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Investments | 12 Months Ended
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Dec. 31, 2015
Investments [Abstract] |
Investments | INVESTMENTS Fixed Maturity Investments Trading The following table summarizes the fair value of fixed maturity investments trading:
|  | December 31, 2015 |  | December 31, 2014 |
| U.S. treasuries | $ | 2,064,944 |  |  | $ | 1,671,471 |  |
| Agencies | 137,976 |  |  | 96,208 |  |
| Municipal | 583,282 |  |  | — |  |
| Non-U.S. government (Sovereign debt) | 334,981 |  |  | 280,651 |  |
| Non-U.S. government-backed corporate | 138,994 |  |  | 146,467 |  |
| Corporate | 2,055,323 |  |  | 1,610,442 |  |
| Agency mortgage-backed | 504,368 |  |  | 312,333 |  |
| Non-agency mortgage-backed | 262,235 |  |  | 241,590 |  |
| Commercial mortgage-backed | 554,625 |  |  | 373,117 |  |
| Asset-backed | 128,277 |  |  | 24,406 |  |
| Total fixed maturity investments trading | $ | 6,765,005 |  |  | $ | 4,756,685 |  |
Fixed Maturity Investments Available For Sale The following table summarizes the amortized cost, fair value and related unrealized gains and losses and non-credit other-than-temporary impairments of fixed maturity investments available for sale:
|  |  |  | Included in Accumulated Other Comprehensive Income |  |  |  |  |
| At December 31, 2015 | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Non-Credit Other-Than- Temporary Impairments (1) |
| Agency mortgage-backed | $ | 143 |  |  | $ | 7 |  |  | $ | — |  |  | $ | 150 |  |  | $ | — |  |
| Non-agency mortgage-backed | 7,005 |  |  | 1,523 |  |  | — |  |  | 8,528 |  |  | 550 |  |
| Commercial mortgage-backed | 6,578 |  |  | 293 |  |  | — |  |  | 6,871 |  |  | — |  |
| Asset-backed | 2,217 |  |  | 47 |  |  | — |  |  | 2,264 |  |  | — |  |
| Total fixed maturity investments available for sale | $ | 15,943 |  |  | $ | 1,870 |  |  | $ | — |  |  | $ | 17,813 |  |  | $ | 550 |  |
|  |  |  | Included in Accumulated Other Comprehensive Income |  |  |  |  |
| At December 31, 2014 | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value |  | Non-Credit Other-Than- Temporary Impairments (1) |
| Agency mortgage-backed | $ | 3,928 |  |  | $ | 359 |  |  | $ | — |  |  | $ | 4,287 |  |  | $ | — |  |
| Non-agency mortgage-backed | 9,478 |  |  | 1,985 |  |  | (3 | ) |  | 11,460 |  |  | 656 |  |
| Commercial mortgage-backed | 7,291 |  |  | 643 |  |  | — |  |  | 7,934 |  |  | — |  |
| Asset-backed | 3,075 |  |  | 129 |  |  | — |  |  | 3,204 |  |  | — |  |
| Total fixed maturity investments available for sale | $ | 23,772 |  |  | $ | 3,116 |  |  | $ | (3 | ) |  | $ | 26,885 |  |  | $ | 656 |  |
(1) | Represents the non-credit component of other-than-temporary impairments recognized in accumulated other comprehensive income adjusted for subsequent sales of securities. It does not include the change in fair value subsequent to the impairment measurement date.
