DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
DOCUMENT AND ENTITY INFORMATION [ABSTRACT] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | AXIS CAPITAL HOLDINGS LTD | |
Entity Central Index Key | 1,214,816 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 83,579,276 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Investments: | ||
Fixed maturities, available for sale, at fair value (Amortized cost 2018: $11,941,555; 2017: $12,611,219) | $ 11,767,697 | $ 12,622,006 |
Equity securities, at fair value (Cost 2018: $376,007; 2017: $552,867) | 433,311 | 635,511 |
Mortgage loans, held for investment, at amortized cost and fair value | 333,018 | 325,062 |
Other investments, at fair value | 833,563 | 1,009,373 |
Equity method investments | 112,155 | 108,597 |
Short-term investments, at amortized cost and fair value | 156,090 | 83,661 |
Total investments | 13,635,834 | 14,784,210 |
Cash and cash equivalents | 1,053,604 | 948,626 |
Restricted cash and cash equivalents | 698,798 | 415,160 |
Accrued interest receivable | 76,000 | 81,223 |
Insurance and reinsurance premium balances receivable | 3,463,360 | 3,012,419 |
Reinsurance recoverable on unpaid and paid losses | 3,439,080 | 3,338,840 |
Deferred acquisition costs | 682,785 | 474,061 |
Prepaid reinsurance premiums | 1,114,039 | 809,274 |
Receivable for investments sold | 2,140 | 11,621 |
Goodwill | 102,003 | 102,003 |
Intangible assets | 247,927 | 257,987 |
Value of business acquired | 58,511 | 206,838 |
Other assets | 268,945 | 317,915 |
Total assets | 24,843,026 | 24,760,177 |
Liabilities | ||
Reserve for losses and loss expenses | 12,025,947 | 12,997,553 |
Unearned premiums | 4,242,108 | 3,641,399 |
Insurance and reinsurance balances payable | 1,301,580 | 899,064 |
Senior notes and notes payable | 1,377,582 | 1,376,529 |
Payable for investments purchased | 220,183 | 100,589 |
Other liabilities | 403,354 | 403,779 |
Total liabilities | 19,570,754 | 19,418,913 |
Shareholders’ equity | ||
Preferred shares | 775,000 | 775,000 |
Common shares (shares issued 2018: 176,580; 2017: 176,580 shares outstanding 2018: 83,557; 2017: 83,161) | 2,206 | 2,206 |
Additional paid-in capital | 2,304,107 | 2,299,166 |
Accumulated other comprehensive income (loss) | (162,312) | 92,382 |
Retained earnings | 6,145,482 | 5,979,666 |
Treasury shares, at cost (2018: 93,023; 2017: 93,419 shares) | (3,792,211) | (3,807,156) |
Total shareholders’ equity | 5,272,272 | 5,341,264 |
Total liabilities and shareholders’ equity | $ 24,843,026 | $ 24,760,177 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, amortized cost | $ 11,941,555 | $ 12,611,219 |
Equity securities, cost | $ 376,007 | $ 552,867 |
Common shares, shares issued (in shares) | 176,580 | 176,580 |
Common shares, shares outstanding (in shares) | 83,557 | 83,161 |
Treasury shares, shares (in shares) | 93,023 | 93,419 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Net premiums earned | $ 1,224,075 | $ 1,017,131 | $ 3,577,026 | $ 2,937,265 |
Net investment income | 114,421 | 95,169 | 325,380 | 299,899 |
Other insurance related income (losses) | 8,475 | (3,197) | 18,811 | (4,420) |
Bargain purchase gain | 0 | 0 | 0 | 15,044 |
Net investment gains (losses): | ||||
Other-than-temporary impairment (OTTI) losses | (5,546) | (5,412) | (7,634) | (13,493) |
Other realized and unrealized investment gains (losses) | (12,082) | 20,044 | (69,917) | (1,318) |
Total net investment gains (losses) | (17,628) | 14,632 | (77,551) | (14,811) |
Total revenues | 1,329,343 | 1,123,735 | 3,843,666 | 3,232,977 |
Expenses | ||||
Net losses and loss expenses | 794,959 | 1,235,367 | 2,162,945 | 2,447,640 |
Acquisition costs | 248,314 | 194,724 | 709,527 | 588,879 |
General and administrative expenses | 154,894 | 124,629 | 489,944 | 433,704 |
Foreign exchange losses | 8,305 | 32,510 | 2,066 | 90,093 |
Interest expense and financing costs | 16,897 | 12,835 | 50,758 | 38,377 |
Transaction and reorganization expenses | 16,300 | 5,970 | 48,125 | 5,970 |
Amortization of value of business acquired | 39,018 | 0 | 149,535 | 0 |
Amortization of intangible assets | 1,753 | 0 | 8,564 | 0 |
Total expenses | 1,280,440 | 1,606,035 | 3,621,464 | 3,604,663 |
Income (loss) before income taxes and interest in income (loss) of equity method investments | 48,903 | (482,300) | 222,202 | (371,686) |
Income tax benefit | 3,525 | 25,877 | 3,565 | 38,547 |
Interest in income (loss) of equity method investments | 1,667 | (661) | 5,045 | (8,402) |
Net income | 54,095 | (457,084) | 230,812 | (341,541) |
Preferred share dividends | 10,656 | 10,656 | 31,969 | 36,154 |
Net income (loss) available (attributable) to common shareholders | $ 43,439 | $ (467,740) | $ 198,843 | $ (377,695) |
Net income (loss) per common share: | ||||
Basic net income (loss) (in usd per share) | $ 0.52 | $ (5.61) | $ 2.38 | $ (4.47) |
Diluted net income (loss) (in usd per share) | $ 0.52 | $ (5.61) | $ 2.37 | $ (4.47) |
Weighted average number of common shares outstanding - basic (in shares) | 83,558 | 83,305 | 83,474 | 84,479 |
Weighted average number of common shares outstanding - diluted (in shares) | 84,107 | 83,305 | 83,939 | 84,479 |
Cash dividends declared per common share (in usd per share) | $ 0.39 | $ 0.38 | $ 1.17 | $ 1.14 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 54,095 | $ (457,084) | $ 230,812 | $ (341,541) |
Other comprehensive income (loss), net of tax: | ||||
Unrealized investment gains (losses) arising during the period | (26,061) | 62,505 | (257,521) | 206,461 |
Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income | 25,924 | (13,286) | 77,189 | 10,169 |
Unrealized investment gains (losses) arising during the period, net of reclassification adjustment | (137) | 49,219 | (180,332) | 216,630 |
Foreign currency translation adjustment | 994 | 8,088 | (6,864) | 46,824 |
Total other comprehensive income (loss), net of tax | 857 | 57,307 | (187,196) | 263,454 |
Comprehensive income (loss) | $ 54,952 | $ (399,777) | $ 43,616 | $ (78,087) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Preferred shares | Common shares (par value) | Additional paid-in capital | Accumulated other comprehensive income (loss) | Unrealized gains (losses) on available for sale investments, net of tax: | Cumulative foreign currency translation adjustments, net of tax: | Retained earnings | Treasury shares, at cost |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Cumulative effect of adoption of ASU | Accounting Standards Update 2018-02 | $ 0 | $ 0 | |||||||
Cumulative effect of adoption of ASU | Accounting Standards Update 2016-01 | 0 | 0 | |||||||
Balance at beginning of period at Dec. 31, 2016 | $ 1,126,074 | $ 2,206 | $ 2,299,857 | $ (121,841) | (82,323) | $ (39,518) | 6,527,627 | $ (3,561,553) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Shares repurchased | (351,074) | ||||||||
Treasury shares reissued | (39,033) | 39,917 | |||||||
Share-based compensation expense | 30,692 | ||||||||
Unrealized gains (losses) arising during the period | $ 216,630 | 216,630 | |||||||
Foreign currency translation adjustment | 46,824 | 46,824 | |||||||
Net income (loss) | (341,541) | (341,541) | |||||||
Preferred share dividends | (36,154) | ||||||||
Common share dividends | (98,273) | ||||||||
Shares repurchased | (285,659) | ||||||||
Balance at end of period at Sep. 30, 2017 | 5,454,699 | 775,000 | 2,206 | 2,291,516 | 141,613 | 134,307 | 7,306 | 6,051,659 | (3,807,295) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Cumulative effect of adoption of ASU | Accounting Standards Update 2018-02 | 2,106 | (2,106) | |||||||
Cumulative effect of adoption of ASU | Accounting Standards Update 2016-01 | (69,604) | 69,604 | |||||||
Balance at beginning of period at Dec. 31, 2017 | 5,341,264 | 775,000 | 2,206 | 2,299,166 | 92,382 | 89,962 | 2,420 | 5,979,666 | (3,807,156) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Shares repurchased | 0 | ||||||||
Treasury shares reissued | (21,935) | 23,644 | |||||||
Share-based compensation expense | 26,876 | ||||||||
Unrealized gains (losses) arising during the period | (180,332) | (180,332) | |||||||
Foreign currency translation adjustment | (6,864) | (6,864) | |||||||
Net income (loss) | 230,812 | 230,812 | |||||||
Preferred share dividends | (31,969) | ||||||||
Common share dividends | (100,525) | ||||||||
Shares repurchased | (8,699) | ||||||||
Balance at end of period at Sep. 30, 2018 | $ 5,272,272 | $ 775,000 | $ 2,206 | $ 2,304,107 | $ (162,312) | $ (157,868) | $ (4,444) | $ 6,145,482 | $ (3,792,211) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||||
Net income (loss) | $ 54,095 | $ (457,084) | $ 230,812 | $ (341,541) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||
Net investment losses | 71,799 | 14,811 | |||
Net realized and unrealized gains on other investments | (41,924) | (56,759) | |||
Amortization of fixed maturities | 20,547 | 32,528 | |||
Interest in income (loss) of equity method investments | (3,557) | 8,402 | |||
Amortization of value of business acquired | 39,018 | 0 | 149,535 | 0 | |
Other amortization and depreciation | 32,934 | 19,279 | |||
Share-based compensation expense, net of cash payments | 26,145 | 1,516 | |||
Non-cash foreign exchange losses | 0 | 24,149 | $ 24,000 | ||
Bargain purchase gain | 0 | 0 | 0 | (15,044) | |
Changes in: | |||||
Accrued interest receivable | 1,085 | 8,730 | |||
Reinsurance recoverable balances | (419,226) | 60,522 | |||
Deferred acquisition costs | (214,500) | (123,961) | |||
Prepaid reinsurance premiums | (311,498) | (178,464) | |||
Reserve for loss and loss expenses | 179,018 | 918,511 | |||
Unearned premiums | 632,912 | 540,108 | |||
Insurance and reinsurance balances, net | (290,728) | (465,436) | |||
Other items | 67,813 | (135,266) | |||
Net cash provided by operating activities | 131,167 | 312,085 | |||
Cash flows from investing activities: | |||||
Fixed maturities | (6,707,576) | (6,250,608) | |||
Equity securities | (59,040) | (108,804) | |||
Mortgage loans | (78,079) | (20,812) | |||
Other investments | (79,319) | (135,526) | |||
Equity method investments | 0 | (1,000) | |||
Short-term investments | (285,103) | (20,792) | |||
Proceeds from the sale of: | |||||
Fixed maturities | 5,956,644 | 5,354,398 | |||
Equity securities | 223,098 | 232,755 | |||
Other investments | 211,395 | 203,896 | |||
Short-term investments | 153,687 | 19,284 | |||
Proceeds from redemption of fixed maturities | 982,010 | 1,546,998 | |||
Proceeds from redemption of short-term investments | 37,831 | 116,261 | |||
Proceeds from the repayment of mortgage loans | 70,481 | 10,702 | |||
Purchase of other assets | (16,918) | (25,842) | |||
Purchase of subsidiary, net | 0 | (73,067) | |||
Net cash provided by investing activities | 409,111 | 847,843 | |||
Cash flows from financing activities: | |||||
Repurchase of common shares - open market | 0 | (266,016) | |||
Taxes paid on withholding shares | (8,699) | (24,480) | |||
Dividends paid - common shares | (100,770) | (102,868) | |||
Repurchase of preferred shares | 0 | (351,074) | |||
Dividends paid - preferred shares | (31,969) | (42,188) | |||
Net cash used in financing activities | (141,438) | (786,626) | |||
Effect of exchange rate changes on foreign currency cash, cash equivalents, and restricted cash | (10,228) | 16,318 | |||
Increase in cash, cash equivalents, and restricted cash | 388,612 | 389,620 | |||
Cash, cash equivalents, and restricted cash - beginning of period | 1,363,786 | 1,241,507 | 1,241,507 | ||
Cash, cash equivalents, and restricted cash - end of period | $ 1,752,398 | $ 1,631,127 | 1,752,398 | 1,631,127 | $ 1,363,786 |
Supplemental disclosures of cash flow information: | |||||
Income taxes paid | 12,108 | 8,993 | |||
Interest paid | $ 42,856 | $ 34,188 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Transfer of securities | $ 600 |
Syndicate 2,007 | |
