|
|
|
|
|
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
|
5.50% Series E 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.
|
||
|
|
|
Item 8.
|
||
|
|
|
Item 9.
|
||
|
|
|
Item 9A.
|
||
|
|
|
Item 9B.
|
||
|
|
|
|
PART III
|
|
|
|
|
Item 10.
|
||
|
|
|
Item 11.
|
||
|
|
|
Item 12.
|
||
|
|
|
Item 13.
|
||
|
|
|
Item 14.
|
||
|
|
|
|
PART IV
|
|
|
|
|
Item 15.
|
||
Item 16.
|
ITEM 1.
|
BUSINESS
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
2,720,242
|
|
|
$
|
2,583,081
|
|
|
$
|
2,535,415
|
|
|
|
Reinsurance
|
2,249,966
|
|
|
2,020,649
|
|
|
2,176,104
|
|
|
|||
|
Total
|
$
|
4,970,208
|
|
|
$
|
4,603,730
|
|
|
$
|
4,711,519
|
|
|
|
|
|
|
|
|
|
|
•
|
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. 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 markets. Target industry sectors include construction, manufacturing, transportation and trucking and other services.
|
•
|
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,
|
2016
|
|
2015
|
|
2014
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Marsh & McLennan Companies Inc.
|
$
|
388,793
|
|
|
14
|
%
|
|
$
|
416,876
|
|
|
16
|
%
|
|
$
|
437,092
|
|
|
17
|
%
|
|
|
Aon plc
|
402,779
|
|
|
15
|
%
|
|
401,612
|
|
|
16
|
%
|
|
354,681
|
|
|
14
|
%
|
|
|||
|
Willis Tower Watson PLC
|
253,887
|
|
|
9
|
%
|
|
314,615
|
|
|
12
|
%
|
|
265,075
|
|
|
10
|
%
|
|
|||
|
Other brokers
|
1,356,181
|
|
|
50
|
%
|
|
1,202,747
|
|
|
47
|
%
|
|
1,235,986
|
|
|
49
|
%
|
|
|||
|
Managing general agencies and underwriters
|
318,602
|
|
|
12
|
%
|
|
247,231
|
|
|
9
|
%
|
|
242,581
|
|
|
10
|
%
|
|
|||
|
Total
|
$
|
2,720,242
|
|
|
100
|
%
|
|
$
|
2,583,081
|
|
|
100
|
%
|
|
$
|
2,535,415
|
|
|
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, personal accident and life. 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 also 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. The Company provides credit insurance coverage to mortgage guaranty
|
•
|
Motor:
provides coverage to insurers for motor liability and property damage losses arising out of any one occurrence. A loss occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence. We offer traditional proportional and non-proportional reinsurance as well as structured solutions.
|
•
|
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.
|
•
|
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.
|
•
|
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.
|
•
|
Marine and Other:
includes marine, aviation and personal accident reinsurance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Marsh & McLennan Companies Inc.
|
$
|
677,677
|
|
|
30
|
%
|
|
$
|
580,843
|
|
|
29
|
%
|
|
$
|
591,412
|
|
|
27
|
%
|
|
|
Aon plc
|
556,577
|
|
|
25
|
%
|
|
439,069
|
|
|
22
|
%
|
|
687,458
|
|
|
32
|
%
|
|
|||
|
Willis Tower Watson PLC
|
338,188
|
|
|
15
|
%
|
|
295,244
|
|
|
15
|
%
|
|
298,628
|
|
|
14
|
%
|
|
|||
|
Capsicum & Gallagher
|
222,461
|
|
|
10
|
%
|
|
250,662
|
|
|
12
|
%
|
|
10,112
|
|
|
—
|
%
|
|
|||
|
Other brokers
|
319,459
|
|
|
14
|
%
|
|
327,365
|
|
|
16
|
%
|
|
366,600
|
|
|
17
|
%
|
|
|||
|
Direct
|
135,604
|
|
|
6
|
%
|
|
127,466
|
|
|
6
|
%
|
|
221,894
|
|
|
10
|
%
|
|
|||
|
Total
|
$
|
2,249,966
|
|
|
100
|
%
|
|
$
|
2,020,649
|
|
|
100
|
%
|
|
$
|
2,176,104
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Protect our capital base and earnings by monitoring our risks against our stated risk appetite and limits;
|
•
|
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' reputation.
|
•
|
The 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.
|
•
|
The Reinsurance Security Committee ("RSC") sets out the financial security requirements of our reinsurance counterparties and approves reinsurance counterparties, as needed.
|
•
|
The Internal Model Committee oversees the Group's Internal Model framework, including the key model assumptions, methodology and validation framework.
|
•
|
The Cyber Risk Committee oversees the Group's Cyber Risk Framework including the development of a cohesive risk governance plan for the internal controls and risk aggregation of cyber risks across the Company.
|
•
|
The Emerging Risks Committee oversees the processes for identifying, assessing and monitoring current and potential emerging risks.
|
•
|
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)
|
2017
|
|
2016
|
|
||||||||||||||||||||||
|
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
|
$
|
461
|
|
|
$
|
534
|
|
|
$
|
811
|
|
|
$
|
511
|
|
|
$
|
729
|
|
|
$
|
907
|
|
|
|
Northeast
|
|
U.S. Hurricane
|
38
|
|
|
105
|
|
|
223
|
|
|
40
|
|
|
137
|
|
|
299
|
|
|
||||||
|
Mid-Atlantic
|
|
U.S. Hurricane
|
100
|
|
|
256
|
|
|
453
|
|
|
104
|
|
|
305
|
|
|
668
|
|
|
||||||
|
Gulf of Mexico
|
|
U.S. Hurricane
|
332
|
|
|
405
|
|
|
468
|
|
|
308
|
|
|
442
|
|
|
614
|
|
|
||||||
|
California
|
|
Earthquake
|
381
|
|
|
446
|
|
|
561
|
|
|
342
|
|
|
532
|
|
|
698
|
|
|
||||||
|
Europe
|
|
Windstorm
|
145
|
|
|
205
|
|
|
273
|
|
|
153
|
|
|
210
|
|
|
284
|
|
|
||||||
|
Japan
|
|
Earthquake
|
121
|
|
|
157
|
|
|
276
|
|
|
123
|
|
|
228
|
|
|
308
|
|
|
||||||
|
Japan
|
|
Windstorm
|
35
|
|
|
60
|
|
|
108
|
|
|
42
|
|
|
71
|
|
|
102
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
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
2016
, 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 an illiquid 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
|
•
|
$204 million, in aggregate, relating to U.S. weather-related events, Hurricane Matthew, Fort McMurray wildfires, the Japanese, Ecuadorian and South Island earthquakes, North Calgary hailstorm and European floods in 2016;
|
•
|
$201 million, in aggregate, relating to various worldwide catastrophe and weather-related events in 2013;
|
•
|
$331 million in relation to Storm Sandy in 2012;
|
•
|
$789 million, in aggregate, in relation to the earthquakes near Christchurch, New Zealand, the Japanese earthquake and tsunami, Australian weather events and the Thai floods in 2011; and
|
•
|
$256 million, in aggregate, in relation to the Chilean and September New Zealand earthquakes in 2010.
|
•
|
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;
|
•
|
changes in tax law; 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2016
|
|
2015
|
|
||||||||||||||||||||
|
|
High
|
|
Low
|
|
Dividends
Declared
|
|
High
|
|
Low
|
|
Dividends
Declared |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
1st Quarter
|
$
|
56.39
|
|
|
$
|
51.67
|
|
|
$
|
0.35
|
|
|
$
|
53.02
|
|
|
$
|
47.65
|
|
|
$
|
0.29
|
|
|
|
2nd Quarter
|
$
|
56.38
|
|
|
$
|
51.01
|
|
|
$
|
0.35
|
|
|
$
|
59.38
|
|
|
$
|
50.81
|
|
|
$
|
0.29
|
|
|
|
3rd Quarter
|
$
|
57.33
|
|
|
$
|
52.67
|
|
|
$
|
0.35
|
|
|
$
|
60.00
|
|
|
$
|
53.19
|
|
|
$
|
0.29
|
|
|
|
4th Quarter
|
$
|
66.23
|
|
|
$
|
53.66
|
|
|
$
|
0.38
|
|
|
$
|
57.98
|
|
|
$
|
52.48
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
Total Number
of Shares
Repurchased
|
Average
Price Paid
Per Share
|
Total Number of Shares
Repurchased as Part of
Publicly Announced
Plans or Programs
(a)
|
Maximum Number (or Approximate
Dollar Value) of Shares That
May Yet Be Repurchased Under the
Announced Plans
or Programs
(b)
|
||||||
October 1-31, 2016
|
1,700
|
|
|
$54.33
|
|
—
|
|
|
$375.1
|
million
|
November 1-30, 2016
|
1,495,216
|
|
|
$60.42
|
|
1,495,177
|
|
|
$284.7
|
million
|
December 1-31, 2016
|
511,985
|
|
|
$63.06
|
|
510,460
|
|
|
$252.5
|
million
|
Total
|
2,008,901
|
|
|
2,005,637
|
|
|
$252.5
|
million
|
Period
|
Total Number
of Shares
Repurchased
(c)
|
Average
Price Paid
Per Share
|
Total Number of Shares
Repurchased as Part of
Publicly Announced
Plans or Programs
|
Maximum Number (or Approximate
Dollar Value) of Shares That May Yet Be
Repurchased Under the Announced Plans
or Programs
|
||||||
October 1-31, 2016
|
1,269,925
|
|
|
$25.75
|
|
—
|
|
|
$0.0
|
million
|
November 1-30, 2016
|
687,120
|
|
|
$25.52
|
|
—
|
|
|
$0.0
|
million
|
Total
|
1,957,045
|
|
|
—
|
|
|
$0.0
|
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 in footnote (b).
|
(b)
|
On December 9, 2016, our Board of Directors authorized a new share repurchase plan for up to
$1 billion
of our common shares through December 31, 2017. The new share repurchase authorization, effective January 1, 2017, replaced the previous plan which had $253 million available until the end of 2016. Share repurchases may be effected from time to time in open market or privately negotiated transactions, depending on market conditions.
|
(c)
|
During October and November 2016, we repurchased
1,957,045
Series C preferred shares at an average purchase price of $25.67 per share for $50 million.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
At and For the year Ended December 31,
|
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
||||||||||
|
|
(in thousands, except per share amounts)
|
|
||||||||||||||||||
|
Selected Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gross premiums written
|
$
|
4,970,208
|
|
|
$
|
4,603,730
|
|
|
$
|
4,711,519
|
|
|
$
|
4,697,041
|
|
|
$
|
4,139,643
|
|
|
|
Net premiums earned
|
3,705,625
|
|
|
3,686,417
|
|
|
3,870,999
|
|
|
3,707,065
|
|
|
3,415,463
|
|
|
|||||
|
Net investment income
|
353,335
|
|
|
305,336
|
|
|
342,766
|
|
|
409,312
|
|
|
380,957
|
|
|
|||||
|
Net realized investment gains (losses)
|
(60,525
|
)
|
|
(138,491
|
)
|
|
132,108
|
|
|
75,564
|
|
|
127,469
|
|
|
|||||
|
Net losses and loss expenses
|
2,204,197
|
|
|
2,176,199
|
|
|
2,186,722
|
|
|
2,134,195
|
|
|
2,096,028
|
|
|
|||||
|
Acquisition costs
|
746,876
|
|
|
718,112
|
|
|
737,197
|
|
|
664,191
|
|
|
627,653
|
|
|
|||||
|
General and administrative expenses
|
602,717
|
|
|
596,821
|
|
|
621,876
|
|
|
575,390
|
|
|
560,981
|
|
|
|||||
|
Interest expense and financing costs
|
51,360
|
|
|
50,963
|
|
|
74,695
|
|
|
61,979
|
|
|
61,863
|
|
|
|||||
|
Preferred share dividends
|
46,597
|
|
|
40,069
|
|
|
40,088
|
|
|
40,474
|
|
|
38,228
|
|
|
|||||
|
Net income available to common shareholders
(1) (2) (3)
|
$
|
465,462
|
|
|
$
|
601,562
|
|
|
$
|
770,657
|
|
|
$
|
683,910
|
|
|
$
|
495,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Per Common Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic earnings per common share
|
$
|
5.13
|
|
|
$
|
6.10
|
|
|
$
|
7.38
|
|
|
$
|
6.02
|
|
|
$
|
4.05
|
|
|
|
Diluted earnings per common share
|
5.08
|
|
|
6.04
|
|
|
7.29
|
|
|
5.93
|
|
|
4.00
|
|
|
|||||
|
Cash dividends declared per common share
|
$
|
1.43
|
|
|
$
|
1.22
|
|
|
$
|
1.10
|
|
|
$
|
1.02
|
|
|
$
|
0.97
|
|
|
|
Basic weighted average common shares outstanding
|
90,772
|
|
|
98,609
|
|
|
104,368
|
|
|
113,636
|
|
|
122,148
|
|
|
|||||
|
Diluted weighted average common shares outstanding
|
91,547
|
|
|
99,629
|
|
|
105,713
|
|
|
115,328
|
|
|
123,654
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating Ratios:
(4)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net loss and loss expense ratio
|
59.5
|
%
|
|
59.0
|
%
|
|
56.5
|
%
|
|
57.6
|
%
|
|
61.4
|
%
|
|
|||||
|
Acquisition cost ratio
|
20.2
|
%
|
|
19.5
|
%
|
|
19.0
|
%
|
|
17.9
|
%
|
|
18.4
|
%
|
|
|||||
|
General and administrative expense ratio
|
16.2
|
%
|
|
16.2
|
%
|
|
16.1
|
%
|
|
15.5
|
%
|
|
16.4
|
%
|
|
|||||
|
Combined ratio
|
95.9
|
%
|
|
94.7
|
%
|
|
91.6
|
%
|
|
91.0
|
%
|
|
96.2
|
%
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selected Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments
|
$
|
13,459,507
|
|
|
$
|
13,386,118
|
|
|
$
|
13,778,911
|
|
|
$
|
13,780,336
|
|
|
$
|
13,546,894
|
|
|
|
Cash and cash equivalents
|
1,241,507
|
|
|
1,174,751
|
|
|
1,209,695
|
|
|
987,876
|
|
|
850,550
|
|
|
|||||
|
Reinsurance recoverable on unpaid and paid losses
|
2,334,922
|
|
|
2,096,104
|
|
|
1,926,145
|
|
|
1,929,988
|
|
|
1,863,819
|
|
|
|||||
|
Total assets
|
20,813,691
|
|
|
19,981,891
|
|
|
19,955,736
|
|
|
19,634,784
|
|
|
18,852,344
|
|
|
|||||
|
Reserve for losses and loss expenses
|
9,697,827
|
|
|
9,646,285
|
|
|
9,596,797
|
|
|
9,582,140
|
|
|
9,058,731
|
|
|
|||||
|
Unearned premiums
|
2,969,498
|
|
|
2,760,889
|
|
|
2,735,376
|
|
|
2,683,849
|
|
|
2,454,692
|
|
|
|||||
|
Senior notes
|
992,950
|
|
|
991,825
|
|
|
990,790
|
|
|
995,855
|
|
|
995,245
|
|
|
|||||
|
Total shareholders’ equity attributable to AXIS Capital
|
$
|
6,272,370
|
|
|
$
|
5,866,882
|
|
|
$
|
5,821,121
|
|
|
$
|
5,817,962
|
|
|
$
|
5,779,761
|
|
|
|
Book value per common share
(5)(6)
|
$
|
59.54
|
|
|
$
|
55.32
|
|
|
$
|
52.23
|
|
|
$
|
47.40
|
|
|
$
|
44.75
|
|
|
|
Diluted book value per common share
(5)(6)
|
$
|
58.27
|
|
|
$
|
54.08
|
|
|
$
|
50.63
|
|
|
$
|
45.80
|
|
|
$
|
42.97
|
|
|
|
Common shares outstanding
(6)
|
86,441
|
|
|
94,708
|
|
|
99,426
|
|
|
109,485
|
|
|
117,920
|
|
|
|||||
|
Common shares outstanding - diluted
(6)
|
88,317
|
|
|
96,883
|
|
|
102,577
|
|
|
113,325
|
|
|
122,793
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During 2015, the Company implemented a number of profitability enhancement initiatives which resulted in a recognition of reorganization and related expenses of $46 million and additional general and administrative expenses of $5 million in the Consolidated Statement of Operations for the year ended December 31, 2015. Refer to Item 8, Note 18 to the Consolidated Financial Statements '
Reorganization and Related Expenses
' for additional information on the profitability enhancement initiatives.
|
(2)
|
During 2015, the Company accepted a request from PartnerRe Ltd., a Bermuda exempted company ("PartnerRe") to terminate the Agreement and Plan of Amalgamation (the "
A
malgamation Agreement") with the Company. PartnerRe paid the Company a termination fee of $280 million.
|
(3)
|
During 2015, the Company early adopted the Accounting Standard Update (“ASU”) 2015-02, “Amendments to the Consolidation Analysis” issued by the Financial Accounting Standards Board. The adoption of this amended accounting guidance resulted in the Company concluding that it is no longer required to consolidate the results of operations and the financial position of Ventures Re. The Company adopted this revised accounting guidance using the modified retrospective approach and ceased to consolidate Ventures Re effective as of January 1, 2015. The 2014 net income available to common shareholders includes an amount attributable from noncontrolling interests of $6,181. Refer to Item 8, Note 14 to the Consolidated Financial Statements '
Noncontrolling Interests'
for additional information on the adoption of ASU 2015-02.
|
(4)
|
Operating ratios are calculated by dividing the respective operating expenses by net premiums earned.
|
(5)
|
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.
|
(6)
|
Calculations and share amounts at December 31, 2015 include 1,358,380 additional shares delivered to the Company in January 2016 under the Company's Accelerated Share Repurchase ("ASR") agreement entered into on August 17, 2015. Refer to Item 8, Note 13 to the Consolidated Financial Statements
'Shareholders' Equity'
for additional information on the ASR.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Net income available to common shareholders of
$465 million
, or
$5.13
per common share and
$5.08
per diluted common share
|
•
|
Non-GAAP operating income of
$410 million
, or
$4.48
per diluted common share
(1)
|
•
|
Gross premiums written of
$5.0 billion
|
•
|
Net premiums written of
$3.8 billion
|
•
|
Net premiums earned of
$3.7 billion
|
•
|
Net favorable prior year reserve development of
$292 million
|
•
|
Estimated pre-tax catastrophe and weather-related net losses, net of reinstatement premiums, of
$204
million compared to
$100
million for 2015
|
•
|
Underwriting income of
$279 million
and combined ratio of
95.9%
|
•
|
Net investment income of
$353 million
|
•
|
Net realized investment losses of
$61 million
|
•
|
Foreign exchange gains of
$121 million
|
•
|
Total cash and investments of
$14.7 billion
; fixed maturities, cash and short-term securities comprise
87%
of total cash and investments and have an average credit rating of
AA-
|
•
|
Total assets of
$20.8 billion
|
•
|
Reserve for losses and loss expenses of
$9.7 billion
and reinsurance recoverable of
$2.3 billion
|
•
|
Total debt of
$993 million
and a debt to total capital ratio of
13.7%
|
•
|
Total common shares repurchased were
10.5 million
, consisting of 9.1 million of common shares repurchased for $512 million and
1.4 million
common shares acquired under an Accelerated Share Repurchase agreement, which terminated on January 15, 2016
|
•
|
On December 9, 2016, our Board of Directors authorized a new share repurchase plan for up to
$1 billion
of our common shares effective January 1, 2017 through December 31, 2017
|
•
|
At February 24,
2017
, the Company had $963 million of remaining authorization under our Board-authorized share repurchase program for common share repurchases through December 31, 2017
|
•
|
Common shareholders’ equity of
$5.1 billion
; diluted book value per common share of
$58.27
|
(1)
|
Non-GAAP 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 growth of our accident and health lines, which is focused on specialty accident and health products;
|
•
|
growth of our syndicate at Lloyd's which provides us with access to Lloyd's worldwide licenses and an extensive distribution network. During the first quarter of 2016 we commenced writing business through our underwriting division at Lloyd's in China;
|
•
|
continued implementation of a more focused distribution strategy and increased our scale and relevance in key markets;
|
•
|
continued rebalancing of our portfolio towards less-volatile lines of business that carry attractive rates;
|
•
|
continued to improve the effectiveness and efficiency of our operating platforms and processes;
|
•
|
increased our investment in data and analytics; and
|
•
|
broadened our risk-funding sources and developed vehicles that utilize third-party capital:
|
•
|
our investment in Harrington Reinsurance Holdings Limited ("Harrington"), the parent company of Harrington Re Ltd. ("Harrington Re"), an independent reinsurance company jointly sponsored by AXIS Capital and The Blackstone Group L.P. ("Blackstone"). Harrington Re’s strategy is to combine a multi-line reinsurance portfolio with a diversified allocation to alternative investment strategies to earn attractive risk-adjusted returns. Harrington has developed a portfolio that optimizes the risk-reward characteristics of both assets and liabilities, leveraging the respective strengths of AXIS Capital and Blackstone while deploying a disciplined and fully integrated approach to both underwriting and investing; and
|
•
|
AXIS Ventures Reinsurance Limited, which manages capital for investors interested in deploying funds directly into the property-catastrophe and other short-tail business.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Underwriting income:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
37,500
|
|
|
(9%)
|
|
$
|
41,433
|
|
|
(47%)
|
|
$
|
78,635
|
|
|
|
Reinsurance
|
241,573
|
|
|
(7%)
|
|
260,809
|
|
|
(32%)
|
|
382,894
|
|
|
|||
|
Net investment income
|
353,335
|
|
|
16%
|
|
305,336
|
|
|
(11%)
|
|
342,766
|
|
|
|||
|
Net realized investment gains (losses)
|
(60,525
|
)
|
|
(56%)
|
|
(138,491
|
)
|
|
nm
|
|
132,108
|
|
|
|||
|
Other expenses, net
|
(56,421
|
)
|
|
(8%)
|
|
(61,589
|
)
|
|
(53%)
|
|
(131,839
|
)
|
|
|||
|
Termination fee received
|
—
|
|
|
nm
|
|
280,000
|
|
|
nm
|
|
—
|
|
|
|||
|
Reorganization and related fees
|
—
|
|
|
nm
|
|
(45,867
|
)
|
|
nm
|
|
—
|
|
|
|||
|
Interest in loss of equity method investments
|
(2,094
|
)
|
|
nm
|
|
—
|
|
|
nm
|
|
—
|
|
|
|||
|
Net income
|
513,368
|
|
|
(20%)
|
|
641,631
|
|
|
(20%)
|
|
804,564
|
|
|
|||
|
Amounts attributable from noncontrolling interests
|
—
|
|
|
nm
|
|
—
|
|
|
nm
|
|
6,181
|
|
|
|||
|
Preferred share dividends
|
(46,597
|
)
|
|
16%
|
|
(40,069
|
)
|
|
—%
|
|
(40,088
|
)
|
|
|||
|
Loss on repurchase of preferred shares
|
(1,309
|
)
|
|
nm
|
|
—
|
|
|
nm
|
|
—
|
|
|
|||
|
Net income available to common shareholders
|
$
|
465,462
|
|
|
(23%)
|
|
$
|
601,562
|
|
|
(22%)
|
|
$
|
770,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Non-GAAP operating income
|
$
|
409,945
|
|
|
2%
|
|
$
|
400,515
|
|
|
(29%)
|
|
$
|
562,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended and at December 31,
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
ROACE
(1)
|
9.0
|
%
|
|
11.5
|
%
|
|
14.8
|
%
|
|
|||
|
Non-GAAP operating ROACE
(2)
|
7.9
|
%
|
|
7.7
|
%
|
|
10.8
|
%
|
|
|||
|
Diluted book value per common share
(3)(4)
|
$
|
58.27
|
|
|
$
|
54.08
|
|
|
$
|
50.63
|
|
|
|
Cash dividends declared per common share
|
1.43
|
|
|
1.22
|
|
|
1.10
|
|
|
|||
|
Increase in diluted book value per common share adjusted for dividends
|
$
|
5.62
|
|
|
$
|
4.67
|
|
|
$
|
5.93
|
|
|
|
|
|
|
|
|
|
|
(1)
|
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)
|
Non-GAAP operating ROACE is calculated by dividing non-GAAP 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. Non-GAAP operating ROACE is a non-GAAP financial measure, as defined in SEC Regulation G. Refer to
‘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.
|
(4)
|
Calculation of DBV per common share at December 31, 2015 includes
1,358,380
additional shares delivered to the Company in January 2016 under the ASR agreement. Refer to Item 8, Note 13 to the Consolidated Financial Statements '
Shareholders' Equity'
for information relating to the ASR.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
|
$
|
4,970,208
|
|
|
8%
|
|
$
|
4,603,730
|
|
|
(2%)
|
|
$
|
4,711,519
|
|
|
|
Net premiums written
|
|
3,752,974
|
|
|
2%
|
|
3,674,666
|
|
|
(6%)
|
|
3,906,975
|
|
|
|||
|
Net premiums earned
|
|
3,705,625
|
|
|
1%
|
|
3,686,417
|
|
|
(5%)
|
|
3,870,999
|
|
|
|||
|
Other insurance related income (loss)
|
|
7,222
|
|
|
nm
|
|
(2,953
|
)
|
|
nm
|
|
650
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year net losses and loss expenses
|
|
(2,496,574
|
)
|
|
|
|
(2,419,247
|
)
|
|
|
|
(2,445,666
|
)
|
|
|||
|
Prior year reserve development
|
|
292,377
|
|
|
|
|
243,048
|
|
|
|
|
258,944
|
|
|
|||
|
Acquisition costs
|
|
(746,876
|
)
|
|
|
|
(718,112
|
)
|
|
|
|
(737,197
|
)
|
|
|||
|
Underwriting-related general and administrative expenses
(1)
|
|
(482,701
|
)
|
|
|
|
(486,911
|
)
|
|
|
|
(486,201
|
)
|
|
|||
|
Underwriting income
(2)(3)
|
|
$
|
279,073
|
|
|
(8)%
|
|
$
|
302,242
|
|
|
(35%)
|
|
$
|
461,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
General and administrative expenses
(1)
|
|
$
|
602,717
|
|
|
|
|
$
|
596,821
|
|
|
|
|
$
|
621,876
|
|
|
|
Income before income taxes and interest in income (loss) of equity method investments
(2)
|
|
$
|
521,802
|
|
|
|
|
$
|
644,659
|
|
|
|
|
$
|
830,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
$120,016
,
$109,910
and
$135,675
of corporate expenses for
2016
,
2015
and
2014
, respectively. Refer to '
Other Expenses (Revenues), 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. Refer to Item 8, Note 3 to the Consolidated Financial Statements '
Segment Information'
, for a reconciliation of consolidated underwriting income to the nearest GAAP financial measures (income before income taxes and interest in income (loss) of equity method investments) 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 Ventures Re, the Company's third-party capital vehicle, on a fully collateralized basis. Ventures Re is a variable interest entity and as the Company had initially concluded that it was the primary beneficiary of this entity, Ventures Re was consolidated by the Company with the net impact of the cessions included in amounts attributable from noncontrolling interest. During the second quarter of 2015, the Company early adopted ASU 2015-02, "Amendments to the Consolidation Analysis". Following the adoption of the ASU and effective as of January 1, 2015, the Company determined that it was no longer required to consolidate the results of operations and the financial position of Ventures Re. Refer to Item 8, Note 14 to the Consolidated Financial Statements '
Noncontrolling Interests'
for more information. For 2014, amounts attributable from noncontrolling interests were $6,181.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gross Premiums Written
|
|
||||||||||||||||||
|
Year ended December 31,
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Insurance
|
$
|
2,720,242
|
|
|
5%
|
|
$
|
2,583,081
|
|
|
2%
|
|
$
|
2,535,415
|
|
|
||||
|
Reinsurance
|
2,249,966
|
|
|
11%
|
|
2,020,649
|
|
|
(7%)
|
|
2,176,104
|
|
|
|||||||
|
Total
|
$
|
4,970,208
|
|
|
8%
|
|
$
|
4,603,730
|
|
|
(2%)
|
|
$
|
4,711,519
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
% ceded
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
34
|
%
|
|
2
|
|
pts
|
|
32
|
%
|
|
2
|
|
pts
|
|
30
|
%
|
|
|||
|
Reinsurance
|
14
|
%
|
|
9
|
|
pts
|
|
5
|
%
|
|
3
|
|
pts
|
|
2
|
%
|
|
|||
|
Total
|
24
|
%
|
|
4
|
|
pts
|
|
20
|
%
|
|
3
|
|
pts
|
|
17
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Net Premiums Written
|
|
||||||||||||||||||
|
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Insurance
|
$
|
1,807,125
|
|
|
3%
|
|
$
|
1,759,359
|
|
|
(1%)
|
|
$
|
1,779,501
|
|
|
||||
|
Reinsurance
|
1,945,849
|
|
|
2%
|
|
1,915,307
|
|
|
(10%)
|
|
2,127,474
|
|
|
|||||||
|
Total
|
$
|
3,752,974
|
|
|
2%
|
|
$
|
3,674,666
|
|
|
(6%)
|
|
$
|
3,906,975
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts presented on a constant currency basis are “non-GAAP financial measures” as defined in Regulation G. The constant currency basis is calculated by applying the average foreign exchange rate from the current year to the prior year balance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
15 to 16
|
|
14 to 15
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Insurance
|
$
|
1,777,321
|
|
|
48
|
%
|
|
$
|
1,798,191
|
|
|
49
|
%
|
|
$
|
1,830,544
|
|
|
47
|
%
|
|
(1
|
%)
|
|
(2
|
%)
|
|
|
Reinsurance
|
1,928,304
|
|
|
52
|
%
|
|
1,888,226
|
|
|
51
|
%
|
|
2,040,455
|
|
|
53
|
%
|
|
2
|
%
|
|
(7
|
%)
|
|
|||
|
Total
|
$
|
3,705,625
|
|
|
100
|
%
|
|
$
|
3,686,417
|
|
|
100
|
%
|
|
$
|
3,870,999
|
|
|
100
|
%
|
|
1
|
%
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year ended December 31,
|
2016
|
|
% Point
Change
|
|
2015
|
|
% Point
Change
|
|
2014
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current accident year loss ratio
|
67.4
|
%
|
|
1.8
|
|
|
65.6
|
%
|
|
2.4
|
|
63.2
|
%
|
|
|
Prior year reserve development
|
(7.9
|
%)
|
|
(1.3
|
)
|
|
(6.6
|
%)
|
|
0.1
|
|
(6.7
|
%)
|
|
|
Acquisition cost ratio
|
20.2
|
%
|
|
0.7
|
|
|
19.5
|
%
|
|
0.5
|
|
19.0
|
%
|
|
|
General and administrative expense ratio
(1)
|
16.2
|
%
|
|
—
|
|
|
16.2
|
%
|
|
0.1
|
|
16.1
|
%
|
|
|
Combined ratio
|
95.9
|
%
|
|
1.2
|
|
|
94.7
|
%
|
|
3.1
|
|
91.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The general and administration expense ratio includes corporate expenses not allocated to underwriting segments of
3.2%
,
3.0%
and
3.5%
for
2016
,
2015
and
2014
, respectively. These costs are further discussed in the ‘
Other Expenses (Revenues), Net
’ section.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
55,905
|
|
|
$
|
23,447
|
|
|
$
|
63,735
|
|
|
|
Reinsurance
|
236,472
|
|
|
219,601
|
|
|
195,209
|
|
|
|||
|
Total
|
$
|
292,377
|
|
|
$
|
243,048
|
|
|
$
|
258,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Property and Other
|
$
|
34,784
|
|
|
$
|
52,257
|
|
|
$
|
68,330
|
|
|
|
Marine
|
12,068
|
|
|
24,563
|
|
|
6,257
|
|
|
|||
|
Aviation
|
3,113
|
|
|
2,429
|
|
|
9,076
|
|
|
|||
|
Credit and Political Risk
|
(242
|
)
|
|
(15,435
|
)
|
|
3,740
|
|
|
|||
|
Professional Lines
|
14,005
|
|
|
(13,789
|
)
|
|
(807
|
)
|
|
|||
|
Liability
|
(7,823
|
)
|
|
(26,578
|
)
|
|
(22,861
|
)
|
|
|||
|
Total
|
$
|
55,905
|
|
|
$
|
23,447
|
|
|
$
|
63,735
|
|
|
|
|
|
|
|
|
|
|
•
|
$35 million
of net favorable prior year reserve development on property and other business, driven by better than expected loss emergence primarily related to accident years 2012 through 2014.
|
•
|
$14 million
of net favorable prior year reserve development on professional lines business, driven by better than expected development related to various accident years, partially offset by reserve strengthening relating to updated information on specific claims impacting accident years 2010 and 2011.
|
•
|
$12 million
of net favorable prior year reserve development on marine business, driven by better than expected loss emergence, primarily driven by reductions in mid-size loss estimates impacting accident year 2015.
|
•
|
$8 million
of net adverse prior year reserve development on liability business, primarily related to reserve strengthening on certain claims within our excess casualty book of business.
|
•
|
$52 million
of net favorable prior year reserve development on property and other business, related to the 2012 and 2013 accident years and driven by better than expected loss emergence, including reserve reductions related to Storm Sandy of $18 million.
|
•
|
$25 million
of net favorable prior year reserve development on marine business, largely related to better than expected loss emergence in our energy offshore business spanning multiple years, particularly accident year 2014.
|
•
|
$14 million
of net adverse prior year reserve development on professional lines business, predominately reflecting reserve strengthening resulting from updated actuarial assumptions for our Australian professional lines and impacting accident years 2010 to 2014, partially offset by favorable development in certain US professional lines.
|
•
|
$15 million
of net adverse prior year reserve development on credit and political risk business, primarily related to updated information on one specific claim impacting accident year 2014, partially offset by better than expected development on the 2013 accident year.
|
•
|
$27 million
of net adverse prior year reserve development on liability business, related to strengthening of specific individual claim reserves and a higher frequency of large auto liability claims in accident year 2014.
|
•
|
$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.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Property and Other
|
$
|
97,691
|
|
|
$
|
72,789
|
|
|
$
|
122,859
|
|
|
|
Credit and Surety
|
10,488
|
|
|
26,568
|
|
|
(713
|
)
|
|
|||
|
Professional Lines
|
29,592
|
|
|
37,778
|
|
|
32,765
|
|
|
|||
|
Motor
|
55,106
|
|
|
36,677
|
|
|
19,007
|
|
|
|||
|
Liability
|
43,595
|
|
|
45,789
|
|
|
21,291
|
|
|
|||
|
Total
|
$
|
236,472
|
|
|
$
|
219,601
|
|
|
$
|
195,209
|
|
|
|
|
|
|
|
|
|
|
•
|
$98 million
of net favorable prior year development on property and other business, primarily related to the 2010 through 2015 accident years driven by better than expected loss emergence.
