Segment Reporting Disclosures

The Company monitors and reports its ongoing underwriting operations in the following three segments: U.S. Insurance, International Insurance and Reinsurance. In determining how to aggregate and monitor its underwriting results, the Company considers many factors, including the geographic location and regulatory environment of the insurance entity underwriting the risk, the nature of the insurance product sold, the type of account written and the type of customer served. The U.S. Insurance segment includes all direct business and facultative placements written by the Company's insurance subsidiaries domiciled in the United States. The International Insurance segment includes all direct business and facultative placements written by the Company's insurance subsidiaries domiciled outside of the United States, including the Company's syndicate at Lloyd's. The Reinsurance segment includes all treaty reinsurance written across the Company. Results for lines of business discontinued prior to, or in conjunction with, acquisitions, including the results attributable to the run-off of life and annuity reinsurance business, are reported in the Other Insurance (Discontinued Lines) segment. All investing activities related to the Company's insurance operations are included in the Investing segment.

The Company's non-insurance operations include its Markel Ventures operations, which primarily consist of controlling interests in various industrial and service businesses. The Company's non-insurance operations also include the results of the Company's legal and professional consulting services, and effective December 8, 2015, the results attributable to Markel CATCo IM. For purposes of segment reporting, the Company's non-insurance operations are not considered to be a reportable segment.

The following table summarizes the Company's gross written premiums by country. Gross written premiums are attributed to individual countries based upon location of risk.



	Years Ended December 31,
(dollars in thousands)	2015		% of Total		2014		% of Total		2013		% of Total
United States	$	3,519,487	76	%	$	3,523,239	73	%	$	2,934,868	75	%
United Kingdom	414,941		9		441,669		9		245,143		6
Canada	115,191		2		125,617		3		128,420		3
Other countries	583,293		13		714,988		15		611,795		16
Total	$	4,632,912	100	%	$	4,805,513	100	%	$	3,920,226	100	%

Most of the Company's gross written premiums are placed through insurance and reinsurance brokers. During the years ended December 31, 2015, 2014 and 2013, the top three independent brokers accounted for approximately 27%, 28% and 24% of consolidated gross premiums written. During the years ended December 31, 2015, 2014 and 2013, the top three independent brokers accounted for approximately and 42%, 41% and 42%, respectively, of gross premiums written in the International Insurance segment, and 68% of gross premiums written in the Reinsurance segment each year.

Segment profit for the Investing segment is measured by net investment income and net realized investment gains or losses. Segment profit or loss for each of the Company's underwriting segments is measured by underwriting profit or loss. The property and casualty insurance industry commonly defines underwriting profit or loss as earned premiums net of losses and loss adjustment expenses and underwriting, acquisition and insurance expenses. Underwriting profit or loss does not replace operating income or net income computed in accordance with U.S. GAAP as a measure of profitability. Underwriting profit or loss provides a basis for management to evaluate the Company's underwriting performance. Segment profit or loss for the Company's underwriting segments also includes other revenues and other expenses, primarily related to the run-off of managing general agent operations that were discontinued in conjunction with acquisitions. Other revenues and other expenses in the Other Insurance (Discontinued Lines) segment are comprised of the results attributable to the run-off of life and annuity reinsurance business.

For management reporting purposes, the Company allocates assets to its underwriting, investing and non-insurance operations. Underwriting assets are all assets not specifically allocated to the Investing segment or to the Company's non-insurance operations. Underwriting and investing assets are not allocated to the U.S. Insurance, International Insurance, Reinsurance or Other Insurance (Discontinued Lines) segments since the Company does not manage its assets by underwriting segment. The Company does not allocate capital expenditures for long-lived assets to any of its underwriting segments for management reporting purposes.


a)	The following tables summarize the Company's segment disclosures.