Consideration for RITC | $ 819 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation These unaudited Consolidated Financial Statements (the "financial statements") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the U.S. Securities and Exchange Commission's ("SEC") instructions to Form 10-Q and Article 10 of Regulation S-X and include AXIS Capital Holdings Limited ("AXIS Capital") and its subsidiaries (the "Company"). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and related notes included in AXIS Capital's Annual Report on Form 10-K for the year ended December 31, 2017 , as filed with the SEC. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company's financial position and results of operations for the periods presented. The results of operations for any interim period are not necessarily indicative of the results for a full year. All inter-company accounts and transactions have been eliminated. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year's presentation. These reclassifications did not impact results of operations, financial condition or liquidity. Tabular dollar and share amounts are in thousands, except per share amounts. All amounts are reported in U.S. dollars. Significant Accounting Policies There was one notable change to the Company's significant accounting policies subsequent to its Annual Report on Form 10-K for the year ended December 31, 2017 . a) Investments Recognition and Measurement of Financial Assets and Financial Liabilities Fixed maturities and equity securities are reported at fair value at the balance sheet date (see Note 4 ' Fair Value Measurements '). Effective January 1, 2018, the Company adopted ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities," which: • requires equity investments (except those accounted for under the equity method of accounting, investments that are consolidated or those that meet a practicability exception) to be measured at fair value with changes in fair value recognized in net income, • simplifies the impairment assessment of equity investments without readily determinable values by requiring a qualitative assessment to identify impairment, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost, • requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, • requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liabilities in accordance with the fair value option, • requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and • clarifies that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the organization’s other deferred tax assets. Upon adoption of this guidance, net unrealized investment gains on equity securities of $70 million , net of deferred income taxes of $13 million , were reclassified from accumulated other comprehensive income to retained earnings. As prescribed, the prior period has not been restated to conform to the current presentation. New Accounting Standards Adopted in 2018 Revenue From Contracts With Customers Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)," using the modified retrospective transition approach. This guidance affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards, such as accounting for insurance contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generated fee income of $31 million for the nine months ended September 30, 2018 which is within the scope of this ASU. These fees represent service fees earned by the Company's reinsurance segment related to services provided to strategic capital partners and are recognized when the related services have been performed. Given that the timing and measurement of revenue associated with impacted contracts did not change, the adoption of this guidance did not have a material impact on the Company's results of operations, financial condition and liquidity. Classification of Certain Cash Receipts and Cash Payments Effective January 1, 2018, the Company adopted ASU 2016-15, "Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments, " which addresses diversity in practice in how eight specific cash receipts and cash payments should be presented and classified on the statement of cash flows. The adoption of this guidance did not impact the Company's results of operations, financial condition and liquidity. Restricted Cash Effective January 1, 2018, the Company adopted ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash, " which addresses diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This guidance requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. To facilitate comparison of the Company's Consolidated Statements of Cash Flows, the Company adopted this guidance utilizing the full retrospective approach for all periods presented in the Company's Consolidated Financial Statements. As a result, the Company's Consolidated Statements of Cash Flows now explains the change during the period in the total of cash, cash equivalents, and restricted cash. Therefore, restricted cash is now included with cash and cash equivalents in the reconciliation of the beginning of period and end of period total amounts shown on the statement of cash flows. The adoption of this guidance did not impact the Company's results of operations, financial condition and liquidity. Stock Compensation - Scope of Modification Accounting Effective January 1, 2018, the Company adopted ASU 2017-09 "Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting, " which provides clarity and reduces diversity in practice of applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance states that an entity should account for the effects of a modification unless all the following are met: 1. the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; 2. the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this Update. The adoption of this guidance did not impact the Company's results of operations, financial condition and liquidity. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Effective January 1, 2018, the Company adopted ASU 2018-02 "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income " which was a response to a financial reporting issue that arose as a consequence of the U.S. federal government tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 ("U.S. Tax Reform"), which was enacted on December 22, 2017. U.S. GAAP currently requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This guidance is applicable even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income rather than in income from continuing operations. As the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate is required to be included in income from continuing operations, the tax effects of items within accumulated other comprehensive income (referred to as stranded tax effects for purposes of this Update) do not reflect the appropriate tax rate. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. Tax Reform. Consequently, the amendments eliminate the stranded tax effects resulting from U.S. Tax Reform and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of U.S. Tax Reform, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. As a consequence of U.S. Tax Reform, the Company recognized a tax benefit of $2 million related to the revaluation of net deferred tax liabilities associated with the reduction in the U.S. corporate income tax rate from 35% to 21%, attributable to net unrealized investment gains associated with investments held by the Company's U.S. domiciled entities. Upon adoption of this guidance, the tax benefit of $2 million was reclassified from accumulated other comprehensive income into retained earnings. Recently Issued Accounting Standards Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" which provides a new comprehensive model for lease accounting. Topic 842 will require a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842) - Targeted Improvements " which provides an additional (and optional) transition method to adopt the new lease guidance. Under the new transition method, companies will initially apply the new guidance by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, a company's reporting for the comparative periods presented in the financial statements in which the company adopts the new lease guidance will continue to be in accordance with the current lease accounting standard (Topic 840). A company electing this additional (and optional) transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. However, these amendments do not change the existing disclosure requirements in Topic 840, in particular these amendments do not create interim disclosure requirements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt Topic 842 effective January 1, 2019, by electing the additional transition method provided in ASU 2018-11. The Company will also elect the package of practical expedients permitted under the transition guidance of Topic 842, which must be elected as a package and applied consistently to all leases. The package of practical expedients permits the Company not to reassess the following: 1. whether any expired or existing contracts are or contain leases; 2. the lease classification for any expired or existing leases; and 3. initial direct costs for any existing leases. In addition to electing the package of practical expedients, the Company will make an accounting policy election not to record leases with an initial term of 12 months or less (short-term) in the Company's Consolidated Balance Sheets. The Company will recognize expense for short-term lease payments on a straight-line basis over the lease term in the Company's Consolidated Statements of Operations. The Company continues to evaluate all potential impacts of this guidance and expects its adoption will result in a significant increase to assets and liabilities in the Company's Consolidated Balance Sheets related to existing office property and equipment leases. The adoption of this guidance will not impact the Company's results of operations and liquidity. Measurement of Credit Losses on Financial Instrument In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments " which replaces the "incurred loss" impairment methodology with an approach based on "expected losses" to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The guidance also provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. This guidance is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for interim and annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of this guidance on its results of operations, financial condition and liquidity. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment " that eliminates the requirement to calculate the implied fair value of goodwill (i.e. Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, an impairment charge will be based on the excess of a reporting unit's carrying amount over its fair value (i.e. measure the charge based on Step 1 of the current goodwill impairment test). This guidance is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The guidance will be adopted on a prospective basis. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017-08 "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities" which shortens the amortization period for certain purchased callable debt securities held at a premium. This guidance is effective for interim and annual reporting periods, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its results of operations, financial condition and liquidity. Changes to Disclosures on Fair Value Measurement In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement " to improve the effectiveness of fair value measurement disclosures. This guidance is effective for interim and annual reporting periods, beginning after December 15, 2019, with early adoption permitted. As this guidance relates solely to financial statement disclosures, the adoption of ASU 2016-18, will not impact the Company's results of operations, financial condition and liquidity. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | AXIS Capital's underwriting operations are organized around its global underwriting platforms, AXIS Insurance and AXIS Re. The Company has determined that it has two reportable segments, insurance and reinsurance. The Company does not allocate its assets by segment, with the exception of goodwill and intangible assets, as it evaluates the underwriting results of each segment separately from the results of its investment portfolio. During the three months ended March 31, 2018, the Company realigned its accident and health business by integrating this business and its operations into the Company's insurance and reinsurance segments. Financial results relating to the Company's accident and health lines of business were previously included in the Company's insurance segment. As a result of the realignment, accident and health results are included in the results of both the insurance and reinsurance segments of the Company with effect from January 1, 2018. Insurance The Company's insurance segment offers specialty insurance products to a variety of niche markets on a worldwide basis. The product lines in this segment are property, marine, terrorism, aviation, credit and political risk, professional lines, liability, accident and health, together with discontinued lines, which represents lines of business that Novae Group plc ("Novae") exited or placed into run-off in the three month periods ended December 31, 2016 and March 31, 2017. Reinsurance The Company's reinsurance segment provides treaty reinsurance to insurance companies on a worldwide basis. The product lines in this segment are catastrophe, property, professional lines, credit and surety, motor, liability, agriculture, engineering, marine and other, accident and health, together with discontinued lines, which represents lines of business that Novae exited or placed into run-off in the three month periods ended December 31, 2016 and March 31, 2017. The reinsurance segment also wrote derivative based risk management products designed to address weather and commodity price risks until July 1, 2017. The following tables present the underwriting results of the Company's reportable segments, as well as the carrying values of allocated goodwill and intangible assets: 2018 2017 Three months ended and at September 30, Insurance Reinsurance Total Insurance Reinsurance Total Gross premiums written $ 969,364 $ 454,343 $ 1,423,707 $ 651,145 $ 534,429 $ 1,185,574 Net premiums written 602,070 317,868 919,938 407,054 425,689 832,743 Net premiums earned 614,795 609,280 1,224,075 420,775 596,356 1,017,131 Other insurance related income (losses) 1,526 6,949 8,475 302 (3,499 ) (3,197 ) Net losses and loss expenses (415,488 ) (379,471 ) (794,959 ) (576,688 ) (658,679 ) (1,235,367 ) Acquisition costs (111,888 ) (136,426 ) (248,314 ) (61,541 ) (133,183 ) (194,724 ) General and administrative expenses (100,656 ) (29,595 ) (130,251 ) (71,007 ) (25,689 ) (96,696 ) Underwriting income (loss) $ (11,711 ) $ 70,737 59,026 $ (288,159 ) $ (224,694 ) (512,853 ) Corporate expenses (24,643 ) (27,933 ) Net investment income 114,421 95,169 Net investment gains (losses) (17,628 ) 14,632 Foreign exchange losses (8,305 ) (32,510 ) Interest expense and financing costs (16,897 ) (12,835 ) Transaction and reorganization expenses (16,300 ) (5,970 ) Amortization of value of business acquired (39,018 ) — Amortization of intangible assets (1,753 ) — Income (loss) before income taxes and interest in income (loss) of equity method investments $ 48,903 $ (482,300 ) Net loss and loss expense ratio 67.6 % 62.3 % 64.9 % 137.1 % 110.5 % 121.5 % Acquisition cost ratio 18.2 % 22.4 % 20.3 % 14.6 % 22.3 % 19.1 % General and administrative expense ratio 16.4 % 4.8 % 12.7 % 16.9 % 4.3 % 12.3 % Combined ratio 102.2 % 89.5 % 97.9 % 168.6 % 137.1 % 152.9 % Total intangible assets $ 408,441 $ — $ 408,441 $ 87,206 $ — $ 87,206 2018 2017 Nine months ended and at September 30, Insurance Reinsurance Total Insurance Reinsurance Total Gross premiums written $ 2,876,856 $ 2,860,471 $ 5,737,327 $ 1,960,608 $ 2,499,164 $ 4,459,772 Net premiums written 1,748,142 2,158,122 3,906,264 1,259,999 2,037,719 3,297,718 Net premiums earned 1,772,126 1,804,900 3,577,026 1,230,279 1,706,986 2,937,265 Other insurance related income (losses) 3,359 15,452 18,811 853 (5,273 ) (4,420 ) Net losses and loss expenses (1,065,799 ) (1,097,146 ) (2,162,945 ) (1,093,237 ) (1,354,403 ) (2,447,640 ) Acquisition costs (290,082 ) (419,445 ) (709,527 ) (177,937 ) (410,942 ) (588,879 ) General and administrative expenses (305,394 ) (99,481 ) (404,875 ) (239,389 ) (96,393 ) (335,782 ) Underwriting income (loss) $ 114,210 $ 204,280 318,490 $ (279,431 ) $ (160,025 ) (439,456 ) Corporate expenses (85,069 ) (97,922 ) Net investment income 325,380 299,899 Net realized investment losses (77,551 ) (14,811 ) Foreign exchange losses (2,066 ) (90,093 ) Interest expense and financing costs (50,758 ) (38,377 ) Bargain purchase gain — 15,044 Transaction and reorganization expenses (48,125 ) (5,970 ) Amortization of value of business acquired (149,535 ) — Amortization of intangible assets (8,564 ) — Income (loss) before income taxes and interest in income (loss) of equity method investments $ 222,202 $ (371,686 ) Net loss and loss expense ratio 60.1 % 60.8 % 60.5 % 88.9 % 79.3 % 83.3 % Acquisition cost ratio 16.4 % 23.2 % 19.8 % 14.4 % 24.2 % 20.0 % General and administrative expense ratio 17.2 % 5.5 % 13.7 % 19.5 % 5.6 % 14.8 % Combined ratio 93.7 % 89.5 % 94.0 % 122.8 % 109.1 % 118.1 % Total intangible assets $ 408,441 $ — $ 408,441 $ 87,206 $ — $ 87,206 |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | a) Fixed Maturities and Equity securities Fixed maturities The amortized cost and fair values of the Company's fixed maturities classified as available for sale were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-credit OTTI in AOCI (5) At September 30, 2018 Fixed maturities U.S. government and agency $ 1,625,114 $ 414 $ (20,063 ) $ 1,605,465 $ — Non-U.S. government 558,862 3,013 (13,750 ) 548,125 — Corporate debt 5,144,747 23,714 (87,376 ) 5,081,085 — Agency RMBS (1) 1,688,977 2,140 (51,886 ) 1,639,231 — CMBS (2) 1,099,728 729 (23,502 ) 1,076,955 — Non-Agency RMBS 41,273 1,475 (962 ) 41,786 (868 ) ABS (3) 1,651,271 1,520 (6,980 ) 1,645,811 — Municipals (4) 131,583 557 (2,901 ) 129,239 — Total fixed maturities $ 11,941,555 $ 33,562 $ (207,420 ) $ 11,767,697 $ (868 ) At December 31, 2017 Fixed maturities U.S. government and agency $ 1,727,643 $ 1,735 $ (16,909 ) $ 1,712,469 $ — Non-U.S. government 798,582 17,240 (9,523 ) 806,299 — Corporate debt 5,265,795 61,922 (29,851 ) 5,297,866 — Agency RMBS (1) 2,414,720 8,132 (27,700 ) 2,395,152 — CMBS (2) 776,715 4,138 (3,125 ) 777,728 — Non-Agency RMBS 45,713 1,917 (799 ) 46,831 (853 ) ABS (3) 1,432,884 5,391 (1,994 ) 1,436,281 — Municipals (4) 149,167 1,185 (972 ) 149,380 — Total fixed maturities $ 12,611,219 $ 101,660 $ (90,873 ) $ 12,622,006 $ (853 ) (1) Residential mortgage-backed securities ("RMBS") originated by U.S. government-sponsored agencies. (2) Commercial mortgage-backed securities ("CMBS"). (3) Asset-backed securities (ABS) include debt tranched securities collateralized primarily by auto loans, student loans, credit card receivables, collateralized debt obligations ("CDOs") and collateralized loan obligations ("CLOs"). (4) Municipals include bonds issued by states, municipalities and political subdivisions. (5) Represents the non-credit component of the other-than-temporary impairment ("OTTI") losses, adjusted for subsequent sales, maturities and redemptions. It does not include the change in fair value subsequent to the impairment measurement date. Equity Securities The cost and fair values of the Company's equity securities were as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value At September 30, 2018 Equity securities Common stocks $ 13,392 $ 1,345 $ (1,232 ) $ 13,505 Exchange-traded funds 211,940 63,543 (2,035 ) 273,448 Bond mutual funds 150,675 — (4,317 ) 146,358 Total equity securities $ 376,007 $ 64,888 $ (7,584 ) $ 433,311 At December 31, 2017 Equity securities Common stocks $ 22,836 $ 3,412 $ (590 ) $ 25,658 Exchange-traded funds 356,252 71,675 (294 ) 427,633 Bond mutual funds 173,779 9,440 (999 ) 182,220 Total equity securities $ 552,867 $ 84,527 $ (1,883 ) $ 635,511 In the normal course of investing activities, the Company actively manages allocations to non-controlling tranches of structured securities which are variable interests issued by Variable Interest Entities ("VIEs"). These structured securities include RMBS, CMBS and ABS. The Company also invests in limited partnerships including hedge funds, direct lending funds, private equity funds and real estate funds as well as CLO equity tranched securities, which are all variable interests issued by VIEs (see Note 3(c) ' Other Investments '). The Company does not have the power to direct the activities that are most significant to the economic performance of the VIEs therefore the Company is not the primary beneficiary of any of these VIEs. The maximum exposure to loss on these interests is limited to the amount of investment made by the Company. The Company has not provided financial or other support with respect to these structured securities other than the original investment. Contractual Maturities Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The contractual maturities of fixed maturities are shown below: Amortized Cost Fair Value % of Total Fair Value At September 30, 2018 Maturity Due in one year or less $ 496,968 $ 492,752 4.1 % Due after one year through five years 4,926,538 4,881,185 41.5 % Due after five years through ten years 1,821,059 1,774,813 15.1 % Due after ten years 215,741 215,164 1.8 % 7,460,306 7,363,914 62.5 % Agency RMBS 1,688,977 1,639,231 13.9 % CMBS 1,099,728 1,076,955 9.2 % Non-Agency RMBS 41,273 41,786 0.4 % ABS 1,651,271 1,645,811 14.0 % Total $ 11,941,555 $ 11,767,697 100.0 % At December 31, 2017 Maturity Due in one year or less $ 486,659 $ 484,663 3.8 % Due after one year through five years 4,906,207 4,912,189 38.9 % Due after five years through ten years 2,338,964 2,350,433 18.6 % Due after ten years 209,357 218,729 1.7 % 7,941,187 7,966,014 63.0 % Agency RMBS 2,414,720 2,395,152 19.0 % CMBS 776,715 777,728 6.2 % Non-Agency RMBS 45,713 46,831 0.4 % ABS 1,432,884 1,436,281 11.4 % Total $ 12,611,219 $ 12,622,006 100.0 % Gross Unrealized Losses The following table summarizes fixed maturities and equity securities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position: 12 months or greater Less than 12 months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses At September 30, 2018 (1) Fixed maturities U.S. government and agency $ 311,591 $ (10,619 ) $ 1,228,100 $ (9,444 ) $ 1,539,691 $ (20,063 ) Non-U.S. government 34,550 (2,086 ) 382,172 (11,664 ) 416,722 (13,750 ) Corporate debt 621,298 (28,190 ) 3,256,619 (59,186 ) 3,877,917 (87,376 ) Agency RMBS 722,287 (33,738 ) 780,730 (18,148 ) 1,503,017 (51,886 ) CMBS 105,887 (3,944 ) 832,183 (19,558 ) 938,070 (23,502 ) Non-Agency RMBS 10,821 (946 ) 6,067 (16 ) 16,888 (962 ) ABS 157,894 (2,115 ) 844,190 (4,865 ) 1,002,084 (6,980 ) Municipals 33,043 (1,327 ) 71,150 (1,574 ) 104,193 (2,901 ) Total fixed maturities $ 1,997,371 $ (82,965 ) $ 7,401,211 $ (124,455 ) $ 9,398,582 $ (207,420 ) At December 31, 2017 Fixed maturities U.S. government and agency $ 194,916 $ (5,963 ) $ 1,389,792 $ (10,946 ) $ 1,584,708 $ (16,909 ) Non-U.S. government 62,878 (6,806 ) 204,110 (2,717 ) 266,988 (9,523 ) Corporate debt 407,300 (11,800 ) 2,041,845 (18,051 ) 2,449,145 (29,851 ) Agency RMBS 759,255 (17,453 ) 1,172,313 (10,247 ) 1,931,568 (27,700 ) CMBS 31,607 (703 ) 348,943 (2,422 ) 380,550 (3,125 ) Non-Agency RMBS 8,029 (788 ) 4,197 (11 ) 12,226 (799 ) ABS 57,298 (570 ) 392,170 (1,424 ) 449,468 (1,994 ) Municipals 11,230 (269 ) 65,632 (703 ) 76,862 (972 ) Total fixed maturities $ 1,532,513 $ (44,352 ) $ 5,619,002 $ (46,521 ) $ 7,151,515 $ (90,873 ) Equity securities Common stocks $ — $ — $ 3,202 $ (590 ) $ 3,202 $ (590 ) Exchange-traded funds — — 12,323 (294 ) 12,323 (294 ) Bond mutual funds — — 12,184 (999 ) 12,184 (999 ) Total equity securities $ — $ — $ 27,709 $ (1,883 ) $ 27,709 $ (1,883 ) (1) Effective January 1, 2018, the Company adopted ASU No. 2016-01 which requires equity securities to be measured at fair value with changes in fair value recognized in net income therefore equity securities at fair value are excluded from the table above at September 30, 2018. Fixed Maturities At September 30, 2018 , 3,444 fixed maturities ( 2017 : 2,424 ) were in an unrealized loss position of $207 million ( 2017 : $91 million ), of which $13 million ( 2017 : $7 million ) was related to securities below investment grade or not rated. At September 30, 2018 , 940 fixed maturities ( 2017 : 627 ) had been in a continuous unrealized loss position for twelve months or greater and had a fair value of $1,997 million ( 2017 : $1,533 million ). Following a credit impairment review, it was concluded that these securities as well as the remaining securities in an unrealized loss position were temporarily impaired at September 30, 2018 , and were expected to recover in value as the securities approach maturity. At September 30, 2018 , the Company did not intend to sell the securities in an unrealized loss position and it is more likely than not that the Company will not be required to sell these securities before the anticipated recovery of their amortized costs. b) Mortgage Loans The following table provides details of the Company's mortgage loans held-for-investment: September 30, 2018 December 31, 2017 Carrying Value % of Total Carrying Value % of Total Mortgage Loans held-for-investment: Commercial $ 333,018 100 % $ 325,062 100 % Total Mortgage Loans held-for-investment $ 333,018 100 % $ 325,062 100 % The primary credit quality indicator for commercial mortgage loans is the debt service coverage ratio which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan, (generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss) and the loan-to-value ratio which compares the unpaid principal balance of the loan to the estimated fair value of the underlying collateral (generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss). The debt service coverage ratio and loan-to-value ratio, as well as the values utilized in calculating these ratios, are updated annually, on a rolling basis. The Company has a high quality mortgage loan