|
•
|
$55 million
of net favorable prior year reserve development on motor business, primarily related to non-proportional business spanning multiple accident years, driven by better than expected loss emergence.
|
•
|
$44 million
of net favorable prior year reserve development on liability business, primarily related to the 2006 through 2011 accident years, for reasons discussed in the overview.
|
•
|
$30 million
of net favorable prior year reserve development on professional lines business, primarily related to the earlier accident years, for reasons discussed in the overview.
|
•
|
$10 million
of net favorable prior year reserve development on credit and surety business, spanning multiple accident years and driven by generally better than expected loss emergence.
|
•
|
$73 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 is $17 million of adverse development on agriculture reserves relating to loss developments on the 2014 accident year driven by lower than expected crop yields reported for two specific treaties.
|
•
|
$46 million
of net favorable prior year reserve development on liability business, primarily related to the 2003 through 2010 accident years, reflecting the greater weight management is giving to experience based indications.
|
•
|
$38 million
of net favorable prior year reserve development on professional lines business, primarily related to the 2009 and 2010 accident years, reflecting increased weight being given to experience-based actuarial methods in selecting our ultimate loss estimates for accident years 2010 and prior.
|
•
|
$37 million
of net favorable prior year reserve development on motor business, predominantly related to non-proportional business and driven by better than expected loss emergence on accident years 2007 through 2013, partially offset by reserve strengthening on accident year 2014.
|
•
|
$27 million
of net favorable prior year reserve development on credit and surety business, spanning multiple accident years and driven by better than expected loss emergence, as well as additional information obtained about a specific claim.
|
•
|
$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.
|
•
|
$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.
|
•
|
$19 million
of net favorable prior year reserve development on motor business, driven by better than expected loss emergence on certain European exposures.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,720,242
|
|
|
5%
|
|
$
|
2,583,081
|
|
|
2%
|
|
$
|
2,535,415
|
|
|
|
Net premiums written
|
1,807,125
|
|
|
3%
|
|
1,759,359
|
|
|
(1%)
|
|
1,779,501
|
|
|
|||
|
Net premiums earned
|
1,777,321
|
|
|
(1%)
|
|
1,798,191
|
|
|
(2%)
|
|
1,830,544
|
|
|
|||
|
Other insurance related income (loss)
|
89
|
|
|
(91%)
|
|
1,036
|
|
|
nm
|
|
(11
|
)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year net losses and loss expenses
|
(1,197,838
|
)
|
|
|
|
(1,178,375
|
)
|
|
|
|
(1,195,615
|
)
|
|
|||
|
Prior year reserve development
|
55,905
|
|
|
|
|
23,447
|
|
|
|
|
63,735
|
|
|
|||
|
Acquisition costs
|
(251,120
|
)
|
|
|
|
(261,208
|
)
|
|
|
|
(278,804
|
)
|
|
|||
|
General and administrative expenses
|
(346,857
|
)
|
|
|
|
(341,658
|
)
|
|
|
|
(341,214
|
)
|
|
|||
|
Underwriting income
|
$
|
37,500
|
|
|
(9%)
|
|
$
|
41,433
|
|
|
(47%)
|
|
$
|
78,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
% Point
Change
|
|
|
|
% Point
Change
|
|
|
|
||||||
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year loss ratio
|
67.4
|
%
|
|
1.9
|
|
65.5
|
%
|
|
0.2
|
|
65.3
|
%
|
|
|||
|
Prior year reserve development
|
(3.1
|
%)
|
|
(1.8)
|
|
(1.3
|
%)
|
|
2.2
|
|
(3.5
|
%)
|
|
|||
|
Acquisition cost ratio
|
14.1
|
%
|
|
(0.4)
|
|
14.5
|
%
|
|
(0.7)
|
|
15.2
|
%
|
|
|||
|
General and administrative expense ratio
|
19.5
|
%
|
|
0.4
|
|
19.1
|
%
|
|
0.4
|
|
18.7
|
%
|
|
|||
|
Combined ratio
|
97.9
|
%
|
|
0.1
|
|
97.8
|
%
|
|
2.1
|
|
95.7
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
15 to 16
|
|
14 to 15
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Property
|
$
|
672,891
|
|
|
25
|
%
|
|
$
|
607,358
|
|
|
24
|
%
|
|
$
|
644,516
|
|
|
26
|
%
|
|
11
|
%
|
|
(6
|
%)
|
|
|
Marine
|
225,609
|
|
|
8
|
%
|
|
241,956
|
|
|
9
|
%
|
|
238,320
|
|
|
9
|
%
|
|
(7
|
%)
|
|
2
|
%
|
|
|||
|
Terrorism
|
38,146
|
|
|
1
|
%
|
|
33,709
|
|
|
1
|
%
|
|
37,705
|
|
|
1
|
%
|
|
13
|
%
|
|
(11
|
%)
|
|
|||
|
Aviation
|
53,173
|
|
|
2
|
%
|
|
54,642
|
|
|
2
|
%
|
|
57,622
|
|
|
2
|
%
|
|
(3
|
%)
|
|
(5
|
%)
|
|
|||
|
Credit and Political Risk
|
49,930
|
|
|
2
|
%
|
|
59,967
|
|
|
2
|
%
|
|
45,368
|
|
|
2
|
%
|
|
(17
|
%)
|
|
32
|
%
|
|
|||
|
Professional Lines
|
845,358
|
|
|
31
|
%
|
|
850,011
|
|
|
33
|
%
|
|
862,784
|
|
|
34
|
%
|
|
(1
|
%)
|
|
(1
|
%)
|
|
|||
|
Liability
|
405,030
|
|
|
15
|
%
|
|
384,145
|
|
|
15
|
%
|
|
368,450
|
|
|
15
|
%
|
|
5
|
%
|
|
4
|
%
|
|
|||
|
Accident and Health
|
430,105
|
|
|
16
|
%
|
|
351,293
|
|
|
14
|
%
|
|
280,650
|
|
|
11
|
%
|
|
22
|
%
|
|
25
|
%
|
|
|||
|
Total
|
$
|
2,720,242
|
|
|
100
|
%
|
|
$
|
2,583,081
|
|
|
100
|
%
|
|
$
|
2,535,415
|
|
|
100
|
%
|
|
5
|
%
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
15 to 16
|
|
14 to 15
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Property
|
$
|
426,918
|
|
|
23
|
%
|
|
$
|
432,587
|
|
|
24
|
%
|
|
$
|
444,197
|
|
|
25
|
%
|
|
(1
|
%)
|
|
(3
|
%)
|
|
|
Marine
|
150,046
|
|
|
8
|
%
|
|
183,696
|
|
|
10
|
%
|
|
178,229
|
|
|
10
|
%
|
|
(18
|
%)
|
|
3
|
%
|
|
|||
|
Terrorism
|
33,279
|
|
|
2
|
%
|
|
36,818
|
|
|
2
|
%
|
|
35,876
|
|
|
2
|
%
|
|
(10
|
%)
|
|
3
|
%
|
|
|||
|
Aviation
|
44,980
|
|
|
3
|
%
|
|
45,659
|
|
|
3
|
%
|
|
41,192
|
|
|
2
|
%
|
|
(1
|
%)
|
|
11
|
%
|
|
|||
|
Credit and Political Risk
|
57,964
|
|
|
3
|
%
|
|
63,583
|
|
|
4
|
%
|
|
63,095
|
|
|
3
|
%
|
|
(9
|
%)
|
|
1
|
%
|
|
|||
|
Professional Lines
|
510,806
|
|
|
29
|
%
|
|
596,430
|
|
|
33
|
%
|
|
629,365
|
|
|
34
|
%
|
|
(14
|
%)
|
|
(5
|
%)
|
|
|||
|
Liability
|
169,182
|
|
|
10
|
%
|
|
161,614
|
|
|
9
|
%
|
|
146,819
|
|
|
8
|
%
|
|
5
|
%
|
|
10
|
%
|
|
|||
|
Accident and Health
|
384,146
|
|
|
22
|
%
|
|
277,804
|
|
|
15
|
%
|
|
291,771
|
|
|
16
|
%
|
|
38
|
%
|
|
(5
|
%)
|
|
|||
|
Total
|
$
|
1,777,321
|
|
|
100
|
%
|
|
$
|
1,798,191
|
|
|
100
|
%
|
|
$
|
1,830,544
|
|
|
100
|
%
|
|
(1
|
%)
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,249,966
|
|
|
11%
|
|
$
|
2,020,649
|
|
|
(7%)
|
|
$
|
2,176,104
|
|
|
|
Net premiums written
|
1,945,849
|
|
|
2%
|
|
1,915,307
|
|
|
(10%)
|
|
2,127,474
|
|
|
|||
|
Net premiums earned
|
1,928,304
|
|
|
2%
|
|
1,888,226
|
|
|
(7%)
|
|
2,040,455
|
|
|
|||
|
Other insurance related income (loss)
|
7,133
|
|
|
nm
|
|
(3,989
|
)
|
|
nm
|
|
661
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year net losses and loss expenses
|
(1,298,736
|
)
|
|
|
|
(1,240,872
|
)
|
|
|
|
(1,250,051
|
)
|
|
|||
|
Prior year reserve development
|
236,472
|
|
|
|
|
219,601
|
|
|
|
|
195,209
|
|
|
|||
|
Acquisition costs
|
(495,756
|
)
|
|
|
|
(456,904
|
)
|
|
|
|
(458,393
|
)
|
|
|||
|
General and administrative expenses
|
(135,844
|
)
|
|
|
|
(145,253
|
)
|
|
|
|
(144,987
|
)
|
|
|||
|
Underwriting income
|
$
|
241,573
|
|
|
(7)%
|
|
$
|
260,809
|
|
|
(32%)
|
|
$
|
382,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
% Point
Change
|
|
|
|
% Point
Change
|
|
|
|
||||||
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current year loss ratio
|
67.4
|
%
|
|
1.7
|
|
65.7
|
%
|
|
4.4
|
|
61.3
|
%
|
|
|||
|
Prior year reserve development
|
(12.3
|
%)
|
|
(0.7)
|
|
(11.6
|
%)
|
|
(2.0)
|
|
(9.6
|
%)
|
|
|||
|
Acquisition cost ratio
|
25.7
|
%
|
|
1.5
|
|
24.2
|
%
|
|
1.7
|
|
22.5
|
%
|
|
|||
|
General and administrative expense ratio
|
7.0
|
%
|
|
(0.7)
|
|
7.7
|
%
|
|
0.6
|
|
7.1
|
%
|
|
|||
|
Combined ratio
|
87.8
|
%
|
|
1.8
|
|
86.0
|
%
|
|
4.7
|
|
81.3
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
15 to 16
|
|
14 to 15
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Catastrophe
|
$
|
324,884
|
|
|
14
|
%
|
|
$
|
291,697
|
|
|
13
|
%
|
|
$
|
372,925
|
|
|
17
|
%
|
|
11
|
%
|
|
(22
|
%)
|
|
|
Property
|
282,535
|
|
|
13
|
%
|
|
305,160
|
|
|
15
|
%
|
|
349,775
|
|
|
16
|
%
|
|
(7
|
%)
|
|
(13
|
%)
|
|
|||
|
Professional Lines
|
268,403
|
|
|
12
|
%
|
|
276,479
|
|
|
14
|
%
|
|
293,263
|
|
|
13
|
%
|
|
(3
|
%)
|
|
(6
|
%)
|
|
|||
|
Credit and Surety
|
319,077
|
|
|
14
|
%
|
|
242,620
|
|
|
12
|
%
|
|
258,865
|
|
|
12
|
%
|
|
32
|
%
|
|
(6
|
%)
|
|
|||
|
Motor
|
346,087
|
|
|
15
|
%
|
|
335,084
|
|
|
17
|
%
|
|
291,293
|
|
|
13
|
%
|
|
3
|
%
|
|
15
|
%
|
|
|||
|
Liability
|
422,489
|
|
|
19
|
%
|
|
345,319
|
|
|
17
|
%
|
|
365,466
|
|
|
17
|
%
|
|
22
|
%
|
|
(6
|
%)
|
|
|||
|
Agriculture
|
158,278
|
|
|
7
|
%
|
|
132,629
|
|
|
7
|
%
|
|
166,047
|
|
|
8
|
%
|
|
19
|
%
|
|
(20
|
%)
|
|
|||
|
Engineering
|
68,892
|
|
|
3
|
%
|
|
72,050
|
|
|
4
|
%
|
|
55,450
|
|
|
3
|
%
|
|
(4
|
%)
|
|
30
|
%
|
|
|||
|
Marine and Other
|
59,321
|
|
|
3
|
%
|
|
19,611
|
|
|
1
|
%
|
|
23,020
|
|
|
1
|
%
|
|
202
|
%
|
|
(15
|
%)
|
|
|||
|
Total
|
$
|
2,249,966
|
|
|
100
|
%
|
|
$
|
2,020,649
|
|
|
100
|
%
|
|
$
|
2,176,104
|
|
|
100
|
%
|
|
11
|
%
|
|
(7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
15 to 16
|
|
14 to 15
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Catastrophe
|
$
|
199,825
|
|
|
11
|
%
|
|
$
|
216,020
|
|
|
12
|
%
|
|
$
|
325,307
|
|
|
17
|
%
|
|
(7
|
%)
|
|
(34
|
%)
|
|
|
Property
|
272,403
|
|
|
14
|
%
|
|
306,083
|
|
|
16
|
%
|
|
312,443
|
|
|
15
|
%
|
|
(11
|
%)
|
|
(2
|
%)
|
|
|||
|
Professional Lines
|
289,868
|
|
|
15
|
%
|
|
310,915
|
|
|
16
|
%
|
|
336,058
|
|
|
16
|
%
|
|
(7
|
%)
|
|
(7
|
%)
|
|
|||
|
Credit and Surety
|
252,210
|
|
|
13
|
%
|
|
250,208
|
|
|
13
|
%
|
|
263,013
|
|
|
13
|
%
|
|
1
|
%
|
|
(5
|
%)
|
|
|||
|
Motor
|
318,863
|
|
|
17
|
%
|
|
299,883
|
|
|
16
|
%
|
|
268,678
|
|
|
13
|
%
|
|
6
|
%
|
|
12
|
%
|
|
|||
|
Liability
|
332,479
|
|
|
17
|
%
|
|
297,000
|
|
|
16
|
%
|
|
289,223
|
|
|
14
|
%
|
|
12
|
%
|
|
3
|
%
|
|
|||
|
Agriculture
|
142,501
|
|
|
7
|
%
|
|
129,346
|
|
|
7
|
%
|
|
164,628
|
|
|
8
|
%
|
|
10
|
%
|
|
(21
|
%)
|
|
|||
|
Engineering
|
62,833
|
|
|
3
|
%
|
|
61,043
|
|
|
3
|
%
|
|
61,143
|
|
|
3
|
%
|
|
3
|
%
|
|
—
|
%
|
|
|||
|
Marine and Other
|
57,322
|
|
|
3
|
%
|
|
17,728
|
|
|
1
|
%
|
|
19,962
|
|
|
1
|
%
|
|
223
|
%
|
|
(11
|
%)
|
|
|||
|
Total
|
$
|
1,928,304
|
|
|
100
|
%
|
|
$
|
1,888,226
|
|
|
100
|
%
|
|
$
|
2,040,455
|
|
|
100
|
%
|
|
2
|
%
|
|
(7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Year ended December 31,
|
|
2016
|
|
% Point
Change
|
|
2015
|
|
% Point
Change
|
|
2014
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current accident year
|
|
67.4
|
%
|
|
1.7
|
|
|
65.7
|
%
|
|
4.4
|
|
|
61.3
|
%
|
|
|
Prior year reserve development
|
|
(12.3
|
%)
|
|
(0.7
|
)
|
|
(11.6
|
%)
|
|
(2.0
|
)
|
|
(9.6
|
%)
|
|
|
Loss ratio
|
|
55.1
|
%
|
|
1.0
|
|
|
54.1
|
%
|
|
2.4
|
|
|
51.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
$
|
120,016
|
|
|
9%
|
|
$
|
109,910
|
|
|
(19%)
|
|
$
|
135,675
|
|
|
|
Foreign exchange gains
|
(121,295
|
)
|
|
19%
|
|
(102,312
|
)
|
|
(2%)
|
|
(104,439
|
)
|
|
|||
|
Interest expense and financing costs
|
51,360
|
|
|
1%
|
|
50,963
|
|
|
(32%)
|
|
74,695
|
|
|
|||
|
Income tax expense
|
6,340
|
|
|
109%
|
|
3,028
|
|
|
(88%)
|
|
25,908
|
|
|
|||
|
Total
|
$
|
56,421
|
|
|
(8%)
|
|
$
|
61,589
|
|
|
(53%)
|
|
$
|
131,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
$
|
305,459
|
|
|
4%
|
|
$
|
294,725
|
|
|
(1%)
|
|
$
|
296,663
|
|
|
|
Other investments
|
42,514
|
|
|
111%
|
|
20,148
|
|
|
(65%)
|
|
57,621
|
|
|
|||
|
Equities
|
16,306
|
|
|
44%
|
|
11,289
|
|
|
(5%)
|
|
11,832
|
|
|
|||
|
Mortgage loans
|
7,996
|
|
|
nm
|
|
1,861
|
|
|
—
|
|
—
|
|
|
|||
|
Cash and cash equivalents
|
9,209
|
|
|
7%
|
|
8,572
|
|
|
(26%)
|
|
11,536
|
|
|
|||
|
Short-term investments
|
2,060
|
|
|
nm
|
|
439
|
|
|
(39%)
|
|
725
|
|
|
|||
|
Gross investment income
|
383,544
|
|
|
14%
|
|
337,034
|
|
|
(11%)
|
|
378,377
|
|
|
|||
|
Investment expense
|
(30,209
|
)
|
|
(5%)
|
|
(31,698
|
)
|
|
(11%)
|
|
(35,611
|
)
|
|
|||
|
Net investment income
|
$
|
353,335
|
|
|
16%
|
|
$
|
305,336
|
|
|
(11%)
|
|
$
|
342,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax yield:
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
2.6
|
%
|
|
|
|
2.4
|
%
|
|
|
|
2.4
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(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,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Hedge, direct lending, private equity and real estate funds
|
$
|
21,378
|
|
|
$
|
21,888
|
|
|
$
|
37,447
|
|
|
|
Other privately held investments
|
124
|
|
|
—
|
|
|
—
|
|
|
|||
|
CLO-Equities
|
21,012
|
|
|
(1,740
|
)
|
|
20,174
|
|
|
|||
|
Total net investment income from other investments
|
$
|
42,514
|
|
|
$
|
20,148
|
|
|
$
|
57,621
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax return on other investments
(1)
|
5.1
|
%
|
|
2.3
|
%
|
|
5.8
|
%
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
The pre-tax return on other investments is non-annualized and calculated by dividing total net investment income from other investments by the average month-end fair value balances held for the periods indicated.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
On sale of investments:
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
$
|
(48,193
|
)
|
|
$
|
(83,600
|
)
|
|
$
|
39,080
|
|
|
|
Equities
|
2,949
|
|
|
10,570
|
|
|
133,858
|
|
|
|||
|
|
(45,244
|
)
|
|
(73,030
|
)
|
|
172,938
|
|
|
|||
|
OTTI charges recognized in earnings
|
(26,210
|
)
|
|
(72,720
|
)
|
|
(31,227
|
)
|
|
|||
|
Change in fair value of investment derivatives
|
10,929
|
|
|
7,259
|
|
|
(9,603
|
)
|
|
|||
|
Net realized investment gains (losses)
|
$
|
(60,525
|
)
|
|
$
|
(138,491
|
)
|
|
$
|
132,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
||||||
|
Non-U.S. government
|
$
|
3,557
|
|
|
$
|
3,538
|
|
|
$
|
17,291
|
|
|
|
Corporate debt
|
20,093
|
|
|
47,029
|
|
|
8,107
|
|
|
|||
|
Non-Agency RMBS
|
—
|
|
|
111
|
|
|
7
|
|
|
|||
|
ABS
|
—
|
|
|
124
|
|
|
61
|
|
|
|||
|
Municipals
|
—
|
|
|
—
|
|
|
418
|
|
|
|||
|
|
23,650
|
|
|
50,802
|
|
|
25,884
|
|
|
|||
|
Equity securities:
|
|
|
|
|
|
|
||||||
|
Common stocks
|
—
|
|
|
—
|
|
|
741
|
|
|
|||
|
Exchange-traded funds
|
2,560
|
|
|
10,732
|
|
|
4,602
|
|
|
|||
|
Bond mutual funds
|
—
|
|
|
11,186
|
|
|
—
|
|
|
|||
|
|
2,560
|
|
|
21,918
|
|
|
5,343
|
|
|
|||
|
Total OTTI recognized in earnings
|
$
|
26,210
|
|
|
$
|
72,720
|
|
|
$
|
31,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Net investment income
|
$
|
353,335
|
|
|
$
|
305,336
|
|
|
$
|
342,766
|
|
|
|
Net realized investments gains (losses)
|
(60,525
|
)
|
|
(138,491
|
)
|
|
132,108
|
|
|
|||
|
Change in net unrealized gains (losses)
(2)
|
70,588
|
|
|
(134,746
|
)
|
|
(163,877
|
)
|
|
|||
|
Interest in loss of equity method investments
|
(2,094
|
)
|
|
—
|
|
|
—
|
|
|
|||
|
Total
|
$
|
361,304
|
|
|
$
|
32,099
|
|
|
$
|
310,997
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Average cash and investments
(1)
|
$
|
14,491,830
|
|
|
$
|
14,894,856
|
|
|
$
|
15,334,932
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total return on average cash and investments, pre-tax:
|
|
|
|
|
|
|
||||||
|
Inclusive of investment related foreign exchange movements
|
2.5
|
%
|
|
0.2
|
%
|
|
2.0
|
%
|
|
|||
|
Exclusive of investment related foreign exchange movements
|
3.0
|
%
|
|
0.9
|
%
|
|
2.8
|
%
|
|
|||
|
|
|
|
|
|
|
|
(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)
|
Change in net unrealized gain (losses) is calculated by taking net unrealized gain (losses) at year end less net unrealized gain (losses) at the prior year end.
|
|
|
|
|
|
|
||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||
|
|
Fair Value
|
|
Fair Value
|
|
||||
|
|
|
|
|
|
||||
|
Fixed maturities
|
$
|
11,397,114
|
|
|
$
|
11,719,749
|
|
|
|
Equities
|
638,744
|
|
|
597,998
|
|
|
||
|
Mortgage loans
|
349,969
|
|
|
206,277
|
|
|
||
|
Other investments
|
830,219
|
|
|
816,756
|
|
|
||
|
Equity method investments
|
116,000
|
|
|
10,932
|
|
|
||
|
Short-term investments
|
127,461
|
|
|
34,406
|
|
|
||
|
Total investments
|
$
|
13,459,507
|
|
|
$
|
13,386,118
|
|
|
|
|
|
|
|
|
||||
|
Cash and cash equivalents
(1)
|
$
|
1,241,507
|
|
|
$
|
1,174,751
|
|
|
|
|
|
|
|
|
(1)
|
Includes restricted cash and cash equivalents of
$202 million
and
$187 million
for 2016 and 2015, respectively.
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
1,656,069
|
|
|
15
|
%
|
|
$
|
1,651,949
|
|
|
14
|
%
|
|
|
Non-U.S. government
|
565,834
|
|
|
5
|
%
|
|
739,005
|
|
|
6
|
%
|
|
||
|
Corporate debt
|
4,600,743
|
|
|
40
|
%
|
|
4,362,769
|
|
|
37
|
%
|
|
||
|
Agency RMBS
|
2,465,135
|
|
|
22
|
%
|
|
2,249,236
|
|
|
19
|
%
|
|
||
|
CMBS
|
666,237
|
|
|
6
|
%
|
|
1,083,298
|
|
|
9
|
%
|
|
||
|
Non-Agency RMBS
|
56,921
|
|
|
—
|
%
|
|
101,008
|
|
|
1
|
%
|
|
||
|
ABS
|
1,222,214
|
|
|
11
|
%
|
|
1,371,270
|
|
|
12
|
%
|
|
||
|
Municipals
(1)
|
163,961
|
|
|
1
|
%
|
|
161,214
|
|
|
2
|
%
|
|
||
|
Total
|
$
|
11,397,114
|
|
|
100
|
%
|
|
$
|
11,719,749
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Credit ratings:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
1,656,069
|
|
|
15
|
%
|
|
$
|
1,651,949
|
|
|
14
|
%
|
|
|
AAA
(2)
|
4,165,226
|
|
|
36
|
%
|
|
4,266,673
|
|
|
36
|
%
|
|
||
|
AA
|
1,124,167
|
|
|
10
|
%
|
|
1,273,941
|
|
|
11
|
%
|
|
||
|
A
|
1,747,857
|
|
|
15
|
%
|
|
2,065,192
|
|
|
18
|
%
|
|
||
|
BBB
|
1,563,352
|
|
|
14
|
%
|
|
1,442,938
|
|
|
12
|
%
|
|
||
|
Below BBB
(3)
|
1,140,443
|
|
|
10
|
%
|
|
1,019,056
|
|
|
9
|
%
|
|
||
|
Total
|
$
|
11,397,114
|
|
|
100
|
%
|
|
$
|
11,719,749
|
|
|
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, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Eurozone countries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Netherlands
|
$
|
18,003
|
|
|
$
|
106,437
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
124,440
|
|
|
40
|
%
|
|
|
France
|
—
|
|
|
44,259
|
|
|
—
|
|
|
—
|
|
|
44,259
|
|
|
14
|
%
|
|
|||||
|
Germany
|
2,573
|
|
|
41,676
|
|
|
—
|
|
|
—
|
|
|
44,249
|
|
|
14
|
%
|
|
|||||
|
Luxembourg
|
—
|
|
|
32,210
|
|
|
—
|
|
|
—
|
|
|
32,210
|
|
|
11
|
%
|
|
|||||
|
Ireland
|
—
|
|
|
23,848
|
|
|
—
|
|
|
4,224
|
|
|
28,072
|
|
|
9
|
%
|
|
|||||
|
Spain
|
—
|
|
|
10,629
|
|
|
—
|
|
|
—
|
|
|
10,629
|
|
|
4
|
%
|
|
|||||
|
Belgium
|
—
|
|
|
10,015
|
|
|
—
|
|
|
—
|
|
|
10,015
|
|
|
3
|
%
|
|
|||||
|
Supranationals
(1)
|
7,316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,316
|
|
|
2
|
%
|
|
|||||
|
Italy
|
—
|
|
|
5,501
|
|
|
—
|
|
|
—
|
|
|
5,501
|
|
|
2
|
%
|
|
|||||
|
Austria
|
—
|
|
|
1,769
|
|
|
—
|
|
|
—
|
|
|
1,769
|
|
|
1
|
%
|
|
|||||
|
Total eurozone
|
$
|
27,892
|
|
|
$
|
276,344
|
|
|
$
|
—
|
|
|
$
|
4,224
|
|
|
$
|
308,460
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Eurozone countries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Netherlands
|
$
|
4,711
|
|
|
$
|
55,741
|
|
|
$
|
545
|
|
|
$
|
—
|
|
|
$
|
60,997
|
|
|
24
|
%
|
|
|
Germany
|
—
|
|
|
44,389
|
|
|
8,888
|
|
|
—
|
|
|
53,277
|
|
|
21
|
%
|
|
|||||
|
France
|
—
|
|
|
42,103
|
|
|
—
|
|
|
—
|
|
|
42,103
|
|
|
16
|
%
|
|
|||||
|
Luxembourg
|
—
|
|
|
28,730
|
|
|
—
|
|
|
—
|
|
|
28,730
|
|
|
11
|
%
|
|
|||||
|
Ireland
|
—
|
|
|
20,972
|
|
|
—
|
|
|
4,181
|
|
|
25,153
|
|
|
10
|
%
|
|
|||||
|
Supranationals
(1)
|
16,085
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,085
|
|
|
6
|
%
|
|
|||||
|
Italy
|
—
|
|
|
14,446
|
|
|
—
|
|
|
—
|
|
|
14,446
|
|
|
6
|
%
|
|
|||||
|
Belgium
|
—
|
|
|
11,543
|
|
|
—
|
|
|
—
|
|
|
11,543
|
|
|
4
|
%
|
|
|||||
|
Spain
|
—
|
|
|
3,072
|
|
|
—
|
|
|
—
|
|
|
3,072
|
|
|
1
|
%
|
|
|||||
|
Austria
|
—
|
|
|
1,663
|
|
|
—
|
|
|
—
|
|
|
1,663
|
|
|
1
|
%
|
|
|||||
|
Total eurozone
|
$
|
20,796
|
|
|
$
|
222,659
|
|
|
$
|
9,433
|
|
|
$
|
4,181
|
|
|
$
|
257,069
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes supranationals only within the eurozone.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||||
|
Country
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Eurozone countries:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Netherlands
|
$
|
18,003
|
|
|
3
|
%
|
|
AAA
|
|
$
|
4,711
|
|
|
1
|
%
|
|
AAA
|
|
|
Supranationals
(1)
|
7,316
|
|
|
1
|
%
|
|
AAA
|
|
16,085
|
|
|
2
|
%
|
|
AAA
|
|
||
|
Germany
|
2,573
|
|
|
—
|
%
|
|
AAA
|
|
—
|
|
|
—
|
%
|
|
—
|
|
||
|
Total eurozone
|
$
|
27,892
|
|
|
4
|
%
|
|
AAA
|
|
$
|
20,796
|
|
|
3
|
%
|
|
AAA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Other concentrations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
U.K.
|
$
|
217,517
|
|
|
38
|
%
|
|
AA
|
|
$
|
211,020
|
|
|
29
|
%
|
|
AA+
|
|
|
Canada
|
101,549
|
|
|
18
|
%
|
|
AAA
|
|
93,501
|
|
|
13
|
%
|
|
AAA
|
|
||
|
Australia
|
66,777
|
|
|
12
|
%
|
|
AAA
|
|
186,293
|
|
|
25
|
%
|
|
AAA
|
|
||
|
Mexico
|
37,489
|
|
|
7
|
%
|
|
BBB+
|
|
52,125
|
|
|
7
|
%
|
|
A-
|
|
||
|
Other
|
114,610
|
|
|
21
|
%
|
|
A-
|
|
175,270
|
|
|
23
|
%
|
|
A-
|
|
||
|
Total other concentrations
|
$
|
537,942
|
|
|
96
|
%
|
|
AA
|
|
$
|
718,209
|
|
|
97
|
%
|
|
AA
|
|
|
Total non-U.S. government
|
$
|
565,834
|
|
|
100
|
%
|
|
AA
|
|
$
|
739,005
|
|
|
100
|
%
|
|
AA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes supranationals only within the eurozone.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
Fair Value
|
|
% of Total
|
|
Weighted
Average
Credit Rating
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
U.S. banking
|
$
|
979,377
|
|
|
21
|
%
|
|
A-
|
|
$
|
1,097,410
|
|
|
25
|
%
|
|
A-
|
|
|
Corporate/commercial finance
|
341,121
|
|
|
7
|
%
|
|
BB+
|
|
302,376
|
|
|
7
|
%
|
|
BBB-
|
|
||
|
Foreign banking
|
271,951
|
|
|
6
|
%
|
|
A
|
|
233,928
|
|
|
5
|
%
|
|
AA-
|
|
||
|
Insurance
|
131,375
|
|
|
3
|
%
|
|
A+
|
|
129,660
|
|
|
3
|
%
|
|
A+
|
|
||
|
Investment brokerage
|
24,858
|
|
|
1
|
%
|
|
BBB+
|
|
31,814
|
|
|
1
|
%
|
|
BBB
|
|
||
|
Total financial institutions
|
1,748,682
|
|
|
38
|
%
|
|
BBB+
|
|
1,795,188
|
|
|
41
|
%
|
|
A-
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Consumer non-cyclicals
|
644,296
|
|
|
14
|
%
|
|
BBB
|
|
534,273
|
|
|
12
|
%
|
|
BBB-
|
|
||
|
Consumer cyclical
|
517,103
|
|
|
11
|
%
|
|
BBB-
|
|
511,643
|
|
|
12
|
%
|
|
BB+
|
|
||
|
Communications
|
401,656
|
|
|
9
|
%
|
|
BBB-
|
|
380,832
|
|
|
9
|
%
|
|
BBB-
|
|
||
|
Industrials
|
358,371
|
|
|
8
|
%
|
|
BB
|
|
399,835
|
|
|
9
|
%
|
|
BB+
|
|
||
|
Technology
|
296,078
|
|
|
6
|
%
|
|
BBB
|
|
233,670
|
|
|
5
|
%
|
|
BBB
|
|
||
|
Energy
|
269,875
|
|
|
6
|
%
|
|
BBB
|
|
191,481
|
|
|
4
|
%
|
|
BBB+
|
|
||
|
Utilities
|
141,526
|
|
|
3
|
%
|
|
BBB+
|
|
125,231
|
|
|
3
|
%
|
|
BBB+
|
|
||
|
Other
|
223,156
|
|
|
5
|
%
|
|
A
|
|
190,616
|
|
|
5
|
%
|
|
A
|
|
||
|
Total
|
$
|
4,600,743
|
|
|
100
|
%
|
|
BBB
|
|
$
|
4,362,769
|
|
|
100
|
%
|
|
BBB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Credit quality summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Investment grade
|
$
|
3,499,457
|
|
|
76
|
%
|
|
A-
|
|
$
|
3,376,886
|
|
|
77
|
%
|
|
A-
|
|
|
Non-investment grade
|
1,101,286
|
|
|
24
|
%
|
|
B
|
|
985,883
|
|
|
23
|
%
|
|
B+
|
|
||
|
Total
|
$
|
4,600,743
|
|
|
100
|
%
|
|
BBB
|
|
$
|
4,362,769
|
|
|
100
|
%
|
|
BBB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||
|
|
RMBS
|
|
CMBS
|
|
RMBS
|
|
CMBS
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Government agency
|
$
|
2,465,135
|
|
|
$
|
—
|
|
|
$
|
2,249,236
|
|
|
$
|
—
|
|
|
|
AAA
|
20,902
|
|
|
475,504
|
|
|
17,925
|
|
|
682,456
|
|
|
||||
|
AA
|
1,882
|
|
|
118,653
|
|
|
4,596
|
|
|
203,790
|
|
|
||||
|
A
|
4,233
|
|
|
61,036
|
|
|
34,218
|
|
|
161,536
|
|
|
||||
|
BBB
|
9,755
|
|
|
10,791
|
|
|
19,099
|
|
|
35,242
|
|
|
||||
|
Below BBB
(1)
|
20,149
|
|
|
253
|
|
|
25,170
|
|
|
274
|
|
|
||||
|
Total
|
$
|
2,522,056
|
|
|
$
|
666,237
|
|
|
$
|
2,350,244
|
|
|
$
|
1,083,298
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-investment grade securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Asset-backed securities
|
|
||||||||||||||||||||||
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Below BBB
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2016
|
|
|
|
|
|
|
|
|||||||||||||||||
|
CLO - debt tranches
|
$
|
537,703
|
|
|
$
|
260,960
|
|
|
$
|
—
|
|
|
$
|
3,510
|
|
|
$
|
5,978
|
|
|
$
|
808,151
|
|
|
|
Auto
|
156,981
|
|
|
11,084
|
|
|
12,926
|
|
|
17,495
|
|
|
—
|
|
|
198,486
|
|
|
||||||
|
Student loan
|
49,974
|
|
|
13,006
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,980
|
|
|
||||||
|
Credit card
|
25,379
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,379
|
|
|
||||||
|
Other
|
73,398
|
|
|
9,748
|
|
|
39,668
|
|
|
1,811
|
|
|
2,593
|
|
|
127,218
|
|
|
||||||
|
Total
|
$
|
843,435
|
|
|
$
|
294,798
|
|
|
$
|
52,594
|
|
|
$
|
22,816
|
|
|
$
|
8,571
|
|
|
$
|
1,222,214
|
|
|
|
% of total
|
69%
|
|
24%
|
|
4%
|
|
2%
|
|
1%
|
|
100%
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|||||||||||||||||
|
CLO - debt tranches
|
$
|
723,759
|
|
|
$
|
273,613
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
997,372
|
|
|
|
Auto
|
122,125
|
|
|
43,992
|
|
|
26,126
|
|
|
17,848
|
|
|
—
|
|
|
210,091
|
|
|
||||||
|
Student loan
|
51,285
|
|
|
15,603
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,888
|
|
|
||||||
|
Credit card
|
11,846
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,846
|
|
|
||||||
|
Other
|
33,090
|
|
|
5,346
|
|
|
43,717
|
|
|
295
|
|
|
2,625
|
|
|
85,073
|
|
|
||||||
|
Total
|
$
|
942,105
|
|
|
$
|
338,554
|
|
|
$
|
69,843
|
|
|
$
|
18,143
|
|
|
$
|
2,625
|
|
|
$
|
1,371,270
|
|
|
|
% of total
|
69%
|
|
25%
|
|
5%
|
|
1%
|
|
—%
|
|
100%
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
G.O.
