|
|
|
|
|
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
|
Depositary Shares, each representing a 1/100th interest in a 5.50% Series E preferred shares
|
AXS PRE
|
New York Stock Exchange
|
Large accelerated filer
|
☒ Accelerated filer ☐
|
Non-accelerated filer
|
☐ Smaller reporting company ☐
|
|
|
|
|
|
Page
|
|
PART I
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 1B.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
PART II
|
|
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
Item 7.
|
||
|
|
|
Item 7A.
|
||
|
|
|
Item 8.
|
||
|
|
|
Item 9.
|
||
|
|
|
Item 9A.
|
||
|
|
|
Item 9B.
|
||
|
|
|
|
PART III
|
|
|
|
|
Item 10.
|
||
|
|
|
Item 11.
|
||
|
|
|
Item 12.
|
||
|
|
|
Item 13.
|
||
|
|
|
Item 14.
|
||
|
|
|
|
PART IV
|
|
|
|
|
Item 15.
|
||
Item 16.
|
ITEM 1.
|
BUSINESS
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
3,675,931
|
|
|
$
|
3,797,592
|
|
|
$
|
2,814,918
|
|
|
|
Reinsurance
|
3,222,927
|
|
|
3,112,473
|
|
|
2,741,355
|
|
|
|||
|
Total
|
$
|
6,898,858
|
|
|
$
|
6,910,065
|
|
|
$
|
5,556,273
|
|
|
|
|
|
|
|
|
|
|
•
|
Property: provides physical loss or damage, business interruption and machinery breakdown cover for virtually all types of property, including commercial buildings, residential premises, construction projects and onshore renewable energy installations. This line of business includes primary and excess risks, some of which are catastrophe-exposed.
|
•
|
Marine: provides cover for traditional marine classes, including offshore energy, cargo, liability, recreational marine, fine art, specie, and hull and war. Offshore energy coverage includes physical damage, business interruption, operator's extra expense and liability coverage for all aspects of offshore upstream energy, from exploration and construction through the operation and distribution phases.
|
•
|
Terrorism: provides cover for physical damage and business interruption of an insured following an act of terrorism and includes kidnap and ransom, and crisis management insurance.
|
•
|
Aviation: provides hull and liability, and specific war cover primarily for passenger airlines but also for cargo operations, general aviation operations, airports, aviation authorities, security firms and product manufacturers.
|
•
|
Credit and Political Risk: provides credit and political risk insurance products for banks, commodity traders, corporations and multilateral and export credit agencies. Cover is provided for a range of risks including sovereign default, credit default, political violence, currency inconvertibility and non-transfer, expropriation, aircraft non-repossession and contract frustration due to political events.
|
•
|
Professional Lines: provides directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, cyber and privacy insurance, medical malpractice and other financial insurance related covers for commercial enterprises, financial institutions, not-for-profit organizations and other professional service providers. This business is predominantly written on a claims-made basis.
|
•
|
Liability: primarily targets primary and low to mid-level excess and umbrella commercial liability risks in the U.S. wholesale markets in addition to primary and excess of loss employers, public, and products liability predominately in the U.K. Target industry sectors include construction, manufacturing, transportation and trucking, and other services.
|
•
|
Accident and Health: includes accidental death, travel insurance and specialty health products for employer and affinity groups.
|
•
|
Discontinued Lines - Novae: includes those lines of business that Novae exited or placed into run-off in the fourth quarter of 2016 and in the first quarter of 2017. These discontinued insurance lines include financial institutions, professional indemnity, international liability, and international direct and facultative property.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Marsh & McLennan Companies Inc.
|
$
|
434,108
|
|
|
12
|
%
|
|
$
|
380,238
|
|
|
10
|
%
|
|
$
|
330,057
|
|
|
12
|
%
|
|
|
Aon plc
|
393,645
|
|
|
11
|
%
|
|
405,281
|
|
|
11
|
%
|
|
374,940
|
|
|
13
|
%
|
|
|||
|
Other brokers
|
2,015,822
|
|
|
54
|
%
|
|
2,067,447
|
|
|
54
|
%
|
|
1,633,444
|
|
|
58
|
%
|
|
|||
|
Managing general agencies and underwriters
|
832,356
|
|
|
23
|
%
|
|
944,626
|
|
|
25
|
%
|
|
476,477
|
|
|
17
|
%
|
|
|||
|
Total
|
$
|
3,675,931
|
|
|
100
|
%
|
|
$
|
3,797,592
|
|
|
100
|
%
|
|
$
|
2,814,918
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Catastrophe: provides protection for most catastrophic losses that are covered in the underlying insurance policies written by our cedants. The underlying policies principally cover property-related exposures but other exposures including workers compensation and personal accident are also covered. The principal perils covered by policies in this portfolio include hurricane and windstorm, earthquake, flood, tornado, hail and fire. In some instances, terrorism may be a covered peril or the only peril. This business is written on a proportional and excess of loss basis.
|
•
|
Property: provides protection for property damage and related losses resulting from natural and man-made perils that are covered in the underlying personal and commercial lines insurance policies written by our cedants. The predominant
|
•
|
Professional Lines: provides protection for directors’ and officers’ liability, employment practices liability, medical malpractice, professional indemnity, environmental liability, cyber and miscellaneous errors and omissions insurance risks. The underlying business is predominantly written on a claims-made basis. This business is written on a proportional and excess of loss basis.
|
•
|
Credit and Surety: provides reinsurance of trade credit insurance products and includes proportional and excess of loss structures. The underlying insurance indemnifies sellers of goods and services in the event of a payment default by the buyer of those goods and services. Surety reinsurance provides protection for losses arising from a broad array of surety bonds issued by insurers to satisfy regulatory demands or contract obligations in a variety of jurisdictions around the world. Mortgage reinsurance is also provided to mortgage guaranty insurers and U.S. government sponsored entities for losses related to credit risk transfer into the private sector.
|
•
|
Motor: provides protection to insurers for motor liability and property damage losses arising out of any one occurrence. A loss occurrence can involve one or many claimants where the ceding insurer aggregates the claims from the occurrence. Traditional proportional and non-proportional reinsurance as well as structured solutions are offered.
|
•
|
Liability: provides protection to insurers of admitted casualty business, excess and surplus lines casualty business and specialty casualty programs. The primary focus of the underlying business is general liability, workers' compensation, auto liability, and excess casualty.
|
•
|
Agriculture: provides protection for risks associated with the production of food and fiber on a global basis for primary insurance companies writing multi-peril crop insurance, crop hail, and named peril covers, as well as custom risk transfer mechanisms for agricultural dependent industries with exposures to crop yield and/or price deviations. This business is written on a proportional and aggregate stop loss reinsurance basis.
|
•
|
Engineering: provides protection for all types of construction risks and risks associated with erection, testing and commissioning of machinery and plants during the construction stage. This line of business also includes cover for losses arising from operational failures of machinery, plant and equipment, and electronic equipment as well as business interruption.
|
•
|
Marine and Other: includes marine and aviation reinsurance.
|
•
|
Accident and Health: includes personal accident, specialty health, accidental death, travel, life and disability reinsurance products which are offered on a proportional and catastrophic or per life excess of events loss basis.
|
•
|
Discontinued Lines - Novae: includes those lines of business that Novae exited or placed into run-off in the fourth quarter of 2016 and in the first quarter of 2017. These discontinued reinsurance lines include motor reinsurance, general liability reinsurance, and international facultative property.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Marsh & McLennan Companies Inc.
|
$
|
838,617
|
|
|
26
|
%
|
|
$
|
779,375
|
|
|
25
|
%
|
|
$
|
783,286
|
|
|
29
|
%
|
|
|
Aon plc
|
887,602
|
|
|
28
|
%
|
|
765,779
|
|
|
25
|
%
|
|
583,199
|
|
|
21
|
%
|
|
|||
|
Willis Tower Watson PLC
|
403,402
|
|
|
13
|
%
|
|
361,983
|
|
|
12
|
%
|
|
408,188
|
|
|
15
|
%
|
|
|||
|
Other brokers
|
795,352
|
|
|
24
|
%
|
|
864,601
|
|
|
28
|
%
|
|
690,337
|
|
|
25
|
%
|
|
|||
|
Direct
|
135,614
|
|
|
4
|
%
|
|
178,568
|
|
|
6
|
%
|
|
176,600
|
|
|
6
|
%
|
|
|||
|
Managing general agencies and underwriters
|
162,339
|
|
|
5
|
%
|
|
162,167
|
|
|
5
|
%
|
|
99,744
|
|
|
4
|
%
|
|
|||
|
Total
|
$
|
3,222,927
|
|
|
100
|
%
|
|
$
|
3,112,473
|
|
|
100
|
%
|
|
$
|
2,741,355
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Protect our capital base and earnings by monitoring our risks against our stated risk appetite and limits;
|
•
|
Promote a sound risk management culture through disciplined and informed risk taking;
|
•
|
Enhance value creation and contribute to an optimal risk-return profile by providing the basis for efficient capital deployment;
|
•
|
Support our group-wide decision-making process by providing reliable and timely risk information; and
|
•
|
Safeguard our reputation.
|
•
|
The Business Council oversees underwriting strategy and performance, establishes return targets, and manages risk/exposure constraints across each line of business, in line with the Company’s strategic goals.
|
•
|
The Product Boards for each major line of business aim to develop a coherent strategy for portfolio management, set underwriting guidelines and risk appetite, and leverage expertise across the multiple geographies that we operate in. The boards also oversee exposure management frameworks and view of risk.
|
•
|
The Investment & Finance Committee oversees the Group’s investment activities by, among other things, monitoring market risks, the performance of our investment managers and the Group’s asset-liability management, liquidity positions and investment policies and guidelines. The Investment & Finance Committee also prepares the Group’s strategic asset allocation and presents it to the Finance Committee of the Board for approval.
|
•
|
The Capital Management Committee oversees the integrity and effectiveness of the Company’s Capital Management Policy, including the capital management policies of the Company’s legal entities and branches, and oversees the availability of capital within the Group.
|
•
|
The Group Reserve Committee ensures appropriate oversight and challenge of the Group and Segment Reserves, led by the Group Chief Reserving Actuary.
|
•
|
The Reinsurance Security Committee ("RSC") sets out the financial security requirements of our reinsurance counterparties and approves our counterparties, as needed.
|
•
|
The Internal Model Committee oversees the Group's Internal Model framework, including the key model assumptions, methodology and validation framework.
|
•
|
The Operational Risk Committee oversees the Group's Operational Risk framework for the identification, management, mitigation and measurement of operational risk and facilitates the embedding of effective operational risk management practices throughout the Group.
|
•
|
The Emerging Risks Working Group oversees the processes for identifying, assessing and monitoring current and potential emerging risks.
|
•
|
Excess of loss per risk – the reinsurer indemnifies us for loss amounts of all individual policies effected, defined in the treaty terms and conditions. Per risk treaties are an effective means of risk mitigation against large single losses (e.g. a large fire claim). This includes the Northshore Re catastrophe bond program, which provides a combined $715 million of limit across the Group. Refer to Item 7 'Management’s Discussion and Analysis of Financial Condition and Results of Operations' – Underwriting Results – Consolidated – Underwriting Expenses' for further details.
|
•
|
Catastrophe excess of loss – provides aggregate loss cover for our insurance portfolio against the accumulation of losses incurred from a single event (e.g. windstorm).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At January 1,
(in millions of U.S. dollars)
|
2020
|
|
2019
|
|
||||||||||||||||||||||
|
Single zone/single event
|
|
Perils
|
50 Year
Return
Period
|
|
100 Year
Return
Period
|
|
250 Year
Return
Period
|
|
50 Year
Return
Period
|
|
100 Year
Return
Period
|
|
250 Year
Return
Period
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Southeast
|
|
U.S. Hurricane
|
$
|
262
|
|
|
$
|
310
|
|
|
$
|
428
|
|
|
$
|
383
|
|
|
$
|
441
|
|
|
$
|
620
|
|
|
|
Northeast
|
|
U.S. Hurricane
|
53
|
|
|
145
|
|
|
236
|
|
|
52
|
|
|
156
|
|
|
290
|
|
|
||||||
|
Mid-Atlantic
|
|
U.S. Hurricane
|
120
|
|
|
214
|
|
|
349
|
|
|
133
|
|
|
315
|
|
|
449
|
|
|
||||||
|
Gulf of Mexico
|
|
U.S. Hurricane
|
202
|
|
|
249
|
|
|
283
|
|
|
258
|
|
|
316
|
|
|
394
|
|
|
||||||
|
California
|
|
Earthquake
|
176
|
|
|
249
|
|
|
292
|
|
|
253
|
|
|
369
|
|
|
468
|
|
|
||||||
|
Europe
|
|
Windstorm
|
195
|
|
|
238
|
|
|
316
|
|
|
231
|
|
|
301
|
|
|
376
|
|
|
||||||
|
Japan
|
|
Earthquake
|
138
|
|
|
247
|
|
|
414
|
|
|
147
|
|
|
227
|
|
|
359
|
|
|
||||||
|
Japan
|
|
Windstorm
|
114
|
|
|
195
|
|
|
256
|
|
|
60
|
|
|
109
|
|
|
158
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Major failures and disasters which could cause a severe disruption to working environments, facilities and personnel, represent a significant operational risk to us. Our Business Continuity Management framework strives to protect critical business functions from these effects to enable us to carry out our core tasks in time and at the quality required. During 2019, we continued to review our Business Continuity Planning procedures through cyclical planned tests.
|
•
|
We have developed a number of Information Technology ("IT") platforms, applications and security controls to support our business activities worldwide. Dedicated security standards are in place for our IT systems to ensure the proper use, availability and protection of our information assets.
|
•
|
Our use of third-party vendors exposes us to a number of increased operational risks, including the risk of security breaches, fraud, non-compliance with laws and regulations or internal guidelines and inadequate service. We manage material third-party vendor risk, by, among other things, performing a thorough risk assessment on potential large vendors, reviewing a vendor’s financial stability, ability to provide ongoing service and business continuity planning.
|
•
|
We maintain cash and cash equivalents and high quality, liquid investment portfolios to meet expected outflows, as well as those that could result from a range of potential stress events. We place internal limits on the maximum percentage of cash and investments which may be in an illiquid form as well as on the minimum percentage of our asset portfolio which may be invested in unrestricted cash and liquid investment grade fixed income securities.
|
•
|
We maintain committed borrowing facilities, as well as access to diverse funding sources to cover contingencies. Funding sources include asset sales, external debt issuances and lines of credit.
|
•
|
Internal risk capital - We use our internal capital model to assess the capital consumption of our business, measuring and monitoring the potential aggregation of risk at extreme return periods.
|
•
|
Regulatory capital requirements - In each country in which we operate, the local regulator specifies the minimum amount and type of capital that each of the regulated entities must hold in support of their liabilities and business plans. We target to hold, in addition to the minimum capital required to comply with the solvency requirements, an adequate buffer to ensure that each of our operating entities meets its local capital requirements. Refer to Item 8, Note 21 to the Consolidated Financial Statements, 'Statutory Financial Information' for further details.
|
•
|
Rating agency capital requirements - Rating agencies apply their own models to evaluate the relationship between the required risk capital of a company and its available capital resources. The assessment of capital adequacy is usually an integral part of the rating agency process. Meeting rating agency capital requirements and maintaining strong credit ratings are strategic business objectives of the Company. Refer to Item 7 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources' for further details.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
$336 million, in the aggregate, primarily related to Japanese Typhoons Hagibis, Faxai and Tapah, Hurricane Dorian, and the Australia Wildfires in 2019;
|
•
|
$430 million, in the aggregate, primarily related to Hurricanes Michael and Florence, California Wildfires, and Typhoon Jebi in 2018; and
|
•
|
$835 million, in the aggregate, primarily related to U.S. weather-related events, Hurricanes Harvey, Irma and Maria, Mexico earthquakes and the California wildfires in 2017.
|
•
|
Providing reinsurance capacity in markets and to consumers that we target;
|
•
|
Requiring our further participation in industry pools and guaranty associations;
|
•
|
Expanding the scope of coverage under existing policies; e.g., following large disasters;
|
•
|
Further regulating the terms of insurance and reinsurance contracts; or
|
•
|
Disproportionately benefiting the companies of one country over those of another.
|
•
|
actual or anticipated variations in our quarterly results, including as a result of catastrophes or our investment performance;
|
•
|
any share repurchase program;
|
•
|
changes in market valuation of companies in the insurance/reinsurance industry;
|
•
|
changes in expectations of future financial performance or changes in estimates of securities analysts;
|
•
|
fluctuations in stock market processes and volumes;
|
•
|
issuances or sales of common shares or other securities in the future;
|
•
|
the addition or departure of key personnel;
|
•
|
changes in tax law; and
|
•
|
announcements by us or our competitors of acquisitions, investments or strategic alliances.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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)
|
|||||
October 1-31, 2019
|
9
|
|
|
$65.26
|
|
—
|
|
—
|
|
November 1-30, 2019
|
1
|
|
|
$59.33
|
|
—
|
|
—
|
|
December 1-31, 2019
|
1
|
|
|
$58.97
|
|
—
|
|
—
|
|
Total
|
11
|
|
|
—
|
|
—
|
|
(a)
|
In thousands.
|
(b)
|
Shares are repurchased from employees to satisfy withholding tax liabilities that arise on the vesting of share-settled restricted stock units.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
At and for the year ended December 31,
|
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
|
(in thousands, except per share amounts)
|
|
||||||||||||||||||
|
Selected Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gross premiums written
|
$
|
6,898,858
|
|
|
$
|
6,910,065
|
|
|
$
|
5,556,273
|
|
|
$
|
4,970,208
|
|
|
$
|
4,603,730
|
|
|
|
Net premiums earned
|
4,587,178
|
|
|
4,791,495
|
|
|
4,148,760
|
|
|
3,705,625
|
|
|
3,686,417
|
|
|
|||||
|
Net investment income
|
478,572
|
|
|
438,507
|
|
|
400,805
|
|
|
353,335
|
|
|
305,336
|
|
|
|||||
|
Net investment gains (losses)
|
91,233
|
|
|
(150,218
|
)
|
|
28,226
|
|
|
(60,525
|
)
|
|
(138,491
|
)
|
|
|||||
|
Net losses and loss expenses
|
3,044,798
|
|
|
3,190,287
|
|
|
3,287,772
|
|
|
2,204,197
|
|
|
2,176,199
|
|
|
|||||
|
Acquisition costs
|
1,024,582
|
|
|
968,835
|
|
|
823,591
|
|
|
746,876
|
|
|
718,112
|
|
|
|||||
|
General and administrative expenses
|
634,831
|
|
|
627,389
|
|
|
579,428
|
|
|
602,717
|
|
|
596,821
|
|
|
|||||
|
Interest expense and financing costs
|
68,107
|
|
|
67,432
|
|
|
54,811
|
|
|
51,360
|
|
|
50,963
|
|
|
|||||
|
Preferred share dividends
|
41,112
|
|
|
42,625
|
|
|
46,810
|
|
|
46,597
|
|
|
40,069
|
|
|
|||||
|
Net income (loss) available (attributable) to common shareholders(1) (2) (3) (4) (5)
|
$
|
282,361
|
|
|
$
|
396
|
|
|
$
|
(415,779
|
)
|
|
$
|
465,462
|
|
|
$
|
601,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Earnings (loss) per common share
|
$
|
3.37
|
|
|
$
|
—
|
|
|
$
|
(4.94
|
)
|
|
$
|
5.13
|
|
|
$
|
6.10
|
|
|
|
Earnings (loss) per diluted common share
|
$
|
3.34
|
|
|
$
|
—
|
|
|
$
|
(4.94
|
)
|
|
$
|
5.08
|
|
|
$
|
6.04
|
|
|
|
Cash dividends declared per common share
|
$
|
1.61
|
|
|
$
|
1.57
|
|
|
$
|
1.53
|
|
|
$
|
1.43
|
|
|
$
|
1.22
|
|
|
|
Weighted average common shares outstanding
|
83,894
|
|
|
83,501
|
|
|
84,108
|
|
|
90,772
|
|
|
98,609
|
|
|
|||||
|
Weighted average diluted common shares outstanding
|
84,473
|
|
|
84,007
|
|
|
84,108
|
|
|
91,547
|
|
|
99,629
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating Ratios:(6)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net losses and loss expenses ratio
|
66.4
|
%
|
|
66.6
|
%
|
|
79.2
|
%
|
|
59.5
|
%
|
|
59.0
|
%
|
|
|||||
|
Acquisition cost ratio
|
22.3
|
%
|
|
20.2
|
%
|
|
19.9
|
%
|
|
20.2
|
%
|
|
19.5
|
%
|
|
|||||
|
General and administrative expense ratio
|
13.9
|
%
|
|
13.1
|
%
|
|
14.0
|
%
|
|
16.2
|
%
|
|
16.2
|
%
|
|
|||||
|
Combined ratio
|
102.6
|
%
|
|
99.9
|
%
|
|
113.1
|
%
|
|
95.9
|
%
|
|
94.7
|
%
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selected Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Investments
|
$
|
14,302,375
|
|
|
$
|
13,155,560
|
|
|
$
|
14,784,210
|
|
|
$
|
13,459,507
|
|
|
$
|
13,386,118
|
|
|
|
Cash and cash equivalents
|
1,576,457
|
|
|
1,830,020
|
|
|
1,363,786
|
|
|
1,241,507
|
|
|
1,174,751
|
|
|
|||||
|
Reinsurance recoverable on unpaid and paid losses and loss expenses
|
4,205,551
|
|
|
3,781,902
|
|
|
3,338,840
|
|
|
2,334,922
|
|
|
2,096,104
|
|
|
|||||
|
Total assets
|
25,604,054
|
|
|
24,132,566
|
|
|
24,760,177
|
|
|
20,813,691
|
|
|
19,981,891
|
|
|
|||||
|
Reserve for losses and loss expenses
|
12,752,081
|
|
|
12,280,769
|
|
|
12,997,553
|
|
|
9,697,827
|
|
|
9,646,285
|
|
|
|||||
|
Unearned premiums
|
3,626,246
|
|
|
3,635,758
|
|
|
3,641,399
|
|
|
2,969,498
|
|
|
2,760,889
|
|
|
|||||
|
Debt
|
1,808,157
|
|
|
1,341,961
|
|
|
1,376,529
|
|
|
992,950
|
|
|
991,825
|
|
|
|||||
|
Total shareholders’ equity
|
$
|
5,544,008
|
|
|
$
|
5,030,071
|
|
|
$
|
5,341,264
|
|
|
$
|
6,272,370
|
|
|
$
|
5,866,882
|
|
|
|
Book value per common share(7)(8)
|
$
|
56.80
|
|
|
$
|
50.91
|
|
|
$
|
54.91
|
|
|
$
|
59.54
|
|
|
$
|
55.32
|
|
|
|
Book value per diluted common share(7)(8)
|
$
|
55.79
|
|
|
$
|
49.93
|
|
|
$
|
53.88
|
|
|
$
|
58.27
|
|
|
$
|
54.08
|
|
|
|
Common shares outstanding(8)
|
83,959
|
|
|
83,586
|
|
|
83,161
|
|
|
86,441
|
|
|
94,708
|
|
|
|||||
|
Diluted common shares outstanding(8)
|
85,489
|
|
|
85,229
|
|
|
84,745
|
|
|
88,317
|
|
|
96,883
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During 2019 and 2018, the Company recognized reorganization expenses of $37 million and $67 million, respectively, related to its transformation program which was launched in 2017. This program encompasses the integration of Novae Group plc ("Novae") which commenced in the fourth quarter of 2017, the realignment of our accident and health business, together with other initiatives designed to increase our efficiency and enhance our profitability while delivering a customer-centric operating model. During 2017, the Company recognized transaction and reorganization expenses of $27 million which included transaction costs incurred in connection with the acquisition of Novae, such as due diligence, legal, accounting, investment banking fees and expenses, as well as integration expenses related to the integration of Novae into the Company's operations and compensation-related costs associated with the termination of certain employees. During 2015, the Company implemented a number of profitability enhancement initiatives which resulted in recognition of transaction and reorganization expenses of $46 million and general and administrative expenses of $5 million.
|
(2)
|
During 2017, the Company recognized a tax expense of $42 million due to the revaluation of net deferred tax assets pursuant to the U.S. Tax Reform.
|
(3)
|
During 2019, 2018 and 2017, the Company recognized amortization of value of business acquired ("VOBA") of $27 million, $172 million and $50 million, respectively, related to the acquisition of Novae. Refer to Item 8, Note 4 to the Consolidated Financial Statements 'Goodwill and Intangible Assets' for further details.
|
(4)
|
During 2015, the Company accepted a request from PartnerRe Ltd., a Bermuda exempted company ("PartnerRe") to terminate the Agreement and Plan of Amalgamation (the "Amalgamation Agreement") with the Company. PartnerRe paid the Company a termination fee of $280 million.
|
(5)
|
During 2015, the Company early adopted the Accounting Standard Update ("ASU") 2015-02 "Consolidation (Topic 810) Amendments to the Consolidation Analysis", issued by the Financial Accounting Standards Board. The adoption of this accounting guidance resulted in the Company concluding that it was no longer required to consolidate the results of operations and the financial position of AXIS Ventures Reinsurance Limited ("Ventures Re"). The Company adopted this accounting guidance using the modified retrospective approach and ceased to consolidate Ventures Re effective January 1, 2015.
|
(6)
|
Operating ratios are calculated by dividing the respective operating expenses by net premiums earned.
|
(7)
|
Book value per common share and book value per diluted common share are calculated by dividing total common shareholders’ equity by the number of common shares and diluted common share outstanding, respectively.
|
(8)
|
Calculations and share amounts at December 31, 2015 include 1,358,380 additional shares delivered to the Company in January 2016 under the Company's Accelerated Share Repurchase ("ASR") agreement entered into on August 17, 2015.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Net income available to common shareholders of $282.4 million, or $3.37 per common share and $3.34 per diluted common share
|
•
|
Operating income(1) of $213 million, or $2.52 per diluted common share(1)
|
•
|
Gross premiums written of $6.9 billion
|
•
|
Net premiums written of $4.5 billion
|
•
|
Net premiums earned of $4.6 billion
|
•
|
Estimated pre-tax catastrophe and weather-related losses, net of reinsurance and reinstatement premiums, of $336 million (Insurance: $84 million; Reinsurance: $252 million), or 7.5 points on the current accident year loss ratio, primarily related to Japanese Typhoons Hagibis, Faxai and Tapah, Hurricane Dorian, Australian Wildfires, and other weather-related events
|
•
|
Net favorable prior year reserve development of $79 million
|
•
|
Underwriting income(2) of $29 million and combined ratio of 102.6%
|
•
|
Net investment income of $479 million
|
•
|
Net investment gains of $91 million
|
•
|
Amortization of value of business acquired ("VOBA") of $27 million
|
•
|
Reorganization expenses of $37 million
|
•
|
Foreign exchange gains of $12 million
|
•
|
Total cash and investments of $15.9 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 $25.6 billion
|
•
|
Reserve for losses and loss expenses of $12.8 billion and reinsurance recoverable on unpaid and paid losses and loss expenses of $4.2 billion
|
•
|
Debt of $1.8 billion and a debt to total capital ratio(3) of 24.6%
|
•
|
Common shares repurchased were 0.2 million for $10 million
|
•
|
Common shareholders’ equity of $4.8 billion; book value per diluted common share of $55.79
|
(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 to the most comparable GAAP financial measures, net income (loss) 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' and a discussion of the rationale for the presentation of these items is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Non GAAP Financial Measures'.
|
(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 net income (loss), the most comparable GAAP financial measure, is provided in 'Management's Discussion and Analysis of Financial Condition – Executive Summary – Results of Operations' and a discussion of the rationale for its presentation is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Non GAAP Financial Measures'.
|
(3)
|
The debt to total capital ratio is calculated by dividing debt by total capital. Total capital represents the sum of total shareholders’ equity and debt.
|
•
|
increasing our relevance in a select number of attractive specialty lines insurance and treaty reinsurance markets, and continuing the implementation of a more focused distribution strategy;
|
•
|
continuing to grow a leadership position in the areas of our business with strong potential for profitable growth including U.S. excess and surplus lines, North America professional lines and Lloyd's specialty insurance business;
|
•
|
continuing to re-balance our portfolio towards less volatile lines of business that carry attractive rates;
|
•
|
continuing to improve the effectiveness and efficiency of our operating platforms and processes;
|
•
|
investing in data and technology capabilities, and tools to empower our underwriters and enhance the service we provide to our customers;
|
•
|
broadening risk-funding sources and the development of vehicles that utilize third-party capital; and
|
•
|
growing our corporate citizenship program to give back to our communities and help contribute to a more sustainable future.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Underwriting revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net premiums earned
|
$
|
4,587,178
|
|
|
(4%)
|
|
$
|
4,791,495
|
|
|
15%
|
|
$
|
4,148,760
|
|
|
|
Other insurance related income (losses)
|
16,444
|
|
|
55%
|
|
10,622
|
|
|
nm
|
|
(1,240
|
)
|
|
|||
|
Underwriting expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net losses and loss expenses
|
(3,044,798
|
)
|
|
(5%)
|
|
(3,190,287
|
)
|
|
(3%)
|
|
(3,287,772
|
)
|
|
|||
|
Acquisition costs
|
(1,024,582
|
)
|
|
6%
|
|
(968,835
|
)
|
|
18%
|
|
(823,591
|
)
|
|
|||
|
Underwriting-related general and administrative expenses (1)
|
(505,735
|
)
|
|
(3%)
|
|
(519,168
|
)
|
|
16%
|
|
(449,483
|
)
|
|
|||
|
Underwriting income (loss)
|
$
|
28,507
|
|
|
|
|
$
|
123,827
|
|
|
|
|
$
|
(413,326
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net investment income
|
478,572
|
|
|
9%
|
|
438,507
|
|
|
9%
|
|
400,805
|
|
|
|||
|
Net investment gains (losses)
|
91,233
|
|
|
nm
|
|
(150,218
|
)
|
|
nm
|
|
28,226
|
|
|
|||
|
Corporate expenses (1)
|
(129,096
|
)
|
|
19%
|
|
(108,221
|
)
|
|
(17%)
|
|
(129,945
|
)
|
|
|||
|
Other (expenses) revenues, net
|
(56,066
|
)
|
|
47%
|
|
(38,267
|
)
|
|
(80%)
|
|
(189,548
|
)
|
|
|||
|
Transaction and reorganization expenses
|
(37,384
|
)
|
|
(44%)
|
|
(66,940
|
)
|
|
nm
|
|
(26,718
|
)
|
|
|||
|
Amortization of value of business acquired
|
(26,722
|
)
|
|
(84%)
|
|
(172,332
|
)
|
|
nm
|
|
(50,104
|
)
|
|
|||
|
Amortization of intangible assets
|
(11,597
|
)
|
|
(16%)
|
|
(13,814
|
)
|
|
nm
|
|
(2,543
|
)
|
|
|||
|
Bargain purchase gain
|
—
|
|
|
—%
|
|
—
|
|
|
nm
|
|
15,044
|
|
|
|||
|
Income (loss) before income taxes and interest in income (loss) of equity method investments
|
337,447
|
|
|
|
|
12,542
|
|
|
|
|
(368,109
|
)
|
|
|||
|
Income tax (expense) benefit
|
(23,692
|
)
|
|
nm
|
|
29,486
|
|
|
nm
|
|
7,542
|
|
|
|||
|
Interest in income (loss) of equity method investments
|
9,718
|
|
|
nm
|
|
993
|
|
|
nm
|
|
(8,402
|
)
|
|
|||
|
Net income (loss)
|
323,473
|
|
|
|
|
43,021
|
|
|
|
|
(368,969
|
)
|
|
|||
|
Preferred share dividends
|
(41,112
|
)
|
|
(4%)
|
|
(42,625
|
)
|
|
(9%)
|
|
(46,810
|
)
|
|
|||
|
Net income (loss) available (attributable) to common shareholders
|
$
|
282,361
|
|
|
nm
|
|
$
|
396
|
|
|
nm
|
|
$
|
(415,779
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net investment (gains) losses(2)
|
(91,233
|
)
|
|
nm
|
|
150,218
|
|
|
nm
|
|
(28,226
|
)
|
|
|||
|
Foreign exchange losses (gains)(3)
|
(12,041
|
)
|
|
(59%)
|
|
(29,165
|
)
|
|
nm
|
|
134,737
|
|
|
|||
|
Transaction and reorganization expenses (4)
|
37,384
|
|
|
(44%)
|
|
66,940
|
|
|
nm
|
|
26,718
|
|
|
|||
|
Interest in (income) loss of equity method investments(5)
|
(9,718
|
)
|
|
nm
|
|
(993
|
)
|
|
nm
|
|
8,402
|
|
|
|||
|
Revaluation of net deferred tax asset(6)
|
—
|
|
|
—%
|
|
—
|
|
|
nm
|
|
41,629
|
|
|
|||
|
Bargain purchase gain(6)
|
—
|
|
|
—%
|
|
—
|
|
|
nm
|
|
(15,044
|
)
|
|
|||
|
Income tax expense (benefit)
|
6,656
|
|
|
nm
|
|
(26,697
|
)
|
|
nm
|
|
(8,594
|
)
|
|
|||
|
Operating income (loss)(7)
|
$
|
213,409
|
|
|
33%
|
|
$
|
160,699
|
|
|
nm
|
|
$
|
(256,157
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $129 million, $108 million and $130 million for the years ended December 31, 2019, 2018 and 2017, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other (Expenses) Revenues, Net' for further details. Refer also to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures' for further details.
|
(2)
|
Tax cost (benefit) of $12 million, $(12) million and $2 million for the years ended December 31, 2019, 2018 and 2017, 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 million, $(4) million and $(8) million for the years ended December 31, 2019, 2018 and 2017, 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 (benefit) of $(7) million, $(11) million and $(3) million for the years ended December 31, 2019, 2018 and 2017, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
(5)
|
Tax cost (benefit) of $nil, $0.3 million and $nil for the years ended December 31, 2019, 2018 and 2017, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
(6)
|
Tax impact is $nil.
|
(7)
|
Operating income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliations to net income (loss), the most comparable GAAP financial measure is presented in the table above, and a discussion of the rationale for its presentation is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Net income (loss) available (attributable) to common shareholders
|
$
|
282,361
|
|
|
$
|
396
|
|
|
$
|
(415,779
|
)
|
|
|
Operating income (loss)
|
$
|
213,409
|
|
|
$
|
160,699
|
|
|
$
|
(256,157
|
)
|
|
|
Weighted average diluted common shares outstanding(1)
|
84,473
|
|
|
84,007
|
|
|
84,108
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Earnings (loss) per diluted common share
|
$
|
3.34
|
|
|
$
|
—
|
|
|
$
|
(4.94
|
)
|
|
|
Operating income (loss) per diluted common share(2)
|
$
|
2.52
|
|
|
$
|
1.91
|
|
|
$
|
(3.05
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Average common shareholders’ equity
|
$
|
4,512,040
|
|
|
$
|
4,410,668
|
|
|
$
|
4,856,280
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Return on average common equity(3)
|
6.3
|
%
|
|
—
|
%
|
|
(8.6
|
%)
|
|
|||
|
Operating return on average common equity(4)
|
4.7
|
%
|
|
3.6
|
%
|
|
(5.3
|
%)
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
Refer to Item 8, Note 13 to the Consolidated Financial Statements 'Earnings Per Common Share' for further details.
|
(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 earnings (loss) per diluted common share, the most comparable GAAP financial measure is presented in the table above, and a discussion of the rationale for its presentation is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
(3)
|
Return on average common equity ("ROACE") is calculated by dividing net income (loss) available (attributable) to common shareholders for the year by the average common shareholders' equity determined using the common shareholders' equity balances at the beginning and end of the year.