portfolio with weighted average debt service coverage ratios in excess of 2.6 x and weighted average loan-to-value ratios of less than 60% . At September 30, 2018 , there are no credit losses associated with the commercial mortgage loans held by the Company. At September 30, 2018 , there are no past due amounts. c) Other Investments The following tables provide a summary of the Company's other investments, together with additional information relating to the liquidity of each category: Fair Value Redemption Frequency (if currently eligible) Redemption Notice Period At September 30, 2018 Long/short equity funds $ 28,593 3 % Annually 60 days Multi-strategy funds 185,255 22 % Quarterly, Semi-annually 60-95 days Event-driven funds 38,084 5 % Annually 45 days Direct lending funds 268,210 32 % n/a n/a Private equity funds 67,840 8 % n/a n/a Real estate funds 63,764 8 % n/a n/a CLO-Equities 24,264 3 % n/a n/a Other privately held investments 47,389 6 % n/a n/a Overseas deposits 110,164 13 % n/a n/a Total other investments $ 833,563 100 % At December 31, 2017 Long/short equity funds $ 38,470 4 % Annually 60 days Multi-strategy funds 286,164 28 % Quarterly, Semi-annually 60-95 days Event-driven funds 39,177 4 % Annually 45 days Direct lending funds 250,681 25 % n/a n/a Private equity funds 68,812 7 % n/a n/a Real estate funds 50,009 5 % n/a n/a CLO-Equities 31,413 2 % n/a n/a Other privately held investments 46,430 5 % n/a n/a Overseas deposits 198,217 20 % n/a n/a Total other investments $ 1,009,373 100 % n/a - not applicable The investment strategies for the above funds are as follows: • Long/short equity funds : Seek to achieve attractive returns primarily by executing an equity trading strategy involving both long and short investments in publicly-traded equity securities. • Multi-strategy funds : Seek to achieve above-market returns by pursuing multiple investment strategies to diversify risks and reduce volatility. This category includes funds of hedge funds which invest in a large pool of hedge funds across a diversified range of hedge fund strategies. • Event-driven funds : Seek to achieve attractive returns by exploiting situations where announced or anticipated events create opportunities. • Direct lending funds : Seek to achieve attractive risk-adjusted returns, including current income generation, by investing in funds which provide financing directly to borrowers. • Private equity funds : Seek to achieve attractive risk-adjusted returns by investing in private transactions over the course of several years. • Real estate funds : Seek to achieve attractive risk-adjusted returns by making and managing investments in real estate and real estate securities and businesses. Two common redemption restrictions which may impact the Company's ability to redeem hedge funds are gates and lockups. A gate is a suspension of redemptions which may be implemented by the general partner or investment manager of the fund in order to defer, in whole or in part, the redemption request in the event the aggregate amount of redemption requests exceeds a predetermined percentage of the fund's net assets which may otherwise hinder the general partner or investment manager's ability to liquidate holdings in an orderly fashion in order to generate the cash necessary to fund extraordinarily large redemption payouts. A lockup period is the initial amount of time an investor is contractually required to hold the security before having the ability to redeem. During the nine months ended September 30, 2018 and 2017 , neither of these restrictions impacted the Company's redemption requests. At September 30, 2018 , $42 million ( 2017 : $38 million ), representing 17% ( 2017 : 11% ) of total hedge funds, relate to a holding where the Company is still within the lockup period. The expiration of these lockup periods range from March 2019 to May 2020. At September 30, 2018 , the Company had $199 million ( 2017 : $137 million ) of unfunded commitments as a limited partner in direct lending funds. Once the full amount of committed capital has been called by the General Partner of each of these funds, the assets will not be fully returned until the completion of the fund's investment term. These funds have investment terms ranging from five to ten years and the General Partners of certain funds have the option to extend the term by up to three years. At September 30, 2018 , the Company had $53 million ( 2017 : $16 million ) of unfunded commitments as a limited partner in multi-strategy hedge funds. Once the full amount of committed capital has been called by the General Partner of each of these funds, the assets will not be fully returned until after the completion of the funds' investment term. These funds have investment terms ranging from two years to the dissolution of the underlying fund. At September 30, 2018 , the Company had $169 million ( 2017 : $115 million ) of unfunded commitments as a limited partner in funds which invest in real estate and real estate securities and businesses. These funds include an open-ended fund and funds with investment terms ranging from seven years to the dissolution of the underlying fund. At September 30, 2018 , the Company had $18 million ( 2017 : $21 million ) of unfunded commitments as a limited partner in a private equity fund. The life of the fund is subject to the dissolution of the underlying funds. The Company expects the overall holding period to be over ten years. During 2015, the Company made a $50 million commitment as a limited partner of a bank revolver opportunity fund. The fund has an investment term of seven years and the General Partners have the option to extend the term by up to two years. At September 30, 2018 , this commitment remains unfunded. It is not anticipated that the full amount of this fund will be drawn. Syndicate 2007 holds overseas deposits which include investments in private funds where the underlying investments are primarily U.S. government, Non-U.S. government and corporate debt securities. The funds do not trade on an exchange therefore are not included within available for sale investments. d) Equity Method Investments During 2016, the Company paid $108 million including direct transaction costs to acquire 19% of the common equity of Harrington Reinsurance Holdings Limited ("Harrington"), the parent company of Harrington Re Ltd. ("Harrington Re"), an independent reinsurance company jointly sponsored by AXIS Capital and The Blackstone Group L.P. ("Blackstone"). Through long-term service agreements, AXIS Capital will serve as Harrington Re's reinsurance underwriting manager and Blackstone will serve as exclusive investment management service provider. As an investor, the Company expects to benefit from underwriting profit generated by Harrington Re and the income and capital appreciation Blackstone seeks to deliver through its investment management services. In addition, the Company has entered into an arrangement with Blackstone under which underwriting and investment related fees will be shared equally. Harrington is not a variable interest entity. Given that the Company exercises significant influence over the operating and financial policies of this investee, the Company accounts for its ownership interest in Harrington under the equity method of accounting. The Company's proportionate share of the underlying equity in net assets resulted in a basis difference of $5 million which represents initial transactions costs. During the nine months ended September 30, 2017 , the Company recorded an impairment charge of $9 million , related to a U.S. based insurance company, which reduced the carrying value of the investment to $nil . This charge was included in interest in income (loss) of equity method investments in the Consolidated Statement of Operations. e) Net Investment Income Net investment income was derived from the following sources: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Fixed maturities $ 89,887 $ 74,978 $ 262,165 $ 230,603 Other investments 15,933 17,373 44,179 59,973 Equity securities 2,099 3,223 7,015 11,048 Mortgage loans 3,322 2,895 9,805 7,970 Cash and cash equivalents 6,992 3,111 16,770 9,640 Short-term investments 3,413 698 5,933 1,797 Gross investment income 121,646 102,278 345,867 321,031 Investment expenses (7,225 ) (7,109 ) (20,487 ) (21,132 ) Net investment income $ 114,421 $ 95,169 $ 325,380 $ 299,899 f) Net Investment Gains (Losses) The following table provides an analysis of net investment gains (losses): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Gross realized investment gains Fixed maturities and short-term investments $ 4,543 $ 19,297 $ 41,932 $ 57,524 Equity securities 15 17,980 18,675 33,794 Gross realized investment gains 4,558 37,277 60,607 91,318 Gross realized investment losses Fixed maturities and short-term investments (25,926 ) (15,893 ) (113,903 ) (83,183 ) Equity securities — (45 ) (1,231 ) (258 ) Gross realized investment losses (25,926 ) (15,938 ) (115,134 ) (83,441 ) Net OTTI recognized in net income (5,546 ) (5,412 ) (7,634 ) (13,493 ) Change in fair value of investment derivatives (1) 2,626 (1,295 ) 9,782 (9,195 ) Net unrealized gains (losses) on equity securities (2) 6,660 — (25,172 ) — Net investment gains (losses) $ (17,628 ) $ 14,632 $ (77,551 ) $ (14,811 ) (1) Refer to Note 5 ' Derivative Instruments'. (2) Effective January 1, 2018, the Company adopted ASU No. 2016-01. The change in fair value of equity securities is now recognized in net investment losses. The following table summarizes the OTTI recognized in net income by asset class: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Fixed maturities: Non-U.S. government $ 4,426 $ 3,905 $ 4,448 $ 8,187 Corporate debt 1,079 1,507 3,145 5,306 CMBS 41 — 41 — Total OTTI recognized in net income $ 5,546 $ 5,412 $ 7,634 $ 13,493 The following table provides a roll forward of the credit losses ("credit loss table") before income taxes, for which a portion of the OTTI was recognized in AOCI: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Balance at beginning of period $ 1,472 $ 1,481 $ 1,494 $ 1,493 Credit impairments recognized on securities not previously impaired — — — — Additional credit impairments recognized on securities previously impaired 8 2 8 2 Change in timing of future cash flows on securities previously impaired — — — — Intent to sell of securities previously impaired — — — — Securities sold/redeemed/matured — — (22 ) (12 ) Balance at end of period $ 1,480 $ 1,483 $ 1,480 $ 1,483 g) Reverse Repurchase Agreements At September 30, 2018 , the Company held $167 million ( 2017 : $ 37 million ) of reverse repurchase agreements. These loans are fully collateralized, are generally outstanding for a short period of time and are presented on a gross basis as part of cash and cash equivalents in the Company's Consolidated Balance Sheets. The required collateral for these loans is either cash or U.S. Treasuries at a minimum rate of 102% of the loan principal. Upon maturity, the Company receives principal and interest income. The Company monitors the estimated fair value of the securities loaned and borrowed on a daily basis with additional collateral obtained as necessary throughout the duration of the transaction. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | Fair Value Hierarchy Fair value is defined as the price to sell an asset or transfer a liability (i.e. the "exit price") in an orderly transaction between market participants. U.S. GAAP prescribes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. 