|
|
Revenue
|
|
Total
|
|
% of Total
Fair Value
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Weighted
Average
Credit Rating
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
New York
|
$
|
16,181
|
|
|
$
|
19,676
|
|
|
$
|
35,857
|
|
|
22%
|
|
$
|
199
|
|
|
$
|
(447
|
)
|
|
AA
|
|
|
California
|
15,032
|
|
|
8,046
|
|
|
23,078
|
|
|
14%
|
|
644
|
|
|
(73
|
)
|
|
AA-
|
|
|||||
|
Utah
|
—
|
|
|
14,491
|
|
|
14,491
|
|
|
9%
|
|
18
|
|
|
—
|
|
|
AA+
|
|
|||||
|
Michigan
|
—
|
|
|
9,081
|
|
|
9,081
|
|
|
6%
|
|
—
|
|
|
(256
|
)
|
|
A+
|
|
|||||
|
Florida
|
—
|
|
|
7,921
|
|
|
7,921
|
|
|
5%
|
|
107
|
|
|
(39
|
)
|
|
AA
|
|
|||||
|
Other
|
15,150
|
|
|
58,383
|
|
|
73,533
|
|
|
44%
|
|
542
|
|
|
(175
|
)
|
|
AA-
|
|
|||||
|
|
$
|
46,363
|
|
|
$
|
117,598
|
|
|
$
|
163,961
|
|
|
100%
|
|
$
|
1,510
|
|
|
$
|
(990
|
)
|
|
AA-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
New York
|
$
|
14,214
|
|
|
$
|
25,480
|
|
|
$
|
39,694
|
|
|
25%
|
|
$
|
184
|
|
|
$
|
(381
|
)
|
|
AA
|
|
|
California
|
23,396
|
|
|
8,123
|
|
|
31,519
|
|
|
20%
|
|
765
|
|
|
(17
|
)
|
|
AA-
|
|
|||||
|
Michigan
|
—
|
|
|
13,796
|
|
|
13,796
|
|
|
9%
|
|
—
|
|
|
(434
|
)
|
|
A
|
|
|||||
|
Ohio
|
2,193
|
|
|
11,066
|
|
|
13,259
|
|
|
8%
|
|
316
|
|
|
(1
|
)
|
|
A
|
|
|||||
|
Maryland
|
—
|
|
|
10,181
|
|
|
10,181
|
|
|
6%
|
|
201
|
|
|
(47
|
)
|
|
AA-
|
|
|||||
|
Other
|
6,760
|
|
|
46,005
|
|
|
52,765
|
|
|
32%
|
|
853
|
|
|
(266
|
)
|
|
A+
|
|
|||||
|
|
$
|
46,563
|
|
|
$
|
114,651
|
|
|
$
|
161,214
|
|
|
100%
|
|
$
|
2,319
|
|
|
$
|
(1,146
|
)
|
|
AA-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||||||||
|
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%
|
$
|
6,162,925
|
|
|
$
|
(109,381
|
)
|
|
60
|
%
|
|
$
|
7,383,036
|
|
|
$
|
(105,399
|
)
|
|
56
|
%
|
|
|
10-20%
|
208,223
|
|
|
(37,642
|
)
|
|
21
|
%
|
|
146,632
|
|
|
(25,426
|
)
|
|
13
|
%
|
|
||||
|
20-30%
|
110,579
|
|
|
(30,692
|
)
|
|
17
|
%
|
|
70,293
|
|
|
(21,232
|
)
|
|
11
|
%
|
|
||||
|
30-40%
|
4,706
|
|
|
(2,368
|
)
|
|
1
|
%
|
|
45,462
|
|
|
(23,574
|
)
|
|
12
|
%
|
|
||||
|
40-50%
|
2,738
|
|
|
(1,923
|
)
|
|
1
|
%
|
|
14,833
|
|
|
(11,972
|
)
|
|
6
|
%
|
|
||||
|
> 50%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
3,080
|
|
|
(3,329
|
)
|
|
2
|
%
|
|
||||
|
Total
|
$
|
6,489,171
|
|
|
$
|
(182,006
|
)
|
|
100
|
%
|
|
$
|
7,663,336
|
|
|
$
|
(190,932
|
)
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||||||||
|
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%
|
$
|
281,498
|
|
|
$
|
(6,575
|
)
|
|
44
|
%
|
|
$
|
707,030
|
|
|
$
|
(18,033
|
)
|
|
47
|
%
|
|
|
10-20%
|
28,115
|
|
|
(4,572
|
)
|
|
30
|
%
|
|
68,079
|
|
|
(10,039
|
)
|
|
25
|
%
|
|
||||
|
20-30%
|
2,656
|
|
|
(778
|
)
|
|
5
|
%
|
|
13,443
|
|
|
(4,103
|
)
|
|
10
|
%
|
|
||||
|
30-40%
|
283
|
|
|
(151
|
)
|
|
1
|
%
|
|
6,057
|
|
|
(3,123
|
)
|
|
8
|
%
|
|
||||
|
40-50%
|
2,833
|
|
|
(2,280
|
)
|
|
15
|
%
|
|
4,280
|
|
|
(3,287
|
)
|
|
8
|
%
|
|
||||
|
> 50%
|
648
|
|
|
(833
|
)
|
|
5
|
%
|
|
636
|
|
|
(891
|
)
|
|
2
|
%
|
|
||||
|
Total
|
$
|
316,033
|
|
|
$
|
(15,189
|
)
|
|
100
|
%
|
|
$
|
799,525
|
|
|
$
|
(39,476
|
)
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Hedge funds
|
|
|
|
|
|
|
|
|
||||||
|
Multi-strategy funds
|
$
|
285,992
|
|
|
34
|
%
|
|
$
|
355,073
|
|
|
43
|
%
|
|
|
Long/short equity funds
|
118,619
|
|
|
14
|
%
|
|
154,348
|
|
|
19
|
%
|
|
||
|
Event-driven funds
|
93,539
|
|
|
11
|
%
|
|
147,287
|
|
|
18
|
%
|
|
||
|
Leveraged bank loan funds
|
—
|
|
|
—
|
%
|
|
65
|
|
|
—
|
%
|
|
||
|
Total hedge funds
|
498,150
|
|
|
59
|
%
|
|
656,773
|
|
|
80
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
Direct lending funds
|
134,650
|
|
|
16
|
%
|
|
90,120
|
|
|
11
|
%
|
|
||
|
Private equity funds
|
81,223
|
|
|
10
|
%
|
|
—
|
|
|
—
|
%
|
|
||
|
Real estate funds
|
13,354
|
|
|
2
|
%
|
|
4,929
|
|
|
1
|
%
|
|
||
|
Total hedge, direct lending, private equity and real estate funds
|
727,377
|
|
|
87
|
%
|
|
751,822
|
|
|
92
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
Other privately held investments
|
42,142
|
|
|
5
|
%
|
|
—
|
|
|
—
|
%
|
|
||
|
CLO-Equities
|
60,700
|
|
|
8
|
%
|
|
64,934
|
|
|
8
|
%
|
|
||
|
Total other investments
|
$
|
830,219
|
|
|
100
|
%
|
|
$
|
816,756
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total cash provided by (used in)
(1)
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Operating activities
|
$
|
406,724
|
|
|
$
|
791,200
|
|
|
$
|
862,182
|
|
|
|
Investing activities
|
(144,431
|
)
|
|
(225,697
|
)
|
|
(154,076
|
)
|
|
|||
|
Financing activities
|
(201,587
|
)
|
|
(487,006
|
)
|
|
(686,015
|
)
|
|
|||
|
Effect of exchange rate changes on cash
|
(9,345
|
)
|
|
(12,194
|
)
|
|
(23,587
|
)
|
|
|||
|
Increase (decrease) in cash and cash equivalents
|
$
|
51,361
|
|
|
$
|
66,303
|
|
|
$
|
(1,496
|
)
|
|
|
|
|
|
|
|
|
|
(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
$407 million
in
2016
, compared to
$791 million
in
2015
and
$862 million
in
2014
. The Company's insurance and reinsurance operations typically receive principal cash inflows from premiums, net of policy acquisition costs, and reinsurance recoverables. Our principal cash outflows are for the payment of claims and loss adjustment expenses, premium payments to reinsurers 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 2016 were primarily attributable to the the termination fee received from PartnerRe in 2015, increased purchases of reinsurance and retrocession covers and an increase in losses paid, primarily in our liability and accident and health lines, partially offset by an increase in premium collection which was driven by higher gross premiums written in 2016. The reductions in operating cash flows in 2015 compared to 2014 were primarily driven by an increase in net paid losses as we settled losses incurred in prior years. In 2015 operating cash flows were also reduced by increased purchases of reinsurance protection and retrocessional coverage, the settlement of reorganization expenses as well as an increase in general and administrative expenses paid, partially offset by the termination fee received by PartnerRe and increased reinsurance recoveries related to the increase in claims paid.
|
•
|
The cash outflows from investing activities in
2016
related principally to the net purchase of mortgage loans of $143 million (2015: $206 million, 2014: $nil), the purchase of equity method investments of $108 million, and the net purchase of short term investments $100 million (2015: $69 million net inflow, 2014: $63 million net outflow) partially
|
•
|
Dividends paid to common and preferred shareholders are the primary source of recurring cash flows used in financing activities and totaled
$172 million
in
2016
(
2015
:
$159 million
,
2014
:
$158 million
). Financing cash outflows also included common share repurchases totaling
$510 million
,
$332 million
and
$543 million
in
2016
,
2015
and
2014
, respectively. We note that market share repurchases are 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
2016
were partially offset by net cash inflows of $480 million related to the preferred share transactions discussed under '
Capital Resources - Preferred Shares
' below.
|
|
|
|
|
|
|
||||
|
At December 31,
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||
|
Long-term debt
|
$
|
992,950
|
|
|
$
|
991,825
|
|
|
|
|
|
|
|
|
||||
|
Preferred shares
|
1,126,074
|
|
|
627,843
|
|
|
||
|
Common equity
|
5,146,296
|
|
|
5,239,039
|
|
|
||
|
Shareholders’ equity attributable to AXIS Capital
|
6,272,370
|
|
|
5,866,882
|
|
|
||
|
Total capital
|
$
|
7,265,320
|
|
|
$
|
6,858,707
|
|
|
|
|
|
|
|
|
||||
|
Ratio of debt to total capital
|
13.7
|
%
|
|
14.5
|
%
|
|
||
|
|
|
|
|
|
||||
|
Ratio of debt and preferred equity to total capital
|
29.2
|
%
|
|
23.6
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year ended December 31,
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
|
||||
|
Common equity - opening
|
|
$
|
5,239,039
|
|
|
$
|
5,193,278
|
|
|
|
Net income attributable to AXIS Capital
|
|
513,368
|
|
|
641,631
|
|
|
||
|
Change in unrealized losses on available for sale investments, net of tax
|
|
67,262
|
|
|
(121,393
|
)
|
|
||
|
Share repurchases
|
|
(571,805
|
)
|
|
(264,538
|
)
|
|
||
|
Settlement of accelerated share repurchase
|
|
60,000
|
|
|
(60,000
|
)
|
|
||
|
Common share dividends
|
|
(132,188
|
)
|
|
(122,713
|
)
|
|
||
|
Preferred share dividends
|
|
(46,597
|
)
|
|
(40,069
|
)
|
|
||
|
Share-based compensation expense recognized in equity
|
|
35,607
|
|
|
30,355
|
|
|
||
|
Loss on repurchase of preferred shares
|
|
(1,309
|
)
|
|
—
|
|
|
||
|
Issue costs of newly issued preferred shares (included in additional paid-in capital)
|
|
(18,055
|
)
|
|
—
|
|
|
||
|
Other
|
|
974
|
|
|
(17,512
|
)
|
|
||
|
Common equity - closing
|
|
$
|
5,146,296
|
|
|
$
|
5,239,039
|
|
|
|
|
|
|
|
|
|
(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 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)
|
|
“Strong capacity to meet its financial commitments"
|
|
The ‘A’ grouping is the third highest out of ten major rating categories. The second through eighth 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)
|
|
“Superior ability to meet ongoing insurance obligations”
|
|
The ‘A+’ grouping is the second highest rating out of fourteen. Ratings outlooks (‘Positive’, ‘Negative’ and ‘Stable’) are assigned to indicate a rating’s potential direction over an intermediate term, generally defined as 36 months.
|
|
|
|
|
|
|
|
|
||||
|
Moody’s Investors Service
|
|
“Opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations.”
|
|
A2 (Stable)
|
|
“Offers good financial security”
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
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)
|
|
$
|
9,697,827
|
|
|
$
|
2,657,834
|
|
|
$
|
2,869,105
|
|
|
$
|
1,563,526
|
|
|
$
|
2,607,362
|
|
|
|
Operating lease obligations
(2)
|
|
187,610
|
|
|
26,517
|
|
|
49,057
|
|
|
39,182
|
|
|
72,854
|
|
|
|||||
|
Reinsurance purchase commitments
(3)
|
|
33,592
|
|
|
33,592
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Unfunded investment commitments
(4)
|
|
$
|
403,357
|
|
|
$
|
24,247
|
|
|
255,237
|
|
|
123,873
|
|
|
—
|
|
|
|||
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Senior notes (including interest payments)
(5)
|
|
1,486,314
|
|
|
48,875
|
|
|
344,438
|
|
|
540,438
|
|
|
552,563
|
|
|
|||||
|
Total
|
|
$
|
11,808,700
|
|
|
$
|
2,791,065
|
|
|
$
|
3,517,837
|
|
|
$
|
2,267,019
|
|
|
$
|
3,232,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. For further details, refer to ‘
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 and retrocessional protection for our insurance and reinsurance lines of business. The minimum premiums are contractually due in advance on a quarterly basis.
|
(4)
|
We have $401 million of unfunded investment commitments related to our investments in hedge, direct-lending, real estate, private equity and bank revolver opportunity funds, which are callable by our investment managers. For further details, refer to Item 8, Note 5(c) to the Consolidated Financial Statements '
Investments
'. In addition, we have a $2 million commitment to purchase commercial mortgage loans.
|
(5)
|
For further details on the terms of our senior unsecured debt, refer to Item 8, Note 10(a) to the Consolidated Financial Statements '
Debt and Financing Arrangements'.
|
•
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2016
|
|
2015
|
|
||||||||||||||||||||
|
At December 31,
|
Case Reserves
|
|
IBNR
|
|
Total
|
|
Case Reserves
|
|
IBNR
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
$
|
436,737
|
|
|
$
|
312,481
|
|
|
$
|
749,218
|
|
|
$
|
361,971
|
|
|
$
|
306,323
|
|
|
$
|
668,294
|
|
|
|
Marine
|
287,383
|
|
|
152,230
|
|
|
439,613
|
|
|
293,592
|
|
|
129,575
|
|
|
423,167
|
|
|
||||||
|
Aviation
|
36,701
|
|
|
24,917
|
|
|
61,618
|
|
|
34,856
|
|
|
25,874
|
|
|
60,730
|
|
|
||||||
|
Credit and political risk
|
(21,853
|
)
|
|
74,665
|
|
|
52,812
|
|
|
(29,756
|
)
|
|
84,326
|
|
|
54,570
|
|
|
||||||
|
Professional lines
|
668,587
|
|
|
1,963,307
|
|
|
2,631,894
|
|
|
690,780
|
|
|
2,016,575
|
|
|
2,707,355
|
|
|
||||||
|
Liability
|
323,930
|
|
|
1,086,570
|
|
|
1,410,500
|
|
|
290,043
|
|
|
1,087,059
|
|
|
1,377,102
|
|
|
||||||
|
Total Insurance
|
1,731,485
|
|
|
3,614,170
|
|
|
5,345,655
|
|
|
1,641,486
|
|
|
3,649,732
|
|
|
5,291,218
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reinsurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
461,071
|
|
|
379,403
|
|
|
840,474
|
|
|
531,771
|
|
|
376,825
|
|
|
908,596
|
|
|
||||||
|
Credit and surety
|
128,840
|
|
|
223,109
|
|
|
351,949
|
|
|
121,507
|
|
|
235,687
|
|
|
357,194
|
|
|
||||||
|
Professional lines
|
302,927
|
|
|
879,477
|
|
|
1,182,404
|
|
|
299,490
|
|
|
891,428
|
|
|
1,190,918
|
|
|
||||||
|
Motor
|
462,843
|
|
|
413,101
|
|
|
875,945
|
|
|
413,616
|
|
|
456,345
|
|
|
869,961
|
|
|
||||||
|
Liability
|
271,348
|
|
|
830,053
|
|
|
1,101,400
|
|
|
245,210
|
|
|
783,188
|
|
|
1,028,398
|
|
|
||||||
|
Total Reinsurance
|
1,627,029
|
|
|
2,725,143
|
|
|
4,352,172
|
|
|
1,611,594
|
|
|
2,743,473
|
|
|
4,355,067
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
3,358,514
|
|
|
$
|
6,339,313
|
|
|
$
|
9,697,827
|
|
|
$
|
3,253,080
|
|
|
$
|
6,393,205
|
|
|
$
|
9,646,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
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
|
$
|
(52,160
|
)
|
|
$
|
(48,300
|
)
|
|
$
|
(44,440
|
)
|
|
|
Unchanged
|
(6,275
|
)
|
|
—
|
|
|
6,275
|
|
|
|||
|
3 months longer
|
41,157
|
|
|
49,928
|
|
|
58,699
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Marine
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(29,477
|
)
|
|
$
|
(23,792
|
)
|
|
$
|
(18,108
|
)
|
|
|
Unchanged
|
(6,874
|
)
|
|
—
|
|
|
6,874
|
|
|
|||
|
3 months longer
|
14,471
|
|
|
22,468
|
|
|
30,465
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Aviation
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(6,431
|
)
|
|
$
|
(5,511
|
)
|
|
$
|
(4,590
|
)
|
|
|
Unchanged
|
(1,196
|
)
|
|
—
|
|
|
1,196
|
|
|
|||
|
3 months longer
|
6,688
|
|
|
8,299
|
|
|
9,909
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Credit and Political Risk
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(14,000
|
)
|
|
$
|
—
|
|
|
$
|
22,000
|
|
|
|
Unchanged
|
(14,000
|
)
|
|
—
|
|
|
22,000
|
|
|
|||
|
3 months longer
|
(14,000
|
)
|
|
—
|
|
|
22,000
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Professional Lines
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(371,446
|
)
|
|
$
|
(104,670
|
)
|
|
$
|
162,106
|
|
|
|
Unchanged
|
(277,243
|
)
|
|
—
|
|
|
277,243
|
|
|
|||
|
6 months longer
|
(149,013
|
)
|
|
142,478
|
|
|
433,968
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Liability
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(182,794
|
)
|
|
$
|
(34,502
|
)
|
|
$
|
113,789
|
|
|
|
Unchanged
|
(151,742
|
)
|
|
—
|
|
|
151,742
|
|
|
|||
|
6 months longer
|
(112,407
|
)
|
|
43,705
|
|
|
199,817
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
REINSURANCE
|
|
|||||||||||
|
Development Pattern
|
Expected Loss Ratio
|
|
||||||||||
|
Property and Other
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(61,536
|
)
|
|
$
|
(52,104
|
)
|
|
$
|
(42,521
|
)
|
|
|
Unchanged
|
(15,490
|
)
|
|
—
|
|
|
4,767
|
|
|
|||
|
3 months longer
|
43,418
|
|
|
53,998
|
|
|
64,814
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Credit and Surety
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(38,357
|
)
|
|
$
|
(19,875
|
)
|
|
$
|
(870
|
)
|
|
|
Unchanged
|
(18,165
|
)
|
|
—
|
|
|
19,889
|
|
|
|||
|
6 months longer
|
33,476
|
|
|
52,325
|
|
|
73,597
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Professional Lines
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(126,223
|
)
|
|
$
|
(30,073
|
)
|
|
$
|
72,091
|
|
|
|
Unchanged
|
(93,456
|
)
|
|
—
|
|
|
96,193
|
|
|
|||
|
6 months longer
|
(44,284
|
)
|
|
46,826
|
|
|
137,020
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Motor
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(61,111
|
)
|
|
$
|
(19,618
|
)
|
|
$
|
23,416
|
|
|
|
Unchanged
|
(41,504
|
)
|
|
—
|
|
|
42,456
|
|
|
|||
|
6 months longer
|
27,590
|
|
|
65,264
|
|
|
110,956
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Liability
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(116,050
|
)
|
|
$
|
(28,414
|
)
|
|
$
|
67,259
|
|
|
|
Unchanged
|
(84,182
|
)
|
|
—
|
|
|
90,911
|
|
|
|||
|
6 months longer
|
(40,571
|
)
|
|
43,092
|
|
|
126,346
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2016
|
|
2015
|
|
||||||||||||||||||||
|
At December 31,
|
Case
Reserves
|
|
IBNR
|
|
Total
|
|
Case
Reserves
|
|
IBNR
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
$
|
139,650
|
|
|
$
|
30,058
|
|
|
$
|
169,707
|
|
|
$
|
112,905
|
|
|
$
|
46,384
|
|
|
$
|
159,289
|
|
|
|
Marine
|
130,680
|
|
|
50,316
|
|
|
180,996
|
|
|
126,947
|
|
|
42,003
|
|
|
168,950
|
|
|
||||||
|
Aviation
|
2,443
|
|
|
3,941
|
|
|
6,384
|
|
|
2,397
|
|
|
3,150
|
|
|
5,547
|
|
|
||||||
|
Credit and political risk
|
—
|
|
|
154
|
|
|
154
|
|
|
—
|
|
|
277
|
|
|
277
|
|
|
||||||
|
Professional lines
|
263,135
|
|
|
735,738
|
|
|
998,873
|
|
|
249,395
|
|
|
617,356
|
|
|
866,751
|
|
|
||||||
|
Liability
|
187,357
|
|
|
649,858
|
|
|
837,215
|
|
|
172,948
|
|
|
621,830
|
|
|
794,778
|
|
|
||||||
|
Total Insurance
|
723,265
|
|
|
1,470,065
|
|
|
2,193,329
|
|
|
664,592
|
|
|
1,331,000
|
|
|
1,995,592
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reinsurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
33,768
|
|
|
21,869
|
|
|
55,637
|
|
|
11,654
|
|
|
23,438
|
|
|
35,092
|
|
|
||||||
|
Credit and surety
|
494
|
|
|
1,422
|
|
|
1,916
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Professional lines
|
243
|
|
|
8,110
|
|
|
8,353
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Motor
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Liability
|
1,821
|
|
|
15,053
|
|
|
16,874
|
|
|
—
|
|
|
625
|
|
|
625
|
|
|
||||||
|
Total Reinsurance
|
36,326
|
|
|
46,454
|
|
|
82,780
|
|
|
11,654
|
|
|
24,063
|
|
|
35,717
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
759,591
|
|
|
$
|
1,516,519
|
|
|
$
|
2,276,109
|
|
|
$
|
676,246
|
|
|
$
|
1,355,063
|
|
|
$
|
2,031,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
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,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Catastrophe
|
$
|
4,418
|
|
|
$
|
7,400
|
|
|
$
|
9,227
|
|
|
|
Property
|
173,380
|
|
|
180,941
|
|
|
200,977
|
|
|
|||
|
Professional lines
|
211,567
|
|
|
201,595
|
|
|
168,799
|
|
|
|||
|
Credit and surety
|
188,365
|
|
|
202,609
|
|
|
226,254
|
|
|
|||
|
Motor
|
239,056
|
|
|
222,091
|
|
|
207,218
|
|
|
|||
|
Liability
|
272,390
|
|
|
182,246
|
|
|
180,388
|
|
|
|||
|
Agriculture
|
141,994
|
|
|
119,695
|
|
|
139,640
|
|
|
|||
|
Engineering
|
60,080
|
|
|
62,483
|
|
|
50,441
|
|
|
|||
|
Other
|
56,283
|
|
|
12,945
|
|
|
13,685
|
|
|
|||
|
Total estimated premiums
|
$
|
1,347,531
|
|
|
$
|
1,192,005
|
|
|
$
|
1,196,629
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written (reinsurance segment)
|
$
|
2,249,966
|
|
|
$
|
2,020,649
|
|
|
$
|
2,176,104
|
|
|
|
As a % of total gross premiums written
|
60
|
%
|
|
59
|
%
|
|
55
|
%
|
|
|||
|
|
|
|
|
|
|
|
•
|
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,
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Fair value of collateral
|
100%
|
|
100%
|
|
|
Discount Margin
|
0.4% - 16.4%
|
|
2.2% - 16.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Default rates
|
4.0%
|
|
4.0%
|
|
|
Loss severity rate
|
35.0% - 53.5%
|
|
53.5%
|
|
|
Collateral spreads
|
3.0% - 3.6%
|
|
3.2% - 3.5%
|
|
|
Estimated maturity dates
|
2 - 6 years
|
|
2.6 - 4.1 years
|
|
|
|
|
|
|
|
a.
|
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.
|
b.
|
The financial condition, near-term and long-term prospects for the issuer of the security, including relevant industry conditions and trends, and the implications of rating agency actions, and offering prices.
|
c.
|
The historical and implied volatility of the fair value.
|
d.
|
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,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Net income available to common shareholders
|
$
|
465,462
|
|
|
$
|
601,562
|
|
|
$
|
770,657
|
|
|
|
Net realized investment (gains) losses, net of tax
(1)
|
62,355
|
|
|
135,320
|
|
|
(106,196
|
)
|
|
|||
|
Foreign exchange gains, net of tax
(2)
|
(119,181
|
)
|
|
(99,291
|
)
|
|
(101,586
|
)
|
|
|||
|
Termination fee received
(3)
|
—
|
|
|
(280,000
|
)
|
|
—
|
|
|
|||
|
Reorganization and related expenses, net of tax
(4)
|
—
|
|
|
42,924
|
|
|
—
|
|
|
|||
|
Loss on repurchase of preferred shares
(3)
|
1,309
|
|
|
—
|
|
|
—
|
|
|
|||
|
Non-GAAP operating income
|
$
|
409,945
|
|
|
$
|
400,515
|
|
|
$
|
562,875
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Earnings per common share - diluted
|
$
|
5.08
|
|
|
$
|
6.04
|
|
|
$
|
7.29
|
|
|
|
Net realized investment (gains) losses, net of tax
|
0.68
|
|
|
1.36
|
|
|
(1.00
|
)
|
|
|||
|
Foreign exchange gains, net of tax
|
(1.29
|
)
|
|
(1.00
|
)
|
|
(0.97
|
)
|
|
|||
|
Termination fee received
|
—
|
|
|
(2.81
|
)
|
|
—
|
|
|
|||
|
Reorganization and related expenses, net of tax
|
—
|
|
|
0.43
|
|
|
—
|
|
|
|||
|
Loss on repurchase of preferred shares
|
0.01
|
|
|
—
|
|
|
—
|
|
|
|||
|
Non-GAAP operating income per common share - diluted
|
$
|
4.48
|
|
|
$
|
4.02
|
|
|
$
|
5.32
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares and common share equivalents - diluted
(5)
|
91,547
|
|
|
99,629
|
|
|
105,713
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Average common shareholders’ equity
|
$
|
5,192,668
|
|
|
$
|
5,216,159
|
|
|
$
|
5,191,699
|
|
|
|
|
|
|
|
|
|
|
||||||
|
ROACE
|
9.0
|
%
|
|
11.5
|
%
|
|
14.8
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Non-GAAP operating ROACE
|
7.9
|
%
|
|
7.7
|
%
|
|
10.8
|
%
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
Tax (benefit) cost of
$1,830
, (
$3,171
) and
$25,912
for
2016
,
2015
and
2014
, 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 of
$2,114
,
$3,021
and
$2,853
for
2016
,
2015
and
2014
, 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)
|
Tax benefit of $2,943 for 2015. Tax impact is estimated by applying the statutory rates of applicable jurisdictions, reflecting the jurisdictional apportionment and related tax treatment of the individual components of the reorganization and related expenses.
