SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED:

March 31, ~~2015~~2016

Commission file number:

1-14527

EVEREST REINSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		22-3263609
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

477 Martinsville Road

Post Office Box 830

Liberty Corner, New Jersey 07938-0830

(908) 604-3000

(Address, including zip code, and telephone number, including area code,

of ~~registrant’s~~registrant's principal executive office)

Large accelerated filer		Accelerated filer
Non-accelerated filer	X	Smaller reporting company
(Do not check if smaller reporting company)

		Number of Shares Outstanding
Class		At May 1, ~~2015~~2016
Common Shares, $0.01 par value		1,000

EVEREST REINSURANCE HOLDINGS, INC.

Table of Contents

Form 10-Q

Page

PART I

FINANCIAL INFORMATION


Item 1.	Financial Statements

	Consolidated Balance Sheets at March 31, ~~2015~~2016 (unaudited) and
		December 31, ~~2014~~2015	1

	Consolidated Statements of Operations and Comprehensive Income (Loss) for the
		three months ended March 31, ~~2015~~2016 and ~~2014~~2015 (unaudited)	2

	Consolidated Statements of Changes in ~~Stockholder’s~~Stockholder's Equity for the three
		months ended March 31, ~~2015~~2016 and ~~2014~~2015 (unaudited)	3

	Consolidated Statements of Cash Flows for the three months ended
		March 31, ~~2015~~2016 and ~~2014~~2015 (unaudited)	4

	Notes to Consolidated Interim Financial Statements (unaudited)		5

Item 2.	~~Management’s~~Management's Discussion and Analysis of Financial Condition and
		Results of Operation	2627

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		3839

Item 4.	Controls and Procedures		3839

PART II

~~PART II~~OTHER INFORMATION

~~OTHER INFORMATION~~


Item 1.	Legal Proceedings	3940

Item 1A.	Risk Factors	3940

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3940

Item 3.	Defaults Upon Senior Securities	3940

Item 4.	Mine Safety Disclosures	3940

Item 5.	Other Information	3940

Item 6.	Exhibits	4041

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	March 31,		December 31,		March 31,			December 31,
(Dollars in thousands, except par value per share)	2015		2014		2016			2015
	(unaudited)				(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value	$	5,226,919	$	5,293,411	$	5,579,911		$	5,356,477
(amortized cost: 2015, $5,108,085; 2014, $5,235,523)
(amortized cost: 2016, $5,488,882; 2015, $5,335,472)
Fixed maturities - available for sale, at fair value		363		1,509		1,870			2,102
Equity securities - available for sale, at market value (cost: 2015, $15; 2014, $15)		16		16
Equity securities - available for sale, at fair value		1,350,070		1,299,037		1,194,972			1,215,377
Short-term investments		559,947		564,364		329,190			563,536
Other invested assets (cost: 2015, $440,616; 2014, $435,010)		440,616		435,010
Other invested assets (cost: 2016, $595,114; 2015, $450,154)						595,114			450,154
Other invested assets, at fair value		1,691,275		1,655,311		1,773,214			1,773,214
Cash		267,487		323,975		148,439			155,429
Total investments and cash		9,536,693		9,572,633		9,622,710			9,516,289
Note receivable - affiliated		250,000		250,000		250,000			250,000
Accrued investment income		47,856		45,386		46,810			41,727
Premiums receivable		1,161,029		1,086,203		1,092,277			1,129,656
Reinsurance receivables - unaffiliated		690,641		659,303		848,919			716,982
Reinsurance receivables - affiliated		3,386,137		3,372,715		3,675,168			3,742,105
Funds held by reinsureds		192,108		182,159		172,271			176,712
Deferred acquisition costs		94,703		109,262		80,270			92,651
Prepaid reinsurance premiums		791,245		809,083		757,777			772,686
Other assets		257,876		235,576		247,742			261,805
TOTAL ASSETS	$	16,408,288	$	16,322,320	$	16,793,944		$	16,700,613

LIABILITIES:
Reserve for losses and loss adjustment expenses	$	7,805,030	$	7,843,856	$	7,992,273		$	7,940,720
Unearned premium reserve		1,408,321		1,442,122		1,318,229			1,349,799
Funds held under reinsurance treaties		107,444		101,743		100,755			101,531
Losses in the course of payment		237,919		178,521		143,296			125,592
Commission reserves		66,461		63,110		45,880			51,873
Other net payable to reinsurers		972,196		1,028,549		1,120,917			1,225,260
4.868% Senior notes due 6/1/2044		400,000		400,000		400,000			400,000
6.6% Long term notes due 5/1/2067		238,365		238,364		238,369			238,368
Accrued interest on debt and borrowings		12,341		3,537		12,341			3,537
Income taxes		81,928		46,835		107,488			68,024
Unsettled securities payable		27,206		41,092		29,525			15,040
Other liabilities		350,540		361,874		248,154			249,658
Total liabilities		11,707,751		11,749,603		11,757,227			11,769,402

Commitments and Contingencies (Note 6)
Commitments and Contingencies (Note 5)

STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized;
1,000 shares issued and outstanding (2015 and 2014)		-		-
1,000 shares issued and outstanding (2016 and 2015)						-			-
Additional paid-in capital		366,258		362,293		379,582			374,789
Accumulated other comprehensive income (loss), net of deferred income tax expense
(benefit) of $6,693 at 2015 and $2,434 at 2014		12,430		4,519
(benefit) of $(182) at 2016 and ($33,458) at 2015						(349	)		(62,136	)
Retained earnings		4,321,849		4,205,905		4,657,484			4,618,558
Total stockholder's equity		4,700,537		4,572,717		5,036,717			4,931,211
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	16,408,288	$	16,322,320	$	16,793,944		$	16,700,613

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF

CHANGES IN ~~STOCKHOLDER’S~~STOCKHOLDER'S EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the Three Months Ended March 31, ~~2015~~2016 and ~~2014~~2015

As used in this document, ~~“Holdings”~~"Holdings" means Everest Reinsurance Holdings, Inc., a Delaware company and direct subsidiary of Everest Underwriting Group (Ireland) Limited (“("Holdings ~~Ireland”~~Ireland"); ~~“Group”~~"Group" means Everest Re Group, Ltd. (Holdings ~~Ireland’s~~Ireland's parent); ~~“Bermuda Re”~~"Bermuda Re" means Everest Reinsurance (Bermuda), Ltd., a subsidiary of Group; ~~“Everest Re”~~"Everest Re" means Everest Reinsurance Company and its subsidiaries, a subsidiary of Holdings (unless the context otherwise requires)~~; “Mt. Logan Re” means Mt. Logan Re Ltd., a subsidiary of Group;~~ and the ~~“Company”~~"Company" means Holdings and its subsidiaries.

Effective July 13, 2015, the Company sold all of the outstanding shares of capital stock of a wholly-owned subsidiary entity, Mt. McKinley Insurance Company ("Mt. McKinley"), to Clearwater Insurance Company. The operating results of Mt. McKinley for the three months ended March 31, 2015 are included within the Company's financial statements.

2.BASIS OF PRESENTATION

The unaudited consolidated financial statements of the Company for the three months ended March 31, ~~2015~~2016 and ~~2014~~2015 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis. Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ~~(“GAAP”~~("GAAP"), has been omitted since it is not required for interim reporting purposes. The December 31, ~~2014~~2015 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The results for the three months ended March 31, ~~2015~~2016 and ~~2014~~2015 are not necessarily indicative of the results for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2015, 2014 ~~2013~~ and ~~2012~~2013 included in the ~~Company’s~~Company's most recent Form 10-K filing.

All intercompany accounts and transactions have been eliminated.

Certain reclassifications and format changes have been made to prior years' amounts to conform to the 2016 presentation.

Application of Recently Issued Accounting Standard ~~Changes~~Changes.

~~No accounting standards or~~Disclosures about Short-Duration Contracts. In May 2015, the FASB issued ASU 2015-09, authoritative guidance regarding required disclosures associated with short duration insurance contracts. The new disclosure requirements focus on information about initial claim estimates and subsequent claim estimate adjustment, methodologies in estimating claims and the timing, frequency and severity of claims related to short duration insurance contracts. This guidance is effective for annual reporting periods beginning after December 15, 2015 and interim reporting periods beginning after December 15, 2016. Therefore, the initial presentation of this guidance in the Company's financial statements and footnotes will be for its 10-K filing as of December 31, 2016. The Company does not anticipate that it will have ~~been~~a significant impact on its financial statements.

Debt Issuance Costs. In April 2015, The FASB issued ~~recently~~ASU 2015–03, authoritative guidance on the presentation of debt issuance costs. This guidance requires that ~~would~~debt issuance costs be presented within the balance sheet as a reduction of the carrying value of the debt liability, rather than as a separate asset. This guidance is effective for annual reporting periods beginning after December 15, 2015 and related interim reporting periods. The Company does not anticipate that the adoption of this guidance will have a material impact on ~~the Company’s~~its financial ~~statements or financial reporting process.~~

statements.

Consolidation. In February 2015, the FASB issued ASU 2015-02, authoritative guidance regarding consolidation of reporting entities. The new guidance focuses on the required evaluation of whether certain legal entities should be consolidated. This guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company has determined that the guidance will not have a significant impact on its financial statements.

The amortized cost, market value and gross unrealized appreciation and depreciation of available for sale, fixed maturity, equity security investments, carried at market value and other-than-temporary impairments ~~(“OTTI”~~("OTTI") in accumulated other comprehensive income ~~(“AOCI”~~("AOCI") are as follows for the periods indicated:

At December 31, 2014
Amortized Unrealized Unrealized Market OTTI in AOCI
(Dollars in thousands) Cost Appreciation Depreciation Value (a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 135,724 $ 1,416 $ (304 ) $ 136,836 $ -
Obligations of U.S. states and political subdivisions 783,129 41,969 (626 ) 824,472 -
Corporate securities 1,992,200 39,954 (53,219 ) 1,978,935 (9,735 )
Asset-backed securities 94,470 727 (374 ) 94,823 -
Mortgage-backed securities
Commercial 57,027 2,292 (51 ) 59,268 -
Agency residential 596,140 6,697 (4,720 ) 598,117 -
Non-agency residential 271 44 - 315 -
Foreign government securities 515,016 27,415 (5,344 ) 537,087 -
Foreign corporate securities 1,061,546 27,832 (25,820 ) 1,063,558 -
Total fixed maturity securities $ 5,235,523 $ 148,346 $ (90,458 ) $ 5,293,411 $ (9,735 )
Equity securities $ 15 $ 1 $ - $ 16 $ -

^(a)~~(a)~~Represents the amount of OTTI recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.

The changes in net unrealized appreciation (depreciation) for the ~~Company’s~~Company's investments are derived from the following sources for the periods as indicated:

The Company frequently reviews all of its fixed maturity, available for sale securities for declines in market value and focuses its attention on securities whose fair value has fallen below 80% of their amortized cost at the time of review. The Company then assesses whether the decline in value is temporary or other-than-temporary. In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information. Generally, a change in a ~~security’s~~security's value caused by a change in the market, interest rate or foreign exchange environment does not constitute an other-than-temporary impairment, but rather a temporary decline in market value. Temporary declines in market value are recorded as unrealized losses in accumulated other comprehensive income (loss). If the Company determines that the decline is other-than-temporary and the Company does not have the intent to sell the security; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, the carrying value of the investment is written down to fair value. The fair value adjustment that is credit or foreign exchange related is recorded in net realized capital gains (losses) in the ~~Company’s~~Company's consolidated statements of operations and comprehensive income (loss). The fair value adjustment that is non-credit related is recorded as a component of other comprehensive income (loss), net of tax, and is included in accumulated other comprehensive income (loss) in the ~~Company’s~~Company's consolidated balance sheets. The ~~Company’s~~Company's assessments are based on the issuers current and expected future financial position, timeliness with respect to interest and/or principal payments, speed of repayments and any applicable credit enhancements or breakeven constant default rates on mortgage-backed and asset-backed securities, as well as relevant information provided by rating agencies, investment advisors and analysts.

The majority of the Company’s equity securities available for sale at market value are primarily comprised of mutual fund investments whose underlying securities consist of fixed maturity securities. When a fund’s value reflects an unrealized loss, the Company assesses whether the decline in value is temporary or other-than-temporary. In making its assessment, the Company considers the composition of its portfolios and their related markets, reports received from the portfolio managers and discussions with portfolio managers. If the Company determines that the declines are temporary and it has the ability and intent to continue to hold the investments, then the declines are recorded as unrealized losses in accumulated other comprehensive income (loss). If declines are deemed to be other-than-temporary, then the carrying value of the investment is written down to fair value and recorded in net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss).

Retrospective adjustments are employed to recalculate the values of asset-backed securities. All of the ~~Company’s~~Company's asset-backed and mortgage-backed securities have a pass-through structure. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition. Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used in the calculation of projected prepayments for pass-through security types.

