Segment Information

The Company currently has two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located, primarily, in the U.S. and Europe. Our AmTrust Reinsurance segment includes all business ceded to our wholly owned subsidiary, Maiden Reinsurance Ltd. ("Maiden Bermuda") from AmTrust Financial Services, Inc. ("AmTrust"), primarily the AmTrust Quota Share and the European Hospital Liability Quota Share. In addition to our reportable segments, the results of operations of the former National General Holdings Corporation Quota Share ("NGHC Quota Share") segment and the remnants of the U.S. excess and surplus ("E&S") business have been included in the "Other" category. Please refer to "Note 8. Related Party Transactions" for additional information.

The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. General and administrative expenses are allocated to the segments on an actual basis except salaries and benefits where management’s judgment is applied. The Company does not allocate general corporate expenses to the segments. In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, reinsurance recoverable on unpaid losses, deferred commission and other acquisition expenses, loans, goodwill and intangible assets, restricted cash and cash equivalents and investments and unearned reinsurance premiums ceded, funds withheld receivable and reinsurance recoverable on paid losses (presented as part of other assets in the Condensed Consolidated Balance Sheet). All remaining assets are allocated to Corporate.

The following tables summarize our reporting segment's underwriting results and the reconciliation of our reportable segments and Other category's underwriting results to our consolidated net income:



For the Three Months Ended September 30, 2017	Diversified Reinsurance			AmTrust Reinsurance			Other			Total
Gross premiums written	$	210,953		$	420,019		$	—		$	630,972
Net premiums written	$	207,137		$	410,193		$	—		$	617,330
Net premiums earned	$	217,513		$	436,353		$	—		$	653,866
Other insurance revenue	2,488			—			—			2,488
Net loss and loss adjustment expense ("loss and LAE")	(172,273		)	(355,030		)	(8,665		)	(535,968		)
Commission and other acquisition expenses	(54,810		)	(138,650		)	(2		)	(193,462		)
General and administrative expenses	(8,595		)	(771		)	—			(9,366		)
Underwriting loss	$	(15,677	)	$	(58,098	)	$	(8,667	)	(82,442		)
Reconciliation to net loss
Net investment income and net realized gains on investment										46,682
Interest and amortization expenses										(4,829		)
Amortization of intangible assets										(533		)
Foreign exchange losses										(3,550		)
Other general and administrative expenses										(10,126		)
Income tax expense										(256		)
Net loss										$	(55,054	)

Net loss and LAE ratio⁽¹⁾	78.3		%	81.4		%				81.6		%
Commission and other acquisition expense ratio⁽²⁾	24.9		%	31.7		%				29.5		%
General and administrative expense ratio⁽³⁾	3.9		%	0.2		%				3.0		%
Expense ratio⁽⁴⁾	28.8		%	31.9		%				32.5		%
Combined ratio⁽⁵⁾	107.1		%	113.3		%				114.1		%

3. Segment Information (continued)



For the Three Months Ended September 30, 2016	Diversified Reinsurance			AmTrust Reinsurance			Other			Total
Gross premiums written	$	186,750		$	520,104		$	—		$	706,854
Net premiums written	$	179,092		$	511,561		$	—		$	690,653
Net premiums earned	$	175,141		$	523,137		$	—		$	698,278
Other insurance revenue	2,345			—			—			2,345
Net loss and LAE	(132,396		)	(334,310		)	(45		)	(466,751		)
Commission and other acquisition expenses	(39,868		)	(166,836		)	(2		)	(206,706		)
General and administrative expenses	(9,038		)	(759		)	—			(9,797		)
Underwriting (loss) income	$	(3,816	)	$	21,232		$	(47	)	17,369
Reconciliation to net income
Net investment income and net realized gains on investment										37,566
Interest and amortization expenses										(6,856		)
Amortization of intangible assets										(616		)
Foreign exchange gains										687
Other general and administrative expenses										(7,155		)
Income tax expense										(199		)
Net income										$	40,796

Net loss and LAE ratio⁽¹⁾	74.6		%	63.9		%				66.6		%
Commission and other acquisition expense ratio⁽²⁾	22.5		%	31.9		%				29.5		%
General and administrative expense ratio⁽³⁾	5.1		%	0.1		%				2.4		%
Expense ratio⁽⁴⁾	27.6		%	32.0		%				31.9		%
Combined ratio⁽⁵⁾	102.2		%	95.9		%				98.5		%