|
(5)
|
Refer to Note 12 to the Consolidated Financial Statements
'Earnings Per Common Share'
for further details on the dilution calculation.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES 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, 2016
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
1,656,069
|
|
|
$
|
(74,786
|
)
|
|
$
|
—
|
|
|
$
|
(74,786
|
)
|
|
|
Non-U.S. government
|
565,834
|
|
|
(16,705
|
)
|
|
—
|
|
|
(16,705
|
)
|
|
||||
|
Agency RMBS
|
2,465,135
|
|
|
(123,928
|
)
|
|
—
|
|
|
(123,928
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Securities exposed to credit spreads:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate debt
|
4,600,743
|
|
|
(153,947
|
)
|
|
(166,352
|
)
|
|
(320,299
|
)
|
|
||||
|
CMBS
|
666,237
|
|
|
(18,502
|
)
|
|
(19,794
|
)
|
|
(38,296
|
)
|
|
||||
|
Non agency RMBS
|
56,921
|
|
|
(254
|
)
|
|
(1,801
|
)
|
|
(2,055
|
)
|
|
||||
|
ABS
|
1,222,214
|
|
|
(6,826
|
)
|
|
(20,659
|
)
|
|
(27,485
|
)
|
|
||||
|
Municipals
|
163,961
|
|
|
(5,738
|
)
|
|
(9,033
|
)
|
|
(14,771
|
)
|
|
||||
|
|
$
|
11,397,114
|
|
|
$
|
(400,686
|
)
|
|
$
|
(217,639
|
)
|
|
$
|
(618,325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
1,651,949
|
|
|
$
|
(74,602
|
)
|
|
$
|
—
|
|
|
$
|
(74,602
|
)
|
|
|
Non-U.S. government
|
739,005
|
|
|
(24,947
|
)
|
|
—
|
|
|
(24,947
|
)
|
|
||||
|
Agency RMBS
|
2,249,236
|
|
|
(95,075
|
)
|
|
—
|
|
|
(95,075
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Securities exposed to credit spreads:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate debt
|
4,362,769
|
|
|
(145,584
|
)
|
|
(150,300
|
)
|
|
(295,884
|
)
|
|
||||
|
CMBS
|
1,083,298
|
|
|
(30,275
|
)
|
|
(33,141
|
)
|
|
(63,416
|
)
|
|
||||
|
Non agency RMBS
|
101,008
|
|
|
(274
|
)
|
|
(2,770
|
)
|
|
(3,044
|
)
|
|
||||
|
ABS
|
1,371,270
|
|
|
(7,393
|
)
|
|
(40,471
|
)
|
|
(47,864
|
)
|
|
||||
|
Municipals
|
161,214
|
|
|
(7,124
|
)
|
|
(7,314
|
)
|
|
(14,438
|
)
|
|
||||
|
|
$
|
11,719,749
|
|
|
$
|
(385,274
|
)
|
|
$
|
(233,996
|
)
|
|
$
|
(619,270
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
AUD
|
|
NZD
|
|
CAD
|
|
EUR
|
|
GBP
|
|
JPY
|
|
Other
|
|
Total
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
At December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net managed assets (liabilities), excluding derivatives
|
$
|
64,818
|
|
|
$
|
(6,924
|
)
|
|
$
|
77,554
|
|
|
$
|
(219,811
|
)
|
|
$
|
(52,030
|
)
|
|
$
|
(1,870
|
)
|
|
$
|
101,274
|
|
|
$
|
(36,989
|
)
|
|
|
Foreign currency derivatives, net
|
(66,368
|
)
|
|
6,939
|
|
|
(81,970
|
)
|
|
210,111
|
|
|
(30,225
|
)
|
|
(5,573
|
)
|
|
14,306
|
|
|
47,220
|
|
|
||||||||
|
Net managed foreign currency exposure
|
(1,550
|
)
|
|
15
|
|
|
(4,416
|
)
|
|
(9,700
|
)
|
|
(82,255
|
)
|
|
(7,443
|
)
|
|
115,580
|
|
|
10,231
|
|
|
||||||||
|
Other net foreign currency exposure
|
1,939
|
|
|
—
|
|
|
—
|
|
|
22,558
|
|
|
675
|
|
|
(46
|
)
|
|
70,304
|
|
|
95,430
|
|
|
||||||||
|
Total net foreign currency exposure
|
$
|
389
|
|
|
$
|
15
|
|
|
$
|
(4,416
|
)
|
|
$
|
12,858
|
|
|
$
|
(81,580
|
)
|
|
$
|
(7,489
|
)
|
|
$
|
185,884
|
|
|
$
|
105,661
|
|
|
|
Net foreign currency exposure as a percentage of total shareholders’ equity
|
—
|
%
|
|
—
|
%
|
|
(0.1
|
%)
|
|
0.2
|
%
|
|
(1.3
|
%)
|
|
(0.1
|
%)
|
|
3.0
|
%
|
|
1.7
|
%
|
|
||||||||
|
Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement
(1)
|
$
|
39
|
|
|
$
|
2
|
|
|
$
|
(442
|
)
|
|
$
|
1,286
|
|
|
$
|
(8,158
|
)
|
|
$
|
(749
|
)
|
|
$
|
18,588
|
|
|
$
|
10,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net managed assets (liabilities), excluding derivatives
|
$
|
(9,158
|
)
|
|
$
|
(108,249
|
)
|
|
$
|
71,199
|
|
|
$
|
(301,680
|
)
|
|
$
|
(121,508
|
)
|
|
$
|
16,821
|
|
|
$
|
14,534
|
|
|
$
|
(438,041
|
)
|
|
|
Foreign currency derivatives, net
|
(34,631
|
)
|
|
110,138
|
|
|
(63,277
|
)
|
|
264,588
|
|
|
109,032
|
|
|
(12,479
|
)
|
|
12,853
|
|
|
386,224
|
|
|
||||||||
|
Net managed foreign currency exposure
|
(43,789
|
)
|
|
1,889
|
|
|
7,922
|
|
|
(37,092
|
)
|
|
(12,476
|
)
|
|
4,342
|
|
|
27,387
|
|
|
(51,817
|
)
|
|
||||||||
|
Other net foreign currency exposure
|
892
|
|
|
—
|
|
|
—
|
|
|
21,281
|
|
|
6,721
|
|
|
—
|
|
|
112,550
|
|
|
141,444
|
|
|
||||||||
|
Total net foreign currency exposure
|
$
|
(42,897
|
)
|
|
$
|
1,889
|
|
|
$
|
7,922
|
|
|
$
|
(15,811
|
)
|
|
$
|
(5,755
|
)
|
|
$
|
4,342
|
|
|
$
|
139,937
|
|
|
$
|
89,627
|
|
|
|
Net foreign currency exposure as a percentage of total shareholders’ equity
|
(0.7
|
%)
|
|
—
|
%
|
|
0.1
|
%
|
|
(0.3
|
%)
|
|
(0.1
|
%)
|
|
0.1
|
%
|
|
2.4
|
%
|
|
1.5
|
%
|
|
||||||||
|
Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement
(1)
|
$
|
(4,290
|
)
|
|
$
|
189
|
|
|
$
|
792
|
|
|
$
|
(1,581
|
)
|
|
$
|
(576
|
)
|
|
$
|
434
|
|
|
$
|
13,994
|
|
|
$
|
8,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes 10% change 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, 2016 and 2015
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
|
|
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 – Reorganization and Related Expenses
|
|
|
|
Note 19 – Income Taxes
|
|
|
|
Note 20 – Other Comprehensive Income (Loss)
|
|
|
|
Note 21 – Statutory Financial Information
|
|
|
|
Note 22 – Unaudited Condensed Quarterly Financial Data
|
|
|
|
Note 23 – Subsequent Events
|
|
|
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 24, 2017
|
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Assets
|
|
||||||
Investments:
|
|
|
|
||||
Fixed maturities, available for sale, at fair value
(Amortized cost 2016: $11,523,316; 2015: $11,897,639)
|
$
|
11,397,114
|
|
|
$
|
11,719,749
|
|
Equity securities, available for sale, at fair value
(Cost 2016: $597,366; 2015: $575,776)
|
638,744
|
|
|
597,998
|
|
||
Mortgage loans, held for investment, at amortized cost and fair value
|
349,969
|
|
|
206,277
|
|
||
Other investments, at fair value
|
830,219
|
|
|
816,756
|
|
||
Equity method investments
|
116,000
|
|
|
10,932
|
|
||
Short-term investments, at amortized cost and fair value
|
127,461
|
|
|
34,406
|
|
||
Total investments
|
13,459,507
|
|
|
13,386,118
|
|
||
Cash and cash equivalents
|
1,039,494
|
|
|
988,133
|
|
||
Restricted cash and cash equivalents
|
202,013
|
|
|
186,618
|
|
||
Accrued interest receivable
|
74,971
|
|
|
73,729
|
|
||
Insurance and reinsurance premium balances receivable
|
2,313,512
|
|
|
1,967,535
|
|
||
Reinsurance recoverable on unpaid and paid losses
|
2,334,922
|
|
|
2,096,104
|
|
||
Deferred acquisition costs
|
438,636
|
|
|
471,782
|
|
||
Prepaid reinsurance premiums
|
556,344
|
|
|
396,201
|
|
||
Receivable for investments sold
|
14,123
|
|
|
26,478
|
|
||
Goodwill and intangible assets
|
85,049
|
|
|
86,858
|
|
||
Other assets
|
295,120
|
|
|
302,335
|
|
||
Total assets
|
$
|
20,813,691
|
|
|
$
|
19,981,891
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Reserve for losses and loss expenses
|
$
|
9,697,827
|
|
|
$
|
9,646,285
|
|
Unearned premiums
|
2,969,498
|
|
|
2,760,889
|
|
||
Insurance and reinsurance balances payable
|
493,183
|
|
|
356,417
|
|
||
Senior notes
|
992,950
|
|
|
991,825
|
|
||
Payable for investments purchased
|
62,550
|
|
|
9,356
|
|
||
Other liabilities
|
325,313
|
|
|
350,237
|
|
||
Total liabilities
|
14,541,321
|
|
|
14,115,009
|
|
||
|
|
|
|
||||
Commitments and Contingencies
|
|
|
|
||||
|
|
|
|
||||
Shareholders' equity
|
|
|
|
||||
Preferred shares
|
1,126,074
|
|
|
627,843
|
|
||
Common shares
(2016: 176,580; 2015: 176,240 shares issued
and 2016: 86,441; 2015: 96,066 shares outstanding)
|
2,206
|
|
|
2,202
|
|
||
Additional paid-in capital
|
2,299,857
|
|
|
2,241,388
|
|
||
Accumulated other comprehensive loss
|
(121,841
|
)
|
|
(188,465
|
)
|
||
Retained earnings
|
6,527,627
|
|
|
6,194,353
|
|
||
Treasury shares, at cost
(2016: 90,139; 2015: 80,174 shares)
|
(3,561,553
|
)
|
|
(3,010,439
|
)
|
||
Total shareholders’ equity
|
6,272,370
|
|
|
5,866,882
|
|
||
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
20,813,691
|
|
|
$
|
19,981,891
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except for per share data)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
3,705,625
|
|
|
$
|
3,686,417
|
|
|
$
|
3,870,999
|
|
Net investment income
|
353,335
|
|
|
305,336
|
|
|
342,766
|
|
|||
Other insurance related income (loss)
|
7,222
|
|
|
(2,953
|
)
|
|
650
|
|
|||
Termination fee received
|
—
|
|
|
280,000
|
|
|
—
|
|
|||
Net realized investment gains (losses)
|
|
|
|
|
|
||||||
Other-than-temporary impairment ("OTTI") losses
|
(26,210
|
)
|
|
(72,720
|
)
|
|
(31,227
|
)
|
|||
Other realized investment gains (losses)
|
(34,315
|
)
|
|
(65,771
|
)
|
|
163,335
|
|
|||
Total net realized investment gains (losses)
|
(60,525
|
)
|
|
(138,491
|
)
|
|
132,108
|
|
|||
Total revenues
|
4,005,657
|
|
|
4,130,309
|
|
|
4,346,523
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Net losses and loss expenses
|
2,204,197
|
|
|
2,176,199
|
|
|
2,186,722
|
|
|||
Acquisition costs
|
746,876
|
|
|
718,112
|
|
|
737,197
|
|
|||
General and administrative expenses
|
602,717
|
|
|
596,821
|
|
|
621,876
|
|
|||
Foreign exchange gains
|
(121,295
|
)
|
|
(102,312
|
)
|
|
(104,439
|
)
|
|||
Interest expense and financing costs
|
51,360
|
|
|
50,963
|
|
|
74,695
|
|
|||
Reorganization and related expenses
|
—
|
|
|
45,867
|
|
|
—
|
|
|||
Total expenses
|
3,483,855
|
|
|
3,485,650
|
|
|
3,516,051
|
|
|||
|
|
|
|
|
|
||||||
Income before income taxes and interest in income (loss) of equity method investments
|
521,802
|
|
|
644,659
|
|
|
830,472
|
|
|||
Income tax expense
|
(6,340
|
)
|
|
(3,028
|
)
|
|
(25,908
|
)
|
|||
Interest in loss of equity method investments
|
(2,094
|
)
|
|
—
|
|
|
—
|
|
|||
Net income
|
513,368
|
|
|
641,631
|
|
|
804,564
|
|
|||
Amounts attributable from noncontrolling interests
|
—
|
|
|
—
|
|
|
(6,181
|
)
|
|||
Net income attributable to AXIS Capital
|
513,368
|
|
|
641,631
|
|
|
810,745
|
|
|||
Preferred share dividends
|
46,597
|
|
|
40,069
|
|
|
40,088
|
|
|||
Loss on repurchase of preferred shares
|
1,309
|
|
|
—
|
|
|
—
|
|
|||
Net income available to common shareholders
|
$
|
465,462
|
|
|
$
|
601,562
|
|
|
$
|
770,657
|
|
|
|
|
|
|
|
||||||
Per share data
|
|
|
|
|
|
||||||
Net income per common share
|
|
|
|
|
|
||||||
Basic net income
|
$
|
5.13
|
|
|
$
|
6.10
|
|
|
$
|
7.38
|
|
Diluted net income
|
$
|
5.08
|
|
|
$
|
6.04
|
|
|
$
|
7.29
|
|
Weighted average common shares outstanding - basic
|
90,772
|
|
|
98,609
|
|
|
104,368
|
|
|||
Weighted average common shares outstanding - diluted
|
91,547
|
|
|
99,629
|
|
|
105,713
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net income
|
$
|
513,368
|
|
|
$
|
641,631
|
|
|
$
|
804,564
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Available for sale investments:
|
|
|
|
|
|
||||||
Unrealized investment gains (losses) arising during the year
|
5,072
|
|
|
(266,384
|
)
|
|
(38,667
|
)
|
|||
Adjustment for re-classification of net realized investment gains (losses) and OTTI losses recognized in net income
|
62,190
|
|
|
144,991
|
|
|
(114,470
|
)
|
|||
Unrealized investment gains (losses) arising during the year, net of reclassification adjustment
|
67,262
|
|
|
(121,393
|
)
|
|
(153,137
|
)
|
|||
Foreign currency translation adjustment
|
(638
|
)
|
|
(21,498
|
)
|
|
(10,262
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
66,624
|
|
|
(142,891
|
)
|
|
(163,399
|
)
|
|||
Comprehensive income
|
579,992
|
|
|
498,740
|
|
|
641,165
|
|
|||
Amounts attributable from noncontrolling interests
|
—
|
|
|
—
|
|
|
(6,181
|
)
|
|||
Comprehensive income attributable to AXIS Capital
|
$
|
579,992
|
|
|
$
|
498,740
|
|
|
$
|
647,346
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Preferred shares
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
627,843
|
|
|
$
|
627,843
|
|
|
$
|
627,843
|
|
Shares issued
|
550,000
|
|
|
—
|
|
|
—
|
|
|||
Shares repurchased
|
(51,769
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
1,126,074
|
|
|
627,843
|
|
|
627,843
|
|
|||
|
|
|
|
|
|
||||||
Common shares (par value)
|
|
|
|
|
|
||||||
Balance at beginning of year
|
2,202
|
|
|
2,191
|
|
|
2,174
|
|
|||
Shares issued
|
4
|
|
|
11
|
|
|
17
|
|
|||
Balance at end of year
|
2,206
|
|
|
2,202
|
|
|
2,191
|
|
|||
|
|
|
|
|
|
||||||
Additional paid-in capital
|
|
|
|
|
|
||||||
Balance at beginning of year
|
2,241,388
|
|
|
2,285,016
|
|
|
2,240,125
|
|
|||
Shares issued - common shares
|
220
|
|
|
3,416
|
|
|
158
|
|
|||
Cost of treasury shares reissued
|
(19,303
|
)
|
|
(17,958
|
)
|
|
(12,054
|
)
|
|||
Settlement of accelerated share repurchase
|
60,000
|
|
|
(60,000
|
)
|
|
—
|
|
|||
Issue costs on newly issued preferred shares
|
(18,055
|
)
|
|
—
|
|
|
—
|
|
|||
Stock options exercised
|
—
|
|
|
559
|
|
|
5,405
|
|
|||
Share-based compensation expense
|
35,607
|
|
|
30,355
|
|
|
51,382
|
|
|||
Balance at end of year
|
2,299,857
|
|
|
2,241,388
|
|
|
2,285,016
|
|
|||
|
|
|
|
|
|
||||||
Accumulated other comprehensive loss
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(188,465
|
)
|
|
(45,574
|
)
|
|
117,825
|
|
|||
Unrealized gains (losses) on available for sale investments, net of tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(149,585
|
)
|
|
(28,192
|
)
|
|
124,945
|
|
|||
Unrealized gains (losses) arising during the year, net of reclassification adjustment
|
67,262
|
|
|
(121,393
|
)
|
|
(153,137
|
)
|
|||
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
(82,323
|
)
|
|
(149,585
|
)
|
|
(28,192
|
)
|
|||
Cumulative foreign currency translation adjustments, net of tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(38,880
|
)
|
|
(17,382
|
)
|
|
(7,120
|
)
|
|||
Foreign currency translation adjustment
|
(638
|
)
|
|
(21,498
|
)
|
|
(10,262
|
)
|
|||
Balance at end of year
|
(39,518
|
)
|
|
(38,880
|
)
|
|
(17,382
|
)
|
|||
Balance at end of year
|
(121,841
|
)
|
|
(188,465
|
)
|
|
(45,574
|
)
|
|||
|
|
|
|
|
|
||||||
Retained earnings
|
|
|
|
|
|
||||||
Balance at beginning of year
|
6,194,353
|
|
|
5,715,504
|
|
|
5,062,706
|
|
|||
Net income
|
513,368
|
|
|
641,631
|
|
|
804,564
|
|
|||
Amounts attributable from noncontrolling interests
|
—
|
|
|
—
|
|
|
6,181
|
|
|||
Preferred share dividends
|
(46,597
|
)
|
|
(40,069
|
)
|
|
(40,088
|
)
|
|||
Loss on repurchase of preferred shares
|
(1,309
|
)
|
|
—
|
|
|
—
|
|
|||
Common share dividends
|
(132,188
|
)
|
|
(122,713
|
)
|
|
(117,859
|
)
|
|||
Balance at end of year
|
6,527,627
|
|
|
6,194,353
|
|
|
5,715,504
|
|
|||
|
|
|
|
|
|
||||||
Treasury shares, at cost
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(3,010,439
|
)
|
|
(2,763,859
|
)
|
|
(2,232,711
|
)
|
|||
Shares repurchased for treasury
|
(571,805
|
)
|
|
(264,538
|
)
|
|
(543,202
|
)
|
|||
Cost of treasury shares reissued
|
20,691
|
|
|
17,958
|
|
|
12,054
|
|
|||
Balance at end of year
|
(3,561,553
|
)
|
|
(3,010,439
|
)
|
|
(2,763,859
|
)
|
|||
|
|
|
|
|
|
||||||
Total shareholders’ equity attributable to AXIS Capital
|
6,272,370
|
|
|
5,866,882
|
|
|
5,821,121
|
|
|||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
58,819
|
|
|||
Total shareholders' equity
|
$
|
6,272,370
|
|
|
$
|
5,866,882
|
|
|
$
|
5,879,940
|
|
|
|
|
|
|
|
||||||
Per share data
|
|
|
|
|
|
||||||
Cash dividends declared per common share
|
$
|
1.43
|
|
|
$
|
1.22
|
|
|
$
|
1.10
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
513,368
|
|
|
$
|
641,631
|
|
|
$
|
804,564
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Net realized investment (gains) losses
|
60,525
|
|
|
138,491
|
|
|
(132,108
|
)
|
|||
Net realized and unrealized gains on other investments
|
(38,669
|
)
|
|
(20,148
|
)
|
|
(57,621
|
)
|
|||
Amortization of fixed maturities
|
65,921
|
|
|
97,223
|
|
|
113,879
|
|
|||
Interest in loss of equity method investments
|
2,094
|
|
|
—
|
|
|
—
|
|
|||
Other amortization and depreciation
|
24,573
|
|
|
26,341
|
|
|
24,970
|
|
|||
Share-based compensation expense, net of cash payments
|
52,211
|
|
|
43,052
|
|
|
63,237
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accrued interest receivable
|
(885
|
)
|
|
8,908
|
|
|
13,788
|
|
|||
Reinsurance recoverable balances
|
(176,532
|
)
|
|
(214,992
|
)
|
|
(16,204
|
)
|
|||
Deferred acquisition costs
|
33,212
|
|
|
(4,744
|
)
|
|
(11,026
|
)
|
|||
Prepaid reinsurance premiums
|
(158,809
|
)
|
|
(46,955
|
)
|
|
(25,185
|
)
|
|||
Reserve for loss and loss expenses
|
54,476
|
|
|
151,011
|
|
|
46,903
|
|
|||
Unearned premiums
|
198,938
|
|
|
29,841
|
|
|
58,376
|
|
|||
Insurance and reinsurance balances, net
|
(209,895
|
)
|
|
(74,578
|
)
|
|
(102,593
|
)
|
|||
Other items
|
(13,804
|
)
|
|
16,119
|
|
|
81,202
|
|
|||
Net cash provided by operating activities
|
406,724
|
|
|
791,200
|
|
|
862,182
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of:
|
|
|
|
|
|
||||||
Fixed maturities
|
(9,176,728
|
)
|
|
(11,011,979
|
)
|
|
(12,047,004
|
)
|
|||
Equity securities
|
(302,554
|
)
|
|
(356,617
|
)
|
|
(564,562
|
)
|
|||
Mortgage loans
|
(148,450
|
)
|
|
(206,191
|
)
|
|
—
|
|
|||
Other investments
|
(190,370
|
)
|
|
(83,561
|
)
|
|
(75,542
|
)
|
|||
Equity method investments
|
(107,913
|
)
|
|
—
|
|
|
—
|
|
|||
Short-term investments
|
(190,747
|
)
|
|
(80,069
|
)
|
|
(669,494
|
)
|
|||
Proceeds from the sale of:
|
|
|
|
|
|
||||||
Fixed maturities
|
7,905,316
|
|
|
9,432,226
|
|
|
10,799,112
|
|
|||
Equity securities
|
305,642
|
|
|
275,357
|
|
|
740,900
|
|
|||
Other investments
|
215,578
|
|
|
252,418
|
|
|
213,508
|
|
|||
Short-term investments
|
54,165
|
|
|
125,311
|
|
|
526,460
|
|
|||
Proceeds from redemption of fixed maturities
|
1,492,588
|
|
|
1,407,806
|
|
|
1,086,244
|
|
|||
Proceeds from redemption of short-term investments
|
36,546
|
|
|
23,687
|
|
|
80,474
|
|
|||
Proceeds from the repayment of mortgage loans
|
5,040
|
|
|
—
|
|
|
—
|
|
|||
Purchase of other assets
|
(27,149
|
)
|
|
(33,683
|
)
|
|
(20,857
|
)
|
|||
Change in restricted cash and cash equivalents
|
(15,395
|
)
|
|
29,598
|
|
|
(223,315
|
)
|
|||
Net cash used in investing activities
|
(144,431
|
)
|
|
(225,697
|
)
|
|
(154,076
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net proceeds from issuance of preferred shares
|
531,945
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of common shares
|
(509,755
|
)
|
|
(332,252
|
)
|
|
(543,202
|
)
|
|||
Dividends paid - common shares
|
(132,323
|
)
|
|
(118,652
|
)
|
|
(117,619
|
)
|
|||
Repurchase of preferred shares
|
(51,769
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid - preferred shares
|
(39,909
|
)
|
|
(40,088
|
)
|
|
(40,088
|
)
|
|||
Proceeds from issuance of common shares
|
224
|
|
|
3,986
|
|
|
5,550
|
|
|||
Net proceeds from issuance of senior notes
|
—
|
|
|
—
|
|
|
494,344
|
|
|||
Redemption of senior notes
|
—
|
|
|
—
|
|
|
(500,000
|
)
|
|||
Sales of shares to noncontrolling interests
|
—
|
|
|
—
|
|
|
25,000
|
|
|||
Return of capital to noncontrolling interests
|
—
|
|
|
—
|
|
|
(10,000
|
)
|
|||
Net cash used in financing activities
|
(201,587
|
)
|
|
(487,006
|
)
|
|
(686,015
|
)
|
|||
|
|
|
|
|
|
Effect of exchange rate changes on foreign currency cash and cash equivalents
|
(9,345
|
)
|
|
(12,194
|
)
|
|
(23,587
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
51,361
|
|
|
66,303
|
|
|
(1,496
|
)
|
|||
Cash and cash equivalents - beginning of year
|
988,133
|
|
|
921,830
|
|
|
923,326
|
|
|||
Cash and cash equivalents - end of year
|
$
|
1,039,494
|
|
|
$
|
988,133
|
|
|
$
|
921,830
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
12,041
|
|
|
$
|
12,661
|
|
|
$
|
7,654
|
|
Interest paid
|
$
|
48,875
|
|
|
$
|
48,875
|
|
|
$
|
68,850
|
|
1.
|
HISTORY
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
•
|
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.
|
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
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
e)
|
Reinsurance
|
f)
|
Foreign Exchange
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
g)
|
Share-Based Compensation
|
h)
|
Derivative Instruments
|
i)
|
Goodwill and Intangible Assets
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
j)
|
Income Taxes
|
k)
|
Treasury Shares
|
l)
|
New Accounting Standards Adopted in 2016
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
m)
|
Recently Issued Accounting Standards Not Yet Adopted
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
3.
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2016
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,720,242
|
|
|
$
|
2,249,966
|
|
|
$
|
4,970,208
|
|
|
|
Net premiums written
|
1,807,125
|
|
|
1,945,849
|
|
|
3,752,974
|
|
|
|||
|
Net premiums earned
|
1,777,321
|
|
|
1,928,304
|
|
|
3,705,625
|
|
|
|||
|
Other insurance related income
|
89
|
|
|
7,133
|
|
|
7,222
|
|
|
|||
|
Net losses and loss expenses
|
(1,141,933
|
)
|
|
(1,062,264
|
)
|
|
(2,204,197
|
)
|
|
|||
|
Acquisition costs
|
(251,120
|
)
|
|
(495,756
|
)
|
|
(746,876
|
)
|
|
|||
|
General and administrative expenses
|
(346,857
|
)
|
|
(135,844
|
)
|
|
(482,701
|
)
|
|
|||
|
Underwriting income
|
$
|
37,500
|
|
|
$
|
241,573
|
|
|
279,073
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
|
|
|
|
(120,016
|
)
|
|
|||||
|
Net investment income
|
|
|
|
|
353,335
|
|
|
|||||
|
Net realized investment losses
|
|
|
|
|
(60,525
|
)
|
|
|||||
|
Foreign exchange gains
|
|
|
|
|
121,295
|
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(51,360
|
)
|
|
|||||
|
Income before income taxes and interest in income (loss) of equity method investments
|
|
|
|
|
$
|
521,802
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net loss and loss expense ratio
|
64.3
|
%
|
|
55.1
|
%
|
|
59.5
|
%
|
|
|||
|
Acquisition cost ratio
|
14.1
|
%
|
|
25.7
|
%
|
|
20.2
|
%
|
|
|||
|
General and administrative expense ratio
|
19.5
|
%
|
|
7.0
|
%
|
|
16.2
|
%
|
|
|||
|
Combined ratio
|
97.9
|
%
|
|
87.8
|
%
|
|
95.9
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
85,049
|
|
|
$
|
—
|
|
|
$
|
85,049
|
|
|
|
|
|
|
|
|
|
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2015
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,583,081
|
|
|
$
|
2,020,649
|
|
|
$
|
4,603,730
|
|
|
|
Net premiums written
|
1,759,359
|
|
|
1,915,307
|
|
|
3,674,666
|
|
|
|||
|
Net premiums earned
|
1,798,191
|
|
|
1,888,226
|
|
|
3,686,417
|
|
|
|||
|
Other insurance related income (loss)
|
1,036
|
|
|
(3,989
|
)
|
|
(2,953
|
)
|
|
|||
|
Net losses and loss expenses
|
(1,154,928
|
)
|
|
(1,021,271
|
)
|
|
(2,176,199
|
)
|
|
|||
|
Acquisition costs
|
(261,208
|
)
|
|
(456,904
|
)
|
|
(718,112
|
)
|
|
|||
|
General and administrative expenses
|
(341,658
|
)
|
|
(145,253
|
)
|
|
(486,911
|
)
|
|
|||
|
Underwriting income
|
$
|
41,433
|
|
|
$
|
260,809
|
|
|
302,242
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
|
|
|
|
(109,910
|
)
|
|
|||||
|
Net investment income
|
|
|
|
|
305,336
|
|
|
|||||
|
Net realized investment loss
|
|
|
|
|
(138,491
|
)
|
|
|||||
|
Foreign exchange gains
|
|
|
|
|
102,312
|
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(50,963
|
)
|
|
|||||
|
Termination fee received
|
|
|
|
|
280,000
|
|
|
|||||
|
Reorganization and related expenses
|
|
|
|
|
(45,867
|
)
|
|
|||||
|
Income before income taxes and interest in income (loss) of equity method investments
|
|
|
|
|
$
|
644,659
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net loss and loss expense ratio
|
64.2
|
%
|
|
54.1
|
%
|
|
59.0
|
%
|
|
|||
|
Acquisition cost ratio
|
14.5
|
%
|
|
24.2
|
%
|
|
19.5
|
%
|
|
|||
|
General and administrative expense ratio
|
19.1
|
%
|
|
7.7
|
%
|
|
16.2
|
%
|
|
|||
|
Combined ratio
|
97.8
|
%
|
|
86.0
|
%
|
|
94.7
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
86,858
|
|
|
$
|
—
|
|
|
$
|
86,858
|
|
|
|
|
|
|
|
|
|
|
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 and interest in income (loss) of equity method investments
|
|
|
|
|
$
|
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)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Bermuda
|
$
|
465,980
|
|
|
$
|
525,226
|
|
|
$
|
618,273
|
|
|
|
Ireland
|
1,650,229
|
|
|
1,532,753
|
|
|
1,641,767
|
|
|
|||
|
U.S.
