x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the quarterly period ended March 31, 2018
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the transition period from to
|
CAYMAN ISLANDS
|
N/A
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. employer identification no.)
|
65 MARKET STREET
SUITE 1207, CAMANA BAY
P.O. BOX 31110
GRAND CAYMAN
CAYMAN ISLANDS
|
KY1-1205
|
(Address of principal executive offices)
|
(Zip code)
|
Class A Ordinary Shares, $0.10 par value
|
31,283,898
|
Class B Ordinary Shares, $0.10 par value
|
6,254,715
|
(Class)
|
Outstanding as of April 27, 2018
|
|
|
Page
|
|
Condensed Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017
|
|
|
Condensed Consolidated Statements of Income for the three months ended March 31, 2018 and 2017 (unaudited)
|
|
|
Condensed Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2018 and 2017 (unaudited)
|
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)
|
|
|
Notes to the Condensed Consolidated Financial Statements (unaudited)
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(unaudited)
|
|
(audited)
|
||||
Assets
|
|
|
|
||||
Investments
|
|
|
|
||||
Debt instruments, trading, at fair value
|
$
|
19,350
|
|
|
$
|
7,180
|
|
Equity securities, trading, at fair value
|
955,255
|
|
|
1,203,672
|
|
||
Other investments, at fair value
|
70,127
|
|
|
152,132
|
|
||
Total investments
|
1,044,732
|
|
|
1,362,984
|
|
||
Cash and cash equivalents
|
37,454
|
|
|
27,285
|
|
||
Restricted cash and cash equivalents
|
1,254,055
|
|
|
1,503,813
|
|
||
Financial contracts receivable, at fair value
|
54,131
|
|
|
12,893
|
|
||
Reinsurance balances receivable
|
326,256
|
|
|
301,762
|
|
||
Loss and loss adjustment expenses recoverable
|
39,482
|
|
|
29,459
|
|
||
Deferred acquisition costs, net
|
60,263
|
|
|
62,350
|
|
||
Unearned premiums ceded
|
25,450
|
|
|
25,120
|
|
||
Notes receivable, net
|
31,008
|
|
|
28,497
|
|
||
Other assets
|
3,818
|
|
|
3,230
|
|
||
Total assets
|
$
|
2,876,649
|
|
|
$
|
3,357,393
|
|
Liabilities and equity
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Securities sold, not yet purchased, at fair value
|
$
|
676,938
|
|
|
$
|
912,797
|
|
Financial contracts payable, at fair value
|
15,397
|
|
|
22,222
|
|
||
Due to prime brokers and other financial institutions
|
574,800
|
|
|
672,700
|
|
||
Loss and loss adjustment expense reserves
|
484,599
|
|
|
464,380
|
|
||
Unearned premium reserves
|
255,758
|
|
|
255,818
|
|
||
Reinsurance balances payable
|
139,112
|
|
|
144,058
|
|
||
Funds withheld
|
15,610
|
|
|
23,579
|
|
||
Other liabilities
|
6,814
|
|
|
10,413
|
|
||
Total liabilities
|
2,169,028
|
|
|
2,505,967
|
|
||
|
|
|
|
||||
Redeemable non-controlling interest in related party joint venture
|
6,705
|
|
|
7,169
|
|
||
Equity
|
|
|
|
||||
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)
|
—
|
|
|
—
|
|
||
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 31,295,933 (2017: 31,104,830): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,715 (2017: 6,254,715))
|
3,755
|
|
|
3,736
|
|
||
Additional paid-in capital
|
504,570
|
|
|
503,316
|
|
||
Retained earnings
|
181,520
|
|
|
324,272
|
|
||
Shareholders’ equity attributable to shareholders
|
689,845
|
|
|
831,324
|
|
||
Non-controlling interest in related party joint venture
|
11,071
|
|
|
12,933
|
|
||
Total equity
|
700,916
|
|
|
844,257
|
|
||
Total liabilities, redeemable non-controlling interest and equity
|
$
|
2,876,649
|
|
|
$
|
3,357,393
|
|
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
Revenues
|
|
|
|
||||
Gross premiums written
|
$
|
175,125
|
|
|
$
|
197,214
|
|
Gross premiums ceded
|
(29,843
|
)
|
|
(3,426
|
)
|
||
Net premiums written
|
145,282
|
|
|
193,788
|
|
||
Change in net unearned premium reserves
|
562
|
|
|
(41,886
|
)
|
||
Net premiums earned
|
145,844
|
|
|
151,902
|
|
||
Net investment income (loss) [net of related party expenses of $4,454 and $5,497]
|
(145,216
|
)
|
|
11,618
|
|
||
Other income (expense), net
|
(487
|
)
|
|
(7
|
)
|
||
Total revenues
|
141
|
|
|
163,513
|
|
||
Expenses
|
|
|
|
||||
Loss and loss adjustment expenses incurred, net
|
95,824
|
|
|
104,812
|
|
||
Acquisition costs, net
|
44,209
|
|
|
43,211
|
|
||
General and administrative expenses
|
5,956
|
|
|
6,743
|
|
||
Total expenses
|
145,989
|
|
|
154,766
|
|
||
Income (loss) before income tax
|
(145,848
|
)
|
|
8,747
|
|
||
Income tax (expense) benefit
|
770
|
|
|
(121
|
)
|
||
Net income (loss) including non-controlling interest
|
(145,078
|
)
|
|
8,626
|
|
||
Loss (income) attributable to non-controlling interest in related party joint venture
|
2,326
|
|
|
(252
|
)
|
||
Net income (loss)
|
$
|
(142,752
|
)
|
|
$
|
8,374
|
|
Earnings (loss) per share
|
|
|
|
||||
Basic
|
$
|
(3.85
|
)
|
|
$
|
0.22
|
|
Diluted
|
$
|
(3.85
|
)
|
|
$
|
0.22
|
|
Weighted average number of ordinary shares used in the determination of earnings and loss per share
|
|
|
|
||||
Basic
|
37,087,169
|
|
|
37,341,338
|
|
||
Diluted
|
37,087,169
|
|
|
37,376,649
|
|
|
Ordinary share capital
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Shareholders' equity attributable to shareholders
|
|
Non-controlling
interest in joint venture |
|
Total equity
|
||||||||||||
Balance at December 31, 2016
|
$
|
3,737
|
|
|
$
|
500,337
|
|
|
$
|
370,168
|
|
|
$
|
874,242
|
|
|
$
|
11,561
|
|
|
$
|
885,803
|
|
Issue of Class A ordinary shares, net of forfeitures
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Share-based compensation expense, net of forfeitures
|
—
|
|
|
843
|
|
|
—
|
|
|
843
|
|
|
—
|
|
|
843
|
|
||||||
Change in non-controlling interest in related party joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
328
|
|
|
328
|
|
||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
8,374
|
|
|
8,374
|
|
|
—
|
|
|
8,374
|
|
||||||
Balance at March 31, 2017
|
$
|
3,744
|
|
|
$
|
501,180
|
|
|
$
|
378,542
|
|
|
$
|
883,466
|
|
|
$
|
11,889
|
|
|
$
|
895,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2017
|
$
|
3,736
|
|
|
$
|
503,316
|
|
|
$
|
324,272
|
|
|
$
|
831,324
|
|
|
$
|
12,933
|
|
|
$
|
844,257
|
|
Issue of Class A ordinary shares, net of forfeitures
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||||
Share-based compensation expense, net of forfeitures
|
—
|
|
|
1,254
|
|
|
—
|
|
|
1,254
|
|
|
—
|
|
|
1,254
|
|
||||||
Change in non-controlling interest in related party joint venture
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,862
|
)
|
|
(1,862
|
)
|
||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
(142,752
|
)
|
|
(142,752
|
)
|
|
—
|
|
|
(142,752
|
)
|
||||||
Balance at March 31, 2018
|
$
|
3,755
|
|
|
$
|
504,570
|
|
|
$
|
181,520
|
|
|
$
|
689,845
|
|
|
$
|
11,071
|
|
|
$
|
700,916
|
|
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
Cash provided by (used in) operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(142,752
|
)
|
|
$
|
8,374
|
|
Adjustments to reconcile net income or loss to net cash provided by (used in) operating activities