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity and equity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

Duration of Unrealized Loss at March 31, 2015 By Maturity
Less than 12 months Greater than 12 months Total
Gross Gross Gross
Unrealized Unrealized Unrealized
(Dollars in thousands) Market Value Depreciation Market Value Depreciation Market Value Depreciation
Fixed maturity securities
Due in one year or less $ 19,187 $ (1,716 ) $ 24,224 $ (2,820 ) $ 43,411 $ (4,536 )
Due in one year through five years 307,725 (40,128 ) 165,952 (4,376 ) 473,677 (44,504 )
Due in five years through ten years 222,882 (9,192 ) 56,606 (1,070 ) 279,488 (10,262 )
Due after ten years 34,486 (583 ) 20,817 (787 ) 55,303 (1,370 )
Asset-backed securities 43,245 (96 ) - - 43,245 (96 )
Mortgage-backed securities 10,595 (33 ) 192,684 (1,416 ) 203,279 (1,449 )
Total fixed maturity securities $ 638,120 $ (51,748 ) $ 460,283 $ (10,469 ) $ 1,098,403 $ (62,217 )

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at March 31, ~~2015~~2016 were ~~$1,098,403~~$1,414,865 thousand and ~~$62,217~~$60,629 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at March 31, ~~2015,~~2016, did not exceed ~~0.5%~~0.2% of the overall market value of the ~~Company’s~~Company's fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The ~~$51,748~~$26,847 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were primarily comprised of ~~foreign and~~ domestic ~~corporate securities~~ and foreign ~~government~~corporate securities. The majority of these unrealized losses are attributable to unrealized losses in the energy sector, ~~$36,644~~$13,158 thousand, as falling oil prices disrupted the market values for this sector, particularly for oil exploration, production and servicing companies and unrealized foreign exchange losses, ~~$13,713~~$5,798 thousand, as the U.S. dollar has strengthened against other currencies. The ~~$10,469~~$33,782 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to ~~foreign government securities,~~ domestic and foreign corporate securities, foreign government securities and agency

residential mortgage-backed securities. OfThe majority of these unrealized losses ~~$9,180~~are attributable to unrealized foreign exchange losses, $17,964 thousand, ~~were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.~~as the U.S. dollar has strengthened against other currencies and unrealized losses in the energy sector, $5,572 thousand, as falling oil prices disrupted the market values for this sector, particularly for oil exploration, production and servicing companies. The Company did not have any sub-prime or alt-A loans with gross unrealized depreciation at March 31, ~~2015.~~2016. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

The Company, given the size of its investment portfolio and capital position, does not have the intent to sell these securities; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis. In addition, all securities currently in an unrealized loss position are current with respect to principal and interest payments.

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, ~~2014~~2015 were ~~$1,892,146~~$2,571,006 thousand and ~~$90,458~~$100,332 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, ~~2014,~~2015, did not exceed ~~0.3%~~0.07% of the overall market value of the ~~Company’s~~Company's fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The ~~$72,254~~$62,697 thousand of unrealized losses related to fixed

maturity securities that have been in an unrealized loss position for less than one year were primarily comprised of domestic and foreign corporate securities, agency residential mortgage-backed securities and foreign government securities. The majority of these unrealized losses are attributable to unrealized losses in the energy sector, ~~$53,772~~$35,978 thousand, as falling oil prices disrupted the market values for this sector, particularly for oil exploration, production and servicing companies ~~during the fourth quarter of 2014~~ and unrealized foreign exchange losses, ~~$7,298~~$6,090 thousand, as the U.S. dollar has strengthened against other currencies. The ~~$18,204~~$37,635 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, foreign government securities and agency residential mortgage-backed ~~securities, foreign and domestic corporate securities and foreign government~~ securities. OfThe majority of these unrealized losses ~~$16,680~~are attributable to unrealized foreign exchange losses, $14,807 thousand, ~~were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization.~~as the U.S. dollar has strengthened against other currencies and unrealized losses in the energy sector, $6,959 thousand, as falling oil prices disrupted the market values for this sector, particularly for oil exploration, production and servicing companies. The Company did not have any sub-prime or alt-A loans with gross unrealized depreciation at December 31, ~~2014.~~2015. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

Other invested assets, at fair value, ~~are~~as of March 31, 2016, and December 31, 2015, were comprised of ~~common~~preferred shares ~~of the Company’s ultimate parent, Group. At March 31, 2015, the Company~~ held ~~9,719,971 shares of Group representing 18.0% of the total outstanding shares.~~in Everest Preferred International Holdings ("Preferred Holdings"), an affiliated company.

The components of net investment income are presented in the ~~table~~tables below for the periods indicated:

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

The Company had contractual commitments to invest up to an additional ~~$237,637~~$288,022 thousand in limited partnerships at March 31, ~~2015.~~2016. These commitments will be funded when called in accordance with the partnership agreements, which have investment periods that expire, unless extended, through 2020.

The components of net realized capital gains (losses) are presented in the ~~table~~tables below for the periods indicated:

The Company recorded as net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss) both fair value re-measurements and write-downs in the value of securities deemed to be impaired on an other-than-temporary basis as displayed in the table above. The Company had no other-than-temporary impaired securities where the impairment had both a credit and non-credit component.

The proceeds and split between gross gains and losses, from sales of fixed maturity and equity securities, are presented in the ~~table~~tables below for the periods indicated:

GAAP guidance regarding fair value measurements address how companies should measure fair value when they are required to use fair value measures for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement, with Level 1 being the highest priority and Level 3 being the lowest priority.

The levels in the hierarchy are defined as follows:

Level 1:

Inputs to the valuation methodology are observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in an active market;

Level 2:

Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument;

Level 3:

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The ~~Company’s~~Company's fixed maturity and equity securities are primarily managed by third party investment asset managers. The investment asset managers obtain prices from nationally recognized pricing services. These services seek to utilize market data and observations in their evaluation process. They use pricing applications that vary by asset class and incorporate available market information and when fixed maturity securities do not trade on a daily basis the services will apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.

In limited instances where prices are not provided by pricing services or in rare instances when a manager may not agree with the pricing service, price quotes on a non-binding basis are obtained from investment brokers. The investment asset managers do not make any changes to prices received from either the pricing services or the investment brokers. In addition, the investment asset managers have procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices. In addition, the Company continually performs analytical reviews of price changes and tests the prices on a random basis to an independent pricing source. No material variances were noted during these price validation procedures. In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value. Due to the unavailability of prices for ~~one~~six private placement ~~security,~~securities, the Company valued the ~~security~~six securities at ~~$6,125~~$16,302 thousand at March 31, ~~2015 and made no such adjustments~~2016. Due to the unavailability of prices for two private placement securities, the Company valued the two securities at $3,593 thousand at December 31, ~~2014.~~2015.

The Company internally manages a small public equity portfolio which had a fair value at March 31, ~~2015~~2016 and December 31, ~~2014~~2015 of ~~$103,866~~$123,172 thousand and ~~$96,890~~$131,219 thousand, respectively, and all prices were obtained from publically published sources.

Equity securities denominated in U.S. ~~denominated~~ currency with quoted prices in active markets for identical assets are categorized as ~~Level~~level 1 ~~Quoted Prices in Active Markets for Identical Assets,~~ since the ~~securities are actively traded on an exchange and~~quoted prices are ~~based on quoted prices from the exchange.~~directly observable. Equity securities traded on foreign exchanges are categorized as ~~Level~~level 2 due to ~~potential~~the added input of a foreign exchange ~~adjustments~~conversion rate to determine fair or market value. The Company uses foreign currency exchange rates published by nationally recognized sources.

~~Fixed~~All categories of fixed maturity securities listed in the tables below are generally categorized as ~~Level~~level 2, ~~Significant Other Observable Inputs,~~ since a particular security may not have traded but the pricing services are able to use valuation models with observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. ~~Valuations that~~For foreign government securities and foreign corporate securities, the fair values provided by the third party pricing services in local currencies, and where applicable, are ~~derived~~converted to U.S. dollars using currency exchange rates from ~~techniques in which one or more of the significant inputs are unobservable (including assumptions about risk) are~~nationally recognized sources.

The fixed maturities with fair values categorized as ~~Level~~level 3 ~~Significant Unobservable Inputs. These~~result when prices are not available from the nationally recognized pricing services. The asset managers will then obtain non-binding price quotes for the securities ~~include broker priced securities.~~

As of March 31, 2015 and December 31, 2014, all Level 3 fixed maturity securities, except the one security priced by the Company, were priced using single non-binding broker quotes since prices for these securities were not provided by normal pricing service companies.from brokers. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The prices received from brokers are reviewed for reasonableness by the third party asset managers and the Company. If the broker quotes are for foreign denominated securities, the quotes are converted to U.S. dollars using currency exchange rates from nationally recognized sources. In limited circumstances when broker prices are not available for private placements, the Company will value the securities using comparable market information.

The composition and valuation inputs for the presented fixed maturities categories are as follows:

·	U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury bonds and the fair value is based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields;

·	Obligations of U.S. states and political subdivisions are comprised of state and municipal bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

·	Corporate securities are primarily comprised of U.S. corporate and public utility bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

·	Asset-backed and mortgage-backed securities fair values are based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads;

Foreign government securities are comprised of global non-U.S. sovereign bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source;

Foreign corporate securities are comprised of global non-U.S. corporate bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source.

Other invested assets, at fair value, ~~are~~was categorized as Level ~~1, Quoted Prices~~3 at March 31, 2016 and December 31, 2015, since it represented a privately placed convertible preferred stock issued by an affiliate. The stock was received in ~~Active Markets~~exchange for ~~Identical Assets, since the securities are~~ shares of the ~~Company’s~~Company's parent, which ~~are actively traded on an exchange and the price is based~~were valued on a ~~quoted price.~~

public securities exchange on December 21, 2015. The ~~following table presents the~~ fair value ~~measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as~~ of the ~~period indicated:~~stock at March 31, 2016 and December 31, 2015 represents this exchange value.

Fair Value Measurement Using:
Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
Assets Inputs Inputs
(Dollars in thousands) March 31, 2015 (Level 1) (Level 2) (Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations $ 177,523 $ - $ 177,523 $ -
Obligations of U.S. States and political subdivisions 788,842 - 788,842 -
Corporate securities 1,971,236 - 1,968,583 2,653
Asset-backed securities 116,087 - 116,087 -
Mortgage-backed securities ��
Commercial 58,279 - 58,279 -
Agency residential 575,361 - 575,361 -
Non-agency residential 277 - 277 -
Foreign government securities 482,277 - 482,277 -
Foreign corporate securities 1,057,037 - 1,050,912 6,125
Total fixed maturities, market value 5,226,919 - 5,218,141 8,778

Fixed maturities, fair value 363 - 363 -
Equity securities, market value 16 16 - -
Equity securities, fair value 1,350,070 1,236,565 113,505 -
Other invested assets, fair value 1,691,275 1,691,275 - -

~~There were no transfers between Level 1 and Level 2 for the three months ended March 31, 2015.~~

The following table presents the fair value measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as of the period indicated:

			Fair Value Measurement Using:								Fair Value Measurement Using:
			Quoted Prices								Quoted Prices
			in Active		Significant						in Active		Significant
			Markets for		Other		Significant				Markets for		Other		Significant
			Identical		Observable		Unobservable				Identical		Observable		Unobservable
			Assets		Inputs		Inputs				Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2014		(Level 1)		(Level 2)		(Level 3)		March 31, 2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	136,836	$	-	$	136,836	$	-	$	370,046	$	-	$	370,046	$	-
Obligations of U.S. States and political subdivisions		824,472		-		824,472		-		702,076		-		702,076		-
Corporate securities		1,978,935		-		1,978,935		-		2,003,020		-		1,987,314		15,706
Asset-backed securities		94,823		-		94,823		-		168,235		-		168,235		-
Mortgage-backed securities
Commercial		59,268		-		50,671		8,597		63,428		-		63,428		-
Agency residential		598,117		-		598,117		-		784,713		-		784,713		-
Non-agency residential		315		-		315		-		132		-		132		-
Foreign government securities		537,087		-		537,087		-		491,461		-		491,461		-
Foreign corporate securities		1,063,558		-		1,056,392		7,166		996,800		-		996,204		596
Total fixed maturities, market value		5,293,411		-		5,277,648		15,763		5,579,911		-		5,563,609		16,302

Fixed maturities, fair value		1,509		-		1,509		-		1,870		-		1,870		-
Equity securities, market value		16		16		-		-		-		-		-		-
Equity securities, fair value		1,299,037		1,188,613		110,424		-		1,194,972		1,134,914		60,058		-
Other invested assets, fair value		1,655,311		1,655,311		-		-		1,773,214		-		-		1,773,214

There were no transfers between Level 1 and Level 2 for the three months ended March 31, 2016.

1314

The following table presents the fair value measurement levels for all assets, which the Company has recorded at fair value (fair and market value) as of the period indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	330,985	$	-	$	330,985	$	-
Obligations of U.S. States and political subdivisions		703,075		-		703,075		-
Corporate securities		1,968,558		-		1,964,625		3,933
Asset-backed securities		144,982		-		144,982		-
Mortgage-backed securities
Commercial		62,446		-		62,446		-
Agency residential		712,298		-		712,298		-
Non-agency residential		150		-		150		-
Foreign government securities		463,074		-		463,074		-
Foreign corporate securities		970,909		-		969,316		1,593
Total fixed maturities, market value		5,356,477		-		5,350,951		5,526

Fixed maturities, fair value		2,102		-		2,102		-
Equity securities, market value		-		-		-		-
Equity securities, fair value		1,215,377		1,153,310		62,067		-
Other invested assets, fair value		1,773,214		-		-		1,773,214

The following table presents the activity under Level 3, fair value measurements using significant unobservable inputs by asset type, for the periods indicated:

	Three Months Ended March 31, 2015											Three Months Ended March 31, 2014												Three Months Ended March 31, 2016									Three Months Ended March 31, 2015
	Corporate					Foreign						Asset-backed			Foreign			Non-agency						Corporate			Foreign						Corporate					Foreign
(Dollars in thousands)	Securities		CMBS			Corporate			Total			Securities			Corporate			RMBS			Total			Securities			Corporate			Total			Securities		CMBS			Corporate			Total
Beginning balance	$	-	$	8,597		$	7,166		$	15,763		$	3,533		$	481		$	4		$	4,018		$	3,933		$	1,593		$	5,526		$	-	$	8,597		$	7,166		$	15,763
Total gains or (losses) (realized/unrealized)
Included in earnings		2		-			57			59			18			1			1			20			8			(997	)		(989	)		2		-			57			59
Included in other comprehensive income (loss)		1		-			(1,098	)		(1,097	)		65			-			-			65			(6	)		-			(6	)		1		-			(1,098	)		(1,097	)
Purchases, issuances and settlements		1,940		-			-			1,940			(572	)		(9	)		(1	)		(582	)		11,771			-			11,771			1,940		-			-			1,940
Transfers in and/or (out) of Level 3		710		(8,597	)		-			(7,887	)		-			-			-			-			-			-			-			710		(8,597	)		-			(7,887	)
Ending balance	$	2,653	$	-		$	6,125		$	8,778		$	3,044		$	473		$	4		$	3,521		$	15,706		$	596		$	16,302		$	2,653	$	-		$	6,125		$	8,778

The amount of total gains or losses for the period
included in earnings (or changes in net assets)
attributable to the change in unrealized gains
or losses relating to assets still held at the
reporting date	$	-	$	-		$	-		$	-		$	-		$	-		$	-		$	-
The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date																								$	-		$	(997	)	$	(997	)	$	-	$	-		$	-		$	-

(Some amounts may not reconcile due to rounding.)

