XML 38 R29.htm IDEA: XBRL DOCUMENT v3.21.1
Segment Reporting
 12 Months Ended
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 lines 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&HSpecialtyPropertyRunoff &
Other		Total
($ in thousands)
Gross premiums written$3,392 $368,722 $187,480 $28,946 $588,540 
Net premiums written 3,392 349,783 160,075 28,946 542,196 
Net premiums earned 3,207 407,951 171,556 28,138 610,852 
Loss and loss adjustment expenses incurred, net 3,319 342,596 119,455 (72)465,298 
Acquisition costs, net313 112,464 48,744 25,541 187,062 
Other underwriting expenses 114 18,744 6,036 5,906 30,800 
Net underwriting loss$(539)$(65,853)$(2,679)$(3,237)(72,308)
Net investment income278,938 
Net corporate and other expenses(41,215)
Interest expense(8,230)
Foreign exchange losses(5,219)
Income before income tax expense$151,966 
Underwriting ratios (1):
Loss ratio103.5 %84.0 %69.6 %NM76.2 %
Acquisition cost ratio9.8 %27.6 %28.4 %NM30.6 %
Other underwriting expense ratio3.6 %4.6 %3.5 %NM5.0 %
Combined ratio (2)
116.9 %116.2 %101.5 %NM111.8 %
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Ratios considered not meaningful ("NM") to Runoff & Other.
2019
A&HSpecialtyPropertyRunoff &
Other		Total
($ 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, net365 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 income282,560 
Net corporate and other expenses(36,285)
Interest expense(8,228)
Foreign exchange losses(3,635)
Income before income tax expense$201,332 
Underwriting ratios (1):
Loss ratio83.8 %67.4 %64.0 %NM57.6 %
Acquisition cost ratio7.8 %32.1 %38.7 %NM42.2 %
Other underwriting expense ratio3.3 %4.3 %3.3 %NM4.9 %
Combined ratio (2)
94.9 %103.8 %106.0 %NM104.7 %
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Ratios considered not meaningful ("NM") to Runoff & Other.
2018
A&HSpecialtyPropertyRunoff &
Other		Total
($ in thousands)
Gross premiums written$3,225 $489,691 $83,051 $74,220 $650,187 
Net premiums written 3,225 485,522 83,051 74,220 646,018 
Net premiums earned 3,098 466,524 77,208 74,612 621,442 
Loss and loss adjustment expenses incurred, net 2,624 315,632 59,411 60,747 438,414 
Acquisition costs, net540 156,533 37,235 12,190 206,498 
Other underwriting expenses 93 18,314 2,315 8,945 29,667 
Net underwriting loss$(159)$(23,955)$(21,753)$(7,270)(53,137)
Net investment loss(251,433)
Net corporate and other expenses(16,184)
Interest expense(8,228)
Foreign exchange gains7,503 
Loss before income tax benefit$(321,479)
Underwriting ratios (1):
Loss ratio84.7 %67.7 %76.9 %NM70.5 %
Acquisition cost ratio17.4 %33.6 %48.2 %NM33.2 %
Other underwriting expense ratio3.0 %3.9 %3.0 %NM4.8 %
Combined ratio (2)
105.1 %105.2 %128.1 %NM108.5 %
(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:
202020192018
Largest contract (1)
n/a14.4 %15.5 %
Second largest contract (2)
n/an/a10.7 %
Total for contracts contributing greater than 10% each— %14.4 %26.2 %
Total for contracts contributing less than 10% each100.0 %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, 2020December 31, 2019
Counterparty 1$94,131 21.3 %$113,718 23.8 %
Counterparty 275,336 17.0 %105,732 22.0 %
Counterparty 346,447 10.5 %88,825 18.6 %
215,914 48.8 %308,275 64.4 %
Other counterparties representing less than 10% each226,021 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:
202020192018
Largest broker$189,097 32.1 %$197,100 29.5 %$224,198 34.5 %
Second largest broker164,569 28.0 %144,611 21.6 %163,336 25.1 %
Third largest broker67,550 11.5 %140,197 21.0 %120,381 18.5 %
Fourth largest brokern/an/an/an/a70,523 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:
202020192018
United States$358,582 60.9 %$361,511 54.1 %$409,584 63.0 %
United Kingdom110,576 18.8 %161,638 24.2 %60,623 9.3 %
Bermuda108,598 18.5 %137,278 20.5 %86,236 13.3 %
Other10,784 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:
202020192018
Written premiums:
Direct$19,039 $— $— 
Assumed569,501 668,414 650,187 
Gross premiums written588,540 668,414 650,187 
Ceded(46,344)(11,376)(4,169)
Net premiums written$542,196 $657,038 $646,018 
202020192018
Premiums earned:
Direct$1,038 $— $— 
Assumed638,817 710,014 624,834 
Gross premiums earned639,855 710,014 624,834 
Ceded(29,003)(9,872)(3,392)
Net premiums earned$610,852 $700,142 $621,442