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. The hierarchy is broken down into three levels as follows: • Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2 - Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. • Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The unobservable inputs reflect the Company's own judgments about assumptions that market participants might use. The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety of factors including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This may lead the Company to change the selection of valuation technique (from market to cash flow approach) or may cause the Company to use multiple valuation techniques to estimate the fair value of a financial instrument. This circumstance could cause an instrument to be reclassified between levels within the fair value hierarchy. Valuation Techniques The valuation techniques, including significant inputs and assumptions generally used to determine the fair values of the Company's financial instruments as well as the classification of the fair values of its financial instruments in the fair value hierarchy are described in detail below. Fixed Maturities At each valuation date, the Company uses the market approach valuation technique to estimate the fair value of its fixed maturities portfolio, when possible. This market approach includes, but is not limited to, prices obtained from third party pricing services for identical or comparable securities and the use of "pricing matrix models" using observable market inputs such as yield curves, credit risks and spreads, measures of volatility, and prepayment speeds. Pricing from third party pricing services is sourced from multiple vendors, when available, and the Company maintains a vendor hierarchy by asset type based on historical pricing experience and vendor expertise. When prices are unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers who are active in the corresponding markets. The valuation techniques including significant inputs and assumptions generally used to determine the fair values of the Company's fixed maturities by asset class as well as the classifications of the fair values of these securities in the fair value hierarchy are described in detail below. U.S. government and agency U.S. government and agency securities consist primarily of bonds issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. As the fair values of U.S. Treasury securities are based on unadjusted market prices in active markets, these securities are classified as Level 1. The fair values of U.S. government agency securities are determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads are observable market inputs, the fair values of U.S. government agency securities are classified as Level 2. Non-U.S. government Non-U.S. government securities include bonds issued by non-U.S. governments and their agencies along with supranational organizations (collectively also known as sovereign debt securities). The fair values of these securities are based on prices obtained from international indices or valuation models that include inputs such as interest rate yield curves, cross-currency basis index spreads, and country credit spreads for structures similar to the sovereign bond in terms of issuer, maturity and seniority. As the significant inputs used to price these securities are observable market inputs, the fair values of non-U.S. government securities are classified as Level 2. Corporate debt Corporate debt securities consist primarily of investment-grade debt of a wide variety of corporate issuers and industries. The fair values of these securities are generally determined using the spread above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and broker-dealer quotes. As the yields for the risk-free yield curve and the spreads are observable market inputs, the fair values of corporate debt securities are generally classified as Level 2. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers to estimate fair value. This is generally the case when there is a low volume of trading activity and current transactions are not orderly. In this event, the fair values of these securities are classified as Level 3. Agency RMBS Agency RMBS consist of bonds issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. The fair values of these securities are priced using a mortgage pool specific model which uses daily inputs from the active to be announced market and the spread associated with each mortgage pool based on vintage. As the significant inputs used to price these securities are observable market inputs, the fair values of Agency RMBS are classified as Level 2. CMBS CMBS include mostly investment-grade bonds originated by non-agencies. The fair values of these securities are determined using a pricing model which uses dealer quotes and other available trade information along with security level characteristics to determine deal specific spreads. As the significant inputs used to price these securities are observable market inputs, the fair values of CMBS securities are generally classified as Level 2. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers to estimate fair value. This is generally the case when there is a low volume of trading activity and current transactions are not orderly. I n this event, the fair values of these securities are classified as Level 3. Non-Agency RMBS Non-Agency RMBS include mostly investment-grade bonds originated by non-agencies. The fair values of these securities are determined using an option adjusted spread model or other relevant models, which use inputs including available trade information or broker quotes, prepayment and default projections based on historical statistics of the underlying collateral and current market data. As the significant inputs used to price these securities are observable market inputs, the fair values of Non-Agency RMBS are generally classified as Level 2. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers to estimate fair value. This is generally the case when there is a low volume of trading activity and current transactions are not orderly. I n this event, the fair values of these securities are classified as Level 3. ABS ABS include mostly investment-grade bonds backed by pools of loans with a variety of underlying collateral, including auto loans, student loans, credit card receivables, CDOs and CLO debt originated by a variety of financial institutions. The fair values of these securities are determined using a model which uses prepayment speeds and spreads sourced primarily from the new issue market. As the significant inputs used to price these securities are observable market inputs, the fair values of ABS are generally classified as Level 2. Where pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers t o estimate fair value. This is generally the case when there is a low volume of trading activity and current transactions are not orderly. I n this event, the fair values of these securities are classified as Level 3. Municipals Municipals comprise revenue and general obligation bonds issued by U.S. domiciled state and municipal entities. The fair values of these securities are determined using spreads obtained from the new issue market, trade prices and broker-dealers quotes. As the significant inputs used to price these securities are observable market inputs, the fair values of municipals are classified as Level 2. Equity Securities Equity securities include common stocks, exchange-traded funds and bond mutual funds. As the fair values of common stocks and exchange-traded funds are based on unadjusted quoted market prices in active markets, the fair value of these securities are classified as Level 1. As bond mutual funds have daily liquidity with redemptions based on the Net Asset Values per share ("NAV") of the funds, the fair values of these securities are classified as Level 2. Other Investments Other privately held securities include convertible preferred shares, convertible notes and notes payable. These securities are initially valued at cost which approximates fair value. In subsequent measurement periods, the fair values of these securities are determined using an income approach valuation technique, specifically an internally developed discounted cash flow model. As the significant inputs used to price these securities are unobservable, the fair values of other investments are classified as Level 3. The fair value of the indirect investment in CLO-Equities are classified as Level 3 as the fair value of this security is estimated using an income approach valuation technique, specifically an externally developed discounted cash flow model due to the lack of observable and relevant trades in secondary markets. Overseas deposits include investments in private funds held by Syndicate 2007 where the underlying investments are primarily U.S. government, Non-U.S. government and corporate debt securities. The funds do not trade on an exchange therefore are not included within available for sale investments. As the significant inputs used to price the underlying investments are observable market inputs, the fair values of overseas deposits are classified as Level 2. Short-Term Investments Short-term investments primarily comprise highly liquid securities with maturities greater than three months but less than one year from the date of purchase. The fair value of these securities are classified as Level 2 because these securities are typically not actively traded due to their approaching maturity and, as such, their amortized cost approximates fair value. Derivative Instruments Derivative instruments include foreign exchange forward contracts and exchange traded interest rate swaps that are customized to the Company's economic hedging strategies and trade in the over-the-counter derivative market. The fair values of these derivatives are determined using a market approach valuation technique based on significant observable market inputs from third party pricing vendors, non-binding broker-dealer quotes and/or recent trading activity. As the significant inputs used to price these securities are observable market inputs, the fair values of these derivatives are classified as Level 2. Other underwriting-related derivatives include insurance and reinsurance contracts that are accounted for as derivatives. These derivative contracts are initially valued at cost which approximates fair value. In subsequent measurement periods, the fair values of these derivatives are determined using an income approach valuation technique, specifically internally developed discounted cash flow models. As the significant inputs used to price these derivatives are unobservable, the fair values of these contracts are classified as Level 3. Insurance-linked Securities Insurance-linked securities comprise an investment in a catastrophe bond. As pricing is unavailable from pricing services, the Company obtains non-binding quotes from broker-dealers to estimate the fair value of this security. Pricing is generally unavailable when there is a low volume of trading activity and current transactions are not orderly therefore the fair value of this security is classified as Level 3. Cash Settled Awards Cash settled awards comprise restricted stock units that form part of the Company's compensation program. Although the fair values of these awards are determined using observable quoted market prices in active markets, the restricted stock units are not actively traded. As the significant inputs used to price these securities are observable market inputs, the fair values of these liabilities are classified as Level 2. The tables below present the financial instruments measured at fair value on a recurring basis for the periods indicated: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair value based on NAV practical expedient Total Fair Value At September 30, 2018 Assets Fixed maturities U.S. government and agency $ 1,579,758 $ 25,707 $ — $ — $ 1,605,465 Non-U.S. government — 548,125 — — 548,125 Corporate debt — 5,027,985 53,100 — 5,081,085 Agency RMBS — 1,639,231 — — 1,639,231 CMBS — 1,066,184 10,771 — 1,076,955 Non-Agency RMBS — 41,786 — — 41,786 ABS — 1,642,154 3,657 — 1,645,811 Municipals — 129,239 — — 129,239 1,579,758 10,120,411 67,528 — 11,767,697 Equity securities Common stocks 13,505 — — — 13,505 Exchange-traded funds 273,448 — — — 273,448 Bond mutual funds — 146,358 — — 146,358 286,953 146,358 — — 433,311 Other investments Hedge funds (1) — — — 251,932 251,932 Direct lending funds — — — 268,210 268,210 Private equity funds — — — 67,840 67,840 Real estate funds — — — 63,764 63,764 Other privately held investments — — 47,389 — 47,389 CLO-Equities — — 24,264 — 24,264 Overseas deposits — 110,164 — — 110,164 — 110,164 71,653 651,746 833,563 Short-term investments — 156,090 — — 156,090 Other assets Derivative instruments (see Note 5) — 3,383 — — 3,383 Total Assets $ 1,866,711 $ 10,536,406 $ 139,181 $ 651,746 $ 13,194,044 Liabilities Derivative instruments (see Note 5) $ — $ 4,908 $ 10,212 $ — $ 15,120 Cash settled awards (see Note 8) — 19,096 — — 19,096 Total Liabilities $ — $ 24,004 $ 10,212 $ — $ 34,216 (1) Includes Long/short equity, Multi-strategy and Event-driven funds. Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair value based on NAV practical expedient Total Fair Value At December 31, 2017 Assets Fixed maturities U.S. government and agency $ 1,658,622 $ 53,847 $ — $ — $ 1,712,469 Non-U.S. government — 806,299 — — 806,299 Corporate debt — 5,244,969 52,897 — 5,297,866 Agency RMBS — 2,395,152 — — 2,395,152 CMBS — 777,728 — — 777,728 Non-Agency RMBS — 46,831 — — 46,831 ABS — 1,436,281 — — 1,436,281 Municipals — 149,380 — — 149,380 1,658,622 10,910,487 52,897 — 12,622,006 Equity securities Common stocks 25,658 — — — 25,658 Exchange-traded funds 427,633 — — — 427,633 Bond mutual funds — 182,220 — — 182,220 453,291 182,220 — — 635,511 Other investments Hedge funds (1) — — — 363,811 363,811 Direct lending funds — — — 250,681 250,681 Private equity funds — — — 68,812 68,812 Real estate funds — — — 50,009 50,009 Other privately held investments — — 46,430 — 46,430 CLO-Equities — — 31,413 — 31,413 Overseas deposits — 198,217 — — 198,217 — 198,217 77,843 733,313 1,009,373 Short-term investments — 83,661 — — 83,661 Other assets Derivative instruments (see Note 5) — 5,125 — — 5,125 Insurance-linked securities — — 25,090 — 25,090 Total Assets $ 2,111,913 $ 11,379,710 $ 155,830 $ 733,313 $ 14,380,766 Liabilities Derivative instruments (see Note 5) $ — $ 2,876 $ 11,510 $ — $ 14,386 Cash settled awards (see Note 8) — 21,535 — — 21,535 Total Liabilities $ — $ 24,411 $ 11,510 $ — $ 35,921 (1) Includes Long/short equity, Multi-strategy and Event-driven funds. During 2018 and 2017 , the Company had no transfers between Levels 1 and 2. Except certain fixed maturities and insurance-linked securities priced using broker-dealer quotes (underlying inputs are not available), the following table quantifies the significant unobservable inputs used in estimating fair values at September 30, 2018 of investments classified as Level 3 in the fair value hierarchy. Fair Value Valuation Technique Unobservable Input Range Weighted Average Other investments - CLO-Equities $ 24,264 Discounted cash flow Default rates 3.0% 3.0% Loss severity rate 35.0% 35.0% Collateral spreads 3.0% 3.0% Estimated maturity dates 7 years 7 years Other investments - Other privately held investments $ 47,389 Discounted cash flow Discount rate 3.0% - 8.5% 7.2% Derivatives - Other underwriting-related derivatives $ (10,212 ) Discounted cash flow Discount rate 3.0% 3.0% Other investments - CLO-Equities The CLO-Equities market continues to be relatively inactive with only a small number of transactions being observed, particularly as it relates to transactions involving CLO-Equities held by the Company. Accordingly, the fair value of the Company's indirect investment in CLO-Equities is determined using a discounted cash flow model prepared by an external investment manager. The default and loss severity rates are the most judgmental unobservable market inputs to the discounted cash flow model to which the valuation of the Company's indirect investment in CLO-Equities is most sensitive. A significant increase (decrease) in either of these significant inputs in isolation would result in a lower (higher) fair value estimate for the investment in CLO-Equities and, in general, a change in default rate assumptions would be accompanied by a directionally similar change in loss severity rate assumptions. Collateral spreads and estimated maturity dates are less judgmental inputs as they are based on the historical average of actual spreads and the weighted average life of the current underlying portfolios, respectively. A significant increase (decrease) in either of these significant inputs in isolation would result in a higher (lower) fair value estimate for the investment in CLO-Equities. In general, these inputs have no significant interrelationship with each other or with default and loss severity rates. On a quarterly basis, the Company's valuation process for its indirect investment in CLO-Equities includes a review of the underlying cash flows and key assumptions used in the discounted cash flow model. The above significant unobservable inputs are reviewed and updated based on information obtained from secondary markets, including information received from the managers of the Company's CLO-Equities portfolio. In order to assess the reasonableness of the inputs the Company uses in its models, the Company maintains an understanding of current market conditions, historical results, as well as emerging trends that may impact future cash flows. In addition, the assumptions the Company uses in its models are updated through regular communication with industry participants and ongoing monitoring of the deals in which the Company participates (e.g. default and loss severity rate trends). Other investments - Other privately held securities Other privately held securities are initially valued at cost which approximates fair value. In subsequent measurement periods, the fair values of these securities are determined using internally developed discounted cash flow models. These models include inputs that are specific to each investment. The inputs used in the fair value measurements include dividend or interest rates and appropriate discount rates. The selection of an appropriate discount rate is judgmental and is the most significant unobservable input used in the valuation of these securities. A significant increase (decrease) in this input in isolation could result in significantly lower (higher) fair value measurement for other privately held securities. Where relevant, the Company also considers the contractual agreements which stipulate methodologies for calculating the dividend rate to be paid upon liquidation, conversion or redemption. In order to assess the reasonableness of the inputs that are used in the discounted cash flow models, the Company maintains an understanding of current market conditions, historical results, as well as investee specific information that may impact future cash flows. Derivatives - Other underwriting-related derivatives Other underwriting-related derivatives are initially valued at cost which approximates fair value. In subsequent measurement periods, the fair values of these derivatives are determined using internally developed discounted cash flow models which uses appropriate discount rates. The selection of an appropriate discount rate is judgmental and is the most significant unobservable input used in the valuation of these derivatives. A significant increase (decrease) in this input in isolation could result in a significantly lower (higher) fair value measurement for the derivative contracts. In order to assess the reasonableness of the inputs the Company uses in the discounted cash flow model, the Company maintains an understanding of current market conditions, historical results, as well as contract specific information that may impact future cash flows. The following tables present changes in Level 3 for financial instruments measured at fair value on a recurring basis for the periods indicated: Opening Balance Transfers into Level 3 Transfers out of Level 3 Included in net income (1) Included in OCI (2) Purchases Sales Settlements/ Distributions Closing Balance Change in unrealized investment gains/(losses) (3) Three months ended September 30, 2018 Fixed maturities Corporate debt $ 42,553 $ 1,346 $ — $ (579 ) $ 4,962 $ 13,871 $ (3,960 ) $ (5,093 ) $ 53,100 $ — Non-Agency RMBS 903 — (790 ) — (1 ) — — (112 ) — — CMBS 18,149 3,160 (10,422 ) — (55 ) — — (61 ) 10,771 — ABS — 3,657 — — — — — — 3,657 — 61,605 8,163 (11,212 ) (579 ) 4,906 13,871 (3,960 ) (5,266 ) 67,528 — Other investments Other privately held investments 47,613 — — (224 ) — — — — 47,389 (224 ) CLO - Equities 26,153 — — 2,035 — — — (3,924 ) 24,264 2,035 73,766 — — 1,811 — — — (3,924 ) 71,653 1,811 Other assets Insurance-linked securities — — — — — — — — — — — — — — — — — — — — Total assets $ 135,371 $ 8,163 $ (11,212 ) $ 1,232 $ 4,906 $ 13,871 $ (3,960 ) $ (9,190 ) $ 139,181 $ 1,811 Other liabilities Derivative instruments $ 10,589 $ — $ — $ (377 ) $ — $ — $ — $ — $ 10,212 $ (377 ) Total liabilities $ 10,589 $ — $ — $ (377 ) $ — $ — $ — $ — $ 10,212 $ (377 ) Nine months ended September 30, 2018 Fixed maturities Corporate debt $ 52,897 $ 2,935 $ (4,279 ) $ (698 ) $ 5,977 $ 17,056 $ (9,714 ) $ (11,074 ) $ 53,100 $ — Non-Agency RMBS — — (789 ) — 1 900 — (112 ) — — CMBS — 5,096 (10,422 ) — (57 ) 16,215 — (61 ) 10,771 — ABS — 3,657 — — — — — — 3,657 — 52,897 11,688 (15,490 ) (698 ) 5,921 34,171 (9,714 ) (11,247 ) 67,528 — Other investments Other privately held investments 46,430 — — (652 ) — 3,111 (1,500 ) — 47,389 (652 ) CLO - Equities 31,413 — — 6,719 — — — (13,868 ) 24,264 6,719 77,843 — — 6,067 — 3,111 (1,500 ) (13,868 ) 71,653 6,067 Other assets Insurance-linked securities 25,090 — — (90 ) — — — (25,000 ) — — 25,090 — — (90 ) — — — (25,000 ) — — Total assets $ 155,830 $ 11,688 $ (15,490 ) $ 5,279 $ 5,921 $ 37,282 $ (11,214 ) $ (50,115 ) $ 139,181 $ 6,067 Other liabilities Derivative instruments $ 11,510 $ — $ — $ (1,298 ) $ — $ — $ — $ — $ 10,212 $ (1,298 ) Total liabilities $ 11,510 $ — $ — $ (1,298 ) $ — $ — $ — $ — $ 10,212 $ (1,298 ) Opening Balance Transfers into Level 3 Transfers out of Level 3 Included in net income (1) Included in OCI (2) Purchases Sales Settlements/ Distributions Closing Balance Change in unrealized investment gains/(losses) (3) Three months ended September 30, 2017 Fixed maturities Corporate debt $ 68,320 $ — $ (1,208 ) $ (835 ) $ (9 ) $ — $ (2,274 ) $ (2,978 ) $ 61,016 $ — CMBS — — — — — — — — — — ABS 5,999 — (6,001 ) — 10 24,007 — — 24,015 — 74,319 — (7,209 ) (835 ) 1 24,007 (2,274 ) (2,978 ) 85,031 — Other investments Other privately held investments 42,938 — — 460 — — — — 43,398 460 CLO - Equities 47,076 — — 1,402 — — — (11,696 ) 36,782 1,402 90,014 — — 1,862 — — — (11,696 ) 80,180 1,862 Other assets Derivative instruments — — — — — — — — — — Insurance-linked securities 25,047 — — (71 ) — — — — 24,976 (71 ) 25,047 — — (71 ) — — — — 24,976 (71 ) Total assets $ 189,380 $ — $ (7,209 ) $ 956 $ 1 $ 24,007 $ (2,274 ) $ (14,674 ) $ 190,187 $ 1,791 Other liabilities Derivative instruments $ 12,209 $ — $ — $ (291 ) $ — $ — $ — $ (74 ) $ 11,844 $ (291 ) Total liabilities $ 12,209 $ — $ — $ (291 ) $ — $ — $ — $ (74 ) $ 11,844 $ (291 ) Nine months ended September 30, 2017 Fixed maturities Corporate debt $ 75,875 $ 1,536 $ (3,112 ) $ (762 ) $ (392 ) $ 19,181 $ (21,475 ) $ (9,835 ) $ 61,016 $ — Non-Agency RMBS — — — — — — — — — — CMBS 3,061 — (9,418 ) — 17 9,400 — (3,060 ) — — ABS 17,464 — (24,949 ) — 1,493 30,007 — — 24,015 — 96,400 1,536 (37,479 ) (762 ) 1,118 58,588 (21,475 ) (12,895 ) 85,031 — Other investments Other privately held investments 42,142 — — 1,256 — — — — 43,398 1,256 CLO - Equities 60,700 — — 3,930 — — — (27,848 ) 36,782 3,930 102,842 — — 5,186 — — — (27,848 ) 80,180 5,186 Other assets Derivative instruments 2,532 — — 653 — — — (3,185 ) — — Insurance-linked securities 25,023 — — (47 ) — — — — 24,976 (47 ) 27,555 — — 606 — — — (3,185 ) 24,976 (47 ) Total assets $ 226,797 $ 1,536 $ (37,479 ) $ 5,030 $ 1,118 $ 58,588 $ (21,475 ) $ (43,928 ) $ 190,187 $ 5,139 Other liabilities Derivative instruments $ 6,500 $ — $ — $ 9,991 $ — $ 12,135 $ — $ (16,782 ) $ 11,844 $ (291 ) Total liabilities $ 6,500 $ — $ — $ 9,991 $ — $ 12,135 $ — $ (16,782 ) $ 11,844 $ (291 ) (1) Realized gains (losses) on fixed maturities, and realized and unrealized gains (losses) on other assets and other liabilities included in net income are included in net investment gains (losses). Realized and unrealized gains (losses) on other investments included in net income are included in net investment income. (2) Unrealized gains (losses) on fixed maturities are included in other comprehensive income ("OCI"). (3) Change in unrealized investment gains (losses) relating to assets held at the reporting date. The transfers into and out of fair value hierarchy levels reflect the fair value of the securities at the end of the reporting period. Transfers into Level 3 from Level 2 The transfers to Level 3 from Level 2 made during the three and nine months ended September 30, 2018 and 2017 were primarily due to the lack of observable market inputs and multiple quotes from pricing vendors and broker-dealers for certain fixed maturities. Transfers out of Level 3 into Level 2 The transfers into Level 2 from Level 3 made during the three and nine months ended September 30, 2018 and 2017 were primarily due to the availability of observable market inputs and multiple quotes from pricing vendors for certain fixed maturities. Measuring the Fair Value of Other Investments Using Net Asset Valuations The fair values of hedge funds, direct lending funds, private equity funds and real estate funds are estimated using NAVs as advised by external fund managers or third party administrators. For these funds, NAVs are based on the manager's or administrator's valuation of the underlying holdings in accordance with the fund's governing documents and in accordance with U.S. GAAP. If there is a reporting lag between the current period end and reporting date of the latest available fund valuation for any hedge fund, the Company estimates fair values by starting with the most recently available fund valuation and adjusting for return estimates as well as any subscriptions, redemptions and distributions that took place during the current period. Return estimates are obtained from the relevant fund managers. Accordingly, the