21. Segment Information

The Company monitors the performance of its operations in three segments, Non-life, Life and Health and Corporate and Other. The Non-life segment is further divided into four sub-segments: North America, Global (Non-U.S.) P&C, Global Specialty and Catastrophe. Effective January 1, 2013, the Life segment is referred to as Life and Health to reflect and include PartnerRe Health’s results following its acquisition on December 31, 2012 and the Global (Non-U.S.) Specialty sub-segment is referred to as Global Specialty. Segments and sub-segments represent markets that are reasonably homogeneous in terms of geography, client types, buying patterns, underlying risk patterns and approach to risk management.

The North America sub-segment includes agriculture, casualty, credit/surety, motor, multiline, property and other risks generally originating in the United States. The Global (Non-U.S.) P&C sub-segment includes casualty, motor and property business generally originating outside of the United States. The Global Specialty sub-segment is comprised of business that is generally considered to be specialized due to the sophisticated technical underwriting required to analyze risks, and is global in nature. This sub-segment consists of several lines of business for which the Company believes it has developed specialized knowledge and underwriting capabilities. These lines of business include agriculture, aviation/space, credit/surety, energy, engineering, marine, specialty casualty, specialty property and other lines. The Catastrophe sub-segment is comprised of the Company’s catastrophe line of business. The Life and Health segment includes mortality, longevity and accident and health lines of business. Corporate and Other is comprised of the capital markets and investment related activities of the Company, including principal finance transactions, insurance-linked securities and strategic investments, and its corporate activities, including other expenses.

Since the Company does not manage its assets by segment, net investment income is not allocated to the Non-life segment. However, because of the interest-sensitive nature of some of the Company’s Life and Health products, net investment income is considered in Management’s assessment of the profitability of the Life and Health segment. The following items are not considered in evaluating the results of the Non-life and Life and Health segments: net realized and unrealized investment gains and losses, interest expense, amortization of intangible assets, net foreign exchange gains and losses, income tax expense or benefit and interest in earnings and losses of equity method investments. Segment results are shown before consideration of intercompany transactions.

Management measures results for the Non-life segment on the basis of the loss ratio, acquisition ratio, technical ratio, other expense ratio and combined ratio (all defined below). Management measures results for the Non-life sub-segments on the basis of the loss ratio, acquisition ratio and technical ratio. Management measures results for the Life and Health segment on the basis of the allocated underwriting result, which includes revenues from net premiums earned, other income or loss and allocated net investment income for Life and Health, and expenses from life policy benefits, acquisition costs and other expenses.

The segment results for the years ended December 31, 2014, 2013 and 2012, were as follows (in millions of U.S. dollars, except ratios):

Segment Information

For the year ended December 31, 2014



	North America			Global (Non-U.S.) P&C			Global Specialty			Catastrophe			Total Non-life segment			Life and Health segment			Corporate and Other			Total
Gross premiums written	$	1,642		$	803		$	1,797		$	425		$	4,667		$	1,265		$	—		$	5,932
Net premiums written	$	1,630		$	794		$	1,696		$	380		$	4,500		$	1,220		$	—		$	5,720
(Increase) decrease in unearned premiums	(33		)	(26		)	(58		)	4			(113		)	2			—			(111		)
Net premiums earned	$	1,597		$	768		$	1,638		$	384		$	4,387		$	1,222		$	—		$	5,609
Losses and loss expenses and life policy benefits	(1,000		)	(438		)	(963		)	(62		)	(2,463		)	(1,000		)	—			(3,463		)
Acquisition costs	(401		)	(222		)	(400		)	(42		)	(1,065		)	(149		)	—			(1,214		)
Technical result	$	196		$	108		$	275		$	280		$	859		$	73		$	—		$	932
Other income													3			8			5			16
Other expenses													(252		)	(68		)	(130		)	(450		)
Underwriting result													$	610		$	13		n/a			$	498
Net investment income																60			420			480
Allocated underwriting result ⁽¹⁾																$	73		n/a			n/a
Net realized and unrealized investment gains																			372			372
Interest expense																			(49		)	(49		)
Amortization of intangible assets																			(27		)	(27		)
Net foreign exchange gains																			18			18
Income tax expense																			(239		)	(239		)
Interest in earnings of equity method investments																			15			15
Net income																			n/a			$	1,068
Loss ratio ⁽²⁾	62.6		%	57.0		%	58.8		%	16.1		%	56.1		%
Acquisition ratio ⁽³⁾	25.1			28.9			24.4			11.0			24.3
Technical ratio ⁽⁴⁾	87.7		%	85.9		%	83.2		%	27.1		%	80.4		%
Other expense ratio ⁽⁵⁾													5.8
Combined ratio ⁽⁶⁾													86.2		%


(1)	Allocated underwriting result is defined as net premiums earned, other income or loss and allocated net investment income less life policy benefits, acquisition costs and other expenses.


(2)	Loss ratio is obtained by dividing losses and loss expenses by net premiums earned.


(3)	Acquisition ratio is obtained by dividing acquisition costs by net premiums earned.


(4)	Technical ratio is defined as the sum of the loss ratio and the acquisition ratio.


(5)	Other expense ratio is obtained by dividing other expenses by net premiums earned.