|
2,562,789
|
|
|
2,364,099
|
|
|
2,309,107
|
|
|
|||
|
Other
|
291,210
|
|
|
181,652
|
|
|
142,372
|
|
|
|||
|
Total gross premium written
|
$
|
4,970,208
|
|
|
$
|
4,603,730
|
|
|
$
|
4,711,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
|
|
|
|
|
|
||||||
|
Property
|
$
|
426,918
|
|
|
$
|
432,587
|
|
|
$
|
444,197
|
|
|
|
Marine
|
150,046
|
|
|
183,696
|
|
|
178,229
|
|
|
|||
|
Terrorism
|
33,279
|
|
|
36,818
|
|
|
35,876
|
|
|
|||
|
Aviation
|
44,980
|
|
|
45,659
|
|
|
41,192
|
|
|
|||
|
Credit and Political Risk
|
57,964
|
|
|
63,583
|
|
|
63,095
|
|
|
|||
|
Professional Lines
|
510,806
|
|
|
596,430
|
|
|
629,365
|
|
|
|||
|
Liability
|
169,182
|
|
|
161,614
|
|
|
146,819
|
|
|
|||
|
Accident and Health
|
384,146
|
|
|
277,804
|
|
|
291,771
|
|
|
|||
|
Total Insurance
|
1,777,321
|
|
|
1,798,191
|
|
|
1,830,544
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Reinsurance
|
|
|
|
|
|
|
||||||
|
Catastrophe
|
199,825
|
|
|
216,020
|
|
|
325,307
|
|
|
|||
|
Property
|
272,403
|
|
|
306,083
|
|
|
312,443
|
|
|
|||
|
Professional Lines
|
289,868
|
|
|
310,915
|
|
|
336,058
|
|
|
|||
|
Credit and Surety
|
252,210
|
|
|
250,208
|
|
|
263,013
|
|
|
|||
|
Motor
|
318,863
|
|
|
299,883
|
|
|
268,678
|
|
|
|||
|
Liability
|
332,479
|
|
|
297,000
|
|
|
289,223
|
|
|
|||
|
Agriculture
|
142,501
|
|
|
129,346
|
|
|
164,628
|
|
|
|||
|
Engineering
|
62,833
|
|
|
61,043
|
|
|
61,143
|
|
|
|||
|
Marine and Other
|
57,322
|
|
|
17,728
|
|
|
19,962
|
|
|
|||
|
Total Reinsurance
|
1,928,304
|
|
|
1,888,226
|
|
|
2,040,455
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Total
|
$
|
3,705,625
|
|
|
$
|
3,686,417
|
|
|
$
|
3,870,999
|
|
|
|
|
|
|
|
|
|
|
4.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Goodwill
|
|
Intangible
assets with an
indefinite life
|
|
Intangible
assets with a
finite life
|
|
Total
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net balance at December 31, 2014
|
$
|
47,148
|
|
|
$
|
26,036
|
|
|
$
|
15,776
|
|
|
$
|
88,960
|
|
|
|
Acquisition of Ternian
|
—
|
|
|
—
|
|
|
13,330
|
|
|
13,330
|
|
|
||||
|
Amortization
|
n/a
|
|
|
n/a
|
|
|
(2,493
|
)
|
|
(2,493
|
)
|
|
||||
|
Impairment charges
|
—
|
|
|
—
|
|
|
(12,939
|
)
|
|
(12,939
|
)
|
|
||||
|
Net balance at December 31, 2015
|
47,148
|
|
|
26,036
|
|
|
13,674
|
|
|
86,858
|
|
|
||||
|
Amortization
|
n/a
|
|
|
n/a
|
|
|
(1,809
|
)
|
|
(1,809
|
)
|
|
||||
|
Net balance at December 31, 2016
|
$
|
47,148
|
|
|
$
|
26,036
|
|
|
$
|
11,865
|
|
|
$
|
85,049
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross balance at December 31, 2016
|
$
|
42,237
|
|
|
$
|
26,036
|
|
|
$
|
29,166
|
|
|
$
|
97,439
|
|
|
|
Accumulated amortization
|
n/a
|
|
|
n/a
|
|
|
(17,301
|
)
|
|
(17,301
|
)
|
|
||||
|
Foreign currency translation adjustment
|
4,911
|
|
|
—
|
|
|
—
|
|
|
4,911
|
|
|
||||
|
Net balance at December 31, 2016
|
$
|
47,148
|
|
|
$
|
26,036
|
|
|
$
|
11,865
|
|
|
$
|
85,049
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,681,425
|
|
|
$
|
1,648
|
|
|
$
|
(27,004
|
)
|
|
$
|
1,656,069
|
|
|
$
|
—
|
|
|
|
Non-U.S. government
|
613,282
|
|
|
2,206
|
|
|
(49,654
|
)
|
|
565,834
|
|
|
—
|
|
|
|||||
|
Corporate debt
|
4,633,834
|
|
|
42,049
|
|
|
(75,140
|
)
|
|
4,600,743
|
|
|
—
|
|
|
|||||
|
Agency RMBS
(1)
|
2,487,837
|
|
|
13,275
|
|
|
(35,977
|
)
|
|
2,465,135
|
|
|
—
|
|
|
|||||
|
CMBS
(2)
|
664,368
|
|
|
5,433
|
|
|
(3,564
|
)
|
|
666,237
|
|
|
—
|
|
|
|||||
|
Non-Agency RMBS
|
57,316
|
|
|
1,628
|
|
|
(2,023
|
)
|
|
56,921
|
|
|
(823
|
)
|
|
|||||
|
ABS
(3)
|
1,221,813
|
|
|
3,244
|
|
|
(2,843
|
)
|
|
1,222,214
|
|
|
—
|
|
|
|||||
|
Municipals
(4)
|
163,441
|
|
|
1,510
|
|
|
(990
|
)
|
|
163,961
|
|
|
—
|
|
|
|||||
|
Total fixed maturities
|
$
|
11,523,316
|
|
|
$
|
70,993
|
|
|
$
|
(197,195
|
)
|
|
$
|
11,397,114
|
|
|
$
|
(823
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
379
|
|
|
41
|
|
|
(342
|
)
|
|
78
|
|
|
|
|
||||||
|
Exchange-traded funds
|
$
|
463,936
|
|
|
$
|
53,405
|
|
|
$
|
(2,634
|
)
|
|
$
|
514,707
|
|
|
|
|
||
|
Bond mutual funds
|
133,051
|
|
|
—
|
|
|
(9,092
|
)
|
|
123,959
|
|
|
|
|
||||||
|
Total equity securities
|
$
|
597,366
|
|
|
$
|
53,446
|
|
|
$
|
(12,068
|
)
|
|
$
|
638,744
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,673,617
|
|
|
$
|
1,545
|
|
|
$
|
(23,213
|
)
|
|
$
|
1,651,949
|
|
|
$
|
—
|
|
|
|
Non-U.S. government
|
809,025
|
|
|
2,312
|
|
|
(72,332
|
)
|
|
739,005
|
|
|
—
|
|
|
|||||
|
Corporate debt
|
4,442,315
|
|
|
16,740
|
|
|
(96,286
|
)
|
|
4,362,769
|
|
|
—
|
|
|
|||||
|
Agency RMBS
(1)
|
2,236,138
|
|
|
22,773
|
|
|
(9,675
|
)
|
|
2,249,236
|
|
|
—
|
|
|
|||||
|
CMBS
(2)
|
1,088,595
|
|
|
3,885
|
|
|
(9,182
|
)
|
|
1,083,298
|
|
|
—
|
|
|
|||||
|
Non-Agency RMBS
|
99,989
|
|
|
1,992
|
|
|
(973
|
)
|
|
101,008
|
|
|
(875
|
)
|
|
|||||
|
ABS
(3)
|
1,387,919
|
|
|
952
|
|
|
(17,601
|
)
|
|
1,371,270
|
|
|
—
|
|
|
|||||
|
Municipals
(4)
|
160,041
|
|
|
2,319
|
|
|
(1,146
|
)
|
|
161,214
|
|
|
—
|
|
|
|||||
|
Total fixed maturities
|
$
|
11,897,639
|
|
|
$
|
52,518
|
|
|
$
|
(230,408
|
)
|
|
$
|
11,719,749
|
|
|
$
|
(875
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||||||
|
Exchange-traded funds
|
$
|
447,524
|
|
|
$
|
31,211
|
|
|
$
|
(4,762
|
)
|
|
$
|
473,973
|
|
|
|
|
||
|
Bond mutual funds
|
128,252
|
|
|
—
|
|
|
(4,227
|
)
|
|
124,025
|
|
|
|
|
||||||
|
Total equity securities
|
$
|
575,776
|
|
|
$
|
31,211
|
|
|
$
|
(8,989
|
)
|
|
$
|
597,998
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Residential mortgage-backed securities (RMBS) originated by U.S. government-sponsored 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, maturities and redemptions. 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, 2016
|
|
|
|
|
|
|
|||||
|
Maturity
|
|
|
|
|
|
|
|||||
|
Due in one year or less
|
$
|
313,287
|
|
|
$
|
305,972
|
|
|
2.8
|
%
|
|
|
Due after one year through five years
|
3,906,190
|
|
|
3,850,149
|
|
|
33.8
|
%
|
|
||
|
Due after five years through ten years
|
2,546,299
|
|
|
2,510,975
|
|
|
22.0
|
%
|
|
||
|
Due after ten years
|
326,206
|
|
|
319,511
|
|
|
2.8
|
%
|
|
||
|
|
7,091,982
|
|
|
6,986,607
|
|
|
61.4
|
%
|
|
||
|
Agency RMBS
|
2,487,837
|
|
|
2,465,135
|
|
|
21.6
|
%
|
|
||
|
CMBS
|
664,368
|
|
|
666,237
|
|
|
5.8
|
%
|
|
||
|
Non-Agency RMBS
|
57,316
|
|
|
56,921
|
|
|
0.5
|
%
|
|
||
|
ABS
|
1,221,813
|
|
|
1,222,214
|
|
|
10.7
|
%
|
|
||
|
Total
|
$
|
11,523,316
|
|
|
$
|
11,397,114
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||
|
At December 31, 2015
|
|
|
|
|
|
|
|||||
|
Maturity
|
|
|
|
|
|
|
|||||
|
Due in one year or less
|
$
|
291,368
|
|
|
$
|
289,571
|
|
|
2.5
|
%
|
|
|
Due after one year through five years
|
4,217,515
|
|
|
4,142,802
|
|
|
35.3
|
%
|
|
||
|
Due after five years through ten years
|
2,263,684
|
|
|
2,181,525
|
|
|
18.6
|
%
|
|
||
|
Due after ten years
|
312,431
|
|
|
301,039
|
|
|
2.6
|
%
|
|
||
|
|
7,084,998
|
|
|
6,914,937
|
|
|
59.0
|
%
|
|
||
|
Agency RMBS
|
2,236,138
|
|
|
2,249,236
|
|
|
19.2
|
%
|
|
||
|
CMBS
|
1,088,595
|
|
|
1,083,298
|
|
|
9.2
|
%
|
|
||
|
Non-Agency RMBS
|
99,989
|
|
|
101,008
|
|
|
0.9
|
%
|
|
||
|
ABS
|
1,387,919
|
|
|
1,371,270
|
|
|
11.7
|
%
|
|
||
|
Total
|
$
|
11,897,639
|
|
|
$
|
11,719,749
|
|
|
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, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. government and agency
|
$
|
54,051
|
|
|
$
|
(2,729
|
)
|
|
$
|
1,340,719
|
|
|
$
|
(24,275
|
)
|
|
$
|
1,394,770
|
|
|
$
|
(27,004
|
)
|
|
|
Non-U.S. government
|
149,360
|
|
|
(38,683
|
)
|
|
283,796
|
|
|
(10,971
|
)
|
|
433,156
|
|
|
(49,654
|
)
|
|
||||||
|
Corporate debt
|
230,218
|
|
|
(30,652
|
)
|
|
1,948,976
|
|
|
(44,488
|
)
|
|
2,179,194
|
|
|
(75,140
|
)
|
|
||||||
|
Agency RMBS
|
76,694
|
|
|
(1,101
|
)
|
|
1,724,170
|
|
|
(34,876
|
)
|
|
1,800,864
|
|
|
(35,977
|
)
|
|
||||||
|
CMBS
|
84,640
|
|
|
(749
|
)
|
|
193,499
|
|
|
(2,815
|
)
|
|
278,139
|
|
|
(3,564
|
)
|
|
||||||
|
Non-Agency RMBS
|
13,642
|
|
|
(1,752
|
)
|
|
7,194
|
|
|
(271
|
)
|
|
20,836
|
|
|
(2,023
|
)
|
|
||||||
|
ABS
|
362,110
|
|
|
(1,950
|
)
|
|
266,763
|
|
|
(893
|
)
|
|
628,873
|
|
|
(2,843
|
)
|
|
||||||
|
Municipals
|
774
|
|
|
(29
|
)
|
|
68,598
|
|
|
(961
|
)
|
|
69,372
|
|
|
(990
|
)
|
|
||||||
|
Total fixed maturities
|
$
|
971,489
|
|
|
$
|
(77,645
|
)
|
|
$
|
5,833,715
|
|
|
$
|
(119,550
|
)
|
|
$
|
6,805,204
|
|
|
$
|
(197,195
|
)
|
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Common stocks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
(342
|
)
|
|
$
|
37
|
|
|
$
|
(342
|
)
|
|
|
Exchange-traded funds
|
4,959
|
|
|
(461
|
)
|
|
87,760
|
|
|
(2,173
|
)
|
|
92,719
|
|
|
(2,634
|
)
|
|
||||||
|
Bond mutual funds
|
—
|
|
|
—
|
|
|
123,954
|
|
|
(9,092
|
)
|
|
123,954
|
|
|
(9,092
|
)
|
|
||||||
|
Total equity securities
|
$
|
4,959
|
|
|
$
|
(461
|
)
|
|
$
|
211,751
|
|
|
$
|
(11,607
|
)
|
|
$
|
216,710
|
|
|
$
|
(12,068
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. government and agency
|
$
|
84,179
|
|
|
$
|
(7,622
|
)
|
|
$
|
1,474,202
|
|
|
$
|
(15,591
|
)
|
|
$
|
1,558,381
|
|
|
$
|
(23,213
|
)
|
|
|
Non-U.S. government
|
170,269
|
|
|
(50,841
|
)
|
|
317,693
|
|
|
(21,491
|
)
|
|
487,962
|
|
|
(72,332
|
)
|
|
||||||
|
Corporate debt
|
340,831
|
|
|
(33,441
|
)
|
|
2,845,375
|
|
|
(62,845
|
)
|
|
3,186,206
|
|
|
(96,286
|
)
|
|
||||||
|
Agency RMBS
|
64,792
|
|
|
(1,609
|
)
|
|
1,073,566
|
|
|
(8,066
|
)
|
|
1,138,358
|
|
|
(9,675
|
)
|
|
||||||
|
CMBS
|
75,627
|
|
|
(1,579
|
)
|
|
659,480
|
|
|
(7,603
|
)
|
|
735,107
|
|
|
(9,182
|
)
|
|
||||||
|
Non-Agency RMBS
|
5,283
|
|
|
(210
|
)
|
|
43,199
|
|
|
(763
|
)
|
|
48,482
|
|
|
(973
|
)
|
|
||||||
|
ABS
|
562,599
|
|
|
(11,158
|
)
|
|
667,448
|
|
|
(6,443
|
)
|
|
1,230,047
|
|
|
(17,601
|
)
|
|
||||||
|
Municipals
|
14,214
|
|
|
(310
|
)
|
|
64,104
|
|
|
(836
|
)
|
|
78,318
|
|
|
(1,146
|
)
|
|
||||||
|
Total fixed maturities
|
$
|
1,317,794
|
|
|
$
|
(106,770
|
)
|
|
$
|
7,145,067
|
|
|
$
|
(123,638
|
)
|
|
$
|
8,462,861
|
|
|
$
|
(230,408
|
)
|
|
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Common stocks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Exchange-traded funds
|
2,331
|
|
|
(313
|
)
|
|
110,972
|
|
|
(4,449
|
)
|
|
113,303
|
|
|
(4,762
|
)
|
|
||||||
|
Bond mutual funds
|
—
|
|
|
—
|
|
|
124,025
|
|
|
(4,227
|
)
|
|
124,025
|
|
|
(4,227
|
)
|
|
||||||
|
Total equity securities
|
$
|
2,331
|
|
|
$
|
(313
|
)
|
|
$
|
234,997
|
|
|
$
|
(8,676
|
)
|
|
$
|
237,328
|
|
|
$
|
(8,989
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
b)
|
Mortgage Loans
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||
|
|
Carrying Value
|
|
% of Total
|
|
Carrying Value
|
|
% of Total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Mortgage Loans held-for-investment:
|
|
|
|
|
|
|
|
|
||||||
|
Commercial
|
$
|
349,969
|
|
|
100
|
%
|
|
$
|
206,277
|
|
|
100
|
%
|
|
|
|
349,969
|
|
|
100
|
%
|
|
206,277
|
|
|
100
|
%
|
|
||
|
Valuation allowances
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
||
|
Total Mortgage Loans held-for-investment
|
$
|
349,969
|
|
|
100
|
%
|
|
$
|
206,277
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
c)
|
Other Investments
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Fair Value
|
|
Redemption Frequency
(if currently eligible)
|
|
Redemption
Notice Period
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||
|
At December 31, 2016
|
|
|
|
|
|
|
|
|
|||
|
Long/short equity funds
|
$
|
118,619
|
|
|
14
|
%
|
|
Semi-annually, Annually
|
|
45-60 days
|
|
|
Multi-strategy funds
|
285,992
|
|
|
34
|
%
|
|
Quarterly, Semi-annually
|
|
60-95 days
|
|
|
|
Event-driven funds
|
93,539
|
|
|
11
|
%
|
|
Annually
|
|
45 days
|
|
|
|
Leveraged bank loan funds
|
—
|
|
|
—
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Direct lending funds
|
134,650
|
|
|
16
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Private equity funds
|
81,223
|
|
|
10
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Real estate funds
|
13,354
|
|
|
2
|
%
|
|
n/a
|
|
n/a
|
|
|
|
CLO-Equities
|
60,700
|
|
|
8
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Other privately held investments
|
42,142
|
|
|
5
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Total other investments
|
$
|
830,219
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
|||
|
Long/short equity funds
|
$
|
154,348
|
|
|
19
|
%
|
|
Quarterly, Semi-annually, Annually
|
|
45-60 days
|
|
|
Multi-strategy funds
|
355,073
|
|
|
43
|
%
|
|
Quarterly, Semi-annually
|
|
60-95 days
|
|
|
|
Event-driven funds
|
147,287
|
|
|
18
|
%
|
|
Quarterly, Annually
|
|
45-60 days
|
|
|
|
Leveraged bank loan funds
|
65
|
|
|
—
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Direct lending funds
|
90,120
|
|
|
11
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Private equity funds
|
—
|
|
|
—
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Real estate funds
|
4,929
|
|
|
1
|
%
|
|
n/a
|
|
n/a
|
|
|
|
CLO-Equities
|
64,934
|
|
|
8
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Other privately held investments
|
—
|
|
|
—
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Total other investments
|
$
|
816,756
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
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.
|
5.
|
INVESTMENTS (CONTINUED)
|
•
|
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.
|
•
|
Private equity funds
: Seek to achieve attractive risk-adjusted returns by investing in private transactions over the course of several years.
|
•
|
Real estate funds
: Seek to achieve attractive risk-adjusted returns by making and managing investments in real estate and real estate securities and businesses.
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
$
|
305,459
|
|
|
$
|
294,725
|
|
|
$
|
296,663
|
|
|
|
Other investments
|
42,514
|
|
|
20,148
|
|
|
57,621
|
|
|
|||
|
Equity securities
|
16,306
|
|
|
11,289
|
|
|
11,832
|
|
|
|||
|
Mortgage loans
|
7,996
|
|
|
1,861
|
|
|
—
|
|
|
|||
|
Cash and cash equivalents
|
9,209
|
|
|
8,572
|
|
|
11,536
|
|
|
|||
|
Short-term investments
|
2,060
|
|
|
439
|
|
|
725
|
|
|
|||
|
Gross investment income
|
383,544
|
|
|
337,034
|
|
|
378,377
|
|
|
|||
|
Investment expenses
|
(30,209
|
)
|
|
(31,698
|
)
|
|
(35,611
|
)
|
|
|||
|
Net investment income
|
$
|
353,335
|
|
|
$
|
305,336
|
|
|
$
|
342,766
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
f)
|
Net Realized Investment Gains (Losses)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross realized gains
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
$
|
86,267
|
|
|
$
|
60,102
|
|
|
$
|
126,023
|
|
|
|
Equities
|
19,104
|
|
|
19,113
|
|
|
149,783
|
|
|
|||
|
Gross realized gains
|
105,371
|
|
|
79,215
|
|
|
275,806
|
|
|
|||
|
Gross realized losses
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
(134,460
|
)
|
|
(143,702
|
)
|
|
(86,943
|
)
|
|
|||
|
Equities
|
(16,155
|
)
|
|
(8,543
|
)
|
|
(15,925
|
)
|
|
|||
|
Gross realized losses
|
(150,615
|
)
|
|
(152,245
|
)
|
|
(102,868
|
)
|
|
|||
|
Net OTTI recognized in earnings
|
(26,210
|
)
|
|
(72,720
|
)
|
|
(31,227
|
)
|
|
|||
|
Change in fair value of investment derivatives
(1)
|
10,929
|
|
|
7,259
|
|
|
(9,603
|
)
|
|
|||
|
Net realized investment gains (losses)
|
$
|
(60,525
|
)
|
|
$
|
(138,491
|
)
|
|
$
|
132,108
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to Note 7
'Derivative Instruments'
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
||||||
|
Non-U.S. government
|
$
|
3,557
|
|
|
$
|
3,538
|
|
|
$
|
17,291
|
|
|
|
Corporate debt
|
20,093
|
|
|
47,029
|
|
|
8,107
|
|
|
|||
|
Non-Agency RMBS
|
—
|
|
|
111
|
|
|
7
|
|
|
|||
|
ABS
|
—
|
|
|
124
|
|
|
61
|
|
|
|||
|
Municipals
|
—
|
|
|
—
|
|
|
418
|
|
|
|||
|
|
23,650
|
|
|
50,802
|
|
|
25,884
|
|
|
|||
|
Equity Securities
|
|
|
|
|
|
|
||||||
|
Common stocks
|
—
|
|
|
—
|
|
|
741
|
|
|
|||
|
Exchange-traded funds
|
2,560
|
|
|
10,732
|
|
|
4,602
|
|
|
|||
|
Bond mutual funds
|
—
|
|
|
11,186
|
|
|
—
|
|
|
|||
|
|
2,560
|
|
|
21,918
|
|
|
5,343
|
|
|
|||
|
Total OTTI recognized in earnings
|
$
|
26,210
|
|
|
$
|
72,720
|
|
|
$
|
31,227
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||
|
Balance at beginning of period
|
$
|
1,506
|
|
|
$
|
1,531
|
|
|
|
Credit impairments recognized on securities not previously impaired
|
—
|
|
|
—
|
|
|
||
|
Additional credit impairments recognized on securities previously impaired
|
20
|
|
|
33
|
|
|
||
|
Change in timing of future cash flows on securities previously impaired
|
—
|
|
|
—
|
|
|
||
|
Intent to sell of securities previously impaired
|
—
|
|
|
—
|
|
|
||
|
Securities sold/redeemed/matured
|
(33
|
)
|
|
(58
|
)
|
|
||
|
Balance at end of period
|
$
|
1,493
|
|
|
$
|
1,506
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
g)
|
Restricted Investments
|
|
|
|
|
|
|
|
||||
|
At December 31,
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
|
||||
|
Collateral in Trust for inter-company agreements
|
|
$
|
2,792,776
|
|
|
$
|
2,766,453
|
|
|
|
Collateral for secured letter of credit facility
|
|
445,482
|
|
|
481,023
|
|
|
||
|
Collateral in Trust for third party agreements
(1)
|
|
777,076
|
|
|
551,985
|
|
|
||
|
Securities on deposit with regulatory authorities
|
|
50,005
|
|
|
57,597
|
|
|
||
|
Total restricted investments
|
|
$
|
4,065,339
|
|
|
$
|
3,857,058
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
$376 million
(
2015
:
$232 million
) of fixed income securities and equities deposited directly with Lloyd's to support the underwriting capacity of the Company's Lloyd's Syndicate, AXIS Syndicate 1686.
|
5.
|
INVESTMENTS (CONTINUED)
|
h)
|
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)
|
|
Fair value based on NAV practical expedient
|
|
Total Fair Value
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,583,106
|
|
|
$
|
72,963
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,656,069
|
|
|
|
Non-U.S. government
|
—
|
|
|
565,834
|
|
|
—
|
|
|
—
|
|
|
565,834
|
|
|
|||||
|
Corporate debt
|
—
|
|
|
4,524,868
|
|
|
75,875
|
|
|
—
|
|
|
4,600,743
|
|
|
|||||
|
Agency RMBS
|
—
|
|
|
2,465,135
|
|
|
—
|
|
|
—
|
|
|
2,465,135
|
|
|
|||||
|
CMBS
|
—
|
|
|
663,176
|
|
|
3,061
|
|
|
—
|
|
|
666,237
|
|
|
|||||
|
Non-Agency RMBS
|
—
|
|
|
56,921
|
|
|
—
|
|
|
—
|
|
|
56,921
|
|
|
|||||
|
ABS
|
—
|
|
|
1,204,750
|
|
|
17,464
|
|
|
—
|
|
|
1,222,214
|
|
|
|||||
|
Municipals
|
—
|
|
|
163,961
|
|
|
—
|
|
|
—
|
|
|
163,961
|
|
|
|||||
|
|
1,583,106
|
|
|
9,717,608
|
|
|
96,400
|
|
|
—
|
|
|
11,397,114
|
|
|
|||||
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78
|
|
|
|||||
|
Exchange-traded funds
|
514,707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
514,707
|
|
|
|||||
|
Bond mutual funds
|
—
|
|
|
123,959
|
|
|
—
|
|
|
—
|
|
|
123,959
|
|
|
|||||
|
|
514,785
|
|
|
123,959
|
|
|
—
|
|
|
—
|
|
|
638,744
|
|
|
|||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Hedge funds
|
—
|
|
|
—
|
|
|
—
|
|
|
498,150
|
|
|
498,150
|
|
|
|||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
—
|
|
|
134,650
|
|
|
134,650
|
|
|
|||||
|
Private equity funds
|
—
|
|
|
—
|
|
|
—
|
|
|
81,223
|
|
|
81,223
|
|
|
|||||
|
Real estate funds
|
—
|
|
|
—
|
|
|
—
|
|
|
13,354
|
|
|
13,354
|
|
|
|||||
|
Other privately held investments
|
—
|
|
|
—
|
|
|
42,142
|
|
|
—
|
|
|
42,142
|
|
|
|||||
|
CLO-Equities
|
—
|
|
|
—
|
|
|
60,700
|
|
|
—
|
|
|
60,700
|
|
|
|||||
|
|
—
|
|
|
—
|
|
|
102,842
|
|
|
727,377
|
|
|
830,219
|
|
|
|||||
|
Short-term investments
|
—
|
|
|
127,461
|
|
|
—
|
|
|
—
|
|
|
127,461
|
|
|
|||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (see Note 7)
|
—
|
|
|
14,365
|
|
|
2,532
|
|
|
—
|
|
|
16,897
|
|
|
|||||
|
Insurance-linked securities
|
—
|
|
|
—
|
|
|
25,023
|
|
|
—
|
|
|
25,023
|
|
|
|||||
|
Total Assets
|
$
|
2,097,891
|
|
|
$
|
9,983,393
|
|
|
$
|
226,797
|
|
|
$
|
727,377
|
|
|
$
|
13,035,458
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (see Note 7)
|
$
|
—
|
|
|
$
|
9,076
|
|
|
$
|
6,500
|
|
|
$
|
—
|
|
|
$
|
15,576
|
|
|
|
Cash settled awards (see Note 16)
|
—
|
|
|
48,432
|
|
|
—
|
|
|
—
|
|
|
48,432
|
|
|
|||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
57,508
|
|
|
$
|
6,500
|
|
|
$
|
—
|
|
|
$
|
64,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
Fair value based on NAV practical expedient
|
|
Total Fair Value
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,632,355
|
|
|
$
|
19,594
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,651,949
|
|
|
|
Non-U.S. government
|
—
|
|
|
739,005
|
|
|
—
|
|
|
—
|
|
|
739,005
|
|
|
|||||
|
Corporate debt
|
—
|
|
|
4,324,251
|
|
|
38,518
|
|
|
—
|
|
|
4,362,769
|
|
|
|||||
|
Agency RMBS
|
—
|
|
|
2,249,236
|
|
|
—
|
|
|
—
|
|
|
2,249,236
|
|
|
|||||
|
CMBS
|
—
|
|
|
1,072,376
|
|
|
10,922
|
|
|
—
|
|
|
1,083,298
|
|
|
|||||
|
Non-Agency RMBS
|
—
|
|
|
101,008
|
|
|
—
|
|
|
—
|
|
|
101,008
|
|
|
|||||
|
ABS
|
—
|
|
|
1,371,270
|
|
|
—
|
|
|
—
|
|
|
1,371,270
|
|
|
|||||
|
Municipals
|
—
|
|
|
161,214
|
|
|
—
|
|
|
—
|
|
|
161,214
|
|
|
|||||
|
|
1,632,355
|
|
|
10,037,954
|
|
|
49,440
|
|
|
—
|
|
|
11,719,749
|
|
|
|||||
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
|
Exchange-traded funds
|
473,973
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
473,973
|
|
|
|||||
|
Bond mutual funds
|
—
|
|
|
124,025
|
|
|
—
|
|
|
—
|
|
|
124,025
|
|
|
|||||
|
|
473,973
|
|
|
124,025
|
|
|
—
|
|
|
—
|
|
|
597,998
|
|
|
|||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Hedge funds
|
—
|
|
|
—
|
|
|
—
|
|
|
656,773
|
|
|
656,773
|
|
|
|||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
—
|
|
|
90,120
|
|
|
90,120
|
|
|
|||||
|
Private equity funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
|
Real estate funds
|
—
|
|
|
—
|
|
|
—
|
|
|
4,929
|
|
|
4,929
|
|
|
|||||
|
Other privately held investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
|
CLO-Equities
|
—
|
|
|
—
|
|
|
27,257
|
|
|
37,677
|
|
|
64,934
|
|
|
|||||
|
|
—
|
|
|
—
|
|
|
27,257
|
|
|
789,499
|
|
|
816,756
|
|
|
|||||
|
Short-term investments
|
—
|
|
|
34,406
|
|
|
—
|
|
|
—
|
|
|
34,406
|
|
|
|||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (see Note 7)
|
—
|
|
|
2,072
|
|
|
4,395
|
|
|
—
|
|
|
6,467
|
|
|
|||||
|
Insurance-linked securities
|
—
|
|
|
—
|
|
|
24,925
|
|
|
—
|
|
|
24,925
|
|
|
|||||
|
Total Assets
|
$
|
2,106,328
|
|
|
$
|
10,198,457
|
|
|
$
|
106,017
|
|
|
$
|
789,499
|
|
|
$
|
13,200,301
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (see Note 7)
|
$
|
—
|
|
|
$
|
7,692
|
|
|
$
|
10,937
|
|
|
$
|
—
|
|
|
$
|
18,629
|
|
|
|
Cash settled awards (see Note 16)
|
—
|
|
|
33,215
|
|
|
—
|
|
|
—
|
|
|
33,215
|
|
|
|||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
40,907
|
|
|
$
|
10,937
|
|
|
$
|
—
|
|
|
$
|
51,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
||
|
|
Fair Value
|
Valuation Technique
|
Unobservable Input
|
Range
|
Weighted
Average
|
|
||
|
|
|
|
|
|
|
|
||
|
Other investments - CLO-Equities
|
$
|
34,941
|
|
Discounted cash flow
|
Default rates
|
4.0%
|
4.0%
|
|
|
|
|
|
Loss severity rate
|
35.0% - 53.5%
|
35.4%
|
|
||
|
|
|
|
Collateral spreads
|
3.0% - 3.6%
|
3.0%
|
|
||
|
|
|
|
Estimated maturity dates
|
2 - 6 years
|
6 years
|
|
||
|
|
|
|
|
|
|
|
||
|
|
$
|
25,759
|
|
Liquidation value
|
Fair value of collateral
|
100%
|
100%
|
|
|
|
|
|
Discount margin
|
0.4% - 16.4%
|
2.0%
|
|
||
|
|
|
|
|
|
|
|
||
|
Other investments - Other privately held investments
|
42,142
|
|
Discounted cash flow
|
Discount rate
|
5.0% - 8.0%
|
7.2%
|
|
|
|
|
|
|
|
|
|
|
||
|
Derivatives - Weather derivatives, net
|
$
|
(3,968
|
)
|
Simulation model
|
Weather curve
|
1 - 5,545
(1)
|
n/a
(2)
|
|
|
|
|
|
Weather standard deviation
|
1 - 1029
(1)
|
n/a
(2)
|
|
||
|
|
|
|
|
|
|
|
(2)
|
Due to the diversity of the portfolio, the range of unobservable inputs is wide; 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 price, 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, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
38,518
|
|
|
$
|
5,733
|
|
|
$
|
(4,955
|
)
|
|
$
|
(1,037
|
)
|
|
$
|
1,296
|
|
|
$
|
48,298
|
|
|
$
|
(4,371
|
)
|
|
$
|
(7,607
|
)
|
|
$
|
75,875
|
|
|
$
|
—
|
|
|
|
CMBS
|
10,922
|
|
|
—
|
|
|
(2,516
|
)
|
|
—
|
|
|
(192
|
)
|
|
—
|
|
|
—
|
|
|
(5,153
|
)
|
|
3,061
|
|
|
—
|
|
|
||||||||||
|
ABS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(917
|
)
|
|
18,381
|
|
|
—
|
|
|
—
|
|
|
17,464
|
|
|
—
|
|
|
||||||||||
|
|
49,440
|
|
|
5,733
|
|
|
(7,471
|
)
|
|
(1,037
|
)
|
|
187
|
|
|
66,679
|
|
|
(4,371
|
)
|
|
(12,760
|
)
|
|
96,400
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Other privately held investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,263
|
)
|
|
—
|
|
|
44,405
|
|
|
—
|
|
|
—
|
|
|
42,142
|
|
|
(2,263
|
)
|
|
||||||||||
|
CLO-Equities
|
27,257
|
|
|
36,378
|
|
|
—
|
|
|
18,976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,911
|
)
|
|
60,700
|
|
|
18,976
|
|
|
||||||||||
|
|
27,257
|
|
|
36,378
|
|
|
—
|
|
|
16,713
|
|
|
—
|
|
|
44,405
|
|
|
—
|
|
|
(21,911
|
)
|
|
102,842
|
|
|
16,713
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
4,395
|
|
|
—
|
|
|
—
|
|
|
6,772
|
|
|
—
|
|
|
1,289
|
|
|
—
|
|
|
(9,924
|
)
|
|
2,532
|
|
|
1,200
|
|
|
||||||||||
|
Insurance-linked securities
|
24,925
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,023
|
|
|
98
|
|
|
||||||||||
|
|
29,320
|
|
|
—
|
|
|
—
|
|
|
6,870
|
|
|
—
|
|
|
1,289
|
|
|
—
|
|
|
(9,924
|
)
|
|
27,555
|
|
|
1,298
|
|
|
||||||||||
|
Total assets
|
$
|
106,017
|
|
|
$
|
42,111
|
|
|
$
|
(7,471
|
)
|
|
$
|
22,546
|
|
|
$
|
187
|
|
|
$
|
112,373
|
|
|
$
|
(4,371
|
)
|
|
$
|
(44,595
|
)
|
|
$
|
226,797
|
|
|
$
|
18,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
10,937
|
|
|
—
|
|
|
—
|
|
|
1,862
|
|
|
—
|
|
|
2,723
|
|
|
—
|
|
|
(9,022
|
)
|
|
6,500
|
|
|
(654
|
)
|
|
||||||||||
|
Total liabilities
|
$
|
10,937
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,862
|
|
|
$
|
—
|
|
|
$
|
2,723
|
|
|
$
|
—
|
|
|
$
|
(9,022
|
)
|
|
$
|
6,500
|
|
|
$
|
(654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
15,837
|
|
|
$
|
—
|
|
|
$
|
(7,903
|
)
|
|
$
|
(49
|
)
|
|
$
|
88
|
|
|
$
|
39,225
|
|
|
$
|
(1,723
|
)
|
|
$
|
(6,957
|
)
|
|
$
|
38,518
|
|
|
$
|
—
|
|
|
|
CMBS
|
17,763
|
|
|
5,072
|
|
|
(9,902
|
)
|
|
—
|
|
|
(647
|
)
|
|
—
|
|
|
—
|
|
|
(1,364
|
)
|
|
10,922
|
|
|
—
|
|
|
||||||||||
|
ABS
|
40,031
|
|
|
—
|
|
|
(39,951
|
)
|
|
—
|
|
|
102
|
|
|
—
|
|
|
—
|
|
|
(182
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
|
73,631
|
|
|
5,072
|
|
|
(57,756
|
)
|
|
(49
|
)
|
|
(457
|
)
|
|
39,225
|
|
|
(1,723
|
)
|
|
(8,503
|
)
|
|
49,440
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Other privately held investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||||
|
CLO-Equities
|
37,046
|
|
|
—
|
|
|
—
|
|
|
3,705
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,494
|
)
|
|
27,257
|
|
|
3,705
|
|
|
||||||||||
|
|
37,046
|
|
|
—
|
|
|
—
|
|
|
3,705
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,494
|
)
|
|
27,257
|
|
|
3,705
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
111
|
|
|
—
|
|
|
—
|
|
|
2,555
|
|
|
—
|
|
|
1,865
|
|
|
—
|
|
|
(136
|
)
|
|
4,395
|
|
|
3,580
|
|
|
||||||||||
|
Insurance-linked securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
24,925
|
|
|
(75
|
)
|
|
||||||||||
|
|
111
|
|
|
—
|
|
|
—
|
|
|
2,480
|
|
|
—
|
|
|
26,865
|
|
|
—
|
|
|
(136
|
)
|
|
29,320
|
|
|
3,505
|
|
|
||||||||||
|
Total assets
|
$
|
110,788
|
|
|
$
|
5,072
|
|
|
$
|
(57,756
|
)
|
|
$
|
6,136
|
|
|
$
|
(457
|
)
|
|
$
|
66,090
|
|
|
$
|
(1,723
|
)
|
|
$
|
(22,133
|
)
|
|
$
|
106,017
|
|
|
$
|
7,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
15,288
|
|
|
—
|
|
|
—
|
|
|
(3,208
|
)
|
|
—
|
|
|
4,795
|
|
|
—
|
|
|
(5,938
|
)
|
|
10,937
|
|
|
8,337
|
|
|
||||||||||
|
Total liabilities
|
$
|
15,288
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,208
|
)
|
|
$
|
—
|
|
|
$
|
4,795
|
|
|
$
|
—
|
|
|
$
|
(5,938
|
)
|
|
$
|
10,937
|
|
|
$
|
8,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
7.
|
DERIVATIVE INSTRUMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
At December 31, 2016
|
|
At December 31, 2015
|
|
||||||||||||||||||||
|
|
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)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
$
|
195,979
|
|
|
$
|
12,331
|
|
|
$
|
87
|
|
|
$
|
198,406
|
|
|
$
|
490
|
|
|
$
|
837
|
|
|
|
Interest rate swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
492,899
|
|
|
2,034
|
|
|
8,989
|
|
|
692,023
|
|
|
1,582
|
|
|
6,855
|
|
|
||||||
|
Weather-related contracts
|
67,957
|
|
|
2,532
|
|
|
6,500
|
|
|
51,395
|
|
|
4,395
|
|
|
10,937
|
|
|
||||||
|
Commodity contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Total derivatives
|
|
|
$
|
16,897
|
|
|
$
|
15,576
|
|
|
|
|
$
|
6,467
|
|
|
$
|
18,629
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Asset and liability derivatives are classified within other assets and other liabilities on the Consolidated Balance Sheets.
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||||||
|
|
Gross Amounts
|
Gross Amounts Offset
|
Net
Amounts
(1)
|
|
Gross Amounts
|
Gross Amounts Offset
|
Net
Amounts
(1)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative assets
|
$
|
22,270
|
|
$
|
(5,373
|
)
|
$
|
16,897
|
|
|
$
|
14,336
|
|
$
|
(7,869
|
)
|
$
|
6,467
|
|
|
|
Derivative liabilities
|
$
|
20,949
|
|
$
|
(5,373
|
)
|
$
|
15,576
|
|
|
$
|
26,498
|
|
$
|
(7,869
|
)
|
$
|
18,629
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net asset and liability derivatives are classified within other assets and other liabilities on the Consolidated Balance Sheets.
|
7.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
7.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Location of Gain (Loss) Recognized
in Income on Derivative
|
Amount of Gain (Loss) Recognized in
Income on Derivative
|
|
||||||||||
|
|
|
||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange forward contracts
|
Net realized investment gains (losses)
|
$
|
10,929
|
|
|
$
|
11,265
|
|
|
$
|
10,333
|
|
|
|
Interest rate swaps
|
Net realized investment gains (losses)
|
—
|
|
|
(4,006
|
)
|
|
(19,936
|
)
|
|
|||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange forward contracts
|
Foreign exchange gains (losses)
|
(8,179
|
)
|
|
(25,412
|
)
|
|
(10,363
|
)
|
|
|||
|
Weather-related contracts
|
Other insurance related income (loss)
|
4,910
|
|
|
(3,005
|
)
|
|
(5,373
|
)
|
|
|||
|
Commodity contracts
|
Other insurance related income (loss)
|
(2,382
|
)
|
|
(1,814
|
)
|
|
8,328
|
|
|
|||
|
Total
|
|
$
|
5,278
|
|
|
$
|
(22,972
|
)
|
|
$
|
(17,011
|
)
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES
|
Reinsurance Segment
|
|
|
|
|
|
|
|
|
||
|
|
Reported Lines of Business
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Reserving Classes
|
Tail
|
Catastrophe
|
Property
|
Credit and Surety
|
Professional Lines
|
Motor
|
Liability
|
Engineering
|
Agriculture
|
Marine and Other
|
|
|
|
|
|
|
|
|
|
|
|
Property and Other
|
Short
|
X
|
X
|
|
|
|
|
X
|
X
|
X
|
Credit and Surety
|
Medium
|
|
|
X
|
|
|
|
|
|
|
Professional Lines
|
Medium
|
|
|
|
X
|
|
|
|
|
|
Motor
|
Long
|
|
|
|
|
X
|
|
|
|
|
Liability
|
Long
|
|
|
|
|
|
X
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
•
|
Expected Loss Ratio Method (“ELR Method”): 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 Method”): 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 information through the use of expected loss ratios, whereas the Loss Development Method does not incorporate such information.
