The Company operates in three segments of the specialty insurance marketplace: the Excess and Surplus Lines, the Specialty Admitted and the London markets. The Company considers many factors, including the nature of its insurance products, production sources, distribution strategies and regulatory environment in determining how to aggregate operating segments.

All investing activities related to our insurance operations are included in the Investing segment. For purposes of segment reporting, the Other Insurance (Discontinued Lines) segment includes lines of business that have been discontinued in conjunction with acquisitions. The Company's non-insurance operations primarily consist of controlling interests in various businesses. For purposes of segment reporting, the Company's non-insurance operations are not considered to be a reportable operating segment.

Segment profit or loss for each of the Company's operating segments is measured by underwriting profit or loss. The property and casualty insurance industry commonly defines underwriting profit or loss as earned premiums net of losses and loss adjustment expenses and underwriting, acquisition and insurance expenses. Underwriting profit or loss does not replace operating income or net income computed in accordance with U.S. GAAP as a measure of profitability. Underwriting profit or loss provides a basis for management to evaluate the Company's underwriting performance. Segment profit for the Investing segment is measured by net investment income and net realized investment gains or losses.

For management reporting purposes, the Company allocates assets to its underwriting, investing and non-insurance operations. Underwriting assets are all assets not specifically allocated to the Investing segment or to the Company's non-insurance operations. Underwriting assets are not allocated to the Excess and Surplus Lines, Specialty Admitted, London Insurance Market or Other Insurance (Discontinued Lines) segments since the Company does not manage its assets by operating segment. Invested assets related to our insurance operations are allocated to the Investing segment since these assets are available for payment of losses and expenses for all operating segments. The Company does not allocate capital expenditures for long-lived assets to any of its operating segments for management reporting purposes.


Quarter Ended September 30, 2011
(dollars in thousands)	Excess and Surplus Lines			Specialty Admitted			London Insurance Market			Other Insurance (Discontinued Lines)			Investing		Consolidated
Gross premium volume	$	236,639		$	153,753		$	194,210		$	33		$	0	$	584,635
Net written premiums		200,658			147,169			176,829			22			0		524,678
Earned premiums		189,695			136,783			182,710			15			0		509,203
Losses and loss adjustment expenses:
Current accident year		(147,992	)		(112,607	)		(144,976	)		0			0		(405,575	)
Prior accident years		60,475			5,973			34,721			(2,226	)		0		98,943
Underwriting, acquisition and insurance expenses		(81,563	)		(51,695	)		(69,731	)		673			0		(202,316	)

Underwriting profit (loss)		20,615			(21,546	)		2,724			(1,538	)		0		255

Net investment income		0			0			0			0			62,199		62,199
Net realized investment gains		0			0			0			0			12,839		12,839
Other revenues (insurance)		0			10,061			0			0			0		10,061
Other expenses (insurance)		0			(3,046	)		47			0			0		(2,999	)

Segment profit (loss)	$	20,615		$	(14,531	)	$	2,771		$	(1,538	)	$	75,038	$	82,355

Other revenues (non-insurance)																81,786
Other expenses (non-insurance)																(67,303	)
Amortization of intangible assets																(6,023	)
Interest expense																(23,656	)

Income before income taxes															$	67,159

U.S. GAAP combined ratio⁽¹⁾		89	%		116	%		99	%		NM	⁽²⁾				100	%


Quarter Ended September 30, 2010
(dollars in thousands)	Excess and Surplus Lines			Specialty Admitted			London Insurance Market			Other Insurance (Discontinued Lines)			Investing		Consolidated
Gross premium volume	$	238,622		$	104,292		$	178,677		$	0		$	0	$	521,591
Net written premiums		208,299			98,521			160,120			215			0		467,155
Earned premiums		207,166			79,396			148,579			214			0		435,355
Losses and loss adjustment expenses:
Current accident year		(175,289	)		(51,299	)		(103,702	)		0			0		(330,290	)
Prior accident years		52,751			3,891			49,277			(469	)		0		105,450
Underwriting, acquisition and insurance expenses		(89,986	)		(31,931	)		(59,585	)		(138	)		0		(181,640	)

