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Segment reporting (Tables) | 9 Months Ended
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Sep. 30, 2014
Segment Reporting [Abstract] |
Schedule of operating segments | The following is a summary of the Company’s operating segments results for the three and nine months ended September 30, 2014 and 2013:
| Three months ended September 30, 2014
| Property and Casualty Reinsurance (6) |  | Catastrophe Risk Management |  | Corporate |  | Total
Revenues | ($ in thousands)
Gross premiums written | $ | 124,931 |  |  | $ | 1,472 |  |  | $ | — |  |  | $ | 126,403 |
Gross premiums ceded | (150 | ) |  | — |  |  | — |  |  | (150 | )
Net premiums written | 124,781 |  |  | 1,472 |  |  | — |  |  | 126,253 |
Change in net unearned premium reserves | (23,294 | ) |  | 5,989 |  |  | — |  |  | (17,305 | )
Net premiums earned | 101,487 |  |  | 7,461 |  |  | — |  |  | 108,948 |
Expenses |  |  |  |  |  |  |
Loss and loss adjustment expenses incurred, net | 60,121 |  |  | (6 | ) |  | — |  |  | 60,115 |
Acquisition costs, net | 37,571 |  |  | 746 |  |  | — |  |  | 38,317 |
General and administrative expenses | 5,556 |  |  | 648 |  |  | 3,920 |  |  | 10,124 |
Total expenses | 103,248 |  |  | 1,388 |  |  | 3,920 |  |  | 108,556 |
Net underwriting loss | (1,761 | ) |  | n/a |  | n/a |  | n/a
Net investment income (loss) | (137 | ) |  | 881 |  |  | 808 |  |  | 1,552 |
Other expenses | (2,982 | ) |  | — |  |  | — |  |  | (2,982 | )
Income tax expense | — |  |  | — |  |  | (1,542 | ) |  | (1,542 | )
Segment income (loss) including non-controlling interests | (4,880 | ) |  | 6,954 |  |  | (4,654 | ) |  | (2,580 | )
Segment income attributable to non-controlling interests | — |  |  | (3,325 | ) |  | (92 | ) |  | (3,417 | )
Segment income (loss) | $ | (4,880 | ) |  | $ | 3,629 |  |  | $ | (4,746 | ) |  | $ | (5,997 | )
Property and Casualty Reinsurance - Underwriting Ratios: |  |  |  |  |  |
Loss ratio (1) | 59.2 | % |  |  |  |  |  |
Acquisition cost ratio (2) | 37.0 | % |  |  |  |  |  |
Composite ratio (3) | 96.2 | % |  |  |  |  |  |
General and administrative expense ratio (4) | 5.5 | % |  |  |  |  |  |
Combined ratio (5) | 101.7 | % |  |  |  |  |  |
(1) | Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.
(2) | Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.
(3) | Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.
(4) | General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.
(5) | Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.
(6) | Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.
| Three Months Ended September 30, 2013
| Property and Casualty Reinsurance (6) |  | Catastrophe Risk Management |  | Corporate |  | Total
Revenues | ($ in thousands)
Gross premiums written | $ | 43,714 |  |  | $ | 1,711 |  |  | $ | — |  |  | $ | 45,425 |
Gross premiums ceded | — |  |  | — |  |  | — |  |  | — |
Net premiums written | 43,714 |  |  | 1,711 |  |  | — |  |  | 45,425 |
Change in net unearned premium reserves | 18,051 |  |  | 2,853 |  |  | — |  |  | 20,904 |
Net premiums earned | 61,765 |  |  | 4,564 |  |  | — |  |  | 66,329 |
Expenses |  |  |  |  |  |  |
Loss and loss adjustment expenses incurred, net | 39,349 |  |  | — |  |  | — |  |  | 39,349 |
Acquisition costs, net | 20,541 |  |  | 576 |  |  | — |  |  | 21,117 |
General and administrative expenses | 6,739 |  |  | 949 |  |  | 2,158 |  |  | 9,846 |
Total expenses | 66,629 |  |  | 1,525 |  |  | 2,158 |  |  | 70,312 |
Net underwriting loss | (4,864 | ) |  | n/a |  | n/a |  | n/a
Net investment income | 7,072 |  |  | 2,089 |  |  | 45,456 |  |  | 54,617 |
Other expenses | (1,246 | ) |  | — |  |  | — |  |  | (1,246 | )
Segment income including non-controlling interests | 962 |  |  | 5,128 |  |  | 43,298 |  |  | 49,388 |
Segment income attributable to non-controlling interests | — |  |  | (2,432 | ) |  | (386 | ) |  | (2,818 | )
Segment income | $ | 962 |  |  | $ | 2,696 |  |  | $ | 42,912 |  |  | $ | 46,570 |
Property and Casualty Reinsurance - Underwriting Ratios: |  |  |  |  |  |
Loss ratio (1) | 63.7 | % |  |  |  |  |  |
Acquisition cost ratio (2) | 33.3 | % |  |  |  |  |  |
Composite ratio (3) | 97.0 | % |  |  |  |  |  |
General and administrative expense ratio (4) | 10.9 | % |  |  |  |  |  |
Combined ratio (5) | 107.9 | % |  |  |  |  |  |
(1) | Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.
