|
|
|
|
|
Title of each class
|
|
Name of each exchange on which registered
|
Common shares, par value $0.0125 per share
|
|
New York Stock Exchange
|
6.875% Series C preferred shares
|
|
New York Stock Exchange
|
5.50% Series D preferred shares
|
|
New York Stock Exchange
|
Large accelerated filer
|
ý
Accelerated filer
¨
|
Non-accelerated filer
|
¨
(Do not check if a smaller reporting company) Smaller reporting company
¨
|
|
|
|
|
|
Page
|
|
PART I
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 1B.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
PART II
|
|
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
Item 7.
|
||
|
|
|
Item 7A.
|
||
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|
Item 8.
|
||
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|
|
Item 9.
|
||
|
|
|
Item 9A.
|
||
|
|
|
Item 9B.
|
||
|
|
|
|
PART III
|
|
|
|
|
Item 10.
|
||
|
|
|
Item 11.
|
||
|
|
|
Item 12.
|
||
|
|
|
Item 13.
|
||
|
|
|
Item 14.
|
||
|
|
|
|
PART IV
|
|
|
|
|
Item 15.
|
ITEM 1.
|
BUSINESS
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
2,535,415
|
|
|
$
|
2,559,138
|
|
|
$
|
2,309,481
|
|
|
|
Reinsurance
|
2,176,104
|
|
|
2,137,903
|
|
|
1,830,162
|
|
|
|||
|
Total
|
$
|
4,711,519
|
|
|
$
|
4,697,041
|
|
|
$
|
4,139,643
|
|
|
|
|
|
|
|
|
|
|
•
|
Property
: provides physical loss or damage, business interruption and machinery breakdown coverage for virtually all types of property, including commercial buildings, residential premises, construction projects and onshore energy installations. This line of business consists of both primary and excess risks, some of which are catastrophe-exposed.
|
•
|
Marine
: provides coverage for traditional marine classes, including offshore energy, cargo, liability, recreational marine, fine art, specie, hull and war. Offshore energy coverage includes physical damage, business interruption, operators extra expense and liability coverage for all aspects of offshore upstream energy, from exploration and construction through the operation and distribution phases.
|
•
|
Terrorism
: provides coverage for physical damage and business interruption of an insured following an act of terrorism.
|
•
|
Aviation
: provides hull and liability and specific war coverage primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers.
|
•
|
Credit and political risk:
provides credit and political risk insurance products for banks and corporations. Coverage is provided for a range of risks including sovereign default, credit default, political violence, currency inconvertibility and non-transfer, expropriation, aircraft non-repossession and contract frustration due to political events. The credit insurance coverage is primarily for lenders seeking to mitigate the risk of non-payment from their borrowers in emerging markets. For the credit insurance contracts, it is necessary for the buyer of the insurance (most often a bank) to hold an insured asset (most often an underlying loan) in order to claim compensation under the insurance contract.
|
•
|
Professional lines
: provides coverage for directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, medical malpractice and other financial insurance related coverages for commercial enterprises, financial institutions and not-for-profit organizations. This business is predominantly written on a claims-made basis.
|
•
|
Liability:
primarily targets primary and low/mid-level excess and umbrella commercial liability risks in the U.S. wholesale and retail markets. Target industry sectors include construction, manufacturing, transportation and trucking and other services. We also target middle to high excess liability business in the London and Bermuda wholesale markets and primary and excess business in the Canadian marketplace.
|
•
|
Accident and health:
includes accidental death, travel insurance and specialty health products for employer and affinity groups, as well as accident and health reinsurance for catastrophic or per life events on a quota share and/or excess of loss basis, with aggregate and/or per person deductibles.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Marsh
|
$
|
437,092
|
|
|
17
|
%
|
|
$
|
422,627
|
|
|
17
|
%
|
|
$
|
427,565
|
|
|
19
|
%
|
|
|
Aon
|
354,681
|
|
|
14
|
%
|
|
451,158
|
|
|
18
|
%
|
|
413,471
|
|
|
18
|
%
|
|
|||
|
Willis
|
265,075
|
|
|
10
|
%
|
|
223,131
|
|
|
9
|
%
|
|
217,631
|
|
|
9
|
%
|
|
|||
|
Other brokers
|
1,235,986
|
|
|
49
|
%
|
|
1,230,165
|
|
|
48
|
%
|
|
1,060,864
|
|
|
46
|
%
|
|
|||
|
Managing general agencies and underwriters
|
242,581
|
|
|
10
|
%
|
|
232,057
|
|
|
8
|
%
|
|
189,950
|
|
|
8
|
%
|
|
|||
|
Total
|
$
|
2,535,415
|
|
|
100
|
%
|
|
$
|
2,559,138
|
|
|
100
|
%
|
|
$
|
2,309,481
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Catastrophe:
provides protection for most catastrophic losses that are covered in the underlying insurance policies written by our cedants. The exposure in the underlying policies is principally property exposure but also covers other exposures including workers compensation and personal accident. The principal perils in this portfolio are hurricane and windstorm, earthquake, flood, tornado, hail and fire. In some instances, terrorism may be a covered peril or the only peril. We underwrite catastrophe reinsurance principally on an excess of loss basis.
|
•
|
Property:
provides coverage for property damage and related losses resulting from natural and man-made perils contained in underlying personal and commercial policies. While our predominant exposure is to property damage, other risks, including business interruption and other non-property losses, may also be covered when arising from a covered peril. While our most significant exposures typically relate to losses from windstorms, tornadoes and earthquakes, we are exposed to other perils such as freezes, riots, floods, industrial explosions, fires, hail and a number of other loss events. We assume business on both a proportional and excess of loss basis.
|
•
|
Professional Lines:
covers directors' and officers' liability, employment practices liability, medical malpractice, professional indemnity, environmental liability and miscellaneous errors and omissions insurance risks. The underlying business is predominantly written on a claims-made basis. Business is written on both a proportional and excess of loss basis.
|
•
|
Credit and Surety:
consists of reinsurance of trade credit insurance products and includes both proportional and excess of loss structures. The underlying insurance indemnifies sellers of goods and services in the event of a payment default by the buyer of those goods and services. Also included in this line of business is coverage for losses arising from a broad array of surety bonds issued by insurers to satisfy regulatory demands or contract obligation in a variety of jurisdictions around the world. Bonding is also known as surety insurance.
|
•
|
Motor:
provides coverage to cedants for motor liability and property damage losses arising out of any one occurrence. The occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence.
|
•
|
Liability:
provides coverage to insurers of standard casualty business, excess and surplus casualty business and specialty casualty programs. The primary focus of the underlying business is general liability, although workers compensation and auto liability are also written.
|
•
|
Engineering:
provides coverage for all types of construction risks and risks associated with erection, testing and commissioning of machinery and plants during the construction stage. This line of business also includes coverage for losses arising from operational failures of machinery, plant and equipment and electronic equipment as well as business interruption.
|
•
|
Agriculture:
provides coverage for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations. We provide both proportional and aggregate stop loss reinsurance.
|
•
|
Other:
includes aviation, marine, and personal accident reinsurance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Aon
|
$
|
687,458
|
|
|
32
|
%
|
|
$
|
749,751
|
|
|
35
|
%
|
|
$
|
712,588
|
|
|
39
|
%
|
|
|
Marsh
|
591,412
|
|
|
27
|
%
|
|
643,292
|
|
|
30
|
%
|
|
468,993
|
|
|
26
|
%
|
|
|||
|
Willis
|
298,628
|
|
|
14
|
%
|
|
339,761
|
|
|
16
|
%
|
|
299,097
|
|
|
16
|
%
|
|
|||
|
Other brokers
|
376,712
|
|
|
17
|
%
|
|
271,458
|
|
|
13
|
%
|
|
212,941
|
|
|
12
|
%
|
|
|||
|
Direct
|
221,894
|
|
|
10
|
%
|
|
133,641
|
|
|
6
|
%
|
|
136,543
|
|
|
7
|
%
|
|
|||
|
Total
|
$
|
2,176,104
|
|
|
100
|
%
|
|
$
|
2,137,903
|
|
|
100
|
%
|
|
$
|
1,830,162
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
||||||||||||||||||||||||||||||||||||||||||
|
|
2004
|
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
Gross reserves for losses and loss expenses
|
$
|
2,404,560
|
|
|
$
|
4,743,338
|
|
|
$
|
5,015,113
|
|
|
$
|
5,587,311
|
|
|
$
|
6,244,783
|
|
|
$
|
6,564,133
|
|
|
$
|
7,032,375
|
|
|
$
|
8,425,045
|
|
|
$
|
9,058,731
|
|
|
$
|
9,582,140
|
|
|
$
|
9,596,797
|
|
|
|
Reinsurance recoverable
|
(564,314
|
)
|
|
(1,473,241
|
)
|
|
(1,310,904
|
)
|
|
(1,297,539
|
)
|
|
(1,314,551
|
)
|
|
(1,381,058
|
)
|
|
(1,540,633
|
)
|
|
(1,736,823
|
)
|
|
(1,825,617
|
)
|
|
(1,900,112
|
)
|
|
(1,890,280
|
)
|
|
|||||||||||
|
Net reserves for unpaid losses and loss expenses
|
1,840,246
|
|
|
3,270,097
|
|
|
3,704,209
|
|
|
4,289,772
|
|
|
4,930,232
|
|
|
5,183,075
|
|
|
5,491,742
|
|
|
6,688,222
|
|
|
7,233,114
|
|
|
7,682,028
|
|
|
7,706,517
|
|
|
|||||||||||
|
Net reserves re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
1 Year later
|
$
|
1,457,250
|
|
|
$
|
3,053,561
|
|
|
$
|
3,367,232
|
|
|
$
|
3,913,485
|
|
|
$
|
4,507,061
|
|
|
$
|
4,870,020
|
|
|
$
|
5,234,281
|
|
|
$
|
6,443,382
|
|
|
$
|
7,013,678
|
|
|
$
|
7,423,085
|
|
|
|
|
||
|
2 Years later
|
1,179,851
|
|
|
2,938,734
|
|
|
3,076,025
|
|
|
3,533,313
|
|
|
4,235,219
|
|
|
4,623,109
|
|
|
5,018,121
|
|
|
6,226,591
|
|
|
6,730,245
|
|
|
|
|
|
|
|||||||||||||
|
3 Years later
|
1,080,083
|
|
|
2,750,476
|
|
|
2,773,158
|
|
|
3,281,011
|
|
|
4,007,046
|
|
|
4,440,229
|
|
|
4,797,981
|
|
|
5,993,711
|
|
|
|
|
|
|
|
|
||||||||||||||
|
4 Years later
|
962,910
|
|
|
2,529,259
|
|
|
2,576,226
|
|
|
3,074,010
|
|
|
3,841,717
|
|
|
4,285,709
|
|
|
4,604,697
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
5 Years later
|
889,190
|
|
|
2,429,724
|
|
|
2,445,150
|
|
|
2,957,939
|
|
|
3,685,823
|
|
|
4,113,712
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
6 Years later
|
863,225
|
|
|
2,365,515
|
|
|
2,376,807
|
|
|
2,820,852
|
|
|
3,540,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
7 Years later
|
839,214
|
|
|
2,328,729
|
|
|
2,290,277
|
|
|
2,691,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
8 Years later
|
823,131
|
|
|
2,278,338
|
|
|
2,213,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
9 Years later
|
799,502
|
|
|
2,226,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
10 Years later
|
783,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Cumulative favorable development on net reserves
|
$
|
1,056,367
|
|
|
$
|
1,043,690
|
|
|
$
|
1,490,912
|
|
|
$
|
1,597,907
|
|
|
$
|
1,389,877
|
|
|
$
|
1,069,363
|
|
|
$
|
887,045
|
|
|
$
|
694,511
|
|
|
$
|
502,869
|
|
|
$
|
258,943
|
|
|
|
|
||
|
Cumulative net paid losses as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
1 Year later
|
$
|
291,695
|
|
|
$
|
880,120
|
|
|
$
|
636,266
|
|
|
$
|
615,717
|
|
|
$
|
982,036
|
|
|
$
|
1,042,890
|
|
|
$
|
953,035
|
|
|
$
|
1,299,384
|
|
|
$
|
1,373,459
|
|
|
$
|
1,544,664
|
|
|
|
|
||
|
2 Years later
|
432,963
|
|
|
1,292,738
|
|
|
999,280
|
|
|
1,147,990
|
|
|
1,539,713
|
|
|
1,592,741
|
|
|
1,601,082
|
|
|
2,187,024
|
|
|
2,341,376
|
|
|
|
|
|
|
|||||||||||||
|
3 Years later
|
511,325
|
|
|
1,500,652
|
|
|
1,355,821
|
|
|
1,461,494
|
|
|
1,936,555
|
|
|
2,002,373
|
|
|
2,061,667
|
|
|
2,857,250
|
|
|
|
|
|
|
|
|
||||||||||||||
|
4 Years later
|
574,874
|
|
|
1,771,039
|
|
|
1,513,350
|
|
|
1,655,688
|
|
|
2,221,221
|
|
|
2,301,915
|
|
|
2,448,219
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
5 Years later
|
615,920
|
|
|
1,873,052
|
|
|
1,625,423
|
|
|
1,807,075
|
|
|
2,424,791
|
|
|
2,553,059
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
6 Years later
|
650,110
|
|
|
1,930,682
|
|
|
1,705,987
|
|
|
1,928,489
|
|
|
2,581,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
7 Years later
|
677,351
|
|
|
1,979,439
|
|
|
1,772,037
|
|
|
2,015,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
8 Years later
|
698,846
|
|
|
2,026,100
|
|
|
1,810,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
9 Years later
|
706,010
|
|
|
2,039,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
10 Years later
|
708,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Impact of foreign exchange and other
|
$
|
4,664
|
|
|
$
|
(13,329
|
)
|
|
$
|
23,581
|
|
|
$
|
28,588
|
|
|
$
|
(133,345
|
)
|
|
$
|
82,018
|
|
|
$
|
(25,282
|
)
|
|
$
|
(16,462
|
)
|
|
$
|
71,084
|
|
|
$
|
6,184
|
|
|
$
|
(230,372
|
)
|
|
|
Gross reserve for losses and loss expenses re-estimated
|
$
|
1,283,500
|
|
|
$
|
3,545,389
|
|
|
$
|
3,275,118
|
|
|
$
|
3,674,606
|
|
|
$
|
4,651,047
|
|
|
$
|
5,340,729
|
|
|
$
|
5,958,037
|
|
|
$
|
7,509,261
|
|
|
$
|
8,459,942
|
|
|
$
|
9,275,945
|
|
|
|
|
||
|
Reinsurance recoverable re-estimated
|
(499,621
|
)
|
|
(1,318,982
|
)
|
|
(1,061,821
|
)
|
|
(982,741
|
)
|
|
(1,110,692
|
)
|
|
(1,227,017
|
)
|
|
(1,353,340
|
)
|
|
(1,515,550
|
)
|
|
(1,729,697
|
)
|
|
(1,852,860
|
)
|
|
|
|
||||||||||||
|
Net reserve for unpaid losses and loss expenses re-estimated
|
783,879
|
|
|
2,226,407
|
|
|
2,213,297
|
|
|
2,691,865
|
|
|
3,540,355
|
|
|
4,113,712
|
|
|
4,604,697
|
|
|
5,993,711
|
|
|
6,730,245
|
|
|
7,423,085
|
|
|
|
|
||||||||||||
|
Cumulative favorable development on gross reserves
|
$
|
1,121,060
|
|
|
$
|
1,197,949
|
|
|
$
|
1,739,995
|
|
|
$
|
1,912,705
|
|
|
$
|
1,593,736
|
|
|
$
|
1,223,404
|
|
|
$
|
1,074,338
|
|
|
$
|
915,784
|
|
|
$
|
598,789
|
|
|
$
|
306,195
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Protect our capital base and earnings by monitoring our risks against our stated risk tolerances;
|
•
|
Promote a sound risk management culture through disciplined and informed risk taking;
|
•
|
Enhance value creation and contribute to an optimal risk-return profile by providing the basis for efficient capital deployment;
|
•
|
Support our group-wide decision making process by providing reliable and timely risk information; and
|
•
|
Safeguard AXIS’s reputation.
|
•
|
Our Risk Management Committee ("RMC") has responsibility for reviewing the allocation of capital, approving individual risk limits and determining changes to our internal risk capital methodology. The RMC also reviews new business plans in the context of our risk framework and defined risk appetite.
|
•
|
Our Investment & Finance Committee oversees the Group’s investment activities by, among other things, monitoring market risks, the performance of our investment managers and the Group’s asset-liability management, liquidity positions and investment policies and guidelines. The Investment & Finance Committee also prepares the Group’s strategic asset allocation and presents it to the Finance Committee of the Board for approval.
|
•
|
Our Reinsurance Security Committee ("RSC") sets out the financial security requirements of our reinsurance counterparties and recommends tolerance levels for different types of ceded business.
|
•
|
Excess of loss per risk – the reinsurer indemnifies us for loss amounts of all individual policies effected, defined in the treaty terms and conditions. Per risk treaties are an effective means of risk mitigation against large single losses (e.g. a large fire claim).
|
•
|
Catastrophe excess of loss – provides aggregate loss cover for our insurance portfolio against the accumulation of losses incurred from a single event (e.g. windstorm).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At January 1,
(in millions of U.S. dollars)
|
2015
|
|
2014
|
|
||||||||||||||||||||||
|
Single zone/single event
|
|
Perils
|
50 Year
Return
Period
|
|
100 Year
Return
Period
|
|
250 Year
Return
Period
|
|
50 Year
Return
Period
|
|
100 Year
Return
Period
|
|
250 Year
Return
Period
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Southeast
|
|
U.S. Hurricane
|
$
|
548
|
|
|
$
|
773
|
|
|
$
|
947
|
|
|
$
|
502
|
|
|
$
|
705
|
|
|
$
|
887
|
|
|
|
Northeast
|
|
U.S. Hurricane
|
55
|
|
|
177
|
|
|
325
|
|
|
60
|
|
|
206
|
|
|
403
|
|
|
||||||
|
Mid-Atlantic
|
|
U.S. Hurricane
|
98
|
|
|
305
|
|
|
758
|
|
|
107
|
|
|
361
|
|
|
772
|
|
|
||||||
|
Gulf of Mexico
|
|
U.S. Hurricane
|
351
|
|
|
508
|
|
|
773
|
|
|
338
|
|
|
507
|
|
|
786
|
|
|
||||||
|
California
|
|
Earthquake
|
379
|
|
|
544
|
|
|
702
|
|
|
352
|
|
|
479
|
|
|
558
|
|
|
||||||
|
Europe
|
|
Windstorm
|
151
|
|
|
224
|
|
|
291
|
|
|
264
|
|
|
371
|
|
|
479
|
|
|
||||||
|
Japan
|
|
Earthquake
|
165
|
|
|
270
|
|
|
447
|
|
|
216
|
|
|
284
|
|
|
482
|
|
|
||||||
|
Japan
|
|
Windstorm
|
52
|
|
|
83
|
|
|
120
|
|
|
68
|
|
|
126
|
|
|
172
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Major failures and disasters which could cause a severe disruption to working environments, facilities and personnel, represent a significant operational risk to us. Our Business Continuity Management framework strives to protect critical business functions from these effects to enable us to carry out our core tasks in time and at the quality required. During
2014
, we continued to review our Business Continuity Planning procedures through cyclical planned tests.
|
•
|
We have developed a number of Information Technology ("IT") platforms, applications and security controls to support our business activities worldwide. Dedicated security standards are in place for our IT systems to ensure the proper use, availability and protection of our information assets.
|
•
|
Our use of third party vendors exposes us to a number of increased operational risks, including the risk of security breaches, fraud, non-compliance with laws and regulations or internal guidelines and inadequate service. We manage material third party vendor risk, by, among other things, performing a thorough risk assessment on potential large vendors, reviewing a vendor’s financial stability, ability to provide ongoing service and business continuity planning.
|
•
|
We maintain cash and cash equivalents and high quality, liquid investment portfolios to meet expected outflows, as well as those that could result from a range of potential stress events. We place internal limits on the maximum percentage of cash and investments which may be in a restricted form as well as a minimum percentage of our investment portfolio to mature within a defined timeframe.
|
•
|
We maintain committed borrowing facilities, as well as access to diverse funding sources to cover contingencies. Funding sources include asset sales, external debt issuances and lines of credit.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the attention of management will have been diverted to the amalgamation instead of being directed solely to our operations and the pursuit of other opportunities that could have been beneficial to us;
|
•
|
under certain circumstances, we may be required to pay PartnerRe a fee of $55 million or $250 million in the event the amalgamation agreement is terminated, and costs and expenses incurred in connection with the transaction in an amount not to exceed $35 million;
|
•
|
uncertainties associated with the amalgamation may cause a loss of management personnel and other key employees or result in the departure some of our customers, which could adversely affect our business;
|
•
|
we would have incurred fees and costs such as legal, accounting and financial advisor fees;
|
•
|
we will be subject to business uncertainties and contractual restrictions while the proposed amalgamation is pending, which could adversely affect our business; and
|
•
|
the loss of time and resources.
|
•
|
$201 million, in aggregate, relating to various worldwide natural catastrophe and weather-related events in 2013;
|
•
|
$331 million in relation to Storm Sandy in 2012;
|
•
|
$789 million, in aggregate, in relation to the February and June earthquakes near Christchurch, New Zealand, the Japanese earthquake and tsunami, first quarter Australian weather events and the Thai floods in 2011;
|
•
|
$256 million, in aggregate, in relation to the Chilean and September New Zealand earthquakes in 2010; and
|
•
|
$408 million, in aggregate, in relation to Hurricanes Ike and Gustav in 2008.
|
•
|
Providing reinsurance capacity in markets and to consumers that we target;
|
•
|
Requiring our further participation in industry pools and guaranty associations;
|
•
|
Expanding the scope of coverage under existing policies; e.g., following large disasters;
|
•
|
Further regulating the terms of (re)insurance contracts; or
|
•
|
Disproportionately benefiting the companies of one country over those of another.
|
•
|
actual or anticipated variations in our quarterly results, including as a result of catastrophes or our investment performance;
|
•
|
our share repurchase program;
|
•
|
changes in market valuation of companies in the insurance and reinsurance industry;
|
•
|
changes in expectations of future financial performance or changes in estimates of securities analysts;
|
•
|
fluctuations in stock market processes and volumes;
|
•
|
issuances or sales of common shares or other securities in the future;
|
•
|
the addition or departure of key personnel; and
|
•
|
announcements by us or our competitors of acquisitions, investments or strategic alliances.
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2014
|
|
2013
|
|
||||||||||||||||||||
|
|
High
|
|
Low
|
|
Dividends
Declared
|
|
High
|
|
Low
|
|
Dividends
Declared |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
1st Quarter
|
$
|
47.41
|
|
|
$
|
41.82
|
|
|
$
|
0.27
|
|
|
$
|
41.98
|
|
|
$
|
34.95
|
|
|
$
|
0.25
|
|
|
|
2nd Quarter
|
$
|
47.34
|
|
|
$
|
43.91
|
|
|
$
|
0.27
|
|
|
$
|
46.88
|
|
|
$
|
41.29
|
|
|
$
|
0.25
|
|
|
|
3rd Quarter
|
$
|
48.66
|
|
|
$
|
43.00
|
|
|
$
|
0.27
|
|
|
$
|
48.39
|
|
|
$
|
41.87
|
|
|
$
|
0.25
|
|
|
|
4th Quarter
|
$
|
52.21
|
|
|
$
|
44.94
|
|
|
$
|
0.29
|
|
|
$
|
49.75
|
|
|
$
|
43.42
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
Total Number
of Shares
Purchased
|
Average
Price Paid
Per Share
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
(a)
|
Maximum Number (or Approximate
Dollar Value) of Shares That
May Yet Be Purchased Under the
Announced Plans
or Programs
(b)
|
||||||
October 1-31, 2014
|
1,262
|
|
|
$46.76
|
|
—
|
|
|
$300.0
|
million
|
November 1-30, 2014
|
505,632
|
|
|
$49.48
|
|
501,457
|
|
|
$275.2
|
million
|
December 1-31, 2014
|
981,895
|
|
|
$50.51
|
|
977,069
|
|
|
$225.8
|
million
|
Total
|
1,488,789
|
|
|
1,478,526
|
|
|
$225.8
|
million
|
(a)
|
From time to time, we purchase shares in connection with the vesting of restricted stock awards granted to our employees under our 2007 Long-Term Equity Compensation Plan. The purchase of these shares is separately authorized and is not part of our Board-authorized share repurchase program, described below.
|
(b)
|
On December 5, 2014, our Board of Directors authorized a new share repurchase plan for up to
$750 million
of our common shares through December 31, 2016. The new share repurchase authorization, effective January 1, 2015, replaced the previous plan which had $225.8 million available until the end of 2014. Share repurchases may be effected from time to time in open market or privately negotiated transactions, depending on market conditions.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
At and For the year Ended December 31,
|
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
||||||||||
|
|
(in thousands, except per share amounts)
|
|
||||||||||||||||||
|
Selected Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gross premiums written
|
$
|
4,711,519
|
|
|
$
|
4,697,041
|
|
|
$
|
4,139,643
|
|
|
$
|
4,096,153
|
|
|
$
|
3,750,536
|
|
|
|
Net premiums earned
|
3,870,999
|
|
|
3,707,065
|
|
|
3,415,463
|
|
|
3,314,961
|
|
|
2,947,410
|
|
|
|||||
|
Net investment income
|
342,766
|
|
|
409,312
|
|
|
380,957
|
|
|
362,430
|
|
|
406,892
|
|
|
|||||
|
Net realized investment gains
|
132,108
|
|
|
75,564
|
|
|
127,469
|
|
|
121,439
|
|
|
195,098
|
|
|
|||||
|
Net losses and loss expenses
|
2,186,722
|
|
|
2,134,195
|
|
|
2,096,028
|
|
|
2,675,052
|
|
|
1,677,132
|
|
|
|||||
|
Acquisition costs
|
737,197
|
|
|
664,191
|
|
|
627,653
|
|
|
587,469
|
|
|
488,712
|
|
|
|||||
|
General and administrative expenses
|
621,876
|
|
|
575,390
|
|
|
560,981
|
|
|
459,151
|
|
|
449,885
|
|
|
|||||
|
Interest expense and financing costs
|
74,695
|
|
|
61,979
|
|
|
61,863
|
|
|
62,598
|
|
|
55,876
|
|
|
|||||
|
Preferred share dividends
|
40,088
|
|
|
40,474
|
|
|
38,228
|
|
|
36,875
|
|
|
36,875
|
|
|
|||||
|
Net income available to common shareholders
(1)
|
$
|
770,657
|
|
|
$
|
683,910
|
|
|
$
|
495,004
|
|
|
$
|
9,430
|
|
|
$
|
819,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Per Common Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic earnings per common share
|
$
|
7.38
|
|
|
$
|
6.02
|
|
|
$
|
4.05
|
|
|
$
|
0.08
|
|
|
$
|
6.74
|
|
|
|
Diluted earnings per common share
|
7.29
|
|
|
5.93
|
|
|
4.00
|
|
|
0.07
|
|
|
6.02
|
|
|
|||||
|
Cash dividends declared per common share
|
$
|
1.10
|
|
|
$
|
1.02
|
|
|
$
|
0.97
|
|
|
$
|
0.93
|
|
|
$
|
0.86
|
|
|
|
Basic weighted average common shares outstanding
|
104,368
|
|
|
113,636
|
|
|
122,148
|
|
|
122,499
|
|
|
121,728
|
|
|
|||||
|
Diluted weighted average common shares outstanding
|
105,713
|
|
|
115,328
|
|
|
123,654
|
|
|
128,122
|
|
|
136,199
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating Ratios:
(2)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net loss and loss expense ratio
|
56.5
|
%
|
|
57.6
|
%
|
|
61.4
|
%
|
|
80.7
|
%
|
|
56.9
|
%
|
|
|||||
|
Acquisition cost ratio
|
19.0
|
%
|
|
17.9
|
%
|
|
18.4
|
%
|
|
17.7
|
%
|
|
16.6
|
%
|
|
|||||
|
General and administrative expense ratio
|
16.1
|
%
|
|
15.5
|
%
|
|
16.4
|
%
|
|
13.9
|
%
|
|
15.2
|
%
|
|
|||||
|
Combined ratio
|
91.6
|
%
|
|
91.0
|
%
|
|
96.2
|
%
|
|
112.3
|
%
|
|
88.7
|
%
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selected Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments
|
$
|
13,769,979
|
|
|
$
|
13,780,336
|
|
|
$
|
13,546,894
|
|
|
$
|
12,466,889
|
|
|
$
|
11,524,166
|
|
|
|
Cash and cash equivalents
|
1,209,695
|
|
|
987,876
|
|
|
850,550
|
|
|
1,082,838
|
|
|
1,045,355
|
|
|
|||||
|
Reinsurance recoverable on unpaid and paid losses
|
1,926,145
|
|
|
1,929,988
|
|
|
1,863,819
|
|
|
1,770,329
|
|
|
1,577,547
|
|
|
|||||
|
Total assets
|
19,955,736
|
|
|
19,634,784
|
|
|
18,852,344
|
|
|
17,806,059
|
|
|
16,445,731
|
|
|
|||||
|
Reserve for losses and loss expenses
|
9,596,797
|
|
|
9,582,140
|
|
|
9,058,731
|
|
|
8,425,045
|
|
|
7,032,375
|
|
|
|||||
|
Unearned premiums
|
2,735,376
|
|
|
2,683,849
|
|
|
2,454,692
|
|
|
2,454,462
|
|
|
2,333,676
|
|
|
|||||
|
Senior notes
|
990,790
|
|
|
995,855
|
|
|
995,245
|
|
|
994,664
|
|
|
994,110
|
|
|
|||||
|
Total shareholders’ equity attributable to AXIS Capital
|
$
|
5,821,121
|
|
|
$
|
5,817,962
|
|
|
$
|
5,779,761
|
|
|
$
|
5,444,079
|
|
|
$
|
5,624,970
|
|
|
|
Book value per common share
(3)
|
$
|
52.23
|
|
|
$
|
47.40
|
|
|
$
|
44.75
|
|
|
$
|
39.37
|
|
|
$
|
45.60
|
|
|
|
Diluted book value per common share
(3)
|
$
|
50.63
|
|
|
$
|
45.80
|
|
|
$
|
42.97
|
|
|
$
|
38.08
|
|
|
$
|
39.37
|
|
|
|
Common shares outstanding
|
99,426
|
|
|
109,485
|
|
|
117,920
|
|
|
125,588
|
|
|
112,393
|
|
|
|||||
|
Common shares outstanding - diluted
|
102,577
|
|
|
113,325
|
|
|
122,793
|
|
|
129,818
|
|
|
130,189
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
2014
net income available to common shareholders includes an amount attributable from noncontrolling interests of
$6,181
.
|
(2)
|
Operating ratios are calculated by dividing the respective operating expenses by net premiums earned.
|
(3)
|
Book value per common share and diluted book value per common share are based on total common shareholders’ equity divided by common shares and diluted common share equivalents outstanding, respectively.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Net income available to common shareholders of
$771 million
, or
$7.38
per common share and
$7.29
per diluted common share
|
•
|
Operating income
of
$563 million
, or
$5.32
per diluted common share
(1)
|
•
|
Gross premiums written of
$4.7 billion
|
•
|
Net premiums written of
$3.9 billion
|
•
|
Net premiums earned of
$3.9 billion
|
•
|
Net favorable prior year reserve development of
$259 million
|
•
|
Estimated aggregate natural catastrophe and weather-related pre-tax net losses of $93 million
|
•
|
Underwriting income of
$462 million
and combined ratio of
91.6%
|
•
|
Net investment income of
$343 million
|
•
|
Net realized investment gains of
$132 million
|
•
|
Total cash and investments of
$15.0 billion
; fixed maturities, cash and short-term securities comprise
90%
of total cash and investments and have an average credit rating of
AA-
|
•
|
Total assets of
$20.0 billion
|
•
|
Reserve for losses and loss expenses of
$9.6 billion
and reinsurance recoverable of
$1.9 billion
|
•
|
Total debt of
$991 million
and a debt to total capital ratio of
14.5%
|
•
|
Repurchased
11.8 million
common shares for total cost of
$543 million
|
•
|
Common shareholders’ equity of
$5.2 billion
; diluted book value per common share of
$50.63
|
(1)
|
Operating income is a non-GAAP financial measure as defined in SEC Regulation G. See
‘Non-GAAP Financial Measures’
for reconciliation to nearest GAAP financial measure (net income available to common shareholders).
|
•
|
continued expansion of our agriculture reinsurance business;
|
•
|
the addition of a number of underwriting and support staff, including underwriting specialists in areas such as healthcare liability insurance, as we continue to build-out the Company's global platform, explore opportunities in new and existing lines of business and grow our business internationally;
|
•
|
the development of our third-party capital capabilities through AXIS Ventures Reinsurance Limited which was launched to manage capital for investors interested in deploying funds directly into the property-catastrophe and related short-tail business;
|
•
|
continued growth of our accident and health line, which launched in 2010 and is focused on specialty accident and health products;
|
•
|
the growth of our Weather and Commodity Markets business unit which offers parametric risk management solutions to clients whose profit margins are exposed to adverse weather and commodity price risks;
|
•
|
the commencement of operations of our new syndicate at Lloyd's which provides us with access to Lloyd's worldwide licenses and an extensive distribution network; and
|
•
|
the continued focus on lines of business with attractive rates.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Underwriting income:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
78,635
|
|
|
(7%)
|
|
$
|
84,749
|
|
|
29%
|
|
$
|
65,477
|
|
|
|
Reinsurance
|
382,894
|
|
|
12%
|
|
343,220
|
|
|
74%
|
|
197,660
|
|
|
|||
|
Net investment income
|
342,766
|
|
|
(16%)
|
|
409,312
|
|
|
7%
|
|
380,957
|
|
|
|||
|
Net realized investment gains
|
132,108
|
|
|
75%
|
|
75,564
|
|
|
(41%)
|
|
127,469
|
|
|
|||
|
Other expenses, net
|
(131,839
|
)
|
|
(29%)
|
|
(185,380
|
)
|
|
(17%)
|
|
(224,322
|
)
|
|
|||
|
Net income
|
804,564
|
|
|
11%
|
|
727,465
|
|
|
33%
|
|
547,241
|
|
|
|||
|
Amounts attributable from noncontrolling interests
|
6,181
|
|
|
nm
|
|
—
|
|
|
nm
|
|
—
|
|
|
|||
|
Preferred share dividends
|
(40,088
|
)
|
|
(1%)
|
|
(40,474
|
)
|
|
6%
|
|
(38,228
|
)
|
|
|||
|
Loss on repurchase of preferred shares
|
—
|
|
|
nm
|
|
(3,081
|
)
|
|
(78%)
|
|
(14,009
|
)
|
|
|||
|
Net income available to common shareholders
|
$
|
770,657
|
|
|
13%
|
|
$
|
683,910
|
|
|
38%
|
|
$
|
495,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating income
|
$
|
562,875
|
|
|
(11)%
|
|
$
|
633,072
|
|
|
50%
|
|
$
|
421,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended and at December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
ROACE
(1)
|
14.8
|
%
|
|
13.1
|
%
|
|
9.7
|
%
|
|
|||
|
Operating ROACE
(2)
|
10.8
|
%
|
|
12.1
|
%
|
|
8.2
|
%
|
|
|||
|
Diluted book value per common share
(3)
|
$
|
50.63
|
|
|
$
|
45.80
|
|
|
$
|
42.97
|
|
|
|
Cash dividends declared per common share
|
1.10
|
|
|
1.02
|
|
|
0.97
|
|
|
|||
|
Increase in diluted book value per common share adjusted for dividends
|
$
|
5.93
|
|
|
$
|
3.85
|
|
|
$
|
5.86
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Return on average common equity (“ROACE”) is calculated by dividing net income available to common shareholders for the year by the average shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the year.
|
(2)
|
Operating ROACE is calculated by dividing operating income for the year by the average common shareholders’ equity determined by using the common shareholders’ equity balances at the beginning and end of the year. Operating ROACE is a non-GAAP financial measure, as defined in SEC Regulation G. See
‘Non-GAAP Financial Measures’
for additional information and a reconciliation to the nearest GAAP financial measure (ROACE).
|
(3)
|
Diluted book value ("DBV") per common share represents total common shareholders’ equity divided by the number of common shares and diluted common share equivalents outstanding, determined using the treasury stock method. Cash settled awards are excluded from the denominator.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
|
$
|
4,711,519
|
|
|
—%
|
|
$
|
4,697,041
|
|
|
13%
|
|
$
|
4,139,643
|
|
|
|
Net premiums written
|
|
3,906,975
|
|
|
(1%)
|
|
3,928,200
|
|
|
18%
|
|
3,337,456
|
|
|
|||
|
Net premiums earned
|
|
3,870,999
|
|
|
4%
|
|
3,707,065
|
|
|
9%
|
|
3,415,463
|
|
|
|||
|
Other insurance related income
|
|
650
|
|
|
(85)%
|
|
4,424
|
|
|
65%
|
|
2,676
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year net losses and loss expenses
|
|
(2,445,666
|
)
|
|
|
|
(2,353,631
|
)
|
|
|
|
(2,340,868
|
)
|
|
|||
|
Prior year reserve development
|
|
258,944
|
|
|
|
|
219,436
|
|
|
|
|
244,840
|
|
|
|||
|
Acquisition costs
|
|
(737,197
|
)
|
|
|
|
(664,191
|
)
|
|
|
|
(627,653
|
)
|
|
|||
|
Underwriting-related general and administrative expenses
(1)
|
|
(486,201
|
)
|
|
|
|
(485,134
|
)
|
|
|
|
(431,321
|
)
|
|
|||
|
Underwriting income
(2)(3)
|
|
$
|
461,529
|
|
|
8%
|
|
$
|
427,969
|
|
|
63%
|
|
$
|
263,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
General and administrative expenses
(1)
|
|
$
|
621,876
|
|
|
|
|
$
|
575,390
|
|
|
|
|
$
|
560,981
|
|
|
|
Income before income taxes
(2)
|
|
$
|
830,472
|
|
|
|
|
$
|
734,467
|
|
|
|
|
$
|
550,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Underwriting-related general and administrative expenses is a non-GAAP measure as defined in SEC Regulation G. Our total general and administrative expenses also included
$135,675
,
$90,256
and
$129,660
of corporate expenses for
2014
,
2013
and
2012
, respectively; refer to '
Other Expenses, Net
' for additional information related to these corporate expenses. Also, refer to
'Non-GAAP Financial Measures'
for further information.
|
(2)
|
Group (or consolidated) underwriting income is a non-GAAP financial measure as defined in SEC Regulation G. See Item 8, Note 3 to the Consolidated Financial Statements, for a reconciliation of consolidated underwriting income to the nearest GAAP financial measures (income before income taxes) for the years indicated above. Also, refer to
'Non-GAAP Financial Measures'
for additional information related to the presentation of consolidated underwriting income.
|
(3)
|
AXIS Capital cedes certain of its reinsurance business to AXIS Ventures Reinsurance Limited ("Ventures Re"), the Company's third-party capital vehicle, on a fully collateralized basis. The collateral has been provided by third party investors. Ventures Re is a variable interest entity and AXIS Capital has been determined to be its primary beneficiary. Following this determination Ventures Re is consolidated in the Consolidated Financial Statements of AXIS Capital and the net impact of the cessions has been included in amounts attributable to (from) noncontrolling interests. For 2014, amounts attributable from noncontrolling interests were
$6,181
. For 2013 and 2012 amounts attributable from noncontrolling interests were $nil. Refer to Item 8, Note 14 to the Consolidated Financial Statements for more information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gross Premiums Written
|
|
||||||||||||||||||
|
Year ended December 31,
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Insurance
|
$
|
2,535,415
|
|
|
(1%)
|
|
$
|
2,559,138
|
|
|
11%
|
|
$
|
2,309,481
|
|
|
||||
|
Reinsurance
|
2,176,104
|
|
|
2%
|
|
2,137,903
|
|
|
17%
|
|
1,830,162
|
|
|
|||||||
|
Total
|
$
|
4,711,519
|
|
|
—%
|
|
$
|
4,697,041
|
|
|
13%
|
|
$
|
4,139,643
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
% ceded
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
30
|
%
|
|
1
|
|
pt
|
|
29
|
%
|
|
(5
|
)
|
pts
|
|
34
|
%
|
|
|||
|
Reinsurance
|
2
|
%
|
|
1
|
|
pt
|
|
1
|
%
|
|
—
|
|
pts
|
|
1
|
%
|
|
|||
|
Total
|
17
|
%
|
|
1
|
|
pt
|
|
16
|
%
|
|
(3
|
)
|
pts
|
|
19
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Written
|
|
||||||||||||||||||
|
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Insurance
|
$
|
1,779,501
|
|
|
(2%)
|
|
$
|
1,813,538
|
|
|
19%
|
|
$
|
1,522,245
|
|
|
||||
|
Reinsurance
|
2,127,474
|
|
|
1%
|
|
2,114,662
|
|
|
16%
|
|
1,815,211
|
|
|
|||||||
|
Total
|
$
|
3,906,975
|
|
|
(1%)
|
|
$
|
3,928,200
|
|
|
18%
|
|
$
|
3,337,456
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
13 to 14
|
|
12 to 13
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Insurance
|
$
|
1,830,544
|
|
|
47
|
%
|
|
$
|
1,722,762
|
|
|
46
|
%
|
|
$
|
1,558,058
|
|
|
46
|
%
|
|
6
|
%
|
|
11
|
%
|
|
|
Reinsurance
|
2,040,455
|
|
|
53
|
%
|
|
1,984,303
|
|
|
54
|
%
|
|
1,857,405
|
|
|
54
|
%
|
|
3
|
%
|
|
7
|
%
|
|
|||
|
Total
|
$
|
3,870,999
|
|
|
100
|
%
|
|
$
|
3,707,065
|
|
|
100
|
%
|
|
$
|
3,415,463
|
|
|
100
|
%
|
|
4
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Year ended December 31,
|
2014
|
|
% Point
Change
|
|
2013
|
|
% Point
Change
|
|
2012
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current accident year loss ratio
|
63.2
|
%
|
|
(0.3
|
)
|
|
63.5
|
%
|
|
(5.0
|
)
|
|
68.5
|
%
|
|
|
Prior year reserve development
|
(6.7
|
%)
|
|
(0.8
|
)
|
|
(5.9
|
%)
|
|
1.2
|
|
|
(7.1
|
%)
|
|
|
Acquisition cost ratio
|
19.0
|
%
|
|
1.1
|
|
|
17.9
|
%
|
|
(0.5
|
)
|
|
18.4
|
%
|
|
|
General and administrative expense ratio
(1)
|
16.1
|
%
|
|
0.6
|
|
|
15.5
|
%
|
|
(0.9
|
)
|
|
16.4
|
%
|
|
|
Combined ratio
|
91.6
|
%
|
|
0.6
|
|
|
91.0
|
%
|
|
(5.2
|
)
|
|
96.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The general and administration expense ratio includes corporate expenses not allocated to underwriting segments of
3.5%
,
2.4%
and
3.8%
for
2014
,
2013
and
2012
, respectively. These costs are further discussed in the ‘
Other Expenses, Net
’ section.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
63,735
|
|
|
$
|
50,355
|
|
|
$
|
122,209
|
|
|
|
Reinsurance
|
195,209
|
|
|
169,081
|
|
|
122,631
|
|
|
|||
|
Total
|
$
|
258,944
|
|
|
$
|
219,436
|
|
|
$
|
244,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Property and Other
|
$
|
68,330
|
|
|
$
|
47,780
|
|
|
$
|
63,919
|
|
|
|
Marine
|
6,257
|
|
|
48,482
|
|
|
37,322
|
|
|
|||
|
Aviation
|
9,076
|
|
|
15,349
|
|
|
5,017
|
|
|
|||
|
Credit and Political Risk
|
3,740
|
|
|
13,136
|
|
|
(143
|
)
|
|
|||
|
Professional Lines
|
(807
|
)
|
|
(50,882
|
)
|
|
19,458
|
|
|
|||
|
Liability
|
(22,861
|
)
|
|
(23,510
|
)
|
|
(3,364
|
)
|
|
|||
|
Total
|
$
|
63,735
|
|
|
$
|
50,355
|
|
|
$
|
122,209
|
|
|
|
|
|
|
|
|
|
|
•
|
$68 million
of net favorable prior year reserve development on our property and other business, related to the 2013 and prior accident years and driven by better than expected loss emergence.