The net transfers from level 3, fair value measurements using significant unobservable inputs, of $7,887 thousand of investments for the three months ended March 31, 2015, primarily relate to securities that were priced using single non-binding broker quotes ~~and~~as of December 31, 2014. The securities were subsequently priced using a recognized pricing service as of March 31, 2015, and were ~~then~~ classified as level ~~2. There were no transfers from level~~2 as of that date.

The following table presents the activity under Level 3, fair value measurements using significant unobservable inputs by other invested assets, for the ~~three months ended March 31, 2014.~~periods indicated:

	Three months ended
	March 31,
(Dollars in thousands)	2016		2015
Other invested assets, fair value:
Beginning balance	$	1,773,214	$	-
Total gains or (losses) (realized/unrealized)
Included in earnings		-		-
Included in other comprehensive income (loss)		-		-
Purchases, issuances and settlements		-		-
Transfers in and/or (out) of Level 3		-		-
Ending balance	$	1,773,214	$	-

The amount of total gains or losses for the period included in earnings
(or changes in net assets) attributable to the change in unrealized
gains or losses relating to assets still held at the reporting date	$	-	$	-

(Some amounts may not reconcile due to rounding.)

5. ~~CAPITAL TRANSACTIONS~~

On July 9, 2014, the Company renewed its shelf registration statement on Form S-3ASR with the Securities and Exchange Commission (the “SEC”), as a Well Known Seasoned Issuer. This shelf registration statement can be used by Group to register common shares, preferred shares, debt securities, warrants, share purchase contracts and share purchase units; by Holdings to register debt securities and by Everest Re Capital Trust III (“Capital Trust III”) to register trust preferred securities.

6. CONTINGENCIES

In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the ~~Company’s~~Company's rights and obligations under insurance and reinsurance agreements. In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights. These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation. In all such matters, the Company believes that its positions are legally and commercially reasonable. The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses.

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

The Company has entered into separate annuity agreements with The Prudential Insurance of America (“("The ~~Prudential”~~Prudential") and an additional unaffiliated life insurance company in which the Company has either purchased annuity contracts or become the assignee of annuity proceeds that are meant to settle claim payment obligations in the future. In both instances, the Company would become contingently liable if either The Prudential or the unaffiliated life insurance company were unable to make payments related to the respective annuity contact.

The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:

	At March 31,		At December 31,		At March 31,		At December 31,
(Dollars in thousands)	2015		2014		2016		2015
The Prudential	$	142,618	$	142,653	$	141,945	$	142,427
Unaffiliated life insurance company		31,158		31,964		31,907		33,062

6. OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the components of comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Three Months Ended March 31, 2015									Three Months Ended March 31, 2014									Three Months Ended March 31, 2016							Three Months Ended March 31, 2015
(Dollars in thousands)	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax			Before Tax		Tax Effect			Net of Tax		Before Tax			Tax Effect			Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - temporary	$	15,572		$	(5,950	)	$	9,622		$	31,996		$	(11,199	)	$	20,797		$	29,956	$	(10,484	)	$	19,472	$	15,572		$	(5,950	)	$	9,622
URA(D) on securities - OTTI		9,735			(3,407	)		6,328			-			-			-			197		(69	)		128		9,735			(3,407	)		6,328
Reclassification of net realized losses (gains) included in net income (loss)		35,639			(11,974	)		23,665			1,997			(699	)		1,298			39,870		(13,955	)		25,915		35,639			(11,974	)		23,665
Foreign currency translation adjustments		(51,243	)		17,935			(33,308	)		(12,055	)		4,219			(7,836	)		22,977		(8,045	)		14,932		(51,243	)		17,935			(33,308	)
Benefit plan actuarial net gain (loss)																				-		-			-		-			-			-
Reclassification of amortization of net gain (loss) included in net income (loss)		2,467			(863	)		1,604			1,186			(415	)		771			2,062		(722	)		1,340		2,467			(863	)		1,604
Total other comprehensive income (loss)	$	12,170		$	(4,259	)	$	7,911		$	23,124		$	(8,094	)	$	15,030		$	95,062	$	(33,275	)	$	61,787	$	12,170		$	(4,259	)	$	7,911

(Some amounts may not reconcile due to rounding)

The following table presents details of the amounts reclassified from AOCI for the periods indicated:

	Three Months Ended							Three Months Ended
	March 31,						Affected line item within the statements of	March 31,						Affected line item within the statements of
AOCI component	2015			2014			operations and comprehensive income (loss)	2016			2015			operations and comprehensive income (loss)
(Dollars in thousands)
URA(D) on securities	$	35,639		$	1,997		Other net realized capital gains (losses)	$	39,870		$	35,639		Other net realized capital gains (losses)
		(11,974	)		(699	)	Income tax expense (benefit)		(13,955	)		(11,974	)	Income tax expense (benefit)
	$	23,665		$	1,298		Net income (loss)	$	25,915		$	23,665		Net income (loss)

Benefit plan net gain (loss)	$	2,467		$	1,186		Other underwriting expenses	$	2,062		$	2,467		Other underwriting expenses
		(863	)		(415	)	Income tax expense (benefit)		(722	)		(863	)	Income tax expense (benefit)
	$	1,604		$	771		Net income (loss)	$	1,340		$	1,604		Net income (loss)

(Some amounts may not reconcile due to rounding)

The following table presents the components of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:

Three Months Ended Twelve Months Ended
March 31, December 31,
(Dollars in thousands) 2015 2014

Beginning balance of URA (D) on securities $ 37,628 $ 55,457
Current period change in URA (D) of investments - temporary 33,287 (11,501 )
Current period change in URA (D) of investments - non-credit OTTI 6,328 (6,328 )
Ending balance of URA (D) on securities 77,243 37,628

Beginning balance of foreign currency translation adjustments 41,877 71,087
Current period change in foreign currency translation adjustments (33,308 ) (29,210 )
Ending balance of foreign currency translation adjustments 8,569 41,877

Beginning balance of benefit plan net gain (loss) (74,986 ) (38,896 )
Current period change in benefit plan net gain (loss) 1,604 (36,090 )
Ending balance of benefit plan net gain (loss) (73,382 ) (74,986 )

Ending balance of accumulated other comprehensive income (loss) $ 12,430 $ 4,519

	Three Months Ended			Twelve Months Ended
	March 31,			December 31,
(Dollars in thousands)	2016			2015

Beginning balance of URA (D) on securities	$	13,654		$	37,628
Current period change in URA (D) of investments - temporary		45,387			(30,257	)
Current period change in URA (D) of investments - non-credit OTTI		128			6,283
Ending balance of URA (D) on securities		59,169			13,654

Beginning balance of foreign currency translation adjustments		(12,701	)		41,877
Current period change in foreign currency translation adjustments		14,932			(54,578	)
Ending balance of foreign currency translation adjustments		2,231			(12,701	)

Beginning balance of benefit plan net gain (loss)		(63,089	)		(74,986	)
Current period change in benefit plan net gain (loss)		1,340			11,897
Ending balance of benefit plan net gain (loss)		(61,749	)		(63,089	)

Ending balance of accumulated other comprehensive income (loss)	$	(349	)	$	(62,136	)

~~8. CREDIT FACILITY - EXPIRED~~

Effective August 15, 2011, the Company entered into a three year, $150,000 thousand unsecured revolving credit facility, referred to as the “Holdings Credit Facility”, which expired on August 15, 2014. The Company decided not to renew the Holdings Credit Facility at expiration.

9.7. REINSURANCE AND TRUST AGREEMENTS

A subsidiary of the Company, Everest Re, has established a trust agreement, which effectively uses Everest ~~Re’s~~Re's investments as collateral, as security for assumed losses payable to a non-affiliated ceding company. At March 31, ~~2015,~~2016, the total amount on deposit in the trust account was ~~$258,324~~$288,380 thousand.

On April 24, 2014, the Company entered into two collateralized reinsurance agreements with Kilimanjaro Re Limited ~~(“Kilimanjaro”~~("Kilimanjaro"), a Bermuda based special purpose reinsurer, to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover specified named storm and earthquake events. The first agreement provides up to $250,000 thousand of reinsurance coverage from named storms in specified states of the Southeastern United States. The second agreement provides up to $200,000 thousand of reinsurance coverage from named storms in specified states of the Southeast, Mid-Atlantic and Northeast regions of the United States and Puerto Rico as well as reinsurance coverage from earthquakes in specified states of the Southeast, Mid-Atlantic, Northeast and West regions of the United States, Puerto Rico and British Columbia.

On November 18, 2014, the Company entered into a collateralized reinsurance agreement with Kilimanjaro Re to provide the Company with catastrophe reinsurance coverage. This agreement is a multi-year reinsurance contract which covers specified earthquake events. The agreement provides up to $500,000 thousand of reinsurance coverage from earthquakes in the United States, Puerto Rico and Canada.

On December 1, 2015 the Company entered into two collateralized reinsurance agreements with Kilimanjaro Re to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The first agreement provides up to $300,000 thousand of reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico and Canada. The second agreement provides up to $325,000 thousand of reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico and Canada.

Kilimanjaro has financed the various property catastrophe reinsurance coverage by issuing catastrophe bonds to unrelated, external investors. On April 24, 2014, Kilimanjaro issued $450,000 thousand of ~~variable rate~~ notes (“("Series 2014-1 ~~Notes”~~Notes"). On November 18, 2014, Kilimanjaro issued $500,000 thousand of ~~variable rate~~ notes (“("Series 2014-2 ~~Notes”~~Notes"). On December 1, 2015, Kilimanjaro issued $625,000 thousand of notes ("Series 2015-1 Notes). The proceeds from the issuance of the Series 2014-1 Notes, the Series 2014-2 Notes and the Series ~~2014-2~~2015-1 Notes are held in reinsurance trust throughout the duration of the applicable reinsurance agreements and invested solely in US government money market funds with a rating of at least ~~“AAAm”~~"AAAm" by Standard & ~~Poor’s.~~Poor's.

~~10.~~8. SENIOR NOTES

The table below displays ~~Holdings’~~Holdings' outstanding senior notes. Market value is based on quoted market prices, but due to limited trading activity, these senior notes are considered Level 2 in the fair value hierarchy.

					March 31, 2015				December 31, 2014								March 31, 2016				December 31, 2015
					Consolidated Balance				Consolidated Balance								Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Principal Amounts		Sheet Amount		Market Value		Sheet Amount		Market Value		Date Issued	Date Due	Principal Amounts		Sheet Amount		Market Value		Sheet Amount		Market Value
4.868% Senior notes	06/05/2014	06/01/2044	$	400,000	$	400,000	$	418,876	$	400,000	$	404,892	06/05/2014	06/01/2044		400,000	$	400,000	$	393,520	$	400,000	$	381,204
5.40% Senior notes	10/12/2004	10/15/2014		250,000		-		-		-		-

On June 5, 2014, Holdings issued $400,000 thousand of 30 year senior notes at 4.868%, which will mature on June 1, 2044. Interest will be paid semi-annually on June 1 and December 1 of each year. ~~The proceeds from the issuance have been used in part to pay off the $250,000 thousand of 5.40% senior notes which matured on October 15, 2014.~~

Interest expense incurred in connection with these senior notes is as follows for the periods indicated:

	Three Months Ended				Three Months Ended
	March 31,				March 31,
(Dollars in thousands)	2015		2014		2016		2015
Interest expense incurred	$	4,868	$	3,388	$	4,868	$	4,868

~~11.~~9. LONG TERM SUBORDINATED NOTES

The table below displays ~~Holdings’~~Holdings' outstanding fixed to floating rate long term subordinated notes. Market value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

Maturity Date

March 31, 2015

December 31, 2014

Maturity Date

March 31, 2016

December 31, 2015

Original

Consolidated Balance

Original

Consolidated Balance

(Dollars in thousands)

Date Issued

Principal Amount

Scheduled

Final

Sheet Amount

Market Value

Sheet Amount

Market Value

Date Issued

Principal Amount

Scheduled

Final

Sheet Amount

Market Value

Sheet Amount

Market Value

6.6% Long term subordinated notes

04/26/2007

400,000

05/15/2037

05/01/2067

238,365

239,227

238,364

246,312

6.6% Long term subordinated notes

04/26/2007

400,000

05/15/2037

05/01/2067

238,369

203,789

238,368

208,978

During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest will be at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007, subject to ~~Holdings’~~Holdings' right to defer interest on one or more occasions for up to ten consecutive years. During the floating rate interest period from May 15, 2017 through maturity, interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to ~~Holdings’~~Holdings' right to defer interest on one or more occasions for up to ten consecutive years. Deferred interest will accumulate interest at the applicable rate compounded semi-annually for periods prior to May 15, 2017, and compounded quarterly for periods from and including May 15, 2017.

Holdings can redeem the long term subordinated notes prior to May 15, 2017, in whole but not in part at the applicable redemption price, which will equal the greater of (a) 100% of the principal amount being redeemed and (b) the present value of the principal payment on May 15, 2017 and scheduled payments of interest that would have accrued from the redemption date to May 15, 2017 on the long term subordinated notes being redeemed, discounted to the redemption date on a semi-annual basis at a discount rate equal to the treasury rate plus an applicable spread of either 0.25% or 0.50%, in each case plus accrued and unpaid interest. Holdings may redeem the long term subordinated notes on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant. This covenant is for the benefit of certain senior note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the subordinated notes. Effective upon the maturity of the ~~Company’s~~Company's 5.40% senior notes on October 15, 2014,

the ~~Company’s~~Company's 4.868% senior notes, due on June 1, 2044, have become the ~~Company’s~~Company's long term indebtedness that ranks senior to the long term subordinated notes.

On March 19, 2009, Group announced the commencement of a cash tender offer for any and all of the 6.60% fixed to floating rate long term subordinated notes. Upon expiration of the tender offer, the Company had reduced its outstanding debt by $161,441 thousand.