(6)	Combined ratio is defined as the sum of the technical ratio and the other expense ratio.

n/a: Not applicable

Segment Information

For the year ended December 31, 2013



	North America			Global (Non-U.S.) P&C			Global Specialty			Catastrophe			Total Non-life segment			Life and Health segment			Corporate and Other			Total
Gross premiums written	$	1,601		$	818		$	1,676		$	495		$	4,590		$	972		$	8		$	5,570
Net premiums written	$	1,587		$	811		$	1,579		$	450		$	4,427		$	964		$	6		$	5,397
(Increase) decrease in unearned premiums	(54		)	(68		)	(73		)	3			(192		)	(7		)	—			(199		)
Net premiums earned	$	1,533		$	743		$	1,506		$	453		$	4,235		$	957		$	6		$	5,198
Losses and loss expenses and life policy benefits	(975		)	(373		)	(920		)	(132		)	(2,400		)	(760		)	2			(3,158		)
Acquisition costs	(351		)	(196		)	(362		)	(44		)	(953		)	(125		)	—			(1,078		)
Technical result	$	207		$	174		$	224		$	277		$	882		$	72		$	8		$	962
Other income													3			11			3			17
Other expenses													(259		)	(71		)	(170		)	(500		)
Underwriting result													$	626		$	12		n/a			$	479
Net investment income																61			423			484
Allocated underwriting result																$	73		n/a			n/a
Net realized and unrealized investment losses																			(161		)	(161		)
Interest expense																			(49		)	(49		)
Amortization of intangible assets																			(27		)	(27		)
Net foreign exchange losses																			(18		)	(18		)
Income tax expense																			(49		)	(49		)
Interest in earnings of equity method investments																			14			14
Net income																			n/a			$	673
Loss ratio	63.6		%	50.2		%	61.1		%	29.0		%	56.7		%
Acquisition ratio	22.9			26.4			24.0			9.7			22.5
Technical ratio	86.5		%	76.6		%	85.1		%	38.7		%	79.2		%
Other expense ratio													6.1
Combined ratio													85.3		%

Segment Information

For the year ended December 31, 2012



	North America			Global (Non-U.S.) P&C			Global Specialty			Catastrophe			Total Non-life segment			Life and Health segment			Corporate and Other			Total
Gross premiums written	$	1,221		$	684		$	1,505		$	500		$	3,910		$	802		$	6		$	4,718
Net premiums written	$	1,219		$	681		$	1,415		$	453		$	3,768		$	799		$	6		$	4,573
(Increase) decrease in unearned premiums	(43		)	(3		)	(42		)	4			(84		)	(4		)	1			(87		)
Net premiums earned	$	1,176		$	678		$	1,373		$	457		$	3,684		$	795		$	7		$	4,486
Losses and loss expenses and life policy benefits	(816		)	(415		)	(821		)	(103		)	(2,155		)	(647		)	(3		)	(2,805		)
Acquisition costs	(291		)	(167		)	(321		)	(42		)	(821		)	(116		)	—			(937		)
Technical result	$	69		$	96		$	231		$	312		$	708		$	32		$	4		$	744
Other income													5			4			3			12
Other expenses													(257		)	(52		)	(102		)	(411		)
Underwriting result													$	456		$	(16	)	n/a			$	345
Net investment income																64			507			571
Allocated underwriting result																$	48		n/a			n/a
Net realized and unrealized investment gains																			494			494
Interest expense																			(49		)	(49		)
Amortization of intangible assets																			(32		)	(32		)
Net foreign exchange losses																			—			—
Income tax expense																			(204		)	(204		)
Interest in earnings of equity method investments																			10			10
Net income																			n/a			$	1,135
Loss ratio	69.4		%	61.3		%	59.8		%	22.4		%	58.5		%
Acquisition ratio	24.7			24.6			23.4			93.0			22.3
Technical ratio	94.1		%	85.9		%	83.2		%	115.4		%	80.8		%
Other expense ratio													7.0
Combined ratio													87.8		%

The following table provides the distribution of net premiums written by line of business for the years ended December 31, 2014, 2013 and 2012:



	2014		2013		2012
Non-life
Property and casualty
Casualty	12	%	12	%	13	%
Motor	7		7		5
Multiline and other	5		4		3
Property	11		12		14
Specialty
Agriculture	12		11		7
Aviation/Space	4		4		5
Catastrophe	6		8		10
Credit/Surety	7		6		7
Energy	1		2		2
Engineering	3		4		4
Marine	5		6		7
Specialty casualty	3		3		2
Specialty property	3		3		4
Life and Health	21		18		17
Total	100	%	100	%	100	%

The following table provides the geographic distribution of gross premiums written based on the location of the underlying risk for the years ended December 31, 2014, 2013 and 2012:



	2014		2013		2012
Asia, Australia and New Zealand	11	%	11	%	11	%
Europe	40		40		41
Latin America, Caribbean and Africa	10		10		11
North America	39		39		37
Total	100	%	100	%	100	%

The Company produces its business both through brokers and through direct relationships with insurance company clients. None of the Company’s cedants accounted for more than 4% , 4% and 5% of total gross premiums written during the years ended December 31, 2014, 2013 and 2012, respectively.

The Company had two brokers that individually accounted for 10% or more of its gross premiums written during the years ended December 31, 2014, 2013 and 2012. The brokers accounted for 20%, 22%, and 24% and 20%, 21%, and 22% of gross premiums written for the years ended December 31, 2014, 2013 and 2012, respectively.

The following table summarizes the percentage of gross premiums written through these two brokers by segment and sub-segment for the years ended December 31, 2014, 2013 and 2012:



	2014		2013		2012
Non-life
North America	59	%	60	%	70	%
Global (Non-U.S.) P&C	31		29		28
Global Specialty	38		41		42
Catastrophe	70		74		74
Life and Health	12		12		13