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Segment Reporting

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Segment Reporting

15. SEGMENT REPORTING

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and Accident and Health (“A&H”) business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S. The International operation writes non-U.S. property and casualty reinsurance through Everest Re’s branches in Canada and Singapore and through offices in Brazil, Miami and New Jersey. The Bermuda operation provides reinsurance and insurance to worldwide property and casualty markets through brokers and directly with ceding companies from its Bermuda office and reinsurance to the United Kingdom and European markets through its UK branch and Ireland Re. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents within the U.S., Canada and Europe.

These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations. Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.

Underwriting results include earned premium less losses and loss adjustment expenses (“LAE”) incurred, commission and brokerage expenses and other underwriting expenses. We measure our underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

For inter-affiliate reinsurance and business written through the Lloyd’s Syndicate, business is generally reported within the segment in which the business was first produced, consistent with how the business is managed.

The Company does not maintain separate balance sheet data for its operating segments. Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

The following tables present the underwriting results for the operating segments for the periods indicated:

	Three Months Ended						Six Months Ended
U.S. Reinsurance	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	641,764		$	652,109		$	1,405,910		$	1,296,331
Net written premiums		506,840			566,303			1,176,547			1,112,134

Premiums earned	$	620,780		$	603,884		$	1,247,251		$	1,167,269
Incurred losses and LAE		351,725			509,653			671,829			1,054,846
Commission and brokerage		172,602			148,712			339,704			276,032
Other underwriting expenses		15,727			15,472			31,318			32,358
Underwriting gain (loss)	$	80,726		$	(69,953)		$	204,400		$	(195,967)

	Three Months Ended						Six Months Ended
International	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	372,861		$	399,024		$	772,915		$	765,748
Net written premiums		357,917			355,309			733,422			700,464

Premiums earned	$	360,075		$	363,795		$	711,010		$	707,399
Incurred losses and LAE		212,972			301,406			467,107			428,430
Commission and brokerage		88,170			92,088			169,595			174,265
Other underwriting expenses		9,835			10,349			18,516			20,925
Underwriting gain (loss)	$	49,098		$	(40,048)		$	55,792		$	83,779

		Three Months Ended					Six Months Ended
Bermuda	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	394,962		$	369,440		$	762,813		$	785,126
Net written premiums		369,929			355,236			719,270			750,204

Premiums earned	$	362,905		$	353,698		$	693,018		$	672,832
Incurred losses and LAE		218,385			250,097			416,344			379,610
Commission and brokerage		84,606			80,318			158,716			161,805
Other underwriting expenses		11,868			10,762			23,365			20,895
Underwriting gain (loss)	$	48,046		$	12,521		$	94,593		$	110,522

	Three Months Ended						Six Months Ended
Insurance	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	757,068		$	645,948		$	1,352,125		$	1,150,923
Net written premiums		549,297			469,530			1,006,442			855,782

Premiums earned	$	473,539		$	408,441		$	898,717		$	801,745
Incurred losses and LAE		311,548			280,158			587,900			535,605
Commission and brokerage		75,572			62,284			142,409			128,939
Other underwriting expenses		67,403			56,516			130,619			115,205
Underwriting gain (loss)	$	19,016		$	9,483		$	37,789		$	21,996

The following table reconciles the underwriting results for the operating segments to income before taxes as reported in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
Underwriting gain (loss)	$	196,886		$	(87,997)		$	392,574		$	20,330
Net investment income		179,028			141,322			320,004			279,616
Net realized capital gains (losses)		30,272			15,776			122,504			(9,125)
Net derivative gain (loss)		353			2,987			3,584			3,260
Corporate expenses		(7,535)			(6,633)			(14,187)			(15,629)
Interest, fee and bond issue cost amortization expense		(8,434)			(7,728)			(16,065)			(15,146)
Other income (expense)		(7,977)			3,036			(17,030)			15,100
Income (loss) before taxes	$	382,593		$	60,763		$	791,384		$	278,406

The Company produces business in the U.S., Bermuda and internationally. The net income deriving from and assets residing in the individual foreign countries in which the Company writes business are not identifiable in the Company’s financial records. Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in thousands)	2019			2018			2019			2018
United Kingdom gross written premium	$	207,140		$	177,072		$	470,997		$	435,331

No other country represented more than 5% of the Company’s revenues.