|
(4)
|
Operating ROACE, a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K, is calculated by dividing operating income (loss) for the year by the average common shareholders' equity determined using the common shareholders’ equity balances at the beginning and end of the year. The reconciliation to ROACE, the most comparable GAAP financial measure is presented in the table above and a discussion of the rationale for its presentation is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net income (loss) available (attributable) to common shareholders
|
$
|
282,361
|
|
|
nm
|
|
$
|
396
|
|
|
nm
|
|
$
|
(415,779
|
)
|
|
|
Net investment (gains) losses
|
(91,233
|
)
|
|
nm
|
|
150,218
|
|
|
nm
|
|
(28,226
|
)
|
|
|||
|
Foreign exchange losses (gains)
|
(12,041
|
)
|
|
(59%)
|
|
(29,165
|
)
|
|
nm
|
|
134,737
|
|
|
|||
|
Transaction and reorganization expenses
|
37,384
|
|
|
(44%)
|
|
66,940
|
|
|
nm
|
|
26,718
|
|
|
|||
|
Interest in (income) loss of equity method investments
|
(9,718
|
)
|
|
nm
|
|
(993
|
)
|
|
nm
|
|
8,402
|
|
|
|||
|
Revaluation of net deferred tax asset
|
—
|
|
|
—%
|
|
—
|
|
|
nm
|
|
41,629
|
|
|
|||
|
Bargain purchase gain
|
—
|
|
|
—%
|
|
—
|
|
|
nm
|
|
(15,044
|
)
|
|
|||
|
Income tax expense (benefit)
|
$
|
6,656
|
|
|
nm
|
|
(26,697
|
)
|
|
nm
|
|
(8,594
|
)
|
|
||
|
Operating income (loss)
|
$
|
213,409
|
|
|
33%
|
|
$
|
160,699
|
|
|
nm
|
|
$
|
(256,157
|
)
|
|
|
Amortization of VOBA and intangible assets (3)
|
37,939
|
|
|
(79%)
|
|
184,531
|
|
|
nm
|
|
52,647
|
|
|
|||
|
Amortization of acquisition costs(4)
|
(12,207
|
)
|
|
(90%)
|
|
(125,467
|
)
|
|
nm
|
|
(32,646
|
)
|
|
|||
|
Income tax (benefit)
|
$
|
(4,888
|
)
|
|
(56%)
|
|
(11,222
|
)
|
|
nm
|
|
(3,800
|
)
|
|
||
|
Ex-PGAAP operating income (loss)(1)
|
$
|
234,253
|
|
|
12%
|
|
$
|
208,541
|
|
|
nm
|
|
$
|
(239,956
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Earnings (loss) per diluted common share
|
$
|
3.34
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(4.94
|
)
|
|
|
Net investment (gains) losses
|
(1.08
|
)
|
|
|
|
1.79
|
|
|
|
|
(0.34
|
)
|
|
|||
|
Foreign exchange losses (gains)
|
(0.14
|
)
|
|
|
|
(0.35
|
)
|
|
|
|
1.60
|
|
|
|||
|
Transaction and reorganization expenses
|
0.44
|
|
|
|
|
0.80
|
|
|
|
|
0.32
|
|
|
|||
|
Interest in (income) loss of equity method investments
|
(0.12
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
0.10
|
|
|
|||
|
Revaluation of net deferred tax asset
|
—
|
|
|
|
|
—
|
|
|
|
|
0.49
|
|
|
|||
|
Bargain purchase gain
|
—
|
|
|
|
|
—
|
|
|
|
|
(0.18
|
)
|
|
|||
|
Income tax expense (benefit)
|
0.08
|
|
|
|
|
(0.32
|
)
|
|
|
|
(0.10
|
)
|
|
|||
|
Operating income (loss) per diluted common share
|
2.52
|
|
|
|
|
1.91
|
|
|
|
|
(3.05
|
)
|
|
|||
|
Amortization of VOBA and intangible assets(3)
|
0.45
|
|
|
|
|
2.20
|
|
|
|
|
0.63
|
|
|
|||
|
Amortization of acquisition cost(4)
|
(0.14
|
)
|
|
|
|
(1.49
|
)
|
|
|
|
(0.39
|
)
|
|
|||
|
Income tax (benefit)
|
(0.06
|
)
|
|
|
|
(0.14
|
)
|
|
|
|
$
|
(0.04
|
)
|
|
||
|
Ex-PGAAP operating income (loss) per diluted common share(1)
|
$
|
2.77
|
|
|
|
|
$
|
2.48
|
|
|
|
|
$
|
(2.85
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average diluted common shares outstanding
|
84,473
|
|
|
|
|
84,007
|
|
|
|
|
84,108
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Average common shareholders' equity
|
$
|
4,512,040
|
|
|
|
|
$
|
4,410,668
|
|
|
|
|
$
|
4,856,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Return on average common equity
|
6.3
|
%
|
|
|
|
—
|
%
|
|
|
|
(8.6
|
%)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Operating return on average common equity
|
4.7
|
%
|
|
|
|
3.6
|
%
|
|
|
|
(5.3
|
%)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Ex-PGAAP operating return on average common equity(1)(2)
|
5.2
|
%
|
|
|
|
4.7
|
%
|
|
|
|
(4.9
|
%)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Ex-PGAAP operating income (loss), ex-PGAAP operating income (loss) per diluted common share and ex-PGAAP operating ROACE are non-GAAP financial measures as defined in Item 10(e) of SEC Regulation S-K. The reconciliations to the most comparable GAAP financial measures, net income (loss) available (attributable) to common shareholders, earnings (loss) per diluted common share, and ROACE, respectively, are presented in the table above, and a discussion of the rationale for the presentation of these items is provided in 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures'.
|
(2)
|
Ex-PGAAP operating ROACE is calculated by dividing ex-PGAAP operating income (loss) for the year by the average common shareholders' equity determined using the common shareholders’ equity balances at the beginning and end of the year.
|
(3)
|
Tax (benefit) of $(7) million, $(35) million and $(10) million for the years ended December 31, 2019, 2018, and 2017, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
(4)
|
Tax cost of $2 million, $24 million and $6 million for the years ended December 31, 2019, 2018, and 2017, respectively. Tax impact is estimated by applying the statutory rates of applicable jurisdictions.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended and at December 31,
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Return on average common equity
|
6.3
|
%
|
|
—
|
%
|
|
(8.6
|
%)
|
|
|||
|
Operating return on average common equity
|
4.7
|
%
|
|
3.6
|
%
|
|
(5.3
|
%)
|
|
|||
|
Ex-PGAAP operating return on average common equity
|
5.2
|
%
|
|
4.7
|
%
|
|
(4.9
|
%)
|
|
|||
|
Book value per diluted common share(1)
|
$
|
55.79
|
|
|
$
|
49.93
|
|
|
$
|
53.88
|
|
|
|
Cash dividends declared per common share
|
$
|
1.61
|
|
|
$
|
1.57
|
|
|
$
|
1.53
|
|
|
|
Increase (decrease) in book value per diluted common share adjusted for dividends
|
$
|
7.47
|
|
|
$
|
(2.38
|
)
|
|
$
|
(2.86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
|
$
|
6,898,858
|
|
|
—%
|
|
$
|
6,910,065
|
|
|
24%
|
|
$
|
5,556,273
|
|
|
|
Net premiums written
|
|
4,489,615
|
|
|
(4%)
|
|
4,658,962
|
|
|
16%
|
|
4,027,143
|
|
|
|||
|
Net premiums earned
|
|
4,587,178
|
|
|
(4%)
|
|
4,791,495
|
|
|
15%
|
|
4,148,760
|
|
|
|||
|
Other insurance related income (losses)
|
|
16,444
|
|
|
55%
|
|
10,622
|
|
|
nm
|
|
(1,240
|
)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current accident year net losses and loss expenses
|
|
(3,123,698
|
)
|
|
|
|
(3,389,949
|
)
|
|
|
|
(3,487,826
|
)
|
|
|||
|
Prior year reserve development
|
|
78,900
|
|
|
|
|
199,662
|
|
|
|
|
200,054
|
|
|
|||
|
Acquisition costs
|
|
(1,024,582
|
)
|
|
|
|
(968,835
|
)
|
|
|
|
(823,591
|
)
|
|
|||
|
Underwriting-related general and administrative expenses(1)
|
|
(505,735
|
)
|
|
|
|
(519,168
|
)
|
|
|
|
(449,483
|
)
|
|
|||
|
Underwriting income (loss)(2)
|
|
$
|
28,507
|
|
|
nm
|
|
$
|
123,827
|
|
|
nm
|
|
$
|
(413,326
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
General and administrative expenses(1)
|
|
$
|
634,831
|
|
|
|
|
$
|
627,389
|
|
|
|
|
$
|
579,428
|
|
|
|
Income (loss) before income taxes and interest in income (loss) of equity method investments(2)
|
|
$
|
337,447
|
|
|
|
|
$
|
12,542
|
|
|
|
|
$
|
(368,109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 general and administrative expenses, the most comparable GAAP financial measure, is 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 net income (loss), the most comparable GAAP financial measure, is provided in 'Management's Discussion and Analysis of Financial Condition and Results of Operations – Executive Summary – Results of Operation'.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Gross premiums written
|
|
||||||||||||||||||
|
Years ended December 31,
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Insurance
|
$
|
3,675,931
|
|
|
(3%)
|
|
$
|
3,797,592
|
|
|
35%
|
|
$
|
2,814,918
|
|
|
||||
|
Reinsurance
|
3,222,927
|
|
|
4%
|
|
3,112,473
|
|
|
14%
|
|
2,741,355
|
|
|
|||||||
|
Total
|
$
|
6,898,858
|
|
|
nm
|
|
$
|
6,910,065
|
|
|
24%
|
|
$
|
5,556,273
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
% ceded
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Insurance
|
40
|
%
|
|
1
|
|
pts
|
|
39
|
%
|
|
2
|
|
pts
|
|
37
|
%
|
|
|||
|
Reinsurance
|
29
|
%
|
|
4
|
|
pts
|
|
25
|
%
|
|
7
|
|
pts
|
|
18
|
%
|
|
|||
|
Total
|
35
|
%
|
|
2
|
|
pts
|
|
33
|
%
|
|
5
|
|
pts
|
|
28
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Net premiums written
|
|
||||||||||||||||||
|
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Insurance
|
$
|
2,209,155
|
|
|
(5%)
|
|
$
|
2,324,747
|
|
|
31%
|
|
$
|
1,775,825
|
|
|
||||
|
Reinsurance
|
2,280,460
|
|
|
(2%)
|
|
2,334,215
|
|
|
4%
|
|
2,251,318
|
|
|
|||||||
|
Total
|
$
|
4,489,615
|
|
|
(4%)
|
|
$
|
4,658,962
|
|
|
16%
|
|
$
|
4,027,143
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Insurance
|
$
|
2,190,084
|
|
|
48
|
%
|
|
$
|
2,362,606
|
|
|
49
|
%
|
|
$
|
1,816,438
|
|
|
44
|
%
|
|
(7
|
%)
|
|
30
|
%
|
|
|
Reinsurance
|
2,397,094
|
|
|
52
|
%
|
|
2,428,889
|
|
|
51
|
%
|
|
2,332,322
|
|
|
56
|
%
|
|
(1
|
%)
|
|
4
|
%
|
|
|||
|
Total
|
$
|
4,587,178
|
|
|
100
|
%
|
|
$
|
4,791,495
|
|
|
100
|
%
|
|
$
|
4,148,760
|
|
|
100
|
%
|
|
(4
|
%)
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Years ended December 31,
|
2019
|
|
% Point
Change
|
|
2018
|
|
% Point
Change
|
|
2017
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current accident year loss ratio excluding catastrophe and weather-related losses
|
60.6
|
%
|
|
(1.1
|
)
|
|
61.7
|
%
|
|
(2.0
|
)
|
|
63.7
|
%
|
|
|
Catastrophe and weather-related losses ratio
|
7.5
|
%
|
|
(1.5
|
)
|
|
9.0
|
%
|
|
(11.4
|
)
|
|
20.4
|
%
|
|
|
Current accident year loss ratio
|
68.1
|
%
|
|
(2.6
|
)
|
|
70.7
|
%
|
|
(13.4
|
)
|
|
84.1
|
%
|
|
|
Prior year reserve development ratio
|
(1.7
|
%)
|
|
2.4
|
|
|
(4.1
|
%)
|
|
0.8
|
|
|
(4.9
|
%)
|
|
|
Net losses and loss expenses ratio
|
66.4
|
%
|
|
(0.2
|
)
|
|
66.6
|
%
|
|
(12.6
|
)
|
|
79.2
|
%
|
|
|
Acquisition cost ratio
|
22.3
|
%
|
|
2.1
|
|
|
20.2
|
%
|
|
0.3
|
|
|
19.9
|
%
|
|
|
General and administrative expense ratio(1)
|
13.9
|
%
|
|
0.8
|
|
|
13.1
|
%
|
|
(0.9
|
)
|
|
14.0
|
%
|
|
|
Combined ratio
|
102.6
|
%
|
|
2.7
|
|
|
99.9
|
%
|
|
(13.2
|
)
|
|
113.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The general and administration expense ratio included corporate expenses not allocated to underwriting segments of 2.8%, 2.3% and 3.1% for 2019, 2018 and 2017, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Expenses (Revenues), Net' for further details.
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
$
|
53,302
|
|
|
$
|
92,806
|
|
|
$
|
60,459
|
|
|
|
Reinsurance
|
25,598
|
|
|
106,856
|
|
|
139,595
|
|
|
|||
|
Total
|
$
|
78,900
|
|
|
$
|
199,662
|
|
|
$
|
200,054
|
|
|
|
|
|
|
|
|
|
|
Insurance segment
|
|
|
|
|
|
|
|
Reserve class and tail
|
|||||
|
|
|
|
|
|
|
|
Property and other
|
Marine
|
Aviation
|
Credit and political risk
|
Professional lines
|
Liability
|
|
|
|
|
|
|
|
|
Short
|
Short
|
Short/Medium
|
Medium
|
Medium
|
Long
|
|
|
|
|
|
|
|
Reported lines of business
|
|
|
|
|
|
|
Property
|
X
|
|
|
|
|
|
Marine
|
|
X
|
|
|
|
|
Terrorism
|
X
|
|
|
|
|
|
Aviation
|
|
|
X
|
|
|
|
Credit and political risk
|
|
|
|
X
|
|
|
Professional lines
|
|
|
|
|
X
|
|
Liability
|
|
|
|
|
|
X
|
Accident and health
|
X
|
|
|
|
|
|
Discontinued lines - Novae
|
X
|
|
|
|
X
|
X
|
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
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Property and other
|
$
|
11,042
|
|
|
$
|
64,781
|
|
|
$
|
11,815
|
|
|
|
Marine
|
33,260
|
|
|
17,913
|
|
|
28,206
|
|
|
|||
|
Aviation
|
3,741
|
|
|
(2,938
|
)
|
|
1,895
|
|
|
|||
|
Credit and political risk
|
18,810
|
|
|
3,609
|
|
|
70
|
|
|
|||
|
Professional lines
|
11,721
|
|
|
31,687
|
|
|
26,248
|
|
|
|||
|
Liability
|
(25,272
|
)
|
|
(22,246
|
)
|
|
(7,775
|
)
|
|
|||
|
Total
|
$
|
53,302
|
|
|
$
|
92,806
|
|
|
$
|
60,459
|
|
|
|
|
|
|
|
|
|
|
•
|
$33 million of net favorable prior year reserve development on marine business primarily due to better than expected loss emergence related to the 2015 through 2017 accident years.
|
•
|
$19 million of net favorable prior year reserve development on credit and political risk business primarily due to better than expected loss emergence related to recent accident years.
|
•
|
$12 million of net favorable prior year reserve development on professional lines business reflecting generally favorable experience on older accident years as we continued to transition to more experience based actuarial methods.
|
•
|
$11 million of net favorable prior year reserve development on property and other business primarily due to overall better than expected loss emergence related to the 2017 catastrophe events and SuperStorm Sandy, partially offset by reserve strengthening within the international book of business, mainly related to the 2018 accident year.
|
•
|
$25 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the U.S. excess casualty and U.S. primary casualty books of business mainly driven by the higher frequency and severity of auto claims and the higher frequency of general liability claims, mainly related to the 2015 and 2017 accident years.
|
•
|
$65 million of net favorable prior year reserve development on property and other business primarily due to overall better than expected loss emergence related to the 2017 catastrophe events.
|
•
|
$32 million of net favorable prior year reserve development on professional lines business primarily due to better than expected loss experience, particularly related to the 2014 and 2015 accident years.
|
•
|
$18 million of net favorable prior year reserve development on marine business primarily due to better than expected loss emergence on more recent accident years.
|
•
|
$22 million of net adverse prior year reserve development on liability business primarily due to reserve strengthening within the U.S. excess casualty book of business mainly driven by the higher frequency of large auto and general liability claims mainly related to the 2015 accident year.
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Property and other
|
$
|
(133,448
|
)
|
|
$
|
6,012
|
|
|
$
|
18,564
|
|
|
|
Credit and surety
|
53,223
|
|
|
33,497
|
|
|
32,791
|
|
|
|||
|
Professional lines
|
3,668
|
|
|
21,310
|
|
|
44,164
|
|
|
|||
|
Motor
|
70,872
|
|
|
22,932
|
|
|
1,155
|
|
|
|||
|
Liability
|
31,283
|
|
|
23,105
|
|
|
42,921
|
|
|
|||
|
Total
|
$
|
25,598
|
|
|
$
|
106,856
|
|
|
$
|
139,595
|
|
|
|
|
|
|
|
|
|
|
•
|
$71 million of net favorable prior year reserve development on motor business primarily due to the impact of the increase in the Ogden Rate and changes in related actuarial assumptions, on several accident years.
|
•
|
$53 million of net favorable prior year reserve development on credit and surety business primarily due to generally better than expected loss emergence, mainly related to accident years 2015 through 2017.
|
•
|
$31 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.
|
•
|
$133 million of net adverse prior year reserve development on property and other business primarily due to an increase in loss estimates attributable to Hurricanes Irma and Michael consistent with industry trends, an increase in loss estimates attributable to Typhoon Jebi consistent with updated industry insured loss estimates, and reserve strengthening within the U.S. regional and commercial proportional property books of business and the European proportional property book of business.
|
•
|
$33 million of net favorable prior year reserve development on credit and surety business primarily due to generally better than expected loss emergence, mainly related to accident years 2013 and 2014.
|
•
|
$23 million of net favorable prior year reserve development on motor business primarily due to non proportional treaty business related to older accident years.
|
•
|
$23 million of net favorable prior year reserve development on liability business primarily due to increased weight given by management to experience based indications on older accident years.
|
•
|
$21 million of net favorable prior year reserve development on professional lines business reflecting the generally favorable experience on older accident years as we continued to transition to more experience based actuarial methods.
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
3,675,931
|
|
|
(3%)
|
|
$
|
3,797,592
|
|
|
35%
|
|
$
|
2,814,918
|
|
|
|
Net premiums written
|
2,209,155
|
|
|
(5%)
|
|
2,324,747
|
|
|
31%
|
|
1,775,825
|
|
|
|||
|
Net premiums earned
|
2,190,084
|
|
|
(7%)
|
|
2,362,606
|
|
|
30%
|
|
1,816,438
|
|
|
|||
|
Other insurance related income
|
2,858
|
|
|
(17)%
|
|
3,460
|
|
|
18%
|
|
2,944
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current accident year net losses and loss expenses
|
(1,331,981
|
)
|
|
|
|
(1,587,129
|
)
|
|
|
|
(1,525,886
|
)
|
|
|||
|
Prior year reserve development
|
53,302
|
|
|
|
|
92,806
|
|
|
|
|
60,459
|
|
|
|||
|
Acquisition costs
|
(468,281
|
)
|
|
|
|
(399,193
|
)
|
|
|
|
(270,229
|
)
|
|
|||
|
General and administrative expenses
|
(401,963
|
)
|
|
|
|
(395,252
|
)
|
|
|
|
(325,368
|
)
|
|
|||
|
Underwriting income (loss)
|
$
|
44,019
|
|
|
(43%)
|
|
$
|
77,298
|
|
|
nm
|
|
$
|
(241,642
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
% Point
Change
|
|
|
|
% Point
Change
|
|
|
|
||||||
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current accident year loss ratio excluding catastrophe and weather-related losses
|
57.0
|
%
|
|
(1.5)
|
|
58.5
|
%
|
|
(2.8)
|
|
61.3
|
%
|
|
|||
|
Catastrophe and weather-related losses ratio
|
3.8
|
%
|
|
(4.9)
|
|
8.7
|
%
|
|
(14.0)
|
|
22.7
|
%
|
|
|||
|
Current accident year loss ratio
|
60.8
|
%
|
|
(6.4)
|
|
67.2
|
%
|
|
(16.8)
|
|
84.0
|
%
|
|
|||
|
Prior year reserve development ratio
|
(2.4
|
%)
|
|
1.6
|
|
(4.0
|
%)
|
|
(0.7)
|
|
(3.3
|
%)
|
|
|||
|
Net losses and loss expenses ratio
|
58.4
|
%
|
|
(4.8)
|
|
63.2
|
%
|
|
(17.5)
|
|
80.7
|
%
|
|
|||
|
Acquisition cost ratio
|
21.4
|
%
|
|
4.5
|
|
16.9
|
%
|
|
2.0
|
|
14.9
|
%
|
|
|||
|
General and administrative expense ratio
|
18.3
|
%
|
|
1.5
|
|
16.8
|
%
|
|
(1.1)
|
|
17.9
|
%
|
|
|||
|
Combined ratio
|
98.1
|
%
|
|
1.2
|
|
96.9
|
%
|
|
(16.6)
|
|
113.5
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Property
|
$
|
943,760
|
|
|
26
|
%
|
|
$
|
1,192,807
|
|
|
31
|
%
|
|
$
|
738,373
|
|
|
25
|
%
|
|
(21
|
%)
|
|
62
|
%
|
|
|
Marine
|
411,309
|
|
|
11
|
%
|
|
367,047
|
|
|
10
|
%
|
|
241,393
|
|
|
9
|
%
|
|
12
|
%
|
|
52
|
%
|
|
|||
|
Terrorism
|
60,120
|
|
|
2
|
%
|
|
61,663
|
|
|
2
|
%
|
|
47,514
|
|
|
2
|
%
|
|
(3
|
%)
|
|
30
|
%
|
|
|||
|
Aviation
|
74,670
|
|
|
2
|
%
|
|
89,673
|
|
|
2
|
%
|
|
83,906
|
|
|
3
|
%
|
|
(17
|
%)
|
|
7
|
%
|
|
|||
|
Credit and political risk
|
154,999
|
|
|
4
|
%
|
|
190,433
|
|
|
5
|
%
|
|
91,316
|
|
|
3
|
%
|
|
(19
|
%)
|
|
nm
|
|
|
|||
|
Professional lines
|
1,177,274
|
|
|
32
|
%
|
|
1,115,213
|
|
|
29
|
%
|
|
922,502
|
|
|
33
|
%
|
|
6
|
%
|
|
21
|
%
|
|
|||
|
Liability
|
699,876
|
|
|
19
|
%
|
|
553,461
|
|
|
15
|
%
|
|
473,935
|
|
|
17
|
%
|
|
26
|
%
|
|
17
|
%
|
|
|||
|
Accident and health
|
144,103
|
|
|
4
|
%
|
|
210,502
|
|
|
6
|
%
|
|
201,159
|
|
|
7
|
%
|
|
(32
|
)%
|
|
5
|
%
|
|
|||
|
Discontinued lines - Novae
|
9,820
|
|
|
—
|
%
|
|
16,793
|
|
|
—
|
%
|
|
14,820
|
|
|
1
|
%
|
|
(42
|
)%
|
|
nm
|
|
|
|||
|
Total
|
$
|
3,675,931
|
|
|
100
|
%
|
|
$
|
3,797,592
|
|
|
100
|
%
|
|
$
|
2,814,918
|
|
|
100
|
%
|
|
(3
|
%)
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Property
|
$
|
633,550
|
|
|
29
|
%
|
|
$
|
796,945
|
|
|
34
|
%
|
|
$
|
543,342
|
|
|
30
|
%
|
|
(21
|
%)
|
|
47
|
%
|
|
|
Marine
|
281,764
|
|
|
13
|
%
|
|
300,944
|
|
|
13
|
%
|
|
181,533
|
|
|
10
|
%
|
|
(6
|
%)
|
|
66
|
%
|
|
|||
|
Terrorism
|
47,345
|
|
|
2
|
%
|
|
49,150
|
|
|
2
|
%
|
|
36,084
|
|
|
2
|
%
|
|
(4
|
%)
|
|
36
|
%
|
|
|||
|
Aviation
|
55,028
|
|
|
3
|
%
|
|
74,203
|
|
|
3
|
%
|
|
75,107
|
|
|
4
|
%
|
|
(26
|
%)
|
|
(1
|
%)
|
|
|||
|
Credit and political risk
|
91,698
|
|
|
4
|
%
|
|
102,825
|
|
|
4
|
%
|
|
56,432
|
|
|
3
|
%
|
|
(11
|
%)
|
|
82
|
%
|
|
|||
|
Professional lines
|
661,250
|
|
|
30
|
%
|
|
570,241
|
|
|
24
|
%
|
|
519,759
|
|
|
29
|
%
|
|
16
|
%
|
|
10
|
%
|
|
|||
|
Liability
|
264,667
|
|
|
12
|
%
|
|
229,373
|
|
|
10
|
%
|
|
188,770
|
|
|
10
|
%
|
|
15
|
%
|
|
22
|
%
|
|
|||
|
Accident and health
|
144,499
|
|
|
7
|
%
|
|
207,777
|
|
|
9
|
%
|
|
199,121
|
|
|
11
|
%
|
|
(30
|
%)
|
|
4
|
%
|
|
|||
|
Discontinued lines - Novae
|
10,283
|
|
|
—
|
%
|
|
31,148
|
|
|
1
|
%
|
|
16,290
|
|
|
1
|
%
|
|
(67
|
%)
|
|
nm
|
|
|
|||
|
Total
|
$
|
2,190,084
|
|
|
100
|
%
|
|
$
|
2,362,606
|
|
|
100
|
%
|
|
$
|
1,816,438
|
|
|
100
|
%
|
|
(7
|
%)
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
3,222,927
|
|
|
4%
|
|
$
|
3,112,473
|
|
|
14%
|
|
$
|
2,741,355
|
|
|
|
Net premiums written
|
2,280,460
|
|
|
(2%)
|
|
2,334,215
|
|
|
4%
|
|
2,251,318
|
|
|
|||
|
Net premiums earned
|
2,397,094
|
|
|
(1%)
|
|
2,428,889
|
|
|
4%
|
|
2,332,322
|
|
|
|||
|
Other insurance related income (losses)
|
13,586
|
|
|
nm
|
|
7,162
|
|
|
nm
|
|
(4,184
|
)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current accident year net losses and loss expenses
|
(1,791,717
|
)
|
|
|
|
(1,802,820
|
)
|
|
|
|
(1,961,940
|
)
|
|
|||
|
Prior year reserve development
|
25,598
|
|
|
|
|
106,856
|
|
|
|
|
139,595
|
|
|
|||
|
Acquisition costs
|
(556,301
|
)
|
|
|
|
(569,642
|
)
|
|
|
|
(553,362
|
)
|
|
|||
|
General and administrative expenses
|
(103,772
|
)
|
|
|
|
(123,916
|
)
|
|
|
|
(124,115
|
)
|
|
|||
|
Underwriting income (loss)
|
$
|
(15,512
|
)
|
|
nm
|
|
$
|
46,529
|
|
|
nm
|
|
$
|
(171,684
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
% Point
Change
|
|
|
|
% Point
Change
|
|
|
|
||||||
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Current accident year loss ratio excluding catastrophe and weather-related losses
|
64.0
|
%
|
|
(0.8)
|
|
64.8
|
%
|
|
(0.8)
|
|
65.6
|
%
|
|
|||
|
Catastrophe and weather-related losses ratio
|
10.7
|
%
|
|
1.3
|
|
9.4
|
%
|
|
(9.1)
|
|
18.5
|
%
|
|
|||
|
Current accident year loss ratio
|
74.7
|
%
|
|
0.5
|
|
74.2
|
%
|
|
(9.9)
|
|
84.1
|
%
|
|
|||
|
Prior year reserve development ratio
|
(1.0
|
%)
|
|
3.4
|
|
(4.4
|
%)
|
|
1.6
|
|
(6.0
|
%)
|
|
|||
|
Net losses and loss expenses ratio
|
73.7
|
%
|
|
3.9
|
|
69.8
|
%
|
|
(8.3)
|
|
78.1
|
%
|
|
|||
|
Acquisition cost ratio
|
23.2
|
%
|
|
(0.3)
|
|
23.5
|
%
|
|
(0.2)
|
|
23.7
|
%
|
|
|||
|
General and administrative expense ratio
|
4.3
|
%
|
|
(0.8)
|
|
5.1
|
%
|
|
(0.2)
|
|
5.3
|
%
|
|
|||
|
Combined ratio
|
101.2
|
%
|
|
2.8
|
|
98.4
|
%
|
|
(8.7)
|
|
107.1
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Catastrophe
|
$
|
718,514
|
|
|
24
|
%
|
|
$
|
536,243
|
|
|
17
|
%
|
|
$
|
436,707
|
|
|
17
|
%
|
|
34
|
%
|
|
23
|
%
|
|
|
Property
|
304,166
|
|
|
9
|
%
|
|
342,789
|
|
|
11
|
%
|
|
352,609
|
|
|
13
|
%
|
|
(11
|
%)
|
|
(3
|
%)
|
|
|||
|
Credit and surety
|
269,733
|
|
|
8
|
%
|
|
329,126
|
|
|
11
|
%
|
|
205,352
|
|
|
7
|
%
|
|
(18
|
%)
|
|
60
|
%
|
|
|||
|
Professional lines
|
261,072
|
|
|
8
|
%
|
|
268,181
|
|
|
9
|
%
|
|
252,272
|
|
|
9
|
%
|
|
(3
|
%)
|
|
6
|
%
|
|
|||
|
Motor
|
334,887
|
|
|
10
|
%
|
|
499,727
|
|
|
16
|
%
|
|
391,923
|
|
|
14
|
%
|
|
(33
|
%)
|
|
28
|
%
|
|
|||
|
Liability
|
546,479
|
|
|
17
|
%
|
|
438,767
|
|
|
14
|
%
|
|
420,701
|
|
|
15
|
%
|
|
25
|
%
|
|
4
|
%
|
|
|||
|
Engineering
|
57,028
|
|
|
2
|
%
|
|
60,358
|
|
|
2
|
%
|
|
77,134
|
|
|
3
|
%
|
|
(6
|
%)
|
|
(22
|
%)
|
|
|||
|
Agriculture
|
224,961
|
|
|
7
|
%
|
|
226,246
|
|
|
7
|
%
|
|
236,200
|
|
|
9
|
%
|
|
(1
|
%)
|
|
(4
|
%)
|
|
|||
|
Marine and other
|
74,781
|
|
|
2
|
%
|
|
44,741
|
|
|
1
|
%
|
|
55,925
|
|
|
2
|
%
|
|
67
|
%
|
|
(20
|
%)
|
|
|||
|
Accident and health
|
432,670
|
|
|
13
|
%
|
|
365,660
|
|
|
12
|
%
|
|
312,919
|
|
|
11
|
%
|
|
18
|
%
|
|
17
|
%
|
|
|||
|
Discontinued lines - Novae
|
(1,364
|
)
|
|
—
|
%
|
|
635
|
|
|
—
|
%
|
|
(387
|
)
|
|
—
|
%
|
|
nm
|
|
|
nm
|
|
|
|||
|
Total
|
$
|
3,222,927
|
|
|
100
|
%
|
|
$
|
3,112,473
|
|
|
100
|
%
|
|
$
|
2,741,355
|
|
|
100
|
%
|
|
4
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|||||||||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Catastrophe
|
$
|
267,591
|
|
|
10
|
%
|
|
$
|
250,016
|
|
|
12
|
%
|
|
$
|
209,470
|
|
|
10
|
%
|
|
7
|
%
|
|
19
|
%
|
|
|
Property
|
311,625
|
|
|
13
|
%
|
|
317,038
|
|
|
13
|
%
|
|
304,376
|
|
|
13
|
%
|
|
(2
|
%)
|
|
4
|
%
|
|
|||
|
Credit and surety
|
208,717
|
|
|
9
|
%
|
|
250,276
|
|
|
10
|
%
|
|
244,186
|
|
|
10
|
%
|
|
(17
|
%)
|
|
2
|
%
|
|
|||
|
Professional lines
|
206,328
|
|
|
9
|
%
|
|
220,687
|
|
|
9
|
%
|
|
226,622
|
|
|
10
|
%
|
|
(7
|
%)
|
|
(3
|
%)
|
|
|||
|
Motor
|
398,565
|
|
|
17
|
%
|
|
438,693
|
|
|
18
|
%
|
|
371,501
|
|
|
16
|
%
|
|
(9
|
%)
|
|
18
|
%
|
|
|||
|
Liability
|
373,664
|
|
|
16
|
%
|
|
363,292
|
|
|
15
|
%
|
|
351,940
|
|
|
15
|
%
|
|
3
|
%
|
|
3
|
%
|
|
|||
|
Engineering
|
63,899
|
|
|
3
|
%
|
|
67,932
|
|
|
3
|
%
|
|
66,291
|
|
|
3
|
%
|
|
(6
|
%)
|
|
2
|
%
|
|
|||
|
Agriculture
|
188,925
|
|
|
8
|
%
|
|
176,435
|
|
|
7
|
%
|
|
195,391
|
|
|
8
|
%
|
|
7
|
%
|
|
(10
|
%)
|
|
|||
|
Marine and other
|
59,209
|
|
|
2
|
%
|
|
35,570
|
|
|
1
|
%
|
|
64,449
|
|
|
3
|
%
|
|
66
|
%
|
|
(45
|
%)
|
|
|||
|
Accident and health
|
319,619
|
|
|
13
|
%
|
|
299,813
|
|
|
12
|
%
|
|
289,925
|
|
|
12
|
%
|
|
7
|
%
|
|
3
|
%
|
|
|||
|
Discontinued lines - Novae
|
(1,048
|
)
|
|
—
|
%
|
|
9,137
|
|
|
—
|
%
|
|
8,171
|
|
|
—
|
%
|
|
nm
|
|
|
12
|
%
|
|
|||
|
Total
|
$
|
2,397,094
|
|
|
100
|
%
|
|
$
|
2,428,889
|
|
|
100
|
%
|
|
$
|
2,332,322
|
|
|
100
|
%
|
|
(1
|
%)
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year ended December 31,
|
|
2019
|
|
% Point
Change
|
|
2018
|
|
% Point
Change
|
|
2017
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current accident year loss ratio
|
|
74.7
|
%
|
|
0.5
|
|
74.2
|
%
|
|
(9.9
|
)
|
|
84.1
|
%
|
|
|
Prior year reserve development ratio
|
|
(1.0
|
%)
|
|
3.4
|
|
(4.4
|
%)
|
|
1.6
|
|
|
(6.0
|
%)
|
|
|
Loss ratio
|
|
73.7
|
%
|
|
3.9
|
|
69.8
|
%
|
|
(8.3
|
)
|
|
78.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Corporate expenses
|
$
|
129,096
|
|
|
19%
|
|
$
|
108,221
|
|
|
(17%)
|
|
$
|
129,945
|
|
|
|
Foreign exchange losses (gains)
|
(12,041
|
)
|
|
nm
|
|
(29,165
|
)
|
|
nm
|
|
134,737
|
|
|
|||
|
Interest expense and financing costs
|
68,107
|
|
|
1%
|
|
67,432
|
|
|
23%
|
|
54,811
|
|
|
|||
|
Income tax expense (benefit)
|
23,692
|
|
|
nm
|
|
(29,486
|
)
|
|
nm
|
|
(7,542
|
)
|
|
|||
|
Total
|
$
|
208,854
|
|
|
nm
|
|
$
|
117,002
|
|
|
nm
|
|
$
|
311,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
% Change
|
|
2018
|
|
% Change
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
$
|
384,053
|
|
|
8%
|
|
$
|
356,273
|
|
|
14%
|
|
$
|
312,662
|
|
|
|
Other investments
|
60,038
|
|
|
23%
|
|
48,959
|
|
|
(36%)
|
|
76,858
|
|
|
|||
|
Equity securities
|
10,434
|
|
|
4%
|
|
10,077
|
|
|
(32%)
|
|
14,919
|
|
|
|||
|
Mortgage loans
|
14,712
|
|
|
8%
|
|
13,566
|
|
|
26%
|
|
10,780
|
|
|
|||
|
Cash and cash equivalents
|
26,882
|
|
|
(2%)
|
|
27,566
|
|
|
nm
|
|
10,057
|
|
|
|||
|
Short-term investments
|
7,053
|
|
|
(25%)
|
|
9,365
|
|
|
nm
|
|
2,718
|
|
|
|||
|
Gross investment income
|
503,172
|
|
|
8%
|
|
465,806
|
|
|
9%
|
|
427,994
|
|
|
|||
|
Investment expense
|
(24,600
|
)
|
|
(10%)
|
|
(27,299
|
)
|
|
—%
|
|
(27,189
|
)
|
|
|||
|
Net investment income
|
$
|
478,572
|
|
|
9%
|
|
$
|
438,507
|
|
|
9%
|
|
$
|
400,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax yield:(1)
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
3.2
|
%
|
|
|
|
3.0
|
%
|
|
|
|
2.7
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Pre-tax yield is calculated by dividing net investment income by the average month-end amortized cost balances for the periods indicated.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Hedge, direct lending, private equity and real estate funds
|
$
|
42,186
|
|
|
$
|
40,295
|
|
|
$
|
69,740
|
|
|
|
Other privately held investments
|
18,050
|
|
|
2,036
|
|
|
4,560
|
|
|
|||
|
CLO-Equities
|
(198
|
)
|
|
6,628
|
|
|
2,558
|
|
|
|||
|
Total net investment income from other investments(1)
|
$
|
60,038
|
|
|
$
|
48,959
|
|
|
$
|
76,858
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Pre-tax return on other investments(2)
|
8.5
|
%
|
|
6.4
|
%
|
|
9.6
|
%
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
Excluding overseas deposits.
|
(2)
|
The pre-tax return on other investments is calculated by dividing total net investment income from other investments by the average month-end fair value balances held for the periods indicated, excluding overseas deposits.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
On sale of investments:
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
$
|
36,645
|
|
|
$
|
(96,086
|
)
|
|
$
|
(26,396
|
)
|
|
|
Equity securities
|
3,126
|
|
|
17,046
|
|
|
77,384
|
|
|
|||
|
|
39,771
|
|
|
(79,040
|
)
|
|
50,988
|
|
|
|||
|
OTTI charges recognized in net income
|
(6,984
|
)
|
|
(9,733
|
)
|
|
(14,493
|
)
|
|
|||
|
Change in fair value of investment derivatives
|
(1,823
|
)
|
|
5,445
|
|
|
(8,269
|
)
|
|
|||
|
Net unrealized gains (losses) on equity securities
|
60,269
|
|
|
(66,890
|
)
|
|
—
|
|
|
|||
|
Net investment gains (losses)
|
$
|
91,233
|
|
|
$
|
(150,218
|
)
|
|
$
|
28,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
||||||
|
Non-U.S. government
|
$
|
90
|
|
|
$
|
4,697
|
|
|
$
|
8,187
|
|
|
|
Corporate debt
|
6,894
|
|
|
4,995
|
|
|
6,306
|
|
|
|||
|
Non-Agency CMBS
|
—
|
|
|
41
|
|
|
—
|
|
|
|||
|
Total OTTI charge recognized in net income
|
$
|
6,984
|
|
|
$
|
9,733
|
|
|
$
|
14,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Net investment income
|
$
|
478,572
|
|
|
$
|
438,507
|
|
|
$
|
400,805
|
|
|
|
Net investments gains (losses)
|
91,233
|
|
|
(150,218
|
)
|
|
28,226
|
|
|
|||
|
Change in net unrealized gains (losses) on fixed maturities(1)
|
385,364
|
|
|
(191,529
|
)
|
|
177,259
|
|
|
|||
|
Interest in income (loss) of equity method investments
|
9,718
|
|
|
993
|
|
|
(8,402
|
)
|
|
|||
|
Total
|
$
|
964,887
|
|
|
$
|
97,753
|
|
|
$
|
597,888
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Average cash and investments(2)
|
$
|
15,322,688
|
|
|
$
|
15,361,287
|
|
|
$
|
14,854,569
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total return on average cash and investments, pre-tax:
|
|
|
|
|
|
|
||||||
|
Including investment related foreign exchange movements
|
6.3
|
%
|
|
0.6
|
%
|
|
4.0
|
%
|
|
|||
|
Excluding investment related foreign exchange movements(3)
|
6.1
|
%
|
|
0.9
|
%
|
|
3.5
|
%
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
Change in net unrealized gains (losses) on fixed maturities is calculated by taking net unrealized gains (losses) at period end less net unrealized gains (losses) at the prior period end.
|
(2)
|
The average cash and investments balance is calculated by taking the average of the period end fair value balances.
|
(3)
|
Pre-tax total return on average cash and investments excluding foreign exchange rate 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 gains (losses) of $25 million, $(48) million and $80 million for the years ended December 31, 2019, 2018 and 2017, respectively.
|
|
|
|
|
|
|
||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||
|
|
Fair value
|
|
Fair value
|
|
||||
|
|
|
|
|
|
||||
|
Fixed maturities
|
$
|
12,468,205
|
|
|
$
|
11,435,347
|
|
|
|
Equity securities
|
474,207
|
|
|
381,633
|
|
|
||
|
Mortgage loans
|
432,748
|
|
|
298,650
|
|
|
||
|
Other investments
|
770,923
|
|
|
787,787
|
|
|
||
|
Equity method investments
|
117,821
|
|
|
108,103
|
|
|
||
|
Short-term investments
|
38,471
|
|
|
144,040
|
|
|
||
|
Total investments
|
$
|
14,302,375
|
|
|
$
|
13,155,560
|
|
|
|
|
|
|
|
|
||||
|
Cash and cash equivalents(1)
|
$
|
1,576,457
|
|
|
$
|
1,830,020
|
|
|
|
|
|
|
|
|
(1)
|
Includes restricted cash and cash equivalents of $335 million and $597 million for 2019 and 2018, respectively.
