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Investment Information (Tables)
 6 Months Ended
Jun. 30, 2018
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 securities classified as available for sale:
 
Estimated
Fair
Value
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Cost or
Amortized
Cost
 
OTTI
Unrealized
Losses (2)
June 30, 2018
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
Corporate bonds
$
5,535,763

 
$
7,199

 
$
(103,978
)
 
$
5,632,542

 
$
(69
)
Mortgage backed securities
488,699

 
1,699

 
(4,742
)
 
491,742

 
(15
)
Municipal bonds
1,431,256

 
7,371

 
(22,047
)
 
1,445,932

 
—

Commercial mortgage backed securities
590,198

 
776

 
(13,222
)
 
602,644

 
—

U.S. government and government agencies
2,788,272

 
6,216

 
(19,577
)
 
2,801,633

 
—

Non-U.S. government securities
1,692,783

 
17,124

 
(27,480
)
 
1,703,139

 
—

Asset backed securities
1,820,489

 
3,310

 
(16,574
)
 
1,833,753

 
—

Total
14,347,460

 
43,695

 
(207,620
)
 
14,511,385

 
(84
)
Equity securities (3)
 
 
 
 
 
 
 
 
 
Other investments
—

 
—

 
—

 
—

 
—

Short-term investments
1,096,798

 
338

 
(72
)
 
1,096,532

 
—

Total
$
15,444,258

 
$
44,033

 
$
(207,692
)
 
$
15,607,917

 
$
(84
)
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
Corporate bonds
$
4,434,439

 
$
30,943

 
$
(32,340
)
 
$
4,435,836

 
$
(73
)
Mortgage backed securities
316,141

 
1,640

 
(2,561
)
 
317,062

 
(15
)
Municipal bonds
2,158,840

 
20,285

 
(12,308
)
 
2,150,863

 
—

Commercial mortgage backed securities
545,817

 
2,131

 
(4,268
)
 
547,954

 
—

U.S. government and government agencies
3,484,257

 
2,188

 
(28,769
)
 
3,510,838

 
—

Non-U.S. government securities
1,612,754

 
48,764

 
(17,321
)
 
1,581,311

 
—

Asset backed securities
1,780,143

 
5,147

 
(8,614
)
 
1,783,610

 
—

Total
14,332,391

 
111,098

 
(106,181
)
 
14,327,474

 
(88
)
Equity securities
504,333

 
88,739

 
(5,583
)
 
421,177

 
—

Other investments
264,989

 
66,946

 
(120
)
 
198,163

 
—

Short-term investments
1,469,042

 
650

 
(563
)
 
1,468,955

 
—

Total
$
16,570,755

 
$
267,433

 
$
(112,447
)
 
$
16,415,769

 
$
(88
)
(1)
In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities 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, 2018, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.2 million, compared to a net unrealized gain of $0.3 million at December 31, 2017.
(3)
Effective January 1, 2018, the Company adopted new accounting guidance for financial instruments (see Note 2). As a result, equity securities are no longer accounted for as available for sale and are excluded from this table.
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, 2018
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
$
4,541,077

 
$
(94,563
)
 
$
236,332

 
$
(9,415
)
 
$
4,777,409

 
$
(103,978
)
Mortgage backed securities
296,876

 
(4,618
)
 
708

 
(124
)
 
297,584

 
(4,742
)
Municipal bonds
814,694

 
(16,888
)
 
109,913

 
(5,159
)
 
924,607

 
(22,047
)
Commercial mortgage backed securities
351,013

 
(9,067
)
 
56,382

 
(4,155
)
 
407,395

 
(13,222
)
U.S. government and government agencies
1,957,338

 
(18,470
)
 
41,069

 
(1,107
)
 
1,998,407

 
(19,577
)
Non-U.S. government securities
1,243,055

 
(24,034
)
 
160,434

 
(3,446
)
 
1,403,489

 
(27,480
)
Asset backed securities
1,377,269

 
(14,096
)
 
110,507

 
(2,478
)
 
1,487,776

 
(16,574
)
Total
10,581,322

 
(181,736
)
 
715,345

 
(25,884
)
 
11,296,667

 
(207,620
)
Equity securities (2)
 
 
 
 
 
 
 
 
 
 
 
Other investments
—

 
—

 
—

 
—

 
—

 
—

Short-term investments
53,937

 
(72
)
 
—

 
—

 
53,937

 
(72
)
Total
$
10,635,259

 
$
(181,808
)
 
$
715,345

 
$
(25,884
)
 
$
11,350,604

 
$
(207,692
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities (1):
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
$
2,320,716

 
$
(25,411
)
 
$
279,082

 
$
(6,929
)
 
$
2,599,798

 
$
(32,340
)
Mortgage backed securities
221,113

 
(1,715
)
 
28,380

 
(846
)
 
249,493

 
(2,561
)
Municipal bonds
1,030,389

 
(8,438
)
 
132,469

 
(3,870
)
 
1,162,858

 
(12,308
)
Commercial mortgage backed securities
225,164

 
(1,899
)
 
57,291

 
(2,369
)
 
282,455

 
(4,268
)
U.S. government and government agencies
2,646,415

 
(26,501
)
 
