Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common shares, par value $0.0125 per share
|
AXS
|
New York Stock Exchange
|
5.50% Series D preferred shares
|
AXS PRD
|
New York Stock Exchange
|
Depositary Shares, each representing a 1/100th interest in a 5.50% Series E preferred share
|
AXS PRE
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
|
|
Page
|
|
PART I
|
|
|
||
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
PART II
|
|
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 5.
|
||
Item 6.
|
||
|
PART I
|
FINANCIAL INFORMATION
|
•
|
the cyclical nature of the insurance and reinsurance business leading to periods with excess underwriting capacity and unfavorable premium rates;
|
•
|
the occurrence and magnitude of natural and man-made disasters;
|
•
|
the impact of global climate change on our business, including the possibility that we do not adequately assess or reserve for the increased frequency and severity of natural catastrophes;
|
•
|
losses from war, terrorism and political unrest or other unanticipated losses;
|
•
|
actual claims exceeding our loss reserves;
|
•
|
general economic, capital and credit market conditions;
|
•
|
the failure of any of the loss limitation methods we employ;
|
•
|
the effects of emerging claims, coverage and regulatory issues, including uncertainty related to coverage definitions, limits, terms and conditions;
|
•
|
our inability to purchase reinsurance or collect amounts due to us;
|
•
|
the breach by third parties in our program business of their obligations to us;
|
•
|
difficulties with technology and/or data security;
|
•
|
the failure of our policyholders and intermediaries to pay premiums;
|
•
|
the failure of our cedants to adequately evaluate risks;
|
•
|
inability to obtain additional capital on favorable terms, or at all;
|
•
|
the loss of one or more key executives;
|
•
|
a decline in our ratings with rating agencies;
|
•
|
loss of business provided to us by our major brokers and credit risk due to our reliance on brokers;
|
•
|
changes in accounting policies or practices;
|
•
|
the use of industry catastrophe models and changes to these models;
|
•
|
changes in governmental regulations and potential government intervention in our industry;
|
•
|
failure to comply with certain laws and regulations relating to sanctions and foreign corrupt practices;
|
•
|
increased competition;
|
•
|
changes in the political environment of certain countries in which we operate or underwrite business including the United Kingdom's expected withdrawal from the European Union;
|
•
|
fluctuations in interest rates, credit spreads, equity securities' prices and/or currency values;
|
•
|
the failure to successfully integrate acquired businesses or realize the expected synergies resulting from such acquisitions;
|
•
|
the failure to realize the expected benefits or synergies relating to our transformation initiative;
|
•
|
changes in tax laws; and
|
•
|
the other factors including but not limited to those described under Item 1A, 'Risk Factors' and Item 7, 'Management’s Discussion and Analysis of Financial Condition and Results of Operations' included in our most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC"), as those factors may be updated from time to time in our periodic and other filings with the SEC, which are accessible on the SEC's website at www.sec.gov.
|
|
Page
|
|
|
Consolidated Balance Sheets at June 30, 2019 (Unaudited) and December 31, 2018
|
|
Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018 (Unaudited)
|
|
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018 (Unaudited)
|
|
Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2019 and 2018 (Unaudited)
|
|
Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018 (Unaudited)
|
|
Notes to Consolidated Financial Statements (Unaudited)
|
|
Note 1 - Basis of Presentation and Significant Accounting Policies
|
|
Note 2 - Segment Information
|
|
Note 3 - Investments
|
|
Note 4 - Fair Value Measurements
|
|
Note 5 - Derivative Instruments
|
|
Note 6 - Reserve for Losses and Loss Expenses
|
|
Note 7 - Earnings Per Common Share
|
|
Note 8 - Share-Based Compensation
|
|
Note 9 - Shareholders' Equity
|
|
Note 10 - Debt and Financing Arrangements
|
|
Note 11 - Commitments and Contingencies
|
|
Note 12 - Leases
|
|
Note 13 - Transaction and Reorganization Expenses
|
|
Note 14 - Other Comprehensive Income (Loss)
|
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturities, available for sale, at fair value
(Amortized cost 2019: $12,343,774; 2018: $11,616,312) |
$
|
12,522,955
|
|
|
$
|
11,435,347
|
|
Equity securities, at fair value
(Cost 2019: $377,895; 2018: $365,905) |
433,407
|
|
|
381,633
|
|
||
Mortgage loans, held for investment, at fair value
|
394,179
|
|
|
298,650
|
|
||
Other investments, at fair value
|
802,064
|
|
|
787,787
|
|
||
Equity method investments
|
112,956
|
|
|
108,103
|
|
||
Short-term investments, at fair value
|
32,421
|
|
|
144,040
|
|
||
Total investments
|
14,297,982
|
|
|
13,155,560
|
|
||
Cash and cash equivalents
|
712,463
|
|
|
1,232,814
|
|
||
Restricted cash and cash equivalents
|
382,251
|
|
|
597,206
|
|
||
Accrued interest receivable
|
82,567
|
|
|
80,335
|
|
||
Insurance and reinsurance premium balances receivable
|
3,732,529
|
|
|
3,007,296
|
|
||
Reinsurance recoverable on unpaid losses and loss expenses
|
3,564,812
|
|
|
3,501,669
|
|
||
Reinsurance recoverable on paid losses and loss expenses
|
364,536
|
|
|
280,233
|
|
||
Deferred acquisition costs
|
657,275
|
|
|
566,622
|
|
||
Prepaid reinsurance premiums
|
1,291,979
|
|
|
1,013,573
|
|
||
Receivable for investments sold
|
25,850
|
|
|
32,627
|
|
||
Goodwill
|
102,003
|
|
|
102,003
|
|
||
Intangible assets
|
236,009
|
|
|
241,568
|
|
||
Value of business acquired
|
15,416
|
|
|
35,714
|
|
||
Operating lease right-of-use assets
|
132,940
|
|
|
—
|
|
||
Other assets
|
271,562
|
|
|
285,346
|
|
||
Total assets
|
$
|
25,870,174
|
|
|
$
|
24,132,566
|
|
Liabilities
|
|
|
|
||||
Reserve for losses and loss expenses
|
$
|
12,254,711
|
|
|
$
|
12,280,769
|
|
Unearned premiums
|
4,503,132
|
|
|
3,635,758
|
|
||
Insurance and reinsurance balances payable
|
1,484,285
|
|
|
1,338,991
|
|
||
Senior notes
|
1,387,748
|
|
|
1,341,961
|
|
||
Payable for investments purchased
|
181,274
|
|
|
111,838
|
|
||
Operating lease liabilities
|
133,257
|
|
|
—
|
|
||
Other liabilities
|
359,290
|
|
|
393,178
|
|
||
Total liabilities
|
20,303,697
|
|
|
19,102,495
|
|
||
Shareholders’ equity
|
|
|
|
||||
Preferred shares
|
775,000
|
|
|
775,000
|
|
||
Common shares (shares issued 2019: 176,580; 2018: 176,580
shares outstanding 2019: 83,947; 2018: 83,586) |
2,206
|
|
|
2,206
|
|
||
Additional paid-in capital
|
2,303,592
|
|
|
2,308,583
|
|
||
Accumulated other comprehensive income (loss)
|
156,145
|
|
|
(177,110
|
)
|
||
Retained earnings
|
6,108,577
|
|
|
5,912,812
|
|
||
Treasury shares, at cost (2019: 92,633; 2018: 92,994 shares)
|
(3,779,043
|
)
|
|
(3,791,420
|
)
|
||
Total shareholders’ equity
|
5,566,477
|
|
|
5,030,071
|
|
||
Total liabilities and shareholders’ equity
|
$
|
25,870,174
|
|
|
$
|
24,132,566
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, except for per share amounts)
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
$
|
1,123,607
|
|
|
$
|
1,185,548
|
|
|
$
|
2,257,819
|
|
|
$
|
2,352,950
|
|
Net investment income
|
137,949
|
|
|
109,960
|
|
|
245,254
|
|
|
210,961
|
|
||||
Other insurance related income
|
2,925
|
|
|
3,730
|
|
|
9,852
|
|
|
10,335
|
|
||||
Net investment gains (losses):
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairment ("OTTI") losses
|
(834
|
)
|
|
(1,674
|
)
|
|
(4,870
|
)
|
|
(2,088
|
)
|
||||
Other realized and unrealized investment gains (losses)
|
22,059
|
|
|
(43,419
|
)
|
|
38,866
|
|
|
(57,835
|
)
|
||||
Total net investment gains (losses)
|
21,225
|
|
|
(45,093
|
)
|
|
33,996
|
|
|
(59,923
|
)
|
||||
Total revenues
|
1,285,706
|
|
|
1,254,145
|
|
|
2,546,921
|
|
|
2,514,323
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Net losses and loss expenses
|
672,463
|
|
|
706,641
|
|
|
1,336,491
|
|
|
1,367,986
|
|
||||
Acquisition costs
|
242,363
|
|
|
231,952
|
|
|
502,781
|
|
|
461,212
|
|
||||
General and administrative expenses
|
165,395
|
|
|
165,213
|
|
|
340,486
|
|
|
335,049
|
|
||||
Foreign exchange gains
|
(12,381
|
)
|
|
(44,099
|
)
|
|
(5,325
|
)
|
|
(6,239
|
)
|
||||
Interest expense and financing costs
|
15,607
|
|
|
17,098
|
|
|
31,502
|
|
|
33,861
|
|
||||
Transaction and reorganization expenses
|
3,276
|
|
|
18,772
|
|
|
18,096
|
|
|
31,825
|
|
||||
Amortization of value of business acquired
|
7,194
|
|
|
53,407
|
|
|
20,298
|
|
|
110,517
|
|
||||
Amortization of intangible assets
|
2,912
|
|
|
4,029
|
|
|
5,914
|
|
|
6,811
|
|
||||
Total expenses
|
1,096,829
|
|
|
1,153,013
|
|
|
2,250,243
|
|
|
2,341,022
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes and interest in income of equity method investments
|
188,877
|
|
|
101,132
|
|
|
296,678
|
|
|
173,301
|
|
||||
Income tax (expense) benefit
|
(14,469
|
)
|
|
(996
|
)
|
|
(15,703
|
)
|
|
40
|
|
||||
Interest in income of equity method investments
|
2,635
|
|
|
3,378
|
|
|
4,853
|
|
|
3,378
|
|
||||
Net income
|
177,043
|
|
|
103,514
|
|
|
285,828
|
|
|
176,719
|
|
||||
Preferred share dividends
|
10,656
|
|
|
10,656
|
|
|
21,313
|
|
|
21,313
|
|
||||
Net income available to common shareholders
|
$
|
166,387
|
|
|
$
|
92,858
|
|
|
$
|
264,515
|
|
|
$
|
155,406
|
|
|
|
|
|
|
|
|
|
||||||||
Per share data
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
|
$
|
1.98
|
|
|
$
|
1.11
|
|
|
$
|
3.16
|
|
|
$
|
1.86
|
|
Earnings per diluted common share
|
$
|
1.97
|
|
|
$
|
1.11
|
|
|
$
|
3.14
|
|
|
$
|
1.85
|
|
Weighted average common shares outstanding
|
83,941
|
|
|
83,539
|
|
|
83,834
|
|
|
83,431
|
|
||||
Weighted average diluted common shares outstanding
|
84,401
|
|
|
83,984
|
|
|
84,338
|
|
|
83,853
|
|
||||
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Net income
|
$
|
177,043
|
|
|
$
|
103,514
|
|
|
$
|
285,828
|
|
|
$
|
176,719
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Available for sale investments:
|
|
|
|
|
|
|
|
||||||||
Unrealized investment gains (losses) arising during the period
|
131,442
|
|
|
(105,280
|
)
|
|
321,651
|
|
|
(217,434
|
)
|
||||
Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income
|
(6,949
|
)
|
|
36,456
|
|
|
6,385
|
|
|
37,240
|
|
||||
Unrealized investment gains (losses) arising during the period, net of reclassification adjustment
|
124,493
|
|
|
(68,824
|
)
|
|
328,036
|
|
|
(180,194
|
)
|
||||
Foreign currency translation adjustment
|
2,556
|
|
|
(9,129
|
)
|
|
5,219
|
|
|
(7,858
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
127,049
|
|
|
(77,953
|
)
|
|
333,255
|
|
|
(188,052
|
)
|
||||
Comprehensive income (loss)
|
$
|
304,092
|
|
|
$
|
25,561
|
|
|
$
|
619,083
|
|
|
$
|
(11,333
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Preferred shares
|
|
|
|
|
|
|
|
||||||||
Balance at beginning and end of period
|
775,000
|
|
|
775,000
|
|
|
$
|
775,000
|
|
|
$
|
775,000
|
|
||
|
|
|
|
|
|
|
|
||||||||
Common shares (par value)
|
|
|
|
|
|
|
|
||||||||
Balance at beginning and end of period
|
2,206
|
|
|
2,206
|
|
|
2,206
|
|
|
2,206
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Additional paid-in capital
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
2,296,639
|
|
|
2,289,497
|
|
|
2,308,583
|
|
|
2,299,166
|
|
||||
Treasury shares reissued
|
(756
|
)
|
|
(2,607
|
)
|
|
(20,058
|
)
|
|
(21,879
|
)
|
||||
Share-based compensation expense
|
7,709
|
|
|
8,743
|
|
|
15,067
|
|
|
18,346
|
|
||||
Balance at end of period
|
2,303,592
|
|
|
2,295,633
|
|
|
2,303,592
|
|
|
2,295,633
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
29,096
|
|
|
(85,216
|
)
|
|
(177,110
|
)
|
|
92,382
|
|
||||
Unrealized gains (losses) on available for sale investments, net of tax:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
35,178
|
|
|
(88,906
|
)
|
|
(168,365
|
)
|
|
89,962
|
|
||||
Cumulative effect of adoption of ASU No. 2018-02
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
2,106
|
|
||||
Cumulative effect of adoption of ASU No. 2016-01, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,604
|
)
|
||||
Unrealized gains (losses) arising during the period, net of reclassification adjustment
|
124,493
|
|
|
(68,788
|
)
|
|
328,036
|
|
|
(180,194
|
)
|
||||
Balance at end of period
|
159,671
|
|
|
(157,730
|
)
|
|
159,671
|
|
|
(157,730
|
)
|
||||
Cumulative foreign currency translation adjustments, net of tax:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
(6,082
|
)
|
|
3,690
|
|
|
(8,745
|
)
|
|
2,420
|
|
||||
Foreign currency translation adjustment
|
2,556
|
|
|
(9,128
|
)
|
|
5,219
|
|
|
(7,858
|
)
|
||||
Balance at end of period
|
(3,526
|
)
|
|
(5,438
|
)
|
|
(3,526
|
)
|
|
(5,438
|
)
|
||||
Balance at end of period
|
156,145
|
|
|
(163,168
|
)
|
|
156,145
|
|
|
(163,168
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Retained earnings
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
5,976,603
|
|
|
6,076,294
|
|
|
5,912,812
|
|
|
5,979,666
|
|
||||
Cumulative effect of adoption of ASU No. 2018-02
|
—
|
|
|
36
|
|
|
—
|
|
|
(2,106
|
)
|
||||
Cumulative effect of adoption of ASU No. 2016-01, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
69,604
|
|
||||
Net income
|
177,043
|
|
|
103,514
|
|
|
285,828
|
|
|
176,719
|
|
||||
Preferred share dividends
|
(10,656
|
)
|
|
(10,656
|
)
|
|
(21,313
|
)
|
|
(21,313
|
)
|
||||
Common share dividends
|
(34,413
|
)
|
|
(33,563
|
)
|
|
(68,750
|
)
|
|
(66,945
|
)
|
||||
Balance at end of period
|
6,108,577
|
|
|
6,135,625
|
|
|
6,108,577
|
|
|
6,135,625
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Treasury shares, at cost
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
(3,779,388
|
)
|
|
(3,793,386
|
)
|
|
(3,791,420
|
)
|
|
(3,807,156
|
)
|
||||
Shares repurchased
|
(411
|
)
|
|
(1,512
|
)
|
|
(9,414
|
)
|
|
(8,676
|
)
|
||||
Shares reissued
|
756
|
|
|
2,607
|
|
|
21,791
|
|
|
23,541
|
|
||||
Balance at end of period
|
(3,779,043
|
)
|
|
(3,792,291
|
)
|
|
(3,779,043
|
)
|
|
(3,792,291
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Total shareholders’ equity
|
$
|
5,566,477
|
|
|
$
|
5,253,005
|
|
|
$
|
5,566,477
|
|
|
$
|
5,253,005
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
285,828
|
|
|
$
|
176,719
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Net investment (gains) losses
|
(33,996
|
)
|
|
54,002
|
|
||
Net realized and unrealized gains on other investments
|
(38,128
|
)
|
|
(26,876
|
)
|
||
Amortization of fixed maturities
|
8,592
|
|
|
15,642
|
|
||
Interest in income of equity method investments
|
(4,853
|
)
|
|
(1,891
|
)
|
||
Amortization of value of business acquired
|
20,298
|
|
|
110,517
|
|
||
Other amortization and depreciation
|
41,444
|
|
|
22,680
|
|
||
Share-based compensation expense, net of cash payments
|
9,100
|
|
|
11,707
|
|
||
Changes in:
|
|
|
|
||||
Accrued interest receivable
|
(2,244
|
)
|
|
(1,839
|
)
|
||
Reinsurance recoverable balances on unpaid and paid losses
|
(146,353
|
)
|
|
(283,733
|
)
|
||
Deferred acquisition costs
|
(91,193
|
)
|
|
(240,320
|
)
|
||
Prepaid reinsurance premiums
|
(279,659
|
)
|
|
(361,482
|
)
|
||
Reserve for losses and loss expenses
|
(21,446
|
)
|
|
118,803
|
|
||
Unearned premiums
|
869,640
|
|
|
991,992
|
|
||
Insurance and reinsurance balances, net
|
(580,450
|
)
|
|
(654,090
|
)
|
||
Other items
|
(53,163
|
)
|
|
25,718
|
|
||
Net cash used in operating activities
|
(16,583
|
)
|
|
(42,451
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of:
|
|
|
|
||||
Fixed maturities
|
(5,014,725
|
)
|
|
(4,910,021
|
)
|
||
Equity securities
|
(26,971
|
)
|
|
(49,498
|
)
|
||
Mortgage loans
|
(95,906
|
)
|
|
(60,195
|
)
|
||
Other investments
|
(141,525
|
)
|
|
(57,477
|
)
|
||
Short-term investments
|
(100,936
|
)
|
|
(239,313
|
)
|
||
Proceeds from the sale of:
|
|
|
|
||||
Fixed maturities
|
3,796,747
|
|
|
4,452,631
|
|
||
Equity securities
|
2,456
|
|
|
219,916
|
|
||
Other investments
|
163,773
|
|
|
91,946
|
|
||
Short-term investments
|
205,607
|
|
|
101,510
|
|
||
Proceeds from redemption of fixed maturities
|
569,922
|
|
|
706,487
|
|
||
Proceeds from redemption of short-term investments
|
7,571
|
|
|
30,572
|
|
||
Proceeds from the repayment of mortgage loans
|
486
|
|
|
40,741
|
|
||
Purchase of other assets
|
(32,747
|
)
|
|
(13,043
|
)
|
||
Net cash provided by (used in) investing activities
|
(666,248
|
)
|
|
314,256
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Taxes paid on withholding shares
|
(9,414
|
)
|
|
(8,676
|
)
|
||
Dividends paid - common shares
|
(69,948
|
)
|
|
(68,172
|
)
|
||
Dividends paid - preferred shares
|
(21,313
|
)
|
|
(21,313
|
)
|
||
Net proceeds from issuance of senior notes
|
296,334
|
|
|
—
|
|
||
Redemption of senior notes
|
(250,000
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(54,341
|
)
|
|
(98,161
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on foreign currency cash, cash equivalents, and restricted cash
|
1,866
|
|
|
(10,737
|
)
|
||
Increase (decrease) in cash, cash equivalents, and restricted cash
|
(735,306
|
)
|
|
162,907
|
|
||
Cash, cash equivalents, and restricted cash - beginning of period
|
1,830,020
|
|
|
1,363,786
|
|
||
Cash, cash equivalents, and restricted cash - end of period
|
$
|
1,094,714
|
|
|
$
|
1,526,693
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Income taxes paid
|
$
|
13,405
|
|
|
$
|
7,350
|
|
Interest paid
|
$
|
31,438
|
|
|
$
|
32,550
|
|
1.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
1.