Interest expense incurred in connection with these long term subordinated notes is as follows for the periods indicated:

	Three Months Ended				Three Months Ended
	March 31,				March 31,
(Dollars in thousands)	2015		2014		2016		2015
Interest expense incurred	$	3,937	$	3,937	$	3,937	$	3,937

~~12.~~

10. SEGMENT REPORTING

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and Accident and Health (“("A~~&H”~~&H") business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S. The International operation writes non-U.S. property and casualty reinsurance through Everest ~~Re’s~~Re's branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey. The Insurance operation writes property and casualty insurance directly and through general agents, brokers and surplus lines brokers mainly within the U.S. ~~and Canada.~~

These segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations. Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results.

Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses. Underwriting results are measured using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

The Company does not maintain separate balance sheet data for its operating segments. Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

The following tables present the underwriting results for the operating segments for the ~~period~~periods indicated:

Three Months Ended
U.S. Reinsurance March 31,
(Dollars in thousands) 2015 2014
Gross written premiums $ 562,647 $ 530,301
Net written premiums 240,694 251,521

Premiums earned $ 255,412 $ 218,191
Incurred losses and LAE 111,455 115,984
Commission and brokerage 58,364 40,136
Other underwriting expenses 11,529 9,482
Underwriting gain (loss) $ 74,064 $ 52,589

	Three Months Ended
U.S. Reinsurance	March 31,
(Dollars in thousands)	2016		2015
Gross written premiums	$	536,706	$	562,647
Net written premiums		223,428		240,694

Premiums earned	$	235,243	$	255,412
Incurred losses and LAE		116,170		111,455
Commission and brokerage		49,731		58,364
Other underwriting expenses		13,458		11,529
Underwriting gain (loss)	$	55,884	$	74,064

Three Months Ended
International March 31,
(Dollars in thousands) 2015 2014
Gross written premiums $ 333,615 $ 328,878
Net written premiums 121,681 141,457

Premiums earned $ 140,699 $ 145,004
Incurred losses and LAE 101,445 83,575
Commission and brokerage 33,999 29,169
Other underwriting expenses 8,115 7,837
Underwriting gain (loss) $ (2,860 ) $ 24,423

	Three Months Ended
International	March 31,
(Dollars in thousands)	2016		2015
Gross written premiums	$	238,478	$	333,615
Net written premiums		87,716		121,681

Premiums earned	$	113,173	$	140,699
Incurred losses and LAE		73,415		101,445
Commission and brokerage		26,110		33,999
Other underwriting expenses		7,823		8,115
Underwriting gain (loss)	$	5,825	$	(2,860	)

Three Months Ended
Insurance March 31,
(Dollars in thousands) 2015 2014
Gross written premiums $ 330,501 $ 225,276
Net written premiums 146,052 106,726

Premiums earned $ 124,951 $ 107,250
Incurred losses and LAE 95,980 78,487
Commission and brokerage 4,168 6,789
Other underwriting expenses 28,899 21,932
Underwriting gain (loss) $ (4,096 ) $ 42

	Three Months Ended
Insurance	March 31,
(Dollars in thousands)	2016			2015
Gross written premiums	$	354,720		$	330,501
Net written premiums		152,926			146,052

Premiums earned	$	133,509		$	124,951
Incurred losses and LAE		106,477			95,980
Commission and brokerage		(7,019	)		4,168
Other underwriting expenses		37,946			28,899
Underwriting gain (loss)	$	(3,895	)	$	(4,096	)

The following table reconciles the underwriting results for the operating segments to income (loss) before taxes as reported in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Three Months Ended						Three Months Ended
	March 31,						March 31,
(Dollars in thousands)	2015			2014			2016			2015
Underwriting gain (loss)	$	67,108		$	77,054		$	57,814		$	67,108
Net investment income		72,581			63,787			58,445			72,581
Net realized capital gains (losses)		21,296			(4,050	)		(66,377	)		21,296
Corporate expense		(1,609	)		(1,302	)		(2,336	)		(1,609	)
Interest, fee and bond issue cost amortization expense		(8,859	)		(7,436	)		(8,859	)		(8,859	)
Other income (expense)		15,833			(3,055	)		13,102			15,833
Income (loss) before taxes	$	166,350		$	124,998		$	51,789		$	166,350

The Company produces business in the U.S. and internationally. The net income deriving from assets residing in the individual foreign countries in which the Company writes business are not identifiable in the ~~Company’s~~Company's financial records. Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

	Three Months Ended				Three Months Ended
	March 31,				March 31,
(Dollars in thousands)	2015		2014		2016		2015
Canada	$	23,512	$	37,659
Canada gross written premiums					$	23,586	$	23,512

No other country represented more than 5% of the ~~Company’s~~Company's revenues.

~~13.~~11. RELATED-PARTY TRANSACTIONS

Parent

Group entered into a $250,000 thousand long term promissory note agreement with Holdings as of December 31, 2014. The note will mature on December 31, 2023 and has an interest rate of 1.72% that will be paid annually, on December 15^th of each year. This transaction is presented as a Note Receivable – Affiliated in the Consolidated Balance Sheets of Holdings. Interest income in the amount of $1,075 thousand was recorded by Holdings for the three months ended March 31, 2016, and March 31, 2015, respectively.

~~Group’s~~Group's Board of Directors approved an amended share repurchase program authorizing Group and/or its subsidiary Holdings to purchase ~~Group’s~~Group's common shares through open market transactions, privately negotiated transactions or both. The table below represents the amendments to the share repurchase program for the common shares approved for repurchase.

			Common Shares
			Authorized for
Amendment Date			Repurchase
(Dollars in thousands)

09/21/2004			5,000,000
07/21/2008			5,000,000
02/24/2010			5,000,000
02/22/2012			5,000,000
05/15/2013			5,000,000
11/19/2014			5,000,000
			30,000,000

~~As of March 31,~~Through December, 2015, Holdings had purchased and held 9,719,971 ~~common shares~~Common Shares of Group, which ~~it had~~were purchased in the open market between February 1, 2007 and March 8, 2011. ~~The table below represents the total purchase price for these common shares purchased.~~

~~(Dollars~~ in ~~thousands)~~
~~Total purchase price~~		$	~~835,371~~

In December, 2015, Holdings transferred the 9,719,971 Common Shares of Group, which it held as other invested assets, at fair value, valued at $1,773,214 thousand, to Preferred Holdings, an affiliated entity and subsidiary of Group, in exchange for 1,773.214 preferred shares of Preferred Holdings with a $1,000 thousand par value and 1.75% annual dividend rate. After the exchange, Holdings no longer holds any shares or has any ownership interest in Group.

Holdings ~~reports these purchases~~reported both its Parent Shares and preferred shares in Preferred Holdings, as other invested assets, fair value, in the consolidated balance sheets with changes in fair value re-measurement recorded in net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss). The following table presents the dividends received on ~~these common~~the preferred shares of preferred Holdings and on the Parent shares that are reported as net investment income in the consolidated statements of operations and comprehensive income (loss) for the period indicated.

	Three Months Ended				Three Months Ended
	March 31,				March 31,
(Dollars in thousands)	2015		2014		2016		2015
Dividends received	$	9,234	$	7,290
Dividends received on Parent shares					$	-	$	9,234
Dividends received on preferred stock of affiliate						7,758		-

Affiliated Companies

Everest Global Services, Inc. (“("Global ~~Services”~~Services"), an affiliate of Holdings, provides centralized management and home office services, through a management agreement, to Holdings and other affiliated companies within ~~Holdings’~~Holdings' consolidated structure. Services provided by Everest Global include executive managerial services, legal services, actuarial services, accounting services, information technology services and others.

The following table presents the expenses incurred by Holdings from services provided by Everest Global for the periods indicated.

	Three Months Ended				Three Months Ended
	March 31,				March 31,
(Dollars in thousands)	2015		2014		2016		2015
Expenses incurred	$	18,363	$	15,843	$	21,170	$	18,363

2122

Affiliates

The table below represents affiliated quota share reinsurance agreements ("whole account quota share") for all new and renewal business for the indicated coverage period:

(Dollars in thousands)
		Percent			Assuming		Single			Aggregate
Coverage Period	Ceding Company	Ceded			Company	Type of Business	Occurrence Limit			Limit

01/01/2002-12/31/2002	Everest Re		20.0	%	Bermuda Re	property / casualty business	$	-		$	-

01/01/2003-12/31/2003	Everest Re		25.0	%	Bermuda Re	property / casualty business		-			-

01/01/2004-12/31/2005	Everest Re		22.5	%	Bermuda Re	property / casualty business		-			-
	Everest Re		2.5	%	Everest International	property / casualty business		-			-

01/01/2006-12/31/2006	Everest Re		18.0	%	Bermuda Re	property business		125,000	(1)		-
	Everest Re		2.0	%	Everest International	property business		-			-

01/01/2006-12/31/2007	Everest Re		31.5	%	Bermuda Re	casualty business		-			-
	Everest Re		3.5	%	Everest International	casualty business		-			-

01/01/2007-12/31/2007	Everest Re		22.5	%	Bermuda Re	property business		130,000	(1)		-
	Everest Re		2.5	%	Everest International	property business		-			-

01/01/2008-12/31/2008	Everest Re		36.0	%	Bermuda Re	property / casualty business		130,000	(1)		275,000	(2)
	Everest Re		4.0	%	Everest International	property / casualty business		-			-

01/01/2009-12/31/2009	Everest Re		36.0	%	Bermuda Re	property / casualty business		150,000	(1)		325,000	(2)
	Everest Re		8.0	%	Everest International	property / casualty business		-			-

01/01/2010-12/31/2010	Everest Re		44.0	%	Bermuda Re	property / casualty business		150,000			325,000

01/01/2011-12/31/2011	Everest Re		50.0	%	Bermuda Re	property / casualty business		150,000			300,000

01/01/2012-12/31/2014	Everest Re		50.0	%	Bermuda Re	property / casualty business		100,000			200,000

01/01/2015	Everest Re		50.0	%	Bermuda Re	property / casualty business		162,500			325,000

01/01/2003-12/31/2006	Everest Re- Canadian Branch		50.0	%	Bermuda Re	property business		-			-
01/01/2007-12/31/2009	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		-			-
01/01/2010-12/31/2010	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2011-12/31/2011	Everest Re- Canadian Branch		60.0	%	Bermuda Re	property business		350,000	(3)		-
01/01/2012-12/31/2012	Everest Re- Canadian Branch		75.0	%	Bermuda Re	property / casualty business		206,250	(3)		412,500	(3)
01/01/2013-12/31/2013	Everest Re- Canadian Branch		75.0	%	Bermuda Re	property / casualty business		150,000	(3)		412,500	(3)
01/01/2014	Everest Re- Canadian Branch		75.0	%	Bermuda Re	property / casualty business		262,500	(3)		412,500	(3)

01/01/2012

Everest Canada

80.0

Everest Re- Canadian Branch

property business


(1)	The single occurance limit is applied before the loss cessions to either Bermuda Re or Everest International.
(2)	The aggregate limit is applied before the loss cessions to either Bermuda Re or Everest International.
(3)	Amounts shown are Canadian dollars.

For premiums earned and losses incurred for the period January 1, 2002 through December 31, 2002, Everest Re, Everest National Insurance Company and Everest Security Insurance Company entered into an Excess of Loss Reinsurance Agreement with Bermuda Re, covering workers’ compensation losses occurring on and after January 1, 2002, as respect to new, renewal and in force policies effective on that date through December 31, 2002. This agreement was commuted as of September 30, 2013. The table below represents Bermuda Re's liability limits for any losses per one occurrence.

Liability Limits
(Dollars in thousands) Exceeding Not to Exceed
Losses per one occurrence $ 100,000 $ 150,000

The table below represents loss portfolio transfer reinsurance agreements whereby net insurance exposures and reserves were transferred to an affiliate.

(Dollars in thousands)

Effective

Transferring

Assuming

% of Business or

Covered Period

Transferring

Assuming

% of Business or

Covered Period

Date

Company

Amount of Transfer

of Transfer

Company

Amount of Transfer

of Transfer

09/19/2000

Mt. McKinley

Bermuda Re

100%

All years

Mt. McKinley

Bermuda Re

100

All years

10/01/2001

Everest Re (Belgium Branch)

Bermuda Re

100%

All years

Everest Re (Belgium Branch)

Bermuda Re

100

All years

10/01/2008

Everest Re

Bermuda Re

747,022

01/01/2002-12/31/2007

Everest Re

Bermuda Re

747,022

01/01/2002-12/31/2007

On July 13, 2015, the Company sold Mt. McKinley to Clearwater Insurance Company, a Delaware domiciled insurance company. As of that date, Mt. McKinley is no longer deemed an affiliated company or related party.

The following tables summarize the premiums and losses ceded by the Company to Bermuda Re and Everest International, respectively, and premiums and losses assumed by the Company from Everest Canada and Lloyd's syndicate 2786 for the periods indicated:

	Three Months Ended				Three Months Ended
Bermuda Re	March 31,				March 31,
(Dollars in thousands)	2015		2014		2016		2015
Ceded written premiums	$	539,033	$	518,017	$	516,683	$	539,033
Ceded earned premiums		554,051		479,813		538,953		554,051
Ceded losses and LAE (a)		295,131		238,501		290,476		295,131

	Three Months Ended
Everest International	March 31,
(Dollars in thousands)	2016			2015
Ceded written premiums	$	(31	)	$	(2	)
Ceded earned premiums		(24	)		41
Ceded losses and LAE		142			(822	)

Three Months Ended
Everest International March 31,
(Dollars in thousands) 2015 2014
Ceded written premiums $ (2 ) $ (115 )
Ceded earned premiums 41 (74 )
Ceded losses and LAE (822 ) 1,884

	Three Months Ended
Everest Canada	March 31,
(Dollars in thousands)	2016		2015
Assumed written premiums	$	10,199	$	6,664
Assumed earned premiums		10,454		8,699
Assumed losses and LAE		6,987		4,729

Three Months Ended
Everest Canada March 31,
(Dollars in thousands) 2015 2014
Assumed written premiums $ 6,664 $ 4,010
Assumed earned premiums 8,699 4,688
Assumed losses and LAE 4,729 3,292

	Three Months Ended
Lloyd's Syndicate 2786	March 31,
(Dollars in thousands)	2016		2015
Assumed written premiums	$	696	$	-
Assumed earned premiums		88		-
Assumed losses and LAE		-		-

(a) Ceded losses and LAE include the Mt. McKinley loss portfolio transfer that constitutes losses ceded under retroactive reinsurance and therefore, in accordance with FASB guidance, aamortization of deferred gain on retroactive reinsurance is reflected in other ~~expenses~~income on the consolidated statements of operations and comprehensive income (loss). Upon the sale of Mt. McKinley, the value of the remaining deferred gain on retroactive reinsurance was included in the calculation of the realized gain on sale of subsidiary.