3. Segment Information (continued)



For the Nine Months Ended September 30, 2017	Diversified Reinsurance			AmTrust Reinsurance			Other			Total
Gross premiums written	$	683,839		$	1,575,677		$	81		$	2,259,597
Net premiums written	$	671,880		$	1,529,980		$	90		$	2,201,950
Net premiums earned	$	623,574		$	1,450,811		$	90		$	2,074,475
Other insurance revenue	7,816			—			—			7,816
Net loss and LAE	(487,759		)	(1,047,222		)	(10,176		)	(1,545,157		)
Commission and other acquisition expenses	(159,744		)	(465,789		)	3			(625,530		)
General and administrative expenses	(25,819		)	(2,240		)	—			(28,059		)
Underwriting loss	$	(41,932	)	$	(64,440	)	$	(10,083	)	(116,455		)
Reconciliation to net loss
Net investment income and net realized gains on investment										131,808
Interest and amortization expenses										(18,430		)
Accelerated amortization of senior note issuance cost										(2,809		)
Amortization of intangible assets										(1,599		)
Foreign exchange losses										(12,193		)
Other general and administrative expenses										(24,193		)
Income tax expense										(1,017		)
Net loss										$	(44,888	)

Net loss and LAE ratio⁽¹⁾	77.2		%	72.2		%				74.2		%
Commission and other acquisition expense ratio⁽²⁾	25.3		%	32.1		%				30.0		%
General and administrative expense ratio⁽³⁾	4.1		%	0.1		%				2.5		%
Expense ratio⁽⁴⁾	29.4		%	32.2		%				32.5		%
Combined ratio⁽⁵⁾	106.6		%	104.4		%				106.7		%

3. Segment Information (continued)



For the Nine Months Ended September 30, 2016	Diversified Reinsurance			AmTrust Reinsurance			Other			Total
Gross premiums written	$	667,388		$	1,591,902		$	—		$	2,259,290
Net premiums written	$	626,522		$	1,507,389		$	—		$	2,133,911
Net premiums earned	$	538,152		$	1,413,699		$	—		$	1,951,851
Other insurance revenue	8,696			—			—			8,696
Net loss and LAE	(395,718		)	(898,703		)	(2,940		)	(1,297,361		)
Commission and other acquisition expenses	(139,895		)	(447,604		)	(2		)	(587,501		)
General and administrative expenses	(26,717		)	(2,308		)	—			(29,025		)
Underwriting (loss) income	$	(15,482	)	$	65,084		$	(2,942	)	46,660
Reconciliation to net income
Net investment income and net realized gains on investment										111,802
Interest and amortization expenses										(21,314		)
Accelerated amortization of senior note issuance cost										(2,345		)
Amortization of intangible assets										(1,846		)
Foreign exchange gains										6,474
Other general and administrative expenses										(20,713		)
Income tax expense										(1,206		)
Net income										$	117,512

Net loss and LAE ratio⁽¹⁾	72.4		%	63.5		%				66.2		%
Commission and other acquisition expense ratio⁽²⁾	25.6		%	31.7		%				30.0		%
General and administrative expense ratio⁽³⁾	4.8		%	0.2		%				2.5		%
Expense ratio⁽⁴⁾	30.4		%	31.9		%				32.5		%
Combined ratio⁽⁵⁾	102.8		%	95.4		%				98.7		%


(1)	Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.


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


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


(4)	Calculated by adding together the commission and other acquisition expense ratio and general and administrative expense ratio.


(5)	Calculated by adding together net loss and LAE ratio and the expense ratio.

