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Investment Information (Tables)
 6 Months Ended
Jun. 30, 2017
Disclosure Investment Information [Abstract]  
Summary of fair value and cost or amortized cost of available for sale securities
The following table summarizes the fair value and cost or amortized cost of the Company’s investments classified as available for sale:
 
Estimated
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Cost or
Amortized
Cost
 
OTTI
Unrealized
Losses (2)
June 30, 2017
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
Corporate bonds
$
4,262,411

 
$
42,142

 
$
(23,632
)
 
$
4,243,901

 
$
(468
)
Mortgage backed securities
331,082

 
4,650

 
(1,596
)
 
328,028

 
(3,102
)
Municipal bonds
2,618,827

 
29,728

 
(9,841
)
 
2,598,940

 
—

Commercial mortgage backed securities
521,272

 
3,448

 
(6,363
)
 
524,187

 
—

U.S. government and government agencies
3,425,196

 
4,673

 
(15,246
)
 
3,435,769

 
—

Non-U.S. government securities
1,375,796

 
30,114

 
(21,466
)
 
1,367,148

 
—

Asset backed securities
1,739,695

 
10,540

 
(4,494
)
 
1,733,649

 
(22
)
Total
14,274,279

 
125,295

 
(82,638
)
 
14,231,622

 
(3,592
)
Equity securities
467,870

 
79,953

 
(7,200
)
 
395,117

 
—

Other investments
248,661

 
39,748

 
(28
)
 
208,941

 
—

Short-term investments
914,356

 
446

 
(122
)
 
914,032

 
—

Total
$
15,905,166

 
$
245,442

 
$
(89,988
)
 
$
15,749,712

 
$
(3,592
)
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
Corporate bonds
$
4,392,373

 
$
27,606

 
$
(46,905
)
 
$
4,411,672

 
$
(2,285
)
Mortgage backed securities
490,093

 
4,794

 
(8,357
)
 
493,656

 
(3,323
)
Municipal bonds
3,713,434

 
8,554

 
(29,154
)
 
3,734,034

 
(201
)
Commercial mortgage backed securities
536,051

 
2,876

 
(6,508
)
 
539,683

 
—

U.S. government and government agencies
2,804,540

 
9,319

 
(24,437
)
 
2,819,658

 
—

Non-U.S. government securities
1,096,440

 
19,036

 
(56,872
)
 
1,134,276

 
—

Asset backed securities
1,123,987

 
6,897

 
(6,526
)
 
1,123,616

 
(22
)
Total
14,156,918

 
79,082

 
(178,759
)
 
14,256,595

 
(5,831
)
Equity securities
532,680

 
62,627

 
(17,517
)
 
487,570

 
—

Other investments
167,970

 
21,358

 
(2,465
)
 
149,077

 
—

Short-term investments
612,005

 
272

 
(145
)
 
611,878

 
—

Total
$
15,469,573

 
$
163,339

 
$
(198,886
)
 
$
15,505,120

 
$
(5,831
)
(1)
In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”
(2)
Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At June 30, 2017, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.8 million, compared to a net unrealized gain of $2.8 million at December 31, 2016.
Summary of available for sale securities in a continual unrealized loss position
The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position:
 
Less than 12 Months
 
12 Months or More
 
Total
 
Estimated
Fair
Value
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
Gross
Unrealized
Losses
June 30, 2017
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
$
1,384,481

 
$
(22,572
)
 
$
15,198

 
$
(1,060
)
 
$
1,399,679

 
$
(23,632
)
Mortgage backed securities
189,816

 
(1,534
)
 
1,573

 
(62
)
 
191,389

 
(1,596
)
Municipal bonds
788,714

 
(9,329
)
 
39,912

 
(512
)
 
828,626

 
(9,841
)
Commercial mortgage backed securities
249,658

 
(6,232
)
 
3,383

 
(131
)
 
253,041

 
(6,363
)
U.S. government and government agencies
2,662,818

 
(15,246
)
 
—

 
—

 
2,662,818

 
(15,246
)
Non-U.S. government securities
1,017,781

 
(21,360
)
 
11,123

 
(106
)
 
