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Segment Reporting | 12 Months Ended
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Dec. 31, 2020
Segment Reporting [Abstract] |
Segment reporting | 23. Segment reporting (as adjusted - see Note 3) The determination of the Company’s business segments is based on the manner in which management monitors the performance of its operations. Effective January 1, 2021, the Company reports four operating segments: Accident & Health (“A&H”), Specialty, Property, and Runoff & Other. Where applicable, all prior periods presented have been revised to conform to this new presentation. Non-underwriting income and expenses are presented as a reconciliation to the Company’s income (loss) before income tax expense. The Company does not manage its assets by segment; accordingly, total assets are not allocated to the segments. Accident & Health Global A&H The Company is a reinsurer of medical expense, travel and personal accident on a treaty or facultative basis worldwide. Specialty Specialty lines represent unique risks where the more difficult and unusual risks are underwritten, and much of the market is characterized by a high degree of specialization. The following provides details of Specialty by product line: Marine & Energy The Company provides marine & energy reinsurance, primarily written on an excess of loss and proportional basis. Coverage offered includes damage to ships and goods in transit, marine liability lines, and offshore energy industry insurance. Credit The Company underwrites mortgage risks both as reinsurance and by retrocession. Mortgage insurance is an insurance policy that compensates lenders or investors for losses arising from the default of a mortgage loan. Mortgage insurance can refer to private mortgage insurance, mortgage life insurance or insurance provided under the credit risk sharing transactions from Fannie Mae and Freddie Mac. In addition to mortgage reinsurance, policies classified as Credit may include trade credit, surety, financial guarantee, residual value insurance and title insurance. Casualty Casualty represents a cross section of all casualty lines, including professional liability, transactional liability, general liability, workers compensation, auto, cyber and other casualty classes, written on a proportional and excess of loss basis. Other Specialty The principal l ines of business included in our Other Specialty line is primarily comprised of multi-line specialty reinsurance and contingency. Multi-line reinsurance is reinsurance of an underlying portfolio of several different types of insurance or reinsurance risks. The Company focuses on multi-line reinsurance opportunities where the Company has expertise in the underlying lines of business or where the terms and conditions of the reinsurance contract minimize the volatility of the more difficult to analyze classes of business in the portfolio. Contracts that cover more than one line of business will typically be designated as multi-line even if a portion of the underlying business is covered by one of the lines of business listed above. These opportunities can be structured on both a proportional and excess of loss basis. The Company’s contingency insurance book covers event cancellation and non-appearance. Property Property consists of the Company’s underwriting lines of business which offer Property Catastrophe Excess Reinsurance and Property Risk and Pro Rata on a worldwide basis. The following provides details of Property by product line: Property Catastrophe Excess Reinsurance Property catastrophe excess reinsurance is comprised of excess of loss and/or proportional coverages to insurance and reinsurance companies and provides protection to an insured for losses from a single catastrophic event or series of events. We carefully monitor and manage our risk aggregations by peril and geography and we seek to manage volatility via portfolio construction and client selection. Property Risk and Pro Rata This line of reinsurance primarily consists