Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

9. Segment Information

The Company monitors the performance of its operations in three segments, Non-life, Life and Corporate and Other as described in Note 22 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. The Non-life segment is further divided into four sub-segments: North America, Global (Non-U.S.) Property and Casualty (Global(Non-U.S.) P&C), Global (Non-U.S.) Specialty and Catastrophe. Following the completion of the Company's integration of PARIS RE Holdings Limited into its other Non-life sub-segments, and to reflect other changes in management responsibilities for certain lines of business and treaties, the Company redefined its financial reporting segments. The comparative data that was previously presented in the Company's Form 10-Q for the three months and six months ended June 30, 2010 has been recast to conform to the current period presentation.

Because 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 products, net investment income is considered in Management's assessment of the profitability of the Life segment. The following items are not considered in evaluating the results of the Non-life and Life 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 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 operating 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 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 expenses from life policy benefits, acquisition costs and other operating expenses.

The followingtables provide a summary of the segment revenues and results for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars, except ratios):

Segment Information
For the three months ended June 30, 2011
					Global			Global						Total
		North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
		America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written		$	242		$	122		$	350		$	169		$	883		$	195	$	4	$	1,082
Net premiums written		$	242		$	121		$	333		$	161		$	857		$	195	$	4	$	1,056
Decrease (increase) in unearned premiums			19			72			8			(51)			48			6		(3)		51
Net premiums earned		$	261		$	193		$	341		$	110		$	905		$	201	$	1	$	1,107
Losses and loss expenses and
life policy benefits			(190)			(127)			(206)			(123)			(646)			(166)		(2)		(814)
Acquisition costs			(63)			(53)			(78)			(9)			(203)			(26)		—		(229)
Technical result		$	8		$	13		$	57		$	(22)		$	56		$	9	$	(1)	$	64
Other income															—			—		1		1
Other operating expenses															(71)			(13)		(30)		(114)
Underwriting result														$	(15)		$	(4)		n/a	$	(49)
Net investment income																		16		142		158
Allocated underwriting result	(1)																$	12		n/a		n/a
Net realized and unrealized investment gains																				78		78
Interest expense																				(12)		(12)
Amortization of intangible assets																				(9)		(9)
Net foreign exchange gains																				9		9
Income tax expense																				(50)		(50)
Interest in losses of equity investments																				(1)		(1)
Net income																				n/a	$	124
Loss ratio (2)			72.8	%		65.9	%		60.3	%		111.7	%		71.4	%
Acquisition ratio (3)			24.1			27.6			22.9			8.1			22.4
Technical ratio (4)			96.9	%		93.5	%		83.2	%		119.8	%		93.8	%
Other operating expense ratio (5)															7.9
Combined ratio (6)															101.7	%

_______________

(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 operating 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 operating expense ratio is obtained by dividing other operating expenses by net premiums earned.

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

Segment Information
For the three months ended June 30, 2010
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	207		$	189		$	371		$	206		$	973		$	167	$	—	$	1,140
Net premiums written	$	207		$	186		$	355		$	191		$	939		$	167	$	7	$	1,113
Decrease (increase) in unearned premiums		16			45			21			(90)			(8)			6		(6)		(8)
Net premiums earned	$	223		$	231		$	376		$	101		$	931		$	173	$	1	$	1,105
Losses and loss expenses and
life policy benefits		(116)			(141)			(292)			13			(536)			(169)		—		(705)
Acquisition costs		(69)			(61)			(82)			(7)			(219)			(25)		—		(244)
Technical result	$	38		$	29		$	2		$	107		$	176		$	(21)	$	1	$	156
Other income (loss)														1			1		(1)		1
Other operating expenses														(82)			(13)		(65)		(160)
Underwriting result													$	95		$	(33)		n/a	$	(3)
Net investment income																	20		154		174
Allocated underwriting result																$	(13)		n/a		n/a
Net realized and unrealized investment gains																			46		46
Interest expense																			(13)		(13)
Amortization of intangible assets																			(8)		(8)
Net foreign exchange gains																			11		11
Income tax expense																			(17)		(17)
Interest in earnings of equity investments																			1		1
Net income																			n/a	$	191
Loss ratio		52.2	%		61.1	%		77.6	%		(12.8)	%		57.6	%
Acquisition ratio		30.7			26.4			21.9			6.3			23.4
Technical ratio		82.9	%		87.5	%		99.5	%		(6.5)	%		81.0	%
Other operating expense ratio														8.8
Combined ratio														89.8	%