|
whether any expired or existing contracts are or contain leases;
|
2.
|
the lease classification for any expired or existing leases; and
|
3.
|
initial direct costs for any existing leases.
|
1.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SEGMENT INFORMATION
|
|
|
2019
|
|
2018
|
|
||||||||||||||||||||
|
Three months ended and at June 30,
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gross premiums written
|
$
|
968,325
|
|
|
$
|
679,435
|
|
|
$
|
1,647,760
|
|
|
$
|
1,026,644
|
|
|
$
|
624,181
|
|
|
$
|
1,650,825
|
|
|
|
Net premiums written
|
591,909
|
|
|
478,412
|
|
|
1,070,321
|
|
|
598,179
|
|
|
402,276
|
|
|
1,000,455
|
|
|
||||||
|
Net premiums earned
|
537,260
|
|
|
586,347
|
|
|
1,123,607
|
|
|
577,271
|
|
|
608,277
|
|
|
1,185,548
|
|
|
||||||
|
Other insurance related income (losses)
|
(695
|
)
|
|
3,620
|
|
|
2,925
|
|
|
1,214
|
|
|
2,516
|
|
|
3,730
|
|
|
||||||
|
Net losses and loss expenses
|
(308,703
|
)
|
|
(363,760
|
)
|
|
(672,463
|
)
|
|
(328,773
|
)
|
|
(377,868
|
)
|
|
(706,641
|
)
|
|
||||||
|
Acquisition costs
|
(111,655
|
)
|
|
(130,708
|
)
|
|
(242,363
|
)
|
|
(90,864
|
)
|
|
(141,088
|
)
|
|
(231,952
|
)
|
|
||||||
|
General and administrative expenses
|
(104,898
|
)
|
|
(28,149
|
)
|
|
(133,047
|
)
|
|
(102,369
|
)
|
|
(32,590
|
)
|
|
(134,959
|
)
|
|
||||||
|
Underwriting income
|
$
|
11,309
|
|
|
$
|
67,350
|
|
|
78,659
|
|
|
$
|
56,479
|
|
|
$
|
59,247
|
|
|
115,726
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Net investment income
|
|
|
|
|
137,949
|
|
|
|
|
|
|
109,960
|
|
|
||||||||||
|
Net investment gains (losses)
|
|
|
|
|
21,225
|
|
|
|
|
|
|
(45,093
|
)
|
|
||||||||||
|
Corporate expenses
|
|
|
|
|
(32,348
|
)
|
|
|
|
|
|
(30,254
|
)
|
|
||||||||||
|
Foreign exchange gains
|
|
|
|
|
12,381
|
|
|
|
|
|
|
44,099
|
|
|
||||||||||
|
Interest expense and financing costs
|
|
|
|
|
(15,607
|
)
|
|
|
|
|
|
(17,098
|
)
|
|
||||||||||
|
Transaction and reorganization expenses
|
|
|
|
|
(3,276
|
)
|
|
|
|
|
|
(18,772
|
)
|
|
||||||||||
|
Amortization of value of business acquired
|
|
|
|
|
(7,194
|
)
|
|
|
|
|
|
(53,407
|
)
|
|
||||||||||
|
Amortization of intangible assets
|
|
|
|
|
(2,912
|
)
|
|
|
|
|
|
(4,029
|
)
|
|
||||||||||
|
Income before income taxes and interest in income of equity method investments
|
|
|
|
|
$
|
188,877
|
|
|
|
|
|
|
$
|
101,132
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Net losses and loss expenses ratio
|
57.5
|
%
|
|
62.0
|
%
|
|
59.8
|
%
|
|
57.0
|
%
|
|
62.1
|
%
|
|
59.6
|
%
|
|
||||||
|
Acquisition cost ratio
|
20.8
|
%
|
|
22.3
|
%
|
|
21.6
|
%
|
|
15.7
|
%
|
|
23.2
|
%
|
|
19.6
|
%
|
|
||||||
|
General and administrative expense ratio
|
19.5
|
%
|
|
4.8
|
%
|
|
14.7
|
%
|
|
17.7
|
%
|
|
5.4
|
%
|
|
13.9
|
%
|
|
||||||
|
Combined ratio
|
97.8
|
%
|
|
89.1
|
%
|
|
96.1
|
%
|
|
90.4
|
%
|
|
90.7
|
%
|
|
93.1
|
%
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total intangible assets
|
$
|
353,428
|
|
|
$
|
—
|
|
|
$
|
353,428
|
|
|
$
|
450,073
|
|
|
$
|
—
|
|
|
$
|
450,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
2019
|
|
2018
|
|
||||||||||||||||||||
|
Six months ended and at June 30,
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gross premiums written
|
$
|
1,819,421
|
|
|
$
|
2,411,565
|
|
|
$
|
4,230,986
|
|
|
$
|
1,907,492
|
|
|
$
|
2,406,128
|
|
|
$
|
4,313,620
|
|
|
|
Net premiums written
|
1,121,149
|
|
|
1,726,232
|
|
|
2,847,381
|
|
|
1,146,071
|
|
|
1,840,255
|
|
|
2,986,326
|
|
|
||||||
|
Net premiums earned
|
1,094,022
|
|
|
1,163,797
|
|
|
2,257,819
|
|
|
1,157,330
|
|
|
1,195,620
|
|
|
2,352,950
|
|
|
||||||
|
Other insurance related income
|
1,046
|
|
|
8,806
|
|
|
9,852
|
|
|
1,833
|
|
|
8,502
|
|
|
10,335
|
|
|
||||||
|
Net losses and loss expenses
|
(622,479
|
)
|
|
(714,012
|
)
|
|
(1,336,491
|
)
|
|
(650,312
|
)
|
|
(717,674
|
)
|
|
(1,367,986
|
)
|
|
||||||
|
Acquisition costs
|
(229,430
|
)
|
|
(273,351
|
)
|
|
(502,781
|
)
|
|
(178,193
|
)
|
|
(283,019
|
)
|
|
(461,212
|
)
|
|
||||||
|
General and administrative expenses
|
(210,932
|
)
|
|
(60,988
|
)
|
|
(271,920
|
)
|
|
(204,738
|
)
|
|
(69,886
|
)
|
|
(274,624
|
)
|
|
||||||
|
Underwriting income
|
$
|
32,227
|
|
|
$
|
124,252
|
|
|
156,479
|
|
|
$
|
125,920
|
|
|
$
|
133,543
|
|
|
259,463
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Net investment income
|
|
|
|
|
245,254
|
|
|
|
|
|
|
210,961
|
|
|
||||||||||
|
Net investment gains (losses)
|
|
|
|
|
33,996
|
|
|
|
|
|
|
(59,923
|
)
|
|
||||||||||
|
Corporate expenses
|
|
|
|
|
(68,566
|
)
|
|
|
|
|
|
(60,425
|
)
|
|
||||||||||
|
Foreign exchange gains
|
|
|
|
|
5,325
|
|
|
|
|
|
|
6,239
|
|
|
||||||||||
|
Interest expense and financing costs
|
|
|
|
|
(31,502
|
)
|
|
|
|
|
|
(33,861
|
)
|
|
||||||||||
|
Transaction and reorganization expenses
|
|
|
|
|
(18,096
|
)
|
|
|
|
|
|
(31,825
|
)
|
|
||||||||||
|
Amortization of value of business acquired
|
|
|
|
|
(20,298
|
)
|
|
|
|
|
|
(110,517
|
)
|
|
||||||||||
|
Amortization of intangible assets
|
|
|
|
|
(5,914
|
)
|
|
|
|
|
|
(6,811
|
)
|
|
||||||||||
|
Income before income taxes and interest in income of equity method investments
|
|
|
|
|
$
|
296,678
|
|
|
|
|
|
|
$
|
173,301
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Net losses and loss expenses ratio
|
56.9
|
%
|
|
61.4
|
%
|
|
59.2
|
%
|
|
56.2
|
%
|
|
60.0
|
%
|
|
58.1
|
%
|
|
||||||
|
Acquisition cost ratio
|
21.0
|
%
|
|
23.5
|
%
|
|
22.3
|
%
|
|
15.4
|
%
|
|
23.7
|
%
|
|
19.6
|
%
|
|
||||||
|
General and administrative expense ratio
|
19.2
|
%
|
|
5.2
|
%
|
|
15.0
|
%
|
|
17.7
|
%
|
|
5.8
|
%
|
|
14.3
|
%
|
|
||||||
|
Combined ratio
|
97.1
|
%
|
|
90.1
|
%
|
|
96.5
|
%
|
|
89.3
|
%
|
|
89.5
|
%
|
|
92.0
|
%
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total intangible assets
|
$
|
353,428
|
|
|
$
|
—
|
|
|
$
|
353,428
|
|
|
$
|
450,073
|
|
|
$
|
—
|
|
|
$
|
450,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
INVESTMENTS
|
|
|
Amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair
value
|
|
Non-credit
OTTI
in AOCI(5)
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
2,288,204
|
|
|
$
|
30,488
|
|
|
$
|
(1,265
|
)
|
|
$
|
2,317,427
|
|
|
$
|
—
|
|
|
|
Non-U.S. government
|
539,588
|
|
|
6,959
|
|
|
(8,723
|
)
|
|
537,824
|
|
|
—
|
|
|
|||||
|
Corporate debt
|
4,850,141
|
|
|
114,591
|
|
|
(19,147
|
)
|
|
4,945,585
|
|
|
—
|
|
|
|||||
|
Agency RMBS(1)
|
1,669,160
|
|
|
24,127
|
|
|
(6,375
|
)
|
|
1,686,912
|
|
|
—
|
|
|
|||||
|
CMBS(2)
|
1,150,370
|
|
|
34,613
|
|
|
(715
|
)
|
|
1,184,268
|
|
|
—
|
|
|
|||||
|
Non-Agency RMBS
|
55,985
|
|
|
1,308
|
|
|
(1,313
|
)
|
|
55,980
|
|
|
(740
|
)
|
|
|||||
|
ABS(3)
|
1,600,846
|
|
|
5,871
|
|
|
(5,946
|
)
|
|
1,600,771
|
|
|
—
|
|
|
|||||
|
Municipals(4)
|
189,480
|
|
|
4,828
|
|
|
(120
|
)
|
|
194,188
|
|
|
—
|
|
|
|||||
|
Total fixed maturities
|
$
|
12,343,774
|
|
|
$
|
222,785
|
|
|
$
|
(43,604
|
)
|
|
$
|
12,522,955
|
|
|
$
|
(740
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,520,142
|
|
|
$
|
4,232
|
|
|
$
|
(8,677
|
)
|
|
$
|
1,515,697
|
|
|
$
|
—
|
|
|
|
Non-U.S. government
|
507,550
|
|
|
1,586
|
|
|
(16,120
|
)
|
|
493,016
|
|
|
—
|
|
|
|||||
|
Corporate debt
|
4,990,279
|
|
|
15,086
|
|
|
(128,444
|
)
|
|
4,876,921
|
|
|
—
|
|
|
|||||
|
Agency RMBS(1)
|
1,666,684
|
|
|
6,508
|
|
|
(29,884
|
)
|
|
1,643,308
|
|
|
—
|
|
|
|||||
|
CMBS(2)
|
1,103,507
|
|
|
2,818
|
|
|
(13,795
|
)
|
|
1,092,530
|
|
|
—
|
|
|
|||||
|
Non-Agency RMBS
|
40,732
|
|
|
1,237
|
|
|
(1,282
|
)
|
|
40,687
|
|
|
(857
|
)
|
|
|||||
|
ABS(3)
|
1,651,350
|
|
|
1,493
|
|
|
(15,240
|
)
|
|
1,637,603
|
|
|
—
|
|
|
|||||
|
Municipals(4)
|
136,068
|
|
|
914
|
|
|
(1,397
|
)
|
|
135,585
|
|
|
—
|
|
|
|||||
|
Total fixed maturities
|
$
|
11,616,312
|
|
|
$
|
33,874
|
|
|
$
|
(214,839
|
)
|
|
$
|
11,435,347
|
|
|
$
|
(857
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 card receivables, collateralized debt obligations ("CDOs") and collateralized loan obligations ("CLOs").
|
(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.
|
3.
|
INVESTMENTS (CONTINUED)
|
|
|
Cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair
value
|
|
||||||||
|
At June 30, 2019
|
|
|
|
|
|
|
|
|
||||||||
|
Equity securities
|
|
|
|
|
|
|
|
|
||||||||
|
Common stocks
|
$
|
695
|
|
|
$
|
21
|
|
|
$
|
(459
|
)
|
|
$
|
257
|
|
|
|
Exchange-traded funds
|
213,909
|
|
|
61,531
|
|
|
(2,171
|
)
|
|
273,269
|
|
|
||||
|
Bond mutual funds
|
163,291
|
|
|
—
|
|
|
(3,410
|
)
|
|
159,881
|
|
|
||||
|
Total equity securities
|
$
|
377,895
|
|
|
$
|
61,552
|
|
|
$
|
(6,040
|
)
|
|
$
|
433,407
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
|
Equity securities
|
|
|
|
|
|
|
|
|
||||||||
|
Common stocks
|
$
|
790
|
|
|
$
|
112
|
|
|
$
|
(375
|
)
|
|
$
|
527
|
|
|
|
Exchange-traded funds
|
213,420
|
|
|
33,498
|
|
|
(10,079
|
)
|
|
236,839
|
|
|
||||
|
Bond mutual funds
|
151,695
|
|
|
—
|
|
|
(7,428
|
)
|
|
144,267
|
|
|
||||
|
Total equity securities
|
$
|
365,905
|
|
|
$
|
33,610
|
|
|
$
|
(17,882
|
)
|
|
$
|
381,633
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
INVESTMENTS (CONTINUED)
|
|
|
Amortized
cost
|
|
Fair
value
|
|
% of Total
fair value
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
At June 30, 2019
|
|
|
|
|
|
|
|||||
|
Maturity
|
|
|
|
|
|
|
|||||
|
Due in one year or less
|
$
|
388,837
|
|
|
$
|
388,997
|
|
|
3.1
|
%
|
|
|
Due after one year through five years
|
5,169,170
|
|
|
5,237,935
|
|
|
41.8
|
%
|
|
||
|
Due after five years through ten years
|
1,921,131
|
|
|
1,967,360
|
|
|
15.7
|
%
|
|
||
|
Due after ten years
|
388,275
|
|
|
400,732
|
|
|
3.2
|
%
|
|
||
|
|
7,867,413
|
|
|
7,995,024
|
|
|
63.8
|
%
|
|
||
|
Agency RMBS
|
1,669,160
|
|
|
1,686,912
|
|
|
13.5
|
%
|
|
||
|
CMBS
|
1,150,370
|
|
|
1,184,268
|
|
|
9.5
|
%
|
|
||
|
Non-Agency RMBS
|
55,985
|
|
|
55,980
|
|
|
0.4
|
%
|
|
||
|
ABS
|
1,600,846
|
|
|
1,600,771
|
|
|
12.8
|
%
|
|
||
|
Total
|
$
|
12,343,774
|
|
|
$
|
12,522,955
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|||||
|
At December 31, 2018
|
|
|
|
|
|
|
|||||
|
Maturity
|
|
|
|
|
|
|
|||||
|
Due in one year or less
|
$
|
430,390
|
|
|
$
|
426,142
|
|
|
3.7
|
%
|
|
|
Due after one year through five years
|
4,751,064
|
|
|
4,691,263
|
|
|
41.0
|
%
|
|
||
|
Due after five years through ten years
|
1,762,452
|
|
|
1,697,737
|
|
|
14.8
|
%
|
|
||
|
Due after ten years
|
210,133
|
|
|
206,077
|
|
|
1.8
|
%
|
|
||
|
|
7,154,039
|
|
|
7,021,219
|
|
|
61.3
|
%
|
|
||
|
Agency RMBS
|
1,666,684
|
|
|
1,643,308
|
|
|
14.4
|
%
|
|
||
|
CMBS
|
1,103,507
|
|
|
1,092,530
|
|
|
9.6
|
%
|
|
||
|
Non-Agency RMBS
|
40,732
|
|
|
40,687
|
|
|
0.4
|
%
|
|
||
|
ABS
|
1,651,350
|
|
|
1,637,603
|
|
|
14.3
|
%
|
|
||
|
Total
|
$
|
11,616,312
|
|
|
$
|
11,435,347
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
3.