Underwriting profit (loss)		(5,358	)		57			34,569			(393	)		0		28,875

Net investment income		0			0			0			0			68,652		68,652
Net realized investment gains		0			0			0			0			8,782		8,782
Other revenues (insurance)		0			0			1,267			0			0		1,267
Other expenses (insurance)		0			0			(618	)		0			0		(618	)

Segment profit (loss)	$	(5,358	)	$	57		$	35,218		$	(393	)	$	77,434	$	106,958

Other revenues (non-insurance)																47,298
Other expenses (non-insurance)																(40,456	)
Amortization of intangible assets																(3,903	)
Interest expense																(18,598	)

Income before income taxes															$	91,299

U.S. GAAP combined ratio⁽¹⁾		103	%		100	%		77	%		NM	⁽²⁾				93	%

⁽¹⁾	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.

⁽²⁾	NM – Ratio is not meaningful.


Nine Months Ended September 30, 2011
(dollars in thousands)	Excess and Surplus Lines			Specialty Admitted			London Insurance Market			Other Insurance (Discontinued Lines)			Investing		Consolidated
Gross premium volume	$	663,989		$	431,604		$	676,893		$	125		$	0	$	1,772,611
Net written premiums		570,243			410,700			593,440			(5	)		0		1,574,378
Earned premiums		557,958			390,623			513,947			(13	)		0		1,462,515
Losses and loss adjustment expenses:
Current accident year		(413,049	)		(285,401	)		(479,398	)		0			0		(1,177,848	)
Prior accident years		169,916			7,942			69,960			2,387			0		250,205
Underwriting, acquisition and insurance expenses		(250,415	)		(148,957	)		(202,291	)		152			0		(601,511	)

Underwriting profit (loss)		64,410			(35,793	)		(97,782	)		2,526			0		(66,639	)

Net investment income		0			0			0			0			196,551		196,551
Net realized investment gains		0			0			0			0			25,423		25,423
Other revenues (insurance)		0			31,622			0			0			0		31,622
Other expenses (insurance)		0			(27,374	)		0			0			0		(27,374	)

Segment profit (loss)	$	64,410		$	(31,545	)	$	(97,782	)	$	2,526		$	221,974	$	159,583

Other revenues (non-insurance)																228,739
Other expenses (non-insurance)																(190,896	)
Amortization of intangible assets																(17,586	)
Interest expense																(64,516	)

Income before income taxes															$	115,324

U.S. GAAP combined ratio⁽¹⁾		88	%		109	%		119	%		NM	⁽²⁾				105	%


Nine Months Ended September 30, 2010
(dollars in thousands)	Excess and Surplus Lines			Specialty Admitted			London Insurance Market			Other Insurance (Discontinued Lines)			Investing		Consolidated
Gross premium volume	$	692,949		$	261,138		$	573,999		$	43		$	0	$	1,528,129
Net written premiums		618,835			242,199			506,594			258			0		1,367,886
Earned premiums		621,331			227,000			415,590			257			0		1,264,178
Losses and loss adjustment expenses:
Current accident year		(452,774	)		(143,097	)		(320,890	)		0			0		(916,761	)
Prior accident years		103,453			4,803			75,160			(2,900	)		0		180,516
Underwriting, acquisition and insurance expenses		(260,526	)		(90,088	)		(166,674	)		(126	)		0		(517,414	)

Underwriting profit (loss)		11,484			(1,382	)		3,186			(2,769	)		0		10,519

Net investment income		0			0			0			0			201,438		201,438
Net realized investment gains		0			0			0			0			22,096		22,096
Other revenues (insurance)		0			0			6,182			0			0		6,182
Other expenses (insurance)		0			0			(5,482	)		0			0		(5,482	)

Segment profit (loss)	$	11,484		$	(1,382	)	$	3,886		$	(2,769	)	$	223,534	$	234,753

Other revenues (non-insurance)																119,593
Other expenses (non-insurance)																(103,958	)
Amortization of intangible assets																(11,717	)
Interest expense																(54,891	)

Income before income taxes															$	183,780

U.S. GAAP combined ratio⁽¹⁾		98	%		101	%		99	%		NM	⁽²⁾				99	%

⁽¹⁾	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of incurred losses, loss adjustment expenses and underwriting, acquisition and insurance expenses to earned premiums.

⁽²⁾	NM – Ratio is not meaningful.

b) The following table reconciles segment assets to the Company's consolidated balance sheets.