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||
|
|
Fair value
|
|
% of total
|
|
Fair value
|
|
% of total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
2,112,881
|
|
|
17
|
%
|
|
$
|
1,515,697
|
|
|
13
|
%
|
|
|
Non-U.S. government
|
576,592
|
|
|
5
|
%
|
|
493,016
|
|
|
4
|
%
|
|
||
|
Corporate debt
|
4,930,254
|
|
|
38
|
%
|
|
4,876,921
|
|
|
44
|
%
|
|
||
|
Agency RMBS
|
1,592,584
|
|
|
13
|
%
|
|
1,643,308
|
|
|
14
|
%
|
|
||
|
CMBS
|
1,365,052
|
|
|
11
|
%
|
|
1,092,530
|
|
|
10
|
%
|
|
||
|
Non-Agency RMBS
|
84,922
|
|
|
1
|
%
|
|
40,687
|
|
|
—
|
%
|
|
||
|
ABS
|
1,598,693
|
|
|
13
|
%
|
|
1,637,603
|
|
|
14
|
%
|
|
||
|
Municipals(1)
|
207,227
|
|
|
2
|
%
|
|
135,585
|
|
|
1
|
%
|
|
||
|
Total
|
$
|
12,468,205
|
|
|
100
|
%
|
|
$
|
11,435,347
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Credit ratings:
|
|
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
2,112,881
|
|
|
17
|
%
|
|
$
|
1,515,697
|
|
|
13
|
%
|
|
|
AAA(2)
|
4,896,833
|
|
|
38
|
%
|
|
4,569,632
|
|
|
40
|
%
|
|
||
|
AA
|
865,601
|
|
|
7
|
%
|
|
874,932
|
|
|
8
|
%
|
|
||
|
A
|
1,848,331
|
|
|
15
|
%
|
|
1,769,686
|
|
|
15
|
%
|
|
||
|
BBB
|
1,684,589
|
|
|
14
|
%
|
|
1,678,962
|
|
|
15
|
%
|
|
||
|
Below BBB(3)
|
1,059,970
|
|
|
9
|
%
|
|
1,026,438
|
|
|
9
|
%
|
|
||
|
Total
|
$
|
12,468,205
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||||||
|
Country
|
Fair value
|
|
% of total
|
|
Weighted
average
credit rating
|
|
Fair value
|
|
% of total
|
|
Weighted
average
credit rating
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Eurozone countries:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Netherlands
|
$
|
12,034
|
|
|
2
|
%
|
|
AA+
|
|
$
|
5,534
|
|
|
1
|
%
|
|
AA+
|
|
|
Supranationals(1)
|
11,928
|
|
|
2
|
%
|
|
AAA
|
|
3,849
|
|
|
1
|
%
|
|
AAA
|
|
||
|
France
|
4,908
|
|
|
1
|
%
|
|
AA
|
|
4,156
|
|
|
1
|
%
|
|
AA
|
|
||
|
Germany
|
4,356
|
|
|
1
|
%
|
|
AAA
|
|
—
|
|
|
—
|
%
|
|
—
|
|
||
|
Austria
|
3,972
|
|
|
1
|
%
|
|
AA+
|
|
2,309
|
|
|
—
|
%
|
|
AA+
|
|
||
|
Belgium
|
—
|
|
|
—
|
%
|
|
—
|
|
10,983
|
|
|
2
|
%
|
|
AA-
|
|
||
|
Spain
|
—
|
|
|
—
|
%
|
|
—
|
|
1,629
|
|
|
—
|
%
|
|
A-
|
|
||
|
Portugal
|
—
|
|
|
—
|
%
|
|
—
|
|
876
|
|
|
—
|
%
|
|
BBB-
|
|
||
|
Total eurozone
|
$
|
37,198
|
|
|
7
|
%
|
|
AA+
|
|
$
|
29,336
|
|
|
5
|
%
|
|
AA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Other concentrations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
United Kingdom
|
$
|
238,238
|
|
|
41
|
%
|
|
AA
|
|
$
|
219,452
|
|
|
45
|
%
|
|
AA
|
|
|
Canada
|
129,191
|
|
|
22
|
%
|
|
AA+
|
|
90,187
|
|
|
18
|
%
|
|
AA+
|
|
||
|
Mexico
|
22,402
|
|
|
4
|
%
|
|
BBB+
|
|
28,735
|
|
|
6
|
%
|
|
BBB+
|
|
||
|
Other
|
149,563
|
|
|
26
|
%
|
|
AA+
|
|
125,306
|
|
|
26
|
%
|
|
A+
|
|
||
|
Total other concentrations
|
$
|
539,394
|
|
|
93
|
%
|
|
AA+
|
|
$
|
463,680
|
|
|
95
|
%
|
|
AA+
|
|
|
Total non-U.S. government
|
$
|
576,592
|
|
|
100
|
%
|
|
AA-
|
|
$
|
493,016
|
|
|
100
|
%
|
|
AA-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes supranationals only in the eurozone.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||||||
|
|
Fair value
|
|
% of total
|
|
Weighted
average credit rating |
|
Fair value
|
|
% of total
|
|
Weighted
average credit rating |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
U.S. banking
|
$
|
969,570
|
|
|
20
|
%
|
|
A-
|
|
$
|
1,075,998
|
|
|
22
|
%
|
|
A-
|
|
|
Foreign banking
|
370,981
|
|
|
8
|
%
|
|
A
|
|
433,182
|
|
|
9
|
%
|
|
A
|
|
||
|
Corporate/commercial finance
|
358,008
|
|
|
7
|
%
|
|
BBB-
|
|
305,896
|
|
|
6
|
%
|
|
BB
|
|
||
|
Insurance
|
147,287
|
|
|
3
|
%
|
|
A
|
|
134,537
|
|
|
3
|
%
|
|
A
|
|
||
|
Investment brokerage
|
53,173
|
|
|
1
|
%
|
|
A-
|
|
35,223
|
|
|
1
|
%
|
|
A
|
|
||
|
Total financial institutions
|
1,899,019
|
|
|
39
|
%
|
|
A-
|
|
1,984,836
|
|
|
41
|
%
|
|
A-
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Consumer non-cyclicals
|
614,605
|
|
|
12
|
%
|
|
BBB-
|
|
584,248
|
|
|
12
|
%
|
|
BBB-
|
|
||
|
Communications
|
454,400
|
|
|
9
|
%
|
|
BB+
|
|
420,511
|
|
|
9
|
%
|
|
BBB-
|
|
||
|
Consumer cyclical
|
452,375
|
|
|
9
|
%
|
|
BBB-
|
|
468,250
|
|
|
10
|
%
|
|
BBB-
|
|
||
|
Technology
|
354,449
|
|
|
7
|
%
|
|
BBB-
|
|
328,101
|
|
|
7
|
%
|
|
BBB-
|
|
||
|
Industrials
|
346,289
|
|
|
7
|
%
|
|
BB
|
|
321,306
|
|
|
7
|
%
|
|
BB
|
|
||
|
Energy
|
239,857
|
|
|
5
|
%
|
|
BBB
|
|
267,644
|
|
|
5
|
%
|
|
BBB
|
|
||
|
Utilities
|
141,104
|
|
|
3
|
%
|
|
BBB+
|
|
149,276
|
|
|
3
|
%
|
|
BBB+
|
|
||
|
Other
|
428,156
|
|
|
9
|
%
|
|
A+
|
|
352,749
|
|
|
6
|
%
|
|
A+
|
|
||
|
Total
|
$
|
4,930,254
|
|
|
100
|
%
|
|
BBB+
|
|
$
|
4,876,921
|
|
|
100
|
%
|
|
BBB+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Credit quality summary:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Investment grade
|
$
|
3,935,941
|
|
|
80
|
%
|
|
A-
|
|
$
|
3,892,399
|
|
|
80
|
%
|
|
A-
|
|
|
Non-investment grade
|
994,313
|
|
|
20
|
%
|
|
B+
|
|
984,522
|
|
|
20
|
%
|
|
B
|
|
||
|
Total
|
$
|
4,930,254
|
|
|
100
|
%
|
|
BBB+
|
|
$
|
4,876,921
|
|
|
100
|
%
|
|
BBB+
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||||
|
|
RMBS
|
|
CMBS
|
|
RMBS
|
|
CMBS
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Government agency
|
$
|
1,592,584
|
|
|
$
|
332,383
|
|
|
$
|
1,643,308
|
|
|
$
|
204,744
|
|
|
|
AAA
|
64,685
|
|
|
991,627
|
|
|
20,965
|
|
|
824,226
|
|
|
||||
|
AA
|
1,377
|
|
|
37,872
|
|
|
3,066
|
|
|
52,875
|
|
|
||||
|
A
|
1,107
|
|
|
3,170
|
|
|
1,459
|
|
|
9,943
|
|
|
||||
|
BBB
|
1,760
|
|
|
—
|
|
|
3,218
|
|
|
742
|
|
|
||||
|
Below BBB(1)
|
15,993
|
|
|
—
|
|
|
11,979
|
|
|
—
|
|
|
||||
|
Total
|
$
|
1,677,506
|
|
|
$
|
1,365,052
|
|
|
$
|
1,683,995
|
|
|
$
|
1,092,530
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Non-investment grade securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Asset-backed securities
|
|
||||||||||||||||||||||
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Below BBB
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|||||||||||||||||
|
CLO - debt tranches
|
$
|
840,999
|
|
|
$
|
46,463
|
|
|
$
|
16,682
|
|
|
$
|
10,385
|
|
|
$
|
23,447
|
|
|
$
|
937,976
|
|
|
|
Auto
|
349,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
349,103
|
|
|
||||||
|
Student loan
|
69,690
|
|
|
5,003
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,693
|
|
|
||||||
|
Credit card
|
19,657
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,657
|
|
|
||||||
|
Other
|
177,488
|
|
|
9,142
|
|
|
27,860
|
|
|
2,186
|
|
|
588
|
|
|
217,264
|
|
|
||||||
|
Total
|
$
|
1,456,937
|
|
|
$
|
60,608
|
|
|
$
|
44,542
|
|
|
$
|
12,571
|
|
|
$
|
24,035
|
|
|
$
|
1,598,693
|
|
|
|
% of total
|
91%
|
|
4%
|
|
3%
|
|
1%
|
|
1%
|
|
100%
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|||||||||||||||||
|
CLO - debt tranches
|
$
|
900,157
|
|
|
$
|
27,492
|
|
|
$
|
—
|
|
|
$
|
9,938
|
|
|
$
|
23,540
|
|
|
$
|
961,127
|
|
|
|
Auto
|
365,685
|
|
|
7,872
|
|
|
4,231
|
|
|
—
|
|
|
—
|
|
|
377,788
|
|
|
||||||
|
Student loan
|
79,419
|
|
|
17,415
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,834
|
|
|
||||||
|
Credit card
|
33,219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,219
|
|
|
||||||
|
Other
|
127,638
|
|
|
13,457
|
|
|
24,867
|
|
|
103
|
|
|
2,570
|
|
|
168,635
|
|
|
||||||
|
Total
|
$
|
1,506,118
|
|
|
$
|
66,236
|
|
|
$
|
29,098
|
|
|
$
|
10,041
|
|
|
$
|
26,110
|
|
|
$
|
1,637,603
|
|
|
|
% of total
|
92%
|
|
4%
|
|
2%
|
|
1%
|
|
1%
|
|
100%
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
G.O.
|
|
Revenue
|
|
Total
|
|
% of total
fair value
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Weighted
average
credit rating
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
New York
|
$
|
5,011
|
|
|
$
|
44,549
|
|
|
$
|
49,560
|
|
|
24%
|
|
$
|
1,139
|
|
|
$
|
(35
|
)
|
|
AA+
|
|
|
California
|
21,333
|
|
|
21,416
|
|
|
42,749
|
|
|
21%
|
|
1,088
|
|
|
(4
|
)
|
|
AA
|
|
|||||
|
Massachusetts
|
16,122
|
|
|
522
|
|
|
16,644
|
|
|
8%
|
|
22
|
|
|
(117
|
)
|
|
AA
|
|
|||||
|
Texas
|
3,702
|
|
|
11,232
|
|
|
14,934
|
|
|
7%
|
|
418
|
|
|
(88
|
)
|
|
AA
|
|
|||||
|
Michigan
|
—
|
|
|
13,952
|
|
|
13,952
|
|
|
7%
|
|
194
|
|
|
(17
|
)
|
|
AA-
|
|
|||||
|
Other
|
12,796
|
|
|
56,592
|
|
|
69,388
|
|
|
33%
|
|
1,498
|
|
|
(146
|
)
|
|
A+
|
|
|||||
|
|
$
|
58,964
|
|
|
$
|
148,263
|
|
|
$
|
207,227
|
|
|
100%
|
|
$
|
4,359
|
|
|
$
|
(407
|
)
|
|
AA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
New York
|
$
|
9,805
|
|
|
$
|
29,479
|
|
|
$
|
39,284
|
|
|
29%
|
|
$
|
67
|
|
|
$
|
(726
|
)
|
|
AA
|
|
|
California
|
21,371
|
|
|
13,314
|
|
|
34,685
|
|
|
26%
|
|
518
|
|
|
(168
|
)
|
|
AA-
|
|
|||||
|
Utah
|
—
|
|
|
9,507
|
|
|
9,507
|
|
|
7%
|
|
57
|
|
|
—
|
|
|
AA+
|
|
|||||
|
Florida
|
—
|
|
|
9,160
|
|
|
9,160
|
|
|
7%
|
|
19
|
|
|
(34
|
)
|
|
AA
|
|
|||||
|
Michigan
|
—
|
|
|
9,147
|
|
|
9,147
|
|
|
7%
|
|
—
|
|
|
(136
|
)
|
|
AA-
|
|
|||||
|
Other
|
4,326
|
|
|
29,476
|
|
|
33,802
|
|
|
24%
|
|
253
|
|
|
(333
|
)
|
|
AA-
|
|
|||||
|
|
$
|
35,502
|
|
|
$
|
100,083
|
|
|
$
|
135,585
|
|
|
100%
|
|
$
|
914
|
|
|
$
|
(1,397
|
)
|
|
AA-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||||||||||
|
Severity of
Unrealized Loss
|
Fair value
|
|
Gross
unrealized
losses
|
|
% of
total gross
unrealized
losses
|
|
Fair value
|
|
Gross
unrealized
losses
|
|
% of
total gross
unrealized
losses
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
0-10%
|
$
|
2,961,063
|
|
|
$
|
(24,823
|
)
|
|
96
|
%
|
|
$
|
7,496,064
|
|
|
$
|
(151,333
|
)
|
|
91
|
%
|
|
|
10-20%
|
6,571
|
|
|
(1,006
|
)
|
|
4
|
%
|
|
88,447
|
|
|
(12,573
|
)
|
|
8
|
%
|
|
||||
|
20-30%
|
10
|
|
|
(3
|
)
|
|
—
|
%
|
|
5,557
|
|
|
(1,522
|
)
|
|
1
|
%
|
|
||||
|
30-40%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
40-50%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
> 50%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
Total
|
$
|
2,967,644
|
|
|
$
|
(25,832
|
)
|
|
100
|
%
|
|
$
|
7,590,068
|
|
|
$
|
(165,428
|
)
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||||||||||
|
Severity of
Unrealized Loss
|
Fair value
|
|
Gross
unrealized losses |
|
% of
total gross unrealized losses |
|
Fair value
|
|
Gross
unrealized losses |
|
% of
total gross unrealized losses |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
0-10%
|
$
|
197,731
|
|
|
$
|
(4,319
|
)
|
|
72
|
%
|
|
$
|
779,812
|
|
|
$
|
(31,179
|
)
|
|
63
|
%
|
|
|
10-20%
|
7,577
|
|
|
(1,063
|
)
|
|
18
|
%
|
|
107,931
|
|
|
(15,074
|
)
|
|
31
|
%
|
|
||||
|
20-30%
|
1,893
|
|
|
(557
|
)
|
|
9
|
%
|
|
9,289
|
|
|
(2,931
|
)
|
|
6
|
%
|
|
||||
|
30-40%
|
106
|
|
|
(63
|
)
|
|
1
|
%
|
|
370
|
|
|
(227
|
)
|
|
—
|
%
|
|
||||
|
40-50%
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
> 50%
|
13
|
|
|
(18
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
||||
|
Total
|
$
|
207,320
|
|
|
$
|
(6,020
|
)
|
|
100
|
%
|
|
$
|
897,402
|
|
|
$
|
(49,411
|
)
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Hedge funds
|
|
|
|
|
|
|
|
|
||||||
|
Long/short equity funds
|
$
|
31,248
|
|
|
4
|
%
|
|
$
|
26,779
|
|
|
3
|
%
|
|
|
Multi-strategy funds
|
136,542
|
|
|
18
|
%
|
|
167,819
|
|
|
22
|
%
|
|
||
|
Total hedge funds
|
167,790
|
|
|
22
|
%
|
|
194,598
|
|
|
25
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
Direct lending funds
|
277,395
|
|
|
36
|
%
|
|
274,478
|
|
|
35
|
%
|
|
||
|
Private equity funds
|
80,412
|
|
|
10
|
%
|
|
64,566
|
|
|
8
|
%
|
|
||
|
Real estate funds
|
130,112
|
|
|
17
|
%
|
|
84,202
|
|
|
11
|
%
|
|
||
|
Total hedge, direct lending, private equity and real estate funds
|
655,709
|
|
|
85
|
%
|
|
617,844
|
|
|
79
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
|
CLO-Equities
|
14,328
|
|
|
2
|
%
|
|
21,271
|
|
|
2
|
%
|
|
||
|
Other privately held investments
|
36,934
|
|
|
5
|
%
|
|
44,518
|
|
|
6
|
%
|
|
||
|
Overseas deposits
|
63,952
|
|
|
8
|
%
|
|
104,154
|
|
|
13
|
%
|
|
||
|
Total other investments
|
$
|
770,923
|
|
|
100
|
%
|
|
$
|
787,787
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total cash provided by (used in)(1)
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Operating activities
|
$
|
199,004
|
|
|
$
|
10,773
|
|
|
$
|
259,229
|
|
|
|
Investing activities
|
(774,315
|
)
|
|
638,554
|
|
|
391,510
|
|
|
|||
|
Financing activities
|
277,510
|
|
|
(186,207
|
)
|
|
(545,688
|
)
|
|
|||
|
Effect of exchange rate changes on cash
|
44,238
|
|
|
3,114
|
|
|
17,228
|
|
|
|||
|
Increase (decrease) in cash and cash equivalents
|
$
|
(253,563
|
)
|
|
$
|
466,234
|
|
|
$
|
122,279
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to Item 8, ‘Consolidated Statements of Cashflows’, for further details.
|
•
|
Net cash provided by operating activities was $199 million in 2019 compared to $11 million in 2018. Cash inflows from insurance and reinsurance operations typically include premiums, net of acquisition costs, and reinsurance recoverables. Cash outflows principally include payments of claims and loss adjustment expenses together with payments of premiums to reinsurers and operating expenses. Cash provided by operating activities can fluctuate due to timing differences between the collection of premiums and reinsurance recoverables and the payment of claims and loss adjustment expenses, and the payment of premiums to reinsurers. Operating cash inflows increased in 2019 compared to 2018, primarily attributable to an increase in premiums and reinsurance recoverables received, partially offset by an increase in payments of claims and loss adjustment expenses, an increase in costs associated with the purchase of reinsurance and retrocessional covers and an increase in operating expenses.
|
•
|
Investing cash outflows in 2019 principally related to the net purchases of fixed maturities of $693 million, net purchases of equity securities of $22 million, partially offset by net proceeds from the sale of other investments of $31 million.
|
•
|
Financing cash inflows were due to net proceeds from the issuance of $300 million 3.900% Senior Notes and $425 million of Junior Subordinated Notes. Financing cash outflows primarily related to the repayment of $250 million 2.650% Senior Notes and dividends paid to common and preferred shareholders of $180 million in 2019 (2018: $176 million). Cash outflows also included common share repurchases associated with the vesting of share-settled restricted stock units of $10 million in 2019 ( 2018: $10 million). Any future share repurchases are discretionary, the timing and amount of repurchase transactions depend on a variety of factors including, but not limited to, global insurance and reinsurance, and financial market conditions and opportunities, capital management and regulatory considerations (refer to 'Capital Resources – Share Repurchases' below for further details). In 2018, we also fully redeemed the $36 million of Dekania Notes at par.
|
|
|
|
|
|
|
||||
|
At December 31,
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
|
Debt
|
$
|
1,808,157
|
|
|
$
|
1,341,961
|
|
|
|
|
|
|
|
|
||||
|
Preferred shares
|
775,000
|
|
|
775,000
|
|
|
||
|
Common equity
|
4,769,008
|
|
|
4,255,071
|
|
|
||
|
Shareholders’ equity
|
5,544,008
|
|
|
5,030,071
|
|
|
||
|
Total capital
|
$
|
7,352,165
|
|
|
$
|
6,372,032
|
|
|
|
|
|
|
|
|
||||
|
Ratio of debt to total capital
|
24.6
|
%
|
|
21.1
|
%
|
|
||
|
|
|
|
|
|
||||
|
Ratio of debt and preferred equity to total capital
|
35.1
|
%
|
|
33.2
|
%
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year ended December 31,
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
|
||||
|
Common equity - opening
|
|
$
|
4,255,071
|
|
|
$
|
4,566,264
|
|
|
|
Net income
|
|
323,473
|
|
|
43,021
|
|
|
||
|
Change in unrealized losses on available for sale investments, net of tax
|
|
349,886
|
|
|
(190,829
|
)
|
|
||
|
Share repurchases
|
|
(10,165
|
)
|
|
(10,080
|
)
|
|
||
|
Common share dividends
|
|
(138,487
|
)
|
|
(134,748
|
)
|
|
||
|
Preferred share dividends
|
|
(41,112
|
)
|
|
(42,625
|
)
|
|
||
|
Share-based compensation expense
|
|
29,675
|
|
|
33,505
|
|
|
||
|
Foreign currency translation adjustment
|
|
(1,066
|
)
|
|
(11,165
|
)
|
|
||
|
Other
|
|
1,728
|
|
|
1,728
|
|
|
||
|
Common equity - closing
|
|
$
|
4,769,003
|
|
|
$
|
4,255,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rating agency
|
|
Agency’s description of rating
|
|
Rating and outlook
|
|
Agency’s rating
definition
|
|
Ranking of rating
|
|
|
|
|
|
|
|
|
||||
|
Standard & Poor’s
|
|
An "opinion about the financial security characteristics of an insurance organization, with respect to its ability to pay under its insurance policies and contracts, in accordance with their terms".
|
|
A+
(Stable) (1)
|
|
"Strong capacity to meet its financial commitments"
|
|
The ‘A’ grouping is the third highest out of ten major rating categories. The second through eighth major rating categories may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
|
|
|
|
|
|
|
|
|
||||
|
A.M. Best
|
|
An "opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations".
|
|
A+
(Negative) (2)
|
|
"Superior ability to meet ongoing insurance obligations"
|
|
The ‘A+’ grouping is the second highest rating out of fourteen. Ratings outlooks (‘Positive’, ‘Negative’ and ‘Stable’) are assigned to indicate a rating’s potential direction over an intermediate term, generally defined as 36 months.
|
|
|
|
|
|
|
|
|
||||
|
Moody’s Investors Service
|
|
"Opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations."
|
|
A2
(Negative) (3)
|
|
"Offers good financial security"
|
|
The ‘A’ grouping is the third highest out of nine rating categories. Each of the second through seventh categories are subdivided into three subcategories, as indicated by an appended numerical modifier of ‘1’, ‘2’ and ‘3’. The ‘1’ modifier indicates that the obligation ranks in the higher end of the rating category, the ‘2’ modifier indicates a mid-category ranking and the ‘3’ modifier indicates a ranking in the lower end of the rating category.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Payment due by period
|
|
||||||||||||||||||
|
Contractual obligations and commitments
|
|
Total
|
|
Less than 1
year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Estimated gross losses and loss expenses payments(1)
|
|
$
|
12,752,081
|
|
|
$
|
3,299,764
|
|
|
$
|
3,925,672
|
|
|
$
|
2,076,156
|
|
|
$
|
3,450,489
|
|
|
|
Operating lease obligations(2)
|
|
144,612
|
|
|
19,225
|
|
|
39,178
|
|
|
27,647
|
|
|
58,562
|
|
|
|||||
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Unfunded investment commitments(3)
|
|
$
|
619,948
|
|
|
$
|
201,372
|
|
|
110,940
|
|
|
151,125
|
|
|
156,511
|
|
|
|||
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Debt (principal payments)(4)
|
|
$
|
1,825,000
|
|
|
$
|
500,000
|
|
|
—
|
|
|
—
|
|
|
1,325,000
|
|
|
|||
|
Debt (interest payments)(4)(5)
|
|
$
|
904,508
|
|
|
$
|
71,640
|
|
|
118,800
|
|
|
118,800
|
|
|
595,268
|
|
|
|||
|
Total
|
|
$
|
16,246,149
|
|
|
$
|
4,092,001
|
|
|
$
|
4,194,590
|
|
|
$
|
2,373,728
|
|
|
$
|
5,585,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
We are obligated to pay claims for specified loss events covered by the insurance and reinsurance contracts that we write. Loss payments represent our most significant future payment obligation. In contrast to our other contractual obligations, cash payments are not determinable from the terms specified within the underlying contracts. Our best estimate of reserve for losses and loss expenses is reflected in the table above. Actual amounts and timing may differ materially from our best estimate (refer to ‘Critical Accounting Estimates – Reserve for Losses and Loss Expenses’ for further details). We have not taken into account corresponding reinsurance recoverable on unpaid amounts that would be due to us.
|
(2)
|
In the ordinary course of business, we renew and enter into new leases for office space which expire at various dates (refer to Item 8, Note 12 to the Consolidated Financial Statements 'Leases' for further details).
|
(3)
|
We have $588 million of unfunded investment commitments related to our other investments portfolio, which are callable by our investment managers (refer to Item 8, Note 5(c) to the Consolidated Financial Statements 'Investments' for further details). In addition, we have $32 million of unfunded commitments related to our commercial mortgage loans portfolio.
|
(4)
|
Refer to Item 8, Note 10(a) to the Consolidated Financial Statements 'Debt and Financing Arrangements' for further details.
|
(5)
|
Debt (interest payments) includes $17 million of unamortized discount and debt insurance expenses.
|
•
|
reserves for losses and loss expenses;
|
•
|
reinsurance recoverable on unpaid losses and loss expenses, including the provision for uncollectible amounts;
|
•
|
gross premiums written and net premiums earned;
|
•
|
fair value measurements of financial assets and liabilities; and
|
•
|
other-than-temporary impairments ("OTTI") in the carrying value of available for sale securities.
|
•
|
Expected Loss Ratio Method ("ELR Method"): This method estimates ultimate losses for an accident year or underwriting year by applying an expected loss ratio to the earned or written premium for that year. Generally, expected loss ratios are based on one or more of (a) an analysis of historical loss experience to date, (b) pricing information and (c) industry data, adjusted as appropriate, to reflect changes in rates, loss and exposure trends, and terms and conditions. This method is insensitive to actual incurred losses for the accident year or underwriting year in question and is, therefore, often useful in the early stages of development when very few losses have been incurred. Conversely, the lack of sensitivity to incurred/paid losses for the accident year or underwriting year in question means that this method is usually inappropriate in later stages of an accident year or underwriting year’s development.
|
•
|
Loss Development Method (also referred to as the "Chain Ladder Method" or "Link Ratio Method"): This method assumes that the losses incurred/paid for each accident year or underwriting year at a particular development stage follow a relatively similar pattern. It assumes that on average, every accident year or underwriting year will display the same percentage of ultimate losses incurred/paid at the same point in time after the inception of that year. The percentages incurred/paid are established for each development stage (e.g. 12 months, 24 months, etc.) after examining averages from historical loss development data and/or external industry benchmark information. Ultimate losses are then estimated by multiplying the actual incurred/paid losses by the reciprocal of the established incurred/paid percentage. The strengths of this method are that it reacts to loss emergence/payments and that it makes full use of historical claim emergence/payment experience. However, this method has weaknesses when the underlying assumption of stable loss development/payment patterns is not valid. This could be the consequence of changes in business mix, claim inflation trends or claim reporting practices and/or the presence of large claims, among other things. Furthermore, this method tends to produce volatile estimates of ultimate losses where there is volatility in the underlying incurred/paid patterns. In particular, where the expected percentage of incurred/paid losses is low, small deviations between actual and expected claims can lead to very volatile estimates of ultimate losses. As a result, this method is often unsuitable at early development stages for an accident year or underwriting year.
|
•
|
Bornhuetter-Ferguson Method ("BF Method"): This method can be seen as a combination of the ELR and Loss Development Methods, under which the Loss Development Method is given progressively more weight as an accident year or underwriting year matures. The main advantage of the BF Method is that it provides a more stable estimate of ultimate losses than the Loss Development Method at earlier stages of development, while remaining more responsive to emerging loss development than the ELR Method. In addition, the BF Method allows for the incorporation of external market information through the use of expected loss ratios, whereas the Loss Development Method does not incorporate such information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
||||||||||||||||||||
|
At December 31,
|
Case reserves
|
|
IBNR
|
|
Total
|
|
Case reserves
|
|
IBNR
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
$
|
655,262
|
|
|
$
|
327,475
|
|
|
$
|
982,737
|
|
|
$
|
792,022
|
|
|
$
|
505,071
|
|
|
$
|
1,297,092
|
|
|
|
Marine
|
235,549
|
|
|
281,677
|
|
|
517,226
|
|
|
208,620
|
|
|
335,889
|
|
|
544,508
|
|
|
||||||
|
Aviation
|
116,932
|
|
|
31,445
|
|
|
148,377
|
|
|
102,954
|
|
|
41,554
|
|
|
144,508
|
|
|
||||||
|
Credit and political risk
|
5,905
|
|
|
124,109
|
|
|
130,014
|
|
|
(3,171
|
)
|
|
127,098
|
|
|
123,927
|
|
|
||||||
|
Professional lines
|
806,780
|
|
|
2,041,317
|
|
|
2,848,097
|
|
|
678,047
|
|
|
1,980,164
|
|
|
2,658,212
|
|
|
||||||
|
Liability
|
396,837
|
|
|
1,473,280
|
|
|
1,870,117
|
|
|
317,449
|
|
|
1,340,613
|
|
|
1,658,062
|
|
|
||||||
|
Total Insurance
|
2,217,265
|
|
|
4,279,303
|
|
|
6,496,568
|
|
|
2,095,920
|
|
|
4,330,389
|
|
|
6,426,309
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reinsurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
879,301
|
|
|
1,186,655
|
|
|
2,065,958
|
|
|
890,747
|
|
|
902,493
|
|
|
1,793,240
|
|
|
||||||
|
Credit and surety
|
125,029
|
|
|
190,368
|
|
|
315,397
|
|
|
125,256
|
|
|
231,222
|
|
|
356,478
|
|
|
||||||
|
Professional lines
|
429,576
|
|
|
688,439
|
|
|
1,118,015
|
|
|
432,137
|
|
|
702,449
|
|
|
1,134,586
|
|
|
||||||
|
Motor
|
778,534
|
|
|
516,148
|
|
|
1,294,681
|
|
|
701,600
|
|
|
517,542
|
|
|
1,219,142
|
|
|
||||||
|
Liability
|
431,211
|
|
|
1,030,252
|
|
|
1,461,462
|
|
|
380,544
|
|
|
970,470
|
|
|
1,351,014
|
|
|
||||||
|
Total Reinsurance
|
2,643,651
|
|
|
3,611,862
|
|
|
6,255,513
|
|
|
2,530,284
|
|
|
3,324,176
|
|
|
5,854,460
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
4,860,916
|
|
|
$
|
7,891,165
|
|
|
$
|
12,752,081
|
|
|
$
|
4,626,204
|
|
|
$
|
7,654,565
|
|
|
$
|
12,280,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Insurance and Reinsurance Professional Lines
|
•
|
Reinsurance Credit and Surety
|
•
|
Insurance Credit and Political Risk
|
•
|
more significant weight given to industry benchmarks in forming our key actuarial assumptions;
|
•
|
potential volatility of actuarial estimates, given the number of years of development it takes to produce a meaningful incurred loss as a percentage of ultimate losses;
|
•
|
inherent uncertainties about loss trends, claims inflation (e.g. medical, judicial, social) and general economic conditions; and
|
•
|
the possibility of future litigation, legislative or judicial change that may impact future loss experience relative to the prior industry loss experience relied on in reserve estimation.
|
•
|
estimates of the size of insured industry losses from the catastrophic event and our corresponding market share;
|
•
|
a review of our portfolio of contracts to identify those contracts which may be exposed to the catastrophic event;
|
•
|
a review of modeled loss estimates based on information previously reported by customers and brokers, including exposure data obtained during the underwriting process;
|
•
|
discussions of the impact of the event with our customers and brokers; and
|
•
|
catastrophe bulletins published by various independent statistical reporting agencies.