	Year Ended December 31, 2015
(dollars in thousands)	U.S. Insurance			International Insurance			Reinsurance			Other Insurance (Discontinued Lines)				Investing		Consolidated
Gross premium volume	$	2,504,096		$	1,164,866		$	965,374		$	(1,424	)		$	—	$	4,632,912
Net written premiums	2,106,490			888,214			824,324			265				—		3,819,293

Earned premiums	2,105,212			879,426			838,543			351				—		3,823,532
Losses and loss adjustment expenses:
Current accident year	(1,367,159		)	(638,144		)	(561,242		)	—				—		(2,566,545		)
Prior accident years	298,967			248,834			97,860			(17,861		)		—		627,800
Amortization of policy acquisition costs	(420,289		)	(142,657		)	(182,018		)	—				—		(744,964		)
Other operating expenses	(378,563		)	(221,758		)	(106,863		)	(2,932		)		—		(710,116		)
Underwriting profit (loss)	238,168			125,701			86,280			(20,442		)		—		429,707
Net investment income	—			—			—			—				353,213		353,213
Net realized investment gains	—			—			—			—				106,480		106,480
Other revenues (insurance)	3,331			7,790			593			617				—		12,331
Other expenses (insurance)	(3,902		)	(5,717		)	(1,419		)	(29,057		)		—		(40,095		)
Segment profit (loss)	$	237,597		$	127,774		$	85,454		$	(48,882	)		$	459,693	$	861,636
Other revenues (non-insurance)																1,074,427
Other expenses (non-insurance)																(1,006,710		)
Amortization of intangible assets																(68,947		)
Interest expense																(118,301		)
Income before income taxes																$	742,105
U.S. GAAP combined ratio ⁽¹⁾	89		%	86		%	90		%	NM			⁽²⁾			89		%


⁽¹⁾	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.


⁽²⁾	NM — Ratio is not meaningful.



	Year Ended December 31, 2014
(dollars in thousands)	U.S. Insurance			International Insurance			Reinsurance			Other Insurance (Discontinued Lines)				Investing		Consolidated
Gross premium volume	$	2,493,823		$	1,200,403		$	1,112,728		$	(1,441	)		$	—	$	4,805,513
Net written premiums	2,071,466			889,336			956,584			(371		)		—		3,917,015

Earned premiums	2,022,860			909,679			908,385			(12		)		—		3,840,912
Losses and loss adjustment expenses:
Current accident year	(1,340,129		)	(660,409		)	(637,474		)	—				—		(2,638,012		)
Prior accident years	216,557			166,615			79,951			(27,578		)		—		435,545
Amortization of policy acquisition costs	(403,233		)	(141,394		)	(110,289		)	—				—		(654,916		)
Other operating expenses	(396,737		)	(207,175		)	(201,673		)	(381		)		—		(805,966		)
Underwriting profit (loss)	99,318			67,316			38,900			(27,971		)		—		177,563
Net investment income	—			—			—			—				363,230		363,230
Net realized investment gains	—			—			—			—				46,000		46,000
Other revenues (insurance)	2,478			21,827			2,696			1,631				—		28,632
Other expenses (insurance)	(5,149		)	(18,706		)	(1,847		)	(37,132		)		—		(62,834		)
Segment profit (loss)	$	96,647		$	70,437		$	39,749		$	(63,472	)		$	409,230	$	552,591
Other revenues (non-insurance)																854,893
Other expenses (non-insurance)																(792,037		)
Amortization of intangible assets																(57,627		)
Interest expense																(117,442		)
Income before income taxes																$	440,378
U.S. GAAP combined ratio ⁽¹⁾	95		%	93		%	96		%	NM			⁽²⁾			95		%


⁽¹⁾	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.


⁽²⁾	NM — Ratio is not meaningful.



	Year Ended December 31, 2013
(dollars in thousands)	U.S. Insurance			International Insurance			Reinsurance			Other Insurance (Discontinued Lines)				Investing		Consolidated
Gross premium volume	$	2,252,739		$	1,101,099		$	566,348		$	40			$	—	$	3,920,226
Net written premiums	1,915,770			840,050			480,822			41				—		3,236,683