(2) | Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.
(3) | Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.
(4) | General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.
(5) | Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.
(6) | Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.
| Nine months ended September 30, 2014
| Property and Casualty Reinsurance (6) |  | Catastrophe Risk Management |  | Corporate |  | Total
Revenues | ($ in thousands)
Gross premiums written | $ | 347,495 |  |  | $ | 12,003 |  |  | $ | — |  |  | $ | 359,498 |
Gross premiums ceded | (150 | ) |  | — |  |  | — |  |  | (150 | )
Net premiums written | 347,345 |  |  | 12,003 |  |  | — |  |  | 359,348 |
Change in net unearned premium reserves | (96,069 | ) |  | (2,319 | ) |  | — |  |  | (98,388 | )
Net premiums earned | 251,276 |  |  | 9,684 |  |  | — |  |  | 260,960 |
Expenses |  |  |  |  |  |  |
Loss and loss adjustment expenses incurred, net | 150,789 |  |  | (6 | ) |  | — |  |  | 150,783 |
Acquisition costs, net | 92,477 |  |  | 854 |  |  | — |  |  | 93,331 |
General and administrative expenses | 17,020 |  |  | 2,160 |  |  | 10,518 |  |  | 29,698 |
Total expenses | 260,286 |  |  | 3,008 |  |  | 10,518 |  |  | 273,812 |
Net underwriting loss | (9,010 | ) |  | n/a |  | n/a |  | n/a
Net investment income | 13,458 |  |  | 943 |  |  | 77,671 |  |  | 92,072 |
Other expenses | (4,789 | ) |  | — |  |  | — |  |  | (4,789 | )
Income tax expense | — |  |  | — |  |  | (3,917 | ) |  | (3,917 | )
Segment income (loss) including non-controlling interests | (341 | ) |  | 7,619 |  |  | 63,236 |  |  | 70,514 |
Segment income attributable to non-controlling interests | — |  |  | (3,854 | ) |  | (1,586 | ) |  | (5,440 | )
Segment income (loss) | $ | (341 | ) |  | $ | 3,765 |  |  | $ | 61,650 |  |  | $ | 65,074 |
Property and Casualty Reinsurance - Underwriting Ratios: |  |  |  |  |  |
Loss ratio (1) | 60.0 | % |  |  |  |  |  |
Acquisition cost ratio (2) | 36.8 | % |  |  |  |  |  |
Composite ratio (3) | 96.8 | % |  |  |  |  |  |
General and administrative expense ratio (4) | 6.8 | % |  |  |  |  |  |
Combined ratio (5) | 103.6 | % |  |  |  |  |  |
(1) | Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.
(2) | Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.
(3) | Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.
(4) | General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.
(5) | Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.
