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Investment Information | 9 Months Ended
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Sep. 30, 2020
Disclosure Investment Information [Abstract] |
Investment Information | Investment Information At September 30, 2020, total investable assets of $28.42 billion included $25.72 billion held by the Company and $2.69 billion attributable to Watford. Available For Sale Investments 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 |  | Allowance for Expected Credit Losses (2) |  | Cost or Amortized Cost |  |
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Fixed maturities (1): |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | $ | 7,965,599 |  |  | $ | 390,839 |  |  | $ | (40,448) |  |  | $ | (1,742) |  |  | $ | 7,616,950 |  |  |
Mortgage backed securities | 717,081 |  |  | 12,456 |  |  | (3,373) |  |  | (336) |  |  | 708,334 |  |  |
Municipal bonds | 527,410 |  |  | 26,980 |  |  | (877) |  |  | (62) |  |  | 501,369 |  |  |
Commercial mortgage backed securities | 374,360 |  |  | 8,523 |  |  | (4,660) |  |  | (256) |  |  | 370,753 |  |  |
U.S. government and government agencies | 4,861,349 |  |  | 39,350 |  |  | (4,396) |  |  | — |  |  | 4,826,395 |  |  |
Non-U.S. government securities | 2,302,646 |  |  | 86,996 |  |  | (18,294) |  |  | — |  |  | 2,233,944 |  |  |
Asset backed securities | 1,767,192 |  |  | 30,026 |  |  | (21,729) |  |  | (1,537) |  |  | 1,760,432 |  |  |
Total | 18,515,637 |  |  | 595,170 |  |  | (93,777) |  |  | (3,933) |  |  | 18,018,177 |  |  |
Short-term investments | 2,039,097 |  |  | 1,807 |  |  | (954) |  |  | — |  |  | 2,038,244 |  |  |
Total | $ | 20,554,734 |  |  | $ | 596,977 |  |  | $ | (94,731) |  |  | $ | (3,933) |  |  | $ | 20,056,421 |  |  |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Fixed maturities (1): |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | $ | 6,406,591 |  |  | $ | 191,889 |  |  | $ | (12,793) |  |  |  |  | $ | 6,227,495 |  |  |
Mortgage backed securities | 562,309 |  |  | 9,669 |  |  | (931) |  |  |  |  | 553,571 |  |  |
Municipal bonds | 881,926 |  |  | 24,628 |  |  | (2,213) |  |  |  |  | 859,511 |  |  |
Commercial mortgage backed securities | 733,108 |  |  | 14,951 |  |  | (2,330) |  |  |  |  | 720,487 |  |  |
U.S. government and government agencies | 4,916,592 |  |  | 36,600 |  |  | (10,134) |  |  |  |  | 4,890,126 |  |  |
Non-U.S. government securities | 2,078,757 |  |  | 48,549 |  |  | (20,330) |  |  |  |  | 2,050,538 |  |  |
Asset backed securities | 1,683,753 |  |  | 24,017 |  |  | (4,724) |  |  |  |  | 1,664,460 |  |  |
Total | 17,263,036 |  |  | 350,303 |  |  | (53,455) |  |  |  |  | 16,966,188 |  |  |
Short-term investments | 956,546 |  |  | 811 |  |  | (1,548) |  |  |  |  | 957,283 |  |  |
Total | $ | 18,219,582 |  |  | $ | 351,114 |  |  | $ | (55,003) |  |  |  |  | $ | 17,923,471 |  |  |
(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, 2020, the Company adopted ASU 2016-13 and as a result any credit impairment losses on the Company’s available-for-sale investments are recorded as an allowance, subject to reversal. See note 1. 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
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Fixed maturities (1): |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | $ | 1,414,931 |  |  | $ | (38,353) |  |  | $ | 4,169 |  |  | $ | (2,095) |  |  | $ | 1,419,100 |  |  | $ | (40,448) |
Mortgage backed securities | 186,860 |  |  | (3,262) |  |  | 690 |  |  | (111) |  |  | 187,550 |  |  | (3,373) |
Municipal bonds | 36,469 |  |  | (877) |  |  | — |  |  | — |  |  | 36,469 |  |  | (877) |
Commercial mortgage backed securities | 179,780 |  |  | (4,601) |  |  | 2,850 |  |  | (59) |  |  | 182,630 |  |  | (4,660) |
U.S. government and government agencies | 1,386,590 |  |  | (4,396) |  |  | — |  |  | — |  |  | 1,386,590 |  |  | (4,396) |
Non-U.S. government securities | 921,890 |  |  | (18,294) |  |  | — |  |  | — |  |  | 921,890 |  |  | (18,294) |
Asset backed securities | 636,373 |  |  | (20,166) |  |  | 39,368 |  |  | (1,563) |  |  | 675,741 |  |  | (21,729) |
Total | 4,762,893 |  |  | (89,949) |  |  | 47,077 |  |  | (3,828) |  |  | 4,809,970 |  |  | (93,777) |
Short-term investments | 81,964 |  |  | (954) |  |  | — |  |  | — |  |  | 81,964 |  |  | (954) |
Total | $ | 4,844,857 |  |  | $ | (90,903) |  |  | $ | 47,077 |  |  | $ | (3,828) |  |  | $ | 4,891,934 |  |  | $ | (94,731) |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Fixed maturities (1): |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | $ | 675,131 |  |  | $ | (12,350) |  |  | $ | 37,671 |  |  | $ | (443) |  |  | $ | 712,802 |  |  | $ | (12,793) |
