
|
|
|
$
|
3,560,887
|
|
▪
|
sufficient capital to maintain our financial strength and credit ratings, as issued by several ratings agencies, at levels considered necessary by management to enable our key operating subsidiaries to compete;
|
▪
|
sufficient capital to enable our regulated subsidiaries to meet the regulatory capital levels required in the U.S., the U.K., Bermuda, Ireland, Switzerland, the Society of Lloyd's and other key markets;
|
▪
|
letters of credit and other forms of collateral that are required to be posted or deposited, as the case may be, by our operating subsidiaries that are "non-admitted" under U.S. state insurance regulations in order for the U.S. cedant to receive statutory credit for reinsurance. We also use letters of credit to support our operations at Lloyd's; and
|
▪
|
revolving credit facilities as a back-up for potential short-term liquidity needs.
|
▪
|
the credit available from banks may be reduced due to market conditions resulting in our need to pledge our investment portfolio to customers, which could result in a lower investment yield;
|
▪
|
we may be downgraded by one or more rating agencies, which could trigger an event of default under certain credit facilities and could materially and negatively impact our business, financial condition, results of operations and/or liquidity; and
|
▪
|
the volume of business that our subsidiaries that are non-admitted in the U.S. are able to transact could be reduced if we are unable to obtain letter of credit facilities at an appropriate amount.
|
▪
|
Consolidation within the banking industry may result in the aggregate amount of credit provided to us being reduced. We attempt to mitigate this risk by identifying and/or selecting additional banks that can participate in the credit facilities in order to diversify the banks that are party to our credit facilities. See Item 1A, "Risk Factors."
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Non-controlling interests - Series D preference ordinary shares in XL-Cayman
|
$
|
345,000
|
|
|
$
|
345,000
|
|
Non-controlling interests - Series E preference ordinary shares in XL-Cayman
|
999,500
|
|
|
999,500
|
|
||
Non-controlling interests - non-controlling preference shares of Catlin Insurance Company Ltd. ("Catlin-Bermuda")
|
562,285
|
|
|
—
|
|
||
Non-controlling interests - Other
|
70,599
|
|
|
57,515
|
|
||
Ordinary share capital
|
11,677,079
|
|
|
10,033,751
|
|
||
Total ordinary shares and non-controlling interests
|
$
|
13,654,463
|
|
|
$
|
11,435,766
|
|
Notes payable and debt
|
2,644,970
|
|
|
1,662,580
|
|
||
Total
|
$
|
16,299,433
|
|
|
$
|
13,098,346
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Ordinary shareholders’ equity – beginning of period
|
$
|
10,033,751
|
|
|
$
|
9,997,633
|
|
Net income (loss) attributable to ordinary shareholders
|
1,207,152
|
|
|
188,340
|
|
||
Share buybacks
|
(468,971
|
)
|
|
(801,953
|
)
|
||
Share issues
|
1,861,538
|
|
|
6,406
|
|
||
Ordinary share dividends
|
(211,814
|
)
|
|
(172,080
|
)
|
||
Change in accumulated other comprehensive income
|
(797,842
|
)
|
|
747,801
|
|
||
Share based compensation and other
|
53,265
|
|
|
67,604
|
|
||
Ordinary shareholders’ equity – end of period
|
$
|
11,677,079
|
|
|
$
|
10,033,751
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
(U.S. dollars in thousands)
|
Commitment/
Debt (1)
|
|
In Use/
Outstanding (2)
|
|
Year of
Expiry
|
|
Less than
1 Year
|
|
1 to 3
Years
|
|
3 to 5
Years
|
|
After 5
Years
|
||||||||||||
2.30% Senior Notes
|
300,000
|
|
|
298,015
|
|
|
2018
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
||||||
5.75% Senior Notes
|
400,000
|
|
|
397,523
|
|
|
2021
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
||||||
6.375% Senior Notes
|
350,000
|
|
|
349,029
|
|
|
2024
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
||||||
4.45% Subordinated Notes
|
500,000
|
|
|
492,521
|
|
|
2025
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
||||||
6.25% Senior Notes
|
325,000
|
|
|
323,218
|
|
|
2027
|
|
—
|
|
|
—
|
|
|
—
|
|
|
325,000
|
|
||||||
5.25% Senior Notes
|
300,000
|
|
|
296,294
|
|
|
2043
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||
5.5% Subordinated Notes
|
500,000
|
|
|
488,370
|
|
|
2045
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
||||||
|
$
|
2,675,000
|
|
|
$
|
2,644,970
|
|
|
|
|
$
|
—
|
|
|
$
|
300,000
|
|
|
$
|
—
|
|
|
$
|
2,375,000
|
|
▪
|
$300 million senior notes due December 2018, with a fixed coupon of 2.30%. The notes are listed on the New York Stock Exchange. The notes were issued at 99.69% and net proceeds were $296.6 million. Related expenses of the offering amounted to $2.5 million.
|
▪
|
$400 million senior notes due October 2021, with a fixed coupon of 5.75%. The notes are listed on the New York Stock Exchange. The notes were issued at 100.0% and net proceeds were $395.7 million. Related expenses of the offering amounted to $4.3 million.
|
▪
|
$350 million senior notes due November 2024, with a fixed coupon of 6.375%. The notes were issued at 100.0% and net proceeds were $347.8 million. Related expenses of the offering amounted to $2.2 million.
|
▪
|
$500 million subordinated notes due March 2025, with a fixed coupon of 4.45%. The notes are listed on the New York Stock Exchange. The notes were issued at
99.633%
of the face amount and net proceeds were
$492.2 million
. Related expenses of the offering amounted to
$5.9 million
.
|
▪
|
$325 million of senior notes due May 2027, with a fixed coupon of 6.25%. The notes were issued at 99.805% and net proceeds were $321.9 million. Related expenses of the offering amounted to $2.5 million.
|
▪
|
$300 million senior notes due December 2043, with a fixed coupon of 5.25%. The notes are listed on the New York Stock Exchange. The notes were issued at 99.77% and net proceeds were $296.0 million. Related expenses of the offering amounted to $3.3 million.
|
▪
|
$500 million subordinated notes due March 2045, with a fixed coupon of 5.5%. The notes are listed on the New York Stock Exchange. The notes were issued at
99.115%
of the face amount and net proceeds were
$488.4 million
. Related expenses of the offering amounted to
$7.2 million
.
|
|
|
|
|
|
|
|
Amount of Commitment Expiration by Period (1)
|
||||||||||||||||||
(U.S. dollars in thousands)
|
Commitment/
Debt |
|
In Use/
Outstanding |
|
Year of
Expiry |
|
Less than
1 Year |
|
1 to 3
Years |
|
3 to 5
Years |
|
After 5
Years |
||||||||||||
Syndicated Unsecured Facility (2)
|
$
|
1,000,000
|
|
|
$
|
182,105
|
|
|
2018
|
|
$
|
—
|
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Syndicated Secured Facility (2)
|
1,000,000
|
|
|
665,215
|
|
|
2018
|
|
—
|
|
|
1,000,000
|
|
|
—
|
|
|
—
|
|
||||||
Citi E.U. Facility
|
600,000
|
|
|
105,613
|
|
|
Continuous
|
|
—
|
|
|
—
|
|
|
—
|
|
|
600,000
|
|
||||||
London Market Facility
|
250,000
|
|
|
131,261
|
|
|
Continuous
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
||||||
2015 Citi Facility
|
250,000
|
|
|
245,000
|
|
|
2017
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
||||||
Goldman Facility
|
200,000
|
|
|
200,000
|
|
|
2017
|
|
—
|
|
|
200,000
|
|
|
—
|
|
|
—
|
|
||||||
2013 Citi Facility
|
100,000
|
|
|
100,000
|
|
|
2016
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ING Facility
|
150,000
|
|
|
47,000
|
|
|
Continuous
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||||
FAL Facility I
|
125,000
|
|
|
$
|
125,000
|
|
|
2019
|
|
—
|
|
|
—
|
|
|
$
|
125,000
|
|
|
$
|
—
|
|
|||
FAL Facility II
|
125,000
|
|
|
$
|
125,000
|
|
|
2019
|
|
—
|
|
|
—
|
|
|
$
|
125,000
|
|
|
$
|
—
|
|
|||
FAL Facility III
|
125,000
|
|
|
$
|
125,000
|
|
|
2019
|
|
—
|
|
|
—
|
|
|
$
|
125,000
|
|
|
$
|
—
|
|
|||
FAL Facility IV
|
125,000
|
|
|
$
|
125,000
|
|
|
2019
|
|
—
|
|
|
—
|
|
|
$
|
125,000
|
|
|
$
|
—
|
|
|||
CICL Facility
|
230,000
|
|
|
157,149
|
|
|
Continuous
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230,000
|
|
||||||
CRCH Facility
|
175,000
|
|
|
174,269
|
|
|
Continuous
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175,000
|
|
||||||
Syndicate 2003 Facility
|
8,041
|
|
|
8,041
|
|
|
Continuous
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total credit facilities (3)
|
$
|
4,463,041
|
|
|
$
|
2,515,653
|
|
|
|
|
$
|
100,000
|
|
|
$
|
2,450,000
|
|
|
$
|
500,000
|
|
|
$
|
1,405,000
|
|
(1)
|
Terms used in this table are defined in the discussion below.
|
(2)
|
We have the option to increase the size of the facilities under the Syndicated Credit Agreements by an additional $500 million across both such facilities.
|
(3)
|
As of December 31, 2015, the portion of the total credit facilities allowable to be utilized for revolving loans was
$1.4 billion
. However,
$527.1 million
of this allowable portion was utilized to issue letters of credit, leaving
$822.9 million
available either to issue additional letters of credit or to support other operating or financing needs under these particular facilities.
|
•
|
A bilateral facility pursuant to a continuous credit agreement, available for utilization by Catlin-Bermuda, collateralized by pledged financial assets (the "CICL Facility"). As of
December 31, 2015
, $230 million of capacity was available under this facility.
|
•
|
A bilateral facility pursuant to a continuous credit agreement, available for utilization by Catlin Re Switzerland Ltd ("CRCH"), collateralized by pledged financial assets (the "CRCH Facility"). As of
December 31, 2015
, $175 million of capacity was available under this facility.
|
•
|
A facility managed by Lloyd's, acting for Catlin Syndicate 2003 (the "Syndicate 2003 Facility"). As of
December 31, 2015
,
$8 million
of letters of credit were issued under this facility.
|
▪
|
engage in mergers or consolidations;
|
▪
|
dispose of assets outside of the ordinary course of business;
|
▪
|
create liens on assets; and
|
▪
|
engage in certain transactions with affiliates.
|
|
|
Covenant Requirement
|
|
Actual Ratio or
Balance
|
|
Margin of
Compliance at
December 31, 2015
|
Ratio of Total Funded Debt to Total Capitalization (1)
|
|
Not greater than 0.35 : 100
|
|
0.17 : 1.00
|
|
$4.3 billion
|
Maximum Secured Indebtedness (2)
|
|
Not greater than 20% of consolidated net worth
|
|
Nil
|
|
$2.6 billion
|
Syndicated Credit Agreements - Consolidated Net Worth (3)
|
|
$7.1 billion
|
|
$13.0 billion
|
|
$5.9 billion
|
FAL Facilities - Consolidated Net Worth (4)
|
|
$8.0 billion
|
|
$14.0 billion
|
|
$6.0 billion
|
Financial Strength Ratings (5)
|
|
A– or better from A.M. Best
|
|
A (Stable)
|
|
Two notches
|
(1)
|
This ratio is defined as total funded debt to the sum of total funded debt plus consolidated net worth.
|
(2)
|
Secured indebtedness excludes secured letter of credit facilities as permitted under the schedules to the credit facilities. At
December 31, 2015
, such secured letter of credit facilities amounted to
$1.28 billion
.
|
(3)
|
Consolidated Net Worth means, at any time, our consolidated shareholders’ equity excluding (a) the effect of any adjustments required under the authoritative accounting guidance for accounting for certain investments in debt and equity securities; and (b) any exempt indebtedness (and the assets relating thereto) in the event such exempt indebtedness is consolidated on our consolidated balance sheet.
|
(4)
|
Consolidated Net Worth means total shareholders' equity (a) minus Exempt indebtedness (and the assets relating thereto) in the event such Exempt Indebtedness is consolidated on our consolidated balance sheets in accordance with GAAP, (b) plus the amounts recorded on our consolidated balance sheets in respect of Hybrid Capital and (c) without giving effect to the impact (positive or negative) of accumulated other comprehensive income/(loss) reflected on our consolidated balance sheets.
|
(5)
|
Covenants require that none of XL Insurance (Bermuda) Ltd, XL Re Ltd or XL Re Europe SE has a financial strength rating of less than "A –" from A.M. Best. At
December 31, 2015
, we were in compliance with such covenants.
|
Contractual Obligations
(U.S. dollars in thousands)
|
Total
|
|
Less than
1 year
|
|
1 to 3
years
|
|
3 to 5
years
|
|
More than
5 years
|
||||||||||
Long-term debt obligations
|
$
|
2,675,000
|
|
|
$
|
—
|
|
|
$
|
300,000
|
|
|
$
|
—
|
|
|
$
|
2,375,000
|
|
Interest on long-term debt
|
2,061,613
|
|
|
139,376
|
|
|
278,449
|
|
|
264,241
|
|
|
1,379,547
|
|
|||||
Operating lease obligations
|
417,524
|
|
|
69,256
|
|
|
118,639
|
|
|
97,803
|
|
|
131,826
|
|
|||||
Capital lease obligations
|
171,642
|
|
|
11,870
|
|
|
24,638
|
|
|
25,886
|
|
|
109,248
|
|
|||||
Deposit liabilities (1)
|
1,803,919
|
|
|
82,174
|
|
|
284,708
|
|
|
303,678
|
|
|
1,133,359
|
|
|||||
Future policy benefits (2)
|
5,575,326
|
|
|
360,703
|
|
|
694,708
|
|
|
673,487
|
|
|
3,846,428
|
|
|||||
Unpaid losses and loss expenses – P&C (3)
|
25,316,130
|
|
|
6,707,683
|
|
|
7,946,044
|
|
|
4,132,194
|
|
|
6,530,209
|
|
|||||
Total
|
$
|
38,021,154
|
|
|
$
|
7,371,062
|
|
|
$
|
9,647,186
|
|
|
$
|
5,497,289
|
|
|
$
|
15,505,617
|
|
(1)
|
Deposit liabilities were
$1.2 billion
on our Consolidated Balance Sheet at
December 31, 2015
. The difference from the amount included above relates to the discount on payments due in the future. The payment related to these liabilities varies primarily based on interest rates. The ultimate payments associated with these liabilities could differ from our estimate. See Item 8,
Note 12, "Deposit Liabilities
," to the Consolidated Financial Statements included herein, for further information.
|
(2)
|
Future policy benefit reserves related to Run-Off Life Operations were
$4.2 billion
on our Consolidated Balance Sheet at
December 31, 2015
. Amounts reflected above include an allowance for future premiums in respect of contracts under which premiums are payable throughout the life of the underlying policy. The value of the discount is also included for those lines of business that have reserves where future claim payments and future premium receipts can be estimated using actuarial principles. The timing and amounts of actual claims payments and premium receipts related to these reserves vary based on the underlying experience of the portfolio. Typical elements of the experience include mortality, morbidity and persistency. The ultimate amount of the claims payments and premium receipts could differ materially from our estimated amounts.
|
(3)
|
The unpaid loss and loss expenses were
$25.4 billion
on our Consolidated Balance Sheet at
December 31, 2015
. The difference from the amount included above relates to the discount on payments due in the future for certain workers' compensation lines and certain U.K. motor liability claims. The timing and amounts of actual claims payments related to these P&C reserves vary based on many factors including large individual losses, changes in the legal environment, as well as general market conditions. The ultimate amount of the claims payments could differ materially from our estimated amounts. For information regarding the estimates for unpaid loss and loss expenses as well as factors affecting potential payment patterns of reserves for actual and potential claims related to our different lines of business, see "Critical Accounting Policies and Estimates" above. Certain lines of business written by us, such as excess casualty, have loss experience characterized as low frequency and high severity. This may result in significant variability in loss payment patterns and, therefore, may impact the related asset/liability investment management process. In order to be in a position, if necessary, to make these payments, our liquidity requirements are supported by having revolving lines of credit facilities available to us and significant reinsurance programs, in addition to our general high grade fixed income investment portfolio.
|
ITEM 7A.
|
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
(Foreign Currency in Millions)
|
2015
|
|
2014
|
||
Euro
|
25.6
|
|
|
129.7
|
|
U.K. Sterling
|
(34.6
|
)
|
|
139.4
|
|
Swiss Franc
|
(11.5
|
)
|
|
155.7
|
|
Canadian Dollar
|
293.9
|
|
|
190.4
|
|
Top 5 Sector Exposures (1)
(U.S. dollars in millions)
|
|
Carrying Value
|
|
Percentage of
Aggregate
Fixed Income
Portfolio
|
|||
Financials (2)
|
|
$
|
3,592.1
|
|
|
11.4
|
%
|
Consumer, non-Cyclical
|
|
1,907.9
|
|
|
6.0
|
%
|
|
Industrial
|
|
912.2
|
|
|
2.9
|
%
|
|
Consumer, Cyclical
|
|
889.5
|
|
|
2.8
|
%
|
|
Energy
|
|
865.3
|
|
|
2.7
|
%
|
|
Total
|
|
$
|
8,167.0
|
|
|
25.8
|
%
|
(1)
|
Excludes Life Funds Withheld Assets.
|
(2)
|
Government-guaranteed securities and Covered Bonds, which are senior debt instruments issued by financial institutions and backed by over-collateralized pools of public sector or mortgage loans, have been excluded from the above figures.
|
Top 10 Corporate Financial Holdings (1)(2)
|
|
Percentage of Aggregate
Fixed Income Portfolio
|
WELLS FARGO & COMPANY
|
|
0.6%
|
THE GOLDMAN SACHS GROUP, INC.
|
|
0.6%
|
JPMORGAN CHASE & CO.
|
|
0.6%
|
HSBC HOLDINGS PLC
|
|
0.5%
|
BANK OF AMERICA CORPORATION
|
|
0.5%
|
THE PNC FINANCIAL SERVICES GROUP, INC.
|
|
0.4%
|
UBS GROUP AG
|
|
0.4%
|
WESTPAC BANKING CORPORATION
|
|
0.4%
|
THE TORONTO-DOMINION BANK
|
|
0.4%
|
COMMONWEALTH BANK OF AUSTRALIA
|
|
0.4%
|
(1)
|
Corporate issuers include Covered Bonds.
|
(2)
|
Excludes Life Funds Withheld Assets.
|
(U.S. dollars in millions)
|
Carrying Value (1)
|
|
Percentage of
Structured Portfolio
|
|||
RMBS - Agency
|
$
|
3,758.0
|
|
|
66.0
|
%
|
RMBS - Non-Agency
|
328.5
|
|
|
5.8
|
%
|
|
CMBS
|
405.3
|
|
|
7.2
|
%
|
|
Core CDOs (non-ABS CDOs and CLOs)
|
32.4
|
|
|
0.6
|
%
|
|
Other ABS (2)
|
1,168.6
|
|
|
20.4
|
%
|
|
Total
|
$
|
5,692.8
|
|
|
100.0
|
%
|
(1)
|
Excludes Life Funds Withheld Assets
|
(2)
|
Includes Covered Bonds.
|
(U.S. dollars in millions)
|
Interest Rate Risk (1)
|
|
Equity Risk (2)
|
|
Absolute Spread Risk (3)
|
|
Relative Spread Risk (4)
|
|
VaR (5) (6)
|
||||||||||
Total Investment Portfolio (7)
|
$
|
(1,127.5
|
)
|
|
$
|
(239.6
|
)
|
|
$
|
(972.6
|
)
|
|
$
|
(91.5
|
)
|
|
$
|
935.2
|
|
(I) Fixed Income Portfolio
|
(1,123.1
|
)
|
|
—
|
|
|
(968.1
|
)
|
|
(90.6
|
)
|
|
926.5
|
|
|||||
(a) Cash & Short Term Investments
|
(10.4
|
)
|
|
—
|
|
|
(3.3
|
)
|
|
(0.1
|
)
|
|
4.7
|
|
|||||
(b) Total Government Related
|
(539.0
|
)
|
|
—
|
|
|
(302.3
|
)
|
|
(26.6
|
)
|
|
412.0
|
|
|||||
(c) Total Corporate Credit
|
(360.7
|
)
|
|
—
|
|
|
(409.8
|
)
|
|
(45.9
|
)
|
|
351.3
|
|
|||||
(d) Total Structured Credit
|
(213.0
|
)
|
|
—
|
|
|
(252.7
|
)
|
|
(17.9
|
)
|
|
176.7
|
|
|||||
(II) Non-Fixed Income Portfolio
|
—
|
|
|
(239.6
|
)
|
|
—
|
|
|
—
|
|
|
360.7
|
|
|||||
(e) Equity Portfolio
|
—
|
|
|
(90.0
|
)
|
|
—
|
|
|
—
|
|
|
222.0
|
|
|||||
(f) Hedge Fund Portfolio
|
—
|
|
|
(69.2
|
)
|
|
—
|
|
|
—
|
|
|
127.2
|
|
|||||
(g) Private Investment Fund Portfolio
|
—
|
|
|
(80.4
|
)
|
|
—
|
|
|
—
|
|
|
58.7
|
|
(1)
|
The estimated impact on the fair value of our fixed income portfolio of an immediate hypothetical +100 bps adverse parallel shift in global bond curves.
|
(2)
|
The estimated impact on the fair value of our investment portfolio of an immediate hypothetical -10% change in the value of equity exposures in our equity portfolio, certain equity-sensitive hedge fund investments and private equity investments. This includes our estimate of equity risk embedded in the hedge fund and private investment fund portfolio with such estimates utilizing market exposures provided to us by certain individual fund investments, internal statistical analyses, and/or various assumptions regarding illiquidity and concentrations.
|
(3)
|
The estimated impact on the fair value of our fixed income portfolio of an immediate hypothetical +100 basis point increase in all global government related, corporate and structured security spreads to which our fixed income portfolio is exposed. This excludes exposure to credit spreads in our hedge fund, private investment funds and counterparty exposure.
|
(4)
|
The estimated impact on the fair value of our fixed income portfolio of an immediate hypothetical +10% increase in all global government related, corporate and structured security spreads to which our fixed income portfolio is exposed. This excludes exposure to credit spreads in our hedge fund, private investment funds and counterparty exposure.
|
(5)
|
The VaR results are based on a 95% confidence interval, with a one-year holding period, excluding foreign exchange rate risk. Our investment portfolio VaR at
December 31, 2015
is not necessarily indicative of future VaR levels as these are based on statistical estimates of possible price changes and, therefore, exclude other sources of investment return such as coupon and dividend income.
|
(6)
|
The VaR results are the standalone VaRs, based on the prescribed methodology, for each component of our Total Investment Portfolio. The standalone VaRs of the individual components are non-additive, with the difference between the summation of the individual component VaRs and their respective aggregations being due to diversification benefits across the individual components. In the case of the VaR results for our Total Investment Portfolio, the results also include the impact associated with our Business and other investments.
|
(7)
|
Our Total Investment Portfolio also includes our Business and other investments that do not form part of our Fixed Income Portfolio or Non-Fixed Income Portfolio. The individual results reported in the above table for our Total Investment Portfolio therefore represent the aggregate impact on our Fixed Income Portfolio, Non-Fixed Income Portfolio and the majority of our other investments.
|
ITEM 8.