Contractual maturities of fixed maturity investments are described in the following table. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Trading |  | Available for Sale |  | Total Fixed Maturity Investments |
| At December 31, 2015 | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value |
| Due in less than one year | $ | 253,700 |  |  | $ | 252,257 |  |  | $ | — |  |  | $ | — |  |  | $ | 253,700 |  |  | $ | 252,257 |  |
| Due after one through five years | 3,872,756 |  |  | 3,833,261 |  |  | — |  |  | — |  |  | 3,872,756 |  |  | 3,833,261 |  |
| Due after five through ten years | 1,031,351 |  |  | 1,011,132 |  |  | — |  |  | — |  |  | 1,031,351 |  |  | 1,011,132 |  |
| Due after ten years | 220,768 |  |  | 218,850 |  |  | — |  |  | — |  |  | 220,768 |  |  | 218,850 |  |
| Mortgage-backed | 1,318,468 |  |  | 1,321,228 |  |  | 13,726 |  |  | 15,549 |  |  | 1,332,194 |  |  | 1,336,777 |  |
| Asset-backed | 128,834 |  |  | 128,277 |  |  | 2,217 |  |  | 2,264 |  |  | 131,051 |  |  | 130,541 |  |
| Total | $ | 6,825,877 |  |  | $ | 6,765,005 |  |  | $ | 15,943 |  |  | $ | 17,813 |  |  | $ | 6,841,820 |  |  | $ | 6,782,818 |  |
Equity Investments Trading The following table summarizes the fair value of equity investments trading:
|  | December 31, 2015 |  | December 31, 2014 |
| Financials | $ | 193,716 |  |  | $ | 222,190 |  |
| Communications and technology | 65,833 |  |  | 31,376 |  |
| Industrial, utilities and energy | 51,168 |  |  | 28,859 |  |
| Consumer | 40,918 |  |  | 19,522 |  |
| Healthcare | 36,148 |  |  | 16,582 |  |
| Basic materials | 6,094 |  |  | 3,569 |  |
| Total | $ | 393,877 |  |  | $ | 322,098 |  |
Pledged Investments At December 31, 2015, $2.5 billion of cash and investments at fair value were on deposit with, or in trust accounts for the benefit of, various counterparties, including with respect to the Company’s standby letter of credit facility and bilateral letter of credit facility (2014 - $2.4 billion). Of this amount, $664.6 million is on deposit with, or in trust accounts for the benefit of, U.S. state regulatory authorities (2014 - $691.9 million). Reverse Repurchase Agreements At December 31, 2015, the Company held $26.2 million (2014 - $49.3 million) of reverse repurchase agreements. These loans are fully collateralized, are generally outstanding for a short period of time and are presented on a gross basis as part of short term investments on the Company’s consolidated balance sheets. The required collateral for these loans typically include high-quality, readily marketable instruments at a minimum amount of 102% of the loan principal. Upon maturity, the Company receives principal and interest income. Net Investment Income The components of net investment income are as follows:
| Year ended December 31, | 2015 |  | 2014 |  | 2013 |
| Fixed maturity investments | $ | 134,800 |  |  | $ | 100,855 |  |  | $ | 95,907 |  |
| Short term investments | 1,227 |  |  | 944 |  |  | 1,698 |  |
| Equity investments | 8,346 |  |  | 3,450 |  |  | 2,295 |  |
| Other investments |  |  |  |  |  |
| Private equity investments | 9,455 |  |  | 18,974 |  |  | 45,767 |  |
| Other | 12,472 |  |  | 11,037 |  |  | 73,735 |  |
| Cash and cash equivalents | 467 |  |  | 395 |  |  | 191 |  |
|  | 166,767 |  |  | 135,655 |  |  | 219,593 |  |
| Investment expenses | (14,200 | ) |  | (11,339 | ) |  | (11,565 | ) |
| Net investment income | $ | 152,567 |  |  | $ | 124,316 |  |  | $ | 208,028 |  |
Net Realized and Unrealized (Losses) Gains on Investments Net realized and unrealized (losses) gains on investments are as follows:
| Year ended December 31, | 2015 |  | 2014 |  | 2013 |
| Gross realized gains | $ | 50,488 |  |  | $ | 45,568 |  |  | $ | 72,492 |  |
| Gross realized losses | (53,630 | ) |  | (14,868 | ) |  | (50,206 | ) |
| Net realized (losses) gains on fixed maturity investments | (3,142 | ) |  | 30,700 |  |  | 22,286 |  |
| Net unrealized (losses) gains on fixed maturity investments trading | (64,908 | ) |  | 19,680 |  |  | (87,827 | ) |
| Net realized and unrealized gains (losses) on investments-related derivatives | 5,443 |  |  | (30,931 | ) |  | 31,058 |  |
| Net realized gains on equity investments trading | 16,348 |  |  | 10,908 |  |  | 26,650 |  |
| Net unrealized (losses) gains on equity investments trading | (22,659 | ) |  | 11,076 |  |  | 42,909 |  |
| Net realized and unrealized (losses) gains on investments | $ | (68,918 | ) |  | $ | 41,433 |  |  | $ | 35,076 |  |
The following table provides an analysis of the components of other comprehensive income and reclassifications out of accumulated other comprehensive income.