|
•
|
$9 million
of net favorable prior year reserve development on aviation business, spanning a number of accident years and largely related to better than expected loss emergence.
|
•
|
$23 million
of net adverse prior year reserve development on liability business, related to specific claims impacting primarily 2008, 2009 and 2011 through 2013 accident years.
|
•
|
$48 million
of net favorable prior year reserve development on our property and other business, largely related to the 2010 and 2011 accident years and driven by better than expected loss emergence.
|
•
|
$48 million
of net favorable prior year reserve development on marine business, spanning a number of accident years and largely related to better than expected loss emergence.
|
•
|
$15 million
of net favorable prior year reserve development on aviation business, spanning a number of accident years and largely related to better than expected loss emergence.
|
•
|
$13 million
of net favorable prior year reserve development on our credit and political risk business, largely related to the 2012 accident year and driven by better than expected loss emergence.
|
•
|
$51 million
of net adverse prior year reserve development on professional lines business, primarily related to strengthening of certain parts of our U.S. D&O lines in the 2011 and 2012 accident years and development on global financial crisis-related claims in our 2008 and 2009 accident years, as discussed in the overview.
|
•
|
$24 million
of net adverse prior year reserve development on liability business, related to developments on two particular claims and pertained to the 2009 and 2011 accident years.
|
•
|
$64 million
of net favorable prior year reserve development on our property and other business, the majority of which related to the 2009 through 2011 accident years and the 2008 accident year. While development was primarily driven by better than expected loss emergence, a portion of the 2008 accident year amount was due to the final settlement of two specific case reserves.
|
•
|
$37 million
of net favorable prior year reserve development on marine business, spanning a number of accident years and largely related to better than expected loss emergence. The majority of this development related to offshore energy business.
|
•
|
$19 million
of net favorable prior year reserve development on professional lines business, primarily related to the 2006 through 2008 accident years for the reasons discussed in the overview.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Property and Other
|
$
|
122,859
|
|
|
$
|
50,017
|
|
|
$
|
79,802
|
|
|
|
Credit and Surety
|
(713
|
)
|
|
6,328
|
|
|
12,254
|
|
|
|||
|
Professional Lines
|
32,765
|
|
|
21,845
|
|
|
34,291
|
|
|
|||
|
Motor
|
19,007
|
|
|
6,260
|
|
|
(4,328
|
)
|
|
|||
|
Liability
|
21,291
|
|
|
84,631
|
|
|
612
|
|
|
|||
|
Total
|
$
|
195,209
|
|
|
$
|
169,081
|
|
|
$
|
122,631
|
|
|
|
|
|
|
|
|
|
|
•
|
$123 million
of net favorable prior year reserve development on property and other business, spanning a number of accident years and driven by better than expected loss emergence. Included in this net development was $31 million of favorable reserve development relating to natural catastrophe and weather-related losses incurred during 2013. In addition, the net development included $26 million of adverse development on New Zealand 2010 and 2011 earthquake events and $10 million of adverse development on agriculture reserves relating to loss experience on events occurring late in the 2013 accident year.
|
•
|
$33 million
of net favorable prior year reserve development on professional lines business, primarily related to the 2004 through 2007 accident years, for the reasons discussed in the overview and partially offset by reserve strengthening on the 2011 to 2013 years.
|
•
|
$19 million
of net favorable prior year reserve development on motor business, driven by better than expected loss emergence on certain European exposures.
|
•
|
$21 million
of net favorable prior year reserve development on liability business related to accident years 2008 and prior, for the reasons discussed in the overview. This favorable development was partially offset by strengthening of the reserves related to the 2009 through 2013 accident years.
|
•
|
$50 million
of net favorable prior year reserve development on property and other business, largely driven by better than expected loss emergence on the 2006 through 2009 and the 2012 accident years.
|
•
|
$22 million
of net favorable prior year reserve development on professional lines reinsurance business, primarily related to the 2007 through 2009 accident years and driven by better than expected loss emergence, for the reasons discussed in the overview.
|
•
|
$85 million
of net favorable prior year reserve development on liability reinsurance business for the reasons discussed in the overview.
|
•
|
$80 million
of net favorable prior year reserve development on property and other business largely consisting of:
|
•
|
$63 million of net favorable prior year reserve development on catastrophe and property business. Net favorable development was evident across all accident years, with the exception of 2011, and was largely due to better than expected loss emergence. We recognized net adverse development of $18 million on the 2011 accident year, driven by the revision in our estimates for the New Zealand earthquakes.
|
•
|
$16 million of net favorable prior year reserve development on crop business, largely related to the 2011 accident year and due to better than expected loss emergence. Of this amount, $6 million related to updated information for one particular claim; the remainder was due to better than expected loss emergence.
|
•
|
$12 million
of net favorable prior year reserve development on trade credit and bond reinsurance business, primarily related to the 2010 and 2011 accident years, in recognition of better than expected loss emergence and updated information from our cedants.
|
•
|
$34 million
of net favorable prior year reserve development on professional lines reinsurance business, primarily related to the 2007, and to a lesser extent 2006, accident years for the reasons discussed in the overview.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,535,415
|
|
|
(1%)
|
|
$
|
2,559,138
|
|
|
11%
|
|
$
|
2,309,481
|
|
|
|
Net premiums written
|
1,779,501
|
|
|
(2%)
|
|
1,813,538
|
|
|
19%
|
|
1,522,245
|
|
|
|||
|
Net premiums earned
|
1,830,544
|
|
|
6%
|
|
1,722,762
|
|
|
11%
|
|
1,558,058
|
|
|
|||
|
Other insurance related income (loss)
|
(11
|
)
|
|
nm
|
|
2,436
|
|
|
(9)%
|
|
2,676
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year net losses and loss expenses
|
(1,195,615
|
)
|
|
|
|
(1,100,757
|
)
|
|
|
|
(1,075,773
|
)
|
|
|||
|
Prior year reserve development
|
63,735
|
|
|
|
|
50,355
|
|
|
|
|
122,209
|
|
|
|||
|
Acquisition costs
|
(278,804
|
)
|
|
|
|
(242,363
|
)
|
|
|
|
(226,859
|
)
|
|
|||
|
General and administrative expenses
|
(341,214
|
)
|
|
|
|
(347,684
|
)
|
|
|
|
(314,834
|
)
|
|
|||
|
Underwriting income
|
$
|
78,635
|
|
|
(7%)
|
|
$
|
84,749
|
|
|
29%
|
|
$
|
65,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
% Point
Change
|
|
|
|
% Point
Change
|
|
|
|
||||||
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year loss ratio
|
65.3
|
%
|
|
1.4
|
|
63.9
|
%
|
|
(5.1)
|
|
69.0
|
%
|
|
|||
|
Prior year reserve development
|
(3.5
|
%)
|
|
(0.6)
|
|
(2.9
|
%)
|
|
4.9
|
|
(7.8
|
%)
|
|
|||
|
Acquisition cost ratio
|
15.2
|
%
|
|
1.1
|
|
14.1
|
%
|
|
(0.5)
|
|
14.6
|
%
|
|
|||
|
General and administrative expense ratio
|
18.7
|
%
|
|
(1.4)
|
|
20.1
|
%
|
|
(0.1)
|
|
20.2
|
%
|
|
|||
|
Combined ratio
|
95.7
|
%
|
|
0.5
|
|
95.2
|
%
|
|
(0.8)
|
|
96.0
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
13 to 14
|
|
12 to 13
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Property
|
$
|
644,516
|
|
|
26
|
%
|
|
$
|
671,970
|
|
|
27
|
%
|
|
$
|
651,188
|
|
|
27
|
%
|
|
(4
|
%)
|
|
3
|
%
|
|
|
Marine
|
238,320
|
|
|
9
|
%
|
|
229,493
|
|
|
9
|
%
|
|
252,434
|
|
|
11
|
%
|
|
4
|
%
|
|
(9
|
%)
|
|
|||
|
Terrorism
|
37,705
|
|
|
1
|
%
|
|
38,373
|
|
|
1
|
%
|
|
37,186
|
|
|
2
|
%
|
|
(2
|
%)
|
|
3
|
%
|
|
|||
|
Aviation
|
57,622
|
|
|
2
|
%
|
|
43,326
|
|
|
2
|
%
|
|
65,143
|
|
|
3
|
%
|
|
33
|
%
|
|
(33
|
%)
|
|
|||
|
Credit and Political Risk
|
45,368
|
|
|
2
|
%
|
|
60,203
|
|
|
2
|
%
|
|
39,405
|
|
|
2
|
%
|
|
(25
|
%)
|
|
53
|
%
|
|
|||
|
Professional Lines
|
862,784
|
|
|
34
|
%
|
|
900,071
|
|
|
35
|
%
|
|
836,634
|
|
|
36
|
%
|
|
(4
|
%)
|
|
8
|
%
|
|
|||
|
Liability
|
368,450
|
|
|
15
|
%
|
|
347,227
|
|
|
14
|
%
|
|
266,696
|
|
|
12
|
%
|
|
6
|
%
|
|
30
|
%
|
|
|||
|
Accident and Health
|
280,650
|
|
|
11
|
%
|
|
268,475
|
|
|
10
|
%
|
|
160,795
|
|
|
7
|
%
|
|
5
|
%
|
|
67
|
%
|
|
|||
|
Total
|
$
|
2,535,415
|
|
|
100
|
%
|
|
$
|
2,559,138
|
|
|
100
|
%
|
|
$
|
2,309,481
|
|
|
100
|
%
|
|
(1
|
%)
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
13 to 14
|
|
12 to 13
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Property
|
$
|
444,197
|
|
|
25
|
%
|
|
$
|
462,364
|
|
|
28
|
%
|
|
$
|
408,943
|
|
|
26
|
%
|
|
(4
|
%)
|
|
13
|
%
|
|
|
Marine
|
178,229
|
|
|
10
|
%
|
|
179,057
|
|
|
10
|
%
|
|
171,165
|
|
|
11
|
%
|
|
—
|
%
|
|
5
|
%
|
|
|||
|
Terrorism
|
35,876
|
|
|
2
|
%
|
|
39,298
|
|
|
2
|
%
|
|
38,605
|
|
|
2
|
%
|
|
(9
|
%)
|
|
2
|
%
|
|
|||
|
Aviation
|
41,192
|
|
|
2
|
%
|
|
48,489
|
|
|
3
|
%
|
|
60,363
|
|
|
4
|
%
|
|
(15
|
%)
|
|
(20
|
%)
|
|
|||
|
Credit and Political Risk
|
63,095
|
|
|
3
|
%
|
|
68,192
|
|
|
4
|
%
|
|
87,103
|
|
|
6
|
%
|
|
(7
|
%)
|
|
(22
|
%)
|
|
|||
|
Professional lines
|
629,365
|
|
|
34
|
%
|
|
586,200
|
|
|
34
|
%
|
|
563,500
|
|
|
36
|
%
|
|
7
|
%
|
|
4
|
%
|
|
|||
|
Liability
|
146,819
|
|
|
8
|
%
|
|
110,623
|
|
|
6
|
%
|
|
86,873
|
|
|
6
|
%
|
|
33
|
%
|
|
27
|
%
|
|
|||
|
Accident and Health
|
291,771
|
|
|
16
|
%
|
|
228,539
|
|
|
13
|
%
|
|
141,506
|
|
|
9
|
%
|
|
28
|
%
|
|
62
|
%
|
|
|||
|
Total
|
$
|
1,830,544
|
|
|
100
|
%
|
|
$
|
1,722,762
|
|
|
100
|
%
|
|
$
|
1,558,058
|
|
|
100
|
%
|
|
6
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
an increase in the property loss ratio reflecting a higher level of attritional loss activity in recent periods; and
|
•
|
a change in the mix of business with a shift towards less volatile lines that carry a higher loss ratio; partially offset by
|
•
|
better than expected loss experience in the marine and liability lines.
|
•
|
strengthening in our professional lines, relating to certain parts of our D&O business written in the United States, following recent loss experience; and
|
•
|
a change in the business mix.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,176,104
|
|
|
2%
|
|
$
|
2,137,903
|
|
|
17%
|
|
$
|
1,830,162
|
|
|
|
Net premiums written
|
2,127,474
|
|
|
1%
|
|
2,114,662
|
|
|
16%
|
|
1,815,211
|
|
|
|||
|
Net premiums earned
|
2,040,455
|
|
|
3%
|
|
1,984,303
|
|
|
7%
|
|
1,857,405
|
|
|
|||
|
Other insurance related income
|
661
|
|
|
(67%)
|
|
1,988
|
|
|
nm
|
|
—
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year net losses and loss expenses
|
(1,250,051
|
)
|
|
|
|
(1,252,874
|
)
|
|
|
|
(1,265,095
|
)
|
|
|||
|
Prior year reserve development
|
195,209
|
|
|
|
|
169,081
|
|
|
|
|
122,631
|
|
|
|||
|
Acquisition costs
|
(458,393
|
)
|
|
|
|
(421,828
|
)
|
|
|
|
(400,794
|
)
|
|
|||
|
General and administrative expenses
|
(144,987
|
)
|
|
|
|
(137,450
|
)
|
|
|
|
(116,487
|
)
|
|
|||
|
Underwriting income
|
$
|
382,894
|
|
|
12%
|
|
$
|
343,220
|
|
|
74%
|
|
$
|
197,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
% Point
Change
|
|
|
|
% Point
Change
|
|
|
|
||||||
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year loss ratio
|
61.3
|
%
|
|
(1.8)
|
|
63.1
|
%
|
|
(5.0)
|
|
68.1
|
%
|
|
|||
|
Prior year reserve development
|
(9.6
|
%)
|
|
(1.1)
|
|
(8.5
|
%)
|
|
(1.9)
|
|
(6.6
|
%)
|
|
|||
|
Acquisition cost ratio
|
22.5
|
%
|
|
1.2
|
|
21.3
|
%
|
|
(0.3)
|
|
21.6
|
%
|
|
|||
|
General and administrative expense ratio
|
7.1
|
%
|
|
0.2
|
|
6.9
|
%
|
|
0.6
|
|
6.3
|
%
|
|
|||
|
Combined ratio
|
81.3
|
%
|
|
(1.5)
|
|
82.8
|
%
|
|
(6.6)
|
|
89.4
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
13 to 14
|
|
12 to 13
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Catastrophe
|
$
|
372,925
|
|
|
17
|
%
|
|
$
|
393,652
|
|
|
18
|
%
|
|
$
|
368,314
|
|
|
21
|
%
|
|
(5
|
%)
|
|
7
|
%
|
|
|
Property
|
349,775
|
|
|
16
|
%
|
|
364,315
|
|
|
17
|
%
|
|
315,758
|
|
|
17
|
%
|
|
(4
|
%)
|
|
15
|
%
|
|
|||
|
Professional Lines
|
293,263
|
|
|
13
|
%
|
|
380,355
|
|
|
18
|
%
|
|
301,863
|
|
|
16
|
%
|
|
(23
|
%)
|
|
26
|
%
|
|
|||
|
Credit and Surety
|
258,865
|
|
|
12
|
%
|
|
268,494
|
|
|
13
|
%
|
|
264,572
|
|
|
14
|
%
|
|
(4
|
%)
|
|
1
|
%
|
|
|||
|
Motor
|
291,293
|
|
|
13
|
%
|
|
242,046
|
|
|
11
|
%
|
|
235,648
|
|
|
13
|
%
|
|
20
|
%
|
|
3
|
%
|
|
|||
|
Liability
|
365,466
|
|
|
17
|
%
|
|
268,673
|
|
|
13
|
%
|
|
242,817
|
|
|
13
|
%
|
|
36
|
%
|
|
11
|
%
|
|
|||
|
Agriculture
|
166,047
|
|
|
8
|
%
|
|
132,780
|
|
|
6
|
%
|
|
19,326
|
|
|
1
|
%
|
|
25
|
%
|
|
nm
|
|
|
|||
|
Engineering
|
55,450
|
|
|
3
|
%
|
|
64,258
|
|
|
3
|
%
|
|
70,597
|
|
|
4
|
%
|
|
(14
|
%)
|
|
(9
|
%)
|
|
|||
|
Other
|
23,020
|
|
|
1
|
%
|
|
23,330
|
|
|
1
|
%
|
|
11,267
|
|
|
1
|
%
|
|
(1
|
%)
|
|
107
|
%
|
|
|||
|
Total
|
$
|
2,176,104
|
|
|
100
|
%
|
|
$
|
2,137,903
|
|
|
100
|
%
|
|
$
|
1,830,162
|
|
|
100
|
%
|
|
2
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
13 to 14
|
|
12 to 13
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Catastrophe
|
$
|
325,307
|
|
|
17
|
%
|
|
$
|
380,199
|
|
|
20
|
%
|
|
$
|
375,088
|
|
|
19
|
%
|
|
(14
|
%)
|
|
1
|
%
|
|
|
Property
|
312,443
|
|
|
15
|
%
|
|
350,970
|
|
|
18
|
%
|
|
351,470
|
|
|
19
|
%
|
|
(11
|
%)
|
|
—
|
%
|
|
|||
|
Professional Lines
|
336,058
|
|
|
16
|
%
|
|
304,754
|
|
|
15
|
%
|
|
297,726
|
|
|
16
|
%
|
|
10
|
%
|
|
2
|
%
|
|
|||
|
Credit and Surety
|
263,013
|
|
|
13
|
%
|
|
279,943
|
|
|
14
|
%
|
|
277,185
|
|
|
15
|
%
|
|
(6
|
%)
|
|
1
|
%
|
|
|||
|
Motor
|
268,678
|
|
|
13
|
%
|
|
221,844
|
|
|
11
|
%
|
|
237,006
|
|
|
13
|
%
|
|
21
|
%
|
|
(6
|
%)
|
|
|||
|
Liability
|
289,223
|
|
|
14
|
%
|
|
234,736
|
|
|
12
|
%
|
|
220,874
|
|
|
12
|
%
|
|
23
|
%
|
|
6
|
%
|
|
|||
|
Agriculture
|
164,628
|
|
|
8
|
%
|
|
126,490
|
|
|
6
|
%
|
|
17,116
|
|
|
1
|
%
|
|
30
|
%
|
|
nm
|
|
|
|||
|
Engineering
|
61,143
|
|
|
3
|
%
|
|
66,243
|
|
|
3
|
%
|
|
68,402
|
|
|
4
|
%
|
|
(8
|
%)
|
|
(3
|
%)
|
|
|||
|
Other
|
19,962
|
|
|
1
|
%
|
|
19,124
|
|
|
1
|
%
|
|
12,538
|
|
|
1
|
%
|
|
4
|
%
|
|
53
|
%
|
|
|||
|
Total
|
$
|
2,040,455
|
|
|
100
|
%
|
|
$
|
1,984,303
|
|
|
100
|
%
|
|
$
|
1,857,405
|
|
|
100
|
%
|
|
3
|
%
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Year ended December 31,
|
|
2014
|
|
% Point
Change
|
|
2013
|
|
% Point
Change
|
|
2012
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current accident year
|
|
61.3
|
%
|
|
(1.8
|
)
|
|
63.1
|
%
|
|
(5.0
|
)
|
|
68.1
|
%
|
|
|
Prior year reserve development
|
|
(9.6
|
%)
|
|
(1.1
|
)
|
|
(8.5
|
%)
|
|
(1.9
|
)
|
|
(6.6
|
%)
|
|
|
Loss ratio
|
|
51.7
|
%
|
|
(2.9
|
)
|
|
54.6
|
%
|
|
(6.9
|
)
|
|
61.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
a change in the mix of business;
|
•
|
an increase in agricultural loss reserves; partially offset by
|
•
|
improved loss experience across most lines of business.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
$
|
135,675
|
|
|
50%
|
|
$
|
90,256
|
|
|
(30%)
|
|
$
|
129,660
|
|
|
|
Foreign exchange losses (gains)
|
(104,439
|
)
|
|
nm
|
|
26,143
|
|
|
(11%)
|
|
29,512
|
|
|
|||
|
Interest expense and financing costs
|
74,695
|
|
|
21%
|
|
61,979
|
|
|
—%
|
|
61,863
|
|
|
|||
|
Income tax expense
|
25,908
|
|
|
270%
|
|
7,002
|
|
|
113%
|
|
3,287
|
|
|
|||
|
Total
|
$
|
131,839
|
|
|
(29%)
|
|
$
|
185,380
|
|
|
(17%)
|
|
$
|
224,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
% Change
|
|
2013
|
|
% Change
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
$
|
296,663
|
|
|
1%
|
|
$
|
293,609
|
|
|
(4%)
|
|
$
|
304,400
|
|
|
|
Other investments
|
57,621
|
|
|
(55%)
|
|
128,814
|
|
|
47%
|
|
87,660
|
|
|
|||
|
Equities
|
11,832
|
|
|
9%
|
|
10,897
|
|
|
(8%)
|
|
11,904
|
|
|
|||
|
Cash and cash equivalents
|
11,536
|
|
|
82%
|
|
6,337
|
|
|
40%
|
|
4,528
|
|
|
|||
|
Short-term investments
|
725
|
|
|
(39%)
|
|
1,181
|
|
|
98%
|
|
596
|
|
|
|||
|
Gross investment income
|
378,377
|
|
|
(14%)
|
|
440,838
|
|
|
8%
|
|
409,088
|
|
|
|||
|
Investment expense
|
(35,611
|
)
|
|
13%
|
|
(31,526
|
)
|
|
12%
|
|
(28,131
|
)
|
|
|||
|
Net investment income
|
$
|
342,766
|
|
|
(16%)
|
|
$
|
409,312
|
|
|
7%
|
|
$
|
380,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax yield:
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
2.4
|
%
|
|
|
|
2.5
|
%
|
|
|
|
2.7
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Pre-tax yield is annualized and calculated as net investment income divided by the average month-end amortized cost balances for the periods indicated.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Hedge and direct lending funds
|
$
|
37,447
|
|
|
$
|
100,915
|
|
|
$
|
56,551
|
|
|
|
CLO - Equities
|
20,174
|
|
|
27,899
|
|
|
31,109
|
|
|
|||
|
Total net investment income from other investments
|
$
|
57,621
|
|
|
$
|
128,814
|
|
|
$
|
87,660
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax return on other investments
(1)
|
5.8
|
%
|
|
13.3
|
%
|
|
11.1
|
%
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
The pre-tax return on other investments is calculated by dividing total income from other investments by the average month-end fair value balances held for the periods indicated.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
On sale of investments:
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
$
|
39,080
|
|
|
$
|
33,038
|
|
|
$
|
140,238
|
|
|
|
Equities
|
133,858
|
|
|
44,157
|
|
|
12,881
|
|
|
|||
|
|
172,938
|
|
|
77,195
|
|
|
153,119
|
|
|
|||
|
OTTI charges recognized in earnings
|
(31,227
|
)
|
|
(9,362
|
)
|
|
(24,234
|
)
|
|
|||
|
Change in fair value of investment derivatives
|
(9,603
|
)
|
|
7,731
|
|
|
(9,170
|
)
|
|
|||
|
Fair value hedges
|
—
|
|
|
—
|
|
|
7,754
|
|
|
|||
|
Net realized investment gains
|
$
|
132,108
|
|
|
$
|
75,564
|
|
|
$
|
127,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
||||||
|
Non-U.S. government
|
$
|
17,291
|
|
|
$
|
120
|
|
|
$
|
3,281
|
|
|
|
Corporate debt
|
8,107
|
|
|
5,802
|
|
|
1,821
|
|
|
|||
|
Non-Agency RMBS
|
7
|
|
|
57
|
|
|
2,016
|
|
|
|||
|
ABS
|
61
|
|
|
129
|
|
|
795
|
|
|
|||
|
Municipals
|
418
|
|
|
639
|
|
|
—
|
|
|
|||
|
|
25,884
|
|
|
6,747
|
|
|
7,913
|
|
|
|||
|
Equities:
|
|
|
|
|
|
|
||||||
|
Common stocks
|
741
|
|
|
2,092
|
|
|
7,318
|
|
|
|||
|
Exchange traded funds
|
4,602
|
|
|
523
|
|
|
9,003
|
|
|
|||
|
|
5,343
|
|
|
2,615
|
|
|
16,321
|
|
|
|||
|
Total OTTI recognized in earnings
|
$
|
31,227
|
|
|
$
|
9,362
|
|
|
$
|
24,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Net investment income
|
$
|
342,766
|
|
|
$
|
409,312
|
|
|
$
|
380,957
|
|
|
|
Net realized investments gains
|
132,108
|
|
|
75,564
|
|
|
127,469
|
|
|
|||
|
Change in net unrealized gains/losses, net of currency hedges
|
(163,877
|
)
|
|
(245,429
|
)
|
|
250,212
|
|
|
|||
|
Total
|
$
|
310,997
|
|
|
$
|
239,447
|
|
|
$
|
758,638
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Average cash and investments
(1)
|
$
|
15,334,932
|
|
|
$
|
14,660,012
|
|
|
$
|
14,098,888
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total return on average cash and investments, pre-tax
(2)
|
2.0
|
%
|
|
1.6
|
%
|
|
5.4
|
%
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
The average cash and investments balance is calculated by taking the average of the month-end fair value balances held for the periods indicated.
|
(2)
|
Excluding the foreign currency impact of securities denominated in foreign currencies, the total return would be 2.8% for 2014 (2013: 1.6%, 2012: 4.9%).
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||||
|
|
Amortized Cost
or Cost
|
|
Fair Value
|
|
Amortized Cost
or Cost
|
|
Fair Value
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities
|
$
|
12,185,973
|
|
|
$
|
12,129,273
|
|
|
$
|
11,987,146
|
|
|
$
|
11,986,327
|
|
|
|
Equities
|
531,648
|
|
|
567,707
|
|
|
566,219
|
|
|
701,987
|
|
|
||||
|
Other investments
|
736,599
|
|
|
965,465
|
|
|
839,177
|
|
|
1,045,810
|
|
|
||||
|
Short-term investments
|
107,534
|
|
|
107,534
|
|
|
46,212
|
|
|
46,212
|
|
|
||||
|
Total investments
|
$
|
13,561,754
|
|
|
$
|
13,769,979
|
|
|
$
|
13,438,754
|
|
|
$
|
13,780,336
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cash and cash equivalents
(1)
|
$
|
1,209,695
|
|
|
$
|
1,209,695
|
|
|
$
|
987,876
|
|
|
$
|
987,876
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes restricted cash and cash equivalents of
$288 million
and $65 million for 2014 and 2013, respectively.
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
1,620,077
|
|
|
12
|
%
|
|
$
|
1,388,698
|
|
|
11
|
%
|
|
|
Non-U.S. government
|
1,033,543
|
|
|
9
|
%
|
|
1,176,382
|
|
|
10
|
%
|
|
||
|
Corporate debt
|
4,361,124
|
|
|
36
|
%
|
|
3,608,238
|
|
|
30
|
%
|
|
||
|
Agency RMBS
|
2,278,108
|
|
|
19
|
%
|
|
2,448,827
|
|
|
20
|
%
|
|
||
|
CMBS
|
1,096,888
|
|
|
9
|
%
|
|
797,414
|
|
|
7
|
%
|
|
||
|
Non-Agency RMBS
|
73,086
|
|
|
1
|
%
|
|
67,567
|
|
|
1
|
%
|
|
||
|
ABS
|
1,461,586
|
|
|
12
|
%
|
|
953,451
|
|
|
8
|
%
|
|
||
|
Municipals
(1)
|
204,861
|
|
|
2
|
%
|
|
1,545,750
|
|
|
13
|
%
|
|
||
|
Total
|
$
|
12,129,273
|
|
|
100
|
%
|
|
$
|
11,986,327
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Credit ratings:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
1,620,077
|
|
|
12
|
%
|
|
$
|
1,388,698
|
|
|
11
|
%
|
|
|
AAA
(2)
|
4,720,852
|
|
|
39
|
%
|
|
4,160,744
|
|
|
35
|
%
|
|
||
|
AA
|
1,034,047
|
|
|
9
|
%
|
|
1,795,291
|
|
|
15
|
%
|
|
||
|
A
|
2,204,984
|
|
|
18
|
%
|
|
2,220,263
|
|
|
19
|
%
|
|
||
|
BBB
|
1,516,815
|
|
|
13
|
%
|
|
1,468,669
|
|
|
12
|
%
|
|
||
|
Below BBB
(3)
|
1,032,498
|
|
|
9
|
%
|
|
952,662
|
|
|
8
|
%
|
|
||
|
Total
|
$
|
12,129,273
|
|
|
100
|
%
|
|
$
|
11,986,327
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes bonds issued by states, municipalities, and political subdivisions.
|
(2)
|
Includes U.S. government-sponsored agency RMBS and CMBS.
|
(3)
|
Non-investment grade and non-rated securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Non-U.S.
Government
|
|
Corporate
|
|
Non-Agency
RMBS
|
|
ABS
|
|
Total
|
|
% of Total
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Eurozone countries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Germany
|
$
|
—
|
|
|
$
|
135,454
|
|
|
$
|
—
|
|
|
$
|
1,108
|
|
|
$
|
136,562
|
|
|
30
|
%
|
|
|
Supranationals
(1)
|
107,299
|
|
|
8,673
|
|
|
—
|
|
|
—
|
|
|
115,972
|
|
|
25
|
%
|
|
|||||
|
Netherlands
|
10,054
|
|
|
49,524
|
|
|
3,450
|
|
|
—
|
|
|
63,028
|
|
|
14
|
%
|
|
|||||
|
France
|
—
|
|
|
59,792
|
|
|
—
|
|
|
64
|
|
|
59,856
|
|
|
13
|
%
|
|
|||||
|
Luxembourg
|
—
|
|
|
23,510
|
|
|
—
|
|
|
—
|
|
|
23,510
|
|
|
5
|
%
|
|
|||||
|
Ireland
|
—
|
|
|
10,347
|
|
|
—
|
|
|
10,600
|
|
|
20,947
|
|
|
5
|
%
|
|
|||||
|
Italy
|
—
|
|
|
14,649
|
|
|
—
|
|
|
—
|
|
|
14,649
|
|
|
3
|
%
|
|
|||||
|
Belgium
|
—
|
|
|
12,577
|
|
|
—
|
|
|
—
|
|
|
12,577
|
|
|
3
|
%
|
|
|||||
|
Spain
|
—
|
|
|
8,619
|
|
|
—
|
|
|
—
|
|
|
8,619
|
|
|
2
|
%
|
|
|||||
|
Slovenia
|
1,782
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,782
|
|
|
—
|
%
|
|
|||||
|
Austria
|
—
|
|
|
478
|
|
|
—
|
|
|
—
|
|
|
478
|
|
|
—
|
%
|
|
|||||
|
Total eurozone
|
$
|
119,135
|
|
|
$
|
323,623
|
|
|
$
|
3,450
|
|
|
$
|
11,772
|
|
|
$
|
457,980
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Eurozone countries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Germany
|
$
|
22,833
|
|
|
$
|
90,916
|
|
|
$
|
—
|
|
|
$
|
5,176
|
|
|
$
|
118,925
|
|
|
28
|
%
|
|
|
Supranationals
(1)
|
115,777
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115,777
|
|
|
28
|
%
|
|
|||||
|
Netherlands
|
20,776
|
|
|
50,472
|
|
|
227
|
|
|
4,838
|
|
|
76,313
|
|
|
18
|
%
|
|
|||||
|
France
|
—
|
|
|
45,366
|
|
|
—
|
|
|
3,225
|
|
|
48,591
|
|
|
11
|
%
|
|
|||||
|
Luxembourg
|
—
|
|
|
17,494
|
|
|
—
|
|
|
—
|
|
|
17,494
|
|
|
4
|
%
|
|
|||||
|
Spain
|
—
|
|
|
17,255
|
|
|
—
|
|
|
—
|
|
|
17,255
|
|
|
4
|
%
|
|
|||||
|
Ireland
|
—
|
|
|
4,065
|
|
|
—
|
|
|
5,668
|
|
|
9,733
|
|
|
2
|
%
|
|
|||||
|
Italy
|
—
|
|
|
8,112
|
|
|
—
|
|
|
—
|
|
|
8,112
|
|
|
2
|
%
|
|
|||||
|
Belgium
|
—
|
|
|
6,454
|
|
|
—
|
|
|
—
|
|
|
6,454
|
|
|
2
|
%
|
|
|||||
|
Austria
|
1,272
|
|
|
2,922
|
|
|
—
|
|
|
—
|
|
|
4,194
|
|
|
1
|
%
|
|
|||||
|
Total eurozone
|
$
|
160,658
|
|
|
$
|
243,056
|
|
|
$
|
227
|
|
|
$
|
18,907
|
|
|
$
|
422,848
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes supranationals only within the eurozone.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||||||
|
Country
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Eurozone countries:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Supranationals
(1)
|
$
|
107,299
|
|
|
10
|
%
|
|
AA+
|
|
$
|
115,777
|
|
|
10
|
%
|
|
AAA
|
|
|
Netherlands
|
10,054
|
|
|
1
|
%
|
|
AA+
|
|
20,776
|
|
|
2
|
%
|
|
AAA
|
|
||
|
Slovenia
|
1,782
|
|
|
—
|
%
|
|
BBB+
|
|
—
|
|
|
—
|
%
|
|
—
|
|
||
|
Germany
|
—
|
|
|
—
|
%
|
|
—
|
|
22,833
|
|
|
2
|
%
|
|
AAA
|
|
||
|
Austria
|
—
|
|
|
—
|
%
|
|
—
|
|
1,272
|
|
|
—
|
%
|
|
AAA
|
|
||
|
Total eurozone
|
$
|
119,135
|
|
|
11
|
%
|
|
AA+
|
|
$
|
160,658
|
|
|
14
|
%
|
|
AAA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Other concentrations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Australia
|
$
|
190,565
|
|
|
18
|
%
|
|
AAA
|
|
$
|
158,056
|
|
|
13
|
%
|
|
AAA
|
|
|
United Kingdom
|
172,410
|
|
|
17
|
%
|
|
AAA
|
|
182,230
|
|
|
15
|
%
|
|
AA+
|
|
||
|
Canada
|
114,430
|
|
|
11
|
%
|
|
AAA
|
|
165,013
|
|
|
14
|
%
|
|
AAA
|
|
||
|
Brazil
|
87,890
|
|
|
9
|
%
|
|
BBB
|
|
94,796
|
|
|
8
|
%
|
|
BBB
|
|
||
|
Mexico
|
67,368
|
|
|
7
|
%
|
|
A-
|
|
66,987
|
|
|
6
|
%
|
|
A-
|
|
||
|
Other
|
281,745
|
|
|
27
|
%
|
|
A
|
|
348,642
|
|
|
30
|
%
|
|
A-
|
|
||
|
Total other concentrations
|
$
|
914,408
|
|
|
89
|
%
|
|
AA-
|
|
$
|
1,015,724
|
|
|
86
|
%
|
|
AA-
|
|
|
Total non-U.S. government
|
$
|
1,033,543
|
|
|
100
|
%
|
|
AA-
|
|
$
|
1,176,382
|
|
|
100
|
%
|
|
AA-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes supranationals only within the eurozone.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
U.S. banking
|
$
|
1,079,729
|
|
|
25
|
%
|
|
A-
|
|
$
|
942,437
|
|
|
26
|
%
|
|
A-
|
|
|
Corporate/commercial finance
|
317,676
|
|
|
7
|
%
|
|
BBB
|
|
209,074
|
|
|
6
|
%
|
|
BBB
|
|
||
|
Foreign banking
|
214,188
|
|
|
5
|
%
|
|
AA-
|
|
45,320
|
|
|
1
|
%
|
|
A+
|
|
||
|
Insurance
|
116,687
|
|
|
3
|
%
|
|
A
|
|
166,987
|
|
|
5
|
%
|
|
A
|
|
||
|
Investment brokerage
|
11,059
|
|
|
—
|
%
|
|
BBB+
|
|
15,750
|
|
|
—
|
%
|
|
BB
|
|
||
|
Consumer finance
|
—
|
|
|
—
|
%
|
|
—
|
|
16,345
|
|
|
—
|
%
|
|
BB
|
|
||
|
Total financial institutions
|
1,739,339
|
|
|
40
|
%
|
|
A-
|
|
1,395,913
|
|
|
38
|
%
|
|
A-
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Communications
|
507,911
|
|
|
12
|
%
|
|
BBB-
|
|
450,490
|
|
|
12
|
%
|
|
BBB-
|
|
||
|
Consumer cyclical
|
487,968
|
|
|
11
|
%
|
|
BBB-
|
|
400,798
|
|
|
11
|
%
|
|
BBB-
|
|
||
|
Consumer non-cyclicals
|
437,377
|
|
|
10
|
%
|
|
BBB
|
|
345,114
|
|
|
10
|
%
|
|
BBB-
|
|
||
|
Industrials
|
401,033
|
|
|
9
|
%
|
|
BB+
|
|
298,159
|
|
|
8
|
%
|
|
BB+
|
|
||
|
Energy
|
277,201
|
|
|
7
|
%
|
|
BBB-
|
|
196,991
|
|
|
6
|
%
|
|
BB+
|
|
||
|
Utilities
|
139,576
|
|
|
3
|
%
|
|
BBB
|
|
263,615
|
|
|
7
|
%
|
|
BBB
|
|
||
|
Non-U.S. government guaranteed
|
99,063
|
|
|
2
|
%
|
|
AAA
|
|
64,982
|
|
|
2
|
%
|
|
AA+
|
|
||
|
Other
|
271,656
|
|
|
6
|
%
|
|
BBB
|
|
192,176
|
|
|
6
|
%
|
|
BBB-
|
|
||
|
Total
|
$
|
4,361,124
|
|
|
100
|
%
|
|
BBB
|
|
$
|
3,608,238
|
|
|
100
|
%
|
|
BBB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Credit quality summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Investment grade
|
$
|
3,376,110
|
|
|
77
|
%
|
|
A-
|
|
$
|
2,707,591
|
|
|
75
|
%
|
|
A-
|
|
|
Non-investment grade
|
985,014
|
|
|
23
|
%
|
|
B+
|
|
900,647
|
|
|
25
|
%
|
|
B+
|
|
||
|
Total
|
$
|
4,361,124
|
|
|
100
|
%
|
|
BBB
|
|
$
|
3,608,238
|
|
|
100
|
%
|
|
BBB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||||
|
|
RMBS
|
|
CMBS
|
|
RMBS
|
|
CMBS
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Government agency
|
$
|
2,278,108
|
|
|
$
|
—
|
|
|
$
|
2,448,827
|
|
|
$
|
—
|
|
|
|
AAA
|
22,360
|
|
|
701,316
|
|
|
12,261
|
|
|
411,811
|
|
|
||||
|
AA
|
338
|
|
|
218,188
|
|
|
370
|
|
|
233,360
|
|
|
||||
|
A
|
6,329
|
|
|
123,623
|
|
|
5,891
|
|
|
73,932
|
|
|
||||
|
BBB
|
12,574
|
|
|
51,990
|
|
|
8,095
|
|
|
76,493
|
|
|
||||
|
Below BBB
(1)
|
31,485
|
|
|
1,771
|
|
|
40,950
|
|
|
1,818
|
|
|
||||
|
Total
|
$
|
2,351,194
|
|
|
$
|
1,096,888
|
|
|
$
|
2,516,394
|
|
|
$
|
797,414
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-investment grade securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Asset-backed securities
|
|
||||||||||||||||||||||
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Below BBB
(3)
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|||||||||||||||||
|
CLO - debt tranches
|
$
|
769,755
|
|
|
$
|
266,928
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
108
|
|
|
$
|
1,036,791
|
|
|
|
Auto
|
170,521
|
|
|
39,818
|
|
|
29,815
|
|
|
21,761
|
|
|
—
|
|
|
261,915
|
|
|
||||||
|
Student loan
|
52,751
|
|
|
8,061
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,812
|
|
|
||||||
|
Credit card
|
21,517
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,517
|
|
|
||||||
|
Other
|
51,114
|
|
|
594
|
|
|
25,819
|
|
|
226
|
|
|
2,798
|
|
|
80,551
|
|
|
||||||
|
Total
|
$
|
1,065,658
|
|
|
$
|
315,401
|
|
|
$
|
55,634
|
|
|
$
|
21,987
|
|
|
$
|
2,906
|
|
|
$
|
1,461,586
|
|
|
|
% of total
|
73%
|
|
22%
|
|
4%
|
|
1%
|
|
—%
|
|
100%
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|||||||||||||||||
|
CLO - debt tranches
|
$
|
399,736
|
|
|
$
|
179,318
|
|
|
$
|
5,575
|
|
|
$
|
8,902
|
|
|
$
|
484
|
|
|
$
|
594,015
|
|
|
|
Auto
|
82,982
|
|
|
41,911
|
|
|
29,828
|
|
|
23,394
|
|
|
—
|
|
|
178,115
|
|
|
||||||
|
Student loan
|
67,767
|
|
|
15,156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,923
|
|
|
||||||
|
Credit card
|
7,110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,110
|
|
|
||||||
|
Other
|
79,316
|
|
|
1,496
|
|
|
2,979
|
|
|
4,756
|
|
|
2,741
|
|
|
91,288
|
|
|
||||||
|
Total
|
$
|
636,911
|
|
|
$
|
237,881
|
|
|
$
|
38,382
|
|
|
$
|
37,052
|
|
|
$
|
3,225
|
|
|
$
|
953,451
|
|
|
|
% of total
|
67%
|
|
25%
|
|
4%
|
|
4%
|
|
—%
|
|
100%
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
G.O.