|
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Index to Consolidated Financial Statements
|
Page
|
Consolidated Balance Sheets at December 31, 2015 and 2014
|
|
Consolidated Statements of Income for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
|
|
Notes to Consolidated Financial Statements for the years ended December 31, 2015, 2014 and 2013
|
(U.S. dollars in thousands, except share data)
|
2015
|
|
2014
|
||||
ASSETS
|
|||||||
Investments:
|
|
|
|
||||
Fixed maturities, at fair value (amortized cost: 2015, $31,517,654; 2014, $27,728,771)
|
$
|
32,257,589
|
|
|
$
|
29,359,034
|
|
Equity securities, at fair value (cost: 2015, $834,079; 2014, $763,833)
|
878,919
|
|
|
868,292
|
|
||
Short-term investments, at fair value (amortized cost: 2015, $618,851; 2014, $257,221)
|
617,390
|
|
|
256,727
|
|
||
Total investments available for sale
|
$
|
33,753,898
|
|
|
$
|
30,484,053
|
|
Fixed maturities, at fair value (amortized cost: 2015, $1,263,609; 2014, $1,180)
|
1,235,699
|
|
|
1,171
|
|
||
Short-term investments, at fair value (amortized cost: 2015, $60,176; 2014, nil)
|
60,330
|
|
|
—
|
|
||
Total investments trading
|
$
|
1,296,029
|
|
|
$
|
1,171
|
|
Investments in affiliates
|
1,708,899
|
|
|
1,637,620
|
|
||
Other investments
|
1,433,057
|
|
|
1,248,439
|
|
||
Total investments
|
$
|
38,191,883
|
|
|
$
|
33,371,283
|
|
Cash and cash equivalents
|
3,256,236
|
|
|
2,521,814
|
|
||
Restricted cash
|
154,992
|
|
|
—
|
|
||
Accrued investment income
|
312,667
|
|
|
315,964
|
|
||
Deferred acquisition costs and value of business acquired
|
890,568
|
|
|
354,533
|
|
||
Ceded unearned premiums
|
1,821,793
|
|
|
952,525
|
|
||
Premiums receivable
|
4,712,493
|
|
|
2,473,736
|
|
||
Reinsurance balances receivable
|
418,666
|
|
|
131,519
|
|
||
Unpaid losses and loss expenses recoverable
|
5,262,706
|
|
|
3,429,368
|
|
||
Receivable from investments sold
|
231,158
|
|
|
92,762
|
|
||
Goodwill and other intangible assets
|
2,210,266
|
|
|
447,952
|
|
||
Deferred tax asset
|
282,311
|
|
|
204,491
|
|
||
Other assets
|
937,199
|
|
|
750,872
|
|
||
Total assets
|
$
|
58,682,938
|
|
|
$
|
45,046,819
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Liabilities:
|
|
|
|
||||
Unpaid losses and loss expenses
|
$
|
25,439,744
|
|
|
$
|
19,353,243
|
|
Deposit liabilities
|
1,168,376
|
|
|
1,245,367
|
|
||
Future policy benefit reserves
|
4,163,500
|
|
|
4,707,199
|
|
||
Funds withheld on GreyCastle life retrocession arrangements (net of future policy benefit reserves recoverable: 2015, $3,719,131; 2014, $4,265,678)
|
914,629
|
|
|
1,155,016
|
|
||
Unearned premiums
|
7,043,358
|
|
|
3,973,132
|
|
||
Notes payable and debt
|
2,644,970
|
|
|
1,662,580
|
|
||
Reinsurance balances payable
|
2,117,727
|
|
|
493,230
|
|
||
Payable for investments purchased
|
130,060
|
|
|
42,291
|
|
||
Deferred tax liability
|
120,651
|
|
|
66,246
|
|
||
Other liabilities
|
1,285,460
|
|
|
912,749
|
|
||
Total liabilities
|
$
|
45,028,475
|
|
|
$
|
33,611,053
|
|
Commitments and Contingencies
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
||||
Ordinary shares, 999,990,000 authorized, par value $0.01; issued and outstanding (2015, 294,745,045; 2014, 255,182,955)
|
$
|
2,947
|
|
|
$
|
2,552
|
|
Additional paid in capital
|
8,910,167
|
|
|
7,359,102
|
|
||
Accumulated other comprehensive income
|
686,616
|
|
|
1,484,458
|
|
||
Retained earnings
|
2,077,349
|
|
|
1,187,639
|
|
||
Shareholders’ equity attributable to XL Group plc
|
$
|
11,677,079
|
|
|
$
|
10,033,751
|
|
Non-controlling interest in equity of consolidated subsidiaries
|
1,977,384
|
|
|
1,402,015
|
|
||
Total shareholders’ equity
|
$
|
13,654,463
|
|
|
$
|
11,435,766
|
|
Total liabilities and shareholders’ equity
|
$
|
58,682,938
|
|
|
$
|
45,046,819
|
|
(U.S. dollars in thousands, except per share data)
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
8,226,425
|
|
|
$
|
5,895,070
|
|
|
$
|
6,309,521
|
|
Net investment income:
|
|
|
|
|
|
||||||
Net investment income - excluding Life Funds Withheld Assets
|
684,881
|
|
|
789,050
|
|
|
957,716
|
|
|||
Net investment income - Life Funds Withheld Assets
|
187,489
|
|
|
129,575
|
|
|
—
|
|
|||
Total net investment income
|
$
|
872,370
|
|
|
$
|
918,625
|
|
|
$
|
957,716
|
|
Realized investment gains (losses):
|
|
|
|
|
|
||||||
Net realized gains (losses) on investments sold - excluding Life Funds Withheld Assets
|
$
|
102,957
|
|
|
$
|
158,733
|
|
|
$
|
104,076
|
|
Other-than-temporary impairments ("OTTI") on investments - excluding Life Funds Withheld Assets
|
(81,987
|
)
|
|
(33,508
|
)
|
|
(10,266
|
)
|
|||
OTTI on investments transferred to (from) other comprehensive income - excluding Life Funds Withheld Assets
|
(973
|
)
|
|
(2,234
|
)
|
|
(6,033
|
)
|
|||
Net realized gains (losses) on investments sold - Life Funds Withheld Assets
|
223,272
|
|
|
5,067
|
|
|
—
|
|
|||
OTTI on investments - Life Funds Withheld Assets
|
(13,357
|
)
|
|
(20,587
|
)
|
|
—
|
|
|||
Net unrealized gains (losses) on investments, trading securities ("Trading") - Life Funds Withheld Assets
|
(27,734
|
)
|
|
(9
|
)
|
|
—
|
|
|||
Total net realized gains (losses) on investments, and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets
|
$
|
202,178
|
|
|
$
|
107,462
|
|
|
$
|
87,777
|
|
Net realized and unrealized gains (losses) on derivative instruments
|
53,123
|
|
|
29,886
|
|
|
7,798
|
|
|||
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
(151,691
|
)
|
|
(488,222
|
)
|
|
—
|
|
|||
Income (loss) from investment fund affiliates
|
73,320
|
|
|
95,816
|
|
|
138,391
|
|
|||
Fee income and other
|
33,201
|
|
|
43,630
|
|
|
40,031
|
|
|||
Total revenues
|
$
|
9,308,926
|
|
|
$
|
6,602,267
|
|
|
$
|
7,541,234
|
|
Expenses:
|
|
|
|
|
|
||||||
Net losses and loss expenses incurred
|
$
|
4,766,200
|
|
|
$
|
3,258,393
|
|
|
$
|
3,731,464
|
|
Claims and policy benefits
|
115,997
|
|
|
242,963
|
|
|
465,702
|
|
|||
Acquisition costs
|
1,317,448
|
|
|
738,118
|
|
|
909,323
|
|
|||
Operating expenses
|
1,966,939
|
|
|
1,341,315
|
|
|
1,213,178
|
|
|||
Foreign exchange (gains) losses
|
22,504
|
|
|
(37,568
|
)
|
|
(28,243
|
)
|
|||
Loss on sale of life reinsurance subsidiary
|
—
|
|
|
666,423
|
|
|
—
|
|
|||
Extinguishment of debt
|
5,592
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
205,215
|
|
|
134,106
|
|
|
155,462
|
|
|||
Total expenses
|
$
|
8,399,895
|
|
|
$
|
6,343,750
|
|
|
$
|
6,446,886
|
|
Income (loss) before income tax and income (loss) from operating affiliates
|
909,031
|
|
|
258,517
|
|
|
1,094,348
|
|
|||
Income (loss) from operating affiliates
|
44,740
|
|
|
107,218
|
|
|
119,804
|
|
|||
Gain on sale of operating affiliate
|
340,407
|
|
|
—
|
|
|
—
|
|
|||
Provision (benefit) for income tax
|
(19,161
|
)
|
|
96,897
|
|
|
77,505
|
|
|||
Net income (loss)
|
$
|
1,313,339
|
|
|
$
|
268,838
|
|
|
$
|
1,136,647
|
|
Non-controlling interests
|
106,187
|
|
|
80,498
|
|
|
76,731
|
|
|||
Net income (loss) attributable to ordinary shareholders
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
Weighted average ordinary shares and ordinary share equivalents outstanding, in thousands – basic
|
286,194
|
|
|
267,103
|
|
|
287,801
|
|
|||
Weighted average ordinary shares and ordinary share equivalents outstanding, in thousands – diluted
|
290,999
|
|
|
271,527
|
|
|
292,069
|
|
|||
Earnings (loss) per ordinary share and ordinary share equivalent – basic
|
$
|
4.22
|
|
|
$
|
0.71
|
|
|
$
|
3.68
|
|
Earnings (loss) per ordinary share and ordinary share equivalent – diluted
|
$
|
4.15
|
|
|
$
|
0.69
|
|
|
$
|
3.63
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss) attributable to ordinary shareholders
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
Change in net unrealized gains (losses) on investments - excluding Life Funds Withheld Assets, net of tax
|
(530,030
|
)
|
|
434,051
|
|
|
(750,755
|
)
|
|||
Unrealized gains on held to maturity investment portfolio at time of transfer to available for sale, net of tax
|
—
|
|
|
424,861
|
|
|
—
|
|
|||
Change in adjustments related to future policy benefit reserves, net of tax
|
170,688
|
|
|
(400,456
|
)
|
|
(44,660
|
)
|
|||
Change in net unrealized gains (losses) on investments - Life Funds Withheld Assets, net of tax
|
(421,604
|
)
|
|
274,083
|
|
|
—
|
|
|||
Change in net unrealized gains (losses) on affiliate and other investments, net of tax
|
(6,074
|
)
|
|
35,143
|
|
|
26,637
|
|
|||
Change in OTTI losses recognized in other comprehensive income, net of tax
|
18,545
|
|
|
13,143
|
|
|
32,181
|
|
|||
Change in underfunded pension liability
|
(3,852
|
)
|
|
(7,550
|
)
|
|
7,653
|
|
|||
Change in value of cash flow hedge
|
(200
|
)
|
|
255
|
|
|
439
|
|
|||
Foreign currency translation adjustments
|
(25,315
|
)
|
|
(25,729
|
)
|
|
(54,858
|
)
|
|||
Comprehensive income (loss)
|
$
|
409,310
|
|
|
$
|
936,141
|
|
|
$
|
276,553
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Ordinary Shares:
|
|
|
|
|
|
||||||
Balance – beginning of year
|
$
|
2,552
|
|
|
$
|
2,783
|
|
|
$
|
2,987
|
|
Issuance of ordinary shares
|
515
|
|
|
12
|
|
|
13
|
|
|||
Buybacks of ordinary shares
|
(125
|
)
|
|
(247
|
)
|
|
(226
|
)
|
|||
Exercise of stock options
|
5
|
|
|
4
|
|
|
9
|
|
|||
Balance – end of year
|
$
|
2,947
|
|
|
$
|
2,552
|
|
|
$
|
2,783
|
|
Additional Paid in Capital:
|
|
|
|
|
|
||||||
Balance – beginning of year
|
$
|
7,359,102
|
|
|
$
|
7,994,100
|
|
|
$
|
8,584,752
|
|
Issuance of ordinary shares
|
1,851,046
|
|
|
27
|
|
|
29
|
|
|||
Buybacks of ordinary shares
|
(370,395
|
)
|
|
(708,993
|
)
|
|
(639,292
|
)
|
|||
Exercise of stock options
|
9,972
|
|
|
6,363
|
|
|
12,614
|
|
|||
Share-based compensation expense
|
60,442
|
|
|
67,605
|
|
|
35,997
|
|
|||
Balance – end of year
|
$
|
8,910,167
|
|
|
$
|
7,359,102
|
|
|
$
|
7,994,100
|
|
Accumulated Other Comprehensive Income (Loss):
|
|
|
|
|
|
||||||
Balance – beginning of year
|
$
|
1,484,458
|
|
|
$
|
736,657
|
|
|
$
|
1,520,020
|
|
Change in net unrealized gains (losses) on investments - excluding Life Funds Withheld Assets, net of tax
|
(530,030
|
)
|
|
434,051
|
|
|
(750,755
|
)
|
|||
Unrealized gains on held to maturity investment portfolio at time of transfer to available for sale, net of tax
|
—
|
|
|
424,861
|
|
|
—
|
|
|||
Change in adjustments related to future policy benefit reserves
|
170,688
|
|
|
(400,456
|
)
|
|
(44,660
|
)
|
|||
Change in net unrealized gains (losses) on investments - Life Funds Withheld Assets, net of tax
|
(421,604
|
)
|
|
274,083
|
|
|
—
|
|
|||
Change in net unrealized gains (losses) on affiliate and other investments, net of tax
|
(6,074
|
)
|
|
35,143
|
|
|
26,637
|
|
|||
Change in OTTI losses recognized in other comprehensive income, net of tax
|
18,545
|
|
|
13,143
|
|
|
32,181
|
|
|||
Change in underfunded pension liability
|
(3,852
|
)
|
|
(7,550
|
)
|
|
7,653
|
|
|||
Change in value of cash flow hedge
|
(200
|
)
|
|
255
|
|
|
439
|
|
|||
Foreign currency translation adjustments
|
(25,315
|
)
|
|
(25,729
|
)
|
|
(54,858
|
)
|
|||
Balance – end of year
|
$
|
686,616
|
|
|
$
|
1,484,458
|
|
|
$
|
736,657
|
|
Retained Earnings (Deficit):
|
|
|
|
|
|
||||||
Balance – beginning of year
|
$
|
1,187,639
|
|
|
$
|
1,264,093
|
|
|
$
|
402,319
|
|
Net income (loss) attributable to ordinary shareholders
|
1,207,152
|
|
|
188,340
|
|
|
1,059,916
|
|
|||
Dividends on ordinary shares
|
(211,814
|
)
|
|
(172,081
|
)
|
|
(162,044
|
)
|
|||
Buybacks of ordinary shares
|
(98,451
|
)
|
|
(92,713
|
)
|
|
(36,098
|
)
|
|||
Share based compensation
|
$
|
(7,177
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Balance – end of year
|
$
|
2,077,349
|
|
|
$
|
1,187,639
|
|
|
$
|
1,264,093
|
|
Non-controlling Interest in Equity of Consolidated Subsidiaries:
|
|
|
|
|
|
||||||
Balance – beginning of year
|
$
|
1,402,015
|
|
|
$
|
1,351,665
|
|
|
$
|
1,346,325
|
|
Non-controlling interests – contributions
|
23,610
|
|
|
48,261
|
|
|
7,747
|
|
|||
Non-controlling interests – distributions
|
(19,001
|
)
|
|
(1,666
|
)
|
|
(37
|
)
|
|||
Non-controlling interests - acquired
|
562,285
|
|
|
—
|
|
|
—
|
|
|||
Non-controlling interests
|
7,466
|
|
|
3,755
|
|
|
(500
|
)
|
|||
Non-controlling interest share in change in accumulated other comprehensive income (loss)
|
1,009
|
|
|
—
|
|
|
(29
|
)
|
|||
Non-controlling interests - deconsolidation
|
—
|
|
|
—
|
|
|
(1,841
|
)
|
|||
Balance – end of year
|
$
|
1,977,384
|
|
|
$
|
1,402,015
|
|
|
$
|
1,351,665
|
|
Total Shareholders’ Equity
|
$
|
13,654,463
|
|
|
$
|
11,435,766
|
|
|
$
|
11,349,298
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
1,313,339
|
|
|
$
|
268,838
|
|
|
$
|
1,136,647
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Total net realized (gains) losses on investments and net unrealized (gains) losses on investments, Trading - Life Funds Withheld Assets
|
(202,178
|
)
|
|
(107,462
|
)
|
|
(87,777
|
)
|
|||
Net realized and unrealized (gains) losses on derivative instruments
|
(53,123
|
)
|
|
(29,886
|
)
|
|
(7,798
|
)
|
|||
Net realized and unrealized (gains) losses on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
151,691
|
|
|
488,222
|
|
|
—
|
|
|||
Amortization of premiums (discounts) on fixed maturities
|
194,824
|
|
|
153,849
|
|
|
166,621
|
|
|||
(Income) loss from investment fund and operating affiliates
|
(46,072
|
)
|
|
(129,915
|
)
|
|
(229,386
|
)
|
|||
Loss on sale of life reinsurance subsidiary
|
—
|
|
|
666,423
|
|
|
—
|
|
|||
Gain on sale of operating affiliate
|
(340,407
|
)
|
|
—
|
|
|
—
|
|
|||
Share based compensation
|
74,431
|
|
|
81,287
|
|
|
46,489
|
|
|||
Depreciation and amortization
|
92,313
|
|
|
56,118
|
|
|
56,229
|
|
|||
Accretion of deposit liabilities
|
43,633
|
|
|
11,195
|
|
|
47,256
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Unpaid losses and loss expenses
|
(211,831
|
)
|
|
(427,528
|
)
|
|
(88,636
|
)
|
|||
Future policy benefit reserves
|
(278,818
|
)
|
|
(229,204
|
)
|
|
(164,923
|
)
|
|||
Funds withheld on life retrocession arrangements, net
|
(210,943
|
)
|
|
(218,144
|
)
|
|
—
|
|
|||
Unearned premiums
|
(528,214
|
)
|
|
253,396
|
|
|
65,279
|
|
|||
Premiums receivable
|
156,168
|
|
|
15,248
|
|
|
(27,334
|
)
|
|||
Unpaid losses and loss expenses recoverable
|
(439,548
|
)
|
|
(44,688
|
)
|
|
(36,897
|
)
|
|||
Ceded unearned premiums
|
237,017
|
|
|
(191,242
|
)
|
|
(196,674
|
)
|
|||
Reinsurance balances receivable
|
2,319
|
|
|
(17,736
|
)
|
|
(60,317
|
)
|
|||
Deferred acquisition costs and value of business acquired
|
126,455
|
|
|
303,998
|
|
|
8,532
|
|
|||
Reinsurance balances payable
|
229,205
|
|
|
160,916
|
|
|
161,132
|
|
|||
Deferred tax asset – net
|
(47,924
|
)
|
|
(33,735
|
)
|
|
(29,230
|
)
|
|||
Derivatives
|
185,300
|
|
|
42,187
|
|
|
(22,324
|
)
|
|||
Other assets
|
17,054
|
|
|
33,344
|
|
|
(26,945
|
)
|
|||
Other liabilities
|
123,897
|
|
|
(147,744
|
)
|
|
60,331
|
|
|||
Other
|
26,968
|
|
|
5,447
|
|
|
9,702
|
|
|||
Total adjustments
|
$
|
(697,783
|
)
|
|
$
|
694,346
|
|
|
$
|
(356,670
|
)
|
Net cash provided by (used in) operating activities
|
$
|
615,556
|
|
|
$
|
963,184
|
|
|
$
|
779,977
|
|
Cash flows provided by (used in) investing activities:
|
|
|
|
|
|
||||||
Proceeds from sale of fixed maturities and short-term investments
|
$
|
16,868,228
|
|
|
$
|
4,896,112
|
|
|
$
|
4,341,429
|
|
Proceeds from redemption of fixed maturities and short-term investments
|
3,751,174
|
|
|
3,601,793
|
|
|
4,008,333
|
|
|||
Proceeds from sale of equity securities
|
664,735
|
|
|
571,410
|
|
|
245,538
|
|
|||
Purchases of fixed maturities and short-term investments
|
(19,718,064
|
)
|
|
(7,158,258
|
)
|
|
(9,143,973
|
)
|
|||
Purchases of equity securities
|
(567,334
|
)
|
|
(445,504
|
)
|
|
(534,356
|
)
|
|||
Proceeds from sale of affiliates
|
188,023
|
|
|
240,785
|
|
|
190,954
|
|
|||
Purchases of affiliates
|
(280,856
|
)
|
|
(371,226
|
)
|
|
(353,678
|
)
|
|||
Purchase of Catlin Group Limited, net of acquired cash
|
(1,020,015
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of life reinsurance subsidiary
|
—
|
|
|
570,000
|
|
|
—
|
|
|||
Proceeds from sale of ARX Holding Corp.
|
560,552
|
|
|
—
|
|
|
—
|
|
|||
Change in restricted cash
|
(154,992
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(155,019
|
)
|
|
(193,491
|
)
|
|
47,891
|
|
|||
Net cash provided by (used in) investing activities
|
$
|
136,432
|
|
|
$
|
1,711,621
|
|
|
$
|
(1,197,862
|
)
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of ordinary shares and exercise of stock options
|
$
|
9,976
|
|
|
$
|
6,367
|
|
|
$
|
12,623
|
|
Buybacks of ordinary shares
|
(468,971
|
)
|
|
(801,953
|
)
|
|
(675,617
|
)
|
|||
Dividends paid on ordinary shares
|
(208,516
|
)
|
|
(169,620
|
)
|
|
(160,155
|
)
|
|||
Distributions to non-controlling interests
|
(117,683
|
)
|
|
(78,465
|
)
|
|
(77,670
|
)
|
|||
Contributions from non-controlling interests
|
23,610
|
|
|
48,261
|
|
|
7,747
|
|
|||
Proceeds from issuance of debt
|
980,600
|
|
|
—
|
|
|
592,615
|
|
|||
Repayment of debt
|
(87,447
|
)
|
|
(600,000
|
)
|
|
—
|
|
|||
Deposit liabilities
|
(84,758
|
)
|
|
(268,298
|
)
|
|
(94,386
|
)
|
|||
Net cash provided by (used in) financing activities
|
$
|
46,811
|
|
|
$
|
(1,863,708
|
)
|
|
$
|
(394,843
|
)
|
Effects of exchange rate changes on foreign currency cash
|
(64,377
|
)
|
|
(90,115
|
)
|
|
(4,818
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
734,422
|
|
|
$
|
720,982
|
|
|
$
|
(817,546
|
)
|
Cash and cash equivalents – beginning of period
|
2,521,814
|
|
|
1,800,832
|
|
|
2,618,378
|
|
|||
Cash and cash equivalents – end of period
|
$
|
3,256,236
|
|
|
$
|
2,521,814
|
|
|
$
|
1,800,832
|
|
|
|
|
|
|
|
||||||
Net taxes paid
|
$
|
96,886
|
|
|
$
|
20,168
|
|
|
$
|
96,469
|
|
Interest paid on notes payable and debt
|
$
|
115,598
|
|
|
$
|
121,285
|
|
|
$
|
97,125
|
|
▪
|
unpaid losses and loss expenses and unpaid losses and loss expenses recoverable;
|
▪
|
future policy benefit reserves;
|
▪
|
valuation and other-than-temporary impairments of investments;
|
▪
|
income taxes;
|
▪
|
reinsurance premium estimates; and
|
▪
|
carrying value of goodwill and intangible assets.
|
▪
|
Level 1
- Quoted prices in active markets for identical assets or liabilities (unadjusted); no blockage factors.
|
▪
|
Level 2
- Other observable inputs (quoted prices in markets that are not active or inputs that are observable either directly or indirectly)—include quoted prices for similar assets/liabilities (adjusted) other than quoted prices in Level 1; quoted prices in markets that are not active; or other inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.
|
▪
|
Level 3
- Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
(In thousands, except per share data)
|
|
||
Catlin Shares outstanding as of April 30, 2015 that received share consideration (including the dilutive effect of warrants)
|
384,118
|
|
|
Exchange ratio per the Implementation Agreement
|
0.130
|
||
XL Share issuance to Catlin shareholders
|
49,935
|
|
|
Closing price per XL share on April 30, 2015 (1)
|
$
|
37.08
|
|
XL Share issuance consideration
|
$
|
1,851,601
|
|
Catlin Shares outstanding as of April 30, 2015 that received cash consideration (including the dilutive effect of warrants)
|
384,118
|
|
|
Cash price component, per Catlin Share in GBP
|
£
|
3.88
|
|
Cash consideration, in GBP
|
£
|
1,490,377
|
|
Foreign exchange rate: GBP/USD on April 30, 2015
|
$
|
1.5349
|
|
Cash consideration
|
$
|
2,287,579
|
|
Total acquisition consideration
|
$
|
4,139,180
|
|
(1)
|
The closing market price of XL Shares on the Acquisition Date represents the fair value of XL shares issued as part of the Acquisition Consideration.
|
(U.S. dollars in thousands)
|
|
||
ASSETS
|
|||
Fixed maturities, at fair value
|
$
|
6,266,489
|
|
Short-term investments, at fair value
|
634,599
|
|
|
Equity investments, at fair value
|
236,230
|
|
|
Investment in affiliates
|
216,843
|
|
|
Other investments
|
386,828
|
|
|
Total investments
|
$
|
7,740,989
|
|
Cash and cash equivalents (1)
|
1,267,565
|
|
|
Accrued investment income
|
35,063
|
|
|
Premiums receivable
|
2,545,188
|
|
|
Unpaid losses and loss expenses recoverable
|
1,493,267
|
|
|
Reinsurance balances receivable
|
299,579
|
|
|
Ceded unearned premiums
|
1,143,852
|
|
|
Deferred acquisition costs and value of business acquired
|
679,259
|
|
|
Intangible assets
|
988,000
|
|
|
Receivable from investments sold
|
9,633
|
|
|
Other assets (2)
|
306,686
|
|
|
Total assets
|
$
|
16,509,081
|
|
|
|
||
LIABILITIES
|
|||
Unpaid losses and loss expenses
|
$
|
6,933,144
|
|
Unearned premiums
|
3,742,234
|
|
|
Reinsurance balances payable
|
1,441,749
|
|
|
Notes payable and debt
|
82,066
|
|
|
Payable for investments purchased
|
34,149
|
|
|
Deferred tax liability (2)
|
82,783
|
|
|
Other liabilities (2)
|
285,481
|
|
|
Total liabilities
|
$
|
12,601,606
|
|
Net assets acquired before non-controlling interest
|
$
|
3,907,475
|
|
Non-controlling interest in equity of consolidated subsidiaries
|
562,285
|
|
|
Net assets acquired
|
$
|
3,345,190
|
|
Acquisition consideration
|
$
|
4,139,180
|
|
Goodwill (2)
|
$
|
793,990
|
|
(2)
|
Includes an increase of
$15.9 million
to goodwill from the amount initially recorded at June 30, 2015, as a result of several tax-related adjustments, including a decrease in other assets of
$7.5 million
, a decrease in deferred tax liability of
$11.3 million
, and an increase in other liabilities of
$19.8 million
. See discussion of "Income Taxes" below for further information.
|
•
|
Deferred acquisition costs and value of business acquired - The adjustment consists of two components. The first adjustment is the elimination of Catlin's deferred acquisition costs asset. The second adjustment is the establishment of the value of business acquired asset, which represents the present value of the expected underwriting profit within the unearned premiums liability, net of reinsurance, less costs to service the related policies and a risk premium. This adjustment will be amortized to underwriting, acquisition and insurance expenses over approximately
two years
, as the contracts for business in-force as of the Acquisition Date expire. The Company has included
$471.0 million
in acquisition expenses related to the amortization of the value of business acquired during the
year ended December 31, 2015
.
|
•
|
Intangible assets - Establish the estimated fair value of intangible assets related to Catlin. See
Note 9, "Goodwill and Other Intangible Assets
," for further information.
|
•
|
Other assets - Establish the estimated fair value of Catlin's internally developed software.
|
•
|
Unpaid losses and loss adjustment expenses - Unpaid losses and loss adjustment expenses acquired include an increase to adjust the carrying value of Catlin's historical unpaid losses and loss adjustment expenses, net of related reinsurance recoverable, to fair value as of the Acquisition Date. The estimated fair value consists of the present value of the expected net loss and loss adjustment expense payments plus a risk premium. This adjustment will be amortized to losses and loss adjustment expenses over approximately
20 years
, based on the estimated payout pattern of net reserves as of the Acquisition Date.
|
•
|
Net deferred tax liabilities - The adjustment to deferred tax liabilities is related to the deferred tax impact of the adjustments to fair value as noted above. This net increase of deferred tax liabilities is explained further in "Income Taxes" below.
|
•
|
Non-controlling interest - The fair value was determined based on the last trade price of preferred shares issued by Catlin Insurance Company Limited ("Catlin-Bermuda"). See
Note 18, "Share Capital
," for further information.
|
(U.S. dollars in thousands)
|
Severance related costs
|
|
Retention and other compensation costs
|
|
Facilities-related costs
|
|
Consulting and other
|
|
Total
|
||||||||||
Costs incurred in 2015
|
$
|
47,185
|
|
|
$
|
35,310
|
|
|
$
|
14,744
|
|
|
$
|
59,129
|
|
|
$
|
156,368
|
|
2015 payments
|
31,058
|
|
|
18,341
|
|
|
13,926
|
|
|
35,754
|
|
|
99,079
|
|
|||||
Liabilities at December 31, 2015
|
$
|
16,127
|
|
|
$
|
16,969
|
|
|
$
|
818
|
|
|
$
|
23,375
|
|
|
$
|
57,289
|
|
(U.S. dollars in thousands)
|
May 1, 2015 to December 31, 2015
|
||
Total revenues - see comments above
|
$
|
2,791,789
|
|
Net income (loss) - see comments above
|
$
|
103,637
|
|
|
Unaudited Pro Forma
|
||||||
(In thousands, except per share data)
|
2015
|
|
2014
|
||||
Total revenues
|
$
|
10,628,915
|
|
|
$
|
10,938,216
|
|
Net income attributable to ordinary shareholders
|
1,221,497
|
|
|
475,914
|
|
||
Earnings (loss) per ordinary share and ordinary share equivalent – basic
|
4.03
|
|
|
1.50
|
|
||
Earnings (loss) per ordinary share and ordinary share equivalent – diluted
|
3.97
|
|
|
1.48
|
|
Impact of GreyCastle Life Retro Arrangements
|
|
|
May 30 to December 31,
|
||||
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Underwriting profit (loss) (1)
|
$
|
605
|
|
|
$
|
11,649
|
|
Net investment income - Life Funds Withheld Assets
|
187,489
|
|
|
129,575
|
|
||
Net realized gains (losses) on investments sold - Life Funds Withheld Assets
|
223,272
|
|
|
5,067
|
|
||
Net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets
|
(27,734
|
)
|
|
(9
|
)
|
||
OTTI on investments - Life Funds Withheld Assets
|
(13,357
|
)
|
|
(20,587
|
)
|
||
Exchange (gains) losses
|
4,788
|
|
|
10,099
|
|
||
Other income and expenses
|
2,280
|
|
|
(1,610
|
)
|
||
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
(151,691
|
)
|
|
(488,222
|
)
|
||
Net income (loss)
|
$
|
225,652
|
|
|
$
|
(354,038
|
)
|
Change in net unrealized gains (losses) on investments - Life Funds Withheld Assets, net of tax
|
(421,604
|
)
|
|
274,083
|
|
||
Change in adjustments related to future policy benefit reserves, net of tax
|
170,688
|
|
|
74,009
|
|
||
Change in cumulative translation adjustment - Life Funds Withheld Assets, net of tax
|
25,869
|
|
|
17,595
|
|
||
Total changes to other comprehensive income as a result of GreyCastle Life Retro Arrangements (2)
|
$
|
(225,047
|
)
|
|
$
|
365,687
|
|
Comprehensive income (loss)
|
$
|
605
|
|
|
$
|
11,649
|
|
(1)
|
The underwriting profit of
$0.6 million
relates to a premium adjustment relating to the GreyCastle Life Retro Arrangements transaction, which was completed on May 30, 2014. Excluding this transaction, the impact to comprehensive income relating to the GreyCastle Life Retro Arrangements was
nil
for the
years ended December 31, 2015 and 2014
.
|
December 31, 2015
(U.S. dollars in thousands)
|
Quoted Prices
in Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant Other
Unobservable
Inputs
(Level 3)
|
|
Collateral and
Counterparty
Netting
|
|
Balance at
December 31,
2015
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities - Available for Sale ("AFS") - Excluding Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government - Related/Supported
|
$
|
—
|
|
|
$
|
5,020,574
|
|
|
$
|
45,063
|
|
|
$
|
—
|
|
|
$
|
5,065,637
|
|
Corporate - Financials
|
—
|
|
|
3,508,224
|
|
|
53,685
|
|
|
—
|
|
|
3,561,909
|
|
|||||
Corporate - Non Financials
|
—
|
|
|
6,900,259
|
|
|
188
|
|
|
—
|
|
|
6,900,447
|
|
|||||
Residential mortgage-backed securities – Agency ("RMBS - Agency")
|
—
|
|
|
3,754,894
|
|
|
3,077
|
|
|
—
|
|
|
3,757,971
|
|
|||||
Residential mortgage-backed securities – Non-Agency ("RMBS - Non-Agency")
|
—
|
|
|
328,540
|
|
|
—
|
|
|
—
|
|
|
328,540
|
|
|||||
Commercial mortgage-backed securities ("CMBS")
|
—
|
|
|
405,316
|
|
|
—
|
|
|
—
|
|
|
405,316
|
|
|||||
Collateralized debt obligations ("CDO")
|
—
|
|
|
2
|
|
|
32,408
|
|
|
—
|
|
|
32,410
|
|
|||||
Other asset-backed securities
|
—
|
|
|
1,150,715
|
|
|
17,857
|
|
|
—
|
|
|
1,168,572
|
|
|||||
U.S. States and political subdivisions of the States
|
—
|
|
|
2,632,070
|
|
|
—
|
|
|
—
|
|
|
2,632,070
|
|
|||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
—
|
|
|
5,251,614
|
|
|
—
|
|
|
—
|
|
|
5,251,614
|
|
|||||
Total fixed maturities - AFS - Excluding Life Funds Withheld Assets, at fair value
|
$
|
—
|
|
|
$
|
28,952,208
|
|
|
$
|
152,278
|
|
|
$
|
—
|
|
|
$
|
29,104,486
|
|
Equity securities, at fair value
|
528,581
|
|
|
350,338
|
|
|
—
|
|
|
—
|
|
|
878,919
|
|
|||||
Short-term investments, at fair value (1)
|
—
|
|
|
617,390
|
|
|
—
|
|
|
—
|
|
|
617,390
|
|
|||||
Total investments AFS - Excluding Life Funds Withheld Assets
|
$
|
528,581
|
|
|
$
|
29,919,936
|
|
|
$
|
152,278
|
|
|
$
|
—
|
|
|
$
|
30,600,795
|
|
Fixed maturities - AFS - Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government - Related/Supported
|
—
|
|
|
12,742
|
|
|
—
|
|
|
—
|
|
|
12,742
|
|
|||||
Corporate - Financials
|
—
|
|
|
598,236
|
|
|
—
|
|
|
—
|
|
|
598,236
|
|
|||||
Corporate - Non Financials
|
—
|
|
|
1,308,628
|
|
|
—
|
|
|
—
|
|
|
1,308,628
|
|
|||||
RMBS - Agency
|
—
|
|
|
752
|
|
|
—
|
|
|
—
|
|
|
752
|
|
|||||
RMBS - Non-Agency
|
—
|
|
|
26,953
|
|
|
—
|
|
|
—
|
|
|
26,953
|
|
|||||
CMBS
|
—
|
|
|
122,481
|
|
|
—
|
|
|
—
|
|
|
122,481
|
|
|||||
Other asset-backed securities
|
—
|
|
|
149,795
|
|
|
—
|
|
|
—
|
|
|
149,795
|
|
|||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
—
|
|
|
933,516
|
|
|
—
|
|
|
—
|
|
|
933,516
|
|
|||||
Total fixed maturities - AFS - Life Funds Withheld Assets, at fair value
|
—
|
|
|
3,153,103
|
|
|
—
|
|
|
—
|
|
|
3,153,103
|
|
|||||
Total investments - AFS, at fair value
|
528,581
|
|
|
33,073,039
|
|
|
152,278
|
|
|
—
|
|
|
33,753,898
|
|
December 31, 2015
(U.S. dollars in thousands)
|
Quoted Prices
in Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant Other
Unobservable
Inputs
(Level 3)
|
|
Collateral and
Counterparty
Netting
|
|
Balance at
December 31,
2015
|
||||||||||
Fixed maturities - Trading
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government - Related/Supported
|
—
|
|
|
4,990
|
|
|
—
|
|
|
—
|
|
|
4,990
|
|
|||||
Corporate - Financials
|
—
|
|
|
335,956
|
|
|
—
|
|
|
—
|
|
|
335,956
|
|
|||||
Corporate - Non Financials
|
—
|
|
|
493,621
|
|
|
—
|
|
|
—
|
|
|
493,621
|
|
|||||
RMBS - Agency
|
—
|
|
|
368
|
|
|
—
|
|
|
—
|
|
|
368
|
|
|||||
CMBS
|
—
|
|
|
4,803
|
|
|
—
|
|
|
—
|
|
|
4,803
|
|
|||||
Other asset-backed securities
|
—
|
|
|
25,700
|
|
|
—
|
|
|
—
|
|
|
25,700
|
|
|||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
—
|
|
|
370,261
|
|
|
—
|
|
|
—
|
|
|
370,261
|
|
|||||
Total fixed maturities - Trading, at fair value
|
—
|
|
|
1,235,699
|
|
|
—
|
|
|
—
|
|
|
1,235,699
|
|
|||||
Short-term investments, at fair value
|
—
|
|
|
60,330
|
|
|
—
|
|
|
—
|
|
|
60,330
|
|
|||||
Total investments Trading
|
—
|
|
|
1,296,029
|
|
|
—
|
|
|
—
|
|
|
1,296,029
|
|
|||||
Cash equivalents (2)
|
437,742
|
|
|
830,924
|
|
|
—
|
|
|
—
|
|
|
1,268,666
|
|
|||||
Cash equivalents - Life Funds Withheld Assets
|
517
|
|
|
100,757
|
|
|
—
|
|
|
—
|
|
|
101,274
|
|
|||||
Other investments (3)
|
—
|
|
|
1,008,176
|
|
|
283,550
|
|
|
—
|
|
|
1,291,726
|
|
|||||
Other assets (4)
|
—
|
|
|
69,914
|
|
|
19,400
|
|
|
(3,087
|
)
|
|
86,227
|
|
|||||
Total assets accounted for at fair value
|
$
|
966,840
|
|
|
$
|
36,378,839
|
|
|
$
|
455,228
|
|
|
$
|
(3,087
|
)
|
|
$
|
37,797,820
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Funds withheld on life retrocession arrangements (net of future policy benefit reserves recoverable) (5)
|
$
|
—
|
|
|
$
|
463,915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
463,915
|
|
Financial instruments sold, but not yet purchased (6)
|
347
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
347
|
|
|||||
Other liabilities (4)
|
—
|
|
|
16,304
|
|
|
29,191
|
|
|
(3,087
|
)
|
|
42,408
|
|
|||||
Total liabilities accounted for at fair value
|
$
|
347
|
|
|
$
|
480,219
|
|
|
$
|
29,191
|
|
|
$
|
(3,087
|
)
|
|
$
|
506,670
|
|
December 31, 2014
(U.S. dollars in thousands)
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|
Collateral
and
Counterparty
Netting
|
|
Balance at
December 31,
2014
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed maturities - AFS - Excluding Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government-Related/Supported
|
$
|
—
|
|
|
$
|
2,171,953
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,171,953
|
|
Corporate - Financials
|
—
|
|
|
2,761,916
|
|
|
—
|
|
|
—
|
|
|
$
|
2,761,916
|
|
||||
Corporate - Non Financials
|
—
|
|
|
6,010,563
|
|
|
5,894
|
|
|
—
|
|
|
$
|
6,016,457
|
|
||||
Residential mortgage-backed securities – RMBS - Agency
|
—
|
|
|
3,726,666
|
|
|
1,910
|
|
|
—
|
|
|
$
|
3,728,576
|
|
||||
Residential mortgage-backed securities – RMBS - Non-Agency
|
—
|
|
|
427,351
|
|
|
—
|
|
|
—
|
|
|
$
|
427,351
|
|
||||
CMBS
|
—
|
|
|
1,052,544
|
|
|
—
|
|
|
—
|
|
|
$
|
1,052,544
|
|
||||
CDOs
|
—
|
|
|
4,076
|
|
|
687,958
|
|
|
—
|
|
|
$
|
692,034
|
|
||||
Other asset-backed securities
|
—
|
|
|
1,060,005
|
|
|
5,288
|
|
|
—
|
|
|
$
|
1,065,293
|
|
||||
U.S. States and political subdivisions of the States
|
—
|
|
|
2,021,272
|
|
|
—
|
|
|
—
|
|
|
$
|
2,021,272
|
|
||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
—
|
|
|
4,240,073
|
|
|
—
|
|
|
—
|
|
|
$
|
4,240,073
|
|
||||
Total fixed maturities - AFS - Excluding Funds Withheld Assets, at fair value
|
$
|
—
|
|
|
$
|
23,476,419
|
|
|
$
|
701,050
|
|
|
$
|
—
|
|
|
$
|
24,177,469
|
|
Equity securities, at fair value
|
502,284
|
|
|
366,008
|
|
|
—
|
|
|
—
|
|
|
868,292
|
|
|||||
Short-term investments, at fair value (1)
|
—
|
|
|
256,727
|
|
|
—
|
|
|
—
|
|
|
256,727
|
|
|||||
Total investments AFS - Excluding Funds Withheld Assets
|
$
|
502,284
|
|
|
$
|
24,099,154
|
|
|
$
|
701,050
|
|
|
$
|
—
|
|
|
$
|
25,302,488
|
|
December 31, 2014
(U.S. dollars in thousands)
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|
Collateral
and
Counterparty
Netting
|
|
Balance at
December 31,
2014
|
||||||||||
Fixed maturities - Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government-Related/Supported
|
$
|
—
|
|
|
$
|
18,724
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,724
|
|
Corporate - Financials
|
—
|
|
|
801,019
|
|
|
—
|
|
|
—
|
|
|
$
|
801,019
|
|
||||
Corporate - Non Financials
|
—
|
|
|
2,016,961
|
|
|
—
|
|
|
—
|
|
|
$
|
2,016,961
|
|
||||
RMBS – Agency
|
—
|
|
|
3,782
|
|
|
—
|
|
|
—
|
|
|
$
|
3,782
|
|
||||
RMBS – Non-Agency
|
—
|
|
|
85,335
|
|
|
—
|
|
|
—
|
|
|
$
|
85,335
|
|
||||
CMBS
|
—
|
|
|
193,167
|
|
|
—
|
|
|
—
|
|
|
$
|
193,167
|
|
||||
Other asset-backed securities
|
—
|
|
|
273,541
|
|
|
—
|
|
|
—
|
|
|
$
|
273,541
|
|
||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
—
|
|
|
1,789,036
|
|
|
—
|
|
|
—
|
|
|
$
|
1,789,036
|
|
||||
Total fixed maturities - AFS - Life Funds Withheld Assets, at fair value
|
$
|
—
|
|
|
$
|
5,181,565
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,181,565
|
|
Total investments - AFS, at fair value
|
$
|
502,284
|
|
|
$
|
29,280,719
|
|
|
$
|
701,050
|
|
|
$
|
—
|
|
|
$
|
30,484,053
|
|
Fixed maturities - Trading
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate - Non Financials
|
—
|
|
|
1,171
|
|
|
—
|
|
|
—
|
|
|
$
|
1,171
|
|
||||
Total fixed maturities - Trading, at fair value
|
$
|
—
|
|
|
$
|
1,171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,171
|
|
Cash equivalents (2)
|
1,103,877
|
|
|
397,955
|
|
|
—
|
|
|
—
|
|
|
$
|
1,501,832
|
|
||||
Cash equivalents - Life Funds Withheld Assets (2)
|
460
|
|
|
132,738
|
|
|
—
|
|
|
—
|
|
|
$
|
133,198
|
|
||||
Other investments (3)
|
—
|
|
|
708,974
|
|
|
185,083
|
|
|
—
|
|
|
$
|
894,057
|
|
||||
Other assets (4)
|
—
|
|
|
122,996
|
|
|
13,663
|
|
|
(696
|
)
|
|
$
|
135,963
|
|
||||
Total assets accounted for at fair value
|
$
|
1,606,621
|
|
|
$
|
30,644,553
|
|
|
$
|
899,796
|
|
|
$
|
(696
|
)
|
|
$
|
33,150,274
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Funds withheld on life retrocession arrangements (net of future policy benefit reserves recoverable) (5)
|
$
|
—
|
|
|
$
|
450,831
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
450,831
|
|
Financial instruments sold, but not yet purchased (6)
|
4,737
|
|
|
25,669
|
|
|
—
|
|
|
—
|
|
|
$
|
30,406
|
|
||||
Other liabilities (4)
|
—
|
|
|
7,757
|
|
|
23,427
|
|
|
(696
|
)
|
|
$
|
30,488
|
|
||||
Total liabilities accounted for at fair value
|
$
|
4,737
|
|
|
$
|
484,257
|
|
|
$
|
23,427
|
|
|
$
|
(696
|
)
|
|
$
|
511,725
|
|
(1)
|
Short-term investments consist primarily of Corporate securities and U.S. and Non-U.S. Government and Government-Related/ Supported securities.
