Segment Reporting

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Reporting

15.  SEGMENT REPORTING

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and Accident and Health ("A&H") business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S.  The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada and Singapore and through offices in Brazil, Miami and New Jersey. The Bermuda operation provides reinsurance and insurance to worldwide property and casualty markets through brokers and directly with ceding companies from its Bermuda office and reinsurance to the United Kingdom and European markets through its UK branch and Ireland Re.  The Insurance operation writes property and casualty insurance directly and through general agents, brokers and surplus lines brokers within the U.S. and Canada.  The Mt. Logan Re segment represents business written for the segregated accounts of Mt. Logan Re, which were formed on July 1, 2013.  The Mt. Logan Re business represents a diversified set of catastrophe exposures, diversified by risk/peril and across different geographical regions globally.

These segments, with the exception of Mt. Logan Re, are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.  Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.  The Mt. Logan Re segment is managed independently and seeks to write a diverse portfolio of catastrophe risks for each segregated account to achieve desired risk and return criteria.

Underwriting results include earned premium less losses and loss adjustment expenses ("LAE") incurred, commission and brokerage expenses and other underwriting expenses.  We measure our underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

Mt. Logan Re's business is sourced through operating subsidiaries of the Company; however, the activity is only reflected in the Mt. Logan Re segment.  For other inter-affiliate reinsurance, business is generally reported within the segment in which the business was first produced, consistent with how the business is managed.

Except for Mt. Logan Re, the Company does not maintain separate balance sheet data for its operating segments.  Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

The following tables present the underwriting results for the operating segments for the periods indicated:

	Three Months Ended				Nine Months Ended
U.S. Reinsurance	September 30,				September 30,
(Dollars in thousands)	2015		2014		2015		2014
Gross written premiums	$	537,483	$	640,660	$	1,464,840	$	1,573,776
Net written premiums		511,238		615,078		1,383,647		1,536,114
Premiums earned	$	488,485	$	559,488	$	1,480,427	$	1,478,258
Incurred losses and LAE		225,944		249,004		699,575		701,473
Commission and brokerage		121,050		123,432		364,005		339,166
Other underwriting expenses		13,718		12,118		37,054		33,054
Underwriting gain (loss)	$	127,773	$	174,934	$	379,793	$	404,565

	Three Months Ended					Nine Months Ended
International	September 30,					September 30,
(Dollars in thousands)	2015			2014		2015		2014
Gross written premiums	$	354,871		$	406,254	$	966,091	$	1,181,513
Net written premiums		318,478			352,608		896,872		977,235
Premiums earned	$	291,396		$	320,020	$	935,228	$	958,399
Incurred losses and LAE		229,013			236,559		630,752		604,166
Commission and brokerage		70,894			73,143		226,321		215,716
Other underwriting expenses		9,128			8,758		25,292		24,683
Underwriting gain (loss)	$	(17,639	)	$	1,560	$	52,863	$	113,834

	Three Months Ended				Nine Months Ended
Bermuda	September 30,				September 30,
(Dollars in thousands)	2015		2014		2015		2014
Gross written premiums	$	267,035	$	205,342	$	605,365	$	573,793
Net written premiums		251,678		189,447		557,453		548,210
Premiums earned	$	222,240	$	181,754	$	616,241	$	546,699
Incurred losses and LAE		154,327		108,961		372,572		310,602
Commission and brokerage		52,980		48,421		151,356		140,968
Other underwriting expenses		9,457		9,360		27,045		25,805
Underwriting gain (loss)	$	5,476	$	15,012	$	65,268	$	69,324

	Three Months Ended					Nine Months Ended
Insurance	September 30,					September 30,
(Dollars in thousands)	2015		2014			2015		2014
Gross written premiums	$	489,124	$	364,111		$	1,173,012	$	911,242
Net written premiums		418,960		310,690			1,022,389		802,431
Premiums earned	$	360,742	$	290,518		$	888,711	$	742,038
Incurred losses and LAE		262,328		239,823			662,052		557,047
Commission and brokerage		50,268		40,418			127,125		114,535
Other underwriting expenses		35,677		31,311			99,232		83,672
Underwriting gain (loss)	$	12,469	$	(21,034	)	$	302	$	(13,216	)

	Three Months Ended				Nine Months Ended
Mt. Logan Re	September 30,				September 30,
(Dollars in thousands)	2015		2014		2015		2014
Gross written premiums	$	72,200	$	50,334	$	183,694	$	109,163
Net written premiums		60,903		49,757		153,281		98,666
Premiums earned	$	50,777	$	38,218	$	132,508	$	81,411
Incurred losses and LAE		16,485		3,410		36,272		19,575
Commission and brokerage		4,856		5,105		13,325		9,823
Other underwriting expenses		2,687		1,566		6,659		4,951
Underwriting gain (loss)	$	26,749	$	28,137	$	76,252	$	47,062

The following table reconciles the underwriting results for the operating segments to income before taxes as reported in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2015			2014			2015			2014
Underwriting gain (loss)	$	154,828		$	198,609		$	574,478		$	621,569
Net investment income		115,511			142,143			363,140			396,524
Net realized capital gains (losses)		(159,971	)		(9,448	)		(194,654	)		70,694
Net derivative gain (loss)		(11,428	)		1,855			(5,225	)		3,968
Corporate expenses		(5,924	)		(9,958	)		(17,312	)		(18,802	)
Interest, fee and bond issue cost amortization expense		(8,990	)		(12,424	)		(27,006	)		(28,970	)
Other income (expense)		17,413			11,332			59,561			(5,835	)
Income (loss) before taxes	$	101,439		$	322,109		$	752,982		$	1,039,148

The Company produces business in the U.S., Bermuda and internationally.  The net income deriving from and assets residing in the individual foreign countries in which the Company writes business are not identifiable in the Company's financial records.  Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2015		2014		2015		2014
United Kingdom gross written premium	$	212,039	$	199,052	$	565,143	$	536,928

No other country represented more than 5% of the Company's revenues.