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
|
|
|
|
|
|
||||
|
As of December 31,
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||
|
Reserve for reported losses and loss expenses
|
$
|
3,358,514
|
|
|
$
|
3,253,080
|
|
|
|
Reserve for losses incurred but not reported
|
6,339,313
|
|
|
6,393,205
|
|
|
||
|
Reserve for losses and loss expenses
|
$
|
9,697,827
|
|
|
$
|
9,646,285
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross reserve for losses and loss expenses, beginning of year
|
$
|
9,646,285
|
|
|
$
|
9,596,797
|
|
|
$
|
9,582,140
|
|
|
|
Less reinsurance recoverable on unpaid losses, beginning of year
|
(2,031,309
|
)
|
|
(1,890,280
|
)
|
|
(1,900,112
|
)
|
|
|||
|
Net reserve for unpaid losses and loss expenses, beginning of year
|
7,614,976
|
|
|
7,706,517
|
|
|
7,682,028
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net incurred losses and loss expenses related to:
|
|
|
|
|
|
|
||||||
|
Current year
|
2,496,574
|
|
|
2,419,247
|
|
|
2,445,666
|
|
|
|||
|
Prior years
|
(292,377
|
)
|
|
(243,048
|
)
|
|
(258,944
|
)
|
|
|||
|
|
2,204,197
|
|
|
2,176,199
|
|
|
2,186,722
|
|
|
|||
|
Net paid losses and loss expenses related to:
|
|
|
|
|
|
|
||||||
|
Current year
|
(428,153
|
)
|
|
(343,063
|
)
|
|
(387,197
|
)
|
|
|||
|
Prior years
|
(1,763,696
|
)
|
|
(1,709,659
|
)
|
|
(1,544,664
|
)
|
|
|||
|
|
(2,191,849
|
)
|
|
(2,052,722
|
)
|
|
(1,931,861
|
)
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange and other
|
(205,606
|
)
|
|
(215,018
|
)
|
|
(230,372
|
)
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net reserve for unpaid losses and loss expenses, end of year
|
7,421,718
|
|
|
7,614,976
|
|
|
7,706,517
|
|
|
|||
|
Reinsurance recoverable on unpaid losses, end of year
|
2,276,109
|
|
|
2,031,309
|
|
|
1,890,280
|
|
|
|||
|
Gross reserve for losses and loss expenses, end of year
|
$
|
9,697,827
|
|
|
$
|
9,646,285
|
|
|
$
|
9,596,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2016
|
$
|
55,905
|
|
|
$
|
236,472
|
|
|
$
|
292,377
|
|
|
|
Year ended December 31, 2015
|
23,447
|
|
|
219,601
|
|
|
243,048
|
|
|
|||
|
Year ended December 31, 2014
|
63,735
|
|
|
195,209
|
|
|
258,944
|
|
|
|||
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Property and Other
|
||||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
||||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||||||
2007
|
$
|
209,411
|
|
$
|
162,796
|
|
$
|
160,343
|
|
$
|
151,107
|
|
$
|
149,236
|
|
$
|
149,580
|
|
$
|
148,350
|
|
$
|
147,875
|
|
$
|
147,552
|
|
$
|
147,178
|
|
$
|
449
|
|
834
|
2008
|
|
318,702
|
|
273,666
|
|
265,330
|
|
255,880
|
|
240,324
|
|
238,882
|
|
234,488
|
|
232,738
|
|
231,713
|
|
2,017
|
|
1,573
|
||||||||||||
2009
|
|
|
120,169
|
|
101,823
|
|
92,505
|
|
85,202
|
|
83,139
|
|
80,983
|
|
81,204
|
|
80,880
|
|
815
|
|
1,483
|
|||||||||||||
2010
|
|
|
|
182,337
|
|
155,368
|
|
147,867
|
|
122,700
|
|
117,130
|
|
116,193
|
|
115,888
|
|
469
|
|
2,309
|
||||||||||||||
2011
|
|
|
|
|
386,326
|
|
364,736
|
|
340,974
|
|
317,110
|
|
316,756
|
|
315,517
|
|
2,583
|
|
3,736
|
|||||||||||||||
2012
|
|
|
|
|
|
463,117
|
|
470,059
|
|
446,790
|
|
426,457
|
|
422,394
|
|
9,381
|
|
27,679
|
||||||||||||||||
2013
|
|
|
|
|
|
|
421,113
|
|
414,793
|
|
387,086
|
|
381,573
|
|
10,120
|
|
51,231
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
471,402
|
|
467,335
|
|
442,392
|
|
19,696
|
|
60,120
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
378,216
|
|
375,867
|
|
38,959
|
|
43,312
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
519,834
|
|
189,742
|
|
51,460
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
3,033,236
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance Property and Other
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
54,533
|
|
$
|
105,253
|
|
$
|
126,050
|
|
$
|
134,379
|
|
$
|
137,481
|
|
$
|
139,931
|
|
$
|
146,404
|
|
$
|
146,717
|
|
$
|
146,807
|
|
$
|
146,563
|
|
2008
|
|
83,640
|
|
164,425
|
|
186,147
|
|
197,852
|
|
224,874
|
|
227,438
|
|
229,498
|
|
228,989
|
|
228,945
|
|
|||||||||||
2009
|
|
|
34,370
|
|
63,009
|
|
71,529
|
|
75,366
|
|
76,212
|
|
77,228
|
|
79,435
|
|
79,717
|
|
||||||||||||
2010
|
|
|
|
48,970
|
|
87,621
|
|
96,449
|
|
107,257
|
|
111,450
|
|
111,543
|
|
111,349
|
|
|||||||||||||
2011
|
|
|
|
|
88,982
|
|
221,701
|
|
282,382
|
|
304,349
|
|
305,184
|
|
305,007
|
|
||||||||||||||
2012
|
|
|
|
|
|
107,441
|
|
278,331
|
|
341,818
|
|
364,966
|
|
372,567
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
128,519
|
|
302,372
|
|
345,866
|
|
359,867
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
173,615
|
|
345,785
|
|
398,150
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
124,166
|
|
280,577
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
173,233
|
|
|||||||||||||||||||
Total
|
|
2,455,975
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
5,376
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
582,637
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Property and Other
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
35.1%
|
38.5%
|
12.4%
|
5.9%
|
3.4%
|
0.8%
|
2.0%
|
0.1%
|
0.1%
|
(0.2)%
|
Insurance Marine
|
||||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
||||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||||||
2007
|
$
|
96,533
|
|
$
|
95,994
|
|
$
|
106,228
|
|
$
|
100,962
|
|
$
|
97,949
|
|
$
|
96,304
|
|
$
|
94,612
|
|
$
|
92,405
|
|
$
|
92,077
|
|
$
|
92,063
|
|
$
|
257
|
|
684
|
2008
|
|
107,697
|
|
108,208
|
|
103,287
|
|
102,201
|
|
95,006
|
|
88,612
|
|
84,848
|
|
84,483
|
|
84,221
|
|
324
|
|
516
|
||||||||||||
2009
|
|
|
82,075
|
|
75,532
|
|
71,049
|
|
65,787
|
|
58,383
|
|
56,208
|
|
54,774
|
|
53,652
|
|
531
|
|
475
|
|||||||||||||
2010
|
|
|
|
67,916
|
|
69,312
|
|
65,198
|
|
52,161
|
|
50,248
|
|
47,397
|
|
45,934
|
|
(1,368
|
)
|
472
|
||||||||||||||
2011
|
|
|
|
|
90,608
|
|
78,293
|
|
72,137
|
|
65,383
|
|
65,363
|
|
65,572
|
|
2,449
|
|
602
|
|||||||||||||||
2012
|
|
|
|
|
|
89,663
|
|
82,344
|
|
68,315
|
|
70,404
|
|
71,370
|
|
9,821
|
|
697
|
||||||||||||||||
2013
|
|
|
|
|
|
|
79,011
|
|
99,885
|
|
94,917
|
|
95,954
|
|
9,907
|
|
727
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
59,880
|
|
44,221
|
|
47,870
|
|
8,864
|
|
794
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
158,240
|
|
138,915
|
|
23,853
|
|
850
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
86,115
|
|
41,293
|
|
804
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
781,666
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Marine
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
14,828
|
|
$
|
35,176
|
|
$
|
57,907
|
|
$
|
76,551
|
|
$
|
82,021
|
|
$
|
85,219
|
|
$
|
85,211
|
|
$
|
86,792
|
|
$
|
90,115
|
|
$
|
90,267
|
|
2008
|
|
22,745
|
|
54,266
|
|
70,590
|
|
78,641
|
|
79,737
|
|
83,465
|
|
83,546
|
|
83,692
|
|
83,772
|
|
|||||||||||
2009
|
|
|
18,938
|
|
31,745
|
|
40,968
|
|
44,535
|
|
46,490
|
|
47,082
|
|
49,588
|
|
49,845
|
|
||||||||||||
2010
|
|
|
|
17,387
|
|
27,822
|
|
32,327
|
|
41,158
|
|
43,962
|
|
44,730
|
|
45,634
|
|
|||||||||||||
2011
|
|
|
|
|
26,431
|
|
44,004
|
|
54,618
|
|
57,677
|
|
59,481
|
|
60,181
|
|
||||||||||||||
2012
|
|
|
|
|
|
10,669
|
|
38,301
|
|
44,463
|
|
49,100
|
|
49,891
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
18,309
|
|
43,193
|
|
53,633
|
|
61,737
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
6,359
|
|
14,877
|
|
26,111
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
21,584
|
|
54,575
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
12,459
|
|
|||||||||||||||||||
Total
|
|
534,472
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
6,114
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
253,308
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Insurance Marine
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
23.4%
|
26.6%
|
16.3%
|
10.8%
|
3.5%
|
2.4%
|
1.7%
|
0.8%
|
1.9%
|
0.2%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Aviation
|
||||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
||||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||||||
2007
|
$
|
29,801
|
|
$
|
25,466
|
|
$
|
22,682
|
|
$
|
17,043
|
|
$
|
16,756
|
|
$
|
16,352
|
|
$
|
14,427
|
|
$
|
12,958
|
|
$
|
12,853
|
|
$
|
12,422
|
|
$
|
53
|
|
270
|
2008
|
|
14,480
|
|
12,009
|
|
8,504
|
|
8,341
|
|
8,243
|
|
7,095
|
|
5,925
|
|
5,840
|
|
5,985
|
|
91
|
|
187
|
||||||||||||
2009
|
|
|
17,408
|
|
14,490
|
|
18,680
|
|
18,007
|
|
16,835
|
|
16,535
|
|
15,351
|
|
14,519
|
|
176
|
|
317
|
|||||||||||||
2010
|
|
|
|
12,629
|
|
11,383
|
|
11,095
|
|
9,419
|
|
8,444
|
|
8,370
|
|
8,418
|
|
253
|
|
516
|
||||||||||||||
2011
|
|
|
|
|
17,721
|
|
15,377
|
|
12,763
|
|
9,536
|
|
8,404
|
|
7,257
|
|
434
|
|
730
|
|||||||||||||||
2012
|
|
|
|
|
|
12,772
|
|
10,642
|
|
10,764
|
|
8,678
|
|
7,728
|
|
499
|
|
866
|
||||||||||||||||
2013
|
|
|
|
|
|
|
15,647
|
|
16,313
|
|
15,179
|
|
15,223
|
|
1,010
|
|
1,005
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
20,429
|
|
23,016
|
|
24,322
|
|
2,969
|
|
1,255
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
29,748
|
|
28,453
|
|
4,999
|
|
1,751
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
29,135
|
|
9,919
|
|
1,143
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
153,462
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance Aviation
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
2,400
|
|
$
|
6,692
|
|
$
|
9,219
|
|
$
|
10,498
|
|
$
|
11,100
|
|
$
|
11,781
|
|
$
|
12,129
|
|
$
|
12,126
|
|
$
|
12,148
|
|
$
|
12,182
|
|
2008
|
|
488
|
|
2,057
|
|
3,074
|
|
3,655
|
|
4,205
|
|
4,475
|
|
4,651
|
|
5,258
|
|
5,514
|
|
|||||||||||
2009
|
|
|
2,022
|
|
3,516
|
|
6,957
|
|
12,697
|
|
13,819
|
|
14,183
|
|
14,120
|
|
13,617
|
|
||||||||||||
2010
|
|
|
|
745
|
|
3,819
|
|
5,995
|
|
6,567
|
|
7,230
|
|
7,345
|
|
7,788
|
|
|||||||||||||
2011
|
|
|
|
|
638
|
|
2,813
|
|
4,499
|
|
5,015
|
|
5,547
|
|
5,796
|
|
||||||||||||||
2012
|
|
|
|
|
|
951
|
|
2,848
|
|
4,133
|
|
5,927
|
|
6,793
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
4,398
|
|
7,317
|
|
9,731
|
|
11,427
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
3,985
|
|
8,011
|
|
11,672
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
8,077
|
|
16,137
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
10,396
|
|
|||||||||||||||||||
Total
|
|
101,322
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
2,410
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
54,550
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Aviation
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
18.1%
|
25.1%
|
19.7%
|
15.4%
|
8.0%
|
3.5%
|
2.7%
|
2.2%
|
2.3%
|
0.3%
|
Insurance Credit and Political Risk
|
||||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
||||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||||||
2007
|
$
|
50,812
|
|
$
|
44,972
|
|
$
|
16,695
|
|
$
|
5,253
|
|
$
|
898
|
|
$
|
898
|
|
$
|
3,609
|
|
$
|
3,642
|
|
$
|
3,667
|
|
$
|
2,741
|
|
$
|
200
|
|
2
|
2008
|
|
52,993
|
|
63,552
|
|
48,715
|
|
45,554
|
|
45,551
|
|
45,551
|
|
45,600
|
|
45,200
|
|
44,410
|
|
—
|
|
9
|
||||||||||||
2009
|
|
|
248,082
|
|
305,277
|
|
326,017
|
|
335,525
|
|
335,398
|
|
335,258
|
|
335,278
|
|
339,557
|
|
1,740
|
|
24
|
|||||||||||||
2010
|
|
|
|
62,415
|
|
63,179
|
|
63,259
|
|
65,595
|
|
64,975
|
|
65,009
|
|
72,099
|
|
6,900
|
|
6
|
||||||||||||||
2011
|
|
|
|
|
58,154
|
|
48,665
|
|
47,706
|
|
48,361
|
|
48,333
|
|
45,036
|
|
17,400
|
|
4
|
|||||||||||||||
2012
|
|
|
|
|
|
32,602
|
|
15,672
|
|
12,435
|
|
12,447
|
|
10,319
|
|
10,282
|
|
4
|
||||||||||||||||
2013
|
|
|
|
|
|
|
26,439
|
|
25,684
|
|
9,759
|
|
9,880
|
|
1,600
|
|
1
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
38,825
|
|
70,712
|
|
67,109
|
|
9,247
|
|
5
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
30,329
|
|
30,368
|
|
7,059
|
|
3
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
43,756
|
|
19,043
|
|
1
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
665,275
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Credit and Political Risk
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
—
|
|
$
|
2,798
|
|
$
|
4,263
|
|
$
|
4,236
|
|
$
|
4,236
|
|
$
|
4,236
|
|
$
|
4,236
|
|
$
|
4,236
|
|
$
|
4,236
|
|
$
|
4,236
|
|
2008
|
|
—
|
|
69,217
|
|
45,625
|
|
45,638
|
|
45,379
|
|
45,379
|
|
44,410
|
|
44,410
|
|
44,410
|
|
|||||||||||
2009
|
|
|
92,841
|
|
344,648
|
|
346,248
|
|
346,209
|
|
341,564
|
|
345,508
|
|
345,507
|
|
345,555
|
|
||||||||||||
2010
|
|
|
|
50,000
|
|
85,418
|
|
90,729
|
|
106,766
|
|
101,784
|
|
101,946
|
|
102,152
|
|
|||||||||||||
2011
|
|
|
|
|
32,788
|
|
37,205
|
|
27,636
|
|
27,636
|
|
27,636
|
|
27,636
|
|
||||||||||||||
2012
|
|
|
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
36
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
745
|
|
2,235
|
|
3,726
|
|
5,216
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
1,924
|
|
39,951
|
|
61,108
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
—
|
|
23,309
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||||||
Total
|
|
613,658
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
20
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
51,637
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Insurance Credit and Political Risk
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
18.0%
|
60.0%
|
4.2%
|
5.2%
|
(1.4)%
|
0.3%
|
(0.5)%
|
—%
|
—%
|
—%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Professional Lines
|
||||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
||||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||||||
2007
|
$
|
221,212
|
|
$
|
247,155
|
|
$
|
249,780
|
|
$
|
248,741
|
|
$
|
221,708
|
|
$
|
217,901
|
|
$
|
201,294
|
|
$
|
202,636
|
|
$
|
197,765
|
|
$
|
196,562
|
|
$
|
4,683
|
|
3,596
|
2008
|
|
240,809
|
|
279,486
|
|
280,329
|
|
299,422
|
|
295,953
|
|
309,268
|
|
328,628
|
|
326,623
|
|
324,197
|
|
23,024
|
|
4,582
|
||||||||||||
2009
|
|
|
251,995
|
|
257,354
|
|
258,134
|
|
256,731
|
|
263,157
|
|
245,939
|
|
247,495
|
|
223,700
|
|
14,856
|
|
6,148
|
|||||||||||||
2010
|
|
|
|
251,985
|
|
257,527
|
|
255,337
|
|
218,436
|
|
195,831
|
|
173,104
|
|
195,869
|
|
44,799
|
|
5,975
|
||||||||||||||
2011
|
|
|
|
|
341,302
|
|
342,063
|
|
359,448
|
|
348,860
|
|
355,008
|
|
368,830
|
|
69,175
|
|
7,633
|
|||||||||||||||
2012
|
|
|
|
|
|
353,693
|
|
399,610
|
|
401,976
|
|
408,870
|
|
397,517
|
|
108,180
|
|
8,805
|
||||||||||||||||
2013
|
|
|
|
|
|
|
410,537
|
|
425,400
|
|
430,517
|
|
398,776
|
|
161,370
|
|
9,835
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
435,447
|
|
443,665
|
|
451,917
|
|
244,910
|
|
10,017
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
401,941
|
|
401,660
|
|
277,836
|
|
10,178
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
348,076
|
|
312,698
|
|
8,935
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
3,307,104
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Professional Lines
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
3,817
|
|
$
|
18,301
|
|
$
|
49,258
|
|
$
|
102,031
|
|
$
|
114,021
|
|
$
|
139,144
|
|
$
|
150,649
|
|
$
|
161,153
|
|
$
|
168,368
|
|
$
|
169,572
|
|
2008
|
|
5,154
|
|
22,565
|
|
68,355
|
|
125,594
|
|
167,923
|
|
189,952
|
|
214,542
|
|
249,050
|
|
267,314
|
|
|||||||||||
2009
|
|
|
4,251
|
|
24,559
|
|
49,396
|
|
76,121
|
|
105,510
|
|
117,174
|
|
136,271
|
|
174,032
|
|
||||||||||||
2010
|
|
|
|
8,179
|
|
30,353
|
|
57,282
|
|
78,663
|
|
96,431
|
|
109,403
|
|
119,939
|
|
|||||||||||||
2011
|
|
|
|
|
8,470
|
|
36,396
|
|
78,605
|
|
117,097
|
|
177,629
|
|
250,219
|
|
||||||||||||||
2012
|
|
|
|
|
|
8,895
|
|
44,804
|
|
106,822
|
|
194,031
|
|
240,671
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
18,305
|
|
75,901
|
|
136,542
|
|
182,468
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
25,351
|
|
73,828
|
|
132,966
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
20,745
|
|
68,050
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
15,707
|
|
|||||||||||||||||||
Total
|
|
1,620,938
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
31,393
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
1,717,559
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Insurance Professional Lines
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
3.4%
|
9.6%
|
13.7%
|
15.9%
|
11.6%
|
10.2%
|
6.9%
|
10.9%
|
4.7%
|
0.6%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Liability
|
||||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
||||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
Cumulative Number of Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||||||
2007
|
$
|
100,380
|
|
$
|
88,102
|
|
$
|
95,435
|
|
$
|
98,625
|
|
$
|
98,851
|
|
$
|
99,483
|
|
$
|
102,010
|
|
$
|
101,299
|
|
$
|
97,526
|
|
$
|
97,078
|
|
$
|
12,107
|
|
3,766
|
2008
|
|
82,969
|
|
79,836
|
|
80,947
|
|
81,785
|
|
82,225
|
|
81,949
|
|
101,589
|
|
102,444
|
|
108,189
|
|
20,340
|
|
3,697
|
||||||||||||
2009
|
|
|
61,469
|
|
64,017
|
|
67,410
|
|
67,869
|
|
76,431
|
|
83,281
|
|
101,179
|
|
98,384
|
|
11,813
|
|
2,735
|
|||||||||||||
2010
|
|
|
|
79,406
|
|
94,222
|
|
98,637
|
|
98,115
|
|
99,574
|
|
98,064
|
|
105,123
|
|
15,988
|
|
2,196
|
||||||||||||||
2011
|
|
|
|
|
72,586
|
|
75,329
|
|
83,118
|
|
87,059
|
|
85,243
|
|
83,730
|
|
20,189
|
|
1,776
|
|||||||||||||||
2012
|
|
|
|
|
|
70,836
|
|
70,608
|
|
73,280
|
|
70,769
|
|
68,179
|
|
23,448
|
|
1,215
|
||||||||||||||||
2013
|
|
|
|
|
|
|
92,146
|
|
94,171
|
|
94,247
|
|
87,491
|
|
36,011
|
|
1,494
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
106,121
|
|
122,583
|
|
128,465
|
|
55,811
|
|
2,240
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
127,318
|
|
125,844
|
|
83,145
|
|
2,970
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
123,233
|
|
107,850
|
|
3,099
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,025,716
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance Liability
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
436
|
|
$
|
5,968
|
|
$
|
22,206
|
|
$
|
40,853
|
|
$
|
52,660
|
|
$
|
60,080
|
|
$
|
69,335
|
|
$
|
76,411
|
|
$
|
80,150
|
|
$
|
82,449
|
|
2008
|
|
1,906
|
|
8,796
|
|
18,507
|
|
27,861
|
|
37,408
|
|
47,447
|
|
51,776
|
|
55,314
|
|
61,618
|
|
|||||||||||
2009
|
|
|
726
|
|
4,646
|
|
13,305
|
|
26,754
|
|
31,865
|
|
41,322
|
|
44,105
|
|
83,991
|
|
||||||||||||
2010
|
|
|
|
1,030
|
|
15,968
|
|
30,791
|
|
53,584
|
|
61,033
|
|
66,118
|
|
71,792
|
|
|||||||||||||
2011
|
|
|
|
|
2,761
|
|
10,540
|
|
20,190
|
|
38,376
|
|
46,074
|
|
54,996
|
|
||||||||||||||
2012
|
|
|
|
|
|
1,630
|
|
5,513
|
|
15,410
|
|
30,144
|
|
37,138
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
2,355
|
|
23,275
|
|
33,314
|
|
42,044
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
1,410
|
|
18,620
|
|
49,816
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
5,437
|
|
22,323
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
6,307
|
|
|||||||||||||||||||
Total
|
|
512,474
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
39,713
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
552,955
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance Liability
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
2.3%
|
10.7%
|
13.8%
|
16.6%
|
8.8%
|
8.4%
|
5.4%
|
17.0%
|
4.9%
|
2.4%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Property and Other
|
|||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
|||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
|||||||||||||||||||||||
2007
|
$
|
394,054
|
|
$
|
321,110
|
|
$
|
279,571
|
|
$
|
265,204
|
|
$
|
249,436
|
|
$
|
238,779
|
|
$
|
231,597
|
|
$
|
224,023
|
|
$
|
220,937
|
|
$
|
220,469
|
|
$
|
379
|
|
2008
|
|
671,079
|
|
569,031
|
|
584,076
|
|
562,028
|
|
547,586
|
|
536,555
|
|
520,174
|
|
513,948
|
|
512,261
|
|
(296
|
)
|
||||||||||||
2009
|
|
|
337,333
|
|
279,833
|
|
241,346
|
|
227,777
|
|
220,889
|
|
199,777
|
|
193,703
|
|
195,545
|
|
705
|
|
|||||||||||||
2010
|
|
|
|
599,084
|
|
584,912
|
|
553,798
|
|
567,341
|
|
569,697
|
|
563,532
|
|
555,647
|
|
7,034
|
|
||||||||||||||
2011
|
|
|
|
|
1,083,060
|
|
1,092,015
|
|
1,090,593
|
|
1,049,625
|
|
1,032,549
|
|
1,006,528
|
|
10,715
|
|
|||||||||||||||
2012
|
|
|
|
|
|
484,438
|
|
450,563
|
|
440,303
|
|
409,836
|
|
393,775
|
|
10,707
|
|
||||||||||||||||
2013
|
|
|
|
|
|
|
466,295
|
|
441,492
|
|
411,440
|
|
392,459
|
|
10,724
|
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
437,470
|
|
455,607
|
|
442,330
|
|
53,805
|
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
380,660
|
|
359,185
|
|
69,223
|
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
440,384
|
|
224,911
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
4,518,583
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance Property and Other
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
58,955
|
|
$
|
159,438
|
|
$
|
189,166
|
|
$
|
203,754
|
|
$
|
211,499
|
|
$
|
215,294
|
|
$
|
219,809
|
|
$
|
217,756
|
|
$
|
215,894
|
|
$
|
217,366
|
|
2008
|
|
157,415
|
|
312,580
|
|
437,973
|
|
489,821
|
|
502,377
|
|
506,139
|
|
505,939
|
|
510,628
|
|
509,433
|
|
|||||||||||
2009
|
|
|
55,694
|
|
126,587
|
|
156,617
|
|
174,250
|
|
184,513
|
|
183,729
|
|
186,448
|
|
188,103
|
|
||||||||||||
2010
|
|
|
|
104,263
|
|
296,764
|
|
388,310
|
|
419,571
|
|
465,358
|
|
494,362
|
|
519,128
|
|
|||||||||||||
2011
|
|
|
|
|
246,222
|
|
557,409
|
|
759,930
|
|
859,089
|
|
888,222
|
|
961,477
|
|
||||||||||||||
2012
|
|
|
|
|
|
92,620
|
|
228,876
|
|
300,983
|
|
322,801
|
|
337,115
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
54,451
|
|
218,110
|
|
328,765
|
|
355,706
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
65,721
|
|
271,621
|
|
346,856
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
48,121
|
|
187,229
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
77,205
|
|
|||||||||||||||||||
Total
|
|
3,699,618
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
4,498
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
823,463
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Property and Other
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
21.2%
|
37.7%
|
19.2%
|
7.7%
|
4.3%
|
2.9%
|
2.0%
|
0.3%
|
(0.5)%
|
0.7%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Credit and Surety
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
13,612
|
|
$
|
24,105
|
|
$
|
28,797
|
|
$
|
33,178
|
|
$
|
34,476
|
|
$
|
35,328
|
|
$
|
36,580
|
|
$
|
46,356
|
|
$
|
46,734
|
|
$
|
47,496
|
|
2008
|
|
20,345
|
|
63,686
|
|
61,530
|
|
75,801
|
|
77,425
|
|
79,414
|
|
81,152
|
|
81,790
|
|
82,026
|
|
|||||||||||
2009
|
|
|
31,892
|
|
73,878
|
|
74,948
|
|
76,863
|
|
80,635
|
|
83,281
|
|
83,338
|
|
83,185
|
|
||||||||||||
2010
|
|
|
|
25,558
|
|
44,156
|
|
54,023
|
|
54,849
|
|
56,304
|
|
57,263
|
|
58,579
|
|
|||||||||||||
2011
|
|
|
|
|
22,198
|
|
50,959
|
|
66,120
|
|
73,282
|
|
77,734
|
|
79,807
|
|
||||||||||||||
2012
|
|
|
|
|
|
48,576
|
|
82,707
|
|
95,544
|
|
101,328
|
|
104,802
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
32,113
|
|
74,740
|
|
88,904
|
|
95,282
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
35,261
|
|
59,406
|
|
83,536
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
32,757
|
|
79,523
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
41,768
|
|
|||||||||||||||||||
Total
|
|
756,004
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
3,865
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
356,668
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Reinsurance Credit and Surety
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
27.8%
|
30.5%
|
9.3%
|
6.3%
|
2.9%
|
2.1%
|
1.6%
|
6.2%
|
0.5%
|
1.4%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Professional Lines
|
|||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
|||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
|||||||||||||||||||||||
2007
|
$
|
195,045
|
|
$
|
204,971
|
|
$
|
204,594
|
|
$
|
196,696
|
|
$
|
176,792
|
|
$
|
151,628
|
|
$
|
137,392
|
|
$
|
118,321
|
|
$
|
114,714
|
|
$
|
111,256
|
|
$
|
8,173
|
|
2008
|
|
174,881
|
|
181,729
|
|
181,097
|
|
177,038
|
|
175,203
|
|
171,409
|
|
172,414
|
|
170,509
|
|
170,596
|
|
14,293
|
|
||||||||||||
2009
|
|
|
210,606
|
|
210,413
|
|
215,065
|
|
217,656
|
|
208,234
|
|
207,939
|
|
192,974
|
|
189,290
|
|
21,035
|
|
|||||||||||||
2010
|
|
|
|
208,718
|
|
209,034
|
|
210,413
|
|
213,560
|
|
213,316
|
|
196,067
|
|
188,729
|
|
42,307
|
|
||||||||||||||
2011
|
|
|
|
|
200,400
|
|
200,776
|
|
201,989
|
|
210,770
|
|
208,126
|
|
207,237
|
|
75,492
|
|
|||||||||||||||
2012
|
|
|
|
|
|
209,109
|
|
215,586
|
|
221,036
|
|
223,023
|
|
221,722
|
|
94,535
|
|
||||||||||||||||
2013
|
|
|
|
|
|
|
208,804
|
|
213,810
|
|
214,659
|
|
212,763
|
|
114,919
|
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
218,734
|
|
218,662
|
|
218,610
|
|
120,754
|
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
211,420
|
|
211,181
|
|
163,900
|
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
194,558
|
|
183,486
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,925,942
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance Professional Lines
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
56
|
|
$
|
4,133
|
|
$
|
21,286
|
|
$
|
34,567
|
|
$
|
54,438
|
|
$
|
60,188
|
|
$
|
70,636
|
|
$
|
73,941
|
|
$
|
82,406
|
|
$
|
86,573
|
|
2008
|
|
373
|
|
6,411
|
|
21,620
|
|
49,053
|
|
70,329
|
|
91,554
|
|
108,226
|
|
123,672
|
|
132,194
|
|
|||||||||||
2009
|
|
|
914
|
|
8,588
|
|
32,286
|
|
62,988
|
|
83,537
|
|
108,140
|
|
127,697
|
|
137,842
|
|
||||||||||||
2010
|
|
|
|
1,740
|
|
12,000
|
|
31,198
|
|
52,066
|
|
76,635
|
|
107,096
|
|
123,711
|
|
|||||||||||||
2011
|
|
|
|
|
1,510
|
|
11,812
|
|
30,216
|
|
57,119
|
|
84,672
|
|
102,813
|
|
||||||||||||||
2012
|
|
|
|
|
|
776
|
|
10,346
|
|
29,527
|
|
53,440
|
|
85,753
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
1,059
|
|
12,020
|
|
30,403
|
|
64,809
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
2,019
|
|
13,049
|
|
48,714
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
3,134
|
|
13,503
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
1,755
|
|
|||||||||||||||||||
Total
|
|
797,667
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
26,189
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
1,154,464
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Professional Lines
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
0.7%
|
4.6%
|
11.2%
|
13.6%
|
13.7%
|
11.1%
|
9.6%
|
5.8%
|
6.3%
|
3.7%
|
Reinsurance Motor
|
|||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
|||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
|||||||||||||||||||||||
2007
|
$
|
65,601
|
|
$
|
66,567
|
|
$
|
62,829
|
|
$
|
62,768
|
|
$
|
63,813
|
|
$
|
60,568
|
|
$
|
59,548
|
|
$
|
58,086
|
|
$
|
55,279
|
|
$
|
54,504
|
|
$
|
14,117
|
|
2008
|
|
64,513
|
|
69,234
|
|
68,617
|
|
70,961
|
|
68,486
|
|
67,783
|
|
63,627
|
|
58,250
|
|
54,678
|
|
18,178
|
|
||||||||||||
2009
|
|
|
77,092
|
|
75,034
|
|
82,170
|
|
83,944
|
|
85,870
|
|
87,017
|
|
78,929
|
|
73,670
|
|
17,780
|
|
|||||||||||||
2010
|
|
|
|
92,168
|
|
97,598
|
|
97,823
|
|
96,811
|
|
91,248
|
|
86,409
|
|
77,560
|
|
27,778
|
|
||||||||||||||
2011
|
|
|
|
|
149,535
|
|
151,432
|
|
155,096
|
|
160,516
|
|
156,912
|
|
148,843
|
|
44,483
|
|
|||||||||||||||
2012
|
|
|
|
|
|
170,379
|
|
159,822
|
|
149,420
|
|
142,454
|
|
137,841
|
|
37,418
|
|
||||||||||||||||
2013
|
|
|
|
|
|
|
155,880
|
|
150,277
|
|
139,138
|
|
130,299
|
|
30,902
|
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
175,848
|
|
173,568
|
|
168,846
|
|
33,650
|
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
215,342
|
|
207,409
|
|
49,375
|
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
238,258
|
|
100,635
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,291,908
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Motor
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
1,663
|
|
$
|
3,881
|
|
$
|
4,150
|
|
$
|
6,127
|
|
$
|
9,939
|
|
$
|
11,616
|
|
$
|
13,710
|
|
$
|
18,527
|
|
$
|
20,433
|
|
$
|
21,596
|
|
2008
|
|
2,741
|
|
5,612
|
|
5,827
|
|
6,984
|
|
8,438
|
|
10,788
|
|
13,366
|
|
13,975
|
|
15,452
|
|
|||||||||||
2009
|
|
|
2,533
|
|
6,343
|
|
7,346
|
|
8,761
|
|
12,037
|
|
17,973
|
|
20,167
|
|
24,535
|
|
||||||||||||
2010
|
|
|
|
5,138
|
|
9,299
|
|
13,939
|
|
17,068
|
|
19,972
|
|
23,957
|
|
27,017
|
|
|||||||||||||
2011
|
|
|
|
|
23,397
|
|
45,270
|
|
58,841
|
|
68,802
|
|
74,955
|
|
80,593
|
|
||||||||||||||
2012
|
|
|
|
|
|
28,703
|
|
50,904
|
|
64,918
|
|
74,063
|
|
80,182
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
33,173
|
|
50,230
|
|
62,830
|
|
72,085
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
42,546
|
|
70,547
|
|
88,652
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
56,940
|
|
89,516
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
59,989
|
|
|||||||||||||||||||
Total
|
|
559,617
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
78,865
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
811,156
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Reinsurance Motor
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
15.8%
|
10.7%
|
6.0%
|
4.6%
|
4.4%
|
4.9%
|
3.9%
|
5.3%
|
3.1%
|
2.1%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Liability
|
|||||||||||||||||||||||||||||||||
|
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
At December 31, 2016
|
|||||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
Total of Incurred-But-Not-Reported Liabilities Plus Expected Development on Reported Claims
|
|||||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
|||||||||||||||||||||||
2007
|
$
|
160,455
|
|
$
|
157,947
|
|
$
|
158,773
|
|
$
|
157,966
|
|
$
|
157,886
|
|
$
|
157,822
|
|
$
|
144,241
|
|
$
|
114,939
|
|
$
|
97,515
|
|
$
|
92,712
|
|
$
|
11,940
|
|
2008
|
|
137,646
|
|
137,932
|
|
138,926
|
|
139,592
|
|
137,793
|
|
132,317
|
|
110,545
|
|
105,286
|
|
94,589
|
|
20,513
|
|
||||||||||||
2009
|
|
|
169,886
|
|
171,868
|
|
179,239
|
|
176,853
|
|
184,378
|
|
203,553
|
|
191,701
|
|
177,852
|
|
34,578
|
|
|||||||||||||
2010
|
|
|
|
169,442
|
|
168,929
|
|
180,949
|
|
181,663
|
|
199,656
|
|
189,531
|
|
180,860
|
|
53,863
|
|
||||||||||||||
2011
|
|
|
|
|
170,182
|
|
170,606
|
|
172,708
|
|
190,043
|
|
196,805
|
|
193,749
|
|
45,166
|
|
|||||||||||||||
2012
|
|
|
|
|
|
165,409
|
|
162,127
|
|
166,492
|
|
171,033
|
|
172,176
|
|
55,572
|
|
||||||||||||||||
2013
|
|
|
|
|
|
|
171,121
|
|
174,885
|
|
180,802
|
|
182,813
|
|
83,598
|
|
|||||||||||||||||
2014
|
|
|
|
|
|
|
|
198,634
|
|
201,551
|
|
203,252
|
|
124,579
|
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
213,387
|
|
213,776
|
|
157,257
|
|
|||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
238,524
|
|
199,828
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,750,303
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance Liability
|
||||||||||||||||||||||||||||||
|
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
|
|||||||||||||||||||||||||||||
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||||||
Accident Year
|
2007 Unaudited
|
2008 Unaudited
|
2009 Unaudited
|
2010 Unaudited
|
2011 Unaudited
|
2012 Unaudited
|
2013 Unaudited
|
2014 Unaudited
|
2015 Unaudited
|
2016
|
||||||||||||||||||||
2007
|
$
|
2,556
|
|
$
|
10,663
|
|
$
|
22,833
|
|
$
|
32,641
|
|
$
|
42,081
|
|
$
|
54,374
|
|
$
|
59,966
|
|
$
|
65,026
|
|
$
|
66,791
|
|
$
|
70,221
|
|
2008
|
|
2,156
|
|
9,940
|
|
21,917
|
|
29,991
|
|
36,497
|
|
43,397
|
|
51,786
|
|
53,578
|
|
57,686
|
|
|||||||||||
2009
|
|
|
1,703
|
|
17,100
|
|
44,429
|
|
56,586
|
|
73,197
|
|
103,871
|
|
123,051
|
|
127,354
|
|
||||||||||||
2010
|
|
|
|
2,405
|
|
17,576
|
|
46,123
|
|
62,207
|
|
83,542
|
|
97,167
|
|
108,476
|
|
|||||||||||||
2011
|
|
|
|
|
5,190
|
|
21,274
|
|
39,983
|
|
69,886
|
|
92,221
|
|
112,066
|
|
||||||||||||||
2012
|
|
|
|
|
|
3,540
|
|
12,791
|
|
28,354
|
|
58,639
|
|
78,037
|
|
|||||||||||||||
2013
|
|
|
|
|
|
|
5,965
|
|
22,214
|
|
52,299
|
|
69,021
|
|
||||||||||||||||
2014
|
|
|
|
|
|
|
|
7,086
|
|
28,645
|
|
48,363
|
|
|||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
7,267
|
|
27,440
|
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
11,859
|
|
|||||||||||||||||||
Total
|
|
710,523
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2007, net of reinsurance
|
|
28,494
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
1,068,274
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance Liability
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
2.7%
|
8.5%
|
12.7%
|
11.0%
|
10.2%
|
11.1%
|
8.0%
|
3.3%
|
3.1%
|
3.7%
|
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses
|
||||||||||||
|
|
|
||||||||||
|
|
At December 31, 2016
|
||||||||||
|
|
Net outstanding liabilities
|
|
Reinsurance recoverable on unpaid claims
|
|
Gross outstanding liabilities
|
||||||
|
|
|
|
|
|
|
||||||
Insurance Segment
|
|
|
|
|
|
|
||||||
Property and Other
|
|
$
|
582,637
|
|
|
$
|
169,707
|
|
|
$
|
752,344
|
|
Marine
|
|
253,308
|
|
|
180,996
|
|
|
434,304
|
|
|||
Aviation
|
|
54,550
|
|
|
6,384
|
|
|
60,934
|
|
|||
Credit and Political Risk
|
|
51,637
|
|
|
154
|
|
|
51,791
|
|
|||
Professional Lines
|
|
1,717,559
|
|
|
998,873
|
|
|
2,716,432
|
|
|||
Liability
|
|
552,955
|
|
|
837,215
|
|
|
1,390,170
|
|
|||
Total Insurance Segment
|
|
3,212,646
|
|
|
2,193,329
|
|
|
5,405,975
|
|
|||
|
|
|
|
|
|
|
||||||
Reinsurance Segment
|
|
|
|
|
|
|
||||||
Property and Other
|
|
823,463
|
|
|
55,637
|
|
|
879,100
|
|
|||
Credit and Surety
|
|
356,668
|
|
|
1,916
|
|
|
358,584
|
|
|||
Professional Lines
|
|
1,154,464
|
|
|
8,353
|
|
|
1,162,817
|
|
|||
Motor
|
|
811,156
|
|
|
—
|
|
|
811,156
|
|
|||
Liability
|
|
1,068,274
|
|
|
16,874
|
|
|
1,085,148
|
|
|||
Total Reinsurance Segment
|
|
4,214,025
|
|
|
82,780
|
|
|
4,296,805
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
7,426,671
|
|
|
$
|
2,276,109
|
|
|
9,702,780
|
|
|
Unallocated claims adjustment expenses
|
|
|
|
|
|
144,375
|
|
|||||
Foreign exchange and other
(1)
|
|
|
|
|
|
(59,988
|
)
|
|||||
(Ceded)/assumed reserves related to retroactive transactions
|
|
|
|
|
|
(89,340
|
)
|
|||||
|
|
|
|
|
|
|
||||||
Total liability for unpaid claims and claims adjustment expense
|
|
|
|
|
|
$
|
9,697,827
|
|
||||
|
|
|
|
|
|
|
(1)
|
Non-U.S. dollar denominated loss data is converted to U.S dollar at the rates of exchange in effect at the balance sheet
date for material underlying currencies. Fluctuations in currency exchange rates cause material shifts in loss development. Reserves for losses and loss expenses, disclosed on our consolidated balance sheets, are also revalued using the exchange rate at the balance sheet date.