|
|
|
|
|
|
|
|
|
||||||
|
INSURANCE
|
|
|||||||||||
|
Development pattern
|
Expected loss ratio
|
|
||||||||||
|
Property and other
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(80,379
|
)
|
|
$
|
(70,217
|
)
|
|
$
|
(59,881
|
)
|
|
|
Unchanged
|
(12,804
|
)
|
|
—
|
|
|
12,805
|
|
|
|||
|
3 months longer
|
57,932
|
|
|
73,149
|
|
|
88,361
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Marine
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(43,094
|
)
|
|
$
|
(46,809
|
)
|
|
$
|
(33,678
|
)
|
|
|
Unchanged
|
(10,820
|
)
|
|
—
|
|
|
10,825
|
|
|
|||
|
3 months longer
|
15,156
|
|
|
27,021
|
|
|
38,892
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Aviation
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(7,401
|
)
|
|
$
|
(6,147
|
)
|
|
$
|
(4,894
|
)
|
|
|
Unchanged
|
(1,560
|
)
|
|
—
|
|
|
1,560
|
|
|
|||
|
3 months longer
|
6,634
|
|
|
8,625
|
|
|
10,617
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Credit and political risk
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(12,747
|
)
|
|
$
|
(193
|
)
|
|
$
|
3,862
|
|
|
|
Unchanged
|
(12,565
|
)
|
|
—
|
|
|
4,065
|
|
|
|||
|
3 months longer
|
(12,388
|
)
|
|
186
|
|
|
4,260
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Professional lines
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(388,752
|
)
|
|
$
|
(108,463
|
)
|
|
$
|
171,829
|
|
|
|
Unchanged
|
(291,965
|
)
|
|
—
|
|
|
291,968
|
|
|
|||
|
6 months longer
|
(176,479
|
)
|
|
129,385
|
|
|
435,238
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Liability
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(225,322
|
)
|
|
$
|
(36,754
|
)
|
|
$
|
151,816
|
|
|
|
Unchanged
|
(191,981
|
)
|
|
—
|
|
|
191,983
|
|
|
|||
|
6 months longer
|
(148,320
|
)
|
|
48,214
|
|
|
244,739
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
REINSURANCE
|
|
|||||||||||
|
Development pattern
|
Expected loss ratio
|
|
||||||||||
|
Property and other
|
5% lower
|
|
Unchanged
|
|
5% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
3 months shorter
|
$
|
(112,511
|
)
|
|
$
|
(48,913
|
)
|
|
$
|
16,103
|
|
|
|
Unchanged
|
(68,507
|
)
|
|
—
|
|
|
60,398
|
|
|
|||
|
3 months longer
|
(12,475
|
)
|
|
53,585
|
|
|
119,690
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Credit and surety
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(36,316
|
)
|
|
$
|
(22,032
|
)
|
|
$
|
(7,748
|
)
|
|
|
Unchanged
|
(16,067
|
)
|
|
—
|
|
|
15,963
|
|
|
|||
|
6 months longer
|
26,629
|
|
|
45,346
|
|
|
63,893
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Professional lines
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(115,985
|
)
|
|
$
|
(44,243
|
)
|
|
$
|
32,974
|
|
|
|
Unchanged
|
(66,832
|
)
|
|
—
|
|
|
78,229
|
|
|
|||
|
6 months longer
|
(4,732
|
)
|
|
63,176
|
|
|
141,754
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Motor
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(83,391
|
)
|
|
$
|
(34,992
|
)
|
|
$
|
14,148
|
|
|
|
Unchanged
|
(50,328
|
)
|
|
—
|
|
|
51,278
|
|
|
|||
|
6 months longer
|
37,369
|
|
|
90,785
|
|
|
144,452
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Liability
|
10% lower
|
|
Unchanged
|
|
10% higher
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
6 months shorter
|
$
|
(192,395
|
)
|
|
$
|
(61,865
|
)
|
|
$
|
82,787
|
|
|
|
Unchanged
|
(118,772
|
)
|
|
—
|
|
|
131,163
|
|
|
|||
|
6 months longer
|
(30,239
|
)
|
|
90,135
|
|
|
208,151
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
||||||||||||||||||||
|
At December 31,
|
Case
reserves
|
|
IBNR
|
|
Total
|
|
Case
reserves
|
|
IBNR
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
$
|
241,028
|
|
|
$
|
117,165
|
|
|
$
|
358,194
|
|
|
$
|
268,834
|
|
|
$
|
213,887
|
|
|
$
|
482,720
|
|
|
|
Marine
|
70,927
|
|
|
93,078
|
|
|
164,005
|
|
|
74,440
|
|
|
112,724
|
|
|
187,164
|
|
|
||||||
|
Aviation
|
34,298
|
|
|
1,796
|
|
|
36,094
|
|
|
8,123
|
|
|
6,187
|
|
|
14,310
|
|
|
||||||
|
Credit and political risk
|
9,730
|
|
|
24,885
|
|
|
34,615
|
|
|
(313
|
)
|
|
24,848
|
|
|
24,536
|
|
|
||||||
|
Professional lines
|
318,850
|
|
|
786,834
|
|
|
1,105,684
|
|
|
251,817
|
|
|
753,499
|
|
|
1,005,316
|
|
|
||||||
|
Liability
|
215,203
|
|
|
893,178
|
|
|
1,108,381
|
|
|
188,314
|
|
|
789,892
|
|
|
978,206
|
|
|
||||||
|
Total Insurance
|
890,036
|
|
|
1,916,936
|
|
|
2,806,973
|
|
|
791,215
|
|
|
1,901,037
|
|
|
2,692,252
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Reinsurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Property and other
|
286,994
|
|
|
161,891
|
|
|
448,885
|
|
|
238,029
|
|
|
197,642
|
|
|
435,671
|
|
|
||||||
|
Credit and surety
|
18,490
|
|
|
45,985
|
|
|
64,475
|
|
|
9,609
|
|
|
26,570
|
|
|
36,180
|
|
|
||||||
|
Professional lines
|
23,968
|
|
|
111,537
|
|
|
135,505
|
|
|
10,066
|
|
|
71,542
|
|
|
81,608
|
|
|
||||||
|
Motor
|
99,730
|
|
|
109,765
|
|
|
209,495
|
|
|
48,525
|
|
|
80,051
|
|
|
128,575
|
|
|
||||||
|
Liability
|
39,722
|
|
|
172,701
|
|
|
212,423
|
|
|
20,838
|
|
|
106,545
|
|
|
127,383
|
|
|
||||||
|
Total Reinsurance
|
468,904
|
|
|
601,879
|
|
|
1,070,783
|
|
|
327,067
|
|
|
482,350
|
|
|
809,417
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
1,358,940
|
|
|
$
|
2,518,815
|
|
|
$
|
3,877,756
|
|
|
$
|
1,118,282
|
|
|
$
|
2,383,387
|
|
|
$
|
3,501,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
changes in renewal rates or rates of new business accepted by cedants (changes could result from changes in the relevant insurance market that could affect more than one of our cedants or could be a consequence of changes in the marketing strategy or risk appetite of an individual cedant);
|
•
|
changes in underlying exposure values; and/or
|
•
|
changes in rates being charged by cedants.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Catastrophe
|
$
|
17,149
|
|
|
$
|
12,944
|
|
|
$
|
16,344
|
|
|
|
Property
|
184,552
|
|
|
237,527
|
|
|
248,580
|
|
|
|||
|
Professional lines
|
159,234
|
|
|
174,126
|
|
|
214,184
|
|
|
|||
|
Credit and surety
|
162,948
|
|
|
221,260
|
|
|
223,184
|
|
|
|||
|
Motor
|
194,871
|
|
|
361,471
|
|
|
318,494
|
|
|
|||
|
Liability
|
251,515
|
|
|
246,554
|
|
|
263,790
|
|
|
|||
|
Agriculture
|
194,379
|
|
|
205,116
|
|
|
202,234
|
|
|
|||
|
Engineering
|
51,052
|
|
|
48,692
|
|
|
67,221
|
|
|
|||
|
Accident and health
|
335,538
|
|
|
284,675
|
|
|
189,567
|
|
|
|||
|
Other
|
22,697
|
|
|
11,360
|
|
|
51,211
|
|
|
|||
|
Total estimated premiums
|
$
|
1,573,935
|
|
|
$
|
1,803,725
|
|
|
$
|
1,794,809
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written (reinsurance segment)
|
$
|
3,222,927
|
|
|
$
|
3,112,473
|
|
|
$
|
2,741,355
|
|
|
|
As a % of total gross premiums written
|
49
|
%
|
|
58
|
%
|
|
65
|
%
|
|
|||
|
|
|
|
|
|
|
|
•
|
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments.
|
•
|
Level 2 – Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
|
•
|
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The unobservable inputs reflect our judgments about assumptions that market participants might use.
|
|
|
|
|
|
|
|
At December 31,
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Discount rate
|
-
|
|
3.0% - 8.0%
|
|
|
|
|
|
|
|
a.
|
the length of time and extent to which the fair value is less than the amortized cost.
|
b.
|
the financial condition, near-term and long-term prospects for the issuer of the security, including relevant industry conditions and trends, and the implications of rating agency actions, and offering prices.
|
c.
|
the reason for the decline (e.g. credit spread widening, credit event, foreign exchange rate movements);
|
d.
|
the historical and implied volatility of the fair value.
|
e.
|
the collateral structure and credit support of the security, if applicable.
|
•
|
declines in value greater than 20% for nine consecutive months, and
|
•
|
declines in value greater than 10% for twelve consecutive months.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Fair value
|
|
Potential adverse change in fair value
|
|
||||||||||||
Increase in
interest rate
by 100
basis points
|
|
Widening of
credit spreads
by 100
basis points
|
|
Total
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
2,112,881
|
|
|
$
|
(78,364
|
)
|
|
$
|
—
|
|
|
$
|
(78,364
|
)
|
|
|
Non-U.S. government
|
576,592
|
|
|
(20,430
|
)
|
|
—
|
|
|
(20,430
|
)
|
|
||||
|
Agency RMBS
|
1,592,584
|
|
|
(54,850
|
)
|
|
—
|
|
|
(54,850
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Securities exposed to credit spreads:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate debt
|
4,930,254
|
|
|
(154,282
|
)
|
|
(162,741
|
)
|
|
(317,023
|
)
|
|
||||
|
CMBS
|
1,365,052
|
|
|
(69,922
|
)
|
|
(74,549
|
)
|
|
(144,471
|
)
|
|
||||
|
Non agency RMBS
|
84,922
|
|
|
(1,766
|
)
|
|
(3,205
|
)
|
|
(4,971
|
)
|
|
||||
|
ABS
|
1,598,693
|
|
|
(10,951
|
)
|
|
(47,745
|
)
|
|
(58,696
|
)
|
|
||||
|
Municipals
|
207,227
|
|
|
(9,045
|
)
|
|
(9,399
|
)
|
|
(18,444
|
)
|
|
||||
|
|
$
|
12,468,205
|
|
|
$
|
(399,610
|
)
|
|
$
|
(297,639
|
)
|
|
$
|
(697,249
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
1,515,697
|
|
|
$
|
(36,818
|
)
|
|
$
|
—
|
|
|
$
|
(36,818
|
)
|
|
|
Non-U.S. government
|
493,016
|
|
|
(17,219
|
)
|
|
—
|
|
|
(17,219
|
)
|
|
||||
|
Agency RMBS
|
1,643,308
|
|
|
(63,612
|
)
|
|
—
|
|
|
(63,612
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Securities exposed to credit spreads:
|
|
|
|
|
|
|
|
|
||||||||
|
Corporate debt
|
4,876,921
|
|
|
(149,896
|
)
|
|
(167,165
|
)
|
|
(317,061
|
)
|
|
||||
|
CMBS
|
1,092,530
|
|
|
(51,005
|
)
|
|
(54,608
|
)
|
|
(105,613
|
)
|
|
||||
|
Non agency RMBS
|
40,687
|
|
|
(315
|
)
|
|
(1,321
|
)
|
|
(1,636
|
)
|
|
||||
|
ABS
|
1,637,603
|
|
|
(10,966
|
)
|
|
(54,226
|
)
|
|
(65,192
|
)
|
|
||||
|
Municipals
|
135,585
|
|
|
(4,838
|
)
|
|
(5,316
|
)
|
|
(10,154
|
)
|
|
||||
|
|
$
|
11,435,347
|
|
|
$
|
(334,669
|
)
|
|
$
|
(282,636
|
)
|
|
$
|
(617,305
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
AUD
|
|
NZD
|
|
CAD
|
|
EUR
|
|
GBP
|
|
JPY
|
|
Other
|
|
Total
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net managed assets (liabilities), excluding derivatives
|
$
|
42,435
|
|
|
$
|
(2,247
|
)
|
|
$
|
157,512
|
|
|
$
|
(442,481
|
)
|
|
$
|
(198,535
|
)
|
|
$
|
(160,737
|
)
|
|
$
|
114,073
|
|
|
$
|
(489,980
|
)
|
|
|
Foreign currency derivatives, net
|
(23,881
|
)
|
|
6,407
|
|
|
(125,019
|
)
|
|
356,501
|
|
|
144,866
|
|
|
204,918
|
|
|
4,366
|
|
|
568,158
|
|
|
||||||||
|
Net managed foreign currency exposure
|
18,554
|
|
|
4,160
|
|
|
32,493
|
|
|
(85,980
|
)
|
|
(53,669
|
)
|
|
44,181
|
|
|
118,439
|
|
|
78,178
|
|
|
||||||||
|
Other net foreign currency exposure
|
1
|
|
|
—
|
|
|
116
|
|
|
(319
|
)
|
|
(316
|
)
|
|
—
|
|
|
51,323
|
|
|
50,805
|
|
|
||||||||
|
Total net foreign currency exposure
|
$
|
18,555
|
|
|
$
|
4,160
|
|
|
$
|
32,609
|
|
|
$
|
(86,299
|
)
|
|
$
|
(53,985
|
)
|
|
$
|
44,181
|
|
|
$
|
169,762
|
|
|
$
|
128,983
|
|
|
|
Net foreign currency exposure as a percentage of total shareholders’ equity
|
0.3
|
%
|
|
0.1
|
%
|
|
0.6
|
%
|
|
(1.6
|
%)
|
|
(1.0
|
%)
|
|
0.8
|
%
|
|
3.1
|
%
|
|
2.3
|
%
|
|
||||||||
|
Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement(1)
|
$
|
1,856
|
|
|
$
|
416
|
|
|
$
|
3,261
|
|
|
$
|
(8,630
|
)
|
|
$
|
(5,399
|
)
|
|
$
|
4,418
|
|
|
$
|
16,976
|
|
|
$
|
12,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
At December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Net managed assets (liabilities), excluding derivatives
|
$
|
56,992
|
|
|
$
|
(5,943
|
)
|
|
$
|
110,394
|
|
|
$
|
(329,761
|
)
|
|
$
|
(166,396
|
)
|
|
$
|
(8,944
|
)
|
|
$
|
64,523
|
|
|
$
|
(279,135
|
)
|
|
|
Foreign currency derivatives, net
|
(38,383
|
)
|
|
3,020
|
|
|
(128,266
|
)
|
|
329,708
|
|
|
20,138
|
|
|
(8,663
|
)
|
|
(939
|
)
|
|
176,615
|
|
|
||||||||
|
Net managed foreign currency exposure
|
18,609
|
|
|
(2,923
|
)
|
|
(17,872
|
)
|
|
(53
|
)
|
|
(146,258
|
)
|
|
(17,607
|
)
|
|
63,584
|
|
|
(102,520
|
)
|
|
||||||||
|
Other net foreign currency exposure
|
1
|
|
|
—
|
|
|
82
|
|
|
(33
|
)
|
|
379
|
|
|
—
|
|
|
52,924
|
|
|
53,353
|
|
|
||||||||
|
Total net foreign currency exposure
|
$
|
18,610
|
|
|
$
|
(2,923
|
)
|
|
$
|
(17,790
|
)
|
|
$
|
(86
|
)
|
|
$
|
(145,879
|
)
|
|
$
|
(17,607
|
)
|
|
$
|
116,508
|
|
|
$
|
(49,167
|
)
|
|
|
Net foreign currency exposure as a percentage of total shareholders’ equity
|
0.4
|
%
|
|
(0.1
|
%)
|
|
(0.4
|
%)
|
|
—
|
%
|
|
(2.9
|
%)
|
|
(0.4
|
%)
|
|
2.3
|
%
|
|
(1.0
|
%)
|
|
||||||||
|
Pre-tax impact of net foreign currency exposure on shareholders’ equity given a hypothetical 10% rate movement(1)
|
$
|
1,861
|
|
|
$
|
(292
|
)
|
|
$
|
(1,779
|
)
|
|
$
|
(9
|
)
|
|
$
|
(14,588
|
)
|
|
$
|
(1,761
|
)
|
|
$
|
11,651
|
|
|
$
|
(4,917
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Assumes 10% change in underlying currencies relative to the U.S. dollar.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Index to Consolidated Financial Statements and Accompanying Notes
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Balance Sheets at December 31, 2019 and 2018
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
Note 1 – History
|
|
|
|
Note 2 – Basis of Presentation and Significant Accounting Policies
|
|
|
|
Note 3 – Segment Information
|
|
|
|
Note 4 – Goodwill and Intangible Assets
|
|
|
|
Note 5 – Investments
|
|
|
|
Note 6 – Fair Value Measurements
|
|
|
|
Note 7 – Derivative Instruments
|
|
|
|
Note 8 – Reserve for Losses and Loss Expenses
|
|
|
|
Note 9 – Reinsurance
|
|
|
|
Note 10 – Debt and Financing Arrangements
|
|
|
|
Note 11 – Commitments and Contingencies
|
|
|
|
Note 12 – Leases
|
|
|
|
Note 13 – Earnings Per Common Share
|
|
|
|
Note 14 – Shareholders’ Equity
|
|
|
|
Note 15 – Retirement Plans
|
|
|
|
Note 16 – Share-Based Compensation
|
|
|
|
Note 17 – Related Party Transactions
|
|
|
|
Note 18 – Transaction and Reorganization Expenses
|
|
|
|
Note 19 – Income Taxes
|
|
|
|
Note 20 – Other Comprehensive Income (Loss)
|
|
|
|
Note 21 – Statutory Financial Information
|
|
|
|
Note 22 – Unaudited Condensed Quarterly Financial Data
|
|
|
|
Note 23 – Subsequent Events
|
|
|
|
•
|
We tested the effectiveness of controls over the valuation of the recorded loss and loss expense reserves, including the review and approval process that management has in place for significant actuarial methods and assumptions used and the approval of management’s best estimate of loss and loss expense reserves.
|
•
|
We tested the completeness and accuracy of the underlying data that served as the basis for the Company’s actuarial analysis, including historical claims data, to test the reasonableness of key inputs to the actuarial estimate.
|
•
|
With the assistance of our actuarial specialists:
|
–
|
We independently developed an estimate of the reserves for selected classes of business, compared our estimates to those booked by the Company, and evaluated the differences.
|
–
|
We evaluated the Company’s methodologies against recognized actuarial practices for the remaining classes. We also evaluated the assumptions used by the Company using our industry knowledge and experience and other analytical procedures.
|
–
|
We compared the results of the reserve study prepared by third party actuaries to management’s best estimate and evaluated the differences.
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 27, 2020
|
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturities, available for sale, at fair value
(Amortized cost 2019: $12,263,240; 2018: $11,616,312) |
$
|
12,468,205
|
|
|
$
|
11,435,347
|
|
Equity securities, at fair value
(Cost 2019: $398,956; 2018: $365,905) |
474,207
|
|
|
381,633
|
|
||
Mortgage loans, held for investment, at fair value
|
432,748
|
|
|
298,650
|
|
||
Other investments, at fair value
|
770,923
|
|
|
787,787
|
|
||
Equity method investments
|
117,821
|
|
|
108,103
|
|
||
Short-term investments, at fair value
|
38,471
|
|
|
144,040
|
|
||
Total investments
|
14,302,375
|
|
|
13,155,560
|
|
||
Cash and cash equivalents
|
1,241,109
|
|
|
1,232,814
|
|
||
Restricted cash and cash equivalents
|
335,348
|
|
|
597,206
|
|
||
Accrued interest receivable
|
78,085
|
|
|
80,335
|
|
||
Insurance and reinsurance premium balances receivable
|
3,071,390
|
|
|
3,007,296
|
|
||
Reinsurance recoverable on unpaid losses and loss expenses
|
3,877,756
|
|
|
3,501,669
|
|
||
Reinsurance recoverable on paid losses and loss expenses
|
327,795
|
|
|
280,233
|
|
||
Deferred acquisition costs
|
492,119
|
|
|
566,622
|
|
||
Prepaid reinsurance premiums
|
1,101,889
|
|
|
1,013,573
|
|
||
Receivable for investments sold
|
35,659
|
|
|
32,627
|
|
||
Goodwill
|
102,003
|
|
|
102,003
|
|
||
Intangible assets
|
230,550
|
|
|
241,568
|
|
||
Value of business acquired
|
8,992
|
|
|
35,714
|
|
||
Operating lease right-of-use assets
|
111,092
|
|
|
—
|
|
||
Other assets
|
287,892
|
|
|
285,346
|
|
||
Total assets
|
$
|
25,604,054
|
|
|
$
|
24,132,566
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Reserve for losses and loss expenses
|
$
|
12,752,081
|
|
|
$
|
12,280,769
|
|
Unearned premiums
|
3,626,246
|
|
|
3,635,758
|
|
||
Insurance and reinsurance balances payable
|
1,349,082
|
|
|
1,338,991
|
|
||
Debt
|
1,808,157
|
|
|
1,341,961
|
|
||
Payable for investments purchased
|
32,985
|
|
|
111,838
|
|
||
Operating lease liabilities
|
115,584
|
|
|
—
|
|
||
Other liabilities
|
375,911
|
|
|
393,178
|
|
||
Total liabilities
|
20,060,046
|
|
|
19,102,495
|
|
||
Commitments and Contingencies
|
|
|
|
||||
Shareholders' equity
|
|
|
|
||||
Preferred shares
|
775,000
|
|
|
775,000
|
|
||
Common shares (shares issued 2019: 176,580; 2018: 176,580
shares outstanding 2019: 83,959; 2018: 83,586)
|
2,206
|
|
|
2,206
|
|
||
Additional paid-in capital
|
2,317,212
|
|
|
2,308,583
|
|
||
Accumulated other comprehensive income (loss)
|
171,710
|
|
|
(177,110
|
)
|
||
Retained earnings
|
6,056,686
|
|
|
5,912,812
|
|
||
Treasury shares, at cost (2019: 92,621; 2018: 92,994)
|
(3,778,806
|
)
|
|
(3,791,420
|
)
|
||
Total shareholders’ equity
|
5,544,008
|
|
|
5,030,071
|
|
||
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
25,604,054
|
|
|
$
|
24,132,566
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands, except for per share data)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
4,587,178
|
|
|
$
|
4,791,495
|
|
|
$
|
4,148,760
|
|
Net investment income
|
478,572
|
|
|
438,507
|
|
|
400,805
|
|
|||
Other insurance related income (losses)
|
16,444
|
|
|
10,622
|
|
|
(1,240
|
)
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
15,044
|
|
|||
Net investment gains (losses):
|
|
|
|
|
|
||||||
Other-than-temporary impairment ("OTTI") losses
|
(6,984
|
)
|
|
(9,733
|
)
|
|
(14,493
|
)
|
|||
Other realized and unrealized investment gains (losses)
|
98,217
|
|
|
(140,485
|
)
|
|
42,719
|
|
|||
Total net investment gains (losses)
|
91,233
|
|
|
(150,218
|
)
|
|
28,226
|
|
|||
Total revenues
|
5,173,427
|
|
|
5,090,406
|
|
|
4,591,595
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Net losses and loss expenses
|
3,044,798
|
|
|
3,190,287
|
|
|
3,287,772
|
|
|||
Acquisition costs
|
1,024,582
|
|
|
968,835
|
|
|
823,591
|
|
|||
General and administrative expenses
|
634,831
|
|
|
627,389
|
|
|
579,428
|
|
|||
Foreign exchange losses (gains)
|
(12,041
|
)
|
|
(29,165
|
)
|
|
134,737
|
|
|||
Interest expense and financing costs
|
68,107
|
|
|
67,432
|
|
|
54,811
|
|
|||
Transaction and reorganization expenses
|
37,384
|
|
|
66,940
|
|
|
26,718
|
|
|||
Amortization of value of business acquired
|
26,722
|
|
|
172,332
|
|
|
50,104
|
|
|||
Amortization of intangible assets
|
11,597
|
|
|
13,814
|
|
|
2,543
|
|
|||
Total expenses
|
4,835,980
|
|
|
5,077,864
|
|
|
4,959,704
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) before income taxes and interest in income (loss) of equity method investments
|
337,447
|
|
|
12,542
|
|
|
(368,109
|
)
|
|||
Income tax (expense) benefit
|
(23,692
|
)
|
|
29,486
|
|
|
7,542
|
|
|||
Interest in income (loss) of equity method investments
|
9,718
|
|
|
993
|
|
|
(8,402
|
)
|
|||
Net income (loss)
|
323,473
|
|
|
43,021
|
|
|
(368,969
|
)
|
|||
Preferred share dividends
|
41,112
|
|
|
42,625
|
|
|
46,810
|
|
|||
Net income (loss) available (attributable) to common shareholders
|
$
|
282,361
|
|
|
$
|
396
|
|
|
$
|
(415,779
|
)
|
|
|
|
|
|
|
||||||
Per share data
|
|
|
|
|
|
||||||
Earnings (loss) per common share:
|
|
|
|
|
|
||||||
Earnings (loss) per common share
|
$
|
3.37
|
|
|
$
|
—
|
|
|
$
|
(4.94
|
)
|
Earnings (loss) per diluted common share
|
$
|
3.34
|
|
|
$
|
—
|
|
|
$
|
(4.94
|
)
|
Weighted average common shares outstanding
|
83,894
|
|
|
83,501
|
|
|
84,108
|
|
|||
Weighted average diluted common shares outstanding
|
84,473
|
|
|
84,007
|
|
|
84,108
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Net income (loss)
|
$
|
323,473
|
|
|
$
|
43,021
|
|
|
$
|
(368,969
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Available for sale investments:
|
|
|
|
|
|
||||||
Unrealized gains (losses) arising during the year
|
374,615
|
|
|
(291,731
|
)
|
|
205,419
|
|
|||
Adjustment for reclassification of net realized (gains) losses and OTTI losses recognized in net income (loss)
|
(24,729
|
)
|
|
100,902
|
|
|
(33,134
|
)
|
|||
Unrealized gains (losses) arising during the year, net of reclassification adjustment
|
349,886
|
|
|
(190,829
|
)
|
|
172,285
|
|
|||
Foreign currency translation adjustment
|
(1,066
|
)
|
|
(11,165
|
)
|
|
41,938
|
|
|||
Total other comprehensive income (loss), net of tax
|
348,820
|
|
|
(201,994
|
)
|
|
214,223
|
|
|||
Comprehensive income (loss)
|
$
|
672,293
|
|
|
$
|
(158,973
|
)
|
|
$
|
(154,746
|
)
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Preferred shares
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
775,000
|
|
|
$
|
775,000
|
|
|
$
|
1,126,074
|
|
Shares repurchased
|
—
|
|
|
—
|
|
|
(351,074
|
)
|
|||
Balance at end of year
|
775,000
|
|
|
775,000
|
|
|
775,000
|
|
|||
|
|
|
|
|
|
||||||
Common shares (par value)
|
|
|
|
|
|
||||||
Balance at beginning and end of year
|
2,206
|
|
|
2,206
|
|
|
2,206
|
|
|||
|
|
|
|
|
|
||||||
Additional paid-in capital
|
|
|
|
|
|
||||||
Balance at beginning of year
|
2,308,583
|
|
|
2,299,166
|
|
|
2,299,857
|
|
|||
Treasury shares reissued
|
(21,046
|
)
|
|
(24,088
|
)
|
|
(39,368
|
)
|
|||
Share-based compensation expense
|
29,675
|
|
|
33,505
|
|
|
38,677
|
|
|||
Balance at end of year
|
2,317,212
|
|
|
2,308,583
|
|
|
2,299,166
|
|
|||
|
|
|
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(177,110
|
)
|
|
92,382
|
|
|
(121,841
|
)
|
|||
Unrealized gains (losses) on available-for-sale investments, net of tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(168,365
|
)
|
|
89,962
|
|
|
(82,323
|
)
|
|||
Cumulative effect of adoption of ASU No. 2018-02
|
—
|
|
|
2,106
|
|
|
—
|
|
|||
Cumulative effect of adoption of ASU No. 2016-01, net of taxes
|
—
|
|
|
(69,604
|
)
|
|
—
|
|
|||
Unrealized gains (losses) arising during the year, net of reclassification adjustment
|
349,886
|
|
|
(190,829
|
)
|
|
172,285
|
|
|||
Balance at end of year
|
181,521
|
|
|
(168,365
|
)
|
|
89,962
|
|
|||
Cumulative foreign currency translation adjustments, net of tax:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(8,745
|
)
|
|
2,420
|
|
|
(39,518
|
)
|
|||
Foreign currency translation adjustment
|
(1,066
|
)
|
|
(11,165
|
)
|
|
41,938
|
|
|||
Balance at end of year
|
(9,811
|
)
|
|
(8,745
|
)
|
|
2,420
|
|
|||
Balance at end of year
|
171,710
|
|
|
(177,110
|
)
|
|
92,382
|
|
|||
|
|
|
|
|
|
||||||
Retained earnings
|
|
|
|
|
|
||||||
Balance at beginning of year
|
5,912,812
|
|
|
5,979,666
|
|
|
6,527,627
|
|
|||
Cumulative effect of adoption of ASU No. 2018-02
|
—
|
|
|
(2,106
|
)
|
|
—
|
|
|||
Cumulative effect of adoption of ASU No. 2016-01, net of taxes
|
—
|
|
|
69,604
|
|
|
—
|
|
|||
Net income (loss)
|
323,473
|
|
|
43,021
|
|
|
(368,969
|
)
|
|||
Preferred share dividends
|
(41,112
|
)
|
|
(42,625
|
)
|
|
(46,810
|
)
|
|||
Common share dividends
|
(138,487
|
)
|
|
(134,748
|
)
|
|
(132,182
|
)
|
|||
Balance at end of year
|
6,056,686
|
|
|
5,912,812
|
|
|
5,979,666
|
|
|||
|
|
|
|
|
|
||||||
Treasury shares, at cost
|
|
|
|
|
|
||||||
Balance at beginning of year
|
(3,791,420
|
)
|
|
(3,807,156
|
)
|
|
(3,561,553
|
)
|
|||
Shares repurchased
|
(10,165
|
)
|
|
(10,080
|
)
|
|
(285,858
|
)
|
|||
Shares reissued
|
22,779
|
|
|
25,816
|
|
|
40,255
|
|
|||
Balance at end of year
|
(3,778,806
|
)
|
|
(3,791,420
|
)
|
|
(3,807,156
|
)
|
|||
|
|
|
|
|
|
||||||
Total shareholders' equity
|
$
|
5,544,008
|
|
|
$
|
5,030,071
|
|
|
$
|
5,341,264
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
323,473
|
|
|
$
|
43,021
|
|
|
$
|
(368,969
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Net investment (gains) losses
|
(91,233
|
)
|
|
144,297
|
|
|
(28,226
|
)
|
|||
Net realized and unrealized gains on other investments
|
(60,038
|
)
|
|
(45,153
|
)
|
|
(72,763
|
)
|
|||
Amortization of fixed maturities
|
18,499
|
|
|
24,663
|
|
|
43,292
|
|
|||
Interest in (income) loss of equity method investments
|
(9,718
|
)
|
|
495
|
|
|
8,402
|
|
|||
Amortization of value of business acquired
|
26,722
|
|
|
172,332
|
|
|
50,104
|
|
|||
Other amortization and depreciation
|
75,229
|
|
|
9,795
|
|
|
31,367
|
|
|||
Share-based compensation expense, net of cash payments
|
32,491
|
|
|
34,346
|
|
|
12,667
|
|
|||
Non-cash foreign exchange losses (gains)
|
(6,043
|
)
|
|
—
|
|
|
24,149
|
|
|||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
(15,044
|
)
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accrued interest receivable
|
2,140
|
|
|
(3,184
|
)
|
|
(4,353
|
)
|
|||
Reinsurance recoverable on unpaid and paid losses and loss expenses
|
(412,076
|
)
|
|
(766,690
|
)
|
|
(131,160
|
)
|
|||
Deferred acquisition costs
|
74,331
|
|
|
(98,329
|
)
|
|
(35,076
|
)
|
|||
Prepaid reinsurance premiums
|
(88,789
|
)
|
|
(212,654
|
)
|
|
(56,377
|
)
|
|||
Reserve for losses and loss expenses
|
467,428
|
|
|
442,839
|
|
|
1,004,578
|
|
|||
Unearned premiums
|
(7,958
|
)
|
|
29,760
|
|
|
(56,603
|
)
|
|||
Insurance and reinsurance balances, net
|
(51,075
|
)
|
|
208,783
|
|
|
(81,831
|
)
|
|||
Other items
|
(94,379
|
)
|
|
26,452
|
|
|
(64,928
|
)
|
|||
Net cash provided by operating activities
|
199,004
|
|
|
10,773
|
|
|
259,229
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of:
|
|
|
|
|
|
||||||
Fixed maturities
|
(9,994,025
|
)
|
|
(8,464,140
|
)
|
|
(8,714,990
|
)
|
|||
Equity securities
|
(58,022
|
)
|
|
(73,107
|
)
|
|
(106,136
|
)
|
|||
Mortgage loans
|
(194,020
|
)
|
|
(106,171
|
)
|
|
(31,077
|
)
|
|||
Other investments
|
(218,178
|
)
|
|
(180,126
|
)
|
|
(153,150
|
)
|
|||
Equity method investments
|
—
|
|
|
—
|
|
|
(1,000
|
)
|
|||
Short-term investments
|
(179,230
|
)
|
|
(305,670
|
)
|
|
(41,609
|
)
|
|||
Proceeds from the sale of:
|
|
|
|
|
|
||||||
Fixed maturities
|
8,018,658
|
|
|
7,586,536
|
|
|
7,004,973
|
|
|||
Equity securities
|
36,016
|
|
|
246,196
|
|
|
448,058
|
|
|||
Other investments
|
249,129
|
|
|
361,030
|
|
|
260,943
|
|
|||
Short-term investments
|
266,057
|
|
|
178,983
|
|
|
49,280
|
|
|||
Proceeds from redemption of fixed maturities
|
1,282,796
|
|
|
1,241,214
|
|
|
2,009,982
|
|
|||
Proceeds from redemption of short-term investments
|
19,366
|
|
|
45,831
|
|
|
119,427
|
|
|||
Proceeds from the repayment of mortgage loans
|
60,244
|
|
|
133,081
|
|
|
56,435
|
|
|||
Purchase of other assets
|
(63,106
|
)
|
|
(25,103
|
)
|
|
(42,685
|
)
|
|||
Purchase of subsidiaries, net
|
—
|
|
|
—
|
|
|
(466,941
|
)
|
|||
Net cash provided by (used in) investing activities
|
(774,315
|
)
|
|
638,554
|
|
|
391,510
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net proceeds from issuance of debt
|
717,509
|
|
|
—
|
|
|
346,362
|
|
|||
Repayment of notes payable
|
(250,000
|
)
|
|
—
|
|
|
(67,242
|
)
|
|||
Repurchase of common shares - open market
|
—
|
|
|
—
|
|
|
(261,180
|
)
|
|||
Taxes paid on withholding shares
|
(10,165
|
)
|
|
(10,080
|
)
|
|
(24,678
|
)
|
|||
Dividends paid - common shares
|
(137,209
|
)
|
|
(133,502
|
)
|
|
(135,032
|
)
|
|||
Repurchase of preferred shares
|
—
|
|
|
—
|
|
|
(351,074
|
)
|
|||
Dividends paid - preferred shares
|
(42,625
|
)
|
|
(42,625
|
)
|
|
(52,844
|
)
|
|||
Net cash provided by (used in) financing activities
|
277,510
|
|
|
(186,207
|
)
|
|
(545,688
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on foreign currency cash, cash equivalents and restricted cash
|
44,238
|
|
|
3,114
|
|
|
17,228
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
(253,563
|
)
|
|
466,234
|
|
|
122,279
|
|
|||
Cash, cash equivalents and restricted cash - beginning of year
|
1,830,020
|
|
|
1,363,786
|
|
|
1,241,507
|
|
|||
Cash, cash equivalents and restricted cash - end of year
|
$
|
1,576,457
|
|
|
$
|
1,830,020
|
|
|
$
|
1,363,786
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
39,949
|
|
|
$
|
15,698
|
|
|
$
|
—
|
|
Interest paid
|
$
|
59,563
|
|
|
$
|
64,822
|
|
|
$
|
49,945
|
|
19.
|
INCOME TAXES (CONTINUED)
|
1.
|
HISTORY
|
•
|
AXIS Specialty Limited ("AXIS Specialty Bermuda"), a Bermuda domiciled company is licensed to provide specialty insurance and treaty reinsurance products on a worldwide basis. In addition, AXIS Specialty Bermuda conducts insurance and reinsurance business through its branch in Singapore, AXIS Specialty Limited (Singapore Branch).
|
•
|
AXIS Insurance Company, domiciled in Illinois and AXIS Reinsurance Company, domiciled in New York, together with AXIS Reinsurance Company (Canadian Branch) are licensed to offer a range of specialty insurance and treaty reinsurance products to a variety of niche markets on a worldwide basis. AXIS Surplus Insurance Company, domiciled in the state of Illinois is eligible to write insurance on a surplus lines basis.
|
•
|
AXIS Specialty Europe SE ("AXIS Specialty Europe") is a European public limited liability company, incorporated as a non-life insurer under the laws of Ireland. It is a Societas Europaea (SE), or European society company, and has been registered in accordance with company law of the E.U. AXIS Specialty Europe also conducts insurance business through its branch in the United Kingdom, AXIS Specialty Europe SE ("UK Branch"). Effective January 1, 2019, the shares of Compagnie Belge d’Assurances Aviation NV/SA ("Aviabel") were transferred to AXIS Specialty Europe from AXIS Specialty Holdings Ireland Limited and Aviabel was merged into AXIS Specialty Europe by way of merger by absorption and dissolved without going into liquidation (the "Aviabel Merger"). In connection with the Aviabel Merger, AXIS Specialty Europe established new branches in Belgium and the Netherlands, AXIS Specialty Europe SE (Belgium Branch) and AXIS Specialty Europe SE (Netherlands Branch), respectively. Effective January 1, 2019, AXIS Specialty Europe conducts insurance business through its new branches in Belgium and the Netherlands.
|
•
|
AXIS Re SE is a European public limited liability company, incorporated as a reinsurer under the laws of Ireland. AXIS Re SE is also a Societas Europaea (SE). AXIS Re SE also conducts reinsurance business through its branch in Switzerland, AXIS Re SE, Dublin (Zurich Branch).
|
•
|
The Company operates in the Lloyd's of London ("Lloyd's") market through its corporate members AXIS Corporate Capital UK Limited and AXIS Corporate Capital UK II Limited (formerly Novae Corporate Underwriting Limited), which provide 70% and 30%, respectively of AXIS Syndicate 1686's ("Syndicate 1686") capital support. AXIS Corporate Capital UK Limited was the sole corporate member of Syndicate 1686 until December 31, 2018. AXIS Syndicate 1686 is managed by AXIS Managing Agency Ltd.
|
•
|
On October 2, 2017, AXIS Specialty UK Holdings Limited, a wholly owned subsidiary of the Company, acquired a 100% ownership interest in Novae Group plc ("Novae"). AXIS Corporate Capital UK II Limited is the sole corporate member of Novae Syndicate 2007 ("Syndicate 2007"). Novae Syndicates Limited ("NSL") managed Syndicate 2007 until January 1, 2018, when the Company received authorization from Lloyd’s for AXIS Managing Agency to commence management and oversight of Syndicate 2007. Effective January 1, 2019, Syndicate 2007 ceased accepting new business and was placed into run-off.
|
•
|
AXIS Ventures Limited ("AXIS Ventures"), regulated by the BMA as an insurance manager, generates fee income from services provided to strategic capital partners.