|
INVESTMENTS (CONTINUED)
|
|
|
12 months or greater
|
|
Less than 12 months
|
|
Total
|
|
||||||||||||||||||
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. government and agency
|
$
|
111,237
|
|
|
$
|
(1,085
|
)
|
|
$
|
174,271
|
|
|
$
|
(180
|
)
|
|
$
|
285,508
|
|
|
$
|
(1,265
|
)
|
|
|
Non-U.S. government
|
130,187
|
|
|
(6,343
|
)
|
|
111,035
|
|
|
(2,380
|
)
|
|
241,222
|
|
|
(8,723
|
)
|
|
||||||
|
Corporate debt
|
479,376
|
|
|
(10,405
|
)
|
|
484,354
|
|
|
(8,742
|
)
|
|
963,730
|
|
|
(19,147
|
)
|
|
||||||
|
Agency RMBS
|
557,096
|
|
|
(6,256
|
)
|
|
66,210
|
|
|
(119
|
)
|
|
623,306
|
|
|
(6,375
|
)
|
|
||||||
|
CMBS
|
18,034
|
|
|
(27
|
)
|
|
136,832
|
|
|
(688
|
)
|
|
154,866
|
|
|
(715
|
)
|
|
||||||
|
Non-Agency RMBS
|
5,845
|
|
|
(973
|
)
|
|
15,760
|
|
|
(340
|
)
|
|
21,605
|
|
|
(1,313
|
)
|
|
||||||
|
ABS
|
400,246
|
|
|
(3,609
|
)
|
|
487,791
|
|
|
(2,337
|
)
|
|
888,037
|
|
|
(5,946
|
)
|
|
||||||
|
Municipals
|
9,980
|
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
9,980
|
|
|
(120
|
)
|
|
||||||
|
Total fixed maturities
|
$
|
1,712,001
|
|
|
$
|
(28,818
|
)
|
|
$
|
1,476,253
|
|
|
$
|
(14,786
|
)
|
|
$
|
3,188,254
|
|
|
$
|
(43,604
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. government and agency
|
$
|
374,030
|
|
|
$
|
(7,659
|
)
|
|
$
|
424,439
|
|
|
$
|
(1,018
|
)
|
|
$
|
798,469
|
|
|
$
|
(8,677
|
)
|
|
|
Non-U.S. government
|
44,339
|
|
|
(2,004
|
)
|
|
303,376
|
|
|
(14,116
|
)
|
|
347,715
|
|
|
(16,120
|
)
|
|
||||||
|
Corporate debt
|
1,439,378
|
|
|
(58,915
|
)
|
|
2,547,135
|
|
|
(69,529
|
)
|
|
3,986,513
|
|
|
(128,444
|
)
|
|
||||||
|
Agency RMBS
|
940,645
|
|
|
(29,255
|
)
|
|
117,181
|
|
|
(629
|
)
|
|
1,057,826
|
|
|
(29,884
|
)
|
|
||||||
|
CMBS
|
455,582
|
|
|
(11,430
|
)
|
|
353,802
|
|
|
(2,365
|
)
|
|
809,384
|
|
|
(13,795
|
)
|
|
||||||
|
Non-Agency RMBS
|
9,494
|
|
|
(1,170
|
)
|
|
11,432
|
|
|
(112
|
)
|
|
20,926
|
|
|
(1,282
|
)
|
|
||||||
|
ABS
|
237,237
|
|
|
(2,755
|
)
|
|
1,150,692
|
|
|
(12,485
|
)
|
|
1,387,929
|
|
|
(15,240
|
)
|
|
||||||
|
Municipals
|
68,814
|
|
|
(1,373
|
)
|
|
9,894
|
|
|
(24
|
)
|
|
78,708
|
|
|
(1,397
|
)
|
|
||||||
|
Total fixed maturities
|
$
|
3,569,519
|
|
|
$
|
(114,561
|
)
|
|
$
|
4,917,951
|
|
|
$
|
(100,278
|
)
|
|
$
|
8,487,470
|
|
|
$
|
(214,839
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
INVESTMENTS (CONTINUED)
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
||||||||||
|
|
Carrying value
|
|
% of Total
|
|
Carrying value
|
|
% of Total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Mortgage Loans held-for-investment:
|
|
|
|
|
|
|
|
|
||||||
|
Commercial
|
$
|
394,179
|
|
|
100
|
%
|
|
$
|
298,650
|
|
|
100
|
%
|
|
|
Total Mortgage Loans held-for-investment
|
$
|
394,179
|
|
|
100
|
%
|
|
$
|
298,650
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
INVESTMENTS (CONTINUED)
|
|
|
Fair value
|
|
Redemption frequency
(if currently eligible)
|
|
Redemption
notice period
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||
|
At June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Long/short equity funds
|
$
|
30,526
|
|
|
4
|
%
|
|
Annually
|
|
60 days
|
|
|
Multi-strategy funds
|
165,123
|
|
|
21
|
%
|
|
Quarterly, Semi-annually
|
|
60-90 days
|
|
|
|
Direct lending funds
|
273,864
|
|
|
34
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Private equity funds
|
60,285
|
|
|
8
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Real estate funds
|
134,763
|
|
|
17
|
%
|
|
n/a
|
|
n/a
|
|
|
|
CLO-Equities
|
17,798
|
|
|
1
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Other privately held investments
|
28,452
|
|
|
4
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Overseas deposits
|
91,253
|
|
|
11
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Total other investments
|
$
|
802,064
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Long/short equity funds
|
$
|
26,779
|
|
|
3
|
%
|
|
Annually
|
|
60 days
|
|
|
Multi-strategy funds
|
167,819
|
|
|
22
|
%
|
|
Quarterly, Semi-annually, Annually
|
|
45-95 days
|
|
|
|
Direct lending funds
|
274,478
|
|
|
35
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Private equity funds
|
64,566
|
|
|
8
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Real estate funds
|
84,202
|
|
|
11
|
%
|
|
n/a
|
|
n/a
|
|
|
|
CLO-Equities
|
21,271
|
|
|
2
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Other privately held investments
|
44,518
|
|
|
6
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Overseas deposits
|
104,154
|
|
|
13
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Total other investments
|
$
|
787,787
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Long/short equity funds: Seek to achieve attractive returns primarily by executing an equity trading strategy involving long and short investments in publicly-traded equity securities.
|
•
|
Multi-strategy funds: Seek to achieve above-market returns by pursuing multiple investment strategies to diversify risks and reduce volatility. This category primarily includes funds of hedge funds which invest in a large pool of hedge funds across a diversified range of hedge fund strategies.
|
•
|
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.
|
3.
|
INVESTMENTS (CONTINUED)
|
3.
|
INVESTMENTS (CONTINUED)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities
|
$
|
97,370
|
|
|
$
|
88,320
|
|
|
$
|
188,752
|
|
|
$
|
172,279
|
|
|
|
Other investments
|
31,232
|
|
|
14,541
|
|
|
38,128
|
|
|
28,246
|
|
|
||||
|
Equity securities
|
3,197
|
|
|
3,158
|
|
|
5,525
|
|
|
4,916
|
|
|
||||
|
Mortgage loans
|
3,689
|
|
|
3,357
|
|
|
6,752
|
|
|
6,483
|
|
|
||||
|
Cash and cash equivalents
|
8,138
|
|
|
5,627
|
|
|
13,940
|
|
|
9,779
|
|
|
||||
|
Short-term investments
|
1,108
|
|
|
1,645
|
|
|
5,002
|
|
|
2,520
|
|
|
||||
|
Gross investment income
|
144,734
|
|
|
116,648
|
|
|
258,099
|
|
|
224,223
|
|
|
||||
|
Investment expenses
|
(6,785
|
)
|
|
(6,688
|
)
|
|
(12,845
|
)
|
|
(13,262
|
)
|
|
||||
|
Net investment income
|
$
|
137,949
|
|
|
$
|
109,960
|
|
|
$
|
245,254
|
|
|
$
|
210,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross realized investment gains
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities and short-term investments
|
$
|
18,971
|
|
|
$
|
5,761
|
|
|
$
|
29,409
|
|
|
$
|
37,389
|
|
|
|
Equity securities
|
154
|
|
|
1,147
|
|
|
1,598
|
|
|
18,662
|
|
|
||||
|
Gross realized investment gains
|
19,125
|
|
|
6,908
|
|
|
31,007
|
|
|
56,051
|
|
|
||||
|
Gross realized investment losses
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities and short-term investments
|
(9,978
|
)
|
|
(44,442
|
)
|
|
(30,257
|
)
|
|
(87,977
|
)
|
|
||||
|
Equity securities
|
(29
|
)
|
|
—
|
|
|
(122
|
)
|
|
(1,234
|
)
|
|
||||
|
Gross realized investment losses
|
(10,007
|
)
|
|
(44,442
|
)
|
|
(30,379
|
)
|
|
(89,211
|
)
|
|
||||
|
Net OTTI recognized in net income
|
(834
|
)
|
|
(1,674
|
)
|
|
(4,870
|
)
|
|
(2,088
|
)
|
|
||||
|
Change in fair value of investment derivatives(1)
|
(204
|
)
|
|
5,134
|
|
|
(2,305
|
)
|
|
7,157
|
|
|
||||
|
Net unrealized gains (losses) on equity securities
|
13,145
|
|
|
(11,019
|
)
|
|
40,543
|
|
|
(31,832
|
)
|
|
||||
|
Net investment gains (losses)
|
$
|
21,225
|
|
|
$
|
(45,093
|
)
|
|
$
|
33,996
|
|
|
$
|
(59,923
|
)
|
|
|
|
|
|
|
|
|
|
|
|
3.
|
INVESTMENTS (CONTINUED)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
|
Non-U.S. government
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
60
|
|
|
$
|
22
|
|
|
|
Corporate debt
|
834
|
|
|
1,652
|
|
|
4,810
|
|
|
2,066
|
|
|
||||
|
Total OTTI recognized in net income
|
$
|
834
|
|
|
$
|
1,674
|
|
|
$
|
4,870
|
|
|
$
|
2,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at beginning of period
|
$
|
472
|
|
|
$
|
1,484
|
|
|
$
|
510
|
|
|
$
|
1,494
|
|
|
|
Credit impairments recognized on securities not previously impaired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
|
Additional credit impairments recognized on securities previously impaired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
|
Change in timing of future cash flows on securities previously impaired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
|
Intent to sell of securities previously impaired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
|
Securities sold/redeemed/matured
|
(79
|
)
|
|
(12
|
)
|
|
(117
|
)
|
|
(22
|
)
|
|
||||
|
Balance at end of period
|
$
|
393
|
|
|
$
|
1,472
|
|
|
$
|
393
|
|
|
$
|
1,472
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
FAIR VALUE MEASUREMENTS
|
•
|
Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has 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 the Company's own judgments about assumptions that market participants might use.
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
4.
|
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 June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
2,281,604
|
|
|
$
|
35,823
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,317,427
|
|
|
|
Non-U.S. government
|
—
|
|
|
537,824
|
|
|
—
|
|
|
—
|
|
|
537,824
|
|
|
|||||
|
Corporate debt
|
—
|
|
|
4,906,448
|
|
|
39,137
|
|
|
—
|
|
|
4,945,585
|
|
|
|||||
|
Agency RMBS
|
—
|
|
|
1,686,912
|
|
|
—
|
|
|
—
|
|
|
1,686,912
|
|
|
|||||
|
CMBS
|
—
|
|
|
1,174,376
|
|
|
9,892
|
|
|
—
|
|
|
1,184,268
|
|
|
|||||
|
Non-Agency RMBS
|
—
|
|
|
55,980
|
|
|
—
|
|
|
—
|
|
|
55,980
|
|
|
|||||
|
ABS
|
—
|
|
|
1,600,280
|
|
|
491
|
|
|
—
|
|
|
1,600,771
|
|
|
|||||
|
Municipals
|
—
|
|
|
194,188
|
|
|
—
|
|
|
—
|
|
|
194,188
|
|
|
|||||
|
|
2,281,604
|
|
|
10,191,831
|
|
|
49,520
|
|
|
—
|
|
|
12,522,955
|
|
|
|||||
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
257
|
|
|
|||||
|
Exchange-traded funds
|
273,269
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
273,269
|
|
|
|||||
|
Bond mutual funds
|
—
|
|
|
159,881
|
|
|
—
|
|
|
—
|
|
|
159,881
|
|
|
|||||
|
|
273,526
|
|
|
159,881
|
|
|
—
|
|
|
—
|
|
|
433,407
|
|
|
|||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Hedge funds (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
195,649
|
|
|
195,649
|
|
|
|||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
—
|
|
|
273,864
|
|
|
273,864
|
|
|
|||||
|
Private equity funds
|
—
|
|
|
—
|
|
|
—
|
|
|
60,285
|
|
|
60,285
|
|
|
|||||
|
Real estate funds
|
—
|
|
|
—
|
|
|
—
|
|
|
134,763
|
|
|
134,763
|
|
|
|||||
|
Other privately held investments
|
—
|
|
|
—
|
|
|
28,452
|
|
|
—
|
|
|
28,452
|
|
|
|||||
|
CLO-Equities
|
—
|
|
|
—
|
|
|
17,798
|
|
|
—
|
|
|
17,798
|
|
|
|||||
|
Overseas deposits
|
—
|
|
|
91,253
|
|
|
—
|
|
|
—
|
|
|
91,253
|
|
|
|||||
|
|
—
|
|
|
91,253
|
|
|
46,250
|
|
|
664,561
|
|
|
802,064
|
|
|
|||||
|
Short-term investments
|
—
|
|
|
32,421
|
|
|
—
|
|
|
—
|
|
|
32,421
|
|
|
|||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (refer to Note 5)
|
—
|
|
|
863
|
|
|
—
|
|
|
—
|
|
|
863
|
|
|
|||||
|
Total Assets
|
$
|
2,555,130
|
|
|
$
|
10,476,249
|
|
|
$
|
95,770
|
|
|
$
|
664,561
|
|
|
$
|
13,791,710
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (refer to Note 5)
|
$
|
—
|
|
|
$
|
2,686
|
|
|
$
|
10,262
|
|
|
$
|
—
|
|
|
$
|
12,948
|
|
|
|
Cash settled awards (refer to Note 8)
|
—
|
|
|
12,946
|
|
|
—
|
|
|
—
|
|
|
12,946
|
|
|
|||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
15,632
|
|
|
$
|
10,262
|
|
|
$
|
—
|
|
|
$
|
25,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
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, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
1,480,466
|
|
|
$
|
35,231
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,515,697
|
|
|
|
Non-U.S. government
|
—
|
|
|
493,016
|
|
|
—
|
|
|
—
|
|
|
493,016
|
|
|
|||||
|
Corporate debt
|
—
|
|
|
4,827,909
|
|
|
49,012
|
|
|
—
|
|
|
4,876,921
|
|
|
|||||
|
Agency RMBS
|
—
|
|
|
1,643,308
|
|
|
—
|
|
|
—
|
|
|
1,643,308
|
|
|
|||||
|
CMBS
|
—
|
|
|
1,073,396
|
|
|
19,134
|
|
|
—
|
|
|
1,092,530
|
|
|
|||||
|
Non-Agency RMBS
|
—
|
|
|
40,687
|
|
|
—
|
|
|
—
|
|
|
40,687
|
|
|
|||||
|
ABS
|
—
|
|
|
1,619,070
|
|
|
18,533
|
|
|
—
|
|
|
1,637,603
|
|
|
|||||
|
Municipals
|
—
|
|
|
135,585
|
|
|
—
|
|
|
—
|
|
|
135,585
|
|
|
|||||
|
|
1,480,466
|
|
|
9,868,202
|
|
|
86,679
|
|
|
—
|
|
|
11,435,347
|
|
|
|||||
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
527
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
527
|
|
|
|||||
|
Exchange-traded funds
|
236,839
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
236,839
|
|
|
|||||
|
Bond mutual funds
|
—
|
|
|
144,267
|
|
|
—
|
|
|
—
|
|
|
144,267
|
|
|
|||||
|
|
237,366
|
|
|
144,267
|
|
|
—
|
|
|
—
|
|
|
381,633
|
|
|
|||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Hedge funds (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
194,598
|
|
|
194,598
|
|
|
|||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
—
|
|
|
274,478
|
|
|
274,478
|
|
|
|||||
|
Private equity funds
|
—
|
|
|
—
|
|
|
—
|
|
|
64,566
|
|
|
64,566
|
|
|
|||||
|
Real estate funds
|
—
|
|
|
—
|
|
|
—
|
|
|
84,202
|
|
|
84,202
|
|
|
|||||
|
Other privately held investments
|
—
|
|
|
—
|
|
|
44,518
|
|
|
—
|
|
|
44,518
|
|
|
|||||
|
CLO-Equities
|
—
|
|
|
—
|
|
|
21,271
|
|
|
—
|
|
|
21,271
|
|
|
|||||
|
Overseas deposits
|
—
|
|
|
104,154
|
|
|
—
|
|
|
—
|
|
|
104,154
|
|
|
|||||
|
|
—
|
|
|
104,154
|
|
|
65,789
|
|
|
617,844
|
|
|
787,787
|
|
|
|||||
|
Short-term investments
|
—
|
|
|
144,040
|
|
|
—
|
|
|
—
|
|
|
144,040
|
|
|
|||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (refer to Note 5)
|
—
|
|
|
8,237
|
|
|
—
|
|
|
—
|
|
|
8,237
|
|
|
|||||
|
Total Assets
|
$
|
1,717,832
|
|
|
$
|
10,268,900
|
|
|
$
|
152,468
|
|
|
$
|
617,844
|
|
|
$
|
12,757,044
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (refer to Note 5)
|
$
|
—
|
|
|
$
|
4,223
|
|
|
$
|
10,299
|
|
|
$
|
—
|
|
|
$
|
14,522
|
|
|
|
Cash settled awards (refer to Note 8)
|
—
|
|
|
20,648
|
|
|
—
|
|
|
—
|
|
|
20,648
|
|
|
|||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
24,871
|
|
|
$
|
10,299
|
|
|
$
|
—
|
|
|
$
|
35,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
Fair value
|
Valuation technique
|
Unobservable input
|
Range
|
Weighted
average
|
|
||
|
|
|
|
|
|
|
|
||
|
Other investments - CLO-Equities
|
$
|
17,798
|
|
Discounted cash flow
|
Default rates
|
3.0%
|
3.0%
|
|
|
|
|
|
Loss severity rate
|
35.0%
|
35.0%
|
|
||
|
|
|
|
Collateral spreads
|
3.0%
|
3.0%
|
|
||
|
|
|
|
Estimated maturity dates
|
7 years
|
7 years
|
|
||
|
|
|
|
|
|
|
|
||
|
Other investments - Other privately held investments
|
$
|
28,452
|
|
Discounted cash flow
|
Discount rate
|
3.0%
|
3.0%
|
|
|
|
|
|
|
|
|
|
||
|
Derivatives - Other underwriting-related derivatives
|
$
|
(10,262
|
)
|
Discounted cash flow
|
Discount rate
|
1.9%
|
1.9%
|
|
|
|
|
|
|
|
|
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
Opening
balance
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
Included in
net income(1)
|
|
Included
in OCI (2)
|
|
Purchases
|
|
Sales
|
|
Settlements/
distributions
|
|
Closing
balance
|
|
Change in
unrealized
investment
gains/(losses) (3)
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Three months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
41,125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(763
|
)
|
|
$
|
309
|
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
(1,503
|
)
|
|
$
|
39,137
|
|
|
$
|
—
|
|
|
|
CMBS
|
11,145
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
(1,274
|
)
|
|
9,892
|
|
|
—
|
|
|
||||||||||
|
ABS
|
12,043
|
|
|
—
|
|
|
(11,564
|
)
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
491
|
|
|
—
|
|
|
||||||||||
|
|
64,313
|
|
|
—
|
|
|
(11,564
|
)
|
|
(763
|
)
|
|
342
|
|
|
—
|
|
|
(31
|
)
|
|
(2,777
|
)
|
|
49,520
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Other privately held investments
|
47,685
|
|
|
—
|
|
|
—
|
|
|
14,194
|
|
|
—
|
|
|
—
|
|
|
(33,427
|
)
|
|
—
|
|
|
28,452
|
|
|
767
|
|
|
||||||||||
|
CLO - Equities
|
18,022
|
|
|
—
|
|
|
—
|
|
|
833
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,057
|
)
|
|
17,798
|
|
|
833
|
|
|
||||||||||
|
|
65,707
|
|
|
—
|
|
|
—
|
|
|
15,027
|
|
|
—
|
|
|
—
|
|
|
(33,427
|
)
|
|
(1,057
|
)
|
|
46,250
|
|
|
1,600
|
|
|
||||||||||
|
Total assets
|
$
|
130,020
|
|
|
$
|
—
|
|
|
$
|
(11,564
|
)
|
|
$
|
14,264
|
|
|
$
|
342
|
|
|
$
|
—
|
|
|
$
|
(33,458
|
)
|
|
$
|
(3,834
|
)
|
|
$
|
95,770
|
|
|
$
|
1,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
$
|
10,233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,262
|
|
|
$
|
29
|
|
|
|
Total liabilities
|
$
|
10,233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,262
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Six months ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Corporate debt
|
$
|
49,012
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,459
|
)
|
|
$
|
933
|
|
|
$
|
—
|
|
|
$
|
(5,578
|
)
|
|
$
|
(3,771
|
)
|
|
$
|
39,137
|
|
|
$
|
—
|
|
|
|
CMBS
|
19,134
|
|
|
—
|
|
|
(4,767
|
)
|
|
—
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
(4,639
|
)
|
|
9,892
|
|
|
—
|
|
|
||||||||||
|
ABS
|
18,533
|
|
|
—
|
|
|
(27,966
|
)
|
|
—
|
|
|
174
|
|
|
9,750
|
|
|
—
|
|
|
—
|
|
|
491
|
|
|
—
|
|
|
||||||||||
|
|
86,679
|
|
|
—
|
|
|
(32,733
|
)
|
|
(1,459
|
)
|
|
1,271
|
|
|
9,750
|
|
|
(5,578
|
)
|
|
(8,410
|
)
|
|
49,520
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other privately held investments
|
44,518
|
|
|
—
|
|
|
—
|
|
|
14,861
|
|
|
—
|
|
|
2,500
|
|
|
(33,427
|
)
|
|
—
|
|
|
28,452
|
|
|
1,434
|
|
|
||||||||||
|
CLO - Equities
|
21,271
|
|
|
—
|
|
|
—
|
|
|
1,248
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,721
|
)
|
|
17,798
|
|
|
1,248
|
|
|
||||||||||
|
|
65,789
|
|
|
—
|
|
|
—
|
|
|
16,109
|
|
|
—
|
|
|
2,500
|
|
|
(33,427
|
)
|
|
(4,721
|
)
|
|
46,250
|
|
|
2,682
|
|
|
||||||||||
|
Total assets
|
$
|
152,468
|
|
|
$
|
—
|
|
|
$
|
(32,733
|
)
|
|
$
|
14,650
|
|
|
$
|
1,271
|
|
|
$
|
12,250
|
|
|
$
|
(39,005
|
)
|
|
$
|
(13,131
|
)
|
|
$
|
95,770
|
|
|
$
|
2,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
$
|
10,299
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,262
|
|
|
$
|
(37
|
)
|
|
|
Total liabilities
|
$
|
10,299
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,262
|
|
|
$
|
(37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Unrealized investment gains (losses) on fixed maturities are included in other comprehensive income ("OCI").
|
(3)
|
Change in unrealized investment gains (losses) relating to assets held at the reporting date.