|
9.
|
REINSURANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||||||||||||||
|
|
Premiums
written
|
|
Premiums
earned
|
|
Premiums
written
|
|
Premiums
earned
|
|
Premiums
written
|
|
Premiums
earned
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gross
|
$
|
4,970,208
|
|
|
$
|
4,762,394
|
|
|
$
|
4,603,730
|
|
|
$
|
4,567,953
|
|
|
$
|
4,711,519
|
|
|
$
|
4,652,345
|
|
|
|
Ceded
|
(1,217,234
|
)
|
|
(1,056,769
|
)
|
|
(929,064
|
)
|
|
(881,536
|
)
|
|
(804,544
|
)
|
|
(781,346
|
)
|
|
||||||
|
Net
|
$
|
3,752,974
|
|
|
$
|
3,705,625
|
|
|
$
|
3,674,666
|
|
|
$
|
3,686,417
|
|
|
$
|
3,906,975
|
|
|
$
|
3,870,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
11.
|
COMMITMENTS AND CONTINGENCIES (CONTINUED)
|
c)
|
Lease Commitments
|
|
|
|
|
||
|
Year ended December 31,
|
|
|
||
|
|
|
|
||
|
2017
|
$
|
26,517
|
|
|
|
2018
|
25,921
|
|
|
|
|
2019
|
23,136
|
|
|
|
|
2020
|
19,631
|
|
|
|
|
2021
|
19,551
|
|
|
|
|
Later years
|
72,854
|
|
|
|
|
Total future minimum lease payments
|
$
|
187,610
|
|
|
|
|
|
|
d)
|
Reinsurance Purchase Commitment
|
e)
|
Legal Proceedings
|
f)
|
Investments
|
12.
|
EARNINGS PER COMMON SHARE
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Basic earnings per common share
|
|
|
|
|
|
|
||||||
|
Net income
|
$
|
513,368
|
|
|
$
|
641,631
|
|
|
$
|
804,564
|
|
|
|
Less: amounts attributable from noncontrolling interests
|
—
|
|
|
—
|
|
|
(6,181
|
)
|
|
|||
|
Less: preferred share dividends
|
46,597
|
|
|
40,069
|
|
|
40,088
|
|
|
|||
|
Less: loss on repurchase of preferred shares
|
1,309
|
|
|
—
|
|
|
—
|
|
|
|||
|
Net income available to common shareholders
|
$
|
465,462
|
|
|
$
|
601,562
|
|
|
$
|
770,657
|
|
|
|
Weighted average common shares outstanding - basic
(1)
|
90,772
|
|
|
98,609
|
|
|
104,368
|
|
|
|||
|
Basic earnings per common share
|
$
|
5.13
|
|
|
$
|
6.10
|
|
|
$
|
7.38
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Diluted earnings per common share
|
|
|
|
|
|
|
||||||
|
Net income available to common shareholders
|
$
|
465,462
|
|
|
$
|
601,562
|
|
|
$
|
770,657
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding - basic
(1)
|
90,772
|
|
|
98,609
|
|
|
104,368
|
|
|
|||
|
Share-based compensation plans
|
775
|
|
|
1,020
|
|
|
1,345
|
|
|
|||
|
Weighted average common shares outstanding - diluted
(1)
|
91,547
|
|
|
99,629
|
|
|
105,713
|
|
|
|||
|
Diluted earnings per common share
|
$
|
5.08
|
|
|
$
|
6.04
|
|
|
$
|
7.29
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Anti-dilutive shares excluded from the dilutive computation
|
170
|
|
|
165
|
|
|
282
|
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
On
August 17, 2015
, the Company entered into an Accelerated Share Repurchase (“ASR”) agreement (refer to Note 13
'Shareholders' Equity'
for additional detail). The weighted-average number of shares outstanding used in the computation of basic and diluted earnings per share reflects the Company’s receipt of
4,149,378
shares delivered to the Company on August 20, 2015, and
1,358,380
common shares delivered to the Company on January 15, 2016 under the Company's ASR agreement.
|
13.
|
SHAREHOLDERS' EQUITY
|
a)
|
Common Shares
|
|
|
|
|
|
|
|
|
|||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
|||
|
|
|
|
|
|
|
|
|||
|
Shares issued, balance at beginning of year
|
176,240
|
|
|
175,478
|
|
|
174,134
|
|
|
|
Shares issued
|
340
|
|
|
762
|
|
|
1,344
|
|
|
|
Total shares issued at end of year
|
176,580
|
|
|
176,240
|
|
|
175,478
|
|
|
|
|
|
|
|
|
|
|
|||
|
Treasury shares, balance at beginning of year
|
(80,174
|
)
|
|
(76,052
|
)
|
|
(64,649
|
)
|
|
|
Shares repurchased
|
(10,508
|
)
|
|
(4,616
|
)
|
|
(11,752
|
)
|
|
|
Shares reissued from treasury
|
543
|
|
|
494
|
|
|
349
|
|
|
|
Total treasury shares at end of year
|
(90,139
|
)
|
|
(80,174
|
)
|
|
(76,052
|
)
|
|
|
|
|
|
|
|
|
|
|||
|
Total shares outstanding
|
86,441
|
|
|
96,066
|
|
|
99,426
|
|
|
|
|
|
|
|
|
|
|
13.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
In the open market:
|
|
|
|
|
|
|
||||||
|
Total shares
(1)
|
10,241
|
|
|
4,264
|
|
|
11,317
|
|
|
|||
|
Total cost
|
$
|
557,476
|
|
|
$
|
246,490
|
|
|
$
|
524,168
|
|
|
|
Average price per share
(2)
|
$
|
54.44
|
|
|
$
|
57.80
|
|
|
$
|
46.32
|
|
|
|
|
|
|
|
|
|
|
||||||
|
From employees:
(3)
|
|
|
|
|
|
|
||||||
|
Total shares
|
267
|
|
|
352
|
|
|
435
|
|
|
|||
|
Total cost
|
$
|
14,329
|
|
|
$
|
18,048
|
|
|
$
|
19,034
|
|
|
|
Average price per share
(2)
|
$
|
53.74
|
|
|
$
|
51.34
|
|
|
$
|
43.82
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total
|
|
|
|
|
|
|
||||||
|
Total shares
|
10,508
|
|
|
4,616
|
|
|
11,752
|
|
|
|||
|
Total cost
|
$
|
571,805
|
|
|
$
|
264,538
|
|
|
$
|
543,202
|
|
|
|
Average price per share
(2)
|
$
|
54.42
|
|
|
$
|
57.32
|
|
|
$
|
46.22
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts in 2016 and 2015 include
1,358,380
and
4,149,378
, respectively, of common shares acquired under the accelerated share repurchase program (see below for more detail).
|
(2)
|
Calculated using whole numbers.
|
(3)
|
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.
|
b)
|
Preferred Shares
|
13.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
13.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
14.
|
NONCONTROLLING INTERESTS
|
|
|
Total
|
|
||||||
|
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||
|
Balance at beginning of year
|
$
|
—
|
|
|
$
|
58,819
|
|
|
|
Adjustment due to the adoption of revised accounting guidance effective January 1, 2015
|
—
|
|
|
(58,819
|
)
|
|
||
|
Balance at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
15.
|
RETIREMENT PLANS
|
16.
|
SHARE-BASED COMPENSATION
|
16.
|
SHARE-BASED COMPENSATION (CONTINUED)
|
a)
|
Share-settled Awards
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
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 (1)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Nonvested restricted stock - beginning of year
|
201
|
|
|
$
|
49.24
|
|
|
1,954
|
|
|
$
|
43.34
|
|
|
|
Granted
|
104
|
|
|
53.80
|
|
|
589
|
|
|
53.87
|
|
|
||
|
Performance Adjustment
|
26
|
|
|
45.95
|
|
|
n/a
|
|
|
n/a
|
|
|
||
|
Vested
|
(48
|
)
|
|
45.38
|
|
|
(789
|
)
|
|
39.29
|
|
|
||
|
Forfeited
|
—
|
|
|
—
|
|
|
(161
|
)
|
|
47.33
|
|
|
||
|
Nonvested restricted stock - end of year
|
283
|
|
|
$
|
51.27
|
|
|
1,593
|
|
|
$
|
48.88
|
|
|
|
|
|
|
|
|
|
|
|
|
16.
|
SHARE-BASED COMPENSATION (CONTINUED)
|
|
|
Performance-based Cash Settled RSUs
|
|
Service-based Cash Settled RSUs
|
|
||
|
|
Number of
Restricted
Stock Units
|
|
Number of
Restricted
Stock Units
|
|
||
|
|
|
|
|
|
||
|
Nonvested restricted stock units - beginning of period
|
70
|
|
|
1,433
|
|
|
|
Granted
|
18
|
|
|
497
|
|
|
|
Performance Adjustment
|
12
|
|
|
n/a
|
|
|
|
Vested
|
(32
|
)
|
|
(377
|
)
|
|
|
Forfeited
|
—
|
|
|
(161
|
)
|
|
|
Nonvested restricted stock units - end of period
|
68
|
|
|
1,392
|
|
|
|
|
|
|
|
|
17.
|
RELATED PARTY TRANSACTIONS
|
18.
|
REORGANIZATION AND RELATED EXPENSES
|
19.
|
INCOME TAXES
|
19.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Current income tax expense
|
|
|
|
|
|
|
||||||
|
U.S.
|
$
|
606
|
|
|
$
|
4,927
|
|
|
$
|
8,411
|
|
|
|
Europe
|
7,451
|
|
|
144
|
|
|
16,582
|
|
|
|||
|
Other
|
—
|
|
|
5
|
|
|
1
|
|
|
|||
|
Deferred income tax expense (benefit)
|
|
|
|
|
|
|
||||||
|
U.S.
|
(1,829
|
)
|
|
(267
|
)
|
|
1,313
|
|
|
|||
|
Europe
|
112
|
|
|
(1,781
|
)
|
|
(399
|
)
|
|
|||
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
Total income tax expense
|
$
|
6,340
|
|
|
$
|
3,028
|
|
|
$
|
25,908
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net current tax receivables (payables)
|
$
|
3,540
|
|
|
$
|
(69
|
)
|
|
$
|
(11,203
|
)
|
|
|
Net deferred tax assets
|
103,313
|
|
|
104,762
|
|
|
89,405
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net tax assets
|
$
|
106,853
|
|
|
$
|
104,693
|
|
|
$
|
78,202
|
|
|
|
|
|
|
|
|
|
|
19.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
||||
|
At December 31,
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||
|
Deferred tax assets:
|
|
|
|
|
||||
|
Discounting of loss reserves
|
$
|
47,258
|
|
|
$
|
50,928
|
|
|
|
Unearned premiums
|
41,797
|
|
|
40,861
|
|
|
||
|
Net unrealized losses on investments
|
—
|
|
|
2,161
|
|
|
||
|
Operating and capital loss carryforwards
|
43,687
|
|
|
36,080
|
|
|
||
|
Accruals not currently deductible
|
59,098
|
|
|
58,042
|
|
|
||
|
Other investment adjustments and impairments
|
84
|
|
|
917
|
|
|
||
|
Tax credits
|
10,139
|
|
|
12,961
|
|
|
||
|
Other deferred tax assets
|
3,684
|
|
|
2,261
|
|
|
||
|
Deferred tax assets before valuation allowance
|
205,747
|
|
|
204,211
|
|
|
||
|
Valuation allowance
|
(41,100
|
)
|
|
(40,331
|
)
|
|
||
|
Deferred tax assets net of valuation allowance
|
164,647
|
|
|
163,880
|
|
|
||
|
|
|
|
|
|
||||
|
Deferred tax liabilities:
|
|
|
|
|
||||
|
Deferred acquisition costs
|
(45,788
|
)
|
|
(41,170
|
)
|
|
||
|
Net unrealized gains on investments
|
(1,168
|
)
|
|
—
|
|
|
||
|
Amortization of intangible assets and goodwill
|
(13,096
|
)
|
|
(11,972
|
)
|
|
||
|
Equalization reserves
|
—
|
|
|
(4,493
|
)
|
|
||
|
Other deferred tax liabilities
|
(1,282
|
)
|
|
(1,483
|
)
|
|
||
|
Deferred tax liabilities
|
(61,334
|
)
|
|
(59,118
|
)
|
|
||
|
Net deferred tax assets
|
$
|
103,313
|
|
|
$
|
104,762
|
|
|
|
|
|
|
|
|
19.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
||||
|
At December 31,
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||
|
Operating and Capital Loss Carryforwards
(1)
|
|
|
|
|
||||
|
Singapore (branch) operating loss carryforward
|
$
|
83,532
|
|
|
$
|
102,430
|
|
|
|
Australia (branch) operating loss carryforward
|
147,193
|
|
|
121,575
|
|
|
||
|
Australia capital loss carryforward
|
4,207
|
|
|
4,207
|
|
|
||
|
United Kingdom operating loss carryforward
|
19,306
|
|
|
22,002
|
|
|
||
|
Switzerland (branch) operating loss carryforward
|
—
|
|
|
378
|
|
|
||
|
Ireland operating loss carryforward
|
—
|
|
|
3,258
|
|
|
||
|
Ireland capital loss carryforward
|
716
|
|
|
716
|
|
|
||
|
U.S. operating loss carryforward
|
14,221
|
|
|
—
|
|
|
||
|
|
|
|
|
|
||||
|
Tax Credits
(1)
|
|
|
|
|
||||
|
Ireland foreign tax credit
|
$
|
3,298
|
|
|
$
|
6,073
|
|
|
|
U.S. alternative minimum tax credit
|
6,840
|
|
|
6,888
|
|
|
||
|
|
|
|
|
|
(1)
|
All operating and capital loss carryforwards and tax credits can be carried forward indefinitely with the exception of the U.S. net operating loss which will expire in 2036.
|
|
|
|
|
|
|
||||
|
At December 31,
|
2016
|
|
2015
|
|
||||
|
|
|
|
|
|
||||
|
Income tax expense:
|
|
|
|
|
||||
|
Valuation allowance - beginning of year
|
$
|
40,331
|
|
|
$
|
34,865
|
|
|
|
Operating loss carryforwards
|
3,857
|
|
|
6,809
|
|
|
||
|
Foreign tax credit
|
(2,775
|
)
|
|
(1,573
|
)
|
|
||
|
Australian CTA and accruals and other foreign rate differentials
|
(313
|
)
|
|
1,001
|
|
|
||
|
Change in investment-related items
|
—
|
|
|
(771
|
)
|
|
||
|
Valuation allowance - end of year
|
$
|
41,100
|
|
|
$
|
40,331
|
|
|
|
|
|
|
|
|
19.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Income before income taxes
|
|
|
|
|
|
|
||||||
|
Bermuda (domestic)
|
$
|
469,306
|
|
|
$
|
652,235
|
|
|
$
|
690,517
|
|
|
|
Foreign
|
50,402
|
|
|
(7,576
|
)
|
|
139,955
|
|
|
|||
|
Total income before income taxes
|
$
|
519,708
|
|
|
$
|
644,659
|
|
|
$
|
830,472
|
|
|
|
|
|
|
|
|
|
|
||||||
|
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:
|
|
|
|
|
|
|
||||||
|
U.S.
|
(0.6
|
)%
|
|
0.8
|
%
|
|
1.8
|
%
|
|
|||
|
Europe
|
1.5
|
%
|
|
(0.2
|
)%
|
|
1.5
|
%
|
|
|||
|
Other
|
—
|
%
|
|
(0.3
|
)%
|
|
—
|
%
|
|
|||
|
Valuation allowance
|
0.2
|
%
|
|
1.2
|
%
|
|
1.1
|
%
|
|
|||
|
Net tax exempt income
|
(0.2
|
)%
|
|
(0.1
|
)%
|
|
(0.7
|
)%
|
|
|||
|
Other
|
0.3
|
%
|
|
(0.9
|
)%
|
|
(0.6
|
)%
|
|
|||
|
Actual tax rate
|
1.2
|
%
|
|
0.5
|
%
|
|
3.1
|
%
|
|
|||
|
|
|
|
|
|
|
|
20.
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
Before Tax Amount
|
|
Tax (Expense) Benefit
|
|
Net of Tax Amount
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2016
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized investment gains arising during the year
|
$
|
10,165
|
|
|
$
|
(5,093
|
)
|
|
$
|
5,072
|
|
|
|
Adjustment for reclassification of net realized investment losses and OTTI losses recognized in net income
|
60,423
|
|
|
1,767
|
|
|
62,190
|
|
|
|||
|
Unrealized investment gains arising during the year, net of reclassification adjustment
|
70,588
|
|
|
(3,326
|
)
|
|
67,262
|
|
|
|||
|
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
Foreign currency translation adjustment
|
(638
|
)
|
|
—
|
|
|
(638
|
)
|
|
|||
|
Total other comprehensive income
|
$
|
69,950
|
|
|
$
|
(3,326
|
)
|
|
$
|
66,624
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2015
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized investment losses arising during the year
|
$
|
(280,512
|
)
|
|
$
|
14,128
|
|
|
$
|
(266,384
|
)
|
|
|
Adjustment for reclassification of net realized investment losses and OTTI losses recognized in net income
|
145,766
|
|
|
(775
|
)
|
|
144,991
|
|
|
|||
|
Unrealized investment losses arising during the year, net of reclassification adjustment
|
(134,746
|
)
|
|
13,353
|
|
|
(121,393
|
)
|
|
|||
|
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
|
Foreign currency translation adjustment
|
(21,498
|
)
|
|
—
|
|
|
(21,498
|
)
|
|
|||
|
Total other comprehensive loss
|
$
|
(156,244
|
)
|
|
$
|
13,353
|
|
|
$
|
(142,891
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
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
|
)
|
|
|
|
|
|
|
|
|
|
20.
|
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,
|
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Unrealized gains (losses) on available for sale investments
|
|
|
|
|
|
|
|
|
||||||
|
|
Other realized investment gains (losses)
|
$
|
(34,213
|
)
|
|
$
|
(73,046
|
)
|
|
$
|
172,399
|
|
|
|
|
|
OTTI losses
|
(26,210
|
)
|
|
(72,720
|
)
|
|
(31,227
|
)
|
|
|
|||
|
|
Total before tax
|
(60,423
|
)
|
|
(145,766
|
)
|
|
141,172
|
|
|
|
|||
|
|
Income tax (expense) benefit
|
(1,767
|
)
|
|
775
|
|
|
(26,702
|
)
|
|
|
|||
|
|
Net of tax
|
$
|
(62,190
|
)
|
|
$
|
(144,991
|
)
|
|
$
|
114,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts in parentheses are debits to net income available to common shareholders
|
21.
|
STATUTORY FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Bermuda
|
|
Ireland
|
|
U.S.
|
|
|||||||||||||||
|
At December 31,
|
2016
|
2015
|
|
2016
|
2015
|
|
2016
|
2015
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Required statutory capital and surplus
|
$
|
1,835,279
|
|
$
|
1,948,833
|
|
|
$
|
552,678
|
|
$
|
282,857
|
|
|
$
|
430,145
|
|
$
|
412,990
|
|
|
|
Available statutory capital and surplus
|
$
|
4,055,252
|
|
$
|
3,619,642
|
|
|
$
|
925,164
|
|
$
|
781,892
|
|
|
$
|
1,470,772
|
|
$
|
1,439,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.
|
STATUTORY FINANCIAL INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Quarters ended
|
Mar 31
|
|
Jun 30
|
|
Sep 30
|
|
Dec 31
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
2016
|
|
|
|
|
|
|
|
|
||||||||
|
Net premiums earned
|
$
|
902,340
|
|
|
$
|
946,990
|
|
|
$
|
934,415
|
|
|
$
|
921,879
|
|
|
|
Net investment income
|
49,164
|
|
|
91,730
|
|
|
116,923
|
|
|
95,517
|
|
|
||||
|
Net realized investment gains (losses)
|
(66,508
|
)
|
|
21,010
|
|
|
5,205
|
|
|
(20,229
|
)
|
|
||||
|
Underwriting income
|
98,951
|
|
|
9,860
|
|
|
103,998
|
|
|
66,265
|
|
|
||||
|
Net income available to common shareholders
|
38,417
|
|
|
119,491
|
|
|
176,644
|
|
|
130,912
|
|
|
||||
|
Earnings per common share - basic
|
$
|
0.41
|
|
|
$
|
1.30
|
|
|
$
|
1.97
|
|
|
$
|
1.50
|
|
|
|
Earnings per common share - diluted
|
$
|
0.41
|
|
|
$
|
1.29
|
|
|
$
|
1.96
|
|
|
$
|
1.48
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2015
|
|
|
|
|
|
|
|
|
||||||||
|
Net premiums earned
|
$
|
904,053
|
|
|
$
|
941,211
|
|
|
$
|
919,341
|
|
|
$
|
921,812
|
|
|
|
Net investment income
|
92,107
|
|
|
88,544
|
|
|
45,685
|
|
|
79,000
|
|
|
||||
|
Net realized investment losses
|
(42,553
|
)
|
|
(11,110
|
)
|
|
(69,957
|
)
|
|
(14,872
|
)
|
|
||||
|
Underwriting income
|
100,790
|
|
|
56,848
|
|
|
56,245
|
|
|
88,358
|
|
|
||||
|
Net income available to common shareholders
|
155,803
|
|
|
63,349
|
|
|
247,620
|
|
|
134,787
|
|
|
||||
|
Earnings per common share - basic
|
$
|
1.56
|
|
|
$
|
0.63
|
|
|
$
|
2.52
|
|
|
$
|
1.40
|
|
|
|
Earnings per common share - diluted
|
$
|
1.54
|
|
|
$
|
0.63
|
|
|
$
|
2.50
|
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 24, 2017
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
Financial Statements, Financial Statement Schedules and Exhibits
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
Schedule I
|
– Summary of Investments - Other than Investments in Related Parties
|
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
|
|
Termination Agreement, dated August 2, 2015, by and between PartnerRe Ltd. and AXIS Capital Holdings Limited (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 3, 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).
|
|
|
|
4.8
|
|
Certificate of Designations setting forth the specific rights, preferences, limitations and other terms of the Series B Preferred Shares (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on November 23, 2005).
|
|
|
|
4.9
|
|
Certificate of Designations setting forth the specific rights, preferences, limitations and other terms of the Series C Preferred Shares (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on March 19, 2012).
|
|
|
|
4.10
|
|
Certificate of Designations setting forth the specific rights, preferences, limitations and other terms of the Series D Preferred Shares (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 20, 2013).
|
|
|
|
4.11
|
|
Certificate of Designations setting forth the specific rights, preferences, limitations and other terms of the Series E Preferred Shares (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on November 7, 2016).
|
|
|
|
10.1
|
|
Amended and Restated Shareholders Agreement dated December 31, 2002, among AXIS Capital Holdings Limited and each of the persons listed on Schedule A thereto (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-1 (Amendment No. 3) (No. 333-103620) filed on June 10, 2003).
|
|
|
|
*10.2
|
|
Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated May 3, 2012 (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K/A filed on May 9, 2012).
|
|
|
|
*10.3
|
|
Amendment No. 1 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 5, 2013 (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on December 9, 2013).
|
|
|
|
*10.4
|
|
Amendment No. 2 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 5, 2014 (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K filed on February 23, 2015).
|
|
|
|
*10.5
|
|
Amendment No. 3 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated January 15, 2016 (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K filed on February 25, 2016).
|
|
|
|
†*10.6
|
|
Amendment No. 4 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 8, 2016.
|
|
|
|
*10.7
|
|
Employment Agreement by and among Albert Benchimol, AXIS Capital Holdings Limited and AXIS Specialty U.S. Services, Inc. dated May 3, 2012 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed on May 9, 2012).
|
|
|
|
*10.8
|
|
Amendment No. 1 to Employment Agreement dated May 3, 2012 by and among Albert Benchimol, AXIS Capital Holdings Limited and AXIS Specialty U.S. Services, Inc. effective as of March 9, 2015 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 11, 2015).
|
|
|
|
*10.9
|
|
Amendment No. 2 to Employment Agreement dated May 3, 2012 by and among Albert Benchimol, AXIS Capital Holdings Limited and AXIS Specialty U.S. Services, Inc. effective as of January 19, 2016 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 25, 2016).
|
|
|
|
†*10.10
|
|
Amendment No. 3 to Employment Agreement dated May 3, 2012 by and among Albert Benchimol, AXIS Capital Holdings Limited, AXIS Specialty U.S. Services, Inc. and AXIS Specialty Limited effective as of January 1, 2017.
|
|
|
|
*10.11
|
|
Restricted Stock Agreement for Albert Benchimol pursuant to the AXIS Capital Holdings Limited 2007 Long-Term Equity Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K/A filed on May 9, 2012).
|
|
|
|
*10.12
|
|
Separation Agreement entered into by and between John Gressier and AXIS Specialty Europe SE dated August 5, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 7, 2014).
|
|
|
|
*10.13
|
|
Letter Agreement by and between John D. Nichols, Jr. and AXIS Specialty U.S. Services, Inc. dated July 8, 2013 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 12, 2013).
|
|
|
|
*10.14
|
|
Employment Agreement by and between John D. Nichols, Jr. and AXIS Specialty U.S. Services, Inc. dated January 23, 2015 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 29, 2015).
|
|
|
|
*10.15
|
|
Amendment No. 1 to Letter Agreement by and between John D. Nichols, Jr. and AXIS Specialty U.S. Services, Inc. dated September 23, 2015 (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K filed on February 25, 2016).
|
|
|
|
*10.16
|
|
Employment Agreement by and between Joseph C. Henry and AXIS Specialty U.S. Services, Inc. dated January 23, 2015 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on January 29, 2015).
|
|
|
|
*10.17
|
|
Employment Agreement by and between Peter W. Wilson and AXIS Specialty U.S. Services, Inc. dated June 23, 2014 (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K filed on February 23, 2015).
|
|
|
|
*10.18
|
|
Employment Agreement by and between Chris DiSipio and AXIS Specialty U.S. Services, Inc. dated February 27, 2014 (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K filed on February 23, 2015).
|
|
|
|
*10.19
|
|
2003 Long-Term Equity Compensation Plan (incorporated by reference to Exhibit 10.12 to the Company's Registration Statement on Form S-1 (Amendment No. 2) (No. 333-103620) filed on May 17, 2003).
|
|
|
|
*10.20
|
|
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).
|
|
|
|
*10.21
|
|
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).
|
|
|
|
†*10.22
|
|
Form of Employee Restricted Stock Unit Agreement (Performance Vesting).
|
|
|
|
*10.23
|
|
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).
|
|
|
|
*10.24
|
|
2013 Executive Long-Term Equity Compensation Program (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 9, 2013).
|
|
|
|
†*10.25
|
|
2014 Executive Annual Incentive Plan.
|
|
|
|
†*10.26
|
|
AXIS Executive RSU Retirement Plan.