111,879

 
(2,268
)
 
2,758,294

 
(28,769
)
Non-U.S. government securities
1,218,514

 
(15,546
)
 
93,530

 
(1,775
)
 
1,312,044

 
(17,321
)
Asset backed securities
1,111,246

 
(5,915
)
 
209,207

 
(2,699
)
 
1,320,453

 
(8,614
)
Total
8,773,557

 
(85,425
)
 
911,838

 
(20,756
)
 
9,685,395

 
(106,181
)
Equity securities
166,562

 
(5,583
)
 
—

 
—

 
166,562

 
(5,583
)
Other investments
15,025

 
(120
)
 
—

 
—

 
15,025

 
(120
)
Short-term investments
109,528

 
(563
)
 
—

 
—

 
109,528

 
(563
)
Total
$
9,064,672

 
$
(91,691
)
 
$
911,838

 
$
(20,756
)
 
$
9,976,510

 
$
(112,447
)
(1)
In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities 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)
Effective January 1, 2018, the Company adopted new accounting guidance for financial instruments (see Note 2). As a result, equity securities are no longer accounted for as available for sale and are excluded from this table.
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, 2018
 
December 31, 2017
Maturity
 
Estimated
Fair
Value
 
Amortized
Cost
 
Estimated
Fair
Value
 
Amortized
Cost
Due in one year or less
 
$
344,007

 
$
343,938

 
$
550,711

 
$
548,771

Due after one year through five years
 
8,154,773

 
8,235,481

 
7,436,153

 
7,434,801

Due after five years through 10 years
 
2,703,341

 
2,756,097

 
3,369,635

 
3,369,750

Due after 10 years
 
245,953

 
247,730

 
333,791

 
325,526

 
 
11,448,074

 
11,583,246

 
11,690,290

 
11,678,848

Mortgage backed securities
 
488,699

 
491,742

 
316,141

 
317,062

Commercial mortgage backed securities
 
590,198

 
602,644

 
545,817

 
547,954

Asset backed securities
 
1,820,489

 
1,833,753

 
1,780,143

 
1,783,610

Total (1)
 
$
14,347,460

 
$
14,511,385

 
$
14,332,391

 
$
14,327,474


(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, 2018
 
 
 
 
 
 
 
 
 
 
U.S. government and government agencies
 
$
147,509

 
$
—

 
$
48,268

 
$
—

 
$
195,777

Corporate bonds
 
29,265

 
—

 
—

 
—

 
29,265

Equity securities
 
11,906

 
—

 
—

 
—

 
11,906

Total
 
$
188,680

 
$
—

 
$
48,268

 
$
—

 
$
236,948

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
 
$
236,948

 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
U.S. government and government agencies
 
$
343,425

 
$
20,309

 
$
76,086

 
$
—

 
$
439,820

Corporate bonds
 
28,003

 
—

 
—

 
—

 
28,003

Equity securities
 
8,782

 
—

 
—

 
—

 
8,782

Total
 
$
380,210

 
$
20,309

 
$
76,086

 
$
—

 
$
476,605

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
 
$
476,605
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,
2018
 
December 31,
2017
Available for sale securities:
 
 
 
Asian and emerging markets
$
—

 
$
135,140

Investment grade fixed income
—

 
53,878

Credit related funds
—

 
18,365

Other
—

 
57,606

Total available for sale (1)
—

 
264,989

Fair value option:
 
 
 
Term loan investments (par value: $1,321,154 and $1,223,453)
$
1,286,305

 
$
1,200,882

Mezzanine debt funds
257,750

 
252,160

Credit related funds
199,437

 
175,422

Investment grade fixed income
98,240

 
102,347

Asian and emerging markets
350,308

 
258,541

Other (2)
136,864

 
147,029

Total fair value option
2,328,904

 
2,136,381

Total
$
2,328,904

 
$
2,401,370


(1)
The Company reviewed the accounting treatment for three limited partnership investments which were accounted for as available for sale at December 31, 2017 during the 2018 first quarter and determined, based on reconsideration during the period of the Company’s percentage ownership, that the equity method of accounting was appropriate for such investments.
(2)
Includes fund investments with strategies in mortgage servicing rights, transportation, infrastructure assets 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,
2018
 
December 31,
2017
Fixed maturities
$
1,428,503

 
$
1,642,855

Other investments
2,328,904

 
2,136,381

Short-term investments
217,066

 
297,426

Equity securities
137,138

 
139,575

Investments accounted for using the fair value option
$
4,111,611

 
$
4,216,237
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,
2018
 
December 31,
2017
Investments accounted for using the equity method (1)
$
1,292,573

 
$
1,041,321

Investments accounted for using the fair value option (2)
130,471

 
130,471

Total
$
1,423,044

 
$
1,171,792

(1)
Aggregate unfunded commitments were $994.7 million at June 30, 2018, compared to $1.02 billion at December 31, 2017.
(2)
Aggregate unfunded commitments were $91.0 million at June 30, 2018, compared to $100.4 million at December 31, 2017.
Components of net investment income
The components of net investment income were derived from the following sources:
 