The following tables summarize the financial position of our reportable segments including the reconciliation to our consolidated assets at September 30, 2017 and December 31, 2016:



September 30, 2017	Diversified Reinsurance		AmTrust Reinsurance		Total
Total assets - reportable segments	$	1,898,036	$	4,362,008	$	6,260,044
Corporate assets	—		—		579,053
Total Assets	$	1,898,036	$	4,362,008	$	6,839,097

December 31, 2016	Diversified Reinsurance		AmTrust Reinsurance		Total
Total assets - reportable segments	$	1,787,320	$	3,900,067	$	5,687,387
Corporate assets	—		—		564,912
Total Assets	$	1,787,320	$	3,900,067	$	6,252,299

3. Segment Information (continued)

The following table sets forth financial information relating to net premiums written by major line of business and reportable segment for the three and nine months ended September 30, 2017 and 2016:



For the Three Months Ended September 30,	2017				2016
	Total		% of Total		Total		% of Total
Net premiums written
Diversified Reinsurance
Property	$	37,962	6.2	%	$	30,606	4.4	%
Casualty	129,726		21.0	%	115,360		16.7	%
Accident and Health	16,946		2.7	%	14,845		2.2	%
International	22,503		3.7	%	18,281		2.6	%
Total Diversified Reinsurance	207,137		33.6	%	179,092		25.9	%
AmTrust Reinsurance
Small Commercial Business	295,499		47.9	%	314,677		45.6	%
Specialty Program	63,816		10.3	%	98,895		14.3	%
Specialty Risk and Extended Warranty	50,878		8.2	%	97,989		14.2	%
Total AmTrust Reinsurance	410,193		66.4	%	511,561		74.1	%
Total Net Premiums Written	$	617,330	100.0	%	$	690,653	100.0	%



For the Nine Months Ended September 30,	2017				2016
	Total		% of Total		Total		% of Total
Net premiums written
Diversified Reinsurance
Property	$	132,398	6.0	%	$	123,991	5.8	%
Casualty	391,503		17.8	%	365,332		17.1	%
Accident and Health	74,504		3.4	%	68,140		3.2	%
International	73,475		3.3	%	69,059		3.2	%
Total Diversified Reinsurance	671,880		30.5	%	626,522		29.3	%
AmTrust Reinsurance
Small Commercial Business	1,028,905		46.7	%	983,601		46.1	%
Specialty Program	255,767		11.6	%	268,193		12.6	%
Specialty Risk and Extended Warranty	245,308		11.2	%	255,595		12.0	%
Total AmTrust Reinsurance	1,529,980		69.5	%	1,507,389		70.7	%
Other	90		—	%	—		—	%
Total Net Premiums Written	$	2,201,950	100.0	%	$	2,133,911	100.0	%

3. Segment Information (continued)

The following table sets forth financial information relating to net premiums earned by major line of business and reportable segment for the three and nine months ended September 30, 2017 and 2016:



For the Three Months Ended September 30,	2017				2016
	Total		% of Total		Total		% of Total
Net premiums earned
Diversified Reinsurance
Property	$	43,362	6.6	%	$	29,921	4.3	%
Casualty	130,428		20.0	%	105,893		15.2	%
Accident and Health	22,780		3.5	%	18,436		2.6	%
International	20,943		3.2	%	20,891		3.0	%
Total Diversified Reinsurance	217,513		33.3	%	175,141		25.1	%
AmTrust Reinsurance
Small Commercial Business	314,773		48.1	%	320,596		45.9	%
Specialty Program	59,143		9.1	%	89,856		12.9	%
Specialty Risk and Extended Warranty	62,437		9.5	%	112,685		16.1	%
Total AmTrust Reinsurance	436,353		66.7	%	523,137		74.9	%
Total Net Premiums Earned	$	653,866	100.0	%	$	698,278	100.0	%



For the Nine Months Ended September 30,	2017				2016
	Total		% of Total		Total		% of Total
Net premiums earned
Diversified Reinsurance
Property	$	122,888	5.9	%	$	103,023	5.3	%
Casualty	375,141		18.1	%	313,736		16.1	%
Accident and Health	63,878		3.1	%	55,788		2.8	%
International	61,667		3.0	%	65,605		3.4	%
Total Diversified Reinsurance	623,574		30.1	%	538,152		27.6	%
AmTrust Reinsurance
Small Commercial Business	946,782		45.6	%	864,699		44.3	%
Specialty Program	251,153		12.1	%	251,543		12.9	%
Specialty Risk and Extended Warranty	252,876		12.2	%	297,457		15.2	%
Total AmTrust Reinsurance	1,450,811		69.9	%	1,413,699		72.4	%
Other	90		—	%	—		—	%
Total Net Premiums Earned	$	2,074,475	100.0	%	$	1,951,851	100.0	%