|  | Year ended December 31, 2015 |
|  | Investments in other ventures |  | Fixed maturity investments available for sale |  | Total |
| Beginning balance | $ | 303 |  |  | $ | 3,113 |  |  | $ | 3,416 |  |
| Other comprehensive loss before reclassifications | (65 | ) |  | (917 | ) |  | (982 | ) |
| Amounts reclassified from accumulated other comprehensive income by statement of operations line item: |  |  |  |  |  |
| Realized gains reclassified from accumulated other comprehensive income to net realized and unrealized (losses) gains on investments | — |  |  | (326 | ) |  | (326 | ) |
| Net current-period other comprehensive loss | (65 | ) |  | (1,243 | ) |  | (1,308 | ) |
| Ending balance | $ | 238 |  |  | $ | 1,870 |  |  | $ | 2,108 |  |
|  | Year ended December 31, 2014 |
|  | Investments in other ventures |  | Fixed maturity investments available for sale |  | Total |
| Beginning balance | $ | 163 |  |  | $ | 3,968 |  |  | $ | 4,131 |  |
| Other comprehensive income (loss) before reclassifications | 140 |  |  | (855 | ) |  | (715 | ) |
| Amounts reclassified from accumulated other comprehensive income by statement of operations line item: |  |  |  |  |  |
| Realized gains reclassified from accumulated other comprehensive income to net realized and unrealized gains (losses) on investments | — |  |  | — |  |  | — |  |
| Net current-period other comprehensive income (loss) | 140 |  |  | (855 | ) |  | (715 | ) |
| Ending balance | $ | 303 |  |  | $ | 3,113 |  |  | $ | 3,416 |  |
The Company did not have any fixed maturity investments available for sale in an unrealized loss position at December 31, 2015. The following tables provide an analysis of the length of time the Company’s fixed maturity investments available for sale in an unrealized loss have been in a continual unrealized loss position.
|  | Less than 12 Months |  | 12 Months or Greater |  | Total |
| At December 31, 2015 | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |
| Total | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |
|  | Less than 12 Months |  | 12 Months or Greater |  | Total |
| At December 31, 2014 | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |
| Non-agency mortgage-backed | $ | — |  |  | $ | — |  |  | $ | 69 |  |  | $ | (3 | ) |  | $ | 69 |  |  | $ | (3 | ) |
| Total | $ | — |  |  | $ | — |  |  | $ | 69 |  |  | $ | (3 | ) |  | $ | 69 |  |  | $ | (3 | ) |
At December 31, 2015, the Company held zero fixed maturity investments available for sale securities that were in an unrealized loss position (2014 - two), and therefore zero fixed maturity investments available for sale securities that were in an unrealized loss position for twelve months or greater (2014 - two). The Company does not intend to sell securities and it is not more likely than not that the Company will be required to sell securities before the anticipated recovery of the remaining amortized cost basis. The Company performed reviews of its fixed maturity investments available for sale for the years ended December 31, 2015 and 2014, respectively, in order to determine whether declines in the fair value below the amortized cost basis were considered other-than-temporary in accordance with the applicable guidance, as discussed below. Other-Than-Temporary Impairment Process The Company’s process for assessing whether declines in the fair value of its fixed maturity investments available for sale represent impairments that are other-than-temporary includes reviewing each fixed maturity investment available for sale that is impaired and determining: (i) if the Company has the intent to sell the debt security or (ii) if it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery; and (iii) whether a credit loss exists, that is, where the Company expects that the present value of the cash flows expected to be collected from the security is less than the amortized cost basis of the security. During 2015, the Company recognized $Nil of other-than-temporary impairments which were recognized in earnings and $Nil related to other factors which were recognized in other comprehensive income (2014 – $Nil and $Nil, respectively, 2013 - $Nil and $Nil, respectively). The following table provides a rollforward of the amount of other-than-temporary impairments related to credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in accumulated other comprehensive income:
|  | 2015 |  | 2014 |
| Balance – January 1 | $ | 498 |  |  | $ | 561 |  |
| Reductions: |  |  |  |
| Securities sold during the period | (81 | ) |  | (63 | ) |
| Balance – December 31 | $ | 417 |  |  | $ | 498 |  |
Other Investments The table below shows the fair value of the Company’s portfolio of other investments:
| At December 31, | 2015 |  | 2014 |
| Catastrophe bonds | $ | 241,253 |  |  | $ | 200,329 |  |
| Private equity partnerships | 214,848 |  |  | 281,932 |  |
| Senior secured bank loan fund | 23,231 |  |  | 19,316 |  |
| Hedge funds | 2,289 |  |  | 2,570 |  |