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
Opening
balance
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
Included in
net income(1)
|
|
Included
in OCI (2)
|
|
Purchases
|
|
Sales
|
|
Settlements/
distributions
|
|
Closing
balance
|
|
Change in
unrealized
investment
gains/(losses) (3)
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Three months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
43,471
|
|
|
$
|
1,589
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(388
|
)
|
|
$
|
3,185
|
|
|
$
|
(3,218
|
)
|
|
$
|
(2,085
|
)
|
|
$
|
42,553
|
|
|
$
|
—
|
|
|
|
Non-Agency RMBS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
900
|
|
|
—
|
|
|
—
|
|
|
903
|
|
|
—
|
|
|
||||||||||
|
CMBS
|
—
|
|
|
1,936
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
16,215
|
|
|
—
|
|
|
—
|
|
|
18,149
|
|
|
—
|
|
|
||||||||||
|
|
43,471
|
|
|
3,525
|
|
|
—
|
|
|
(1
|
)
|
|
(387
|
)
|
|
20,300
|
|
|
(3,218
|
)
|
|
(2,085
|
)
|
|
61,605
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other privately held investments
|
48,787
|
|
|
—
|
|
|
—
|
|
|
(1,174
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,613
|
|
|
(1,174
|
)
|
|
||||||||||
|
CLO - Equities
|
28,556
|
|
|
—
|
|
|
—
|
|
|
3,068
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,471
|
)
|
|
26,153
|
|
|
3,068
|
|
|
||||||||||
|
|
77,343
|
|
|
—
|
|
|
—
|
|
|
1,894
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,471
|
)
|
|
73,766
|
|
|
1,894
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Insurance-linked securities
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
Total assets
|
$
|
145,814
|
|
|
$
|
3,525
|
|
|
$
|
—
|
|
|
$
|
1,893
|
|
|
$
|
(387
|
)
|
|
$
|
20,300
|
|
|
$
|
(3,218
|
)
|
|
$
|
(32,556
|
)
|
|
$
|
135,371
|
|
|
$
|
1,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
$
|
10,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(353
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,589
|
|
|
$
|
(353
|
)
|
|
|
Total liabilities
|
$
|
10,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(353
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,589
|
|
|
$
|
(353
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Corporate debt
|
$
|
52,897
|
|
|
$
|
1,589
|
|
|
$
|
(4,279
|
)
|
|
$
|
(119
|
)
|
|
$
|
1,015
|
|
|
$
|
3,185
|
|
|
$
|
(5,754
|
)
|
|
$
|
(5,981
|
)
|
|
$
|
42,553
|
|
|
$
|
—
|
|
|
|
Non-Agency RMBS
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
900
|
|
|
—
|
|
|
—
|
|
|
903
|
|
|
—
|
|
|
||||||||||
|
CMBS
|
—
|
|
|
1,936
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
16,215
|
|
|
—
|
|
|
—
|
|
|
18,149
|
|
|
—
|
|
|
||||||||||
|
|
52,897
|
|
|
3,525
|
|
|
(4,279
|
)
|
|
(119
|
)
|
|
1,016
|
|
|
20,300
|
|
|
(5,754
|
)
|
|
(5,981
|
)
|
|
61,605
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other privately held investments
|
46,430
|
|
|
—
|
|
|
—
|
|
|
(428
|
)
|
|
—
|
|
|
3,111
|
|
|
(1,500
|
)
|
|
—
|
|
|
47,613
|
|
|
(428
|
)
|
|
||||||||||
|
CLO - Equities
|
31,413
|
|
|
—
|
|
|
—
|
|
|
4,684
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,944
|
)
|
|
26,153
|
|
|
4,684
|
|
|
||||||||||
|
|
77,843
|
|
|
—
|
|
|
—
|
|
|
4,256
|
|
|
—
|
|
|
3,111
|
|
|
(1,500
|
)
|
|
(9,944
|
)
|
|
73,766
|
|
|
4,256
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Insurance-linked securities
|
25,090
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
|
25,090
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
Total assets
|
$
|
155,830
|
|
|
$
|
3,525
|
|
|
$
|
(4,279
|
)
|
|
$
|
4,047
|
|
|
$
|
1,016
|
|
|
$
|
23,411
|
|
|
$
|
(7,254
|
)
|
|
$
|
(40,925
|
)
|
|
$
|
135,371
|
|
|
$
|
4,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
$
|
11,510
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(921
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,589
|
|
|
$
|
(921
|
)
|
|
|
Total liabilities
|
$
|
11,510
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(921
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,589
|
|
|
$
|
(921
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
4.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
5.
|
DERIVATIVE INSTRUMENTS
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
||||||||||||||||||||
|
|
Derivative
notional
amount
|
|
Derivative
asset
fair
value(1)
|
|
Derivative
liability
fair
value(1)
|
|
Derivative
notional
amount
|
|
Derivative
asset
fair
value(1)
|
|
Derivative
liability
fair
value(1)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
$
|
189,811
|
|
|
$
|
147
|
|
|
$
|
1,074
|
|
|
$
|
79,336
|
|
|
$
|
262
|
|
|
$
|
531
|
|
|
|
Interest rate swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
1,116
|
|
|
||||||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
534,811
|
|
|
716
|
|
|
1,612
|
|
|
737,419
|
|
|
7,975
|
|
|
2,576
|
|
|
||||||
|
Other underwriting-related contracts
|
85,000
|
|
|
—
|
|
|
10,262
|
|
|
85,000
|
|
|
—
|
|
|
10,299
|
|
|
||||||
|
Total derivatives
|
|
|
$
|
863
|
|
|
$
|
12,948
|
|
|
|
|
$
|
8,237
|
|
|
$
|
14,522
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Asset and liability derivatives are classified within other assets and other liabilities in the consolidated balance sheets.
|
5.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
||||||||||||||||
|
|
Gross amounts
|
Gross amounts offset
|
Net
amounts(1)
|
|
Gross amounts
|
Gross amounts offset
|
Net
amounts(1)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative assets
|
$
|
2,577
|
|
$
|
(1,714
|
)
|
$
|
863
|
|
|
$
|
11,967
|
|
$
|
(3,730
|
)
|
$
|
8,237
|
|
|
|
Derivative liabilities
|
$
|
14,662
|
|
$
|
(1,714
|
)
|
$
|
12,948
|
|
|
$
|
18,252
|
|
$
|
(3,730
|
)
|
$
|
14,522
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Net asset and liability derivatives are classified within other assets and other liabilities in the consolidated balance sheets.
|
5.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
|
|
Location of gain (loss) recognized in net income
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange forward contracts
|
Net investment gains (losses)
|
$
|
620
|
|
|
$
|
2,515
|
|
|
$
|
1,372
|
|
|
$
|
1,323
|
|
|
|
Interest rate swaps
|
Net investment gains (losses)
|
(824
|
)
|
|
2,619
|
|
|
(3,677
|
)
|
|
5,833
|
|
|
||||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
|
|
||||||||
|
Foreign exchange forward contracts
|
Foreign exchange gains (losses)
|
802
|
|
|
(7,809
|
)
|
|
(9,715
|
)
|
|
(138
|
)
|
|
||||
|
Other underwriting-related contracts
|
Other insurance related income (losses)
|
271
|
|
|
647
|
|
|
618
|
|
|
1,548
|
|
|
||||
|
Total
|
|
$
|
869
|
|
|
$
|
(2,028
|
)
|
|
$
|
(11,402
|
)
|
|
$
|
8,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30,
|
|
||||||
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
|
Gross reserve for losses and loss expenses, beginning of period
|
$
|
12,280,769
|
|
|
$
|
12,997,553
|
|
|
|
Less reinsurance recoverable on unpaid losses, beginning of period
|
(3,501,669
|
)
|
|
(3,159,514
|
)
|
|
||
|
Net reserve for unpaid losses and loss expenses, beginning of period
|
8,779,100
|
|
|
9,838,039
|
|
|
||
|
|
|
|
|
|
||||
|
Net incurred losses and loss expenses related to:
|
|
|
|
|
||||
|
Current year
|
1,374,784
|
|
|
1,482,409
|
|
|
||
|
Prior years
|
(38,293
|
)
|
|
(114,423
|
)
|
|
||
|
|
1,336,491
|
|
|
1,367,986
|
|
|
||
|
Net paid losses and loss expenses related to:
|
|
|
|
|
||||
|
Current year
|
(132,111
|
)
|
|
(186,576
|
)
|
|
||
|
Prior years
|
(1,304,413
|
)
|
|
(1,233,793
|
)
|
|
||
|
|
(1,436,524
|
)
|
|
(1,420,369
|
)
|
|
||
|
|
|
|
|
|
||||
|
Foreign exchange and other
|
10,832
|
|
|
(985,628
|
)
|
|
||
|
|
|
|
|
|
||||
|
Net reserve for unpaid losses and loss expenses, end of period
|
8,689,899
|
|
|
8,800,028
|
|
|
||
|
Reinsurance recoverable on unpaid losses, end of period
|
3,564,812
|
|
|
3,152,706
|
|
|
||
|
Gross reserve for losses and loss expenses, end of period
|
$
|
12,254,711
|
|
|
$
|
11,952,734
|
|
|
|
|
|
|
|
|
6.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
$
|
21,326
|
|
|
$
|
24,294
|
|
|
$
|
28,240
|
|
|
$
|
47,068
|
|
|
|
Reinsurance
|
2,295
|
|
|
35,822
|
|
|
10,053
|
|
|
67,355
|
|
|
||||
|
Total
|
$
|
23,621
|
|
|
$
|
60,116
|
|
|
$
|
38,293
|
|
|
$
|
114,423
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance segment
|
|
|
|
|
|
|
Reserve class and tail
|
||||
|
|
|
|
|
|
|
Property and other
|
Credit and surety
|
Professional lines
|
Motor
|
Liability
|
|
|
|
|
|
|
|
Short
|
Medium
|
Medium
|
Long
|
Long
|
|
|
|
|
|
|
Reported lines of business
|
|
|
|
|
|
Catastrophe
|
X
|
|
|
|
|
Property
|
X
|
|
|
|
|
Credit and surety
|
|
X
|
|
|
|
Professional lines
|
|
|
X
|
|
|
Motor
|
|
|
|
X
|
|
Liability
|
|
|
|
|
X
|
Engineering
|
X
|
|
|
|
|
Agriculture
|
X
|
|
|
|
|
Marine and other
|
X
|
|
|
|
|
Accident and health
|
X
|
|
|
|
|
Discontinued lines - Novae
|
X
|
|
|
X
|
X
|
6.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
7.
|
EARNINGS PER COMMON SHARE
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per common share
|
|
|
|
|
|
|
|
|
||||||||
|
Net income
|
$
|
177,043
|
|
|
$
|
103,514
|
|
|
$
|
285,828
|
|
|
$
|
176,719
|
|
|
|
Less: Preferred share dividends
|
10,656
|
|
|
10,656
|
|
|
21,313
|
|
|
21,313
|
|
|
||||
|
Net income available to common shareholders
|
166,387
|
|
|
92,858
|
|
|
264,515
|
|
|
155,406
|
|
|
||||
|
Weighted average common shares outstanding
|
83,941
|
|
|
83,539
|
|
|
83,834
|
|
|
83,431
|
|
|
||||
|
Earnings per common share
|
$
|
1.98
|
|
|
$
|
1.11
|
|
|
$
|
3.16
|
|
|
$
|
1.86
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per diluted common share
|
|
|
|
|
|
|
|
|
||||||||
|
Net income available to common shareholders
|
$
|
166,387
|
|
|
$
|
92,858
|
|
|
$
|
264,515
|
|
|
$
|
155,406
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average common shares outstanding
|
83,941
|
|
|
83,539
|
|
|
83,834
|
|
|
83,431
|
|
|
||||
|
Share-based compensation plans
|
460
|
|
|
445
|
|
|
504
|
|
|
422
|
|
|
||||
|
Weighted average diluted common shares outstanding
|
84,401
|
|
|
83,984
|
|
|
84,338
|
|
|
83,853
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per diluted common share
|
$
|
1.97
|
|
|
$
|
1.11
|
|
|
$
|
3.14
|
|
|
$
|
1.85
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted average anti-dilutive shares excluded from the dilutive computation
|
3
|
|
|
158
|
|
|
302
|
|
|
484
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
8.
|
SHARE-BASED COMPENSATION
|
|
|
Share-Settled Performance Vesting Restricted Stock Units
|
|
Share-Settled Service Based Restricted Stock Units
|
|
||||||||||
|
|
Number of
restricted
stock units
|
|
Weighted
average
grant date
fair value(1)
|
|
Number of
restricted
stock units
|
|
Weighted average
grant date
fair value(1)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Nonvested restricted stock units - beginning of period
|
232
|
|
|
$
|
54.54
|
|
|
1,411
|
|
|
$
|
54.12
|
|
|
|
Granted
|
127
|
|
|
54.70
|
|
|
512
|
|
|
54.70
|
|
|
||
|
Vested
|
(61
|
)
|
|
53.82
|
|
|
(463
|
)
|
|
54.20
|
|
|
||
|
Forfeited
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
54.57
|
|
|
||
|
Nonvested restricted stock units - end of period
|
298
|
|
|
$
|
54.76
|
|
|
1,334
|
|
|
$
|
54.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash-Settled Performance Vesting Restricted Stock Units
|
|
Cash-Settled Service Based Restricted Stock Units
|
|
||
|
|
Number of
restricted
stock units
|
|
Number of
restricted
stock units
|
|
||
|
|
|
|
|
|
||
|
Nonvested restricted stock units - beginning of period
|
27
|
|
|
932
|
|
|
|
Granted
|
—
|
|
|
354
|
|
|
|
Vested
|
(12
|
)
|
|
(327
|
)
|
|
|
Forfeited
|
—
|
|
|
(62
|
)
|
|
|
Nonvested restricted stock units - end of period
|
15
|
|
|
897
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
|
Shares issued, balance at beginning of period
|
176,580
|
|
|
176,580
|
|
|
176,580
|
|
|
176,580
|
|
|
|
Shares issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total shares issued at end of period
|
176,580
|
|
|
176,580
|
|
|
176,580
|
|
|
176,580
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Treasury shares, balance at beginning of period
|
(92,646
|
)
|
|
(93,062
|
)
|
|
(92,994
|
)
|
|
(93,419
|
)
|
|
|
Shares repurchased
|
(7
|
)
|
|
(26
|
)
|
|
(164
|
)
|
|
(175
|
)
|
|
|
Shares reissued
|
20
|
|
|
64
|
|
|
525
|
|
|
570
|
|
|
|
Total treasury shares at end of period
|
(92,633
|
)
|
|
(93,024
|
)
|
|
(92,633
|
)
|
|
(93,024
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total shares outstanding
|
83,947
|
|
|
83,556
|
|
|
83,947
|
|
|
83,556
|
|
|
|
|
|
|
|
|
|
|
|
|
9.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
In the open market:
|
|
|
|
|
|
|
|
|
||||||||
|
Total shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
|
Total cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Average price per share(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
From employees:(2)
|
|
|
|
|
|
|
|
|
||||||||
|
Total shares
|
7
|
|
|
26
|
|
|
164
|
|
|
175
|
|
|
||||
|
Total cost
|
$
|
411
|
|
|
$
|
1,512
|
|
|
$
|
9,414
|
|
|
$
|
8,676
|
|
|
|
Average price per share(1)
|
$
|
58.34
|
|
|
$
|
57.97
|
|
|
$
|
57.22
|
|
|
$
|
49.56
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total shares repurchased:
|
|
|
|
|
|
|
|
|
||||||||
|
Total shares
|
7
|
|
|
26
|
|
|
164
|
|
|
175
|
|
|
||||
|
Total cost
|
$
|
411
|
|
|
$
|
1,512
|
|
|
$
|
9,414
|
|
|
$
|
8,676
|
|
|
|
Average price per share(1)
|
$
|
58.34
|
|
|
$
|
57.97
|
|
|
$
|
57.22
|
|
|
$
|
49.56
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Shares are repurchased from employees to satisfy withholding tax liabilities related to the vesting of share-settled restricted stock units.
|
10.
|
DEBT AND FINANCING ARRANGEMENTS
|
a)
|
Senior Notes
|
b)
|
Credit Facilities
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
12.
|
LEASES
|
12.
|
LEASES (CONTINUED)
|
|
|
Three months ended
|
|
Six months ended
|
|
||||
|
|
June 30, 2019
|
|
June 30, 2019
|
|
||||
|
|
|
|
|
|
||||
|
Lease cost:
|
|
|
|
|
||||
|
Operating lease expense
|
$
|
4,134
|
|
|
$
|
11,064
|
|
|
|
Short-term lease expense(1)
|
119
|
|
|
765
|
|
|
||
|
Sublease income(2)
|
(192
|
)
|
|
(734
|
)
|
|
||
|
Total lease expense
|
$
|
4,061
|
|
|
$
|
11,095
|
|
|
|
|
|
|
|
|
||||
|
Other information:
|
|
|
|
|
||||
|
Operating cash outflows from operating leases
|
$
|
6,384
|
|
|
$
|
12,920
|
|
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Weighted-average remaining lease term - operating leases(3)
|
8.7 years
|
|
|
8.7 years
|
|
|
||
|
Weighted-average discount rate - operating lease(4)
|
4.7
|
%
|
|
4.7
|
%
|
|
|
|
Expected
|
|
||
|
|
Cash Flows
|
|
||
|
|
|
|
||
|
Remainder of 2019
|
$
|
12,709
|
|
|
|
2020
|
21,558
|
|
|
|
|
2021
|
21,366
|
|
|
|
|
2022
|
21,989
|
|
|
|
|
2023
|
17,877
|
|
|
|
|
Later years
|
70,056
|
|
|
|
|
Discount
|
(32,298
|
)
|
|
|
|
Total discounted operating lease liabilities
|
$
|
133,257
|
|
|
|
|
|
|
12.