Everest Re sold net assets of its UK branch to Bermuda Re and provided Bermuda Re with a reserve indemnity agreement allowing for indemnity payments of up to 90% of ₤25.0 million of the excess of 2002 and prior reserves, provided that any recognition of profit from the reserves for 2002 and prior underwriting years is taken into account.

2324

Effective February 27, 2013, Group established a new subsidiary, Mt. Logan Re, which is a Class 3 insurer based in Bermuda. Effective July 1, 2013, Mt. Logan Re established separate segregated accounts for its business activity, which will invest in a diversified set of catastrophe exposures.

The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts and assumed by the Company from Mt. Logan ~~Re.~~

Three Months Ended
Mt. Logan Re March 31,
(Dollars in thousands) 2015 2014
Ceded written premiums $ 61,670 $ 28,366
Ceded earned premiums 38,683 17,837
Ceded losses and LAE 8,314 5,143

Assumed written premiums 3,984 9,919
Assumed earned premiums 3,984 2,106
Assumed losses and LAE - -
Re segregated accounts.

	Three Months Ended
Mt. Logan Re Segregated Accounts	March 31,
(Dollars in thousands)	2016		2015
Ceded written premiums	$	40,931	$	61,670
Ceded earned premiums		34,872		38,683
Ceded losses and LAE		9,098		8,314

Assumed written premiums		3,560		3,984
Assumed earned premiums		3,560		3,984
Assumed losses and LAE		-		-

~~14.~~

12.RETIREMENT BENEFITS

The Company maintains both qualified and non-qualified defined benefit pension plans and a retiree health plan for its U.S. employees employed prior to April 1, 2010.

Net periodic benefit cost for U.S. employees included the following components for the periods indicated:

Pension Benefits	Three Months Ended						Three Months Ended
	March 31,						March 31,
(Dollars in thousands)	2015			2014			2016			2015
Service cost	$	2,940		$	2,460		$	2,897		$	2,940
Interest cost		2,457			2,542			2,361			2,457
Expected return on plan assets		(2,903	)		(2,823	)		(2,484	)		(2,903	)
Amortization of prior service cost		5			13			-			5
Amortization of net (income) loss		2,251			1,091			2,014			2,251
Net periodic benefit cost	$	4,750		$	3,283		$	4,788		$	4,750

Other Benefits	Three Months Ended
	March 31,
(Dollars in thousands)	2016		2015
Service cost	$	438	$	401
Interest cost		296		263
Amortization of net (income) loss		48		211
Net periodic benefit cost	$	782	$	875

Other Benefits Three Months Ended
March 31,
(Dollars in thousands) 2015 2014
Service cost $ 401 $ 407
Interest cost 263 342
Amortization of net (income) loss 211 82
Net periodic benefit cost $ 875 $ 831

The Company did not make any contributions to the qualified pension benefit plan for the three months ended March 31, ~~2015~~2016 and ~~2014.~~2015.

~~15.~~

13.INCOME TAXES

The Company is domiciled in the United States and has subsidiaries domiciled within the United States with significant branches in Canada and Singapore. The ~~Company’s~~Company's non-U.S. branches are subject to income taxation at varying rates in their respective domiciles.

For interim reporting periods, the company is generally required to use the annualized effective tax rate ~~(“AETR”~~("AETR") method, as prescribed by ASC 740-270, Interim Reporting, to calculate its income tax provision. Under this method, the AETR is applied to the interim year-to-date pre-tax income to determine the income tax expense or benefit for the year-to-date period. The income tax expense or benefit for a quarter represents the difference between the year-to-date income tax expense or benefit for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the ~~Company’s~~Company's annual pre-tax income and AETR.

~~16.~~14. SUBSEQUENT EVENTS

On April 23, 2015, the Company entered into an agreement to sell all of the outstanding shares of capital stock of Mt. McKinley Insurance Company (“Mt. McKinley”), a Delaware domiciled insurance company and wholly-owned subsidiary of the Company to Clearwater Insurance Company, a Delaware domiciled insurance company. The purchase price shall be paid in cash and based on the statutory book value of Mt. McKinley as of the closing date, which is expected to be approximately $20,000 thousand. The Company expects to recognize a realized gain of approximately $61,000 thousand on the sale of Mt. McKinley.

The ~~transaction is subject~~Company has evaluated known recognized and non-recognized subsequent events. The Company does not have any subsequent events to ~~receipt of insurance regulatory approvals and satisfaction of other customary closing conditions.~~

The transaction meets the criteria for Held for Sale accounting. In accordance with the guidance, the table below details the approximate assets and liabilities associated with the business classified as Held for Sale.

report.

(Dollars in thousands)
Investments and cash $ 17,000
Reinsurance recoverables 146,000
Deferred tax asset 35,000
Other assets 1,000
Total assets held for sale $ 199,000

Reserve for losses and loss adjustment expenses $ 142,000
Deferred gain on retroactive reinsurance 97,000
Other liabilities 1,000
Total liabilities held for sale $ 240,000

Net liabilities held for sale $ (41,000 )

2526

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Industry Conditions.

The worldwide reinsurance and insurance businesses are highly competitive, as well as cyclical by product and market. As such, financial results tend to fluctuate with periods of constrained availability, high rates and strong profits followed by periods of abundant capacity, low rates and constrained profitability. Competition in the types of reinsurance and insurance business that we underwrite is based on many factors, including the perceived overall financial strength of the reinsurer or insurer, ratings of the reinsurer or insurer by A.M. Best and/or Standard & ~~Poor’s,~~Poor's, underwriting expertise, the jurisdictions where the reinsurer or insurer is licensed or otherwise authorized, capacity and coverages offered, premiums charged, other terms and conditions of the reinsurance and insurance business offered, services offered, speed of claims payment and reputation and experience in lines written. Furthermore, the market impact from these competitive factors related to reinsurance and insurance is generally not consistent across lines of business, domestic and international geographical areas and distribution channels.

We compete in the U.S. and international reinsurance and insurance markets with numerous global competitors. Our competitors include independent reinsurance and insurance companies, subsidiaries or affiliates of established worldwide insurance companies, reinsurance departments of certain insurance companies, domestic and international underwriting operations, including underwriting syndicates at ~~Lloyd’s~~Lloyd's of London and certain government sponsored risk transfer vehicles. Some of these competitors have greater financial resources than we do and have established long term and continuing business relationships, which can be a significant competitive advantage. In addition, the lack of strong barriers to entry into the reinsurance business and recently, the securitization of reinsurance and insurance risks through capital markets provide additional sources of potential reinsurance and insurance capacity and competition.

Worldwide insurance and reinsurance market conditions continued to be very competitive, particularly in the property catastrophe and casualty reinsurance lines of business. Generally, there was ample insurance and reinsurance capacity relative to demand, as well as, additional capital from the capital markets through insurance linked financial instruments. These financial instruments such as side cars, catastrophe bonds and collateralized reinsurance funds, provide capital markets with access to insurance and reinsurance risk exposure. The capital markets demand for these products is being primarily driven by the current low interest environment and the desire to achieve greater risk diversification and potentially higher returns on their investments. This increased competition is generally having a negative impact on rates, terms and conditions; however, the impact varies widely by market and coverage.

Rates tend to fluctuate by specific region and products, particularly areas recently impacted by large catastrophic events. ~~During the second and third quarters of 2013, Canada experienced historic flooding in Alberta and Toronto, which resulted in higher catastrophe rates in these areas during 2014.~~ Although there ~~were~~have been flooding and wind storm events and earthquakes in ~~Europe and Asia in~~parts of the ~~latter part of 2013,~~world, the overall 2013, 2014 and 2015 catastrophe losses for the industry were considerably lower than average. This lower level of losses, combined with increased competition has resulted in downward pressure on insurance and reinsurance rates in certain geographical areas.

During 2015, we initiated a strategic build out of our insurance platform through the investment in key leadership hires which in turn has brought significant underwriting talent and stronger direction in achieving our insurance program strategic goals of increased volume and improved underwriting results. Recent growth is coming from highly diversified areas ~~during 2014. Catastrophe results during 2014~~including newly launched lines of business, as well as, product and ~~the first quarter~~geographic expansion in existing lines of ~~2015 were also generally benign, which could have~~business. We are building a ~~negative impact on worldwide regional catastrophe markets for the balance~~world-class insurance platform capable of ~~2015.~~offering products across lines and geographies, complementing our leading global reinsurance franchise.

Overall, we believe that given our size, strong ratings, distribution system, reputation, expertise and capital market vehicle activity the current marketplace conditions provide profit opportunities. We continue to employ our strategy of targeting business that offers the greatest profit potential, while maintaining balance and diversification in our overall portfolio.

2627

Financial Summary.

We monitor and evaluate our overall performance based upon financial results. The following table displays a summary of the consolidated net income (loss), ratios and ~~stockholder’s~~stockholder's equity for the periods indicated:

Three Months Ended Percentage
March 31, Increase/
(Dollars in millions) 2015 2014 (Decrease)
Gross written premiums $ 1,226.8 $ 1,084.5 13.1 %
Net written premiums 508.4 499.7 1.7 %

REVENUES:
Premiums earned $ 521.1 $ 470.4 10.8 %
Net investment income 72.6 63.8 13.8 %
Net realized capital gains (losses) 21.3 (4.1 ) NM
Other income (expense) 15.8 (3.1 ) NM
Total revenues 630.8 527.1 19.7 %

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses 308.9 278.0 11.1 %
Commission, brokerage, taxes and fees 96.5 76.1 26.9 %
Other underwriting expenses 48.5 39.3 23.7 %
Corporate expense 1.6 1.3 23.6 %
Interest, fee and bond issue cost amortization expense 8.9 7.4 19.1 %
Total claims and expenses 464.4 402.1 15.5 %

INCOME (LOSS) BEFORE TAXES 166.4 125.0 33.1 %
Income tax expense (benefit) 50.4 38.5 30.8 %
NET INCOME (LOSS) 115.9 86.5 34.1 %

RATIOS: Point Change
Loss ratio 59.3 % 59.1 % 0.2
Commission and brokerage ratio 18.5 % 16.2 % 2.3
Other underwriting expense ratio 9.3 % 8.3 % 1.0
Combined ratio 87.1 % 83.6 % 3.5

At At Percentage
March 31, December 31, Increase/
(Dollars in millions) 2015 2014 (Decrease)
Balance sheet data:
Total investments and cash $ 9,536.7 $ 9,572.6 -0.4 %
Total assets 16,408.3 16,322.3 0.5 %
Loss and loss adjustment expense reserves 7,805.0 7,843.9 -0.5 %
Total debt 638.4 638.4 0.0 %
Total liabilities 11,707.8 11,749.6 -0.4 %
Stockholder's equity 4,700.5 4,572.7 2.8 %

(NM, not meaningful)
(Some amounts may not reconcile due to rounding)

	Three Months Ended						Percentage
	March 31,						Increase/
(Dollars in millions)	2016			2015			(Decrease)
Gross written premiums	$	1,129.9		$	1,226.8			-7.9	%
Net written premiums		464.1			508.4			-8.7	%

REVENUES:
Premiums earned	$	481.9		$	521.1			-7.5	%
Net investment income		58.4			72.6			-19.5	%
Net realized capital gains (losses)		(66.4	)		21.3		NM
Other income (expense)		13.1			15.8			-17.2	%
Total revenues		487.1			630.8			-22.8	%

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		296.1			308.9			-4.1	%
Commission, brokerage, taxes and fees		68.8			96.5			-28.7	%
Other underwriting expenses		59.2			48.5			22.0	%
Corporate expense		2.3			1.6			45.2	%
Interest, fee and bond issue cost amortization expense		8.9			8.9			0.0	%
Total claims and expenses		435.3			464.4			-6.3	%

INCOME (LOSS) BEFORE TAXES		51.8			166.4			-68.9	%
Income tax expense (benefit)		12.9			50.4			-74.5	%
NET INCOME (LOSS)	$	38.9		$	115.9			-66.4	%

RATIOS:							Point Change
Loss ratio		61.4	%		59.3	%		2.1
Commission and brokerage ratio		14.3	%		18.5	%		(4.2	)
Other underwriting expense ratio		12.3	%		9.3	%		3.0
Combined ratio		88.0	%		87.1	%		0.9

	At			At			Percentage
	March 31,			December 31,			Increase/
(Dollars in millions)		2016			2015		(Decrease)
Balance sheet data:
Total investments and cash	$	9,622.7		$	9,516.3			1.1	%
Total assets		16,793.9			16,700.6			0.6	%
Loss and loss adjustment expense reserves		7,992.3			7,940.7			0.6	%
Total debt		638.4			638.4			0.0	%
Total liabilities		11,757.2			11,769.4			-0.1	%
Stockholder's equity		5,036.7			4,931.2			2.1	%

(Some amounts may not reconcile due to rounding)
(NM - Not meaningful)

$481.9 million for the three months ended March 31, ~~2014. The variance between the increase in gross written premiums~~2016, compared to the increase in net written premiums is primarily due to a higher utilization of reinsurance for the crop business and for the quota share contracts, which increased due to the changes in the mix of business. Premiums earned increased by 10.8% to $521.1 million for the three months ended March 31, ~~2015, compared to $470.4 million for the three months ended March 31, 2014.~~2015. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Net Investment Income. Net investment income ~~increased~~decreased by ~~13.8%~~19.5% to $58.4 million for the three months ended March 31, 2016, compared with net investment income of $72.6 million for the three months ended March 31, ~~2015, compared with net investment income of $63.8 million for the three months ended March 31, 2014.~~2015. Net pre-tax investment income, as a percentage of average invested assets, was 2.5% for the three months ended March 31, 2016 compared to 3.5% for the three months ended March 31, ~~2015, compared to 3.0%~~ 2015. The decline in income and yield was primarily the result of a decrease in our limited partnership income and lower reinvestment rates for the fixed income portfolios.