|
|
Revenue
|
|
Total
|
|
% of Total
Fair Value
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Weighted
Average
Credit Rating
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
California
|
$
|
38,155
|
|
|
$
|
24,827
|
|
|
$
|
62,982
|
|
|
31%
|
|
$
|
2,794
|
|
|
$
|
(86
|
)
|
|
A+
|
|
|
New York
|
16,497
|
|
|
20,351
|
|
|
36,848
|
|
|
18%
|
|
319
|
|
|
(377
|
)
|
|
AA
|
|
|||||
|
Ohio
|
—
|
|
|
12,854
|
|
|
12,854
|
|
|
6%
|
|
404
|
|
|
(1
|
)
|
|
A-
|
|
|||||
|
Michigan
|
—
|
|
|
12,672
|
|
|
12,672
|
|
|
6%
|
|
—
|
|
|
(82
|
)
|
|
A
|
|
|||||
|
Pennsylvania
|
—
|
|
|
7,876
|
|
|
7,876
|
|
|
4%
|
|
241
|
|
|
(32
|
)
|
|
AA-
|
|
|||||
|
Other
|
15,640
|
|
|
55,989
|
|
|
71,629
|
|
|
35%
|
|
1,524
|
|
|
(254
|
)
|
|
AA-
|
|
|||||
|
|
$
|
70,292
|
|
|
$
|
134,569
|
|
|
$
|
204,861
|
|
|
100%
|
|
$
|
5,282
|
|
|
$
|
(832
|
)
|
|
AA-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
New York
|
$
|
68,633
|
|
|
$
|
199,160
|
|
|
$
|
267,793
|
|
|
17%
|
|
$
|
4,973
|
|
|
$
|
(3,406
|
)
|
|
AA
|
|
|
California
|
70,302
|
|
|
134,786
|
|
|
205,088
|
|
|
13%
|
|
7,390
|
|
|
(1,871
|
)
|
|
AA-
|
|
|||||
|
Texas
|
50,685
|
|
|
125,201
|
|
|
175,886
|
|
|
11%
|
|
2,707
|
|
|
(1,690
|
)
|
|
AA
|
|
|||||
|
Florida
|
13,307
|
|
|
78,903
|
|
|
92,210
|
|
|
6%
|
|
2,982
|
|
|
(170
|
)
|
|
AA-
|
|
|||||
|
Illinois
|
15,523
|
|
|
68,095
|
|
|
83,618
|
|
|
5%
|
|
1,947
|
|
|
(533
|
)
|
|
A
|
|
|||||
|
Other
|
162,231
|
|
|
558,924
|
|
|
721,155
|
|
|
48%
|
|
12,433
|
|
|
(6,846
|
)
|
|
A
|
|
|||||
|
|
$
|
380,681
|
|
|
$
|
1,165,069
|
|
|
$
|
1,545,750
|
|
|
100%
|
|
$
|
32,432
|
|
|
$
|
(14,516
|
)
|
|
AA-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||||||||||
|
Severity of
Unrealized Loss
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
% of
Total Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
% of
Total Gross
Unrealized
Losses
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
0-10%
|
$
|
5,229,362
|
|
|
$
|
(88,627
|
)
|
|
65
|
%
|
|
$
|
4,689,773
|
|
|
$
|
(117,975
|
)
|
|
66
|
%
|
|
|
10-20%
|
203,227
|
|
|
(28,578
|
)
|
|
21
|
%
|
|
290,477
|
|
|
(40,494
|
)
|
|
23
|
%
|
|
||||
|
20-30%
|
48,010
|
|
|
(15,141
|
)
|
|
11
|
%
|
|
35,503
|
|
|
(10,713
|
)
|
|
6
|
%
|
|
||||
|
30-40%
|
9,068
|
|
|
(4,236
|
)
|
|
3
|
%
|
|
17,317
|
|
|
(8,673
|
)
|
|
5
|
%
|
|
||||
|
40-50%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
> 50%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
Total
|
$
|
5,489,667
|
|
|
$
|
(136,582
|
)
|
|
100
|
%
|
|
$
|
5,033,070
|
|
|
$
|
(177,855
|
)
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||||||||||
|
Severity of
Unrealized Loss
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
% of
Total Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
% of
Total Gross
Unrealized
Losses
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
0-10%
|
$
|
594,960
|
|
|
$
|
(11,887
|
)
|
|
31
|
%
|
|
$
|
125,663
|
|
|
$
|
(1,880
|
)
|
|
86
|
%
|
|
|
10-20%
|
30,574
|
|
|
(5,412
|
)
|
|
15
|
%
|
|
2,349
|
|
|
(302
|
)
|
|
14
|
%
|
|
||||
|
20-30%
|
17,471
|
|
|
(5,371
|
)
|
|
15
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
30-40%
|
14,696
|
|
|
(7,887
|
)
|
|
22
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
40-50%
|
7,955
|
|
|
(6,099
|
)
|
|
17
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
> 50%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
Total
|
$
|
665,656
|
|
|
$
|
(36,656
|
)
|
|
100
|
%
|
|
$
|
128,012
|
|
|
$
|
(2,182
|
)
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Hedge funds
|
|
|
|
|
|
|
|
|
||||||
|
Multi-strategy funds
|
$
|
324,020
|
|
|
34
|
%
|
|
$
|
285,155
|
|
|
27
|
%
|
|
|
Long/short equity funds
|
298,907
|
|
|
31
|
%
|
|
425,444
|
|
|
41
|
%
|
|
||
|
Event-driven funds
|
185,899
|
|
|
19
|
%
|
|
190,458
|
|
|
18
|
%
|
|
||
|
Leveraged bank loan funds
|
9,713
|
|
|
1
|
%
|
|
48,753
|
|
|
5
|
%
|
|
||
|
Total hedge funds
|
818,539
|
|
|
85
|
%
|
|
949,810
|
|
|
91
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
Direct lending funds
|
54,438
|
|
|
6
|
%
|
|
22,134
|
|
|
2
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
Total hedge and direct lending funds
|
872,977
|
|
|
91
|
%
|
|
971,944
|
|
|
93
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
CLO - Equities
|
92,488
|
|
|
9
|
%
|
|
73,866
|
|
|
7
|
%
|
|
||
|
Total other investments
|
$
|
965,465
|
|
|
100
|
%
|
|
$
|
1,045,810
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
At December 31,
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
||||
|
Collateral in Trust for inter-company agreements
|
$
|
2,792,461
|
|
|
$
|
2,261,081
|
|
|
|
Collateral for secured letter of credit facility
|
468,923
|
|
|
777,828
|
|
|
||
|
Collateral in Trust for third party agreements
(1)
|
567,060
|
|
|
276,839
|
|
|
||
|
Securities on deposit with regulatory authorities
|
58,476
|
|
|
58,327
|
|
|
||
|
Total restricted investments
|
$
|
3,886,920
|
|
|
$
|
3,374,075
|
|
|
|
|
|
|
|
|
(1)
|
Includes
$245 million
of fixed income securities deposited directly with Lloyd's to support the underwriting capacity of the Company's Lloyd's Syndicate, AXIS Syndicate 1686.
|
|
|
|
|
|
|
|
|
||||||
|
Total cash provided by (used in)
(1)
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Operating activities
|
$
|
862,182
|
|
|
$
|
1,096,968
|
|
|
$
|
1,120,617
|
|
|
|
Investing activities
|
(154,076
|
)
|
|
(489,287
|
)
|
|
(862,381
|
)
|
|
|||
|
Financing activities
|
(686,015
|
)
|
|
(441,094
|
)
|
|
(481,811
|
)
|
|
|||
|
Effect of exchange rate changes on cash
|
(23,587
|
)
|
|
(3,078
|
)
|
|
1,543
|
|
|
|||
|
Increase (decrease) in cash and cash equivalents
|
$
|
(1,496
|
)
|
|
$
|
163,509
|
|
|
$
|
(222,032
|
)
|
|
|
|
|
|
|
|
|
|
(1)
|
See Consolidated Statements of Cash Flows included in Item 8, ‘
Financial Statements and Supplementary Data
’, of this report for additional information.
|
•
|
Net cash provided by operating activities was
$0.9 billion
in
2014
, compared to
$1.1 billion
in
2013
and
2012
. The Company's insurance and reinsurance operations typically receive principal cash inflows from premiums and reinsurance recoverables. Our principal cash outflows are for the payment of claims and loss adjustment expenses, premium payments to reinsurers, policy acquisition costs and operating expenses. Cash provided by operating activities can fluctuate due to timing differences in the collection of premium receivable and reinsurance recoverables and the payment of losses and ceded premiums payable. The reductions in operating cash flows in 2014 and 2013 were primarily driven by an increase in net paid losses as we settled losses incurred in prior years. In 2014, the increase was primarily attributable to increased loss payments in the professional, liability and motor lines, while in 2013, the increase was primarily attributable to an increase in paid losses relating to natural catastrophe and weather-related events. Net paid losses in 2014 were also impacted by an increase in claims paid in the agriculture lines, however this increase was more than offset by the growth in the premiums collected for these lines of business.
|
•
|
The cash outflows from investing activities for
2014
related principally to the net purchase of fixed maturities of
$0.2 billion
(
2013
:
$0.6 billion
,
2012
:
$0.9 billion
). This was a result of reinvesting net investment income across a variety of fixed income asset classes. The decrease in the investing cash flows compared to prior years relates to an increased allocation to cash and cash equivalents during the year.
|
•
|
Dividends paid to common and preferred shareholders are the primary source of recurring cash flows used in financial activities and totaled
$158 million
in
2014
(
2013
:
$158 million
,
2012
:
$159 million
). Financing cash outflows also included common share repurchases totaling
$543 million
,
$472 million
and
$318 million
in
2014
,
2013
and
2012
, respectively. We note that market share repurchases are completely discretionary; the timing and amount of the additional repurchase transactions will depend on a variety of factors including, but not limited to, global (re)insurance and financial market conditions and opportunities, capital management and regulatory considerations (see
‘Capital Resources – Share Repurchases’
below). Cash outflows in
2014
and
2013
were partially offset by $15 million and $50 million third party investment in shares issued by Ventures Re, respectively (See noncontrolling interests discussion in Item 8, Note 14 of the Consolidated Financial Statements). During 2013 and 2012, financing cash flows also included a net $118 million inflow and $11 million outflow, respectively, related to the preferred share transactions discussed under
'Capital Resources - Preferred Shares'
below.
|
|
|
|
|
|
|
||||
|
At December 31,
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
||||
|
Long-term debt
|
$
|
990,790
|
|
|
$
|
995,855
|
|
|
|
|
|
|
|
|
||||
|
Preferred shares
|
627,843
|
|
|
627,843
|
|
|
||
|
Common equity
|
5,193,278
|
|
|
5,190,119
|
|
|
||
|
Shareholders’ equity attributable to AXIS Capital
|
5,821,121
|
|
|
5,817,962
|
|
|
||
|
Total capital
|
$
|
6,811,911
|
|
|
$
|
6,813,817
|
|
|
|
|
|
|
|
|
||||
|
Ratio of debt to total capital
|
14.5
|
%
|
|
14.6
|
%
|
|
||
|
|
|
|
|
|
||||
|
Ratio of debt and preferred equity to total capital
|
23.8
|
%
|
|
23.8
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year ended December 31,
|
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
|
||||
|
Common equity - opening
|
|
$
|
5,190,119
|
|
|
$
|
5,276,918
|
|
|
|
Net income attributable to AXIS Capital
|
|
810,745
|
|
|
727,465
|
|
|
||
|
Change in unrealized appreciation on available for sale investments, net of tax
|
|
(153,137
|
)
|
|
(223,383
|
)
|
|
||
|
Share repurchases
|
|
(543,202
|
)
|
|
(472,263
|
)
|
|
||
|
Common share dividends
|
|
(117,859
|
)
|
|
(118,993
|
)
|
|
||
|
Preferred share dividends
|
|
(40,088
|
)
|
|
(40,474
|
)
|
|
||
|
Share-based compensation
|
|
51,382
|
|
|
48,475
|
|
|
||
|
Series C and D preferred share issue costs (included in additional paid-in capital)
|
|
—
|
|
|
(6,551
|
)
|
|
||
|
Other
|
|
(4,682
|
)
|
|
(1,075
|
)
|
|
||
|
Common equity - closing
|
|
$
|
5,193,278
|
|
|
$
|
5,190,119
|
|
|
|
|
|
|
|
|
|
(i)
|
Maintenance of a minimum consolidated net worth, with the minimum being equal to the sum of $3.802 billion plus 25% of consolidated net income (if positive) for each semi-annual fiscal period ending on or after June 30, 2013 plus 25% of the net cash proceeds received by AXIS Capital from the issuance of its capital stock during each such semi-annual fiscal period. For the purposes of this covenant, consolidated net worth excludes unrealized appreciation (depreciation) on our available for sale investments.
|
(ii)
|
Maintenance of a maximum debt to total capital ratio of 0.35 to 1. For the purposes of this covenant, unrealized appreciation (depreciation) on our available for sale investments is excluded from total capital.
|
(iii)
|
Maintenance of an A.M. Best Company, Inc. (“A.M. Best”) financial strength rating of at least B++ for each of AXIS Capital’s material insurance/reinsurance subsidiaries that are party to the Credit Facility.
|
|
|
|
|
|
|
|
|
|
|
|
|
Rating agency
|
|
Agency’s description of rating
|
|
Rating
|
|
Agency’s rating
definition
|
|
Ranking of rating
|
|
|
|
|
|
|
|
|
||||
|
Standard & Poor’s
|
|
An “opinion about the financial security characteristics of an insurance organization, with respect to its ability to pay under its insurance policies and contracts, in accordance with their terms”.
|
|
A+
(Stable)
(1)
|
|
“Strong financial security characteristics”
|
|
The ‘A’ grouping is the third highest out of ten major rating categories. The first seven major rating categories may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
|
|
|
|
|
|
|
|
|
||||
|
A.M. Best
|
|
An “opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations”.
|
|
A+
(Stable)
(2)
|
|
“Superior ability to meet ongoing insurance obligations”
|
|
The ‘A+’ grouping is the second highest ratings category out of fifteen. Ratings outlooks (‘Positive’, ‘Negative’ and ‘Stable’) are assigned to indicate a rating’s potential direction over an intermediate term, generally defined as 12 - 36 months.
|
|
|
|
|
|
|
|
|
||||
|
Moody’s Investors Service
|
|
“Opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations.”
|
|
A2 (Stable)
(3)
|
|
“Upper-medium grade and subject to low credit risk”
|
|
The ‘A’ grouping is the third highest out of nine rating categories. Each of the second through seventh categories are subdivided into three subcategories, as indicated by an appended numerical modifier of ‘1’, ‘2’ and ‘3’. The ‘1’ modifier indicates that the obligation ranks in the higher end of the rating category, the ‘2’ modifier indicates a mid-category ranking and the ‘3’ modifier indicates a ranking in the lower end of the rating category.
|
|
(1)
|
On January 25, 2015, the Company announced the signing of a definitive amalgamation agreement with PartnerRe Ltd. Following this announcement, Standard and Poor's placed our rating on Creditwatch with negative implications. The status reflects Standard and Poor's uncertainty around the effective execution of the merger and successful integration of the two entities. We expect that the Creditwatch placement will be resolved or updated within the three months after the announcement date, following Standard and Poor's discussions with the Company's management.
|
(2)
|
Following the amalgamation announcement, A.M. Best placed our rating under review with negative implications, reflecting the uncertainties related to the merger's size, scope and complexity. A.M. Best has indicated that the under review status will be removed once the merger transaction has closed and the final integration plan has been reviewed.
|
(3)
|
Following the amalgamation announcement, Moody's placed AXIS Capital's ratings on review for a possible upgrade of the Company. Moody's expects to conclude its review following completion of the merger.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Payment Due By Period
|
|
||||||||||||||||||
|
Contractual Obligations and Commitments
|
|
Total
|
|
Less than 1
year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Estimated gross loss and loss expense payments
(1)
|
|
$
|
9,596,797
|
|
|
$
|
2,516,826
|
|
|
$
|
2,791,744
|
|
|
$
|
1,597,297
|
|
|
$
|
2,690,930
|
|
|
|
Operating lease obligations
(2)
|
|
140,893
|
|
|
27,609
|
|
|
43,384
|
|
|
33,448
|
|
|
36,452
|
|
|
|||||
|
Reinsurance purchase commitments
(3)
|
|
78,451
|
|
|
67,254
|
|
|
11,197
|
|
|
—
|
|
|
—
|
|
|
|||||
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Unfunded investment commitments
(4)
|
|
$
|
147,211
|
|
|
$
|
147,211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Senior notes (including interest payments)
(5)
|
|
1,584,063
|
|
|
48,875
|
|
|
97,750
|
|
|
344,438
|
|
|
1,093,000
|
|
|
|||||
|
Total
|
|
$
|
11,547,415
|
|
|
$
|
2,807,775
|
|
|
$
|
2,944,075
|
|
|
$
|
1,975,183
|
|
|
$
|
3,820,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We are obligated to pay claims for specified loss events covered by the (re)insurance contracts we write. Such loss payments represent our most significant future payment obligation. In contrast to our other contractual obligations, our cash payments are not determinable from the terms specified within the underlying contracts. The total amount in the table above reflects our best estimate of our reserve for losses and loss expenses. However, the actual amounts and timing may differ materially; refer to the ‘
Critical Accounting Estimates – Reserve for Losses and Loss Expenses
’ for further information. We have not taken into account corresponding reinsurance recoverable amounts that would be due to us.
|
(2)
|
We lease office space under operating leases which expire at various dates. We renew and enter into new leases in the ordinary course of business, as required.
|
(3)
|
We purchase reinsurance protection for our insurance lines of business. The minimum premiums are contractually due in advance on a quarterly basis.
|
(4)
|
We have $123 million of unfunded investment commitments related to our investments in hedge and credit funds, which are callable by our investment managers. We have assumed that such investments will be called in the next year but such funding may occur over a longer period of time, due to market conditions and other factors. For further details, see Item 8, Note 5(b) to the Consolidated Financial Statements. In addition we have a $25 million commitment to purchase securities with one of our fixed income managers at December 31, 2014.
|
(5)
|
For further details on the terms of our senior unsecured debt, see Item 8, Note 10(a) to the Consolidated Financial Statements.
|
•
|
reserves for losses and loss expenses;
|
•
|
reinsurance recoverable balances;
|
•
|
premiums;
|
•
|
fair value measurements for our financial assets and liabilities; and
|
•
|
assessments of other-than-temporary impairments.
|
•
|
Expected Loss Ratio Method (“ELR”): This method estimates ultimate losses for an accident year or underwriting year by applying an expected loss ratio to the earned or written premium for that year. Generally, expected loss ratios are based on one or more of (a) an analysis of historical loss experience to date, (b) pricing information and (c) industry data, adjusted as appropriate, to reflect changes in rates and terms and conditions. This method is insensitive to actual incurred losses for the accident year or underwriting year in question and is, therefore, often useful in the early stages of development when very few losses have been incurred. Conversely, the lack of sensitivity to incurred/paid losses for the accident year or underwriting year in question means that this method is usually inappropriate in later stages of an accident year or underwriting year’s development.
|
•
|
Loss Development Method (also referred to as the Chain Ladder Method or Link Ratio Method): This method assumes that the losses incurred/paid for each accident year or underwriting year at a particular development stage follow a relatively similar pattern. It assumes that on average, every accident year or underwriting year will display the same percentage of ultimate losses incurred/paid at the same point in time after the inception of that year. The percentages incurred/paid are established for each development stage (e.g. 12 months, 24 months, etc.) after examining historical averages from historical loss development data and/or external industry benchmark information. Ultimate losses are then estimated by multiplying the actual incurred/paid losses by the reciprocal of the established incurred/paid percentage. The strengths of this method are that it reacts to loss emergence/payments and that it makes full use of historical claim emergence/payment experience. However, this method has weaknesses when the underlying assumption of stable loss development/payment patterns is not valid. This could be the consequence of changes in business mix, claim inflation trends or claim reporting practices and/or the presence of large claims, amongst other things. Furthermore, this method tends to produce volatile estimates of ultimate losses where there is volatility in the underlying incurred/paid patterns. In particular, where the expected percentage of incurred/paid losses is low, small deviations between actual and expected claims can lead to very volatile estimates of ultimate losses. As a result, this method is often unsuitable at early development stages for an accident year or underwriting year.
|
•
|
Bornhuetter-Ferguson Method (“BF”): This method can be seen as a combination of the ELR and Loss Development Methods, under which the Loss Development Method is given progressively more weight as an accident year or underwriting year matures. The main advantage of the BF Method is that it provides a more stable estimate of ultimate losses than the Loss Development Method at earlier stages of development, while remaining more sensitive to emerging loss development than the ELR Method. In addition, the BF Method allows for the incorporation of external market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2014
|
|
2013
|
|
||||||||||||||||||||
|
At December 31,
|
Case Reserves
|
|
IBNR
|
|
Total
|
|
Case Reserves
|
|
IBNR
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
$
|
476,106
|
|
|
$
|
309,228
|
|
|
$
|
785,334
|
|
|
$
|
565,930
|
|
|
$
|
292,067
|
|
|
$
|
857,997
|
|
|
|
Marine
|
151,733
|
|
|
116,384
|
|
|
268,117
|
|
|
143,126
|
|
|
136,452
|
|
|
279,578
|
|
|
||||||
|
Aviation
|
26,644
|
|
|
21,147
|
|
|
47,791
|
|
|
16,159
|
|
|
31,940
|
|
|
48,099
|
|
|
||||||
|
Credit and political risk
|
(45,691
|
)
|
|
93,569
|
|
|
47,878
|
|
|
(59,101
|
)
|
|
72,860
|
|
|
13,759
|
|
|
||||||
|
Professional lines
|
788,480
|
|
|
1,921,467
|
|
|
2,709,947
|
|
|
716,279
|
|
|
1,796,205
|
|
|
2,512,484
|
|
|
||||||
|
Liability
|
183,089
|
|
|
1,020,991
|
|
|
1,204,080
|
|
|
171,923
|
|
|
989,344
|
|
|
1,161,267
|
|
|
||||||
|
Total Insurance
|
1,580,361
|
|
|
3,482,786
|
|
|
5,063,147
|
|
|
1,554,316
|
|
|
3,318,868
|
|
|
4,873,184
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reinsurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
607,061
|
|
|
489,505
|
|
|
1,096,566
|
|
|
809,384
|
|
|
496,881
|
|
|
1,306,265
|
|
|
||||||
|
Credit and surety
|
116,718
|
|
|
217,105
|
|
|
333,823
|
|
|
141,255
|
|
|
209,485
|
|
|
350,740
|
|
|
||||||
|
Professional lines
|
311,865
|
|
|
885,733
|
|
|
1,197,598
|
|
|
314,827
|
|
|
840,683
|
|
|
1,155,510
|
|
|
||||||
|
Motor
|
410,483
|
|
|
466,947
|
|
|
877,430
|
|
|
428,453
|
|
|
464,048
|
|
|
892,501
|
|
|
||||||
|
Liability
|
259,187
|
|
|
769,046
|
|
|
1,028,233
|
|
|
251,582
|
|
|
752,358
|
|
|
1,003,940
|
|
|
||||||
|
Total Reinsurance
|
1,705,314
|
|
|
2,828,336
|
|
|
4,533,650
|
|
|
1,945,501
|
|
|
2,763,455
|
|
|
4,708,956
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
3,285,675
|
|
|
$
|
6,311,122
|
|
|
$
|
9,596,797
|
|
|
$
|
3,499,817
|
|
|
$
|
6,082,323
|
|
|
$
|
9,582,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
The more significant weight given to industry benchmarks in forming our key actuarial assumptions;
|
•
|
The potential volatility of actuarial estimates, given the number of years of development it takes to produce a meaningful incurred loss as a percentage of ultimate losses;
|
•
|
Inherent uncertainties about loss trends, claims inflation (e.g. medical, judicial, social) and general economic conditions; and
|
•
|
The possibility of future litigation, legislative or judicial change that may impact future loss experience relative to the prior industry loss experience relied upon in reserve estimation.
|
|
|
|
|
|
|
|
|
||||||
|
INSURANCE
|
|
|||||||||||
|
Development Pattern
|
Expected Loss Ratio
|
|
||||||||||
|
Property and Other
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(37,306
|
)
|
|
$
|
(33,354
|
)
|
|
$
|
(29,401
|
)
|
|
|
Unchanged
|
(5,620
|
)
|
|
—
|
|
|
5,620
|
|
|
|||
|
3 months longer
|
53,504
|
|
|
62,236
|
|
|
70,968
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Marine
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(25,716
|
)
|
|
$
|
(20,936
|
)
|
|
$
|
(16,156
|
)
|
|
|
Unchanged
|
(5,827
|
)
|
|
—
|
|
|
5,827
|
|
|
|||
|
3 months longer
|
24,456
|
|
|
31,876
|
|
|
39,297
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Aviation
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(4,942
|
)
|
|
$
|
(4,158
|
)
|
|
$
|
(3,373
|
)
|
|
|
Unchanged
|
(992
|
)
|
|
—
|
|
|
992
|
|
|
|||
|
3 months longer
|
4,692
|
|
|
5,984
|
|
|
7,275
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Credit and Political Risk
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(7,907
|
)
|
|
$
|
—
|
|
|
$
|
7,907
|
|
|
|
Unchanged
|
(7,907
|
)
|
|
—
|
|
|
7,907
|
|
|
|||
|
3 months longer
|
(7,907
|
)
|
|
—
|
|
|
7,907
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Professional Lines
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(348,670
|
)
|
|
$
|
(74,923
|
)
|
|
$
|
198,825
|
|
|
|
Unchanged
|
(281,239
|
)
|
|
—
|
|
|
281,239
|
|
|
|||
|
6 months longer
|
(209,418
|
)
|
|
79,801
|
|
|
369,021
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Liability
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(168,570
|
)
|
|
$
|
(45,128
|
)
|
|
$
|
78,315
|
|
|
|
Unchanged
|
(127,955
|
)
|
|
—
|
|
|
127,955
|
|
|
|||
|
6 months longer
|
(78,348
|
)
|
|
55,119
|
|
|
188,586
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
REINSURANCE
|
|
|||||||||||
|
Development Pattern
|
Expected Loss Ratio
|
|
||||||||||
|
Property and Other
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(67,198
|
)
|
|
$
|
(30,506
|
)
|
|
$
|
20,460
|
|
|
|
Unchanged
|
(45,077
|
)
|
|
—
|
|
|
45,077
|
|
|
|||
|
3 months longer
|
(16,030
|
)
|
|
45,821
|
|
|
77,350
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Credit and Surety
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(41,795
|
)
|
|
$
|
(19,915
|
)
|
|
$
|
17,875
|
|
|
|
Unchanged
|
(31,293
|
)
|
|
—
|
|
|
31,293
|
|
|
|||
|
6 months longer
|
(5,284
|
)
|
|
33,400
|
|
|
74,267
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Professional Lines
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(117,040
|
)
|
|
$
|
(20,244
|
)
|
|
$
|
74,376
|
|
|
|
Unchanged
|
(86,796
|
)
|
|
—
|
|
|
100,206
|
|
|
|||
|
6 months longer
|
(44,970
|
)
|
|
30,864
|
|
|
136,559
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Motor
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(86,089
|
)
|
|
$
|
(20,534
|
)
|
|
$
|
55,611
|
|
|
|
Unchanged
|
(69,163
|
)
|
|
—
|
|
|
69,163
|
|
|
|||
|
6 months longer
|
(51,296
|
)
|
|
33,089
|
|
|
126,565
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Liability
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(113,553
|
)
|
|
$
|
(16,839
|
)
|
|
$
|
85,909
|
|
|
|
Unchanged
|
(97,078
|
)
|
|
—
|
|
|
97,078
|
|
|
|||
|
6 months longer
|
(87,557
|
)
|
|
17,739
|
|
|
122,079
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2014
|
|
2013
|
|
||||||||||||||||||||
|
At December 31,
|
Case
Reserves
|
|
IBNR
|
|
Total
|
|
Case
Reserves
|
|
IBNR
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
$
|
139,193
|
|
|
$
|
82,047
|
|
|
$
|
221,240
|
|
|
$
|
163,228
|
|
|
$
|
80,175
|
|
|
$
|
243,403
|
|
|
|
Marine
|
54,681
|
|
|
29,549
|
|
|
84,230
|
|
|
63,097
|
|
|
36,830
|
|
|
99,927
|
|
|
||||||
|
Aviation
|
198
|
|
|
320
|
|
|
518
|
|
|
264
|
|
|
1,311
|
|
|
1,575
|
|
|
||||||
|
Credit and political risk
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Professional lines
|
297,246
|
|
|
586,441
|
|
|
883,687
|
|
|
268,318
|
|
|
575,625
|
|
|
843,943
|
|
|
||||||
|
Liability
|
92,276
|
|
|
605,321
|
|
|
697,597
|
|
|
92,036
|
|
|
609,948
|
|
|
701,984
|
|
|
||||||
|
Total Insurance
|
583,594
|
|
|
1,303,678
|
|
|
1,887,272
|
|
|
586,943
|
|
|
1,303,889
|
|
|
1,890,832
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reinsurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
985
|
|
|
1,469
|
|
|
2,454
|
|
|
—
|
|
|
4,543
|
|
|
4,543
|
|
|
||||||
|
Credit and surety
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Professional lines
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
231
|
|
|
231
|
|
|
||||||
|
Motor
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Liability
|
—
|
|
|
554
|
|
|
554
|
|
|
—
|
|
|
4,506
|
|
|
4,506
|
|
|
||||||
|
Total Reinsurance
|
985
|
|
|
2,023
|
|
|
3,008
|
|
|
—
|
|
|
9,280
|
|
|
9,280
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
584,579
|
|
|
$
|
1,305,701
|
|
|
$
|
1,890,280
|
|
|
$
|
586,943
|
|
|
$
|
1,313,169
|
|
|
$
|
1,900,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
changes in renewal rates or rates of new business accepted by cedants (such changes could result from changes in the relevant insurance market that could affect more than one of our cedants or could be a consequence of changes in the marketing strategy or risk appetite of an individual cedant);
|
•
|
changes in underlying exposure values; and/or
|
•
|
changes in rates being charged by cedants.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Catastrophe
|
$
|
9,227
|
|
|
$
|
3,896
|
|
|
$
|
2,264
|
|
|
|
Property
|
200,977
|
|
|
195,435
|
|
|
169,214
|
|
|
|||
|
Professional lines
|
168,799
|
|
|
280,242
|
|
|
199,732
|
|
|
|||
|
Credit and surety
|
226,254
|
|
|
222,486
|
|
|
232,998
|
|
|
|||
|
Motor
|
207,218
|
|
|
177,834
|
|
|
158,230
|
|
|
|||
|
Liability
|
180,388
|
|
|
152,790
|
|
|
116,208
|
|
|
|||
|
Agriculture
|
139,640
|
|
|
103,869
|
|
|
3,800
|
|
|
|||
|
Engineering
|
50,441
|
|
|
47,295
|
|
|
55,846
|
|
|
|||
|
Other
|
13,685
|
|
|
11,582
|
|
|
7,118
|
|
|
|||
|
Total estimated premiums
|
$
|
1,196,629
|
|
|
$
|
1,195,429
|
|
|
$
|
945,410
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written (reinsurance segment)
|
2,176,104
|
|
|
2,137,903
|
|
|
1,830,162
|
|
|
|||
|
As a % of total gross premiums written
|
55
|
%
|
|
56
|
%
|
|
52
|
%
|
|
|||
|
|
|
|
|
|
|
|
•
|
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments.
|
•
|
Level 2 – Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
|
•
|
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The unobservable inputs reflect our own assumptions about assumptions that market participants might use.
|
|
|
|
|
|
|
|
At December 31,
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Default rates
|
4.0% - 5.0%
|
|
4.0% - 5.0%
|
|
|
Loss severity rate
|
53.5%
|
|
53.5%
|
|
|
Collateral spreads
|
3.0% - 3.5%
|
|
2.6% - 3.4%
|
|
|
Estimated maturity dates
|
3.1 - 4.2 years
|
|
2.1 - 4.6 years
|
|
|
|
|
|
|
|
•
|
The length of time and extent to which the fair value has been less than the amortized cost for fixed maturities or cost for equity securities.
|
•
|
The financial condition, near-term and long-term prospects for the issuer of the security, including the relevant industry conditions and trends, and implications of rating agency actions and offering prices.
|
•
|
The historical and implied volatility of the fair value.
|
•
|
The collateral structure and credit support.
|
1)
|
have the intent to sell the security,
|
2)
|
more likely than not will be required to sell the security before its anticipated recovery, or
|
3)
|
do not anticipate to recover fully the amortized cost based on projected cash flows to be collected (i.e. a credit loss exists).
|
•
|
declines in value greater than 20% for nine consecutive months, and
|
•
|
declines in value greater than 10% for twelve consecutive months.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Net income available to common shareholders
|
$
|
770,657
|
|
|
$
|
683,910
|
|
|
$
|
495,004
|
|
|
|
Net realized investment gains, net of tax
(1)
|
(106,196
|
)
|
|
(77,603
|
)
|
|
(115,854
|
)
|
|
|||
|
Foreign exchange losses (gains), net of tax
(2)
|
(101,586
|
)
|
|
23,684
|
|
|
28,364
|
|
|
|||
|
Loss on repurchase of preferred shares, net of tax
(3)
|
—
|
|
|
3,081
|
|
|
14,009
|
|
|
|||
|
Operating income
|
$
|
562,875
|
|
|
$
|
633,072
|
|
|
$
|
421,523
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Earnings per common share - diluted
|
$
|
7.29
|
|
|
$
|
5.93
|
|
|
$
|
4.00
|
|
|
|
Net realized investment gains, net of tax
|
(1.00
|
)
|
|
(0.68
|
)
|
|
(0.94
|
)
|
|
|||
|
Foreign exchange losses (gains), net of tax
|
(0.97
|
)
|
|
0.21
|
|
|
0.24
|
|
|
|||
|
Loss on repurchase of preferred shares, net of tax
|
—
|
|
|
0.03
|
|
|
0.11
|
|
|
|||
|
Operating income per common share - diluted
|
$
|
5.32
|
|
|
$
|
5.49
|
|
|
$
|
3.41
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares and common share equivalents - diluted
(4)
|
105,713
|
|
|
115,328
|
|
|
123,654
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Average common shareholders’ equity
|
$
|
5,191,699
|
|
|
$
|
5,233,519
|
|
|
$
|
5,110,449
|
|
|
|
|
|
|
|
|
|
|
||||||
|
ROACE
|
14.8
|
%
|
|
13.1
|
%
|
|
9.7
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Operating ROACE
|
10.8
|
%
|
|
12.1
|
%
|
|
8.2
|
%
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
Tax cost (benefit) of
$25,912
, (
$2,039
) and
$11,615
for
2014
,
2013
and
2012
, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors including the ability to utilize capital losses.
|
(2)
|
Tax cost (benefit) of
$2,853
, (
$2,459
) and (
$1,148
) for
2014
,
2013
and
2012
, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors including the tax status of specific foreign exchange transactions.
|
(3)
|
Tax impact is nil.