of exposure to homeowners’ and commercial lines insurance coverage. We provide structured surplus relief transactions covering property exposures where the expected volatility and reinsurance margins are lower. Runoff & Other Runoff & Other contracts consist of loss portfolio transfers, adverse development covers and other forms of reserve reinsurance providing indemnification of loss and loss adjustment expense reserves with respect to past loss events. These contracts can include one or multiple lines of business and cover the potential for changes in estimates of loss and loss adjustment expense reserves related to loss events that have occurred in the past. The following is a summary of the Company’s operating segment results for the years ended December 31, 2020, 2019 and 2018:
| 2020
| A&H |  | Specialty |  | Property |  | Runoff & Other |  | Total
| ($ in thousands)
Gross premiums written | $ | 3,392 |  |  | $ | 368,722 |  |  | $ | 187,480 |  |  | $ | 28,946 |  |  | $ | 588,540 |
Net premiums written | 3,392 |  |  | 349,783 |  |  | 160,075 |  |  | 28,946 |  |  | 542,196 |
Net premiums earned | 3,207 |  |  | 407,951 |  |  | 171,556 |  |  | 28,138 |  |  | 610,852 |
Loss and loss adjustment expenses incurred, net | 3,319 |  |  | 342,596 |  |  | 119,455 |  |  | (72) |  |  | 465,298 |
Acquisition costs, net | 313 |  |  | 112,464 |  |  | 48,744 |  |  | 25,541 |  |  | 187,062 |
Other underwriting expenses | 114 |  |  | 18,744 |  |  | 6,036 |  |  | 5,906 |  |  | 30,800 |
Net underwriting loss | $ | (539) |  |  | $ | (65,853) |  |  | $ | (2,679) |  |  | $ | (3,237) |  |  | (72,308) |
Net investment income |  |  |  |  |  |  |  |  | 278,938 |
Net corporate and other expenses |  |  |  |  |  |  |  |  | (41,215) |
Interest expense |  |  |  |  |  |  |  |  | (8,230) |
Foreign exchange losses |  |  |  |  |  |  |  |  | (5,219) |
Income before income tax expense |  |  |  |  |  |  |  |  | $ | 151,966 |
Underwriting ratios (1): |  |  |  |  |  |  |  |  |
Loss ratio | 103.5 | % |  | 84.0 | % |  | 69.6 | % |  | NM |  | 76.2 | %
Acquisition cost ratio | 9.8 | % |  | 27.6 | % |  | 28.4 | % |  | NM |  | 30.6 | %
Other underwriting expense ratio | 3.6 | % |  | 4.6 | % |  | 3.5 | % |  | NM |  | 5.0 | %
Combined ratio (2) | 116.9 | % |  | 116.2 | % |  | 101.5 | % |  | NM |  | 111.8 | %
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned. (2)Ratios considered not meaningful ("NM") to Runoff & Other.
| 2019
| A&H |  | Specialty |  | Property |  | Runoff & Other |  | Total
| ($ in thousands)
Gross premiums written | $ | 4,587 |  |  | $ | 420,982 |  |  | $ | 155,208 |  |  | $ | 87,637 |  |  | $ | 668,414 |
Net premiums written | 4,587 |  |  | 412,085 |  |  | 152,729 |  |  | 87,637 |  |  | 657,038 |
Net premiums earned | 4,665 |  |  | 465,426 |  |  | 141,477 |  |  | 88,574 |  |  | 700,142 |
Loss and loss adjustment expenses incurred, net | 3,907 |  |  | 313,750 |  |  | 90,577 |  |  | (4,735) |  |  | 403,499 |
Acquisition costs, net | 365 |  |  | 149,497 |  |  | 54,769 |  |  | 90,995 |  |  | 295,626 |
Other underwriting expenses | 156 |  |  | 20,144 |  |  | 4,722 |  |  | 9,075 |  |  | 34,097 |
Net underwriting income (loss) | $ | 237 |  |  | $ | (17,965) |  |  | $ | (8,591) |  |  | $ | (6,761) |  |  | (33,080) |
Net investment income |  |  |  |  |  |  |  |  | 282,560 |
Net corporate and other expenses |  |  |  |  |  |  |  |  | (36,285) |
Interest expense |  |  |  |  |  |  |  |  | (8,228) |
Foreign exchange losses |  |  |  |  |  |  |  |  | (3,635) |
Income before income tax expense |  |  |  |  |  |  |  |  | $ | 201,332 |
Underwriting ratios (1): |  |  |  |  |  |  |  |  |
Loss ratio | 83.8 | % |  | 67.4 | % |  | 64.0 | % |  | NM |  | 57.6 | %
Acquisition cost ratio | 7.8 | % |  | 32.1 | % |  | 38.7 | % |  | NM |  | 42.2 | %
Other underwriting expense ratio | 3.3 | % |  | 4.3 | % |  | 3.3 | % |  | NM |  | 4.9 | %
Combined ratio (2) | 94.9 | % |  | 103.8 | % |  | 106.0 | % |  | NM |  | 104.7 | %
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned. (2)Ratios considered not meaningful ("NM") to Runoff & Other.