|
|
|
|
||||
Net change in unrealized gains and losses on investments and financial contracts
|
3,695
|
|
|
23,378
|
|
||
Net realized (gains) losses on investments and financial contracts
|
140,255
|
|
|
(48,967
|
)
|
||
Foreign exchange (gains) losses on investments
|
387
|
|
|
6,480
|
|
||
Income (loss) attributable to total non-controlling interest in related party joint venture
|
(2,326
|
)
|
|
252
|
|
||
Share-based compensation expense, net of forfeitures
|
1,273
|
|
|
850
|
|
||
Depreciation expense
|
92
|
|
|
92
|
|
||
Net change in
|
|
|
|
||||
Reinsurance balances receivable
|
(24,494
|
)
|
|
(49,321
|
)
|
||
Loss and loss adjustment expenses recoverable
|
(10,023
|
)
|
|
122
|
|
||
Deferred acquisition costs, net
|
2,087
|
|
|
(12,448
|
)
|
||
Unearned premiums ceded
|
(330
|
)
|
|
(778
|
)
|
||
Other assets
|
(680
|
)
|
|
494
|
|
||
Loss and loss adjustment expense reserves
|
20,219
|
|
|
33,389
|
|
||
Unearned premium reserves
|
(60
|
)
|
|
42,741
|
|
||
Reinsurance balances payable
|
(4,946
|
)
|
|
10,834
|
|
||
Funds withheld
|
(7,969
|
)
|
|
(351
|
)
|
||
Other liabilities
|
(3,599
|
)
|
|
(888
|
)
|
||
Performance compensation payable to related party
|
—
|
|
|
1,189
|
|
||
Net cash provided by (used in) operating activities
|
(29,171
|
)
|
|
15,442
|
|
||
Investing activities
|
|
|
|
||||
Purchases of investments, trading
|
(167,809
|
)
|
|
(365,970
|
)
|
||
Sales of investments, trading
|
431,737
|
|
|
239,048
|
|
||
Payments for financial contracts
|
(85,146
|
)
|
|
(10,538
|
)
|
||
Proceeds from financial contracts
|
18,665
|
|
|
47,295
|
|
||
Securities sold, not yet purchased
|
139,683
|
|
|
323,273
|
|
||
Dispositions of securities sold, not yet purchased
|
(448,376
|
)
|
|
(345,313
|
)
|
||
Change in due to prime brokers and other financial institutions
|
(97,900
|
)
|
|
238,968
|
|
||
Change in notes receivable, net
|
(2,511
|
)
|
|
(1,502
|
)
|
||
Net cash provided by (used in) investing activities
|
(211,657
|
)
|
|
125,261
|
|
||
Financing activities
|
|
|
|
||||
Net cash provided by (used in) financing activities
|
—
|
|
|
—
|
|
||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
|
1,239
|
|
|
(1,192
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(239,589
|
)
|
|
139,511
|
|
||
Cash, cash equivalents and restricted cash at beginning of the period (see Note 2)
|
1,531,098
|
|
|
1,242,509
|
|
||
Cash, cash equivalents and restricted cash at end of the period (see Note 2)
|
$
|
1,291,509
|
|
|
$
|
1,382,020
|
|
Supplementary information
|
|
|
|
||||
Interest paid in cash
|
$
|
3,867
|
|
|
$
|
1,883
|
|
Income tax paid in cash
|
—
|
|
|
—
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
($ in thousands)
|
||||||
Cash and cash equivalents
|
$
|
37,454
|
|
|
$
|
27,285
|
|
Restricted cash and cash equivalents
|
1,254,055
|
|
|
1,503,813
|
|
||
Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows
|
$
|
1,291,509
|
|
|
$
|
1,531,098
|
|
|
Three months ended March 31
|
||||
|
2018
|
|
2017
|
||
Weighted average shares outstanding - basic
|
37,087,169
|
|
|
37,341,338
|
|
Effect of dilutive employee and director share-based awards
|
—
|
|
|
35,311
|
|
Weighted average shares outstanding - diluted
|
37,087,169
|
|
|
37,376,649
|
|
Anti-dilutive stock options outstanding
|
1,015,627
|
|
|
335,991
|
|
Participating securities excluded from calculation of loss per share
|
460,155
|
|
|
—
|
|
|
|
Fair value measurements as of March 31, 2018
|
||||||||||||||
Description
|
|
Quoted prices in
active markets (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
|
Total
|
||||||||
|
|
($ in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Debt instruments
|
|
$
|
—
|
|
|
$
|
18,465
|
|
|
$
|
885
|
|
|
$
|
19,350
|
|
Listed equity securities
|
|
943,121
|
|
|
12,134
|
|
|
—
|
|
|
955,255
|
|
||||
Commodities
|
|
38,382
|
|
|
—
|
|
|
—
|
|
|
38,382
|
|
||||
Private and unlisted equity securities
|
|
—
|
|
|
—
|
|
|
6,135
|
|
|
6,135
|
|
||||
|
|
$
|
981,503
|
|
|
$
|
30,599
|
|
|
$
|
7,020
|
|
|
$
|
1,019,122
|
|
Unlisted equity funds measured at net asset value
(1)
|
|
|
|
|
|
|
|
25,610
|
|
|||||||
Total investments
|
|
|
|
|
|
|
|
$
|
1,044,732
|
|
||||||
Financial contracts receivable
|
|
$
|
1,074
|
|
|
$
|
53,057
|
|
|
$
|
—
|
|
|
$
|
54,131
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Listed equity securities, sold not yet purchased
|
|
$
|
(567,950
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(567,950
|
)
|
Debt instruments, sold not yet purchased
|
|
—
|
|
|
(108,988
|
)
|
|
—
|
|
|
(108,988
|
)
|
||||
Total securities sold, not yet purchased
|
|
$
|
(567,950
|
)
|
|
$
|
(108,988
|
)
|
|
$
|
—
|
|
|
$
|
(676,938
|
)
|
Financial contracts payable
|
|
$
|
—
|
|
|
$
|
(15,397
|
)
|
|
$
|
—
|
|
|
$
|
(15,397
|
)
|
|
|
Fair value measurements as of December 31, 2017
|
||||||||||||||
Description
|
|
Quoted prices in
active markets (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
|
Total
|
||||||||
|
|
($ in thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Debt instruments
|
|
$
|
—
|
|
|
$
|
6,300
|
|
|
$
|
880
|
|
|
$
|
7,180
|
|
Listed equity securities
|
|
1,181,150
|
|
|
22,522
|
|
|
—
|
|
|
1,203,672
|
|
||||
Commodities
|
|
121,502
|
|
|
—
|
|
|
—
|
|
|
121,502
|
|
||||
Private and unlisted equity securities
|
|
—
|
|
|
—
|
|
|
6,108
|
|
|
6,108
|
|
||||
|
|
$
|
1,302,652
|
|
|
$
|
28,822
|
|
|
$
|
6,988
|
|
|
$
|
1,338,462
|
|
Unlisted equity funds measured at net asset value
(1)
|
|
|
|
|
|
|
|
24,522
|
|
|||||||
Total investments
|
|
|
|
|
|
|
|
$
|
1,362,984
|
|
||||||
Financial contracts receivable
|
|
$
|
22
|
|
|
$
|
12,871
|
|
|
$
|
—
|
|
|
$
|
12,893
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Listed equity securities, sold not yet purchased
|
|
$
|
(812,652
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(812,652
|
)
|
Debt instruments, sold not yet purchased
|
|
—
|
|
|
(100,145
|
)
|
|
—
|
|
|
(100,145
|
)
|
||||
Total securities sold, not yet purchased
|
|
$
|
(812,652
|
)
|
|
$
|
(100,145
|
)
|
|
$
|
—
|
|
|
$
|
(912,797
|
)
|
Financial contracts payable
|
|
$
|
—
|
|
|
$
|
(22,222
|
)
|
|
$
|
—
|
|
|
$
|
(22,222
|
)
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||
|
|
Three months ended March 31, 2018
|
||||||||||
|
|
Assets
|
||||||||||
|
|
Debt instruments
|
|
Private and unlisted equity securities
|
|
Total
|
||||||
|
|
($ in thousands)
|
||||||||||
Beginning balance
|
|
$
|
880
|
|
|
$
|
6,108
|
|
|
$
|
6,988
|
|
Purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Issuances
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total realized and unrealized gains (losses) and amortization included in earnings, net
|
|
5
|
|
|
27
|
|
|
32
|
|
|||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
|
$
|
885
|
|
|
$
|
6,135
|
|
|
$
|
7,020
|
|
|
|
Cost/amortized cost
|
|
Unrealized gains
|
|
Unrealized losses
|
|
Fair
value |
||||||||
|
|
($ in thousands)
|
||||||||||||||
Corporate debt – U.S.