|
(2)
|
Cash equivalents balances subject to fair value measurement include certificates of deposit and money market funds. Operating cash balances are not subject to recurring fair value measurement guidance.
|
(3)
|
The Other investments balance excludes certain structured transactions including certain investments in project finance transactions, a payment obligation and liquidity financing provided to a structured credit vehicle as a part of a third party medium term note facility. These investments, which totaled
$141.3 million
at
December 31, 2015
and
$354.4 million
at
December 31, 2014
, are carried at amortized cost. For further information, see
Note 8, "Other Investments
."
|
(4)
|
Other assets and other liabilities include derivative instruments. The derivative balances included in each category are reported on a gross basis by level with a netting adjustment presented separately in the Collateral and Counterparty Netting column. The fair values of the individual derivative contracts are reported gross in their respective levels based on the fair value hierarchy. For further details regarding derivative fair values and associated collateral received or paid see
Note 15, "Derivative Instruments
."
|
(5)
|
Funds withheld on life retrocession arrangements (net of future policy benefit reserves recoverable) include balances related to the life retrocession embedded derivative, under which all investment results associated with the Life Funds Withheld Assets related the GreyCastle Life Retro Arrangements described in
Note 3(e), "Acquisitions and Disposals - Sale of Life Reinsurance Subsidiary
", accrue to the benefit of GCLR.
|
(6)
|
Financial instruments sold, but not yet purchased, represent "short sales" and are included within "Payable for investments purchased" on the balance sheets.
|
|
Level 3 Assets and Liabilities - Year Ended December 31, 2015
|
||||||||||||||
(U.S. dollars in thousands)
|
U.S. Government and Government - Related/Supported
|
|
Corporate - Financials
|
|
Corporate - Non-Financials
|
|
RMBS - Agency
|
||||||||
Balance, beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,894
|
|
|
$
|
1,910
|
|
Realized gains (losses)
|
—
|
|
|
9
|
|
|
(186
|
)
|
|
—
|
|
||||
Movement in unrealized gains (losses)
|
—
|
|
|
(10
|
)
|
|
(13
|
)
|
|
(3
|
)
|
||||
Purchases and issuances (1)
|
35,044
|
|
|
53,686
|
|
|
(123
|
)
|
|
1,297
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
(316
|
)
|
|
(323
|
)
|
||||
Transfers into Level 3
|
10,019
|
|
|
—
|
|
|
—
|
|
|
3,059
|
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
(5,068
|
)
|
|
(2,863
|
)
|
||||
Fixed maturities to short-term investments classification change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
45,063
|
|
|
$
|
53,685
|
|
|
$
|
188
|
|
|
$
|
3,077
|
|
Movement in total gains (losses) above relating to instruments still held at the reporting date
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(153
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
RMBS - Non
Agency |
|
CMBS
|
|
CDO
|
|
Other asset-
backed securities |
||||||||
Balance, beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
687,958
|
|
|
$
|
5,288
|
|
Realized gains (losses)
|
—
|
|
|
—
|
|
|
(8,658
|
)
|
|
628
|
|
||||
Movement in unrealized gains (losses)
|
—
|
|
|
—
|
|
|
16,688
|
|
|
(599
|
)
|
||||
Purchases and issuances (1)
|
—
|
|
|
—
|
|
|
25,882
|
|
|
46,940
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
(366,633
|
)
|
|
(7,269
|
)
|
||||
Settlements
|
—
|
|
|
—
|
|
|
(322,829
|
)
|
|
(6,359
|
)
|
||||
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
13,317
|
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,089
|
)
|
||||
Fixed maturities to short-term investments classification change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,408
|
|
|
$
|
17,857
|
|
Movement in total gains (losses) above relating to instruments still held at the reporting date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,279
|
|
|
$
|
451
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-US Sovereign
Government, Provincial, Supranational and Government Related/Supported |
|
Short-term
investments |
|
Other investments
|
|
Derivative Contracts
- Net |
||||||||
Balance, beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
185,083
|
|
|
$
|
(9,764
|
)
|
Realized gains (losses)
|
—
|
|
|
—
|
|
|
15,270
|
|
|
—
|
|
||||
Movement in unrealized gains (losses)
|
—
|
|
|
—
|
|
|
(12,548
|
)
|
|
(27
|
)
|
||||
Purchases and issuances (1)
|
—
|
|
|
—
|
|
|
117,143
|
|
|
—
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
(1,417
|
)
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
(19,981
|
)
|
|
—
|
|
||||
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fixed maturities to short-term investments classification change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
283,550
|
|
|
$
|
(9,791
|
)
|
Movement in total gains (losses) above relating to instruments still held at the reporting date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,724
|
|
|
$
|
80
|
|
|
Level 3 Assets and Liabilities - Year Ended December 31, 2014
|
||||||||||||||
(U.S. dollars in thousands)
|
U.S. Government and Government - Related/Supported
|
|
Corporate - Financials
|
|
Corporate - Non-Financials
|
|
RMBS - Agency
|
||||||||
Balance, beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,573
|
|
|
$
|
10,473
|
|
Realized gains (losses)
|
—
|
|
|
—
|
|
|
199
|
|
|
5
|
|
||||
Movement in unrealized gains (losses)
|
—
|
|
|
—
|
|
|
(128
|
)
|
|
(18
|
)
|
||||
Purchases and issuances
|
—
|
|
|
—
|
|
|
3,759
|
|
|
120
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
(6,543
|
)
|
|
(3,205
|
)
|
||||
Transfers into Level 3
|
—
|
|
|
—
|
|
|
766
|
|
|
—
|
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
(23,732
|
)
|
|
(5,465
|
)
|
||||
Fixed maturities to short-term investments classification change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,894
|
|
|
$
|
1,910
|
|
Movement in total gains (losses) above relating to instruments still held at the reporting date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
(12
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
RMBS - Non
Agency
|
|
CMBS
|
|
CDO
|
|
Other asset-
backed
securities
|
||||||||
Balance, beginning of period
|
$
|
9
|
|
|
$
|
12,533
|
|
|
$
|
710,253
|
|
|
$
|
11,877
|
|
Realized gains (losses)
|
1
|
|
|
3
|
|
|
3,781
|
|
|
(7
|
)
|
||||
Movement in unrealized gains (losses)
|
1
|
|
|
(3
|
)
|
|
11,604
|
|
|
65
|
|
||||
Purchases and issuances
|
—
|
|
|
1,376
|
|
|
185,710
|
|
|
5,182
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
(48,313
|
)
|
|
—
|
|
||||
Settlements
|
(11
|
)
|
|
(12,533
|
)
|
|
(175,077
|
)
|
|
(5,705
|
)
|
||||
Transfers into Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3
|
—
|
|
|
(1,376
|
)
|
|
—
|
|
|
(6,124
|
)
|
||||
Fixed maturities to short-term investments classification change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
687,958
|
|
|
$
|
5,288
|
|
Movement in total gains (losses) above relating to instruments still held at the reporting date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,432
|
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-US Sovereign
Government,
Provincial,
Supranational and
Government
Related/Supported
|
|
Short-term
investments
|
|
Other investments
|
|
Derivative Contracts
- Net
|
||||||||
Balance, beginning of period
|
$
|
—
|
|
|
$
|
2,015
|
|
|
$
|
113,472
|
|
|
$
|
(29,110
|
)
|
Realized gains (losses)
|
—
|
|
|
—
|
|
|
12,676
|
|
|
—
|
|
||||
Movement in unrealized gains (losses)
|
—
|
|
|
(15
|
)
|
|
538
|
|
|
19,346
|
|
||||
Purchases and issuances
|
—
|
|
|
—
|
|
|
59,401
|
|
|
—
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
(2,000
|
)
|
|
(25,498
|
)
|
|
—
|
|
||||
Transfers into Level 3
|
—
|
|
|
—
|
|
|
24,494
|
|
|
—
|
|
||||
Transfers out of Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fixed maturities to short-term investments classification change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
185,083
|
|
|
$
|
(9,764
|
)
|
Movement in total gains (losses) above relating to instruments still held at the reporting date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,212
|
|
|
$
|
19,346
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||||||||||
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|||||||||
Financial Assets -
Other investments, structured transactions
|
$
|
141,329
|
|
|
$
|
154,065
|
|
|
$
|
354,382
|
|
|
$
|
371,625
|
|
Deposit liabilities
|
$
|
1,168,376
|
|
|
$
|
1,436,210
|
|
|
$
|
1,245,367
|
|
|
$
|
1,543,761
|
|
Notes payable and debt
|
2,644,970
|
|
|
2,805,152
|
|
|
1,662,580
|
|
|
1,897,854
|
|
||||
Financial Liabilities
|
$
|
3,813,346
|
|
|
$
|
4,241,362
|
|
|
$
|
2,907,947
|
|
|
$
|
3,441,615
|
|
Year Ended December 31, 2015
(U.S. dollars in thousands, except ratios) |
Insurance
|
|
Reinsurance
|
|
Total P&C
|
|
Corporate and Other (1)
|
|
Total
|
||||||||||
Gross premiums written
|
$
|
8,395,846
|
|
|
$
|
2,273,163
|
|
|
$
|
10,669,009
|
|
|
$
|
309,916
|
|
|
$
|
10,978,925
|
|
Net premiums written
|
5,859,934
|
|
|
2,028,890
|
|
|
7,888,824
|
|
|
62,239
|
|
|
7,951,063
|
|
|||||
Net premiums earned
|
5,648,482
|
|
|
2,515,702
|
|
|
8,164,184
|
|
|
62,241
|
|
|
8,226,425
|
|
|||||
Net losses and loss expenses (2)
|
3,614,048
|
|
|
1,152,152
|
|
|
4,766,200
|
|
|
115,997
|
|
|
4,882,197
|
|
|||||
Acquisition costs (2)
|
704,364
|
|
|
602,290
|
|
|
1,306,654
|
|
|
10,794
|
|
|
1,317,448
|
|
|||||
Operating expenses (3)
|
1,154,760
|
|
|
283,379
|
|
|
1,438,139
|
|
|
1,232
|
|
|
1,439,371
|
|
|||||
Underwriting profit (loss)
|
$
|
175,310
|
|
|
$
|
477,881
|
|
|
$
|
653,191
|
|
|
$
|
(65,782
|
)
|
|
$
|
587,409
|
|
Net investment income - excluding Life Funds Withheld Assets (4)
|
|
|
|
|
583,871
|
|
|
40,569
|
|
|
624,440
|
|
|||||||
Net investment income - Life Funds Withheld Assets
|
|
|
|
|
|
|
187,489
|
|
|
187,489
|
|
||||||||
Net results from structured products (5)
|
12,185
|
|
|
5,806
|
|
|
17,991
|
|
|
—
|
|
|
17,991
|
|
|||||
Net fee income and other (6)
|
(16,936
|
)
|
|
2,958
|
|
|
(13,978
|
)
|
|
622
|
|
|
(13,356
|
)
|
|||||
Extinguishment of debt
|
|
|
|
|
—
|
|
|
5,592
|
|
|
5,592
|
|
|||||||
Net realized gains (losses) on investments - excluding Life Funds Withheld Assets
|
|
|
|
|
14,586
|
|
|
5,411
|
|
|
19,997
|
|
|||||||
Net realized gains (losses) on investments and net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets
|
|
|
|
|
—
|
|
|
182,181
|
|
|
182,181
|
|
|||||||
Net realized and unrealized gains (losses) on derivative instruments
|
|
|
|
|
—
|
|
|
53,123
|
|
|
53,123
|
|
|||||||
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
|
|
|
|
—
|
|
|
(151,691
|
)
|
|
(151,691
|
)
|
|||||||
Net income (loss) from investment fund affiliates and operating affiliates
|
|
|
|
|
—
|
|
|
118,060
|
|
|
118,060
|
|
|||||||
Gain on sale of operating affiliate
|
|
|
|
|
|
|
340,407
|
|
|
340,407
|
|
||||||||
Exchange (gains) losses
|
|
|
|
|
—
|
|
|
22,504
|
|
|
22,504
|
|
|||||||
Corporate operating expenses
|
|
|
|
|
—
|
|
|
480,755
|
|
|
480,755
|
|
|||||||
Contribution from P&C and Corporate and Other
|
|
|
|
|
1,255,661
|
|
|
201,538
|
|
|
1,457,199
|
|
|||||||
Interest expense (7)
|
|
|
|
|
|
|
163,021
|
|
|
163,021
|
|
||||||||
Non-controlling interests
|
|
|
|
|
|
|
106,187
|
|
|
106,187
|
|
||||||||
Income tax expense
|
|
|
|
|
|
|
(19,161
|
)
|
|
(19,161
|
)
|
||||||||
Net income (loss) attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
$
|
1,207,152
|
|
||||||||
Ratios – P&C operations: (8)
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss expense ratio
|
64.0
|
%
|
|
45.8
|
%
|
|
58.4
|
%
|
|
|
|
|
|||||||
Underwriting expense ratio
|
32.9
|
%
|
|
35.2
|
%
|
|
33.6
|
%
|
|
|
|
|
|||||||
Combined ratio
|
96.9
|
%
|
|
81.0
|
%
|
|
92.0
|
%
|
|
|
|
|
(1)
|
Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes, as well as the Company's Run-Off Life Operations.
|
(2)
|
The Company has reflected the amortization of certain fair value adjustments recorded in conjunction with the Catlin Acquisition within the respective segments.
|
(3)
|
Operating expenses of the segments exclude Corporate operating expenses, shown separately.
|
(4)
|
Net investment income - excluding Life Funds Withheld Assets does not include net investment income related to the net results from structured products.
|
(5)
|
The net results from P&C structured products include net investment income and interest expense of
$60.4 million
and
$42.2 million
, respectively.
|
(6)
|
Net fee income and other includes operating expenses from the Company's loss prevention consulting services business.
|
(7)
|
Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments.
|
(8)
|
Ratios are based on net premiums earned from P&C operations.
|
Year Ended December 31, 2014
(U.S. dollars in thousands, except ratios)
|
Insurance
|
|
Reinsurance
|
|
Total P&C
|
|
Corporate & Other (1)
|
|
Total
|
||||||||||
Gross premiums written
|
$
|
5,976,011
|
|
|
$
|
1,785,479
|
|
|
$
|
7,761,490
|
|
|
$
|
333,436
|
|
|
$
|
8,094,926
|
|
Net premiums written
|
4,134,151
|
|
|
1,633,058
|
|
|
5,767,209
|
|
|
177,632
|
|
|
5,944,841
|
|
|||||
Net premiums earned
|
4,026,713
|
|
|
1,690,725
|
|
|
5,717,438
|
|
|
177,632
|
|
|
5,895,070
|
|
|||||
Net losses and loss expenses
|
2,543,108
|
|
|
715,285
|
|
|
3,258,393
|
|
|
242,963
|
|
|
3,501,356
|
|
|||||
Acquisition costs
|
393,319
|
|
|
330,684
|
|
|
724,003
|
|
|
14,115
|
|
|
738,118
|
|
|||||
Operating expenses (2)
|
865,592
|
|
|
193,404
|
|
|
1,058,996
|
|
|
10,693
|
|
|
1,069,689
|
|
|||||
Underwriting profit (loss)
|
$
|
224,694
|
|
|
$
|
451,352
|
|
|
$
|
676,046
|
|
|
$
|
(90,139
|
)
|
|
$
|
585,907
|
|
Net investment income - excluding Life Funds Withheld Assets (3)
|
|
|
|
|
574,458
|
|
|
146,558
|
|
|
721,016
|
|
|||||||
Net investment income - Life Funds Withheld Assets
|
|
|
|
|
|
|
129,575
|
|
|
129,575
|
|
||||||||
Net results from structured products (4)
|
43,710
|
|
|
10,499
|
|
|
54,209
|
|
|
—
|
|
|
54,209
|
|
|||||
Net fee income and other (5)
|
(10,051
|
)
|
|
2,800
|
|
|
(7,251
|
)
|
|
360
|
|
|
(6,891
|
)
|
|||||
Loss on sale of life reinsurance subsidiary
|
|
|
|
|
—
|
|
|
666,423
|
|
|
666,423
|
|
|||||||
Net realized gains (losses) on investments
|
|
|
|
|
119,366
|
|
|
3,625
|
|
|
122,991
|
|
|||||||
Net realized gains (losses) on investments - Life Funds Withheld Assets
|
|
|
|
|
—
|
|
|
(15,529
|
)
|
|
(15,529
|
)
|
|||||||
Net realized and unrealized gains (losses) on derivative instruments
|
|
|
|
|
—
|
|
|
29,886
|
|
|
29,886
|
|
|||||||
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
|
|
|
|
—
|
|
|
(488,222
|
)
|
|
(488,222
|
)
|
|||||||
Net income (loss) from investment fund affiliates and operating affiliates
|
|
|
|
|
—
|
|
|
203,034
|
|
|
203,034
|
|
|||||||
Exchange (gains) losses
|
|
|
|
|
—
|
|
|
(37,568
|
)
|
|
(37,568
|
)
|
|||||||
Corporate operating expenses
|
|
|
|
|
—
|
|
|
220,165
|
|
|
220,165
|
|
|||||||
Contribution from P&C and Corporate and Other
|
|
|
|
|
1,416,828
|
|
|
(929,872
|
)
|
|
486,956
|
|
|||||||
Interest expense (6)
|
|
|
|
|
|
|
121,221
|
|
|
121,221
|
|
||||||||
Non-controlling interests
|
|
|
|
|
|
|
80,498
|
|
|
80,498
|
|
||||||||
Income tax expense
|
|
|
|
|
|
|
96,897
|
|
|
96,897
|
|
||||||||
Net income (loss) attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
$
|
188,340
|
|
||||||||
Ratios – P&C operations: (7)
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss expense ratio
|
63.2
|
%
|
|
42.3
|
%
|
|
57.0
|
%
|
|
|
|
|
|||||||
Underwriting expense ratio
|
31.2
|
%
|
|
31.0
|
%
|
|
31.2
|
%
|
|
|
|
|
|||||||
Combined ratio
|
94.4
|
%
|
|
73.3
|
%
|
|
88.2
|
%
|
|
|
|
|
(1)
|
Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes, as well as the Company's Run-Off Life Operations.
|
(2)
|
Operating expenses of the segments exclude Corporate operating expenses, shown separately.
|
(3)
|
Net investment income does not include net investment income related to the net results from structured products.
|
(4)
|
The net results from P&C structured products include net investment income and interest expense of
$68.0 million
and
$12.9 million
, respectively.
|
(5)
|
Net fee income and other includes operating expenses from the Company's loss prevention consulting services business.
|
(6)
|
Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments.
|
(7)
|
Ratios are based on net premiums earned from P&C operations.
|
Year Ended December 31, 2013
(U.S. dollars in thousands, except ratios)
|
Insurance
|
|
Reinsurance
|
|
Total P&C
|
|
Corporate and Other (1)
|
|
Total
|
||||||||||
Gross premiums written
|
$
|
5,523,181
|
|
|
$
|
1,893,611
|
|
|
$
|
7,416,792
|
|
|
$
|
324,343
|
|
|
$
|
7,741,135
|
|
Net premiums written
|
4,154,093
|
|
|
1,749,889
|
|
|
5,903,982
|
|
|
295,422
|
|
|
6,199,404
|
|
|||||
Net premiums earned
|
4,267,677
|
|
|
1,746,422
|
|
|
6,014,099
|
|
|
295,422
|
|
|
6,309,521
|
|
|||||
Net losses and loss expenses
|
2,829,999
|
|
|
901,465
|
|
|
3,731,464
|
|
|
465,702
|
|
|
4,197,166
|
|
|||||
Acquisition costs
|
529,270
|
|
|
353,388
|
|
|
882,658
|
|
|
26,665
|
|
|
909,323
|
|
|||||
Operating expenses (2)
|
782,677
|
|
|
166,238
|
|
|
948,915
|
|
|
8,926
|
|
|
957,841
|
|
|||||
Underwriting profit (loss)
|
$
|
125,731
|
|
|
$
|
325,331
|
|
|
$
|
451,062
|
|
|
$
|
(205,871
|
)
|
|
$
|
245,191
|
|
Net investment income (3)
|
|
|
|
|
599,144
|
|
|
286,645
|
|
|
885,789
|
|
|||||||
Net results from structured products (4)
|
15,562
|
|
|
8,229
|
|
|
23,791
|
|
|
—
|
|
|
23,791
|
|
|||||
Net fee income and other (5)
|
(9,317
|
)
|
|
2,320
|
|
|
(6,997
|
)
|
|
1,305
|
|
|
(5,692
|
)
|
|||||
Net realized gains (losses) on investments
|
|
|
|
|
85,792
|
|
|
1,985
|
|
|
87,777
|
|
|||||||
Net realized and unrealized gains (losses) on derivative instruments
|
|
|
|
|
—
|
|
|
7,798
|
|
|
7,798
|
|
|||||||
Net income (loss) from investment fund affiliates and operating affiliates
|
|
|
|
|
—
|
|
|
258,195
|
|
|
258,195
|
|
|||||||
Exchange (gains) losses
|
|
|
|
|
—
|
|
|
(28,243
|
)
|
|
(28,243
|
)
|
|||||||
Corporate operating expenses
|
|
|
|
|
—
|
|
|
209,454
|
|
|
209,454
|
|
|||||||
Contribution from P&C and Corporate and Other
|
|
|
|
|
1,152,792
|
|
|
168,846
|
|
|
1,321,638
|
|
|||||||
Interest expense (6)
|
|
|
|
|
|
|
107,486
|
|
|
107,486
|
|
||||||||
Non-controlling interests
|
|
|
|
|
|
|
76,731
|
|
|
76,731
|
|
||||||||
Income tax expense
|
|
|
|
|
|
|
77,505
|
|
|
77,505
|
|
||||||||
Net income (loss) attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
$
|
1,059,916
|
|
||||||||
Ratios – P&C operations: (7)
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss expense ratio
|
66.3
|
%
|
|
51.6
|
%
|
|
62.0
|
%
|
|
|
|
|
|||||||
Underwriting expense ratio
|
30.8
|
%
|
|
29.8
|
%
|
|
30.5
|
%
|
|
|
|
|
|||||||
Combined ratio
|
97.1
|
%
|
|
81.4
|
%
|
|
92.5
|
%
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Corporate and Other includes other items of our revenue and expenditures that are not evaluated at the segment level for reporting purposes, as well as the Company's Run-Off Life Operations.
|
(2)
|
Operating expenses exclude Corporate operating expenses, shown separately.
|
(3)
|
Net investment income does not include net investment income related to the net results from structured products.
|
(4)
|
The net results from P&C structured products include net investment income and interest expense of
$71.9 million
and
$48.0 million
, respectively.
|
(5)
|
Net fee income and other includes operating expenses from the Company's loss prevention consulting services business.
|
(6)
|
Interest expense excludes interest expense related to deposit liabilities recorded in the Insurance and Reinsurance segments.
|
(7)
|
Ratios are based on net premiums earned from P&C operations.
|
Year Ended December 31, 2015
(U.S. dollars in thousands)
|
Insurance
|
|
Reinsurance
|
|
Corporate and Other
|
|
Total
|
||||||||
P&C Operations:
|
|
|
|
|
|
|
|
||||||||
Professional
|
$
|
1,163,302
|
|
|
$
|
168,367
|
|
|
$
|
—
|
|
|
$
|
1,331,669
|
|
Casualty
|
1,685,748
|
|
|
468,286
|
|
|
—
|
|
|
2,154,034
|
|
||||
Property catastrophe
|
—
|
|
|
663,958
|
|
|
—
|
|
|
663,958
|
|
||||
Property
|
1,021,037
|
|
|
869,286
|
|
|
—
|
|
|
1,890,323
|
|
||||
Specialty
|
1,473,929
|
|
|
127,797
|
|
|
—
|
|
|
1,601,726
|
|
||||
Other (1)
|
304,466
|
|
|
218,008
|
|
|
—
|
|
|
522,474
|
|
||||
Total P&C Operations
|
$
|
5,648,482
|
|
|
$
|
2,515,702
|
|
|
$
|
—
|
|
|
$
|
8,164,184
|
|
Corporate and Other:
|
|
|
|
|
|
|
|
||||||||
Run-off life operations - Annuity
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Run-off life operations - Other life
|
—
|
|
|
—
|
|
|
62,240
|
|
|
62,240
|
|
||||
Total Corporate and Other
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,241
|
|
|
$
|
62,241
|
|
Total
|
$
|
5,648,482
|
|
|
$
|
2,515,702
|
|
|
$
|
62,241
|
|
|
$
|
8,226,425
|
|
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
||||||||
P&C Operations:
|
|
|
|
|
|
|
|
||||||||
Professional
|
$
|
1,075,420
|
|
|
$
|
181,223
|
|
|
$
|
—
|
|
|
$
|
1,256,643
|
|
Casualty
|
1,422,684
|
|
|
300,223
|
|
|
—
|
|
|
1,722,907
|
|
||||
Property catastrophe
|
—
|
|
|
433,602
|
|
|
—
|
|
|
433,602
|
|
||||
Property
|
544,856
|
|
|
555,583
|
|
|
—
|
|
|
1,100,439
|
|
||||
Specialty
|
737,281
|
|
|
95,745
|
|
|
—
|
|
|
833,026
|
|
||||
Other (1)
|
246,472
|
|
|
124,349
|
|
|
—
|
|
|
370,821
|
|
||||
Total P&C Operations
|
$
|
4,026,713
|
|
|
$
|
1,690,725
|
|
|
$
|
—
|
|
|
$
|
5,717,438
|
|
Corporate and Other:
|
|
|
|
|
|
|
|
||||||||
Run-off life operations - Annuity
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,363
|
|
|
$
|
53,363
|
|
Run-off life operations - Other life
|
—
|
|
|
—
|
|
|
124,269
|
|
|
124,269
|
|
||||
Total Corporate and Other
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
177,632
|
|
|
$
|
177,632
|
|
Total
|
$
|
4,026,713
|
|
|
$
|
1,690,725
|
|
|
$
|
177,632
|
|
|
$
|
5,895,070
|
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||
P&C Operations:
|
|
|
|
|
|
|
|
||||||||
Professional
|
$
|
1,370,196
|
|
|
$
|
206,169
|
|
|
$
|
—
|
|
|
$
|
1,576,365
|
|
Casualty
|
1,389,851
|
|
|
312,156
|
|
|
—
|
|
|
1,702,007
|
|
||||
Property catastrophe
|
—
|
|
|
492,568
|
|
|
—
|
|
|
492,568
|
|
||||
Property
|
544,278
|
|
|
561,105
|
|
|
—
|
|
|
1,105,383
|
|
||||
Specialty
|
732,042
|
|
|
94,797
|
|
|
—
|
|
|
826,839
|
|
||||
Other (1)
|
231,310
|
|
|
79,627
|
|
|
—
|
|
|
310,937
|
|
||||
Total P&C Operations
|
$
|
4,267,677
|
|
|
$
|
1,746,422
|
|
|
$
|
—
|
|
|
$
|
6,014,099
|
|
Corporate and Other:
|
|
|
|
|
|
|
|
||||||||
Run-off life operations - Annuity
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
122,715
|
|
|
$
|
122,715
|
|
Run-off life operations - Other life
|
—
|
|
|
—
|
|
|
172,707
|
|
|
172,707
|
|
||||
Total Corporate and Other
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
295,422
|
|
|
$
|
295,422
|
|
Total
|
$
|
4,267,677
|
|
|
$
|
1,746,422
|
|
|
$
|
295,422
|
|
|
$
|
6,309,521
|
|
(1)
|
Other within the Insurance segment includes: excess and surplus, programs, surety, structured indemnity and certain discontinued lines. Other within the Reinsurance segment includes: whole account contracts, accident and health and other lines.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
P&C Operations:
|
|
|
|
|
|
||||||
Bermuda
|
$
|
781,618
|
|
|
$
|
636,109
|
|
|
$
|
658,041
|
|
United States
|
3,045,031
|
|
|
2,528,196
|
|
|
2,650,916
|
|
|||
Europe
|
3,628,258
|
|
|
2,124,117
|
|
|
2,111,065
|
|
|||
Other
|
433,917
|
|
|
478,787
|
|
|
483,960
|
|
|||
Total P&C Operations
|
$
|
7,888,824
|
|
|
$
|
5,767,209
|
|
|
$
|
5,903,982
|
|
Corporate and Other:
|
|
|
|
|
|
||||||
Bermuda
|
$
|
62,276
|
|
|
$
|
91,979
|
|
|
$
|
117,948
|
|
Europe
|
(37
|
)
|
|
85,653
|
|
|
177,474
|
|
|||
Total Corporate and Other
|
$
|
62,239
|
|
|
$
|
177,632
|
|
|
$
|
295,422
|
|
|
|
|
Included in AOCI
|
|
|
|
|
||||||||||||
December 31, 2015
(U.S. dollars in thousands)
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Non-credit Related OTTI (1)
|
||||||||||
Fixed maturities - AFS - Excluding Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government-Related/Supported
|
$
|
5,047,621
|
|
|
$
|
52,355
|
|
|
$
|
(34,339
|
)
|
|
$
|
5,065,637
|
|
|
$
|
—
|
|
Corporate - Financials
|
3,535,830
|
|
|
49,535
|
|
|
(23,456
|
)
|
|
3,561,909
|
|
|
—
|
|
|||||
Corporate - Non Financials
|
6,867,525
|
|
|
130,568
|
|
|
(97,646
|
)
|
|
6,900,447
|
|
|
—
|
|
|||||
RMBS – Agency
|
3,697,756
|
|
|
77,776
|
|
|
(17,561
|
)
|
|
3,757,971
|
|
|
—
|
|
|||||
RMBS – Non-Agency
|
319,876
|
|
|
25,644
|
|
|
(16,980
|
)
|
|
328,540
|
|
|
(54,200
|
)
|
|||||
CMBS
|
401,713
|
|
|
7,933
|
|
|
(4,330
|
)
|
|
405,316
|
|
|
(1,182
|
)
|
|||||
CDO
|
41,679
|
|
|
4
|
|
|
(9,273
|
)
|
|
32,410
|
|
|
(1,208
|
)
|
|||||
Other asset-backed securities
|
1,164,426
|
|
|
17,665
|
|
|
(13,519
|
)
|
|
1,168,572
|
|
|
(1,144
|
)
|
|||||
U.S. States and political subdivisions of the States
|
2,514,048
|
|
|
125,395
|
|
|
(7,373
|
)
|
|
2,632,070
|
|
|
—
|
|
|||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
5,249,148
|
|
|
100,383
|
|
|
(97,917
|
)
|
|
5,251,614
|
|
|
—
|
|
|||||
Total fixed maturities - AFS - Excluding Life Funds Withheld Assets
|
$
|
28,839,622
|
|
|
$
|
587,258
|
|
|
$
|
(322,394
|
)
|
|
$
|
29,104,486
|
|
|
$
|
(57,734
|
)
|
Total short-term investments - Excluding Life Funds Withheld Assets
|
618,851
|
|
|
967
|
|
|
(2,428
|
)
|
|
617,390
|
|
|
—
|
|
|||||
Total equity securities
|
834,079
|
|
|
89,993
|
|
|
(45,153
|
)
|
|
878,919
|
|
|
—
|
|
|||||
Total investments - AFS - Excluding Life Funds Withheld Assets
|
$
|
30,292,552
|
|
|
$
|
678,218
|
|
|
$
|
(369,975
|
)
|
|
$
|
30,600,795
|
|
|
$
|
(57,734
|
)
|
Fixed maturities - AFS - Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Government and Government-Related/Supported
|
$
|
10,721
|
|
|
$
|
2,021
|
|
|
$
|
—
|
|
|
$
|
12,742
|
|
|
$
|
—
|
|
Corporate - Financials
|
531,016
|
|
|
67,220
|
|
|
—
|
|
|
598,236
|
|
|
—
|
|
|||||
Corporate - Non Financials
|
1,132,926
|
|
|
175,702
|
|
|
—
|
|
|
1,308,628
|
|
|
—
|
|
|||||
RMBS – Agency
|
591
|
|
|
161
|
|
|
—
|
|
|
752
|
|
|
—
|
|
|||||
RMBS – Non-Agency
|
24,401
|
|
|
2,552
|
|
|
—
|
|
|
26,953
|
|
|
—
|
|
|||||
CMBS
|
107,968
|
|
|
14,513
|
|
|
—
|
|
|
122,481
|
|
|
—
|
|
|||||
Other asset-backed securities
|
132,674
|
|
|
17,121
|
|
|
—
|
|
|
149,795
|
|
|
—
|
|
|||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
737,735
|
|
|
195,781
|
|
|
—
|
|
|
933,516
|
|
|
—
|
|
|||||
Total fixed maturities - AFS - Life Funds Withheld Assets
|
$
|
2,678,032
|
|
|
$
|
475,071
|
|
|
$
|
—
|
|
|
$
|
3,153,103
|
|
|
$
|
—
|
|
Total investments - AFS
|
$
|
32,970,584
|
|
|
$
|
1,153,289
|
|
|
$
|
(369,975
|
)
|
|
$
|
33,753,898
|
|
|
$
|
(57,734
|
)
|
(1)
|
Represents the non-credit component of OTTI losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date.