Mortgage backed securities | 102,887 |  |  | (927) |  |  | 203 |  |  | (4) |  |  | 103,090 |  |  | (931) |
Municipal bonds | 220,296 |  |  | (2,213) |  |  | — |  |  | — |  |  | 220,296 |  |  | (2,213) |
Commercial mortgage backed securities | 147,290 |  |  | (2,302) |  |  | 2,683 |  |  | (28) |  |  | 149,973 |  |  | (2,330) |
U.S. government and government agencies | 1,373,127 |  |  | (10,089) |  |  | 32,058 |  |  | (45) |  |  | 1,405,185 |  |  | (10,134) |
Non-U.S. government securities | 1,224,243 |  |  | (20,163) |  |  | 37,610 |  |  | (167) |  |  | 1,261,853 |  |  | (20,330) |
Asset backed securities | 441,522 |  |  | (3,334) |  |  | 48,313 |  |  | (1,390) |  |  | 489,835 |  |  | (4,724) |
Total | 4,184,496 |  |  | (51,378) |  |  | 158,538 |  |  | (2,077) |  |  | 4,343,034 |  |  | (53,455) |
Short-term investments | 95,777 |  |  | (1,548) |  |  | — |  |  | — |  |  | 95,777 |  |  | (1,548) |
Total | $ | 4,280,273 |  |  | $ | (52,926) |  |  | $ | 158,538 |  |  | $ | (2,077) |  |  | $ | 4,438,811 |  |  | $ | (55,003) |
(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.” At September 30, 2020, on a lot level basis, approximately 3,270 security lots out of a total of approximately 11,090 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $0.9 million. At December 31, 2019, on a lot level basis, approximately 2,230 security lots out of a total of approximately 9,590 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $0.9 million. 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.
|  | September 30, 2020 |  | December 31, 2019
Maturity |  | Estimated Fair Value |  | Amortized Cost |  | Estimated Fair Value |  | Amortized Cost
Due in one year or less |  | $ | 318,767 |  |  | $ | 312,569 |  |  | $ | 428,659 |  |  | $ | 423,617 |
Due after one year through five years |  | 9,937,129 |  |  | 9,698,743 |  |  | 10,126,403 |  |  | 9,996,206 |
Due after five years through 10 years |  | 4,849,248 |  |  | 4,641,483 |  |  | 3,317,535 |  |  | 3,219,567 |
Due after 10 years |  | 551,860 |  |  | 525,863 |  |  | 411,269 |  |  | 388,280 |
|  | 15,657,004 |  |  | 15,178,658 |  |  | 14,283,866 |  |  | 14,027,670 |
Mortgage backed securities |  | 717,081 |  |  | 708,334 |  |  | 562,309 |  |  | 553,571 |
Commercial mortgage backed securities |  | 374,360 |  |  | 370,753 |  |  | 733,108 |  |  | 720,487 |
Asset backed securities |  | 1,767,192 |  |  | 1,760,432 |  |  | 1,683,753 |  |  | 1,664,460 |
Total (1) |  | $ | 18,515,637 |  |  | $ | 18,018,177 |  |  | $ | 17,263,036 |  |  | $ | 16,966,188 |
(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.” Securities Lending Agreements The Company enters into securities lending agreements with financial institutions to enhance investment income whereby it loans certain of its securities to third parties, primarily major brokerage firms, for short periods of time through a lending agent. The Company maintains legal control over the securities it lends (shown as ‘Securities pledged under securities lending, at fair value’ on the Company’s balance sheet), retains the earnings and cash flows associated with the loaned securities and receives a fee from the borrower for the temporary use of the securities. An indemnification agreement with the lending agent protects the Company in the event a borrower becomes insolvent or fails to return any of the securities on loan from the Company. The Company receives collateral (shown as ‘Collateral received under securities lending, at fair value’ on the Company’s balance sheet) in the form of cash or U.S. government and government agency securities. At September 30, 2020, the fair value of the cash collateral received on securities lending was nil and the fair value of security collateral received was $64.3 million. At December 31, 2019, the fair value of the cash collateral received on securities lending was $81.2 million, and the fair value of security collateral received was $307.2 million. The carrying value of collateral held under the Company’s securities lending transactions by significant investment category and remaining contractual maturity of the underlying agreements is as follows:
|  | Remaining Contractual Maturity of the Agreements
|  | Overnight and Continuous |  | Less than 30 Days |  | 30-90 Days |  | 90 Days or More |  | Total