| 2018
| A&H |  | Specialty |  | Property |  | Runoff & Other |  | Total
| ($ in thousands)
Gross premiums written | $ | 3,225 |  |  | $ | 489,691 |  |  | $ | 83,051 |  |  | $ | 74,220 |  |  | $ | 650,187 |
Net premiums written | 3,225 |  |  | 485,522 |  |  | 83,051 |  |  | 74,220 |  |  | 646,018 |
Net premiums earned | 3,098 |  |  | 466,524 |  |  | 77,208 |  |  | 74,612 |  |  | 621,442 |
Loss and loss adjustment expenses incurred, net | 2,624 |  |  | 315,632 |  |  | 59,411 |  |  | 60,747 |  |  | 438,414 |
Acquisition costs, net | 540 |  |  | 156,533 |  |  | 37,235 |  |  | 12,190 |  |  | 206,498 |
Other underwriting expenses | 93 |  |  | 18,314 |  |  | 2,315 |  |  | 8,945 |  |  | 29,667 |
Net underwriting loss | $ | (159) |  |  | $ | (23,955) |  |  | $ | (21,753) |  |  | $ | (7,270) |  |  | (53,137) |
Net investment loss |  |  |  |  |  |  |  |  | (251,433) |
Net corporate and other expenses |  |  |  |  |  |  |  |  | (16,184) |
Interest expense |  |  |  |  |  |  |  |  | (8,228) |
Foreign exchange gains |  |  |  |  |  |  |  |  | 7,503 |
Loss before income tax benefit |  |  |  |  |  |  |  |  | $ | (321,479) |
Underwriting ratios (1): |  |  |  |  |  |  |  |  |
Loss ratio | 84.7 | % |  | 67.7 | % |  | 76.9 | % |  | NM |  | 70.5 | %
Acquisition cost ratio | 17.4 | % |  | 33.6 | % |  | 48.2 | % |  | NM |  | 33.2 | %
Other underwriting expense ratio | 3.0 | % |  | 3.9 | % |  | 3.0 | % |  | NM |  | 4.8 | %
Combined ratio (2) | 105.1 | % |  | 105.2 | % |  | 128.1 | % |  | NM |  | 108.5 | %
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned. (2)Ratios considered not meaningful ("NM") to Runoff & Other. The following table lists the number of contracts that individually contributed more than 10% of total gross premiums written for the years ended December 31, 2020, 2019 and 2018 as a percentage of total gross premiums written in the relevant year:
| 2020 |  | 2019 |  | 2018
Largest contract (1) | n/a |  | 14.4 | % |  | 15.5 | %
Second largest contract (2) | n/a |  | n/a |  | 10.7 | %
Total for contracts contributing greater than 10% each | — | % |  | 14.4 | % |  | 26.2 | %
Total for contracts contributing less than 10% each | 100.0 | % |  | 85.6 | % |  | 73.8 | %
| 100.0 | % |  | 100.0 | % |  | 100.0 | %
(1)The largest contract in the years ended December 31, 2019 and 2018 relate to the Specialty segment. (2)The second largest contract in the year ended December 31, 2018 relates to the Runoff & Other segment. The following table lists counterparties with whom the Company has reinsurance balances receivable representing more than 10% of the Company’s total reinsurance balances receivable as of December 31, 2020 and 2019:
| December 31, 2020 |  | December 31, 2019
Counterparty 1 | $ | 94,131 |  |  | 21.3 | % |  | $ | 113,718 |  |  | 23.8 | %
Counterparty 2 | 75,336 |  |  | 17.0 | % |  | 105,732 |  |  | 22.0 | %
Counterparty 3 | 46,447 |  |  | 10.5 | % |  | 88,825 |  |  | 18.6 | %