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
•
|
reserve for losses and loss expenses;
|
•
|
reinsurance recoverable on unpaid losses and loss expenses, including the provision for uncollectible amounts;
|
•
|
gross and net premiums written and net premiums earned;
|
•
|
fair value measurements of financial assets and liabilities; and
|
•
|
other-than-temporary impairments ("OTTI") in the carrying value of available-for-sale securities.
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
a)
|
Investments
|
a.
|
the duration and the extent of the decline;
|
b.
|
the financial condition, near-term and long-term prospects of the issuer of the security;
|
c.
|
the reason for the decline (e.g. credit spread widening, credit event, foreign exchange rate movements);
|
d.
|
the historical and implied future volatility of the fair value; and
|
e.
|
the collateral structure and credit support of the security, if applicable.
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
b)
|
Cash and Cash Equivalents
|
c)
|
Premiums and Acquisition Costs
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
d)
|
Losses and Loss Expenses
|
e)
|
Reinsurance
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
f)
|
Foreign Exchange
|
g)
|
Share-based Compensation
|
h)
|
Derivative Instruments
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
i)
|
Goodwill and Intangible Assets
|
j)
|
Income Taxes
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
k)
|
Treasury Shares
|
l)
|
New Accounting Standards Adopted in 2019
|
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.
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
m)
|
Recently Issued Accounting Standards Not Yet Adopted
|
3.
|
SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2019
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
3,675,931
|
|
|
$
|
3,222,927
|
|
|
$
|
6,898,858
|
|
|
|
Net premiums written
|
2,209,155
|
|
|
2,280,460
|
|
|
4,489,615
|
|
|
|||
|
Net premiums earned
|
2,190,084
|
|
|
2,397,094
|
|
|
4,587,178
|
|
|
|||
|
Other insurance related income
|
2,858
|
|
|
13,586
|
|
|
16,444
|
|
|
|||
|
Net losses and loss expenses
|
(1,278,679
|
)
|
|
(1,766,119
|
)
|
|
(3,044,798
|
)
|
|
|||
|
Acquisition costs
|
(468,281
|
)
|
|
(556,301
|
)
|
|
(1,024,582
|
)
|
|
|||
|
General and administrative expenses
|
(401,963
|
)
|
|
(103,772
|
)
|
|
(505,735
|
)
|
|
|||
|
Underwriting income (loss)
|
$
|
44,019
|
|
|
$
|
(15,512
|
)
|
|
$
|
28,507
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net investment income
|
|
|
|
|
478,572
|
|
|
|||||
|
Net investment gains
|
|
|
|
|
91,233
|
|
|
|||||
|
Corporate expenses
|
|
|
|
|
(129,096
|
)
|
|
|||||
|
Foreign exchange gains
|
|
|
|
|
12,041
|
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(68,107
|
)
|
|
|||||
|
Reorganization expenses
|
|
|
|
|
(37,384
|
)
|
|
|||||
|
Amortization of value of business acquired
|
|
|
|
|
(26,722
|
)
|
|
|||||
|
Amortization of intangible assets
|
|
|
|
|
(11,597
|
)
|
|
|||||
|
Income before income taxes and interest in income (loss) of equity method investments
|
|
|
|
|
$
|
337,447
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net losses and loss expenses ratio
|
58.4
|
%
|
|
73.7
|
%
|
|
66.4
|
%
|
|
|||
|
Acquisition cost ratio
|
21.4
|
%
|
|
23.2
|
%
|
|
22.3
|
%
|
|
|||
|
General and administrative expense ratio
|
18.3
|
%
|
|
4.3
|
%
|
|
13.9
|
%
|
|
|||
|
Combined ratio
|
98.1
|
%
|
|
101.2
|
%
|
|
102.6
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
332,553
|
|
|
$
|
—
|
|
|
$
|
332,553
|
|
|
|
|
|
|
|
|
|
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2018
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
3,797,592
|
|
|
$
|
3,112,473
|
|
|
$
|
6,910,065
|
|
|
|
Net premiums written
|
2,324,747
|
|
|
2,334,215
|
|
|
4,658,962
|
|
|
|||
|
Net premiums earned
|
2,362,606
|
|
|
2,428,889
|
|
|
4,791,495
|
|
|
|||
|
Other insurance related income
|
3,460
|
|
|
7,162
|
|
|
10,622
|
|
|
|||
|
Net losses and loss expenses
|
(1,494,323
|
)
|
|
(1,695,964
|
)
|
|
(3,190,287
|
)
|
|
|||
|
Acquisition costs
|
(399,193
|
)
|
|
(569,642
|
)
|
|
(968,835
|
)
|
|
|||
|
General and administrative expenses
|
(395,252
|
)
|
|
(123,916
|
)
|
|
(519,168
|
)
|
|
|||
|
Underwriting income
|
$
|
77,298
|
|
|
$
|
46,529
|
|
|
$
|
123,827
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net investment income
|
|
|
|
|
438,507
|
|
|
|||||
|
Net investment losses
|
|
|
|
|
(150,218
|
)
|
|
|||||
|
Corporate expenses
|
|
|
|
|
(108,221
|
)
|
|
|||||
|
Foreign exchange gains
|
|
|
|
|
29,165
|
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(67,432
|
)
|
|
|||||
|
Reorganization expenses
|
|
|
|
|
(66,940
|
)
|
|
|||||
|
Amortization of value of business acquired
|
|
|
|
|
(172,332
|
)
|
|
|||||
|
Amortization of intangible assets
|
|
|
|
|
(13,814
|
)
|
|
|||||
|
Income before income taxes and interest in income (loss) of equity method investments
|
|
|
|
|
$
|
12,542
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net losses and loss expenses ratio
|
63.2
|
%
|
|
69.8
|
%
|
|
66.6
|
%
|
|
|||
|
Acquisition cost ratio
|
16.9
|
%
|
|
23.5
|
%
|
|
20.2
|
%
|
|
|||
|
General and administrative expense ratio
|
16.8
|
%
|
|
5.1
|
%
|
|
13.1
|
%
|
|
|||
|
Combined ratio
|
96.9
|
%
|
|
98.4
|
%
|
|
99.9
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
343,571
|
|
|
$
|
—
|
|
|
$
|
343,571
|
|
|
|
|
|
|
|
|
|
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31, 2017
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross premiums written
|
$
|
2,814,918
|
|
|
$
|
2,741,355
|
|
|
$
|
5,556,273
|
|
|
|
Net premiums written
|
1,775,825
|
|
|
2,251,318
|
|
|
4,027,143
|
|
|
|||
|
Net premiums earned
|
1,816,438
|
|
|
2,332,322
|
|
|
4,148,760
|
|
|
|||
|
Other insurance related income (losses)
|
2,944
|
|
|
(4,184
|
)
|
|
(1,240
|
)
|
|
|||
|
Net losses and loss expenses
|
(1,465,427
|
)
|
|
(1,822,345
|
)
|
|
(3,287,772
|
)
|
|
|||
|
Acquisition costs
|
(270,229
|
)
|
|
(553,362
|
)
|
|
(823,591
|
)
|
|
|||
|
General and administrative expenses
|
(325,368
|
)
|
|
(124,115
|
)
|
|
(449,483
|
)
|
|
|||
|
Underwriting loss
|
$
|
(241,642
|
)
|
|
$
|
(171,684
|
)
|
|
$
|
(413,326
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Net investment income
|
|
|
|
|
400,805
|
|
|
|||||
|
Net investment gains
|
|
|
|
|
28,226
|
|
|
|||||
|
Corporate expenses
|
|
|
|
|
(129,945
|
)
|
|
|||||
|
Foreign exchange losses
|
|
|
|
|
(134,737
|
)
|
|
|||||
|
Interest expense and financing costs
|
|
|
|
|
(54,811
|
)
|
|
|||||
|
Bargain purchase gain
|
|
|
|
|
15,044
|
|
|
|||||
|
Transaction and reorganization expenses
|
|
|
|
|
(26,718
|
)
|
|
|||||
|
Amortization of value of business acquired
|
|
|
|
|
(50,104
|
)
|
|
|||||
|
Amortization of intangible assets
|
|
|
|
|
(2,543
|
)
|
|
|||||
|
Loss before income taxes and interest in income (loss) of equity method investments
|
|
|
|
|
$
|
(368,109
|
)
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
Net losses and loss expenses ratio
|
80.7
|
%
|
|
78.1
|
%
|
|
79.2
|
%
|
|
|||
|
Acquisition cost ratio
|
14.9
|
%
|
|
23.7
|
%
|
|
19.9
|
%
|
|
|||
|
General and administrative expense ratio
|
17.9
|
%
|
|
5.3
|
%
|
|
14.0
|
%
|
|
|||
|
Combined ratio
|
113.5
|
%
|
|
107.1
|
%
|
|
113.1
|
%
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Goodwill and intangible assets
|
$
|
359,990
|
|
|
$
|
—
|
|
|
$
|
359,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Bermuda
|
$
|
738,258
|
|
|
$
|
606,452
|
|
|
$
|
529,425
|
|
|
|
Ireland
|
1,679,646
|
|
|
1,805,882
|
|
|
1,569,956
|
|
|
|||
|
U.S.
|
3,090,547
|
|
|
2,811,537
|
|
|
2,814,933
|
|
|
|||
|
Lloyd's of London
|
1,390,407
|
|
|
1,686,194
|
|
|
641,959
|
|
|
|||
|
Gross premiums written
|
$
|
6,898,858
|
|
|
$
|
6,910,065
|
|
|
$
|
5,556,273
|
|
|
|
|
|
|
|
|
|
|
3.
|
SEGMENT INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Years ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Insurance
|
|
|
|
|
|
|
||||||
|
Property
|
$
|
633,550
|
|
|
$
|
796,945
|
|
|
$
|
543,342
|
|
|
|
Marine
|
281,764
|
|
|
300,944
|
|
|
181,533
|
|
|
|||
|
Terrorism
|
47,345
|
|
|
49,150
|
|
|
36,084
|
|
|
|||
|
Aviation
|
55,028
|
|
|
74,203
|
|
|
75,107
|
|
|
|||
|
Credit and political risk
|
91,698
|
|
|
102,825
|
|
|
56,432
|
|
|
|||
|
Professional lines
|
661,250
|
|
|
570,241
|
|
|
519,759
|
|
|
|||
|
Liability
|
264,667
|
|
|
229,373
|
|
|
188,770
|
|
|
|||
|
Accident and health
|
144,499
|
|
|
207,777
|
|
|
199,121
|
|
|
|||
|
Discontinued lines - Novae
|
10,283
|
|
|
31,148
|
|
|
16,290
|
|
|
|||
|
Total Insurance
|
2,190,084
|
|
|
2,362,606
|
|
|
1,816,438
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Reinsurance
|
|
|
|
|
|
|
||||||
|
Catastrophe
|
267,591
|
|
|
250,016
|
|
|
209,470
|
|
|
|||
|
Property
|
311,625
|
|
|
317,038
|
|
|
304,376
|
|
|
|||
|
Professional lines
|
206,328
|
|
|
220,687
|
|
|
226,622
|
|
|
|||
|
Credit and surety
|
208,717
|
|
|
250,276
|
|
|
244,186
|
|
|
|||
|
Motor
|
398,565
|
|
|
438,693
|
|
|
371,501
|
|
|
|||
|
Liability
|
373,664
|
|
|
363,292
|
|
|
351,940
|
|
|
|||
|
Agriculture
|
188,925
|
|
|
176,435
|
|
|
195,391
|
|
|
|||
|
Engineering
|
63,899
|
|
|
67,932
|
|
|
66,291
|
|
|
|||
|
Marine and other
|
59,209
|
|
|
35,570
|
|
|
64,449
|
|
|
|||
|
Accident and health
|
319,619
|
|
|
299,813
|
|
|
289,925
|
|
|
|||
|
Discontinued lines - Novae
|
(1,048
|
)
|
|
9,137
|
|
|
8,171
|
|
|
|||
|
Total Reinsurance
|
2,397,094
|
|
|
2,428,889
|
|
|
2,332,322
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Total
|
$
|
4,587,178
|
|
|
$
|
4,791,495
|
|
|
$
|
4,148,760
|
|
|
|
|
|
|
|
|
|
|
4.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Goodwill
|
|
Intangible
assets with an
indefinite life
|
|
Intangible
assets with a
finite life
|
|
Total
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
|
Gross amount
|
$
|
42,237
|
|
|
$
|
26,036
|
|
|
$
|
23,030
|
|
|
$
|
91,303
|
|
|
|
Accumulated amortization
|
n/a
|
|
|
n/a
|
|
|
(11,165
|
)
|
|
(11,165
|
)
|
|
||||
|
Accumulated translation adjustment
|
4,911
|
|
|
—
|
|
|
—
|
|
|
4,911
|
|
|
||||
|
|
47,148
|
|
|
26,036
|
|
|
11,865
|
|
|
85,049
|
|
|
||||
|
Acquired during the year
|
54,855
|
|
|
94,748
|
|
|
387,545
|
|
|
537,148
|
|
|
||||
|
Amortization
|
n/a
|
|
|
n/a
|
|
|
(55,369
|
)
|
|
(55,369
|
)
|
|
||||
|
Balance at December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
|
Gross amount
|
97,092
|
|
|
120,784
|
|
|
410,575
|
|
|
628,451
|
|
|
||||
|
Accumulated amortization
|
n/a
|
|
|
n/a
|
|
|
(66,534
|
)
|
|
(66,534
|
)
|
|
||||
|
Accumulated translation adjustment
|
4,911
|
|
|
—
|
|
|
—
|
|
|
4,911
|
|
|
||||
|
|
102,003
|
|
|
120,784
|
|
|
344,041
|
|
|
566,828
|
|
|
||||
|
Amortization
|
n/a
|
|
|
n/a
|
|
|
(184,043
|
)
|
|
(184,043
|
)
|
|
||||
|
Impairment charges
|
—
|
|
|
—
|
|
|
(3,500
|
)
|
|
(3,500
|
)
|
|
||||
|
Balance at December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
|
Gross amount
|
$
|
97,092
|
|
|
$
|
120,784
|
|
|
$
|
404,304
|
|
|
$
|
622,180
|
|
|
|
Accumulated amortization
|
n/a
|
|
|
n/a
|
|
|
(247,804
|
)
|
|
(247,804
|
)
|
|
||||
|
Accumulated translation adjustment
|
4,911
|
|
|
—
|
|
|
—
|
|
|
4,911
|
|
|
||||
|
|
102,003
|
|
|
120,784
|
|
|
156,500
|
|
|
379,287
|
|
|
||||
|
Amortization
|
n/a
|
|
|
n/a
|
|
|
(37,742
|
)
|
|
(37,742
|
)
|
|
||||
|
|
$
|
102,003
|
|
|
$
|
120,784
|
|
|
$
|
118,758
|
|
|
$
|
341,545
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
GOODWILL AND INTANGIBLE ASSETS (CONTINUED)
|
|
|
|
VOBA and intangible assets
|
|
||||||||||
|
Balance At December 31, 2019
|
|
Gross amount
|
|
Accumulated amortization
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
U.S. state licenses
|
|
$
|
26,036
|
|
|
n/a
|
|
|
$
|
26,036
|
|
|
|
|
Customer lists, trademark and non-compete - Media Pro (1)
|
|
9,700
|
|
|
(9,700
|
)
|
|
—
|
|
|
|||
|
Customer relationships and customers lists - Ternian (2)
|
|
13,330
|
|
|
(6,333
|
)
|
|
6,997
|
|
|
|||
|
VOBA - Novae
|
|
256,942
|
|
|
(247,950
|
)
|
|
8,992
|
|
|
|||
|
Syndicate capacity
|
|
94,748
|
|
|
n/a
|
|
|
94,748
|
|
|
|||
|
Coverholders
|
|
63,565
|
|
|
(11,918
|
)
|
|
51,647
|
|
|
|||
|
Large brokers
|
|
46,641
|
|
|
(6,996
|
)
|
|
39,645
|
|
|
|||
|
SME brokers
|
|
14,126
|
|
|
(2,649
|
)
|
|
11,477
|
|
|
|||
|
|
|
$
|
525,088
|
|
|
$
|
(285,546
|
)
|
|
$
|
239,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VOBA and intangible assets
|
|
||||||||||
|
Balance At December 31, 2018
|
|
Gross amount
|
|
Accumulated amortization and impairment
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
U.S. state licenses
|
|
$
|
26,036
|
|
|
n/a
|
|
|
$
|
26,036
|
|
|
|
|
Customer lists, trademark and non-compete - Media Pro
|
|
9,700
|
|
|
(9,598
|
)
|
|
102
|
|
|
|||
|
Customer relationships and customers lists - Ternian
|
|
13,330
|
|
|
(4,999
|
)
|
|
8,331
|
|
|
|||
|
VOBA - Aviabel
|
|
2,140
|
|
|
(2,140
|
)
|
|
—
|
|
|
|||
|
VOBA - Novae
|
|
256,942
|
|
|
(221,228
|
)
|
|
35,714
|
|
|
|||
|
Syndicate capacity
|
|
94,748
|
|
|
n/a
|
|
|
94,748
|
|
|
|||
|
Coverholders
|
|
63,565
|
|
|
(6,622
|
)
|
|
56,943
|
|
|
|||
|
Large brokers
|
|
46,641
|
|
|
(3,888
|
)
|
|
42,753
|
|
|
|||
|
SME brokers
|
|
14,126
|
|
|
(1,471
|
)
|
|
12,655
|
|
|
|||
|
MGA contract(1)
|
|
4,131
|
|
|
(4,131
|
)
|
|
—
|
|
|
|||
|
|
|
$
|
531,359
|
|
|
$
|
(254,077
|
)
|
|
$
|
277,282
|
|
|
|
|
|
|
|
|
|
|
|
4.
|
GOODWILL AND INTANGIBLE ASSETS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
VOBA
|
|
Intangible assets
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
|
2020
|
|
5,139
|
|
|
10,916
|
|
|
16,055
|
|
|
|||
|
2021
|
|
3,853
|
|
|
10,916
|
|
|
14,769
|
|
|
|||
|
2022
|
|
—
|
|
|
10,916
|
|
|
10,916
|
|
|
|||
|
2023
|
|
—
|
|
|
10,916
|
|
|
10,916
|
|
|
|||
|
2024
|
|
—
|
|
|
10,916
|
|
|
10,916
|
|
|
|||
|
2025 and thereafter
|
|
—
|
|
|
55,186
|
|
|
55,186
|
|
|
|||
|
Total remaining amortization expense
|
|
8,992
|
|
|
109,766
|
|
|
118,758
|
|
|
|||
|
Indefinite lived intangible assets
|
|
—
|
|
|
120,784
|
|
|
120,784
|
|
|
|||
|
Total intangible assets
|
|
$
|
8,992
|
|
|
$
|
230,550
|
|
|
$
|
239,542
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Amortized
cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair
value |
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
||||||||
|
U.S. government and agency
|
$
|
2,102,849
|
|
|
$
|
16,345
|
|
|
$
|
(6,313
|
)
|
|
$
|
2,112,881
|
|
|
|
Non-U.S. government
|
564,505
|
|
|
14,535
|
|
|
(2,448
|
)
|
|
576,592
|
|
|
||||
|
Corporate debt
|
4,797,384
|
|
|
140,426
|
|
|
(7,556
|
)
|
|
4,930,254
|
|
|
||||
|
Agency RMBS(1)
|
1,570,823
|
|
|
25,215
|
|
|
(3,454
|
)
|
|
1,592,584
|
|
|
||||
|
CMBS(2)
|
1,340,156
|
|
|
29,838
|
|
|
(4,942
|
)
|
|
1,365,052
|
|
|
||||
|
Non-Agency RMBS
|
84,381
|
|
|
1,393
|
|
|
(852
|
)
|
|
84,922
|
|
|
||||
|
ABS(3)
|
1,599,867
|
|
|
4,706
|
|
|
(5,880
|
)
|
|
1,598,693
|
|
|
||||
|
Municipals(4)
|
203,275
|
|
|
4,359
|
|
|
(407
|
)
|
|
207,227
|
|
|
||||
|
Total fixed maturities
|
$
|
12,263,240
|
|
|
$
|
236,817
|
|
|
$
|
(31,852
|
)
|
|
$
|
12,468,205
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
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
|
|
|
||||
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and collateralized loan obligations ("CLOs").
|
(4)
|
Municipals include bonds issued by states, municipalities and political subdivisions.
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Cost
|
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair
value |
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
|
Equity securities
|
|
|
|
|
|
|
|
|
||||||||
|
Common stocks
|
$
|
504
|
|
|
$
|
77
|
|
|
$
|
(388
|
)
|
|
$
|
193
|
|
|
|
Exchange-traded funds
|
215,986
|
|
|
81,444
|
|
|
(105
|
)
|
|
297,325
|
|
|
||||
|
Bond mutual funds
|
182,466
|
|
|
—
|
|
|
(5,777
|
)
|
|
176,689
|
|
|
||||
|
Total equity securities
|
$
|
398,956
|
|
|
$
|
81,521
|
|
|
$
|
(6,270
|
)
|
|
$
|
474,207
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|||||
|
|
Amortized
cost
|
|
Fair
value
|
|
% of Total
fair value
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
At December 31, 2019
|
|
|
|
|
|
|
|||||
|
Maturity
|
|
|
|
|
|
|
|||||
|
Due in one year or less
|
$
|
438,881
|
|
|
$
|
443,228
|
|
|
3.6
|
%
|
|
|
Due after one year through five years
|
4,810,202
|
|
|
4,884,837
|
|
|
39.2
|
%
|
|
||
|
Due after five years through ten years
|
2,091,486
|
|
|
2,157,157
|
|
|
17.3
|
%
|
|
||
|
Due after ten years
|
327,444
|
|
|
341,732
|
|
|
2.7
|
%
|
|
||
|
|
7,668,013
|
|
|
7,826,954
|
|
|
62.8
|
%
|
|
||
|
Agency RMBS
|
1,570,823
|
|
|
1,592,584
|
|
|
12.8
|
%
|
|
||
|
CMBS
|
1,340,156
|
|
|
1,365,052
|
|
|
10.9
|
%
|
|
||
|
Non-Agency RMBS
|
84,381
|
|
|
84,922
|
|
|
0.7
|
%
|
|
||
|
ABS
|
1,599,867
|
|
|
1,598,693
|
|
|
12.8
|
%
|
|
||
|
Total
|
$
|
12,263,240
|
|
|
$
|
12,468,205
|
|
|
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
|
%
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
12 months or greater
|
|
Less than 12 months
|
|
Total
|
|
||||||||||||||||||
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
U.S. government and agency
|
$
|
9,536
|
|
|
$
|
(67
|
)
|
|
$
|
614,705
|
|
|
$
|
(6,246
|
)
|
|
$
|
624,241
|
|
|
$
|
(6,313
|
)
|
|
|
Non-U.S. government
|
99,466
|
|
|
(2,036
|
)
|
|
18,361
|
|
|
(412
|
)
|
|
117,827
|
|
|
(2,448
|
)
|
|
||||||
|
Corporate debt
|
121,635
|
|
|
(3,847
|
)
|
|
375,858
|
|
|
(3,709
|
)
|
|
497,493
|
|
|
(7,556
|
)
|
|
||||||
|
Agency RMBS
|
195,395
|
|
|
(1,816
|
)
|
|
326,402
|
|
|
(1,638
|
)
|
|
521,797
|
|
|
(3,454
|
)
|
|
||||||
|
CMBS
|
24,281
|
|
|
(64
|
)
|
|
364,641
|
|
|
(4,878
|
)
|
|
388,922
|
|
|
(4,942
|
)
|
|
||||||
|
Non-Agency RMBS
|
6,345
|
|
|
(792
|
)
|
|
25,816
|
|
|
(60
|
)
|
|
32,161
|
|
|
(852
|
)
|
|
||||||
|
ABS
|
535,780
|
|
|
(4,667
|
)
|
|
404,641
|
|
|
(1,213
|
)
|
|
940,421
|
|
|
(5,880
|
)
|
|
||||||
|
Municipals
|
5,418
|
|
|
(34
|
)
|
|
46,684
|
|
|
(373
|
)
|
|
52,102
|
|
|
(407
|
)
|
|
||||||
|
Total fixed maturities
|
$
|
997,856
|
|
|
$
|
(13,323
|
)
|
|
$
|
2,177,108
|
|
|
$
|
(18,529
|
)
|
|
$
|
3,174,964
|
|
|
$
|
(31,852
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
b)
|
Mortgage Loans
|
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||
|
|
Carrying value
|
|
% of Total
|
|
Carrying value
|
|
% of Total
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Mortgage Loans held-for-investment:
|
|
|
|
|
|
|
|
|
||||||
|
Commercial
|
$
|
432,748
|
|
|
100
|
%
|
|
$
|
298,650
|
|
|
100
|
%
|
|
|
Total Mortgage Loans held-for-investment
|
$
|
432,748
|
|
|
100
|
%
|
|
$
|
298,650
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
c)
|
Other Investments
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Fair value
|
|
Redemption frequency
(if currently eligible)
|
|
Redemption
notice period
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
|||
|
Long/short equity funds
|
$
|
31,248
|
|
|
4
|
%
|
|
Annually
|
|
60 days
|
|
|
Multi-strategy funds
|
136,542
|
|
|
18
|
%
|
|
Quarterly, Semi-annually
|
|
60-90 days
|
|
|
|
Direct lending funds
|
277,395
|
|
|
36
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Private equity funds
|
80,412
|
|
|
10
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Real estate funds
|
130,112
|
|
|
17
|
%
|
|
n/a
|
|
n/a
|
|
|
|
CLO-Equities
|
14,328
|
|
|
2
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Other privately held investments
|
36,934
|
|
|
5
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Overseas deposits
|
63,952
|
|
|
8
|
%
|
|
n/a
|
|
n/a
|
|
|
|
Total other investments
|
$
|
770,923
|
|
|
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 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.
|
5.
|
INVESTMENTS (CONTINUED)
|
5.
|
INVESTMENTS (CONTINUED)
|
d)
|
Equity Method Investments
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities
|
$
|
384,053
|
|
|
$
|
356,273
|
|
|
$
|
312,662
|
|
|
|
Other investments
|
60,038
|
|
|
48,959
|
|
|
76,858
|
|
|
|||
|
Equity securities
|
10,434
|
|
|
10,077
|
|
|
14,919
|
|
|
|||
|
Mortgage loans
|
14,712
|
|
|
13,566
|
|
|
10,780
|
|
|
|||
|
Cash and cash equivalents
|
26,882
|
|
|
27,566
|
|
|
10,057
|
|
|
|||
|
Short-term investments
|
7,053
|
|
|
9,365
|
|
|
2,718
|
|
|
|||
|
Gross investment income
|
503,172
|
|
|
465,806
|
|
|
427,994
|
|
|
|||
|
Investment expenses
|
(24,600
|
)
|
|
(27,299
|
)
|
|
(27,189
|
)
|
|
|||
|
Net investment income
|
$
|
478,572
|
|
|
$
|
438,507
|
|
|
$
|
400,805
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
f)
|
Net Investment Gains (Losses)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross realized investment gains
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
$
|
93,160
|
|
|
$
|
46,067
|
|
|
$
|
72,046
|
|
|
|
Equity securities
|
3,449
|
|
|
20,435
|
|
|
78,343
|
|
|
|||
|
Gross realized investment gains
|
96,609
|
|
|
66,502
|
|
|
150,389
|
|
|
|||
|
Gross realized investment losses
|
|
|
|
|
|
|
||||||
|
Fixed maturities and short-term investments
|
(56,515
|
)
|
|
(142,153
|
)
|
|
(98,442
|
)
|
|
|||
|
Equity securities
|
(323
|
)
|
|
(3,389
|
)
|
|
(959
|
)
|
|
|||
|
Gross realized investment losses
|
(56,838
|
)
|
|
(145,542
|
)
|
|
(99,401
|
)
|
|
|||
|
Net OTTI charge recognized in net income
|
(6,984
|
)
|
|
(9,733
|
)
|
|
(14,493
|
)
|
|
|||
|
Change in fair value of investment derivatives(1)
|
(1,823
|
)
|
|
5,445
|
|
|
(8,269
|
)
|
|
|||
|
Net unrealized gains (losses) on equity securities(2)
|
60,269
|
|
|
(66,890
|
)
|
|
—
|
|
|
|||
|
Net investment gains (losses)
|
$
|
91,233
|
|
|
$
|
(150,218
|
)
|
|
$
|
28,226
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to Note 7 'Derivative Instruments'
|
(2)
|
Effective January 1, 2018, the Company adopted ASU No. 2016-01 which requires the change in fair value of equity securities to be recognized in net income.
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Fixed maturities:
|
|
|
|
|
|
|
||||||
|
Non-U.S. government
|
$
|
90
|
|
|
$
|
4,697
|
|
|
$
|
8,187
|
|
|
|
Corporate debt
|
6,894
|
|
|
4,995
|
|
|
6,306
|
|
|
|||
|
Non-Agency CMBS
|
—
|
|
|
41
|
|
|
—
|
|
|
|||
|
Total OTTI recognized in net income
|
$
|
6,984
|
|
|
$
|
9,733
|
|
|
$
|
14,493
|
|
|
|
|
|
|
|
|
|
|
5.
|
INVESTMENTS (CONTINUED)
|
5.
|
INVESTMENTS (CONTINUED)
|
g)
|
Restricted Assets
|
|
|
|
|
|
|
|
||||
|
At December 31,
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
|
||||
|
Collateral in Trust for inter-company agreements
|
|
$
|
1,580,689
|
|
|
$
|
2,121,522
|
|
|
|
Collateral for secured letter of credit facility
|
|
473,187
|
|
|
470,051
|
|
|
||
|
Funds at Lloyd's
|
|
1,314,345
|
|
|
1,307,945
|
|
|
||
|
Collateral in Trust for third-party agreements
|
|
1,856,327
|
|
|
1,510,416
|
|
|
||
|
Securities on deposit with regulatory authorities
|
|
76,229
|
|
|
64,360
|
|
|
||
|
Total restricted investments
|
|
$
|
5,300,777
|
|
|
$
|
5,474,294
|
|
|
|
|
|
|
|
|
|
h)
|
Reverse Repurchase Agreements
|
•
|
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.
|
6.
|
FAIR VALUE MEASUREMENTS
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
Quoted prices in active markets
for identical assets (Level 1) |
|
Significant other observable
inputs (Level 2) |
|
Significant unobservable inputs (Level 3)
|
|
Fair value based on NAV practical expedient
|
|
Total fair value
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
U.S. government and agency
|
$
|
2,053,622
|
|
|
$
|
59,259
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,112,881
|
|
|
|
Non-U.S. government
|
—
|
|
|
576,592
|
|
|
—
|
|
|
—
|
|
|
576,592
|
|
|
|||||
|
Corporate debt
|
—
|
|
|
4,927,957
|
|
|
2,297
|
|
|
—
|
|
|
4,930,254
|
|
|
|||||
|
Agency RMBS
|
—
|
|
|
1,592,584
|
|
|
—
|
|
|
—
|
|
|
1,592,584
|
|
|
|||||
|
CMBS
|
—
|
|
|
1,359,817
|
|
|
5,235
|
|
|
—
|
|
|
1,365,052
|
|
|
|||||
|
Non-Agency RMBS
|
—
|
|
|
84,922
|
|
|
—
|
|
|
—
|
|
|
84,922
|
|
|
|||||
|
ABS
|
—
|
|
|
1,598,204
|
|
|
489
|
|
|
—
|
|
|
1,598,693
|
|
|
|||||
|
Municipals
|
—
|
|
|
207,227
|
|
|
—
|
|
|
—
|
|
|
207,227
|
|
|
|||||
|
|
2,053,622
|
|
|
10,406,562
|
|
|
8,021
|
|
|
—
|
|
|
12,468,205
|
|
|
|||||
|
Equity securities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common stocks
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
|||||
|
Exchange-traded funds
|
297,325
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
297,325
|
|
|
|||||
|
Bond mutual funds
|
—
|
|
|
176,689
|
|
|
—
|
|
|
—
|
|
|
176,689
|
|
|
|||||
|
|
297,518
|
|
|
176,689
|
|
|
—
|
|
|
—
|
|
|
474,207
|
|
|
|||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Hedge funds(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
167,790
|
|
|
167,790
|
|
|
|||||
|
Direct lending funds
|
—
|
|
|
—
|
|
|
—
|
|
|
277,395
|
|
|
277,395
|
|
|
|||||
|
Private equity funds
|
—
|
|
|
—
|
|
|
—
|
|
|
80,412
|
|
|
80,412
|
|
|
|||||
|
Real estate funds
|
—
|
|
|
—
|
|
|
—
|
|
|
130,112
|
|
|
130,112
|
|
|
|||||
|
Other privately held investments
|
—
|
|
|
—
|
|
|
36,934
|
|
|
—
|
|
|
36,934
|
|
|
|||||
|
CLO-Equities
|
—
|
|
|
—
|
|
|
14,328
|
|
|
—
|
|
|
14,328
|
|
|
|||||
|
Overseas deposits
|
—
|
|
|
63,952
|
|
|
—
|
|
|
—
|
|
|
63,952
|
|
|
|||||
|
|
—
|
|
|
63,952
|
|
|
51,262
|
|
|
655,709
|
|
|
770,923
|
|
|
|||||
|
Short-term investments
|
—
|
|
|
38,471
|
|
|
—
|
|
|
—
|
|
|
38,471
|
|
|
|||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (refer to Note 7)
|
—
|
|
|
3,174
|
|
|
—
|
|
|
—
|
|
|
3,174
|
|
|
|||||
|
Total Assets
|
$
|
2,351,140
|
|
|
$
|
10,688,848
|
|
|
$
|
59,283
|
|
|
$
|
655,709
|
|
|
$
|
13,754,980
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Derivative instruments (refer to Note 7)
|
$
|
—
|
|
|
$
|
3,965
|
|
|
$
|
9,672
|
|
|
$
|
—
|
|
|
$
|
13,637
|
|
|
|
Cash settled awards (refer to Note 16)
|
—
|
|
|
21,731
|
|
|
—
|
|
|
—
|
|
|
21,731
|
|
|
|||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
25,696
|
|
|
$
|
9,672
|
|
|
$
|
—
|
|
|
$
|
35,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes Long/short equity and Multi-strategy funds.
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
Quoted prices in active markets
for identical assets (Level 1) |
|
Significant other observable
inputs (Level 2) |
|
Significant unobservable inputs (Level 3)
|
|
Fair value based on NAV practical expedient
|
|
Total fair value
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At December 31, 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 7)
|
—
|
|
|
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 7)
|
$
|
—
|
|
|
$
|
4,223
|
|
|
$
|
10,299
|
|
|
$
|
—
|
|
|
$
|
14,522
|
|
|
|
Cash settled awards (refer to Note 16)
|
—
|
|
|
20,648
|
|
|
—
|
|
|
—
|
|
|
20,648
|
|
|
|||||
|
Total Liabilities
|
$
|
—
|
|
|
$
|
24,871
|
|
|
$
|
10,299
|
|
|
$
|
—
|
|
|
$
|
35,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes Long/short equity and Multi-strategy funds.