|
|
$
|
3,437
|
|
|
$
|
—
|
|
|
$
|
(2,464
|
)
|
|
$
|
973
|
|
Corporate debt – Non U.S.
|
|
2,109
|
|
|
—
|
|
|
(2,082
|
)
|
|
27
|
|
||||
Municipal debt – U.S.
|
|
10,397
|
|
|
7,953
|
|
|
—
|
|
|
18,350
|
|
||||
Total debt instruments
|
|
$
|
15,943
|
|
|
$
|
7,953
|
|
|
$
|
(4,546
|
)
|
|
$
|
19,350
|
|
|
|
Cost/amortized cost
|
|
Unrealized gains
|
|
Unrealized losses
|
|
Fair
value |
||||||||
|
|
($ in thousands)
|
||||||||||||||
Corporate debt – U.S.
|
|
$
|
8,508
|
|
|
$
|
—
|
|
|
$
|
(7,186
|
)
|
|
$
|
1,322
|
|
Corporate debt – Non U.S.
|
|
2,109
|
|
|
—
|
|
|
(2,057
|
)
|
|
52
|
|
||||
Municipal debt – U.S.
|
|
5,831
|
|
|
—
|
|
|
(25
|
)
|
|
5,806
|
|
||||
Total debt instruments
|
|
$
|
16,448
|
|
|
$
|
—
|
|
|
$
|
(9,268
|
)
|
|
$
|
7,180
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Cost/
amortized cost |
|
Fair
value |
|
Cost/
amortized cost |
|
Fair
value |
||||||||
|
|
($ in thousands)
|
||||||||||||||
Within one year
|
|
$
|
1,551
|
|
|
$
|
243
|
|
|
$
|
7,557
|
|
|
$
|
441
|
|
From one to five years
|
|
1,143
|
|
|
236
|
|
|
—
|
|
|
—
|
|
||||
From five to ten years
|
|
2,859
|
|
|
1,425
|
|
|
2,109
|
|
|
52
|
|
||||
More than ten years
|
|
10,390
|
|
|
17,446
|
|
|
6,782
|
|
|
6,687
|
|
||||
|
|
$
|
15,943
|
|
|
$
|
19,350
|
|
|
$
|
16,448
|
|
|
$
|
7,180
|
|
|
|
Cost
|
|
Unrealized
gains |
|
Unrealized
losses |
|
Fair
value |
||||||||
|
|
($ in thousands)
|
||||||||||||||
Equities – listed
|
|
$
|
863,334
|
|
|
$
|
126,207
|
|
|
$
|
(34,286
|
)
|
|
$
|
955,255
|
|
Total equity securities
|
|
$
|
863,334
|
|
|
$
|
126,207
|
|
|
$
|
(34,286
|
)
|
|
$
|
955,255
|
|
|
|
Cost
|
|
Unrealized
gains |
|
Unrealized
losses |
|
Fair
value |
||||||||
|
|
($ in thousands)
|
||||||||||||||
Equities – listed
|
|
$
|
1,014,426
|
|
|
$
|
208,350
|
|
|
$
|
(19,104
|
)
|
|
$
|
1,203,672
|
|
Total equity securities
|
|
$
|
1,014,426
|
|
|
$
|
208,350
|
|
|
$
|
(19,104
|
)
|
|
$
|
1,203,672
|
|
|
|
Cost
|
|
Unrealized
gains |
|
Unrealized
losses |
|
Fair
value |
||||||||
|
|
($ in thousands)
|
||||||||||||||
Commodities
|
|
$
|
29,493
|
|
|
$
|
8,889
|
|
|
$
|
—
|
|
|
$
|
38,382
|
|
Private and unlisted equity funds
|
|
25,374
|
|
|
6,371
|
|
|
—
|
|
|
31,745
|
|
||||
|
|
$
|
54,867
|
|
|
$
|
15,260
|
|
|
$
|
—
|
|
|
$
|
70,127
|
|
|
|
Cost
|
|
Unrealized
gains |
|
Unrealized
losses |
|
Fair
value |
||||||||
|
|
($ in thousands)
|
||||||||||||||
Commodities
|
|
$
|
101,184
|
|
|
$
|
20,318
|
|
|
$
|
—
|
|
|
$
|
121,502
|
|
Private and unlisted equity funds
|
|
25,316
|
|
|
5,314
|
|
|
—
|
|
|
30,630
|
|
||||
|
|
$
|
126,500
|
|
|
$
|
25,632
|
|
|
$
|
—
|
|
|
$
|
152,132
|
|
|
|
Proceeds
|
|
Unrealized gains
|
|
Unrealized losses
|
|
Fair value
|
||||||||
|
|
($ in thousands)
|
||||||||||||||
Corporate debt – U.S.
|
|
$
|
(3,086
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
(3,093
|
)
|
Equities – listed
|
|
(470,844
|
)
|
|
$
|
16,131
|
|
|
(108,062
|
)
|
|
(562,775
|
)
|
|||
Exchange traded funds
|
|
(5,872
|
)
|
|
696
|
|
|
—
|
|
|
(5,176
|
)
|
||||
Sovereign debt – Non U.S.
|
|
(96,230
|
)
|
|
—
|
|
|
(9,664
|
)
|
|
(105,894
|
)
|
||||
|
|
$
|
(576,032
|
)
|
|
$
|
16,827
|
|
|
$
|
(117,733
|
)
|
|
$
|
(676,938
|
)
|
|
|
Proceeds
|
|
Unrealized gains
|
|
Unrealized losses
|
|
Fair value
|
||||||||
|
|
($ in thousands)
|
||||||||||||||
Corporate debt – U.S.
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equities – listed
|
|
(643,148
|
)
|
|
17,541
|
|
|
(187,045
|
)
|
|
(812,652
|
)
|
||||
Exchange traded funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sovereign debt – Non U.S.