Company does not typically have a reporting lag in fair value measurements of these funds. Historically, the Company's valuation estimates incorporating these return estimates have not significantly diverged from the subsequently received NAVs. For direct lending funds, private equity funds, real estate funds and two of the Company's hedge funds, valuation statements are typically released on a reporting lag therefore the Company estimates the fair value of these funds by starting with the prior quarter-end fund valuations and adjusting for capital calls, redemptions, drawdowns and distributions. Return estimates are not available from the relevant fund managers for these funds therefore the Company typically has a reporting lag in its fair value measurements of these funds. For the nine months ended September 30, 2018 , funds reported on a lag represented 55% (2017: 44% ) of the Company's total other investments balance. The Company often does not have access to financial information relating to the underlying securities held within the funds, therefore management is unable to corroborate the fair values placed on the securities underlying the asset valuations provided by fund managers or fund administrators. In order to assess the reasonableness of the NAVs, the Company performs a number of monitoring procedures on a quarterly basis, to assess the quality of the information provided by fund managers and fund administrators. These procedures include, but are not limited to, regular review and discussion of each fund's performance with its manager, regular evaluation of fund performance against applicable benchmarks and the backtesting of the Company's fair value estimates against subsequently received NAVs. Backtesting involves comparing the Company's previously reported fair values for each fund against NAVs per audited financial statements (for year-end values) and final NAVs from fund managers and fund administrators (for interim values). The fair values of hedge funds, direct lending funds, private equity funds and real estate funds are measured using the NAV practical expedient, therefore the fair values of these funds have not been categorized within the fair value hierarchy. Financial Instruments Disclosed, But Not Carried, at Fair Value The fair value of financial instruments accounting guidance also applies to financial instruments disclosed, but not carried, at fair value, except for certain financial instruments, including insurance contracts. At September 30, 2018 , the carrying values of cash and cash equivalents including restricted amounts, accrued investment income, receivable for investments sold, certain other assets, payable for investments purchased and certain other liabilities approximated their fair values due to their respective short maturities. As these financial instruments are not actively traded, their fair values are classified as Level 2. At September 30, 2018 , the carrying value of mortgage loans held-for-investment approximated their fair value. The fair values of mortgage loans are primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk, or are determined from pricing for similar loans. As mortgage loans are not actively traded their fair values are classified as Level 3. At September 30, 2018 , senior notes are recorded at amortized cost with a carrying |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | The balance sheet classifications of derivatives recorded at fair value are shown in the following table. September 30, 2018 December 31, 2017 Derivative Notional Amount Derivative Asset Fair Value (1) Derivative Liability Fair Value (1) Derivative Notional Amount Derivative Asset Fair Value (1) Derivative Liability Fair Value (1) Relating to investment portfolio: Foreign exchange forward contracts $ 166,113 $ 437 $ 557 $ 137,422 $ 10 $ 619 Interest rate swaps 186,000 — 1,105 191,000 448 1,556 Relating to underwriting portfolio: Foreign exchange forward contracts 932,017 2,946 3,246 698,959 4,667 701 Other underwriting-related contracts 85,000 — 10,212 85,000 — 11,510 Total derivatives $ 3,383 $ 15,120 $ 5,125 $ 14,386 (1) Asset and liability derivatives are classified within other assets and other liabilities in the Consolidated Balance Sheets. The notional amounts of derivative contracts which represent the basis upon which pay or receive amounts are calculated are presented in the above table to quantify the volume of the Company's derivative activities. Notional amounts are not reflective of credit risk. None of the Company's derivative instruments are designated as hedges under current accounting guidance. Offsetting Assets and Liabilities The Company's derivative instruments are generally traded under International Swaps and Derivatives Association master netting agreements, which establish terms that apply to all transactions. In the event of a bankruptcy or other stipulated event, master netting agreements provide that individual positions be replaced with a new amount, usually referred to as the termination amount, determined by taking into account market prices and converting into a single currency. Effectively, this contractual close-out netting reduces credit exposure from gross to net exposure. A reconciliation of gross derivative assets and liabilities to the net amounts presented in the Consolidated Balance Sheets, with the difference being attributable to the impact of master netting agreements, is shown in the following table. September 30, 2018 December 31, 2017 Gross Amounts Gross Amounts Offset Net Amounts (1) Gross Amounts Gross Amounts Offset Net Amounts (1) Derivative assets $ 9,313 $ (5,930 ) $ 3,383 $ 8,178 $ (3,053 ) $ 5,125 Derivative liabilities $ 21,050 $ (5,930 ) $ 15,120 $ 17,439 $ (3,053 ) $ 14,386 (1) Net asset and liability derivatives are classified within other assets and other liabilities in the Consolidated Balance Sheets. For information on reverse repurchase agreements see Note 3 'Investments' . a) Relating to Investment Portfolio Foreign Currency Risk The Company's investment portfolio is exposed to foreign currency risk therefore the fair values of its investments are partially influenced by the change in foreign exchange rates. The Company may enter into foreign currency forward contracts to manage the effect of this foreign currency risk. These foreign currency hedging activities are not designated as specific hedges for financial reporting purposes. Interest Rate Risk The Company's investment portfolio contains a large percentage of fixed maturities which expose it to significant interest rate risk. As part of overall management of this risk, the Company may use interest rate swaps. b) Relating to Underwriting Portfolio Foreign Currency Risk The Company's (re)insurance subsidiaries and branches operate in various countries. Some of its business is written in currencies other than the U.S. dollar, therefore the underwriting portfolio is exposed to significant foreign currency risk. The Company manages foreign currency risk by seeking to match its foreign-denominated net liabilities under (re)insurance contracts with cash and investments that are denominated in the same currencies. The Company uses derivative instruments, specifically, forward contracts to economically hedge foreign currency exposures. Weather Risk During 2013, the Company began to write derivative-based risk management products designed to address weather risks with the objective of generating profits on a portfolio basis. The majority of this business consists of receiving a payment at contract inception in exchange for bearing the risk of variations in a quantifiable weather-related phenomenon, such as temperature. Where a client wishes to minimize the upfront payment, these transactions may be structured as swaps or collars. In general, the Company's portfolio of such derivative contracts is of short duration, with contracts being predominantly seasonal in nature. In order to economically hedge a portion of this portfolio, the Company may also purchase weather derivatives. Effective July 1, 2017, the Company no longer writes derivative-based risk management products which address weather risks. Other Underwriting-related Risks The Company enters into insurance and reinsurance contracts that are accounted for as derivatives. These insurance or reinsurance contracts provide indemnification to an insured or cedant as a result of a change in a variable as opposed to an identifiable insurable event. The Company considers these contracts to be part of its underwriting operations. The total unrealized and realized gains (losses) recognized in net income for derivatives not designated as hedges are shown in the following table: Location of Gain (Loss) Recognized in Net Income Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Relating to investment portfolio: Foreign exchange forward contracts Net investment gains (losses) $ 766 $ (1,815 ) $ 2,090 $ (6,534 ) Interest rate swaps Net investment gains (losses) 1,859 520 7,692 (2,661 ) Relating to underwriting portfolio: Foreign exchange forward contracts Foreign exchange (losses) gains (3,965 ) 12,367 (4,103 ) 26,182 Weather-related contracts Other insurance related income (losses) — — — (9,629 ) Other underwriting-related contracts Other insurance related income (losses) 677 514 2,225 852 Total $ (663 ) $ 11,586 $ 7,904 $ 8,210 |
RESERVE FOR LOSSES AND LOSS EXP
RESERVE FOR LOSSES AND LOSS EXPENSES | 9 Months Ended |
Sep. 30, 2018 | |
Insurance Loss Reserves [Abstract] | |
RESERVE FOR LOSSES AND LOSS EXPENSES | Reserve Roll-Forward The following table presents a reconciliation of the Company's beginning and ending gross reserve for losses and loss expenses and net reserve for unpaid losses and loss expenses for the periods indicated: Nine months ended September 30, 2018 2017 Gross reserve for losses and loss expenses, beginning of period $ 12,997,553 $ 9,697,827 Less reinsurance recoverable on unpaid losses, beginning of period (3,159,514 ) (2,276,109 ) Net reserve for unpaid losses and loss expenses, beginning of period 9,838,039 7,421,718 Net incurred losses and loss expenses related to: Current year 2,323,028 2,591,135 Prior years (160,083 ) (143,495 ) 2,162,945 2,447,640 Net paid losses and loss expenses related to: Current year (381,158 ) (328,751 ) Prior years (1,770,667 ) (1,384,510 ) (2,151,825 ) (1,713,261 ) Foreign exchange and other (1,040,999 ) 333,456 Net reserve for unpaid losses and loss expenses, end of period 8,808,160 8,489,553 Reinsurance recoverable on unpaid losses, end of period 3,217,787 2,298,022 Gross reserve for losses and loss expenses, end of period $ 12,025,947 $ 10,787,575 The Company writes business with loss experience generally characterized as low frequency and high severity in nature, which can result in volatility in its financial results. During the nine months ended September 30, 2018 , the Company recognized net losses and loss expenses of $162 million ( 2017 : $702 million , net of reinstatement premiums) attributable to catastrophe and weather-related events. On April 16, 2018, the Company entered into a quota share retrocessional agreement with Harrington Re, a related party, which was deemed to have met the established criteria for retroactive reinsurance accounting. The Company recognized reinsurance recoverable on unpaid losses of $108 million related to this reinsurance agreement. This transaction was conducted at market rates consistent with negotiated arms-length contracts. On January 1, 2018, AXIS Managing Agency Limited, the managing agent of Syndicate 2007 entered into an agreement for the RITC of the 2015 and prior years of account of Syndicate 2007. This agreement was accounted for as a novation reinsurance contract. At September 30, 2018 , foreign exchange and other included a reduction in reserves for losses and loss expenses of $819 million related to this transaction. On April 1, 2017, the Company acquired a 100% ownership interest in Aviabel. At September 30, 2017, foreign exchange and other included reserves for losses and loss expenses of $79 million and reinsurance recoverables on unpaid and paid losses of $5 million related to this acquisition. The transfer of the insurance business of AXIS Specialty Australia to a reinsurer was approved by the Irish High Court on February 1, 2017 and the Federal Court of Australia on February 10, 2017. Consequently, the insurance policies, assets and liabilities of AXIS Specialty Australia were transferred to the reinsurer with effect from February 13, 2017. This resulted in the reduction of reserves for losses and loss expenses by $223 million and a reduction in reinsurance recoverables on unpaid and paid losses by $223 million . Prior Year Development Prior year reserve