(6) | Effective January 1, 2014, the Company modified the presentation of its operating segments to allocate net investment income from float to the Property and Casualty Reinsurance segment. Prior period segment results have been adjusted to conform to this presentation.
| Nine months ended September 30, 2013
| Property and Casualty Reinsurance (6) |  | Catastrophe Risk Management |  | Corporate |  | Total
Revenues | ($ in thousands)
Gross premiums written | $ | 231,229 |  |  | $ | 8,431 |  |  | $ | — |  |  | $ | 239,660 |
Gross premiums ceded | (9,975 | ) |  | — |  |  | — |  |  | (9,975 | )
Net premiums written | 221,254 |  |  | 8,431 |  |  | — |  |  | 229,685 |
Change in net unearned premium reserves | (65,408 | ) |  | (2,120 | ) |  | — |  |  | (67,528 | )
Net premiums earned | 155,846 |  |  | 6,311 |  |  | — |  |  | 162,157 |
Expenses |  |  |  |  |  |  |
Loss and loss adjustment expenses incurred, net | 103,291 |  |  | 388 |  |  | — |  |  | 103,679 |
Acquisition costs, net | 48,353 |  |  | 758 |  |  | — |  |  | 49,111 |
General and administrative expenses | 16,265 |  |  | 2,721 |  |  | 5,085 |  |  | 24,071 |
Total expenses | 167,909 |  |  | 3,867 |  |  | 5,085 |  |  | 176,861 |
Net underwriting loss | (12,063 | ) |  | n/a |  | n/a |  | n/a
Net investment income | 15,128 |  |  | 3,210 |  |  | 150,466 |  |  | 168,804 |
Other expenses | (2,675 | ) |  | — |  |  | — |  |  | (2,675 | )
Segment income including non-controlling interests | 390 |  |  | 5,654 |  |  | 145,381 |  |  | 151,425 |
Segment income attributable to non-controlling interests | — |  |  | (3,027 | ) |  | (1,175 | ) |  | (4,202 | )
Segment income | $ | 390 |  |  | $ | 2,627 |  |  | $ | 144,206 |  |  | $ | 147,223 |
Property and Casualty Reinsurance - Underwriting Ratios: |  |  |  |  |  |
Loss ratio (1) | 66.3 | % |  |  |  |  |  |
Acquisition cost ratio (2) | 31.0 | % |  |  |  |  |  |
Composite ratio (3) | 97.3 | % |  |  |  |  |  |
General and administrative expense ratio (4) | 10.4 | % |  |  |  |  |  |
Combined ratio (5) | 107.7 | % |  |  |  |  |  |
(1) | Loss ratio is calculated by dividing loss and loss adjustment expenses incurred, net by net premiums earned.
(2) | Acquisition cost ratio is calculated by dividing acquisition costs, net by net premiums earned.
(3) | Composite ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net and acquisition costs, net by net premiums earned.
(4) | General and administrative expense ratio is calculated by dividing general and administrative expenses related to underwriting activities by net premiums earned.
(5) | Combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, net, acquisition costs, net and general and administrative expenses related to underwriting activities by net premiums earned.
Schedule of breakdown of the Company’s gross premiums written by line of business | The following table provides a breakdown of the Company’s gross premiums written by line of business for the three and nine months ended September 30, 2014 and 2013:
| For the three months ended
| September 30, 2014 |  | September 30, 2013
| ($ in thousands)
Property | $ | (2,810 | ) |  | (2.2 | )% |  | $ | (1,603 | ) |  | (3.5 | )%
Casualty | 128,469 |  |  | 101.6 | % |  | 9,426 |  |  | 20.7 | %
Specialty | (728 | ) |  | (0.6 | )% |  | 35,891 |  |  | 79.0 | %
Total property and casualty reinsurance | 124,931 |  |  | 98.8 | % |  | 43,714 |  |  | 96.2 | %
Catastrophe risk management | 1,472 |  |  | 1.2 | % |  | 1,711 |  |  | 3.8 | %
| $ | 126,403 |  |  | 100.0 | % |  | $ | 45,425 |  |  | 100.0 | %
| For the nine months ended
| September 30, 2014 |  | September 30, 2013
| ($ in thousands)
Property | $ | 78,577 |  |  | 21.9 | % |  | $ | 26,635 |  |  | 11.1 | %
