Derivative Instruments

6 Months Ended

Jun. 30, 2013

Derivative Instruments [Abstract]

Derivative Instruments

5. DERIVATIVE INSTRUMENTS

As ofJune 30, 2013 and December 31, 2012, none of the Company's derivatives were designated as hedges.The following table summarizes information on the location and amounts of derivative fair values on the unaudited condensed consolidated balance sheets (“consolidated balance sheets”):

	June 30, 2013								December 31, 2012
	Asset				Liability				Asset				Liability
	Derivative		Asset		Derivative		Liability		Derivative		Asset		Derivative		Liability
	Notional		Derivative		Notional		Derivative		Notional		Derivative		Notional		Derivative
	Amount		Fair Value		Amount		Fair Value		Amount		Fair Value		Amount		Fair Value
Put options	$	0	$	0	$	0	$	0	$	5,152	$	532	$	0	$	0
Foreign exchange contracts		307,191		9,248		171,906		4,612		127,712		1,713		194,566		2,656
Interest rate swaps		0		0		33,000		161		0		0		0		0
Total derivatives	$	307,191	$	9,248	$	204,906	$	4,773	$	132,864	$	2,245	$	194,566	$	2,656

Derivative assets and derivative liabilities relating to the put options are classified within “equity securities trading, at fair value” on the consolidated balance sheets. All other asset and liability derivatives are classified within “other assets” or “accounts payable and accrued liabilities” on the consolidated balance sheets.

The following table provides the net realized and unrealized gains (losses)on derivatives not designated as hedges recorded on the consolidated income statements:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Foreign exchange contracts	$	1,989	$	(359)	$	1,245	$	580
Total included in foreign exchange (loss) gain		1,989		(359)		1,245		580
Put options		(90)		0		(3,822)		(336)
Foreign exchange contracts		4,274		4,415		6,089		2,110
Interest rate futures and swaps		4,354		(10,329)		5,294		(1,004)
Total included in net realized investment gains		8,538		(5,914)		7,561		770
Total realized and unrealized gains (losses) on derivatives	$	10,527	$	(6,273)	$	8,806	$	1,350

Derivative Instruments Not Designated as Hedging Instruments

The Company is exposed to foreign currency risk in its investment portfolio. Accordingly, the fair values of the Company's investment portfolio are partially influenced by the change in foreign exchange rates. These foreign currency hedging activities have not been designated as specific hedges for financial reporting purposes.

The Company's insurance and reinsurance subsidiaries and branches operate in various foreign countries and consequently the Company's underwriting portfolio is exposed to foreign currency risk. The Company manages foreign currency risk by seeking to match liabilities under the insurance policies and reinsurance contracts that it writes and that are payable in foreign currencies with cash and investments that are denominated in such currencies. When necessary, the Company may also use derivatives to economically hedge un-matched foreign currency exposures, specifically forward contracts and currency options.

The Company also purchases and sells interest rate future and interest rate swap contracts to actively manage the duration and yield curve positioning of its fixed income portfolio. Interest rate futures and interest rate swaps can efficiently increase or decrease the overall duration of the portfolio. Additionally, interest rate future and interest rate swap contracts can be utilized to obtain the desired position along the yield curve in order to protect against certain future yield curve shapes.

The Company also purchases options to actively manage the Company's equity portfolio.