|
(4)
|
Refer to Note 12 to the Consolidated Financial Statements for further details on the dilution calculation.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Fair Value
|
|
Potential Adverse Change in Fair Value
|
|
||||||||||||
Increase in
interest rate
by 100
basis points
|
|
Widening of
credit spreads
by 100
basis points
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
1,620,077
|
|
|
$
|
(64,012
|
)
|
|
$
|
—
|
|
|
$
|
(64,012
|
)
|
|
|
Non-U.S. government
|
1,033,543
|
|
|
(31,598
|
)
|
|
—
|
|
|
(31,598
|
)
|
|
||||
|
Agency MBS
|
2,278,108
|
|
|
(91,539
|
)
|
|
—
|
|
|
(91,539
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Securities exposed to credit spreads:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate debt
|
4,361,124
|
|
|
(123,518
|
)
|
|
(136,219
|
)
|
|
(259,737
|
)
|
|
||||
|
CMBS
|
1,096,888
|
|
|
(34,920
|
)
|
|
(35,313
|
)
|
|
(70,233
|
)
|
|
||||
|
Non agency RMBS
|
73,086
|
|
|
(363
|
)
|
|
(2,322
|
)
|
|
(2,685
|
)
|
|
||||
|
ABS
|
1,461,586
|
|
|
(7,073
|
)
|
|
(48,192
|
)
|
|
(55,265
|
)
|
|
||||
|
Municipals
|
204,861
|
|
|
(11,230
|
)
|
|
(11,127
|
)
|
|
(22,357
|
)
|
|
||||
|
|
$
|
12,129,273
|
|
|
$
|
(364,253
|
)
|
|
$
|
(233,173
|
)
|
|
$
|
(597,426
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
1,388,698
|
|
|
$
|
(56,590
|
)
|
|
$
|
—
|
|
|
$
|
(56,590
|
)
|
|
|
Non-U.S. government
|
1,176,382
|
|
|
(37,274
|
)
|
|
—
|
|
|
(37,274
|
)
|
|
||||
|
Agency MBS
|
2,448,827
|
|
|
(119,533
|
)
|
|
—
|
|
|
(119,533
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Securities exposed to credit spreads:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate debt
|
3,608,238
|
|
|
(87,210
|
)
|
|
(96,590
|
)
|
|
(183,800
|
)
|
|
||||
|
CMBS
|
797,414
|
|
|
(19,710
|
)
|
|
(19,931
|
)
|
|
(39,641
|
)
|
|
||||
|
Non agency RMBS
|
67,567
|
|
|
(343
|
)
|
|
(2,398
|
)
|
|
(2,741
|
)
|
|
||||
|
ABS
|
953,451
|
|
|
(5,827
|
)
|
|
(34,255
|
)
|
|
(40,082
|
)
|
|
||||
|
Municipals
|
1,545,750
|
|
|
(68,785
|
)
|
|
(69,610
|
)
|
|
(138,395
|
)
|
|
||||
|
|
$
|
11,986,327
|
|
|
$
|
(395,272
|
)
|
|
$
|
(222,784
|
)
|
|
$
|
(618,056
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
AUD
|
|
NZD
|
|
CAD
|
|
EUR
|
|
GBP
|
|
JPY
|
|
Other
|
|
Total
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net managed assets (liabilities), excluding derivatives
|
$
|
41,680
|
|
|
$
|
(145,842
|
)
|
|
$
|
70,389
|
|
|
$
|
(95,224
|
)
|
|
$
|
(184,288
|
)
|
|
$
|
25,773
|
|
|
$
|
(61,365
|
)
|
|
$
|
(348,877
|
)
|
|
|
Foreign currency derivatives, net
|
(28,583
|
)
|
|
150,534
|
|
|
(63,280
|
)
|
|
70,789
|
|
|
135,535
|
|
|
(5,424
|
)
|
|
489
|
|
|
260,060
|
|
|
||||||||
|
Net managed foreign currency exposure
|
13,097
|
|
|
4,692
|
|
|
7,109
|
|
|
(24,435
|
)
|
|
(48,753
|
)
|
|
20,349
|
|
|
(60,876
|
)
|
|
(88,817
|
)
|
|
||||||||
|
Other net foreign currency exposure
|
2,221
|
|
|
—
|
|
|
—
|
|
|
46,911
|
|
|
764
|
|
|
6
|
|
|
211,195
|
|
|
261,097
|
|
|
||||||||
|
Total net foreign currency exposure
|
$
|
15,318
|
|
|
$
|
4,692
|
|
|
$
|
7,109
|
|
|
$
|
22,476
|
|
|
$
|
(47,989
|
)
|
|
$
|
20,355
|
|
|
$
|
150,319
|
|
|
$
|
172,280
|
|
|
|
Net foreign currency exposure as a percentage of total shareholders’ equity
|
0.3
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
0.4
|
%
|
|
(0.8
|
%)
|
|
0.3
|
%
|
|
2.6
|
%
|
|
2.9
|
%
|
|
||||||||
|
Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement
(1)
|
$
|
1,532
|
|
|
$
|
469
|
|
|
$
|
711
|
|
|
$
|
2,248
|
|
|
$
|
(4,799
|
)
|
|
$
|
2,036
|
|
|
$
|
15,032
|
|
|
$
|
17,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net managed assets (liabilities), excluding derivatives
|
$
|
(6,661
|
)
|
|
$
|
(195,714
|
)
|
|
$
|
72,846
|
|
|
$
|
(99,409
|
)
|
|
$
|
(132,980
|
)
|
|
$
|
35,115
|
|
|
$
|
(41,504
|
)
|
|
$
|
(368,307
|
)
|
|
|
Foreign currency derivatives, net
|
(22,315
|
)
|
|
172,144
|
|
|
(56,455
|
)
|
|
42,735
|
|
|
16,567
|
|
|
(32,301
|
)
|
|
(4,011
|
)
|
|
116,364
|
|
|
||||||||
|
Net managed foreign currency exposure
|
(28,976
|
)
|
|
(23,570
|
)
|
|
16,391
|
|
|
(56,674
|
)
|
|
(116,413
|
)
|
|
2,814
|
|
|
(45,515
|
)
|
|
(251,943
|
)
|
|
||||||||
|
Other net foreign currency exposure
|
4,203
|
|
|
—
|
|
|
779
|
|
|
31,225
|
|
|
12,497
|
|
|
12,838
|
|
|
308,446
|
|
|
369,988
|
|
|
||||||||
|
Total net foreign currency exposure
|
$
|
(24,773
|
)
|
|
$
|
(23,570
|
)
|
|
$
|
17,170
|
|
|
$
|
(25,449
|
)
|
|
$
|
(103,916
|
)
|
|
$
|
15,652
|
|
|
$
|
262,931
|
|
|
$
|
118,045
|
|
|
|
Net foreign currency exposure as a percentage of total shareholders’ equity
|
(0.4
|
%)
|
|
(0.4
|
%)
|
|
0.3
|
%
|
|
(0.4
|
%)
|
|
(1.8
|
%)
|
|
0.3
|
%
|
|
4.5
|
%
|
|
2.0
|
%
|
|
||||||||
|
Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement
(1)
|
$
|
(2,477
|
)
|
|
$
|
(2,357
|
)
|
|
$
|
1,717
|
|
|
$
|
(2,545
|
)
|
|
$
|
(10,392
|
)
|
|
$
|
1,565
|
|
|
$
|
26,293
|
|
|
$
|
11,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes 10% appreciation in underlying currencies relative to the U.S. dollar.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Index to Consolidated Financial Statements and Related Notes
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Balance Sheets at December 31, 2014 and 2013
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012
|
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012
|
|
|
|
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2014, 2013 and 2012
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Note 1 – History
|
|
|
|
Note 2 – Significant Accounting Policies
|
|
|
|
Note 3 – Segment Information
|
|
|
|
Note 4 – Goodwill and Intangible Assets
|
|
|
|
Note 5 – Investments
|
|
|
|
Note 6 – Fair Value Measurements
|
|
|
|
Note 7 – Derivative Instruments
|
|
|
|
Note 8 – Reserves for Losses and Loss Expenses
|
|
|
|
Note 9 – Reinsurance
|
|
|
|
Note 10 – Debt and Financing Arrangements
|
|
|
|
Note 11 – Commitments and Contingencies
|
|
|
|
Note 12 – Earnings Per Common Share
|
|
|
|
Note 13 – Shareholders’ Equity
|
|
|
|
Note 14 – Noncontrolling Interest
|
|
|
|
Note 15 – Retirement Plans
|
|
|
|
Note 16 – Share-Based Compensation
|
|
|
|
Note 17 – Related Party Transactions
|
|
|
|
Note 18 – Income Taxes
|
|
|
|
Note 19 – Other Comprehensive Income (Loss)
|
|
|
|
Note 20 – Statutory Financial Information
|
|
|
|
Note 21 – Unaudited Condensed Quarterly Financial Data
|
|
|
|
Note 22 – Subsequent Events
|
|
|
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 20, 2015
|
|
2014
|
|
2013
|
||||
|
(in thousands)
|
||||||
Assets
|
|
||||||
Investments:
|
|
|
|
||||
Fixed maturities, available for sale, at fair value
(Amortized cost 2014: $12,185,973; 2013: $11,987,146)
|
$
|
12,129,273
|
|
|
$
|
11,986,327
|
|
Equity securities, available for sale, at fair value
(Cost 2014: $531,648; 2013: $566,219)
|
567,707
|
|
|
701,987
|
|
||
Other investments, at fair value
|
965,465
|
|
|
1,045,810
|
|
||
Short-term investments, at fair value and amortized cost
|
107,534
|
|
|
46,212
|
|
||
Total investments
|
13,769,979
|
|
|
13,780,336
|
|
||
Cash and cash equivalents
|
921,830
|
|
|
923,326
|
|
||
Restricted cash and cash equivalents
|
287,865
|
|
|
64,550
|
|
||
Accrued interest receivable
|
83,070
|
|
|
97,132
|
|
||
Insurance and reinsurance premium balances receivable
|
1,808,620
|
|
|
1,688,957
|
|
||
Reinsurance recoverable on unpaid and paid losses
|
1,926,145
|
|
|
1,929,988
|
|
||
Deferred acquisition costs
|
466,987
|
|
|
456,122
|
|
||
Prepaid reinsurance premiums
|
351,441
|
|
|
330,261
|
|
||
Receivable for investments sold
|
169
|
|
|
1,199
|
|
||
Goodwill and intangible assets
|
88,960
|
|
|
89,528
|
|
||
Other assets
|
250,670
|
|
|
273,385
|
|
||
Total assets
|
$
|
19,955,736
|
|
|
$
|
19,634,784
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Reserve for losses and loss expenses
|
$
|
9,596,797
|
|
|
$
|
9,582,140
|
|
Unearned premiums
|
2,735,376
|
|
|
2,683,849
|
|
||
Insurance and reinsurance balances payable
|
249,186
|
|
|
234,412
|
|
||
Senior notes
|
990,790
|
|
|
995,855
|
|
||
Payable for investments purchased
|
188,176
|
|
|
21,744
|
|
||
Other liabilities
|
315,471
|
|
|
248,822
|
|
||
Total liabilities
|
14,075,796
|
|
|
13,766,822
|
|
||
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
||||
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Preferred shares
|
627,843
|
|
|
627,843
|
|
||
Common shares
(2014: 175,478; 2013: 174,134 shares issued
and 2014: 99,426; 2013: 109,485 shares outstanding)
|
2,191
|
|
|
2,174
|
|
||
Additional paid-in capital
|
2,285,016
|
|
|
2,240,125
|
|
||
Accumulated other comprehensive income (loss)
|
(45,574
|
)
|
|
117,825
|
|
||
Retained earnings
|
5,715,504
|
|
|
5,062,706
|
|
||
Treasury shares, at cost
(2014: 76,052; 2013: 64,649 shares)
|
(2,763,859
|
)
|
|
(2,232,711
|
)
|
||
Total shareholders’ equity attributable to AXIS Capital
|
5,821,121
|
|
|
5,817,962
|
|
||
Noncontrolling interests
|
58,819
|
|
|
50,000
|
|
||
Total shareholders’ equity
|
5,879,940
|
|
|
5,867,962
|
|
||
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
19,955,736
|
|
|
$
|
19,634,784
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands, except for per share data)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
3,870,999
|
|
|
$
|
3,707,065
|
|
|
$
|
3,415,463
|
|
Net investment income
|
342,766
|
|
|
409,312
|
|
|
380,957
|
|
|||
Other insurance related income
|
650
|
|
|
4,424
|
|
|
2,676
|
|
|||
Net realized investment gains
|
|
|
|
|
|
||||||
Other-than-temporary impairment ("OTTI") losses
|
(31,227
|
)
|
|
(9,362
|
)
|
|
(24,234
|
)
|
|||
Other net realized investment gains
|
163,335
|
|
|
84,926
|
|
|
151,703
|
|
|||
Total net realized investment gains
|
132,108
|
|
|
75,564
|
|
|
127,469
|
|
|||
Total revenues
|
4,346,523
|
|
|
4,196,365
|
|
|
3,926,565
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Net losses and loss expenses
|
2,186,722
|
|
|
2,134,195
|
|
|
2,096,028
|
|
|||
Acquisition costs
|
737,197
|
|
|
664,191
|
|
|
627,653
|
|
|||
General and administrative expenses
|
621,876
|
|
|
575,390
|
|
|
560,981
|
|
|||
Foreign exchange losses (gains)
|
(104,439
|
)
|
|
26,143
|
|
|
29,512
|
|
|||
Interest expense and financing costs
|
74,695
|
|
|
61,979
|
|
|
61,863
|
|
|||
Total expenses
|
3,516,051
|
|
|
3,461,898
|
|
|
3,376,037
|
|
|||
|
|
|
|
|
|
||||||
Income before income taxes
|
830,472
|
|
|
734,467
|
|
|
550,528
|
|
|||
Income tax expense
|
25,908
|
|
|
7,002
|
|
|
3,287
|
|
|||
Net income
|
804,564
|
|
|
727,465
|
|
|
547,241
|
|
|||
Amounts attributable from noncontrolling interests
|
(6,181
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to AXIS Capital
|
810,745
|
|
|
727,465
|
|
|
547,241
|
|
|||
Preferred share dividends
|
40,088
|
|
|
40,474
|
|
|
38,228
|
|
|||
Loss on repurchase of preferred shares
|
—
|
|
|
3,081
|
|
|
14,009
|
|
|||
Net income available to common shareholders
|
$
|
770,657
|
|
|
$
|
683,910
|
|
|
$
|
495,004
|
|
|
|
|
|
|
|
||||||
Per share data
|
|
|
|
|
|
||||||
Net income per common share
|
|
|
|
|
|
||||||
Basic net income
|
$
|
7.38
|
|
|
$
|
6.02
|
|
|
$
|
4.05
|
|
Diluted net income
|
$
|
7.29
|
|
|
$
|
5.93
|
|
|
$
|
4.00
|
|
Weighted average number of common shares outstanding - basic
|
104,368
|
|
|
113,636
|
|
|
122,148
|
|
|||
Weighted average number of common shares outstanding - diluted
|
105,713
|
|
|
115,328
|
|
|
123,654
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Net income
|
$
|
804,564
|
|
|
$
|
727,465
|
|
|
$
|
547,241
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Available for sale investments:
|
|
|
|
|
|
||||||
Unrealized investment gains (losses) arising during the year
|
(38,667
|
)
|
|
(161,832
|
)
|
|
348,510
|
|
|||
Adjustment for re-classification of net realized investment gains and OTTI losses recognized in net income
|
(114,470
|
)
|
|
(61,551
|
)
|
|
(116,278
|
)
|
|||
Unrealized investment gains (losses) arising during the year, net of reclassification adjustment
|
(153,137
|
)
|
|
(223,383
|
)
|
|
232,232
|
|
|||
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation adjustment
|
(10,262
|
)
|
|
(21,414
|
)
|
|
510
|
|
|||
Net change in benefit plan assets and obligations recognized in equity and
reclassification adjustment
|
—
|
|
|
—
|
|
|
1,718
|
|
|||
Total other comprehensive income (loss), net of tax
|
(163,399
|
)
|
|
(244,797
|
)
|
|
234,460
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
641,165
|
|
|
$
|
482,668
|
|
|
$
|
781,701
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Preferred shares
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
627,843
|
|
|
$
|
502,843
|
|
|
$
|
500,000
|
|
Shares issued
|
—
|
|
|
225,000
|
|
|
400,000
|
|
|||
Shares repurchased
|
—
|
|
|
(100,000
|
)
|
|
(397,157
|
)
|
|||
Balance at end of year
|
627,843
|
|
|
627,843
|
|
|
502,843
|
|
|||
|
|
|
|
|
|
||||||
Common shares (par value)
|
|
|
|
|
|
||||||
Balance at beginning of year
|
2,174
|
|
|
2,146
|
|
|
2,125
|
|
|||
Shares issued
|
17
|
|
|
28
|
|
|
21
|
|
|||
Balance at end of year
|
2,191
|
|
|
2,174
|
|
|
2,146
|
|
|||
|
|
|
|
|
|
||||||
Additional paid-in capital
|
|
|
|
|
|
||||||
Balance at beginning of year
|
2,240,125
|
|
|
2,179,034
|
|
|
2,105,386
|
|
|||
Shares issued - common shares
|
158
|
|
|
3,422
|
|
|
2,582
|
|
|||
Cost of treasury shares reissued
|
(12,054
|
)
|
|
(4,225
|
)
|
|
—
|
|
|||
Issue costs on newly issued preferred shares
|
—
|
|
|
(6,551
|
)
|
|
(6,456
|
)
|
|||
Reversal of issue costs on repurchase of preferred shares
|
—
|
|
|
3,081
|
|
|
7,093
|
|
|||
Stock options exercised
|
5,405
|
|
|
16,889
|
|
|
2,517
|
|
|||
Share-based compensation expense
|
51,382
|
|
|
48,475
|
|
|
67,912
|
|
|||
Balance at end of year
|
2,285,016
|
|
|
2,240,125
|
|
|
2,179,034
|
|
|||
|
|
|
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
||||||
Balance at beginning of year
|
117,825
|
|
|
362,622
|
|
|
128,162
|
|
|||
Unrealized gains (losses) on available for sale investments, net of tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
124,945
|
|
|
348,328
|
|
|
116,096
|
|
|||
Unrealized gains (losses) arising during the year, net of reclassification adjustment
|
(153,137
|
)
|
|
(223,383
|
)
|
|
232,232
|
|
|||
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
(28,192
|
)
|
|
124,945
|
|
|
348,328
|
|
|||
Cumulative foreign currency translation adjustments, net of tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(7,120
|
)
|
|
14,294
|
|
|
13,784
|
|
|||
Foreign currency translation adjustment
|
(10,262
|
)
|
|
(21,414
|
)
|
|
510
|
|
|||
Balance at end of year
|
(17,382
|
)
|
|
(7,120
|
)
|
|
14,294
|
|
|||
Supplemental Executive Retirement Plans ("SERPs"):
|
|
|
|
|
|
||||||
Balance at beginning of year
|
—
|
|
|
—
|
|
|
(1,718
|
)
|
|||
Net change in benefit plan assets and obligations recognized in equity
|
—
|
|
|
—
|
|
|
1,718
|
|
|||
Balance at end of year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
(45,574
|
)
|
|
117,825
|
|
|
362,622
|
|
|||
|
|
|
|
|
|
||||||
Retained earnings
|
|
|
|
|
|
||||||
Balance at beginning of year
|
5,062,706
|
|
|
4,497,789
|
|
|
4,155,392
|
|
|||
Net income
|
804,564
|
|
|
727,465
|
|
|
547,241
|
|
|||
Amounts attributable from noncontrolling interests
|
6,181
|
|
|
—
|
|
|
—
|
|
|||
Preferred share dividends
|
(40,088
|
)
|
|
(40,474
|
)
|
|
(38,228
|
)
|
|||
Loss on repurchase of preferred shares
|
—
|
|
|
(3,081
|
)
|
|
(14,009
|
)
|
|||
Common share dividends
|
(117,859
|
)
|
|
(118,993
|
)
|
|
(152,607
|
)
|
|||
Balance at end of year
|
5,715,504
|
|
|
5,062,706
|
|
|
4,497,789
|
|
|||
|
|
|
|
|
|
||||||
Treasury shares, at cost
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(2,232,711
|
)
|
|
(1,764,673
|
)
|
|
(1,446,986
|
)
|
|||
Shares repurchased for treasury
|
(543,202
|
)
|
|
(472,263
|
)
|
|
(317,687
|
)
|
|||
Treasury shares reissued
|
12,054
|
|
|
4,225
|
|
|
—
|
|
|||
Balance at end of year
|
(2,763,859
|
)
|
|
(2,232,711
|
)
|
|
(1,764,673
|
)
|
|||
|
|
|
|
|
|
||||||
Total shareholders’ equity attributable to AXIS Capital
|
5,821,121
|
|
|
5,817,962
|
|
|
5,779,761
|
|
|||
Noncontrolling interests
|
58,819
|
|
|
50,000
|
|
|
—
|
|
|||
Total shareholders' equity
|
$
|
5,879,940
|
|
|
$
|
5,867,962
|
|
|
$
|
5,779,761
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
804,564
|
|
|
$
|
727,465
|
|
|
$
|
547,241
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Net realized investment gains
|
(132,108
|
)
|
|
(75,564
|
)
|
|
(127,469
|
)
|
|||
Net realized and unrealized gains on other investments
|
(57,621
|
)
|
|
(128,814
|
)
|
|
(87,623
|
)
|
|||
Amortization of fixed maturities
|
113,879
|
|
|
139,667
|
|
|
135,297
|
|
|||
Other amortization and depreciation
|
24,970
|
|
|
23,272
|
|
|
13,821
|
|
|||
Share-based compensation expense
|
63,237
|
|
|
57,168
|
|
|
67,912
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accrued interest receivable
|
13,788
|
|
|
88
|
|
|
1,126
|
|
|||
Reinsurance recoverable balances
|
(16,204
|
)
|
|
(66,169
|
)
|
|
(93,490
|
)
|
|||
Deferred acquisition costs
|
(11,026
|
)
|
|
(66,874
|
)
|
|
18,279
|
|
|||
Prepaid reinsurance premiums
|
(25,185
|
)
|
|
(14,585
|
)
|
|
(77,053
|
)
|
|||
Reserve for loss and loss expenses
|
46,903
|
|
|
523,409
|
|
|
633,686
|
|
|||
Unearned premiums
|
58,376
|
|
|
229,157
|
|
|
230
|
|
|||
Insurance and reinsurance balances, net
|
(102,593
|
)
|
|
(250,463
|
)
|
|
3,218
|
|
|||
Other items
|
81,202
|
|
|
(789
|
)
|
|
85,442
|
|
|||
Net cash provided by operating activities
|
862,182
|
|
|
1,096,968
|
|
|
1,120,617
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of:
|
|
|
|
|
|
||||||
Fixed maturities
|
(12,047,004
|
)
|
|
(12,230,274
|
)
|
|
(13,513,143
|
)
|
|||
Equity securities
|
(564,562
|
)
|
|
(240,926
|
)
|
|
(377,749
|
)
|
|||
Other investments
|
(75,542
|
)
|
|
(166,835
|
)
|
|
(110,084
|
)
|
|||
Short-term investments
|
(669,494
|
)
|
|
(198,168
|
)
|
|
(383,981
|
)
|
|||
Proceeds from the sale of:
|
|
|
|
|
|
||||||
Fixed maturities
|
10,799,112
|
|
|
10,261,256
|
|
|
11,144,351
|
|
|||
Equity securities
|
740,900
|
|
|
323,423
|
|
|
468,473
|
|
|||
Other investments
|
213,508
|
|
|
93,277
|
|
|
53,590
|
|
|||
Short-term investments
|
526,460
|
|
|
197,690
|
|
|
354,924
|
|
|||
Proceeds from redemption of fixed maturities
|
1,086,244
|
|
|
1,407,676
|
|
|
1,456,553
|
|
|||
Proceeds from redemption of short-term investments
|
80,474
|
|
|
61,715
|
|
|
69,751
|
|
|||
Purchase of other assets
|
(20,857
|
)
|
|
(24,304
|
)
|
|
(35,322
|
)
|
|||
Change in restricted cash and cash equivalents
|
(223,315
|
)
|
|
26,183
|
|
|
10,256
|
|
|||
Net cash used in investing activities
|
(154,076
|
)
|
|
(489,287
|
)
|
|
(862,381
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net proceeds from issuance of senior notes
|
494,344
|
|
|
—
|
|
|
—
|
|
|||
Redemption of senior notes
|
(500,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds from issuance of preferred shares
|
—
|
|
|
218,449
|
|
|
393,544
|
|
|||
Repurchase of preferred shares
|
—
|
|
|
(100,000
|
)
|
|
(404,073
|
)
|
|||
Repurchase of common shares
|
(543,202
|
)
|
|
(472,263
|
)
|
|
(317,687
|
)
|
|||
Dividends paid - common shares
|
(117,619
|
)
|
|
(118,426
|
)
|
|
(120,487
|
)
|
|||
Dividends paid - preferred shares
|
(40,088
|
)
|
|
(39,193
|
)
|
|
(38,228
|
)
|
|||
Proceeds from issuance of common shares
|
5,550
|
|
|
20,339
|
|
|
5,120
|
|
|||
Sale of shares to noncontrolling interests
|
25,000
|
|
|
50,000
|
|
|
—
|
|
|||
Return of capital to noncontrolling interests
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in financing activities
|
(686,015
|
)
|
|
(441,094
|
)
|
|
(481,811
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on foreign currency cash and cash equivalents
|
(23,587
|
)
|
|
(3,078
|
)
|
|
1,543
|
|
|||
Increase (decrease) in cash and cash equivalents
|
(1,496
|
)
|
|
163,509
|
|
|
(222,032
|
)
|
|||
Cash and cash equivalents - beginning of year
|
923,326
|
|
|
759,817
|
|
|
981,849
|
|
|||
Cash and cash equivalents - end of year
|
$
|
921,830
|
|
|
$
|
923,326
|
|
|
$
|
759,817
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
7,654
|
|
|
$
|
22,472
|
|
|
$
|
10,897
|
|
Interest paid
|
$
|
68,850
|
|
|
$
|
58,125
|
|
|
$
|
58,125
|
|
1.
|
HISTORY
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
•
|
reserve for losses and loss expenses;
|
•
|
reinsurance recoverable on unpaid losses, including the provision for uncollectible amounts;
|
•
|
gross and net premiums written and net premiums earned;
|
•
|
other-than-temporary impairments (“OTTI”) in the carrying value of available-for-sale investment securities; and
|
•
|
fair value measurements for our financial assets and liabilities.
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
a)
|
Investments
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
b)
|
Cash and cash equivalents
|
c)
|
Premiums and Acquisition Costs
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
d)
|
Losses and Loss Expenses
|
e)
|
Reinsurance
|
f)
|
Foreign Exchange
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
g)
|
Share-Based Compensation
|
h)
|
Derivative Instruments
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
i)
|
Goodwill and Intangible Assets
|
j)
|
Income Taxes
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
k)
|
Treasury Shares
|
l)
|
Recently Issued Accounting Standards Not Yet Adopted
|
3.
|
SEGMENT INFORMATION
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2014
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,535,415
|
|
|
$
|
2,176,104
|
|
|
$
|
4,711,519
|
|
|
|
Net premiums written
|
1,779,501
|
|
|
2,127,474
|
|
|
3,906,975
|
|
|
|||
|
Net premiums earned
|
1,830,544
|
|
|
2,040,455
|
|
|
3,870,999
|
|
|
|||
|
Other insurance related income (loss)
|
(11
|
)
|
|
661
|
|
|
650
|
|
|
|||
|
Net losses and loss expenses
|
(1,131,880
|
)
|
|
(1,054,842
|
)
|
|
(2,186,722
|
)
|
|
|||
|
Acquisition costs
|
(278,804
|
)
|
|
(458,393
|
)
|
|
(737,197
|
)
|
|
|||
|
General and administrative expenses
|
(341,214
|
)
|
|
(144,987
|
)
|
|
(486,201
|
)
|
|
|||
|
Underwriting income
|
$
|
78,635
|
|
|
$
|
382,894
|
|
|
461,529
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
|
|
|
|
(135,675
|
)
|
|
|||||
|
Net investment income
|
|
|
|
|
342,766
|
|
|
|||||
|
Net realized investment gains
|
|
|
|
|
132,108
|
|
|
|||||
|
Foreign exchange gains
|
|
|
|
|
104,439
|
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(74,695
|
)
|
|
|||||
|
Income before income taxes
|
|
|
|
|
$
|
830,472
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net loss and loss expense ratio
|
61.8
|
%
|
|
51.7
|
%
|
|
56.5
|
%
|
|
|||
|
Acquisition cost ratio
|
15.2
|
%
|
|
22.5
|
%
|
|
19.0
|
%
|
|
|||
|
General and administrative expense ratio
|
18.7
|
%
|
|
7.1
|
%
|
|
16.1
|
%
|
|
|||
|
Combined ratio
|
95.7
|
%
|
|
81.3
|
%
|
|
91.6
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
88,960
|
|
|
$
|
—
|
|
|
$
|
88,960
|
|
|
|
|
|
|
|
|
|
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2013
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,559,138
|
|
|
$
|
2,137,903
|
|
|
$
|
4,697,041
|
|
|
|
Net premiums written
|
1,813,538
|
|
|
2,114,662
|
|
|
3,928,200
|
|
|
|||
|
Net premiums earned
|
1,722,762
|
|
|
1,984,303
|
|
|
3,707,065
|
|
|
|||
|
Other insurance related income
|
2,436
|
|
|
1,988
|
|
|
4,424
|
|
|
|||
|
Net losses and loss expenses
|
(1,050,402
|
)
|
|
(1,083,793
|
)
|
|
(2,134,195
|
)
|
|
|||
|
Acquisition costs
|
(242,363
|
)
|
|
(421,828
|
)
|
|
(664,191
|
)
|
|
|||
|
General and administrative expenses
|
(347,684
|
)
|
|
(137,450
|
)
|
|
(485,134
|
)
|
|
|||
|
Underwriting income
|
$
|
84,749
|
|
|
$
|
343,220
|
|
|
427,969
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
|
|
|
|
(90,256
|
)
|
|
|||||
|
Net investment income
|
|
|
|
|
409,312
|
|
|
|||||
|
Net realized investment gains
|
|
|
|
|
75,564
|
|
|
|||||
|
Foreign exchange losses
|
|
|
|
|
(26,143
|
)
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(61,979
|
)
|
|
|||||
|
Income before income taxes
|
|
|
|
|
$
|
734,467
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net loss and loss expense ratio
|
61.0
|
%
|
|
54.6
|
%
|
|
57.6
|
%
|
|
|||
|
Acquisition cost ratio
|
14.1
|
%
|
|
21.3
|
%
|
|
17.9
|
%
|
|
|||
|
General and administrative expense ratio
|
20.1
|
%
|
|
6.9
|
%
|
|
15.5
|
%
|
|
|||
|
Combined ratio
|
95.2
|
%
|
|
82.8
|
%
|
|
91.0
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
89,528
|
|
|
$
|
—
|
|
|
$
|
89,528
|
|
|
|
|
|
|
|
|
|
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2012
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,309,481
|
|
|
$
|
1,830,162
|
|
|
$
|
4,139,643
|
|
|
|
Net premiums written
|
1,522,245
|
|
|
1,815,211
|
|
|
3,337,456
|
|
|
|||
|
Net premiums earned
|
1,558,058
|
|
|
1,857,405
|
|
|
3,415,463
|
|
|
|||
|
Other insurance related income
|
2,676
|
|
|
—
|
|
|
2,676
|
|
|
|||
|
Net losses and loss expenses
|
(953,564
|
)
|
|
(1,142,464
|
)
|
|
(2,096,028
|
)
|
|
|||
|
Acquisition costs
|
(226,859
|
)
|
|
(400,794
|
)
|
|
(627,653
|
)
|
|
|||
|
General and administrative expenses
|
(314,834
|
)
|
|
(116,487
|
)
|
|
(431,321
|
)
|
|
|||
|
Underwriting income
|
$
|
65,477
|
|
|
$
|
197,660
|
|
|
263,137
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
|
|
|
|
(129,660
|
)
|
|
|||||
|
Net investment income
|
|
|
|
|
380,957
|
|
|
|||||
|
Net realized investment gains
|
|
|
|
|
127,469
|
|
|
|||||
|
Foreign exchange losses
|
|
|
|
|
(29,512
|
)
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(61,863
|
)
|
|
|||||
|
Income before income taxes
|
|
|
|
|
$
|
550,528
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net loss and loss expense ratio
|
61.2
|
%
|
|
61.5
|
%
|
|
61.4
|
%
|
|
|||
|
Acquisition cost ratio
|
14.6
|
%
|
|
21.6
|
%
|
|
18.4
|
%
|
|
|||
|
General and administrative expense ratio
|
20.2
|
%
|
|
6.3
|
%
|
|
16.4
|
%
|
|
|||
|
Combined ratio
|
96.0
|
%
|
|
89.4
|
%
|
|
96.2
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
97,493
|
|
|
$
|
—
|
|
|
$
|
97,493
|
|
|
|
|
|
|
|
|
|
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Bermuda
|
$
|
618,273
|
|
|
$
|
718,904
|
|
|
$
|
684,588
|
|
|
|
Europe
|
1,784,139
|
|
|
1,699,748
|
|
|
1,561,701
|
|
|
|||
|
United States
|
2,309,107
|
|
|
2,278,389
|
|
|
1,893,354
|
|
|
|||
|
Total gross premium written
|
$
|
4,711,519
|
|
|
$
|
4,697,041
|
|
|
$
|
4,139,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
|
|
|
|
|
|
||||||
|
Property
|
$
|
444,197
|
|
|
$
|
462,364
|
|
|
$
|
408,943
|
|
|
|
Marine
|
178,229
|
|
|
179,057
|
|
|
171,165
|
|
|
|||
|
Terrorism
|
35,876
|
|
|
39,298
|
|
|
38,605
|
|
|
|||
|
Aviation
|
41,192
|
|
|
48,489
|
|
|
60,363
|
|
|
|||
|
Credit and Political Risk
|
63,095
|
|
|
68,192
|
|
|
87,103
|
|
|
|||
|
Professional Lines
|
629,365
|
|
|
586,200
|
|
|
563,500
|
|
|
|||
|
Liability
|
146,819
|
|
|
110,623
|
|
|
86,873
|
|
|
|||
|
Accident and Health
|
291,771
|
|
|
228,539
|
|
|
141,506
|
|
|
|||
|
Total Insurance
|
1,830,544
|
|
|
1,722,762
|
|
|
1,558,058
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Reinsurance
|
|
|
|
|
|
|
||||||
|
Catastrophe
|
325,307
|
|
|
380,199
|
|
|
375,088
|
|
|
|||
|
Property
|
312,443
|
|
|
350,970
|
|
|
351,470
|
|
|
|||
|
Professional Lines
|
336,058
|
|
|
304,754
|
|
|
297,726
|
|
|
|||
|
Credit and Surety
|
263,013
|
|
|
279,943
|
|
|
277,185
|
|
|
|||
|
Motor
|
268,678
|
|
|
221,844
|
|
|
237,006
|
|
|
|||
|
Liability
|
289,223
|
|
|
234,736
|
|
|
220,874
|
|
|
|||
|
Agriculture
|
164,628
|
|
|
126,490
|
|
|
17,116
|
|
|
|||
|
Engineering
|
61,143
|
|
|
66,243
|
|
|
68,402
|
|
|
|||
|
Other
|
19,962
|
|
|
19,124
|
|
|
12,538
|
|
|
|||
|
Total Reinsurance
|
2,040,455
|
|
|
1,984,303
|
|
|
1,857,405
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Total
|
$
|
3,870,999
|
|
|
$
|
3,707,065
|
|
|
$
|
3,415,463
|
|
|
|
|
|
|
|
|
|
|
4.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Goodwill
|
|
Intangible
assets with an
indefinite life
|
|
Intangible
assets with a
finite life
|
|
Total
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net balance at December 31, 2012
|
$
|
49,635
|
|
|
$
|
26,036
|
|
|
$
|
21,822
|
|
|
$
|
97,493
|
|
|
|
Amortization
|
n/a
|
|
|
n/a
|
|
|
(2,233
|
)
|
|
(2,233
|
)
|
|
||||
|
Foreign currency translation adjustment
|
(3,213
|
)
|
|
—
|
|
|
(2,519
|
)
|
|
(5,732
|
)
|
|
||||
|
Net balance at December 31, 2013
|
46,422
|
|
|
26,036
|
|
|
17,070
|
|
|
89,528
|
|
|
||||
|
Amortization
|
n/a
|
|
|
n/a
|
|
|
(1,982
|
)
|
|
(1,982
|
)
|
|
||||
|
Foreign currency translation adjustment
|
726
|
|
|
—
|
|
|
688
|
|
|
1,414
|
|
|
||||
|
Net balance at December 31, 2014
|
$
|
47,148
|
|
|
$
|
26,036
|
|
|
$
|
15,776
|
|
|
$
|
88,960
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross balance at December 31, 2014
|
$
|
42,237
|
|
|
$
|
26,036
|
|
|
$
|
35,596
|
|
|
$
|
103,869
|
|
|
|
Accumulated amortization
|
n/a
|
|
|
n/a
|
|
|
(25,583
|
)
|
|
(25,583
|
)
|
|
||||
|
Foreign currency translation adjustment
|
4,911
|
|
|
—
|
|
|
5,763
|
|
|
10,674
|
|
|
||||
|
Net balance at December 31, 2014
|
$
|
47,148
|
|
|
$
|
26,036
|
|
|
$
|
15,776
|
|
|
$
|
88,960
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS
|
a)
|
Fixed Maturities and Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Amortized
Cost or
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Non-credit
OTTI
in AOCI
(5)
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,645,068
|
|
|
$
|
3,337
|
|
|
$
|
(28,328
|
)
|
|
$
|
1,620,077
|
|
|
$
|
—
|
|
|
|
Non-U.S. government
|
1,080,601
|
|
|
7,383
|
|
|
(54,441
|
)
|
|
1,033,543
|
|
|
—
|
|
|
|||||
|
Corporate debt
|
4,386,432
|
|
|
40,972
|
|
|
(66,280
|
)
|
|
4,361,124
|
|
|
—
|
|
|
|||||
|
Agency RMBS
(1)
|
2,241,581
|
|
|
40,762
|
|
|
(4,235
|
)
|
|
2,278,108
|
|
|
—
|
|
|
|||||
|
CMBS
(2)
|
1,085,618
|
|
|
13,289
|
|
|
(2,019
|
)
|
|
1,096,888
|
|
|
—
|
|
|
|||||
|
Non-Agency RMBS
|
71,236
|
|
|
2,765
|
|
|
(915
|
)
|
|
73,086
|
|
|
(889
|
)
|
|
|||||
|
ABS
(3)
|
1,475,026
|
|
|
2,748
|
|
|
(16,188
|
)
|
|
1,461,586
|
|
|
—
|
|
|
|||||
|
Municipals
(4)
|
200,411
|
|
|
5,282
|
|
|
(832
|
)
|
|
204,861
|
|
|
—
|
|
|
|||||
|
Total fixed maturities
|
$
|
12,185,973
|
|
|
$
|
116,538
|
|
|
$
|
(173,238
|
)
|
|
$
|
12,129,273
|
|
|
$
|
(889
|
)
|
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||
|
Exchange-traded funds
|
416,063
|
|
|
43,583
|
|
|
(4,756
|
)
|
|
454,890
|
|
|
|
|
||||||
|
Non-U.S. bond mutual funds
|
115,585
|
|
|
—
|
|
|
(2,768
|
)
|
|
112,817
|
|
|
|
|
||||||
|
Total equity securities
|
$
|
531,648
|
|
|
$
|
43,583
|
|
|
$
|
(7,524
|
)
|
|
$
|
567,707
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,421,245
|
|
|
$
|
1,405
|
|
|
$
|
(33,952
|
)
|
|
$
|
1,388,698
|
|
|
$
|
—
|
|
|
|
Non-U.S. government
|
1,208,384
|
|
|
17,990
|
|
|
(49,992
|
)
|
|
1,176,382
|
|
|
—
|
|
|
|||||
|
Corporate debt
|
3,533,585
|
|
|
84,881
|
|
|
(10,228
|
)
|
|
3,608,238
|
|
|
—
|
|
|
|||||
|
Agency RMBS
(1)
|
2,485,139
|
|
|
21,979
|
|
|
(58,291
|
)
|
|
2,448,827
|
|
|
—
|
|
|
|||||
|
CMBS
(2)
|
790,095
|
|
|
11,285
|
|
|
(3,966
|
)
|
|
797,414
|
|
|
—
|
|
|
|||||
|
Non-Agency RMBS
|
65,590
|
|
|
2,375
|
|
|
(398
|
)
|
|
67,567
|
|
|
(868
|
)
|
|
|||||
|
ABS
(3)
|
955,274
|
|
|
6,871
|
|
|
(8,694
|
)
|
|
953,451
|
|
|
—
|
|
|
|||||
|
Municipals
(4)
|
1,527,834
|
|
|
32,432
|
|
|
(14,516
|
)
|
|
1,545,750
|
|
|
—
|
|
|
|||||
|
Total fixed maturities
|
$
|
11,987,146
|
|
|
$
|
179,218
|
|
|
$
|
(180,037
|
)
|
|
$
|
11,986,327
|
|
|
$
|
(868
|
)
|
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
345,759
|
|
|
98,742
|
|
|
(6,183
|
)
|
|
438,318
|
|
|
|
|
||||||
|
Exchange-traded funds
|
106,762
|
|
|
32,085
|
|
|
—
|
|
|
138,847
|
|
|
|
|
||||||
|
Non-U.S. bond mutual funds
|
113,698
|
|
|
11,124
|
|
|
—
|
|
|
124,822
|
|
|
|
|
||||||
|
Total equity securities
|
$
|
566,219
|
|
|
$
|
141,951
|
|
|
$
|
(6,183
|
)
|
|
$
|
701,987
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Residential mortgage-backed securities (RMBS) originated by U.S. agencies.
|
(2)
|
Commercial mortgage-backed securities (CMBS).
|
(3)
|
Asset-backed securities (ABS) include debt tranched securities collateralized primarily by auto loans, student loans, credit cards, and other asset types. This asset class also includes collateralized loan obligations (CLOs) and collateralized debt obligations (CDOs).
|
(4)
|
Municipals include bonds issued by states, municipalities and political subdivisions.
|
(5)
|
Represents the non-credit component of the other-than-temporary impairment (OTTI) losses, adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date.
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|||||
|
|
Amortized
Cost
|
|
Fair
Value
|
|
% of Total
Fair Value
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
At December 31, 2014
|
|
|
|
|
|
|
|||||
|
Maturity
|
|
|
|
|
|
|
|||||
|
Due in one year or less
|
$
|
424,077
|
|
|
$
|
423,265
|
|
|
3.5
|
%
|
|
|
Due after one year through five years
|
4,925,780
|
|
|
4,892,411
|
|
|
40.3
|
%
|
|
||
|
Due after five years through ten years
|
1,755,248
|
|
|
1,695,641
|
|
|
14.0
|
%
|
|
||
|
Due after ten years
|
207,407
|
|
|
208,288
|
|
|
1.7
|
%
|
|
||
|
|
7,312,512
|
|
|
7,219,605
|
|
|
59.5
|
%
|
|
||
|
Agency RMBS
|
2,241,581
|
|
|
2,278,108
|
|
|
18.8
|
%
|
|
||
|
CMBS
|
1,085,618
|
|
|
1,096,888
|
|
|
9.0
|
%
|
|
||
|
Non-Agency RMBS
|
71,236
|
|
|
73,086
|
|
|
0.6
|
%
|
|
||
|
ABS
|
1,475,026
|
|
|
1,461,586
|
|
|
12.1
|
%
|
|
||
|
Total
|
$
|
12,185,973
|
|
|
$
|
12,129,273
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||
|
At December 31, 2013
|
|
|
|
|
|
|
|||||
|
Maturity
|
|
|
|
|
|
|
|||||
|
Due in one year or less
|
$
|
710,079
|
|
|
$
|
717,052
|
|
|
5.9
|
%
|
|
|
Due after one year through five years
|
5,030,728
|
|
|
5,116,060
|
|
|
42.7
|
%
|
|
||
|
Due after five years through ten years
|
1,852,877
|
|
|
1,791,835
|
|
|
14.9
|
%
|
|
||
|
Due after ten years
|
97,364
|
|
|
94,121
|
|
|
0.8
|
%
|
|
||
|
|
7,691,048
|
|
|
7,719,068
|
|
|
64.3
|
%
|
|
||
|
Agency RMBS
|
2,485,139
|
|
|
2,448,827
|
|
|
20.4
|
%
|
|
||
|
CMBS
|
790,095
|
|
|
797,414
|
|
|
6.7
|
%
|
|
||
|
Non-Agency RMBS
|
65,590
|
|
|
67,567
|
|
|
0.6
|
%
|
|
||
|
ABS
|
955,274
|
|
|
953,451
|
|
|
8.0
|
%
|
|
||
|
Total
|
$
|
11,987,146
|
|
|
$
|
11,986,327
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
12 months or greater
|
|
Less than 12 months
|
|
Total
|
|
||||||||||||||||||
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. government and agency
|
$
|
388,551
|
|
|
$
|
(24,319
|
)
|
|
$
|
786,850
|
|
|
$
|
(4,009
|
)
|
|
$
|
1,175,401
|
|
|
$
|
(28,328
|
)
|
|
|
Non-U.S. government
|
143,602
|
|
|
(29,171
|
)
|
|
435,670
|
|
|
(25,270
|
)
|
|
579,272
|
|
|
(54,441
|
)
|
|
||||||
|
Corporate debt
|
26,708
|
|
|
(2,221
|
)
|
|
2,199,672
|
|
|
(64,059
|
)
|
|
2,226,380
|
|
|
(66,280
|
)
|
|
||||||
|
Agency RMBS
|
259,914
|
|
|
(3,084
|
)
|
|
333,288
|
|
|
(1,151
|
)
|
|
593,202
|
|
|
(4,235
|
)
|
|
||||||
|
CMBS
|
68,624
|
|
|
(925
|
)
|
|
256,225
|
|
|
(1,094
|
)
|
|
324,849
|
|
|
(2,019
|
)
|
|
||||||
|
Non-Agency RMBS
|
6,689
|
|
|
(613
|
)
|
|
13,442
|
|
|
(302
|
)
|
|
20,131
|
|
|
(915
|
)
|
|
||||||
|
ABS
|
425,663
|
|
|
(10,325
|
)
|
|
750,679
|
|
|
(5,863
|
)
|
|
1,176,342
|
|
|
(16,188
|
)
|
|
||||||
|
Municipals
|
34,462
|
|
|
(644
|
)
|
|
25,284
|
|
|
(188
|
)
|
|
59,746
|
|
|
(832
|
)
|
|
||||||
|
Total fixed maturities
|
$
|
1,354,213
|
|
|
$
|
(71,302
|
)
|
|
$
|
4,801,110
|
|
|
$
|
(101,936
|
)
|
|
$
|
6,155,323
|
|
|
$
|
(173,238
|
)
|
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Common stocks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Exchange-traded funds
|
—
|
|
|
—
|
|
|
91,275
|
|
|
(4,756
|
)
|
|
91,275
|
|
|
(4,756
|
)
|
|
||||||
|
Non-U.S. bond mutual funds
|
—
|
|
|
—
|
|
|
112,817
|
|
|
(2,768
|
)
|
|
112,817
|
|
|
(2,768
|
)
|
|
||||||
|
Total equity securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
204,092
|
|
|
$
|
(7,524
|
)
|
|
$
|
204,092
|
|
|
$
|
(7,524
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. government and agency
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
982,307
|
|
|
$
|
(33,952
|
)
|
|
$
|
982,307
|
|
|
$
|
(33,952
|
)
|
|
|
Non-U.S. government
|
35,577
|
|
|
(3,430
|
)
|
|
420,622
|
|
|
(46,562
|
)
|
|
456,199
|
|
|
(49,992
|
)
|
|
||||||
|
Corporate debt
|
27,696
|
|
|
(802
|
)
|
|
606,592
|
|
|
(9,426
|
)
|
|
634,288
|
|
|
(10,228
|
)
|
|
||||||
|
Agency RMBS
|
144,468
|
|
|
(5,247
|
)
|
|
1,478,527
|
|
|
(53,044
|
)
|
|
1,622,995
|
|
|
(58,291
|
)
|
|
||||||
|
CMBS
|
13,319
|
|
|
(116
|
)
|
|
298,863
|
|
|
(3,850
|
)
|
|
312,182
|
|
|
(3,966
|
)
|
|
||||||
|
Non-Agency RMBS
|
4,287
|
|
|
(315
|
)
|
|
5,319
|
|
|
(83
|
)
|
|
9,606
|
|
|
(398
|
)
|
|
||||||
|
ABS
|
37,765
|
|
|
(2,941
|
)
|
|
553,803
|
|
|
(5,753
|
)
|
|
591,568
|
|
|
(8,694
|
)
|
|
||||||
|
Municipals
|
8,408
|
|
|
(615
|
)
|
|
543,474
|
|
|
(13,901
|
)
|
|
551,882
|
|
|
(14,516
|
)
|
|
||||||
|
Total fixed maturities
|
$
|
271,520
|
|
|
$
|
(13,466
|
)
|
|
$
|
4,889,507
|
|
|
$
|
(166,571
|
)
|
|
$
|
5,161,027
|
|
|
$
|
(180,037
|
)
|
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Common stocks
|
$
|
3,499
|
|
|
$
|
(398
|
)
|
|
$
|
48,828
|
|
|
$
|
(5,785
|
)
|
|
$
|
52,327
|
|
|
$
|
(6,183
|
)
|
|
|
Exchange-traded funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Non-U.S. bond mutual funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Total equity securities
|
$
|
3,499
|
|
|
$
|
(398
|
)
|
|
$
|
48,828
|
|
|
$
|
(5,785
|
)
|
|
$
|
52,327
|
|
|
$
|
(6,183
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
b)
|
Other Investments
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Fair Value
|
|
Redemption Frequency
(if currently eligible)
|
|
Redemption
Notice Period
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
|||
|
Long/short equity funds
|
$
|
298,907
|
|
|
31
|
%
|
|
Quarterly, Semi-annually
|
|
30-60 days
|
|
|
Multi-strategy funds
|
324,020
|
|
|
34
|
%
|
|
Quarterly, Semi-annually
|
|
60-95 days
|
|
|
|
Event-driven funds
|
185,899
|
|
|
19
|
%
|
|
Quarterly, Annually
|
|
45-60 days
|
|
|
|
Leveraged bank loan funds
|
9,713
|
|
|
1
|
%
|
|
Quarterly
|
|
65 days
|
|
|
|
Direct lending funds
|
54,438
|
|
|
6
|
%
|
|
n/a
|
|
n/a
|
|
|
|
CLO - Equities
|
92,488
|
|
|
9
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Total other investments
|
$
|
965,465
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|||
|
Long/short equity funds
|
$
|
425,444
|
|
|
41
|
%
|
|
Monthly, Quarterly, Semi-annually
|
|
30-60 days
|
|
|
Multi-strategy funds
|
285,155
|
|
|
27
|
%
|
|
Quarterly, Semi-annually
|
|
60-95 days
|
|
|
|
Event-driven funds
|
190,458
|
|
|
18
|
%
|
|
Quarterly, Annually
|
|
45-60 days
|
|
|
|
Leveraged bank loan funds
|
48,753
|
|
|
5
|
%
|
|
Quarterly
|
|
65 days
|
|
|
|
Direct lending funds
|
22,134
|
|
|
2
|
%
|
|
n/a
|
|
n/a
|
|
|
|
CLO - Equities
|
73,866
|
|
|
7
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Total other investments
|
$
|
1,045,810
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
•
|
Long/short equity funds
: Seek to achieve attractive returns primarily by executing an equity trading strategy involving both long and short investments in publicly-traded equities.
|
•
|
Multi-strategy funds
: Seek to achieve above-market returns by pursuing multiple investment strategies to diversify risks and reduce volatility. This category includes funds of hedge funds which invest in a large pool of hedge funds across a diversified range of hedge fund strategies.
|
•
|
Event-driven funds
: Seek to achieve attractive returns by exploiting situations where announced or anticipated events create opportunities.
|
•
|
Leveraged bank loan funds
: Seek to achieve attractive returns by investing primarily in bank loan collateral that has limited interest rate risk exposure.
|
•
|
Direct lending funds
: Seek to achieve attractive risk-adjusted returns, including current income generation, by investing in funds which provide financing directly to borrowers.
|
5.
|
INVESTMENTS (CONTINUED)
|
c)
|
Net Investment Income
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
$
|
296,663
|
|
|
$
|
293,609
|
|
|
$
|
304,400
|
|
|
|
Other investments
|
57,621
|
|
|
128,814
|
|
|
87,660
|
|
|
|||
|
Equity securities
|
11,832
|
|
|
10,897
|
|
|
11,904
|
|
|
|||
|
Cash and cash equivalents
|
11,536
|
|
|
6,337
|
|
|
4,528
|
|
|
|||
|
Short-term investments
|
725
|
|
|
1,181
|
|
|
596
|
|
|
|||
|
Gross investment income
|
378,377
|
|
|
440,838
|
|
|
409,088
|
|
|
|||
|
Investment expenses
|
(35,611
|
)
|
|
(31,526
|
)
|
|
(28,131
|
)
|
|
|||
|
Net investment income
|
$
|
342,766
|
|
|
$
|
409,312
|
|
|
$
|
380,957
|
|
|
|
|
|
|
|
|
|
|
d)
|
Net Realized Investment Gains
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross realized gains
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
(1)
|
$
|
126,023
|
|
|
$
|
120,932
|
|
|
$
|
242,082
|
|
|
|
Equities
|
149,783
|
|
|
54,564
|
|
|
36,411
|
|
|
|||
|
Gross realized gains
|
275,806
|
|
|
175,496
|
|
|
278,493
|
|
|
|||
|
Gross realized losses
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
(86,943
|
)
|
|
(87,894
|
)
|
|
(101,844
|
)
|
|
|||
|
Equities
|
(15,925
|
)
|
|
(10,407
|
)
|
|
(23,530
|
)
|
|
|||
|
Gross realized losses
|
(102,868
|
)
|
|
(98,301
|
)
|
|
(125,374
|
)
|
|
|||
|
Net OTTI recognized in earnings
|
(31,227
|
)
|
|
(9,362
|
)
|
|
(24,234
|
)
|
|
|||
|
Change in fair value of investment derivatives
(2)
|
(9,603
|
)
|
|
7,731
|
|
|
(9,170
|
)
|
|
|||
|
Fair value hedges
(2)
|
—
|
|
|
—
|
|
|
7,754
|
|
|
|||
|
Net realized investment gains
|
$
|
132,108
|
|
|
$
|
75,564
|
|
|
$
|
127,469
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
$37 million
of gains in 2012 relating to previously unrealized foreign exchange currency amounts on the hedged fixed maturity portfolios. The hedged portfolio was sold and all associated foreign exchange contracts were fully settled during 2012 so there is no impact on the 2013 or 2014 figures.
|
(2)
|
Refer to Note 7 – Derivative Instruments
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
||||||
|
Non-U.S. government
|
$
|
17,291
|
|
|
$
|
120
|
|
|
$
|
3,281
|
|
|
|
Corporate debt
|
8,107
|
|
|
5,802
|
|
|
1,821
|
|
|
|||
|
Non-Agency RMBS
|
7
|
|
|
57
|
|
|
2,016
|
|
|
|||
|
ABS
|
61
|
|
|
129
|
|
|
795
|
|
|
|||
|
Municipals
|
418
|
|
|
639
|
|
|
—
|
|
|
|||
|
|
25,884
|
|
|
6,747
|
|
|
7,913
|
|
|
|||
|
Equity Securities
|
|
|
|
|
|
|
||||||
|
Common stocks
|
741
|
|
|
2,092
|
|
|
7,318
|
|
|
|||
|
Exchange-traded funds
|
4,602
|
|
|
523
|
|
|
9,003
|
|
|
|||
|
|
5,343
|
|
|
2,615
|
|
|
16,321
|
|
|
|||
|
Total OTTI recognized in earnings
|
$
|
31,227
|
|
|
$
|
9,362
|
|
|
$
|
24,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
||||
|
Balance at beginning of period
|
$
|
1,594
|
|
|
$
|
1,809
|
|
|
|
Credit impairments recognized on securities not previously impaired
|
—
|
|
|
—
|
|
|
||
|
Additional credit impairments recognized on securities previously impaired
|
—
|
|
|
—
|
|
|
||
|
Change in timing of future cash flows on securities previously impaired
|
—
|
|
|
—
|
|
|
||
|
Intent to sell of securities previously impaired
|
—
|
|
|
—
|
|
|
||
|
Securities sold/redeemed/matured
|
(63
|
)
|
|
(215
|
)
|
|
||
|
Balance at end of period
|
$
|
1,531
|
|
|
$
|
1,594
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
5.
|
INVESTMENTS (CONTINUED)
|
e)
|
Restricted Investments
|
|
|
|
|
|
|
|
||||
|
At December 31,
|
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
|
||||
|
Collateral in Trust for inter-company agreements
|
|
$
|
2,792,461
|
|
|
$
|
2,261,081
|
|
|
|
Collateral for secured letter of credit facility
|
|
468,923
|
|
|
777,828
|
|
|
||
|
Collateral in Trust for third party agreements
(1)
|
|
567,060
|
|
|
276,839
|
|
|
||
|
Securities on deposit with regulatory authorities
|
|
58,476
|
|
|
58,327
|
|
|
||
|
Total restricted investments
|
|
$
|
3,886,920
|
|
|
$
|
3,374,075
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
$245 million
of fixed income securities deposited directly with Lloyd's to support the underwriting capacity of the Company's Lloyd's Syndicate, AXIS Syndicate 1686.
|
f)
|
Reverse Repurchase Agreements
|
6.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access.
|
•
|
Level 2 - Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
|
•
|
Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The unobservable inputs reflect our own judgments about assumptions that market participants might use.
