Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

7. Goodwill and Intangible Assets

On April 3, 2017, after receiving all necessary regulatory approvals, the Company completed the acquisition of 100% of the outstanding ordinary shares of Aurigen, for CAD 370 million (or approximately $278 million). The acquisition of Aurigen is consistent with the Company’s diversified strategy and expands its life reinsurance footprint in Canada and the U.S. with limited overlap in market coverage. The Company recorded pre-tax intangible assets related to the life value of business acquired (life VOBA) of $76 million and insurance licenses of $2 million. A bargain purchase gain of less than $1 million was included in Other income in the Consolidated Statement of Operations for the year ended December 31, 2017 representing the excess of fair value of the net assets acquired over the purchase price of $278 million.

The Company’s goodwill related to the acquisitions of PartnerRe SA, Winterthur Re, Paris Re and Presidio and intangible assets related to the acquisitions of Paris Re, Presidio and Aurigen at December 31, 2017 and 2016 were as follows (in thousands of U.S. dollars):



2017	Goodwill		Definite- lived intangible assets			Indefinite- lived intangible asset		Total intangible assets
Balance at January 1	$	456,380	$	99,742		$	7,350	$	107,092
Acquired during the year	—		75,583			2,205		77,788
Intangible assets amortization	n/a		(24,646		)	n/a		(24,646		)
Balance at December 31	$	456,380	$	150,679		$	9,555	$	160,234

2016	Goodwill		Definite- lived intangible assets			Indefinite- lived intangible asset		Total intangible assets
Balance at January 1	$	456,380	$	125,661		$	7,350	$	133,011
Intangible assets amortization	n/a		(25,919		)	n/a		(25,919		)
Balance at December 31	$	456,380	$	99,742		$	7,350	$	107,092

n/a: Not applicable

The gross carrying value and accumulated amortization of intangible assets included in the Consolidated Balance Sheets at December 31, 2017 and 2016 were as follows (in thousands of U.S. dollars):



	December 31, 2017						December 31, 2016
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
Definite-lived intangible assets:
Unpaid losses and loss expenses	$	191,196	$	168,581	$	22,615	$	191,196	$	157,842	$	33,354
Renewal rights	48,163		27,909		20,254		48,163		23,404		24,759
Customer relationships	63,408		29,353		34,055		63,408		21,779		41,629
Life VOBA	75,583		1,828		73,755		—		—		—
Total definite-lived intangible assets	$	378,350	$	227,671	$	150,679	$	302,767	$	203,025	$	99,742
Indefinite-lived intangible asset:
Insurance licenses	9,555		n/a		9,555		7,350		n/a		7,350
Total intangible assets	$	387,905	$	227,671	$	160,234	$	310,117	$	203,025	$	107,092

n/a: Not applicable

Definite-lived intangible assets are amortized over a period of 11 years for unpaid losses and loss expenses, 13 years for renewal rights and customer relationships, and 100 years for life VOBA.

The allocation of the goodwill to the Company’s segments at December 31, 2017 and 2016 was as follows (in thousands of U.S. dollars):



	Amount
P&C segment	$	241,530
Specialty segment	196,047
Life and Health segment	18,803
Total	$	456,380

The estimated amortization expense for each of the five succeeding fiscal years related to the Company’s definite-lived intangible assets was as follows (in thousands of U.S. dollars):



Year	Amount
2018	$	23,351
2019	19,946
2020	12,395
2021	8,406
2022	8,499
Total	$	72,597

- 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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