Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

11. GOODWILL AND INTANGIBLE ASSETS

The following table shows the Company’s goodwill and intangible assets as at March 31, 2014 and December 31, 2013:


	Goodwill		Intangible assets with a definite life - Other			Intangible assets with an indefinite life		Total			Intangible assets with a definite life - FVA
Balance as at January 1, 2013	$	60,071	$	27,000		$	63,000	$	150,071		$	223,947
Acquired during the period		—		—			—		—			—
Intangible assets amortization		—		(677	)		—		(677	)		1,343

Balance as at March 31, 2014	$	60,071	$	26,323		$	63,000	$	149,394		$	225,290

Intangible assets with a definite life include:

(i)

Fair value adjustments (“FVA”) relate to outstanding losses and loss adjustment expenses, policy benefits for life and annuity contracts and reinsurance recoverables and are included as a component of each balance sheet item. FVA are amortized in proportion to future premiums for policy benefits for life and annuity contracts and over the estimated payout or recovery period for outstanding losses and loss adjustment expenses and reinsurance recoverables; and

(ii)

Other intangible assets relate to the values associated with the distribution channel and brand related to the Company’s acquisition of Atrium. These assets will be amortized on a straight-line basis over a period of ten to fifteen years.

Intangible asset amortization for the three months ended March 31, 2014 and 2013 was $1.5 million and $2.1 million, respectively.

Intangible assets with an indefinite life include the values associated with the Lloyd’s syndicate capacity and Atrium’s management contract with Syndicate 609 in relation to underwriting, actuarial and support services it provides.

The gross carrying value, accumulated amortization and net carrying value of intangible assets by type at March 31, 2014 and December 31, 2013 were as follows:


	March 31, 2014									December 31, 2013
	Gross Carrying Value			Accumulated Amortization			Net Carrying Value			Gross Carrying Value			Accumulated Amortization			Net Carrying Value
Intangible assets with a definite life:
Fair value adjustments:
Losses and loss adjustment expense	$	500,485		$	(288,550	)	$	211,935		$	500,485		$	(282,178	)	$	218,307
Reinsurance balances recoverable		(179,116	)		124,096			(55,020	)		(179,116	)		113,659			(65,457	)
Policy benefits for life and annuity contracts		86,332			(17,957	)		68,375			86,332			(15,235	)		71,097

Total		407,701			(182,411	)		225,290			407,701			(183,754	)		223,947
Other:
Distribution channel		20,000			(444	)		19,556			20,000			—			20,000
Brand		7,000			(233	)		6,767			7,000			—			7,000

Total		27,000			(677	)		26,323			27,000			—			27,000

Total intangible assets with a definite life		434,701			(183,088	)		251,613			434,701			(183,754	)		250,947

Intangible assets with an indefinite life:
Lloyd’s syndicate capacity		32,900			—			32,900			32,900			—			32,900
Management contract		30,100			—			30,100			30,100			—			30,100

Total intangible assets	$	497,701		$	(183,088	)	$	314,613		$	497,701		$	(183,754	)	$	313,947

As at March 31, 2014 and December 31, 2013, the allocation of the goodwill to the Company’s non-life run-off and active underwriting segments was $21.2 million and $38.9 million, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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