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total Fair
Value
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
1,497,922
|
|
|
$
|
122,155
|
|
|
$
|
—
|
|
|
$
|
1,620,077
|
|
|
|
Non-U.S. government
|
—
|
|
|
1,033,543
|
|
|
—
|
|
|
1,033,543
|
|
|
||||
|
Corporate debt
|
—
|
|
|
4,345,287
|
|
|
15,837
|
|
|
4,361,124
|
|
|
||||
|
Agency RMBS
|
—
|
|
|
2,278,108
|
|
|
—
|
|
|
2,278,108
|
|
|
||||
|
CMBS
|
—
|
|
|
1,079,125
|
|
|
17,763
|
|
|
1,096,888
|
|
|
||||
|
Non-Agency RMBS
|
—
|
|
|
73,086
|
|
|
—
|
|
|
73,086
|
|
|
||||
|
ABS
|
—
|
|
|
1,421,555
|
|
|
40,031
|
|
|
1,461,586
|
|
|
||||
|
Municipals
|
—
|
|
|
204,861
|
|
|
—
|
|
|
204,861
|
|
|
||||
|
|
1,497,922
|
|
|
10,557,720
|
|
|
73,631
|
|
|
12,129,273
|
|
|
||||
|
Equity securities
|
|
|
|
|
|
|
|
|
||||||||
|
Common stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
|
Exchange-traded funds
|
454,890
|
|
|
—
|
|
|
—
|
|
|
454,890
|
|
|
||||
|
Non-U.S. bond mutual funds
|
—
|
|
|
112,817
|
|
|
—
|
|
|
112,817
|
|
|
||||
|
|
454,890
|
|
|
112,817
|
|
|
—
|
|
|
567,707
|
|
|
||||
|
Other investments
|
|
|
|
|
|
|
|
|
||||||||
|
Hedge funds
|
—
|
|
|
347,621
|
|
|
470,918
|
|
|
818,539
|
|
|
||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
54,438
|
|
|
54,438
|
|
|
||||
|
CLO-Equities
|
—
|
|
|
—
|
|
|
92,488
|
|
|
92,488
|
|
|
||||
|
|
—
|
|
|
347,621
|
|
|
617,844
|
|
|
965,465
|
|
|
||||
|
Short-term investments
|
—
|
|
|
107,534
|
|
|
—
|
|
|
107,534
|
|
|
||||
|
Derivative instruments (see Note 7)
|
—
|
|
|
7,153
|
|
|
111
|
|
|
7,264
|
|
|
||||
|
Total Assets
|
$
|
1,952,812
|
|
|
$
|
11,132,845
|
|
|
$
|
691,586
|
|
|
$
|
13,777,243
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
|
Derivative instruments (see Note 7)
|
$
|
—
|
|
|
$
|
3,041
|
|
|
$
|
15,288
|
|
|
$
|
18,329
|
|
|
|
Cash settled awards (see Note 16)
|
—
|
|
|
20,518
|
|
|
—
|
|
|
20,518
|
|
|
||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
23,559
|
|
|
$
|
15,288
|
|
|
$
|
38,847
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
|
Assets
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
1,119,632
|
|
|
$
|
269,066
|
|
|
$
|
—
|
|
|
$
|
1,388,698
|
|
|
|
Non-U.S. government
|
—
|
|
|
1,176,382
|
|
|
—
|
|
|
1,176,382
|
|
|
||||
|
Corporate debt
|
—
|
|
|
3,608,238
|
|
|
—
|
|
|
3,608,238
|
|
|
||||
|
Agency RMBS
|
—
|
|
|
2,448,827
|
|
|
—
|
|
|
2,448,827
|
|
|
||||
|
CMBS
|
—
|
|
|
793,396
|
|
|
4,018
|
|
|
797,414
|
|
|
||||
|
Non-Agency RMBS
|
—
|
|
|
67,567
|
|
|
—
|
|
|
67,567
|
|
|
||||
|
ABS
|
—
|
|
|
922,652
|
|
|
30,799
|
|
|
953,451
|
|
|
||||
|
Municipals
|
—
|
|
|
1,545,750
|
|
|
—
|
|
|
1,545,750
|
|
|
||||
|
|
1,119,632
|
|
|
10,831,878
|
|
|
34,817
|
|
|
11,986,327
|
|
|
||||
|
Equity securities
|
|
|
|
|
|
|
|
|
||||||||
|
Common stocks
|
438,318
|
|
|
—
|
|
|
—
|
|
|
438,318
|
|
|
||||
|
Exchange-traded funds
|
138,847
|
|
|
—
|
|
|
—
|
|
|
138,847
|
|
|
||||
|
Non-U.S. bond mutual funds
|
—
|
|
|
124,822
|
|
|
—
|
|
|
124,822
|
|
|
||||
|
|
577,165
|
|
|
124,822
|
|
|
—
|
|
|
701,987
|
|
|
||||
|
Other investments
|
|
|
|
|
|
|
|
|
||||||||
|
Hedge funds
|
—
|
|
|
488,755
|
|
|
461,055
|
|
|
949,810
|
|
|
||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
22,134
|
|
|
22,134
|
|
|
||||
|
CLO-Equities
|
—
|
|
|
—
|
|
|
73,866
|
|
|
73,866
|
|
|
||||
|
|
—
|
|
|
488,755
|
|
|
557,055
|
|
|
1,045,810
|
|
|
||||
|
Short-term investments
|
—
|
|
|
46,212
|
|
|
—
|
|
|
46,212
|
|
|
||||
|
Derivative instruments (see Note 7)
|
—
|
|
|
6,824
|
|
|
984
|
|
|
7,808
|
|
|
||||
|
Total Assets
|
$
|
1,696,797
|
|
|
$
|
11,498,491
|
|
|
$
|
592,856
|
|
|
$
|
13,788,144
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
|
Derivative instruments (see Note 7)
|
$
|
—
|
|
|
$
|
1,152
|
|
|
$
|
815
|
|
|
$
|
1,967
|
|
|
|
Cash settled awards (see Note 16)
|
—
|
|
|
8,693
|
|
|
—
|
|
|
8,693
|
|
|
||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
9,845
|
|
|
$
|
815
|
|
|
$
|
10,660
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
||
|
|
Fair Value
|
Valuation Technique
|
Unobservable Input
|
Range
|
Weighted
Average
|
|
||
|
|
|
|
|
|
|
|
||
|
Other investments - CLO Equities
|
$
|
37,046
|
|
Discounted cash flow
|
Default rates
|
4.0% - 5.0%
|
4.3%
|
|
|
|
|
|
Loss severity rate
|
53.5%
|
53.5%
|
|
||
|
|
|
|
Collateral spreads
|
3.0% - 3.5%
|
3.3%
|
|
||
|
|
|
|
Estimated maturity dates
|
3.1 - 4.2 years
|
3.8 years
|
|
||
|
|
|
|
|
|
|
|
||
|
Derivatives - Weather derivatives, net
|
$
|
(15,177
|
)
|
Simulation model
|
Weather curve
|
32 - 3,370
(1)
|
n/a
(2)
|
|
|
|
|
|
Weather standard deviation
|
3 - 250
(1)
|
n/a
(2)
|
|
||
|
|
|
|
|
|
|
|
(2)
|
Due to the diversity of the portfolio, the range of unobservable inputs is widespread; therefore, presentation of a weighted average is not useful. Weather parameters may include various temperature and/or precipitation measures that will naturally vary by geographic location of each counterparty's operations.
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
•
|
Observable inputs: market prices for similar instruments, notional, option strike, term to expiry, contractual limits;
|
•
|
Unobservable inputs: correlation; and
|
•
|
Both observable and unobservable inputs: weather curves, weather standard deviation.
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
Opening
Balance
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
Included in
earnings
(1)
|
|
Included
in OCI
(2)
|
|
Purchases
|
|
Sales
|
|
Settlements/
Distributions
|
|
Closing
Balance
|
|
Change in
unrealized
investment
gain/loss
(3)
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(95
|
)
|
|
$
|
15,957
|
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
|
$
|
15,837
|
|
|
$
|
—
|
|
|
|
Non-Agency RMBS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||||
|
CMBS
|
4,018
|
|
|
9,447
|
|
|
—
|
|
|
—
|
|
|
1,381
|
|
|
5,027
|
|
|
—
|
|
|
(2,110
|
)
|
|
17,763
|
|
|
—
|
|
|
||||||||||
|
ABS
|
30,799
|
|
|
1,125
|
|
|
(6,165
|
)
|
|
—
|
|
|
2,350
|
|
|
39,800
|
|
|
—
|
|
|
(27,878
|
)
|
|
40,031
|
|
|
—
|
|
|
||||||||||
|
|
34,817
|
|
|
10,572
|
|
|
(6,165
|
)
|
|
—
|
|
|
3,636
|
|
|
60,784
|
|
|
—
|
|
|
(30,013
|
)
|
|
73,631
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Hedge funds
|
461,055
|
|
|
12,355
|
|
|
(32,255
|
)
|
|
24,790
|
|
|
—
|
|
|
19,500
|
|
|
—
|
|
|
(14,527
|
)
|
|
470,918
|
|
|
24,651
|
|
|
||||||||||
|
Direct lending funds
|
22,134
|
|
|
—
|
|
|
—
|
|
|
3,515
|
|
|
—
|
|
|
30,101
|
|
|
—
|
|
|
(1,312
|
)
|
|
54,438
|
|
|
3,515
|
|
|
||||||||||
|
CLO-Equities
|
73,866
|
|
|
—
|
|
|
—
|
|
|
20,173
|
|
|
—
|
|
|
25,941
|
|
|
—
|
|
|
(27,492
|
)
|
|
92,488
|
|
|
20,173
|
|
|
||||||||||
|
|
557,055
|
|
|
12,355
|
|
|
(32,255
|
)
|
|
48,478
|
|
|
—
|
|
|
75,542
|
|
|
—
|
|
|
(43,331
|
)
|
|
617,844
|
|
|
48,339
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
984
|
|
|
—
|
|
|
—
|
|
|
5,112
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,985
|
)
|
|
111
|
|
|
101
|
|
|
||||||||||
|
|
984
|
|
|
—
|
|
|
—
|
|
|
5,112
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,985
|
)
|
|
111
|
|
|
101
|
|
|
||||||||||
|
Total assets
|
$
|
592,856
|
|
|
$
|
22,927
|
|
|
$
|
(38,420
|
)
|
|
$
|
53,590
|
|
|
$
|
3,636
|
|
|
$
|
136,326
|
|
|
$
|
—
|
|
|
$
|
(79,329
|
)
|
|
$
|
691,586
|
|
|
$
|
48,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
815
|
|
|
—
|
|
|
—
|
|
|
10,604
|
|
|
—
|
|
|
12,715
|
|
|
—
|
|
|
(8,846
|
)
|
|
15,288
|
|
|
6,621
|
|
|
||||||||||
|
Total liabilities
|
$
|
815
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,604
|
|
|
$
|
—
|
|
|
$
|
12,715
|
|
|
$
|
—
|
|
|
$
|
(8,846
|
)
|
|
$
|
15,288
|
|
|
$
|
6,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Year ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
1,550
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,550
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,100
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Non-Agency RMBS
|
1,110
|
|
|
—
|
|
|
(1,222
|
)
|
|
—
|
|
|
135
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
CMBS
|
4,296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(278
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,018
|
|
|
—
|
|
|
||||||||||
|
ABS
|
63,975
|
|
|
—
|
|
|
—
|
|
|
(111
|
)
|
|
1,794
|
|
|
—
|
|
|
—
|
|
|
(34,859
|
)
|
|
30,799
|
|
|
—
|
|
|
||||||||||
|
|
70,931
|
|
|
—
|
|
|
(1,222
|
)
|
|
1,439
|
|
|
1,651
|
|
|
—
|
|
|
—
|
|
|
(37,982
|
)
|
|
34,817
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Hedge funds
|
359,996
|
|
|
—
|
|
|
—
|
|
|
58,293
|
|
|
—
|
|
|
86,138
|
|
|
—
|
|
|
(43,372
|
)
|
|
461,055
|
|
|
58,293
|
|
|
||||||||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
—
|
|
|
(125
|
)
|
|
—
|
|
|
22,317
|
|
|
—
|
|
|
(58
|
)
|
|
22,134
|
|
|
(125
|
)
|
|
||||||||||
|
CLO-Equities
|
62,435
|
|
|
—
|
|
|
—
|
|
|
27,898
|
|
|
—
|
|
|
34,016
|
|
|
—
|
|
|
(50,483
|
)
|
|
73,866
|
|
|
27,898
|
|
|
||||||||||
|
|
422,431
|
|
|
—
|
|
|
—
|
|
|
86,066
|
|
|
—
|
|
|
142,471
|
|
|
—
|
|
|
(93,913
|
)
|
|
557,055
|
|
|
86,066
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
2,084
|
|
|
—
|
|
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|
984
|
|
|
2,084
|
|
|
||||||||||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,084
|
|
|
—
|
|
|
(1,100
|
)
|
|
—
|
|
|
—
|
|
|
984
|
|
|
2,084
|
|
|
||||||||||
|
Total assets
|
$
|
493,362
|
|
|
$
|
—
|
|
|
$
|
(1,222
|
)
|
|
$
|
89,589
|
|
|
$
|
1,651
|
|
|
$
|
141,371
|
|
|
$
|
—
|
|
|
$
|
(131,895
|
)
|
|
$
|
592,856
|
|
|
$
|
88,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|
—
|
|
|
717
|
|
|
—
|
|
|
—
|
|
|
815
|
|
|
98
|
|
|
||||||||||
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98
|
|
|
$
|
—
|
|
|
$
|
717
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
815
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Gains and losses included in earnings on fixed maturities are included in net realized investment gains (losses). Gains and (losses) included in earnings on other investments are included in net investment income. Gains (losses) on weather derivatives included in earnings are included in other insurance-related income.
|
(2)
|
Gains and losses included in other comprehensive income (“OCI”) on fixed maturities are included in unrealized gains (losses) arising during the period.
|
(3)
|
Change in unrealized investment gain/(loss) relating to assets held at the reporting date.
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
7.
|
DERIVATIVE INSTRUMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
At December 31, 2014
|
|
At December 31, 2013
|
|
||||||||||||||||||||
|
|
Derivative
Notional
Amount
|
|
Asset
Derivative
Fair
Value
(1)
|
|
Liability
Derivative
Fair
Value
(1)
|
|
Derivative
Notional
Amount
|
|
Asset
Derivative
Fair
Value
(1)
|
|
Liability
Derivative
Fair
Value
(1)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
$
|
161,678
|
|
|
$
|
3,925
|
|
|
$
|
12
|
|
|
$
|
254,023
|
|
|
$
|
1,214
|
|
|
$
|
1,032
|
|
|
|
Interest rate swaps
|
140,000
|
|
|
—
|
|
|
248
|
|
|
281,250
|
|
|
873
|
|
|
—
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
577,836
|
|
|
3,228
|
|
|
2,781
|
|
|
390,663
|
|
|
4,737
|
|
|
120
|
|
|
||||||
|
Weather-related contracts
|
58,124
|
|
|
111
|
|
|
15,288
|
|
|
24,451
|
|
|
984
|
|
|
815
|
|
|
||||||
|
Total derivatives
|
|
|
$
|
7,264
|
|
|
$
|
18,329
|
|
|
|
|
$
|
7,808
|
|
|
$
|
1,967
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Asset and liability derivatives are classified within other assets and other liabilities on the Consolidated Balance Sheets.
|
|
|
December 31, 2014
|
|
December 31, 2013
|
|
||||||||||||||||
|
|
Gross Amounts
|
Gross Amounts Offset
|
Net
Amounts
(1)
|
|
Gross Amounts
|
Gross Amounts Offset
|
Net
Amounts
(1)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative assets
|
$
|
15,125
|
|
$
|
(7,861
|
)
|
$
|
7,264
|
|
|
$
|
9,796
|
|
$
|
(1,988
|
)
|
$
|
7,808
|
|
|
|
Derivative liabilities
|
$
|
26,190
|
|
$
|
(7,861
|
)
|
$
|
18,329
|
|
|
$
|
3,955
|
|
$
|
(1,988
|
)
|
$
|
1,967
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net asset and liability derivatives are classified within other assets and other liabilities on the Consolidated Balance Sheets.
|
7.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange forward contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,853
|
|
|
|
Hedged investment portfolio
|
—
|
|
|
—
|
|
|
(3,099
|
)
|
|
|||
|
Hedge ineffectiveness recognized in earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,754
|
|
|
|
|
|
|
|
|
|
|
7.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Location of Gain (Loss) Recognized
in Income on Derivative
|
Amount of Gain (Loss) Recognized in
Income on Derivative
|
|
||||||||||
|
|
|
||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange forward contracts
|
Net realized investment gains
|
$
|
10,333
|
|
|
$
|
10,843
|
|
|
$
|
(9,170
|
)
|
|
|
Interest rate swaps
|
Net realized investment gains
|
(19,936
|
)
|
|
(3,112
|
)
|
|
—
|
|
|
|||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange forward contracts
|
Foreign exchange gains (losses)
|
(10,363
|
)
|
|
1,690
|
|
|
26,612
|
|
|
|||
|
Weather-related contracts
|
Other insurance related income
|
(5,373
|
)
|
|
1,987
|
|
|
—
|
|
|
|||
|
Commodity contracts
|
Other insurance related income
|
8,328
|
|
|
—
|
|
|
—
|
|
|
|||
|
Total
|
|
$
|
(17,011
|
)
|
|
$
|
11,408
|
|
|
$
|
17,442
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES
|
|
|
|
|
|
|
||||
|
As of December 31,
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
||||
|
Reserve for reported losses and loss expenses
|
$
|
3,285,675
|
|
|
$
|
3,499,817
|
|
|
|
Reserve for losses incurred but not reported
|
6,311,122
|
|
|
6,082,323
|
|
|
||
|
Reserve for losses and loss expenses
|
$
|
9,596,797
|
|
|
$
|
9,582,140
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross reserve for losses and loss expenses, beginning of year
|
$
|
9,582,140
|
|
|
$
|
9,058,731
|
|
|
$
|
8,425,045
|
|
|
|
Less reinsurance recoverable on unpaid losses, beginning of year
|
(1,900,112
|
)
|
|
(1,825,617
|
)
|
|
(1,736,823
|
)
|
|
|||
|
Net reserve for unpaid losses and loss expenses, beginning of year
|
7,682,028
|
|
|
7,233,114
|
|
|
6,688,222
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net incurred losses and loss expenses related to:
|
|
|
|
|
|
|
||||||
|
Current year
|
2,445,666
|
|
|
2,353,631
|
|
|
2,340,868
|
|
|
|||
|
Prior years
|
(258,944
|
)
|
|
(219,436
|
)
|
|
(244,840
|
)
|
|
|||
|
|
2,186,722
|
|
|
2,134,195
|
|
|
2,096,028
|
|
|
|||
|
Net paid losses and loss expenses related to:
|
|
|
|
|
|
|
||||||
|
Current year
|
(387,197
|
)
|
|
(318,006
|
)
|
|
(322,836
|
)
|
|
|||
|
Prior years
|
(1,544,664
|
)
|
|
(1,373,459
|
)
|
|
(1,299,384
|
)
|
|
|||
|
|
(1,931,861
|
)
|
|
(1,691,465
|
)
|
|
(1,622,220
|
)
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange and other
|
(230,372
|
)
|
|
6,184
|
|
|
71,084
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net reserve for unpaid losses and loss expenses, end of year
|
7,706,517
|
|
|
7,682,028
|
|
|
7,233,114
|
|
|
|||
|
Reinsurance recoverable on unpaid losses, end of year
|
1,890,280
|
|
|
1,900,112
|
|
|
1,825,617
|
|
|
|||
|
Gross reserve for losses and loss expenses, end of year
|
$
|
9,596,797
|
|
|
$
|
9,582,140
|
|
|
$
|
9,058,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2014
|
$
|
63,735
|
|
|
$
|
195,209
|
|
|
$
|
258,944
|
|
|
|
Year ended December 31, 2013
|
50,355
|
|
|
169,081
|
|
|
219,436
|
|
|
|||
|
Year ended December 31, 2012
|
122,209
|
|
|
122,631
|
|
|
244,840
|
|
|
|||
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
9.
|
REINSURANCE
|
9.
|
REINSURANCE (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||||||||||||||
|
|
Premiums
written
|
|
Premiums
earned
|
|
Premiums
written
|
|
Premiums
earned
|
|
Premiums
written
|
|
Premiums
earned
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gross
|
$
|
4,711,519
|
|
|
$
|
4,652,345
|
|
|
$
|
4,697,041
|
|
|
$
|
4,459,269
|
|
|
$
|
4,139,643
|
|
|
$
|
4,141,037
|
|
|
|
Ceded
|
(804,544
|
)
|
|
(781,346
|
)
|
|
(768,841
|
)
|
|
(752,204
|
)
|
|
(802,187
|
)
|
|
(725,574
|
)
|
|
||||||
|
Net
|
$
|
3,906,975
|
|
|
$
|
3,870,999
|
|
|
$
|
3,928,200
|
|
|
$
|
3,707,065
|
|
|
$
|
3,337,456
|
|
|
$
|
3,415,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.
|
DEBT AND FINANCING ARRANGEMENTS
|
a)
|
Senior Notes
|
10.
|
DEBT AND FINANCING ARRANGEMENTS (CONTINUED)
|
b)
|
Credit Facilities
|
10.
|
DEBT AND FINANCING ARRANGEMENTS (CONTINUED)
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
a)
|
Concentrations of Credit Risk
|
11.
|
COMMITMENTS AND CONTINGENCIES (CONTINUED)
|
b)
|
Brokers
|
c)
|
Lease Commitments
|
|
|
|
|
||
|
Year ended December 31,
|
|
|
||
|
|
|
|
||
|
2015
|
$
|
27,609
|
|
|
|
2016
|
23,074
|
|
|
|
|
2017
|
20,310
|
|
|
|
|
2018
|
17,511
|
|
|
|
|
2019
|
15,937
|
|
|
|
|
Later years
|
36,452
|
|
|
|
|
Total future minimum lease payments
|
$
|
140,893
|
|
|
|
|
|
|
11.
|
COMMITMENTS AND CONTINGENCIES (CONTINUED)
|
d)
|
Reinsurance Purchase Commitment
|
e)
|
Legal Proceedings
|
f)
|
Investments
|
12.
|
EARNINGS PER COMMON SHARE
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Basic earnings per common share
|
|
|
|
|
|
|
||||||
|
Net income
|
$
|
804,564
|
|
|
$
|
727,465
|
|
|
$
|
547,241
|
|
|
|
Less: noncontrolling interests
|
(6,181
|
)
|
|
—
|
|
|
—
|
|
|
|||
|
Less: preferred share dividends
|
40,088
|
|
|
40,474
|
|
|
38,228
|
|
|
|||
|
Less: loss on repurchase of preferred shares
|
—
|
|
|
3,081
|
|
|
14,009
|
|
|
|||
|
Net income available to common shareholders
|
$
|
770,657
|
|
|
$
|
683,910
|
|
|
$
|
495,004
|
|
|
|
Weighted average common shares outstanding - basic
|
104,368
|
|
|
113,636
|
|
|
122,148
|
|
|
|||
|
Basic earnings per common share
|
$
|
7.38
|
|
|
$
|
6.02
|
|
|
$
|
4.05
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share
|
|
|
|
|
|
|
||||||
|
Net income available to common shareholders
|
$
|
770,657
|
|
|
$
|
683,910
|
|
|
$
|
495,004
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding - basic
|
104,368
|
|
|
113,636
|
|
|
122,148
|
|
|
|||
|
Stock compensation plans
|
1,345
|
|
|
1,692
|
|
|
1,506
|
|
|
|||
|
Weighted average common shares outstanding - diluted
|
105,713
|
|
|
115,328
|
|
|
123,654
|
|
|
|||
|
Diluted earnings per common share
|
$
|
7.29
|
|
|
$
|
5.93
|
|
|
$
|
4.00
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Anti-dilutive shares excluded from the dilutive computation
|
282
|
|
|
250
|
|
|
614
|
|
|
|||
|
|
|
|
|
|
|
|
13.
|
SHAREHOLDERS' EQUITY
|
a)
|
Common Shares
|
|
|
|
|
|
|
|
|
|||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
|||
|
|
|
|
|
|
|
|
|||
|
Shares issued, balance at beginning of year
|
174,134
|
|
|
171,867
|
|
|
170,159
|
|
|
|
Shares issued
|
1,344
|
|
|
2,267
|
|
|
1,708
|
|
|
|
Total shares issued at end of year
|
175,478
|
|
|
174,134
|
|
|
171,867
|
|
|
|
|
|
|
|
|
|
|
|||
|
Treasury shares, balance at beginning of year
|
(64,649
|
)
|
|
(53,947
|
)
|
|
(44,571
|
)
|
|
|
Shares repurchased
|
(11,752
|
)
|
|
(10,830
|
)
|
|
(9,376
|
)
|
|
|
Shares reissued from treasury
|
349
|
|
|
128
|
|
|
—
|
|
|
|
Total treasury shares at end of year
|
(76,052
|
)
|
|
(64,649
|
)
|
|
(53,947
|
)
|
|
|
|
|
|
|
|
|
|
|||
|
Total shares outstanding
|
99,426
|
|
|
109,485
|
|
|
117,920
|
|
|
|
|
|
|
|
|
|
|
13.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
In the open market:
|
|
|
|
|
|
|
||||||
|
Total shares
|
11,317
|
|
|
7,362
|
|
|
6,057
|
|
|
|||
|
Total cost
|
$
|
524,168
|
|
|
$
|
337,083
|
|
|
$
|
203,704
|
|
|
|
Average price per share
(1)
|
$
|
46.32
|
|
|
$
|
45.79
|
|
|
$
|
33.63
|
|
|
|
|
|
|
|
|
|
|
||||||
|
From employees:
(2)
|
|
|
|
|
|
|
||||||
|
Total shares
|
435
|
|
|
468
|
|
|
319
|
|
|
|||
|
Total cost
|
$
|
19,034
|
|
|
$
|
19,080
|
|
|
$
|
10,483
|
|
|
|
Average price per share
(1)
|
$
|
43.82
|
|
|
$
|
40.75
|
|
|
$
|
32.85
|
|
|
|
|
|
|
|
|
|
|
||||||
|
From founding shareholder:
(3)
|
|
|
|
|
|
|
||||||
|
Total shares
|
—
|
|
|
3,000
|
|
|
3,000
|
|
|
|||
|
Total cost
|
$
|
—
|
|
|
$
|
116,100
|
|
|
$
|
103,500
|
|
|
|
Average price per share
(1)
|
$
|
—
|
|
|
$
|
38.70
|
|
|
$
|
34.50
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total
|
|
|
|
|
|
|
||||||
|
Total shares
|
11,752
|
|
|
10,830
|
|
|
9,376
|
|
|
|||
|
Total cost
|
$
|
543,202
|
|
|
$
|
472,263
|
|
|
$
|
317,687
|
|
|
|
Average price per share
(1)
|
$
|
46.22
|
|
|
$
|
43.61
|
|
|
$
|
33.88
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Calculated using whole figures.
|
(2)
|
To satisfy withholding tax liabilities upon vesting of restricted stock, restricted stock units, and exercise of stock options. Share repurchases from employees are excluded from the authorized share repurchase plans noted above.
|
(3)
|
Represents privately negotiated repurchases of
3,000,000
of our common shares from Trident II, L.P and affiliated entities in both 2013 and 2012.
|
b)
|
Preferred Shares
|
13.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
13.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
c)
|
Out of Period Adjustment
|
14.
|
NONCONTROLLING INTERESTS
|
14.
|
NONCONTROLLING INTERESTS (CONTINUED)
|
|
|
Total
|
|
||
|
|
2014
|
|
||
|
|
|
|
||
|
Balance at January 1, 2014
|
$
|
50,000
|
|
|
|
Increase from issuance of preferred equity to noncontrolling interests
|
25,000
|
|
|
|
|
Decrease from return of capital to noncontrolling interests
|
(10,000
|
)
|
|
|
|
Amounts attributable from noncontrolling interests
|
(6,181
|
)
|
|
|
|
Balance at December 31, 2014
|
$
|
58,819
|
|
|
|
|
|
|
15.
|
RETIREMENT PLANS
|
16.
|
SHARE-BASED COMPENSATION
|
16.
|
SHARE-BASED COMPENSATION (CONTINUED)
|
a)
|
Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Performance-based Stock Awards
|
|
Service-based Stock Awards
|
|
||||||||||
|
|
Number of
Restricted
Stock
|
|
Weighted Average
Grant Date
Fair Value
|
|
Number of
Restricted
Stock
|
|
Weighted Average
Grant Date
Fair Value
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Nonvested restricted stock - beginning of year
|
283
|
|
|
$
|
35.74
|
|
|
3,430
|
|
|
$
|
34.72
|
|
|
|
Granted
|
68
|
|
|
44.33
|
|
|
1,053
|
|
|
44.47
|
|
|
||
|
Vested
|
—
|
|
|
—
|
|
|
(1,474
|
)
|
|
33.83
|
|
|
||
|
Forfeited
|
(4
|
)
|
|
44.33
|
|
|
(241
|
)
|
|
36.96
|
|
|
||
|
Nonvested restricted stock - end of year
|
347
|
|
|
$
|
37.34
|
|
|
2,768
|
|
|
$
|
38.70
|
|
|
|
|
|
|
|
|
|
|
|
|
16.
|
SHARE-BASED COMPENSATION (CONTINUED)
|
b)
|
Cash-settled Awards
|
c)
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Number
of Stock
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
(1)
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
|
Outstanding and exercisable - beginning of year
|
213
|
|
|
$
|
27.98
|
|
|
|
|
|
|
||
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
|
Exercised
|
(193
|
)
|
|
27.97
|
|
|
|
|
|
|
|||
|
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
|
Outstanding and exercisable - end of year
|
20
|
|
|
$
|
28.02
|
|
|
0.0
|
|
$
|
461
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between our closing stock price at
December 31, 2014
and the exercisable price, multiplied by the number of in-the-money-options) that would have been received by the stock option holder had all stock option holders exercised their stock options on
December 31, 2014
.
|
17.
|
RELATED PARTY TRANSACTIONS
|
17.
|
RELATED PARTY TRANSACTIONS (CONTINUED)
|
18.
|
INCOME TAXES
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Current income tax expense (benefit)
|
|
|
|
|
|
|
||||||
|
United States
|
$
|
8,411
|
|
|
$
|
12,466
|
|
|
$
|
4,931
|
|
|
|
Europe
|
16,582
|
|
|
9,039
|
|
|
8,566
|
|
|
|||
|
Other
|
1
|
|
|
—
|
|
|
(174
|
)
|
|
|||
|
Deferred income tax expense (benefit)
|
|
|
|
|
|
|
||||||
|
United States
|
1,313
|
|
|
(13,976
|
)
|
|
(10,749
|
)
|
|
|||
|
Europe
|
(399
|
)
|
|
(526
|
)
|
|
713
|
|
|
|||
|
Other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
|||
|
Total income tax expense
|
$
|
25,908
|
|
|
$
|
7,002
|
|
|
$
|
3,287
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net current tax receivables (payables)
|
$
|
(11,203
|
)
|
|
$
|
5,689
|
|
|
$
|
1,164
|
|
|
|
Net deferred tax assets
|
89,405
|
|
|
80,258
|
|
|
52,794
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net tax assets
|
$
|
78,202
|
|
|
$
|
85,947
|
|
|
$
|
53,958
|
|
|
|
|
|
|
|
|
|
|
18.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
||||
|
At December 31,
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
||||
|
Deferred tax assets:
|
|
|
|
|
||||
|
Discounting of loss reserves
|
$
|
59,852
|
|
|
$
|
59,023
|
|
|
|
Unearned premiums
|
39,661
|
|
|
39,146
|
|
|
||
|
Operating loss carryforwards
|
26,016
|
|
|
20,316
|
|
|
||
|
Accruals not currently deductible
|
44,082
|
|
|
39,018
|
|
|
||
|
Other investment adjustments and impairments
|
4,001
|
|
|
7,859
|
|
|
||
|
Tax credits
|
15,412
|
|
|
11,886
|
|
|
||
|
Depreciation
|
—
|
|
|
2,410
|
|
|
||
|
Other deferred tax assets
|
1,324
|
|
|
2,906
|
|
|
||
|
Deferred tax assets before valuation allowance
|
190,348
|
|
|
182,564
|
|
|
||
|
Valuation allowance
|
(34,094
|
)
|
|
(25,542
|
)
|
|
||
|
Deferred tax assets net of valuation allowance
|
156,254
|
|
|
157,022
|
|
|
||
|
|
|
|
|
|
||||
|
Deferred tax liabilities:
|
|
|
|
|
||||
|
Deferred acquisition costs
|
(37,712
|
)
|
|
(37,226
|
)
|
|
||
|
Net unrealized gains on investments
|
(12,792
|
)
|
|
(23,200
|
)
|
|
||
|
Amortization of intangible assets and goodwill
|
(10,778
|
)
|
|
(10,059
|
)
|
|
||
|
Accrued market discounts
|
(707
|
)
|
|
(1,151
|
)
|
|
||
|
Equalization reserves
|
(3,554
|
)
|
|
(2,080
|
)
|
|
||
|
Other deferred tax liabilities
|
(1,306
|
)
|
|
(3,048
|
)
|
|
||
|
Deferred tax liabilities
|
(66,849
|
)
|
|
(76,764
|
)
|
|
||
|
Net deferred tax assets
|
$
|
89,405
|
|
|
$
|
80,258
|
|
|
|
|
|
|
|
|
18.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
||||
|
At December 31,
|
2014
|
|
2013
|
|
||||
|
|
|
|
|
|
||||
|
Income tax expense:
|
|
|
|
|
||||
|
Valuation allowance - beginning of year
|
$
|
27,070
|
|
|
$
|
33,933
|
|
|
|
Operating loss carryforwards
|
3,044
|
|
|
(794
|
)
|
|
||
|
Capital loss carryforwards
|
1,262
|
|
|
—
|
|
|
||
|
Foreign tax credit
|
3,194
|
|
|
1,762
|
|
|
||
|
Australian CTA and accruals and rate differentials
|
1,052
|
|
|
—
|
|
|
||
|
Change in investment-related items
|
(757
|
)
|
|
(7,831
|
)
|
|
||
|
Valuation allowance - end of year
|
34,865
|
|
|
27,070
|
|
|
||
|
|
|
|
|
|
||||
|
Accumulated other comprehensive income:
|
|
|
|
|
||||
|
Valuation allowance - beginning of year
|
(1,528
|
)
|
|
(9,359
|
)
|
|
||
|
Change in investment-related items
|
757
|
|
|
7,831
|
|
|
||
|
Valuation allowance - end of year
|
(771
|
)
|
|
(1,528
|
)
|
|
||
|
|
|
|
|
|
||||
|
Total valuation allowance - end of year
|
$
|
34,094
|
|
|
$
|
25,542
|
|
|
|
|
|
|
|
|
18.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Income before income taxes
|
|
|
|
|
|
|
||||||
|
Bermuda (domestic)
|
$
|
690,517
|
|
|
$
|
625,490
|
|
|
$
|
485,613
|
|
|
|
Foreign
|
139,955
|
|
|
108,977
|
|
|
64,915
|
|
|
|||
|
Total income before income taxes
|
$
|
830,472
|
|
|
$
|
734,467
|
|
|
$
|
550,528
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Reconciliation of effective tax rate (% of income before income taxes)
|
|
|
|
|
|
|
||||||
|
Expected tax rate
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
|||
|
Foreign taxes at local expected rates:
|
|
|
|
|
|
|
||||||
|
United States
|
1.8
|
%
|
|
2.1
|
%
|
|
0.4
|
%
|
|
|||
|
Europe
|
1.5
|
%
|
|
1.0
|
%
|
|
1.4
|
%
|
|
|||
|
Other
|
—
|
%
|
|
0.3
|
%
|
|
—
|
%
|
|
|||
|
Valuation allowance
|
1.1
|
%
|
|
(0.7
|
)%
|
|
0.6
|
%
|
|
|||
|
Net tax exempt income
|
(0.7
|
)%
|
|
(1.3
|
)%
|
|
(1.5
|
)%
|
|
|||
|
Other
|
(0.6
|
)%
|
|
(0.4
|
)%
|
|
(0.3
|
)%
|
|
|||
|
Actual tax rate
|
3.1
|
%
|
|
1.0
|
%
|
|
0.6
|
%
|
|
|||
|
|
|
|
|
|
|
|
19.
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
Before Tax Amount
|
|
Tax (Expense) Benefit
|
|
Net of Tax Amount
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2014
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized investment losses arising during the year
|
$
|
(22,704
|
)
|
|
$
|
(15,963
|
)
|
|
$
|
(38,667
|
)
|
|
|
Adjustment for reclassification of net realized investment gains and OTTI losses recognized in net income
|
(141,172
|
)
|
|
26,702
|
|
|
(114,470
|
)
|
|
|||
|
Unrealized investment losses arising during the year, net of reclassification adjustment
|
(163,876
|
)
|
|
10,739
|
|
|
(153,137
|
)
|
|
|||
|
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
Foreign currency translation adjustment
|
(10,262
|
)
|
|
—
|
|
|
(10,262
|
)
|
|
|||
|
Total other comprehensive loss
|
$
|
(174,138
|
)
|
|
$
|
10,739
|
|
|
$
|
(163,399
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2013
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized investment losses arising during the year
|
$
|
(169,614
|
)
|
|
$
|
7,782
|
|
|
$
|
(161,832
|
)
|
|
|
Adjustment for reclassification of net realized investment gains and OTTI losses recognized in net income
|
(67,156
|
)
|
|
5,605
|
|
|
(61,551
|
)
|
|
|||
|
Unrealized investment losses arising during the year, net of reclassification adjustment
|
(236,770
|
)
|
|
13,387
|
|
|
(223,383
|
)
|
|
|||
|
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
Foreign currency translation adjustment
|
(21,414
|
)
|
|
—
|
|
|
(21,414
|
)
|
|
|||
|
Total other comprehensive loss
|
$
|
(258,184
|
)
|
|
$
|
13,387
|
|
|
$
|
(244,797
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2012
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized investment gains arising during the year
|
$
|
378,040
|
|
|
$
|
(29,530
|
)
|
|
$
|
348,510
|
|
|
|
Adjustment for reclassification of net realized investment gains and OTTI losses recognized in net income
|
(127,828
|
)
|
|
11,550
|
|
|
(116,278
|
)
|
|
|||
|
Unrealized investment gains arising during the year, net of reclassification adjustment
|
250,212
|
|
|
(17,980
|
)
|
|
232,232
|
|
|
|||
|
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
Foreign currency translation adjustment
|
510
|
|
|
—
|
|
|
510
|
|
|
|||
|
Net change in benefit plan assets and obligations recognized in equity and reclassification adjustment
|
1,718
|
|
|
—
|
|
|
1,718
|
|
|
|||
|
Total other comprehensive income
|
$
|
252,440
|
|
|
$
|
(17,980
|
)
|
|
$
|
234,460
|
|
|
|
|
|
|
|
|
|
|
19.
|
OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
|
|
|
|
Amount Reclassified from AOCI
(1)
|
|
|||||||||||
|
Details About AOCI Components
|
Consolidated Statement of Operations Line Item That Includes Reclassification
|
Year ended December 31,
|
|
|||||||||||
|
2014
|
|
2013
|
|
2012
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Unrealized appreciation on available for sale investments
|
|
|
|
|
|
|
|
|
||||||
|
|
Other realized investment gains
|
$
|
172,399
|
|
|
$
|
76,518
|
|
|
$
|
152,062
|
|
|
|
|
|
OTTI losses
|
(31,227
|
)
|
|
(9,362
|
)
|
|
(24,234
|
)
|
|
|
|||
|
|
Total before tax
|
141,172
|
|
|
67,156
|
|
|
127,828
|
|
|
|
|||
|
|
Tax expense
|
(26,702
|
)
|
|
(5,605
|
)
|
|
(11,550
|
)
|
|
|
|||
|
|
Net of tax
|
$
|
114,470
|
|
|
$
|
61,551
|
|
|
$
|
116,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Supplemental Executive Retirement Plans (SERPs)
|
|
|
|
|
|
|
|
|
||||||
|
Net change in benefit plan assets and obligations
|
General and administrative expenses
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,718
|
)
|
|
|
|
|
Tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||
|
|
Net of tax
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,718
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts in parentheses are debits to net income available to common shareholders
|
20.
|
STATUTORY FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Bermuda
|
|
Ireland
|
|
United States
|
|
|||||||||||||||
|
At December 31,
|
2014
|
2013
|
|
2014
|
2013
|
|
2014
|
2013
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Required statutory capital and surplus
|
$
|
1,972,951
|
|
$
|
1,996,794
|
|
|
$
|
299,758
|
|
$
|
315,258
|
|
|
$
|
415,011
|
|
$
|
385,651
|
|
|
|
Available statutory capital and surplus
|
$
|
3,729,925
|
|
$
|
3,839,840
|
|
|
$
|
788,882
|
|
$
|
792,427
|
|
|
$
|
1,443,032
|
|
$
|
1,348,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20.
|
STATUTORY FINANCIAL INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Quarters ended
|
Mar 31
|
|
Jun 30
|
|
Sep 30
|
|
Dec 31
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
2014
|
|
|
|
|
|
|
|
|
||||||||
|
Net premiums earned
|
$
|
945,949
|
|
|
$
|
1,000,400
|
|
|
$
|
966,138
|
|
|
$
|
958,517
|
|
|
|
Net investment income
|
82,744
|
|
|
114,867
|
|
|
66,562
|
|
|
78,595
|
|
|
||||
|
Net realized investment gains
|
10,620
|
|
|
33,261
|
|
|
77,448
|
|
|
10,779
|
|
|
||||
|
Underwriting income
|
108,766
|
|
|
126,581
|
|
|
113,464
|
|
|
112,720
|
|
|
||||
|
Net income attributable to AXIS Capital
|
147,249
|
|
|
200,686
|
|
|
289,126
|
|
|
173,685
|
|
|
||||
|
Net income available to common shareholders
|
137,227
|
|
|
190,664
|
|
|
279,104
|
|
|
163,663
|
|
|
||||
|
Earnings per common share - basic
|
$
|
1.26
|
|
|
$
|
1.81
|
|
|
$
|
2.71
|
|
|
$
|
1.63
|
|
|
|
Earnings per common share - diluted
|
$
|
1.24
|
|
|
$
|
1.79
|
|
|
$
|
2.68
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2013
|
|
|
|
|
|
|
|
|
||||||||
|
Net premiums earned
|
$
|
874,039
|
|
|
$
|
945,873
|
|
|
$
|
945,242
|
|
|
$
|
941,911
|
|
|
|
Net investment income
|
108,908
|
|
|
83,112
|
|
|
103,429
|
|
|
113,863
|
|
|
||||
|
Net realized investment gains (losses)
|
44,478
|
|
|
16,235
|
|
|
(4,708
|
)
|
|
19,558
|
|
|
||||
|
Underwriting income
|
170,799
|
|
|
9,921
|
|
|
153,088
|
|
|
94,159
|
|
|
||||
|
Net income attributable to AXIS Capital
|
311,557
|
|
|
83,725
|
|
|
150,635
|
|
|
181,546
|
|
|
||||
|
Net income available to common shareholders
|
302,816
|
|
|
72,447
|
|
|
137,121
|
|
|
171,524
|
|
|
||||
|
Earnings per common share - basic
|
$
|
2.59
|
|
|
$
|
0.63
|
|
|
$
|
1.23
|
|
|
$
|
1.55
|
|
|
|
Earnings per common share - diluted
|
$
|
2.55
|
|
|
$
|
0.62
|
|
|
$
|
1.21
|
|
|
$
|
1.52
|
|
|
|
|
|
|
|
|
|
|
|
|
22.
|
SUBSEQUENT EVENTS
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 20, 2015
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
|
Position
|
Michael A. Butt
|
72
|
Chairman of the Board of Directors
|
Albert A. Benchimol
|
57
|
Chief Executive Officer and President
|
Christopher N. DiSipio
|
52
|
Chief Executive Officer, AXIS Accident & Health
|
Joseph C. Henry
|
62
|
Executive Vice President and Chief Financial Officer
|
John D. Nichols
|
54
|
Chief Executive Officer, AXIS Reinsurance
|
Peter W. Wilson
|
55
|
Chief Executive Officer, AXIS Insurance
|
Geoffrey Bell
|
75
|
Independent Director
|
Jane Boisseau
|
69
|
Independent Director
|
Charles A. Davis
|
66
|
Independent Director
|
Robert L. Friedman
|
71
|
Independent Director
|
Christopher V. Greetham
|
70
|
Independent Director
|
Maurice A. Keane
|
73
|
Independent Director
|
Sir Andrew Large
|
72
|
Independent Director
|
Cheryl-Ann Lister
|
58
|
Independent Director
|
Thomas C. Ramey
|
71
|
Independent Director
|
Henry B. Smith
|
66
|
Independent Director
|
Alice Young
|
64
|
Independent Director
|
Wilhelm Zeller
|
70
|
Independent Director
|
|
Majority vote standard for election of directors.