|
LEASES (CONTINUED)
|
|
|
|
|
||
|
Year ended December 31,
|
|
|
||
|
|
|
|
||
|
2019
|
$
|
28,240
|
|
|
|
2020
|
25,331
|
|
|
|
|
2021
|
27,025
|
|
|
|
|
2022
|
28,012
|
|
|
|
|
2023
|
23,801
|
|
|
|
|
Later years
|
118,497
|
|
|
|
|
Total future minimum lease payments
|
$
|
250,906
|
|
|
|
|
|
|
13.
|
TRANSACTION AND REORGANIZATION EXPENSES
|
|
|
2019
|
|
2018
|
|
||||||||||||||||||||
|
|
Before tax amount
|
|
Tax (expense) benefit
|
|
Net of tax amount
|
|
Before tax amount
|
|
Tax (expense) benefit
|
|
Net of Tax Amount
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three months ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Available for sale investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Unrealized investment gains (losses) arising during the period
|
$
|
146,907
|
|
|
$
|
(15,465
|
)
|
|
$
|
131,442
|
|
|
$
|
(114,842
|
)
|
|
$
|
9,562
|
|
|
$
|
(105,280
|
)
|
|
|
Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income
|
(8,141
|
)
|
|
1,192
|
|
|
(6,949
|
)
|
|
39,100
|
|
|
(2,644
|
)
|
|
36,456
|
|
|
||||||
|
Unrealized investment gains (losses) arising during the period, net of reclassification adjustment
|
138,766
|
|
|
(14,273
|
)
|
|
124,493
|
|
|
(75,742
|
)
|
|
6,918
|
|
|
(68,824
|
)
|
|
||||||
|
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Foreign currency translation adjustment
|
2,556
|
|
|
—
|
|
|
2,556
|
|
|
(9,129
|
)
|
|
—
|
|
|
(9,129
|
)
|
|
||||||
|
Total other comprehensive income (loss), net of tax
|
$
|
141,322
|
|
|
$
|
(14,273
|
)
|
|
$
|
127,049
|
|
|
$
|
(84,871
|
)
|
|
$
|
6,918
|
|
|
$
|
(77,953
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six months ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Available for sale investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Unrealized investment gains (losses) arising during the period
|
$
|
353,712
|
|
|
$
|
(32,061
|
)
|
|
$
|
321,651
|
|
|
$
|
(220,480
|
)
|
|
$
|
3,046
|
|
|
$
|
(217,434
|
)
|
|
|
Adjustment for reclassification of net realized investment losses and OTTI losses recognized in net income
|
5,733
|
|
|
652
|
|
|
6,385
|
|
|
34,987
|
|
|
2,253
|
|
|
37,240
|
|
|
||||||
|
Unrealized investment gains (losses) arising during the period, net of reclassification adjustment
|
359,445
|
|
|
(31,409
|
)
|
|
328,036
|
|
|
(185,493
|
)
|
|
5,299
|
|
|
(180,194
|
)
|
|
||||||
|
Non-credit portion of OTTI losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
Foreign currency translation adjustment
|
5,219
|
|
|
—
|
|
|
5,219
|
|
|
(7,858
|
)
|
|
—
|
|
|
(7,858
|
)
|
|
||||||
|
Total other comprehensive income (loss), net of tax
|
$
|
364,664
|
|
|
$
|
(31,409
|
)
|
|
$
|
333,255
|
|
|
$
|
(193,351
|
)
|
|
$
|
5,299
|
|
|
$
|
(188,052
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount reclassified from AOCI(1)
|
|
||||||||||||||
|
Details about AOCI Components
|
Consolidated statement of operations line item that includes reclassification
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Unrealized investment gains (losses) on available for sale investments
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Other realized investment gains (losses)
|
$
|
8,975
|
|
|
$
|
(37,426
|
)
|
|
$
|
(863
|
)
|
|
$
|
(32,899
|
)
|
|
|
|
OTTI losses
|
(834
|
)
|
|
(1,674
|
)
|
|
(4,870
|
)
|
|
(2,088
|
)
|
|
||||
|
|
Total before tax
|
8,141
|
|
|
(39,100
|
)
|
|
(5,733
|
)
|
|
(34,987
|
)
|
|
||||
|
|
Income tax (expense) benefit
|
(1,192
|
)
|
|
2,644
|
|
|
(652
|
)
|
|
(2,253
|
)
|
|
||||
|
|
Net of tax
|
$
|
6,949
|
|
|
$
|
(36,456
|
)
|
|
$
|
(6,385
|
)
|
|
$
|
(37,240
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts in parentheses are decreases to net income (loss).
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Page
|
|
|
Second Quarter 2019 Financial Highlights
|
|
Executive Summary
|
|
Underwriting Results – Consolidated
|
|
Results by Segment: For the three and six months ended June 30, 2019 and 2018
|
|
i) Insurance Segment
|
|
ii) Reinsurance Segment
|
|
Other Expenses (Revenues), Net
|
|
Net Investment Income and Net Investment Gains (Losses)
|
|
Cash and Investments
|
|
Liquidity and Capital Resources
|
|
Critical Accounting Estimates
|
|
Recent Accounting Pronouncements
|
|
Off-Balance Sheet and Special Purpose Entity Arrangements
|
•
|
Net income available to common shareholders of $166 million, or $1.98 per common share and $1.97 per diluted common share
|
•
|
Operating income(1) of $137 million, or $1.62 per diluted common share(1)
|
•
|
Gross premiums written of $1.6 billion
|
•
|
Net premiums written of $1.1 billion
|
•
|
Net premiums earned of $1.1 billion
|
•
|
Estimated pre-tax catastrophe and weather-related losses of $26 million (insurance: $14 million and reinsurance: $11 million), or 2.3 points on current accident year loss ratio related to weather-related events
|
•
|
Net favorable prior year reserve development of $24 million
|
•
|
Underwriting income(2) of $79 million and combined ratio of 96.1%
|
•
|
Net investment income of $138 million
|
•
|
Net investment gains of $21 million
|
•
|
Amortization of value of business acquired ("VOBA") of $7 million
|
•
|
Transaction and reorganization expenses of $3 million
|
•
|
Foreign exchange gains of $12 million
|
•
|
Total cash and investments of $15.4 billion; fixed maturities, cash and short-term securities comprise 89% of total cash and investments and have an average credit rating of AA-
|
•
|
Total assets of $25.9 billion
|
•
|
Reserve for losses and loss expenses of $12.3 billion and reinsurance recoverable on unpaid and paid losses and loss expenses of $3.9 billion
|
•
|
Total debt of $1.4 billion and debt to total capital ratio of 20.0%
|
•
|
Common shareholders’ equity of $4.8 billion; book value per diluted common share of $55.99
|
(1)
|
Operating income (loss) and operating income (loss) per diluted common share are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. The reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures, net income (loss) available (attributable) to common shareholders and earnings (loss) per diluted common share, respectively, are provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Results of Operations'.
|
(2)
|
Consolidated underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to income (loss) before income taxes and interest in income (loss) of equity method investments, the most comparable GAAP measure, is presented in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Results of Operations'.
|
•
|
increasing our relevance in a select number of attractive specialty insurance and global reinsurance markets and continuing the implementation of a more focused distribution strategy;
|
•
|
continuing to grow a leadership position in business lines with strong growth potential including U.S. excess and surplus lines, and North America professional lines;
|
•
|
increasing our presence at Lloyd's of London ("Lloyd's") achieved through our acquisition of Novae Group plc ("Novae") in 2017 which provides us with access to Lloyd's worldwide licenses and an extensive distribution network;
|
•
|
continuing to re-balance our portfolio towards less volatile lines of business that carry attractive rates;
|
•
|
launching a new phase of our transformation efforts, an enterprise-wide program to enhance all of our functions and position us to lead in a transforming industry;
|
•
|
continuing to improve in the effectiveness and efficiency of our operating platforms and processes;
|
•
|
increasing investment in data and analytics; and
|
•
|
broadening risk-funding sources and the development of vehicles that utilize third-party capital.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Underwriting revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net premiums earned
|
$
|
1,123,607
|
|
|
(5%)
|
|
$
|
1,185,548
|
|
|
$
|
2,257,819
|
|
|
(4%)
|
|
$
|
2,352,950
|
|
|
|
|
Other insurance related income
|
2,925
|
|
|
(22%)
|
|
3,730
|
|
|
9,852
|
|
|
(5%)
|
|
10,335
|
|
|
|||||
|
Underwriting expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net losses and loss expenses
|
(672,463
|
)
|
|
(5%)
|
|
(706,641
|
)
|
|
(1,336,491
|
)
|
|
(2%)
|
|
(1,367,986
|
)
|
|
|||||
|
Acquisition costs
|
(242,363
|
)
|
|
4%
|
|
(231,952
|
)
|
|
(502,781
|
)
|
|
9%
|
|
(461,212
|
)
|
|
|||||
|
Underwriting-related general and administrative expenses(1)
|
(133,047
|
)
|
|
(1%)
|
|
(134,959
|
)
|
|
(271,920
|
)
|
|
(1%)
|
|
(274,624
|
)
|
|
|||||
|
Underwriting Income
|
$
|
78,659
|
|
|
|
|
$
|
115,726
|
|
|
$
|
156,479
|
|
|
|
|
$
|
259,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net investment income
|
137,949
|
|
|
25%
|
|
109,960
|
|
|
245,254
|
|
|
16%
|
|
210,961
|
|
|
|||||
|
Net investment gains (losses)
|
21,225
|
|
|
nm
|
|
(45,093
|
)
|
|
33,996
|
|
|
nm
|
|
(59,923
|
)
|
|
|||||
|
Corporate expenses(1)
|
(32,348
|
)
|
|
7%
|
|
(30,254
|
)
|
|
(68,566
|
)
|
|
13%
|
|
(60,425
|
)
|
|
|||||
|
Other (expenses) revenues, net
|
(3,226
|
)
|
|
nm
|
|
27,001
|
|
|
(26,177
|
)
|
|
(5%)
|
|
(27,622
|
)
|
|
|||||
|
Transaction and reorganization expenses
|
(3,276
|
)
|
|
(83%)
|
|
(18,772
|
)
|
|
(18,096
|
)
|
|
(43%)
|
|
(31,825
|
)
|
|
|||||
|
Amortization of value of business acquired
|
(7,194
|
)
|
|
(87%)
|
|
(53,407
|
)
|
|
(20,298
|
)
|
|
(82%)
|
|
(110,517
|
)
|
|
|||||
|
Amortization of intangible assets
|
(2,912
|
)
|
—
|
|
(28%)
|
|
(4,029
|
)
|
|
(5,914
|
)
|
|
(13%)
|
|
(6,811
|
)
|
|
||||
|
Income before income taxes and interest in income of equity method investments
|
188,877
|
|
|
|
|
101,132
|
|
|
296,678
|
|
|
|
|
173,301
|
|
|
|||||
|
Income tax (expense) benefit
|
(14,469
|
)
|
|
nm
|
|
(996
|
)
|
|
(15,703
|
)
|
|
nm
|
|
40
|
|
|
|||||
|
Interest in income of equity method investments
|
2,635
|
|
|
(22%)
|
|
3,378
|
|
|
4,853
|
|
|
44%
|
|
3,378
|
|
|
|||||
|
Net income
|
$
|
177,043
|
|
|
|
|
$
|
103,514
|
|
|
$
|
285,828
|
|
|
|
|
$
|
176,719
|
|
|
|
|
Preferred share dividends
|
(10,656
|
)
|
|
—%
|
|
(10,656
|
)
|
|
(21,313
|
)
|
|
—%
|
|
(21,313
|
)
|
|
|||||
|
Net income available to common shareholders
|
$
|
166,387
|
|
|
79%
|
|
$
|
92,858
|
|
|
$
|
264,515
|
|
|
70%
|
|
$
|
155,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net investment (gains) losses(2)
|
$
|
(21,225
|
)
|
|
nm
|
|
$
|
45,093
|
|
|
$
|
(33,996
|
)
|
|
nm
|
|
$
|
59,923
|
|
|
|
|
Foreign exchange (gains)(3)
|
(12,381
|
)
|
|
(72%)
|
|
(44,099
|
)
|
|
(5,325
|
)
|
|
(15%)
|
|
(6,239
|
)
|
|
|||||
|
Transaction and reorganization expenses(4)
|
3,276
|
|
|
(83%)
|
|
18,772
|
|
|
18,096
|
|
|
(43%)
|
|
31,825
|
|
|
|||||
|
Interest in (income) of equity method investments(5)
|
(2,635
|
)
|
|
(22%)
|
|
(3,378
|
)
|
|
(4,853
|
)
|
|
44%
|
|
(3,378
|
)
|
|
|||||
|
Income tax expense (benefit)
|
3,569
|
|
|
nm
|
|
(5,996
|
)
|
|
3,164
|
|
|
nm
|
|
(11,658
|
)
|
|
|||||
|
Operating income (6)
|
$
|
136,991
|
|
|
33%
|
|
$
|
103,250
|
|
|
$
|
241,601
|
|
|
7%
|
|
$
|
225,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Underwriting-related general and administrative expenses is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to total general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $32,348 and $30,254 for the three months ended June 30, 2019 and 2018, respectively, and $68,566 and $60,425 for the six months ended June 30, 2019 and 2018, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Expenses (Revenues), Net' for additional information related to the corporate expenses. Refer also to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures' for additional information.
|
(2)
|
Tax cost (benefit) of $2,936 and ($4,531) for the three months ended June 30, 2019 and 2018, respectively, and $5,771 and $(3,388) for the six months ended June 30, 2019 and 2018, 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.
|
(3)
|
Tax cost (benefit) of $1,170 and $779 for the three months ended June 30, 2019 and 2018, respectively, and $588 and $(3,555) for the six months ended June 30, 2019 and 2018, 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.
|
(4)
|
Tax cost (benefit) of ($537) and ($2,556) for the three months ended June 30, 2019 and 2018, respectively, and ($3,195) and ($5,027) for the six months ended June 30, 2019 and 2018, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
(5)
|
Tax cost (benefit) of $nil and $312 for the three months ended June 30, 2019 and 2018, respectively, and $nil and $312 for the six months ended June 30, 2019 and 2018, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
(6)
|
Operating income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliations to the most comparable GAAP financial measure, net income (loss) available (attributable) to common shareholders, is presented in the table above, and a discussion of the rationale for its presentation is included in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income available to common shareholders
|
$
|
166,387
|
|
|
$
|
92,858
|
|
|
$
|
264,515
|
|
|
$
|
155,406
|
|
|
|
Operating income
|
136,991
|
|
|
103,250
|
|
|
241,601
|
|
|
225,879
|
|
|
||||
|
Weighted average diluted common shares outstanding(1)
|
84,401
|
|
|
83,984
|
|
|
84,338
|
|
|
83,853
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per diluted common share
|
$
|
1.97
|
|
|
$
|
1.11
|
|
|
$
|
3.14
|
|
|
$
|
1.85
|
|
|
|
Operating income per diluted common share(2)
|
$
|
1.62
|
|
|
$
|
1.23
|
|
|
$
|
2.86
|
|
|
$
|
2.69
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Average common shareholders’ equity
|
$
|
4,658,317
|
|
|
$
|
4,483,700
|
|
|
$
|
4,523,274
|
|
|
$
|
4,522,135
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Annualized return on average common equity(3)
|
14.3
|
%
|
|
8.3
|
%
|
|
11.7
|
%
|
|
6.9
|
%
|
|
||||
|
Annualized operating return on average common equity(4)
|
11.8
|
%
|
|
9.2
|
%
|
|
10.7
|
%
|
|
10.0
|
%
|
|
||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to Item 1, Note 7 to our Consolidated Financial Statements 'Earnings per Common Share' for additional information on the dilution calculation.
|
(2)
|
Operating income (loss) per diluted common share is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to the most comparable GAAP financial measure, earnings (loss) per diluted common share, is presented in the table above, and a discussion of the rationale for its presentation is included in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
(3)
|
Annualized ROACE is calculated by dividing annualized net income (loss) available (attributable) to common shareholders for the period by the average common shareholders' equity determined by using the common shareholders' equity balances at the beginning and end of the period.