| 215,914 |  |  | 48.8 | % |  | 308,275 |  |  | 64.4 | %
Other counterparties representing less than 10% each | 226,021 |  |  | 51.2 | % |  | 170,177 |  |  | 35.6 | %
Reinsurance balances receivable | $ | 441,935 |  |  | 100.0 | % |  | $ | 478,452 |  |  | 100.0 | %
Substantially all of the Company’s business is sourced through reinsurance brokers. The following table sets forth the Company’s premiums written by source that individually contributed more than 10% of total gross premiums written for the years ended December 31, 2020, 2019 and 2018:
| 2020 |  | 2019 |  | 2018
Largest broker | $ | 189,097 |  |  | 32.1 | % |  | $ | 197,100 |  |  | 29.5 | % |  | $ | 224,198 |  |  | 34.5 | %
Second largest broker | 164,569 |  |  | 28.0 | % |  | 144,611 |  |  | 21.6 | % |  | 163,336 |  |  | 25.1 | %
Third largest broker | 67,550 |  |  | 11.5 | % |  | 140,197 |  |  | 21.0 | % |  | 120,381 |  |  | 18.5 | %
Fourth largest broker | n/a |  | n/a |  | n/a |  | n/a |  | 70,523 |  |  | 10.8 | %
Other | 167,324 |  |  | 28.4 | % |  | 186,506 |  |  | 27.9 | % |  | 71,749 |  |  | 11.1 | %
| $ | 588,540 |  |  | 100.0 | % |  | $ | 668,414 |  |  | 100.0 | % |  | $ | 650,187 |  |  | 100.0 | %
The following table provides a breakdown of the Company’s gross premiums written by domicile of the ceding companies for the years ended December 31, 2020, 2019 and 2018:
| 2020 |  | 2019 |  | 2018
United States | $ | 358,582 |  |  | 60.9 | % |  | $ | 361,511 |  |  | 54.1 | % |  | $ | 409,584 |  |  | 63.0 | %
United Kingdom | 110,576 |  |  | 18.8 | % |  | 161,638 |  |  | 24.2 | % |  | 60,623 |  |  | 9.3 | %
Bermuda | 108,598 |  |  | 18.5 | % |  | 137,278 |  |  | 20.5 | % |  | 86,236 |  |  | 13.3 | %
Other | 10,784 |  |  | 1.8 | % |  | 7,987 |  |  | 1.2 | % |  | 93,744 |  |  | 14.4 | %
| $ | 588,540 |  |  | 100.0 | % |  | $ | 668,414 |  |  | 100.0 | % |  | $ | 650,187 |  |  | 100.0 | %
The following tables provide a breakdown of the Company’s premiums written from direct business, reinsurance assumed and reinsurance ceded, on both a written and earned basis for the years ended December 31, 2020, 2019 and 2018:
| 2020 |  | 2019 |  | 2018
Written premiums: |  |  |  |  |
Direct | $ | 19,039 |  |  | $ | — |  |  | $ | — |
Assumed | 569,501 |  |  | 668,414 |  |  | 650,187 |
Gross premiums written | 588,540 |  |  | 668,414 |  |  | 650,187 |
Ceded | (46,344) |  |  | (11,376) |  |  | (4,169) |
Net premiums written | $ | 542,196 |  |  | $ | 657,038 |  |  | $ | 646,018 |
| 2020 |  | 2019 |  | 2018
Premiums earned: |  |  |  |  |
Direct | $ | 1,038 |  |  | $ | — |  |  | $ | — |
Assumed | 638,817 |  |  | 710,014 |  |  | 624,834 |
Gross premiums earned | 639,855 |  |  | 710,014 |  |  | 624,834 |
Ceded | (29,003) |  |  | (9,872) |  |  | (3,392) |
Net premiums earned | $ | 610,852 |  |  | $ | 700,142 |  |  | $ | 621,442 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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