Each director must be elected by a majority of
votes cast, not a plurality.
|
|
|
Independent lead director.
|
|
No “over-boarding”. None of our directors serve
on the board of directors of more than three
other publicly-held corporations.
|
|
|
Shareholders holding 10% or more of our outstanding stock have the right to call a special meeting.
|
|
Shareholder engagement. We engage with our shareholders to better understand their perspectives.
|
|
|
Majority independent Board. Our Board comprises all independent directors, except our CEO and Chairman.
|
|
Regular Board and committee self-evaluation process.
|
|
|
Independent Audit, Compensation and Corporate Governance and Nominating Committees.
|
|
No hedging the economic risk of owning AXIS stock or pledging of AXIS stock for loans or other obligations.
|
|
|
Robust Code of Business Conduct. AXIS is committed to operating our business with the highest level of ethical conduct and has adopted the Code of Business Conduct that applies to all employees as well as the Board of Directors. Our Code of Business Conduct is available at www.axiscapital.com.
|
Name
|
Executive
|
Audit
|
Compensation
|
Corporate
Governance
and
Nominating
|
Finance
|
Risk
|
Independent
Director
|
Mr. Bell
|
|
|
Member
|
|
Member
|
Member
|
X
|
Mr. Benchimol
|
Member
|
|
|
|
|
|
|
Ms. Boisseau
|
|
Member
|
|
Member
|
|
|
X
|
Mr. Butt
|
Member
|
|
|
|
|
|
|
Mr. Davis
|
Member
|
|
|
|
Chair
|
|
X
|
Mr. Friedman
|
|
|
Member
|
|
Member
|
|
X
|
Mr. Greetham
|
|
|
Member
|
|
Member
|
Chair
|
X
|
Mr. Keane
|
|
Member
|
|
Member
|
|
Member
|
X
|
Sir Andrew Large
|
|
|
|
Member
|
|
Member
|
X
|
Ms. Lister
|
|
|
|
Member
|
|
Member
|
X
|
Mr. Ramey
|
|
Chair
|
Member
|
|
|
|
X
|
Mr. Smith
|
Chair
|
Member
|
Chair
|
Chair
|
|
|
X
|
Ms. Young
|
|
Member
|
|
Member
|
|
|
X
|
Mr. Zeller
|
|
|
|
|
Member
|
Member
|
X
|
2014 Meetings
|
1
|
8
|
6
|
4
|
4
|
5
|
|
•
|
providing input on meeting scheduling, agendas and information that is provided to the Board;
|
•
|
acting as a liaison between the independent directors and the Chairman;
|
•
|
recommending, as appropriate, that the Board retain consultants who will report directly to the Board; and
|
•
|
consulting and communicating with major shareholders on a per request basis.
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
Albert A. Benchimol
|
Chief Executive Officer and President (“CEO”)
|
Christopher N. DiSipio
|
Chief Executive Officer, AXIS Accident & Health
|
John W. Gressier
(1)
|
Former Chief Operating Officer
|
Joseph C. Henry
|
Chief Financial Officer (“CFO”)
|
John D. Nichols
|
Chief Executive Officer, AXIS Reinsurance
|
Peter W. Wilson
|
Chief Executive Officer, AXIS Insurance
|
(1)
|
On June 23, 2014, Mr. Gressier provided notice to the Company of his voluntary resignation effective June 30, 2015 and his then-current responsibilities were distributed among other executive officers.
|
•
|
Investing in our people and culture
|
•
|
Delivering diversified growth
|
•
|
Optimizing our enterprise-wide risk portfolio
|
•
|
Enhancing operational excellence
|
•
|
Continued strong growth in our AXIS Accident and Health line of business, supporting achievement of full operating leverage in the unit
|
•
|
Meaningful progress on targeted portfolio enhancements for underperforming businesses
|
•
|
Focus on profitable growth opportunities, with the recruitment of a new Medical Malpractice team, expansion of our U.S. casualty efforts and the first full year of our AXIS Syndicate 1686 Lloyd’s underwriting platform
|
•
|
Enhanced marketing efforts through the development of our broker and distribution management function
|
•
|
Advancement of our third party capital activities, including a number of transactions that supported risk management objectives and delivered non-risk bearing revenue for the year
|
•
|
Increased activity in evaluating strategic partnership opportunities, including mergers, acquisitions and other strategic investments, to support achievement of corporate goals
|
•
|
Delivered on risk management initiatives that support the achievement of a best-in-class risk management culture throughout the Company
|
•
|
Progressed a number of initiatives supporting the achievement of enhanced usage of data and analytics throughout the Company, including the in-sourcing of our reserving function
|
•
|
Introduced new business initiatives intended to provide further balance and diversification to our underwriting portfolios and designed to reduce volatility in our results
|
•
|
Continued progress in delivering on critical information technology projects and an efficient and effective outsourced service delivery system
|
•
|
Meaningful progress on expense management initiatives
|
•
|
Effected further enhancements to our compensation practices and policies to improve alignment of our compensation with our performance, and, therefore, shareholder’s interests
|
•
|
Continued investment in a training and development initiative designed to enhance the capabilities of our staff and improve staff retention
|
•
|
No change to base salaries in 2014 for our NEOs
|
•
|
Bonuses awarded to our NEOs ranging between 100% and 120% of target
|
•
|
Equity grants for our NEOs granted at 90% of target, with vesting for 50% of the awards subject to satisfying Company specified performance conditions
|
ü
|
Fixed-dollar equity targets. We converted equity targets from a fixed number of shares or units to a fixed-dollar target allowing for closer targeting of market pay levels.
|
|
ü
|
Equity awards adjust based on performance. Our performance-vesting equity awards are adjusted at the time of vesting and our time-vesting equity award targets are adjusted at the time of grant, in both cases based on growth in diluted book value per share over a three-year period as compared to our peers.
|
ü
|
Equity awards split between performance-vesting and time-vesting awards. Beginning in 2014,
equity grants for our NEOs and other senior executives (other than our CEO, who did not receive an annual equity award in 2014) are split evenly between performance-vesting and time-vesting awards.
|
|
ü
|
Stock ownership guidelines. We maintain stock ownership guidelines and holding requirements that apply to our senior executives to encourage a long-term focus in managing our business.
|
ü
|
No tax gross-ups. The employment agreements for our NEOs do not contain excise tax gross-up provisions and we do not provide other tax gross-ups beyond what is generally available for all employees.
|
|
ü
|
Double-trigger in the event of a change-in-control. We replaced “single-trigger” change-in-control vesting provisions within our equity program to ensure that awards will only vest automatically upon a change in control of the Company if the employee is subsequently terminated.
|
ü
|
Independent compensation consultant. Our Compensation Committee engages an independent compensation consultant that reports directly to them.
|
|
ü
|
No hedging or pledging of AXIS stock. Our Insider Trading Policy prohibits all employees and directors from hedging the economic risk of owning AXIS stock or pledging AXIS stock for loans or other obligations.
|
ü
|
Cash-settlement for a portion of equity awards.
Implemented cash-settlement at vesting for 50% of each equity award, excluding awards to our NEOs, in order to reduce the overall number of equity awards utilized, or burn rate, under our equity plan.
|
|
ü
|
Clawback Policy. Our executive compensation Clawback Policy allows us to recoup compensation paid to our NEOs under certain circumstances.
|
ü
|
No individual executive retirement plans.
|
|
ü
|
Limited executive perquisites.
|
•
|
approve initial offers of employment for senior executives;
|
•
|
make recommendations to the Board regarding compensation programs and policies affecting our executives as well as our other employees;
|
•
|
make recommendations on the form and amount of director compensation;
|
•
|
approve all equity awards to our executives and set the pool for all other equity awards; and
|
•
|
approve the design of our incentive and equity compensation plans and any changes or amendments to those plans.
|
•
|
reviews the incentive plan results from the prior year;
|
•
|
makes final determinations regarding salaries for the current year;
|
•
|
approves equity awards and incentive cash payments for prior-year performance;
|
•
|
establishes the performance goals under the incentive plans for the current year;
|
•
|
approves the Compensation Committee’s report for our proxy statement or Form 10-K; and
|
•
|
conducts a self-assessment.
|
•
|
our Compensation Committee retains downward discretion in overseeing our compensation programs, such that meaningful reductions in compensation are possible if our financial results do not meet our expectations, as was the
|
•
|
our executive compensation Clawback Policy ensures that our executives are not inappropriately rewarded in the event that we are required to restate our financial results, as described above;
|
•
|
our stock ownership guidelines are designed to ensure that the long-term interests of our executives are aligned with those of our shareholders; and
|
•
|
our Compensation Committee retains an independent compensation consultant, apart from the consultant retained by management, as discussed in detail below.
|
•
|
reviewed and advised the Compensation Committee on matters concerning compensation of the CEO and our other NEOs;
|
•
|
prepared formal presentations for the Compensation Committee in May 2014 regarding executive compensation; and
|
•
|
reviewed director compensation biennially, with its last review and formal report occurring in September 2014.
|
•
|
ACE Limited
|
•
|
XL Group plc
|
•
|
Everest Re Group, Ltd.
|
•
|
PartnerRe Ltd.
|
•
|
Arch Capital Group Ltd.
|
•
|
Endurance Specialty Holdings Ltd.
|
•
|
Platinum Underwriters Holdings, Ltd.
|
•
|
Renaissance Re Holdings Ltd.
|
•
|
Aspen Insurance Holdings Limited
|
•
|
Allied World Assurance Company Holdings, Ltd.
|
•
|
Validus Holdings Ltd.
|
|
Component
|
Purpose
|
Fixed
|
Base Salary
|
Attract and retain executives
Compensate executives for level of responsibility and experience
|
Variable
|
Annual Incentive Awards
|
Reward achievement of annual Company financial and non-financial objectives, which include individual and, for 2014, business unit performance goals
Promote accountability and strategic decision-making
|
|
Long-Term Incentive Awards
|
Align the interests of our NEOs with those of our shareholders by rewarding the achievement of long-term goals
Encourage strategic decision-making
Promote accountability
Retain key executives
|
Name
|
FY 2014 Base Salary
|
FY 2015 Base Salary
|
Albert A. Benchimol
|
$1,100,000
|
$1,100,000
|
Christopher N. DiSipio
|
$500,000
|
$500,000
|
John W. Gressier
|
£600,000
|
£600,000
(1)
|
Joseph C. Henry
|
$565,000
|
$565,000
|
John D. Nichols
|
$900,000
|
$900,000
|
Peter W. Wilson
|
$800,000
|
$800,000
|
Name
|
2014 Bonus Target
|
2015 Bonus Target
|
|
Albert A. Benchimol
|
175%
|
175%
|
|
Christopher N. DiSipio
|
80%
|
100
|
%
|
John W. Gressier
|
135%
|
N/A
(1)
|
|
Joseph C. Henry
|
100%
|
100%
|
|
John D. Nichols
|
125%
|
125%
|
|
Peter W. Wilson
|
125%
|
125%
|
|
•
|
For the operating ROACE metric, payout factors ranged from 0% to 200%, with 10% operating ROACE yielding 100% of target payout and 20% operating ROACE yielding a 200% of target payout and pro-rata funding based on other operating ROACE results.
|
•
|
For the achievement of Company non-financial metrics, business unit financial metrics (where applicable) and individual non-financial metrics, payout factors can also range between 0% and 200%.
|
Metric
|
Financial Metric Weighting
|
Non-Financial Weighting
|
Business Unit Financial Metric Weighting
|
CEO
|
85%
|
15%
|
N/A
|
Business Unit Leaders
|
50%
|
20%
|
30%
|
Corporate Function Leaders
|
75%
|
25%
|
N/A
|
Albert A. Benchimol
|
|
|
|
|
|
2014 Metric
|
Payout Factor
|
x Weighting
|
= Adjusted Weighting
|
X Target Bonus
|
= Bonus Payout
|
OROACE
|
108%
|
85%
|
91.8%
|
$1,925,000
|
$1,767,150
|
Non-Financial
|
125%
|
15%
|
18.8%
|
$360,938
|
|
TOTAL
|
|
|
110.6%
|
|
$2,128,088
|
Christopher N. DiSipio
|
|
|
|
|
|
2014 Metric
|
Payout Factor
|
x Weighting
|
= Adjusted Weighting
|
X Target Bonus
|
= Bonus Payout
|
OROACE
|
108%
|
50%
|
54.0%
|
$400,000
|
$216,000
|
Business Unit Financial
|
130%
|
30%
|
39.0%
|
$156,000
|
|
Non-Financial
|
125%
|
20%
|
25.0%
|
$100,000
|
|
TOTAL
|
|
|
118.0%
|
|
$472,000
|
John W. Gressier
|
|
|
|
|
|
2014 Metric
|
Payout Factor
|
x Weighting
|
= Adjusted Weighting
|
X Target Bonus
(1)
|
= Bonus Payout
|
OROACE
|
100%
|
75%
|
75.0%
|
$1,262,500
|
$946,875
|
Non-Financial
|
100%
|
25%
|
25.0%
|
$315,625
|
|
TOTAL
|
|
|
100.0%
|
|
$1,262,500
|
(1)
|
Converted from pounds sterling based on December 31, 2014 exchange rate of 1.5586418347
|
Joseph C. Henry
|
|
|
|
|
|
2014 Metric
|
Payout Factor
|
x Weighting
|
= Adjusted Weighting
|
X Target Bonus
|
= Bonus Payout
|
OROACE
|
108%
|
75%
|
81.0%
|
$565,000
|
$457,650
|
Non-Financial
|
140%
|
25%
|
35.0%
|
$197,750
|
|
TOTAL
|
|
|
116.0%
|
|
$655,400
|
John D. Nichols
|
|
|
|
|
|
2014 Metric
|
Payout Factor
|
x Weighting
|
= Adjusted Weighting
|
X Target Bonus
|
= Bonus Payout
|
OROACE
|
108%
|
50%
|
54.0%
|
$1,125,000
|
$607,500
|
Business Unit Financial
|
135%
|
30%
|
40.56%
|
$456,300
|
|
Non-Financial
|
125%
|
20%
|
25.0%
|
$281,250
|
|
TOTAL
|
|
|
119.6%
|
|
$1,345,050
|
Peter W. Wilson
|
|
|
|
|
|
2014 Metric
|
Payout Factor
|
x Weighting
|
= Adjusted Weighting
|
X Target Bonus
|
= Bonus Payout
|
OROACE
|
108%
|
50%
|
54.0%
|
$1,000,000
|
$540,000
|
Business Unit Financial
|
70%
|
30%
|
21.0%
|
$210,000
|
|
Non-Financial
|
125%
|
20%
|
25.0%
|
$250,000
|
|
TOTAL
|
|
|
100.0%
|
|
$1,000,000
|
Name
|
2013 Equity Target ($)
|
PSUs and RSUs ($) Awarded in 2014
(1)
(2013 Performance)
|
Albert A. Benchimol
|
N/A
|
N/A
|
Christopher N. DiSipio
|
$720,000
|
$719,919
|
John W. Gressier
|
$1,400,000
|
$1,399,941
|
Joseph C. Henry
|
$1,200,000
|
$1,199,924
|
John D. Nichols
|
$1,400,000
|
$1,399,941
|
Peter W. Wilson
|
$720,000
|
$1,157,940
(2)
|
(1)
|
50/50 split between PSUs and RSUs for Messrs. DiSipio, Gressier, Henry and Nichols. Mr. Wilson did not receive any PSUs in 2014. Amounts represent the $44.33 grant date fair value per share of the RSU and PSU awards granted on March 1, 2014.
|
(2)
|
Includes a one-time special equity award of $360,000 which will vest in a single installment on the third anniversary of the grant date.
|
Name
|
|
|
2014 Target - Split
|
|
2013 RSU Target ($)
|
2014 RSU Target ($)
|
RSUs
(1)
|
PSUs
(2)
|
|
Albert A. Benchimol
|
N/A
|
N/A
|
N/A
|
N/A
|
Christopher N. DiSipio
|
$720,000
|
$720,000
|
$360,000
|
$360,000
|
John W. Gressier
|
$1,400,000
|
$1,400,000
|
$700,000
|
$700,000
|
Joseph C. Henry
|
$1,200,000
|
$1,200,000
|
$600,000
|
$600,000
|
John D. Nichols
|
$1,400,000
|
$1,400,000
|
$700,000
|
$700,000
|
Peter W. Wilson
|
$720,000
|
$900,000
|
$450,000
|
$450,000
|
(1)
|
The RSUs will vest in four equal installments on the first, second, third and fourth anniversaries of the date of grant.
|
(2)
|
The PSUs will vest in a single installment on the third anniversary of the grant date.
|
•
|
RSU targets are adjusted at time of grant based on a three-year look-back in growth in DBVPS adjusted for dividends as compared to our peers, measured as of September 30 of the performance year. Adjustments to time-based targets can range from 75% to 125% of target, depending on our growth in DBVPS percentile as compared to our peer group.
|
•
|
PSU targets are adjusted at time of vesting based on a three-year look-back in growth in DBVPS adjusted for dividends as compared to our peers as of the September 30 preceding the PSU vesting date. Adjustments at vesting can range from 10% to 200% of target, depending on our growth in DBVPS percentile as compared to our peer group.
|
Name
|
|
Value Ranges
|
Total Value Ranges Based on Performance
|
||||||||||||||
2014 Equity
Target ($)
|
RSUs (50%)
|
PSUs (50%)
|
|||||||||||||||
75%
|
100%
|
125%
|
10%
|
100%
|
200%
|
Minimum
|
Maximum
|
||||||||||
Albert A. Benchimol
|
N/A
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Christopher N. DiSipio
|
$720,000
|
$270,000
|
|
$360,000
|
|
$450,000
|
|
$36,000
|
|
$360,000
|
|
$720,000
|
|
$306,000
|
|
$1,170,000
|
|
John W. Gressier
|
$1,400,000
|
$525,000
|
|
$700,000
|
|
$875,000
|
|
$70,000
|
|
$700,000
|
|
$1,400,000
|
|
$595,000
|
|
$2,275,000
|
|
Joseph C. Henry
|
$1,200,000
|
$450,000
|
|
$600,000
|
|
$750,000
|
|
$60,000
|
|
$600,000
|
|
$1,200,000
|
|
$510,000
|
|
$1,950,000
|
|
John D. Nichols
|
$1,400,000
|
$525,000
|
|
$700,000
|
|
$875,000
|
|
$70,000
|
|
$700,000
|
|
$1,400,000
|
|
$595,000
|
|
$2,275,000
|
|
Peter W. Wilson
|
$900,000
|
$337,500
|
|
$450,000
|
|
$562,500
|
|
$45,000
|
|
$450,000
|
|
$900,000
|
|
$382,500
|
|
$1,462,500
|
|
Name
|
RSUs
|
PSUs
|
Albert A. Benchimol
|
N/A
|
N/A
|
Christopher N. DiSipio
|
$324,000
|
$360,000
|
Joseph C. Henry
|
$540,000
|
$600,000
|
John W. Gressier
|
N/A
|
N/A
|
John D. Nichols
|
$630,000
|
$700,000
|
Peter W. Wilson
|
$405,000
|
$450,000
|
•
|
align the long-term interests of our new CEO with those of our shareholders; and
|
•
|
reward him in the event our performance exceeds the median of our peer group over a three-year period.
|
Name & Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
|
Stock Awards
($)
(1)
|
|
Non-Equity Incentive Plan Compensation
($)
|
All Other Compensation
($)
(2)
|
Total
($)
|
Albert A. Benchimol
CEO, President and Director
|
2014
|
$1,100,000
|
$203,088
|
|
—
|
|
$1,925,000
|
$576,518
|
$3,804,606
|
2013
|
$1,100,000
|
—
|
|
—
|
|
$1,900,000
|
$653,631
|
$3,653,631
|
|
2012
|
$1,032,038
|
$385,000
|
|
$18,863,225
|
|
$1,925,000
|
$468,758
|
$22,674,021
|
|
Christopher N. DiSipio
CEO, AXIS Accident & Health
|
2014
|
$500,000
|
$72,000
|
|
$719,919
|
|
$400,000
|
$54,017
|
$1,745,936
|
John W. Gressier
Former Chief Operating Officer
|
2014
|
$929,340
|
—
|
|
$1,399,941
|
|
$1,262,500
|
$145,974
|
$3,737,755
|
2013
|
$915,153
|
—
|
|
$1,753,200
|
|
$1,175,543
|
$732,739
|
$4,576,636
|
|
2012
|
$910,000
|
$112,500
|
|
$1,673,175
|
|
$1,137,500
|
$493,361
|
$4,326,536
|
|
Joseph C. Henry
CFO
|
2014
|
$565,000
|
$90,400
|
|
$1,199,924
|
|
$565,000
|
$64,750
|
$2,489,074
|
2013
|
$565,000
|
—
|
|
$1,168,800
|
|
$548,050
|
$63,721
|
$2,345,571
|
|
2012
|
$285,577
|
$55,000
|
|
$487,050
|
|
$550,000
|
$97,584
|
$1,475,211
|
|
John D. Nichols
CEO, AXIS Reinsurance
|
2014
|
$900,000
|
$220,050
|
|
$1,399,941
|
|
$1,125,000
|
$435,431
|
$4,080,422
|
2013
|
$900,000
|
—
|
|
$1,558,400
|
|
$1,091,250
|
$235,390
|
$3,785,040
|
|
2012
|
$657,692
|
$75,000
|
|
$1,666,500
|
|
$1,125,000
|
$25,000
|
$3,549,192
|
|
Peter W. Wilson
CEO, AXIS Insurance
|
2014
|
$786,346
|
—
|
|
$1,157,900
|
|
$1,000,000
|
$78,635
|
$3,022,881
|
(1)
|
The grant date fair value of the awards is based on the closing price of our common stock on the NYSE on the date of the grant without taking into account estimated forfeitures.
|
(2)
|
The All Other Compensation for 2014-Supplemental Table below provides details regarding the 2014 amounts.
|
Name
|
Personal Use of Aircraft ($)
(1)
|
Housing Allowance ($)
|
Retirement Contributions ($)
(2)
|
Other Compensation ($)
(3)
|
All Other Compensation ($)
|
Albert A. Benchimol
|
$144,893
|
$300,000
|
$26,000
|
$105,625
|
$576,518
|
Christopher N. DiSipio
|
|
|
$50,000
|
$4,017
|
$54,017
|
John W. Gressier
|
|
|
$139,401
|
$6,573
|
$145,974
|
Joseph C. Henry
|
|
|
$26,000
|
$42,750
|
$68,750
|
John D. Nichols
|
|
$300,000
|
$26,000
|
$109,431
|
$435,431
|
Peter W. Wilson
|
|
|
$78,635
|
|
$78,635
|
(1)
|
This amount represents the incremental cost to the Company of the aircraft that we lease. We calculate our incremental cost for personal use of corporate aircraft based on variable operating costs including fuel costs, crew travel, hourly costs, landing fees and other miscellaneous variable costs. Fixed costs that do not change based on usage, such as the lease cost for the aircraft, are not included. On certain occasions, a family member or guest may accompany the executive on a flight.
|
(2)
|
The amounts for Messrs. Benchimol, Henry, and Nichols represent a Company contribution under the AXIS 401(k) Plan. The amounts for Messrs. DiSipio and Wilson represent Company contributions under the AXIS 401(k) Plan, and the AXIS Specialty U.S. Services, Inc. Supplemental Retirement Plan ("U.S. Supplemental Plan"). The amount for Mr. Gressier is the Company’s contribution to the London Stakeholder Pension Plan.
|
(3)
|
Other Compensation includes: (i) a cash payment in lieu of a Company contribution to the U.S. Supplemental Plan for Messrs. Benchimol ($105,625), Henry ($38,750), and Nichols ($80,625), as these executives are no longer eligible participants due to changes in Section 457A of the Internal Revenue code; (ii) a home leave benefit for Messrs. Gressier ($6,573) and Nichols ($21,112); (iii) the cost of executive physicals for Messrs. Henry and Nichols; and (iv) a service award with a tax gross-up adjustment for Mr. DiSipio.
|
Name
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(5)
|
All Other Stock Awards: Shares of Stock or Units (#)
(9)
|
Grant Date Fair Value of Stock
($)
(10)
|
||||
Grant Date
(1)
|
Threshold ($)
(2)
|
Target ($)
(3)
|
Maximum ($)
(4)
|
|
Threshold ($)
(6)
|
Target ($)
(7)
|
Maximum ($)
(8)
|
|||
Albert A. Benchimol
|
N/A
|
$0
|
$1,925,000
|
$3,850,000
|
|
—
|
—
|
—
|
—
|
—
|
Christopher N. DiSipio
|
3/1/2014
|
|
|
|
|
$35,996
|
$359,960
|
$719,919
|
8,120
|
$719,919
|
|
N/A
|
$0
|
$400,000
|
$800,000
|
|
|
|
|
|
|
John W. Gressier
|
3/1/2014
|
|
|
|
|
$69,997
|
$699,971
|
$1,399,941
|
15,790
|
$1,399,941
|
|
N/A
|
$0
|
$1,262,500
|
$2,525,000
|
|
|
|
|
|
|
Joseph C. Henry
|
3/1/2014
|
|
|
|
|
$59,978
|
$599,962
|
$1,199,924
|
13,534
|
$1,199,924
|
|
N/A
|
$0
|
$565,000
|
$1,130,000
|
|
|
|
|
|
|
John D. Nichols
|
3/1/2014
|
|
|
|
|
$69,997
|
$699,971
|
$1,399,941
|
15,790
|
$1,399,941
|
|
N/A
|
$0
|
$1,125,000
|
$2,250,000
|
|
|
|
|
|
|
Peter W. Wilson
|
3/1/2014
|
|
|
|
|
|
|
|
26,120
|
$1,157,900
|
|
N/A
|
$0
|
$1,000,000
|
$2,000,000
|
|
|
|
|
|
|
(1)
|
Effective date of grants of RSU and PSU awards under our 2007 LTEP, the terms of which are summarized under “Compensation Discussion and Analysis - Long-Term Equity Compensation Plans.”
|
(2)
|
Amounts represent the minimum incentive bonus opportunity pursuant to the 2014 Annual Incentive Plan.
|
(3)
|
Amounts represent the annual target incentive bonus opportunity pursuant to each NEO’s employment agreement.
|
(4)
|
Amounts represent the maximum incentive bonus opportunity pursuant to the 2014 Annual Incentive Plan.
|
(5)
|
Messrs. DiSipio, Gressier, Henry and Nichols received a 50/50 split of RSUs and PSUs. Amounts represent PSU award. The PSUs will vest in one installment on the third anniversary of the grant date.
|
(6)
|
Amounts represent guaranteed minimum payout for PSU award.
|
(7)
|
Amounts represent target payout for PSU award provided certain Company performance conditions are satisfied.
|
(8)
|
Amounts represent maximum payout for PSU award provided certain Company performance conditions are satisfied.
|
(9)
|
Messrs. DiSipio, Gressier, Henry and Nichols received a 50/50 split of RSUs and PSUs. Amounts represent RSU award. The RSUs will vest in four equal installments on the first, second, third and fourth anniversaries of the date of the grant of RSUs. Mr. Wilson received RSUs with the same terms as those granted to the other NEOs, and a special equity award ($360,000) which will vest in one installment on the third anniversary of the grant date.
|
(10)
|
Amounts represent the $44.33 grant date fair value per share of the RSU and PSU awards granted on March 1, 2014.
|
Name
|
Option Awards
|
|
Stock Awards
|
|||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Option Exercise Price ($)
|
Option Expiration Date
|
|
Grant Date
|
Number of Shares or Number Units of Stock that have Not Vested
(#)
(1)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
(2)
|
Equity Incentive Plan Awards:
# of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
(1)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
(2)
|
||||||
|
||||||||||||||
|
||||||||||||||
|
||||||||||||||
|
||||||||||||||
|
||||||||||||||
Albert A. Benchimol
|
—
|
|
—
|
|
—
|
|
|
1/17/2011
|
25,000
|
$1,277,250
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
2/6/2012
|
26,250
|
$1,341,113
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
5/3/2012
|
83,334
|
$4,257,534
|
250,000
|
|
$12,772,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$19,648,397
|
|
Christopher N. DiSipio
|
—
|
|
—
|
|
—
|
|
|
2/7/2011
|
3,750
|
$191,588
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
2/6/2012
|
10,350
|
$528,782
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
2/4/2013
|
18,750
|
$957,938
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
3/1/2014
|
8,120
|
$414,851
|
8,120
|
|
$414,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2,508,010
|
|
John W. Gressier
|
—
|
|
—
|
|
—
|
|
|
2/7/2011
|
12,500
|
$638,625
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
2/6/2012
|
26,250
|
$1,341,113
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
2/4/2013
|
33,750
|
$1,724,288
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
3/1/2014
|
15,790
|
$806,711
|
15,790
|
|
$806,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$5,317,448
|
|
Joseph C. Henry
|
—
|
|
—
|
|
—
|
|
|
6/18/2012
|
7,500
|
$383,175
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
2/4/2013
|
22,500
|
$1,149,525
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
3/1/2014
|
13,534
|
$691,452
|
13,534
|
|
$691,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2,915,604
|
|
John D. Nichols
|
—
|
|
—
|
|
—
|
|
|
4/2/2012
|
25,000
|
$1,277,250
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
2/4/2013
|
30,000
|
$1,532,700
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
3/1/2014
|
15,790
|
$806,711
|
15,790
|
|
$806,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4,423,372
|
|
Peter W. Wilson
|
—
|
|
—
|
|
—
|
|
|
5/6/2013
|
18,750
|
$957,938
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
3/1/2014
|
26,120
|
$1,334,471
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2,292,409
|
|
(2)
|
The market value is based on the closing price of common stock on December 31, 2014 ($51.09).
|
|
Option Awards
|
|
Stock Awards
|
||
Name
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting
(#)
|
Value Realized on Vesting
($)
|
|
|||||
|
|||||
Albert A. Benchimol
|
—
|
—
|
|
121,458
|
$5,465,427
(1)
|
Christopher N. DiSipio
|
—
|
—
|
|
18,175
|
$785,905
(2)
|
John W. Gressier
|
—
|
—
|
|
46,875
|
$2,018,138
(3)
|
Joseph C. Henry
|
—
|
—
|
|
11,250
|
$505,688
(4)
|
John D. Nichols
|
—
|
—
|
|
22,500
|
$1,013,050
(5)
|
Peter W. Wilson
|
—
|
—
|
|
6,250
|
$277,563
(6)
|
Name
|
Executive Contributions in Last FY ($)
|
Registrant Contributions in Last FY ($)
(1)
|
Aggregate Earnings in Last FY
|
Aggregate Withdrawals / Distributions ($)
(2)
|
Aggregate Balance at Last FYE ($)
(3)
|
|
Albert A. Benchimol
|
—
|
—
|
—
|
—
|
—
|
|
Christopher N. DiSipio
|
$156,380
|
$24,000
|
$41,232
|
—
|
$606,100
|
|
John W. Gressier
(2)
|
—
|
—
|
—
|
$1,043
|
—
|
|
Joseph C. Henry
|
—
|
—
|
—
|
—
|
—
|
|
John D. Nichols
|
—
|
—
|
—
|
—
|
—
|
|
Peter W. Wilson
|
—
|
$52,635
|
$2,079
|
—
|
$24,706
|
(2)
|
Mr. Gressier received a final distribution from the International Pension Plan in January 2014 in connection with his relocation to the United Kingdom in December 2013.
|
(3)
|
Includes the following amount that has been reported in the “All Other Compensation” column of the Summary of Compensation Table for 2014 and previous years.
|
Name
|
2014
|
Previous Years
|
Albert A. Benchimol
|
—
|
—
|
Christopher N. DiSipio
|
—
|
—
|
John W. Gressier
|
—
|
$619,082
|
Joseph C. Henry
|
—
|
—
|
John D. Nichols
|
—
|
—
|
Peter W. Wilson
|
—
|
—
|
•
|
Options and stock appreciation rights become immediately exercisable, and remain exercisable throughout their entire term, unless exercised, cashed out, or replaced
|
•
|
Performance units are paid out as if the date of the change in control were the last day of the applicable performance period and “target performance levels” had been attained
|
•
|
All other outstanding awards will automatically be deemed exercisable and vested and all restrictions and forfeiture provisions related to the awards will lapse
|
(i)
|
material breach of the terms of their employment;
|
(ii)
|
conviction for a felony or commission of any act which would rise to the level of a felony;
|
(iii)
|
commission of a lesser crime or offense that materially harms or could harm our business or reputation;
|
(iv)
|
willful violation of our specific directives;
|
(v)
|
commission of a dishonest or wrongful act involving fraud, misrepresentation or moral turpitude causing us damage or potential damage;
|
(vi)
|
willful failure to perform a substantial part of their duties; or
|
(vii)
|
breach of fiduciary duty.
|
Name
|
Death or
Disability
|
Executive
Termination for
Good Reason or
Company
Termination
Without Cause
(pre-Change in
Control)
|
Executive
Termination for
Good Reason or
Company
Termination
Without Cause in
Connection with
Change in Control
(1)
|
|
Albert A. Benchimol
|
|
|
|
|
Base Pay ($)
|
1,100,000
|
|
2,200,000
|
2,200,000
|
Separation Bonus ($)
|
1,925,000
|
|
6,545,000
|
8,855,000
|
Value of Equity Awards
(2)
($)
|
19,648,397
|
|
19,648,397
|
19,648,397
|
Benefits and Perquisites: Medical, Dental, Vision
(3)
($)
|
—
|
|
21,003
|
21,003
|
Total ($)
|
22,673,397
|
|
28,414,400
|
30,724,400
|
Christopher N. DiSipio
|
|
|
|
|
Base Pay ($)
|
—
|
|
500,000
|
500,000
|
Separation Bonus ($)
|
400,000
|
|
800,000
|
1,200,000
|
Value of Equity Awards
(2)
($)
|
2,508,000
|
|
2,508,000
|
2,508,000
|
Benefits and Perquisites: Medical ($)
(3)
|
—
|
|
14,557
|
14,557
|
Total ($)
|
2,908,000
|
|
3,822,557
|
4,222,557
|
Joseph C. Henry
|
|
|
|
|
Base Pay ($)
|
—
|
|
565,000
|
565,000
|
Separation Bonus ($)
|
565,000
|
|
1,130,000
|
1,695,000
|
Value of Equity Awards
(2)
($)
|
2,915,604
|
|
2,915,604
|
2,915,604
|
Benefits and Perquisites: Medical, Dental, Vision
(3)
($)
|
—
|
|
14,578
|
14,578
|
Total ($)
|
3,480,604
|
|
4,625,182
|
5,190,182
|
John D. Nichols
|
|
|
|
|
Base Pay ($)
|
—
|
|
900,000
|
900,000
|
Separation Bonus ($)
|
1,125,000
|
|
2,250,000
|
3,375,000
|
Value of Equity Awards
(2)
($)
|
4,423,372
|
|
4,423,372
|
4,423,372
|
Benefits and Perquisites: Medical, Dental, Vision
(3)
($)
|
—
|
|
21,003
|
21,003
|
Total ($)
|
5,548,372
|
|
7,594,375
|
8,719,375
|
Peter W. Wilson
|
|
|
|
|
Base Pay ($)
|
—
|
|
800,000
|
800,000
|
Separation Bonus ($)
|
1,000,000
|
|
2,000,000
|
3,000,000
|
Value of Equity Awards
(2)
($)
|
2,292,409
|
|
2,292,409
|
2,292,409
|
Benefits and Perquisites: Medical, Dental, Vision ($)
(3)
|
—
|
|
14,578
|
14,578
|
Total ($)
|
3,292,409
|
|
5,106,987
|
6,106,987
|
(1)
|
Under the 2007 LTEP and each of our NEO’s employment agreements, a “change in control” occurs if: (i) a person, company, government, or political subdivision, agency, or instrumentality of a government becomes the beneficial owner of 50% or more of the combined voting power of our outstanding voting securities, except for: (a) any acquisition directly from us, (b) any acquisition by us, (c) any acquisition by one of our employee benefit plans, or (d) any acquisition that complies with clauses (a), (b) and (c) of paragraph (iii) below; (ii) our Board is no longer composed of a majority of individuals who were either members as of the date the 2003 LTEP was adopted, or whose election or nomination for election was approved by a majority of the directors then comprising the incumbent Board; (iii) a merger, sale of substantially all of the assets or other similar transaction occurs between us and another person, company, government, or political subdivision, agency, or instrumentality of a government, unless, following the transaction, (a) substantially all of the beneficial owners of our voting securities immediately before the transaction beneficially own more than 50% of the combined voting power of the successor entity, in substantially the same proportions as their ownership of our voting securities immediately prior to the transaction; (b) no person, company, government, or political subdivision, agency, or instrumentality of a government (excluding the successor entity) beneficially owns 50% or more of the outstanding shares of our common stock or the combined voting power of the successor entity, or owns all or
|
(2)
|
Indicates value of unvested equity awards for which vesting accelerates upon termination for death or disability and for which vesting continues in accordance with the vesting terms set forth in the applicable award agreements in the case of Company termination without cause or termination by each NEO for good reason. In the case of each NEO’s termination without cause by the Company or for good reason by the NEO after a change in control, unvested equity awards, including those subject to performance conditions, immediately vest. Aggregate value of unvested equity awards calculated at a price of $51.09, the closing price of our common stock on December 31, 2014.
|
(3)
|
Value of continued coverage under medical, dental, vision assumes the Company is paying full cost of COBRA premiums for one year.
|
Name
|
Fees Earned or Paid in Cash
($)
(1)
|
All Other Compensation ($)
|
Total ($)
|
|
Geoffrey Bell
|
$219,500
|
—
|
$219,500
|
|
Jane Boisseau
|
$218,000
|
—
|
$218,000
|
|
Michael A. Butt
|
$402,000
(2)
|
$950,000
(3)
|
$1,352,000
|
|
Charles A. Davis
|
$216,000
|
—
|
$216,000
|
|
Robert L. Friedman
|
$215,000
|
—
|
$215,000
|
|
Christopher V. Greetham
|
$276,000
(2)
|
—
|
$276,000
|
|
Maurice A. Keane
|
$277,500
(2)
|
—
|
$277,500
|
|
Sir Andrew Large
|
$225,500
|
—
|
$225,500
|
|
Cheryl-Ann Lister
|
$213,500
|
—
|
$213,500
|
|
Thomas C. Ramey
|
$251,000
|
—
|
$251,000
|
|
Henry B. Smith
|
$311,500
(2)
|
—
|
$311,500
|
|
Alice Young
|
$215,000
|
—
|
$215,000
|
|
Wilhelm Zeller
|
$213,500
|
—
|
$213,500
|
(1)
|
Under the terms of the 2014 Directors Annual Compensation Program, all or half of the annual cash retainer and all of the committee meeting fees can be distributed to the Directors in common shares in lieu of cash, pursuant to individual elections. For 2014, the following directors elected to have 50% of their annual retainer delivered in common shares resulting in the following common share payments: Mr. Bell (2,177), Ms. Boisseau (2,177), Mr. Greetham (2,177), Mr. Keane (2,177), Ms. Lister (2,177), Mr. Smith (2,177), Ms. Young (2,177), and Mr. Zeller (2,177). Mr. Friedman received 4,714 common shares, based on his election to have 100% of his annual retainer, and $16,500 related to 2013 meeting fees, delivered in common shares. All common share amounts are derived using the fair market value of our common stock on the tenth business day in January of the applicable year, pursuant to our 2014 Directors Annual Compensation Program.
|
(2)
|
Cash payment to Messrs. Butt, Greetham, Keane, and Smith includes $52,000 for serving on the Boards of our Irish subsidiaries, AXIS Re SE and AXIS Specialty Europe SE, during 2014.
|
(3)
|
Mr. Butt received $950,000 in consulting fee payments pursuant to the terms of a consulting agreement by and between Mr. Butt and the Company dated May 3, 2012, as amended December 5, 2013 and December 5, 2014.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights
(1)
|
Weighted-
Average
Exercise Price
Outstanding
Options,
Warrants and
Rights
(2)
|
Number of
Securities
Remaining
Available for
Future Issuance
under Equity
Compensation
Plans (Excluding
Securities
Reflected in the
First Column)
(3)
|
Equity compensation plans approved by security holders
|
1,863,953
|
$28.02
|
5,868,286
|
Equity compensation plans not approved by security holders
|
—
|
—
|
—
|
Total
|
1,863,953
|
$28.02
|
5,868,286
|
(1)
|
Includes: (i) 20,000 stock options granted under our 2003 LTEP and the AXIS Capital Holdings Limited 2003 Directors Long-Term Equity Compensation Plan; (ii) 13,174 phantom stock units granted under the AXIS Capital Holdings Limited 2003 Directors Long-Term Equity Compensation Plan and 13,246 phantom stock units granted under our 2007 LTEP; and (iii) 1,720,577 restricted stock units and 96,956 performance units granted under our 2007 LTEP. This balance does not include 1,343,147 outstanding restricted shares, 1,451,539 cash-settled restricted stock units or 51,841 cash-settled performance units.
|
(2)
|
Represents the weighted-average exercise price of the 20,000 outstanding options. The weighted-average remaining term of all outstanding options is 12 days (or 0.03 years).
|
(3)
|
Includes common shares available for issuance under our 2007 LTEP pursuant to awards of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance unit awards and other equity-based or equity-related awards.
|
•
|
Each person or group known to us to be the beneficial owner of more than 5% of our common shares
|
•
|
Each of our directors
|
•
|
Each of our Named Executive Officers
|
•
|
All of our directors and executive officers as a group
|
Directors and Executive Officers
|
Number of
Common
Shares
(1)
|
Percent of
Outstanding
Common
Shares
(1)
|
Geoffrey Bell
|
13,454
|
*
|
Albert A. Benchimol
|
515,006
|
*
|
Jane Boisseau
|
6,971
|
*
|
Michael A. Butt
|
1,215,956
|
1.2%
|
Charles A. Davis
|
—
|
*
|
Robert L. Friedman
|
47,183
|
*
|
Christopher V. Greetham
|
24,949
|
*
|
Maurice A. Keane
|
95,880
|
*
|
Sir Andrew Large
|
9,711
|
*
|
Cheryl-Ann Lister
|
23,716
|
*
|
Thomas C. Ramey
|
12,276
|
*
|
Henry B. Smith
|
38,309
|
*
|
Alice Young
|
2,177
|
*
|
Wilhelm Zeller
|
12,527
|
*
|
Christopher N. DiSipio
|
59,462
|
*
|
John W. Gressier
|
242,816
|
*
|
Joseph C. Henry
|
17,905
|
*
|
John D. Nichols
|
73,481
|
*
|
Peter W. Wilson
|
9,673
|
*
|
All directors and executive officers as a group (19 persons)
|
2,421,452
|
2.4%
|
Other Shareholders
|
|
|
FMR LLC and related entities
(2)
|
9,777,217
|
9.56%
|
Pzena Investment Management, LLC
(3)
|
7,078,975
|
6.93%
|
The Vanguard Group
(4)
|
7,742,888
|
7.57%
|
BlackRock, Inc.