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
||
|
|
Fair value
|
Valuation technique
|
Unobservable input
|
Range
|
Weighted
average
|
|
||
|
|
|
|
|
|
|
|
||
|
Other investments - CLO-Equities
|
$
|
14,328
|
|
Discounted cash flow
|
Default rates
|
3.5%
|
3.5%
|
|
|
|
|
|
Loss severity rate
|
35.0%
|
35.0%
|
|
||
|
|
|
|
Collateral spreads
|
3.0%
|
3.0%
|
|
||
|
|
|
|
Estimated maturity dates
|
7 years
|
7 years
|
|
||
|
|
|
|
|
|
|
|
||
|
Derivatives - Other underwriting-related derivatives
|
$
|
(9,672
|
)
|
Discounted cash flow
|
Discount rate
|
1.8%
|
1.8%
|
|
|
|
|
|
|
|
|
|
6.
|
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
gains/losses (3)
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
49,012
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,790
|
|
|
$
|
(4,168
|
)
|
|
$
|
—
|
|
|
$
|
(6,068
|
)
|
|
$
|
(41,269
|
)
|
|
$
|
2,297
|
|
|
$
|
—
|
|
|
|
CMBS
|
19,134
|
|
|
—
|
|
|
(7,077
|
)
|
|
—
|
|
|
142
|
|
|
—
|
|
|
—
|
|
|
(6,964
|
)
|
|
5,235
|
|
|
—
|
|
|
||||||||||
|
ABS
|
18,533
|
|
|
—
|
|
|
(18,230
|
)
|
|
—
|
|
|
186
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
489
|
|
|
—
|
|
|
||||||||||
|
|
86,679
|
|
|
—
|
|
|
(25,307
|
)
|
|
4,790
|
|
|
(3,840
|
)
|
|
—
|
|
|
(6,068
|
)
|
|
(48,233
|
)
|
|
8,021
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Other privately held investments
|
44,518
|
|
|
—
|
|
|
—
|
|
|
18,092
|
|
|
—
|
|
|
22,500
|
|
|
(48,176
|
)
|
|
—
|
|
|
36,934
|
|
|
5,150
|
|
|
||||||||||
|
CLO-Equities
|
21,271
|
|
|
—
|
|
|
—
|
|
|
(199
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,744
|
)
|
|
14,328
|
|
|
(199
|
)
|
|
||||||||||
|
|
65,789
|
|
|
—
|
|
|
—
|
|
|
17,893
|
|
|
—
|
|
|
22,500
|
|
|
(48,176
|
)
|
|
(6,744
|
)
|
|
51,262
|
|
|
4,951
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Insurance-linked securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||||
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||||
|
Total assets
|
$
|
152,468
|
|
|
$
|
—
|
|
|
$
|
(25,307
|
)
|
|
$
|
22,683
|
|
|
$
|
(3,840
|
)
|
|
$
|
22,500
|
|
|
$
|
(54,244
|
)
|
|
$
|
(54,977
|
)
|
|
$
|
59,283
|
|
|
$
|
4,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
10,299
|
|
|
—
|
|
|
—
|
|
|
(627
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,672
|
|
|
(627
|
)
|
|
||||||||||
|
Total liabilities
|
$
|
10,299
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(627
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,672
|
|
|
$
|
(627
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Year ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Corporate debt
|
$
|
52,897
|
|
|
$
|
2,935
|
|
|
$
|
(4,279
|
)
|
|
$
|
(591
|
)
|
|
$
|
6,343
|
|
|
$
|
10,267
|
|
|
$
|
(7,446
|
)
|
|
$
|
(11,114
|
)
|
|
$
|
49,012
|
|
|
$
|
—
|
|
|
|
CMBS
|
—
|
|
|
5,096
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
17,200
|
|
|
—
|
|
|
(3,017
|
)
|
|
19,134
|
|
|
—
|
|
|
||||||||||
|
ABS
|
—
|
|
|
1,979
|
|
|
—
|
|
|
—
|
|
|
(446
|
)
|
|
17,000
|
|
|
—
|
|
|
—
|
|
|
18,533
|
|
|
—
|
|
|
||||||||||
|
|
52,897
|
|
|
10,010
|
|
|
(4,279
|
)
|
|
(591
|
)
|
|
5,752
|
|
|
44,467
|
|
|
(7,446
|
)
|
|
(14,131
|
)
|
|
86,679
|
|
|
—
|
|
|
||||||||||
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Other privately held investments
|
46,430
|
|
|
—
|
|
|
—
|
|
|
(913
|
)
|
|
—
|
|
|
3,110
|
|
|
(4,109
|
)
|
|
—
|
|
|
44,518
|
|
|
(913
|
)
|
|
||||||||||
|
CLO-Equities
|
31,413
|
|
|
—
|
|
|
—
|
|
|
6,627
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,769
|
)
|
|
21,271
|
|
|
6,627
|
|
|
||||||||||
|
|
77,843
|
|
|
—
|
|
|
—
|
|
|
5,714
|
|
|
—
|
|
|
3,110
|
|
|
(4,109
|
)
|
|
(16,769
|
)
|
|
65,789
|
|
|
5,714
|
|
|
||||||||||
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Insurance-linked securities
|
25,090
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
|
25,090
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
—
|
|
|
||||||||||
|
Total assets
|
$
|
155,830
|
|
|
$
|
10,010
|
|
|
$
|
(4,279
|
)
|
|
$
|
5,033
|
|
|
$
|
5,752
|
|
|
$
|
47,577
|
|
|
$
|
(11,555
|
)
|
|
$
|
(55,900
|
)
|
|
$
|
152,468
|
|
|
$
|
5,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Derivative instruments
|
11,510
|
|
|
—
|
|
|
—
|
|
|
(1,211
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,299
|
|
|
(1,211
|
)
|
|
||||||||||
|
Total liabilities
|
$
|
11,510
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,211
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,299
|
|
|
$
|
(1,211
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Realized gains (losses) on fixed maturities, and realized and unrealized gains (losses) on other assets and other liabilities included in net income are included in net investment gains (losses). Realized and unrealized gains (losses) on other investments included in net income are included in net investment income.
|
(2)
|
Unrealized gains (losses) on fixed maturities are included in other comprehensive income ("OCI").
|
(3)
|
Change in unrealized gains (losses) relating to assets held at the reporting date.
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
6.
|
FAIR VALUE MEASUREMENTS (CONTINUED)
|
7.
|
DERIVATIVE INSTRUMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
At December 31, 2019
|
|
At December 31, 2018
|
|
||||||||||||||||||||
|
|
Derivative
notional
amount
|
|
Asset
derivative
fair
value(1)
|
|
Liability
derivative
fair
value(1)
|
|
Derivative
notional
amount
|
|
Asset
derivative
fair
value(1)
|
|
Liability
derivative
fair
value(1)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
$
|
68,998
|
|
|
$
|
—
|
|
|
$
|
1,405
|
|
|
$
|
79,336
|
|
|
$
|
262
|
|
|
$
|
531
|
|
|
|
Interest rate swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
|
—
|
|
|
1,116
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Foreign exchange forward contracts
|
1,038,630
|
|
|
3,174
|
|
|
2,560
|
|
|
737,419
|
|
|
7,975
|
|
|
2,576
|
|
|
||||||
|
Other underwriting-related contracts
|
85,000
|
|
|
—
|
|
|
9,672
|
|
|
85,000
|
|
|
—
|
|
|
10,299
|
|
|
||||||
|
Total derivatives
|
|
|
$
|
3,174
|
|
|
$
|
13,637
|
|
|
|
|
$
|
8,237
|
|
|
$
|
14,522
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Asset and liability derivatives are classified within other assets and other liabilities in the consolidated balance sheets.
|
|
|
December 31, 2019
|
|
December 31, 2018
|
|
||||||||||||||||
|
|
Gross amounts
|
Gross amounts offset
|
Net
amounts(1)
|
|
Gross amounts
|
Gross amounts offset
|
Net
amounts(1)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Derivative assets
|
$
|
7,673
|
|
$
|
(4,499
|
)
|
$
|
3,174
|
|
|
$
|
11,967
|
|
$
|
(3,730
|
)
|
$
|
8,237
|
|
|
|
Derivative liabilities
|
$
|
18,136
|
|
$
|
(4,499
|
)
|
$
|
13,637
|
|
|
$
|
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.
|
7.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
a)
|
Relating to Investment Portfolio
|
b)
|
Relating to Underwriting Portfolio
|
7.
|
DERIVATIVE INSTRUMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Location of gain (loss) recognized
in net income
|
Amount of gain (loss) recognized in
net income
|
|
||||||||||
|
|
|
||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
|||||||
|
|
|
|
|
|
|
|
|
||||||
|
Relating to investment portfolio:
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange forward contracts
|
Net investment gains (losses)
|
$
|
1,854
|
|
|
$
|
3,446
|
|
|
$
|
(6,935
|
)
|
|
|
Interest rate swaps
|
Net investment gains (losses)
|
(3,677
|
)
|
|
1,999
|
|
|
(1,334
|
)
|
|
|||
|
Relating to underwriting portfolio:
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange forward contracts
|
Foreign exchange gains (losses)
|
(10,678
|
)
|
|
(3,509
|
)
|
|
25,383
|
|
|
|||
|
Weather-related contracts
|
Other insurance related income (losses)
|
—
|
|
|
—
|
|
|
(9,629
|
)
|
|
|||
|
Other underwriting-related contracts
|
Other insurance related income
|
1,789
|
|
|
2,384
|
|
|
1,476
|
|
|
|||
|
Total
|
|
$
|
(10,712
|
)
|
|
$
|
4,320
|
|
|
$
|
8,961
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES
|
Insurance segment
|
|
|
|
|
|
|
|
Reserve class and tail
|
|||||
|
|
|
|
|
|
|
|
Property and other
|
Marine
|
Aviation
|
Credit and political risk
|
Professional lines
|
Liability
|
|
|
|
|
|
|
|
|
Short
|
Short
|
Short/Medium
|
Medium
|
Medium
|
Long
|
|
|
|
|
|
|
|
Reported lines of business
|
|
|
|
|
|
|
Property
|
X
|
|
|
|
|
|
Marine
|
|
X
|
|
|
|
|
Terrorism
|
X
|
|
|
|
|
|
Aviation
|
|
|
X
|
|
|
|
Credit and political risk
|
|
|
|
X
|
|
|
Professional lines
|
|
|
|
|
X
|
|
Liability
|
|
|
|
|
|
X
|
Accident and health
|
X
|
|
|
|
|
|
Discontinued lines - Novae
|
X
|
|
|
|
X
|
X
|
8.
|
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
|
•
|
Expected Loss Ratio Method ("ELR Method"): This method estimates ultimate losses for an accident year or underwriting year by applying an expected loss ratio to the earned or written premium for that year. Generally, expected loss ratios are based on one or more of (a) an analysis of historical loss experience to date, (b) pricing information and (c) industry data, adjusted as appropriate, to reflect changes in rates, loss and exposure trends, and terms and conditions. This method is insensitive to actual incurred losses for the accident year or underwriting year in question and is, therefore, often useful in the early stages of development when very few losses have been incurred. Conversely, the lack of sensitivity to incurred/paid losses for the accident year or underwriting year in question means that this method is usually inappropriate in later stages of an accident year or underwriting year’s development.
|
•
|
Loss Development Method (also referred to as the "Chain Ladder Method" or "Link Ratio Method"): This method assumes that the losses incurred/paid for each accident year or underwriting year at a particular development stage follow a relatively similar pattern. It assumes that on average, every accident year or underwriting year will display the same percentage of ultimate losses incurred/paid at the same point in time after the inception of that year. The percentages incurred/paid are established for each development stage (e.g. 12 months, 24 months, etc.) after examining averages from historical loss development data and/or external industry benchmark information. Ultimate losses are then estimated by multiplying the actual incurred/paid losses by the reciprocal of the established incurred/paid percentage. The strengths of this method are that it reacts to loss emergence/payments and that it makes full use of historical claim emergence/payment experience. However, this method has weaknesses when the underlying assumption of stable loss development/payment patterns is not valid. This could be the consequence of changes in business mix, claim inflation trends or claim reporting practices and/or the presence of large claims, among other things. Furthermore, this method
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
•
|
Bornhuetter-Ferguson Method ("BF Method"): This method can be seen as a combination of the ELR and Loss Development Methods, under which the Loss Development Method is given progressively more weight as an accident year or underwriting year matures. The main advantage of the BF Method is that it provides a more stable estimate of ultimate losses than the Loss Development Method at earlier stages of development, while remaining more responsive to emerging loss development than the ELR Method. In addition, the BF Method allows for the incorporation of external market information through the use of expected loss ratios, whereas the Loss Development Method does not incorporate such information.
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
•
|
estimates of the size of insured industry losses from the catastrophic event and the Company's corresponding market share;
|
•
|
a review of the Company's portfolio of contracts performed to identify those contracts which may be exposed to the catastrophic event;
|
•
|
a review of modeled loss estimates based on information previously reported by customers and brokers, including exposure data obtained during the underwriting process;
|
•
|
discussions of the impact of the event with customers and brokers; and
|
•
|
catastrophe bulletins published by various independent statistical reporting agencies.
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
|
|
|
|
|
|
||||
|
At December 31,
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
|
Reserve for reported losses and loss expenses
|
$
|
4,860,916
|
|
|
$
|
4,626,204
|
|
|
|
Reserve for losses incurred but not reported
|
7,891,165
|
|
|
7,654,565
|
|
|
||
|
Reserve for losses and loss expenses
|
$
|
12,752,081
|
|
|
$
|
12,280,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Gross reserve for losses and loss expenses, beginning of year
|
$
|
12,280,769
|
|
|
$
|
12,997,553
|
|
|
$
|
9,697,827
|
|
|
|
Less reinsurance recoverable on unpaid losses, beginning of year
|
(3,501,669
|
)
|
|
(3,159,514
|
)
|
|
(2,276,109
|
)
|
|
|||
|
Net reserve for unpaid losses and loss expenses, beginning of year
|
8,779,100
|
|
|
9,838,039
|
|
|
7,421,718
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net incurred losses and loss expenses related to:
|
|
|
|
|
|
|
||||||
|
Current year
|
3,123,698
|
|
|
3,389,949
|
|
|
3,487,826
|
|
|
|||
|
Prior years
|
(78,900
|
)
|
|
(199,662
|
)
|
|
(200,054
|
)
|
|
|||
|
|
3,044,798
|
|
|
3,190,287
|
|
|
3,287,772
|
|
|
|||
|
Net paid losses and loss expenses related to:
|
|
|
|
|
|
|
||||||
|
Current year
|
(598,988
|
)
|
|
(724,199
|
)
|
|
(703,796
|
)
|
|
|||
|
Prior years
|
(2,371,637
|
)
|
|
(2,368,615
|
)
|
|
(1,880,882
|
)
|
|
|||
|
|
(2,970,625
|
)
|
|
(3,092,814
|
)
|
|
(2,584,678
|
)
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Foreign exchange and other
|
21,052
|
|
|
(1,156,412
|
)
|
|
1,713,227
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net reserve for unpaid losses and loss expenses, end of year
|
8,874,325
|
|
|
8,779,100
|
|
|
9,838,039
|
|
|
|||
|
Reinsurance recoverable on unpaid losses, end of year
|
3,877,756
|
|
|
3,501,669
|
|
|
3,159,514
|
|
|
|||
|
Gross reserve for losses and loss expenses, end of year
|
$
|
12,752,081
|
|
|
$
|
12,280,769
|
|
|
$
|
12,997,553
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
|
Insurance
|
|
Reinsurance
|
|
Total
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2019
|
$
|
53,302
|
|
|
$
|
25,598
|
|
|
$
|
78,900
|
|
|
|
Year ended December 31, 2018
|
92,806
|
|
|
106,856
|
|
|
199,662
|
|
|
|||
|
Year ended December 31, 2017
|
60,459
|
|
|
139,595
|
|
|
200,054
|
|
|
|||
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance property and other
|
||||||||||||||||||||||||||||||||||
|
Incurred claims and allocated claim adjustment expenses, net of reinsurance
|
At December 31, 2019
|
||||||||||||||||||||||||||||||||
|
For the years ended December 31,
|
Total of incurred-but-not-reported liabilities plus expected development on reported claims
|
Cumulative number of reported claims
|
|||||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||||||
2010
|
$
|
173,118
|
|
$
|
155,512
|
|
$
|
148,126
|
|
$
|
122,897
|
|
$
|
117,406
|
|
$
|
116,477
|
|
$
|
116,172
|
|
$
|
115,712
|
|
$
|
114,614
|
|
$
|
114,355
|
|
$
|
684
|
|
4,423
|
2011
|
|
348,001
|
|
327,787
|
|
307,305
|
|
286,896
|
|
283,852
|
|
282,663
|
|
283,096
|
|
281,389
|
|
280,491
|
|
(18
|
)
|
6,350
|
||||||||||||
2012
|
|
|
391,031
|
|
400,995
|
|
383,228
|
|
363,171
|
|
358,598
|
|
352,879
|
|
352,048
|
|
342,017
|
|
497
|
|
29,931
|
|||||||||||||
2013
|
|
|
|
309,937
|
|
299,498
|
|
272,642
|
|
268,704
|
|
268,350
|
|
278,790
|
|
275,074
|
|
1,505
|
|
53,191
|
||||||||||||||
2014
|
|
|
|
|
360,874
|
|
355,495
|
|
344,878
|
|
329,251
|
|
328,252
|
|
326,638
|
|
3,990
|
|
62,356
|
|||||||||||||||
2015
|
|
|
|
|
|
278,554
|
|
270,793
|
|
259,725
|
|
255,392
|
|
252,560
|
|
4,077
|
|
48,424
|
||||||||||||||||
2016
|
|
|
|
|
|
|
351,075
|
|
377,820
|
|
369,508
|
|
356,353
|
|
6,011
|
|
93,717
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
885,486
|
|
829,016
|
|
808,602
|
|
2,992
|
|
697,983
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
721,266
|
|
759,300
|
|
41,900
|
|
705,592
|
|||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
429,987
|
|
113,754
|
|
445,460
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
3,945,377
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance property and other
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
35.0%
|
40.9%
|
13.7%
|
5.5%
|
1.9%
|
0.6%
|
0.2%
|
0.3%
|
0.2%
|
—%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance marine
|
||||||||||||||||||||||||||||||
|
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
|
|||||||||||||||||||||||||||||
|
For the years ended December 31,
|
|||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||
2010
|
$
|
18,017
|
|
$
|
28,603
|
|
$
|
33,296
|
|
$
|
42,325
|
|
$
|
45,159
|
|
$
|
45,944
|
|
$
|
46,918
|
|
$
|
43,286
|
|
$
|
43,372
|
|
$
|
43,377
|
|
2011
|
|
26,453
|
|
44,274
|
|
55,029
|
|
58,132
|
|
59,976
|
|
60,689
|
|
65,000
|
|
67,046
|
|
67,523
|
|
|||||||||||
2012
|
|
|
10,708
|
|
38,594
|
|
44,884
|
|
49,631
|
|
50,448
|
|
52,841
|
|
54,863
|
|
55,950
|
|
||||||||||||
2013
|
|
|
|
18,856
|
|
43,958
|
|
54,777
|
|
63,034
|
|
65,717
|
|
76,753
|
|
76,900
|
|
|||||||||||||
2014
|
|
|
|
|
6,357
|
|
15,179
|
|
26,905
|
|
26,930
|
|
36,020
|
|
40,895
|
|
||||||||||||||
2015
|
|
|
|
|
|
21,433
|
|
54,958
|
|
108,312
|
|
111,212
|
|
112,617
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
12,487
|
|
31,817
|
|
57,314
|
|
63,333
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
14,515
|
|
68,411
|
|
92,773
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
25,153
|
|
84,834
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
35,449
|
|
|||||||||||||||||||
Total
|
|
673,651
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2010, net of reinsurance
|
|
4,296
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
350,692
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Insurance marine
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
21.1%
|
29.2%
|
21.3%
|
7.7%
|
5.7%
|
6.1%
|
3.0%
|
(1.1)%
|
0.5%
|
—%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance aviation
|
||||||||||||||||||||||||||||||||||
|
Incurred claims and allocated claim adjustment expenses, net of reinsurance
|
At December 31, 2019
|
||||||||||||||||||||||||||||||||
|
For the years ended December 31,
|
Total of incurred-but-not-reported liabilities plus expected development on reported claims
|
Cumulative number of reported claims
|
|||||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||||||
2010
|
$
|
12,917
|
|
$
|
11,698
|
|
$
|
11,420
|
|
$
|
9,745
|
|
$
|
8,766
|
|
$
|
8,695
|
|
$
|
8,741
|
|
$
|
8,525
|
|
$
|
8,868
|
|
$
|
8,836
|
|
$
|
48
|
|
663
|
2011
|
|
17,724
|
|
15,391
|
|
12,781
|
|
9,555
|
|
8,424
|
|
7,277
|
|
7,234
|
|
7,192
|
|
6,952
|
|
118
|
|
4,202
|
||||||||||||
2012
|
|
|
12,793
|
|
10,677
|
|
10,801
|
|
8,718
|
|
7,769
|
|
7,712
|
|
7,599
|
|
7,392
|
|
83
|
|
2,857
|
|||||||||||||
2013
|
|
|
|
15,652
|
|
16,330
|
|
15,205
|
|
15,249
|
|
15,585
|
|
15,470
|
|
16,763
|
|
255
|
|
3,017
|
||||||||||||||
2014
|
|
|
|
|
20,435
|
|
23,033
|
|
24,349
|
|
21,789
|
|
21,847
|
|
19,088
|
|
493
|
|
3,529
|
|||||||||||||||
2015
|
|
|
|
|
|
29,782
|
|
28,502
|
|
29,833
|
|
29,567
|
|
27,512
|
|
299
|
|
4,140
|
||||||||||||||||
2016
|
|
|
|
|
|
|
29,173
|
|
33,502
|
|
33,658
|
|
31,723
|
|
606
|
|
4,062
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
55,581
|
|
62,035
|
|
66,896
|
|
3,747
|
|
4,272
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
57,990
|
|
63,753
|
|
6,841
|
|
4,258
|
|||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
42,360
|
|
11,632
|
|
2,305
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
291,275
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance aviation
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
24.8%
|
27.4%
|
19.4%
|
10.4%
|
8.1%
|
2.7%
|
2.9%
|
0.7%
|
1.4%
|
2.1%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance credit and political risk
|
||||||||||||||||||||||||||||||
|
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
|
|||||||||||||||||||||||||||||
|
For the years ended December 31,
|
|||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||
2010
|
$
|
50,000
|
|
$
|
85,418
|
|
$
|
90,729
|
|
$
|
106,768
|
|
$
|
101,789
|
|
$
|
101,951
|
|
$
|
102,157
|
|
$
|
102,203
|
|
$
|
102,522
|
|
$
|
101,262
|
|
2011
|
|
32,788
|
|
37,205
|
|
27,636
|
|
27,636
|
|
27,636
|
|
27,636
|
|
27,636
|
|
27,636
|
|
27,636
|
|
|||||||||||
2012
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
39
|
|
41
|
|
43
|
|
43
|
|
||||||||||||
2013
|
|
|
|
745
|
|
2,235
|
|
3,726
|
|
5,216
|
|
11,769
|
|
13,828
|
|
13,828
|
|
|||||||||||||
2014
|
|
|
|
|
1,924
|
|
39,952
|
|
61,108
|
|
57,858
|
|
57,858
|
|
64,050
|
|
||||||||||||||
2015
|
|
|
|
|
|
—
|
|
23,309
|
|
23,309
|
|
23,309
|
|
23,309
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
—
|
|
24,697
|
|
24,697
|
|
24,697
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
1,523
|
|
5,593
|
|
11,019
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
4,937
|
|
13,545
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
15,528
|
|
|||||||||||||||||||
Total
|
|
294,917
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2010, net of reinsurance
|
|
(2,588
|
)
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
98,219
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Insurance credit and political risk
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
22.6%
|
33.6%
|
4.0%
|
3.4%
|
11.3%
|
5.3%
|
0.3%
|
—%
|
0.2%
|
(1.3)%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance professional lines
|
||||||||||||||||||||||||||||||||||
|
Incurred claims and allocated claim adjustment expenses, net of reinsurance
|
At December 31, 2019
|
||||||||||||||||||||||||||||||||
|
For the years ended December 31,
|
Total of incurred-but-not-reported liabilities plus expected development on reported claims
|
Cumulative number of reported claims
|
|||||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||||||
2010
|
$
|
232,002
|
|
$
|
237,156
|
|
$
|
234,655
|
|
$
|
206,406
|
|
$
|
183,237
|
|
$
|
158,729
|
|
$
|
180,704
|
|
$
|
167,917
|
|
$
|
187,464
|
|
$
|
185,116
|
|
$
|
17,194
|
|
5,698
|
2011
|
|
313,520
|
|
315,326
|
|
333,914
|
|
326,663
|
|
330,773
|
|
343,911
|
|
352,309
|
|
352,792
|
|
350,066
|
|
28,007
|
|
7,229
|
||||||||||||
2012
|
|
|
328,397
|
|
375,164
|
|
376,603
|
|
375,549
|
|
362,534
|
|
364,443
|
|
353,182
|
|
351,283
|
|
34,964
|
|
8,326
|
|||||||||||||
2013
|
|
|
|
383,432
|
|
396,819
|
|
398,059
|
|
364,851
|
|
354,190
|
|
356,261
|
|
334,398
|
|
49,144
|
|
9,439
|
||||||||||||||
2014
|
|
|
|
|
412,523
|
|
411,232
|
|
421,093
|
|
391,952
|
|
371,407
|
|
353,994
|
|
76,580
|
|
9,802
|
|||||||||||||||
2015
|
|
|
|
|
|
377,129
|
|
376,865
|
|
382,679
|
|
357,646
|
|
344,239
|
|
87,707
|
|
10,453
|
||||||||||||||||
2016
|
|
|
|
|
|
|
349,030
|
|
351,990
|
|
358,368
|
|
359,813
|
|
105,971
|
|
11,763
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
378,746
|
|
397,760
|
|
437,528
|
|
197,748
|
|
13,418
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
361,490
|
|
374,683
|
|
217,867
|
|
15,584
|
|||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
399,585
|
|
348,212
|
|
11,747
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
3,490,705
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance professional lines
|
||||||||||||||||||||||||||||||
|
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
|
|||||||||||||||||||||||||||||
|
For the years ended December 31,
|
|||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||
2010
|
$
|
7,807
|
|
$
|
27,806
|
|
$
|
53,493
|
|
$
|
72,592
|
|
$
|
88,558
|
|
$
|
99,039
|
|
$
|
109,540
|
|
$
|
114,520
|
|
$
|
136,510
|
|
$
|
142,788
|
|
2011
|
|
7,402
|
|
32,897
|
|
74,461
|
|
108,598
|
|
165,806
|
|
238,401
|
|
283,510
|
|
294,678
|
|
302,151
|
|
|||||||||||
2012
|
|
|
7,818
|
|
41,328
|
|
100,089
|
|
184,191
|
|
230,913
|
|
253,958
|
|
273,383
|
|
281,715
|
|
||||||||||||
2013
|
|
|
|
17,690
|
|
73,077
|
|
129,671
|
|
175,835
|
|
213,225
|
|
242,860
|
|
263,325
|
|
|||||||||||||
2014
|
|
|
|
|
23,529
|
|
70,662
|
|
130,039
|
|
192,405
|
|
223,838
|
|
242,899
|
|
||||||||||||||
2015
|
|
|
|
|
|
20,197
|
|
67,725
|
|
137,738
|
|
169,555
|
|
203,542
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
15,859
|
|
71,245
|
|
147,370
|
|
192,459
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
20,946
|
|
71,779
|
|
139,143
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
20,091
|
|
81,986
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
25,911
|
|
|||||||||||||||||||
Total
|
|
1,875,919
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2010, net of reinsurance
|
|
65,486
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
1,680,272
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Insurance professional lines
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
4.7%
|
12.8%
|
16.6%
|
13.9%
|
11.4%
|
9.5%
|
7.6%
|
2.8%
|
7.0%
|
3.4%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance liability
|
||||||||||||||||||||||||||||||||||
|
Incurred claims and allocated claim adjustment expenses, net of reinsurance
|
At December 31, 2019
|
||||||||||||||||||||||||||||||||
|
For the years ended December 31,
|
Total of incurred-but-not-reported liabilities plus expected development on reported claims
|
Cumulative number of reported claims
|
|||||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||||||
2010
|
$
|
79,398
|
|
$
|
94,222
|
|
$
|
98,642
|
|
$
|
98,853
|
|
$
|
100,133
|
|
$
|
98,529
|
|
$
|
105,438
|
|
$
|
104,465
|
|
$
|
104,042
|
|
$
|
107,420
|
|
$
|
12,287
|
|
4,029
|
2011
|
|
72,580
|
|
75,329
|
|
83,925
|
|
87,770
|
|
85,792
|
|
84,079
|
|
82,312
|
|
82,657
|
|
85,036
|
|
14,042
|
|
3,571
|
||||||||||||
2012
|
|
|
70,887
|
|
71,683
|
|
74,134
|
|
71,474
|
|
68,658
|
|
75,697
|
|
72,727
|
|
67,237
|
|
18,015
|
|
3,188
|
|||||||||||||
2013
|
|
|
|
93,233
|
|
95,306
|
|
95,174
|
|
88,241
|
|
93,681
|
|
95,981
|
|
91,941
|
|
16,997
|
|
3,568
|
||||||||||||||
2014
|
|
|
|
|
107,133
|
|
124,303
|
|
129,764
|
|
130,672
|
|
132,019
|
|
131,474
|
|
22,710
|
|
4,865
|
|||||||||||||||
2015
|
|
|
|
|
|
128,437
|
|
127,353
|
|
137,568
|
|
165,073
|
|
183,088
|
|
43,822
|
|
6,225
|
||||||||||||||||
2016
|
|
|
|
|
|
|
124,323
|
|
130,188
|
|
128,911
|
|
127,528
|
|
53,401
|
|
7,068
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
162,446
|
|
166,573
|
|
183,793
|
|
76,834
|
|
6,710
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
168,146
|
|
167,614
|
|
95,288
|
|
5,454
|
|||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
191,121
|
|
165,431
|
|
3,714
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,336,252
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Insurance liability
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
3.1%
|
12.9%
|
13.8%
|
19.3%
|
11.8%
|
7.6%
|
5.7%
|
6.0%
|
3.6%
|
0.4%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance property and other
|
||||||||||||||||||||||||||||||
|
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
|
|||||||||||||||||||||||||||||
|
For the years ended December 31,
|
|||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||
2010
|
$
|
116,132
|
|
$
|
311,052
|
|
$
|
404,287
|
|
$
|
434,908
|
|
$
|
480,734
|
|
$
|
509,769
|
|
$
|
534,590
|
|
$
|
540,312
|
|
$
|
542,590
|
|
$
|
546,691
|
|
2011
|
|
251,855
|
|
587,047
|
|
794,575
|
|
893,746
|
|
923,166
|
|
996,481
|
|
1,011,283
|
|
1,013,858
|
|
1,019,917
|
|
|||||||||||
2012
|
|
|
122,823
|
|
294,298
|
|
366,968
|
|
389,373
|
|
403,926
|
|
413,594
|
|
415,634
|
|
428,152
|
|
||||||||||||
2013
|
|
|
|
107,628
|
|
324,839
|
|
441,138
|
|
471,380
|
|
481,066
|
|
482,480
|
|
483,105
|
|
|||||||||||||
2014
|
|
|
|
|
102,356
|
|
352,883
|
|
434,769
|
|
452,193
|
|
458,350
|
|
463,342
|
|
||||||||||||||
2015
|
|
|
|
|
|
71,477
|
|
265,896
|
|
368,698
|
|
400,980
|
|
413,477
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
128,126
|
|
376,920
|
|
520,779
|
|
563,781
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
252,360
|
|
723,826
|
|
868,458
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
195,707
|
|
648,622
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
161,293
|
|
|||||||||||||||||||
Total
|
|
5,596,838
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2010, net of reinsurance
|
|
14,757
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
1,644,046
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Reinsurance property and other
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
20.9%
|
40.8%
|
18.8%
|
6.2%
|
3.3%
|
3.1%
|
1.6%
|
1.3%
|
0.5%
|
0.7%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance credit and surety
|
|||||||||||||||||||||||||||||||||
|
Incurred claims and allocated claim adjustment expenses, net of reinsurance
|
At December 31, 2019
|
|||||||||||||||||||||||||||||||
|
For the years ended December 31,
|
Total of incurred-but-not-reported liabilities plus expected development on reported claims
|
|||||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
|||||||||||||||||||||||
2010
|
$
|
119,180
|
|
$
|
99,460
|
|
$
|
92,848
|
|
$
|
90,029
|
|
$
|
85,856
|
|
$
|
78,247
|
|
$
|
76,937
|
|
$
|
74,913
|
|
$
|
73,672
|
|
$
|
71,911
|
|
$
|
1,751
|
|
2011
|
|
120,572
|
|
106,495
|
|
104,616
|
|
111,485
|
|
109,662
|
|
101,236
|
|
99,412
|
|
98,885
|
|
95,813
|
|
2,439
|
|
||||||||||||
2012
|
|
|
159,507
|
|
147,627
|
|
150,137
|
|
147,406
|
|
139,097
|
|
131,120
|
|
127,576
|
|
124,552
|
|
3,883
|
|
|||||||||||||
2013
|
|
|
|
164,207
|
|
152,467
|
|
143,719
|
|
139,886
|
|
135,762
|
|
124,533
|
|
124,674
|
|
3,546
|
|
||||||||||||||
2014
|
|
|
|
|
136,419
|
|
135,525
|
|
142,703
|
|
139,015
|
|
127,683
|
|
126,397
|
|
6,726
|
|
|||||||||||||||
2015
|
|
|
|
|
|
160,132
|
|
165,861
|
|
160,675
|
|
156,635
|
|
137,848
|
|
8,335
|
|
||||||||||||||||
2016
|
|
|
|
|
|
|
141,639
|
|
141,128
|
|
148,943
|
|
123,366
|
|
9,849
|
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
135,040
|
|
132,618
|
|
126,786
|
|
22,830
|
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
111,692
|
|
120,289
|
|
38,357
|
|
|||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
74,689
|
|
39,291
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
1,126,325
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance credit and surety
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
30.2%
|
28.8%
|
14.6%
|
6.6%
|
3.9%
|
2.1%
|
2.4%
|
1.5%
|
0.7%
|
0.6%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance professional lines
|
||||||||||||||||||||||||||||||
|
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
|
|||||||||||||||||||||||||||||
|
For the years ended December 31,
|
|||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||
2010
|
$
|
1,757
|
|
$
|
12,026
|
|
$
|
31,243
|
|
$
|
52,138
|
|
$
|
76,798
|
|
$
|
107,363
|
|
$
|
123,981
|
|
$
|
130,610
|
|
$
|
138,047
|
|
$
|
142,994
|
|
2011
|
|
1,510
|
|
11,822
|
|
30,272
|
|
57,230
|
|
84,845
|
|
103,052
|
|
119,767
|
|
130,059
|
|
136,492
|
|
|||||||||||
2012
|
|
|
778
|
|
10,392
|
|
29,622
|
|
53,629
|
|
85,972
|
|
107,224
|
|
131,853
|
|
145,866
|
|
||||||||||||
2013
|
|
|
|
1,064
|
|
12,073
|
|
30,491
|
|
64,958
|
|
81,630
|
|
104,904
|
|
123,282
|
|
|||||||||||||
2014
|
|
|
|
|
2,019
|
|
13,073
|
|
48,854
|
|
74,577
|
|
109,239
|
|
147,194
|
|
||||||||||||||
2015
|
|
|
|
|
|
3,134
|
|
13,505
|
|
41,539
|
|
79,296
|
|
112,042
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
1,768
|
|
20,534
|
|
52,617
|
|
95,283
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
2,813
|
|
14,921
|
|
39,915
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
271
|
|
2,593
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
335
|
|
|||||||||||||||||||
Total
|
|
945,996
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2010, net of reinsurance
|
|
52,321
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
969,167
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Reinsurance professional lines
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
0.8%
|
5.5%
|
12.4%
|
15.1%
|
14.2%
|
13.8%
|
10.5%
|
5.7%
|
4.2%
|
3.0%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance motor
|
||||||||||||||||||||||||||||||
|
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
|
|||||||||||||||||||||||||||||
|
For the years ended December 31,
|
|||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
||||||||||||||||||||
2010
|
$
|
7,201
|
|
$
|
12,601
|
|
$
|
18,149
|
|
$
|
21,713
|
|
$
|
25,153
|
|
$
|
29,429
|
|
$
|
32,717
|
|
$
|
33,769
|
|
$
|
34,839
|
|
$
|
37,041
|
|
2011
|
|
23,943
|
|
47,991
|
|
62,861
|
|
73,562
|
|
80,349
|
|
86,466
|
|
91,165
|
|
92,201
|
|
94,155
|
|
|||||||||||
2012
|
|
|
29,381
|
|
53,959
|
|
68,970
|
|
78,880
|
|
85,488
|
|
89,646
|
|
91,982
|
|
93,194
|
|
||||||||||||
2013
|
|
|
|
34,133
|
|
54,274
|
|
68,502
|
|
78,744
|
|
84,512
|
|
90,165
|
|
93,234
|
|
|||||||||||||
2014
|
|
|
|
|
43,628
|
|
75,543
|
|
95,563
|
|
103,909
|
|
114,300
|
|
124,157
|
|
||||||||||||||
2015
|
|
|
|
|
|
58,231
|
|
95,172
|
|
115,903
|
|
133,528
|
|
149,813
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
61,321
|
|
106,934
|
|
131,606
|
|
150,004
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
72,859
|
|
137,217
|
|
168,855
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
84,564
|
|
145,561
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
90,291
|
|
|||||||||||||||||||
Total
|
|
1,146,305
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
All outstanding liabilities before 2010, net of reinsurance
|
|
193,345
|
|
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
Liabilities for claims and claim adjustment expenses, net of reinsurance
|
|
$
|
1,229,604
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
Reinsurance motor
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
22.3%
|
16.4%
|
10.1%
|
6.9%
|
5.5%
|
4.7%
|
3.0%
|
1.0%
|
1.4%
|
2.8%
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance liability
|
|||||||||||||||||||||||||||||||||
|
Incurred claims and allocated claim adjustment expenses, net of reinsurance
|
At December 31, 2019
|
|||||||||||||||||||||||||||||||
|
For the years ended December 31,
|
Total of incurred-but-not-reported liabilities plus expected development on reported claims
|
|||||||||||||||||||||||||||||||
Accident year
|
2010 unaudited
|
2011 unaudited
|
2012 unaudited
|
2013 unaudited
|
2014 unaudited
|
2015 unaudited
|
2016 unaudited
|
2017 unaudited
|
2018 unaudited
|
2019
|
|||||||||||||||||||||||
2010
|
$
|
172,823
|
|
$
|
171,775
|
|
$
|
183,347
|
|
$
|
183,715
|
|
$
|
202,007
|
|
$
|
190,921
|
|
$
|
181,962
|
|
$
|
165,983
|
|
$
|
159,230
|
|
$
|
156,113
|
|
$
|
13,119
|
|
2011
|
|
172,189
|
|
172,201
|
|
173,984
|
|
191,668
|
|
197,766
|
|
194,604
|
|
193,784
|
|
191,873
|
|
189,014
|
|
16,614
|
|
||||||||||||
2012
|
|
|
166,386
|
|
162,945
|
|
167,366
|
|
172,341
|
|
173,501
|
|
170,979
|
|
164,309
|
|
158,342
|
|
16,994
|
|
|||||||||||||
2013
|
|
|
|
171,271
|
|
175,174
|
|
182,201
|
|
184,240
|
|
183,915
|
|
177,112
|
|
157,236
|
|
24,545
|
|
||||||||||||||
2014
|
|
|
|
|
199,433
|
|
202,939
|
|
204,657
|
|
200,557
|
|
199,340
|
|
197,187
|
|
53,905
|
|
|||||||||||||||
2015
|
|
|
|
|
|
214,735
|
|
215,099
|
|
216,061
|
|
215,889
|
|
213,662
|
|
67,030
|
|
||||||||||||||||
2016
|
|
|
|
|
|
|
240,440
|
|
245,820
|
|
250,868
|
|
254,154
|
|
99,784
|
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
276,929
|
|
270,589
|
|
279,172
|
|
133,392
|
|
||||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
264,570
|
|
268,506
|
|
168,425
|
|
|||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
263,525
|
|
214,542
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Total
|
$
|
2,136,911
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
RESERVE FOR LOSSES AND LOSS EXPENSES (CONTINUED)
|
Reinsurance liability
|
|||||||||
Average annual percentage payout of incurred claims by age, net of reinsurance (unaudited)
|
|||||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Year 7
|
Year 8
|
Year 9
|
Year 10
|
4.1%
|
9.6%
|
13.2%
|
13.7%
|
12.2%
|
10.6%
|
7.2%
|
6.7%
|
4.4%
|
1.4%
|
(1)
|
Non-U.S. dollar denominated loss data is converted to U.S dollar at the rates of exchange in effect at the balance sheet date for material underlying currencies. Fluctuations in currency exchange rates may cause material shifts in loss development. Reserves for losses and loss expenses disclosed in the consolidated balance sheets are also remeasured using rates of exchange in effect at the balance sheet date.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||||||||||||||
|
|
Premiums
written
|
|
Premiums
earned
|
|
Premiums
written
|
|
Premiums
earned
|
|
Premiums
written
|
|
Premiums
earned
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Gross
|
$
|
6,898,858
|
|
|
$
|
6,910,677
|
|
|
$
|
6,910,065
|
|
|
$
|
6,882,217
|
|
|
$
|
5,556,273
|
|
|
$
|
5,616,234
|
|
|
|
Ceded
|
(2,409,243
|
)
|
|
(2,323,499
|
)
|
|
(2,251,103
|
)
|
|
(2,090,722
|
)
|
|
(1,529,130
|
)
|
|
(1,467,474
|
)
|
|
||||||
|
Net
|
$
|
4,489,615
|
|
|
$
|
4,587,178
|
|
|
$
|
4,658,962
|
|
|
$
|
4,791,495
|
|
|
$
|
4,027,143
|
|
|
$
|
4,148,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.