|
|
(96,231
|
)
|
|
—
|
|
|
(3,914
|
)
|
|
(100,145
|
)
|
||||
|
|
$
|
(739,379
|
)
|
|
$
|
17,541
|
|
|
$
|
(190,959
|
)
|
|
$
|
(912,797
|
)
|
Financial Contracts
|
|
Listing
currency (1) |
|
Notional amount of
underlying instruments |
|
Fair value of net assets
(obligations) on financial contracts |
|||
|
|
|
|
($ in thousands)
|
|||||
Financial contracts receivable
|
|
|
|
|
|
|
|||
Futures
|
|
USD
|
|
84,852
|
|
|
$
|
1,074
|
|
Interest rate options
|
|
USD
|
|
1,104,000
|
|
|
923
|
|
|
Interest rate swaps
|
|
JPY
|
|
22,565
|
|
|
148
|
|
|
Put options
|
|
USD
|
|
112,568
|
|
|
47,301
|
|
|
Total return swaps – equities
|
|
EUR/KRW/RON/USD
|
|
93,723
|
|
|
4,685
|
|
|
Warrants and rights on listed equities
|
|
USD
|
|
2
|
|
|
—
|
|
|
Total financial contracts receivable, at fair value
|
|
|
|
|
|
$
|
54,131
|
|
|
Financial contracts payable
|
|
|
|
|
|
|
|||
Call options
|
|
USD
|
|
470
|
|
|
$
|
(112
|
)
|
Commodity Swaps
|
|
USD
|
|
19,487
|
|
|
(141
|
)
|
|
Forwards
|
|
KRW
|
|
63,293
|
|
|
(192
|
)
|
|
Put options
|
|
USD
|
|
29,278
|
|
|
(13,069
|
)
|
|
Total return swaps – equities
|
|
EUR/USD
|
|
33,311
|
|
|
(1,883
|
)
|
|
Total financial contracts payable, at fair value
|
|
|
|
|
|
$
|
(15,397
|
)
|
Financial Contracts
|
|
Listing currency
(1)
|
|
Notional amount of
underlying instruments |
|
Fair value of net assets
(obligations) on financial contracts |
|||
|
|
|
|
($ in thousands)
|
|||||
Financial contracts receivable
|
|
|
|
|
|
|
|||
Call options
|
|
USD
|
|
2,656
|
|
|
$
|
91
|
|
Commodity Swaps
|
|
USD
|
|
17,833
|
|
|
2,142
|
|
|
Forwards
|
|
KRW
|
|
41,379
|
|
|
801
|
|
|
Futures
|
|
USD
|
|
5,874
|
|
|
12
|
|
|
Interest rate swaps
|
|
JPY
|
|
21,269
|
|
|
479
|
|
|
Put options
(2)
|
|
USD
|
|
155
|
|
|
1
|
|
|
Total return swaps – equities
|
|
EUR/GBP/USD
|
|
34,965
|
|
|
9,357
|
|
|
Warrants and rights on listed equities
|
|
EUR/USD
|
|
29
|
|
|
10
|
|
|
Total financial contracts receivable, at fair value
|
|
|
|
|
|
$
|
12,893
|
|
|
Financial contracts payable
|
|
|
|
|
|
|
|||
Commodity Swaps
|
|
USD
|
|
26,795
|
|
|
$
|
(353
|
)
|
Put options
|
|
USD
|
|
130
|
|
|
(14
|
)
|
|
Total return swaps – equities
|
|
EUR/GBP/KRW/RON/USD
|
|
60,663
|
|
|
(21,855
|
)
|
|
Total financial contracts payable, at fair value
|
|
|
|
|
|
$
|
(22,222
|
)
|
Derivatives not designated as hedging instruments
|
|
Location of gains and losses on derivatives recognized in income
|
|
Gain (loss) on derivatives recognized in income
|
||||||
|
|
|
|
Three months ended March 31
|
||||||
|
|
|
|
2018
|
|
2017
|
||||
|
|
|
|
($ in thousands)
|
||||||
Forwards
|
|
Net investment income (loss)
|
|
$
|
(123
|
)
|
|
$
|
623
|
|
Futures
|
|
Net investment income (loss)
|
|
(1,949
|
)
|
|
(513
|
)
|
||
Interest rate options
|
|
Net investment income (loss)
|
|
(637
|
)
|
|
—
|
|
||
Interest rate swaps
|
|
Net investment income (loss)
|
|
(331
|
)
|
|
105
|
|
||
Options, warrants, and rights
|
|
Net investment income (loss)
|
|
1,087
|
|
|
(7,528
|
)
|
||
Commodity swaps
|
|
Net investment income (loss)
|
|
1,848
|
|
|
(6,959
|
)
|
||
Total return swaps – equities
|
|
Net investment income (loss)
|
|
(19,031
|
)
|
|
10,311
|
|
||
Total
|
|
|
|
$
|
(19,136
|
)
|
|
$
|
(3,961
|
)
|
2018
|
|
Three months ended March 31
|
||||||
Derivatives not designated as hedging instruments (notional amounts)
|
|
Entered
|
|
Exited
|
||||
|
|
($ in thousands)
|
||||||
Forwards
|
|
$
|
54,372
|
|
|
$
|
33,328
|
|
Futures
|
|
335,241
|
|
|
257,912
|
|
||
Interest rate options
(1)
|
|
1,104,000
|
|
|
—
|
|
||
Options, warrants and rights
(1)
|
|
172,580
|
|
|
17,366
|
|
||
Commodity swaps
|
|
—
|
|
|
28,975
|
|
||
Total return swaps
|
|
8,637
|
|
|
19,136
|
|
||
Total
|
|
$
|
1,674,830
|
|
|
$
|
356,717
|
|
2017
|
|
Three months ended March 31
|
||||||
Derivatives not designated as hedging instruments (notional amounts)
|
|
Entered
|
|
Exited
|
||||
|
|
($ in thousands)
|
||||||
Forwards
|
|
$
|
3,476
|
|
|
$
|
—
|
|
Futures
|
|
29,510
|
|
|
24,069
|
|
||
Options, warrants and rights
(1)
|
|
347,918
|
|
|
110,102
|
|
||
Commodity swaps
|
|
—
|
|
|
8,182
|
|
||
Total return swaps
|
|
232,118
|
|
|
60,607
|
|
||
Total
|
|
$
|
613,022
|
|
|
$
|
202,960
|
|
March 31, 2018
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) - (ii)
|
|
(iv) Gross amounts not offset in the balance sheet
|
|
(v) = (iii) + (iv)
|
||||||||||||||
Description
|
|
Gross amounts of recognized assets (liabilities)
|
|
Gross amounts offset in the balance sheet
|
|
Net amounts of assets (liabilities) presented in the balance sheet
|
|
Financial instruments available for offset
|
|
Cash collateral (received) pledged
|
|
Net amount of asset (liability)
|
||||||||||||
|
|
($ in thousands)
|
||||||||||||||||||||||
Financial contracts receivable
|
|
$
|
54,131
|
|
|
$
|
—
|
|
|
$
|
54,131
|
|
|
$
|
(15,397
|
)
|
|
$
|
(23,290
|
)
|
|
$
|
15,444
|
|
Financial contracts payable
|
|
(15,397
|
)
|
|
—
|
|
|
(15,397
|
)
|
|
15,397
|
|
|
—
|
|
|
—
|
|
December 31, 2017
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) - (ii)
|
|
(iv) Gross amounts not offset in the balance sheet
|
|
(v) = (iii) + (iv)
|
||||||||||||||
Description
|
|
Gross amounts of recognized assets (liabilities)
|
|
Gross amounts offset in the balance sheet
|
|
Net amounts of assets (liabilities) presented in the balance sheet
|
|
Financial instruments available for offset
|
|
Cash collateral (received) pledged
|
|
Net amount of asset (liability)
|
||||||||||||
|
|
($ in thousands)
|
||||||||||||||||||||||
Financial contracts receivable
|
|
$
|
12,893
|
|
|
$
|
—
|
|
|
$
|
12,893
|
|
|
$
|
(5,128
|
)
|
|
$
|
(1,336
|
)
|
|
$
|
6,429
|
|
Financial contracts payable
|
|
(22,222
|
)
|
|
—
|
|
|
(22,222
|
)
|
|
5,128
|
|
|
17,094
|
|
|
—
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
|
($ in thousands)
|
||||||
Due to Prime Brokers
|
|
$
|
544,800
|
|
|
$
|
647,700
|
|
Due to Other Financial Institutions
|
|
30,000
|
|
|
25,000
|
|
||
|
|
$
|
574,800
|
|
|
$
|
672,700
|
|
Consolidated
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
|
($ in thousands)
|
||||||
Case reserves
|
|
$
|
183,013
|
|
|
$
|
178,088
|
|
IBNR
|
|
301,586
|
|
|
286,292
|
|
||
Total
|
|
$
|
484,599
|
|
|
$
|
464,380
|
|
Consolidated
|
|
2018
|
|
2017
|
||||
|
|
($ in thousands)
|
||||||
Gross balance at January 1
|
|
$
|
464,380
|
|
|
$
|
306,641
|
|
Less: Losses recoverable
|
|
(29,459
|
)
|
|
(2,704
|
)
|
||
Net balance at January 1
|
|
434,921
|
|
|
303,937
|
|
||
Incurred losses related to:
|
|
|
|
|
||||
Current year
|
|
98,558
|
|
|
99,807
|
|
||
Prior years
|
|
(2,734
|
)
|
|
5,005
|
|
||
Total incurred
|
|
95,824
|
|
|
104,812
|
|
||
Paid losses related to:
|
|
|
|
|
||||
Current year
|
|
(17,161
|
)
|
|
(15,930
|
)
|
||
Prior years
|
|
(69,703
|
)
|
|
(55,920
|
)
|
||
Total paid
|
|
(86,864
|
)
|
|
(71,850
|
)
|
||
Loss portfolio transfer
|
|
—
|
|
|
—
|
|
||
Foreign currency revaluation
|
|
1,236
|
|
|
549
|
|
||
Net balance at March 31
|
|
445,117
|
|
|
337,448
|
|
||
Add: Losses recoverable
|
|
39,482
|
|
|
2,582
|
|
||
Gross balance at March 31
|
|
$
|
484,599
|
|
|
$
|
340,030
|
|
Health
|
|
2018
|
|
2017
|
||||
|
|
($ in thousands)
|
||||||
Gross balance at January 1
|
|
$
|
22,181
|
|
|
$
|
18,993
|
|
Less: Losses recoverable
|
|
—
|
|
|
—
|
|
||
Net balance at January 1
|
|
22,181
|
|
|
18,993
|
|
||
Incurred losses related to:
|
|
|
|
|
||||
Current year
|
|
11,992
|
|
|
10,015
|
|
||
Prior years
|
|
830
|
|
|
(261
|
)
|
||
Total incurred
|
|
12,822
|
|
|
9,754
|
|
||
Paid losses related to:
|
|
|
|
|
||||
Current year
|
|
(1,872
|
)
|
|
(2,123
|
)
|
||
Prior years
|
|
(9,231
|
)
|
|
(9,416
|
)
|
||
Total paid
|
|
(11,103
|
)
|
|
(11,539
|
)
|
||
Foreign currency revaluation
|
|
—
|
|
|
—
|
|
||
Net balance at March 31
|
|
23,900
|
|
|
17,208
|
|
||
Add: Losses recoverable
|
|
—
|
|
|
—
|
|
||
Gross balance at March 31
|
|
$
|
23,900
|
|
|
$
|
17,208
|
|
•
|
$6.1 million
of favorable loss development, net of retrocession recoveries, relating to 2017 hurricanes resulting from updated reporting received from cedents.