(5)
|
5,205,588
|
5.1%
|
(1)
|
Unless otherwise indicated, the number of common shares beneficially owned and percentage ownership are based on 100,784,936 common shares outstanding as of January 19, 2015 adjusted as required by rules promulgated by the SEC. Beneficial ownership is determined in accordance with the rules of the SEC and includes sole or shared voting or investment power with respect to such shares. Except as indicated in the footnotes to the table, based on information provided by the persons named in the table, such persons have sole voting and investment power with respect to all common shares shown as beneficially owned by them. Our bye-laws reduce the total voting power of any shareholder owning 9.5% or more of our common shares to less than 9.5% of the voting power of our capital stock, but only in the event that a U.S. Shareholder, as defined in our bye-laws, owning 9.5% or more of our common shares is first determined to exist.
|
(2)
|
The number of common shares beneficially owned and the information set forth below is based solely on information contained in Amendment No. 11 to the Schedule 13G/A filed on February 13, 2015 by FMR LLC, 245 Summer Street, Boston Massachusetts, 02210, and includes common shares beneficially owned as of December 31, 2014. FMR LLC has sole voting power over 528,665 common shares and sole dispositive power over 9,777,217 common shares; Edward C. Johnson 3d is a Director and the Chairman of FMR LLC and has sole dispositive power over 9,777,217 common shares; Abigail P. Johnson is a Director, the Vice Chairman, the Chief Executive Officer and the President of FMR LLC and has sole dispositive power over 9,777,217 common shares; Fidelity Low-Priced Stock Fund has sole voting power over 7,484,300 common shares. Neither FMR LLC nor Edward C. Johnson 3d nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees.
|
(3)
|
The number of common shares beneficially owned and the information set forth below is based solely on information contained in Schedule 13G filed on January 29, 2015 by Pzena Investment Management, LLC (“Pzena”),120 West 45
th
Street, 20
th
Floor, New York, NY 10036, and includes common shares beneficially owned as of December 31, 2014. Pzena has sole voting power over 3,862,876 common shares and sole dispositive power over 7,078,975 common shares.
|
(4)
|
The number of common shares beneficially owned and the information set forth below is based solely on information contained in Schedule 13G filed on February 10, 2015 by The Vanguard Group (“Vanguard”), 100 Vanguard Blvd., Malvern, PA 19355, and includes common shares beneficially owned as of December 31, 2014. Vanguard has sole voting power over 100,257 common shares and sole dispositive power over 7,658,702 common shares.
|
(5)
|
The number of common shares beneficially owned and the information set forth below is based solely on information contained in Schedule 13G filed on February 3, 2015 by BlackRock, Inc. (“BlackRock”), 55 East 52
nd
Street, New York, NY 10022, and includes common shares beneficially owned as of December 31, 2014. BlackRock has sole voting power over 4,429,021 common shares and sole dispositive power over 5,205,588 common shares.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
(1)
|
Audit Fees for the years ended December 31, 2014 and 2013 were for professional services rendered for the audit of our annual financial statements, for the review of the financial statements included in our quarterly reports on Form 10-Q, for services in connection with the audits for insurance statutory and regulatory purposes in the various jurisdictions in which we operate and for the provision of opinions and consents relating to our filings with the Securities and Exchange Commission.
|
(2)
|
Audit-Related Fees for the years ended December 31, 2014, and December 31, 2013, related to the provision of comfort letters in relation to a debt offering, the repurchase of common shares formerly held by Stone Point Capital LLC and its affiliates and an issuance of preferred securities. The amounts also included fees related to an actuarial external peer review and preparation of an annual regulatory certificate in Australia and New York and the audit of employees’ pension plans.
|
(3)
|
Tax fees for the year ended December 31, 2014 included $13,782 for tax consulting services and $9,851 for tax compliance services.
|
(4)
|
There were no fees in the All Other Fees category for the fiscal years ended December 31, 2014 or 2013.
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
Financial Statements, Financial Statement Schedules and Exhibits
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
Schedule II
|
– Condensed Financial Information of Registrant
|
Schedule III
|
– Supplementary Insurance Information
|
Schedule IV
|
– Supplementary Reinsurance Information
|
3.
|
Exhibits
|
Exhibit
Number
|
|
Description of Document
|
|
|
|
2.1
|
|
Agreement and Plan of Amalgamation, dated as of January 25, 2015, by and among PartnerRe Ltd. and AXIS Capital Holdings Limited (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on January 29, 2015).
|
3.1
|
|
Certificate of Incorporation and Memorandum of Association of AXIS Capital Holdings Limited (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (Amendment No. 1) (No. 333-103620) filed on April 16, 2003).
|
|
|
|
3.2
|
|
Amended and Restated Bye-laws of AXIS Capital Holdings Limited (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-8 filed on May 15, 2009).
|
|
|
|
4.1
|
|
Specimen Common Share Certificate (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Amendment No. 3) (No. 333-103620) filed on June 10, 2003).
|
|
|
|
4.2
|
|
Senior Indenture between AXIS Capital Holdings Limited and The Bank of New York, as trustee, dated as of November 15, 2004 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on November 15, 2004).
|
|
|
|
4.3
|
|
First Supplemental Indenture between AXIS Capital Holdings Limited and The Bank of New York, as trustee, dated as of November 15, 2004 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on November 15, 2004).
|
|
|
|
4.4
|
|
Senior Indenture among AXIS Specialty Finance LLC, AXIS Capital Holdings Limited and The Bank of New York Mellon Trust Company, N.A., as trustee, dated as of March 23, 2010 (incorporated by reference to Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q filed on April 27, 2010).
|
|
|
|
4.5
|
|
Senior Indenture, dated as of March 13, 2014, among AXIS Specialty Finance PLC, as issuer, the Company, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 13, 2014).
|
|
|
|
4.6
|
|
Form of 2.650% Senior Notes due 2019 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 13, 2014).
|
|
|
|
4.7
|
|
Form of 5.150% Senior Notes due 2045 (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on March 13, 2014).
|
|
|
|
|
|
|
*10.15
|
|
2007 Long-Term Equity Compensation Plan, as amended (incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 filed on May 15, 2012).
|
|
|
|
*10.16
|
|
Form of Employee Restricted Stock Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 28, 2010).
|
|
|
|
*10.17
|
|
Form of Employee Restricted Stock Unit Agreement (Performance Vesting) (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K filed on February 21, 2014).
|
|
|
|
*10.18
|
|
Form of Employee Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K filed on February 21, 2014).
.
|
|
|
|
*10.19
|
|
2013 Executive Long-Term Equity Compensation Program (incorporated by by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 9, 2013).
|
|
|
|
*10.20
|
|
2014 Executive Annual Incentive Plan (incorporated by by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 26, 2014).
|
|
|
|
*10.21
|
|
2003 Directors Long-Term Equity Compensation Plan (incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-8 (No. 333-110228) filed on November 4, 2003).
|
|
|
|
*10.22
|
|
2003 Directors Deferred Compensation Plan, as amended and restated (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on April 28, 2009).
|
|
|
|
*10.23
|
|
2015 Directors Annual Compensation Program (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on October 31, 2014).
|
|
|
|
*10.24
|
|
AXIS Specialty U.S. Services, Inc. Supplemental Retirement Plan (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K filed on February 26, 2008).
|
|
|
|
10.25
|
|
Master Reimbursement Agreement, dated as of May 14, 2010, by and among AXIS Specialty Limited, AXIS Re Limited, AXIS Specialty Europe Limited, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Specialty Insurance Company, AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 19, 2010).
|
|
|
|
10.26
|
|
Amendment to Master Reimbursement Agreement dated January 27, 2012 by and among AXIS Specialty Limited, AXIS Re Limited, AXIS Specialty Europe Limited, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Specialty Insurance Company and AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 30, 2012).
|
|
|
|
10.27
|
|
Amendment to Committed Facility Letter dated November 20, 2013 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Surplus Insurance Company and AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 21, 2013).
|
|
|
|
10.28
|
|
Credit Agreement dated March 26, 2013 by and among AXIS Capital Holdings Limited, certain subsidiaries of AXIS Capital Holdings Limited party thereto, Wells Fargo Bank, National Association, as Administrative Agent, Fronting Bank and L/C Administrator and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 29, 2013).
|
|
|
|
10.29
|
|
First Amendment to Credit Agreement dated September 18, 2013 by and among AXIS Capital Holdings Limited, certain subsidiaries of AXIS Capital Holdings Limited party thereto, Wells Fargo Bank, National Association, as Administrative Agent, Fronting Bank and L/C Administrator and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 24, 2013).
|
|
|
|
10.30
|
|
Letter of Credit Facility dated November 6, 2013 by and between AXIS Specialty Limited and ING Bank N.V., London Branch (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 8, 2013).
|
|
|
|
10.31
|
|
Guaranty dated February 10, 2014 by AXIS Specialty Finance PLC in favor of the Lenders, the Administrative Agent, the Fronting Banks and the L/C Administrator under the Credit Agreement dated March 26, 2013, as amended, by and among AXIS Capital Holdings Limited, certain subsidiaries of AXIS Capital Holdings Limited party thereto, Wells Fargo Bank, National Association, as Administrative Agent, Fronting Bank and L/C Administrator and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 11, 2014).
|
|
|
|
†12.1
|
|
Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends.
|
|
|
|
†21.1
|
|
Subsidiaries of the registrant.
|
|
|
|
†23.1
|
|
Consent of Deloitte Ltd.
|
|
|
|
†24.1
|
|
Power of Attorney (included as part of signature pages hereto).
|
|
|
|
†31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†101
|
|
The following financial information from AXIS Capital Holdings Limited’s Annual Report on Form 10-K for the year ended December 31, 2014 formatted in XBRL: (i) Consolidated Balance Sheets at December 31, 2014 and 2013; (ii) Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012; (iv) Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2014, 2013 and 2012; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012; and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.
|
*
|
Exhibits 10.2 through 10.24 represent a management contract, compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.
|
†
|
Filed herewith.
|
|
|
|
|
|
|
|
|
|
AXIS CAPITAL HOLDINGS LIMITED
|
||||
|
|
|
|
|||
|
|
By:
|
|
/s/ ALBERT BENCHIMOL
|
|
|
|
|
|
|
Albert Benchimol
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ ALBERT BENCHIMOL
|
|
Chief Executive Officer, President and Director
(Principal Executive Officer)
|
Albert Benchimol
|
|
|
|
|
|
/s/ JOSEPH HENRY
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Joseph Henry
|
|
|
|
|
|
/s/ JAMES O'SHAUGHNESSY
|
|
Controller
(Principal Accounting Officer)
|
James O'Shaughnessy
|
|
|
|
|
|
/s/ GEOFFREY BELL
|
|
Director
|
Geoffrey Bell
|
|
|
|
|
|
/s/ JANE BOISSEAU
|
|
Director
|
Jane Boisseau
|
|
|
|
|
|
/s/ MICHAEL A. BUTT
|
|
Director
|
Michael A. Butt
|
|
|
|
|
|
/s/ CHARLES A. DAVIS
|
|
Director
|
Charles A. Davis
|
|
|
|
|
|
/s/ ROBERT L. FRIEDMAN
|
|
Director
|
Robert L. Friedman
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ CHRISTOPHER V. GREETHAM
|
|
|
Christopher V. Greetham
|
|
Director
|
|
|
|
/s/ MAURICE A. KEANE
|
|
|
Maurice A. Keane
|
|
Director
|
|
|
|
/s/ SIR ANDREW LARGE
|
|
|
Sir Andrew Large
|
|
Director
|
|
|
|
/s/ CHERYL-ANN LISTER
|
|
|
Cheryl-Ann Lister
|
|
Director
|
|
|
|
/s/ THOMAS C. RAMEY
|
|
|
Thomas C. Ramey
|
|
Director
|
|
|
|
/s/ HENRY B. SMITH
|
|
|
Henry B. Smith
|
|
Director
|
|
|
|
/s/ ALICE YOUNG
|
|
Director
|
Alice Young
|
|
|
|
|
|
/s/ WILHELM ZELLER
|
|
|
Wilhelm Zeller
|
|
Director
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 20, 2015
|
|
2014
|
|
2013
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Investments in subsidiaries on equity basis
|
$
|
6,114,436
|
|
|
$
|
6,581,368
|
|
Cash and cash equivalents
|
7,041
|
|
|
4,414
|
|
||
Other assets
|
2,642
|
|
|
3,179
|
|
||
Total assets
|
$
|
6,124,119
|
|
|
$
|
6,588,961
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Intercompany payable
|
$
|
213,149
|
|
|
$
|
204,877
|
|
Senior notes
|
—
|
|
|
499,906
|
|
||
Dividends payable
|
48,197
|
|
|
47,959
|
|
||
Other liabilities
|
41,652
|
|
|
18,257
|
|
||
Total liabilities
|
302,998
|
|
|
770,999
|
|
||
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Preferred shares
|
627,843
|
|
|
627,843
|
|
||
Common shares
(2014: 175,478; 2013: 174,134 shares issued
and 2014: 99,426; 2013: 109,485 shares outstanding)
|
2,191
|
|
|
2,174
|
|
||
Additional paid-in capital
|
2,285,016
|
|
|
2,240,125
|
|
||
Accumulated other comprehensive income (loss)
|
(45,574
|
)
|
|
117,825
|
|
||
Retained earnings
|
5,715,504
|
|
|
5,062,706
|
|
||
Treasury shares, at cost
(2014: 76,052; 2013: 64,649 shares)
|
(2,763,859
|
)
|
|
(2,232,711
|
)
|
||
Total shareholders’ equity
|
5,821,121
|
|
|
5,817,962
|
|
||
Total liabilities and shareholders’ equity
|
$
|
6,124,119
|
|
|
$
|
6,588,961
|
|
(1)
|
On November 15, 2004, AXIS Capital issued
$500 million
aggregate principal amount of
5.75%
senior unsecured debt (“Senior Notes”) at an issue price of
99.785%
, generating net proceeds of
$496 million
. Interest of the
5.75%
Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2005. AXIS Capital repaid the full
$500 million
of its outstanding
5.75%
Senior Notes upon their scheduled maturity of December 1, 2014.
|
(2)
|
AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance LLC, a
100%
owned finance subsidiary, related to the issuance of
$500 million
aggregate principal amount of
5.875%
senior unsecured notes. AXIS Capital’s obligations under this guarantee are unsecured and senior and rank equally with all other senior obligations of AXIS Capital.
|
(3)
|
AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance PLC,, a
100%
owned finance subsidiary, related to the issuance of
$250 million
aggregate principal amount of
2.65%
and
$250 million
aggregate principal amount of
5.15%
senior unsecured notes. AXIS Capital's obligations under this guarantee are unsecured and senior and rank equally with all other senior obligations of AXIS Capital.
|
(4)
|
AXIS Capital has fully and unconditionally guaranteed the obligations of AXIS Specialty Finance LLC, AXIS Specialty Finance PLC and AXIS Specialty Holdings Bermuda Limited related to the
$250 million
credit facility issued by a syndication of lenders. At
December 31,
2014
, debt outstanding under the credit facility was $
nil
.
|
(5)
|
AXIS Capital has fully and unconditionally guaranteed the derivative instrument obligations of certain of its
100%
owned operating subsidiaries. At December 31, 2014, the fair value of guaranteed obligations utilized aggregated to
$68 million
(2013: $
28 million
).
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Net investment income
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
25
|
|
Total revenues
|
3
|
|
|
5
|
|
|
25
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
General and administrative expenses
|
57,998
|
|
|
40,565
|
|
|
62,293
|
|
|||
Interest expense and financing costs
|
26,749
|
|
|
29,201
|
|
|
29,201
|
|
|||
Total expenses
|
84,747
|
|
|
69,766
|
|
|
91,494
|
|
|||
|
|
|
|
|
|
||||||
Loss before equity in net earnings of subsidiaries
|
(84,744
|
)
|
|
(69,761
|
)
|
|
(91,469
|
)
|
|||
Equity in net earnings of subsidiaries
|
895,489
|
|
|
797,226
|
|
|
638,710
|
|
|||
Net income
|
810,745
|
|
|
727,465
|
|
|
547,241
|
|
|||
Preferred share dividends
|
40,088
|
|
|
40,474
|
|
|
38,228
|
|
|||
Loss on repurchase of preferred shares
|
—
|
|
|
3,081
|
|
|
14,009
|
|
|||
Net income available to common shareholders
|
$
|
770,657
|
|
|
$
|
683,910
|
|
|
$
|
495,004
|
|
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
641,165
|
|
|
$
|
482,668
|
|
|
$
|
781,701
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
810,745
|
|
|
$
|
727,465
|
|
|
$
|
547,241
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in net earnings of subsidiaries
|
(895,489
|
)
|
|
(797,226
|
)
|
|
(638,710
|
)
|
|||
Change in intercompany payable
|
8,272
|
|
|
(38,375
|
)
|
|
(7,667
|
)
|
|||
Dividends received from subsidiaries
|
724,000
|
|
|
566,000
|
|
|
525,000
|
|
|||
Other items
|
53,865
|
|
|
34,803
|
|
|
56,425
|
|
|||
Net cash provided by operating activities
|
701,393
|
|
|
492,667
|
|
|
482,289
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital repaid from subsidiary
|
496,593
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by investing activities
|
496,593
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Redemption of senior notes
|
(500,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net proceeds from issuance of preferred shares
|
—
|
|
|
218,449
|
|
|
393,544
|
|
|||
Repurchase of preferred shares
|
—
|
|
|
(100,000
|
)
|
|
(404,073
|
)
|
|||
Repurchase of common shares
|
(543,202
|
)
|
|
(472,263
|
)
|
|
(317,687
|
)
|
|||
Dividends paid - common shares
|
(117,619
|
)
|
|
(118,426
|
)
|
|
(120,487
|
)
|
|||
Dividends paid - preferred shares
|
(40,088
|
)
|
|
(39,193
|
)
|
|
(38,228
|
)
|
|||
Proceeds from issuance of common shares
|
5,550
|
|
|
20,339
|
|
|
5,120
|
|
|||
Net cash used in financing activities
|
(1,195,359
|
)
|
|
(491,094
|
)
|
|
(481,811
|
)
|
|||
|
|
|
|
|
|
||||||
Increase in cash and cash equivalents
|
2,627
|
|
|
1,573
|
|
|
478
|
|
|||
Cash and cash equivalents - beginning of year
|
4,414
|
|
|
2,841
|
|
|
2,363
|
|
|||
Cash and cash equivalents - end of year
|
$
|
7,041
|
|
|
$
|
4,414
|
|
|
$
|
2,841
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
28,750
|
|
|
$
|
28,750
|
|
|
$
|
28,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2014
|
||||||||||||||||||||||||||||||||||
(in thousands)
|
|
Deferred
Acquisition
Costs
|
|
Reserve
for Losses
and Loss
Expenses
|
|
Unearned
Premiums
|
|
Net
Premiums
Earned
|
|
Net
Investment
Income
(1)
|
|
Losses
And Loss
Expenses
|
|
Amortization
of Deferred
Acquisition
Costs
|
|
Other
Operating
Expenses
(2)
|
|
Net
Premiums
Written
|
||||||||||||||||||
Insurance
|
|
$
|
135,111
|
|
|
$
|
5,063,147
|
|
|
$
|
1,506,925
|
|
|
$
|
1,830,544
|
|
|
$
|
—
|
|
|
$
|
1,131,880
|
|
|
$
|
278,804
|
|
|
$
|
341,214
|
|
|
$
|
1,779,501
|
|
Reinsurance
|
|
331,876
|
|
|
4,533,650
|
|
|
1,228,451
|
|
|
2,040,455
|
|
|
—
|
|
|
1,054,842
|
|
|
458,393
|
|
|
144,987
|
|
|
2,127,474
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
342,766
|
|
|
—
|
|
|
—
|
|
|
135,675
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
466,987
|
|
|
$
|
9,596,797
|
|
|
$
|
2,735,376
|
|
|
$
|
3,870,999
|
|
|
$
|
342,766
|
|
|
$
|
2,186,722
|
|
|
$
|
737,197
|
|
|
$
|
621,876
|
|
|
$
|
3,906,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2013
|
||||||||||||||||||||||||||||||||||
(in thousands)
|
|
Deferred
Acquisition
Costs
|
|
Reserve
for Losses
and Loss
Expenses
|
|
Unearned
Premiums
|
|
Net
Premiums
Earned
|
|
Net
Investment
Income
(1)
|
|
Losses
And Loss
Expenses
|
|
Amortization
of Deferred
Acquisition
Costs
|
|
Other
Operating
Expenses
(2)
|
|
Net
Premiums
Written
|
||||||||||||||||||
Insurance
|
|
$
|
150,109
|
|
|
$
|
4,873,184
|
|
|
$
|
1,548,653
|
|
|
$
|
1,722,762
|
|
|
$
|
—
|
|
|
$
|
1,050,402
|
|
|
$
|
242,363
|
|
|
$
|
347,684
|
|
|
$
|
1,813,538
|
|
Reinsurance
|
|
306,013
|
|
|
4,708,956
|
|
|
1,135,196
|
|
|
1,984,303
|
|
|
—
|
|
|
1,083,793
|
|
|
421,828
|
|
|
137,450
|
|
|
2,114,662
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409,312
|
|
|
—
|
|
|
—
|
|
|
90,256
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
456,122
|
|
|
$
|
9,582,140
|
|
|
$
|
2,683,849
|
|
|
$
|
3,707,065
|
|
|
$
|
409,312
|
|
|
$
|
2,134,195
|
|
|
$
|
664,191
|
|
|
$
|
575,390
|
|
|
$
|
3,928,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2012
|
||||||||||||||||||||||||||||||||||
(in thousands)
|
|
Deferred
Acquisition
Costs
|
|
Reserve
for Losses
and Loss
Expenses
|
|
Unearned
Premiums
|
|
Net
Premiums
Earned
|
|
Net
Investment
Income
(1)
|
|
Losses
And Loss
Expenses
|
|
Amortization
of Deferred
Acquisition
Costs
|
|
Other
Operating
Expenses
(2)
|
|
Net
Premiums
Written
|
||||||||||||||||||
Insurance
|
|
$
|
128,311
|
|
|
$
|
4,492,553
|
|
|
$
|
1,456,318
|
|
|
$
|
1,558,058
|
|
|
$
|
—
|
|
|
$
|
953,564
|
|
|
$
|
226,859
|
|
|
$
|
314,834
|
|
|
$
|
1,522,245
|
|
Reinsurance
|
|
260,937
|
|
|
4,566,178
|
|
|
998,374
|
|
|
1,857,405
|
|
|
—
|
|
|
1,142,464
|
|
|
400,794
|
|
|
116,487
|
|
|
1,815,211
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
380,957
|
|
|
—
|
|
|
—
|
|
|
129,660
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
389,248
|
|
|
$
|
9,058,731
|
|
|
$
|
2,454,692
|
|
|
$
|
3,415,463
|
|
|
$
|
380,957
|
|
|
$
|
2,096,028
|
|
|
$
|
627,653
|
|
|
$
|
560,981
|
|
|
$
|
3,337,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
As we evaluate the underwriting results of each of our reportable segments separately from the results of our investment portfolio, we do not allocate net investment income to our reportable segments.
|
(2)
|
Amounts related to our reportable segments reflect underwriting-related general and administrative expenses, including those incurred directly by segment personnel and certain corporate overhead costs allocated based on estimated consumption, headcount and other variables deemed relevant. Other corporate overhead costs, which are are not incremental and/or directly attributable to our individual underwriting operations, are not allocated to our reportable segments and are presented separately as corporate expenses.
|
|
(in thousands)
|
|
DIRECT
GROSS
PREMIUM
|
|
CEDED TO
OTHER
COMPANIES
|
|
ASSUMED
FROM
OTHER
COMPANIES
|
|
NET
AMOUNT
|
|
PERCENTAGE
OF AMOUNT
ASSUMED TO
NET
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
1,882,695
|
|
|
$
|
786,555
|
|
|
$
|
2,548,174
|
|
|
$
|
3,644,314
|
|
|
69.9
|
%
|
|
|
Accident and Health
|
|
127,279
|
|
|
17,989
|
|
|
153,371
|
|
|
262,661
|
|
|
58.4
|
%
|
|
||||
|
Total
|
|
$
|
2,009,974
|
|
|
$
|
804,544
|
|
|
$
|
2,701,545
|
|
|
$
|
3,906,975
|
|
|
69.1
|
%
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
1,920,203
|
|
|
$
|
767,374
|
|
|
$
|
2,508,363
|
|
|
$
|
3,661,192
|
|
|
68.5
|
%
|
|
|
Accident and Health
|
|
54,712
|
|
|
1,467
|
|
|
213,763
|
|
|
267,008
|
|
|
80.1
|
%
|
|
||||
|
Total
|
|
$
|
1,974,915
|
|
|
$
|
768,841
|
|
|
$
|
2,722,126
|
|
|
$
|
3,928,200
|
|
|
69.3
|
%
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
1,765,407
|
|
|
$
|
800,466
|
|
|
$
|
2,213,441
|
|
|
$
|
3,178,382
|
|
|
69.6
|
%
|
|
|
Accident and Health
|
|
40,480
|
|
|
1,721
|
|
|
120,315
|
|
|
159,074
|
|
|
75.6
|
%
|
|
||||
|
Total
|
|
$
|
1,805,887
|
|
|
$
|
802,187
|
|
|
$
|
2,333,756
|
|
|
$
|
3,337,456
|
|
|
69.9
|
%
|
|
1.
|
Section 3 of the Agreement (Consulting Fee) is hereby amended by deleting the reference to “2014” in the sixth line thereof and replacing such reference with “2015 and January and April 2016 plus a prorated portion of $237,500 for service from April 1, 2016 through the date of the Annual General Meeting of AXIS Capital Holdings Limited in 2016”.
|
2.
|
Section 4 of the Agreement (Consulting Term) is hereby amended by deleting the reference to “on December 31, 2014” in the third line thereof and replacing such reference with “at the Annual General Meeting of AXIS Capital Holdings Limited in 2016”.
|
3.
|
Section 8 of the Agreement (Noncompetition and Nonsolicitation) is hereby amended by deleting the reference to “December 31, 2015” in the last line thereof and replacing such reference with “May 31, 2017”.
|
4.
|
Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.
|
1)
|
Employment
|
a)
|
Position and Duties
. Effective June 23, 2014 the Company shall employ you in the position of Executive Vice President and Chief Executive Officer of AXIS Insurance or in such other position as is mutually agreeable to you and the Company. You will report directly and exclusively to the Chief Executive Officer of the Parent, or any other individual as is mutually agreeable to you and the Company. You will be expected to devote your full business time and energy, attention, skills and ability to the performance of your duties and responsibilities to the Company and its direct and indirect subsidiaries (collectively, the “Parent Group”) on an exclusive basis, as requested by the Chief Executive Officer of Parent, and shall faithfully and diligently endeavor to promote the business and best interests of the Company and its subsidiaries and affiliates. Anything herein to the contrary notwithstanding, nothing shall preclude you from (i) upon the written approval of the Parent’s Board, serving on the board of directors of another corporation or a trade association; (ii) serving on the board of charitable organizations, (iii) engaging in charitable, community and other business affairs, and (iv) managing your personal investments and affairs; provided such activities do not, in the reasonable judgment of the Company, materially interfere with the proper performance of your responsibilities and duties hereunder.
|
b)
|
Place of Performance
. In connection with your employment during the Employment Term (as defined in Section 3(a)), you shall be based primarily at the Company’s offices in New York, NY except for necessary travel on Company business.
|
2)
|
Compensation and Benefits
|
a)
|
During the Employment Term, your annual base salary shall be no less than $800,000 (the base salary as may be increased from time to time referred to as "
Base Salary
") and shall be paid pursuant to the Company's customary payroll practices.
|
b)
|
In addition to the Base Salary, in each fiscal year of the Parent ending during the Employment Term, you will be eligible to earn an annual cash bonus ("
Annual Bonus
"). Your target Annual Bonus is 125% of your then current Base Salary if the Parent achieves certain performance objectives and subject to your individual performance pursuant to the Parent’s annual bonus plan. Except as provided in Section 4 below, the Annual Bonus for each period will be paid only if you are actively employed with the Company on the date of disbursement. Any Annual Bonus payable hereunder shall be paid in the calendar year following the applicable fiscal year of the Parent, after it has been determined by the Compensation Committee of the Parent.
|
c)
|
You will be eligible to participate in the Parent’s 2013 Executive Long-Term Equity Compensation Program (the “Program”) (as may be amended from time to time) or a successor plan with an initial annual target share or unit award valued at $900,000 subject to the rules of the Program and an award agreement in such form as the Compensation Committee of the Parent may determine from time to time.
|
d)
|
During the Employment Term, you will be eligible to participate in or receive benefits under any 401(k) savings plan, medical and dental benefits plan, life insurance plan, short-term and long-term disability plans, supplemental and/or incentive compensation plans, or any other employee benefit or fringe benefit plan, generally made available by the Parent to senior executives in accordance with the eligibility requirements of such plans and subject to the terms and conditions set forth in this Agreement.
|
e)
|
During the Employment Term, you will be entitled to 25 days of paid vacation per calendar year (prorated for any partial years of employment), subject to the applicable vacation policies and procedures on usage and carry over. You are also eligible for two personal days per year.
|
f)
|
During the Employment Term, the Company will reimburse you for all reasonable business expenses incurred by you in the course of performing your duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of expenses. Reimbursements will be paid promptly after submission and review of appropriate documentation, but in any event no later than 2½ months after the end of the calendar year in which the expense was incurred.
|
g)
|
The Company will reimburse you for the reasonable legal expenses you incur to have this agreement approved within 30 days of receiving proof of such expenses having been incurred.
|
3)
|
Term of Employment
|
a)
|
The employment period shall commence on June 23, 2014, and shall terminate on December 31, 2016, unless earlier terminated as provided in this Section 3. Your employment hereunder may be terminated by the Company or by you, as applicable, without any breach of this Agreement under the following circumstances:
|
i)
|
Death
. Your employment shall automatically terminate upon your death.
|
ii)
|
Disability
. The Company shall be entitled to terminate your employment if, as a result of your incapacity due to physical or mental illness or injury, you shall
|
iii)
|
Cause
. The Company may terminate your employment at any time for Cause which, for purposes of this Agreement, shall mean (i) any act or omission which constitutes a material breach by you of the terms of this Agreement, the employment policies of the Parent Group, or applicable law governing the Parent Group or your employment, (ii) the conviction of a felony or commission of any act which would rise to the level of a felony, (iii) the conviction (or commission of any act which would rise to the level of) a lesser crime or offense that adversely impacts or potentially could impact upon the business or reputation of the Parent Group in a material way, (iv) your willful violation of specific lawful and material directives of the Parent that are not contrary to this Agreement, (v) commission of a dishonest or wrongful act involving fraud, misrepresentation or moral turpitude causing damage to the Company, its parent and/or affiliates and subsidiaries, (vi) the willful failure to perform a substantial part of your substantial job functions after written notice from the Board requesting such performance, or (vii) material breach of fiduciary duty.
|
iv)
|
Without Cause
. The Company may terminate your employment at any time without Cause;
provided
, however, that the Company provides you with notice of its intent to terminate at least thirty (30) days
in advance of the date of termination. A non-renewal of this Agreement by the Company at the end of the December 31, 2016 term of employment on terms and conditions at least as favorable as specified in this Agreement will be considered a termination without Cause. The parties acknowledge and agree that good faith negotiations related to such renewal will commence no later than June 30, 2016.
|
v)
|
Voluntary Resignation
. You may voluntarily terminate your employment hereunder;
provided
, however, that in the event you are not terminating for Good Reason pursuant to subparagraphs (vi) and (vii) below, you provide the Company with notice of your intent to terminate at least twelve (12) months
in advance of the date of termination.
|
vi)
|
Good Reason
. You may terminate your employment for Good Reason if (i) (A) the scope of your position, authority or duties is materially adversely changed (except for changes during a Notice Period as authorized under Section 3(c) below), (B) your compensation under this Agreement is not paid or your Base Salary or your Target Bonus is reduced below the levels specified in Sections 2(a) and (b) or there is a material adverse change in your employee benefits (excluding changes in any benefits plan where such changes apply generally to participants in the plan), (C) you are notified by the Company that you are required to relocate to a place more than 50 miles from your place of employment in New York, NY, (D) you are assigned duties that are materially inconsistent with your position with the Company/Parent, (E) you are required to
|
vii)
|
Good Reason following a Change in Control
. You may terminate your employment for Good Reason if (i) during the twenty-four (24) month period immediately following a Change in Control (A) the scope of your position, authority or duties is materially adversely changed (except for changes during a Notice Period as authorized under Section 3 (c) below), (B) your compensation under this Agreement is not paid or your Base Salary or your Target Bonus is reduced below the levels specified in Sections 2(a) and (b) or there is a material adverse change in your employee benefits (excluding changes in any benefits plan where such changes apply generally to participants in the plan), (C) ) you are notified by the Company that you are required to relocate to a place more than 50 miles from your current place of employment in New York, NY, (D) you are assigned duties that are materially inconsistent with your position with the Company/Parent, (E) you are required to report to anyone other than the Chief Executive Officer of the Parent or any other individual that is not mutually agreeable to you and the Company, or (F) in the event that any other person or entity acquires all or substantially all of the Parent Group’s business, the Company fails to obtain the assumption of this Agreement by the successor; (ii) you give the Company written notice of your intent to terminate your employment as a result of such event and provide the specific reasons therefore within sixty (60) days of your knowledge of such event occurring; (iii) the Company does not make the necessary corrections within sixty (60) days of receipt of your written notice; and (iv) you terminate employment no later than ten (10) days following the end of such sixty (60) day period. For purposes of this Agreement, the “Change in Control" will be deemed to have occurred as of the first day any of the following events occur:
|
1.
|
Any person or entity is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the U.S. Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Parent representing 50% or more of the combined voting power of the Parent’s then outstanding voting securities entitled to vote generally in the election of directors (the "
Outstanding Parent Voting Securities
");
provided
, however, that for purposes of this Section 3(a)(vii)(1), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Parent, (B) any acquisition by the Parent, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent or any affiliate of the Parent or (D) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of Section 3(a)(vii)(3) hereof;
|
2.
|
Individuals who, as of the date of this Agreement, constitute the Board (hereinafter referred to as the "
Incumbent Board
") cease for
|
3.
|
Consummation of a reorganization, merger, share exchange, amalgamation, recapitalization, consolidation or similar transaction by and among the Parent and another person or entity, including, for this purpose, a transaction as a result of which another person or entity owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries (a "
Business Combination
"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent management personnel) of the entity resulting from such Business Combination or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, in substantially the same proportions as their ownership of the Outstanding Parent Voting Securities immediately prior to such Business Combination; (B) no person or entity (excluding any entity resulting from such Business Combination, or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, or any employee benefit plan (or related trust) of the foregoing) beneficially owns, directly or indirectly, 50% or more of the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent management personnel) of the entity resulting from such Business Combination or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, except to the extent that such ownership existed with respect to the Parent prior to the Business Combination; and (C) at least a majority of the members of the board of directors (or equivalent management personnel) of the entity resulting from such Business Combination or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, pursuant to which such Business Combination is effected or approved; or
|
4.
|
Approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent or the sale or other disposition of all or substantially all of the Parent's assets.
|
b)
|
Any termination of your employment by the Company or by you under this Section 3 (other than termination pursuant to Section 3(a)(i)) shall be communicated by a written notice to the other party hereto indicating the specific termination provision in this Agreement relied upon and specifying a date of termination.
|
c)
|
The period between the date notice of termination is provided and your termination date shall be referred to as the “Notice Period.” During any Notice Period, the Company may, in its absolute discretion (i) require you to perform only such portion of your normal duties as it may allocate to you from time to time, (ii) require you not to perform any of your duties, (iii) require you not to have any contact with customers or clients of the Company nor any contact (other than purely social contact) with such employees of the Company as the Company shall determine, (iv) exclude you from any premises of the Company, and/or (v) require you to resign from all directorships and other offices that you hold in connection with your employment with the Company (including any directorships with subsidiaries or other affiliates of the Company) effective as of any date during the Notice Period. If the Company elects to take any such action, such election shall not constitute a breach by the Company of this Agreement or Good Reason for you to terminate your Employment under Sections 3(a)(vi) or (vii) and you shall not have any claim against the Company in connection therewith so long as, during the Notice Period, the Company continues to pay to you your Base Salary, Annual Bonus and all of the other amounts described in Section 2 of this Agreement.
|
4)
|
Severance Payments and Other Benefits Following Termination of Employment
|
a)
|
In the event that your employment with the Company shall terminate for any reason, and except as otherwise set forth in this Agreement, the Company’s sole obligation under this Agreement shall be to pay to you any accrued but unpaid Base Salary for services rendered to the date of termination, any bonus awarded by the Compensation Committee in respect of a prior year’s target Annual Bonus but not yet paid as of the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any unused vacation accrued to the date of termination. For the sake of clarity, this Section 4(a) does not limit any rights you may have under the Company’s retirement or welfare plans.
|
b)
|
Death
. In the event your employment is terminated due to your death pursuant to Section 3(a)(i), then in addition to the amounts provided under Section 4(a) above:
|
i)
|
Your beneficiary will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination; and
|
ii)
|
All outstanding and unvested restricted stock units pursuant to the 2007 Long-Term Equity Compensation Plan as it may be amended from time to time, or any successor plan, unless prohibited by such successor plan (“Restricted Stock Units”), shall immediately vest upon said termination.
|
c)
|
Disability
. In the event that the Company terminates your employment due to your disability, pursuant to Section 3(a)(ii), then in addition to the amounts provided under Section 4(a) above:
|
i)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination; and
|
ii)
|
All outstanding and unvested Restricted Stock Units shall immediately vest upon said termination.
|
d)
|
Termination by the Company without Cause
. In the event that the Company terminates your employment without Cause in accordance with the provisions of Section 3(a)(iv) hereof, and conditioned on your compliance with this Agreement during the Notice Period (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)), then in addition to the amounts you have received during the Notice Period and any other amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you following the termination of the Notice Period:
|
i)
|
You will be paid a lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
iii)
|
You will be paid an amount equal to the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
iv)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
vi)
|
In the event that the Company terminates your employment without Cause in accordance with the provisions of Section 3(a)(iv), then for so long as you shall remain in full compliance with the obligations set forth in Sections 7, 8, 9 and 10 below, and conditioned on such continued compliance, all Restricted Stock Units previously granted to you which have not vested as of the date of your termination, if any, shall continue to vest on the applicable dates set forth in the applicable award agreements granting such Restricted Stock Units.
|
e)
|
Termination by the Company without Cause Following Change in Control
. In the event that within 24 months following a Change in Control as defined in Section 3(a)(vii) (1 – 4) hereof the Company terminates your employment without Cause, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to the amounts you have received during the Notice Period and any other amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you following the termination of the Notice Period:
|
i)
|
You will be paid a lump sum amount equal twelve (12) month’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
iii)
|
You will be paid an amount equal to two times the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
iv)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
vi)
|
All outstanding and unvested Restricted Stock Units shall immediately vest upon said termination.
|
f)
|
Termination by You for Good Reason
. In the event that you terminate for Good Reason in accordance with the provisions of Section 3(a)(vi) hereof, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to
|
i)
|
You will be paid a lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
iii)
|
You will be paid an amount equal to the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
iv)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
vi)
|
In the event that you terminate for Good Reason in accordance with the provisions of Section 3(a)(vi), then for so long as you shall remain in full compliance with the obligations set forth in Sections 7, 8, 9 and 10 below, and conditioned on such continued compliance, all Restricted Stock Units previously granted to you which have not vested as of the date of your termination, if any, shall continue to vest on the applicable dates set forth in the applicable award agreements granting such Restricted Stock Units.
|
g)
|
Termination by You for Good Reason Following Change in Control
. In the event that within 24 months following a Change of Control as defined in Section 3(a)(vii) (1 – 4) hereof you terminate for Good Reason in accordance with the provisions of Section 3(a)(vii) hereof, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to the amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you:
|
i)
|
You will be paid a lump sum amount equal to twelve (12) month’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
iii)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
iv)
|
You will be paid an amount equal to two times the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
vi)
|
All outstanding and unvested Restricted Stock Units shall immediately vest upon said termination.
|
h)
|
No severance benefits or payments provided pursuant to this Section 4, other than the amounts described in Section 4(a), will be provided to you unless you execute a waiver and release in the form specified in
Exhibit A
hereto (with such changes as may be required due to change in applicable law or regulation) within forty-five (45) days following your employment termination date and do not revoke such release. To the extent required to avoid penalty taxes under Section 409A of the Code, any payment or benefit payment hereunder shall commence on the 60
th
day following your termination, including any payments that would otherwise have been made prior to such date.
|
i)
|
In the event of any termination of your Employment by the Company, or by you in conformity with this Agreement, you shall be under no obligation to seek other employment, and there shall be no offset against amounts due you under this Agreement on account of any remuneration attributable to any subsequent employment you may obtain. Any amounts due under this Section 4 are considered to be reasonable by the Company and not in the nature of a penalty.
|
5)
|
Resignation from Directorships and Other Offices
|
6)
|
Conflict of Interest
|
7)
|
Confidential Information
|
a)
|
As an executive of the Company, you will learn or have access to, or may assist in the development of, highly confidential and sensitive information and trade secrets about the Company, its operations, its subsidiaries and affiliates, its employees, and its customers, which are the property of the Company. Such Confidential Information and Trade Secrets include but are not limited to: (i) financial and business information relating to the Company, such as information with respect to costs, commissions, fees, profits, expenses, sales, markets, mailing lists, strategies and plans for future business, new business, product or other development, potential acquisitions or divestitures, and new marketing ideas; (ii) product and technical information relating to the Company, such as product formulations, new and innovative product ideas, methods, procedures, devices, machines, equipment, data processing programs, software, software codes, computer models, and research and development projects; (iii) customer information, such as the identity of the Company’s customers, the names of representatives of the Company’s customers responsible for entering into contracts with the Company, the amounts paid by such customers to the Company, specific customer needs and requirements, specific customer risk characteristics, policy expiration dates, policy terms and conditions, information regarding the markets or sources with which insurance is placed, and leads and referrals to prospective customers; (iv) personnel information, such as the identity and number of the Company’s other employees, their salaries, bonuses, benefits, skills, qualifications, and abilities; (v) any and all information in whatever form relating to any client or prospective customer of the Company, including but not limited to, its business, employees, operations, systems, assets, liabilities, finances, products, and marketing, selling and operating practices; (vi) any information not included in (i) or (ii) above which you know or should know is subject to a restriction on disclosure or which you know or should know is considered by the Company or the Company’s customers or prospective customers to be confidential, sensitive, proprietary or a trade secret or is not readily available to the public; and (vii) intellectual property, including inventions and copyrightable works. Confidential Information and Trade Secrets are not generally known or available to the general public, but have been developed, compiled or acquired by the Company at its great effort and expense. Confidential Information and Trade Secrets can be in any form: oral, written or machine readable, including electronic files, but shall not included any information known generally to the public or within the Company’s industry.
