Segments

12 Months Ended

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2010

Segments [Abstract]

Segments

(12)Segments

We report HCC's results in six operating segments, each of which reports to an HCC executive who is responsible for the segment results. Each of our five insurance underwriting segments bears risk for insurance coverage written within its portfolio of insurance products. Each segment generates income from premium written by our underwriting agencies, through third party agents and brokers, or on a direct basis. Fee and commission income earned by our agencies from third party insurance companies is included in segment revenue. Each segment incurs insurance losses, acquisition costs and other administrative expenses related to our insurance companies and underwriting agencies. We monitor and assess each segment's pretax results based on underwriting profit, gross and net written premium, and its combined ratio, consisting of the net loss ratio and expense ratio.

Included in the portfolio of products for each insurance underwritingsegment are the following key products:

• U.S. Property & Casualty –aviation, small account errors and omissions (E&O) liability, public risk, contingency, disability, title and mortgage reinsurance, residual value,employment practices liability (EPLI), technical property, primary and excess casualty, and brown water marine written in the United States.
• Professional Liability –directors' and officers' (D&O) liability, large account E&O liability,fiduciary liability, fidelity and bankers' blanket bonds, and EPLI for some D&O policyholders written in the United States and internationally.
• Accident & Health – medical stop-loss, short-term domestic and international medical coverageswritten in the United States.
• U.S. Surety & Credit – contract surety bonds, commercial surety bondsand bail bondswritten in the United States and credit insurancemanaged in the United States.
• International – energy, property treaty, liability, surety, credit,property (direct and facultative), ocean marine, accident and health and other smaller product lines written outside the United States.

The Investing segment includes our consolidated investment portfolio, as well as all investment income, investment related expenses, realized investment gains and losses, and other-than-temporary impairment credit losses on investments.All investment activity is reported as revenue, consistent with our consolidated presentation.

In addition to our segments, we include a Corporate & Other categoryto reconcile segment results to consolidated totals. The Corporate & Other category includes corporate operating expenses not allocable to the segments, interest expense on long-term debt, foreign currency expense (benefit), and underwriting results of our Exited Lines. Our Exited Lines include these eightproduct lines that we no longer write and do not expect to write in the future: 1) accident and health business managed by our underwriting agency, LDG Reinsurance, 2) workers' compensation, 3) provider excess, 4) Spanish medical malpractice, 5) U.K. motor, 6) film completion bonds, 7) HMO reinsurance and 8) medical excess reinsurance. In the third quarter of 2012, we exited the HMO and medical excess reinsurance businesses that had previously been included in our Accident & Health segment. We have adjusted all prior financial data to report these two product lines in Exited Lines for all periods presented.

All stock-based compensation is included in Corporate & Other because it is not included in management's evaluation of the five insurance underwriting segments. All contractual and discretionary bonuses are expensed in the respective employee's segment in the year the bonuses are earned. Any such bonuses that will be paid by restricted stock awards or units, which will be granted by the Compensation Committee in the following year, are reversed within Corporate & Other. The appropriate stock-based compensation expense will be recorded in Corporate & Other as the awards vest in future years. The majority of our depreciation and amortization expense is included in Corporate & Other.

The following tables presentinformation by business segment.

			U.S. Property & Casualty		Professional Liability		Accident & Health		U.S. Surety & Credit		International		Investing		Corporate & Other		Consolidated
Year ended December 31, 2012
Net earned premium			$	354,050	$	394,687	$	831,827	$	207,955	$	412,853	$	0	$	41,253	$	2,242,625
Other revenue				18,865		731		4,918		843		5,005		252,754		86		283,202
	Segment revenue			372,915		395,418		836,745		208,798		417,858		252,754		41,339		2,525,827
Loss and LAE				209,286		229,873		601,076		38,535		189,410		0		37,331		1,305,511
Other expense				116,398		66,721		122,232		113,619		146,807		0		100,112		665,889
	Segment expense			325,684		296,594		723,308		152,154		336,217		-		137,443		1,971,400
		Segment pretax earnings (loss)	$	47,231	$	98,824	$	113,437	$	56,644	$	81,641	$	252,754	$	(96,104)	$	554,427

The following table presents total assets by segment at December 31, 2012 and 2011.

	2012		2011
U.S. Property & Casualty	$	859,597	$	938,265
Professional Liability		1,053,024		1,026,639
Accident & Health		243,023		236,811
U.S. Surety & Credit		162,817		157,037
International		658,632		722,933
Investing		7,018,747		6,119,288
Corporate & Other		271,967		396,305
Total	$	10,267,807	$	9,597,278

The tables below present the split of our revenue, pretax earnings and total assets by geographic location.For these disclosures, wedetermine geographic location by the country of domicile of our subsidiaries that write the business and not by the location of insureds or reinsureds from whom the business was generated.

	2012		2011		2010
Domestic	$	1,880,954	$	1,779,789	$	1,785,865
Foreign		644,873		594,216		516,389
Total revenue	$	2,525,827	$	2,374,005	$	2,302,254
Domestic	$	364,083	$	237,056	$	347,841
Foreign		190,344		117,950		141,986
Total pretax earnings	$	554,427	$	355,006	$	489,827

	December 31,
	2012		2011
Domestic	$	7,536,285	$	7,232,177
Foreign		2,731,522		2,365,101
Total assets	$	10,267,807	$	9,597,278

Year ended December 31, 2011
Net earned premium			$	333,410	$	410,816	$	758,270	$	210,535	$	368,748	$	0	$	45,391	$	2,127,170
Other revenue				23,951		912		4,684		1,247		5,309		211,245		(513)		246,835
	Segment revenue			357,361		411,728		762,954		211,782		374,057		211,245		44,878		2,374,005
Loss and LAE				201,017		328,503		552,292		52,206		233,879		0		31,350		1,399,247
Other expense				110,184		59,036		116,336		113,932		136,750		0		83,514		619,752
	Segment expense			311,201		387,539		668,628		166,138		370,629		-		114,864		2,018,999
		Segment pretax earnings (loss)	$	46,160	$	24,189	$	94,326	$	45,644	$	3,428	$	211,245	$	(69,986)	$	355,006

			U.S. Property & Casualty		Professional Liability		Accident & Health		U.S. Surety & Credit		International		Investing		Corporate & Other		Consolidated
Year ended December 31, 2010
Net earned premium			$	339,513	$	425,226	$	705,408	$	199,908	$	316,186	$	0	$	55,683	$	2,041,924
Other revenue				31,201		981		3,872		580		7,344		215,498		854		260,330
	Segment revenue			370,714		426,207		709,280		200,488		323,530		215,498		56,537		2,302,254
Loss and LAE				191,108		265,465		506,994		52,940		143,412		0		53,110		1,213,029
Other expense				103,229		74,524		110,942		109,685		120,956		0		80,062		599,398
	Segment expense			294,337		339,989		617,936		162,625		264,368		-		133,172		1,812,427
		Segment pretax earnings (loss)	$	76,377	$	86,218	$	91,344	$	37,863	$	59,162	$	215,498	$	(76,635)	$	489,827