|
•
|
$3.5 million
of favorable loss development on prior period mortgage insurance contracts resulting from continued favorable claims experience.
|
•
|
$3.2 million
of adverse loss development on solicitors professional indemnity contracts resulting from adverse reporting of claims in excess of expected claims during the quarter.
|
•
|
$1.9 million
of adverse loss development on general liabilities contracts across two accounts, spread over treaty years 2012-2017, resulting from deteriorations in claims experience.
|
•
|
$1.2 million
of adverse loss development on surety contracts, net of retrocession recoveries, due to deteriorations in circumstances on several previously reported claims for a single legacy contract.
|
•
|
The remaining
$0.6 million
of adverse loss development was due to development across various other property, casualty and other contracts.
|
|
|
Number of
non-vested restricted shares |
|
Weighted
average grant date fair value |
|||
Balance at December 31, 2017
|
|
331,510
|
|
|
$
|
23.45
|
|
Granted
|
|
189,329
|
|
|
15.90
|
|
|
Vested
|
|
(58,405
|
)
|
|
32.21
|
|
|
Forfeited
|
|
(2,279
|
)
|
|
21.61
|
|
|
Balance at March 31, 2018
|
|
460,155
|
|
|
$
|
19.24
|
|
|
Number of
options |
|
Weighted
average exercise price |
|
Weighted
average grant date fair value |
|
Intrinsic value ($ in millions)
|
|
Weighted average remaining contractual term
|
|||||||
Balance at December 31, 2017
|
1,015,627
|
|
|
$
|
23.55
|
|
|
$
|
9.89
|
|
|
$
|
—
|
|
|
6.9 years
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
Exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
Balance at March 31, 2018
|
1,015,627
|
|
|
$
|
23.55
|
|
|
$
|
9.89
|
|
|
$
|
—
|
|
|
6.7 years
|
|
|
Number of
non-vested RSUs |
|
Weighted
average grant date fair value |
|||
Balance at December 31, 2017
|
|
22,798
|
|
|
$
|
23.50
|
|
Granted
|
|
28,301
|
|
|
15.90
|
|
|
Vested
|
|
(4,053
|
)
|
|
32.21
|
|
|
Forfeited
|
|
(648
|
)
|
|
21.65
|
|
|
Balance at March 31, 2018
|
|
46,398
|
|
|
$
|
18.13
|
|
|
|
Redeemable non-controlling interest in related party joint venture
|
|
Non-controlling interest in related party joint venture
|
|
Total non-controlling interest in related party joint venture
|
||||||||||||||||||||
|
|
Three months ended March 31
|
|
Three months ended March 31
|
|
Three months ended March 31
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||
Opening balance
|
|
$
|
7,169
|
|
|
$
|
5,884
|
|
—
|
|
$
|
12,933
|
|
|
$
|
11,561
|
|
—
|
|
$
|
20,102
|
|
|
$
|
17,445
|
|
Income (loss) attributed to non-controlling interest
|
|
(853
|
)
|
|
(76
|
)
|
—
|
|
(1,473
|
)
|
|
328
|
|
—
|
|
(2,326
|
)
|
|
252
|
|
||||||
Net contribution into (withdrawal from) non-controlling interest
|
|
389
|
|
|
—
|
|
—
|
|
(389
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||||||
Ending balance
|
|
$
|
6,705
|
|
|
$
|
5,808
|
|
|
$
|
11,071
|
|
|
$
|
11,889
|
|
|
$
|
17,776
|
|
|
$
|
17,697
|
|
|
|
Facility
|
|
Termination Date
|
|
Notice period required for termination
|
||
|
|
($ in thousands)
|
|
|
|
|
||
Butterfield Bank (Cayman) Limited
|
|
$
|
50,000
|
|
|
June 30, 2018
|
|
90 days prior to termination date
|
Citibank Europe plc
|
|
400,000
|
|
|
October 11, 2018
|
|
120 days prior to termination date
|
|
|
|
$
|
450,000
|
|
|
|
|
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||
Operating lease obligations
|
$
|
233
|
|
|
$
|
155
|
|
|
$
|
155
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
600
|
|
Private equity and limited partnerships
(1)
|
7,075
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,075
|
|
|||||||
|
$
|
7,308
|
|
|
$
|
155
|
|
|
$
|
155
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,675
|
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
($ in thousands)
|
||||||||||||
Property
|
|
|
|
|
|
|
|
|
||||||
Commercial
|
|
$
|
3,896
|
|
|
2.3
|
%
|
|
$
|
5,170
|
|
|
2.6
|
%
|
Motor
|
|
23,013
|
|
|
13.1
|
|
|
15,744
|
|
|
8.0
|
|
||
Personal
|
|
2,464
|
|
|
1.4
|
|
|
21,573
|
|
|
10.9
|
|
||
Total Property
|
|
29,373
|
|
|
16.8
|
|
|
42,487
|
|
|
21.5
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Casualty
|
|
|
|
|
|
|
|
|
||||||
General Liability
|
|
5,584
|
|
|
3.2
|
|
|
9,499
|
|
|
4.8
|
|
||
Motor Liability
|
|
84,625
|
|
|
48.3
|
|
|
78,341
|
|
|
39.7
|
|
||
Professional Liability
|
|
5,395
|
|
|
3.1
|
|
|
14,553
|
|
|
7.4
|
|
||
Workers' Compensation
|
|
7,380
|
|
|
4.2
|
|
|
10,536
|
|
|
5.4
|
|
||
Total Casualty
|
|
102,984
|
|
|
58.8
|
|
|
112,929
|
|
|
57.3
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Other
|
|
|
|
|
|
|
|
|
||||||
Accident & Health
|
|
28,738
|
|
|
16.4
|
|
|
23,739
|
|
|
12.1
|
|
||
Financial
|
|
11,447
|
|
|
6.5
|
|
|
12,056
|
|
|
6.1
|
|
||
Marine
|
|
1,095
|
|
|
0.6
|
|
|
2,223
|
|
|
1.1
|
|
||
Other Specialty
|
|
1,488
|
|
|
0.9
|
|
|
3,780
|
|
|
1.9
|
|
||
Total Other
|
|
42,768
|
|
|
24.4
|
|
|
41,798
|
|
|
21.2
|
|
||
|
|
$
|
175,125
|
|
|
100.0
|
%
|
|
$
|
197,214
|
|
|
100.0
|
%
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
($ in thousands)
|
||||||||||||
U.S. and Caribbean
|
|
$
|
157,707
|
|
|
90.1
|
%
|
|
$
|
171,758
|
|
|
87.1
|
%
|
Worldwide
(1)
|
|
17,278
|
|
|
9.8
|
|
|
25,294
|
|
|
12.8
|
|
||
Europe
|
|
186
|
|
|
0.1
|
|
|
146
|
|
|
0.1
|
|
||
Asia
(2)
|
|
(46
|
)
|
|
—
|
|
|
16
|
|
|
—
|
|
||
|
|
$
|
175,125
|
|
|
100.0
|
%
|
|
$
|
197,214
|
|
|
100.0
|
%
|
|
●
|
Property
|
|
●
|
Casualty
|
|
●
|
Other
|
•
|
Basic adjusted book value per share;
|
•
|
Fully diluted adjusted book value per share; and
|
•
|
Net underwriting income (loss).