|
December 31, 2014
(U.S. dollars in thousands)
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Non-credit Related OTTI (1)
|
||||||||||
Fixed maturities - AFS - Excluding Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Government and Government-Related/Supported
|
$
|
2,100,851
|
|
|
$
|
77,889
|
|
|
$
|
(6,787
|
)
|
|
$
|
2,171,953
|
|
|
$
|
—
|
|
Corporate - Financials
|
2,687,797
|
|
|
87,058
|
|
|
(12,939
|
)
|
|
2,761,916
|
|
|
—
|
|
|||||
Corporate - Non Financials
|
5,774,333
|
|
|
278,747
|
|
|
(36,623
|
)
|
|
6,016,457
|
|
|
(3,309
|
)
|
|||||
RMBS – Agency
|
3,625,171
|
|
|
114,188
|
|
|
(10,783
|
)
|
|
3,728,576
|
|
|
—
|
|
|||||
RMBS – Non-Agency
|
404,398
|
|
|
41,108
|
|
|
(18,155
|
)
|
|
427,351
|
|
|
(67,918
|
)
|
|||||
CMBS
|
1,033,819
|
|
|
23,987
|
|
|
(5,262
|
)
|
|
1,052,544
|
|
|
(2,033
|
)
|
|||||
CDOs
|
717,544
|
|
|
1,659
|
|
|
(27,169
|
)
|
|
692,034
|
|
|
(1,663
|
)
|
|||||
Other asset-backed securities
|
1,028,528
|
|
|
42,810
|
|
|
(6,045
|
)
|
|
1,065,293
|
|
|
(1,797
|
)
|
|||||
U.S. States and political subdivisions of the States
|
1,892,566
|
|
|
129,910
|
|
|
(1,204
|
)
|
|
2,021,272
|
|
|
—
|
|
|||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
4,162,425
|
|
|
139,484
|
|
|
(61,836
|
)
|
|
4,240,073
|
|
|
—
|
|
|||||
Total fixed maturities - AFS - Excluding Life Funds Withheld Assets
|
$
|
23,427,432
|
|
|
$
|
936,840
|
|
|
$
|
(186,803
|
)
|
|
$
|
24,177,469
|
|
|
$
|
(76,720
|
)
|
Total short-term investments - Excluding Life Funds Withheld Assets
|
$
|
257,221
|
|
|
$
|
49
|
|
|
$
|
(543
|
)
|
|
$
|
256,727
|
|
|
$
|
—
|
|
Total equity securities - Excluding Life Funds Withheld Assets
|
$
|
763,833
|
|
|
$
|
130,689
|
|
|
$
|
(26,230
|
)
|
|
$
|
868,292
|
|
|
$
|
—
|
|
Total investments - AFS - Excluding Life Funds Withheld Assets
|
$
|
24,448,486
|
|
|
$
|
1,067,578
|
|
|
$
|
(213,576
|
)
|
|
$
|
25,302,488
|
|
|
$
|
(76,720
|
)
|
Fixed maturities - AFS - Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government and Government-Related/Supported
|
$
|
14,866
|
|
|
$
|
3,858
|
|
|
$
|
—
|
|
|
$
|
18,724
|
|
|
$
|
—
|
|
Corporate - Financials
|
701,587
|
|
|
99,432
|
|
|
—
|
|
|
801,019
|
|
|
—
|
|
|||||
Corporate - Non Financials
|
1,706,262
|
|
|
310,699
|
|
|
—
|
|
|
2,016,961
|
|
|
—
|
|
|||||
RMBS – Agency
|
3,301
|
|
|
481
|
|
|
—
|
|
|
3,782
|
|
|
—
|
|
|||||
RMBS – Non-Agency
|
71,075
|
|
|
14,260
|
|
|
—
|
|
|
85,335
|
|
|
—
|
|
|||||
CMBS
|
168,886
|
|
|
24,281
|
|
|
—
|
|
|
193,167
|
|
|
—
|
|
|||||
Other asset-backed securities
|
238,168
|
|
|
35,373
|
|
|
—
|
|
|
273,541
|
|
|
—
|
|
|||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
1,397,194
|
|
|
391,842
|
|
|
—
|
|
|
1,789,036
|
|
|
—
|
|
|||||
Total fixed maturities - AFS - Life Funds Withheld Assets
|
$
|
4,301,339
|
|
|
$
|
880,226
|
|
|
$
|
—
|
|
|
$
|
5,181,565
|
|
|
$
|
—
|
|
Total investments - AFS
|
$
|
28,749,825
|
|
|
$
|
1,947,804
|
|
|
$
|
(213,576
|
)
|
|
$
|
30,484,053
|
|
|
$
|
(76,720
|
)
|
(1)
|
Represents the non-credit component of OTTI losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date.
|
December 31, 2015
(U.S. dollars in thousands)
|
Amortized
Cost |
|
Fair Value
|
||||
Fixed maturities - Trading - Life Funds Withheld Assets
|
|
|
|
|
|
||
U.S. Government and Government-Related/Supported
|
$
|
4,957
|
|
|
$
|
4,990
|
|
Corporate - Financials
|
344,070
|
|
|
335,956
|
|
||
Corporate - Non Financials
|
509,441
|
|
|
493,621
|
|
||
RMBS – Agency
|
370
|
|
|
368
|
|
||
CMBS
|
4,874
|
|
|
4,803
|
|
||
Other asset-backed securities
|
26,405
|
|
|
25,700
|
|
||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
373,492
|
|
|
370,261
|
|
||
Total fixed maturities - Trading - Life Funds Withheld Assets
|
$
|
1,263,609
|
|
|
$
|
1,235,699
|
|
Total short-term investments - Trading - Life Funds Withheld Assets
|
$
|
60,176
|
|
|
$
|
60,330
|
|
Total investments - Trading - Life Funds Withheld Assets
|
$
|
1,323,785
|
|
|
$
|
1,296,029
|
|
December 31, 2014
(U.S. dollars in thousands)
|
Amortized
Cost |
|
Fair Value
|
||||
Fixed maturities - Trading - Life Funds Withheld Assets
|
|
|
|
|
|
||
Corporate - Non Financials
|
$
|
1,180
|
|
|
$
|
1,171
|
|
Total investments - Trading - Life Funds Withheld Assets
|
$
|
1,180
|
|
|
$
|
1,171
|
|
(U.S. dollars in thousands)
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|||||||||
Fixed maturities - AFS - Excluding Life Funds Withheld Assets
|
|
|
|
|
|
|
|
||||||||
Due less than one year
|
$
|
2,106,851
|
|
|
$
|
2,104,106
|
|
|
$
|
1,972,224
|
|
|
$
|
1,980,429
|
|
Due after 1 through 5 years
|
14,051,494
|
|
|
14,143,461
|
|
|
8,919,037
|
|
|
9,113,651
|
|
||||
Due after 5 through 10 years
|
5,680,830
|
|
|
5,740,954
|
|
|
4,232,396
|
|
|
4,412,569
|
|
||||
Due after 10 years
|
1,374,997
|
|
|
1,423,156
|
|
|
1,494,315
|
|
|
1,705,022
|
|
||||
|
$
|
23,214,172
|
|
|
$
|
23,411,677
|
|
|
$
|
16,617,972
|
|
|
$
|
17,211,671
|
|
RMBS – Agency
|
$
|
3,697,756
|
|
|
$
|
3,757,971
|
|
|
$
|
3,625,171
|
|
|
$
|
3,728,576
|
|
RMBS – Non-Agency
|
319,876
|
|
|
328,540
|
|
|
404,398
|
|
|
427,351
|
|
||||
CMBS
|
401,713
|
|
|
405,316
|
|
|
1,033,819
|
|
|
1,052,544
|
|
||||
CDO
|
41,679
|
|
|
32,410
|
|
|
717,544
|
|
|
692,034
|
|
||||
Other asset-backed securities
|
1,164,426
|
|
|
1,168,572
|
|
|
1,028,528
|
|
|
1,065,293
|
|
||||
Total mortgage and asset-backed securities
|
$
|
5,625,450
|
|
|
$
|
5,692,809
|
|
|
$
|
6,809,460
|
|
|
$
|
6,965,798
|
|
Total fixed maturities - AFS - Excluding Life Funds Withheld Assets
|
$
|
28,839,622
|
|
|
$
|
29,104,486
|
|
|
$
|
23,427,432
|
|
|
$
|
24,177,469
|
|
Fixed maturities - AFS - Life Funds Withheld Assets
|
|
|
|
|
|
|
|
||||||||
Due less than one year
|
$
|
81,700
|
|
|
$
|
92,921
|
|
|
$
|
117,048
|
|
|
$
|
125,326
|
|
Due after 1 through 5 years
|
386,810
|
|
|
416,743
|
|
|
638,526
|
|
|
685,787
|
|
||||
Due after 5 through 10 years
|
491,621
|
|
|
558,805
|
|
|
1,004,698
|
|
|
1,165,348
|
|
||||
Due after 10 years
|
1,452,267
|
|
|
1,784,653
|
|
|
2,059,637
|
|
|
2,649,279
|
|
||||
|
$
|
2,412,398
|
|
|
$
|
2,853,122
|
|
|
$
|
3,819,909
|
|
|
$
|
4,625,740
|
|
RMBS – Agency
|
$
|
591
|
|
|
$
|
752
|
|
|
$
|
3,301
|
|
|
$
|
3,782
|
|
RMBS – Non-Agency
|
24,401
|
|
|
26,953
|
|
|
71,075
|
|
|
85,335
|
|
||||
CMBS
|
107,968
|
|
|
122,481
|
|
|
168,886
|
|
|
193,167
|
|
||||
Other asset-backed securities
|
132,674
|
|
|
149,795
|
|
|
238,168
|
|
|
273,541
|
|
||||
Total mortgage and asset-backed securities
|
$
|
265,634
|
|
|
$
|
299,981
|
|
|
$
|
481,430
|
|
|
$
|
555,825
|
|
Total fixed maturities - AFS - Life Funds Withheld Assets
|
$
|
2,678,032
|
|
|
$
|
3,153,103
|
|
|
$
|
4,301,339
|
|
|
$
|
5,181,565
|
|
Total fixed maturities - AFS
|
$
|
31,517,654
|
|
|
$
|
32,257,589
|
|
|
$
|
27,728,771
|
|
|
$
|
29,359,034
|
|
(U.S. dollars in thousands)
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|||||||||
Fixed maturities - Trading - Life Funds Withheld Assets
|
|
|
|
|
|
|
|
||||||||
Due less than one year
|
$
|
4,573
|
|
|
$
|
5,096
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Due after 1 through 5 years
|
278,163
|
|
|
272,220
|
|
|
—
|
|
|
—
|
|
||||
Due after 5 through 10 years
|
280,487
|
|
|
277,920
|
|
|
1,180
|
|
|
1,171
|
|
||||
Due after 10 years
|
668,737
|
|
|
649,592
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
1,231,960
|
|
|
$
|
1,204,828
|
|
|
$
|
1,180
|
|
|
$
|
1,171
|
|
RMBS – Agency
|
370
|
|
|
368
|
|
|
—
|
|
|
—
|
|
||||
CMBS
|
4,874
|
|
|
4,803
|
|
|
—
|
|
|
—
|
|
||||
Other asset-backed securities
|
26,405
|
|
|
25,700
|
|
|
—
|
|
|
—
|
|
||||
Total mortgage and asset-backed securities
|
31,649
|
|
|
30,871
|
|
|
—
|
|
|
—
|
|
||||
Total fixed maturities - Trading - Life Funds Withheld Assets
|
$
|
1,263,609
|
|
|
$
|
1,235,699
|
|
|
$
|
1,180
|
|
|
$
|
1,171
|
|
December 31, 2015
(U.S. dollars in thousands)
|
Less than 12 months
|
|
Equal to or greater
than 12 months
|
||||||||||||
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|||||||||
Fixed maturities and short-term investments - AFS
|
|
|
|
|
|
|
|
||||||||
U.S. Government and Government-Related/Supported
|
$
|
3,762,869
|
|
|
$
|
(29,339
|
)
|
|
$
|
89,113
|
|
|
$
|
(5,044
|
)
|
Corporate - Financials
|
1,641,021
|
|
|
(13,280
|
)
|
|
102,022
|
|
|
(10,192
|
)
|
||||
Corporate - Non Financials
|
3,275,270
|
|
|
(73,069
|
)
|
|
227,527
|
|
|
(24,706
|
)
|
||||
RMBS – Agency
|
1,065,055
|
|
|
(10,046
|
)
|
|
221,211
|
|
|
(7,515
|
)
|
||||
RMBS – Non-Agency
|
19,614
|
|
|
(1,104
|
)
|
|
180,146
|
|
|
(15,876
|
)
|
||||
CMBS
|
118,605
|
|
|
(1,561
|
)
|
|
78,651
|
|
|
(2,769
|
)
|
||||
CDO
|
12,311
|
|
|
(516
|
)
|
|
20,096
|
|
|
(8,757
|
)
|
||||
Other asset-backed securities
|
572,671
|
|
|
(5,252
|
)
|
|
57,563
|
|
|
(8,268
|
)
|
||||
U.S. States and political subdivisions of the States
|
565,055
|
|
|
(6,609
|
)
|
|
12,259
|
|
|
(765
|
)
|
||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
1,921,286
|
|
|
(53,440
|
)
|
|
474,929
|
|
|
(46,714
|
)
|
||||
Total fixed maturities and short-term investments - AFS
|
$
|
12,953,757
|
|
|
$
|
(194,216
|
)
|
|
$
|
1,463,517
|
|
|
$
|
(130,606
|
)
|
Total equity securities
|
$
|
356,742
|
|
|
$
|
(45,153
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Less than 12 months
|
|
Equal to or greater
than 12 months
|
||||||||||||
December 31, 2014
(U.S. dollars in thousands)
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized Losses |
||||||||
Fixed maturities and short-term investments - AFS
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government and Government-Related/Supported
|
$
|
251,091
|
|
|
$
|
(1,196
|
)
|
|
$
|
342,890
|
|
|
$
|
(5,603
|
)
|
Corporate – Financials
|
387,619
|
|
|
(5,858
|
)
|
|
105,155
|
|
|
(7,097
|
)
|
||||
Corporate – Non Financials
|
949,851
|
|
|
(28,023
|
)
|
|
319,066
|
|
|
(8,657
|
)
|
||||
RMBS – Agency
|
134,535
|
|
|
(220
|
)
|
|
512,652
|
|
|
(10,563
|
)
|
||||
RMBS – Non-Agency
|
45,378
|
|
|
(1,358
|
)
|
|
202,700
|
|
|
(16,797
|
)
|
||||
CMBS
|
78,356
|
|
|
(385
|
)
|
|
169,065
|
|
|
(4,877
|
)
|
||||
CDOs
|
249,803
|
|
|
(2,666
|
)
|
|
414,516
|
|
|
(24,503
|
)
|
||||
Other asset-backed securities
|
143,044
|
|
|
(2,813
|
)
|
|
57,544
|
|
|
(3,232
|
)
|
||||
U.S. States and political subdivisions of the States
|
32,187
|
|
|
(210
|
)
|
|
63,695
|
|
|
(994
|
)
|
||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
624,346
|
|
|
(19,043
|
)
|
|
558,422
|
|
|
(43,251
|
)
|
||||
Total fixed maturities and short-term investments - AFS
|
$
|
2,896,210
|
|
|
$
|
(61,772
|
)
|
|
$
|
2,745,705
|
|
|
$
|
(125,574
|
)
|
Total equity securities
|
$
|
191,193
|
|
|
$
|
(26,230
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed maturities, short term investments and cash equivalents - Excluding Life Funds Withheld Assets
|
$
|
726,161
|
|
|
$
|
809,964
|
|
|
$
|
982,275
|
|
Fixed maturities, short term investments and cash equivalents - Life Funds Withheld Assets
|
187,489
|
|
|
129,575
|
|
|
—
|
|
|||
Equity securities and other investments
|
28,200
|
|
|
42,252
|
|
|
35,388
|
|
|||
Interest on funds withheld
|
10,835
|
|
|
14,583
|
|
|
12,783
|
|
|||
Total gross investment income
|
$
|
952,685
|
|
|
$
|
996,374
|
|
|
$
|
1,030,446
|
|
Investment expenses
|
(80,315
|
)
|
|
(77,749
|
)
|
|
(72,730
|
)
|
|||
Total net investment income
|
$
|
872,370
|
|
|
$
|
918,625
|
|
|
$
|
957,716
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Fixed maturities, short term investments, cash and cash equivalents - Excluding Life Funds Withheld Assets:
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
187,523
|
|
|
$
|
119,817
|
|
|
$
|
129,479
|
|
Gross realized losses on investments sold
|
(134,441
|
)
|
|
(66,892
|
)
|
|
(84,703
|
)
|
|||
OTTI on investments, net of amounts transferred to other comprehensive income
|
(54,346
|
)
|
|
(12,341
|
)
|
|
(16,282
|
)
|
|||
Net realized gains (losses)
|
$
|
(1,264
|
)
|
|
$
|
40,584
|
|
|
$
|
28,494
|
|
Equity securities:
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
79,556
|
|
|
$
|
96,260
|
|
|
$
|
29,402
|
|
Gross realized losses on investments sold
|
(49,223
|
)
|
|
(12,270
|
)
|
|
(3,185
|
)
|
|||
OTTI on investments, net of amounts transferred to other comprehensive income
|
(15,954
|
)
|
|
(10,944
|
)
|
|
(17
|
)
|
|||
Net realized gains (losses)
|
$
|
14,379
|
|
|
$
|
73,046
|
|
|
$
|
26,200
|
|
Other investments:
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
39,198
|
|
|
$
|
31,830
|
|
|
$
|
46,934
|
|
Gross realized losses on investments sold
|
(19,656
|
)
|
|
(10,011
|
)
|
|
(13,851
|
)
|
|||
OTTI on investments, net of amounts transferred to other comprehensive income
|
(12,660
|
)
|
|
(12,458
|
)
|
|
—
|
|
|||
Net realized gains (losses)
|
$
|
6,882
|
|
|
$
|
9,361
|
|
|
$
|
33,083
|
|
Net realized gains (losses) on investments - Excluding Life Funds Withheld Assets
|
$
|
19,997
|
|
|
$
|
122,991
|
|
|
$
|
87,777
|
|
Fixed maturities, short term investments, cash and cash equivalents - Life Funds Withheld Assets:
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
259,798
|
|
|
$
|
7,926
|
|
|
$
|
—
|
|
Gross realized losses on investments sold
|
(36,526
|
)
|
|
(2,859
|
)
|
|
—
|
|
|||
Net unrealized gains (losses) on investments, Trading - Life Funds Withheld Assets
|
(27,734
|
)
|
|
(9
|
)
|
|
—
|
|
|||
OTTI on investments, net of amounts transferred to other comprehensive income
|
(13,357
|
)
|
|
(20,587
|
)
|
|
—
|
|
|||
Net realized gains (losses) on investments - Life Funds Withheld Assets
|
$
|
182,181
|
|
|
$
|
(15,529
|
)
|
|
$
|
—
|
|
Net realized gains (losses) on investments
|
$
|
202,178
|
|
|
$
|
107,462
|
|
|
$
|
87,777
|
|
Net realized and unrealized gains (losses) on investment related derivative instruments
|
$
|
(8,616
|
)
|
|
$
|
20,121
|
|
|
$
|
6,367
|
|
Net realized gains (losses) on investments and net realized and unrealized gains (losses) on investment related derivative instruments
|
$
|
193,562
|
|
|
$
|
127,583
|
|
|
$
|
94,144
|
|
Change in unrealized gains (losses):
|
|
|
|
|
|
||||||
Fixed maturities – AFS - Excluding Life Funds Withheld Assets
|
$
|
(486,140
|
)
|
|
$
|
360,463
|
|
|
$
|
(913,174
|
)
|
Fixed maturities - AFS - Life Funds Withheld Assets
|
(405,155
|
)
|
|
880,226
|
|
|
—
|
|
|||
Fixed maturities – HTM
|
—
|
|
|
(272,540
|
)
|
|
(175,817
|
)
|
|||
Equity securities
|
(59,619
|
)
|
|
(32,577
|
)
|
|
105,163
|
|
|||
Affiliates and other investments
|
(6,072
|
)
|
|
35,143
|
|
|
26,636
|
|
|||
Net change in unrealized gains (losses) on investments
|
$
|
(956,986
|
)
|
|
$
|
970,715
|
|
|
$
|
(957,192
|
)
|
Total net realized gains (losses) on investments, net realized and unrealized gains (losses) on investment related derivative instruments, and net change in unrealized gains (losses) on investments
|
$
|
(763,424
|
)
|
|
$
|
1,098,298
|
|
|
$
|
(863,048
|
)
|
▪
|
$19.4 million
related to change of intent to hold Corporate high yield securities.
|
▪
|
$16.0 million
related to certain equities that were in a loss position for more than 11 months or impaired by more than 50%.
|
▪
|
$8.7 million
related to other investments.
|
▪
|
$8.0 million
for structured securities, principally CDOs that we no longer intend to hold for a period sufficient to recover their fair value to amortized cost.
|
▪
|
$4.0 million
related to hedge funds, included in other investments, that were in a loss position for more than 11 months.
|
▪
|
$2.0 million
related to certain quasi-government securities that we no longer intend to hold for a period sufficient to recover their fair value to amortized cost.
|
▪
|
$1.3 million
for structured securities, principally non-Agency RMBS, where we determined that the likely recovery on these securities was below the carrying value and, accordingly, recorded an impairment of the securities to the discounted value of the cash flows expected to be received on these securities.
|
▪
|
$23.6 million
related to foreign exchange losses.
|
▪
|
$12.5 million
related to other investments.
|
▪
|
$10.9 million
related to certain equities as the holdings were in a loss position for more than 11 months or impaired by more than 50%.
|
▪
|
$3.7 million
related to change of intent to hold certain Corporate high yield securities.
|
▪
|
$4.3 million
for structured securities, principally non-Agency RMBS, where we determined that the likely recovery on these securities was below the carrying value and, accordingly, recorded an impairment of the securities to the discounted value of the cash flows expected to be received on these securities.
|
▪
|
$4.3 million
related to foreign exchange losses.
|
Credit Loss Impairments
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Opening balance at beginning of indicated period
|
$
|
131,942
|
|
|
$
|
174,805
|
|
Credit loss impairment recognized in the current period on securities not previously impaired
|
9,698
|
|
|
3,907
|
|
||
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period
|
(54,648
|
)
|
|
(42,671
|
)
|
||
Credit loss impairments previously recognized on securities impaired to fair value during the period
|
(2,629
|
)
|
|
—
|
|
||
Additional credit loss impairments recognized in the current period on securities previously impaired
|
2,230
|
|
|
4,185
|
|
||
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected
|
(13,124
|
)
|
|
(8,284
|
)
|
||
Closing balance at end of indicated period
|
$
|
73,469
|
|
|
$
|
131,942
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Investment fund affiliates
|
$
|
1,386,837
|
|
|
$
|
1,219,138
|
|
Operating affiliates
|
322,062
|
|
|
418,482
|
|
||
Total investment affiliates
|
$
|
1,708,899
|
|
|
$
|
1,637,620
|
|
Year Ended December 31, 2015
(U.S. dollars in thousands, except percentages) |
XL Group Investment
|
|
Combined
Funds |
|||||||||||
Carrying
Value |
|
Equity in
Net Income (Loss) for the Year |
|
Weighted
Average XL Percentage Ownership |
|
|||||||||
Total Net Assets
(Estimated) (1) |
||||||||||||||
Hedge Funds:
|
|
|
|
|
|
|
|
|||||||
Arbitrage
|
$
|
190,016
|
|
|
$
|
612
|
|
|
8.6
|
%
|
|
$
|
2,202,112
|
|
Directional
|
551,262
|
|
|
31,012
|
|
|
7.2
|
%
|
|
7,643,134
|
|
|||
Event Driven (2)
|
285,823
|
|
|
5,592
|
|
|
3.0
|
%
|
|
9,460,387
|
|
|||
Multi-Style
|
57,097
|
|
|
5,452
|
|
|
3.6
|
%
|
|
1,600,959
|
|
|||
Total hedge funds
|
$
|
1,084,198
|
|
|
$
|
42,668
|
|
|
5.2
|
%
|
|
$
|
20,906,592
|
|
Private Investment Funds:
|
302,639
|
|
|
30,652
|
|
|
9.5
|
%
|
|
3,195,204
|
|
|||
Total Investment Fund Affiliates
|
$
|
1,386,837
|
|
|
$
|
73,320
|
|
|
5.8
|
%
|
|
$
|
24,101,796
|
|
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|||||||
Hedge Funds:
|
|
|
|
|
|
|
|
|||||||
Arbitrage
|
$
|
134,400
|
|
|
$
|
12,060
|
|
|
11.0
|
%
|
|
$
|
1,224,526
|
|
Directional
|
536,470
|
|
|
32,196
|
|
|
9.2
|
%
|
|
5,865,247
|
|
|||
Event Driven (2)
|
300,168
|
|
|
21,030
|
|
|
3.1
|
%
|
|
9,703,973
|
|
|||
Multi-Style
|
52,122
|
|
|
1,751
|
|
|
4.1
|
%
|
|
1,278,410
|
|
|||
Total hedge funds
|
$
|
1,023,160
|
|
|
$
|
67,037
|
|
|
5.7
|
%
|
|
$
|
18,072,156
|
|
Private Investment Funds:
|
195,978
|
|
|
28,779
|
|
|
17.7
|
%
|
|
1,105,776
|
|
|||
Total Investment Fund Affiliates
|
$
|
1,219,138
|
|
|
$
|
95,816
|
|
|
6.4
|
%
|
|
$
|
19,177,932
|
|
(1)
|
Total estimated net assets are generally as at November 30 for hedge fund affiliates and September 30 for private investment fund affiliates.
|
(2)
|
The Company accounts for its investment in certain funds where the ownership percentage is less than three percent using the equity method, where the Company has significant influence over the related investment management company.
|
Year ended December 31, 2015
(U.S. dollars in thousands) |
XL Group Investment
|
|
Combined Investee Summarized
Financial Data (Estimated) (2) |
||||||||||||||||||||
Carrying
Value |
|
Equity in
Net Income (Loss) for the Year |
|
Total
Assets |
|
Total
Liabilities |
|
Total
Revenue (Loss) |
|
Net Income
(Loss) |
|||||||||||||
Strategic and other operating affiliates
|
$
|
251,348
|
|
|
$
|
33,608
|
|
|
$
|
4,280,976
|
|
|
$
|
3,293,873
|
|
|
$
|
847,131
|
|
|
$
|
91,701
|
|
Investment manager affiliates (1)
|
70,714
|
|
|
11,132
|
|
|
708,605
|
|
|
95,826
|
|
|
206,672
|
|
|
90,491
|
|
||||||
Total operating affiliates
|
$
|
322,062
|
|
|
$
|
44,740
|
|
|
$
|
4,989,581
|
|
|
$
|
3,389,699
|
|
|
$
|
1,053,803
|
|
|
$
|
182,192
|
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Strategic and other operating affiliates
|
317,216
|
|
|
50,132
|
|
|
4,679,395
|
|
|
3,691,173
|
|
|
1,075,935
|
|
|
152,122
|
|
||||||
Investment manager affiliates (1)
|
101,266
|
|
|
57,086
|
|
|
850,666
|
|
|
101,088
|
|
|
579,524
|
|
|
476,841
|
|
||||||
Total operating affiliates
|
$
|
418,482
|
|
|
$
|
107,218
|
|
|
$
|
5,530,061
|
|
|
$
|
3,792,261
|
|
|
$
|
1,655,459
|
|
|
$
|
628,963
|
|
(1)
|
During the years ended
December 31, 2015 and 2014
, the Company received distributions from its Investment Manager Affiliates of approximately
$25.3 million
and
$60.3 million
, respectively.
|
(2)
|
Total assets and total liabilities reflect balances related to investees still held at
December 31, 2015 and 2014
, respectively. Total revenue (loss) and net income (loss) reflect activity for the years ended
December 31, 2015 and 2014
related to both investees still held at year-end and investees disposed of during the year.