Net Realized Capital Gains (Losses). Net realized capital losses were $66.4 million and net realized capital gains were $21.3 million for the three months ended March 31, ~~2014.~~ 2016 and 2015, respectively. The ~~increase in income~~$66.4 million was comprised of $24.8 million of net losses from sales on our fixed maturity and ~~yield for the three months ended March 31, 2015 compared to the three months ended March 31, 2014 was primarily the result~~equity securities, $23.0 million of ~~an increase in our limited partnership income~~other-than-temporary impairments and ~~an increase in dividends~~$18.6 million of losses from ~~shares held of the parent.~~

fair value re-measurements on fixed maturity and equity securities. ~~Net Realized Capital Gains (Losses).~~ ~~Net~~The net realized capital gains ~~were~~of $21.3 million for the three months ended March 31, 2015 ~~and net realized capital losses~~ were ~~$4.1 million for the three months ended March 31, 2014. The $21.3 million was~~ comprised of $57.0 million of gains from fair value re-measurements on fixed maturity securities, equity securities and other invested assets, partially offset by $24.1 million of other-than-temporary impairments and $11.6 million of losses from sales on our fixed ~~maturity~~maturities and equity securities. ~~The net realized capital losses~~

Other Income (Expense). We recorded other income of ~~$4.1~~$13.1 and $15.8 million for the three months ended March 31, ~~2014 were the result of $2.4 million of net realized capital losses from sales on our fixed maturity~~2016 and ~~equity securities and $1.7 million of losses from fair value re-measurements.~~2015

~~Other Income (Expense).~~ ~~We recorded other income of $15.8 million for the three months ended March 31, 2015 and other expense of $3.1 million for the three months ended March 31, 2014.~~, respectively. The changes were primarily the result of fluctuations in foreign currency exchange rates for the corresponding periods.

Claims and Expenses.

Incurred Losses and Loss Adjustment Expenses. The following table presents our incurred losses and loss adjustment expenses ~~(“LAE”~~("LAE") for the periods indicated.

Three Months Ended March 31,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2015
Attritional (a) $ 312.8 60.1 % $ (1.7 ) -0.4 % $ 311.1 59.7 %
Catastrophes - 0.0 % (2.2 ) -0.4 % (2.2 ) -0.4 %
Total $ 312.8 60.1 % $ (3.9 ) -0.8 % $ 308.9 59.3 %

2014
Attritional (a) $ 281.3 59.8 % $ (0.6 ) -0.1 % $ 280.7 59.7 %
Catastrophes - 0.0 % (2.7 ) -0.6 % (2.7 ) -0.6 %
Total $ 281.3 59.8 % $ (3.3 ) -0.7 % $ 278.0 59.1 %

Variance 2015/2014
Attritional (a) $ 31.5 0.3 pts $ (1.1 ) (0.3 ) pts $ 30.4 - pts
Catastrophes - - pts 0.5 0.2 pts 0.5 0.2 pts
Total $ 31.5 0.3 pts $ (0.6 ) (0.1 ) pts $ 30.9 0.2 pts

(a) Attritional losses exclude catastrophe losses.
(Some amounts may not reconcile due to rounding.)

~~premiums earned.~~2016 Taiwan earthquake ($5.2 million). There were no current year catastrophe losses for the three months ended March 31, ~~2015 and 2014.~~2015.

Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees ~~increased~~decreased by ~~26.9%~~28.7% to ~~$96.5~~$68.8 million for the three months ended March 31, ~~2015~~2016 compared to ~~$76.1~~$96.5 million for the three months ended March 31, 2015. The decline was primarily due to the impact of the decline in premiums earned, changes in the mix of business and the impact of affiliated quota share agreements.

Other Underwriting Expenses. Other underwriting expenses increased 22.0% to $59.2 million for the three months ended March 31, ~~2014. These changes were primarily due~~2016, compared to ~~the impact of the increase in premiums earned, higher contingent commissions and changes in the mix of business.~~

~~Other Underwriting Expenses.~~ ~~Other underwriting expenses were~~ $48.5 ~~million and $39.3~~ million for the three months ended March 31, ~~2015 and 2014, respectively.~~2015. The increase ~~in other underwriting expenses~~ was ~~mainly~~ due to the ~~impact~~costs incurred related to the expansion of the ~~increase in premiums earned.~~insurance business.

Corporate Expenses. Corporate expenses, which are general operating expenses that are not allocated to segments, were ~~comparable at $1.6~~$2.3 million and ~~$1.3~~$1.6 million for the three months ended March 31, 2016 and 2015, respectively. The increase in corporate expense was mainly due to increased compensation and ~~2014, respectively.~~benefit expense.

Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense was $8.9 million ~~and $7.4 million~~ for the three months ended March 31, ~~2015~~2016 and 2014, respectively. The increase was primarily due to the issuance of $400.0 million of senior notes in June, 2014, partially offset by the maturity of $250.0 million of senior notes on October 15, 2014.2015.

Income Tax Expense (Benefit). Income tax ~~expense was~~expenses were $12.9 million and $50.4 million ~~and $38.5 million~~ for the three months ended March 31, 2016 and 2015, ~~and 2014,~~ respectively. ~~Income~~Income tax expense is primarily a function of the geographic location of the ~~Company’s~~Company's pre-tax income and the statutory tax rates in those jurisdictions, as affected by tax-exempt investment ~~income.~~income and as calculated under the annualized effective tax rate ("AETR") method. Variations in the income tax expense generally result from changes in the relative levels of pre-tax income, including the impact of catastrophe losses and net capital gains (losses), among jurisdictions with different tax rates. The ~~increase~~decrease in income tax expense for the three months ended March 31, ~~2015~~ 2016 compared to the three months ended March 31, ~~2014~~ 2015 was primarily due to ~~higher net~~the realized capital ~~gains.~~losses and lower net investment income.

Stockholder's Equity.

~~Stockholders’~~Stockholders' equity increased by ~~$127.8~~$105.5 million to ~~$4,700.5~~$5,036.7 million at March 31, ~~2015~~ 2016 from ~~$4,572.7~~$4,931.2 million at December 31, ~~2014,~~2015, principally as a result of ~~$115.9 million of net income, $39.6~~$45.5 million of net unrealized appreciation on investments, net of tax, ~~$4.0~~$38.9 million of net income, $14.9 million of net foreign currency translation adjustments, $4.8 million of share-based compensation transactions and ~~$1.6~~$1.3 million of net benefit plan obligation ~~adjustments, partially offset by $33.3 million of net foreign currency translation~~ adjustments.

Consolidated Investment Results

Net Investment Income.

The following table shows the components of net investment income for the periods indicated:

The following ~~tables show~~table shows a comparison of various investment yields for the periods indicated:

The following table presents the composition of our net realized capital gains (losses) for the periods indicated:

Net realized capital losses were $66.4 million and net realized capital gains were $21.3 million for the three months ended March 31, 2016, and 2015, ~~and~~respectively. For the three months ended March 31, 2016, we recorded $24.8 million of net realized capital losses ~~were $4.1~~from sales of fixed maturity and equity securities, $23.0 million of other-than-temporary impairments and $18.6 million of net realized capital losses due to fair value re-measurements on fixed maturities and equity securities. The fixed maturity and equity sales for the three months ended March 31, ~~2014.~~2016 related primarily to adjusting the portfolios for overall market changes and individual credit shifts. For the three months ended March 31, 2015, we recorded $57.0 million of net realized capital gains due to fair value re-measurements on fixed maturity securities, equity securities and other invested assets, partially offset by $24.1 million of other-than-temporary impairments and $11.6 million of net realized capital losses from sales of fixed maturity and equity securities. The fixed maturity and equity sales for the three months ended March 31, 2015 related primarily to adjusting the portfolios for overall market changes and individual credit shifts. For the three months ended March 31, 2014, we recorded $2.4 million of net realized capital losses from sales on our fixed maturity and equity securities and $1.7 million of losses from fair value re-measurements.

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S. The International operation writes non-U.S. property and casualty reinsurance through Everest ~~Re’s~~Re's branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey. The Insurance operation writes property and casualty insurance directly and through general agents, brokers and surplus lines brokers mainly within the ~~U.S and Canada.~~U.S.

Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses. We measure our underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

Our loss and LAE reserves are ~~our~~management's best estimate of our ultimate liability for unpaid claims. We re-evaluate our estimates on an ongoing basis, including all prior period reserves, taking into consideration all available information and, in particular, recently reported loss claim experience and trends related to prior periods. Such re-evaluations are recorded in incurred losses in the period in which the re-evaluation is made.

The following discusses the underwriting results for each of our segments for the periods indicated:

The following table presents the underwriting results and ratios for the U.S. Reinsurance segment for the periods indicated.

Premiums. Gross written premiums ~~increased~~decreased by ~~6.1%~~4.6% to $536.7 million for the three months ended March 31, 2016 from $562.6 million for the three months ended March 31, 2015 ~~from $530.3 million for the three months ended March 31, 2014,~~, primarily due to ~~an increase in treaty property and catastrophe business, partially offset by~~ a decline in treaty casualty business. Net written premiums decreased by ~~4.3%~~7.2% to $223.4 million for the three months ended March 31, 2016 compared to $240.7 million for the three months ended March 31, 2015 ~~compared to $251.5 million for the three months ended March 31, 2014.~~. The ~~variance~~difference between the ~~increase~~change in gross written premiums compared to the ~~decrease~~change in net written premiums is primarily due to a ~~higher~~varying utilization of reinsurance primarily related to affiliated quota share contracts. Premiums earned ~~increased 17.1%~~decreased 7.9% to ~~$255.4~~$235.2 million ~~for the~~

~~three months ended March 31, 2015 compared to $218.2 million~~ for the three months ended March 31, ~~2014.~~2016 compared to $255.4 million for the three months ended March 31, 2015. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Incurred Losses and LAE. The following table presents the incurred losses and LAE for the U.S. Reinsurance segment for the periods indicated.

Incurred losses ~~decreased~~increased by ~~3.9%~~4.2% to $116.2 million for the three months ended March 31, 2016 compared to $111.5 million for the three months ended March 31, 2015 ~~compared to $116.0 million for the three months ended March 31, 2014,~~, primarily due to ~~a decrease~~$6.0 million of favorable development on prior year losses in ~~losses on treaty casualty business and~~2015 which did not recur to the ~~impact of changes~~same level in ~~affiliated quota share agreements, partially offset by the impact of the increase in earned premiums.~~2016. There were no current year catastrophe losses for the three months ended March 31, 2016 and 2015.

Segment Expenses. Commission and brokerage decreased by 14.8% to $49.7 million for the three months ended March 31, 2016 compared to $58.4 million for the three months ended March 31, 2015. This decline was primarily due to the impact of the decrease in premiums earned and ~~2014.~~

the impact of affiliated quota share contracts. Segment ~~Expenses.~~ ~~Commission and brokerage~~other underwriting expenses increased ~~by 45.4%~~ to ~~$58.4~~$13.5 million for the three months ended March 31, ~~2015 compared to $40.1~~2016 from $11.5 million for the three months ended March 31, ~~2014. This variance~~2015. The increase was primarily due to the impact of ~~the increase in premiums earned, higher contingent commissions and~~ changes in the mix of business. Segment other underwriting expenses increased to $11.5 million for the three months ended March 31, 2015 from $9.5 million for the three months ended March 31, 2014 due primarily to the impact of the increase in premiums earned.business and higher compensation and benefit plan costs.

The following table presents the underwriting results and ratios for the International segment for the periods indicated.

Premiums. Gross written premiums ~~increased~~decreased by ~~1.4%~~28.5% to $238.5 million for the three months ended March 31, 2016 compared to $333.6 million for the three months ended March 31, 2015 ~~compared to $328.9 million for the three months ended March 31, 2014,~~, primarily due to ~~new~~the decline in Latin American and Asian business, reductions in premiums related to quota share ~~contracts, partially offset by~~agreements and the negative impact of approximately ~~$12.4~~$14.8 million from the movement of foreign exchange rates. Net written premiums decreased by ~~14.0%~~27.9% to $87.7 million for the three months ended March 31, 2016 compared to $121.7 million for the three months ended March 31, 2015 ~~compared~~, which is consistent with the change in gross written premiums. Premiums earned decreased 19.6% to ~~$141.5~~$113.2 million for the three months ended March 31, ~~2015. The variance of the change in gross written premiums~~ 2016 compared ~~to the change in net written premiums is due to a higher utilization of reinsurance related to the new quota share contracts. Premiums earned decreased 3.0%~~ to $140.7 million for the three months ended March 31, 2015 ~~compared to $145.0 million for the three months ended March 31, 2015.~~. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Incurred Losses and LAE. The following table presents the incurred losses and LAE for the International segment for the periods indicated.

Three Months Ended March 31,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2015
Attritional $ 99.7 70.9 % $ 1.6 1.1 % $ 101.3 72.0 %
Catastrophes - 0.0 % 0.2 0.1 % 0.2 0.1 %
Total segment $ 99.7 70.9 % $ 1.7 1.2 % $ 101.4 72.1 %

2014
Attritional $ 84.7 58.4 % $ 0.2 0.2 % $ 85.0 58.6 %
Catastrophes - 0.0 % (1.4 ) -1.0 % (1.4 ) -1.0 %
Total segment $ 84.7 58.4 % $ (1.1 ) -0.8 % $ 83.6 57.6 %

Variance 2015/2014
Attritional $ 15.0 12.5 pts $ 1.4 0.9 pts $ 16.3 13.4 pts
Catastrophes - - pts 1.6 1.1 pts 1.6 1.1 pts
Total segment $ 15.0 12.5 pts $ 2.8 2.0 pts $ 17.9 14.5 pts

(Some amounts may not reconcile due to rounding.)