|
DEBT AND FINANCING ARRANGEMENTS
|
a)
|
Debt
|
|
Year ended December 31,
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
|
5.875% Senior Notes
|
$
|
499,687
|
|
|
$
|
498,967
|
|
|
|
2.650% Senior Notes(1)
|
—
|
|
|
249,885
|
|
|
||
|
5.150% Senior Notes
|
246,491
|
|
|
246,425
|
|
|
||
|
4.000% Senior Notes
|
346,997
|
|
|
346,684
|
|
|
||
|
3.900% Senior Notes
|
295,339
|
|
|
—
|
|
|
||
|
Junior Subordinated Notes
|
419,643
|
|
|
—
|
|
|
||
|
Total Debt
|
$
|
1,808,157
|
|
|
$
|
1,341,961
|
|
|
|
|
|
|
|
|
(1)
|
On April 1, 2019, AXIS Specialty Finance PLC, a 100% owned finance subsidiary, repaid $250 million aggregate principal amount of 2.650% Senior Notes at their stated maturity.
|
|
Description
|
Interest Rate
|
|
Interest Payments Due
|
|
|
|
|
|
|
|
|
|
|
5.875% Senior Notes
|
5.875
|
%
|
|
Semi-annually in arrears on June 1 and December 1 of each year
|
|
|
5.150% Senior Notes
|
5.150
|
%
|
|
Semi-annually in arrears on April 1 and October 1 of each year
|
|
|
4.000% Senior Notes
|
4.000
|
%
|
|
Semi-annually in arrears on June 6 and December 6 of each year
|
|
|
3.900% Senior Notes
|
3.900
|
%
|
|
Semi-annually in arrears on January 15 and July 15 of each year
|
|
|
Junior Subordinated Notes(2)
|
4.900
|
%
|
|
Semi-annually on January 15 and July 15 of each year
|
|
(2)
|
The Junior Notes accrue interest from the date of issuance to, but excluding, January 15, 2030 (the "Par Call Date") at the fixed rate of 4.900% and from, and including, the Par Call Date, at a rate equal to the Five-Year Treasury Rate as of the Reset Interest Determination Date, plus 3.186%. Interest of the Junior Notes is payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2020.
|
|
Year ended December 31,
|
|
|
||
|
|
|
|
||
|
2020
|
$
|
500,000
|
|
|
|
2021
|
—
|
|
|
|
|
2022
|
—
|
|
|
|
|
2023
|
—
|
|
|
|
|
2024
|
—
|
|
|
|
|
After 2024
|
1,325,000
|
|
|
|
|
Unamortized discount and debt issuance expenses
|
(16,843
|
)
|
|
|
|
Total senior notes and notes payable
|
$
|
1,808,157
|
|
|
|
|
|
|
b)
|
Letter of Credit Facility
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
a)
|
Concentrations of Credit Risk
|
11.
|
COMMITMENTS AND CONTINGENCIES (CONTINUED)
|
d)
|
Legal Proceedings
|
e)
|
Investments
|
11.
|
COMMITMENTS AND CONTINGENCIES (CONTINUED)
|
f)
|
Funds at Lloyd's
|
12.
|
LEASES
|
|
|
Year ended
|
|
||
|
|
December 31, 2019
|
|
||
|
|
|
|
||
|
Lease cost:
|
|
|
||
|
Operating lease expense
|
$
|
27,549
|
|
|
|
Short-term lease expense(1)
|
1,132
|
|
|
|
|
Sublease income(2)
|
(1,144
|
)
|
|
|
|
Total lease expense
|
$
|
27,537
|
|
|
|
|
|
|
||
|
Other information:
|
|
|
||
|
Operating cash outflows from operating leases
|
$
|
25,004
|
|
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
—
|
|
|
|
Weighted-average remaining lease term - operating leases(3)
|
9.0 years
|
|
|
|
|
Weighted-average discount rate - operating lease(4)
|
4.7
|
%
|
|
12.
|
LEASES (CONTINUED)
|
|
|
Expected
|
|
||
|
Year ended December 31,
|
Cash Flows
|
|
||
|
|
|
|
||
|
2020
|
$
|
19,225
|
|
|
|
2021
|
19,129
|
|
|
|
|
2022
|
20,049
|
|
|
|
|
2023
|
16,641
|
|
|
|
|
2024
|
11,006
|
|
|
|
|
Later years
|
58,562
|
|
|
|
|
Discount
|
(29,028
|
)
|
|
|
|
Total discounted operating lease liabilities
|
$
|
115,584
|
|
|
|
|
|
|
|
|
|
|
||
|
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.
|
EARNINGS PER COMMON SHARE
|
|
|
|
|
|
|
|
|
||||||
|
At and year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Earnings (loss) per common share
|
|
|
|
|
|
|
||||||
|
Net income (loss)
|
$
|
323,473
|
|
|
$
|
43,021
|
|
|
$
|
(368,969
|
)
|
|
|
Less: Preferred share dividends
|
41,112
|
|
|
42,625
|
|
|
46,810
|
|
|
|||
|
Net income (loss) available (attributable) to common shareholders
|
$
|
282,361
|
|
|
$
|
396
|
|
|
$
|
(415,779
|
)
|
|
|
Weighted average common shares outstanding
|
83,894
|
|
|
83,501
|
|
|
84,108
|
|
|
|||
|
Earnings (loss) per common share
|
$
|
3.37
|
|
|
$
|
—
|
|
|
$
|
(4.94
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Earnings (loss) per diluted common share
|
|
|
|
|
|
|
||||||
|
Net income (loss) available (attributable) to common shareholders
|
$
|
282,361
|
|
|
$
|
396
|
|
|
$
|
(415,779
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average common shares outstanding
|
83,894
|
|
|
83,501
|
|
|
84,108
|
|
|
|||
|
Share-based compensation plans(1)
|
579
|
|
|
506
|
|
|
—
|
|
|
|||
|
Weighted average diluted common shares outstanding(1)
|
84,473
|
|
|
84,007
|
|
|
84,108
|
|
|
|||
|
Earnings (loss) per diluted common share
|
$
|
3.34
|
|
|
$
|
—
|
|
|
$
|
(4.94
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted average anti-dilutive shares excluded from the dilutive computation
|
154
|
|
|
245
|
|
|
702
|
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
Due to the net loss recognized for the year ended December 31, 2017, the share equivalents were anti-dilutive.
|
14.
|
SHAREHOLDERS' EQUITY
|
a)
|
Common Shares
|
|
|
|
|
|
|
|
|
|||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
|||
|
|
|
|
|
|
|
|
|||
|
Shares issued, balance at beginning of year
|
176,580
|
|
|
176,580
|
|
|
176,580
|
|
|
|
Shares issued
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total shares issued at end of year
|
176,580
|
|
|
176,580
|
|
|
176,580
|
|
|
|
|
|
|
|
|
|
|
|||
|
Treasury shares, balance at beginning of year
|
(92,994
|
)
|
|
(93,419
|
)
|
|
(90,139
|
)
|
|
|
Shares repurchased
|
(176
|
)
|
|
(200
|
)
|
|
(4,288
|
)
|
|
|
Shares reissued
|
549
|
|
|
625
|
|
|
1,008
|
|
|
|
Total treasury shares at end of year
|
(92,621
|
)
|
|
(92,994
|
)
|
|
(93,419
|
)
|
|
|
|
|
|
|
|
|
|
|||
|
Total shares outstanding
|
83,959
|
|
|
83,586
|
|
|
83,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
In the open market:
|
|
|
|
|
|
|
||||||
|
Total shares
|
—
|
|
|
—
|
|
|
3,932
|
|
|
|||
|
Total cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
261,180
|
|
|
|
Average price per share(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
66.43
|
|
|
|
|
|
|
|
|
|
|
||||||
|
From employees:(2)
|
|
|
|
|
|
|
||||||
|
Total shares
|
176
|
|
|
200
|
|
|
356
|
|
|
|||
|
Total cost
|
$
|
10,165
|
|
|
$
|
10,080
|
|
|
$
|
24,678
|
|
|
|
Average price per share(1)
|
$
|
57.66
|
|
|
$
|
50.40
|
|
|
$
|
69.36
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total shares repurchased:
|
|
|
|
|
|
|
||||||
|
Total shares
|
176
|
|
|
200
|
|
|
4,288
|
|
|
|||
|
Total cost
|
$
|
10,165
|
|
|
$
|
10,080
|
|
|
$
|
285,858
|
|
|
|
Average price per share(1)
|
$
|
57.66
|
|
|
$
|
50.40
|
|
|
$
|
66.67
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Calculated using whole numbers.
|
(2)
|
Shares are repurchased from employees to satisfy withholding tax liabilities that arise on the vesting of share-settled restricted stock units.
|
14.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
b)
|
Preferred Shares
|
14.
|
SHAREHOLDERS' EQUITY (CONTINUED)
|
|
|
Per share data
|
|
||||||||||
|
|
Dividends declared
|
|
Dividends paid in year of declaration
|
|
Dividends paid in year following declaration
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2017
|
|
|
|
|
|
|
||||||
|
Common shares
|
$
|
1.53
|
|
|
$
|
1.14
|
|
|
$
|
0.39
|
|
|
|
Series C preferred shares
|
$
|
0.43
|
|
|
$
|
0.43
|
|
|
$
|
—
|
|
|
|
Series D preferred shares
|
$
|
1.38
|
|
|
$
|
1.03
|
|
|
$
|
0.34
|
|
|
|
Series E preferred shares
|
$
|
137.50
|
|
|
$
|
103.13
|
|
|
$
|
34.38
|
|
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|
||||||
|
Common shares
|
$
|
1.57
|
|
|
$
|
1.17
|
|
|
$
|
0.40
|
|
|
|
Series D preferred shares
|
$
|
1.38
|
|
|
$
|
1.03
|
|
|
$
|
0.34
|
|
|
|
Series E preferred shares
|
$
|
137.50
|
|
|
$
|
103.13
|
|
|
$
|
34.38
|
|
|
|
Year ended December 31, 2019
|
|
|
|
|
|
|
||||||
|
Common shares
|
$
|
1.61
|
|
|
$
|
1.20
|
|
|
$
|
0.41
|
|
|
|
Series D preferred shares
|
$
|
1.21
|
|
|
$
|
1.03
|
|
|
$
|
0.18
|
|
|
|
Series E preferred shares
|
$
|
137.50
|
|
|
$
|
103.13
|
|
|
$
|
34.38
|
|
|
|
|
|
|
|
|
|
|
16.
|
SHARE-BASED COMPENSATION
|
16.
|
SHARE-BASED COMPENSATION (CONTINUED)
|
a)
|
Share-Settled Awards
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Share-Settled Performance Restricted Stock Units
|
|
Share-Settled Service
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 - December 31, 2017
|
230
|
|
|
$
|
57.08
|
|
|
1,355
|
|
|
$
|
57.09
|
|
|
|
Granted
|
104
|
|
|
48.89
|
|
|
737
|
|
|
49.36
|
|
|
||
|
Vested
|
(87
|
)
|
|
54.71
|
|
|
(539
|
)
|
|
54.51
|
|
|
||
|
Forfeited
|
(15
|
)
|
|
53.80
|
|
|
(142
|
)
|
|
55.36
|
|
|
||
|
Nonvested restricted stock units - December 31, 2018
|
232
|
|
|
54.54
|
|
|
1,411
|
|
|
54.12
|
|
|
||
|
Granted
|
127
|
|
|
54.70
|
|
|
523
|
|
|
54.88
|
|
|
||
|
Vested
|
(61
|
)
|
|
53.82
|
|
|
(487
|
)
|
|
54.29
|
|
|
||
|
Forfeited
|
(40
|
)
|
|
64.01
|
|
|
(174
|
)
|
|
54.49
|
|
|
||
|
Nonvested restricted stock units - December 31, 2019
|
258
|
|
|
$
|
53.31
|
|
|
1,273
|
|
|
$
|
54.32
|
|
|
|
|
|
|
|
|
|
|
|
|
16.
|
SHARE-BASED COMPENSATION (CONTINUED)
|
|
|
Cash-Settled Performance Restricted Stock Units
|
|
Cash-Settled
Service Restricted Stock Units
|
|
||
|
|
Number of
restricted stock units
|
|
Number of
restricted stock units
|
|
||
|
|
|
|
|
|
||
|
Nonvested restricted stock units - December 31, 2017
|
42
|
|
|
988
|
|
|
|
Granted
|
—
|
|
|
473
|
|
|
|
Vested
|
(12
|
)
|
|
(390
|
)
|
|
|
Forfeited
|
(3
|
)
|
|
(139
|
)
|
|
|
Nonvested restricted stock units - December 31, 2018
|
27
|
|
|
932
|
|
|
|
Granted
|
—
|
|
|
364
|
|
|
|
Vested
|
(12
|
)
|
|
(333
|
)
|
|
|
Forfeited
|
(9
|
)
|
|
(110
|
)
|
|
|
Nonvested restricted stock units - December 31, 2019
|
6
|
|
|
853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Share-based compensation expense (1)
|
$
|
52,218
|
|
|
$
|
54,011
|
|
|
$
|
67,697
|
|
|
|
Tax benefits associated with share-based compensation expense
|
$
|
8,913
|
|
|
$
|
7,772
|
|
|
$
|
14,937
|
|
|
|
Liability for cash-settled restricted stock units (2)
|
$
|
21,731
|
|
|
$
|
20,648
|
|
|
$
|
21,535
|
|
|
|
Fair value of restricted stock units vested (3)(4)
|
$
|
51,206
|
|
|
$
|
50,750
|
|
|
$
|
124,990
|
|
|
|
Unrecognized share-based compensation expense
|
$
|
75,770
|
|
|
$
|
87,341
|
|
|
$
|
94,315
|
|
|
|
Expected weighted average period to recognize unrecognized share-based compensation expense
|
2.3 years
|
|
|
2.4 years
|
|
|
2.5 years
|
|
|
|||
|
|
|
|
|
|
|
|
17.
|
RELATED PARTY TRANSACTIONS (CONTINUED)
|
18.
|
TRANSACTION AND REORGANIZATION EXPENSES
|
19.
|
INCOME TAXES
|
19.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Current income tax expense (benefit)
|
|
|
|
|
|
|
||||||
|
U.S.
|
$
|
12,601
|
|
|
$
|
(5,401
|
)
|
|
$
|
(6,207
|
)
|
|
|
Europe
|
22,425
|
|
|
10,409
|
|
|
10,249
|
|
|
|||
|
Other
|
469
|
|
|
51
|
|
|
—
|
|
|
|||
|
Deferred income tax expense (benefit)
|
|
|
|
|
|
|
||||||
|
U.S.
|
17,665
|
|
|
15,288
|
|
|
18,495
|
|
|
|||
|
Europe
|
(29,468
|
)
|
|
(49,833
|
)
|
|
(30,079
|
)
|
|
|||
|
Total income tax expense (benefit)
|
$
|
23,692
|
|
|
$
|
(29,486
|
)
|
|
$
|
(7,542
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Net current tax receivables (payables)
|
$
|
13,130
|
|
|
$
|
9,683
|
|
|
$
|
(639
|
)
|
|
|
Net deferred tax assets
|
18,621
|
|
|
39,775
|
|
|
4,438
|
|
|
|||
|
|
|
|
|
|
|
|
||||||
|
Net tax assets
|
$
|
31,751
|
|
|
$
|
49,458
|
|
|
$
|
3,799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
At December 31,
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
|
Deferred tax assets:
|
|
|
|
|
||||
|
Discounting of net reserves for losses and loss expenses
|
$
|
40,523
|
|
|
$
|
37,440
|
|
|
|
Unearned premiums
|
42,709
|
|
|
40,447
|
|
|
||
|
Net unrealized investments losses
|
—
|
|
|
11,438
|
|
|
||
|
Operating and capital loss carryforwards(1)
|
85,901
|
|
|
83,850
|
|
|
||
|
Accruals not currently deductible
|
29,705
|
|
|
32,589
|
|
|
||
|
Tax credits
|
2,956
|
|
|
8,672
|
|
|
||
|
Other deferred tax assets
|
14,355
|
|
|
9,195
|
|
|
||
|
Deferred tax assets before valuation allowance
|
216,149
|
|
|
223,631
|
|
|
||
|
Valuation allowance
|
(18,560
|
)
|
|
(18,955
|
)
|
|
||
|
Deferred tax assets net of valuation allowance
|
197,589
|
|
|
204,676
|
|
|
||
|
|
|
|
|
|
||||
|
Deferred tax liabilities:
|
|
|
|
|
||||
|
Deferred acquisition costs
|
(38,320
|
)
|
|
(39,745
|
)
|
|
||
|
Net unrealized investments gains
|
(30,434
|
)
|
|
—
|
|
|
||
|
Intangible assets
|
(44,199
|
)
|
|
(49,097
|
)
|
|
||
|
Equalization reserves
|
(2,825
|
)
|
|
(22,069
|
)
|
|
||
|
Other deferred tax liabilities
|
(63,190
|
)
|
|
(53,990
|
)
|
|
||
|
Deferred tax liabilities
|
(178,968
|
)
|
|
(164,901
|
)
|
|
||
|
Net deferred tax assets
|
$
|
18,621
|
|
|
$
|
39,775
|
|
|
|
|
|
|
|
|
(1)
|
At December 31, 2019 and 2018, the total operating loss carryforwards includes Lloyd's deferred year of account losses of $50 million and $68 million, respectively.
|
19.
|
INCOME TAXES (CONTINUED)
|
|
|
|
|
|
|
||||
|
At December 31,
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
|
Operating and Capital Loss Carryforwards(1)
|
|
|
|
|
||||
|
Singapore (branch) operating loss carryforward
|
$
|
103,899
|
|
|
$
|
79,445
|
|
|
|
U.K. operating loss carryforward(2)
|
431,374
|
|
|
413,504
|
|
|
||
|
Ireland operating loss carryforward
|
9,064
|
|
|
12,756
|
|
|
||
|
U.S. operating loss carryforward
|
—
|
|
|
15,062
|
|
|
||
|
Ireland capital loss carryforward
|
716
|
|
|
716
|
|
|
||
|
|
|
|
|
|
||||
|
Tax Credits(1)
|
|
|
|
|
||||
|
Ireland foreign tax credit
|
$
|
2,092
|
|
|
$
|
2,248
|
|
|
|
U.S. alternative minimum tax credit
|
—
|
|
|
6,026
|
|
|
||
|
U.K. tax credit
|
864
|
|
|
398
|
|
|
||
|
|
|
|
|
|
(1)
|
At December 31, 2019, all remaining operating and capital loss carryforwards and tax credits can be carried forward indefinitely.
|
(2)
|
At December 31, 2019 and 2018, the U.K. operating loss carryforward includes Lloyd's deferred year of account losses of $293 million and $403 million, respectively.
|
|
|
|
|
|
|
||||
|
At December 31,
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
||||
|
Income tax expense:
|
|
|
|
|
||||
|
Valuation allowance - beginning of year
|
$
|
13,891
|
|
|
$
|
16,157
|
|
|
|
Operating loss carryforwards
|
2,445
|
|
|
198
|
|
|
||
|
Foreign tax credit
|
(114
|
)
|
|
(1,359
|
)
|
|
||
|
U.K. branch assets and other foreign rate differentials
|
2,338
|
|
|
(205
|
)
|
|
||
|
U.S. alternative minimum tax credits
|
—
|
|
|
(900
|
)
|
|
||
|
Valuation allowance - end of year
|
$
|
18,560
|
|
|
$
|
13,891
|
|
|
|
|
|
|
|
|
||||
|
Accumulated other comprehensive income:
|
|
|
|
|
||||
|
Valuation allowance - beginning of year
|
5,064
|
|
|
—
|
|
|
||
|
Change in investment - related items
|
(5,064
|
)
|
|
5,064
|
|
|
||
|
Valuation allowance - end of year
|
—
|
|
|
5,064
|
|
|
||
|
|
|
|
|
|
||||
|
Total valuation allowance - end of year
|
$
|
18,560
|
|
|
$
|
18,955
|
|
|
|
|
|
|
|
|
19.
|
INCOME TAXES (CONTINUED)
|
20.
|
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
Before tax amount
|
|
Income tax (expense) benefit
|
|
Net of tax amount
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2019
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized gains (loss) arising during the year
|
$
|
414,982
|
|
|
$
|
(40,367
|
)
|
|
$
|
374,615
|
|
|
|
Adjustment for reclassification of net realized (gains) losses and OTTI losses recognized in net income
|
(29,618
|
)
|
|
4,889
|
|
|
(24,729
|
)
|
|
|||
|
Unrealized gains (losses) arising during the year, net of reclassification adjustment
|
385,364
|
|
|
(35,478
|
)
|
|
349,886
|
|
|
|||
|
Foreign currency translation adjustment
|
(1,066
|
)
|
|
—
|
|
|
(1,066
|
)
|
|
|||
|
Total other comprehensive income (loss), net of tax
|
$
|
384,298
|
|
|
$
|
(35,478
|
)
|
|
$
|
348,820
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2018
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized gains (losses) arising during the year
|
$
|
(297,259
|
)
|
|
$
|
5,528
|
|
|
$
|
(291,731
|
)
|
|
|
Adjustment for reclassification of net realized (gains) losses and OTTI losses recognized in net income
|
105,730
|
|
|
(4,828
|
)
|
|
100,902
|
|
|
|||
|
Unrealized gains (losses) arising during the year, net of reclassification adjustment (1)
|
(191,529
|
)
|
|
700
|
|
|
(190,829
|
)
|
|
|||
|
Foreign currency translation adjustment
|
(11,165
|
)
|
|
—
|
|
|
(11,165
|
)
|
|
|||
|
Total other comprehensive income (loss), net of tax
|
$
|
(202,694
|
)
|
|
$
|
700
|
|
|
$
|
(201,994
|
)
|
|
|
|
|
|
|
|
|
|
||||||
|
Year ended December 31, 2017
|
|
|
|
|
|
|
||||||
|
Available for sale investments:
|
|
|
|
|
|
|
||||||
|
Unrealized gains (losses) arising during the year
|
$
|
211,151
|
|
|
$
|
(5,732
|
)
|
|
$
|
205,419
|
|
|
|
Adjustment for reclassification of net realized (gains) losses and OTTI losses recognized in net loss
|
(33,892
|
)
|
|
758
|
|
|
(33,134
|
)
|
|
|||
|
Unrealized gains (losses) arising during the year, net of reclassification adjustment
|
177,259
|
|
|
(4,974
|
)
|
|
172,285
|
|
|
|||
|
Foreign currency translation adjustment
|
41,938
|
|
|
—
|
|
|
41,938
|
|
|
|||
|
Total other comprehensive income (loss), net of tax
|
$
|
219,197
|
|
|
$
|
(4,974
|
)
|
|
$
|
214,223
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Effective January 1, 2018, the Company adopted ASU No. 2016-01. The adoption of this guidance resulted in a cumulative adjustment to reclassify unrealized investment gains on equity securities from accumulated other comprehensive income to retained earnings. Refer to Item 8, Note 2 'Basis of Presentation and Significant Accounting Policies' to the consolidated financial statements for additional information.
|
20.
|
OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
|
|
|
|
Amounts reclassified from AOCI(1)
|
|
|||||||||||
|
AOCI components
|
Consolidated statement of operations line item that includes reclassification adjustment
|
Years ended December 31,
|
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Unrealized gains (losses) on available for sale investments
|
|
|
|
|
|
|
|
|
||||||
|
|
Other realized gains (losses)
|
$
|
36,602
|
|
|
$
|
(95,997
|
)
|
|
$
|
48,385
|
|
|
|
|
|
OTTI losses
|
(6,984
|
)
|
|
(9,733
|
)
|
|
(14,493
|
)
|
|
|
|||
|
|
Total before tax
|
29,618
|
|
|
(105,730
|
)
|
|
33,892
|
|
|
|
|||
|
|
Income tax (expense) benefit
|
(4,889
|
)
|
|
4,828
|
|
|
(758
|
)
|
|
|
|||
|
|
Net of tax
|
$
|
24,729
|
|
|
$
|
(100,902
|
)
|
|
$
|
33,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
||||||
|
|
Foreign exchange gains (losses)
|
$
|
6,043
|
|
|
$
|
—
|
|
|
$
|
(24,149
|
)
|
|
|
|
|
Income tax (expense) benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||
|
|
Net of tax
|
$
|
6,043
|
|
|
$
|
—
|
|
|
$
|
(24,149
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts in parentheses are charges to net income (loss)
|
21.
|
STATUTORY FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Bermuda
|
|
Ireland
|
|
U.S.
|
|
|||||||||||||||
|
At December 31,
|
2019
|
2018
|
|
2019
|
2018
|
|
2019
|
2018
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Required statutory capital and surplus
|
$
|
1,502,153
|
|
$
|
1,470,375
|
|
|
$
|
719,405
|
|
$
|
637,226
|
|
|
$
|
500,750
|
|
$
|
489,560
|
|
|
|
Available statutory capital and surplus
|
$
|
3,288,752
|
|
$
|
3,513,342
|
|
|
$
|
1,069,621
|
|
$
|
896,868
|
|
|
$
|
1,713,013
|
|
$
|
1,668,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.
|
STATUTORY FINANCIAL INFORMATION (CONTINUED)
|
21.
|
STATUTORY FINANCIAL INFORMATION (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Quarters ended
|
Mar 31
|
|
Jun 30
|
|
Sep 30
|
|
Dec 31
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
2019
|
|
|
|
|
|
|
|
|
||||||||
|
Net premiums earned
|
$
|
1,134,212
|
|
|
$
|
1,123,607
|
|
|
$
|
1,157,307
|
|
|
$
|
1,172,051
|
|
|
|
Net investment income
|
107,303
|
|
|
137,949
|
|
|
115,763
|
|
|
117,557
|
|
|
||||
|
Net investment gains
|
12,767
|
|
|
21,225
|
|
|
14,527
|
|
|
42,712
|
|
|
||||
|
Underwriting income (loss) (1) (2)
|
77,822
|
|
|
78,659
|
|
|
(78,718
|
)
|
|
(49,254
|
)
|
|
||||
|
Net income (loss) available (attributable) to common shareholders
|
98,125
|
|
|
166,387
|
|
|
27,745
|
|
|
(9,897
|
)
|
|
||||
|
Earnings (loss) per common share
|
$
|
1.17
|
|
|
$
|
1.98
|
|
|
$
|
0.33
|
|
|
$
|
(0.12
|
)
|
|
|
Earnings (loss) per diluted common share
|
$
|
1.16
|
|
|
$
|
1.97
|
|
|
$
|
0.33
|
|
|
$
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2018
|
|
|
|
|
|
|
|
|
||||||||
|
Net premiums earned
|
$
|
1,167,402
|
|
|
$
|
1,185,548
|
|
|
$
|
1,224,075
|
|
|
$
|
1,214,469
|
|
|
|
Net investment income
|
100,999
|
|
|
109,960
|
|
|
114,421
|
|
|
113,128
|
|
|
||||
|
Net investment losses
|
(14,830
|
)
|
|
(45,093
|
)
|
|
(17,628
|
)
|
|
(72,667
|
)
|
|
||||
|
Underwriting income (loss)
|
143,737
|
|
|
115,726
|
|
|
59,026
|
|
|
(194,664
|
)
|
|
||||
|
Net income (loss) available (attributable) to common shareholders
|
62,546
|
|
|
92,858
|
|
|
43,439
|
|
|
(198,448
|
)
|
|
||||
|
Earnings (loss) per common share
|
$
|
0.75
|
|
|
$
|
1.11
|
|
|
$
|
0.52
|
|
|
$
|
(2.37
|
)
|
|
|
Earnings (loss) per diluted common share
|
$
|
0.75
|
|
|
$
|
1.11
|
|
|
$
|
0.52
|
|
|
$
|
(2.37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Consolidated underwriting income is a pre-tax measure of underwriting profitability that takes into account net premiums earned and other insurance related income (loss) as revenues and net losses and loss expenses, acquisition costs and underwriting-related general and administrative expenses as expenses. 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 financial measure, is provided in Note 3 'Segment Information'.
|
(2)
|
Underwriting-related general and administrative expenses includes those general and administrative expenses that are incremental and/or directly attributable to the Company's underwriting operations. 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 general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $129 million, $108 million and $130 million for the years ended December 31, 2019, 2018 and 2017, respectively. Corporate expenses include holding company costs necessary to support our worldwide insurance and reinsurance operations and costs associated with operating as a publicly-traded company. As these costs are not incremental and/or directly attributable to the Company's underwriting operations, these expenses are excluded from underwriting-related general and administrative expenses.
|
(3)
|
During the quarters ended March 31, June 30, September 30 and December 31, 2019, the Company recognized reorganization expenses of $15 million, $3 million, $11 million and $8 million, respectively, related to its transformation program which was launched in 2017. This program encompasses the integration of Novae which commenced in the fourth quarter of 2017, the realignment of the accident and health business, together with other initiatives designed to increase the Company's efficiency and enhance the Company's profitability while delivering a customer-centric operating model. During the quarters ended March 31, June 30, September 30 and December 31, 2018, the Company recognized reorganization expenses of $13 million, $19 million, $16 million and $19 million, respectively (refer to Note 18 'Transaction and Reorganization Expense').
|
(4)
|
During the quarters ended March 31, June 30, September 30 and December 31, 2019, the Company recognized amortization of VOBA of $13 million, $7 million, $4 million, $2 million, respectively, related to the acquisition of Novae. During the quarters ended March 31, June 30, September 30 and December 31, 2018, the Company recognized amortization of VOBA of $57 million, $53 million, $39 million and $23 million (refer to Note 4 'Goodwill and Intangible Assets').
|
23.
|
SUBSEQUENT EVENTS
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 27, 2020
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
Financial Statements, Financial Statement Schedules and Exhibits
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
Schedule I
|
– Summary of Investments - Other than Investments in Related Parties
|
Schedule II
|
– Condensed Financial Information of Registrant
|
Schedule III
|
– Supplementary Insurance Information
|
Schedule IV
|
– Supplementary Reinsurance Information
|
3.
|
Exhibits
|
Exhibit
Number
|
|
Description of Document
|
|
Termination Agreement dated August 2, 2015 by and between PartnerRe Ltd. and AXIS Capital Holdings Limited (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 3, 2015.)
|
|
|
|
|
|
Rule 2.7 Announcement dated July 5, 2017 in connection with acquisition of Novae Group plc (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 in connection with acquisition of Novae Group plc (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 of AXIS Capital Holdings Limited (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (Amendment No. 1) (No. 333-103620) filed on April 16, 2003).
|
|
|
|
|
|
Amended and Restated Bye-laws of AXIS Capital Holdings Limited (incorporated by reference to Exhibit 4.2 to the Company's Registration Statement on Form S-8 filed on May 15, 2009).
|
|
|
|
|
|
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).
|
|
|
|
|
|
Senior Indenture among AXIS Specialty Finance LLC, AXIS Capital Holdings Limited and The Bank of New York Mellon Trust Company, N.A., as trustee, dated as of March 23, 2010 (incorporated by reference to Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q filed on April 27, 2010).
|
|
|
|
|
|
Senior Indenture among AXIS Specialty Finance PLC, as issuer, the Company, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee, dated as of March 13, 2014 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 13, 2014).
|
|
|
|
|
|
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).
|
|
|
|
|
|
Junior Subordinated Indenture dated as of December 10, 2019, among AXIS Specialty Finance LLC, AXIS Capital Holdings Limited and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 11, 2019).
|
|
|
|
|
|
First Supplemental Indenture dated as of December 10, 2019, among AXIS Specialty Finance LLC, AXIS Capital Holdings Limited and The Bank of New York Mellon Trust Company, N.A., relating to the 4.900% Junior Subordinated Notes due 2040 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on December 11, 2019).
|
|
|
|
|
|
Form of 5.875% Senior Notes due 2020 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 23, 2010).
|
|
|
|
|
|
Form of 2.650% Senior Notes due 2019 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 13, 2014).
|
|
|
|
|
|
Form of 5.150% Senior Notes due 2045 (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on March 13, 2014).
|
|
|
|
|
|
Form of 4.000% Senior Notes due 2027 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 6, 2017).
|
|
|
|
|
|
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).
|
|
|
|
|
|
Form of 4.900% Junior Subordinated Notes due 2040 (incorporated by reference to Exhibit 4.3 [included as part of Exhibit 4.2] to the Company's Current Report on Form 8-K filed on December 11, 2019).
|
|
|
|
|
|
Certificate of Designations setting forth the specific rights, preferences, limitations and other terms of the 5.50% 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 setting forth the specific rights, preferences, limitations and other terms of the 5.50% 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).
|
|
|
|
|
†4.15
|
|
Description of AXIS Capital Holdings Limited's Securities Registered under Section 12 of the Exchange Act.