|
Year ended December 31,
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Hedge Funds:
|
|
|
|
||||
Arbitrage
|
$
|
205,117
|
|
|
$
|
179,821
|
|
Directional
|
276,277
|
|
|
336,082
|
|
||
Event Driven
|
5,427
|
|
|
56,238
|
|
||
Multi-Style
|
57,249
|
|
|
68,706
|
|
||
Total hedge funds
|
$
|
544,070
|
|
|
$
|
640,847
|
|
Private investment funds
|
244,576
|
|
|
129,243
|
|
||
Overseas deposits
|
479,187
|
|
|
92,223
|
|
||
Structured transactions
|
138,608
|
|
|
350,563
|
|
||
Other
|
26,616
|
|
|
35,563
|
|
||
Total other investments
|
$
|
1,433,057
|
|
|
$
|
1,248,439
|
|
Year ended December 31,
(U.S. dollars in thousands) |
Net Unrealized Gains
(Losses) |
|
Net Realized Gains (Losses)
|
||||||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||
Hedge funds
|
$
|
188,698
|
|
|
$
|
188,674
|
|
|
$
|
12,769
|
|
|
$
|
6,685
|
|
|
$
|
30,858
|
|
Private investment funds
|
38,340
|
|
|
42,604
|
|
|
9,342
|
|
|
13,275
|
|
|
4,331
|
|
|||||
Total
|
$
|
227,038
|
|
|
$
|
231,278
|
|
|
$
|
22,111
|
|
|
$
|
19,960
|
|
|
$
|
35,189
|
|
(U.S. dollars in thousands)
|
Goodwill
|
|
Intangible
assets with an
indefinite life
|
|
Intangible
assets with a
definite life
|
|
Total
|
||||||||
Balance at December 31, 2012
|
$
|
392,882
|
|
|
$
|
15,366
|
|
|
$
|
279
|
|
|
$
|
408,527
|
|
Amortization
|
—
|
|
|
—
|
|
|
(279
|
)
|
|
(279
|
)
|
||||
Foreign currency translation
|
3,363
|
|
|
—
|
|
|
—
|
|
|
3,363
|
|
||||
Balance at December 31, 2013
|
$
|
396,245
|
|
|
$
|
15,366
|
|
|
$
|
—
|
|
|
$
|
411,611
|
|
Additions
|
25,159
|
|
|
—
|
|
|
18,500
|
|
|
43,659
|
|
||||
Amortization
|
—
|
|
|
—
|
|
|
(1,850
|
)
|
|
(1,850
|
)
|
||||
Foreign currency translation
|
(5,468
|
)
|
|
—
|
|
|
—
|
|
|
(5,468
|
)
|
||||
Balance at December 31, 2014
|
$
|
415,936
|
|
|
$
|
15,366
|
|
|
$
|
16,650
|
|
|
$
|
447,952
|
|
Additions
|
807,381
|
|
|
673,000
|
|
|
315,000
|
|
|
1,795,381
|
|
||||
Amortization
|
—
|
|
|
—
|
|
|
(15,517
|
)
|
|
(15,517
|
)
|
||||
Foreign currency translation
|
(9,687
|
)
|
|
(5,507
|
)
|
|
(2,356
|
)
|
|
(17,550
|
)
|
||||
Balance at December 31, 2015
|
$
|
1,213,630
|
|
|
$
|
682,859
|
|
|
$
|
313,777
|
|
|
$
|
2,210,266
|
|
Year Ended December 31,
(U.S. dollars in thousands) |
|
||
2016
|
$
|
22,350
|
|
2017
|
19,017
|
|
|
2018
|
17,350
|
|
|
2019
|
17,350
|
|
|
2020
|
17,350
|
|
|
2021-2036
|
220,360
|
|
|
Total expected amortization expenses
|
$
|
313,777
|
|
(U.S. dollars in thousands)
|
Amount
|
Estimated Useful Life
|
||
Lloyd's - Syndicate capacity
|
$
|
660,000
|
|
Indefinite
|
Insurance licenses
|
13,000
|
|
Indefinite
|
|
Total identified indefinite life intangible assets
|
$
|
673,000
|
|
|
Lloyd's - Managing agent contracts
|
15,000
|
|
15 years
|
|
Distribution network
|
290,000
|
|
20 years
|
|
Trademarks / Trade names
|
10,000
|
|
2 years
|
|
Total identified definite life intangible assets
|
$
|
315,000
|
|
|
Total identified intangible assets
|
$
|
988,000
|
|
|
•
|
Lloyd's syndicate capacity - This asset represents the syndicate capacity of two Lloyd's syndicates allowing the Company to write insurance business in the Lloyd's market globally and realize the profits from that business. The value of the syndicate capacity includes the reputational value of participation in the Lloyd's market, and the value of trade names and licenses associated with syndicate ownership. The syndicate capacity was valued using the Multi-Period Excess Earnings Method, an application of the Income Approach. Critical inputs into the valuation model used for this intangible included estimates of the future growth of syndicate authorized premium income limits (ie, capacity) and expected return on that capacity and discounting based on a weighted average cost of capital.
|
•
|
Insurance licenses - The insurance licenses owned by Catlin at the time of the Catlin Acquisition allow the Company to write insurance business in the United States. The insurance licenses were valued using the Market Approach. Critical inputs utilized in the valuation of this intangible were the number of licenses obtained by US state and an aggregate market value per license based on similar past market transactions.
|
•
|
Lloyd's managing agent contracts - As the managing agent for certain Lloyd's syndicates, the Company has contracts with the syndicate members to provide underwriting services for which it earns managing agent fees and a profit commission. The managing agent contracts were based on the Income Approach. Critical inputs utilized in the valuation of this intangible included expected contract fee and profit commission rates applied to future managed syndicate capacity, contract renewal probabilities over a time horizon and discounting based on a weighted average cost of capital.
|
•
|
Distribution network - This asset represents a network of hundreds of retail and wholesale brokers worldwide, including specialty and regional brokerages, which allow the Company to form closer relationships with clients and aids business retention. The distribution network was valued using the Multi-Period Excess Earnings Method, an application of the Income Approach. Critical inputs into the valuation model used for this intangible included projections of underwriting profitability and investment returns, supporting capital charges, and discounting based on a weighted average cost of capital.
|
•
|
Trademarks / Trade names - The Catlin trademarks / trade names are utilized to attract customers for the turnkey solutions provided under the Company's managing agent contracts and to generate premiums from the non-Lloyd's
|
(U.S. dollars in thousands)
|
Premiums Written
Year Ended December 31,
|
|
Premiums Earned
Year Ended December 31,
|
||||||||||||||||||||
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||
Direct
|
$
|
7,847,236
|
|
|
$
|
5,450,868
|
|
|
$
|
5,050,953
|
|
|
$
|
7,717,173
|
|
|
$
|
5,173,403
|
|
|
$
|
4,966,207
|
|
Assumed
|
2,821,771
|
|
|
2,310,621
|
|
|
2,365,839
|
|
|
3,465,421
|
|
|
2,343,329
|
|
|
2,363,261
|
|
||||||
Ceded
|
(2,780,183
|
)
|
|
(1,994,280
|
)
|
|
(1,512,810
|
)
|
|
(3,018,410
|
)
|
|
(1,799,294
|
)
|
|
(1,315,369
|
)
|
||||||
Net
|
$
|
7,888,824
|
|
|
$
|
5,767,209
|
|
|
$
|
5,903,982
|
|
|
$
|
8,164,184
|
|
|
$
|
5,717,438
|
|
|
$
|
6,014,099
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
P&C Operations
|
$
|
5,248,905
|
|
|
$
|
3,411,528
|
|
Corporate and Other
|
13,801
|
|
|
17,840
|
|
||
Total unpaid losses and loss expenses recoverable
|
$
|
5,262,706
|
|
|
$
|
3,429,368
|
|
Name of Reinsurer
|
Reinsurer Financial Strength Rating
|
|
% of Total
|
|
Munich Reinsurance Co.
|
AA-/Stable
|
|
26.1
|
%
|
Lloyd's Syndicates
|
A+/Stable
|
|
11.7
|
%
|
Swiss Reinsurance Co.
|
AA-/Stable
|
|
6.8
|
%
|
Swiss Re Europe S.A.
|
AA-/Stable
|
|
4.9
|
%
|
Transatlantic Reinsurance Company
|
A+/Stable
|
|
4.3
|
%
|
Arch Reinsurance Company
|
A+/Stable
|
|
3.0
|
%
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Reserve for reported losses and loss expenses
|
$
|
10,293,448
|
|
|
$
|
7,461,444
|
|
Reserve for losses incurred but not reported
|
15,146,296
|
|
|
11,891,799
|
|
||
Unpaid losses and loss expenses
|
$
|
25,439,744
|
|
|
$
|
19,353,243
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Loss and loss expenses payments
|
$
|
6,505,075
|
|
|
$
|
4,499,642
|
|
|
$
|
4,496,802
|
|
Change in unpaid losses and loss expenses
|
(168,263
|
)
|
|
(514,406
|
)
|
|
(71,901
|
)
|
|||
Change in unpaid losses and loss expenses recoverable
|
(440,189
|
)
|
|
(48,536
|
)
|
|
(24,774
|
)
|
|||
Paid loss recoveries
|
(1,130,423
|
)
|
|
(678,307
|
)
|
|
(668,663
|
)
|
|||
Net losses and loss expenses incurred
|
$
|
4,766,200
|
|
|
$
|
3,258,393
|
|
|
$
|
3,731,464
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Unpaid losses and loss expenses at the beginning of the year
|
$
|
19,353,243
|
|
|
$
|
20,481,065
|
|
|
$
|
20,484,121
|
|
Unpaid losses and loss expenses recoverable
|
3,411,528
|
|
|
3,414,735
|
|
|
3,361,703
|
|
|||
Net unpaid losses and loss expenses at the beginning of the year
|
$
|
15,941,715
|
|
|
$
|
17,066,330
|
|
|
$
|
17,122,418
|
|
Acquired reserves
|
5,439,876
|
|
|
—
|
|
|
—
|
|
|||
Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
5,072,830
|
|
|
3,513,465
|
|
|
4,021,353
|
|
|||
Prior year
|
(306,630
|
)
|
|
(255,072
|
)
|
|
(289,889
|
)
|
|||
Total net incurred losses and loss expenses
|
$
|
4,766,200
|
|
|
$
|
3,258,393
|
|
|
$
|
3,731,464
|
|
Exchange rate effects
|
(582,300
|
)
|
|
(561,673
|
)
|
|
40,587
|
|
|||
Less net losses and loss expenses paid in respect of losses occurring in:
|
|
|
|
|
|
||||||
Current year
|
1,047,277
|
|
|
381,008
|
|
|
425,254
|
|
|||
Prior year
|
4,327,375
|
|
|
3,440,327
|
|
|
3,402,885
|
|
|||
Total net paid losses
|
$
|
5,374,652
|
|
|
$
|
3,821,335
|
|
|
$
|
3,828,139
|
|
Net unpaid losses and loss expenses at the end of the year
|
20,190,839
|
|
|
15,941,715
|
|
|
17,066,330
|
|
|||
Unpaid losses and loss expenses recoverable
|
5,248,905
|
|
|
3,411,528
|
|
|
3,414,735
|
|
|||
Unpaid losses and loss expenses at the end of the year
|
$
|
25,439,744
|
|
|
$
|
19,353,243
|
|
|
$
|
20,481,065
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Insurance segment
|
$
|
(65,030
|
)
|
|
$
|
(99,758
|
)
|
|
$
|
(102,039
|
)
|
Reinsurance segment
|
(241,600
|
)
|
|
(155,314
|
)
|
|
(187,850
|
)
|
|||
Total
|
$
|
(306,630
|
)
|
|
$
|
(255,072
|
)
|
|
$
|
(289,889
|
)
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Professional
|
$
|
5,763
|
|
|
$
|
17,097
|
|
|
$
|
75,045
|
|
Casualty
|
(11,949
|
)
|
|
38,414
|
|
|
(21,829
|
)
|
|||
Property
|
25,189
|
|
|
(57,470
|
)
|
|
(46,387
|
)
|
|||
Specialty
|
(120,879
|
)
|
|
(82,756
|
)
|
|
(140,740
|
)
|
|||
Other
|
36,846
|
|
|
(15,043
|
)
|
|
31,872
|
|
|||
Total
|
$
|
(65,030
|
)
|
|
$
|
(99,758
|
)
|
|
$
|
(102,039
|
)
|
•
|
For professional lines, net prior year development was
$5.8 million
unfavorable. Strengthening in the U.S. standard commercial and select accountants and public entities portfolios were largely offset by releases in the Bermuda standard commercial and design architects and engineers portfolios.
|
•
|
For casualty lines, net prior year development was
$11.9 million
favorable. This was driven by releases of
$24.5 million
in the excess casualty book, predominantly on the Bermuda portfolio, and
$24.0 million
in International casualty reflecting the better than expected loss experience reported across most accident years. These reductions were partially offset by deteriorations of
$31.2 million
in excess and surplus lines casualty book.
|
•
|
For property lines, net prior year development was
$25.2 million
unfavorable driven by worse than expected loss experience reported for the non-catastrophe exposures in the International construction and North America portfolios totaling
$53.1 million
. These deteriorations were partially offset by a reduction of
$29.6 million
in the International energy book to reflect better than expected attritional loss experience.
|
•
|
For specialty lines, net prior year development was
$120.9 million
favorable driven by releases of
$60.8 million
in the marine business and
$18.8 million
in the discontinued Bermuda political risk portfolio, the latter arising predominantly from the favorable settlement of a loss on the 2009 accident year and the lapse of the exposure for this account. There were further reductions of
$14.8 million
in the discontinued specialty book to reflect better than expected loss experience reported primarily on the 2002 and 2003 accident years and
$15.2 million
and
$7.1 million
to reflect favorable experience in aerospace and crisis management, respectively.
|
•
|
For other lines, net prior year development was
$36.8 million
unfavorable driven by a
$25.4 million
strengthening in the excess and surplus book due to worse than expected loss experience reported on the New York Contractors general liability business, predominantly on the 2013 and prior accident years. This was compounded by a strengthening of a
$18.3 million
in the surety book relating to a large claim impacting the 2013 and 2014 accident years. These deteriorations were partially offset by a
$10.1 million
reduction in the discontinued structured indemnity book due to the favorable settlement of a large claim.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Property and other short-tail lines
|
$
|
(173,754
|
)
|
|
$
|
(85,324
|
)
|
|
$
|
(136,912
|
)
|
Casualty and other
|
(67,846
|
)
|
|
(69,990
|
)
|
|
(50,938
|
)
|
|||
Total
|
$
|
(241,600
|
)
|
|
$
|
(155,314
|
)
|
|
$
|
(187,850
|
)
|
•
|
Net favorable prior year development for the short-tailed lines totaled
$173.8 million
. Details of the significant components are as follows:
|
◦
|
For property catastrophe lines, net prior year development was
$50.3 million
favorable due to reductions on a number of catastrophe losses and better than expected development on attritional losses, mainly in Europe, Middle East & Africa ("EMEA") and Latin America & Credit.
|
◦
|
For property other lines, net prior year development was
$88.9 million
favorable primarily due to better than expected attritional loss development across all books.
|
◦
|
For specialty lines, net prior year development was
$34.6 million
favorable due to better than expected attritional loss development mainly in EMEA and reductions on catastrophe and large losses.
|
•
|
Net favorable prior year development for the long-tailed lines totaled
$67.8 million
. Details of the significant components are as follows:
|
◦
|
For casualty lines, net prior year development was
$40.1 million
favorable due to better than expected attritional loss development in London, EMEA and reductions on a 2001 and a 2009 large loss being partially offset by worse than expected attritional loss development in North America and a strengthening on two 2008 large losses.
|
◦
|
For other lines, net prior year development was
$27.8 million
favorable due to better than expected development on attritional losses mainly from whole account business written in Bermuda and London.
|
(1)
|
Reinsurance contracts written, both on a proportional and excess basis, after 1972. The Company discontinued writing contracts with these exposures in 1985. Business written was across many different policies, each with a relatively small contract limit. The Company’s reported asbestos claims relate to both traditional products and premises and operations coverage.
|
(2)
|
Winterthur – business of Winterthur purchased by the Company from AXA Insurance (formerly Winterthur Swiss Insurance Company) in 2001. Pursuant to the Sale and Purchase Agreement and related agreements, AXA Insurance reimburses the Company for all asbestos losses.
|
(3)
|
During 2006, the Company acquired
$40.2 million
in losses through a loss portfolio transfer contract of which
$18.3 million
in losses related to asbestos and environmental claims. Given the terms of the policy, the combined aggregate limit on the total acquired reserves is limited to
$60.0 million
, not including coverage for claims handling costs over a defined period.
|
(4)
|
Catlin Acquisition - aviation insurance contracts written by Catlin in the Lloyd's market where the specific asbestos exclusion language was not implemented until 2003. Exposures only extend back to 1993 as Equitas was established to take on the Lloyd's market exposure for 1992 and prior. Exposure is due to asbestos-containing products in use by the aviation industry leading to claims against aviation manufacturers for asbestosis, mesothelioma and lung cancer.
|
Year ended December 31,
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net unpaid losses and loss expenses at beginning of year
|
$
|
81,416
|
|
|
$
|
80,435
|
|
|
$
|
78,315
|
|
Net incurred losses and loss expenses
|
15,663
|
|
|
8,903
|
|
|
6,257
|
|
|||
Less net paid losses and loss expenses
|
9,087
|
|
|
7,922
|
|
|
4,137
|
|
|||
Net increase (decrease) in unpaid losses and loss expenses
|
$
|
6,576
|
|
|
$
|
981
|
|
|
$
|
2,120
|
|
Acquired reserves
|
5,712
|
|
|
—
|
|
|
—
|
|
|||
Net unpaid losses and loss expenses at end of year
|
93,704
|
|
|
81,416
|
|
|
80,435
|
|
|||
Unpaid losses and loss expenses recoverable at end of year
|
93,688
|
|
|
100,537
|
|
|
115,090
|
|
|||
Gross unpaid losses and loss expenses at end of year
|
$
|
187,392
|
|
|
$
|
181,953
|
|
|
$
|
195,525
|
|
|
Asbestos
Claims
|
|
Environmental
Claims
|
||
Total number of claims outstanding at December 31, 2012
|
1,073
|
|
|
354
|
|
New claims reported in 2013
|
178
|
|
|
34
|
|
Claims resolved in 2013
|
(154
|
)
|
|
(50
|
)
|
Total number of claims outstanding at December 31, 2013
|
1,097
|
|
|
338
|
|
New claims reported in 2014
|
456
|
|
|
190
|
|
Claims resolved in 2014
|
(154
|
)
|
|
(69
|
)
|
Total number of claims outstanding at December 31, 2014
|
1,399
|
|
|
459
|
|
New claims reported in 2015
|
272
|
|
|
67
|
|
Claims resolved in 2015
|
(246
|
)
|
|
(96
|
)
|
Acquired reserves
|
1,166
|
|
|
—
|
|
Total number of claims outstanding at December 31, 2015
|
2,591
|
|
|
430
|
|
Year ended December 31
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Traditional Life
|
$
|
792,001
|
|
|
$
|
789,133
|
|
Annuities
|
3,371,499
|
|
|
3,918,066
|
|
||
Gross future policy benefit reserves
|
$
|
4,163,500
|
|
|
$
|
4,707,199
|
|
Reinsurance recoverable - GreyCastle Life Retro Arrangements
|
(3,719,131
|
)
|
|
(4,265,678
|
)
|
||
Reinsurance recoverable - U.S. Term Life Retro Arrangements
|
(284,481
|
)
|
|
—
|
|
||
Reinsurance recoverable - Other life retrocessions
|
(13,801
|
)
|
|
(17,840
|
)
|
||
Net future policy benefit reserves
|
$
|
146,087
|
|
|
$
|
423,681
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Assets held on a funds withheld basis relating to the GreyCastle Life Retro Arrangements
|
$
|
4,633,760
|
|
|
$
|
5,420,694
|
|
Reinsurance recoverable from GCLR
|
(3,719,131
|
)
|
|
(4,265,678
|
)
|
||
Funds withheld on GreyCastle life retrocession arrangements (net of future policy benefit reserves recoverable)
|
$
|
914,629
|
|
|
$
|
1,155,016
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||||||||||
Commitment/
Debt (1) |
|
In Use/
Outstanding (2) |
|
Commitment/
Debt (1) |
|
In Use/
Outstanding (2) |
|||||||||
Debt:
|
|
|
|
|
|
|
|
||||||||
2.30% Senior Notes due 2018
|
$
|
300,000
|
|
|
$
|
298,015
|
|
|
$
|
300,000
|
|
|
$
|
297,344
|
|
5.75% Senior Notes due 2021
|
400,000
|
|
|
397,523
|
|
|
400,000
|
|
|
397,092
|
|
||||
6.375% Senior Notes due 2024
|
350,000
|
|
|
349,029
|
|
|
350,000
|
|
|
348,920
|
|
||||
4.45% Subordinated Notes due 2025
|
500,000
|
|
|
492,521
|
|
|
—
|
|
|
—
|
|
||||
6.25% Senior Notes due 2027
|
325,000
|
|
|
323,218
|
|
|
325,000
|
|
|
323,062
|
|
||||
5.25% Senior Notes due 2043
|
300,000
|
|
|
296,294
|
|
|
300,000
|
|
|
296,162
|
|
||||
5.5% Subordinated Notes due 2045
|
500,000
|
|
|
488,370
|
|
|
—
|
|
|
—
|
|
||||
Total debt carrying value
|
$
|
2,675,000
|
|
|
$
|
2,644,970
|
|
|
$
|
1,675,000
|
|
|
$
|
1,662,580
|
|
(1)
|
Excluded from the table are certain credit facilities under which the Company is permitted to utilize up to
$1.4 billion
and
$1.6 billion
as of
December 31, 2015
and
December 31, 2014
, respectively, for revolving loans to support general operating and financing needs. However, as of
December 31, 2015
and
December 31, 2014
,
$527.1 million
and
$606.1 million
, respectively, were utilized under these facilities to issue letters of credit, leaving
$822.9 million
and $
968.9 million
, respectively, available to support other operating and financing needs.
|
•
|
Variable rate unsecured subordinated notes in the amounts of
€7 million
and
$27 million
due March 2035 and March 2036, respectively, issued by Catlin Underwriting (formerly Wellington Underwriting plc) in May 2006. The notes are subordinated to the claims of all senior creditors, as defined in the agreement governing the notes. The notes pay interest at a floating rate based on the rate on three-month deposits in U.S. dollars plus a margin of 295 basis points and 317 basis points, respectively. Interest is payable quarterly in arrears. The notes are redeemable at the discretion of the issuer.
|
•
|
Variable rate unsecured subordinated notes in the amounts of
$31 million
,
$10 million
and
€11 million
due September 2036, issued by Catlin Underwriting, in July 2006. The notes are subordinated to the claims of all senior creditors, as defined in the agreement governing the notes. The notes pay interest at a floating rate based on the rate on three-month deposits in U.S. dollars plus a margin of 310 basis points, 300 basis points and 300 basis points, respectively. Interest is payable quarterly in arrears. The notes are redeemable at the discretion of the issuer.
|
(1)
|
As of
December 31, 2015
and
December 31, 2014
, there were
fifteen
and
eight
available credit facilities, respectively.
|
(2)
|
As of
December 31, 2015
and
December 31, 2014
the stated portion of allowable credit facilities permitted to be utilized for revolving loans was
$1.4 billion
and
$1.6 billion
, respectively. However, as of
December 31, 2015
and
December 31, 2014
,
$527.1 million
and
$606.1 million
, respectively, of such facilities' limits were utilized to issue letters of credit, leaving
$822.9 million
and $
968.9 million
, respectively, available either to issue additional letters of credit or to support other operating or financing needs under these particular facilities.
|
•
|
A bilateral facility pursuant to a continuous credit agreement, available for utilization by Catlin-Bermuda, collateralized by pledged financial assets. As of
December 31, 2015
,
$230 million
of capacity was available under this facility.
|
•
|
A bilateral facility pursuant to a continuous credit agreement, available for utilization by Catlin Re Switzerland Ltd, collateralized by pledged financial assets. As of
December 31, 2015
,
$175 million
of capacity was available under this facility.
|
•
|
A facility managed by Lloyd's, acting for Catlin Syndicate 2003. As of
December 31, 2015
,
$8 million
of letters of credit were issued under this facility.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||||||||||||||||||||||||||
Asset
Derivative
Notional
Amount
|
|
Asset
Derivative
Fair
Value (1)
|
|
Liability
Derivative
Notional
Amount
|
|
Liability
Derivative
Fair
Value (1)
|
|
Asset
Derivative
Notional
Amount
|
|
Asset
Derivative
Fair
Value (1)
|
|
Liability
Derivative
Notional
Amount
|
|
Liability
Derivative
Fair
Value (1)
|
|||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange contracts
|
$
|
1,667,585
|
|
|
$
|
64,289
|
|
|
$
|
674,976
|
|
|
$
|
11,941
|
|
|
$
|
2,300,609
|
|
|
$
|
121,862
|
|
|
$
|
302,211
|
|
|
$
|
2,936
|
|
Total derivatives designated as hedging instruments
|
$
|
1,667,585
|
|
|
$
|
64,289
|
|
|
$
|
674,976
|
|
|
$
|
11,941
|
|
|
$
|
2,300,609
|
|
|
$
|
121,862
|
|
|
$
|
302,211
|
|
|
$
|
2,936
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investment Related Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate exposure
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
394,597
|
|
|
$
|
206
|
|
|
$
|
20,782
|
|
|
$
|
51
|
|
Foreign exchange exposure
|
102,234
|
|
|
2,888
|
|
|
144,707
|
|
|
1,702
|
|
|
7,385
|
|
|
403
|
|
|
207,182
|
|
|
4,442
|
|
||||||||
Credit exposure
|
8,433
|
|
|
652
|
|
|
71,614
|
|
|
12,067
|
|
|
2,408
|
|
|
165
|
|
|
14,270
|
|
|
9,836
|
|
||||||||
Financial market exposure
|
37
|
|
|
77
|
|
|
26,500
|
|
|
417
|
|
|
46,145
|
|
|
360
|
|
|
33,670
|
|
|
34
|
|
||||||||
Financial Operations Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Credit exposure
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other Non-Investment Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign exchange contracts
|
194,566
|
|
|
2,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,194
|
|
|
282
|
|
||||||||
Credit exposure
|
29,874
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
31,060
|
|
|
60
|
|
|
—
|
|
|
—
|
|
||||||||
Guaranteed minimum income benefit contract
|
46,032
|
|
|
19,368
|
|
|
46,032
|
|
|
19,368
|
|
|
46,249
|
|
|
13,603
|
|
|
46,249
|
|
|
13,603
|
|
||||||||
Modified coinsurance funds withheld contract (2)
|
60,667
|
|
|
—
|
|
|
4,620,879
|
|
|
—
|
|
|
64,947
|
|
|
—
|
|
|
5,401,278
|
|
|
—
|
|
||||||||
Total derivatives not designated as hedging instruments
|
$
|
441,843
|
|
|
$
|
25,025
|
|
|
$
|
4,909,732
|
|
|
$
|
33,554
|
|
|
$
|
592,791
|
|
|
$
|
14,797
|
|
|
$
|
5,804,625
|
|
|
$
|
28,248
|
|
(1)
|
Derivative instruments in an asset or liability position are included within Other assets or Other liabilities, respectively, in the balance sheets on a net basis where the Company has both a legal right of offset and the intention to settle the contracts on a net basis.
|
(2)
|
The fair value movements in derivative assets and liabilities relating to modified coinsurance funds withheld contracts are included within the associated asset or liability at each period end on the face of the balance sheets. Notional amounts associated with reinsurance agreements under which the Company assumes reinsurance risk are recorded as asset derivative notional amounts. Notional amounts associated with the GreyCastle Life Retro Arrangements under which the Company cedes reinsurance risk are recorded as liability derivative notional amounts. Included in the liability derivative notional amount at
December 31, 2015
is the cumulative net realized and unrealized loss on life retrocession embedded derivative of
$463.9 million
.
|
|
|
|
|
|
Gross Amounts Not Offset in the Balance Sheets
|
|
|
||||||||||||||||
December 31, 2015
(U.S. dollars in thousands) |
Gross Amounts Recognized in the Balance Sheets
|
|
Gross Amounts Offset in the Balance Sheets
|
|
Net Amounts in the Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral
|
|
Net Amounts
|
||||||||||||
Derivative Assets
|
$
|
89,314
|
|
|
$
|
3,087
|
|
|
$
|
86,227
|
|
|
$
|
—
|
|
|
$
|
30,958
|
|
|
$
|
55,269
|
|
Derivative Liabilities
|
$
|
45,495
|
|
|
$
|
3,087
|
|
|
$
|
42,408
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2014
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Assets
|
$
|
136,659
|
|
|
$
|
696
|
|
|
$
|
135,963
|
|
|
$
|
—
|
|
|
$
|
78,580
|
|
|
$
|
57,383
|
|
Derivative Liabilities
|
$
|
31,184
|
|
|
$
|
696
|
|
|
$
|
30,488
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,488
|
|
Derivatives Designated as Fair Value Hedges
(U.S. dollars in thousands)
|
Hedged Items – Amount of Gain/(Loss) Recognized in Income Attributable to Risk
|
||||||||||||||
Gain/(Loss) Recognized in Income on Derivative
|
|
Deposit
Liabilities
|
|
Fixed
Maturity
Investments
|
|
Ineffective Portion of Hedging Relationship – Gain/(Loss)
|
|||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Interest rate exposure
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Foreign exchange exposure
|
—
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Interest rate exposure
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Foreign exchange exposure
|
(15,663
|
)
|
|
|
|
|
|
|
|||||||
Total
|
$
|
(15,663
|
)
|
|
$
|
—
|
|
|
$
|
15,407
|
|
|
$
|
(256
|
)
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Interest rate exposure
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Foreign exchange exposure
|
(22,568
|
)
|
|
|
|
|
|
|
|||||||
Total
|
$
|
(22,568
|
)
|
|
$
|
—
|
|
|
$
|
23,065
|
|
|
$
|
497
|
|
Settlement of Fair Value Hedges – Summary
(U.S. dollars in thousands, except years)
|
Fair Value Hedges –
Notes Payable and Debt
December 31,
|
|
Fair Value Hedges –
Deposit Liabilities
December 31,
|
||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||
Cumulative reduction to interest expense
|
$
|
—
|
|
|
$
|
21,624
|
|
|
$
|
103,742
|
|
|
$
|
95,333
|
|
Remaining balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129,454
|
|
|
$
|
137,862
|
|
Weighted average years remaining to maturity
|
0.0
|
|
|
0.0
|
|
|
21.6
|
|
|
23.2
|
|
(1)
|
Derivative gains (losses) from derivative instruments designated as hedges of the net investment in a foreign operation are recorded in the cumulative translation adjustment account within AOCI for each period.
|
Net Realized and Unrealized Gains (Losses) on Derivative Instruments
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Investment Related Derivatives:
|
|
|
|
|
|
||||||
Interest rate exposure
|
$
|
(2,347
|
)
|
|
$
|
15,959
|
|
|
$
|
5,065
|
|
Foreign exchange exposure
|
(1,542
|
)
|
|
3,351
|
|
|
(948
|
)
|
|||
Credit exposure
|
(2,537
|
)
|
|
400
|
|
|
(4,052
|
)
|
|||
Financial market exposure
|
(2,190
|
)
|
|
411
|
|
|
6,302
|
|
|||
Financial Operations Derivatives:
|
|
|
|
|
|
||||||
Credit exposure
|
—
|
|
|
5,023
|
|
|
(2,437
|
)
|
|||
Other Non-Investment Derivatives:
|
|
|
|
|
|
||||||
Foreign exchange exposure
|
60,319
|
|
|
—
|
|
|
—
|
|
|||
Credit exposure
|
1,375
|
|
|
—
|
|
|
—
|
|
|||
Guaranteed minimum income benefit contract
|
—
|
|
|
2,257
|
|
|
10,457
|
|
|||
Modified coinsurance funds withheld contract
|
45
|
|
|
2,741
|
|
|
(7,086
|
)
|
|||
Total derivatives not designated as hedging instruments
|
$
|
53,123
|
|
|
$
|
30,142
|
|
|
$
|
7,301
|
|
Amount of gain (loss) recognized in income from ineffective portion of fair value hedges
|
—
|
|
|
(256
|
)
|
|
497
|
|
|||
Net realized and unrealized gains (losses) on derivative instruments
|
$
|
53,123
|
|
|
$
|
29,886
|
|
|
$
|
7,798
|
|
Net realized and unrealized gains (losses on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
$
|
(151,691
|
)
|
|
$
|
(488,222
|
)
|
|
$
|
—
|
|
Components of Life Retrocession Embedded Derivative and Derivative Instruments - Life Funds Withheld Assets:
|
|
||||||
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Interest income - Life Funds Withheld Assets
|
$
|
(193,568
|
)
|
|
$
|
(134,634
|
)
|
Realized and unrealized gains (losses) on Life Funds Withheld Assets
|
180,134
|
|
|
(318,065
|
)
|
||
Other
|
351
|
|
|
1,868
|
|
||
Net realized and unrealized gains (losses) on life retrocession embedded derivative
|
$
|
(13,083
|
)
|
|
$
|
(450,831
|
)
|
Net adjustments related to future policy benefit reserves, net of tax
|
$
|
(125,747
|
)
|
|
$
|
(21,786
|
)
|
Net realized and unrealized gains (losses) on derivative instruments - Life Funds Withheld Assets
|
$
|
(12,861
|
)
|
|
$
|
(15,605
|
)
|
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
$
|
(151,691
|
)
|
|
$
|
(488,222
|
)
|
Contingent Credit Features - Summary:
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Aggregate fair value of derivative agreements with downgrade provisions in a net liability position
|
$
|
5,827
|
|
|
$
|
5,770
|
|
Collateral posted to counterparty
|
$
|
—
|
|
|
$
|
—
|
|
(Percentage of consolidated gross written premiums from P&C operations)
|
2015
|
|
2014
|
|
2013
|
|||
AON Corporation and subsidiaries
|
18
|
%
|
|
18
|
%
|
|
21
|
%
|
Marsh & McLennan Companies
|
19
|
%
|
|
20
|
%
|
|
23
|
%
|
Willis Group and subsidiaries
|
13
|
%
|
|
11
|
%
|
|
13
|
%
|
Year Ended December 31,
(U.S. dollars in thousands)
|
|
||
2016
|
$
|
69,256
|
|
2017
|
62,517
|
|
|
2018
|
56,122
|
|
|
2019
|
51,447
|
|
|
2020
|
46,356
|
|
|
2021-2031
|
131,826
|
|
|
Total minimum future rentals
|
$
|
417,524
|
|
Year Ended December 31,
(U.S. dollars in thousands)
|
|
||
2016
|
$
|
11,870
|
|
2017
|
12,167
|
|
|
2018
|
12,471
|
|
|
2019
|
12,783
|
|
|
2020
|
13,103
|
|
|
2021-2028
|
109,248
|
|
|
Total minimum future lease payments
|
$
|
171,642
|
|
(in thousands)
|
2015
|
|
2014
|
||
Balance – beginning of year
|
255,183
|
|
|
278,253
|
|
Exercise of options
|
480
|
|
|
424
|
|
Net issuance of restricted shares
|
1,581
|
|
|
1,246
|
|
Share buybacks (1)
|
(12,434
|
)
|
|
(24,740
|
)
|
Issue of shares
|
49,935
|
|
|
—
|
|
Balance – end of year
|
294,745
|
|
|
255,183
|
|
(1)
|
Includes share buybacks associated with authorized share buyback programs as well as purchases related to satisfying tax withholding obligations of employees in connection with the vesting of restricted shares granted under the Company’s equity compensation programs.