Segment Information
For the six months ended June 30, 2011
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	581		$	440		$	724		$	486		$	2,231		$	403	$	6	$	2,640
Net premiums written	$	581		$	437		$	648		$	453		$	2,119		$	402	$	6	$	2,527
(Increase) decrease in unearned premiums		(60)			(63)			10			(220)			(333)			(17)		(5)		(355)
Net premiums earned	$	521		$	374		$	658		$	233		$	1,786		$	385	$	1	$	2,172
Losses and loss expenses and
life policy benefits		(365)			(277)			(427)			(1,040)			(2,109)			(311)		(2)		(2,422)
Acquisition costs		(129)			(93)			(158)			(1)			(381)			(56)		—		(437)
Technical result	$	27		$	4		$	73		$	(808)		$	(704)		$	18	$	(1)	$	(687)
Other income														2			—		1		3
Other operating expenses														(137)			(25)		(56)		(218)
Underwriting result													$	(839)		$	(7)		n/a	$	(902)
Net investment income																	31		279		310
Allocated underwriting result																$	24		n/a		n/a
Net realized and unrealized investment losses																			(34)		(34)
Interest expense																			(24)		(24)
Amortization of intangible assets																			(18)		(18)
Net foreign exchange gains																			9		9
Income tax expense																			(24)		(24)
Interest in losses of equity investments																			—		—
Net loss																			n/a	$	(683)
Loss ratio		70.0	%		74.0	%		64.9	%		446.3	%		118.0	%
Acquisition ratio		24.8			25.0			24.0			0.3			21.4
Technical ratio		94.8	%		99.0	%		88.9	%		446.6	%		139.4	%
Other operating expense ratio														7.7
Combined ratio														147.1	%

Segment Information
For the six months ended June 30, 2010
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	564		$	633		$	880		$	615		$	2,692		$	354	$	3	$	3,049
Net premiums written	$	564		$	621		$	811		$	550		$	2,546		$	349	$	2	$	2,897
Increase in unearned premiums		(73)			(160)			(98)			(295)			(626)			(12)		(1)		(639)
Net premiums earned	$	491		$	461		$	713		$	255		$	1,920		$	337	$	1	$	2,258
Losses and loss expenses and
life policy benefits		(296)			(387)			(595)			(140)			(1,418)			(299)		—		(1,717)
Acquisition costs		(137)			(114)			(146)			(18)			(415)			(49)		—		(464)
Technical result	$	58		$	(40)		$	(28)		$	97		$	87		$	(11)	$	1	$	77
Other income (loss)														2			1		(1)		2
Other operating expenses														(160)			(27)		(101)		(288)
Underwriting result													$	(71)		$	(37)		n/a	$	(209)
Net investment income																	37		311		348
Allocated underwriting result																$	—		n/a		n/a
Net realized and unrealized investment gains																			191		191
Interest expense																			(20)		(20)
Amortization of intangible assets																			(13)		(13)
Net foreign exchange gains																			15		15
Income tax expense																			(45)		(45)
Interest in earnings of equity investments																			4		4
Net income																			n/a	$	271
Loss ratio		60.2	%		84.0	%		83.4	%		54.6	%		73.9	%
Acquisition ratio		28.0			24.6			20.5			7.3			21.6
Technical ratio		88.2	%		108.6	%		103.9	%		61.9	%		95.5	%
Other operating expense ratio														8.3
Combined ratio														103.8	%