|
(4)
|
Annualized operating ROACE, a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K, is calculated by dividing annualized operating income (loss) for the period by the average common shareholders' equity balances at the beginning and end of the period. The reconciliation to the most comparable GAAP financial measure, ROACE, is presented in the table above and a discussion of the rationale for its presentation is included in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income available to common shareholders
|
$
|
166,387
|
|
|
$
|
92,858
|
|
|
$
|
264,515
|
|
|
$
|
155,406
|
|
Net investment (gains) losses
|
(21,225
|
)
|
|
45,093
|
|
|
(33,996
|
)
|
|
59,923
|
|
||||
Foreign exchange (gains)
|
(12,381
|
)
|
|
(44,099
|
)
|
|
(5,325
|
)
|
|
(6,239
|
)
|
||||
Transaction and reorganization expenses
|
3,276
|
|
|
18,772
|
|
|
18,096
|
|
|
31,825
|
|
||||
Interest in (income) of equity method investments
|
(2,635
|
)
|
|
(3,378
|
)
|
|
(4,853
|
)
|
|
(3,378
|
)
|
||||
Income tax expense (benefit)
|
3,569
|
|
|
(5,996
|
)
|
|
3,164
|
|
|
(11,658
|
)
|
||||
Operating income
|
$
|
136,991
|
|
|
$
|
103,250
|
|
|
$
|
241,601
|
|
|
$
|
225,879
|
|
Amortization of VOBA and intangible assets(2)
|
10,093
|
|
|
56,328
|
|
|
26,095
|
|
|
113,438
|
|
||||
Amortization of acquisition costs(3)
|
(2,854
|
)
|
|
(39,641
|
)
|
|
(9,121
|
)
|
|
(80,090
|
)
|
||||
Income tax expense (benefit)
|
(1,376
|
)
|
|
(3,170
|
)
|
|
(3,225
|
)
|
|
(6,336
|
)
|
||||
Ex-PGAAP operating income(1)
|
$
|
142,854
|
|
|
$
|
116,767
|
|
|
$
|
255,350
|
|
|
$
|
252,891
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per diluted common share
|
$
|
1.97
|
|
|
$
|
1.11
|
|
|
$
|
3.14
|
|
|
$
|
1.85
|
|
Net investment (gains) losses
|
(0.25
|
)
|
|
0.54
|
|
|
(0.40
|
)
|
|
0.71
|
|
||||
Foreign exchange (gains)
|
(0.15
|
)
|
|
(0.53
|
)
|
|
(0.06
|
)
|
|
(0.07
|
)
|
||||
Transaction and reorganization expenses
|
0.04
|
|
|
0.22
|
|
|
0.21
|
|
|
0.38
|
|
||||
Interest in (income) of equity method investments
|
(0.03
|
)
|
|
(0.04
|
)
|
|
(0.06
|
)
|
|
(0.04
|
)
|
||||
Income tax expense (benefit)
|
0.04
|
|
|
(0.07
|
)
|
|
0.03
|
|
|
(0.14
|
)
|
||||
Operating income per diluted common share
|
$
|
1.62
|
|
|
$
|
1.23
|
|
|
$
|
2.86
|
|
|
$
|
2.69
|
|
Amortization of VOBA and intangible assets(2)
|
0.12
|
|
|
0.67
|
|
|
0.31
|
|
|
1.35
|
|
||||
Amortization of acquisition cost(3)
|
(0.03
|
)
|
|
(0.47
|
)
|
|
(0.11
|
)
|
|
(0.94
|
)
|
||||
Income tax expense (benefit)
|
(0.02
|
)
|
|
(0.04
|
)
|
|
(0.03
|
)
|
|
(0.08
|
)
|
||||
Ex-PGAAP operating income per diluted common share(1)
|
$
|
1.69
|
|
|
$
|
1.39
|
|
|
$
|
3.03
|
|
|
$
|
3.02
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average diluted common shares outstanding
|
84,401
|
|
|
83,984
|
|
|
84,338
|
|
|
83,853
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Average common shareholders' equity
|
$
|
4,658,317
|
|
|
$
|
4,483,700
|
|
|
$
|
4,523,274
|
|
|
$
|
4,522,135
|
|
|
|
|
|
|
|
|
|
||||||||
Annualized return on average common equity
|
14.3
|
%
|
|
8.3
|
%
|
|
11.7
|
%
|
|
6.9
|
%
|
||||
Annualized operating return on average common equity
|
11.8
|
%
|
|
9.2
|
%
|
|
10.7
|
%
|
|
10.0
|
%
|
||||
Annualized ex-PGAAP operating return on average common equity(1)
|
12.3
|
%
|
|
10.4
|
%
|
|
11.3
|
%
|
|
11.2
|
%
|
||||
|
|
|
|
|
|
|
|
(1)
|
Ex-PGAAP operating income (loss), ex-PGAAP operating income (loss) per diluted common share and annualized ex-PGAAP operating ROACE are non-GAAP financial measures as defined in SEC Regulation S-K. The reconciliation to the most comparable GAAP financial measures, net income (loss) available (attributable) to common shareholders, earnings (loss) per diluted common share, and annualized ROACE, respectively, are provided in the table above, and a discussion of the rationale for the presentation of these items is included in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
(2)
|
Tax cost (benefit) of $(1,918) and $(10,702) for the three months ended June 30, 2019 and 2018, respectively, and $(4,958) and $(21,553) for the six months ended June 30, 2019 and 2018, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
(3)
|
Tax cost (benefit) of $542 and $7,532 for the three months ended June 30, 2019 and 2018, respectively, and $1,733 and $15,217 for the six months ended June 30, 2019 and 2018, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Annualized ROACE
|
14.3
|
%
|
|
8.3
|
%
|
|
11.7
|
%
|
|
6.9
|
%
|
|
||||
|
Annualized operating ROACE
|
11.8
|
%
|
|
9.2
|
%
|
|
10.7
|
%
|
|
10.0
|
%
|
|
||||
|
Annualized ex-PGAAP operating ROACE
|
12.3
|
%
|
|
10.4
|
%
|
|
11.3
|
%
|
|
11.2
|
%
|
|
||||
|
Book value per diluted common share(1)
|
$
|
55.99
|
|
|
$
|
52.47
|
|
|
$
|
55.99
|
|
|
$
|
52.47
|
|
|
|
Cash dividends declared per common share
|
0.40
|
|
|
0.39
|
|
|
0.80
|
|
|
0.78
|
|
|
||||
|
Increase (decrease) in book value per diluted common share adjusted for dividends
|
$
|
3.55
|
|
|
$
|
0.29
|
|
|
$
|
5.11
|
|
|
$
|
(6.43
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Book value per diluted common share represents total common shareholders’ equity divided by the number of diluted common shares outstanding, determined using the treasury stock method. Cash settled awards are excluded.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross premiums written
|
$
|
1,647,760
|
|
|
—%
|
|
$
|
1,650,825
|
|
|
$
|
4,230,986
|
|
|
(2%)
|
|
$
|
4,313,620
|
|
|
|
Net premiums written
|
1,070,321
|
|
|
7%
|
|
1,000,455
|
|
|
2,847,381
|
|
|
(5%)
|
|
2,986,326
|
|
|
||||
|
Net premiums earned
|
1,123,607
|
|
|
(5%)
|
|
1,185,548
|
|
|
2,257,819
|
|
|
(4%)
|
|
2,352,950
|
|
|
||||
|
Other insurance related income
|
2,925
|
|
|
(22%)
|
|
3,730
|
|
|
9,852
|
|
|
(5%)
|
|
10,335
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Current year net losses and loss expenses
|
(696,084
|
)
|
|
|
|
(766,757
|
)
|
|
(1,374,784
|
)
|
|
|
|
(1,482,409
|
)
|
|
||||
|
Prior year reserve development
|
23,621
|
|
|
|
|
60,116
|
|
|
38,293
|
|
|
|
|
114,423
|
|
|
||||
|
Acquisition costs
|
(242,363
|
)
|
|
|
|
(231,952
|
)
|
|
(502,781
|
)
|
|
|
|
(461,212
|
)
|
|
||||
|
Underwriting-related general and administrative expenses(1)
|
(133,047
|
)
|
|
|
|
(134,959
|
)
|
|
(271,920
|
)
|
|
|
|
(274,624
|
)
|
|
||||
|
Underwriting income (2)
|
$
|
78,659
|
|
|
(32%)
|
|
$
|
115,726
|
|
|
$
|
156,479
|
|
|
(40%)
|
|
$
|
259,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
General and administrative expenses(1)
|
$
|
165,395
|
|
|
|
|
$
|
165,213
|
|
|
$
|
340,486
|
|
|
|
|
$
|
335,049
|
|
|
|
Income before income taxes and interest in income of equity method investments(2)
|
$
|
188,877
|
|
|
|
|
$
|
101,132
|
|
|
$
|
296,678
|
|
|
|
|
$
|
173,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Underwriting-related general and administrative expenses is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to total general and administrative expenses, the most comparable GAAP financial measure, is presented in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Results of Operations'.
|
(2)
|
Consolidated underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to income (loss) before income taxes and interest in income (loss) of equity investments, the most comparable GAAP financial measure, is presented in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Results of Operations'.
|
|
|
Gross premiums written
|
|
||||||||||||||||||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
$
|
968,325
|
|
|
(6%)
|
|
$
|
1,026,644
|
|
|
$
|
1,819,421
|
|
|
(5%)
|
|
$
|
1,907,492
|
|
|
|
Reinsurance
|
679,435
|
|
|
9%
|
|
624,181
|
|
|
2,411,565
|
|
|
—%
|
|
2,406,128
|
|
|
||||
|
Total
|
$
|
1,647,760
|
|
|
—%
|
|
$
|
1,650,825
|
|
|
$
|
4,230,986
|
|
|
(2%)
|
|
$
|
4,313,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
% ceded
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
39%
|
|
(3) pts
|
|
42%
|
|
38%
|
|
(2) pts
|
|
40%
|
|
||||||||
|
Reinsurance
|
30%
|
|
(6) pts
|
|
36%
|
|
28%
|
|
4 pts
|
|
24%
|
|
||||||||
|
Total
|
35%
|
|
(4) pts
|
|
39%
|
|
33%
|
|
2 pts
|
|
31%
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Net premiums written
|
|
||||||||||||||||||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
$
|
591,909
|
|
|
(1%)
|
|
$
|
598,179
|
|
|
$
|
1,121,149
|
|
|
(2%)
|
|
$
|
1,146,071
|
|
|
|
Reinsurance
|
478,412
|
|
|
19%
|
|
402,276
|
|
|
1,726,232
|
|
|
(6%)
|
|
1,840,255
|
|
|
||||
|
Total
|
$
|
1,070,321
|
|
|
7%
|
|
$
|
1,000,455
|
|
|
$
|
2,847,381
|
|
|
(5%)
|
|
$
|
2,986,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
|
|
Six months ended June 30,
|
|
|
|
||||||||||||||||||||||||
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Insurance
|
$
|
537,260
|
|
|
48
|
%
|
|
$
|
577,271
|
|
|
49
|
%
|
|
(7%)
|
|
$
|
1,094,022
|
|
|
48
|
%
|
|
$
|
1,157,330
|
|
|
49
|
%
|
|
(5%)
|
|
|
Reinsurance
|
586,347
|
|
|
52
|
%
|
|
608,277
|
|
|
51
|
%
|
|
(4%)
|
|
1,163,797
|
|
|
52
|
%
|
|
1,195,620
|
|
|
51
|
%
|
|
(3%)
|
|
||||
|
Total
|
$
|
1,123,607
|
|
|
100
|
%
|
|
$
|
1,185,548
|
|
|
100
|
%
|
|
(5%)
|
|
$
|
2,257,819
|
|
|
100
|
%
|
|
$
|
2,352,950
|
|
|
100
|
%
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
% Point
Change
|
|
2018
|
|
2019
|
|
% Point
Change
|
|
2018
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current accident year loss ratio excluding catastrophe and weather-related losses
|
59.7
|
%
|
|
(1.8)
|
|
61.5
|
%
|
|
59.3
|
%
|
|
(0.6)
|
|
59.9
|
%
|
|
|
Catastrophe and weather-related losses ratio
|
2.3
|
%
|
|
(0.9)
|
|
3.2
|
%
|
|
1.6
|
%
|
|
(1.5)
|
|
3.1
|
%
|
|
|
Current accident year loss ratio
|
62.0
|
%
|
|
(2.7)
|
|
64.7
|
%
|
|
60.9
|
%
|
|
(2.1)
|
|
63.0
|
%
|
|
|
Prior year reserve development ratio
|
(2.2
|
%)
|
|
2.9
|
|
(5.1
|
%)
|
|
(1.7
|
%)
|
|
3.2
|
|
(4.9
|
%)
|
|
|
Net losses and loss expenses ratio
|
59.8
|
%
|
|
0.2
|
|
59.6
|
%
|
|
59.2
|
%
|
|
1.1
|
|
58.1
|
%
|
|
|
Acquisition cost ratio
|
21.6
|
%
|
|
2.0
|
|
19.6
|
%
|
|
22.3
|
%
|
|
2.7
|
|
19.6
|
%
|
|
|
General and administrative expense ratio(1)
|
14.7
|
%
|
|
0.8
|
|
13.9
|
%
|
|
15.0
|
%
|
|
0.7
|
|
14.3
|
%
|
|
|
Combined ratio
|
96.1
|
%
|
|
3.0
|
|
93.1
|
%
|
|
96.5
|
%
|
|
4.5
|
|
92.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The general and administrative expense ratio includes corporate expenses not allocated to reportable segments of 2.9% and 2.6% for the three months ended June 30, 2019 and 2018, respectively and 3.0% and 2.6% for the six months ended June 30, 2019 and 2018, respectively. These costs are further discussed in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Expenses (Revenues), Net'.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
$
|
21,326
|
|
|
$
|
24,294
|
|
|
$
|
28,240
|
|
|
$
|
47,068
|
|
|
|
Reinsurance
|
2,295
|
|
|
35,822
|
|
|
10,053
|
|
|
67,355
|
|
|
||||
|
Total
|
$
|
23,621
|
|
|
$
|
60,116
|
|
|
$
|
38,293
|
|
|
$
|
114,423
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance segment
|
|
|
|
|
|
|
Reserve class and tail
|
||||
|
|
|
|
|
|
|
Property and other
|
Credit and surety
|
Professional lines
|
Motor
|
Liability
|
|
|
|
|
|
|
|
Short
|
Medium
|
Medium
|
Long
|
Long
|
|
|
|
|
|
|
Reported lines of business
|
|
|
|
|
|
Catastrophe
|
X
|
|
|
|
|
Property
|
X
|
|
|
|
|
Credit and surety
|
|
X
|
|
|
|
Professional lines
|
|
|
X
|
|
|
Motor
|
|
|
|
X
|
|
Liability
|
|
|
|
|
X
|
Engineering
|
X
|
|
|
|
|
Agriculture
|
X
|
|
|
|
|
Marine and other
|
X
|
|
|
|
|
Accident and health
|
X
|
|
|
|
|
Discontinued lines - Novae
|
X
|
|
|
X
|
X
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Property and other
|
$
|
5,868
|
|
|
$
|
22,318
|
|
|
$
|
(15,851
|
)
|
|
$
|
39,508
|
|
|
|
Marine
|
5,156
|
|
|
3,363
|
|
|
21,634
|
|
|
14,635
|
|
|
||||
|
Aviation
|
12
|
|
|
1,239
|
|
|
1,200
|
|
|
(2,453
|
)
|
|
||||
|
Credit and political risk
|
6,561
|
|
|
(687
|
)
|
|
9,062
|
|
|
78
|
|
|
||||
|
Professional lines
|
4,278
|
|
|
(1,673
|
)
|
|
10,243
|
|
|
2,234
|
|
|
||||
|
Liability
|
(549
|
)
|
|
(266
|
)
|
|
1,952
|
|
|
(6,934
|
)
|
|
||||
|
Total
|
$
|
21,326
|
|
|
$
|
24,294
|
|
|
$
|
28,240
|
|
|
$
|
47,068
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
$7 million of net favorable prior year reserve development on credit and political risk business primarily due to the recognition of better than expected loss emergence on the 2018 accident year.
|
•
|
$6 million of net favorable prior year reserve development on property and other business primarily due to the recognition of better than expected loss emergence attributable to SuperStorm Sandy.
|
•
|
$5 million of net favorable prior year reserve development on marine business primarily due to the recognition of better than expected loss emergence on more recent accident years, partially offset by reserve strengthening attributable to a specific 2018 accident year claim.
|
•
|
$4 million of net favorable prior year reserve development on professional lines business due to the recognition of better than expected loss emergence particularly on the 2013 to 2015 accident years.
|
•
|
$22 million of net favorable prior year reserve development on property and other business primarily due to generally better than expected loss emergence related to the 2017 catastrophe events.
|
•
|
$22 million of net favorable prior year reserve development on marine business primarily due to the recognition of better than expected loss emergence on more recent accident years.
|
•
|
$10 million of net favorable prior year reserve development on professional lines business due to the recognition of better than expected loss emergence particularly on the 2011 to 2015 accident years.
|
•
|
$9 million of net favorable prior year reserve development on credit and political risk business primarily due to the recognition of better than expected loss emergence on the 2018 accident year.
|
•
|
$16 million of net adverse prior year reserve development on property and other business primarily due to reserve strengthening in our international book of business mainly related to accident year 2018, partially offset by the recognition of better than expected loss emergence attributable to SuperStorm Sandy.
|
•
|
$40 million of net favorable prior year reserve development on property and other business primarily due to generally better than expected loss emergence related to the 2017 catastrophe events.
|
•
|
$15 million of net favorable prior year reserve development on marine business due to better than expected loss emergence on recent accident years.
|
•
|
$7 million of net adverse prior year reserve development on liability business due to slight reserve strengthening within our U.S. excess casualty book of business, mainly related to the 2013 to 2015 accident years.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Property and other
|
$
|
(30,094
|
)
|
|
$
|
16,058
|
|
|
$
|
(58,943
|
)
|
|
$
|
29,120
|
|
|
|
Credit and surety
|
16,645
|
|
|
8,712
|
|
|
27,008
|
|
|
13,698
|
|
|
||||
|
Professional lines
|
6,465
|
|
|
(467
|
)
|
|
7,944
|
|
|
8,106
|
|
|
||||
|
Motor
|
(1,243
|
)
|
|
5,334
|
|
|
11,062
|
|
|
8,525
|
|
|
||||
|
Liability
|
10,522
|
|
|
6,185
|
|
|
22,982
|
|
|
7,906
|
|
|
||||
|
Total
|
$
|
2,295
|
|
|
$
|
35,822
|
|
|
$
|
10,053
|
|
|
$
|
67,355
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
$17 million of net favorable prior year reserve development on credit and surety business primarily due to generally better than expected loss emergence primarily related to the 2016 accident year.
|
•
|
$11 million of net favorable prior year reserve development on liability business due to increased weight given by management to experience based indications on older accident years.
|
•
|
$6 million of net favorable prior year reserve development on professional lines business reflecting the generally favorable experience on earlier accident years as we continued to transition to more experience based actuarial methods.
|
•
|
$30 million of net adverse prior year reserve development on property and other business mainly due to an increase in loss estimates attributable to Typhoon Jebi consistent with updated industry insured loss estimates, an increase in loss estimates attributable to Hurricane Michael, and reserve strengthening attributable to late reporting of claims bordereaux associated with the 2015 through 2017 accident years, partially offset by the recognition of better than expected loss emergence attributable to the California Wildfires.
|
•
|
$16 million of net favorable prior year reserve development on property and other business due to overall better than expected loss emergence related to the 2017 catastrophe events and better than expected loss emergence on our agriculture business.
|
•
|
$9 million of net favorable prior year reserve development on credit and surety business due to generally better than expected prior year loss emergence.
|
•
|
$6 million of net favorable prior year reserve development on liability business reflecting the generally favorable experience on earlier accident years, particularly 2008, 2009 and 2013, as progressively increased weight was given by management to experience based indications on older accident years.
|
•
|
$5 million of net favorable prior year reserve development on motor business related to favorable experience on non proportional business on earlier accident years.
|
•
|
$27 million of net favorable prior year reserve development on credit and surety business primarily due to generally better than expected loss emergence primarily related to 2015 and 2016 accident years, partially offset by reserve strengthening attributable to the 2018 accident year.
|
•
|
$23 million of net favorable prior year reserve development on liability business due to increased weight given by management to experience based indications on older accident years.
|
•
|
$11 million of net favorable prior year reserve development on motor business largely due to non proportional treaty business related to older accident years.
|
•
|
$8 million of net favorable prior year reserve development on professional lines business reflecting the generally favorable experience on earlier accident years as we continued to transition to more experience based actuarial methods.
|
•
|
$59 million of net adverse prior year reserve development on property and other business mainly due to an increase in loss estimates attributable Typhoons Jebi and Trami consistent with updated industry insured loss estimates, an increase in loss estimates attributable to Hurricane Michael, and reserve strengthening attributable to 2015 through 2017 accident year claims associated with late bordereau reporting, partially offset by to the recognition of better than expected loss emergence attributable to the California Wildfires.
|
•
|
$29 million of net favorable prior year reserve development on property and other business due to overall better than expected loss emergence related to the 2017 catastrophe events and better than expected loss emergence on agriculture business.
|
•
|
$14 million of net favorable prior year reserve development on credit and surety due to generally better than expected prior year loss emergence.
|
•
|
$9 million of net favorable prior year reserve development on motor business related to favorable non proportional business on earlier accident years.
|
•
|
$8 million of net favorable prior year reserve development on professional lines business reflecting the generally favorable experience on earlier accident years as we continue to transition to more experience actuarial based methods.