September 30, 2020 |  |  |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 64,251 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 64,251 |
Corporate bonds |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Equity securities |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | 64,251 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 64,251 |
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 |  | $ | 64,251 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |
U.S. government and government agencies |  | $ | 240,332 |  |  | $ | — |  |  | $ | 115,973 |  |  | $ | — |  |  | $ | 356,305 |
Corporate bonds |  | 2,570 |  |  | — |  |  | — |  |  | — |  |  | 2,570 |
Equity securities |  | 29,491 |  |  | — |  |  | — |  |  | — |  |  | 29,491 |
Total |  | $ | 272,393 |  |  | $ | — |  |  | $ | 115,973 |  |  | $ | — |  |  | $ | 388,366 |
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 |  | $ | 388,366 |
Equity Securities, at Fair Value At September 30, 2020, the Company held $1.50 billion of equity securities, at fair value, compared to $838.9 million at December 31, 2019. Such holdings include publicly traded common stocks primarily in the consumer cyclical and non-cyclical, technology, communication and financial sectors and exchange-traded funds in fixed income, equity and other sectors. Other Investments The following table summarizes the Company’s other investments which are included in investments accounted for using the fair value option, by strategy:
| September 30, 2020 |  | December 31, 2019
Term loan investments | $ | 1,202,526 |  |  | $ | 1,326,018 |
Lending | 575,623 |  |  | 602,841 |
Credit related funds | 98,121 |  |  | 123,020 |
Energy | 65,330 |  |  | 97,402 |
Investment grade fixed income | 114,784 |  |  | 151,594 |
Infrastructure | 60,579 |  |  | 61,786 |
Private equity | 34,983 |  |  | 49,376 |
Real estate | 17,951 |  |  | 17,279 |
Total | $ | 2,169,897 |  |  | $ | 2,429,316 |
Investments Accounted For Using the Equity Method The following table summarizes the Company’s investments accounted for using the equity method, by strategy:
| September 30, 2020 |  | December 31, 2019
Credit related funds | $ | 687,178 |  |  | $ | 428,437 |
Equities | 323,670 |  |  | 293,686 |
Real estate | 246,998 |  |  | 246,851 |
Lending | 141,305 |  |  | 202,690 |
Private equity | 214,357 |  |  | 144,983 |
Infrastructure | 156,029 |  |  | 235,033 |
Energy | 114,165 |  |  | 108,716 |
Total | $ | 1,883,702 |  |  | $ | 1,660,396 |
Certain of the Company’s other investments are in investment funds for which the Company has the option to redeem at agreed upon values as described in each investment fund’s subscription agreement. Depending on the terms of the various subscription agreements, investments in investment funds may be redeemed daily, monthly, quarterly or on other terms. Two common redemption restrictions which may impact the Company’s ability to redeem these investment funds are gates and lockups. A gate is a suspension of redemptions which may be implemented by the general partner or investment manager of the fund in order to defer, in whole or in part, the redemption request in the event the aggregate amount of redemption requests exceeds a predetermined percentage of the investment fund’s net assets which may otherwise hinder the general partner or investment manager’s ability to liquidate holdings in an orderly fashion in order to generate the cash necessary to fund extraordinarily large redemption payouts. A lockup period is the initial amount of time an investor is contractually required to hold the security before having the ability to redeem. If the investment funds are eligible to be redeemed, the time to redeem such fund can take weeks or months following the notification. Fair Value Option The following table summarizes the Company’s assets which are accounted for using the fair value option:
| September 30, 2020 |  | December 31, 2019
Fixed maturities | $ | 1,019,529 |  |  | $ | 754,452 |
Other investments | 2,169,897 |  |  | 2,429,316 |
Short-term investments | 468,704 |  |  | 377,014 |
Equity securities | 91,445 |  |  | 102,695 |
Investments accounted for using the fair value option | $ | 3,749,575 |  |  | $ | 3,663,477 |
Limited Partnership Interests In the normal course of its activities, the Company invests in limited partnerships as part of its overall investment strategy. Such amounts are included in ‘investments accounted for using the equity method’ and ‘investments accounted for using the fair value option.’ The Company has determined that it is not required to consolidate these investments because it is not the primary beneficiary of the funds. The Company’s maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported in the Company’s consolidated balance sheet and any unfunded commitment. The following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item:
