RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2021

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, the Company engages SKY Harbor Capital Management, LLC, an affiliate of Stone Point, to provide asset management services for certain high yield debt portfolios. For the year ended December 31, 2021, total fees paid to SKY Harbor Capital Management, LLC, were $2 million (2020: $3 million; 2019: $3 million).

In addition, the Company has an investment of $47 million in the Freedom Consumer Credit Fund, LLC - Series B. The manager of this fund is Freedom Financial Asset Management, LLC ("Freedom") which is an indirect subsidiary of Pantheon Partners, LLC ("Pantheon"). Investment funds managed by Stone Point own approximately 14.5% of Pantheon. For the year ended December 31, 2021, fees paid to Freedom were $3 million (2020: $2 million; 2019: $3 million).

The Company has an investment of $79 million in Stone Point's private equity fund, Trident VIII L.P. ("Trident VIII") and co-investments of $25 million with Trident VIII. For the year ended December 31, 2021, fees paid to Stone Point in relation to Trident VIII were $4 million (2020: $1 million; 2019: $nil).

The Company has an investment of $20 million with Rialto Real Estate IV-Property and co-investments of $16 million with Rialto Real Estate Fund IV-Property, a fund managed by a portfolio company of Stone Point's private equity fund, Trident VII L.P. For the year ended December 31, 2021, fees paid to Rialto were $1 million (2020: $nil; 2019: $nil).

The Company has an investment of $12 million in Stone Point Credit Corporation. For the year ended December 31, 2021, the Company has not paid any fees to Stone Point in relation to Stone Point Credit Corporation.

During his tenure as the Company's Chair, Mr. Butt received consulting fees for the year ended December 31, 2020 of $0.4 million (2019: $0.4 million) pursuant to the terms of a consulting agreement between Mr. Butt and the Company which terminated on December 31, 2020.

The Company's investment portfolio includes certain investments where it is considered to have the ability to exercise significant influence over the operating and financial policies of the investee. Significant influence is generally deemed to exist where the Company has an investment of 20% or more in the common stock of a corporation or an investment greater than 3% to 5% in closed end funds, limited partnerships, LLCs or similar investment vehicles. At December 31, 2021, the Company has $555 million (2020: $404 million) of investments where it is deemed to have the ability to exercise such significant influence. The Company generally pays management and performance fees to the investment managers of these investments. The Company considers all fees paid to the investment managers to be at market rates consistent with negotiated arms-length contracts.

Harrington and Harrington Re commenced operations in 2016 (refer to Note 5 'Investments'). The Company has the ability to exercise significant influence over the operating and financial policies of Harrington and Harrington Re. In the normal course of business, the Company enters into certain reinsurance transactions with Harrington Re. For the year ended December 31, 2021, the Company ceded reinsurance premiums of $283 million (2020: $256 million; 2019: $247 million) and ceded losses of $188 million (2020: $187 million; 2019: $157 million) to Harrington Re. In addition, Harrington Re paid certain acquisition costs and administrative fees to the Company. At December 31, 2021, the amount of reinsurance recoverable on unpaid and paid losses was $717 million (2020: $641 million) and the amount of ceded reinsurance payable included in insurance and reinsurance balances payable was $189 million (2020: $188 million) in the consolidated balance sheets. All transactions were conducted at market rates consistent with negotiated arms-length contracts.

On June 29, 2021, the Company invested $10 million in 7.25% fixed to floating rate, senior unsecured notes due 2031, issued by Harrington.

On November 5, 2013, the Company formed AXIS Ventures Reinsurance Limited ("Ventures Re"), a Bermuda domiciled insurer. All of Ventures Re's directors were employees of the Company. Effective January 1, 2015, Ventures Re was no longer included in the consolidated financial statements of the Company. In the normal course of business, the Company entered into certain reinsurance contracts with Ventures Re. Effective, January 1, 2020, Ventures Re entered into a novation reinsurance contract with various reinsurers. For the year ended December 31, 2019, the Company ceded premiums of $192 million and ceded losses of $140 million to Ventures Re. In addition, Ventures Re paid certain acquisition costs and administrative fees to the Company.