|
|
March 31, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
June 30, 2017
|
|
March 31, 2017
|
||||||||||
|
($ in thousands, except per share and share amounts)
|
||||||||||||||||||
Numerator for basic adjusted and fully diluted adjusted book value per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total equity (U.S. GAAP)
|
$
|
700,916
|
|
|
$
|
844,257
|
|
|
$
|
880,333
|
|
|
$
|
858,517
|
|
|
$
|
895,355
|
|
Less: Non-controlling interest in joint venture
|
(11,071
|
)
|
|
(12,933
|
)
|
|
(12,828
|
)
|
|
(11,780
|
)
|
|
(11,889
|
)
|
|||||
Numerator for basic adjusted book value per share
|
689,845
|
|
|
831,324
|
|
|
867,505
|
|
|
846,737
|
|
|
883,466
|
|
|||||
Add: Proceeds from in-the-money stock options issued and outstanding
|
—
|
|
|
13,859
|
|
|
14,028
|
|
|
4,000
|
|
|
4,245
|
|
|||||
Numerator for fully diluted adjusted book value per share
|
$
|
689,845
|
|
|
$
|
845,183
|
|
|
$
|
881,533
|
|
|
$
|
850,737
|
|
|
$
|
887,711
|
|
Denominator for basic adjusted and fully diluted adjusted book value per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Ordinary shares issued and outstanding (denominator for basic adjusted book value per share)
|
37,550,648
|
|
|
37,359,545
|
|
|
37,348,753
|
|
|
37,367,094
|
|
|
37,438,658
|
|
|||||
Add: In-the-money stock options and RSUs issued and outstanding
|
46,398
|
|
|
679,684
|
|
|
687,351
|
|
|
217,684
|
|
|
230,184
|
|
|||||
Denominator for fully diluted adjusted book value per share
|
37,597,046
|
|
|
38,039,229
|
|
|
38,036,104
|
|
|
37,584,778
|
|
|
37,668,842
|
|
|||||
Basic adjusted book value per share
|
$
|
18.37
|
|
|
$
|
22.25
|
|
|
$
|
23.23
|
|
|
$
|
22.66
|
|
|
$
|
23.60
|
|
Fully diluted adjusted book value per share
|
18.35
|
|
|
22.22
|
|
|
23.18
|
|
|
22.64
|
|
|
23.57
|
|
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Income (loss) before income tax
|
$
|
(145,848
|
)
|
|
$
|
8,747
|
|
Add (subtract):
|
|
|
|
||||
Investment (income) loss
|
145,216
|
|
|
(11,618
|
)
|
||
Other (income) expense
|
670
|
|
|
7
|
|
||
Corporate expenses
|
2,463
|
|
|
2,632
|
|
||
Net underwriting income (loss)
|
$
|
2,501
|
|
|
$
|
(232
|
)
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
($ in thousands)
|
||||||||||||
Property
|
|
$
|
29,373
|
|
|
16.8
|
%
|
|
$
|
42,487
|
|
|
21.5
|
%
|
Casualty
|
|
102,984
|
|
|
58.8
|
|
|
112,929
|
|
|
57.3
|
|
||
Other
|
|
42,768
|
|
|
24.4
|
|
|
41,798
|
|
|
21.2
|
|
||
Total
|
|
$
|
175,125
|
|
|
100.0
|
%
|
|
$
|
197,214
|
|
|
100.0
|
%
|
Gross Premiums Written
|
||||||
Three months ended March 31, 2018
|
||||||
|
|
Increase (decrease)
($ in millions) |
|
% change
|
|
Explanation
|
Property
|
|
$(13.1)
|
|
(30.9)%
|
|
Decrease was primarily due to homeowners’ insurance contracts that were not renewed, partially offset by increase in gross premiums written relating to private passenger automobile contracts.
|
Casualty
|
|
$(9.9)
|
|
(8.8)%
|
|
Decrease was primarily due to a casualty contract renewed at a lower share as well as a number of professional liability casualty contracts not renewed. The decrease was partially offset by an increase in motor liability premiums on private passenger automobile contracts.
|
Other
|
|
$1.0
|
|
2.3%
|
|
Increase was primarily related to medical stop-loss business for which a significant portion of the underlying policies and corresponding premiums are written during the first calendar quarter. However, we have decided to not renew a medical stop-loss contract which expired during 2018, which will result in lower medical-stop loss premiums written in future quarters.
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
($ in thousands)
|
||||||||||||
Property
|
|
$
|
23,336
|
|
|
16.1
|
%
|
|
$
|
41,947
|
|
|
21.6
|
%
|
Casualty
|
|
79,195
|
|
|
54.5
|
|
|
110,076
|
|
|
56.8
|
|
||
Other
|
|
42,751
|
|
|
29.4
|
|
|
41,765
|
|
|
21.6
|
|
||
Total
|
|
$
|
145,282
|
|
|
100.0
|
%
|
|
$
|
193,788
|
|
|
100.0
|
%
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
($ in thousands)
|
||||||||||||
Property
|
|
$
|
26,378
|
|
|
18.1
|
%
|
|
$
|
33,716
|
|
|
22.2
|
%
|
Casualty
|
|
85,214
|
|
|
58.4
|
|
|
94,724
|
|
|
62.4
|
|
||
Other
|
|
34,252
|
|
|
23.5
|
|
|
23,462
|
|
|
15.4
|
|
||
Total
|
|
$
|
145,844
|
|
|
100.0
|
%
|
|
$
|
151,902
|
|
|
100.0
|
%
|
Net Premiums Earned
|
||||||
Three months ended March 31, 2018
|
||||||
|
|
Increase (decrease)
($ in millions) |
|
% change
|
|
Explanation
|
Property
|
|
$(7.3)
|
|
(21.8)%
|
|
Decrease was primarily due to a homeowners’ insurance contract that was commuted at the end of 2017 and all unearned premiums returned to the cedent. In addition, the premiums ceded relating to private passenger automobile business contributed to the decrease in net premiums earned. The decrease was partially offset by increase in gross premiums earned relating to private passenger automobile contracts.
|
Casualty
|
|
$(9.5)
|
|
(10.0)%
|
|
Decrease was primarily related to the premiums ceded relating to the private passenger automobile business, and, to a lesser extent, due to professional liability contracts not renewed.
|
Other
|
|
$10.8
|
|
46.0%
|
|
Increase was partially related to increase in medical stop-loss business and partially related to mortgage insurance business.
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
($ in thousands)
|
||||||||||||
Property
|
|
$
|
11,219
|
|
|
11.7
|
%
|
|
$
|
21,201
|
|
|
20.2
|
%
|
Casualty
|
|
$
|
66,641
|
|
|
69.6
|
%
|
|
$
|
67,694
|
|
|
64.6
|
%
|
Other
|
|
$
|
17,964
|
|
|
18.7
|
%
|
|
$
|
15,917
|
|
|
15.2
|
%
|
Total
|
|
$
|
95,824
|
|
|
100.0
|
%
|
|
$
|
104,812
|
|
|
100.0
|
%
|
Net Losses Incurred
|
||||||
Three months ended March 31, 2018
|
||||||
|
|
Increase (decrease)
($ in millions) |
|
% change
|
|
Explanation
|
Property
|
|
$(10.0)
|
|
(47.1)%
|
|
Decrease was primarily due to a homeowners’ insurance contract that was commuted at the end of 2017 resulting in no losses incurred during the first quarter of 2018. In addition, favorable loss development on prior period catastrophe losses also contributed to the decrease in losses incurred for the first quarter of 2018.