|
|
2015
|
|
2014
|
|
2013
|
|||
Dividend yield
|
2.00
|
%
|
|
2.00
|
%
|
|
2.00
|
%
|
Risk free interest rate
|
1.70
|
%
|
|
1.81
|
%
|
|
1.14
|
%
|
Volatility
|
21.6
|
%
|
|
34.0
|
%
|
|
37.0
|
%
|
Expected lives
|
6.0 years
|
|
|
6.0 years
|
|
|
6.0 years
|
|
(In thousands except for weighted average grant date fair value)
|
2015
|
|
2014
|
|
2013
|
||||||
Options granted to purchase ordinary shares under the Programs - in thousands
|
1,974
|
|
|
1,025
|
|
|
1,047
|
|
|||
Weighted average grant date fair value
|
$
|
6.51
|
|
|
$
|
8.60
|
|
|
$
|
8.34
|
|
Total intrinsic value of stock options exercised
|
$
|
8,546
|
|
|
$
|
7,499
|
|
|
$
|
16,076
|
|
Options exercised during the year - in thousands
|
480
|
|
|
424
|
|
|
927
|
|
|||
Compensation expense related to stock option plans
|
$
|
8,961
|
|
|
$
|
9,961
|
|
|
$
|
8,294
|
|
Estimated tax benefit (charge) related to stock option plans
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
50
|
|
|
Number of Shares (
in thousands
)
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding – beginning of year
|
10,525
|
|
|
$
|
32.42
|
|
|
4.8 years
|
|
$
|
86,690
|
|
Granted
|
1,974
|
|
|
36.43
|
|
|
|
|
|
|||
Exercised
|
(480
|
)
|
|
20.79
|
|
|
|
|
|
|||
Canceled/Expired
|
(1,270
|
)
|
|
75.34
|
|
|
|
|
|
|||
Outstanding – end of year
|
10,749
|
|
|
$
|
28.59
|
|
|
5.4 years
|
|
$
|
121,085
|
|
Options exercisable
|
7,741
|
|
|
$
|
26.43
|
|
|
4.1 years
|
|
$
|
105,990
|
|
Available for grant (1)
|
6,907
|
|
|
|
|
|
|
|
(1)
|
Available for grant includes shares that may be granted as either stock options, restricted stock, restricted stock units or performance units.
|
(In thousands except for weighted average grant date fair value)
|
2015
|
|
2014
|
|
2013
|
||||||
Restricted ordinary shares granted
|
44
|
|
|
46
|
|
|
181
|
|
|||
Weighted average grant date fair value
|
$
|
37.11
|
|
|
$
|
31.86
|
|
|
$
|
29.44
|
|
Aggregate grant date fair value
|
$
|
1,613
|
|
|
$
|
1,463
|
|
|
$
|
5,325
|
|
Compensation expense related to restricted stock awards
|
$
|
3,889
|
|
|
$
|
5,239
|
|
|
$
|
4,419
|
|
Estimated tax benefit related to restricted stock awards
|
$
|
709
|
|
|
$
|
1,233
|
|
|
$
|
1,047
|
|
(In thousands except for weighted average grant date fair value)
|
Number of
Shares
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Unvested at December 31, 2014
|
433
|
|
|
$
|
36.41
|
|
Granted
|
44
|
|
|
$
|
37.11
|
|
Vested
|
(202
|
)
|
|
$
|
29.08
|
|
Unvested at December 31, 2015
|
275
|
|
|
$
|
41.90
|
|
(In thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Restricted stock units granted
|
1,534
|
|
|
1,867
|
|
|
1,803
|
|
|||
Aggregate grant date fair value
|
$
|
55,540
|
|
|
$
|
57,134
|
|
|
$
|
51,829
|
|
Compensation expense related to restricted stock units
|
$
|
48,937
|
|
|
$
|
41,879
|
|
|
$
|
32,874
|
|
Estimated tax benefit related to restricted stock units
|
$
|
13,271
|
|
|
$
|
11,607
|
|
|
$
|
8,813
|
|
(In thousands except for weighted average grant date fair value)
|
Number of
Shares
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Unvested at December 31, 2014
|
3,248
|
|
|
$
|
28.93
|
|
Granted
|
1,534
|
|
|
$
|
36.20
|
|
Vested
|
(1,536
|
)
|
|
$
|
27.67
|
|
Forfeited
|
(176
|
)
|
|
$
|
32.45
|
|
Unvested at December 31, 2015
|
3,070
|
|
|
$
|
32.99
|
|
(In thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Performance units granted
|
781
|
|
|
572
|
|
|
656
|
|
|||
Potential maximum share payout
|
1,563
|
|
|
1,144
|
|
|
1,312
|
|
|||
Aggregate grant date fair value
|
$
|
28,082
|
|
|
$
|
16,345
|
|
|
$
|
17,753
|
|
Compensation expense related to performance units
|
$
|
12,942
|
|
|
$
|
24,089
|
|
|
$
|
1,041
|
|
Estimated tax benefit (charge) related to performance units
|
$
|
1,459
|
|
|
$
|
4,250
|
|
|
$
|
(176
|
)
|
(In thousands except for weighted average grant date fair value)
|
Number of
Shares
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Unvested at December 31, 2014
|
2,540
|
|
|
$
|
25.24
|
|
Granted
|
781
|
|
|
$
|
35.94
|
|
Vested
|
(750
|
)
|
|
$
|
19.35
|
|
Forfeited
|
(63
|
)
|
|
$
|
30.03
|
|
Performance driven addition (reduction)
|
(627
|
)
|
|
$
|
27.74
|
|
Unvested at December 31, 2015
|
1,881
|
|
|
$
|
31.02
|
|
Funded Status
(U.S. dollars in thousands) |
2015
|
|
2014
|
||||
U.S.
|
$
|
(16,306
|
)
|
|
$
|
(13,124
|
)
|
U.K.
|
(4,650
|
)
|
|
(7,742
|
)
|
||
Other European
|
(21,807
|
)
|
|
(22,977
|
)
|
||
Funded status – end of year
|
$
|
(42,763
|
)
|
|
$
|
(43,843
|
)
|
Change in projected benefit obligation
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Projected benefit obligation – beginning of year
|
$
|
93,124
|
|
|
$
|
81,976
|
|
Projected benefit obligation assumed due to Catlin Acquisition
|
28,414
|
|
|
—
|
|
||
Service cost (1)
|
1,494
|
|
|
1,279
|
|
||
Interest cost
|
4,382
|
|
|
3,747
|
|
||
Actuarial (gain) / loss
|
2,821
|
|
|
13,402
|
|
||
Benefits and expenses paid
|
(3,747
|
)
|
|
(2,761
|
)
|
||
Foreign currency (gains) / losses
|
(4,047
|
)
|
|
(3,817
|
)
|
||
Settlements
|
(276
|
)
|
|
(702
|
)
|
||
Projected benefit obligation – end of year
|
$
|
122,165
|
|
|
$
|
93,124
|
|
Change in plan assets
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Fair value of plan assets – beginning of year
|
$
|
49,281
|
|
|
$
|
47,158
|
|
Fair value of plan assets acquired due to Catlin Acquisition
|
33,131
|
|
|
—
|
|
||
Actual return on plan assets
|
(119
|
)
|
|
3,543
|
|
||
Employer contributions
|
1,775
|
|
|
1,187
|
|
||
Benefits and expenses paid
|
(3,305
|
)
|
|
(1,932
|
)
|
||
Foreign currency gains / (losses)
|
(1,361
|
)
|
|
(675
|
)
|
||
Fair value of plan assets – end of year
|
$
|
79,402
|
|
|
$
|
49,281
|
|
Funded status – end of year
|
$
|
(42,763
|
)
|
|
$
|
(43,843
|
)
|
Accrued pension liability
|
$
|
42,763
|
|
|
$
|
43,843
|
|
Components of net benefit cost
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Service cost
|
$
|
1,494
|
|
|
$
|
1,279
|
|
|
$
|
1,491
|
|
Interest cost
|
4,381
|
|
|
3,747
|
|
|
3,589
|
|
|||
Expected return on plan assets
|
(3,903
|
)
|
|
(2,859
|
)
|
|
(3,096
|
)
|
|||
Amortization of net actuarial loss
|
1,617
|
|
|
812
|
|
|
1,440
|
|
|||
Net benefit cost
|
$
|
3,589
|
|
|
$
|
2,979
|
|
|
$
|
3,424
|
|
|
2015
|
|
2014
|
||||||||||||||
|
U.S. Plans
|
|
U.K. Plans
|
|
Other European Plans
|
|
U.S. Plans
|
|
U.K. Plans
|
|
Other European Plans
|
||||||
Net Benefit Cost – Weighted-average assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.91
|
%
|
|
3.70
|
%
|
|
2.42
|
%
|
|
4.95
|
%
|
|
4.60
|
%
|
|
3.50
|
%
|
Expected long-term rate of return on plan assets
|
6.00
|
%
|
|
3.48
|
%
|
|
N/A
|
|
|
6.50
|
%
|
|
4.60
|
%
|
|
N/A
|
|
Rate of compensation increase
|
N/A
|
|
|
3.96
|
%
|
|
2.50
|
%
|
|
N/A
|
|
|
5.50
|
%
|
|
2.50
|
%
|
Benefit Obligation – Weighted-average assumptions
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.25
|
%
|
|
3.70
|
%
|
|
2.42
|
%
|
|
3.91
|
%
|
|
4.60
|
%
|
|
2.40
|
%
|
Rate of compensation increase
|
N/A
|
|
|
3.96
|
%
|
|
2.50
|
%
|
|
N/A
|
|
|
5.50
|
%
|
|
2.50
|
%
|
(U.S. dollars in thousands, except percentages)
|
Expected Return on Assets for 2015
|
|
Fair Value at December 31, 2015
|
|
Expected Return on Assets for2014
|
|
Fair Value at December 31,2014
|
||||||
Equities
|
6.2
|
%
|
|
$
|
7,893
|
|
|
7.4
|
%
|
|
$
|
7,787
|
|
Gilts
|
2.4
|
%
|
|
17,856
|
|
|
3.6
|
%
|
|
1,579
|
|
||
Corporate Bonds
|
3.4
|
%
|
|
16,915
|
|
|
4.6
|
%
|
|
1,594
|
|
||
Other (cash)
|
1.8
|
%
|
|
52
|
|
|
4.0
|
%
|
|
224
|
|
||
Total market fair value of assets
|
|
|
$
|
42,716
|
|
|
|
|
$
|
11,184
|
|
(U.S. dollars in thousands)
|
Retirement Plan
|
|
Benefits Equalization Plan
|
|
Total
|
||||||
2016
|
$
|
988
|
|
|
$
|
434
|
|
|
$
|
1,422
|
|
2017
|
$
|
1,023
|
|
|
$
|
430
|
|
|
$
|
1,453
|
|
2018
|
$
|
1,054
|
|
|
$
|
427
|
|
|
$
|
1,481
|
|
2019
|
$
|
1,240
|
|
|
$
|
524
|
|
|
$
|
1,764
|
|
2020
|
$
|
1,396
|
|
|
$
|
538
|
|
|
$
|
1,934
|
|
2021-2025
|
$
|
9,904
|
|
|
$
|
3,032
|
|
|
$
|
12,936
|
|
(U.S. dollars in thousands)
|
Unrealized Gains (Losses) on Investments (1)
|
|
OTTI Losses Recognized in AOCI
|
|
Foreign Currency Translation Adjustments
|
|
Underfunded Pension Liability
|
|
Cash Flow Hedge
|
|
Total
|
||||||||||||
Balance, net of tax, December 31, 2012
|
$
|
1,591,210
|
|
|
$
|
(121,371
|
)
|
|
$
|
69,399
|
|
|
$
|
(20,892
|
)
|
|
$
|
1,674
|
|
|
$
|
1,520,020
|
|
OCI before reclassifications
|
(742,768
|
)
|
|
—
|
|
|
(62,934
|
)
|
|
9,722
|
|
|
—
|
|
|
(795,980
|
)
|
||||||
Amounts reclassified from AOCI
|
(119,970
|
)
|
|
32,193
|
|
|
206
|
|
|
1,440
|
|
|
439
|
|
|
(85,692
|
)
|
||||||
Tax benefit (expense)
|
93,960
|
|
|
(12
|
)
|
|
7,870
|
|
|
(3,509
|
)
|
|
—
|
|
|
98,309
|
|
||||||
Net current period OCI - net of tax
|
$
|
(768,778
|
)
|
|
$
|
32,181
|
|
|
$
|
(54,858
|
)
|
|
$
|
7,653
|
|
|
$
|
439
|
|
|
$
|
(783,363
|
)
|
Balance, net of tax, December 31, 2013
|
$
|
822,432
|
|
|
$
|
(89,190
|
)
|
|
$
|
14,541
|
|
|
$
|
(13,239
|
)
|
|
$
|
2,113
|
|
|
$
|
736,657
|
|
OCI before reclassifications (1)
|
954,326
|
|
|
—
|
|
|
(26,497
|
)
|
|
(10,877
|
)
|
|
—
|
|
|
916,952
|
|
||||||
Amounts reclassified from AOCI
|
(143,330
|
)
|
|
14,082
|
|
|
87
|
|
|
812
|
|
|
255
|
|
|
(128,094
|
)
|
||||||
Tax benefit (expense)
|
(43,314
|
)
|
|
(939
|
)
|
|
681
|
|
|
2,515
|
|
|
—
|
|
|
(41,057
|
)
|
||||||
Net current period OCI - net of tax
|
$
|
767,682
|
|
|
$
|
13,143
|
|
|
$
|
(25,729
|
)
|
|
$
|
(7,550
|
)
|
|
$
|
255
|
|
|
$
|
747,801
|
|
Balance, net of tax, December 31, 2014
|
$
|
1,590,114
|
|
|
$
|
(76,047
|
)
|
|
$
|
(11,188
|
)
|
|
$
|
(20,789
|
)
|
|
$
|
2,368
|
|
|
$
|
1,484,458
|
|
OCI before reclassifications (1)
|
(474,304
|
)
|
|
—
|
|
|
(33,690
|
)
|
|
(6,100
|
)
|
|
—
|
|
|
(514,094
|
)
|
||||||
Amounts reclassified from AOCI
|
(346,911
|
)
|
|
18,987
|
|
|
—
|
|
|
1,145
|
|
|
(200
|
)
|
|
(326,979
|
)
|
||||||
Tax benefit (expense)
|
34,195
|
|
|
(442
|
)
|
|
8,375
|
|
|
1,103
|
|
|
—
|
|
|
43,231
|
|
||||||
Net current period OCI - net of tax
|
$
|
(787,020
|
)
|
|
$
|
18,545
|
|
|
$
|
(25,315
|
)
|
|
$
|
(3,852
|
)
|
|
$
|
(200
|
)
|
|
$
|
(797,842
|
)
|
Balance, net of tax, December 31, 2015
|
$
|
803,094
|
|
|
$
|
(57,502
|
)
|
|
$
|
(36,503
|
)
|
|
$
|
(24,641
|
)
|
|
$
|
2,168
|
|
|
$
|
686,616
|
|
(1)
|
Included in these amounts is the impact of Shadow Adjustments. As of December 31, 2014,
$445.1 million
was recorded. During the year ended
December 31, 2015
, additional net impacts of
$(170.7) million
were recorded, resulting in a total cumulative net impact of Shadow Adjustments on future policy benefit reserves of
$274.4 million
at
December 31, 2015
.
|
Gross Amount Reclassified From AOCI
|
||||||||
Details About AOCI Components
(U.S. dollars in thousands)
|
2015
|
|
2014
|
Affected Line Item in the Statement of Income
|
||||
Unrealized gains and losses on investments:
|
|
|
|
|
||||
|
$
|
(316,508
|
)
|
|
$
|
(175,639
|
)
|
Net realized gains (losses) on investments sold
|
|
95,344
|
|
|
$
|
54,095
|
|
OTTI on investments
|
|
|
(125,747
|
)
|
|
$
|
(21,786
|
)
|
Net realized and unrealized gains (losses) on life retrocession embedded derivative and derivative instruments - Life Funds Withheld Assets
|
|
|
$
|
(346,911
|
)
|
|
$
|
(143,330
|
)
|
Total before tax
|
|
7,597
|
|
|
$
|
(1,593
|
)
|
Provision (benefit) for income tax
|
|
|
$
|
(339,314
|
)
|
|
$
|
(144,923
|
)
|
Net of tax
|
OTTI losses recognized in OCI:
|
|
|
|
|
||||
|
$
|
18,014
|
|
|
$
|
11,848
|
|
Net realized gains (losses) on investments sold
|
|
973
|
|
|
$
|
2,234
|
|
OTTI on investments transferred to (from) OCI
|
|
|
$
|
18,987
|
|
|
$
|
14,082
|
|
Total before tax
|
|
(32
|
)
|
|
$
|
(175
|
)
|
Provision (benefit) for income tax
|
|
|
$
|
18,955
|
|
|
$
|
13,907
|
|
Net of tax
|
Foreign Currency Translation:
|
|
|
|
|
||||
Foreign exchange relating to affiliate investments
|
$
|
—
|
|
|
$
|
87
|
|
Exchange gains (losses) - before tax
|
|
—
|
|
|
$
|
—
|
|
Provision (benefit) for income tax
|
|
|
$
|
—
|
|
|
$
|
87
|
|
Net of tax
|
Underfunded Pension Liability:
|
|
|
|
|
||||
Pension expense
|
$
|
1,145
|
|
|
$
|
812
|
|
Operating Expenses
|
|
(401
|
)
|
|
$
|
(206
|
)
|
Provision (benefit) for income tax
|
|
|
$
|
744
|
|
|
$
|
606
|
|
Net of tax
|
Gains and losses on cash flow hedges:
|
|
|
|
|
||||
Interest rate contracts
|
$
|
(200
|
)
|
|
$
|
255
|
|
Interest Expense
|
|
—
|
|
|
$
|
—
|
|
Provision (benefit) for income tax
|
|
|
$
|
(200
|
)
|
|
$
|
255
|
|
Net of tax
|
|
|
|
|
|
||||
Total reclassifications for the period, gross of tax
|
$
|
(326,979
|
)
|
|
(128,094
|
)
|
|
|
Tax (benefit) expense
|
7,164
|
|
|
(1,974
|
)
|
|
||
Total reclassifications for the period, net of tax
|
$
|
(319,815
|
)
|
|
(130,068
|
)
|
|
(U.S. dollars in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Series D preference ordinary shares (1) (2)
|
$
|
11.8
|
|
|
$
|
11.7
|
|
|
$
|
12.3
|
|
Series E preference ordinary shares (3)
|
$
|
65.1
|
|
|
$
|
65.1
|
|
|
$
|
65.1
|
|
Non-cumulative perpetual preferred shares (4)
|
$
|
21.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
On
October 30, 2015
, the Company announced that the Board of Directors of XL-Cayman resolved to pay a dividend of
$8.7787
per share on XL-Cayman’s Series D Preference Ordinary Shares. The dividend was paid on
January 15, 2016
to all shareholders of record at
January 1, 2016
.
|
(2)
|
On
February 19, 2016
, the Company announced that the Board of Directors of XL-Cayman, resolved on
February 18, 2016
to pay a dividend of
$9.349
per share on XL-Cayman’s Series D Preference Ordinary Shares. The dividend will be paid on
April 15, 2016
to all shareholders of record at
April 1, 2016
.
|
(3)
|
On
February 19, 2016
, the Company announced that the Board of Directors of XL-Cayman, resolved on
February 18, 2016
to pay a dividend of
$32.50
per share on XL-Cayman’s Series E Preference Ordinary Shares. The dividend will be paid on
April 15, 2016
to all shareholders of record at
April 1, 2016
.
|
(4)
|
On
January 12, 2016
, the Board of Directors of Catlin-Bermuda resolved to pay a dividend in the aggregate amount of
$21.8 million
on CICL Prefs. The dividend was paid on
January 19, 2016
to all shareholders of record at
December 31, 2015
.
|
Jurisdiction
|
Tax Years
|
U.S.
|
2013
|
Ireland
|
2006 - 2009
|
Germany
|
2010 - 2013
|
France
|
2013 - 2014
|
Jurisdiction
|
Tax Years
|
U.S.
|
2012 - 2015
|
Ireland
|
2006 - 2015
|
U.K.
|
2013 - 2015
|
Germany
|
2010 - 2015
|
Switzerland
|
2011 - 2015
|
France
|
2013 - 2015
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Current expense (benefit):
|
|
|
|
|
|
||||||
U.S.
|
$
|
(22,698
|
)
|
|
$
|
45,598
|
|
|
$
|
49,566
|
|
Non U.S.
|
67,784
|
|
|
81,371
|
|
|
41,921
|
|
|||
Total current expense (benefit)
|
$
|
45,086
|
|
|
$
|
126,969
|
|
|
$
|
91,487
|
|
Deferred expense (benefit):
|
|
|
|
|
|
||||||
U.S.
|
$
|
(63,491
|
)
|
|
$
|
8,572
|
|
|
$
|
700
|
|
Non U.S.
|
(756
|
)
|
|
(38,644
|
)
|
|
(14,682
|
)
|
|||
Total deferred expense (benefit)
|
$
|
(64,247
|
)
|
|
$
|
(30,072
|
)
|
|
$
|
(13,982
|
)
|
Total tax expense (benefit)
|
$
|
(19,161
|
)
|
|
$
|
96,897
|
|
|
$
|
77,505
|
|
Jurisdiction
|
Applicable Statutory Taxation Rates
|
|
Ireland (1)
|
12.50
|
%
|
Ireland (1)
|
25.00
|
%
|
Bermuda
|
—
|
%
|
U.S.
|
35.00
|
%
|
U.K.
|
20.25
|
%
|
Switzerland (2)
|
7.83
|
%
|
Switzerland (2)
|
21.20
|
%
|
Germany
|
15.00
|
%
|
France
|
38.00
|
%
|
(1)
|
The different applicable statutory taxation rates in Ireland relate to entities classified as trading or non-trading companies.
|
(2)
|
The different applicable statutory taxation rates in Switzerland relate to entities classified as trading or holding companies.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Expected tax (benefit) provision at weighted average rate
|
$
|
(50,797
|
)
|
|
$
|
132,775
|
|
|
$
|
43,092
|
|
Permanent differences:
|
|
|
|
|
|
||||||
Non-taxable (income) loss
|
(23,036
|
)
|
|
(19,870
|
)
|
|
(50,745
|
)
|
|||
Revision to prior year estimates
|
7,402
|
|
|
2,016
|
|
|
8,551
|
|
|||
State, local and foreign taxes
|
27,499
|
|
|
47,078
|
|
|
12,225
|
|
|||
Valuation allowance
|
9,517
|
|
|
(181
|
)
|
|
5,754
|
|
|||
Net allocated investment income
|
(405
|
)
|
|
3,399
|
|
|
5,949
|
|
|||
Stock options
|
(433
|
)
|
|
411
|
|
|
1,501
|
|
|||
Non-deductible expenses
|
42,839
|
|
|
22,556
|
|
|
23,662
|
|
|||
Other investment related adjustments
|
2,075
|
|
|
(2,916
|
)
|
|
—
|
|
|||
Adjustments related to GreyCastle Life Retro Arrangements
|
(35,045
|
)
|
|
(99,535
|
)
|
|
—
|
|
|||
Change in tax rates
|
(11,877
|
)
|
|
3,974
|
|
|
(2,484
|
)
|
|||
Uncertain tax positions
|
13,100
|
|
|
7,190
|
|
|
30,000
|
|
|||
Total tax expense (benefit)
|
$
|
(19,161
|
)
|
|
$
|
96,897
|
|
|
$
|
77,505
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Deferred tax asset:
|
|
|
|
||||
Net unpaid loss reserve discount
|
$
|
111,584
|
|
|
$
|
90,262
|
|
Net unearned premiums
|
80,434
|
|
|
72,752
|
|
||
Compensation liabilities
|
94,013
|
|
|
77,578
|
|
||
Net operating losses
|
181,295
|
|
|
49,834
|
|
||
Investment adjustments
|
14,399
|
|
|
13,022
|
|
||
Pension
|
10,370
|
|
|
8,114
|
|
||
Bad debt reserve
|
7,425
|
|
|
6,626
|
|
||
Amortizable goodwill
|
5,396
|
|
|
6,694
|
|
||
Net unrealized depreciation on investments
|
5,051
|
|
|
1,484
|
|
||
Stock options
|
16,192
|
|
|
11,985
|
|
||
Depreciation
|
13,299
|
|
|
7,599
|
|
||
Net realized capital losses
|
98,756
|
|
|
97,189
|
|
||
Deferred intercompany capital losses
|
26,164
|
|
|
57,427
|
|
||
Untaxed Lloyd's result
|
3,769
|
|
|
7,254
|
|
||
Deferred acquisition costs
|
31,133
|
|
|
11,386
|
|
||
Currency translation adjustments
|
6,280
|
|
|
—
|
|
||
Other
|
24,977
|
|
|
2,282
|
|
||
Deferred tax asset, gross of valuation allowance
|
$
|
730,537
|
|
|
$
|
521,488
|
|
Valuation allowance
|
276,301
|
|
|
207,062
|
|
||
Deferred tax asset, net of valuation allowance
|
$
|
454,236
|
|
|
$
|
314,426
|
|
|
|
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Deferred tax liability:
|
|
|
|
||||
Net unrealized appreciation on investments
|
$
|
51,010
|
|
|
$
|
63,642
|
|
Unremitted earnings
|
$
|
3,739
|
|
|
$
|
5,125
|
|
Deferred acquisition costs
|
8,308
|
|
|
2,737
|
|
||
Currency translation adjustments
|
1,210
|
|
|
3,969
|
|
||
Regulatory reserves
|
64,352
|
|
|
65,965
|
|
||
Investment adjustment
|
6,373
|
|
|
12,061
|
|
||
Untaxed Lloyd’s result
|
—
|
|
|
11,422
|
|
||
Depreciation
|
11,500
|
|
|
—
|
|
||
Syndicate capacity
|
92,756
|
|
|
—
|
|
||
Intangible asset
|
40,126
|
|
|
—
|
|
||
Other
|
13,202
|
|
|
11,260
|
|
||
Deferred tax liability
|
$
|
292,576
|
|
|
$
|
176,181
|
|
Net Deferred Tax Asset
|
$
|
161,660
|
|
|
$
|
138,245
|
|
Jurisdiction
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
Switzerland
|
$
|
7,818
|
|
|
$
|
1,459
|
|
Ireland
|
93,396
|
|
|
72,363
|
|
||
U.S.
|
106,624
|
|
|
123,695
|
|
||
U.K.
|
46,732
|
|
|
1,632
|
|
||
Other
|
21,731
|
|
|
7,913
|
|
||
Valuation Allowance Total
|
$
|
276,301
|
|
|
$
|
207,062
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Unrecognized tax benefits, beginning of the year
|
$
|
37,190
|
|
|
$
|
30,000
|
|
|
$
|
—
|
|
Increases for tax positions taken during the year
|
20,370
|
|
|
12,182
|
|
|
9,591
|
|
|||
Increases for tax positions taken in prior years (1)
|
38,650
|
|
|
15,304
|
|
|
20,409
|
|
|||
Decreases for tax positions taken in prior years
|
(4,850
|
)
|
|
(20,296
|
)
|
|
—
|
|
|||
Decreases for lapse of the applicable statute of limitations
|
(10,770
|
)
|
|
—
|
|
|
—
|
|
|||
Unrecognized tax benefits, end of year
|
$
|
80,590
|
|
|
$
|
37,190
|
|
|
$
|
30,000
|
|
(1)
|
Included in this amount is approximately
$30.3 million
of unrecognized tax benefits related to the Catlin Acquisition that existed as of the Acquisition Date. Of this amount,
$4.8 million
had been specifically identified as an unrecognized tax benefit, and the remaining
$25.5 million
was included in deferred tax liability. In conjunction with the Catlin Acquisition, management determined that this amount should be reclassified as an unrecognized tax benefit.
|
(U.S. dollars in thousands)
|
Bermuda (1)
|
|
U.S. (2)
|
|
U.K., Europe and Other
|
||||||||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||||||
Required statutory capital and surplus
|
$
|
7,722,123
|
|
|
$
|
6,194,832
|
|
|
$
|
747,313
|
|
|
$
|
668,794
|
|
|
$
|
4,445,247
|
|
|
$
|
1,604,721
|
|
Actual statutory capital and surplus (3)
|
$
|
11,112,176
|
|
|
$
|
10,309,895
|
|
|
$
|
2,234,767
|
|
|
$
|
2,233,596
|
|
|
$
|
6,054,122
|
|
|
$
|
2,712,552
|
|
(1)
|
Required statutory capital and surplus at
December 31, 2015
represents
100%
Bermuda Solvency Capital Requirement ("BSCR") level for the top Bermuda operating subsidiary, XL Insurance (Bermuda) Ltd, calculated on a consolidated basis (and therefore includes a BSCR requirement for all regions).
|
(2)
|
Required statutory capital and surplus represents
100%
Risk-Based Capital level for principal U.S. operating subsidiaries.
|
(3)
|
Statutory assets in Bermuda include investments in other U.S. and international subsidiaries reported separately herein.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Bermuda
|
$
|
1,513,924
|
|
|
$
|
361,022
|
|
|
$
|
1,241,878
|
|
U.S.
|
$
|
17,574
|
|
|
$
|
155,751
|
|
|
$
|
124,310
|
|
U.K., Europe and Other
|
$
|
(125,758
|
)
|
|
$
|
215,787
|
|
|
$
|
1,465
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Reported net premiums
|
$
|
42,042
|
|
|
$
|
91,261
|
|
|
$
|
73,085
|
|
Reported net losses
|
$
|
13,246
|
|
|
$
|
38,927
|
|
|
$
|
29,042
|
|
Reported net acquisition costs
|
$
|
14,682
|
|
|
$
|
35,711
|
|
|
$
|
25,275
|
|
(U.S. dollars in thousands, except per share amounts)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
2015
|
|
|
|
|
|
|
|
||||||||
Net premiums earned – P&C operations
|
$
|
1,319,494
|
|
|
$
|
2,063,795
|
|
|
$
|
2,405,740
|
|
|
$
|
2,375,155
|
|
Net premiums earned – Corporate and Other
|
$
|
14,506
|
|
|
$
|
18,258
|
|
|
$
|
17,812
|
|
|
$
|
11,665
|
|
Underwriting profit (loss) – P&C operations
|
$
|
146,836
|
|
|
$
|
208,779
|
|
|
$
|
114,118
|
|
|
$
|
183,458
|
|
Net income (loss) attributable to ordinary shareholders
|
$
|
36,281
|
|
|
$
|
915,039
|
|
|
$
|
27,282
|
|
|
$
|
228,550
|
|
Net income (loss) per ordinary share and ordinary equivalent – basic
|
$
|
0.14
|
|
|
$
|
3.16
|
|
|
$
|
0.09
|
|
|
$
|
0.77
|
|
Net income (loss) per ordinary share and ordinary equivalent – diluted
|
$
|
0.14
|
|
|
$
|
3.11
|
|
|
$
|
0.09
|
|
|
$
|
0.76
|
|
2014
|
|
|
|
|
|
|
|
||||||||
Net premiums earned – P&C operations
|
$
|
1,412,528
|
|
|
$
|
1,438,076
|
|
|
$
|
1,453,673
|
|
|
$
|
1,413,161
|
|
Net premiums earned – Corporate and Other
|
$
|
76,311
|
|
|
$
|
58,518
|
|
|
$
|
19,739
|
|
|
$
|
23,064
|
|
Underwriting profit (loss) – P&C operations
|
$
|
144,874
|
|
|
$
|
167,947
|
|
|
$
|
144,375
|
|
|
$
|
218,850
|
|
Net income (loss) attributable to ordinary shareholders
|
$
|
255,717
|
|
|
$
|
(279,260
|
)
|
|
$
|
72,384
|
|
|
$
|
139,499
|
|
Net income (loss) per ordinary share and ordinary equivalent – basic
|
$
|
0.93
|
|
|
$
|
(1.03
|
)
|
|
$
|
0.27
|
|
|
$
|
0.54
|
|
Net income (loss) per ordinary share and ordinary equivalent – diluted
|
$
|
0.91
|
|
|
$
|
(1.03
|
)
|
|
$
|
0.27
|
|
|
$
|
0.53
|
|
ITEM 9.