|
•
|
$8 million of net favorable prior year reserve development on liability business reflecting the generally favorable experience on earlier accident years as progressively increased weight was given by management to experience based indications on older accident years.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross premiums written
|
$
|
968,325
|
|
|
(6%)
|
|
$
|
1,026,644
|
|
|
$
|
1,819,421
|
|
|
(5%)
|
|
$
|
1,907,492
|
|
|
|
Net premiums written
|
591,909
|
|
|
(1%)
|
|
598,179
|
|
|
1,121,149
|
|
|
(2%)
|
|
1,146,071
|
|
|
||||
|
Net premiums earned
|
537,260
|
|
|
(7%)
|
|
577,271
|
|
|
1,094,022
|
|
|
(5%)
|
|
1,157,330
|
|
|
||||
|
Other insurance related income (loss)
|
(695
|
)
|
|
nm
|
|
1,214
|
|
|
1,046
|
|
|
(43%)
|
|
1,833
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Current year net losses and loss expenses
|
(330,029
|
)
|
|
|
|
(353,067
|
)
|
|
(650,719
|
)
|
|
|
|
(697,380
|
)
|
|
||||
|
Prior year reserve development
|
21,326
|
|
|
|
|
24,294
|
|
|
28,240
|
|
|
|
|
47,068
|
|
|
||||
|
Acquisition costs
|
(111,655
|
)
|
|
|
|
(90,864
|
)
|
|
(229,430
|
)
|
|
|
|
(178,193
|
)
|
|
||||
|
General and administrative expenses
|
(104,898
|
)
|
|
|
|
(102,369
|
)
|
|
(210,932
|
)
|
|
|
|
(204,738
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Underwriting income
|
$
|
11,309
|
|
|
(80%)
|
|
$
|
56,479
|
|
|
$
|
32,227
|
|
|
(74%)
|
|
$
|
125,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Ratios:
|
|
|
% Point
Change
|
|
|
|
|
|
% Point
Change
|
|
|
|
||||||||
|
Current accident year loss ratio excluding catastrophe and weather-related losses
|
58.7
|
%
|
|
1.5
|
|
57.2
|
%
|
|
57.4
|
%
|
|
1.6
|
|
55.8
|
%
|
|
||||
|
Catastrophe and weather-related losses ratio
|
2.7
|
%
|
|
(1.3)
|
|
4.0
|
%
|
|
2.1
|
%
|
|
(2.4)
|
|
4.5
|
%
|
|
||||
|
Current accident year loss ratio
|
61.4
|
%
|
|
0.2
|
|
61.2
|
%
|
|
59.5
|
%
|
|
(0.8)
|
|
60.3
|
%
|
|
||||
|
Prior year reserve development ratio
|
(3.9
|
%)
|
|
0.3
|
|
(4.2
|
%)
|
|
(2.6
|
%)
|
|
1.5
|
|
(4.1
|
%)
|
|
||||
|
Net losses and loss expenses ratio
|
57.5
|
%
|
|
0.5
|
|
57.0
|
%
|
|
56.9
|
%
|
|
0.7
|
|
56.2
|
%
|
|
||||
|
Acquisition cost ratio
|
20.8
|
%
|
|
5.1
|
|
15.7
|
%
|
|
21.0
|
%
|
|
5.6
|
|
15.4
|
%
|
|
||||
|
General and administrative expense ratio
|
19.5
|
%
|
|
1.8
|
|
17.7
|
%
|
|
19.2
|
%
|
|
1.5
|
|
17.7
|
%
|
|
||||
|
Combined ratio
|
97.8
|
%
|
|
7.4
|
|
90.4
|
%
|
|
97.1
|
%
|
|
7.8
|
|
89.3
|
%
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
|
|
Six months ended June 30,
|
|
|
|
||||||||||||||||||||||||
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property
|
$
|
259,295
|
|
|
26
|
%
|
|
$
|
344,737
|
|
|
33
|
%
|
|
(25%)
|
|
$
|
459,797
|
|
|
25
|
%
|
|
$
|
639,943
|
|
|
34
|
%
|
|
(28%)
|
|
|
Marine
|
99,389
|
|
|
10
|
%
|
|
95,690
|
|
|
9
|
%
|
|
4%
|
|
246,368
|
|
|
14
|
%
|
|
222,432
|
|
|
12
|
%
|
|
11%
|
|
||||
|
Terrorism
|
15,157
|
|
|
2
|
%
|
|
15,812
|
|
|
2
|
%
|
|
(4%)
|
|
29,519
|
|
|
2
|
%
|
|
32,712
|
|
|
2
|
%
|
|
(10%)
|
|
||||
|
Aviation
|
18,539
|
|
|
2
|
%
|
|
21,048
|
|
|
2
|
%
|
|
(12%)
|
|
36,209
|
|
|
2
|
%
|
|
42,061
|
|
|
2
|
%
|
|
(14%)
|
|
||||
|
Credit and political risk
|
36,076
|
|
|
4
|
%
|
|
30,736
|
|
|
3
|
%
|
|
17%
|
|
81,983
|
|
|
5
|
%
|
|
75,466
|
|
|
4
|
%
|
|
9%
|
|
||||
|
Professional lines
|
321,284
|
|
|
33
|
%
|
|
297,243
|
|
|
29
|
%
|
|
8%
|
|
548,592
|
|
|
30
|
%
|
|
505,208
|
|
|
26
|
%
|
|
9%
|
|
||||
|
Liability
|
190,030
|
|
|
20
|
%
|
|
150,167
|
|
|
15
|
%
|
|
27%
|
|
332,672
|
|
|
18
|
%
|
|
255,828
|
|
|
13
|
%
|
|
30%
|
|
||||
|
Accident and health
|
28,126
|
|
|
3
|
%
|
|
69,860
|
|
|
7
|
%
|
|
(60%)
|
|
79,174
|
|
|
4
|
%
|
|
130,537
|
|
|
7
|
%
|
|
(39%)
|
|
||||
|
Discontinued lines - Novae
|
429
|
|
|
—
|
%
|
|
1,351
|
|
|
—
|
%
|
|
(68%)
|
|
5,107
|
|
|
—
|
%
|
|
3,305
|
|
|
—
|
%
|
|
55%
|
|
||||
|
Total
|
$
|
968,325
|
|
|
100
|
%
|
|
$
|
1,026,644
|
|
|
100
|
%
|
|
(6%)
|
|
$
|
1,819,421
|
|
|
100
|
%
|
|
$
|
1,907,492
|
|
|
100
|
%
|
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
|
|
Six months ended June 30,
|
|
|
|
||||||||||||||||||||||||
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property
|
$
|
155,566
|
|
|
29
|
%
|
|
$
|
189,402
|
|
|
32
|
%
|
|
(18%)
|
|
$
|
326,699
|
|
|
30
|
%
|
|
$
|
386,015
|
|
|
34
|
%
|
|
(15%)
|
|
|
Marine
|
70,379
|
|
|
13
|
%
|
|
73,194
|
|
|
13
|
%
|
|
(4%)
|
|
144,192
|
|
|
13
|
%
|
|
149,569
|
|
|
13
|
%
|
|
(4%)
|
|
||||
|
Terrorism
|
12,867
|
|
|
2
|
%
|
|
11,879
|
|
|
2
|
%
|
|
8%
|
|
24,030
|
|
|
2
|
%
|
|
26,386
|
|
|
2
|
%
|
|
(9%)
|
|
||||
|
Aviation
|
14,737
|
|
|
3
|
%
|
|
17,702
|
|
|
3
|
%
|
|
(17%)
|
|
27,610
|
|
|
3
|
%
|
|
36,188
|
|
|
3
|
%
|
|
(24%)
|
|
||||
|
Credit and political risk
|
24,175
|
|
|
4
|
%
|
|
26,281
|
|
|
5
|
%
|
|
(8%)
|
|
46,979
|
|
|
4
|
%
|
|
53,999
|
|
|
5
|
%
|
|
(13%)
|
|
||||
|
Professional lines
|
161,525
|
|
|
30
|
%
|
|
136,306
|
|
|
24
|
%
|
|
19%
|
|
318,649
|
|
|
29
|
%
|
|
271,918
|
|
|
23
|
%
|
|
17%
|
|
||||
|
Liability
|
62,141
|
|
|
12
|
%
|
|
58,465
|
|
|
10
|
%
|
|
6%
|
|
124,350
|
|
|
11
|
%
|
|
109,562
|
|
|
9
|
%
|
|
13%
|
|
||||
|
Accident and health
|
35,610
|
|
|
7
|
%
|
|
56,103
|
|
|
10
|
%
|
|
(37%)
|
|
76,034
|
|
|
7
|
%
|
|
104,686
|
|
|
9
|
%
|
|
(27%)
|
|
||||
|
Discontinued lines - Novae
|
260
|
|
|
—
|
%
|
|
7,939
|
|
|
1
|
%
|
|
(97%)
|
|
5,479
|
|
|
1
|
%
|
|
19,007
|
|
|
2
|
%
|
|
(71%)
|
|
||||
|
Total
|
$
|
537,260
|
|
|
100
|
%
|
|
$
|
577,271
|
|
|
100
|
%
|
|
(7%)
|
|
$
|
1,094,022
|
|
|
100
|
%
|
|
$
|
1,157,330
|
|
|
100
|
%
|
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
% Point
Change
|
|
2018
|
|
2019
|
|
% Point
Change
|
|
2018
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current accident year
|
61.4
|
%
|
|
0.2
|
|
61.2
|
%
|
|
59.5
|
%
|
|
(0.8)
|
|
60.3
|
%
|
|
|
Prior year reserve development
|
(3.9
|
%)
|
|
0.3
|
|
(4.2
|
%)
|
|
(2.6
|
%)
|
|
1.5
|
|
(4.1
|
%)
|
|
|
Loss ratio
|
57.5
|
%
|
|
0.5
|
|
57.0
|
%
|
|
56.9
|
%
|
|
0.7
|
|
56.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gross premiums written
|
$
|
679,435
|
|
|
9%
|
|
$
|
624,181
|
|
|
$
|
2,411,565
|
|
|
—%
|
|
$
|
2,406,128
|
|
|
|
Net premiums written
|
478,412
|
|
|
19%
|
|
402,276
|
|
|
1,726,232
|
|
|
(6%)
|
|
1,840,255
|
|
|
||||
|
Net premiums earned
|
586,347
|
|
|
(4%)
|
|
608,277
|
|
|
1,163,797
|
|
|
(3%)
|
|
1,195,620
|
|
|
||||
|
Other insurance related income
|
3,620
|
|
|
44%
|
|
2,516
|
|
|
8,806
|
|
|
4%
|
|
8,502
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Current year net losses and loss expenses
|
(366,055
|
)
|
|
|
|
(413,690
|
)
|
|
(724,065
|
)
|
|
|
|
(785,029
|
)
|
|
||||
|
Prior year reserve development
|
2,295
|
|
|
|
|
35,822
|
|
|
10,053
|
|
|
|
|
67,355
|
|
|
||||
|
Acquisition costs
|
(130,708
|
)
|
|
|
|
(141,088
|
)
|
|
(273,351
|
)
|
|
|
|
(283,019
|
)
|
|
||||
|
General and administrative expenses
|
(28,149
|
)
|
|
|
|
(32,590
|
)
|
|
(60,988
|
)
|
|
|
|
(69,886
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Underwriting income
|
$
|
67,350
|
|
|
14%
|
|
$
|
59,247
|
|
|
$
|
124,252
|
|
|
(7%)
|
|
$
|
133,543
|
|
|
|
Ratios:
|
|
|
% Point
Change
|
|
|
|
|
|
% Point
Change
|
|
|
|
||||||||
|
Current accident year loss ratio excluding catastrophe and weather-related losses
|
60.5
|
%
|
|
(5.0)
|
|
65.5
|
%
|
|
61.0
|
%
|
|
(2.8)
|
|
63.8
|
%
|
|
||||
|
Catastrophe and weather-related losses ratio
|
1.9
|
%
|
|
(0.6)
|
|
2.5
|
%
|
|
1.2
|
%
|
|
(0.7)
|
|
1.9
|
%
|
|
||||
|
Current accident year loss ratio
|
62.4
|
%
|
|
(5.6)
|
|
68.0
|
%
|
|
62.2
|
%
|
|
(3.5)
|
|
65.7
|
%
|
|
||||
|
Prior year reserve development ratio
|
(0.4
|
%)
|
|
5.5
|
|
(5.9
|
%)
|
|
(0.8
|
%)
|
|
4.9
|
|
(5.7
|
%)
|
|
||||
|
Net losses and loss expenses ratio
|
62.0
|
%
|
|
(0.1)
|
|
62.1
|
%
|
|
61.4
|
%
|
|
1.4
|
|
60.0
|
%
|
|
||||
|
Acquisition cost ratio
|
22.3
|
%
|
|
(0.9)
|
|
23.2
|
%
|
|
23.5
|
%
|
|
(0.2)
|
|
23.7
|
%
|
|
||||
|
General and administrative expense ratio
|
4.8
|
%
|
|
(0.6)
|
|
5.4
|
%
|
|
5.2
|
%
|
|
(0.6)
|
|
5.8
|
%
|
|
||||
|
Combined ratio
|
89.1
|
%
|
|
(1.6)
|
|
90.7
|
%
|
|
90.1
|
%
|
|
0.6
|
|
89.5
|
%
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
|
|
Six months ended June 30,
|
|
|
|
||||||||||||||||||||||||
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
2019
|
|
|
|
2018
|
|
|
|
%
Change
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Catastrophe
|
$
|
245,203
|
|
|
36
|
%
|
|
$
|
148,304
|
|
|
23
|
%
|
|
65%
|
|
$
|
603,336
|
|
|
26
|
%
|
|
$
|
430,188
|
|
|
19
|
%
|
|
40%
|
|
|
Property
|
43,135
|
|
|
6
|
%
|
|
60,293
|
|
|
10
|
%
|
|
(28%)
|
|
215,877
|
|
|
9
|
%
|
|
261,000
|
|
|
11
|
%
|
|
(17%)
|
|
||||
|
Professional lines
|
92,915
|
|
|
14
|
%
|
|
116,273
|
|
|
19
|
%
|
|
(20%)
|
|
202,743
|
|
|
8
|
%
|
|
222,452
|
|
|
9
|
%
|
|
(9%)
|
|
||||
|
Credit and surety
|
38,465
|
|
|
6
|
%
|
|
52,685
|
|
|
8
|
%
|
|
(27%)
|
|
190,369
|
|
|
8
|
%
|
|
249,000
|
|
|
10
|
%
|
|
(24%)
|
|
||||
|
Motor
|
6,846
|
|
|
1
|
%
|
|
43,279
|
|
|
7
|
%
|
|
(84%)
|
|
288,248
|
|
|
12
|
%
|
|
455,355
|
|
|
19
|
%
|
|
(37%)
|
|
||||
|
Liability
|
125,990
|
|
|
19
|
%
|
|
91,343
|
|
|
15
|
%
|
|
38%
|
|
311,310
|
|
|
13
|
%
|
|
250,352
|
|
|
10
|
%
|
|
24%
|
|
||||
|
Agriculture
|
70,077
|
|
|
10
|
%
|
|
53,953
|
|
|
9
|
%
|
|
30%
|
|
196,517
|
|
|
8
|
%
|
|
199,350
|
|
|
8
|
%
|
|
(1%)
|
|
||||
|
Engineering
|
7,600
|
|
|
1
|
%
|
|
6,604
|
|
|
1
|
%
|
|
15%
|
|
30,365
|
|
|
1
|
%
|
|
33,110
|
|
|
1
|
%
|
|
(8%)
|
|
||||
|
Marine and other
|
22,042
|
|
|
3
|
%
|
|
13,631
|
|
|
2
|
%
|
|
62%
|
|
58,379
|
|
|
2
|
%
|
|
40,279
|
|
|
2
|
%
|
|
45%
|
|
||||
|
Accident and health
|
27,723
|
|
|
4
|
%
|
|
37,808
|
|
|
6
|
%
|
|
(27%)
|
|
315,315
|
|
|
13
|
%
|
|
265,496
|
|
|
11
|
%
|
|
19%
|
|
||||
|
Discontinued lines - Novae
|
(561
|
)
|
|
—
|
%
|
|
8
|
|
|
—
|
%
|
|
nm
|
|
(894
|
)
|
|
—
|
%
|
|
(454
|
)
|
|
—
|
%
|
|
97%
|
|
||||
|
Total
|
$
|
679,435
|
|
|
100
|
%
|
|
$
|
624,181
|
|
|
100
|
%
|
|
9%
|
|
$
|
2,411,565
|
|
|
100
|
%
|
|
$
|
2,406,128
|
|
|
100
|
%
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
|
|
Six months ended June 30,
|
|
|
|
||||||||||||||||||||||||
|
|
2019
|
|
|
|
2018
|
|
|
|
% Change
|
|
2019
|
|
|
|
2018
|
|
|
|
% Change
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Catastrophe
|
$
|
68,506
|
|
|
11
|
%
|
|
$
|
59,498
|
|
|
10
|
%
|
|
15%
|
|
$
|
136,558
|
|
|
10
|
%
|
|
$
|
121,352
|
|
|
9
|
%
|
|
13%
|
|
|
Property
|
71,338
|
|
|
12
|
%
|
|
78,466
|
|
|
13
|
%
|
|
(9%)
|
|
148,243
|
|
|
13
|
%
|
|
156,923
|
|
|
13
|
%
|
|
(6%)
|
|
||||
|
Professional lines
|
51,525
|
|
|
9
|
%
|
|
51,558
|
|
|
8
|
%
|
|
—%
|
|
103,424
|
|
|
9
|
%
|
|
107,749
|
|
|
9
|
%
|
|
(4%)
|
|
||||
|
Credit and surety
|
48,930
|
|
|
8
|
%
|
|
65,746
|
|
|
11
|
%
|
|
(26%)
|
|
99,013
|
|
|
9
|
%
|
|
118,481
|
|
|
10
|
%
|
|
(16%)
|
|
||||
|
Motor
|
92,458
|
|
|
16
|
%
|
|
117,975
|
|
|
19
|
%
|
|
(22%)
|
|
193,694
|
|
|
17
|
%
|
|
221,507
|
|
|
19
|
%
|
|
(13%)
|
|
||||
|
Liability
|
95,145
|
|
|
16
|
%
|
|
89,511
|
|
|
15
|
%
|
|
6%
|
|
184,006
|
|
|
16
|
%
|
|
179,103
|
|
|
15
|
%
|
|
3%
|
|
||||
|
Agriculture
|
47,158
|
|
|
8
|
%
|
|
35,330
|
|
|
6
|
%
|
|
33%
|
|
84,226
|
|
|
7
|
%
|
|
73,888
|
|
|
6
|
%
|
|
14%
|
|
||||
|
Engineering
|
16,003
|
|
|
3
|
%
|
|
16,593
|
|
|
3
|
%
|
|
(4%)
|
|
30,676
|
|
|
3
|
%
|
|
34,298
|
|
|
3
|
%
|
|
(11%)
|
|
||||
|
Marine and other
|
15,168
|
|
|
3
|
%
|
|
12,616
|
|
|
2
|
%
|
|
20%
|
|
26,610
|
|
|
2
|
%
|
|
19,076
|
|
|
2
|
%
|
|
39%
|
|
||||
|
Accident and health
|
80,420
|
|
|
14
|
%
|
|
78,442
|
|
|
13
|
%
|
|
3%
|
|
157,888
|
|
|
14
|
%
|
|
156,999
|
|
|
13
|
%
|
|
1%
|
|
||||
|
Discontinued lines - Novae
|
(304
|
)
|
|
—
|
%
|
|
2,542
|
|
|
—
|
%
|
|
nm
|
|
(541
|
)
|
|
—
|
%
|
|
6,244
|
|
|
1
|
%
|
|
nm
|
|
||||
|
Total
|
$
|
586,347
|
|
|
100
|
%
|
|
$
|
608,277
|
|
|
100
|
%
|
|
(4%)
|
|
$
|
1,163,797
|
|
|
100
|
%
|
|
$
|
1,195,620
|
|
|
100
|
%
|
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
% Point
Change
|
|
2018
|
|
2019
|
|
% Point
Change
|
|
2018
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current accident year
|
62.4
|
%
|
|
(5.6)
|
|
68.0
|
%
|
|
62.2
|
%
|
|
(3.5)
|
|
65.7
|
%
|
|
|
Prior year reserve development
|
(0.4
|
%)
|
|
5.5
|
|
(5.9
|
%)
|
|
(0.8
|
%)
|
|
4.9
|
|
(5.7
|
%)
|
|
|
Loss ratio
|
62.0
|
%
|
|
(0.1)
|
|
62.1
|
%
|
|
61.4
|
%
|
|
1.4
|
|
60.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate expenses
|
$
|
32,348
|
|
|
7%
|
|
$
|
30,254
|
|
|
$
|
68,566
|
|
|
13%
|
|
$
|
60,425
|
|
|
|
Foreign exchange gains
|
(12,381
|
)
|
|
(72%)
|
|
(44,099
|
)
|
|
(5,325
|
)
|
|
(15%)
|
|
(6,239
|
)
|
|
||||
|
Interest expense and financing costs
|
15,607
|
|
|
(9%)
|
|
17,098
|
|
|
31,502
|
|
|
(7%)
|
|
33,861
|
|
|
||||
|
Income tax expense (benefit)
|
14,469
|
|
|
nm
|
|
996
|
|
|
15,703
|
|
|
nm
|
|
(40
|
)
|
|
||||
|
Total
|
$
|
50,043
|
|
|
nm
|
|
$
|
4,249
|
|
|
$
|
110,446
|
|
|
25%
|
|
$
|
88,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
2019
|
|
% Change
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities
|
$
|
97,370
|
|
|
10%
|
|
$
|
88,320
|
|
|
$
|
188,752
|
|
|
10%
|
|
$
|
172,279
|
|
|
|
Other investments
|
31,232
|
|
|
115%
|
|
14,541
|
|
|
38,128
|
|
|
35%
|
|
28,246
|
|
|
||||
|
Equity securities
|
3,197
|
|
|
1%
|
|
3,158
|
|
|
5,525
|
|
|
12%
|
|
4,916
|
|
|
||||
|
Mortgage loans
|
3,689
|
|
|
10%
|
|
3,357
|
|
|
6,752
|
|
|
4%
|
|
6,483
|
|
|
||||
|
Cash and cash equivalents
|
8,138
|
|
|
45%
|
|
5,627
|
|
|
13,940
|
|
|
43%
|
|
9,779
|
|
|
||||
|
Short-term investments
|
1,108
|
|
|
(33%)
|
|
1,645
|
|
|
5,002
|
|
|
98%
|
|
2,520
|
|
|
||||
|
Gross investment income
|
144,734
|
|
|
24%
|
|
116,648
|
|
|
258,099
|
|
|
15%
|
|
224,223
|
|
|
||||
|
Investment expense
|
(6,785
|
)
|
|
1%
|
|
(6,688
|
)
|
|
(12,845
|
)
|
|
(3%)
|
|
(13,262
|
)
|
|
||||
|
Net investment income
|
$
|
137,949
|
|
|
25%
|
|
$
|
109,960
|
|
|
$
|
245,254
|
|
|
16%
|
|
$
|
210,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Pre-tax yield:(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities
|
3.2
|
%
|
|
|
|
3.0
|
%
|
|
3.2
|
%
|
|
|
|
2.8
|
%
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Hedge, direct lending, private equity and real estate funds
|
$
|
16,807
|
|
|
$
|
11,867
|
|
|
$
|
22,253
|
|
|
$
|
22,457
|
|
|
|
Other privately held investments
|
13,592
|
|
|
(394
|
)
|
|
14,627
|
|
|
1,105
|
|
|
||||
|
CLO-Equities
|
833
|
|
|
3,068
|
|
|
1,248
|
|
|
4,684
|
|
|
||||
|
Net investment income from other investments (1)
|
$
|
31,232
|
|
|
$
|
14,541
|
|
|
$
|
38,128
|
|
|
$
|
28,246
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Pre-tax return on other investments(2)
|
4.4
|
%
|
|
1.8
|
%
|
|
5.5
|
%
|
|
3.5
|
%
|
|
||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Excluding overseas deposits.