	Three Months Ended March 31,
	Current			Ratio %/				Prior			Ratio %/				Total			Ratio %/
(Dollars in millions)	Year			Pt Change				Years			Pt Change				Incurred			Pt Change
2016
Attritional	$	71.4			63.1	%		$	(2.8	)		-2.5	%		$	68.6			60.6	%
Catastrophes		5.2			4.6	%			(0.4	)		-0.3	%			4.8			4.3	%
Total segment	$	76.6			67.7	%		$	(3.2	)		-2.8	%		$	73.4			64.9	%
						��
2015
Attritional	$	99.7			70.9	%		$	1.6			1.1	%		$	101.3			72.0	%
Catastrophes		-			0.0	%			0.2			0.1	%			0.2			0.1	%
Total segment	$	99.7			70.9	%		$	1.7			1.2	%		$	101.4			72.1	%

Variance 2016/2015
Attritional	$	(28.3	)		(7.8	)	pts	$	(4.4	)		(3.6	)	pts	$	(32.7	)		(11.4	)	pts
Catastrophes		5.2			4.6		pts		(0.6	)		(0.4	)	pts		4.6			4.2		pts
Total segment	$	(23.1	)		(3.2	)	pts	$	(4.9	)		(4.0	)	pts	$	(28.0	)		(7.2	)	pts

(Some amounts may not reconcile due to rounding.)

Segment Expenses. Commission and brokerage ~~increased 16.6%~~decreased 23.2% to ~~$34.0~~$26.1 million for the three months ended March 31, ~~2015~~ 2016 compared to ~~$29.2~~$34.0 million for the three months ended March 31, ~~2014.~~ 2015. The ~~increase~~decrease was primarily due to the impact of ~~changes~~the decrease in ~~affiliated quota share agreements~~premiums earned and the impact of ~~changes in the mix of business.~~affiliated quota share agreements. Segment other underwriting expenses decreased slightly ~~increased~~ to ~~$8.1~~$7.8 million for the three months ended March 31, ~~2015~~ 2016 compared to ~~$7.8~~$8.1 million for the three months ended March 31, ~~2014.~~2015.

The following table presents the underwriting results and ratios for the Insurance segment for the periods indicated.

Premiums. Gross written premiums increased by ~~46.7%~~7.3% to $354.7 million for the three months ended March 31, 2016 compared to $330.5 million for the three months ended March 31, 2015 ~~compared to $225.3 million for the three months ended March 31, 2014.~~. This increase was primarily driven by an increase in ~~crop~~accident and ~~workers’ compensation~~health business, ~~as well as eight~~premium from the startup of the Lloyd's syndicate and additional expansion of other ~~business units.~~insurance lines of business. Net written premiums increased by ~~36.8%~~4.7% to $152.9 million for the three months ended March 31, 2016 compared to $146.1 million for the three months ended March 31, 2015. The difference between the change in gross written premiums and the change in new written premiums is primarily due to a varying utilization of reinsurance. Premiums earned increased 6.9% to $133.5 million for the three months ended March 31, 2016 compared to $125.0 million for the three months ended March 31, 2015 compared to $106.7 million for the three months ended March 31, 2014, which is consistent with the change in gross written premiums. Premiums earned increased 16.5% to $125.0 million for the three months ended March 31, 2015 compared to $107.3 million for the three months ended March 31, 2014.. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Insurance segment for the periods indicated.

Three Months Ended March 31,
Current Ratio %/ Prior Ratio %/ Total Ratio %/
(Dollars in millions) Year Pt Change Years Pt Change Incurred Pt Change
2015
Attritional $ 95.6 76.5 % $ 0.4 0.3 % $ 96.0 76.8 %
Catastrophes - 0.0 % - 0.0 % - 0.0 %
Total segment $ 95.6 76.5 % $ 0.4 0.3 % $ 96.0 76.8 %

2014
Attritional $ 76.0 70.8 % $ 2.4 2.3 % $ 78.4 73.1 %
Catastrophes - 0.0 % 0.1 0.1 % 0.1 0.1 %
Total segment $ 76.0 70.8 % $ 2.5 2.4 % $ 78.5 73.2 %

Variance 2015/2014
Attritional $ 19.6 5.7 pts $ (2.0 ) (2.0 ) pts $ 17.6 3.7 pts
Catastrophes - - pts (0.1 ) (0.1 ) pts (0.1 ) (0.1 ) pts
Total segment $ 19.6 5.7 pts $ (2.1 ) (2.1 ) pts $ 17.5 3.6 pts

(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE increased by ~~22.3%~~10.9% to $106.5 million for the three months ended March 31, 2016 compared to $96.0 million for the three months ended March 31, 2015 ~~compared to $78.5 million for the three months ended March 31, 2014, mainly~~, primarily due to an increase of ~~$19.6~~$8.0 million in current year attritional ~~losses. This rise was primarily~~losses related to the impact of the increase in premiums ~~earned.~~earned and an increase of $2.6 million of favorable development on prior years attritional losses related primarily to crop hail business. There were no current year catastrophe losses for the three months ended March 31, ~~2015~~2016 and ~~2014.~~2015.

Segment Expenses. Commission and brokerage decreased ~~38.6%~~ to ~~$4.2~~$(7.0) million for the three months ended March 31, ~~2015~~ 2016 compared to ~~$6.8~~$4.2 million for the three months ended March 31, ~~2014. This increase~~2015. The decrease was primarily ~~due to the impact of changes in affiliated quota share agreements and the impact of~~driven by changes in the mix of business ~~partially offset by~~and impacts from affiliated quota share agreements. Segment other underwriting expenses increased to $37.9 million for the three months ended March 31, 2016 compared to $28.9 million for the three months ended March 31, 2015. The increase resulted from the impact of the increase in premiums ~~earned. Segment other underwriting~~earned and increased expenses ~~increased to $28.9 million for the three months ended March 31, 2015 compared to $21.9 million for the three months ended March 31, 2014 primarily~~ due to the ~~impact~~build out of the ~~increase in premiums earned.~~insurance platform.

Market Sensitive Instruments.

The ~~SEC’s~~SEC's Financial Reporting Release #48 requires registrants to clarify and expand upon the existing financial statement disclosure requirements for derivative financial instruments, derivative commodity instruments and other financial instruments (collectively, ~~“market~~"market sensitive ~~instruments”~~instruments"). We do not generally enter into market sensitive instruments for trading purposes.

Our current investment strategy seeks to maximize after-tax income through a high quality, diversified, taxable and tax-preferenced fixed maturity portfolio, while maintaining an adequate level of liquidity. Our mix of taxable and tax-preferenced investments is adjusted periodically, consistent with our current and projected operating results, market conditions and our tax position. The fixed maturity securities in the investment portfolio are comprised of non-trading available for sale securities. Additionally, we have invested in equity securities.

The overall investment strategy considers the scope of present and anticipated Company operations. In particular, estimates of the financial impact resulting from non-investment asset and liability transactions, together with our capital structure and other factors, are used to develop a net liability analysis. This analysis includes estimated payout characteristics for which our investments provide liquidity. This analysis is considered in the development of specific investment strategies for asset allocation, duration and credit quality. The change in overall market sensitive risk exposure principally reflects the asset changes that took place during the period.

Interest Rate Risk. Our ~~$9.5~~$9.6 billion investment portfolio, at March 31, ~~2015,~~2016, is principally comprised of fixed maturity securities, which are generally subject to interest rate risk and some foreign currency exchange rate risk, and some equity securities, which are subject to price fluctuations and some foreign exchange rate risk. The overall economic impact of the foreign exchange risks on the investment portfolio is partially mitigated by changes in the dollar value of foreign currency denominated liabilities and their associated income statement impact.

Interest rate risk is the potential change in value of the fixed maturity securities portfolio, including short-term investments, from a change in market interest rates. In a declining interest rate environment, it includes prepayment risk on the ~~$633.9~~$848.3 million of mortgage-backed securities in the ~~$5,227.3~~$5,581.8 million fixed maturity portfolio. Prepayment risk results from potential accelerated principal payments that shorten the average life and thus the expected yield of the security.

The table below displays the potential impact of market value fluctuations and after-tax unrealized appreciation on our fixed maturity portfolio (including ~~$559.9~~$329.2 million of short-term investments) for the period indicated based on upward and downward parallel and immediate 100 and 200 basis point shifts in interest rates. For legal entities with a U.S. dollar functional currency, this modeling was performed on each security individually. To generate appropriate price estimates for mortgage-backed securities, changes in prepayment expectations under different interest rate environments were taken into account. For legal entities with non-U.S. dollar functional currency, the effective duration of the involved portfolio of securities was used as a proxy for the market value change under the various interest rate change scenarios.

	Impact of Interest Rate Shift in Basis Points															Impact of Interest Rate Shift in Basis Points
	At March 31, 2015															At March 31, 2016
(Dollars in millions)	-200			-100			0			100			200			-200			-100			0			100			200
Total Market/Fair Value	$	6,077.5		$	5,933.6		$	5,787.2		$	5,634.7		$	5,477.6		$	6,210.8		$	6,062.0		$	5,911.0		$	5,747.7		$	5,578.5
Market/Fair Value Change from Base (%)		5.0	%		2.5	%		0.0	%		-2.6	%		-5.3	%		5.1	%		2.6	%		0.0	%		-2.8	%		-5.6	%
Change in Unrealized Appreciation
After-tax from Base ($)	$	188.7		$	95.1		$	-		$	(99.1	)	$	(201.2	)	$	194.9		$	98.2		$	-		$	(106.1	)	$	(216.1	)

We had ~~$7,805.0~~$7,992.3 million and ~~$7,843.9~~$7,940.7 million of gross reserves for losses and LAE as of March 31, ~~2015~~2016 and December 31, ~~2014,~~2015, respectively. These amounts are recorded at their nominal value, as opposed to present value, which would reflect a discount adjustment to reflect the time value of money. Since losses are paid out over a period of time, the present value of the reserves is less than the nominal value. As interest rates rise, the present value of the reserves decreases and, conversely, as interest rates decline, the present value increases. These movements are the opposite of the interest rate impacts on the fair value of investments. While the difference between present value and nominal value is not reflected in our financial statements, our financial results will include investment income over time from the investment portfolio until the claims are paid. Our loss and loss reserve obligations have an expected duration that is reasonably consistent with our fixed income portfolio.

Equity Risk. Equity risk is the potential change in fair and/or market value of the common stock and preferred stock portfolios arising from changing prices. Our equity investments consist of a diversified portfolio of individual securities. The primary objective of the equity portfolio is to obtain greater total return relative to bonds over time through market appreciation and income.

The ~~table~~tables below displays the impact on fair/market value and after-tax change in fair/market value of a 10% and 20% change in equity prices up and down for the periods indicated.

Impact of Percentage Change in Equity Fair/Market Values
At March 31, 2015
(Dollars in millions) -20% -10% 0% 10% 20%
Fair/Market Value of the Equity Portfolio $ 1,080.1 $ 1,215.1 $ 1,350.1 $ 1,485.1 $ 1,620.1
After-tax Change in Fair/Market Value (175.5 ) (87.8 ) - 87.8 175.5

	Impact of Percentage Change in Equity Fair/Market Values
	At March 31, 2016
(Dollars in millions)	-20%			-10%			0%		10%		20%
Fair/Market Value of the Equity Portfolio	$	956.0		$	1,075.5		$	1,195.0	$	1,314.5	$	1,434.0
After-tax Change in Fair/Market Value		(155.3	)		(77.7	)		-		77.7		155.3

Foreign Exchange Risk. Foreign currency risk is the potential change in value, income and cash flow arising from adverse changes in foreign currency exchange rates. Each of our non-U.S. ~~(“foreign”~~("foreign") operations maintains capital in the currency of the country of its geographic location consistent with local regulatory guidelines. Each foreign operation may conduct business in its local currency, as well as the currency of other countries in which it operates. The primary foreign currency exposures for these foreign operations are the Singapore and Canadian Dollars. We mitigate foreign exchange exposure by generally matching the currency and duration of our assets to our corresponding operating liabilities. In accordance with FASB guidance, we translate the assets, liabilities and income of non-U.S. dollar functional currency legal entities to the U.S. dollar. This translation amount is reported as a component of other comprehensive income. As of March 31, ~~2015,~~2016, there has been no material change in exposure to foreign exchange rates as compared to December 31, ~~2014.~~2015.

SAFE HARBOR DISCLOSURE

This report contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the federal securities laws. In some cases, these statements can be identified by the use of forward-looking words such as ~~“may”~~"may", ~~“will”~~"will", ~~“should”~~"should", ~~“could”~~"could", ~~“anticipate”~~"anticipate", ~~“estimate”~~"estimate", ~~“expect”~~"expect", ~~“plan”~~"plan", ~~“believe”~~"believe", ~~“predict”~~"predict", ~~“potential”~~"potential" and ~~“intend”~~"intend". Forward-looking statements contained in this report include information regarding our reserves for losses and LAE, the adequacy of our provision for uncollectible balances, estimates of our catastrophe exposure, the effects of catastrophic events on our financial statements and the ability of our subsidiaries to pay dividends. Forward-looking statements only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause our actual events or results to be materially different from our expectations include those discussed under the caption ITEM 1A, ~~“Risk Factors”~~"Risk Factors" in the ~~Company’s~~Company's most recent 10-K filing. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Instruments. See ~~“Market~~"Market Sensitive ~~Instruments”~~Instruments" in PART I – ITEM 2.

ITEM 4.CONTROLS AND PROCEDURES

As of the end of the period covered by this report, our management carried out an evaluation, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the ~~“Exchange Act”~~"Exchange Act")). Based on their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange ~~Commission’s~~Commission's rules and forms. Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report.