|
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
|
OTHER INFORMATION
|
ITEM 10.
|
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Schedule
Number
|
Page
|
I
|
||
II
|
||
IV
|
||
VI
|
||
Other Schedules have been omitted as they are not applicable to the Company.
|
|
|
▪
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
▪
|
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
▪
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
▪
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
Exhibit
|
Description
|
2.1
|
Implementation Agreement, dated January 9, 2015, among XL Group plc, Green Holdings Limited and Catlin Group Limited, incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K (No. 1-10804) filed on January 9, 2015.
|
2.2
|
Merger Agreement, dated as of January 9, 2015, among XL Group plc, Green Holdings Limited and Catlin Group Limited, incorporated by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K (No. 1-10804) filed on January 9, 2015.
|
3.1
|
Amended and Restated Memorandum and Articles of Incorporation of XL Group plc, incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2014.
|
3.2
|
Certification of Incorporation of XL Group plc, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K12B (No. 1-10804) filed on July 1, 2010.
|
3.3
|
Memorandum of Association of XLIT Ltd., incorporated by reference to Exhibit 4.19 of the Company’s Registration Statement on Form S-3 (No. 333-177869) filed on November 9, 2011.
|
3.4
|
Articles of Association of XLIT Ltd., incorporated by reference to Exhibit 4.20 of the Company’s Registration Statement on Form S-3 (No. 333-177869) filed on November 9, 2011.
|
4.1
|
Excerpts from the Minutes of a Meeting of a Committee of the Board of Directors pursuant to Article 75 of XL Capital Ltd’s Articles of Association held on March 12, 2007, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (No. 1-10804) filed on March 15, 2007.
|
4.2
|
Indenture, dated as of June 2, 2004, between XL Capital Ltd and The Bank of New York, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (No. 333-116245) filed on June 7, 2004.
|
4.3
|
Second Supplemental Indenture, dated as of November 12, 2004, to the Indenture, dated as of June 2, 2004, between XL Capital Ltd and The Bank of New York, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-10804) filed on November 15, 2004.
|
4.4
|
Fourth Supplemental Indenture, dated May 7, 2007, to the Indenture, dated as of June 2, 2004, between XL Capital Ltd, and The Bank of New York, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-10804) filed on May 7, 2007.
|
4.5
|
Form of XL Group plc Ordinary Share Certificate, incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K12B (No. 1-10804) filed on July 1, 2010.
|
4.6
|
Excerpts from the Authorizing Resolutions of the Board of Directors of XL Capital Ltd., dated October 27, 2006, incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2011.
|
4.7
|
Form of XL Capital Ltd Global Series E Preference Share Certificate, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-10804) filed on March 15, 2007.
|
4.8
|
Form of XLIT Ltd. Global Series D Preference Ordinary Share Certificate, incorporated by reference to Exhibit 4.29 to the Company’s Annual Report on Form 10-K (No. 1-10804)for the year ended December 31, 2011.
|
4.9
|
Indenture, dated September 30, 2011, among XL Group plc, XL Group Ltd. (n/k/a XLIT Ltd.) and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 30, 2011 (No. 1-10804).
|
4.10
|
First Supplemental Indenture, dated September 30, 2011, to the Indenture dated September 30, 2011 among XL Group plc, XL Group Ltd. (n/k/a XLIT Ltd.) and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on September 30, 2011 (No. 1-10804).
|
4.11
|
Second Supplemental Indenture, dated November 21, 2013, to the Indenture dated September 30, 2011 among XL Group plc, XL Group Ltd. (n/k/a XLIT Ltd.) and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (No. 1-10804) filed on November 21, 2013.
|
4.12
|
Indenture, dated March 30, 2015, among XL Group plc, XLIT Ltd. and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 30, 2015 (No. 1-10804).
|
4.13
|
First Supplemental Indenture, dated March 30, 2015, to the Indenture dated March 30, 0215 among XL Group plc, XLIT Ltd. and Wells Fargo Bank, National Association, as trustee, incorporated by reference to Exhibit 4.2 to the Company's Current Report on From 8-K (No. 1-10804) filed on March 30, 2015.
|
4.14
|
Replacement Capital Covenant, dated March 15, 2007, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-10804) filed on March 15, 2007.
|
4.15
|
Termination of March 15, 2007 Replacement Capital Covenant, dated March 30, 2015, incorporated by reference to Exhibit 4.6 to the Company's Current Report on From 8-K (No. 1-10804) filed on March 30, 2015.
|
4.16
|
Replacement Capital Covenant, dated March 30, 2015, incorporated by reference to Exhibit 4.7 to the Company's Current Report on From 8-K (No. 1-10804) filed on March 30, 2015.
|
10.1+
|
1991 Performance Incentive Program (as amended and restated effective May 6, 2011), incorporated by reference to Appendix A to the Company's Definitive Proxy Statement on Schedule 14A (No. 1-10804) filed on March 7, 2011.
|
10.2+
|
Amendment to the 1991 Performance Incentive Program (as amended and restated effective May 6, 2011), incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2013.
|
10.3+
|
Amended and Restated Directors Stock & Option Plan, incorporated by reference to Annex C to the Company's Definitive Proxy Statement on Schedule 14A (No. 1-10804) filed on March 10, 2014.
|
10.4+
|
Amended and Restated Directors Stock & Option Plan, incorporated by reference to Annex A to the Company's Definitive Proxy Statement on Schedule 14A (No. 1-10804) filed on March 20, 2015.
|
10.5+
|
Employment Agreement, dated as of September 29, 2006, between XL Capital Ltd and Sarah E. Street, incorporated by reference to Exhibit 10.1 to the Company’s quarterly report on Form 10-Q (No. 1-10804) for the period ended September 30, 2006.
|
10.6+
|
Form of Non-Statutory Stock Option Agreement (Incremental Vesting), incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2010.
|
10.7+
|
Form of Non-Statutory Stock Option Agreement (Incremental Vesting), incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2004 (No. 1-10804).
|
10.8+
|
Form of Non-Statutory Stock Option Agreement, incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q (No. 1-10804) for the period ended March 31, 2013.
|
10.9+
|
Form of Non-Statutory Stock Option Agreement, incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K (No. 1-10804) for the period ended December 31, 2014.
|
10.10+
|
Form of Restricted Stock Agreement, incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2004 (No. 1-10804).
|
10.11+
|
Form of Restricted Stock Agreement, incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q (No. 1-10804) for the period ended March 31, 2013.
|
10.12+
|
Form of Non-Statutory Stock Option Agreement (Non-Employee Director Renewal Form), incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2004 (No. 1-10804).
|
10.13+
|
Form of Performance Unit Agreement (U.S. Citizens Subject to IRC 457A), incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q (No. 1-10804) for the period ended March 31, 2013.
|
10.14+
|
Form of Performance Unit Agreement, incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q (No. 1-10804) for the period ended March 31, 2013.
|
10.15+
|
Form of Restricted Stock Unit Agreement (U.S. Citizens Subject to IRC 457A), incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (No. 1-10804) for the period ended March 31, 2013.
|
10.16+
|
Form of Restricted Stock Unit Agreement, incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q (No. 1-10804) for the period ended March 31, 2013.
|
10.17+
|
Form of Restricted Stock Unit Agreement (Bespoke Vesting), incorporated by reference to Exhibit 10.1 to the Company's Quarterly report on Form 10-Q (No. 1-10804) for the period ended March 31, 2014.
|
10.18+
|
Form of Restricted Stock Unit Agreement, incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K (No. 1-10804) for the period ended December 31, 2014.
|
10.19+
|
Form of Director Stock Option Agreement, incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2004 (No. 1-10804).
|
10.20
|
Amended and Restated Pledge Agreement dated as of December 19, 2014, as made by XL Investments Ltd., XL Re Ltd and XL Insurance (Bermuda) Ltd, as Grantors, in favor of Citibank, N.A., as Bank, which amends and restates the Pledge Agreement dated December 18, 2011, incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for the period ended December 31, 2014.
|
10.21+
|
Employment Agreement, dated as of March 14, 2008 by and between XL Capital Ltd and Michael S. McGavick, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (No. 1-10804) filed on March 20, 2008.
|
10.22+
|
Amendment to Employment Agreement, dated as of December 2008, between XL Capital Ltd and Michael S. McGavick (amended in response to Internal Revenue Code Section 457A), incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2009.
|
10.23+
|
Second Amendment to Employment Agreement, dated April 26, 2013, between XL Group plc and Michael S. McGavick, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (No. 1-10804) filed on April 29, 2013.
|
10.24+
|
2008 Form of Employment Agreement between XL Capital Ltd and certain Executive Officers, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2009.
|
10.25+
|
2008 Form of Amendment to Employment Agreement between XL Capital Ltd and certain Executive Officers (amended in response to Internal Revenue Code Section 457A), incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2009.
|
10.26+
|
Amended Employment Agreement, dated as of April 25, 2008, by and between XL Capital Ltd, X.L. Global Services, Inc. and James H. Veghte (amended in response to Internal Revenue Code Section 409A), incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2009.
|
10.27+
|
Amendment to Employment Agreement, dated as of December 16, 2009, by and between XL Capital Ltd and Sarah E. Street, incorporated by reference to Exhibit 10.52 to the Company’s Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2009.
|
10.28+
|
Form of Letter Agreement, dated December 15, 2009, relating to Employment Agreements between XL Capital Ltd and certain Executive Officers, incorporated by reference to Exhibit 10.53 to the Company’s Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2009.
|
10.29
|
Insurance Letters of Credit - Master Agreement, dated November 11, 2009, between XL Insurance (Bermuda) Ltd and Citibank Europe plc, incorporated by reference to Exhibit 10.54 to the Company’s Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2009.
|
10.30
|
Facility and Fee Letter dated December 30, 2014 from Citibank Europe plc to XL Insurance (Bermuda) Ltd relating to the Insurance Letters of Credit - Master Agreement, dated November 11, 2009, between XL Insurance (Bermuda) Ltd and Citibank Europe plc, incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2014.
|
10.31
|
Amended and Restated Pledge Agreement dated as of December 19, 2014, as made by XL Insurance (Bermuda) Ltd and XL Re Ltd, as Pledgors, and Citibank plc, as Pledgee, which amends and restates the Pledge Agreement dated November 11, 2009, incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2014.
|
10.32+
|
Form of Indemnification Agreement, dated July 1, 2010, by and between XL Capital Ltd and certain directors and executive officers of the Company, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K12B (No. 1-10804) filed on July 1, 2010.
|
10.33+
|
Deed Poll Indemnity, dated July 1, 2010, by XL Capital Ltd, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K12B (No. 1-10804) filed on July 1, 2010.
|
10.34+
|
Supplemental Deferred Compensation Plan, amended and restated effective as of January 1, 2007, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2010.
|
10.35+
|
Aircraft Time Sharing Agreement, dated February 22, 2011, between Michael S. McGavick and X.L. America, Inc, incorporated by reference to Exhibit 10.63 to the Company’s Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2010.
|
10.36+
|
XL Services U.K. Limited Profit Sharing Scheme, incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (No. 333-174138) filed on May 11, 2011.
|
10.37+
|
Agreement and Release dated October 30, 2014 between XL Group plc, X.L. Global Services, Inc. and James H. Veghte, incorporated by reference to Exhibit 10.48 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
|
10.38+
|
XL Group plc Executive Severance Benefit Plan effective December 11, 2014, incorporated by reference to Exhibit 10.49 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
|
10.39+
|
XL Group plc Reinsurance Supplemental Long Term Cash Incentive Compensation Plan, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (No. 1-10804) filed on April 30, 2012.
|
10.40+
|
X.L. America, Inc. Deferred Compensation Plan, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2012.
|
10.41
|
Secured Credit Agreement, dated as of November 22, 2013, between XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe plc, XL Insurance Company plc, XL Insurance Switzerland Ltd and XL Life Ltd, as Account Parties, XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd and XL Life Ltd, as Guarantors, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and The Bank of New York Mellon, as Collateral Agent, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (No. 1-10804) filed on November 25, 2013.
|
10.42
|
First Amendment, dated February 11, 2015, to the Secured Credit Agreement, dated as of November 22, 2013, between XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe plc, XL Insurance Company plc, XL Insurance Switzerland Ltd and XL Life Ltd, as Account Parties, XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd and XL Life Ltd, as Guarantors, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and The Bank of New York Mellon, as Collateral Agent, incorporated by reference to Exhibit 10.74 to the Company's Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2014.
|
10.43
|
Second Amendment, dated May 1, 2015, to the Secured Credit Agreement, dated as of November 22, 2013, between XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe plc, XL Insurance Company plc, XL Insurance Switzerland Ltd and XL Life Ltd, as Account Parties, XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd and XL Life Ltd, as Guarantors, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and The Bank of New York Mellon, as Collateral Agent, incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q (No. 1-10804) for the period ended June 30, 2015.
|
10.44
|
Unsecured Credit Agreement, dated as of November 22, 2013, between XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe plc, XL Insurance Company plc, XL Insurance Switzerland Ltd and XL Life Ltd, as Account Parties, XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd and XL Life Ltd, as Guarantors, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (No. 1-10804) filed on November 25, 2013.
|
10.45
|
First Amendment, dated February 11, 2015, to the Unsecured Credit Agreement, dated as of November 22, 2013, between XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe plc, XL Insurance Company plc, XL Insurance Switzerland Ltd and XL Life Ltd as Account Parties, XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd and XL Life Ltd, as Guarantors, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, incorporated by reference to Exhibit 10.76 to the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
|
10.46
|
Second Amendment, dated May 1, 2015, to the Unsecured Credit Agreement, dated as of November 22, 2013, between XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe plc, XL Insurance Company plc, XL Insurance Switzerland Ltd and XL Life Ltd as Account Parties, XL Group plc, XLIT Ltd., X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd and XL Life Ltd, as Guarantors, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2015.
|
10.47
|
Pledge Agreement, dated as of November 22, 2013, between XL Group plc, XLIT Ltd., X.L. America, Inc., Insurance (Bermuda) Ltd, XL Re Ltd, XL Re Europe plc, XL Insurance Company plc, XL Insurance Switzerland Ltd and XL Life Ltd, as Pledgors, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Bank of New York Mellon, as Collateral Agent, incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K (No. 1-10804) filed on November 25, 2013.
|
10.48+
|
Form of Director Initial Stock Option Agreement, incorporated by reference to Exhibit 10.89 to the Company's Annual Report on Form 10-K (No. 1-10804) for the year ended December 31, 2013.
|
10.49
|
Form of Director Irrevocable Undertaking, incorporated by reference to Exhibit 2.3 to the Company's Form 8-K filed on January 9, 2015.
|
10.50
|
364-Day Bridge Loan Agreement, dated as of January 9, 2015, among XLIT Ltd., as borrower, XL Group plc, X.L. America, Inc., XL Insurance (Bermuda) Ltd, XL Re Ltd, and XL Life Ltd, as guarantors, Morgan Stanley Senior Funding, Inc., as administrative agent, and the lenders party thereto, incorporated by reference to Exhibit 2.4 to the Company's Form 8-K (No. 1-10804) filed on January 9, 2015.
|
|
2015
|
|
2014
|
||||||||||||||||||||
(U.S. dollars in thousands)
|
Cost or
Amortized
Cost (1)
|
|
Fair
Value
|
|
Amount Presented in the Balance Sheet
|
|
Cost or
Amortized
Cost (1)
|
|
Fair
Value
|
|
Amount Presented in the Balance Sheet
|
||||||||||||
Fixed Maturities – AFS - Excluding Life Funds Withheld Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and Government
Agency-Related/Supported
|
$
|
5,047,621
|
|
|
$
|
5,065,637
|
|
|
$
|
5,065,637
|
|
|
$
|
2,100,851
|
|
|
$
|
2,171,953
|
|
|
$
|
2,171,953
|
|
Corporate - Financials
|
3,535,830
|
|
|
3,561,909
|
|
|
3,561,909
|
|
|
2,687,797
|
|
|
2,761,916
|
|
|
2,761,916
|
|
||||||
Corporate - Non-Financials
|
6,867,525
|
|
|
6,900,447
|
|
|
6,900,447
|
|
|
5,774,333
|
|
|
6,016,457
|
|
|
6,016,457
|
|
||||||
RMBS – Agency
|
3,697,756
|
|
|
3,757,971
|
|
|
3,757,971
|
|
|
3,625,171
|
|
|
3,728,576
|
|
|
3,728,576
|
|
||||||
RMBS – Non-Agency
|
319,876
|
|
|
328,540
|
|
|
328,540
|
|
|
404,398
|
|
|
427,351
|
|
|
427,351
|
|
||||||
CMBS
|
401,713
|
|
|
405,316
|
|
|
405,316
|
|
|
1,033,819
|
|
|
1,052,544
|
|
|
1,052,544
|
|
||||||
CDO
|
41,679
|
|
|
32,410
|
|
|
32,410
|
|
|
717,544
|
|
|
692,034
|
|
|
692,034
|
|
||||||
Other asset-backed securities
|
1,164,426
|
|
|
1,168,572
|
|
|
1,168,572
|
|
|
1,028,528
|
|
|
1,065,293
|
|
|
1,065,293
|
|
||||||
U.S. States and political subdivisions of the States
|
2,514,048
|
|
|
2,632,070
|
|
|
2,632,070
|
|
|
1,892,566
|
|
|
2,021,272
|
|
|
2,021,272
|
|
||||||
Non-U.S. Sovereign Government, Supranational and Government-Related
|
5,249,148
|
|
|
5,251,614
|
|
|
5,251,614
|
|
|
4,162,425
|
|
|
4,240,073
|
|
|
4,240,073
|
|
||||||
Total Fixed maturities – AFS
|
$
|
28,839,622
|
|
|
$
|
29,104,486
|
|
|
$
|
29,104,486
|
|
|
$
|
23,427,432
|
|
|
$
|
24,177,469
|
|
|
$
|
24,177,469
|
|
Equity securities
|
834,079
|
|
|
878,919
|
|
|
878,919
|
|
|
763,833
|
|
|
868,292
|
|
|
868,292
|
|
||||||
Short-term investments
|
618,851
|
|
|
617,390
|
|
|
617,390
|
|
|
257,221
|
|
|
256,727
|
|
|
256,727
|
|
||||||
Total Investments - AFS - Excluding Life Funds Withheld Assets
|
30,292,552
|
|
|
30,600,795
|
|
|
30,600,795
|
|
|
24,448,486
|
|
|
25,302,488
|
|
|
25,302,488
|
|
||||||
Fixed Maturities - AFS - Life Funds Withheld Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and Government agency-Related/Supported
|
10,721
|
|
|
12,742
|
|
|
12,742
|
|
|
14,866
|
|
|
18,724
|
|
|
18,724
|
|
||||||
Corporate - Financials
|
531,016
|
|
|
598,236
|
|
|
598,236
|
|
|
701,587
|
|
|
801,019
|
|
|
801,019
|
|
||||||
Corporate - Non-Financials
|
1,132,926
|
|
|
1,308,628
|
|
|
1,308,628
|
|
|
1,706,262
|
|
|
2,016,961
|
|
|
2,016,961
|
|
||||||
RMBS – Agency
|
591
|
|
|
752
|
|
|
752
|
|
|
3,301
|
|
|
3,782
|
|
|
3,782
|
|
||||||
RMBS – Non-Agency
|
24,401
|
|
|
26,953
|
|
|
26,953
|
|
|
71,075
|
|
|
85,335
|
|
|
85,335
|
|
||||||
CMBS
|
107,968
|
|
|
122,481
|
|
|
122,481
|
|
|
168,886
|
|
|
193,167
|
|
|
193,167
|
|
||||||
Other asset-backed securities
|
132,674
|
|
|
149,795
|
|
|
149,795
|
|
|
238,168
|
|
|
273,541
|
|
|
273,541
|
|
||||||
Non-U.S. Sovereign Government, Supranational and Government-Related
|
737,735
|
|
|
933,516
|
|
|
933,516
|
|
|
1,397,194
|
|
|
1,789,036
|
|
|
1,789,036
|
|
||||||
Total Fixed maturities - AFS - Life Funds Withheld Assets
|
2,678,032
|
|
|
3,153,103
|
|
|
3,153,103
|
|
|
4,301,339
|
|
|
5,181,565
|
|
|
5,181,565
|
|
||||||
Total Investments - AFS
|
32,970,584
|
|
|
33,753,898
|
|
|
33,753,898
|
|
|
28,749,825
|
|
|
30,484,053
|
|
|
30,484,053
|
|
||||||
Fixed maturities - Trading
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and Government-Related/Supported
|
4,957
|
|
|
4,990
|
|
|
4,990
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Corporate - Financials
|
344,070
|
|
|
335,956
|
|
|
335,956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Corporate - Non-Financials
|
509,441
|
|
|
493,621
|
|
|
493,621
|
|
|
1,180
|
|
|
1,171
|
|
|
1,171
|
|
||||||
RMBS - Agency
|
370
|
|
|
368
|
|
|
368
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
CMBS
|
4,874
|
|
|
4,803
|
|
|
4,803
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other asset-backed securities
|
26,405
|
|
|
25,700
|
|
|
25,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Non-U.S. Sovereign Government, Provincial, Supranational and Government-Related/Supported
|
373,492
|
|
|
370,261
|
|
|
370,261
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total Fixed maturities - Trading
|
1,263,609
|
|
|
1,235,699
|
|
|
1,235,699
|
|
|
1,180
|
|
|
1,171
|
|
|
1,171
|
|
||||||
Short-term investments
|
60,176
|
|
|
60,330
|
|
|
60,330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total investments - Trading
|
1,323,785
|
|
|
1,296,029
|
|
|
1,296,029
|
|
|
1,180
|
|
|
1,171
|
|
|
1,171
|
|
||||||
Other investments
|
1,197,674
|
|
|
1,445,793
|
|
|
1,433,057
|
|
|
1,002,871
|
|
|
1,265,682
|
|
|
1,248,439
|
|
||||||
Total investments other than investments in related parties
|
$
|
35,492,043
|
|
|
$
|
36,495,720
|
|
|
$
|
36,482,984
|
|
|
$
|
29,753,876
|
|
|
$
|
31,750,906
|
|
|
$
|
31,733,663
|
|
(1)
|
Investments in fixed maturities, short-term investments and held to maturity are shown at amortized cost.
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
11,557
|
|
|
$
|
22,443
|
|
Amounts due from subsidiaries
|
33,417
|
|
|
—
|
|
||
Investments in subsidiaries on an equity basis
|
11,648,673
|
|
|
10,195,445
|
|
||
Other assets
|
2,748
|
|
|
3,017
|
|
||
Total assets
|
$
|
11,696,395
|
|
|
$
|
10,220,905
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Amounts due to subsidiaries
|
$
|
—
|
|
|
$
|
166,782
|
|
Accounts payable and accrued liabilities
|
19,316
|
|
|
20,372
|
|
||
Total liabilities
|
$
|
19,316
|
|
|
$
|
187,154
|
|
Commitments and Contingencies
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
||||
Class A ordinary shares, 999,990,000 authorized, par value $0.01; issued and outstanding: (2015: 294,745,045; 2014: 255,182,955)
|
$
|
2,947
|
|
|
$
|
2,552
|
|
Additional paid in capital
|
8,910,167
|
|
|
7,359,102
|
|
||
Accumulated other comprehensive income
|
686,616
|
|
|
1,484,458
|
|
||
Retained earnings (deficit)
|
2,077,349
|
|
|
1,187,639
|
|
||
Total shareholders’ equity
|
$
|
11,677,079
|
|
|
$
|
10,033,751
|
|
Total liabilities and shareholders’ equity
|
$
|
11,696,395
|
|
|
$
|
10,220,905
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net investment income
|
$
|
169
|
|
|
$
|
275
|
|
|
$
|
24
|
|
Total revenues
|
$
|
169
|
|
|
$
|
275
|
|
|
$
|
24
|
|
Operating expenses
|
$
|
46,340
|
|
|
$
|
9,646
|
|
|
$
|
11,699
|
|
Foreign exchange (gains) losses
|
(345
|
)
|
|
127
|
|
|
243
|
|
|||
Interest expense
|
11
|
|
|
5
|
|
|
2
|
|
|||
Total expenses
|
$
|
46,006
|
|
|
$
|
9,778
|
|
|
$
|
11,944
|
|
Income (loss) before income tax
|
$
|
(45,837
|
)
|
|
$
|
(9,503
|
)
|
|
$
|
(11,920
|
)
|
Equity in net earnings (losses) of subsidiaries (dividends were: 2015: $764,277; 2014: $858,521; 2013: $617,719)
|
1,253,609
|
|
|
197,843
|
|
|
1,071,836
|
|
|||
Provision for income tax
|
620
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to ordinary shareholders
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
Net income (loss)
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
Change in net unrealized gains (losses) on investments - excluding Life Funds Withheld Assets, net of tax
|
(530,030
|
)
|
|
434,051
|
|
|
(750,755
|
)
|
|||
Unrealized gains on held to maturity investment portfolio at time of transfer to available for sale, net of tax
|
—
|
|
|
424,861
|
|
|
—
|
|
|||
Change in adjustments related to future policy benefit reserves, net of tax
|
170,688
|
|
|
(400,456
|
)
|
|
(44,660
|
)
|
|||
Change in net unrealized gains (losses) on investments - Life Funds Withheld Assets, net of tax
|
(421,604
|
)
|
|
274,083
|
|
|
—
|
|
|||
Change in net unrealized gains (losses) on affiliate and investments, net of tax
|
(6,074
|
)
|
|
35,143
|
|
|
26,637
|
|
|||
Change in OTTI losses recognized in other comprehensive income, net of tax
|
18,545
|
|
|
13,143
|
|
|
32,181
|
|
|||
Change in underfunded pension liability
|
(3,852
|
)
|
|
(7,550
|
)
|
|
7,653
|
|
|||
Change in value of cash flow hedge
|
(200
|
)
|
|
255
|
|
|
439
|
|
|||
Foreign currency translation adjustments
|
(25,315
|
)
|
|
(25,729
|
)
|
|
(54,858
|
)
|
|||
Comprehensive income (loss)
|
$
|
409,310
|
|
|
$
|
936,141
|
|
|
$
|
276,553
|
|
(U.S. dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss)
|
$
|
1,207,152
|
|
|
$
|
188,340
|
|
|
$
|
1,059,916
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Equity in (earnings) loss of subsidiaries
|
(1,253,609
|
)
|
|
(197,843
|
)
|
|
(1,071,836
|
)
|
|||
Share based compensation (1)
|
74,431
|
|
|
81,287
|
|
|
46,489
|
|
|||
Amounts due to (from) subsidiaries
|
(200,199
|
)
|
|
(23,819
|
)
|
|
104,590
|
|
|||
Dividends received from subsidiaries
|
764,277
|
|
|
858,521
|
|
|
617,719
|
|
|||
Other
|
(30,584
|
)
|
|
(10,632
|
)
|
|
(16,570
|
)
|
|||
Total adjustments
|
$
|
(645,684
|
)
|
|
$
|
707,514
|
|
|
$
|
(319,608
|
)
|
Net cash provided by (used in) operating activities
|
$
|
561,468
|
|
|
$
|
895,854
|
|
|
$
|
740,308
|
|
Cash flows provided by (used in) investing activities:
|
|
|
|
|
|
||||||
Purchase of Catlin Group Limited
|
$
|
(2,287,579
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Proceeds from sale of subsidiary
|
2,317,699
|
|
|
—
|
|
|
—
|
|
|||
Returns of capital from subsidiaries
|
65,037
|
|
|
79,086
|
|
|
84,589
|
|
|||
Net cash provided by (used in) investing activities
|
$
|
95,157
|
|
|
$
|
79,086
|
|
|
$
|
84,589
|
|
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of ordinary shares and exercise of stock options
|
$
|
9,976
|
|
|
$
|
6,367
|
|
|
$
|
12,623
|
|
Dividends paid
|
(208,516
|
)
|
|
(169,620
|
)
|
|
(160,155
|
)
|
|||
Buybacks of ordinary shares
|
(468,971
|
)
|
|
(801,953
|
)
|
|
(675,617
|
)
|
|||
Net cash provided by (used in) financing activities
|
$
|
(667,511
|
)
|
|
$
|
(965,206
|
)
|
|
$
|
(823,149
|
)
|
Net change in cash and cash equivalents
|
(10,886
|
)
|
|
9,734
|
|
|
1,748
|
|
|||
Cash and cash equivalents – beginning of period
|
22,443
|
|
|
12,709
|
|
|
10,961
|
|
|||
Cash and cash equivalents – end of period
|
$
|
11,557
|
|
|
$
|
22,443
|
|
|
$
|
12,709
|
|
(1)
|
Includes cash collected from subsidiaries in the amounts of
$60.1 million
,
$59.2 million
and
$33.9 million
, respectively, for the years ended
December 31, 2015, 2014 and 2013
.
|
(U.S. dollars in million)
|
2015
|
|
2014
|
|
2013
|
||||||
Dividends and returns of capital
|
$
|
829
|
|
|
$
|
940
|
|
|
$
|
702
|
|
(U.S. dollars in thousands)
|
Gross
Amount
|
|
Ceded
to Other
Companies
|
|
Assumed
from Other
Companies
|
|
Net
Amount
|
|
Percentage
of Amount
Assumed
to Net
|
|||||||||
2015
|
|
|
|
|
|
|
|
|
|
|||||||||
Life reinsurance in force (1)
|
$
|
—
|
|
|
$
|
62,290,992
|
|
|
$
|
63,158,304
|
|
|
$
|
867,312
|
|
|
N/M
|
|
Premiums Earned:
|
|
|
|
|
|
|
|
|
|
|||||||||
Property and casualty operations
|
$
|
7,717,173
|
|
|
$
|
3,018,410
|
|
|
$
|
3,465,421
|
|
|
$
|
8,164,184
|
|
|
42.4
|
%
|
Life operations
|
—
|
|
|
247,675
|
|
|
309,916
|
|
|
62,241
|
|
|
497.9
|
%
|
||||
Total premiums earned
|
$
|
7,717,173
|
|
|
$
|
3,266,085
|
|
|
$
|
3,775,337
|
|
|
$
|
8,226,425
|
|
|
45.9
|
%
|
2014
|
|
|
|
|
|
|
|
|
|
|||||||||
Life reinsurance in force (1)
|
$
|
—
|
|
|
$
|
46,947,677
|
|
|
$
|
68,854,340
|
|
|
$
|
21,906,663
|
|
|
314.3
|
%
|
Premiums Earned:
|
|
|
|
|
|
|
|
|
|
|||||||||
Property and casualty operations
|
$
|
5,173,403
|
|
|
$
|
1,799,294
|
|
|
$
|
2,343,329
|
|
|
$
|
5,717,438
|
|
|
41.0
|
%
|
Life operations
|
—
|
|
|
155,804
|
|
|
333,436
|
|
|
177,632
|
|
|
187.7
|
%
|
||||
Total premiums earned
|
$
|
5,173,403
|
|
|
$
|
1,955,098
|
|
|
$
|
2,676,765
|
|
|
$
|
5,895,070
|
|
|
45.4
|
%
|
2013
|
|
|
|
|
|
|
|
|
|
|||||||||
Life reinsurance in force (1)
|
$
|
—
|
|
|
$
|
378,391
|
|
|
$
|
77,917,632
|
|
|
$
|
77,539,241
|
|
|
100.5
|
%
|
Premiums Earned:
|
|
|
|
|
|
|
|
|
|
|||||||||
Property and casualty operations
|
$
|
4,966,207
|
|
|
$
|
1,315,369
|
|
|
$
|
2,363,261
|
|
|
$
|
6,014,099
|
|
|
39.3
|
%
|
Life operations
|
—
|
|
|
28,920
|
|
|
324,342
|
|
|
295,422
|
|
|
109.8
|
%
|
||||
Total premiums earned
|
$
|
4,966,207
|
|
|
$
|
1,344,289
|
|
|
$
|
2,687,603
|
|
|
$
|
6,309,521
|
|
|
42.6
|
%
|
(1)
|
Represents the sum face value outstanding of the in force life reinsurance policies.