|
(2)
|
The pre-tax return on other investments is calculated by dividing total net investment income from other investments (non-annualized) by the average month-end fair value balances held for the periods indicated, excluding overseas deposits.
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
On sale of investments:
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities and short-term investments
|
$
|
8,993
|
|
|
$
|
(38,681
|
)
|
|
$
|
(848
|
)
|
|
$
|
(50,588
|
)
|
|
|
Equity securities
|
125
|
|
|
1,147
|
|
|
1,476
|
|
|
17,428
|
|
|
||||
|
|
9,118
|
|
|
(37,534
|
)
|
|
628
|
|
|
(33,160
|
)
|
|
||||
|
OTTI charges recognized in net income
|
(834
|
)
|
|
(1,674
|
)
|
|
(4,870
|
)
|
|
(2,088
|
)
|
|
||||
|
Change in fair value of investment derivatives
|
(204
|
)
|
|
5,134
|
|
|
(2,305
|
)
|
|
7,157
|
|
|
||||
|
Net unrealized gains (losses) on equity securities
|
13,145
|
|
|
(11,019
|
)
|
|
40,543
|
|
|
(31,832
|
)
|
|
||||
|
Net investment gains (losses)
|
$
|
21,225
|
|
|
$
|
(45,093
|
)
|
|
$
|
33,996
|
|
|
$
|
(59,923
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net investment income
|
$
|
137,949
|
|
|
$
|
109,960
|
|
|
$
|
245,254
|
|
|
$
|
210,961
|
|
|
|
Net investments gains (losses)
|
21,225
|
|
|
(45,093
|
)
|
|
33,996
|
|
|
(59,923
|
)
|
|
||||
|
Change in net unrealized gains (losses) on fixed maturities (1)
|
138,766
|
|
|
(75,745
|
)
|
|
359,445
|
|
|
(183,010
|
)
|
|
||||
|
Interest in income (loss) of equity method investments
|
2,635
|
|
|
3,378
|
|
|
4,853
|
|
|
3,378
|
|
|
||||
|
Total
|
$
|
300,575
|
|
|
$
|
(7,500
|
)
|
|
$
|
643,548
|
|
|
$
|
(28,594
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Average cash and investments(2)
|
$
|
15,040,615
|
|
|
$
|
15,165,153
|
|
|
$
|
15,049,282
|
|
|
$
|
15,440,159
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total return on average cash and investments, pre-tax:
|
|
|
|
|
|
|
|
|
||||||||
|
Including investment related foreign exchange movements
|
2.0
|
%
|
|
—
|
%
|
|
4.3
|
%
|
|
(0.2
|
%)
|
|
||||
|
Excluding investment related foreign exchange movements(3)
|
2.1
|
%
|
|
0.3
|
%
|
|
4.3
|
%
|
|
(0.1
|
%)
|
|
||||
|
|
|
|
|
|
|
|
|
|
(1)
|
Change in net unrealized investment gains (losses) on fixed maturities is calculated by taking net unrealized investment gains (losses) at period end less net unrealized investment gains (losses) at the prior period end.
|
(2)
|
The average cash and investments balance is calculated by taking the average of the month-end fair value balances held.
|
(3)
|
Pre-tax total return on cash and investments excluding foreign exchange movements is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to pre-tax total return on cash and investments, the most comparable GAAP financial measure, included foreign exchange (losses) gains of $(8) million and $(59) million for the three months ended June 30, 2019 and 2018, respectively, and foreign exchange (losses) gains of $2 million and $(19) million for six months ended June 30, 2019 and 2018, respectively.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
||||||
|
|
|
Fair Value
|
|
|
Fair Value
|
|
||||
|
|
|
|
|
|
|
|
||||
|
Fixed maturities
|
|
$
|
12,522,955
|
|
|
|
$
|
11,435,347
|
|
|
|
Equity securities
|
|
433,407
|
|
|
|
381,633
|
|
|
||
|
Mortgage loans
|
|
394,179
|
|
|
|
298,650
|
|
|
||
|
Other investments
|
|
802,064
|
|
|
|
787,787
|
|
|
||
|
Equity method investments
|
|
112,956
|
|
|
|
108,103
|
|
|
||
|
Short-term investments
|
|
32,421
|
|
|
|
144,040
|
|
|
||
|
Total investments
|
|
$
|
14,297,982
|
|
|
|
$
|
13,155,560
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cash and cash equivalents(1)
|
|
$
|
1,094,714
|
|
|
|
$
|
1,830,020
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes restricted cash and cash equivalents of $382 million and $597 million at June 30, 2019 and at December 31, 2018, respectively.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
2,317,427
|
|
|
19
|
%
|
|
$
|
1,515,697
|
|
|
13
|
%
|
|
|
Non-U.S. government
|
537,824
|
|
|
4
|
%
|
|
493,016
|
|
|
4
|
%
|
|
||
|
Corporate debt
|
4,945,585
|
|
|
39
|
%
|
|
4,876,921
|
|
|
44
|
%
|
|
||
|
Agency RMBS
|
1,686,912
|
|
|
13
|
%
|
|
1,643,308
|
|
|
14
|
%
|
|
||
|
CMBS
|
1,184,268
|
|
|
9
|
%
|
|
1,092,530
|
|
|
10
|
%
|
|
||
|
Non-Agency RMBS
|
55,980
|
|
|
1
|
%
|
|
40,687
|
|
|
—
|
%
|
|
||
|
ABS
|
1,600,771
|
|
|
13
|
%
|
|
1,637,603
|
|
|
14
|
%
|
|
||
|
Municipals(1)
|
194,188
|
|
|
2
|
%
|
|
135,585
|
|
|
1
|
%
|
|
||
|
Total
|
$
|
12,522,955
|
|
|
100
|
%
|
|
$
|
11,435,347
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Credit ratings:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
2,317,427
|
|
|
19
|
%
|
|
$
|
1,515,697
|
|
|
13
|
%
|
|
|
AAA(2)
|
4,486,856
|
|
|
36
|
%
|
|
4,569,632
|
|
|
40
|
%
|
|
||
|
AA
|
1,080,532
|
|
|
8
|
%
|
|
874,932
|
|
|
8
|
%
|
|
||
|
A
|
1,767,759
|
|
|
14
|
%
|
|
1,769,686
|
|
|
15
|
%
|
|
||
|
BBB
|
1,705,773
|
|
|
14
|
%
|
|
1,678,962
|
|
|
15
|
%
|
|
||
|
Below BBB(3)
|
1,164,608
|
|
|
9
|
%
|
|
1,026,438
|
|
|
9
|
%
|
|
||
|
Total
|
$
|
12,522,955
|
|
|
100
|
%
|
|
$
|
11,435,347
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes bonds issued by states, municipalities, and political subdivisions.
|
(2)
|
Includes U.S. government-sponsored agencies, Residential mortgage-backed securities ("RMBS") and Commercial mortgage-backed securities ("CMBS").
|
(3)
|
Non-investment grade and non-rated securities.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Hedge funds
|
|
|
|
|
|
|
|
|
||||||
|
Long/short equity funds
|
$
|
30,526
|
|
|
4
|
%
|
|
$
|
26,779
|
|
|
3
|
%
|
|
|
Multi-strategy funds
|
165,123
|
|
|
21
|
%
|
|
167,819
|
|
|
22
|
%
|
|
||
|
Total hedge funds
|
195,649
|
|
|
25
|
%
|
|
194,598
|
|
|
25
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
Direct lending funds
|
273,864
|
|
|
34
|
%
|
|
274,478
|
|
|
35
|
%
|
|
||
|
Private equity funds
|
60,285
|
|
|
8
|
%
|
|
64,566
|
|
|
8
|
%
|
|
||
|
Real estate funds
|
134,763
|
|
|
17
|
%
|
|
84,202
|
|
|
11
|
%
|
|
||
|
Total hedge, direct lending, private equity and real estate funds
|
664,561
|
|
|
84
|
%
|
|
617,844
|
|
|
79
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
CLO-Equities
|
17,798
|
|
|
1
|
%
|
|
21,271
|
|
|
2
|
%
|
|
||
|
Other privately held investments
|
28,452
|
|
|
4
|
%
|
|
44,518
|
|
|
6
|
%
|
|
||
|
Overseas deposits
|
91,253
|
|
|
11
|
%
|
|
104,154
|
|
|
13
|
%
|
|
||
|
Total other investments
|
$
|
802,064
|
|
|
100
|
%
|
|
$
|
787,787
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|
||||
|
|
|
|
|
|
||||
|
Debt
|
$
|
1,387,748
|
|
|
$
|
1,341,961
|
|
|
|
|
|
|
|
|
||||
|
Preferred shares
|
775,000
|
|
|
775,000
|
|
|
||
|
Common equity
|
4,791,477
|
|
|
4,255,071
|
|
|
||
|
Shareholders’ equity
|
5,566,477
|
|
|
5,030,071
|
|
|
||
|
Total capital
|
$
|
6,954,225
|
|
|
$
|
6,372,032
|
|
|
|
|
|
|
|
|
||||
|
Ratio of debt to total capital
|
20.0
|
%
|
|
21.1
|
%
|
|
||
|
Ratio of debt and preferred equity to total capital
|
31.1
|
%
|
|
33.2
|
%
|
|
||
|
|
|
|
|
|
|
Six months ended June 30,
|
2019
|
|
||
|
|
|
|
||
|
Common equity - opening
|
$
|
4,255,071
|
|
|
|
Treasury shares reissued
|
1,733
|
|
|
|
|
Share-based compensation expense
|
15,067
|
|
|
|
|
Change in unrealized gains (losses) on available for sale investments, net of tax
|
328,036
|
|
|
|
|
Foreign currency translation adjustment
|
5,219
|
|
|
|
|
Net income
|
285,828
|
|
|
|
|
Preferred share dividends
|
(21,313
|
)
|
|
|
|
Common share dividends
|
(68,750
|
)
|
|
|
|
Treasury shares repurchased
|
(9,414
|
)
|
|
|
|
Common equity - closing
|
$
|
4,791,477
|
|
|
|
|
|
|
•
|
reserves for losses and loss expenses;
|
•
|
reinsurance recoverable on unpaid losses, including the provision for uncollectible amounts;
|
•
|
gross premiums written;
|
•
|
fair value measurements of financial assets and liabilities; and
|
•
|
other-than-temporary impairments ("OTTI") in the carrying value of available-for-sale securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
AUD
|
|
NZD
|
|
CAD
|
|
EUR
|
|
GBP
|
|
JPY
|
|
Other
|
|
Total
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
At June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net managed assets (liabilities), excluding derivatives
|
$
|
26,081
|
|
|
$
|
(5,363
|
)
|
|
$
|
124,990
|
|
|
$
|
(191,493
|
)
|
|
$
|
(80,707
|
)
|
|
$
|
22,866
|
|
|
$
|
158,337
|
|
|
$
|
54,710
|
|
|
|
Foreign currency derivatives, net
|
(48,374
|
)
|
|
5,032
|
|
|
(119,339
|
)
|
|
271,468
|
|
|
(57,763
|
)
|
|
(4,171
|
)
|
|
(7,204
|
)
|
|
39,649
|
|
|
||||||||
|
Net managed foreign currency exposure
|
(22,292
|
)
|
|
(330
|
)
|
|
5,651
|
|
|
79,974
|
|
|
(138,471
|
)
|
|
18,694
|
|
|
151,132
|
|
|
94,359
|
|
|
||||||||
|
Other net foreign currency exposure
|
1
|
|
|
—
|
|
|
115
|
|
|
192
|
|
|
599
|
|
|
—
|
|
|
52,857
|
|
|
53,764
|
|
|
||||||||
|
Total net foreign currency exposure
|
$
|
(22,291
|
)
|
|
$
|
(330
|
)
|
|
$
|
5,766
|
|
|
$
|
80,166
|
|
|
$
|
(137,872
|
)
|
|
$
|
18,694
|
|
|
$
|
203,989
|
|
|
$
|
148,123
|
|
|
|
Net foreign currency exposure as a percentage of total shareholders’ equity
|
(0.4
|
%)
|
|
—
|
%
|
|
0.1
|
%
|
|
1.4
|
%
|
|
(2.5
|
%)
|
|
0.3
|
%
|
|
3.7
|
%
|
|
2.7
|
%
|
|
||||||||
|
Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement(1)
|
$
|
(2,229
|
)
|
|
$
|
(33
|
)
|
|
$
|
577
|
|
|
$
|
8,017
|
|
|
$
|
(13,787
|
)
|
|
$
|
1,869
|
|
|
$
|
20,399
|
|
|
$
|
14,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes 10% change in underlying currencies relative to the U.S. dollar.
|
Period
|
Total number
of shares
purchased(a) (b)
|
|
Average
price paid
per share
|
|
Total number of shares purchased as part of
publicly announced
plans or programs
|
|
Maximum number (or approximate
dollar value) of shares that may yet be
purchased under the plans
or programs(b)
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||
April 1-30, 2019
|
—
|
|
|
|
$—
|
|
|
—
|
|
|
—
|
|
|
May 1-31, 2019
|
6
|
|
|
58.19
|
|
|
—
|
|
|
—
|
|
|
|
June 1-30, 2019
|
1
|
|
|
59.58
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
7
|
|
|
|
|
—
|
|
|
—
|
|
|
||
|
|
|
|
|
|
|
|
|
(a)
|
In thousands.
|
(b)
|
Shares are repurchased from employees to satisfy withholding tax liabilities that arise upon the vesting of restricted stock units.
|
Rule 2.7 Announcement, dated July 5, 2017 (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on July 6, 2017).
|
|
Rule 2.7 Announcement, dated August 24, 2017 (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on August 25, 2017).
|
|
Certificate of Incorporation and Memorandum of Association (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).
|
|
Amended and Restated Bye-Laws (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed on May 15, 2009).
|
|
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).
|
|
Certificate of Designations establishing 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).
|
|
Certificate of Designations establishing 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).
|
|
First Supplemental Indenture, dated as of April 3, 2019, among AXIS Specialty Finance PLC, AXIS Capital Holdings Limited and The Bank of New York Mellon Trust Company, N.A., relating to the 5.150% Senior Notes due 2045 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on April 4, 2019).
|
|
Form of 3.900% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 19, 2019).
|
|
†*10.1
|
Amendment No. 7 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated July 18, 2019.
|
†31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
†31.2
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
†32.1
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
†32.2
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
†101
|
The following financial information from AXIS Capital Holdings Limited’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 formatted in Inline XBRL: (i) Consolidated Balance Sheets at June 30, 2019 and December 31, 2018; (ii) Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018; (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018; (iv) Consolidated Statements of Changes in Shareholders' Equity for the six months ended June 30, 2019 and 2018; (v) Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018; and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.
|
†104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
*
|
Exhibit 10.1 represents a management contract, compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.
|
†
|
Filed herewith.
|
AXIS CAPITAL HOLDINGS LIMITED
|
|
By:
|
/S/ ALBERT BENCHIMOL
|
|
Albert Benchimol
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
/S/ PETER VOGT
|
|
Peter Vogt
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
1.
|
Section 3 of the Agreement (Consulting Fee) is hereby amended to insert the following after “April 2019.”:
|
2.
|
Section 4 of the Agreement (Consulting Term) is hereby amended by deleting the reference to “at the Annual General Meeting of AXIS Capital Holdings Limited in 2020” and replacing such reference with “on December 31, 2020”.
|
3.
|
Section 8 of the Agreement (Noncompetition and Nonsolicitation) is hereby amended by deleting the reference to “May 31, 2021” in the last line thereof and replacing such reference with “December 31, 2021”.
|
4.
|
Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.
|
AXIS Specialty Limited
|
|
/s/ Peter J. Vogt
|
Executive Vice President and Chief Financial Officer
|
|
Consultant
|
|
/s/ Michael A. Butt
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of AXIS Capital Holdings Limited for the period ended June 30, 2019;
|
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:
|
August 7, 2019
|
Albert Benchimol
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of AXIS Capital Holdings Limited for the period ended June 30, 2019;
|
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/ PETER VOGT
|
Date:
|
August 7, 2019
|
Peter Vogt
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:
|
August 7, 2019
|
/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:
|
August 7, 2019
|
/s/ PETER VOGT
|
|
|
Peter Vogt
|
|
|
Chief Financial Officer
|