|
|
|
|
|
Amended and Restated Shareholders Agreement dated December 31, 2002, among AXIS Capital Holdings Limited and each of the persons listed on Schedule A thereto (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-1 (Amendment No. 3) (No. 333-103620) filed on June 10, 2003).
|
|
|
|
|
*10.2
|
|
Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated May 3, 2012 (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K/A filed on May 9, 2012).
|
|
|
|
*10.3
|
|
Amendment No. 1 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 5, 2013 (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on December 9, 2013).
|
|
|
|
*10.4
|
|
Amendment No. 2 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 5, 2014 (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K filed on February 23, 2015).
|
|
|
|
*10.5
|
|
Amendment No. 3 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated January 15, 2016 (incorporated by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K filed on February 25, 2016).
|
|
|
|
*10.6
|
|
Amendment No. 4 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 8, 2016 (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K filed on February 27, 2017).
|
|
|
|
*10.7
|
|
Amendment No. 5 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 7, 2017 (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K filed on February 28, 2018).
|
|
|
|
*10.8
|
|
Amendment No. 6 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated December 5, 2018 (incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K filed on February 26, 2019).
|
|
|
|
*10.9
|
|
Amendment No. 7 to Consulting Agreement by and between Michael A. Butt and AXIS Specialty Limited dated July 18, 2019 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2019).
|
|
|
|
|
Employment Agreement by and among Albert Benchimol, AXIS Capital Holdings Limited and AXIS Specialty U.S. Services, Inc. dated May 3, 2012 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed on May 9, 2012).
|
|
|
|
|
|
Amendment No. 1 to Employment Agreement dated May 3, 2012 by and among Albert Benchimol, AXIS Capital Holdings Limited and AXIS Specialty U.S. Services, Inc. effective as of March 9, 2015 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 11, 2015).
|
|
|
|
|
|
Amendment No. 2 to Employment Agreement dated May 3, 2012 by and among Albert Benchimol, AXIS Capital Holdings Limited and AXIS Specialty U.S. Services, Inc. effective as of January 19, 2016 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 25, 2016).
|
|
|
|
|
|
Amendment No. 3 to Employment Agreement dated May 3, 2012 by and among Albert Benchimol, AXIS Capital Holdings Limited, AXIS Specialty U.S. Services, Inc. and AXIS Specialty Limited effective as of January 1, 2017 (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K filed on February 27, 2017).
|
|
|
|
|
|
Amendment No. 4 to Employment Agreement dated May 3, 2012 by and among Albert Benchimol, AXIS Capital Holdings Limited, AXIS Specialty U.S. Services, Inc. and AXIS Specialty Limited effective as of December 6, 2018 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 11, 2018).
|
|
|
|
|
|
Separation Agreement by and between Christopher DiSipio and AXIS Specialty U.S. Services, Inc. dated March 14, 2018 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 9, 2018).
|
|
|
|
|
|
Employment Agreement by and between Peter W. Wilson and AXIS Specialty U.S. Services, Inc. dated June 23, 2014 (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K filed on February 23, 2015).
|
|
|
|
|
|
Amendment No. 1 to Employment Agreement by and between Peter W. Wilson and AXIS Specialty U.S. Services, Inc. dated September 21, 2016 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 27, 2016).
|
|
|
|
|
|
Amendment No. 2 to Employment Agreement by and between Peter W. Wilson and AXIS Specialty U.S. Services, Inc. dated September 19, 2019 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 24, 2019).
|
|
|
|
|
|
Employment Agreement by and between Peter Vogt and AXIS Specialty U.S. Services, Inc. dated December 11, 2017 (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed on February 28, 2018).
|
|
|
|
|
|
Employment Agreement by and between Steve K. Arora and AXIS Specialty U.S. Services, Inc. dated July 5, 2017 (incorporated by reference to Exhibit 10.20 to the Company's Annual Report on Form 10-K filed on February 26, 2019).
|
|
|
|
|
|
Letter Agreement by and between Steve K. Arora and AXIS Specialty U.S. Services, Inc. dated July 5, 2017 (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K filed on February 26, 2019).
|
|
|
|
|
|
Employment Agreement by and between David Phillips and AXIS Specialty U.S. Services, Inc. dated March 21, 2014 (incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K filed on February 26, 2019).
|
|
|
|
|
|
2007 Long-Term Equity Compensation Plan, as amended (incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 filed on May 15, 2012).
|
|
|
|
|
|
2017 Long-Term Equity Compensation Plan (incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 filed on May 8, 2017).
|
|
|
|
|
|
2013 Executive Long-Term Equity Compensation Program (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 9, 2013).
|
|
|
|
|
|
2018 Executive Long-Term Equity Compensation Program (incorporated by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K filed on February 28, 2018).
|
|
|
|
|
|
Executive Long-Term Equity Compensation Program (incorporated by reference to Exhibit 10.27 to the Company's Annual Report on form 10-K filed on February 26, 2019).
|
|
|
|
|
|
2014 Executive Annual Incentive Plan (incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K filed on February 27, 2017).
|
|
|
|
|
†*10.29
|
|
Executive Annual Incentive Plan.
|
|
|
|
|
AXIS Executive RSU Retirement Plan (incorporated by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K filed on February 27, 2017).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K filed on February 21, 2014).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (Performance Vesting) (incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K filed on February 27, 2017).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (Retirement Eligible/Performance Vesting) (incorporated by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K filed on February 27, 2017).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (Retirement Eligible) (incorporated by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K filed on February 27, 2017).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (Performance Vesting) (incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K filed on February 28, 2018).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.38 to the Company's Annual Report on Form 10-K filed on February 28, 2018).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (Performance Vesting) (incorporated by reference to Exhibit 10.36 to the Company's Annual Report on Form 10-K filed on February 26, 2019).
|
|
|
|
|
|
Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.37 to the Company's Annual Report on Form 10-K filed on February 26, 2019).
|
|
|
|
|
†*10.39
|
|
Form of Employee Restricted Stock Unit Award Agreement (Performance Vesting).
|
|
|
|
|
AXIS Specialty U.S. Services, Inc. Supplemental Retirement Plan (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K filed on February 26, 2008).
|
|
|
|
|
|
Directors Annual Compensation Program (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K filed on February 26, 2019).
|
|
|
|
|
†*10.42
|
|
Directors Annual Compensation Program.
|
|
|
|
|
Master Reimbursement Agreement, dated as of May 14, 2010, by and among AXIS Specialty Limited, AXIS Re Limited, AXIS Specialty Europe Limited, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Specialty Insurance Company, AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 19, 2010).
|
|
|
|
|
|
Amendment to Master Reimbursement Agreement dated January 27, 2012 by and among AXIS Specialty Limited, AXIS Re Limited, AXIS Specialty Europe Limited, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Specialty Insurance Company and AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 30, 2012).
|
|
|
|
|
|
Amendment to Committed Facility Letter dated November 20, 2013 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Surplus Insurance Company and AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 21, 2013).
|
|
|
|
|
|
Amendment to Committed Facility Letter dated March 31, 2015 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Reinsurance Company, AXIS Surplus Insurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 1, 2015).
|
|
|
|
|
|
Amendment to Facility Fee Letter dated March 31, 2015 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Reinsurance Company, AXIS Surplus Insurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on April 1, 2015).
|
|
|
|
|
|
Committed Facility Letter dated December 18, 2015 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Surplus Insurance Company and AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 22, 2015).
|
|
|
|
|
|
Committed Facility Letter dated March 27, 2017 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Surplus Insurance Company and AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 31, 2017).
|
|
|
|
|
|
Amendment to Master Reimbursement Agreement dated March 27, 2017 by and among AXIS Specialty Limited, AXIS Re Limited, AXIS Specialty Europe Limited, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on March 31, 2017).
|
|
|
|
|
|
Amendment to Committed Facility Letter dated March 28, 2018 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 3, 2018).
|
|
|
|
|
|
Deed of Amendment to $250 million secured letter of credit facility dated March 28, 2019 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 3, 2019).
|
|
|
|
|
|
Deed of Amendment to $500 million secured letter of credit facility dated December 24, 2019 by and among AXIS Specialty Limited, AXIS Re SE, AXIS Specialty Europe SE, AXIS Insurance Company, AXIS Surplus Insurance Company, AXIS Reinsurance Company and Citibank Europe plc (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 30, 2019).
|
|
|
|
|
†21.1
|
|
Subsidiaries of the registrant.
|
|
|
|
†23.1
|
|
Consent of Deloitte Ltd.
|
|
|
|
†24.1
|
|
Power of Attorney (included as part of signature pages hereto).
|
|
|
|
†31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
†101
|
|
The following financial information from AXIS Capital Holdings Limited’s Annual Report on Form 10-K for the year ended December 31, 2019 formatted in Inline XBRL: (i) Consolidated Balance Sheets at December 31, 2019 and 2018; (ii) Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017; (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017; (iv) Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2019, 2018 and 2017; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017; 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).
|
*
|
Exhibits 10.2 through 10.42 represent a management contract, compensatory plan or arrangement in which directors and/or executive officers are eligible to participate.
|
†
|
Filed herewith.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
|
|
|
|
|
|
|
AXIS CAPITAL HOLDINGS LIMITED
|
||||
|
|
|
|
|||
|
|
By:
|
|
/s/ ALBERT BENCHIMOL
|
|
|
|
|
|
|
Albert Benchimol
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ ALBERT BENCHIMOL
|
|
Chief Executive Officer, President and Director
(Principal Executive Officer)
|
Albert Benchimol
|
|
|
|
|
|
/s/ PETER VOGT
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Peter Vogt
|
|
|
|
|
|
/s/ KENT ZIEGLER
|
|
Global Corporate Controller
(Principal Accounting Officer)
|
Kent Ziegler
|
|
|
|
|
|
/s/ MICHAEL A. BUTT
|
|
Director
|
Michael A. Butt
|
|
|
|
|
|
/s/ CHARLES A. DAVIS
|
|
Director
|
Charles A. Davis
|
|
|
|
|
|
/s/ ANNE MELISSA DOWLING
|
|
Director
|
Anne Melissa Dowling
|
|
|
|
|
|
/s/ ROBERT L. FRIEDMAN
|
|
Director
|
Robert L. Friedman
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ CHRISTOPHER V. GREETHAM
|
|
Director
|
Christopher V. Greetham
|
|
|
|
|
|
/s/ ELANOR R. HARDWICK
|
|
Director
|
Elanor R. Hardwick
|
|
|
|
|
|
/s/ MAURICE KEANE
|
|
Director
|
Maurice Keane
|
|
|
|
|
|
/s/ THOMAS C. RAMEY
|
|
Director
|
Thomas C. Ramey
|
|
|
|
|
|
/s/ HENRY B. SMITH
|
|
Director
|
Henry B. Smith
|
|
|
|
|
|
/s/ BARBARA A. YASTINE
|
|
Director
|
Barbara A. Yastine
|
|
|
|
|
|
/s/ WILHELM ZELLER
|
|
Director
|
Wilhelm Zeller
|
|
|
|
|
|
/s/ LIZABETH H. ZLATKUS
|
|
Director
|
Lizabeth H. Zlatkus
|
|
|
|
|
At December 31, 2019
|
|
||||||||||
|
|
Amortized cost
|
|
Fair value
|
|
Amount shown on the balance sheet
|
|
||||||
|
(in thousands)
|
|
|
|
|
|
|
||||||
|
Type of investment:
|
|
|
|
|
|
|
||||||
|
Fixed maturities, available for sale, at fair value
|
|
|
|
|
|
|
||||||
|
U.S. government and agency
|
$
|
2,102,849
|
|
|
$
|
2,112,881
|
|
|
$
|
2,112,881
|
|
|
|
Non-U.S. government
|
564,505
|
|
|
576,592
|
|
|
576,592
|
|
|
|||
|
Corporate debt
|
4,797,384
|
|
|
4,930,254
|
|
|
4,930,254
|
|
|
|||
|
Agency RMBS
|
1,570,823
|
|
|
1,592,584
|
|
|
1,592,584
|
|
|
|||
|
CMBS
|
1,340,156
|
|
|
1,365,052
|
|
|
1,365,052
|
|
|
|||
|
Non-Agency RMBS
|
84,381
|
|
|
84,922
|
|
|
84,922
|
|
|
|||
|
ABS
|
1,599,867
|
|
|
1,598,693
|
|
|
1,598,693
|
|
|
|||
|
Municipals
|
203,275
|
|
|
207,227
|
|
|
207,227
|
|
|
|||
|
Total fixed maturities
|
$
|
12,263,240
|
|
|
12,468,205
|
|
|
12,468,205
|
|
|
||
|
Mortgage loans, held for investment, at fair value
|
|
|
432,748
|
|
|
432,748
|
|
|
||||
|
Short-term investments, at fair value
|
|
|
38,471
|
|
|
38,471
|
|
|
||||
|
Equity securities, at fair value
|
|
|
474,207
|
|
|
474,207
|
|
|
||||
|
Other investments, at fair value (1)
|
|
|
478,810
|
|
|
770,923
|
|
|
||||
|
Equity method investments (2)
|
|
|
—
|
|
|
117,821
|
|
|
||||
|
Total investments
|
|
|
$
|
13,892,441
|
|
|
$
|
14,302,375
|
|
|
||
|
|
|
|
|
|
|
|
(1)
|
Other investments exclude investments where the Company is considered to have the ability to exercise significant influence over the operating and financial policies of the investees.
|
(2)
|
Equity method investments are excluded as the Company has the ability to exercise significant influence over the operating and financial policies of the investees.
|
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Investments in subsidiaries
|
$
|
5,807,851
|
|
|
$
|
5,320,828
|
|
Cash and cash equivalents
|
3,103
|
|
|
3,099
|
|
||
Other assets
|
5,540
|
|
|
9,647
|
|
||
Total assets
|
$
|
5,816,494
|
|
|
$
|
5,333,574
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Intercompany payable
|
$
|
215,911
|
|
|
$
|
247,992
|
|
Dividends payable
|
50,927
|
|
|
51,157
|
|
||
Other liabilities
|
5,648
|
|
|
4,354
|
|
||
Total liabilities
|
272,486
|
|
|
303,503
|
|
||
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Preferred shares
|
775,000
|
|
|
775,000
|
|
||
Common shares (shares issued 2019: 176,580; 2018: 176,580
shares outstanding 2019: 83,959; 2018: 83,586) |
2,206
|
|
|
2,206
|
|
||
Additional paid-in capital
|
2,317,212
|
|
|
2,308,583
|
|
||
Accumulated other comprehensive income (loss)
|
171,710
|
|
|
(177,110
|
)
|
||
Retained earnings
|
6,056,686
|
|
|
5,912,812
|
|
||
Treasury shares, at cost (2019: 92,621; 2018: 92,994)
|
(3,778,806
|
)
|
|
(3,791,420
|
)
|
||
Total shareholders’ equity
|
5,544,008
|
|
|
5,030,071
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,816,494
|
|
|
$
|
5,333,574
|
|
(1)
|
AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance LLC, a 100% owned finance subsidiary, related to the issuance of $500 million aggregate principal amount of 5.875% senior unsecured notes. AXIS Capital’s obligations under this guarantee are unsecured senior obligations and rank equally with all other senior obligations of AXIS Capital.
|
(2)
|
AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance PLC, a 100% owned finance subsidiary, related to the issuance of $250 million aggregate principal amount of 5.15% senior unsecured notes. AXIS Capital's obligations under this guarantee are unsecured senior obligations and rank equally with all other senior obligations of AXIS Capital.
|
(3)
|
AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance PLC, a 100% owned finance subsidiary, related to the issuance of $350 million aggregate principal amount of 4.0% senior unsecured notes. AXIS Capital's obligations under this guarantee are unsecured senior obligations and rank equally with all other senior obligations of AXIS Capital.
|
(4)
|
On February 15, 2018, AXIS Capital contributed $105 million to AXIS Specialty Global Holdings Limited to support the capital requirements of its U.S. subsidiaries.
|
(5)
|
AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance LLC, a 100% owned finance subsidiary, related to the issuance of $300 million aggregate principal amount of 3.9% senior unsecured notes. AXIS Capital's obligations under this guarantee are unsecured senior obligations and rank equally with all other senior obligations of AXIS Capital.
|
(6)
|
AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance LLC, a 100% owned finance subsidiary, related to the issuance of $425 million aggregate principal amount of 4.9% fixed-rate reset junior unsecured notes. AXIS Capital's obligation under this guarantee is an unsecured junior subordinated obligation and ranks equally with all future unsecured and junior subordinated obligations of AXIS Capital, and junior in right of payment to all outstanding and future senior obligations of AXIS Capital.
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Net investment income (1)
|
$
|
1,800
|
|
|
$
|
900
|
|
|
$
|
2,116
|
|
Total revenues
|
1,800
|
|
|
900
|
|
|
2,116
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
General and administrative expenses
|
53,335
|
|
|
29,250
|
|
|
34,933
|
|
|||
Total expenses
|
53,335
|
|
|
29,250
|
|
|
34,933
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) before equity in net income (loss) of subsidiaries
|
(51,535
|
)
|
|
(28,350
|
)
|
|
(32,817
|
)
|
|||
Equity in net income (loss) of subsidiaries
|
375,008
|
|
|
71,371
|
|
|
(336,152
|
)
|
|||
Net income (loss)
|
323,473
|
|
|
43,021
|
|
|
(368,969
|
)
|
|||
Preferred share dividends
|
41,112
|
|
|
42,625
|
|
|
46,810
|
|
|||
Net income (loss) available (attributable) to common shareholders
|
$
|
282,361
|
|
|
$
|
396
|
|
|
$
|
(415,779
|
)
|
|
|
|
|
|
|
||||||
Comprehensive income (loss)
|
$
|
672,293
|
|
|
$
|
(158,973
|
)
|
|
$
|
(154,746
|
)
|
(1)
|
On April 15, 2017 a promissory note of $368 million advanced by AXIS Capital Holdings Limited to AXIS Specialty Limited on November 7, 2016, matured. For the year ended December 31, 2017, interest earned at an annual rate of 1.132% and was recorded in net investment income.
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
323,473
|
|
|
$
|
43,021
|
|
|
$
|
(368,969
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in net income (loss) of subsidiaries
|
(375,008
|
)
|
|
(71,371
|
)
|
|
336,152
|
|
|||
Change in intercompany payable
|
(32,081
|
)
|
|
87,042
|
|
|
94,827
|
|
|||
Dividends received from subsidiaries
|
250,000
|
|
|
200,000
|
|
|
400,000
|
|
|||
Other items
|
23,619
|
|
|
(79,927
|
)
|
|
4,988
|
|
|||
Net cash provided by operating activities
|
190,003
|
|
|
178,765
|
|
|
466,998
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital returned by subsidiary
|
—
|
|
|
—
|
|
|
368,252
|
|
|||
Net cash provided by investing activities
|
—
|
|
|
—
|
|
|
368,252
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Repurchase of common shares - open market
|
—
|
|
|
—
|
|
|
(261,180
|
)
|
|||
Taxes paid on withholding shares
|
(10,165
|
)
|
|
(10,080
|
)
|
|
(24,678
|
)
|
|||
Dividends paid - common shares
|
(137,209
|
)
|
|
(133,502
|
)
|
|
(135,032
|
)
|
|||
Repurchase of preferred shares
|
—
|
|
|
—
|
|
|
(351,074
|
)
|
|||
Dividends paid - preferred shares
|
(42,625
|
)
|
|
(42,625
|
)
|
|
(52,844
|
)
|
|||
Net cash used in financing activities
|
(189,999
|
)
|
|
(186,207
|
)
|
|
(824,808
|
)
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
4
|
|
|
(7,442
|
)
|
|
10,442
|
|
|||
Cash, cash equivalents and restricted cash - beginning of year
|
3,099
|
|
|
10,541
|
|
|
99
|
|
|||
Cash, cash equivalents and restricted cash - end of year
|
$
|
3,103
|
|
|
$
|
3,099
|
|
|
$
|
10,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2019
|
||||||||||||||||||||||||||||||||||
(in thousands)
|
|
Deferred
acquisition
costs
|
|
Reserve
for losses
and loss
expenses
|
|
Unearned
premiums
|
|
Net
premiums
earned
|
|
Net
investment
income(1)
|
|
Net losses
and loss
expenses
|
|
Acquisition
costs
|
|
Other
operating
expenses(2)
|
|
Net
premiums
written
|
||||||||||||||||||
Insurance
|
|
$
|
191,925
|
|
|
$
|
6,496,568
|
|
|
$
|
2,115,664
|
|
|
$
|
2,190,084
|
|
|
$
|
—
|
|
|
$
|
1,278,679
|
|
|
$
|
468,281
|
|
|
$
|
401,963
|
|
|
$
|
2,209,155
|
|
Reinsurance
|
|
300,194
|
|
|
6,255,513
|
|
|
1,510,582
|
|
|
2,397,094
|
|
|
—
|
|
|
1,766,119
|
|
|
556,301
|
|
|
103,772
|
|
|
2,280,460
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
478,572
|
|
|
—
|
|
|
—
|
|
|
129,096
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
492,119
|
|
|
$
|
12,752,081
|
|
|
$
|
3,626,246
|
|
|
$
|
4,587,178
|
|
|
$
|
478,572
|
|
|
$
|
3,044,798
|
|
|
$
|
1,024,582
|
|
|
$
|
634,831
|
|
|
$
|
4,489,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2018
|
||||||||||||||||||||||||||||||||||
(in thousands)
|
|
Deferred
acquisition
costs
|
|
Reserve
for losses
and loss
expenses
|
|
Unearned
premiums
|
|
Net
premiums
earned
|
|
Net
investment
income(1)
|
|
Net losses
and loss
expenses
|
|
Acquisition
costs
|
|
Other
operating
expenses(2)
|
|
Net
premiums
written
|
||||||||||||||||||
Insurance
|
|
$
|
209,622
|
|
|
$
|
6,426,309
|
|
|
$
|
2,061,123
|
|
|
$
|
2,362,606
|
|
|
$
|
—
|
|
|
$
|
1,494,323
|
|
|
$
|
399,193
|
|
|
$
|
395,252
|
|
|
$
|
2,324,747
|
|
Reinsurance
|
|
357,000
|
|
|
5,854,460
|
|
|
1,574,635
|
|
|
2,428,889
|
|
|
—
|
|
|
1,695,964
|
|
|
569,642
|
|
|
123,916
|
|
|
2,334,215
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
438,507
|
|
|
—
|
|
|
—
|
|
|
108,221
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
566,622
|
|
|
$
|
12,280,769
|
|
|
$
|
3,635,758
|
|
|
$
|
4,791,495
|
|
|
$
|
438,507
|
|
|
$
|
3,190,287
|
|
|
$
|
968,835
|
|
|
$
|
627,389
|
|
|
$
|
4,658,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
At and year ended December 31, 2017
|
||||||||||||||||||||||||||||||||||
(in thousands)
|
|
Deferred
acquisition
costs
|
|
Reserve
for losses
and loss
expenses
|
|
Unearned
premiums
|
|
Net
premiums
earned
|
|
Net
investment
income(1)
|
|
Net losses
and loss
expenses
|
|
Acquisition
costs
|
|
Other
operating
expenses(2)
|
|
Net
premiums
written
|
||||||||||||||||||
Insurance
|
|
$
|
115,332
|
|
|
$
|
7,011,805
|
|
|
$
|
2,053,422
|
|
|
$
|
1,816,438
|
|
|
$
|
—
|
|
|
$
|
1,465,427
|
|
|
$
|
270,229
|
|
|
$
|
325,368
|
|
|
$
|
1,775,825
|
|
Reinsurance
|
|
358,729
|
|
|
5,985,748
|
|
|
1,587,977
|
|
|
2,332,322
|
|
|
—
|
|
|
1,822,345
|
|
|
553,362
|
|
|
124,115
|
|
|
2,251,318
|
|
|||||||||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,805
|
|
|
—
|
|
|
—
|
|
|
129,945
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
474,061
|
|
|
$
|
12,997,553
|
|
|
$
|
3,641,399
|
|
|
$
|
4,148,760
|
|
|
$
|
400,805
|
|
|
$
|
3,287,772
|
|
|
$
|
823,591
|
|
|
$
|
579,428
|
|
|
$
|
4,027,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company evaluates underwriting results of its reportable segments separately from the performance of its investment portfolio therefore, the Company believes it is appropriate to exclude net investment income from its underwriting profitability measure.
|
(2)
|
Amounts related to the Company's reportable segments reflect underwriting-related general and administrative expenses, which includes those general and administrative expenses that are incremental and/or directly attributable to the Company's underwriting operations. 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 general and administrative expenses, the most comparable GAAP financial measure, presented in the table above, also included corporate expenses of $129 million, $108 million and $130 million for the years ended December 31, 2019, 2018 and 2017, respectively. Corporate expenses include holding company costs necessary to support our worldwide insurance and reinsurance operations and costs associated with operating as a publicly-traded company. As these costs are not incremental and/or directly attributable to the Company's underwriting operations, these expenses are excluded from underwriting-related general and administrative expenses.
|
|
(in thousands)
|
|
GROSS
AMOUNT
|
|
CEDED TO
OTHER
COMPANIES
|
|
ASSUMED
FROM
OTHER
COMPANIES
|
|
NET
AMOUNT
|
|
PERCENTAGE
OF AMOUNT
ASSUMED TO
NET
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
3,134,462
|
|
|
$
|
2,311,001
|
|
|
$
|
3,187,623
|
|
|
$
|
4,011,084
|
|
|
79.5
|
%
|
|
|
Accident and Health
|
|
141,535
|
|
|
98,242
|
|
|
435,238
|
|
|
478,531
|
|
|
91.0
|
%
|
|
||||
|
Total
|
|
$
|
3,275,997
|
|
|
$
|
2,409,243
|
|
|
$
|
3,622,861
|
|
|
$
|
4,489,615
|
|
|
80.7
|
%
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
3,258,999
|
|
|
$
|
2,163,417
|
|
|
$
|
3,074,906
|
|
|
$
|
4,170,488
|
|
|
73.7
|
%
|
|
|
Accident and Health
|
|
209,041
|
|
|
87,686
|
|
|
367,119
|
|
|
488,474
|
|
|
75.2
|
%
|
|
||||
|
Total
|
|
$
|
3,468,040
|
|
|
$
|
2,251,103
|
|
|
$
|
3,442,025
|
|
|
$
|
4,658,962
|
|
|
73.9
|
%
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Property and Casualty
|
|
$
|
2,228,022
|
|
|
$
|
1,523,662
|
|
|
$
|
2,814,173
|
|
|
$
|
3,518,533
|
|
|
80.0
|
%
|
|
|
Accident and Health
|
|
195,104
|
|
|
5,468
|
|
|
318,974
|
|
|
508,610
|
|
|
62.7
|
%
|
|
||||
|
Total
|
|
$
|
2,423,126
|
|
|
$
|
1,529,130
|
|
|
$
|
3,133,147
|
|
|
$
|
4,027,143
|
|
|
77.8
|
%
|
|
|
•
|
|
no dividend shall be paid or declared on our common shares or any other shares of our junior stock, other than a dividend payable solely in our common shares or other junior stock; and
|
|
•
|
|
no common shares or other junior stock shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (1) as a result of a reclassification of junior stock for or into other junior stock or the exchange or conversion of one share of junior stock for or into another share of junior stock, (2) through the use of the proceeds of a substantially contemporaneous sale of junior stock) or (3) as required by or necessary to fulfill the terms of any employment contract, benefit plan or similar arrangement with or for the benefit of one or more employees, directors or consultants.
|
|
•
|
|
the redemption date;
|
|
•
|
|
the number of Series E Preferred Shares to be redeemed (and the corresponding number of depositary shares) and, if less than all the Series E Preferred Shares held by such holder are to be redeemed, the number of such Series E Preferred Shares to be redeemed from such holder;
|
|
•
|
|
the redemption price or methodology for determining the redemption price; and
|
|
•
|
|
the place or places where holders may surrender certificates evidencing the depositary shares representing interests in the Series E Preferred Shares for payment of the redemption price.
|
|
•
|
|
all outstanding depositary shares have been redeemed; or
|
|
•
|
|
there has been made a final distribution in respect of the Series E Preferred Shares in connection with our liquidation, dissolution or winding-up, and such distribution has been distributed to the holders of depositary shares.
|
|
•
|
|
no dividend could have been paid or declared on our common shares or any other shares of our junior stock, other than a dividend payable solely in our common shares or other junior stock; and
|
|
•
|
|
no common shares or other junior stock could have been purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (1) as a result of a reclassification of junior stock for or into other junior stock or the exchange or conversion of one share of junior stock for or into another share of junior stock, (2) through the use of the proceeds of a substantially contemporaneous sale of junior stock or (3) as required by or necessary to fulfill the terms of any employment contract, benefit plan or similar arrangement with or for the benefit of one or more employees, directors or consultants).
|
|
•
|
|
the redemption date;
|
|
•
|
|
the number of Series D Preferred Shares to be redeemed and, if less than all the Series D Preferred Shares held by such holder were to be redeemed, the number of such Series D Preferred Shares to be redeemed from such holder;
|
|
•
|
|
the redemption price or the methodology for determining the redemption price; and
|
|
•
|
|
the place or places where holders could surrender certificates evidencing the Series D Preferred Shares for payment of the redemption price.
|
1.
|
Eligibility. Any Executive Committee Member who is employed by the Company or one of its subsidiaries shall be entitled to an annual allocation from the bonus pool (as defined in Section 2) and shall be a “Participant” in the Plan from and after January 1, 2014.
|
2.
|
Target Incentive Allocation. Each Participant’s annual “Target Allocation” shall be based on the Participant’s base salary multiplied by their annual incentive target percentage, as set forth in their respective employment agreement, offer letter or other written document. This Target Allocation will then be adjusted as described in Section 3 below.
|
3.
|
Adjustment to Target Incentive Allocation. The “Adjustment to Target Incentive Allocation,” represents an adjustment to the Target Incentive Allocation in order to determine the final payment and is based on (i) the Company’s satisfaction of a performance target linked to the Company’s annual operating return on average common equity, as established each year by the Compensation Committee of the Company’s Board of Directors (the “Committee”), (ii) the achievement by the Participant of individualized, non-financial performance metrics as determined annually by the Chief Executive Officer or Compensation Committee (in the case of the Chief Executive Officer), and (iii) for Business Unit leaders, the Business Unit’s performance as compared to pre-established metrics. In determining the Adjustment to Target Incentive Allocation, the metrics as described above are weighted based on the Participant’s role as a CEO, Business Unit leader or corporate function leader as determined by the Compensation Committee from time to time.
|
4.
|
Payment. Each Participant’s final payment shall be paid in the calendar year following the applicable fiscal performance year of the Company, after the amount has been determined by the Committee. If a Participant’s employment with the Company and its subsidiaries terminates prior to the payment date for any reason, such Participant’s eligibility under the Plan shall cease and the final payment shall be forfeited as of the termination date and the
|
5.
|
Clawback. Any incentive compensation award hereunder is subject to recoupment, at the Committee’s discretion, under the Company’s executive compensation recoupment, or “clawback,” policy.
|
6.
|
Interpretation of Plan. The Committee shall have the authority to administer the Plan, to conclusively make all determinations under the Plan and to interpret the Plan. Any such determinations or interpretations made by the Committee shall be binding on all persons.
|
7.
|
Governing Law. The Plan shall be governed by the laws of Bermuda.
|
8.
|
No Guarantee of Continued Employment. Nothing in the Plan shall interfere with, or limit in any way, the right of the Company or any of its subsidiaries to terminate any employee’s employment at any time, nor shall it confer upon any Participant any right to continue in the employ of the Company or any of its subsidiaries. For purposes of the Plan, temporary absence from employment because of illness, vacation, approved leaves of absence and transfers of employment among the Company and its subsidiaries shall not be considered to terminate an employee’s employment.
|
9.
|
Successors. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger, consolidation, purchase of all or substantially all of the business and/or assets of the Company or otherwise.
|
10.
|
Amendment and Termination. This Plan may be amended or terminated at any time by the Committee.
|
Performance Level
|
Relative TSR Percentile
|
Performance Multiplier
|
Maximum
|
80th or above
|
125%
|
Target
|
55th
|
100%
|
Threshold
|
30th or below
|
75%
|
Board Retainers
|
|
$ Annual Retainer
|
Director
|
|
200,000
|
Lead Independent Director
|
|
15,000
|
Non-Employee (Non-Executive) Chair
|
|
150,000
|
Committee Retainers
|
|
$ Annual Retainer
|
Corporate Governance and Nominating Committee
|
|
7,500
|
Finance Committee
|
|
10,000
|
Compensation Committee
|
|
10,000
|
Risk Committee
|
|
10,000
|
Audit Committee
|
|
15,000
|
Committee Chair Retainers
|
|
$ Annual Retainer
|
Corporate Governance and Nominating Committee
|
|
7,500
|
Finance Committee
|
|
10,000
|
Compensation Committee
|
|
15,000
|
Risk Committee
|
|
20,000
|
Audit Committee
|
|
30,000
|
Board Retainers(s)
|
||
Form of Payment
|
Date of Payment
|
|
Equity
(AXS Common Shares)
|
Cash
|
|
$100k to be paid in AXIS common shares
|
AXIS common shares to be issued annually on the tenth trading day of January1
|
N/A
|
$100k to be paid in accordance with director’s election to receive cash/equity
|
AXIS common shares to be issued annually on the tenth trading day of January1
|
Cash to be paid semi-annually in arrears in two payments no later than the tenth business day of July and the following January
|
Additional retainers for Lead Independent Chair and Non-Employee Chair, as applicable, to be paid in accordance with director’s election to receive cash/equity
|
AXIS common shares to be issued annually on the tenth trading day of January1
|
Cash to be paid semi-annually in arrears in two payments no later than the tenth business day of July and the following January
|
Committee Retainer(s)
|
||
Form of Payment
|
Date of Payment
|
|
Equity
(AXS Common Shares)
|
Cash
|
|
Committee Retainer(s) to be paid in accordance with director’s election to receive cash/equity
|
AXIS common shares to be issued annually on the tenth trading day of January1
|
Cash to be paid semi-annually in arrears in two payments no later than the tenth business day of July and the following January
|
|
|
|
Subsidiaries
|
|
Jurisdiction of Incorporation
|
AXIS Specialty Holdings Bermuda Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Investments Limited
|
Bermuda
|
|
|
|
|
AXIS Specialty Investments II Limited
|
Bermuda
|
|
|
|
|
AXIS Ventures Limited
|
Bermuda
|
|
|
|
|
AXIS Ventures Reinsurance Limited
|
Bermuda
|
|
|
|
|
AXIS Reinsurance Managers Limited
|
Bermuda
|
|
|
|
|
AXIS Re SE
|
Ireland
|
|
|
|
|
AXIS Specialty Europe SE
|
Ireland
|
|
|
|
|
AXIS Specialty Global Holdings Limited
|
Ireland
|
|
|
|
|
AXIS Specialty Holdings Ireland Limited
|
Ireland
|
|
|
|
|
Ternian Insurance Group LLC
|
Arizona
|
|
|
|
|
AXIS Specialty Insurance Company
|
Connecticut
|
|
|
|
|
AXIS Group Services, Inc.
|
Delaware
|
|
|
|
|
AXIS Specialty Finance LLC
|
Delaware
|
|
|
|
|
AXIS Specialty U.S. Holdings, Inc.
|
Delaware
|
|
|
|
|
AXIS Specialty U.S. Services, Inc.
|
Delaware
|
|
|
|
|
AXIS Specialty Underwriters, Inc.
|
Delaware
|
|
|
|
|
AXIS Insurance Company
|
Illinois
|
|
|
|
|
AXIS Surplus Insurance Company
|
Illinois
|
|
|
|
|
AXIS Reinsurance Company
|
New York
|
|
|
|
|
AXIS Managing Agency Ltd.
|
United Kingdom
|
|
|
|
|
AXIS Specialty Finance PLC
|
United Kingdom
|
|
|
|
|
AXIS Specialty UK Holdings Limited
|
United Kingdom
|
|
|
|
AXIS Corporate Capital UK Limited
|
United Kingdom
|
|
|
|
|
AXIS Corporate Capital UK II Limited
|
United Kingdom
|
|
|
|
|
Novae Group Limited
|
United Kingdom
|
|
|
|
|
AXIS UK Services Limited
|
United Kingdom
|
|
|
|
|
Novae Holdings Limited
|
United Kingdom
|
|
|
|
|
Novae Syndicates Limited
|
United Kingdom
|
|
|
|
|
AXIS Underwriting Limited
|
United Kingdom
|
|
|
|
|
Contessa Limited
|
United Kingdom
|
|
|
|
|
AXIS Re SE Escritório de Representação No Brasil Ltda.
|
Brazil
|
|
|
|
|
AXIS Specialty Canada Services, ULC
|
British Columbia
|
|
|
|
|
AXIS Reinsurance (DIFC) Limited
|
Dubai
|
|
/s/ Deloitte Ltd.
|
Hamilton, Bermuda
|
February 27, 2020
|
1.
|
I have reviewed this Annual Report on Form 10-K of AXIS Capital Holdings Limited for the year ended December 31, 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:
|
February 27, 2020
|
Albert Benchimol
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of AXIS Capital Holdings Limited for the year ended December 31, 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:
|
February 27, 2020
|
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:
|
February 27, 2020
|
/s/ ALBERT BENCHIMOL
|
|
|
Albert Benchimol
|
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 27, 2020
|
/s/ PETER VOGT
|
|
|
Peter Vogt
|
|
|
Chief Financial Officer
|