Earned premiums	1,727,766			833,984			669,826			40				—		3,231,616
Losses and loss adjustment expenses:
Current accident year	(1,173,258		)	(588,759		)	(465,385		)	—				—		(2,227,402		)
Prior accident years	298,113			130,660			12,938			(30,582		)		—		411,129
Transaction costs and other acquisition-related expenses ⁽¹⁾	(12,724		)	(13,366		)	(49,050		)	—				—		(75,140		)
Amortization of policy acquisition costs	(287,795		)	(138,626		)	(45,494		)	—				—		(471,915		)
Other operating expenses	(409,886		)	(171,666		)	(183,817		)	112				—		(765,257		)
Underwriting profit (loss)	142,216			52,227			(60,982		)	(30,430		)		—		103,031
Net investment income	—			—			—			—				317,373		317,373
Net realized investment gains	—			—			—			—				63,152		63,152
Other revenues (insurance)	13,648			4,284			5,432			1,130				—		24,494
Other expenses (insurance)	(17,087		)	(5,065		)	—			(28,126		)		—		(50,278		)
Segment profit (loss)	$	138,777		$	51,446		$	(55,550	)	$	(57,426	)		$	380,525	$	457,772
Other revenues (non-insurance)																686,448
Other expenses (non-insurance)																(613,250		)
Amortization of intangible assets																(55,223		)
Interest expense																(114,004		)
Income before income taxes																$	361,743
U.S. GAAP combined ratio ⁽²⁾	92		%	94		%	109		%	NM			⁽³⁾			97		%

⁽¹⁾

In connection with the acquisition of Alterra, the Company incurred transaction costs of $16.0 million for the year ended December 31, 2013, which primarily consist of due diligence, legal and investment banking costs. Additionally, the Company incurred severance costs of $31.7 million, stay bonuses of $14.8 million and other compensation costs totaling $12.6 million related to the acceleration of certain long-term incentive compensation awards and restricted stock awards that were granted by Alterra prior to the acquisition.


⁽²⁾	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.


⁽³⁾	NM — Ratio is not meaningful.

b)The following table summarizes deferred policy acquisition costs, unearned premiums and unpaid losses and loss adjustment expenses by segment.



(dollars in thousands)	Deferred Policy Acquisition Costs		Unearned Premiums		Unpaid Losses and Loss Adjustment Expenses
December 31, 2015
U.S. Insurance	$	162,289	$	1,105,456	$	3,720,429
International Insurance	48,913		467,158		3,140,000
Reinsurance	141,554		593,491		2,750,258
Other Insurance (Discontinued Lines)	—		—		641,266
Total	$	352,756	$	2,166,105	$	10,251,953
December 31, 2014
U.S. Insurance	$	165,333	$	1,110,910	$	3,577,166
International Insurance	47,618		491,708		3,353,417
Reinsurance	140,459		643,072		2,818,792
Other Insurance (Discontinued Lines)	—		—		654,777
Total	$	353,410	$	2,245,690	$	10,404,152

c)The following table summarizes segment earned premiums by major product grouping.



	Years Ended December 31,
(dollars in thousands)	2015		2014			2013
U.S. Insurance:
General liability	$	522,358	$	491,645		$	431,798
Professional liability	324,230		321,005			268,203
Property	264,232		266,019			190,530
Personal lines	325,811		299,442			185,935
Programs	277,829		244,216			205,004
Workers compensation	281,954		263,164			250,790
Other	108,798		137,369			195,506
Total U.S. Insurance	2,105,212		2,022,860			1,727,766
International Insurance:
General liability	124,198		146,178			128,171
Professional liability	268,637		285,300			252,816
Property	85,152		76,691			91,497
Marine and energy	262,307		287,263			287,745
Other	139,132		114,247			73,755
Total International Insurance	879,426		909,679			833,984
Reinsurance:
Property	265,373		270,461			227,394
Casualty	315,027		323,390			244,981
Auto	102,227		152,645			84,042
Other	155,916		161,889			113,409
Total Reinsurance	838,543		908,385			669,826
Other Insurance (Discontinued Lines)	351		(12		)	40
Total earned premiums	$	3,823,532	$	3,840,912		$	3,231,616

The Company does not manage products at this level of aggregation. The Company offers a diverse portfolio of products and manages these products in logical groupings within each operating segment.

d)The following table reconciles segment assets to the Company's consolidated balance sheets.



	December 31,
(dollars in thousands)	2015		2014		2013
Segment assets:
Investing	$	18,056,947	$	18,531,150	$	17,550,332
Underwriting	5,386,710		5,422,445		5,468,731
Total segment assets	23,443,657		23,953,595		23,019,063
Non-insurance operations	1,497,614		1,246,762		936,448
Total assets	$	24,941,271	$	25,200,357	$	23,955,511