Derivative Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

As of December 31, 2013 and 2012, none of the Company’s derivatives were designated as hedges for accounting purposes. The following table summarizes information on the location and amounts of derivative fair values on the consolidated balance sheets:

	December 31, 2013								December 31, 2012
	Asset Derivative Notional Amount		Asset Derivative Fair Value		Liability Derivative Notional Amount		Liability Derivative Fair Value		Asset Derivative Notional Amount		Asset Derivative Fair Value		Liability Derivative Notional Amount		Liability Derivative Fair Value
Put options	$	—	$	—	$	—	$	—	$	5,152	$	532	$	—	$	—
Foreign exchange contracts	294,788		6,254		122,439		1,176		127,712		1,713		194,566		2,656
Interest rate swaps	491,400		6,829		40,000		4,214		—		—		—		—
Total derivatives	$	786,188	$	13,083	$	162,439	$	5,390	$	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:

	Year Ended December 31,
	2013			2012			2011
Foreign exchange contracts	$	1,274		$	(749	)	$	(6,005	)
Total included in foreign exchange loss	1,274			(749		)	(6,005		)
Put options	(3,822		)	(2,222		)	(4,125		)
Foreign exchange contracts	3,054			(1,024		)	(6,242		)
Interest rate swaps	5,591			—			—
Interest rate futures	4,662			(362		)	(59,723		)
Total included in net realized investment gains	9,485			(3,608		)	(70,090		)
Total realized and unrealized gains (losses) on derivatives	$	10,759		$	(4,357	)	$	(76,095	)

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 unmatched 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.