ITEM 1. LEGAL PROCEEDINGS

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

ITEM 1A. RISK FACTORS

No material changes.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 5. OTHER INFORMATION

Exhibit Index:

Exhibit No.	Description

31.1	Section 302 Certification of Dominic J. Addesso

31.2	Section 302 Certification of Craig Howie

32.1	Section 906 Certification of Dominic J. Addesso and Craig Howie

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema

101.CAL	XBRL Taxonomy Extension Calculation Linkbase

101.DEF	XBRL Taxonomy Extension Definition Linkbase

101.LAB	XBRL Taxonomy Extension Labels Linkbase

101.PRE	XBRL Taxonomy Extension Presentation Linkbase

4041

Everest Reinsurance Holdings, Inc.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Everest Reinsurance Holdings, Inc.
		(Registrant)


		/S/ CRAIG HOWIE
		Craig Howie
		Executive Vice President and
		Chief Financial Officer

		(Duly Authorized Officer and Principal Financial Officer)

Dated: May ~~15, 2015~~16, 2016

	Three Months Ended						Three Months Ended
	March 31,						March 31,
(Dollars in thousands)	2015			2014			2016			2015
	(unaudited)						(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	115,944		$	86,466		$	38,926		$	115,944
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable		(78,969	)		12,611			38,549			(78,969	)
Decrease (increase) in funds held by reinsureds, net		(4,707	)		2,877			3,817			(4,707	)
Decrease (increase) in reinsurance receivables		(68,311	)		(279,364	)		(56,106	)		(68,311	)
Decrease (increase) in income taxes		31,408			24,447			6,546			31,408
Decrease (increase) in prepaid reinsurance premiums		15,016			(47,040	)		15,994			15,016
Increase (decrease) in reserve for losses and loss adjustment expenses		20,927			(58,410	)		29,962			20,927
Increase (decrease) in unearned premiums		(28,224	)		76,126			(33,573	)		(28,224	)
Increase (decrease) in other net payable to reinsurers		(52,400	)		130,527			(106,588	)		(52,400	)
Increase (decrease) in losses in course of payment		60,419			101,869			17,456			60,419
Change in equity adjustments in limited partnerships		(7,173	)		3,143			2,514			(7,173	)
Distribution of limited partnership income		7,369			5,824			9,859			7,369
Change in other assets and liabilities, net		35,494			(16,618	)		24,496			35,494
Non-cash compensation expense		1,946			1,729			3,117			1,946
Amortization of bond premium (accrual of bond discount)		4,955			6,004			4,541			4,955
Amortization of underwriting discount on senior notes		1			14			1			1
Net realized capital (gains) losses		(21,296	)		4,050			66,377			(21,296	)
Net cash provided by (used in) operating activities		32,399			54,255			65,888			32,399

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value		188,815			207,534			154,378			188,815
Proceeds from fixed maturities matured/called - available for sale, at fair value		-			875
Proceeds from fixed maturities sold - available for sale, at market value		112,846			149,578			188,046			112,846
Proceeds from fixed maturities sold - available for sale, at fair value		1,236			20,763			-			1,236
Proceeds from equity securities sold - available for sale, at fair value		133,960			176,116			86,149			133,960
Distributions from other invested assets		10,797			9,828			255,889			10,797
Cost of fixed maturities acquired - available for sale, at market value		(293,848	)		(689,205	)		(506,085	)		(293,848	)
Cost of fixed maturities acquired - available for sale, at fair value		-			(1,309	)
Cost of equity securities acquired - available for sale, at fair value		(164,112	)		(77,427	)		(92,019	)		(164,112	)
Cost of other invested assets acquired		(16,600	)		(4,961	)		(413,223	)		(16,600	)
Net change in short-term investments		(860	)		113,571			235,895			(860	)
Net change in unsettled securities transactions		(31,296	)		(8,812	)		5,870			(31,296	)
Net cash provided by (used in) investing activities		(59,062	)		(103,449	)		(85,100	)		(59,062	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation		2,020			1,665			1,676			2,020
Net cash provided by (used in) financing activities		2,020			1,665			1,676			2,020

EFFECT OF EXCHANGE RATE CHANGES ON CASH		(31,845	)		3,987			10,546			(31,845	)

Net increase (decrease) in cash		(56,488	)		(43,542	)		(6,990	)		(56,488	)
Cash, beginning of period		323,975			316,807			155,429			323,975
Cash, end of period	$	267,487		$	273,265		$	148,439		$	267,487

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$	18,077		$	12,474		$	4,558		$	18,077
Interest paid		-			42			-			-

The accompanying notes are an integral part of the consolidated financial statements.

	Three Months Ended						Three Months Eded
	March 31,						March 31,
(Dollars in thousands)	2015			2014			2016			2015
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities	$	51,211		$	33,993		$	69,826		$	51,211
Fixed maturity securities, other-than-temporary impairment		9,735			-			197			9,735
Change in unrealized appreciation (depreciation), pre-tax		60,946			33,993			70,023			60,946
Deferred tax benefit (expense)		(17,924	)		(11,898	)		(24,439	)		(17,924	)
Deferred tax benefit (expense), other-than-temporary impairment		(3,407	)		-			(69	)		(3,407	)
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in stockholder's equity	$	39,615		$	22,095		$	45,515		$	39,615

	Duration of Unrealized Loss at March 31, 2015 By Security Type															Duration of Unrealized Loss at March 31, 2016 By Security Type
	Less than 12 months					Greater than 12 months					Total					Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross					Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized					Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	200	$	(1	)	$	2,043	$	(82	)	$	2,243	$	(83	)	$	54,980	$	(66	)	$	698	$	-		$	55,678	$	(66	)
Obligations of U.S. states and political subdivisions		26,973		(579	)		18,171		(335	)		45,144		(914	)		4,469		(16	)		7,014		(827	)		11,483		(843	)
Corporate securities		362,527		(22,140	)		153,423		(2,276	)		515,950		(24,416	)		471,961		(20,832	)		242,718		(18,770	)		714,679		(39,602	)
Asset-backed securities		43,245		(96	)		-		-			43,245		(96	)		20,482		(77	)		31,533		(210	)		52,015		(287	)
Mortgage-backed securities
Commercial		-		-			-		-			-		-			17,323		(188	)		-		-			17,323		(188	)
Agency residential		10,595		(33	)		192,684		(1,416	)		203,279		(1,449	)		100,416		(901	)		114,503		(1,024	)		214,919		(1,925	)
Non-agency residential		-		-			-		-			-		-			-		-			-		-			-		-
Foreign government securities		60,663		(3,273	)		46,741		(4,411	)		107,404		(7,684	)		22,510		(638	)		57,790		(7,144	)		80,300		(7,782	)
Foreign corporate securities		133,917		(25,626	)		47,221		(1,949	)		181,138		(27,575	)		202,263		(4,129	)		66,205		(5,807	)		268,468		(9,936	)
Total fixed maturity securities	$	638,120	$	(51,748	)	$	460,283	$	(10,469	)	$	1,098,403	$	(62,217	)	$	894,404	$	(26,847	)	$	520,461	$	(33,782	)	$	1,414,865	$	(60,629	)
Equity securities		-		-			-		-			-		-
Total	$	638,120	$	(51,748	)	$	460,283	$	(10,469	)	$	1,098,403	$	(62,217	)

	Duration of Unrealized Loss at March 31, 2016 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	39,889	$	(183	)	$	32,078	$	(3,841	)	$	71,967	$	(4,024	)
Due in one year through five years		422,494		(9,573	)		276,367		(17,598	)		698,861		(27,171	)
Due in five years through ten years		265,716		(14,274	)		60,641		(10,681	)		326,357		(24,955	)
Due after ten years		28,084		(1,651	)		5,339		(428	)		33,423		(2,079	)
Asset-backed securities		20,482		(77	)		31,533		(210	)		52,015		(287	)
Mortgage-backed securities		117,739		(1,089	)		114,503		(1,024	)		232,242		(2,113	)
Total fixed maturity securities	$	894,404	$	(26,847	)	$	520,461	$	(33,782	)	$	1,414,865	$	(60,629	)

	Duration of Unrealized Loss at December 31, 2014 By Security Type															Duration of Unrealized Loss at December 31, 2015 By Security Type
	Less than 12 months					Greater than 12 months					Total					Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross					Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized					Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	13,187	$	(20	)	$	26,897	$	(284	)	$	40,084	$	(304	)	$	216,352	$	(712	)	$	692	$	(6	)	$	217,044	$	(718	)
Obligations of U.S. states and political subdivisions		20,428		(242	)		18,199		(384	)		38,627		(626	)		6,434		(84	)		4,917		(806	)		11,351		(890	)
Corporate securities		830,928		(48,891	)		171,207		(4,328	)		1,002,135		(53,219	)		866,715		(49,034	)		307,215		(21,691	)		1,173,930		(70,725	)
Asset-backed securities		62,451		(374	)		-		-			62,451		(374	)		102,506		(791	)		28,048		(272	)		130,554		(1,063	)
Mortgage-backed securities
Commercial		11,742		(51	)		-		-			11,742		(51	)		26,483		(511	)		-		-			26,483		(511	)
Agency residential		24,230		(59	)		267,824		(4,661	)		292,054		(4,720	)		320,285		(3,094	)		150,095		(3,509	)		470,380		(6,603	)
Non-agency residential		-		-			-		-			-		-			-		-			-		-			-		-
Foreign government securities		45,521		(913	)		53,086		(4,431	)		98,607		(5,344	)		61,498		(2,182	)		77,911		(6,243	)		139,409		(8,425	)
Foreign corporate securities		228,733		(21,704	)		117,713		(4,116	)		346,446		(25,820	)		324,904		(6,289	)		76,951		(5,108	)		401,855		(11,397	)
Total fixed maturity securities	$	1,237,220	$	(72,254	)	$	654,926	$	(18,204	)	$	1,892,146	$	(90,458	)	$	1,925,177	$	(62,697	)	$	645,829	$	(37,635	)	$	2,571,006	$	(100,332	)
Equity securities		-		-			-		-			-		-
Total	$	1,237,220	$	(72,254	)	$	654,926	$	(18,204	)	$	1,892,146	$	(90,458	)

	At March 31, 2015											At March 31, 2016
	Amortized		Unrealized		Unrealized			Market		OTTI in AOCI		Amortized		Unrealized		Unrealized			Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value		(a)		Cost		Appreciation		Depreciation			Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	174,065	$	3,541	$	(83	)	$	177,523	$	-	$	363,705	$	6,407	$	(66	)	$	370,046	$	-
Obligations of U.S. states and political subdivisions		750,672		39,084		(914	)		788,842		-		664,481		38,438		(843	)		702,076		-
Corporate securities		1,941,982		53,670		(24,416	)		1,971,236		-		2,003,827		38,795		(39,602	)		2,003,020		128
Asset-backed securities		115,357		826		(96	)		116,087		-		167,757		765		(287	)		168,235		-
Mortgage-backed securities
Commercial		55,527		2,752		-			58,279		-		62,415		1,201		(188	)		63,428		-
Agency residential		568,152		8,658		(1,449	)		575,361		-		777,460		9,178		(1,925	)		784,713		-
Non-agency residential		240		37		-			277		-		113		19		-			132		-
Foreign government securities		459,079		30,882		(7,684	)		482,277		-		472,081		27,162		(7,782	)		491,461		-
Foreign corporate securities		1,043,011		41,601		(27,575	)		1,057,037		-		977,043		29,693		(9,936	)		996,800		-
Total fixed maturity securities	$	5,108,085	$	181,051	$	(62,217	)	$	5,226,919	$	-	$	5,488,882	$	151,658	$	(60,629	)	$	5,579,911	$	128
Equity securities	$	15	$	1	$	-		$	16	$	-

	At December 31, 2015
	Amortized		Unrealized		Unrealized			Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	329,281	$	2,422	$	(718	)	$	330,985	$	-
Obligations of U.S. states and political subdivisions		669,945		34,020		(890	)		703,075		-
Corporate securities		2,011,997		27,286		(70,725	)		1,968,558		(86	)
Asset-backed securities		145,755		290		(1,063	)		144,982		-
Mortgage-backed securities
Commercial		61,527		1,430		(511	)		62,446		-
Agency residential		714,907		3,994		(6,603	)		712,298		-
Non-agency residential		126		24		-			150		-
Foreign government securities		447,244		24,255		(8,425	)		463,074		-
Foreign corporate securities		954,690		27,616		(11,397	)		970,909		17
Total fixed maturity securities	$	5,335,472	$	121,337	$	(100,332	)	$	5,356,477	$	(69	)

	At December 31, 2014
	Amortized		Unrealized		Unrealized			Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	135,724	$	1,416	$	(304	)	$	136,836	$	-
Obligations of U.S. states and political subdivisions		783,129		41,969		(626	)		824,472		-
Corporate securities		1,992,200		39,954		(53,219	)		1,978,935		(9,735	)
Asset-backed securities		94,470		727		(374	)		94,823		-
Mortgage-backed securities
Commercial		57,027		2,292		(51	)		59,268		-
Agency residential		596,140		6,697		(4,720	)		598,117		-
Non-agency residential		271		44		-			315		-
Foreign government securities		515,016		27,415		(5,344	)		537,087		-
Foreign corporate securities		1,061,546		27,832		(25,820	)		1,063,558		-
Total fixed maturity securities	$	5,235,523	$	148,346	$	(90,458	)	$	5,293,411	$	(9,735	)
Equity securities	$	15	$	1	$	-		$	16	$	-

	Liability Limits
(Dollars in thousands)	Exceeding		Not to Exceed
Losses per one occurrence	$	100,000	$	150,000

	Three Months Ended
Mt. Logan Re	March 31,
(Dollars in thousands)	2015		2014
Ceded written premiums	$	61,670	$	28,366
Ceded earned premiums		38,683		17,837
Ceded losses and LAE		8,314		5,143

Assumed written premiums		3,984		9,919
Assumed earned premiums		3,984		2,106
Assumed losses and LAE		-		-


(Dollars in thousands)
Investments and cash	$	17,000
Reinsurance recoverables		146,000
Deferred tax asset		35,000
Other assets		1,000
Total assets held for sale	$	199,000

Reserve for losses and loss adjustment expenses	$	142,000
Deferred gain on retroactive reinsurance		97,000
Other liabilities		1,000
Total liabilities held for sale	$	240,000

Net liabilities held for sale	$	(41,000	)

	At	At	At	At
	March 31.	December 31,	March 31,	December 31,
	2015	2014	2016	2015
Imbedded pre-tax yield of cash and invested assets at December 31	3.1%	3.1%	2.8%	2.9%
Imbedded after-tax yield of cash and invested assets at December 31	2.2%	2.2%	2.0%	2.1%