1,028,904

 
(21,466
)
Asset backed securities
751,464

 
(4,220
)
 
12,282

 
(274
)
 
763,746

 
(4,494
)
Total
7,044,732

 
(80,493
)
 
83,471

 
(2,145
)
 
7,128,203

 
(82,638
)
Equity securities
167,176

 
(7,200
)
 
—

 
—

 
167,176

 
(7,200
)
Other investments
1,562

 
(28
)
 
—

 
—

 
1,562

 
(28
)
Short-term investments
22,941

 
(122
)
 
—

 
—

 
22,941

 
(122
)
Total
$
7,236,411

 
$
(87,843
)
 
$
83,471

 
$
(2,145
)
 
$
7,319,882

 
$
(89,988
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
$
1,700,813

 
$
(43,011
)
 
$
46,902

 
$
(3,894
)
 
$
1,747,715

 
$
(46,905
)
Mortgage backed securities
402,699

 
(8,134
)
 
6,105

 
(223
)
 
408,804

 
(8,357
)
Municipal bonds
1,513,308

 
(28,504
)
 
29,636

 
(650
)
 
1,542,944

 
(29,154
)
Commercial mortgage backed securities
231,374

 
(6,331
)
 
5,635

 
(177
)
 
237,009

 
(6,508
)
U.S. government and government agencies
1,888,018

 
(24,437
)
 
—

 
—

 
1,888,018

 
(24,437
)
Non-U.S. government securities
807,598

 
(56,872
)
 
—

 
—

 
807,598

 
(56,872
)
Asset backed securities
627,557

 
(5,465
)
 
65,723

 
(1,061
)
 
693,280

 
(6,526
)
Total
7,171,367

 
(172,754
)
 
154,001

 
(6,005
)
 
7,325,368

 
(178,759
)
Equity securities
269,381

 
(17,517
)
 
—

 
—

 
269,381

 
(17,517
)
Other investments
39,299

 
(2,465
)
 
—

 
—

 
39,299

 
(2,465
)
Short-term investments
29,146

 
(145
)
 
—

 
—

 
29,146

 
(145
)
Total
$
7,509,193

 
$
(192,881
)
 
$
154,001

 
$
(6,005
)
 
$
7,663,194

 
$
(198,886
)
(1)
In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”
Contractual maturities of the Company's fixed maturities and fixed maturities pledged under securities lending arrangements
The contractual maturities of the Company’s fixed maturities are shown in the following table. Expected maturities, which are management’s best estimates, will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
 
June 30, 2017
 
December 31, 2016
Maturity
 
Estimated
Fair
Value
 
Amortized
Cost
 
Estimated
Fair
Value
 
Amortized
Cost
Due in one year or less
 
$
580,006

 
$
579,694

 
$
560,830

 
$
557,675

Due after one year through five years
 
7,240,600

 
7,222,772

 
6,158,148

 
6,211,099

Due after five years through 10 years
 
3,542,222

 
3,528,439

 
4,676,847

 
4,710,017

Due after 10 years
 
319,402

 
314,853

 
610,962

 
620,849

 
 
11,682,230

 
11,645,758

 
12,006,787

 
12,099,640

Mortgage backed securities
 
331,082

 
328,028

 
490,093

 
493,656

Commercial mortgage backed securities
 
521,272

 
524,187

 
536,051

 
539,683

Asset backed securities
 
1,739,695

 
1,733,649

 
1,123,987

 
1,123,616

Total (1)
 
$
14,274,279

 
$
14,231,622

 
$
14,156,918

 
$
14,256,595


(1)
In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”
Securities lending transactions accounted for as secured borrowings, by significant investment category
The Company’s securities lending transactions were accounted for as secured borrowings with significant investment categories as follows:
 
 
Remaining Contractual Maturity of the Agreements
 
 
Overnight and Continuous
 
Less than 30 Days
 
30-90 Days
 
90 Days or More
 
Total
June 30, 2017
 
 
 
 
 
 
 
 
 
