Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2018

Summary of gross and net written and earned premiums, underwriting results, ratios and reserves for each of Company's business segments

The Company uses underwriting ratios as measures of performance. The loss ratio is the ratio of losses and loss adjustment expenses to net earned premiums. The policy acquisition expense ratio is the ratio of amortization of deferred policy acquisition costs to net earned premiums. The general and administrative expense ratio is the ratio of general, administrative and corporate expenses to net earned premiums. The combined ratio is the sum of the loss ratio, the policy acquisition expense ratio and the general and administrative expense ratio.

The following tables provide a summary of gross and net written and earned premiums, underwriting results, ratios and reserves for each of the Company’s business segments for the twelve months ended December 31, 2018, 2017 and 2016:



	Twelve Months Ended December 31, 2018
	Reinsurance			Insurance			Total
	($ in millions)
Underwriting Revenues
Gross written premiums	$	1,495.7		$	1,951.2		$	3,446.9
Net written premiums	1,182.9			899.1			2,082.0
Gross earned premiums	1,593.9			1,940.5			3,534.4
Net earned premiums	1,256.4			958.3			2,214.7
Underwriting Expenses
Losses and loss adjustment expenses	927.0			646.0			1,573.0
Amortization of deferred policy acquisition costs	260.9			110.7			371.6
General and administrative expenses	118.5			239.2			357.7
Underwriting (loss)	(50.0		)	(37.6		)	(87.6		)
Corporate expenses							(56.8		)
Non-operating expenses							(77.2		)	⁽¹⁾
Net investment income							198.2
Realized and unrealized investment gains							110.0
Realized and unrealized investment losses							(174.7		)
Realized loss on debt extinguishment							(8.6		)
Change in fair value of loan notes issued by variable interest entities							(4.4		)
Change in fair value of derivatives							(31.8		)
Interest expense on long term debt							(25.9		)
Net realized and unrealized foreign exchange (losses)							(3.5		)
Other income							9.0
Other expenses							(2.7		)
(Loss) before tax							(156.0		)
Income tax benefit							10.2
Net (loss)							$	(145.8	)

Net reserves for loss and loss adjustment expenses	$	2,843.6		$	2,153.0		$	4,996.6
Ratios
Loss ratio	73.8		%	67.4		%	71.0		%
Policy acquisition expense ratio	20.8			11.6			16.8
General and administrative expense ratio	9.4			25.0			22.2			⁽²⁾
Expense ratio	30.2			36.6			39.0
Combined ratio	104.0		%	104.0		%	110.0		%

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⁽¹⁾	Non-operating expenses includes $37.5 million of expenses related to the Company’s operating effectiveness and efficiency program (the “Effectiveness and Efficiency Program”), $39.0 million of advisor fees related to the Merger and $11.3 million of retention costs, partially offset by the write back of a $14.1 million buy out provision.


⁽²⁾	The general and administrative expense ratio in the total column includes corporate and non-operating expenses.



	Twelve Months Ended December 31, 2017
	Reinsurance			Insurance			Total
	( $ in millions)
Underwriting Revenues
Gross written premiums	$	1,548.5		$	1,812.4		$	3,360.9
Net written premiums	1,250.0			962.5			2,212.5
Gross earned premiums	1,451.8			1,757.4			3,209.2
Net earned premiums	1,206.1			1,100.5			2,306.6
Underwriting Expenses
Losses and loss adjustment expenses	1,116.4			878.3			1,994.7
Amortization of deferred policy acquisition costs	235.5			165.0			400.5
General and administrative expenses	157.3			253.9			411.2
Underwriting (loss)	(303.1		)	(196.7		)	(499.8		)
Corporate expenses							(58.3		)
Non-operating expenses							(32.7		)	⁽¹⁾
Net investment income							189.0
Realized and unrealized investment gains							148.9
Realized and unrealized investment losses							(28.4		)
Change in fair value of loan notes issued by variable interest entities							21.2
Change in fair value of derivatives							27.7
Interest expense on long term debt							(29.5		)
Net realized and unrealized foreign exchange (losses)							(23.9		)
Other income							8.9
Other expenses							(4.9		)
(Loss) before tax							(281.8		)
Income tax benefit							15.4
Net (loss)							$	(266.4	)

