Segment Reporting

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Reporting

16. SEGMENT REPORTING

The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the U.S., Bermuda, and Ireland offices, as well as, through branches in Canada, Singapore and the United Kingdom. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents within the U.S., Canada and Europe through its offices in the U.S., Canada, Ireland and a branch located in Zurich.

These segments 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.

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.

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				Six Months Ended
Reinsurance	June 30,				June 30,
(Dollars in thousands)	2020		2019		2020		2019
Gross written premiums	$	1,538,348	$	1,409,587	$	3,316,119	$	2,941,638
Net written premiums		1,424,089		1,234,686		3,037,183		2,629,239
Premiums earned	$	1,502,256	$	1,343,760	$	2,987,476	$	2,651,279
Incurred losses and LAE		1,005,677		783,082		2,026,319		1,555,280
Commission and brokerage		387,339		345,378		757,695		668,015
Other underwriting expenses		39,698		37,430		83,837		73,199
Underwriting gain (loss)	$	69,542	$	177,870	$	119,625	$	354,785

	Three Months Ended				Six Months Ended
Insurance	June 30,				June 30,
(Dollars in thousands)	2020		2019		2020		2019
Gross written premiums	$	830,990	$	757,068	$	1,624,090	$	1,352,125
Net written premiums		593,389		549,297		1,181,774		1,006,442
Premiums earned	$	540,149	$	473,539	$	1,091,743	$	898,717
Incurred losses and LAE		401,339		311,548		811,537		587,900
Commission and brokerage		78,977		75,572		157,143		142,409
Other underwriting expenses		78,432		67,403		163,153		130,619
Underwriting gain (loss)	$	(18,599)	$	19,016	$	(40,090)	$	37,789

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				Six Months Ended
	June 30,				June 30,
(Dollars in thousands)	2020		2019		2020		2019
Underwriting gain (loss)	$	50,943	$	196,886	$	79,535	$	392,574
Net investment income		38,083		179,028		185,883		320,004
Net realized capital gains (losses)		184,648		30,272		(25,940)		122,504
Net derivative gain (loss)		11,869		353		(3,504)		3,584
Corporate expenses		(8,733)		(7,535)		(18,566)		(14,187)
Interest, fee and bond issue cost amortization expense		(7,253)		(8,434)		(14,836)		(16,065)
Other income (expense)		(32,490)		(18,225)		(9,127)		(21,525)
Income (loss) before taxes	$	237,067	$	372,345	$	193,445	$	786,889

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				Six Months Ended
	June 30,				June 30,
(Dollars in thousands)	2020		2019		2020		2019
United Kingdom gross written premium	$	236,100	$	207,140	$	542,808	$	470,997

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