| September 30, 2020 |  | December 31, 2019
Investments accounted for using the equity method (1) | 1,883,702 |  |  | 1,660,396 |
Investments accounted for using the fair value option (2) | 180,409 |  |  | 188,283 |
Total | $ | 2,064,111 |  |  | $ | 1,848,679 |
(1) Aggregate unfunded commitments were $1.59 billion at September 30, 2020, compared to $1.36 billion at December 31, 2019. (2) Aggregate unfunded commitments were $36.7 million at September 30, 2020, compared to $41.7 million at December 31, 2019. Net Investment Income The components of net investment income were derived from the following sources:
| September 30,
| 2020 |  | 2019
Three Months Ended |  |  |
Fixed maturities | $ | 98,344 |  |  | $ | 126,889 |
Term loans | 22,459 |  |  | 24,236 |
Equity securities | 6,659 |  |  | 3,992 |
Short-term investments | 1,332 |  |  | 3,834 |
Other (1) | 22,060 |  |  | 22,704 |
Gross investment income | 150,854 |  |  | 181,655 |
Investment expenses | (22,342) |  |  | (20,167) |
Net investment income | $ | 128,512 |  |  | $ | 161,488 |
Nine Months Ended |  |  |
Fixed maturities | $ | 318,582 |  |  | $ | 381,706 |
Term loans | 66,141 |  |  | 73,582 |
Equity securities | 18,885 |  |  | 11,348 |
Short-term investments | 9,611 |  |  | 11,872 |
Other (1) | 57,926 |  |  | 62,423 |
Gross investment income | 471,145 |  |  | 540,931 |
Investment expenses | (65,995) |  |  | (67,456) |
Net investment income | $ | 405,150 |  |  | $ | 473,475 |
(1) Includes income distributions from investment funds and other items. Net Realized Gains (Losses) Net realized gains (losses), which include changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings were as follows:
| September 30,
| 2020 |  | 2019
Three Months Ended |  |  |
Available for sale securities: |  |  |
Gross gains on investment sales | $ | 104,733 |  |  | $ | 73,685 |
Gross losses on investment sales | (16,862) |  |  | (30,561) |
Change in fair value of assets and liabilities accounted for using the fair value option: |  |  |
Fixed maturities | 34,115 |  |  | (3,895) |
Other investments | 61,622 |  |  | (21,778) |
Equity securities | 4,048 |  |  | (1,231) |
Short-term investments | 3,377 |  |  | (1,941) |
Equity securities, at fair value: |  |  |
Net realized gains (losses) on sales during the period | 26,549 |  |  | 5,217 |
Net unrealized gains (losses) on equity securities still held at reporting date | 33,562 |  |  | (1,206) |
Allowance for credit losses: |  |  |
Investments related | 1,332 |  |  | — |
Underwriting related | 351 |  |  | — |
Net impairment losses | — |  |  | (1,163) |
Derivative instruments (1) | 20,369 |  |  | 42,893 |
Other | 7,303 |  |  | 1,335 |
Net realized gains (losses) | $ | 280,499 |  |  | $ | 61,355 |
Nine Months Ended |  |  |
Available for sale securities: |  |  |
Gross gains on investment sales | $ | 515,086 |  |  | $ | 192,140 |
Gross losses on investment sales | (98,654) |  |  | (77,498) |
Change in fair value of assets and liabilities accounted for using the fair value option: |  |  |
Fixed maturities | (25,370) |  |  | 38,682 |
Other investments | (67,608) |  |  | (37,363) |
Equity securities | 5,803 |  |  | 9,449 |
Short-term investments | (1,936) |  |  | (2,613) |
Equity securities, at fair value: |  |  |
Net realized gains (losses) on sales during the period | 7,760 |  |  | 9,503 |
Net unrealized gains (losses) on equity securities still held at reporting date | 3,682 |  |  | 58,562 |
Allowance for credit losses: |  |  |
Investments related | (4,763) |  |  | — |
Underwriting related | (8,753) |  |  | — |
Net impairments losses | (533) |  |  | (2,521) |
Derivative instruments (1) | 146,722 |  |  | 142,730 |
Other | (1,309) |  |  | (8,703) |
Net realized gains (losses) | $ | 470,127 |  |  | $ | 322,368 |
