Segments (Tables)

The following tables summarize our operating segment's underwriting results and the reconciliation of our operating segments to net income:



For the Three Months Ended March 31, 2014	Diversified Reinsurance			AmTrust Quota Share Reinsurance			NGHC Quota Share			Total
Net premiums written	$	291,619		$	419,010		$	(737	)	$	709,892
Net premiums earned	$	199,316		$	304,922		$	14,992		$	519,230
Other insurance revenue	5,162			—			—			5,162
Net loss and loss adjustment expenses	(141,364		)	(199,544		)	(10,436		)	(351,344		)
Commission and other acquisition expenses	(50,841		)	(90,485		)	(4,756		)	(146,082		)
General and administrative expenses	(10,990		)	(548		)	(199		)	(11,737		)
Underwriting income (loss)	$	1,283		$	14,345		$	(399	)	$	15,229
Reconciliation to net income
Net investment income and realized gains on investment										27,930
Amortization of intangible assets										(819		)
Foreign exchange and other gains										138
Interest and amortization expenses										(8,064		)
Accelerated amortization of junior subordinated debt discount and issuance cost										(28,240		)
Other general and administrative expenses										(3,187		)
Income tax expense										(926		)
Net income										$	2,061

Net loss and loss adjustment expense ratio*	69.1		%	65.4		%	69.6		%	67.0		%
Commission and other acquisition expense ratio**	24.9		%	29.7		%	31.7		%	27.9		%
General and administrative expense ratio***	5.4		%	0.2		%	1.4		%	2.8		%
Combined ratio****	99.4		%	95.3		%	102.7		%	97.7		%

3. Segments (continued)



For the Three Months Ended March 31, 2013	Diversified Reinsurance			AmTrust Quota Share Reinsurance			NGHC Quota Share			Total
Net premiums written	$	267,610		$	344,818		$	76,631		$	689,059
Net premiums earned	$	196,249		$	220,288		$	71,905		$	488,442
Other insurance revenue	5,215			—			—			5,215
Net loss and loss adjustment expenses	(140,763		)	(145,645		)	(48,487		)	(334,895		)
Commission and other acquisition expenses	(44,782		)	(65,132		)	(22,416		)	(132,330		)
General and administrative expenses	(10,798		)	(489		)	(174		)	(11,461		)
Underwriting income	$	5,121		$	9,022		$	828		$	14,971
Reconciliation to net income
Net investment income and realized gains on investment										25,262
Amortization of intangible assets										(945		)
Foreign exchange and other gains										1,547
Interest and amortization expenses										(9,570		)
Other general and administrative expenses										(2,634		)
Income tax expense										(524		)
Net income										$	28,107

Net loss and loss adjustment expense ratio*	69.9		%	66.1		%	67.4		%	67.8		%
Commission and other acquisition expense ratio**	22.2		%	29.6		%	31.2		%	26.8		%
General and administrative expense ratio***	5.4		%	0.2		%	0.2		%	2.9		%
Combined ratio****	97.5		%	95.9		%	98.8		%	97.5		%


*	Calculated by dividing net loss and loss adjustment expenses by the sum of net premiums earned and other insurance revenue.


**	Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.


***	Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.


****	Calculated by adding together net loss and loss adjustment expense ratio, commission and other acquisition expense ratio and general and administrative expense ratio.

3. Segments (continued)

The following table summarizes the financial position of our operating segments as of March 31, 2014 and December 31, 2013:



March 31, 2014	Diversified Reinsurance		AmTrust Quota Share Reinsurance		NGHC Quota Share		Total
Reinsurance balances receivable, net	$	336,807	$	338,412	$	—	$	675,219
Prepaid reinsurance premiums	31,870		—		—		31,870
Reinsurance recoverable on unpaid losses	83,350		—		—		83,350
Deferred commission and other acquisition expenses	102,342		244,322		2,052		348,716
Loan to related party	—		167,975		—		167,975
Goodwill and intangible assets, net	89,794		—		—		89,794
Restricted cash and cash equivalents and investments	1,032,818		1,221,365		106,328		2,360,511
Other assets	28,617		—		—		28,617
Total assets - operating segments	1,705,598		1,972,074		108,380		3,786,052
Corporate assets	—		—		—		1,082,504
Total Assets	$	1,705,598	$	1,972,074	$	108,380	$	4,868,556



December 31, 2013	Diversified Reinsurance		AmTrust Quota Share Reinsurance		NGHC Quota Share		Total
Reinsurance balances receivable, net	$	260,882	$	278,573	$	20,690	$	560,145
Prepaid reinsurance premiums	39,186		—		—		39,186
Reinsurance recoverable on unpaid losses	84,036		—		—		84,036
Deferred commission and other acquisition expenses	88,482		209,439		6,987		304,908
Loan to related party	—		167,975		—		167,975
Goodwill and intangible assets, net	90,613		—		—		90,613
Restricted cash and cash equivalents and investments	1,029,537		1,098,409		103,752		2,231,698
Other assets	32,358		—		—		32,358
Total assets - operating segments	1,625,094		1,754,396		131,429		3,510,919
Corporate assets	—		—		—		1,202,460
Total Assets	$	1,625,094	$	1,754,396	$	131,429	$	4,713,379

The following tables set forth financial information relating to net premiums written and earned by major line of business for the three months ended March 31, 2014 and 2013:



For the Three Months Ended March 31,	2014					2013
Net premiums written	Total			% of Total		Total		% of Total
Diversified Reinsurance
Property	$	62,581		8.8	%	$	69,522	10.1	%
Casualty	171,754			24.2	%	148,423		21.5	%
Accident and Health	17,222			2.4	%	15,529		2.2	%
International	40,062			5.7	%	34,136		5.0	%
Total Diversified Reinsurance	291,619			41.1	%	267,610		38.8	%
AmTrust Quota Share Reinsurance
Small Commercial Business	253,757			35.7	%	162,018		23.5	%
Specialty Program	31,798			4.5	%	34,946		5.1	%
Specialty Risk and Extended Warranty	133,455			18.8	%	147,854		21.5	%
Total AmTrust Quota Share Reinsurance	419,010			59.0	%	344,818		50.1	%
NGHC Quota Share
Automobile Liability	(534		)	(0.1	)%	44,339		6.4	%
Automobile Physical Damage	(203		)	—	%	32,292		4.7	%
Total NGHC Quota Share	(737		)	(0.1	)%	76,631		11.1	%
	$	709,892		100.0	%	$	689,059	100.0	%



For the Three Months Ended March 31,	2014				2013
Net premiums earned	Total		% of Total		Total		% of Total
Diversified Reinsurance
Property	$	40,595	7.8	%	$	47,547	9.7	%
Casualty	121,887		23.5	%	117,059		24.0	%
Accident and Health	8,886		1.7	%	8,633		1.8	%
International	27,948		5.4	%	23,010		4.7	%
Total Diversified Reinsurance	199,316		38.4	%	196,249		40.2	%
AmTrust Quota Share Reinsurance
Small Commercial Business	158,605		30.5	%	102,257		20.9	%
Specialty Program	32,853		6.3	%	33,346		6.8	%
Specialty Risk and Extended Warranty	113,464		21.9	%	84,685		17.3	%
Total AmTrust Quota Share Reinsurance	304,922		58.7	%	220,288		45.0	%
NGHC Quota Share
Automobile Liability	9,096		1.8	%	41,630		8.6	%
Automobile Physical Damage	5,896		1.1	%	30,275		6.2	%
Total NGHC Quota Share	14,992		2.9	%	71,905		14.8	%
	$	519,230	100.0	%	$	488,442	100.0	%

- 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.

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