|
b)
|
You acknowledge and agree that the Company is engaged in a highly competitive business and that its competitive position depends upon its ability to maintain the confidentiality of the Confidential Information and Trade Secrets which were developed, compiled and acquired by the Company at its great effort and expense. You further acknowledge and agree that any disclosing, divulging, revealing, or using of any of the Confidential Information and Trade Secrets, other than in connection with the Company’s business or as appropriate to carry out your duties for the Parent Group, will be highly detrimental to the Company and cause it to suffer serious loss of business and pecuniary damage.
|
c)
|
Accordingly, you agree that you will not, while associated with the Company and for so long thereafter as the pertinent information or documentation remains confidential, for any purpose whatsoever, directly or indirectly use, disseminate or disclose to any other person, organization or entity Confidential Information or Trade Secrets, except as appropriate to carry out your duties as an executive of the Parent and except (i) as expressly authorized by the Chief Executive Officer of the Company, (ii) appropriate to enforce the terms of this Agreement, or (iii) required by law or legal process; provided, that you give notice to the Company promptly on becoming aware of any obligations to disclose such information under this provision, and not less than ten days prior to making any such disclosure.
|
d)
|
Immediately upon the termination of employment with the Company for any reason, or at any time the Company so requests, you will return to the Company: (i) any originals and all copies of all files, notes, documents, slides (including transparencies), computer disks, printouts, reports, lists of the Company’s clients or leads or referrals to prospective clients, and other media or property in Employee’s possession or control which contain or pertain to Confidential Information or Trade Secrets; and (ii) all property of the Company, including, but not limited to, supplies, keys, access devices, books, identification cards, computers, telephones and other equipment.
|
8)
|
Intellectual Property
|
a)
|
You agree that all inventions, improvements, products, designs, specifications, trademarks, service marks, discoveries, formulae, processes, software or computer programs, modifications of software or computer programs, data processing systems, analyses, techniques, trade secrets, creations, ideas, work product or contributions thereto, and any other intellectual property, regardless of whether patented, registered or otherwise protected or protectable, and regardless of whether containing or constituting Trade Secrets or Confidential Information as defined in this Agreement (referred to collectively as “Intellectual Property”), that were conceived, developed or made by you during the period of your employment by the Company and that relate directly to the Company’s insurance and reinsurance business and any other business in which the Company was engaged as of the date of your termination of employment with the Company (the “Proprietary Interests”), shall belong to and be the property of the Company.
|
b)
|
You further covenant and agree that you will: (i) promptly disclose such Intellectual Property to the Company; (ii) make and maintain for the Company, adequate and current written records of your innovations, inventions, discoveries and improvements; (iii) assign to the Company, without additional compensation, the entire rights to Intellectual Property for the United States and all foreign countries; (iv) execute assignments and all other papers and do all acts necessary to carry out the above, including enabling the Company to file and prosecute applications for, acquire, ascertain and enforce in all countries, letters patent, trademark registrations and/or copyrights covering or otherwise relating to Intellectual Property and to enable the Company to protect its proprietary interests therein; and (v) give testimony, at the Company’s expense, in any action or proceeding to enforce rights in the Intellectual Property.
|
c)
|
You further covenant and agree that it shall be conclusively presumed as against you that any Intellectual Property related to the Proprietary Interests described by you in a patent, service mark, trademark, or copyright application, disclosed by you in any manner to a third person, or created by you or any person with whom you have any business, financial
|
d)
|
Nothing in this Section 8 shall be construed as granting or implying any right to you under any patent or unpatented intellectual property right of the Company, or your right to use any invention covered thereby.
|
e)
|
In the event that you are requested or required (by oral questions, interrogatories, requests for information or documents, subpoena or similar process) to disclose any information protected by Sections 7 and 8 (collectively, “Restricted Material,”) you agree to provide the Company with prompt notice of such request(s) so that the Company may seek an appropriate protective order or other appropriate remedy and/or waive your compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, or that the Company grants a waiver hereunder, you may furnish that portion (and only that portion) of the Restricted Material which you are legally compelled to disclose and will exercise your reasonable best efforts to obtain reliable assurance that confidential treatment will be accorded any Restricted Material so furnished.
|
9)
|
Non-Competition
|
a)
|
You acknowledge and agree that the Company is engaged in a highly competitive business and that by virtue of your senior executive position and responsibilities with the Company and your access to the Confidential Information and Trade Secrets, engaging in any business which is directly competitive with the Company during the twelve (12) month period following the termination of your employment will cause it great and irreparable harm.
|
b)
|
Accordingly, you covenant and agree that so long as you are employed by the Company and for a period of twelve (12) months after such employment ends for any reason whatsoever, whether voluntarily or involuntarily and whether with or without cause, you will not, without the express written consent of the Chief Executive Officer of the Parent, directly or indirectly, own, manage, operate or control, or be employed in the same or substantially the same position or duties as the position(s) held by you with the Company or the Parent, by any company or entity engaged in the insurance or reinsurance business in which the Company is engaged or has announced an intention to become engaged as of the date of termination of employment, and for which you had responsibility or about which you had knowledge of or access to Confidential Information and Trade Secrets. In recognition of the nature of the Company’s business, which includes the sale of its products and services throughout the New York, NY area, and the nature of your senior executive position, this restriction shall only apply throughout a 50 mile radius from the Company’s New York, NY office. In the event that the Company exercises its right to relieve you of your normal duties during the Notice Period as set forth and described in Section 3(c)(i) – (iv) of this Agreement (a “Garden Leave Period”), then the twelve (12) month non-competition period shall be reduced on a day-for-day basis by any such Garden Leave Period.
|
10)
|
Non-Solicitation of Employees
|
a)
|
You acknowledge and agree that solely as a result of employment with the Company, and in light of the broad responsibilities of such employment which include working with
|
11)
|
Enforcement
|
a)
|
The parties acknowledge and agree that compliance with the covenants set forth in this Agreement is necessary to protect the Confidential Information and Trade Secrets, business and goodwill of the Company, and that any breach of this Agreement will result in irreparable and continuing harm to the Company, for which money damages may not provide adequate relief. Accordingly, in the event of any breach or anticipatory breach of this Agreement by you, or your claim in a declaratory judgment action that all or part of this Agreement is unenforceable, the parties agree that the Company shall be entitled to the following particular forms of relief as a result of such breach, in addition to any remedies otherwise available to it at law or equity: (a) injunctions, both preliminary and permanent, enjoining or restraining such breach or anticipatory breach, and you consent to the issuance thereof forthwith and without bond by any court of competent jurisdiction; and (b) recovery of all reasonable sums and costs, including attorneys’ fees, incurred by the Company to defend or enforce the provisions of this Agreement if you argue that such covenants are unreasonable or unenforceable.
|
b)
|
The parties hereto hereby declare that it is impossible to measure in money the damages that will accrue to the Company by reason of your failure to perform any of your obligations under Sections 7, 8, 9, and 10. Accordingly, if the Company institutes any action or proceeding to enforce the provisions hereof, to the extent permitted by applicable law, you hereby waive the claim or defense that the Company has an adequate remedy at law, and you shall not urge in any such action or proceeding the defense that any such remedy exists at law. The foregoing rights shall be in addition to any other rights and remedies available to the Company under law or in equity.
|
c)
|
If any of the covenants contained in Sections 7, 8, 9, and 10, or any part thereof, is construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect, without regard to the invalid portion(s). In addition, if any of the covenants contained in Sections 7, 8, 9, and 10 hereof, or any part thereof, is held by any person or entity with jurisdiction over the matter to be invalid or unenforceable because of duration of such provision or the geographical area covered thereby, the parties agree that such person or entity shall have the power to reduce the duration and/or geographical area of such provision and, in its reduced form, said provisions shall then be enforceable.
|
d)
|
It is understood and agreed that no failure or delay by the Company in exercising any right, power or privilege contained in Sections 7, 8, 9, and 10 shall operate as a waiver
|
e)
|
It is understood and agreed that references to the “Company” in the foregoing Sections 7, 8, 9 and 10 include the Company, Parent and its affiliates.
|
12)
|
Disclosure of Agreement; Disclosure of New Employment
|
13)
|
Confidential Information Belonging to Others
|
14)
|
Choice of Forum
|
15)
|
Governing Law
|
16)
|
Section 409A
|
17)
|
Indemnification
|
18)
|
Miscellaneous
|
a)
|
Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or three days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed to the relevant party at the address provided for such party on the first page hereof, or to such other address as any party hereto may designate by notice to the other in accordance with the foregoing.
|
b)
|
This Agreement constitutes the entire agreement among you and the Company, the Parent and any affiliate with respect to your employment by the Company, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to your employment including, but not limited to, the offer letter to you from AXIS, dated
March 20, 2013. This Agreement shall be binding upon execution by both parties, it being understood and agreed that your employment shall not commence until May 6, 2013.
|
c)
|
This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed
|
d)
|
The Company shall withhold from any compensation and benefits payable under this Agreement all applicable U.S. federal, state, local, or other taxes.
|
e)
|
Except as otherwise set forth herein, in the event of any contest or dispute between you and the Company with respect to this Agreement, each of the parties shall be responsible for their respective legal fees and expenses.
|
f)
|
If any term or provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such term or provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.
|
g)
|
Except as otherwise provided in this Agreement, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, representatives, successors and assigns. Your rights and benefits under this Agreement are personal to you and no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer; provided, however, that nothing in this Section 18 shall preclude you from designating a beneficiary or beneficiaries to receive any benefit payable on your death.
|
h)
|
The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.
|
i)
|
Except as otherwise expressly set forth in this Agreement, to the extent necessary to carry out the intentions of the parties hereunder, the respective rights and obligations of the parties hereunder shall survive any termination of your employment or expiration or termination of this Agreement.
|
j)
|
Nothing in this Agreement shall be construed as giving you any claim against any specific assets of the Company, Parent or any affiliate or as imposing any trustee relationship upon the Company in respect of you. The Company shall not be required to establish a special or separate fund or to segregate any of its assets in order to provide for the satisfaction of its obligations under this Agreement. Your rights under this Agreement shall be limited to those of an unsecured general creditor of the Company, Parent and its affiliates;
|
k)
|
Both parties, through their respective counsel, have participated in the preparation of this Agreement and its
Exhibit A
. Accordingly, both parties shall be deemed to be the drafter of this Agreement or its
Exhibit A
for purposes of construing their provisions. The language in all parts of this Agreement and its exhibits shall be interpreted according to its fair meaning, and shall not be interpreted for or against either of the Parties as the drafter of the language.
|
1)
|
Employment
|
a)
|
Position and Duties
. Commencing on the date hereof the Company shall employ you in the position of Chief Executive Officer of the AXIS Accident & Health business unit of the Parent or in such other position as is mutually agreeable to you and the Company. You will report directly to the Chief Operating Officer of the Parent and its direct and indirect subsidiaries (collectively, the “Parent Group”). You will be expected to devote your full business time and energy, attention, skills and ability to the performance of your duties and responsibilities to the Parent Group on an exclusive basis, including service to subsidiaries and affiliates of the Parent, on a basis consistent with your position with the Parent, as requested by the Chief Operating Officer, Chief Executive Officer and President and the Board of Directors of the Parent (the "
Board
"), and shall faithfully and diligently endeavor to promote the business and best interests of the Company and its subsidiaries and affiliates. Anything herein to the contrary notwithstanding, nothing shall preclude you from (i) upon the approval of the Parent’s Board, serving on the board of directors of another corporation or a trade association; (ii) serving on the board of charitable organizations, (iii) engaging in charitable, community and other business affairs, and (iv) managing your personal investments and affairs; provided such activities do not, in the reasonable judgment of the Company, materially interfere with the proper performance of your responsibilities and duties hereunder.
|
b)
|
Place of Performance
. In connection with your employment during the Employment Term (as defined in Section 3(a)), you shall be based primarily at the Company’s offices in Princeton, NJ except for necessary travel on Company business.
|
2)
|
Compensation and Benefits
|
a)
|
During the Employment Term, your annual base salary shall be no less than $500,0000 (the base salary as may be increased from time to time referred to as "
Base Salary
") and shall be paid pursuant to the Company's customary payroll practices.
|
b)
|
In addition to the Base Salary, in each fiscal year of the Parent ending during the Employment Term, you will be eligible to earn an annual cash bonus ("
Annual Bonus
"). Your target Annual Bonus is 80% of your then current Base Salary if the Parent achieves certain performance objectives and subject to your individual performance pursuant to the Parent’s annual bonus plan. Except as provided in Section 4 below, the Annual Bonus for each period will be paid only if you are actively employed with the Company on the date of disbursement. Any Annual Bonus payable hereunder shall be paid in the calendar year following the applicable fiscal year of the Parent, after it has been determined by the Compensation Committee of the Parent.
|
c)
|
You will be eligible to participate in the Parent’s 2013 Executive Long Term Equity Compensation Program as it may be amended from time to time (or a successor plan) with an initial annual target share or unit award valued at $720,000, subject to the rules of the Company’s equity compensation program and an award agreement, in both cases in such form as the Compensation Committee of the Parent may determine from time to time.
|
d)
|
During the Employment Term, you will be eligible to participate in or receive benefits under any 401(k) savings plan, medical and dental benefits plan, life insurance plan, short-term and long-term disability plans, supplemental and/or incentive compensation plans, or any other employee benefit or fringe benefit plan, generally made available by the Parent to senior executives in accordance with the eligibility requirements of such plans and subject to the terms and conditions set forth in this Agreement. Notwithstanding the foregoing, you shall not be eligible to participate in any nonqualified deferred compensation plans sponsored by the Company in order to prevent the application of Section 457A of the Internal Revenue Code of 1986, as amended (the “Code”) to any compensation earned by you.
|
e)
|
During the Employment Term, you will be entitled to 25 days of paid vacation per calendar year, subject to the applicable vacation policies and procedures on usage and carry over. You are also eligible for two personal days per year.
|
f)
|
During the Employment Term, the Company will reimburse you for all reasonable business expenses incurred by you in the course of performing your duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of expenses. Reimbursements will be paid promptly after submission and review of appropriate documentation, but in any event no later than 2½ months after the end of the calendar year in which the expense was incurred.
|
3)
|
Term of Employment
|
a)
|
The employment period shall commence as of the date hereof and shall terminate on December 31, 2016 (the “Employment Term”); provided, however, that the term of employment shall automatically be extended for an additional three-year period unless either party shall give at least six (6) month’s prior notice of non-renewal or until terminated in accordance with this Agreement as follows:
|
(i)
|
Death
. Your employment shall automatically terminate upon your death.
|
(ii)
|
Disability
. The Company shall be entitled to terminate your employment if, as a result of your incapacity due to physical or mental illness or injury, you shall have been unable to perform your duties hereunder for a period of 181 days in any twelve-month period (your “Disability”).
|
(iii)
|
Cause
. The Company may terminate your employment at any time for Cause which, for purposes of this Agreement, shall mean (i) any act or omission which constitutes a material breach by you of the terms of this Agreement, the employment policies of the Parent Group, or applicable law governing the Parent Group or your employment, (ii) the conviction of a felony or commission of any act which would rise to the level of a felony, (iii) the conviction (or commission of any act which would rise to the level of) a lesser crime or offense that adversely impacts or potentially could impact upon the business or reputation of the Parent Group in a material way, (iv) your willful violation of specific lawful and material directives of the Parent that are not contrary to this Agreement, (v) commission of a dishonest or wrongful act involving fraud, misrepresentation or moral turpitude causing damage or potential damage to the Company, its parent and/or affiliates and subsidiaries, (vi) the willful failure to perform a substantial part of your substantial job functions after written notice from the Board requesting such performance, or (vii) breach of fiduciary duty.
|
(iv)
|
Without Cause
. The Company may terminate your employment at any time without Cause;
provided
, however, that the Company provides you with notice of its intent to terminate at least thirty (30) days
in advance of the date of termination.
|
(v)
|
Voluntary Resignation
. You may voluntarily terminate your employment hereunder;
provided
, however, that in the event you are not terminating for Good Reason pursuant to subparagraphs (vi) and (vii) below, you provide the Company with notice of your intent to terminate at least six (6) months
in advance of the date of termination.
|
(vi)
|
Good Reason
. You may terminate your employment for Good Reason if (i) (A) the scope of your position, authority or duties is materially adversely changed (except for changes during a Notice Period as authorized under Section 3(c) below), (B) your compensation under this Agreement is not paid or your Base Salary or your Target Bonus is reduced below the levels specified in Sections 2(a) and (b) or there is a material adverse change in your employee benefits (excluding changes in any benefits plan where such changes apply generally to participants in the plan), (C) you are notified by the Company that you are required to relocate away from your place of employment in the Princeton, New Jersey area, (D) you are assigned duties that are materially inconsistent with your position with the Company/Parent, (E) you are required to report to anyone other than the Parent’s Chief Operating Officer, the Chief Executive Officer or such other person as may be mutually agreed by you and the Chief Executive Officer; (ii) you give the Company written notice of your intent to terminate your employment as a result of such event and provide the specific reasons therefore within thirty (30) days of such event occurring; (iii) the Company does not make the
|
(vii)
|
Good Reason following a Change in Control
. You may terminate your employment for Good Reason if (i) during the twenty-four (24) month period immediately following a Change in Control (A) the scope of your position, authority or duties is materially adversely changed (except for changes during a Notice Period as authorized under Section 3 (c) below), (B) your compensation under this Agreement is not paid or your Base Salary or your Target Bonus is reduced below the levels specified in Sections 2(a) and (b) or there is a material adverse change in your employee benefits (excluding changes in any benefits plan where such changes apply generally to participants in the plan), (C) you are notified by the Company that you are required to relocate away from your place of employment in the Princeton, New Jersey area, (D) you are assigned duties that are materially inconsistent with your position with the Company/Parent, (E) you are required to report to anyone other than the Parent’s Chief Operating Officer, the Chief Executive Officer or such other person as may be mutually agreed by you and the Chief Executive Officer; or (F) in the event that any other person or entity acquires all or substantially all of the Parent Group’s business, the Company fails to obtain the assumption of this Agreement by the successor; (ii) you give the Company written notice of your intent to terminate your employment as a result of such event and provide the specific reasons therefore within thirty (30) days of your knowledge of such event occurring; (iii) the Company does not make the necessary corrections within thirty (30) days of receipt of your written notice; and (iv) you terminate employment no later than ten (10) days following the end of such thirty (30) day period. For purposes of this Agreement, the “Change in Control" will be deemed to have occurred as of the first day any of the following events occur:
|
1.
|
Any person or entity is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the U.S. Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Parent representing 50% or more of the combined voting power of the Parent’s then outstanding voting securities entitled to vote generally in the election of directors (the "
Outstanding Parent Voting Securities
");
provided
, however, that for purposes of this Section 3(a)(vii)(1), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Parent, (B) any acquisition by the Parent, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent or any affiliate of the Parent or (D) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of Section 3(a)(vii)(3) hereof;
|
2.
|
Individuals who, as of the date of this Agreement, constitute the Board (hereinafter referred to as the "
Incumbent Board
") cease for any reason to constitute at least a majority of the Board;
provided
, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Parent's
|
3.
|
Consummation of a reorganization, merger, share exchange, amalgamation, recapitalization, consolidation or similar transaction by and among the Parent and another person or entity, including, for this purpose, a transaction as a result of which another person or entity owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries (a "
Business Combination
"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent management personnel) of the entity resulting from such Business Combination or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, in substantially the same proportions as their ownership of the Outstanding Parent Voting Securities immediately prior to such Business Combination; (B) no person or entity (excluding any entity resulting from such Business Combination, or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, or any employee benefit plan (or related trust) of the foregoing) beneficially owns, directly or indirectly, 50% or more of the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or equivalent management personnel) of the entity resulting from such Business Combination or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, except to the extent that such ownership existed with respect to the Parent prior to the Business Combination; and (C) at least a majority of the members of the board of directors (or equivalent management personnel) of the entity resulting from such Business Combination or that, as a result of such Business Combination, owns the Parent or all or substantially all of the Parent's assets, either directly or through one or more subsidiaries, were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, pursuant to which such Business Combination is effected or approved; or
|
4.
|
Approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent or the sale or other disposition of all or substantially all of the Parent's assets.
|
b)
|
Any termination of your employment by the Company or by you under this Section 3 (other than termination pursuant to Section 3(a)(i)) shall be communicated by a written notice to the other party hereto indicating the specific termination provision in this Agreement relied upon and specifying a date of termination.
|
c)
|
The period between the date notice of termination is provided and your termination date shall be referred to as the “Notice Period.” During any Notice Period, the Company may, in its absolute discretion (i) require you to perform only such portion of your normal duties as it may allocate to you from time to time, (ii) require you not to perform any of your duties, (iii) require you not to have any contact with customers or clients of the Company nor any contact (other than purely social contact) with such employees of the Company as the Company shall determine, (iv) exclude you from any premises of the Company, and/or (v) require you to resign from all directorships and other offices that you hold in connection with your employment with the Company (including any directorships with subsidiaries or other affiliates of the Company) effective as of any date during the Notice Period. If the Company elects to take any such action, such election shall not constitute a breach by the Company of this Agreement or Good Reason for you to terminate your Employment under Sections 3(a)(vi) or (vii) and you shall not have any claim against the Company in connection therewith so long as, during the Notice Period, the Company continues to pay to you your Base Salary, Annual Bonus and all of the other amounts described in Section 2 of this Agreement.
|
4)
|
Severance Payments and Other Benefits Following Termination of Employment
|
a)
|
In the event that your employment with the Company shall terminate for any reason, and except as otherwise set forth in this Agreement, the Company’s sole obligation under this Agreement shall be to pay to you any accrued but unpaid Base Salary for services rendered to the date of termination, any bonus awarded by the Compensation Committee in respect of a prior year’s target Annual Bonus but not yet paid as of the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement and any unused vacation accrued to the date of termination. For the sake of clarity, this Section 4(a) does not limit any rights you may have under the Company’s retirement or welfare plans.
|
b)
|
Death
. In the event your employment is terminated due to your death pursuant to Section 3(a)(i), then in addition to the amounts provided under Section 4(a) above:
|
i)
|
Your beneficiary will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination; and
|
ii)
|
All outstanding and unvested restricted shares of the Common Stock or restricted stock units of Parent pursuant to the 2007 Long-Term Equity Compensation Plan as it may be amended from time to time, or any successor plan, unless prohibited by such successor plan (together “Restricted Shares”), shall immediately vest upon said termination.
|
c)
|
Disability
. In the event that the Company terminates your employment due to your disability, pursuant to Section 3(a)(ii), then in addition to the amounts provided under Section 4(a) above:
|
i)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination; and
|
ii)
|
All outstanding and unvested Restricted Shares shall immediately vest upon said termination.
|
d)
|
Termination by Voluntary Resignation
. In the event that you terminate your employment by voluntary resignation in accordance with the provisions of Section 3(a)(v), the following will be provided to you following the termination of the Notice Period:
|
i)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
ii)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination
|
e)
|
Termination by the Company without Cause
. In the event that the Company terminates your employment without Cause in accordance with the provisions of Section 3(a)(iv) hereof, and conditioned on your compliance with this Agreement during the Notice Period (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)), then in addition to the amounts you have received during the Notice Period and any other amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you following the termination of the Notice Period:
|
(i)
|
You will be paid a lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
(iii)
|
You will be paid an amount equal to the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
(iv)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
(vi)
|
In the event that the Company terminates your employment without Cause in accordance with the provisions of Section 3(a)(iv), then for so long as you shall remain in full compliance with the obligations set forth in Sections 7, 8, 9 and 10 below, and conditioned on such continued compliance, all Restricted Shares previously granted to you which have not vested as of the date of your termination, if any, shall continue to vest on the applicable dates set forth in the applicable award agreements granting such Restricted Shares.
|
f)
|
Termination by the Company without Cause Following Change in Control
. In the event that within 24 months following a Change in Control as defined in Section 3(a)(vii) (1 – 4) hereof the Company terminates your employment without Cause, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to the amounts you have received during the Notice Period and any other amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you following the termination of the Notice Period:
|
(i)
|
You will be paid a lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
(iii)
|
You will be paid an amount equal to two times the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
(iv)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
(vi)
|
All outstanding and unvested Restricted Shares shall immediately vest upon said termination.
|
g)
|
Termination by You for Good Reason
. In the event that you terminate for Good Reason in accordance with the provisions of Section 3(a)(vi) hereof, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to the amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you:
|
(i)
|
You will be paid a lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
(iii)
|
You will be paid an amount equal to the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
(iv)
|
You will be paid will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another
|
(vi)
|
In the event that you terminate for Good Reason in accordance with the provisions of Section 3(a)(vi), then for so long as you shall remain in full compliance with the obligations set forth in Sections 7, 8, and 10 below, and conditioned on such continued compliance, all Restricted Shares previously granted to you which have not vested as of the date of your termination, if any, shall continue to vest on the applicable dates set forth in the applicable award agreements granting such Restricted Shares.
|
h)
|
Termination by You for Good Reason Following Change in Control
. In the event that within 24 months following a Change of Control as defined in Section 3(a)(vii) (1 – 4) hereof you terminate for Good Reason in accordance with the provisions of Section 3(a)(vii) hereof, (but not for any other reason, including without limitation under Sections 3(a)(i), (ii), (iii), or (v)) then in addition to the amounts provided in Section 4(a), but subject to your timely satisfaction of the condition precedent in Section 4(i) below, the following will be provided to you:
|
(i)
|
You will be paid a lump sum amount equal to one year’s Base Salary at the rate in effect immediately prior to said termination, to be paid no later than sixty (60) days following your termination;
|
(ii)
|
With respect to the Annual Bonus for the calendar year prior to the calendar year in which your termination occurs, you will be excused from the requirement in Section 2(b) that you must be actively employed with the Company on the date of disbursement in order to receive the Bonus;
|
(iii)
|
You will be paid an amount equal to two times the Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
(iv)
|
You will be paid a pro-rata portion of your Annual Bonus that you would have been entitled to receive for the calendar year in which your termination occurs, based on the number of days you were employed by the Parent Group during such year and calculated as if all targets were met, to be paid in a lump sum no later than sixty (60) days following your termination;
|
(v)
|
The Company will pay COBRA premiums to continue your coverage pursuant to COBRA and the applicable insurance policies up and until the earlier of: (i) 12 months from the date of termination, (ii) or the date upon which you cease to be eligible for COBRA continuation coverage under applicable law and the terms of the applicable policies. You agree to notify the Company in the event that you obtain coverage with another employer group health plan that does not contain any exclusions or limitations with respect to any pre-existing condition, or if you become entitled to Medicare benefits; and
|
(vi)
|
All outstanding and unvested Restricted Shares shall immediately vest upon said termination.
|
i)
|
No severance benefits or payments provided pursuant to this Section 4, other than the amounts described in Section 4(a), will be provided to you unless you execute a waiver and release in the form specified in
Exhibit A
hereto (with such changes as may be required due to change in applicable law or regulation) within forty-five (45) days following your employment termination date and do not revoke such release. To the extent required to avoid penalty taxes under Section 409A of the Code, any payment or benefit payment hereunder shall commence on the 60
th
day following your termination, including any payments that would otherwise have been made prior to such date.
|
j)
|
In the event of any termination of your Employment by the Company, or by you in conformity with this Agreement, you shall be under no obligation to seek other employment, and there shall be no offset against amounts due you under this Agreement on account of any remuneration attributable to any subsequent employment you may obtain. Any amounts due under this Section 4 are considered to be reasonable by the Company and not in the nature of a penalty.
|
5)
|
Resignation from Directorships and Other Offices
|
6)
|
Conflict of Interest
|
7)
|
Confidential Information
|
a)
|
As an executive of the Company, you will learn or have access to, or may assist in the development of, highly confidential and sensitive information and trade secrets about the Company, its operations, its subsidiaries and affiliates, its employees, and its customers, which are the property of the Company. Such Confidential Information and Trade Secrets include but are not limited to: (i) financial and business information relating to the Company, such as information with respect to costs, commissions, fees, profits, expenses, sales, markets, mailing lists, strategies and plans for future business, new business, product or other development, potential acquisitions or divestitures, and new marketing ideas; (ii) product and technical information relating to the Company, such as product formulations, new and innovative product ideas, methods, procedures, devices, machines, equipment, data processing programs, software, software codes, computer models, and research and development projects; (iii) customer information, such as the identity of the Company’s customers, the names of representatives of the Company’s customers responsible for entering into contracts with the Company, the amounts paid by such customers to the Company, specific customer needs and requirements, specific
|
b)
|
You acknowledge and agree that the Company is engaged in a highly competitive business and that its competitive position depends upon its ability to maintain the confidentiality of the Confidential Information and Trade Secrets which were developed, compiled and acquired by the Company at its great effort and expense. You further acknowledge and agree that any disclosing, divulging, revealing, or using of any of the Confidential Information and Trade Secrets, other than in connection with the Company’s business or as appropriate to carry out your duties for the Parent Group, will be highly detrimental to the Company and cause it to suffer serious loss of business and pecuniary damage.
|
c)
|
Accordingly, you agree that you will not, while associated with the Company and for so long thereafter as the pertinent information or documentation remains confidential, for any purpose whatsoever, directly or indirectly use, disseminate or disclose to any other person, organization or entity Confidential Information or Trade Secrets, except as appropriate to carry out your duties as an executive of the Parent and except (i) as expressly authorized by the Chief Executive Officer of the Company, (ii) appropriate to enforce the terms of this Agreement, or (iii) required by law or legal process; provided, that you give notice to the Company promptly on becoming aware of any obligations to disclose such information under this provision, and not less than ten days prior to making any such disclosure.
|
d)
|
Immediately upon the termination of employment with the Company for any reason, or at any time the Company so requests, you will return to the Company: (i) any originals and all copies of all files, notes, documents, slides (including transparencies), computer disks, printouts, reports, lists of the Company’s clients or leads or referrals to prospective clients, and other media or property in Employee’s possession or control which contain or pertain to Confidential Information or Trade Secrets; and (ii) all property of the Company, including, but not limited to, supplies, keys, access devices, books, identification cards, computers, telephones and other equipment.
|
8)
|
Intellectual Property
|
a)
|
You agree that all inventions, improvements, products, designs, specifications, trademarks, service marks, discoveries, formulae, processes, software or computer programs, modifications of software or computer programs, data processing systems, analyses, techniques, trade secrets, creations, ideas, work product or contributions
|
b)
|
You further covenant and agree that you will: (i) promptly disclose such Intellectual Property to the Company; (ii) make and maintain for the Company, adequate and current written records of your innovations, inventions, discoveries and improvements; (iii) assign to the Company, without additional compensation, the entire rights to Intellectual Property for the United States and all foreign countries; (iv) execute assignments and all other papers and do all acts necessary to carry out the above, including enabling the Company to file and prosecute applications for, acquire, ascertain and enforce in all countries, letters patent, trademark registrations and/or copyrights covering or otherwise relating to Intellectual Property and to enable the Company to protect its proprietary interests therein; and (v) give testimony, at the Company’s expense, in any action or proceeding to enforce rights in the Intellectual Property.
|
c)
|
You further covenant and agree that it shall be conclusively presumed as against you that any Intellectual Property related to the Proprietary Interests described by you in a patent, service mark, trademark, or copyright application, disclosed by you in any manner to a third person, or created by you or any person with whom you have any business, financial or confidential relationship, within one (1) year after cessation of your employment with the Company, was conceived or made by you during the period of employment by the Company and that such Intellectual Property be the sole property of the Company.
|
d)
|
Nothing in this Section 8 shall be construed as granting or implying any right to you under any patent or unpatented intellectual property right of the Company, or your right to use any invention covered thereby.
|
e)
|
In the event that you are requested or required (by oral questions, interrogatories, requests for information or documents, subpoena or similar process) to disclose any information protected by Sections 7 and 8 (collectively, “Restricted Material,”) you agree to provide the Company with prompt notice of such request(s) so that the Company may seek an appropriate protective order or other appropriate remedy and/or waive your compliance with the provisions of this Agreement. In the event that such protective order or other remedy is not obtained, or that the Company grants a waiver hereunder, you may furnish that portion (and only that portion) of the Restricted Material which you are legally compelled to disclose and will exercise your reasonable best efforts to obtain reliable assurance that confidential treatment will be accorded any Restricted Material so furnished.
|
9)
|
Non-Competition
|
a)
|
You acknowledge and agree that the Company is engaged in a highly competitive business and that by virtue of your senior executive position and responsibilities with the Company and your access to the Confidential Information and Trade Secrets, engaging in any business which is directly competitive with the Company during the six (6) month
|
b)
|
Accordingly, you covenant and agree that so long as you are employed by the Company and for a period of six (6) months after the date that: (i) you provide notice of termination in connection with a voluntary termination of employment pursuant to Section 3(a)(v) hereof, or (ii) the Company terminates your employment for Cause pursuant to Section 3(a)(iii), you will not, without the express written consent of the Chief Executive Officer of the Parent, directly or indirectly, own, manage, operate or control, or be employed in the same or substantially the same position or duties as the position(s) held by you with the Company or the Parent, by any company or entity engaged in the insurance or reinsurance business in which the Company is engaged or has announced an intention to become engaged as of the date of termination of employment, and for which you had responsibility or about which you had knowledge of or access to Confidential Information and Trade Secrets. In recognition of the nature of the Company’s business which includes the sale of its products and services throughout the New York and New Jersey area, and the nature of your senior executive position, this restriction shall only apply throughout a 250 mile radius from the Company’s Princeton, NJ office.
|
10)
|
Non-Solicitation of Employees
|
a)
|
You acknowledge and agree that solely as a result of employment with the Company, and in light of the broad responsibilities of such employment which include working with other employees of the Company, you have and will come into contact with and acquire Confidential Information and Trade Secrets regarding other employees of the Company, and will develop relationships with those employees.
|
11)
|
Enforcement
|
a)
|
The parties acknowledge and agree that compliance with the covenants set forth in this Agreement is necessary to protect the Confidential Information and Trade Secrets, business and goodwill of the Company, and that any breach of this Agreement will result in irreparable and continuing harm to the Company, for which money damages may not provide adequate relief. Accordingly, in the event of any breach or anticipatory breach of this Agreement by you, or your claim in a declaratory judgment action that all or part of this Agreement is unenforceable, the parties agree that the Company shall be entitled to the following particular forms of relief as a result of such breach, in addition to any remedies otherwise available to it at law or equity: (a) injunctions, both preliminary and permanent, enjoining or restraining such breach or anticipatory breach, and you consent to the issuance thereof forthwith and without bond by any court of competent jurisdiction; and (b) recovery of all reasonable sums and costs, including attorneys’ fees, incurred by the Company to defend or enforce the provisions of this Agreement if you argue that such covenants are unreasonable or unenforceable.
|
b)
|
The parties hereto hereby declare that it is impossible to measure in money the damages that will accrue to the Company by reason of your failure to perform any of your obligations under Sections 7, 8, 9, and 10. Accordingly, if the Company institutes any action or proceeding to enforce the provisions hereof, to the extent permitted by applicable law, you hereby waive the claim or defense that the Company has an adequate remedy at law, and you shall not urge in any such action or proceeding the defense that any such remedy exists at law. The foregoing rights shall be in addition to any other rights and remedies available to the Company under law or in equity.
|
c)
|
If any of the covenants contained in Sections 7, 8, 9, and 10, or any part thereof, is construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect, without regard to the invalid portion(s). In addition, if any of the covenants contained in Sections 7, 8, 9, and 10 hereof, or any part thereof, is held by any person or entity with jurisdiction over the matter to be invalid or unenforceable because of duration of such provision or the geographical area covered thereby, the parties agree that such person or entity shall have the power to reduce the duration and/or geographical area of such provision and, in its reduced form, said provisions shall then be enforceable.
|
d)
|
It is understood and agreed that no failure or delay by the Company in exercising any right, power or privilege contained in Sections 7, 8, 9, and 10 shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege contained in Sections 7, 8, 9, or 10.
|
e)
|
It is understood and agreed that references to the “Company” in the foregoing Sections 7, 8, 9 and 10 include the Company, Parent and its affiliates.
|
12)
|
Disclosure of Agreement; Disclosure of New Employment
|
13)
|
Confidential Information Belonging to Others
|
14)
|
Choice of Forum
|
15)
|
Governing Law
|
16)
|
Section 409A
|
17)
|
Indemnification
|
18)
|
Miscellaneous
|
a)
|
Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and shall be deemed to be given when delivered personally or three days after it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight courier service and, in each case, addressed to the relevant party at the address provided for such party on the first page hereof, or to such other address as any party hereto may designate by notice to the other in accordance with the foregoing.
|
b)
|
This Agreement constitutes the entire agreement among you and the Company, the Parent and any affiliate with respect to your employment by the Company, and supersedes and is in full substitution for any and all prior understandings or agreements with respect to your employment including, but not limited to, the offer letter to you from AXIS, dated December 18, 2008. This Agreement shall be binding upon execution by both parties.
|
c)
|
This Agreement may be amended only by an instrument in writing signed by the parties hereto, and any provision hereof may be waived only by an instrument in writing signed by the party against whom or which enforcement of such waiver is sought. Any amendment to this Agreement must comply with the requirements of Section 409A of the Code.
|
d)
|
The Company shall withhold from any compensation and benefits payable under this Agreement all applicable U.S. federal, state, local, or other taxes.
|
e)
|
Except as otherwise set forth herein, in the event of any contest or dispute between you and the Company with respect to this Agreement, each of the parties shall be responsible for their respective legal fees and expenses.
|
f)
|
If any term or provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such term or provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.
|
g)
|
Except as otherwise provided in this Agreement, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, representatives, successors and assigns. Your rights and benefits under this Agreement are personal to you and no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer; provided, however, that nothing in this Section 18 shall preclude you from designating a beneficiary or beneficiaries to receive any benefit payable on your death.
|
h)
|
The headings in this Agreement are inserted for convenience of reference only and shall not be a part of or control or affect the meaning of any provision hereof.
|
i)
|
Except as otherwise expressly set forth in this Agreement, to the extent necessary to carry out the intentions of the parties hereunder, the respective rights and obligations of the parties hereunder shall survive any termination of your employment or expiration or termination of this Agreement.
|
j)
|
Nothing in this Agreement shall be construed as giving you any claim against any specific assets of the Company, Parent or any affiliate or as imposing any trustee
|
k)
|
Both parties, through their respective counsel, have participated in the preparation of this Agreement and its
Exhibit A
. Accordingly, both parties shall be deemed to be the drafter of this Agreement or its
Exhibit A
for purposes of construing their provisions. The language in all parts of this Agreement and its exhibits shall be interpreted according to its fair meaning, and shall not be interpreted for or against either of the Parties as the drafter of the language.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year ended December 31,
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Earnings: income before income taxes
|
$
|
830,472
|
|
|
$
|
734,467
|
|
|
$
|
550,528
|
|
|
$
|
61,538
|
|
|
$
|
895,403
|
|
|
|
Add: fixed charges
|
80,809
|
|
|
67,944
|
|
|
67,898
|
|
|
66,185
|
|
|
58,010
|
|
|
|||||
|
Add: amounts attributable from noncontrolling interests
|
6,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
|
Earnings for computation
|
$
|
917,462
|
|
|
$
|
802,411
|
|
|
$
|
618,426
|
|
|
$
|
127,723
|
|
|
$
|
953,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Assumed interest component of rent expense
(1)
|
$
|
8,327
|
|
|
$
|
8,866
|
|
|
$
|
8,849
|
|
|
$
|
7,163
|
|
|
$
|
5,798
|
|
|
|
Interest expense
|
72,482
|
|
|
59,078
|
|
|
59,049
|
|
|
59,022
|
|
|
52,212
|
|
|
|||||
|
Total fixed charges
|
$
|
80,809
|
|
|
$
|
67,944
|
|
|
$
|
67,898
|
|
|
$
|
66,185
|
|
|
$
|
58,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Ratio of earnings to fixed charges
|
11.4
|
|
|
11.8
|
|
|
9.1
|
|
|
1.9
|
|
|
16.4
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Preferred share dividends
(2)
|
$
|
40,088
|
|
|
$
|
40,474
|
|
|
$
|
38,228
|
|
|
$
|
36,875
|
|
|
$
|
36,875
|
|
|
|
Total fixed charges and preferred share dividends
|
$
|
120,897
|
|
|
$
|
108,414
|
|
|
$
|
106,126
|
|
|
$
|
103,060
|
|
|
$
|
94,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Ratio of earnings to fixed charges and preferred
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
share dividends
|
7.6
|
|
|
7.4
|
|
|
5.8
|
|
|
1.2
|
|
|
10.0
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
33.3%
represents a reasonable approximation of the interest factor.
|
(2)
|
Dividends have been tax effected at a 0% rate because it is presumed they will be funded from a Bermuda entity.
|
|
|
|
Subsidiaries
|
|
Jurisdiction of Incorporation
|
AXIS Bermuda Services Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Holdings Bermuda Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Markets Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Markets II Limited
|
Bermuda
|
|
|
|
|
AXIS Ventures Limited
|
Bermuda
|
|
|
|
|
AXIS Ventures Reinsurance Limited
|
Bermuda
|
|
|
|
|
AXIS Re SE
|
Ireland
|
|
|
|
|
AXIS Specialty Europe SE
|
Ireland
|
|
|
|
|
AXIS Specialty Global Holdings Limited
|
Ireland
|
|
|
|
|
AXIS Specialty Holdings Ireland Limited
|
Ireland
|
|
|
|
|
AXIS Specialty Insurance Company
|
Connecticut
|
|
|
|
|
AXIS Group Services, Inc.
|
Delaware
|
|
|
|
|
AXIS Specialty Finance LLC
|
Delaware
|
|
|
|
|
AXIS Specialty U.S. Holdings, Inc.
|
Delaware
|
|
|
|
|
AXIS Specialty U.S. Services, Inc.
|
Delaware
|
|
|
|
|
AXIS Insurance Company
|
Illinois
|
|
|
|
|
AXIS Surplus Insurance Company
|
Illinois
|
|
|
|
|
AXIS Reinsurance Company
|
New York
|
|
|
|
|
AXIS Corporate Capital UK Limited
|
United Kingdom
|
|
|
|
|
AXIS Specialty Finance PLC
|
United Kingdom
|
|
|
|
|
AXIS Specialty UK Holdings Limited
|
United Kingdom
|
|
|
|
|
AXIS UK Corporate Services Limited
|
United Kingdom
|
|
|
|
Dexta Corporation Pty Ltd
|
Australia
|
|
|
|
|
Sirius Australia Holdings Pty Ltd
|
Australia
|
|
|
|
|
AXIS Re SE Escritório de Representação No Brasil Ltda.
|
Brazil
|
|
|
|
|
AXIS Specialty Canada Services, ULC
|
British Columbia
|
|
|
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 20, 2015
|
1.
|
I have reviewed this Annual Report on Form 10-K of AXIS Capital Holdings Limited for the period ended
December 31, 2014
;
|
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.
|
|
|
/
S
/ ALBERT BENCHIMOL
|
Date:
|
February 20, 2015
|
Albert Benchimol
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of AXIS Capital Holdings Limited for the period ended
December 31, 2014
;
|
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.
|
|
|
/S/ JOSEPH HENRY
|
Date:
|
February 20, 2015
|
Joseph Henry
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 20, 2015
|
/s/ ALBERT BENCHIMOL
|
|
|
Albert Benchimol
|
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 20, 2015
|
/s/ JOSEPH HENRY
|
|
|
Joseph Henry
|
|
|
Executive Vice President and Chief Financial Officer
|