Casualty | 244,235 |  |  | 67.9 | % |  | 111,021 |  |  | 46.4 | %
Specialty | 24,683 |  |  | 6.9 | % |  | 93,573 |  |  | 39.0 | %
Total property and casualty reinsurance | 347,495 |  |  | 96.7 | % |  | 231,229 |  |  | 96.5 | %
Catastrophe risk management | 12,003 |  |  | 3.3 | % |  | 8,431 |  |  | 3.5 | %
| $ | 359,498 |  |  | 100.0 | % |  | $ | 239,660 |  |  | 100.0 | %
The following table provides a breakdown of the Company’s gross premiums written by prospective and retroactive reinsurance contracts for the three and nine months ended September 30, 2014 and 2013:
| For the three months ended |  | For the nine months ended
| September 30, 2014 |  | September 30, 2013 |  | September 30, 2014 |  | September 30, 2013
| ($ in thousands)
Prospective | $ | 126,403 |  |  | 100.0 | % |  | $ | 27,981 |  |  | 61.6 | % |  | $ | 356,822 |  |  | 99.3 | % |  | $ | 199,916 |  |  | 83.4 | %
Retroactive | — |  |  | — | % |  | 17,444 |  |  | 38.4 | % |  | 2,676 |  |  | 0.7 | % |  | 39,744 |  |  | 16.6 | %
| $ | 126,403 |  |  | 100.0 | % |  | $ | 45,425 |  |  | 100.0 | % |  | $ | 359,498 |  |  | 100.0 | % |  | $ | 239,660 |  |  | 100.0 | %
Schedule of breakdown of the Company’s gross premiums written from brokers | Substantially all of the Company's business is sourced through reinsurance brokers. The following table provides a breakdown of the Company's gross premiums written from brokers for the nine months ended September 30, 2014 and 2013:
| 2014 |  | 2013
| ($ in thousands)
Guy Carpenter & Company, LLC | $ | 91,567 |  |  | 25.5 | % |  | $ | (11,927 | ) |  | (5.0 | )%
Willis Re | 55,589 |  |  | 15.5 | % |  | 13,421 |  |  | 5.6 | %
Aon Benfield - a division of Aon plc | 54,072 |  |  | 15.0 | % |  | 91,349 |  |  | 38.2 | %
Advocate Reinsurance Partners, LLC | 51,002 |  |  | 14.2 | % |  | 26,000 |  |  | 10.8 | %
Stonehill Reinsurance Partners, LLC | 44,744 |  |  | 12.4 | % |  | — |  |  | — | %
TigerRisk Partners LLC | 13,852 |  |  | 3.9 | % |  | 10,472 |  |  | 4.4 | %
BMS Intermediaries | — |  |  | — | % |  | 46,095 |  |  | 19.2 | %
Other brokers | 3,203 |  |  | 0.9 | % |  | 7,545 |  |  | 3.1 | %
Total broker placed | 314,029 |  |  | 87.4 | % |  | 182,955 |  |  | 76.3 | %
Direct placements | 45,469 |  |  | 12.6 | % |  | 56,705 |  |  | 23.7 | %
| $ | 359,498 |  |  | 100.0 | % |  | $ | 239,660 |  |  | 100.0 | %
Schedule of breakdown of the Company’s gross premiums written by domicile of the ceding companies | The following table provides a breakdown of the Company’s gross premiums written by domicile of the ceding companies for the three and nine months September 30, 2014 and 2013:
| For the three months ended |  | For the nine months ended
| September 30, 2014 |  | September 30, 2013 |  | September 30, 2014 |  | September 30, 2013
| ($ in thousands)
United States | $ | 85,686 |  |  | 67.7 | % |  | $ | 7,665 |  |  | 16.9 | % |  | $ | 288,420 |  |  | 80.3 | % |  | $ | 151,314 |  |  | 63.1 | %
United Kingdom | (812 | ) |  | (0.6 | )% |  | — |  |  | — | % |  | 24,600 |  |  | 6.8 | % |  | — |  |  | — | %
Bermuda | 41,529 |  |  | 32.9 | % |  | 37,760 |  |  | 83.1 | % |  | 46,478 |  |  | 12.9 | % |  | 86,946 |  |  | 36.3 | %
Other | — |  |  | — | % |  | — |  |  | — | % |  | — |  |  | — | % |  | 1,400 |  |  | 0.6 | %
| $ | 126,403 |  |  | 100.0 | % |  | $ | 45,425 |  |  | 100.0 | % |  | $ | 359,498 |  |  | 100.0 | % |  | $ | 239,660 |  |  | 100.0 | %

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- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8721-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8813-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8736-108599 + Details
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