 
U.S. government and government agencies
 
$
406,753

 
$
10,175

 
$
133,449

 
$
29,984

 
$
580,361

Corporate bonds
 
40,488

 
—

 
—

 
—

 
40,488

Equity securities
 
7,003

 
—

 
—

 
—

 
7,003

Total
 
$
454,244

 
$
10,175

 
$
133,449

 
$
29,984

 
$
627,852

Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9
 
$
—

Amounts related to securities lending not included in offsetting disclosure in Note 9
 
$
627,852

 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
U.S. government and government agencies
 
$
556,015

 
$
31,244

 
$
126,093

 
$
5,140

 
$
718,492

Corporate bonds
 
29,078

 
—

 
—

 
—

 
29,078

Equity securities
 
14,984

 
—

 
—

 
—

 
14,984

Total
 
$
600,077

 
$
31,244

 
$
126,093

 
$
5,140

 
$
762,554

Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9
 
$
—

Amounts related to securities lending not included in offsetting disclosure in Note 9
 
$
762,554
Summary of other investments, including available for sale and fair value option components
The following table summarizes the Company’s other investments, including available for sale and fair value option components:
 
June 30,
2017
 
December 31,
2016
Available for sale:
 
 
 
Asian and emerging markets
$
114,594

 
$
84,778

Investment grade fixed income
52,266

 
33,923

Credit related funds
14,632

 
7,469

Other
67,169

 
41,800

Total available for sale
248,661

 
167,970

Fair value option:
 
 
 
Term loan investments (par value: $1,367,178 and $1,208,537)
1,334,590

 
1,190,799

Mezzanine debt funds
141,066

 
127,943

Credit related funds
197,144

 
218,298

Investment grade fixed income
86,389

 
75,468

Asian and emerging markets
245,866

 
178,568

Other (1)
138,710

 
129,717

Total fair value option
2,143,765

 
1,920,793

Total
$
2,392,426

 
$
2,088,763


(1)
Includes fund investments with strategies in mortgage servicing rights, transportation, infrastructure and other.
Summary of assets and liabilities accounted for using the fair value option
The following table summarizes the Company’s assets and liabilities which are accounted for using the fair value option:
 
June 30,
2017
 
December 31,
2016
Fixed maturities
$
1,074,961

 
$
1,099,116

Other investments
2,143,765

 
1,920,793

Short-term investments
527,384

 
373,669

Equity securities
81,298

 
27,642

Investments accounted for using the fair value option
$
3,827,408

 
$
3,421,220
Summary of investments in limited partnership interests where the Company has a variable interest
The following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item:
 
June 30,
2017
 
December 31,
2016
Investments accounted for using the equity method (1)
$
948,856

 
$
800,970

Investments accounted for using the fair value option (2)
86,888

 
90,804

Total
$
1,035,744

 
$
891,774

(1)
Aggregate unfunded commitments were $961.0 million at June 30, 2017, compared to $776.6 million at December 31, 2016.
(2)
Aggregate unfunded commitments were $67.7 million at June 30, 2017, compared to $16.7 million at December 31, 2016.
Components of net investment income
The components of net investment income were derived from the following sources:
 
June 30,
 
2017
 
2016
Three Months Ended
 
 
 
Fixed maturities
$
94,270

 
$
77,994

Term loan investments
19,105

 
18,608

Equity securities (dividends)
3,654

 
3,663

Short-term investments
2,016

 
816

Other (1)
14,971

 
8,260

Gross investment income
134,016

 
109,341

Investment expenses
(22,892
)
 
(21,003
)
Net investment income
$
111,124

 
$
88,338

 
 
 
 
Six Months Ended
 
 
 
Fixed maturities
$
188,663

 
$
151,667

Term loan investments
40,275

 
38,620

Equity securities (dividends)
6,297

 
7,098

Short-term investments
3,775

 
1,312

Other (1)
33,381

 
22,003

Gross investment income
272,391

 
220,700

Investment expenses
(43,393
)
 
(38,627
)
Net investment income
$
228,998

 
$
182,073

(1)
Includes income distributions from investment funds and other items.
Summary of net realized gains (losses), excluding other-than-temporary impairment provisions
Net realized gains (losses) were as follows, excluding other than-temporary impairment provision.
 