The decrease was partially offset by the increase in losses incurred relating to the increase in private passenger motor insurance premiums earned during the three months ended March 31, 2018, compared to the same period in 2017.
|
Casualty
|
|
$(1.1)
|
|
(1.6)%
|
|
Decrease was primarily due to the retroceded private passenger automobile business, and was mostly offset by adverse loss development on other casualty business relating to professional indemnity and general liability contracts.
|
Other
|
|
$2.0
|
|
12.9%
|
|
Increase was primarily related to the increase in earned premiums on medical stop-loss business and to a lesser extent related to an increase in losses on prior period surety contracts.
The increase was partially offset by favorable loss development on prior period mortgage insurance contracts.
|
Change in Loss Ratios
|
|||
Three months ended March 31, 2018
|
|||
|
|
Increase / (decrease)
in loss ratio points
|
Explanation
|
Property
|
|
(20.4)
|
Decrease in loss ratio was due to favorable loss development on prior period catastrophe losses relating to the 2017 hurricanes Harvey, Irma and Maria.
|
Casualty
|
|
6.7
|
Increase in loss ratio was due to adverse loss development relating to prior period professional indemnity and general liability contracts.
|
Other
|
|
(15.4)
|
Decrease in loss ratio was due to favorable loss development on prior period mortgage insurance contracts, partially offset by increase in loss reserves on prior period surety contracts.
|
|
Three months ended March 31
|
||||||||||||||||||||||
|
|
|
2018
|
|
|
|
|
|
2017
|
|
|
||||||||||||
|
Gross
|
|
Ceded
|
|
Net
|
|
Gross
|
|
Ceded
|
|
Net
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Losses paid (recovered)
|
$
|
96,226
|
|
|
$
|
(9,362
|
)
|
|
$
|
86,864
|
|
|
$
|
72,040
|
|
|
$
|
(190
|
)
|
|
$
|
71,850
|
|
Change in loss and loss adjustment expense reserves
|
18,981
|
|
|
(10,021
|
)
|
|
8,960
|
|
|
32,839
|
|
|
123
|
|
|
32,962
|
|
||||||
Total
|
$
|
115,207
|
|
|
$
|
(19,383
|
)
|
|
$
|
95,824
|
|
|
$
|
104,879
|
|
|
$
|
(67
|
)
|
|
$
|
104,812
|
|
•
|
$6.1 million of favorable loss development, net of retrocession recoveries, relating to 2017 hurricanes resulting from updated reporting received from cedents.
|
•
|
$3.5 million of favorable loss development on prior period mortgage insurance contracts resulting from continued favorable claims experience.
|
•
|
$3.2 million of adverse loss development on solicitors professional indemnity contracts resulting from adverse reporting of claims in excess of expected during the quarter.
|
•
|
$1.9 million of adverse loss development on general liabilities contracts across two accounts, spread over treaty years 2012-2017, resulting from deteriorations in claims experience.
|
•
|
$1.2 million of adverse loss development on surety contracts, net of retrocession recoveries, due to deteriorations in circumstances on several previously reported claims for a single legacy contract.
|
•
|
The remaining $0.6 million of adverse loss development was due to development across various other property, casualty and other contracts.
|
|
|
Three months ended March 31
|
||||||||||||
|
|
2018
|
|
2017
|
||||||||||
|
|
($ in thousands)
|
||||||||||||
Property
|
|
$
|
6,205
|
|
|
14
|
%
|
|
$
|
10,758
|
|
|
25
|
%
|
Casualty
|
|
21,235
|
|
|
48
|
|
|
24,531
|
|
|
57
|
|
||
Other
|
|
16,769
|
|
|
38
|
|
|
7,922
|
|
|
18
|
|
||
Total
|
|
$
|
44,209
|
|
|
100
|
%
|
|
$
|
43,211
|
|
|
100
|
%
|
Change in Acquisition Cost Ratios
|
|||
Three months ended March 31, 2018
|
|||
|
|
Increase / (decrease) in acquisition cost ratio points
|
Explanation
|
Property
|
|
(8.4)
|
Decrease in acquisition cost ratio was primarily due to the homeowners’ insurance contract commuted during 2017. Since this contract had a higher rate of ceding commission than other property contracts, in the absence of this contract, the acquisition cost ratio for the property business was lower than the comparative period in 2017.
|
Casualty
|
|
(1.0)
|
Decrease in acquisition cost ratio was due to modest changes in commission rates on workers’ compensation contracts renewed.
|
Other
|
|
15.2
|
Increase in acquisition cost ratio primarily related to increase in profit commissions resulting from the favorable loss development on mortgage insurance contracts.
|
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Underwriting expenses
|
$
|
3,493
|
|
|
$
|
4,111
|
|
Corporate expenses
|
2,463
|
|
|
2,632
|
|
||
General and administrative expenses
|
$
|
5,956
|
|
|
$
|
6,743
|
|
|
Three months ended March 31
|
||||||
|
2018
|
|
2017
|
||||
|
($ in thousands)
|
||||||
Realized gains (losses)
|
$
|
(140,255
|
)
|
|
$
|
48,967
|
|
Change in unrealized gains and losses
|
(3,695
|
)
|
|
(23,378
|
)
|
||
Investment related foreign exchange gains (losses)
|
(1,195
|
)
|
|
(7,015
|
)
|
||
Interest and dividend income, net of withholding taxes
|
10,592
|
|
|
4,606
|
|
||
Interest, dividend and other expenses
|
(6,209
|
)
|
|
(6,065
|
)
|
||
Investment advisor compensation
|
(4,454
|
)
|
|
(5,497
|
)
|
||
Net investment income (loss)
|
$
|
(145,216
|
)
|
|
$
|
11,618
|
|
|
Three months ended March 31
|
||||
|
2018
|
|
2017
|
||
Long portfolio gains (losses)
|
(5.2
|
)%
|
|
4.3
|
%
|
Short portfolio gains (losses)
|
(6.0
|
)
|
|
(3.0
|
)
|
Macro gains (losses)
|
(0.1
|
)
|
|
0.2
|
|
Other income and expenses
1
|
(0.5
|
)
|
|
(0.5
|
)
|
Gross investment return
|
(11.8
|
)%
|
|
1.0
|
%
|
Net investment return
|
(11.8
|
)%
|
|
0.9
|
%
|
|
Three months ended March 31
|
|
Three months ended March 31
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Property
|
|
Casualty
|
|
Other
|
|
Total
|
|
Property
|
|
Casualty
|
|
Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loss ratio
|
42.5
|
%
|
|
78.2
|
%
|
|
52.4
|
%
|
|
65.7
|
%
|
|
62.9
|
%
|
|
71.5
|
%
|
|
67.8
|
%
|
|
69.0
|
%
|
Acquisition cost ratio
|
23.5
|
|
|
24.9
|
|
|
49.0
|
|
|
30.3
|
|
|
31.9
|
|
|
25.9
|
|
|
33.8
|
|
|
28.4
|
|
Composite ratio
|
66.0
|
%
|
|
103.1
|
%
|
|
101.4
|
%
|
|
96.0
|
%
|
|
94.8
|
%
|
|
97.4
|
%
|
|
101.6
|
%
|
|
97.4
|
%
|
Underwriting expense ratio
|
|
|
|
|
|
|
2.3
|
|
|
|
|
|
|
|
|
2.7
|
|
||||||
Combined ratio
|
|
|
|
|
|
|
98.3
|
%
|
|
|
|
|
|
|
|
100.1
|
%
|
Increase (decrease)
($ in millions)
|
|
Explanation
|
||
$(248.4)
|
|
Equities - Listed
|
|
Decrease in long equity investments resulting from a decrease in the long exposure from sale of equities and to a lesser extent due to decrease in fair values of certain equity securities.
|
$(82.0)
|
|
Other investments
|
|
Decrease in other investments was primarily due to the sale of physical gold bullion during the period. While the gold bullion was reduced, the overall exposure to gold was maintained through purchase of gold futures.
|
$12.2
|
|
Debt
|
|
Increase was primarily due to municipal debt purchases during the period.
|
$41.2
|
|
Financial contracts receivable
|
|
Increase was primarily due to put options entered into during the period.