(1) See note 9 for information on the Company’s derivative instruments. Equity in Net Income (Loss) of Investment Funds Accounted for Using the Equity Method The Company recorded $126.7 million of equity in net income related to investment funds accounted for using the equity method in the 2020 third quarter, compared to income of $17.1 million for the 2019 third quarter, and $57.4 million for the nine months ended September 30, 2020, compared to $96.5 million for the nine months ended September 30, 2019. In applying the equity method, investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the market value of the underlying securities in the funds). Such investments are generally recorded on a one to three month lag based on the availability of reports from the investment funds. Allowance for Expected Credit Losses The following table provides a roll forward of the allowance for expected credit losses of the Company’s securities classified as available for sale:
|  | September 30, 2020
|  | Structured Securities (1) |  | Municipal Bonds |  | Corporate Bonds |  | Short Term Investments |  | Total
Three Months Ended |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | 1,726 |  |  | $ | 28 |  |  | $ | 4,115 |  |  | $ | — |  |  | $ | 5,869 |
Cumulative effect of accounting change |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Additions for current-period provision for expected credit losses |  | 27 |  |  | — |  |  | 202 |  |  | — |  |  | 229 |
Additions (reductions) for previously recognized expected credit losses |  | 403 |  |  | 33 |  |  | (1,996) |  |  | — |  |  | (1,560) |
Reductions due to disposals |  | (28) |  |  | — |  |  | (577) |  |  | — |  |  | (605) |
Write-offs charged against the allowance |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Balance at end of period |  | $ | 2,128 |  |  | $ | 61 |  |  | $ | 1,744 |  |  | $ | — |  |  | $ | 3,933 |
Nine Months Ended |  |  |  |  |  |  |  |  |  |
Balance at beginning of period |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cumulative effect of accounting change |  | 517 |  |  | — |  |  | 117 |  |  | — |  |  | 634 |
Additions for current-period provision for expected credit losses |  | 2,868 |  |  | 67 |  |  | 7,643 |  |  | — |  |  | 10,578 |
Additions (reductions) for previously recognized expected credit losses |  | (903) |  |  | 8 |  |  | (4,920) |  |  | — |  |  | (5,815) |
Reductions due to disposals |  | (354) |  |  | (14) |  |  | (1,096) |  |  | — |  |  | (1,464) |
Write-offs charged against the allowance |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Balance at end of period |  | $ | 2,128 |  |  | $ | 61 |  |  | $ | 1,744 |  |  | $ | — |  |  | $ | 3,933 |
(1) Includes asset backed securities, mortgage backed securities and commercial mortgage backed securities. Restricted Assets The Company is required to maintain assets on deposit, which primarily consist of fixed maturities, with various regulatory authorities to support its underwriting operations. The Company’s subsidiaries maintain assets in trust accounts as collateral for transactions with affiliated companies and also have investments in segregated portfolios primarily to provide collateral or guarantees for letters of credit to third parties. See note 17, “Commitments and Contingencies,” of the notes to consolidated financial statements in the Company’s 2019 Form 10-K. The following table details the value of the Company’s restricted assets:
| September 30, 2020 |  | December 31, 2019
Assets used for collateral or guarantees: |  |  |
Affiliated transactions | $ | 4,829,252 |  |  | $ | 4,526,761 |
Third party agreements | 2,636,097 |  |  | 2,278,248 |
Deposits with U.S. regulatory authorities | 942,480 |  |  | 797,371 |
Deposits with non-U.S. regulatory authorities | 179,726 |  |  | 119,238 |
Total restricted assets | $ | 8,587,555 |  |  | $ | 7,721,618 |
In addition, Watford maintains secured credit facilities to provide borrowing capacity for investment purposes and a total return swap agreement and maintains assets pledged as collateral for such purposes. The Company does not guarantee or provide credit support for Watford, and the Company’s financial exposure to Watford is limited to its investment in Watford’s senior notes, common and preferred shares and counterparty credit risk (mitigated by collateral) arising from reinsurance transactions. As of September 30, 2020 and December 31, 2019, Watford held $1.19 billion and $1.0 billion, respectively, in pledged assets to collateralize the credit facility mentioned above. Reconciliation of Cash and Restricted Cash The following table details reconciliation of cash and restricted cash within the Consolidated Balance Sheets:
| September 30, 2020 |  | December 31, 2019
Cash | $ | 976,398 |  |  | $ | 726,230 |
Restricted cash (included in ‘other assets’) | $ | 210,575 |  |  | $ | 177,468 |
Cash and restricted cash | $ | 1,186,973 |  |  | $ | 903,698 |

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