|
*
|
N/M - Not Meaningful
|
(U.S. dollars
in thousands)
|
Deferred
Acquisition
Costs and
Value of
Business
Acquired
|
|
Reserves
for
Losses
and Loss
Expenses
|
|
Reserves
for
Unearned
Premiums
|
|
Net
Earned
Premiums
|
|
Net
Investment
Income
|
|
Losses and Loss
Expenses
incurred related to
|
|
Net Paid
Losses
and
Loss
Expenses
|
|
Amortization
of Deferred
Acquisition
Costs
|
|
Net
Premiums
Written
|
||||||||||||||||||||||
Current
Year
|
|
Prior
Year
|
|
||||||||||||||||||||||||||||||||||||
2015
|
$
|
893,111
|
|
|
$
|
25,439,744
|
|
|
$
|
7,043,383
|
|
|
$
|
8,164,184
|
|
|
$
|
644,312
|
|
|
$
|
5,072,830
|
|
|
$
|
(306,630
|
)
|
|
$
|
5,374,652
|
|
|
$
|
1,306,654
|
|
|
$
|
7,888,824
|
|
2014
|
$
|
357,067
|
|
|
$
|
19,353,243
|
|
|
$
|
3,973,159
|
|
|
$
|
5,717,438
|
|
|
$
|
642,492
|
|
|
$
|
3,513,465
|
|
|
$
|
(255,072
|
)
|
|
$
|
3,821,335
|
|
|
$
|
724,003
|
|
|
$
|
5,767,209
|
|
2013
|
$
|
537,473
|
|
|
$
|
20,481,065
|
|
|
$
|
3,846,568
|
|
|
$
|
6,014,099
|
|
|
$
|
671,071
|
|
|
$
|
4,021,353
|
|
|
$
|
(289,889
|
)
|
|
$
|
3,828,139
|
|
|
$
|
882,658
|
|
|
$
|
5,903,982
|
|
Date:
|
February 26, 2016
|
|
|
|
XL Group plc
|
|
|
(Registrant)
|
|
|
/s/ MICHAEL S. MCGAVICK
|
|
|
Name: Michael S. McGavick
|
|
|
Title: Chief Executive Officer and Director
|
|
|
XL Group plc
|
Date:
|
February 26, 2016
|
|
|
|
/s/ PETER R. PORRINO
|
|
|
Name: Peter R. Porrino
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
|
|
XL Group plc
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ MICHAEL S. MCGAVICK
|
|
Chief Executive Officer (Principal Executive Officer) and Director
|
|
February 26, 2016
|
Michael S. McGavick
|
|
|
|
|
/s/ PETER R. PORRINO
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
February 26, 2016
|
Peter R. Porrino
|
|
|
|
|
/s/ RAMANI AYER
|
|
Director
|
|
February 26, 2016
|
Ramani Ayer
|
|
|
|
|
/s/ STEPHEN J. O. CATLIN
|
|
Executive Deputy Chairman and Director
|
|
February 26, 2016
|
Stephen J. O. Catlin
|
|
|
|
|
/s/ DALE R. COMEY
|
|
Director
|
|
February 26, 2016
|
Dale R. Comey
|
|
|
|
|
/s/ CLAUS-MICHAEL DILL
|
|
Director
|
|
February 26, 2016
|
Claus-Michael Dill
|
|
|
|
|
/s/ ROBERT R. GLAUBER
|
|
Director
|
|
February 26, 2016
|
Robert R. Glauber
|
|
|
|
|
/s/ EDWARD J. KELLY, III
|
|
Director
|
|
February 26, 2016
|
Edward J. Kelly, III
|
|
|
|
|
/s/ SUZANNE B. LABARGE
|
|
Director
|
|
February 26, 2016
|
Suzanne B. Labarge
|
|
|
|
|
/s/ JOSEPH MAURIELLO
|
|
Director
|
|
February 26, 2016
|
Joseph Mauriello
|
|
|
|
|
/s/ EUGENE M. MCQUADE
|
|
Director and Chairman of the Board of Directors
|
|
February 26, 2016
|
Eugene M. McQuade
|
|
|
|
|
/s/ CLAYTON S. ROSE
|
|
Director
|
|
February 26, 2016
|
Clayton S. Rose
|
|
|
|
|
/s/ ANNE STEVENS
|
|
Director
|
|
February 26, 2016
|
Anne Stevens
|
|
|
|
|
/s/ SIR JOHN VEREKER
|
|
Director
|
|
February 26, 2016
|
Sir John Vereker
|
|
|
|
|
|
|
Execution Copy
XL Group plc Letterhead
|
a)
|
You will remain employed by Catlin Holdings Limited until the date on which XL and Catlin harmonise their employees' terms and conditions of employment in the United Kingdom (anticipated to be 1 January 2016) (the "Integration Date") to enable you to continue to participate in Catlin's pension and benefit programmes until the Integration Date in accordance with clause 5;
|
b)
|
From the Integration Date you will be employed by XL Services UK Limited (or such other XL entity as shall be the employer of the XL Group's employees in the UK at the time) in place of Catlin Holdings Limited.
|
1.
|
Duties
|
2.
|
Salary
|
3.
|
Discretionary Bonus/Annual Incentive Plan
|
4.
|
Long Term Incentives
|
5.
|
Pension and Benefits
|
6.
|
Sickness Absence
|
7.
|
Place of Work
|
8.
|
Hours of Work
|
9.
|
Holiday Entitlement
|
10.
|
Notice Period
|
(a)
|
at any time or from time to time thereafter upon the request of the Company, resign without claim for compensation from all offices held in the Company or any of the companies in the XL Group;
|
(b)
|
deliver all Company property including Company ID entry cards, credit cards and office entry keys, and if you should fail to do so the Company is hereby irrevocably authorised to appoint some person in your name and on your behalf to sign any documents and do any things necessary or requisite to give effect thereto.
|
11.
|
Approved/Registered Positions
|
12.
|
Confidential Information
|
13.
|
Intellectual Property
|
14.
|
Executive Severance Benefit Plan
|
15.
|
Post-Termination Restrictions
|
(a)
|
Restriction on Work for a Competitor/Solicitation of Business:
|
(i)
|
You will not become employed by or associated with any entity, whether as a principal, advisor, partner, employee, agent, consultant, shareholder (other than as a shareholder of less than 5% of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in selling or providing, either directly or indirectly, in the United States, Bermuda, Greater London, or the Republic of Ireland, any products or services that are the same as or similar to insurance and reinsurance products or services that as of the date of your termination are being provided in those locations either directly or indirectly by XL and about which you hold Confidential Information or with which you have any involvement in the final twenty-four months of your employment with XL.
|
(ii)
|
You will not, directly or indirectly contact, seek, entice, solicit, induce, persuade, divert or attempt to divert any business away from XL, including any former, present or prospective customer, client, insured, vendor, supplier, investor, or business partner of which you have personal knowledge or with whom you are personally involved during the last twenty-four months of your employment at XL, with respect to any existing or proposed contractual or
|
(b)
|
Restriction on the Solicitation of Employees:
|
(c)
|
Equitable Relief:
|
(d)
|
For the purposes of clauses 12 and 15 of this Offer of Employment, references to XL Group shall include Catlin Group Limited and its subsidiaries and affiliates, which will be part of the XL Group from the completion of the Acquisition.
|
16.
|
Prior agreements and Amendments
|
17.
|
Start Date and Continuous Employment
|
18.
|
Notices
|
19.
|
Governing Law and Jurisdiction
|
20.
|
Acceptance of Offer
|
•
|
acknowledge and confirm that you have no restrictions whatsoever on your ability to work for XL in any location or capacity; and
|
•
|
represent, warrant and agree that by entering into and performing your obligations as an employee of the Company, you do not and will not breach any duties or obligations (whether fiduciary, statutory, contractual or otherwise) owed by you to your current or former employer or any third party in connection with any current or prior employment or contractual obligation (including, but not limited to, duties or obligations relating to confidential or proprietary information, solicitation of customers or business and non-competition).
|
•
|
set out limits for those workers who are required to work during the night, as well as a right for night workers to received free health assessments
|
•
|
set out minimum rights with respect to rest periods for each day and each week; and
|
•
|
provide a right to all workers to be entitled to four week's paid leave in every year, including public and statutory holidays.
|
Personal / Confidential
[Name]
[Address]
Switzerland
8808
|
Zurich, __ _____ 2015
|
Employment Contract
|
a)
|
Restriction on Work for a Competitor/Solicitation of Business:
|
(i)
|
You will not become employed by or associated with any entity, whether as a principal, advisor, partner, employee, agent, consultant, shareholder (other than as a shareholder of less than 5% of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in selling or providing, either directly or indirectly, in the United States, Bermuda, Greater London, the Republic of Ireland or Switzerland, any products or services that are the same as or similar to insurance and reinsurance products or services that as of the date of your termination are being provided in those locations either directly or indirectly by XL and about which you hold Confidential Information or with which you have any involvement in the final twenty-four months of your employment with XL.
|
(ii)
|
You will not, directly or indirectly contact, seek, entice, solicit, induce, persuade, divert or attempt to divert any business away from XL, including any former, present or prospective customer, client, insured, vendor, supplier, investor, or business partner of which you have personal knowledge or with whom you are personally involved during the last twenty-four months of your employment at XL, with respect to any existing or proposed contractual or business arrangement with XL, insurance or reinsurance product or service sold or provided by or to XL during your employment, or any such product or service that is under development by XL at the time your employment ends. It is presumed that by reason of your membership on the Leadership Team of XL Group that you have actual knowledge of any material business arrangement or contract, or any insurance or reinsurance products or services, whether currently provided or under development during, your employment. The restrictions in this paragraph shall not apply if you are expressly permitted to engage in the otherwise prohibited activity, in writing, by XL, in its sole discretion, following its receipt of your written request before commencement of the activity.
|
b)
|
Restriction on the Solicitation of Employees:
|
c)
|
Equitable Relief:
|
Place and date
|
|
1.
|
Severance Plan
|
|
a)
|
You will remain employed by Catlin Holdings Limited until the date on which XL and Catlin harmonise their employees' terms and conditions of employment in the United Kingdom (anticipated to be 1 January 2016) (the "Integration Date") to enable you to continue to participate in Catlin's pension and benefit programmes until the Integration Date in accordance with clause 5;
|
b)
|
From the Integration Date you will be employed by XL Services UK Limited (or such other XL entity as shall be the employer of the XL Group's employees in the UK at the time) in place of Catlin Holdings Limited.
|
1.
|
Duties
|
2.
|
Salary
|
3.
|
Discretionary Bonus/Annual Incentive Plan
|
4.
|
Long Term Incentives
|
5.
|
Pension and Benefits
|
6.
|
Sickness Absence
|
7.
|
Place of Work
|
8.
|
Hours of Work
|
9.
|
Holiday Entitlement
|
10.
|
Notice Period
|
(a)
|
at any time or from time to time thereafter upon the request of the Company, resign without claim for compensation from all offices held in the Company or any of the companies in the XL Group;
|
(b)
|
deliver all Company property including Company ID entry cards, credit cards and office entry keys, and if you should fail to do so the Company is hereby irrevocably authorised to appoint some person in your name and on your behalf to sign any documents and do any things necessary or requisite to give effect thereto.
|
11.
|
Approved/Registered Positions
|
12.
|
Confidential Information
|
13.
|
Intellectual Property
|
14.
|
Executive Severance Benefit Plan
|
15.
|
Post-Termination Restrictions
|
(a)
|
Restriction on Work for a Competitor/Solicitation of Business:
|
(i)
|
You will not become employed by or associated with any entity, whether as a principal, advisor, partner, employee, agent, consultant, shareholder (other than as a shareholder of less than 5% of any publicly traded company) or in any other relationship or capacity, paid or unpaid, that is actively engaged in selling or providing, either directly or indirectly, in the United States, Bermuda, Greater London, or the Republic of Ireland, any products or services that are the same as or similar to insurance and reinsurance products or services that as of the date of your termination are being provided in those locations either directly or indirectly by XL and about which you hold Confidential Information or with which you have any involvement in the final twenty-four months of your employment with XL.
|
(ii)
|
You will not, directly or indirectly contact, seek, entice, solicit, induce, persuade, divert or attempt to divert any business away from XL, including any former, present or prospective customer, client, insured, vendor, supplier, investor, or business partner of which you have personal knowledge or with whom you are personally involved during the last twenty-four months of your employment at XL, with respect to any existing or proposed contractual or business arrangement with XL, insurance or reinsurance product or service sold or provided by or to XL during your employment, or any such product or service that is under development by XL at the time your employment ends. It is presumed that by reason of your membership on the Leadership Team of XL Group that you have actual knowledge of any material business arrangement or contract, or any insurance or reinsurance products or services, whether currently provided or under development during, your employment. The restrictions in this paragraph shall not apply if you are expressly permitted to engage in the otherwise prohibited
|
(b)
|
Restriction on the Solicitation of Employees:
|
(c)
|
Equitable Relief:
|
(d)
|
For the purposes of clauses 12 and 15 of this Offer of Employment, references to XL Group shall include Catlin Group Limited and its subsidiaries and affiliates, which became part of XL Group as of 1 May 2015.
|
16.
|
Prior agreements and Amendments
|
17.
|
Start Date and Continuous Employment
|
18.
|
Notices
|
19.
|
Governing Law and Jurisdiction
|
20.
|
Acceptance of Offer
|
•
|
acknowledge and confirm that you have no restrictions whatsoever on your ability to work for XL in any location or capacity; and
|
•
|
represent, warrant and agree that by entering into and performing your obligations as an employee of the Company, you do not and will not breach any duties or obligations (whether fiduciary, statutory, contractual or otherwise) owed by you to your current or former employer or any third party in connection with any current or prior employment or contractual obligation (including, but not limited to, duties or obligations relating to confidential or proprietary information, solicitation of customers or business and non-competition).
|
•
|
set out limits for those workers who are required to work during the night, as well as a right for night workers to received free health assessments
|
•
|
set out minimum rights with respect to rest periods for each day and each week; and
|
•
|
provide a right to all workers to be entitled to four week's paid leave in every year, including public and statutory holidays.
|
|
______________________________
Signature of Executive
______________________________
Print Name
Dated: _________________________
|
|
Year Ended
|
||||||
(U.S. dollars in thousands, except ratios)
|
2015
|
|
2014
|
||||
Earnings:
|
|
|
|
||||
Pre-tax income (loss) from continuing operations
|
$
|
1,176,118
|
|
|
$
|
162,701
|
|
Fixed charges
|
324,134
|
|
|
221,761
|
|
||
Distributed income of equity investees
|
658,172
|
|
|
157,061
|
|
||
Subtotal
|
$
|
2,158,424
|
|
|
$
|
541,523
|
|
Less: Non-controlling interests
|
7,466
|
|
|
3,755
|
|
||
Preference share dividends
|
98,721
|
|
|
76,743
|
|
||
Total earnings (loss)
|
$
|
2,052,237
|
|
|
$
|
461,025
|
|
|
|
|
|
||||
Fixed charges:
|
|
|
|
||||
Interest costs
|
$
|
163,021
|
|
|
$
|
121,221
|
|
Accretion of deposit liabilities
|
42,194
|
|
|
12,885
|
|
||
Rental expense at 30% (1)
|
20,198
|
|
|
10,912
|
|
||
Total fixed charges
|
$
|
225,413
|
|
|
$
|
145,018
|
|
Preference share dividends
|
98,721
|
|
|
76,743
|
|
||
Total fixed charges and preference dividends
|
$
|
324,134
|
|
|
$
|
221,761
|
|
|
|
|
|
||||
Ratio of earnings to fixed charges
|
9.1
|
|
|
3.2
|
|
||
|
|
|
|
||||
Ratio of earnings to combined fixed charges and preference dividends
|
6.3
|
|
|
2.1
|
|
||
|
|
|
|
||||
Deficiency - fixed charges only
|
N/A
|
|
|
N/A
|
|
||
|
|
|
|
||||
Deficiency - fixed charges and preference dividends
|
N/A
|
|
|
N/A
|
|
(1)
|
30% represents a reasonable approximation of the interest factor.
|
COMPANY
|
%
|
JURISDICTION
|
||||||||||||||
XL Group plc
|
|
Ireland
|
||||||||||||||
|
XLIT Ltd.
|
|
Cayman
|
|||||||||||||
|
|
XL Company Switzerland LLC
|
|
Switzerland
|
||||||||||||
|
|
|
EXEL Holdings Limited
|
|
Cayman
|
|||||||||||
|
|
|
|
X.L. Property Holdings Limited
|
|
Bermuda
|
||||||||||
|
|
|
|
XL Insurance (Bermuda) Ltd
|
|
Bermuda
|
||||||||||
|
|
|
|
|
Mid Ocean Holdings Ltd.
|
|
Bermuda
|
|||||||||
|
|
|
|
|
|
XL London Market Group Ltd
|
|
UK
|
||||||||
|
|
|
|
|
|
|
Dornoch Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
XL London Market Ltd- Syndicate 1209
|
|
UK
|
|||||||
|
|
|
|
|
|
XL Re Ltd
|
|
Bermuda
|
||||||||
|
|
|
|
|
|
|
ECS Reinsurance Company Inc.
|
|
Barbados
|
|||||||
|
|
|
|
|
|
|
Fundamental Insurance Investments Ltd.
|
|
Bermuda
|
|||||||
|
|
|
|
|
|
|
|
XL Underwriting Managers Ltd.
|
|
Bermuda
|
||||||
|
|
|
|
|
|
|
|
New Ocean Capital Management Limited
|
65.6
|
|
Bermuda
|
|||||
|
|
|
|
|
|
|
|
New Ocean Market Value Cat Fund Ltd.***
|
100
|
|
Bermuda
|
|||||
|
|
|
|
|
|
|
|
New Ocean Focus Cat Fund Ltd.***
|
50
|
|
Bermuda
|
|||||
|
|
|
|
|
|
|
|
|
Vector Reinsurance Ltd.***
|
70
|
|
Bermuda
|
||||
|
|
|
|
|
|
|
XL Re Europe SE
|
|
Ireland
|
|||||||
|
|
|
|
|
XL (Brazil) Holdings Ltda
|
|
Brazil
|
|||||||||
|
|
|
|
|
XL Services (Bermuda) Ltd
|
|
Bermuda
|
|||||||||
|
|
|
|
|
XL Life Ltd
|
|
Bermuda
|
|||||||||
|
|
|
|
|
|
Reeve Court General Partner Limited
|
|
Bermuda
|
||||||||
|
|
|
|
|
|
|
Reeve Court 4 Limited Partnership
|
|
Bermuda
|
|||||||
|
|
|
|
|
|
|
Reeve Court 6 Limited Partnership
|
|
Bermuda
|
|||||||
|
|
|
|
|
XL Gracechurch Limited
|
|
UK
|
|||||||||
|
|
|
|
|
|
XL Insurance (UK) Holdings Limited
|
|
UK
|
||||||||
|
|
|
|
|
|
|
XL Insurance Argentina S.A. Compañia de Seguros
|
90
|
|
Argentina
|
||||||
|
|
|
|
|
|
|
XL Services UK Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
XL Insurance Company SE
|
|
UK
|
|||||||
|
|
|
|
|
|
|
|
XL Insurance Argentina S.A. Compañia de Seguros
|
10
|
|
Argentina
|
|||||
|
|
|
|
|
|
|
|
XL Insurance (China) Company Ltd
|
49
|
|
China
|
|||||
|
|
|
|
|
|
|
|
XL Seguros Brasil S.A.
|
|
Brazil
|
||||||
|
|
|
|
|
|
|
|
XL Holdings Proprietary Limited
|
|
South Africa
|
||||||
|
|
|
|
|
|
|
|
|
XL AB (PTY) Ltd
|
|
South Africa
|
|||||
|
|
|
|
|
XL Financial Holdings (Ireland) Limited
|
|
Ireland
|
|||||||||
|
|
|
|
|
|
XL Finance (Ireland) Limited
|
|
Ireland
|
||||||||
|
|
|
|
|
|
XL Services Canada Ltd.
|
|
Canada
|
||||||||
|
|
|
|
|
|
X.L. America, Inc. *
|
|
Delaware
|
||||||||
|
|
|
|
|
|
|
XL Financial Solutions, Inc.
|
|
Delaware
|
|||||||
|
|
|
|
|
|
|
|
XL Innovate Partners, LP**
|
93.39
|
|
Delaware
|
|||||
|
|
|
|
|
|
|
|
XL Innovate Fund, LP**
|
94.8
|
|
Delaware
|
|||||
|
|
|
|
|
|
|
|
|
New Energy Risk, Inc.
|
|
Delaware
|
|||||
|
|
|
|
|
|
|
XLA Garrison L.P.
|
|
Delaware
|
|||||||
|
|
|
|
|
|
|
Catlin, LLC
|
|
Delaware
|
|||||||
|
|
|
|
|
|
|
|
Catlin Insurance Services, Inc.
|
|
Louisiana
|
||||||
|
|
|
|
|
|
|
|
Catlin Specialty Insurance Company
|
|
Delaware
|
||||||
|
|
|
|
|
|
|
|
|
Catlin Indemnity Company
|
|
Delaware
|
|||||
|
|
|
|
|
|
|
|
|
|
Catlin Insurance Company, Inc.
|
|
Texas
|
||||
|
|
|
|
|
|
|
|
Catlin Underwriting Inc.
|
|
Delaware
|
|
|
|
|
|
|
|
XL Reinsurance America Inc.
|
|
New York
|
|||||||
|
|
|
|
|
|
|
|
XL Insurance (China) Company Ltd
|
51
|
|
China
|
|||||
|
|
|
|
|
|
|
|
Greenwich Insurance Company
|
|
Delaware
|
||||||
|
|
|
|
|
|
|
|
|
Global Asset Protection Services, LLC
|
|
Connecticut
|
|||||
|
|
|
|
|
|
|
|
|
|
Global Asset Protection Services Company Limited
|
|
Japan
|
||||
|
|
|
|
|
|
|
|
|
|
Global Asset Protection Services Consultancy (Beijing) Company Limited
|
|
China
|
||||
|
|
|
|
|
|
|
|
|
XL Insurance America, Inc.
|
|
Delaware
|
|||||
|
|
|
|
|
|
|
|
|
|
XL Select Insurance Company
|
|
Delaware
|
||||
|
|
|
|
|
|
|
|
|
|
XL Insurance Company of New York, Inc.
|
|
New York
|
||||
|
|
|
|
|
|
|
|
XL Group Investments LLC
|
|
Delaware
|
||||||
|
|
|
|
|
|
|
|
|
XL Group Investments Ltd
|
|
Bermuda
|
|||||
|
|
|
|
|
|
|
|
XL Specialty Insurance Company
|
|
Delaware
|
||||||
|
|
|
|
|
|
|
|
|
Indian Harbor Insurance Company
|
|
Delaware
|
|||||
|
|
|
|
|
|
|
|
Global Ag Insurance Services, LLC
|
|
California
|
||||||
|
|
|
|
|
|
|
XL Global, Inc.
|
|
Delaware
|
|||||||
|
|
|
|
|
|
|
|
XL Innovate, LLC
|
|
Delaware
|
||||||
|
|
|
|
|
|
|
X.L. Global Services, Inc.
|
|
Delaware
|
|||||||
|
|
|
|
|
|
|
|
Eagleview Insurance Brokerage Services, LLC
|
|
Delaware
|
||||||
|
|
|
|
|
|
|
XL Life and Annuity Holding Company
|
|
Delaware
|
|||||||
|
|
|
|
|
|
|
|
XL Life Insurance and Annuity Company
|
|
Illinois
|
||||||
|
|
|
|
|
XL Investments Ltd
|
|
Bermuda
|
|||||||||
|
|
|
|
|
|
XL Capital Products Ltd
|
|
Bermuda
|
||||||||
|
|
|
|
|
|
|
Angle Risk Management Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
XL Insurance Guernsey Limited
|
|
Guernsey
|
||||||||
|
|
|
|
|
|
Garrison Investments Inc. **
|
|
Barbados
|
||||||||
|
|
|
|
|
XL (WESTERN EUROPE) S.a.r.l.
|
|
Luxembourg
|
|||||||||
|
|
|
|
|
|
XL Swiss Holdings Ltd
|
|
Switzerland
|
||||||||
|
|
|
|
|
|
|
XL Re Latin America (Argentina SA)
|
20
|
|
Argentina
|
||||||
|
|
|
|
|
|
|
XL Insurance Switzerland Ltd
|
|
Switzerland
|
|||||||
|
|
|
|
|
|
|
XL Services Switzerland Ltd
|
|
Switzerland
|
|||||||
|
|
|
|
|
|
|
XL India Business Services Private Limited
|
|
India
|
|||||||
|
|
|
|
|
|
|
XL Seguros Mexico SA de CV
|
|
Mexico
|
|||||||
|
|
|
|
|
Green Holdings Limited
|
|
Bermuda
|
|||||||||
|
|
|
|
|
|
Catlin Managers Ltd.
|
|
Bermuda
|
||||||||
|
|
|
|
|
|
|
Catlin PPV Fund Ltd.
|
|
Bermuda
|
|||||||
|
|
|
|
|
|
|
Catlin ILS Fund
|
|
Bermuda
|
|||||||
|
|
|
|
|
|
|
Hubble Re Ltd.
|
|
Bermuda
|
|||||||
|
|
|
|
|
|
|
Catlin Property Treaty Fund Ltd.
|
|
Bermuda
|
|||||||
|
|
|
|
|
|
Catlin Insurance Company Ltd.
|
|
Bermuda
|
||||||||
|
|
|
|
|
|
|
Catlin Middle East
|
|
Dubai
|
|||||||
|
|
|
|
|
|
|
Catlin Treasury Guernsey Limited
|
|
Guernsey
|
|||||||
|
|
|
|
|
|
|
Catlin Labuan Limited
|
|
Malaysia
|
|||||||
|
|
|
|
|
|
|
Catlin Singapore Pte Ltd.
|
|
Singapore
|
|||||||
|
|
|
|
|
|
|
Catlin Finance (UK) Ltd.
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin USD Holdings Ltd.
|
|
Bermuda
|
|||||||
|
|
|
|
|
|
|
Catlin Insurance Company (UK) Holdings Ltd.
|
|
UK
|
|||||||
|
|
|
|
|
|
|
|
Catlin Insurance Company (UK) Ltd.
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
|
Catlin Treasury Luxembourg S.a.r.l.
|
|
Luxembourg
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Insurance Company (UK) Ltd - Escritorio de Representacao no Brazil Ltda
|
|
Brazil
|
|||||
|
|
|
|
|
|
Catlin US Investment Holdings LLC
|
45
|
|
Delaware
|
|||||||
|
|
|
|
|
|
Catlin Luxembourg S.a.r.l.
|
|
Luxembourg
|
||||||||
|
|
|
|
|
|
|
Catlin Re Switzerland Ltd./Catlin Re Schweiz AG
|
|
Switzerland
|
|||||||
|
|
|
|
|
|
|
|
XL Re Latin America Ltd
|
|
Switzerland
|
||||||
|
|
|
|
|
|
|
|
|
XL Latin America Investments Ltd
|
|
Bermuda
|
|
|
|
|
|
|
|
|
|
XL Resseguros Brasil S.A.
|
|
Brazil
|
|||||
|
|
|
|
|
|
|
|
|
XL Re Latin America (Argentina SA)
|
80
|
|
Argentina
|
||||
|
|
|
|
|
|
|
|
|
XL Re Latin America Ltd Escritório de Representação no Brasil Ltda
|
|
Brazil
|
|||||
|
|
|
|
|
|
|
|
Catlin US Investment Holdings LLC
|
40
|
|
Delaware
|
|||||
|
|
|
|
|
|
|
|
Catlin CCC Holdings LLC
|
|
Delaware
|
||||||
|
|
|
|
|
|
Catlin (WUPLC) Holdings Limited
|
|
Bermuda
|
||||||||
|
|
|
|
|
|
|
Catlin Underwriting
|
99.9
|
|
UK
|
||||||
|
|
|
|
|
|
Catlin (CHUKL) Holdings Limited
|
|
Bermuda
|
||||||||
|
|
|
|
|
|
|
Catlin Underwriting
|
0.1
|
|
UK
|
||||||
|
|
|
|
|
|
Catlin (North American) Holdings Ltd.
|
|
UK
|
||||||||
|
|
|
|
|
|
|
Catlin Investment Holdings (Jersey) Limited
|
|
Jersey
|
|||||||
|
|
|
|
|
|
|
|
Catlin Investment (UK) Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
Catlin (PUL) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
|
Catlin Alpha Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Beta Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Gamma Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Delta Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Epsilon Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Zeta Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Eta Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
Wellington Pension Trustee Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin (One) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin (Two) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin (Three) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin (Four) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin (Five) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin Underwriting (UK) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
|
Catlin Risk Solutions Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin (Wellington) Insurance Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Reinsurance Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlininsured Direct Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin Underwriting Services Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
Catlin (Wellington) Underwriting Agencies Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
Catlin Syndicate Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
Catlin Holdings (UK) Limited
|
|
UK
|
|||||||
|
|
|
|
|
|
|
|
Catlin Holdings Limited
|
|
UK
|
||||||
|
|
|
|
|
|
|
|
|
Catlin Brasil Servicos Tecnicos Ltda
|
|
Brazil
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Canada Inc.
|
|
Canada
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Japan KK
|
|
Japan
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Ecosse Insurance Limited
|
|
UK
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Underwriting Agencies Limited
|
|
UK
|
|||||
|
|
|
|
|
|
|
|
|
|
Catlin US Investment Holdings LLC
|
15
|
|
Delaware
|
|||
|
|
|
|
|
|
|
|
|
|
Z Capital N-2L, L.L.C.
|
|
Delaware
|
||||
|
|
|
|
|
|
|
|
|
|
Z Capital CUAL CO INVEST., L.L.C.
|
|
Delaware
|
||||
|
|
|
|
|
|
|
|
|
|
Z Capital HG-C, L.L.C.
|
|
Delaware
|
||||
|
|
|
|
|
|
|
|
|
|
CATGS I, L.L.C.
|
50
|
|
US
|
|||
|
|
|
|
|
|
|
|
|
|
CUA-CVIII Holdings LLC
|
|
US
|
||||
|
|
|
|
|
|
|
|
|
|
|
C-1001 State Co-Investor, LLC
|
|
Delaware
|
|||
|
|
|
|
|
|
|
|
|
|
|
C-140W Co-Investor LLC
|
|
Delaware
|
|||
|
|
|
|
|
|
|
|
|
Catlin Guernsey Limited
|
|
Guernsey
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Australia Pty Limited
|
|
Australia
|
|||||
|
|
|
|
|
|
|
|
|
Catlin (BB) Limited
|
|
UK
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Europe SE
|
|
Germany
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Hong Kong Ltd Limited
|
|
Hong Kong
|
|
|
|
|
|
|
|
|
|
Catlin Angel Strategic Holdings Limited
|
|
UK
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Syndicate 6112 Limited (UK)
|
|
UK
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Syndicate 6121 Limited
|
|
UK
|
|||||
|
|
|
|
|
|
|
|
|
Catlin Shared Services (Europe) Sp.z.o.o.
|
|
Poland
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) - General Parter of XLA Garrison L.P.
|
|
|
|||||||||||
|
|
|
(**) - Limited Partner of XLA Garrison L.P.
|
|
|
|||||||||||
|
|
|
(***) - Preferred Share Ownership
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of XL Group plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
February 26, 2016
|
|
|
|
|
|
|
/s/ MICHAEL S. MCGAVICK
|
|
|
|
|
|
|
|
|
Michael S. McGavick
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of XL Group plc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
February 26, 2016
|
|
|
|
|
|
|
/s/ PETER R. PORRINO
|
|
|
|
|
|
|
|
|
Peter R. Porrino
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
Dated:
|
February 26, 2016
|
|
|
|
|
/s/ MICHAEL S. MCGAVICK
|
|
|
|
|
|
|
|
|
Michael S. McGavick
|
|
|
Chief Executive Officer
|
|
|
XL Group plc
|
|
|
|
|
|
Dated:
|
February 26, 2016
|
|
|
|
|
/s/ PETER R. PORRINO
|
|
|
|
|
|
|
|
|
Peter R. Porrino
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
|
XL Group plc
|