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Segment Reporting

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Reporting

16. 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						Nine Months Ended
U.S. Reinsurance	September 30,						September 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	852,679		$	940,839		$	2,258,589		$	2,237,170
Net written premiums		754,477			845,743			1,931,024			1,957,877

Premiums earned	$	646,265		$	670,663		$	1,893,516		$	1,837,932
Incurred losses and LAE		380,960			440,070			1,052,789			1,494,916
Commission and brokerage		215,813			156,500			555,517			432,532
Other underwriting expenses		19,150			16,250			50,468			48,608
Underwriting gain (loss)	$	30,342		$	57,843		$	234,742		$	(138,124)

	Three Months Ended						Nine Months Ended
International	September 30,						September 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	442,294		$	362,651		$	1,215,209		$	1,128,399
Net written premiums		407,897			348,785			1,141,319			1,049,249

Premiums earned	$	372,344		$	342,238		$	1,083,354		$	1,049,637
Incurred losses and LAE		411,011			310,400			878,118			738,830
Commission and brokerage		83,420			81,439			253,015			255,704
Other underwriting expenses		11,331			10,191			29,847			31,116
Underwriting gain (loss)	$	(133,418)		$	(59,792)		$	(77,626)		$	23,987

		Three Months Ended					Nine Months Ended
Bermuda	September 30,						September 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	441,699		$	377,916		$	1,204,512		$	1,163,042
Net written premiums		421,339			358,758			1,140,609			1,108,962

Premiums earned	$	402,190		$	299,815		$	1,095,208		$	972,647
Incurred losses and LAE		258,650			211,718			674,994			591,328
Commission and brokerage		71,865			76,611			230,581			238,416
Other underwriting expenses		13,351			10,752			36,716			31,647
Underwriting gain (loss)	$	58,324		$	734		$	152,917		$	111,256

	Three Months Ended						Nine Months Ended
Insurance	September 30,						September 30,
(Dollars in thousands)	2019			2018			2019			2018
Gross written premiums	$	666,602		$	517,258		$	2,018,727		$	1,668,181
Net written premiums		484,844			385,487			1,491,286			1,241,269

Premiums earned	$	484,820		$	418,763		$	1,383,537		$	1,220,508
Incurred losses and LAE		321,303			289,670			909,203			825,275
Commission and brokerage		71,978			66,851			214,387			195,790
Other underwriting expenses		74,326			60,749			204,945			175,954
Underwriting gain (loss)	$	17,213		$	1,493		$	55,002		$	23,489

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						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2019			2018			2019			2018
Underwriting gain (loss)	$	(27,539)		$	278		$	365,035		$	20,608
Net investment income		181,058			161,363			501,062			440,979
Net realized capital gains (losses)		(12,943)			54,804			109,561			45,679
Net derivative gain (loss)		(189)			2,225			3,395			5,485
Corporate expenses		(8,435)			(7,890)			(22,622)			(23,519)
Interest, fee and bond issue cost amortization expense		(7,907)			(7,901)			(23,972)			(23,047)
Other income (expense)		(31,025)			(13,408)			(52,550)			(2,948)
Income (loss) before taxes	$	93,020		$	189,471		$	879,909		$	463,237

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						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2019			2018			2019			2018
United Kingdom gross written premium	$	272,297		$	246,580		$	743,294		$	681,911

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