June 30,
 
2018
 
2017
Three Months Ended
 
 
 
Fixed maturities
$
115,110

 
$
94,270

Equity securities
4,777

 
3,654

Short-term investments
4,392

 
2,016

Other (1)
38,168

 
34,076

Gross investment income
162,447

 
134,016

Investment expenses
(26,779
)
 
(22,892
)
Net investment income
$
135,668

 
$
111,124

 
 
 
 
Six Months Ended
 
 
 
Fixed maturities
$
222,997

 
$
188,663

Equity securities
7,345

 
6,297

Short-term investments
9,252

 
3,775

Other (1)
75,542

 
73,656

Gross investment income
315,136

 
272,391

Investment expenses
(52,744
)
 
(43,393
)
Net investment income
$
262,392

 
$
228,998

(1)
Includes income distributions from investment funds, term loan investments and other items.
Summary of net realized gains (losses), excluding other-than-temporary impairment provisions
Net realized gains (losses) were as follows, excluding net impairment losses recognized in earnings:
 
June 30,
 
2018
 
2017
Three Months Ended
 
 
 
Available for sale securities:
 

 
 

Gross gains on investment sales
$
18,777

 
$
76,730

Gross losses on investment sales
(57,711
)
 
(52,619
)
Change in fair value of assets and liabilities accounted for using the fair value option:
 
 
 
Fixed maturities
(22,927
)
 
9,656

Other investments
(254
)
 
637

Equity securities
1,230

 
2,829

Short-term investments
(136
)
 
3,328

Equity securities, at fair value (1):
 
 
 
Net realized gains (losses) on sales during the period
(5,918
)
 
—

Net unrealized gains (losses) on equity securities still held at reporting date
(7,278
)
 
—

Derivative instruments (2)
(2,146
)
 
(4,770
)
Other (3)
(248
)
 
(14,056
)
Net realized gains (losses)
$
(76,611
)
 
$
21,735

 
 
 
 
Six Months Ended
 
 
 
Available for sale securities:
 
 
 
Gross gains on investment sales
$
33,742

 
$
145,905

Gross losses on investment sales
(140,262
)
 
(113,981
)
Change in fair value of assets and liabilities accounted for using the fair value option:
 
 
 
Fixed maturities
(40,478
)
 
30,197

Other investments
(6,628
)
 
17,885

Equity securities
7,898

 
6,374

Short-term investments
(287
)
 
3,332

Equity securities, at fair value (1):
 
 
 
Net realized gains (losses) on sales during the period
(11,286
)
 
—

Net unrealized gains (losses) on equity securities still held at reporting date
(14,861
)
 
—

Derivative instruments (2)
(6,109
)
 
(13,951
)
Other (3)
(9,338
)
 
(19,873
)
Net realized gains (losses)
$
(187,609
)
 
$
55,888

(1)
Pursuant to new accounting guidance (see Note 2), changes in fair value on equity securities are recorded through net income effective January 1, 2018.
(2)
See Note 9 for information on the Company’s derivative instruments.
(3)
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,
 
2018
 
2017
Three Months Ended
 
 
 
Fixed maturities:
 

 
 

Mortgage backed securities
$
(81
)
 
$
(92
)
Corporate bonds
(241
)
 
(1,401
)
Asset backed securities
(148
)
 
—

Municipal bonds
—

 
(173
)
Total
(470
)
 
(1,666
)
Other investments
—

 
(64
)
Net impairment losses recognized in earnings
$
(470
)
 
$
(1,730
)
 
 
 
 
Six Months Ended
 
 
 
Fixed maturities:
 
 
 
Mortgage backed securities
$
(123
)
 
$
(1,411
)
Corporate bonds
(361
)
 
(1,402
)
Non-U.S. government securities
—

 
(198
)
Asset backed securities
(148
)
 
—

Municipal bonds
—

 
(173
)
Total
(632
)
 
(3,184
)
Equity securities
—

 
(186
)
Other investments
—

 
(167
)
Net impairment losses recognized in earnings
$
(632
)
 
$
(3,537
)
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,
 
2018
 
2017
Three Months Ended
 
 
 
Balance at start of period
$
767

 
$
12,537

Credit loss impairments recognized on securities not previously impaired
—

 
31

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
(69
)
 
(8,303
)
Balance at end of period
$
698

 
$
4,437

 
 
 
 
Six Months Ended
 
 
 
Balance at start of year
$
767

 
$
13,138

Credit loss impairments recognized on securities not previously impaired
—

 
31

Credit loss impairments recognized on securities previously impaired
—

 
195

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
(69
)
 
(8,927
)
Balance at end of period
$
698

 
$
4,437
Summary of restricted assets
The following table details the value of the Company’s restricted assets:
 
June 30,
2018
 
December 31,
2017
Assets used for collateral or guarantees:
 

 
 

Affiliated transactions
$
4,549,122

 
$
4,323,726

Third party agreements
1,537,336

 
1,674,304

Deposits with U.S. regulatory authorities
701,026

 
616,987

Deposits with non-U.S. regulatory authorities
58,371

 
55,895

Total restricted assets
$
6,845,855

 
$
6,670,912