June 30,
 
2017
 
2016
Three Months Ended
 
 
 
Available for sale securities:
 

 
 

Gross gains on investment sales
$
76,730

 
$
74,695

Gross losses on investment sales
(52,619
)
 
(43,293
)
Change in fair value of assets and liabilities accounted for using the fair value option:
 
 
 
Fixed maturities
9,656

 
18,632

Other investments
637

 
13,136

Equity securities
2,829

 
401

Short-term investments
3,328

 
(621
)
Derivative instruments (1)
(4,770
)
 
20,334

Other (2)
(14,056
)
 
(15,066
)
Net realized gains (losses)
$
21,735

 
$
68,218

 
 
 
 
Six Months Ended
 
 
 
Available for sale securities:
 
 
 
Gross gains on investment sales
$
145,905

 
$
182,514

Gross losses on investment sales
(113,981
)
 
(106,424
)
Change in fair value of assets and liabilities accounted for using the fair value option:
 
 
 
Fixed maturities
30,197

 
18,299

Other investments
17,885

 
(8,412
)
Equity securities
6,374

 
437

Short-term investments
3,332

 
(1,043
)
Derivative instruments (1)
(13,951
)
 
41,066

Other (2)
(19,873
)
 
(20,895
)
Net realized gains (losses)
$
55,888

 
$
105,542

(1)
See Note 9 for information on the Company’s derivative instruments.
(2)
Includes the re-measurement of contingent consideration liability amounts.
Summary of OTTI recognized in earnings by asset class
The following table details the net impairment losses recognized in earnings by asset class:
 
June 30,
 
2017
 
2016
Three Months Ended
 
 
 
Fixed maturities:
 

 
 

Mortgage backed securities
$
(92
)
 
$
(82
)
Corporate bonds
(1,401
)
 
(775
)
Non-U.S. government securities
—

 
(51
)
Asset backed securities
—

 
(2,500
)
Municipal bonds
(173
)
 
—

Total
(1,666
)
 
(3,408
)
Equity securities
—

 
(1,935
)
Other investments
(64
)
 
—

Net impairment losses recognized in earnings
$
(1,730
)
 
$
(5,343
)
 
 
 
 
Six Months Ended
 
 
 
Fixed maturities:
 
 
 
Mortgage backed securities
$
(1,411
)
 
$
(555
)
Corporate bonds
(1,402
)
 
(5,655
)
Non-U.S. government securities
(198
)
 
(232
)
Asset backed securities
—

 
(2,506
)
Municipal bonds
(173
)
 
—

Total
(3,184
)
 
(8,948
)
Equity securities
(186
)
 
(3,037
)
Other investments
(167
)
 
(997
)
Net impairment losses recognized in earnings
$
(3,537
)
 
$
(12,982
)
Rollforward of the amount related to credit losses recognized in earnings for which a portion was recognized in AOCI
The following table provides a roll forward of the amount related to credit losses recognized in earnings for which a portion of an OTTI was recognized in accumulated other comprehensive income:
 
June 30,
 
2017
 
2016
Three Months Ended
 
 
 
Balance at start of period
$
12,537

 
$
18,291

Credit loss impairments recognized on securities not previously impaired
31

 
287

Credit loss impairments recognized on securities previously impaired
172

 
—

Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security
—

 
—

Reductions for securities sold during the period
(8,303
)
 
(3,731
)
Balance at end of period
$
4,437

 
$
14,847

 
 
 
 
Six Months Ended
 
 
 
Balance at start of year
$
13,138

 
$
26,875

Credit loss impairments recognized on securities not previously impaired
31

 
1,350

Credit loss impairments recognized on securities previously impaired
195

 
522

Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security
—

 
—

Reductions for securities sold during the period
(8,927
)
 
(13,900
)
Balance at end of period
$
4,437

 
$
14,847
Summary of restricted assets
The following table details the value of the Company’s restricted assets:
 
June 30,
2017
 
December 31,
2016
Assets used for collateral or guarantees:
 

 
 

Affiliated transactions
$
4,003,009

 
$
3,871,971

Third party agreements
1,672,159

 
1,513,079

Deposits with U.S. regulatory authorities
618,448

 
472,890

Deposits with non-U.S. regulatory authorities
45,493

 
44,399

Total restricted assets
$
6,339,109

 
$
5,902,339