| Total other investments | $ | 481,621 |  |  | $ | 504,147 |  |
Interest income, income distributions and net realized and unrealized gains on other investments are included in net investment income and totaled $21.9 million (2014 – $30.0 million, 2013 – $119.5 million) of which $13.5 million related to net unrealized losses (2014 – losses of $1.4 million, 2013 – gains of $75.8 million). Included in net investment income for 2015 is a loss of $2.5 million (2014 - $0.6 million, 2013 - $3.7 million) representing the change in estimate during the period related to the difference between the Company’s estimated fair value due to the lag in reporting, as discussed in “Note 2. Significant Accounting Policies,” and the actual amount as reported in the final net asset values provided by the Company’s fund managers. The Company has committed capital to private equity partnerships and other entities of $724.5 million, of which $528.8 million has been contributed at December 31, 2015. The Company’s remaining commitments to these funds at December 31, 2015 totaled $204.5 million. In the future, the Company may enter into additional commitments in respect of private equity partnerships or individual portfolio company investment opportunities. Investments in Other Ventures, under Equity Method The table below shows the Company’s portfolio of investments in other ventures, under equity method:
|  | 2015 |  | 2014 |
| At December 31, | Investment |  | Ownership % |  | Carrying Value |  | Investment |  | Ownership % |  | Carrying Value |
| THIG | $ | 50,000 |  |  | 25.0 | % |  | $ | 19,155 |  |  | $ | 50,000 |  |  | 25.0 | % |  | $ | 20,811 |  |
| Tower Hill | 10,000 |  |  | 31.3 | % |  | 19,981 |  |  | 10,000 |  |  | 30.3 | % |  | 18,991 |  |
| Tower Hill Re | 4,250 |  |  | 25.0 | % |  | 4,136 |  |  | 4,250 |  |  | 25.0 | % |  | 5,162 |  |
| Tower Hill Signature | 500 |  |  | 25.0 | % |  | 7,315 |  |  | 500 |  |  | 25.0 | % |  | 5,692 |  |
| Total Tower Hill Companies | 64,750 |  |  |  |  | 50,587 |  |  | 64,750 |  |  |  |  | 50,656 |  |
| Top Layer Re | 65,375 |  |  | 50.0 | % |  | 68,936 |  |  | 65,375 |  |  | 50.0 | % |  | 60,911 |  |
| Other | 23,607 |  |  | 43.5 | % |  | 12,828 |  |  | 13,507 |  |  | 36.3 | % |  | 9,146 |  |
| Total investments in other ventures, under equity method | $ | 153,732 |  |  |  |  | $ | 132,351 |  |  | $ | 143,632 |  |  |  |  | $ | 120,713 |  |
On July 1, 2008, the Company invested $50.0 million in Tower Hill Insurance Group, LLC (“THIG”) representing a 25.0% equity ownership. Included in the purchase price was $40.0 million of other intangibles and $7.8 million of goodwill, which, in accordance with generally accepted accounting principles, are recorded as “Investments in other ventures, under equity method” rather than “Goodwill and other intangibles” on the Company’s consolidated balance sheet. The Company originally invested $13.1 million in Top Layer Re, representing a 50.0% ownership. In December 2010, March 2011 and December 2011, primarily as a result of net claims and claim expenses incurred by Top Layer Re with respect to the September 2010 New Zealand Earthquake, the February 2011 New Zealand Earthquake and the Tohoku Earthquake and Tsunami, respectively, the Company invested an additional $13.8 million, $20.5 million and $18.0 million, respectively, in Top Layer Re, maintaining the Company’s 50% ownership interest. The table below shows the Company’s equity in earnings of other ventures, under equity method:
| Year ended December 31, | 2015 |  | 2014 |  | 2013 |
| Tower Hill Companies | $ | 13,116 |  |  | $ | 18,376 |  |  | $ | 10,270 |  |
| Top Layer Re | 8,026 |  |  | 10,411 |  |  | 13,836 |  |
| Other | (661 | ) |  | (2,712 | ) |  | (912 | ) |
| Total equity in earnings of other ventures | $ | 20,481 |  |  | $ | 26,075 |  |  | $ | 23,194 |  |
Undistributed earnings in the Company’s investments in other ventures, under equity method were $10.1 million at December 31, 2015 (2014 - $20.0 million). During 2015, the Company received $13.3 million of dividends from its investments in other ventures, under equity method (2014 – $10.3 million, 2013 – $9.9 million). Except for Top Layer Re, the equity in earnings of the Company’s investments in other ventures are reported one quarter in arrears.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -Glossary Debt Security -URI http://asc.fasb.org/extlink&oid=6509901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27290-111563 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27232-111563 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -Glossary Equity Security -URI http://asc.fasb.org/extlink&oid=6511694 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27161-111563 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27357-111563 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27405-111563 + Details
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