|
|
|
|
†*10.27
|
|
Form of Employee Restricted Stock Unit Agreement (Retirement Eligible/Performance Vesting).
|
|
|
|
†*10.28
|
|
Form of Employee Restricted Stock Unit Agreement (Retirement Eligible).
|
|
|
|
*10.29
|
|
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).
|
|
|
|
*10.30
|
|
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).
|
|
|
|
*10.31
|
|
2016 Directors Annual Compensation Program (incorporated by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K filed on February 25, 2016).
|
|
|
|
†*10.32
|
|
2017 Directors Annual Compensation Program.
|
|
|
|
*10.33
|
|
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).
|
|
|
|
10.34
|
|
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).
|
|
|
|
10.35
|
|
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).
|
|
|
|
10.36
|
|
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).
|
|
|
|
10.37
|
|
Amendment to Committed Facility Letter dated March 31, 2015 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Reinsurance Company, AXIS Surplus Insurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 1, 2015).
|
|
|
|
10.38
|
|
Amendment to Facility Fee Letter dated March 31, 2015 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Reinsurance Company, AXIS Surplus Insurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on April 1, 2015).
|
|
|
|
10.39
|
|
Committed Facility Letter dated December 18, 2015 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 December 22, 2015).
|
|
|
|
10.40
|
|
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).
|
|
|
|
10.41
|
|
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).
|
|
|
|
10.42
|
|
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).
|
|
|
|
10.43
|
|
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).
|
|
|
|
10.44
|
|
Master Confirmation and form of Supplemental Confirmation, dated August 17, 2015, by and between AXIS Capital Holdings Limited and Goldman, Sachs & Co. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 19, 2015).
|
|
|
|
†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).
|
|
|
|
*
|
Exhibits 10.2 through 10.33 represent a management contract, compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.
|
†
|
Filed herewith.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
|
|
|
|
|
|
|
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/ 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
|
|
Director
|
Christopher V. Greetham
|
|
|
|
|
|
/s/ MAURICE A. KEANE
|
|
Director
|
Maurice A. Keane
|
|
|
|
|
|
/s/ CHERYL-ANN LISTER
|
|
Director
|
Cheryl-Ann Lister
|
|
|
|
|
|
/s/ THOMAS C. RAMEY
|
|
Director
|
Thomas C. Ramey
|
|
|
|
|
|
/s/ HENRY B. SMITH
|
|
Director
|
Henry B. Smith
|
|
|
|
|
|
/s/ ALICE YOUNG
|
|
Director
|
Alice Young
|
|
|
|
|
|
/s/ WILHELM ZELLER
|
|
Director
|
Wilhelm Zeller
|
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 24, 2017
|
|
|
At December 31, 2016
|
|
||||||||||
|
|
Amortized Cost
|
|
Fair Value
|
|
Amount shown on the Balance Sheet
|
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
Type of investment:
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
1,681,425
|
|
|
$
|
1,656,069
|
|
|
$
|
1,656,069
|
|
|
|
Non-U.S. government
|
613,282
|
|
|
565,834
|
|
|
565,834
|
|
|
|||
|
Corporate debt
|
4,633,834
|
|
|
4,600,743
|
|
|
4,600,743
|
|
|
|||
|
Agency RMBS
|
2,487,837
|
|
|
2,465,135
|
|
|
2,465,135
|
|
|
|||
|
CMBS
|
664,368
|
|
|
666,237
|
|
|
666,237
|
|
|
|||
|
Non-Agency RMBS
|
57,316
|
|
|
56,921
|
|
|
56,921
|
|
|
|||
|
ABS
|
1,221,813
|
|
|
1,222,214
|
|
|
1,222,214
|
|
|
|||
|
Municipals
|
163,441
|
|
|
163,961
|
|
|
163,961
|
|
|
|||
|
Total fixed maturities
|
$
|
11,523,316
|
|
|
11,397,114
|
|
|
11,397,114
|
|
|
||
|
Mortgage loans, at amortized cost and fair value
|
|
|
349,969
|
|
|
349,969
|
|
|
||||
|
Short-term investments, at amortized cost and fair value
|
|
|
127,461
|
|
|
127,461
|
|
|
||||
|
Equity securities
|
|
|
638,744
|
|
|
638,744
|
|
|
||||
|
Other investments
(1)
|
|
|
534,784
|
|
|
830,219
|
|
|
||||
|
Equity method investments
(2)
|
|
|
—
|
|
|
116,000
|
|
|
||||
|
Total investments
|
|
|
$
|
13,048,072
|
|
|
$
|
13,459,507
|
|
|
||
|
|
|
|
|
|
|
|
(1)
|
Other investments excludes investments where AXIS is considered to have the ability to exercise significant influence over the operating and financial policies of the investees.
|
(2)
|
Equity method investments are excluded as AXIS has the ability to exercise significant influence over the operating and financial policies of the investees.
|
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Investments in subsidiaries on equity basis
|
$
|
6,033,564
|
|
|
$
|
5,943,182
|
|
Promissory note receivable from subsidiary
|
368,252
|
|
|
—
|
|
||
Cash and cash equivalents
|
99
|
|
|
8,098
|
|
||
Other assets
|
9,913
|
|
|
9,381
|
|
||
Total assets
|
$
|
6,411,828
|
|
|
$
|
5,960,661
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Intercompany payable
|
$
|
66,123
|
|
|
$
|
32,837
|
|
Dividends payable
|
58,791
|
|
|
52,237
|
|
||
Other liabilities
|
14,544
|
|
|
8,705
|
|
||
Total liabilities
|
139,458
|
|
|
93,779
|
|
||
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Preferred shares
|
1,126,074
|
|
|
627,843
|
|
||
Common shares
(2016: 176,580; 2015: 176,240 shares issued
and 2016: 86,441; 2015: 96,066 shares outstanding)
|
2,206
|
|
|
2,202
|
|
||
Additional paid-in capital
|
2,299,857
|
|
|
2,241,388
|
|
||
Accumulated other comprehensive loss
|
(121,841
|
)
|
|
(188,465
|
)
|
||
Retained earnings
|
6,527,627
|
|
|
6,194,353
|
|
||
Treasury shares, at cost
(2016: 90,139; 2015: 80,174 shares)
|
(3,561,553
|
)
|
|
(3,010,439
|
)
|
||
Total shareholders’ equity
|
6,272,370
|
|
|
5,866,882
|
|
||
Total liabilities and shareholders’ equity
|
$
|
6,411,828
|
|
|
$
|
5,960,661
|
|
(1)
|
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.
|
(2)
|
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.
|
(3)
|
AXIS Capital has fully and unconditionally guaranteed the obligations of AXIS Specialty Finance LLC, AXIS Specialty Holdings Bermuda Limited, AXIS Specialty Finance PLC, and operating subsidiaries i.e. the borrowing entities related to the
$250 million
credit facility issued by a syndication of lenders. At
December 31,
2016
and
2015
, debt outstanding under the credit facility was $
nil
.
|
(4)
|
AXIS Capital has fully and unconditionally guaranteed the derivative instrument obligations of certain of its
100%
owned operating subsidiaries. At
December 31, 2016
, the notional value of guaranteed obligations utilized aggregated to
$64 million
(
2015
: $
70 million
).
|
(5)
|
On November 7, 2016, AXIS Capital advanced an amount of
$368 million
to AXIS Specialty Limited, bearing interest at an annual rate of
1.132%
and a maturity date of April 15, 2017. Interest income on the promissory note is recorded in net investment income.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Net investment income
|
$
|
656
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Termination fee received
|
—
|
|
|
280,000
|
|
|
—
|
|
|||
Total revenues
|
656
|
|
|
280,001
|
|
|
3
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
General and administrative expenses
|
39,909
|
|
|
8,012
|
|
|
57,998
|
|
|||
Interest expense and financing costs
|
—
|
|
|
—
|
|
|
26,749
|
|
|||
Total expenses
|
39,909
|
|
|
8,012
|
|
|
84,747
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) before equity in net earnings of subsidiaries
|
(39,253
|
)
|
|
271,989
|
|
|
(84,744
|
)
|
|||
Equity in net earnings of subsidiaries
|
552,621
|
|
|
369,642
|
|
|
895,489
|
|
|||
Net income
|
513,368
|
|
|
641,631
|
|
|
810,745
|
|
|||
Preferred share dividends
|
46,597
|
|
|
40,069
|
|
|
40,088
|
|
|||
Loss on repurchase of preferred shares
|
1,309
|
|
|
—
|
|
|
—
|
|
|||
Net income available to common shareholders
|
$
|
465,462
|
|
|
$
|
601,562
|
|
|
$
|
770,657
|
|
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
579,992
|
|
|
$
|
498,740
|
|
|
$
|
641,165
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
513,368
|
|
|
$
|
641,631
|
|
|
$
|
810,745
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in net earnings of subsidiaries
|
(552,621
|
)
|
|
(369,642
|
)
|
|
(895,489
|
)
|
|||
Change in intercompany payable
|
33,286
|
|
|
(180,312
|
)
|
|
8,272
|
|
|||
Dividends received from subsidiaries
|
550,000
|
|
|
420,000
|
|
|
724,000
|
|
|||
Other items
|
17,807
|
|
|
(23,614
|
)
|
|
53,865
|
|
|||
Net cash provided by operating activities
|
561,840
|
|
|
488,063
|
|
|
701,393
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Promissory note receivable from subsidiary
|
(368,252
|
)
|
|
—
|
|
|
—
|
|
|||
Capital repaid from subsidiary
|
—
|
|
|
—
|
|
|
496,593
|
|
|||
Net cash provided by (used in) investing activities
|
(368,252
|
)
|
|
—
|
|
|
496,593
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net proceeds from issuance of preferred shares
|
531,945
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of common shares
|
(509,755
|
)
|
|
(332,252
|
)
|
|
(543,202
|
)
|
|||
Dividends paid - common shares
|
(132,323
|
)
|
|
(118,652
|
)
|
|
(117,619
|
)
|
|||
Repurchase of preferred shares
|
(51,769
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid - preferred shares
|
(39,909
|
)
|
|
(40,088
|
)
|
|
(40,088
|
)
|
|||
Proceeds from issuance of common shares
|
224
|
|
|
3,986
|
|
|
5,550
|
|
|||
Redemption of senior notes
|
—
|
|
|
—
|
|
|
(500,000
|
)
|
|||
Net cash used in financing activities
|
(201,587
|
)
|
|
(487,006
|
)
|
|
(1,195,359
|
)
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash and cash equivalents
|
(7,999
|
)
|
|
1,057
|
|
|
2,627
|
|
|||
Cash and cash equivalents - beginning of year
|
8,098
|
|
|
7,041
|
|
|
4,414
|
|
|||
Cash and cash equivalents - end of year
|
$
|
99
|
|
|
$
|
8,098
|
|
|
$
|
7,041
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2016
|
||||||||||||||||||||||||||||||||||
(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
|
|
$
|
128,880
|
|
|
$
|
5,345,655
|
|
|
$
|
1,574,164
|
|
|
$
|
1,777,321
|
|
|
$
|
—
|
|
|
$
|
1,141,933
|
|
|
$
|
251,120
|
|
|
$
|
346,857
|
|
|
$
|
1,807,125
|
|
Reinsurance
|
|
309,756
|
|
|
4,352,172
|
|
|
1,395,334
|
|
|
1,928,304
|
|
|
—
|
|
|
1,062,264
|
|
|
495,756
|
|
|
135,844
|
|
|
1,945,849
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353,335
|
|
|
—
|
|
|
—
|
|
|
120,016
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
438,636
|
|
|
$
|
9,697,827
|
|
|
$
|
2,969,498
|
|
|
$
|
3,705,625
|
|
|
$
|
353,335
|
|
|
$
|
2,204,197
|
|
|
$
|
746,876
|
|
|
$
|
602,717
|
|
|
$
|
3,752,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2015
|
||||||||||||||||||||||||||||||||||
(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
|
|
$
|
119,186
|
|
|
$
|
5,291,218
|
|
|
$
|
1,494,068
|
|
|
$
|
1,798,191
|
|
|
$
|
—
|
|
|
$
|
1,154,928
|
|
|
$
|
261,208
|
|
|
$
|
341,658
|
|
|
$
|
1,759,359
|
|
Reinsurance
|
|
352,596
|
|
|
4,355,067
|
|
|
1,266,821
|
|
|
1,888,226
|
|
|
—
|
|
|
1,021,271
|
|
|
456,904
|
|
|
145,253
|
|
|
1,915,307
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
305,336
|
|
|
—
|
|
|
—
|
|
|
109,910
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
471,782
|
|
|
$
|
9,646,285
|
|
|
$
|
2,760,889
|
|
|
$
|
3,686,417
|
|
|
$
|
305,336
|
|
|
$
|
2,176,199
|
|
|
$
|
718,112
|
|
|
$
|
596,821
|
|
|
$
|
3,674,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
1,975,497
|
|
|
$
|
1,215,775
|
|
|
$
|
2,564,606
|
|
|
$
|
3,324,328
|
|
|
77.1
|
%
|
|
|
Accident and Health
|
|
136,681
|
|
|
1,459
|
|
|
293,424
|
|
|
428,646
|
|
|
68.5
|
%
|
|
||||
|
Total
|
|
$
|
2,112,178
|
|
|
$
|
1,217,234
|
|
|
$
|
2,858,030
|
|
|
$
|
3,752,974
|
|
|
76.2
|
%
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
1,901,757
|
|
|
$
|
910,917
|
|
|
$
|
2,350,680
|
|
|
$
|
3,341,520
|
|
|
70.3
|
%
|
|
|
Accident and Health
|
|
129,808
|
|
|
18,147
|
|
|
221,485
|
|
|
333,146
|
|
|
66.5
|
%
|
|
||||
|
Total
|
|
$
|
2,031,565
|
|
|
$
|
929,064
|
|
|
$
|
2,572,165
|
|
|
$
|
3,674,666
|
|
|
70.0
|
%
|
|
|
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
|
%
|
|
1.
|
Section 3 of the Agreement (Consulting Fee) is hereby amended to insert the following after “April 2017.”:
|
2.
|
Section 4 of the Agreement (Consulting Term) is hereby amended by deleting the reference to “2017” with “2018”.
|
3.
|
Section 8 of the Agreement (Noncompetition and Nonsolicitation) is hereby amended by deleting the reference to “May 31, 2018” in the last line thereof and replacing such reference with “May 31, 2019”.
|
4.
|
Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.
|
By:
|
/s/ Joseph C. Henry
|
Name:
|
Joseph C. Henry
|
Title:
|
Executive Vice President and
|
|
Chief Financial Officer
|
1.
|
The opening paragraph of the letter agreement is amended to replace reference to “AXIS Specialty U.S. Service, Inc., a Delaware Corporation” with “AXIS Specialty Limited, a Bermuda company”.
|
2.
|
Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.
|
DBVPS Percentile
|
Performance Multiplier
|
100%
|
200%
|
90% - 99.99%
|
175%
|
80% - 89.99%
|
150%
|
70% - 79.99%
|
125%
|
60% - 69.99%
|
100%
|
50% - 59.99%
|
80%
|
40% - 49.99%
|
60%
|
30% - 39.99%
|
40%
|
20% - 29.99%
|
20%
|
Less than 20%
|
10%
|
1.
|
Eligibility
. Any Executive Committee Member who is employed by the Company or one of its subsidiaries shall be entitled to an annual allocation from the bonus pool (as defined in Section 2) and shall be a “Participant” in the Plan from and after January 1, 2014.
|
2.
|
Target Incentive Allocation.
Each Participant’s annual “Target Allocation” shall be based on the Participant’s base salary multiplied by their annual incentive target percentage, as set forth in their respective employment agreement, offer letter or other written document. This Target Allocation will then be adjusted as described in Section 3 below.
|
3.
|
Adjustment to Target Incentive Allocation
. The “Adjustment to Target Incentive Allocation,” represents an adjustment to the Target Incentive Allocation in order to determine the final payment and is based on (i) the Company’s satisfaction of a performance target linked to the Company’s annual operating return on average common equity, as established each year by the Compensation Committee of the Company’s Board of Directors (the “Committee”), (ii) the achievement by the Participant of individualized, non-financial performance metrics as determined annually by the Chief Executive Officer or Compensation Committee (in the case of the Chief Executive Officer), and (iii) for Business Unit leaders, the Business Unit’s performance as compared to the Business Unit's financial plan. In determining the Adjustment to Target Incentive Allocation, the metrics as described above are weighted based on the Participant’s role as a CEO, Business Unit leader or corporate function leader as determined by the Compensation Committee from time to time.
|
4.
|
Payment
. Each Participant’s final payment shall be paid in the calendar year following the applicable fiscal performance year of the Company, after the amount has been determined by the Committee. If a Participant’s employment with the Company and its subsidiaries terminates prior to the payment date for any reason, such Participant’s eligibility under the Plan shall cease and the final payment shall be forfeited as of the termination date and the Participant shall have no further rights to payments under the Plan, except to the extent of any contractual obligation to the Participant made by the Company or any of its subsidiaries.
|
5.
|
Clawback.
Any incentive compensation award hereunder is subject to recoupment, at the Committee’s discretion, under the Company’s executive compensation recoupment, or “clawback,” policy.
|
6.
|
Interpretation of Plan
. The Committee shall have the authority to administer the Plan, to conclusively make all determinations under the Plan and to interpret the Plan. Any such determinations or interpretations made by the Committee shall be binding on all persons.
|
7.
|
Governing Law
. The Plan shall be governed by the laws of Bermuda.
|
8.
|
No Guarantee of Continued Employment
. Nothing in the Plan shall interfere with, or limit in any way, the right of the Company or any of its subsidiaries to terminate any employee’s employment at any time, nor shall it confer upon any Participant any right to continue in the employ of the Company or any of its subsidiaries. For purposes of the Plan, temporary absence from employment because of illness, vacation, approved leaves of absence and transfers of employment among the Company and its subsidiaries shall not be considered to terminate an employee’s employment.
|
9.
|
Successors
. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger, consolidation, purchase of all or substantially all of the business and/or assets of the Company or otherwise.
|
10.
|
Amendment and Termination
. This Plan may be amended or terminated at any time by the Committee.
|
1.
|
Eligibility
. Except as otherwise provided in the Plan, any employee of the Company or its employer affiliates (other than those employees explicitly excluded from the Plan pursuant to Section 18 hereof) who is Retirement Eligible and who has an outstanding grant(s) of restricted stock units under the AXIS Capital Holdings Limited (“AXIS”) 2007 Long-Term Equity Compensation Plan and any successor equity compensation plan (the “Stock Plan”) as of the employee’s date of termination and who satisfies the requirements of this Plan shall be a participant in the Plan (a “Participant”).
|
•
|
An employee is “Retirement Eligible” if the employee is age 60 or older as of his or her date of termination;
and
|
•
|
has at least ten Years of Service as of his or her date of termination.
|
◦
|
“Years of Service” means completed years of service with the Company or an employer affiliate of the Company.
|
2.
|
Termination and Advance Notice Requirement.
In order to earn and be paid the benefits provided under this Plan, a Participant must not have been terminated for Cause (as defined in the Employee Restricted Stock Unit Agreement pursuant to which the outstanding restricted stock units were granted (the “RSU Agreement”)) and must be in good standing as of his or her date of termination (as determined by the Compensation Committee of the Board of AXIS (the “Committee”) in its sole discretion) and provide not less than ninety (90) days advance notice of his or her termination if he or she voluntarily terminates employment, provided, however, that management retains discretion to require a period of notice up to one year as particular employment circumstances may dictate.
|
3.
|
Restrictive Covenant Agreement
. In order to earn and be paid the benefits provided under this Plan, to the extent permitted by law, a Participant must execute a Confidentiality, Non-Solicitation and Non-Competition and Release Agreement in a form acceptable to the Company (a “Covenant Agreement”) at the time required by the Company. The Company reserves the right to require a Participant to attest to continued compliance with the Covenant Agreement from time to time. Failure to do so will be deemed to be a breach of the Covenant Agreement.
|
4.
|
Plan Benefit
.
|
a.
|
Pre-2016 Grants
.
|
i.
|
Subject to the terms and conditions of the Plan, a Participant shall vest, as of the date of his or her termination of employment, in any restricted stock units granted pursuant to RSU Agreements
dated prior to January 1, 2016
that are outstanding and unvested as of the date of his or her termination, subject to Section 4(a)(ii) below.
|
b.
|
2016 and Later Grants
.
|
i.
|
A Participant shall, except as provided below in Section 4(b)(ii), continue to vest in any restricted stock units granted pursuant to RSU Agreements
dated on or after January 1, 2016
that remain outstanding and unvested as of the date of his or her termination as though the Participant had not terminated employment with the Company (e.g., on the first, second, third and fourth anniversaries of the award date for time-based restricted stock units; on the third anniversary of the award date for performance-based restricted stock units; or as otherwise provided in the applicable RSU Agreement); provided that such vesting shall terminate if the Participant breaches any of the terms of the Covenant Agreement, in the determination of the Committee or its designee, to the extent permitted by law and all unvested restricted stock units shall terminate and be forfeited as of the date of the breach.
|
ii.
|
Notwithstanding Section 4(b)(i), (1) with respect to any restricted stock units subject to time-based vesting granted in the twelve month period immediately prior to the Participant’s termination (the “Last Grant”), only the restricted stock units scheduled to vest on the first anniversary of such Last Grant, if any, shall be eligible to vest and the remaining restricted stock units shall be forfeited as of the Participant’s termination and (2) with respect to any restricted stock units subject to performance-based vesting granted in the Last Grant, only 25% of the restricted stock units scheduled to vest on the regularly scheduled vesting date shall be eligible to vest, subject to performance goals being achieved, and 75% of such restricted stock units shall be forfeited as of the Participant’s termination.
|
iii.
|
In the case of any restricted stock units subject to performance vesting, where the restricted stock units vest on the regularly scheduled vesting date as though the Participant had not terminated employment, the number of restricted stock units that vest shall be determined by applying the same Performance Multiplier (as defined in the applicable RSU Agreement) that would apply had the Participant not terminated employment.
|
c.
|
Notwithstanding the foregoing, the Committee shall have the sole authority to determine that no benefit shall be provided under this Plan in connection with certain outstanding restricted stock unit grants made to Participants; provided that in all events, benefits shall be provided under this Plan in connection with restricted stock units granted to Participants that are subject to time-based four year graded vesting and performance-based three year cliff vesting that were granted using the AXIS standard form of award agreement.
|
5.
|
Payment
. Payment of the cash and Shares (as defined in the RSU Agreement) payable with respect to outstanding restricted stock units which vest pursuant to Sections 4(a) and 4(b) hereof on or after a Participant’s termination of employment, shall be made as follows:
|
a.
|
With respect to restricted stock units which vest pursuant to Section 4(a) hereof, subject to Section 12 hereof, payment shall be made within thirty (30) days following the Participant’s date of termination in the same form delivery would have been made under the RSU Agreement if the Participant had remained employed through the applicable vesting date.
|
b.
|
With respect to restricted stock units which vest pursuant to Section 4(b) hereof, subject to Section 12 hereof, payment shall be made at the same time and in the same form delivery would have been made under the RSU Agreement if the Participant had remained employed through the applicable vesting date (e.g., the first, second, third and fourth anniversaries of the award date for time-based restricted stock units; the third anniversary of the award date for performance-based restricted stock units; or as otherwise provided in the applicable RSU Agreement).
|
c.
|
Notwithstanding the foregoing, in the event that a Participant dies or becomes Disabled (as defined in the applicable RSU Agreement) prior to delivery of the amounts described in Section 5(a), (b) or 6(c), payment shall be made to the Participant or his or her beneficiary in a lump sum upon the earlier of the date provided in Section 5(a), (b) or 6(c), as applicable, or within sixty (60) days following the Participant’s death or Disability, as applicable. In the case of any restricted stock units subject to performance vesting, the determination of the number of restricted stock units with respect to which payment will be made pursuant to this Section 5(c) shall be determined assuming that the Performance Multiplier is 100% unless the last day of the applicable Performance Period occurred prior to the Participant’s termination of employment.
|
6.
|
Special Vesting and Payment Rule for Terminations that Occur Within Twenty Four Months of a Change in Control with Respect to RSU Agreements dated on or after January 1, 2016
.
|
a.
|
Notwithstanding any provision of Section 4 to the contrary, if the Participant’s termination occurs within twenty four months following a Change in Control (as defined in the RSU Agreement), a Participant shall vest in any outstanding and unvested restricted stock units granted pursuant to RSU Agreements dated on or after January 1, 2016 as of his or her termination, reduced as required pursuant to Section 4(b)(ii).
|
b.
|
Where performance-based restricted stock units vest on the date of a Participant’s termination of employment within twenty four months following a Change in Control, the number of restricted stock units that vest shall be determined by applying a Performance Multiplier of 100%, unless the last day of the applicable Performance Period occurred prior to the Participant’s termination of employment.
|
c.
|
Notwithstanding any provision of Section 5 to the contrary, if vesting occurs in connection with a termination that is within twenty four months following a Change in Control, payment shall be made at the same time and same form as delivery
|
7.
|
Termination Prior to Retirement Eligibility
. If an employee’s employment with the Company and its employer affiliates terminates prior to the date that the employee becomes Retirement Eligible for any reason, such employee shall have no right to participate in or receive benefits under the Plan.
|
8.
|
RSU Agreement
. The applicable RSU Agreement shall govern the outstanding restricted stock units to the extent the RSU Agreement is not inconsistent with the Plan.
|
9.
|
Beneficiary
. To the extent not inconsistent with the Stock Plan, in the event of a Participant’s death, payment of the Participant’s Plan benefit, if any, shall be made to a beneficiary (or beneficiaries) designated by the Participant in the form and manner prescribed by the Committee. If a Participant does not have a properly designated beneficiary, payment shall be made to the Participant’s estate.
|
10.
|
Clawback.
Any Plan benefit hereunder is subject to recoupment, at the Committee’s discretion, under the AXIS executive compensation recoupment, or “clawback,” policy.
|
11.
|
Administration and Interpretation of Plan
. The Committee, in consultation with AXIS management, shall have the authority to administer the Plan, to conclusively make all determinations under the Plan and to interpret the Plan. Any such determinations or interpretations made by the Committee shall be binding on all persons.
|
12.
|
Section 409A
.
|
a.
|
Although the Company does not guarantee the tax treatment of any payments under the Plan, the intent of the Company is that the payments and benefits under this Plan comply with Section 409A of the Internal Revenue Code of 1986, as amended, and all Treasury Regulations and guidance promulgated thereunder (“Code Section 409A”) and to the maximum extent permitted the Plan shall be limited, construed and interpreted in accordance with such intent. In no event whatsoever shall the Committee, the Company or its affiliates or their respective officers, directors, employees or agents be liable for any additional tax, interest or penalties that may be imposed on a Participant by Code Section 409A or damages for failing to comply with Code Section 409A.
|
b.
|
Notwithstanding any other provision of this Plan to the contrary, if at the time of a Participant’s separation from service (as defined in Code Section 409A), the Participant is a “Specified Employee”, then the Company will defer the payment or commencement of any nonqualified deferred compensation subject to Code Section 409A payable upon separation from service (without any reduction in such payments or benefits ultimately paid or provided to the Participant) until the date that is six (6) months following separation from service or, if earlier, the earliest other date as is permitted under Code Section 409A (and any amounts that otherwise would have been paid during this deferral period will be paid in a lump
|
c.
|
Notwithstanding anything in this Plan or elsewhere to the contrary, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits that constitute “non-qualified deferred compensation” within the meaning of Code Section 409A upon or following a termination of the Participant’s employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” and the date of such separation from service shall be the date of termination for purposes of any such payment or benefits.
|
13.
|
Governing Law
. The Plan shall be governed by the laws of New York without regard to its conflicts of law provisions.
|
14.
|
Effective Date
. The Plan shall be effective January 1, 2017 and shall continue until terminated by the Company.
|
15.
|
No Guarantee of Continued Employment
. Nothing in the Plan shall interfere with, or limit in any way, the right of the Company or any of its affiliates to terminate any Participant’s employment at any time, nor shall it confer upon any Participant any right to continue in the employ of the Company or any of its affiliates. For purposes of the Plan, temporary absence from employment because of illness, vacation, approved leaves of absence and transfers of employment among the Company and its affiliates shall not be considered to terminate a Participant’s employment unless such treatment would cause a violation of Code Section 409A.
|
16.
|
Successors
. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger, consolidation, purchase of all or substantially all of the business and/or assets of the Company or otherwise.
|
17.
|
No Claim Against Assets
. Nothing in this Plan shall be construed as giving any Participant or his or her legal representative, or designated beneficiary, any claim against any specific assets of the Company or as imposing any trustee relationship upon the Company in respect of the Participant. The Company shall not be required to segregate any assets in order to provide for the satisfaction of the obligations hereunder. If and to the extent that the Participant or his or her legal representative or designated beneficiary acquires a right to receive any payment pursuant to this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company.
|
18.
|
Employees of AXIS Capital Holdings Limited
. Unless determined otherwise by the Committee, in no event shall any employee (i) who is a United States resident or citizen whose compensation is allocated to AXIS and/or (ii) whose benefit under the Plan would be subject to Section 457A of the Internal Revenue Code, be a Participant in the Plan. Also, absent
|
19.
|
ERISA
. This Plan is intended to be a bonus program exempt from the Employee Retirement Income Security Act of 1974, as amended, pursuant to DOL Regulation Section 2510.3-2(c).
|
20.
|
Amendment and Termination
. This Plan may be amended or terminated at any time by the Company without the consent of any employee or Participant to the extent permitted by law.
|
DBVPS Percentile
|
Performance Multiplier
|
100%
|
200%
|
90% - 99.99%
|
175%
|
80% - 89.99%
|
150%
|
70% - 79.99%
|
125%
|
60% - 69.99%
|
100%
|
50% - 59.99%
|
80%
|
40% - 49.99%
|
60%
|
30% - 39.99%
|
40%
|
20% - 29.99%
|
20%
|
Less than 20%
|
10%
|
1)
|
Annual retainer of $200,000 for all non-employee directors serving on the Board as of January 1, 2017. Members of the Board who become Participants after January 1 of any year shall be entitled to a pro-rated amount based on months of service in that year, with eligibility for the full annual retainer commencing as of January 1 of the subsequent year.
|
2)
|
Committee members receive the following annual retainer payment:
|
Committee Member
|
|
Annual Retainer
|
|
Corporate Governance and Nominating Committee
|
|
$
|
7,500
|
Finance Committee
|
|
$
|
10,000
|
Compensation Committee
|
|
$
|
10,000
|
Risk Committee
|
|
$
|
10,000
|
Audit Committee
|
|
$
|
15,000
|
3)
|
Committee Chairs receive the following additional annual retainer payment:
|
Committee Chair
|
|
Annual Retainer
|
|
|
Corporate Governance and Nominating Committee
|
|
$
|
7,500
|
|
Finance Committee
|
|
$
|
10,000
|
|
Compensation Committee
|
|
$
|
15,000
|
|
Risk Committee
|
|
$
|
20,000
|
|
Audit Committee
|
|
$
|
30,000
|
|
4)
|
The Lead Independent Director receives an additional annual retainer payment of $15,000.
|
5)
|
In addition to the compensation described above that is payable to non-employee directors, a non-employee Chairman of the Board shall receive an additional annual retainer of $150,000, pro-rated based on months of service as Chairman of the Board in the applicable year.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year ended December 31,
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Earnings: income before income taxes
|
$
|
521,802
|
|
|
$
|
644,659
|
|
|
$
|
830,472
|
|
|
$
|
734,467
|
|
|
$
|
550,528
|
|
|
|
Add: fixed charges
|
57,641
|
|
|
58,702
|
|
|
80,809
|
|
|
67,944
|
|
|
67,898
|
|
|
|||||
|
Add: amounts attributable from noncontrolling interests
|
—
|
|
|
—
|
|
|
6,181
|
|
|
—
|
|
|
—
|
|
|
|||||
|
Earnings for computation
|
$
|
579,443
|
|
|
$
|
703,361
|
|
|
$
|
917,462
|
|
|
$
|
802,411
|
|
|
$
|
618,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Assumed interest component of rent expense
(1)
|
$
|
7,673
|
|
|
$
|
8,793
|
|
|
$
|
8,327
|
|
|
$
|
8,866
|
|
|
$
|
8,849
|
|
|
|
Interest expense
|
49,968
|
|
|
49,909
|
|
|
72,482
|
|
|
59,078
|
|
|
59,049
|
|
|
|||||
|
Total fixed charges
|
$
|
57,641
|
|
|
$
|
58,702
|
|
|
$
|
80,809
|
|
|
$
|
67,944
|
|
|
$
|
67,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Ratio of earnings to fixed charges
|
10.1
|
|
|
12.0
|
|
|
11.4
|
|
|
11.8
|
|
|
9.1
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Preferred share dividends
(2)
|
$
|
46,597
|
|
|
$
|
40,069
|
|
|
$
|
40,088
|
|
|
$
|
40,474
|
|
|
$
|
38,228
|
|
|
|
Total fixed charges and preferred share dividends
|
$
|
104,238
|
|
|
$
|
98,771
|
|
|
$
|
120,897
|
|
|
$
|
108,414
|
|
|
$
|
106,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Ratio of earnings to fixed charges and preferred
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
share dividends
|
5.6
|
|
|
7.1
|
|
|
7.6
|
|
|
7.4
|
|
|
5.8
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
(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 Specialty Holdings Bermuda Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Limited
|
Bermuda
|
|
|
|
|
AXIS Bermuda Services Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Markets Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Markets II Limited
|
Bermuda
|
|
|
|
|
AXIS Ventures Limited
|
Bermuda
|
|
|
|
|
AXIS Ventures Reinsurance Limited
|
Bermuda
|
|
|
|
|
AXIS Reinsurance Managers Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Investments II Limited
|
Bermuda
|
|
|
|
|
AXIS Re SE
|
Ireland
|
|
|
|
|
AXIS Specialty Europe SE
|
Ireland
|
|
|
|
|
AXIS Specialty Global Holdings Limited
|
Ireland
|
|
|
|
|
AXIS Specialty Holdings Ireland Limited
|
Ireland
|
|
|
|
|
Ternian Insurance Group LLC
|
Arizona
|
|
|
|
|
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 Specialty Underwriters, 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 24, 2017
|
1.
|
I have reviewed this Annual Report on Form 10-K of AXIS Capital Holdings Limited for the period ended
December 31, 2016
;
|
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 24, 2017
|
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, 2016
;
|
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 24, 2017
|
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 24, 2017
|
/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 24, 2017
|
/s/ JOSEPH HENRY
|
|
|
Joseph Henry
|
|
|
Executive Vice President and Chief Financial Officer
|