|
•
|
Fluctuations in the share price due to an overall positive investment market;
|
•
|
Sudden unexpected changes in the underlying business model of the issuer;
|
•
|
Changes in laws and regulations relating to short sales;
|
•
|
Press releases and earnings guidance issued by the issuer;
|
•
|
A merger or acquisition of the issuer at a price in excess of the current share price;
|
•
|
The shares of the issuer becoming difficult to borrow; or
|
•
|
A short squeeze.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Case
Reserves |
|
IBNR
|
|
Total
|
|
Case
Reserves |
|
IBNR
|
|
Total
|
||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||
Property
|
$
|
60,120
|
|
|
$
|
30,088
|
|
|
$
|
90,208
|
|
|
$
|
64,762
|
|
|
$
|
33,040
|
|
|
$
|
97,802
|
|
Casualty
|
91,387
|
|
|
224,956
|
|
|
316,343
|
|
|
86,254
|
|
|
206,205
|
|
|
292,459
|
|
||||||
Other
|
31,506
|
|
|
46,542
|
|
|
78,048
|
|
|
27,072
|
|
|
47,047
|
|
|
74,119
|
|
||||||
Total
|
$
|
183,013
|
|
|
$
|
301,586
|
|
|
$
|
484,599
|
|
|
$
|
178,088
|
|
|
$
|
286,292
|
|
|
$
|
464,380
|
|
•
|
includes property, marine and energy, motor and catastrophe workers’ compensation exposures, but not other casualty exposures;
|
•
|
is net of any retrocession (including ILWs);
|
•
|
is net of any estimated reinstatement and additional premiums;
|
•
|
is net of existing estimated losses which reduce the limit of liability;
|
•
|
is based on expected premium where limits of liability are expressed as a percentage of premium;
|
•
|
uses the maximum single underwriting year exposure for renewed risks-attaching contracts; and
|
•
|
does not include transactional costs such as brokerage, collateral costs and federal excise tax.
|
|
|
April 1, 2018
|
||||||
Zone
|
|
Single Event Loss
|
|
Net Annual Aggregate Loss
|
||||
|
|
($ in thousands)
|
||||||
United States, Canada and the Caribbean
|
|
$
|
181,956
|
|
|
$
|
206,798
|
|
Europe
|
|
94,828
|
|
|
111,715
|
|
||
Japan
|
|
94,828
|
|
|
111,715
|
|
||
Rest of the world
|
|
94,828
|
|
|
111,715
|
|
||
Maximum Aggregate
|
|
181,956
|
|
|
206,798
|
|
|
|
April 1, 2018
|
||||||
|
|
1-in-250 year return period
|
||||||
Zone
|
|
Single Event Loss
|
|
Aggregate Loss
|
||||
|
|
($ in thousands)
|
||||||
United States, Canada and the Caribbean
|
|
$
|
66,866
|
|
|
$
|
78,532
|
|
Europe
|
|
22,092
|
|
|
25,696
|
|
||
Japan
|
|
8,888
|
|
|
9,893
|
|
||
Rest of the world
|
|
7,815
|
|
|
8,810
|
|
||
Maximum
|
|
66,866
|
|
|
80,060
|
|
|
Less than
1 year |
|
1-3 years
|
|
3-5 years
|
|
More than
5 years |
|
Total
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||
Operating lease obligations
(1)
|
$
|
271
|
|
|
$
|
310
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
600
|
|
Private equity and limited partnerships
(2)
|
7,075
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,075
|
|
|||||
Loss and loss adjustment expense reserves
(3)
|
258,730
|
|
|
127,062
|
|
|
43,732
|
|
|
55,075
|
|
|
484,599
|
|
|||||
|
$
|
266,076
|
|
|
$
|
127,372
|
|
|
$
|
43,751
|
|
|
$
|
55,075
|
|
|
$
|
492,274
|
|
•
|
|
equity price risk;
|
•
|
|
commodity price risk;
|
•
|
|
foreign currency risk;
|
•
|
|
interest rate risk;
|
•
|
|
credit risk; and
|
•
|
|
political risk.
|
|
10% increase in commodity prices
|
|
10% decrease in commodity prices
|
||||||||||
Commodity
|
Change in
fair value |
|
Change in fair value as % of investment portfolio
|
|
Change in
fair value |
|
Change in fair value as % of investment portfolio
|
||||||
|
($ in thousands)
|
|
|
|
($ in thousands)
|
|
|
||||||
Gold
|
$
|
11,254
|
|
|
1.0
|
%
|
|
$
|
(11,254
|
)
|
|
(1.0
|
)%
|
Natural Gas
|
1,935
|
|
|
0.2
|
|
|
(1,935
|
)
|
|
(0.2
|
)
|
||
Total
|
$
|
13,189
|
|
|
1.2
|
%
|
|
$
|
(13,189
|
)
|
|
(1.2
|
)%
|
|
|
|
|
|
|
|
|
|
10% increase in U.S. dollar
|
|
10% decrease in U.S. dollar
|
||||||||||
Foreign Currency
|
Change in
fair value |
|
Change in fair value as % of investment portfolio
|
|
Change in
fair value |
|
Change in fair value as % of investment portfolio
|
||||||
|
($ in thousands)
|
||||||||||||
British Pound
|
$
|
418
|
|
|
0.04
|
%
|
|
$
|
(418
|
)
|
|
(0.04
|
)%
|
Euro
|
(570
|
)
|
|
(0.05
|
)
|
|
570
|
|
|
0.05
|
|
||
Japanese Yen
|
2,600
|
|
|
0.23
|
|
|
(2,600
|
)
|
|
(0.23
|
)
|
||
Norwegian Krone
|
320
|
|
|
0.03
|
|
|
(320
|
)
|
|
(0.03
|
)
|
||
Other
|
116
|
|
|
0.01
|
|
|
(116
|
)
|
|
(0.01
|
)
|
||
Total
|
$
|
2,884
|
|
|
0.26
|
%
|
|
$
|
(2,884
|
)
|
|
(0.26
|
)%
|
|
100 basis point increase
in interest rates |
|
100 basis point decrease
in interest rates |
||||||||||
|
Change in
fair value |
|
Change in fair value as % of investment portfolio
|
|
Change in
fair value |
|
Change in fair value as % of investment portfolio
|
||||||
|
($ in thousands)
|
||||||||||||
Debt instruments
|
$
|
18,953
|
|
|
1.7
|
%
|
|
$
|
(24,318
|
)
|
|
(2.2
|
)%
|
Interest rate swaps
|
4,205
|
|
|
0.4
|
|
|
(4,205
|
)
|
|
(0.4
|
)
|
||
Net exposure to interest rate risk
|
$
|
23,158
|
|
|
2.1
|
%
|
|
$
|
(28,523
|
)
|
|
(2.6
|
)%
|
10.1
|
|
12.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Shareholders’ Equity; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements.
|
*
|
Furnished herewith.
|
|
GREENLIGHT CAPITAL RE, LTD.
|
|
|
|
(Registrant)
|
|
|
|
By:
|
/s/ SIMON BURTON
|
|
|
|
Simon Burton
Chief Executive Officer (principal executive officer) |
|
|
|
April 30, 2018
|
|
|
|
|
|
|
By:
|
/s/ TIM COURTIS
|
|
|
|
Tim Courtis
Chief Financial Officer (principal financial and accounting officer) |
|
|
|
April 30, 2018
|
|
|
|
|
|
|
Three months ended March 31, 2018
|
|
Three months ended March 31, 2017
|
|
(2)
|
|
(2)
|
Ratio of Earnings to Fixed Charges (1)
|
—
|
|
16.49
|
Deficiency of Earnings to Fixed Charges ($000) (3)
|
145,848
|
|
—
|
1.
|
I have reviewed this annual report on Form 10-Q of Greenlight Capital Re, Ltd.;
|
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 periods 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 officers 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:
|
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):
|
Dated:
|
April 30, 2018
|
/s/ SIMON BURTON
|
|
|
Simon Burton
Chief Executive Officer (principal executive officer) |
|
|
|
1.
|
I have reviewed this annual report on Form 10-Q of Greenlight Capital Re, Ltd.;
|
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 periods 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 officers 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:
|
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):
|
Dated:
|
April 30, 2018
|
/s/ TIM COURTIS
|
|
|
Tim Courtis
|
|
|
Chief Financial Officer
|
Dated:
|
April 30, 2018
|
/s/ SIMON BURTON
|
|
|
Simon Burton
Chief Executive Officer (principal executive officer) |
Dated:
|
April 30, 2018
|
/s/ TIM COURTIS
|
|
|
Tim Courtis
|
|
|
Chief Financial Officer
|