RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions

A member of the Company’s Board of Directors, Mr. Charles Davis, is the Chief Executive Officer of Stone Point Capital, LLC ("Stone Point"). In the ordinary course of business, we engage SKY Harbor Capital Management, LLC, an affiliate of Stone Point, for asset management services for certain of our short duration high yield debt portfolios and StoneRiver RegEd, also an affiliate of Stone Point, for broker and adjuster licensing, appointment and compliance services. During 2016, total fees paid to these Stone Point companies were $4 million (2015: $4 million; 2014: $4 million).

We currently have $30 million committed to the NXT Capital Senior Loan Fund II and $30 million committed to NXT Capital Senior Loan Fund III. The manager of these funds is an indirect subsidiary of NXT Capital Holdings, L.P. ("NXT Capital"). Investment funds managed by Stone Point own approximately 45% of NXT Capital. During 2016, fees paid to NXT Capital totaled $1 million (2015: $1 million; 2014: $1 million).

Our Chairman, Mr. Butt, received $0.6 million in consulting fee payments in 2016 pursuant to the terms of a consulting agreement by and between Mr. Butt and the Company dated May 3, 2012, as amended December 5, 2013, December 4, 2014, and January 15, 2016 (2015: $1 million; 2014: $1 million). The consulting agreement was further amended on December 8, 2016 to extend the term of the agreement to the Company's 2018 Annual General Meeting for an annual fee of $0.5 million.

Our investments portfolio includes certain investments where we are considered to have the ability to exercise significant influence over the investment entity's operations. Significant influence is generally deemed to exist where we have an investment of 20% or more in the common stock of a corporation or an investment of 3% or more in closed end funds, limited partnerships, LLCs or similar investment vehicles.  At December 31, 2016 we have $411 million (2015: $193 million) of investments where we are deemed to have the ability to exercise such significant influence.  We generally pay management and performance fees to the investment managers of these investments. We consider all fees paid to the investment managers to be at market rates consistent with negotiated arms-length contracts.

As discussed further in Note 5 ‘Investments’, during the second quarter of 2016, Harrington and Harrington Re commenced operations. AXIS has the ability to exercise significant influence over the operating and financial policies of Harrington. In the normal course of business, the Company entered into certain reinsurance transactions with Harrington Re. During the six months ended December 31, 2016, the Company ceded reinsurance premiums of $128 million to Harrington Re and ceded losses of $27 million. In addition, Harrington Re paid certain acquisition costs and administrative fees to the Company. At December 31, 2016, the amount of reinsurance recoverable on unpaid and paid losses was $38 million and the amount of ceded reinsurance payable included in insurance and reinsurance balances payable was $86 million in the Consolidated balance sheets.

As discussed further in Note 14 'Noncontrolling Interests', during November 2013, the Company formed Ventures Re, a Bermuda domiciled insurer. With effect from January 1, 2015, Ventures Re is no longer consolidated in the financial statements of the Company. All of Ventures Re's directors are employees of the Company. In the normal course of business, the Company enters into certain reinsurance contracts with Ventures Re. During the year ended December 31, 2016, the Company ceded premiums of $40 million to Ventures Re and ceded losses of $10 million. In addition, Ventures Re also paid certain acquisition costs and administrative fees to the Company. We believe that all transactions were conducted at market rates consistent with negotiated arms-length contracts.