Net reserves for loss and loss adjustment expenses	$	2,917.1		$	2,317.2		$	5,234.3
Ratios
Loss ratio	92.6		%	79.8		%	86.5		%
Policy acquisition expense ratio	19.5			15.0			17.4
General and administrative expense ratio	13.0			23.1			21.8			⁽²⁾
Expense ratio	32.5			38.1			39.2
Combined ratio	125.1		%	117.9		%	125.7		%

________________


⁽¹⁾	Non-operating expenses includes $15.2 million of expenses related to the Company’s Effectiveness and Efficiency Program.


⁽²⁾	The general and administrative expense ratio in the total column includes corporate and non-operating expenses.



	Twelve Months Ended December 31, 2016
	Reinsurance			Insurance			Total
	($ in millions)
Underwriting Revenues
Gross written premiums	$	1,413.2		$	1,733.8		$	3,147.0
Net written premiums	1,269.2			1,324.5			2,593.7
Gross earned premiums	1,317.9			1,768.4			3,086.3
Net earned premiums	1,181.9			1,455.4			2,637.3
Underwriting Expenses
Losses and loss adjustment expenses	657.9			918.2			1,576.1
Amortization of deferred policy acquisition costs	226.4			302.5			528.9
General and administrative expenses	178.2			228.4			406.6
Underwriting income	119.4			6.3			125.7
Corporate expenses							(73.8		)
Non-operating expenses							(9.7		)	⁽¹⁾
Net investment income							187.1
Realized and unrealized investment gains							108.4
Realized and unrealized investment losses							(63.2		)
Change in fair value of loan notes issued by variable interest entities							(17.1		)
Change in fair value of derivatives							(24.6		)
Interest expense on long term debt							(29.5		)
Net realized and unrealized foreign exchange gains							1.8
Other income							5.7
Other expenses							(1.3		)
Income before tax							209.5
Income tax expense							(6.1		)
Net income							$	203.4

Net reserves for loss and loss adjustment expenses	$	2,462.1		$	2,297.1		$	4,759.2
Ratios
Loss ratio	55.7		%	63.1		%	59.8		%
Policy acquisition expense ratio	19.2			20.8			20.1
General and administrative expense ratio	15.1			15.7			18.6			⁽²⁾
Expense ratio	34.3			36.5			38.7
Combined ratio	90.0		%	99.6		%	98.5		%

_______________


⁽¹⁾	Non-operating expenses includes amortization of intangibles acquired from the acquisition of AgriLogic.


⁽²⁾	The general and administrative expense ratio in the total column includes corporate and non-operating expenses.

Schedule of gross written premiums based on geographical areas

Geographical Areas. The following summary presents the Company’s gross written premiums based on the location of the insured risk for the twelve months ended December 31, 2018, 2017 and 2016.



	For the Twelve Months Ended
	December 31, 2018		December 31, 2017		December 31, 2016
	($ in millions)
Australia/Asia	$	175.9	$	167.3	$	140.5
Caribbean	7.7		17.6		14.3
Europe	92.6		94.5		109.7
United Kingdom	290.1		258.3		231.4
United States & Canada⁽¹⁾	1,875.9		1,729.3		1,597.0
Worldwide excluding United States ⁽²⁾	70.1		88.1		90.7
Worldwide including United States⁽³⁾	775.8		868.6		837.2
Others	158.8		137.2		126.2
Total	$	3,446.9	$	3,360.9	$	3,147.0

______________


⁽¹⁾	“United States and Canada” comprises individual policies that insure risks specifically in the United States and/or Canada, but not elsewhere.


⁽²⁾	“Worldwide excluding the United States” comprises individual policies that insure risks wherever they may be across the world but specifically excludes the United States.


⁽³⁾	“Worldwide including the United States” comprises individual policies that insure risks wherever they may be across the world but specifically includes the United States.