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Segment Reporting

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Reporting

17. 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:

U.S. Reinsurance	Years Ended December 31,
(Dollars in thousands)	2019			2018			2017
Gross written premiums	$	2,962,416		$	3,014,338		$	2,592,972
Net written premiums		2,513,579			2,642,182			2,245,422

Premiums earned	$	2,471,447		$	2,528,991		$	2,181,160
Incurred losses and LAE		1,514,151			2,784,181			1,632,795
Commission and brokerage		703,803			568,374			462,487
Other underwriting expenses		68,796			60,266			55,881
Underwriting gain (loss)	$	184,697		$	(883,830)		$	29,997

International	Years Ended December 31,
(Dollars in thousands)	2019			2018			2017
Gross written premiums	$	1,648,598		$	1,543,946		$	1,316,701
Net written premiums		1,551,753			1,458,745			1,229,597

Premiums earned	$	1,475,669		$	1,439,882		$	1,202,043
Incurred losses and LAE		1,193,816			992,704			1,059,640
Commission and brokerage		342,400			364,010			287,688
Other underwriting expenses		41,690			39,042			38,844
Underwriting gain (loss)	$	(102,237)		$	44,126		$	(184,129)

Bermuda	Years Ended December 31,
(Dollars in thousands)	2019			2018			2017
Gross written premiums	$	1,744,875		$	1,666,317		$	1,205,001
Net written premiums		1,666,940			1,605,526			1,139,082

Premiums earned	$	1,544,180		$	1,324,198		$	1,093,250
Incurred losses and LAE		967,211			808,717			735,292
Commission and brokerage		354,044			319,197			303,707
Other underwriting expenses		50,348			43,566			38,011
Underwriting gain (loss)	$	172,577		$	152,718		$	16,240

Insurance	Years Ended December 31,
(Dollars in thousands)	2019			2018			2017
Gross written premiums	$	2,777,475		$	2,250,552		$	2,059,248
Net written premiums		2,092,152			1,707,975			1,630,560

Premiums earned	$	1,912,390		$	1,638,628		$	1,461,387
Incurred losses and LAE		1,247,720			1,065,801			1,094,854
Commission and brokerage		303,479			267,449			250,081
Other underwriting expenses		280,065			228,667			186,081
Underwriting gain (loss)	$	81,126		$	76,711		$	(69,629)

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:

	Years Ended December 31,
(Dollars in thousands)	2019			2018			2017
Underwriting gain (loss)	$	336,163		$	(610,275)		$	(207,521)
Net investment income		647,139			581,183			542,898
Net realized capital gains (losses)		185,004			(127,136)			153,194
Net derivative gain (loss)		6,374			520			9,581
Corporate expenses		(32,966)			(30,672)			(25,923)
Interest, fee and bond issue cost amortization expense		(31,693)			(31,031)			(31,603)
Other income (expense)		(11,034)			(24,771)			(21,215)
Income (loss) before taxes	$	1,098,987		$	(242,182)		$	419,411

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:

	Year Ended December 31,
(Dollars in thousands)	2019			2018			2017
United Kingdom gross written premium	$	964,358		$	914,612		$	730,826

Approximately 23.1%, 19.7% and 20.4% of the Company’s gross written premiums in 2019, 2018 and 2017, respectively, were sourced through the Company’s largest intermediary.