development arises from changes to loss and loss expense estimates related to loss events that occurred in previous calendar years. The following table presents prior year reserve development by segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Insurance $ 13,478 $ 7,926 $ 60,547 $ 35,579 Reinsurance 32,182 39,842 99,536 107,916 Total $ 45,660 $ 47,768 $ 160,083 $ 143,495 The following tables reconcile reserve classes to the lines of business categories and the expected claim tails: Insurance Segment Reported Lines of Business Reserve Classes Tail Property Marine Terrorism Aviation Credit and Political Risk Professional Lines Liability Accident and Health Discontinued lines - Novae Property and Other Short X X X X Marine Short X Aviation Short X Credit and Political Risk Medium X Professional Lines Medium X X Liability Long X X Reinsurance Segment Reported Lines of Business Reserve Classes Tail Catastrophe Property Credit and Surety Professional Lines Motor Liability Engineering Agriculture Marine and Other Accident and Health Discontinued lines - Novae Property and Other Short X X X X X X Credit and Surety Medium X Professional Lines Medium X Motor Long X X Liability Long X X Short-tail business Short-tail business includes the underlying exposures in property and other, marine and aviation reserve classes within the insurance segment, and the property and other reserve class within the reinsurance segment. For the three and nine months ended September 30, 2018 , these reserve classes contributed net favorable prior year reserve development of $12 million and $92 million , respectively, reflecting the recognition of overall better than expected loss emergence related to the 2017 catastrophe events. For the three and nine months ended September 30, 2017 , these reserve classes contributed net favorable prior year reserve development of $5 million and $41 million , respectively, reflecting the recognition of better than expected loss emergence. Medium-tail business Medium-tail business consists primarily of insurance and reinsurance professional reserve classes, insurance credit and political risk reserve class and reinsurance credit and surety reserve class. For the three and nine months ended September 30, 2018 , the reinsurance professional reserve class recognized net favorable prior year reserve development of $10 million (2017: $9 million ) and $18 million (2017: $36 million ), respectively. For the three and nine months ended September 30, 2018 , the insurance professional reserve class recognized net favorable prior year development of $10 million and $12 million (2017: $18 million ), respectively. The net favorable prior year reserve development on these reserve classes continued to reflect generally favorable experience as the Company continued to transition to more experienced based methods. For the three and nine months ended September 30, 2018 , the credit and surety reinsurance reserve class recorded net favorable prior year reserve development of $6 million ( 2017 : $17 million ) and $21 million ( 2017 : $18 million ), respectively. This net favorable prior year reserve development reflected the recognition of better than expected loss emergence. Long-tail business Long-tail business consists primarily of insurance and reinsurance liability reserve classes and reinsurance motor reserve classes. For the three and nine months ended September 30, 2018 , the reinsurance liability reserve class contributed net favorable prior year reserve development of $11 million and $19 million ( 2017 : $40 million ), respectively. For the three months ended September 30, 2018 , the net favorable prior year reserve development was largely associated with multi-line contracts and due to overall better than expected loss emergence related to the 2017 catastrophe events. For the nine months ended September 30, 2018 , the net favorable prior year reserve development was largely associated with multi-line contracts and due to overall better than expected loss emergence related to the 2017 catastrophe events, together with generally favorable experience reflecting the progressively increased weight given by management to experience based indications on older accident years. For the nine months ended September 30, 2017 , the net favorable prior year reserve development was primarily due to the progressively increased weight given by management to experience based indications on older accident years, which have generally been favorable. For the three and nine months ended September 30, 2018 , the insurance liability reserve class recorded net adverse prior year development of $11 million and $18 million , respectively, primarily related to reserve strengthening within the Company's U.S. excess casualty book of business. For the nine months ended September 30, 2017 , the insurance liability reserve class recorded net adverse prior year development of $6 million primarily attributable to reserve strengthening within the Company's run-off Bermuda excess casualty book of business. For the three and nine months ended September 30, 2018 , the motor reinsurance reserve class contributed net favorable prior year reserve development of $7 million and $15 million , respectively, primarily attributable to non proportional treaty business on older accident years. For the three and nine months ended September 30, 2017 , the motor reinsurance reserve class recorded net favorable prior year development of $16 million and net adverse prior year reserve development of $4 million , respectively. For the three months ended September 30, 2017 , the net favorable prior year reserve development related to favorable loss emergence trends on several classes of business spanning multiple accident years. For the nine months ended September 30, 2017 , the adverse prior year development was mainly driven by the decrease in the discount rate used to calculate lump sum awards in U.K. bodily injury cases, known as the Ogden Rate which changed from plus 2.5% to minus 0.75% effective March 20, 2017. At September 30, 2018 , net reserves for losses and loss expenses included estimated amounts for numerous catastrophe events. The magnitude and/or complexity of losses arising from these events, in particular Hurricane Florence as well as Hurricanes Harvey, Irma and Maria, the two earthquakes in Mexico and the wildfires in Northern and Southern California which occurred in 2017, inherently increase the level of uncertainty and, therefore, the level of management judgment involved in arriving at the estimated net reserves for losses and loss expenses. As a result, actual losses for these events may ultimately differ materially from our current estimates. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | The following table presents a comparison of basic and diluted earnings per common share: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Basic earnings (loss) per common share Net income (loss) $ 54,095 $ (457,084 ) $ 230,812 $ (341,541 ) Less: preferred share dividends 10,656 10,656 31,969 36,154 Net income (loss) available to common shareholders 43,439 (467,740 ) 198,843 (377,695 ) Weighted average common shares outstanding - basic 83,558 83,305 83,474 84,479 Basic earnings (loss) per common share $ 0.52 $ (5.61 ) $ 2.38 $ (4.47 ) Earnings (loss) per diluted common share Net income (loss) available to common shareholders $ 43,439 $ (467,740 ) $ 198,843 $ (377,695 ) Weighted average common shares outstanding - basic 83,558 83,305 83,474 84,479 Share-based compensation plans (1) 549 — 465 — Weighted average common shares outstanding - diluted 84,107 83,305 83,939 84,479 Earnings (loss) per diluted common share $ 0.52 $ (5.61 ) $ 2.37 $ (4.47 ) Weighted average anti-dilutive shares excluded from the dilutive computation 8 425 325 712 (1) Due to the net loss incurred in the three and nine months ended September 30, 2017, all the share equivalents were anti-dilutive. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | For the three months ended September 30, 2018 , the Company incurred share-based compensation costs of $15 million ( 2017 : $13 million ) related to share-settled restricted stock units and cash-settled restricted stock units and recorded associated tax benefits of $3 million ( 2017 : $3 million ). For the nine months ended September 30, 2018 , the Company incurred share-based compensation costs of $45 million ( 2017 : $57 million ) and recorded associated tax benefits of $6 million ( 2017 : $20 million , including $7 million related to excess tax benefits associated with the vesting of restricted stock units). During the nine months ended September 30, 2018 , the fair value of share-settled restricted stock units and cash-settled restricted stock units that vested was $47 million ( 2017 : $125 million , including $44 million attributable to a grant made in 2014 of three year cliff vesting service-based awards). At September 30, 2018 there were $106 million of unrecognized compensation costs ( 2017 : $99 million ) which are expected to be recognized over the weighted average period of 2.6 years . Share-settled Awards The following table provides a summary of nonvested share-settled restricted stock units for the nine months ended September 30, 2018 : Share-Settled Performance Vesting Restricted Stock Units Share-Settled Service Based Restricted Stock Units Number of Restricted Stock Units Weighted Average Grant Date Fair Value (1) Number of Restricted Stock Units Weighted Average Grant Date Fair Value (1) Nonvested restricted stock units - beginning of period 230 $ 57.08 1,355 $ 57.09 Granted 104 48.89 732 49.30 Vested (87 ) 54.71 (486 ) 54.39 Forfeited — — (70 ) 56.07 Nonvested restricted stock units - end of period 247 $ 54.49 1,531 $ 54.19 (1) Fair value is based on the closing price of common shares on the grant date. Cash-settled awards The following table provides a summary of nonvested cash-settled restricted stock units for the nine months ended September 30, 2018 : Cash-Settled Performance Vesting Restricted Stock Units Cash-Settled Service Based Restricted Stock Units Number of Restricted Stock Units Number of Restricted Stock Units Nonvested restricted stock units - beginning of period 42 988 Granted — 468 Vested (12 ) (379 ) Forfeited — (70 ) Nonvested restricted stock units - end of period 30 1,007 At September 30, 2018 , the liability for cash-settled restricted stock units, included in other liabilities in the Consolidated Balance Sheets, was $19 million (2017: $18 million ). |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | The following table presents common shares issued and outstanding: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Shares issued, balance at beginning of period 176,580 176,580 176,580 176,580 Shares issued — — — — Total shares issued at end of period 176,580 176,580 176,580 176,580 Treasury shares, balance at beginning of period (93,024 ) (93,377 ) (93,419 ) (90,139 ) Shares repurchased — (51 ) (175 ) (4,284 ) Shares reissued 1 5 571 1,000 Total treasury shares at end of period (93,023 ) (93,423 ) (93,023 ) (93,423 ) Total shares outstanding 83,557 83,157 83,557 83,157 Treasury Shares The following table presents share repurchases: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 In the open market: Total shares — 49 — 3,932 Total cost $ — $ 3,237 $ — $ 261,180 Average price per share (1) $ — $ 65.80 $ — $ 66.43 From employees: (2) Total shares — 2 175 352 Total cost $ — $ 110 $ 8,699 $ 24,479 Average price per share (1) $ — $ 64.04 $ 49.57 $ 69.53 Total shares repurchased: Total shares — 51 175 4,284 Total cost $ — $ 3,347 $ 8,699 $ 285,659 Average price per share (1) $ — $ 65.74 $ 49.57 $ 66.68 (1) Calculated using whole numbers. (2) Shares are repurchased from employees to satisfy withholding tax liabilities related to the vesting of restricted stock units. |
DEBT AND FINANCING ARRANGEMENTS
DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING ARRANGEMENTS | On March 28, 2018, certain of AXIS Capital’s operating subsidiaries (the "Participating Subsidiaries") amended their existing $250 million secured letter of credit facility with Citibank Europe plc (the " $250 Million Facility") under their aggregate $750 million secured letter of credit facility with Citibank Europe plc (the " $750 Million Facility") to extend the expiration date to March 31, 2019. The terms and conditions of the additional $500 million secured letter of credit facility under the $750 Million Facility remain unchanged. The $500 million secured letter of credit facility expires December 31, 2019. Letters of credit issued under the $750 Million Facility will principally be used to support the reinsurance obligations of the Participating Subsidiaries. The Participating Subsidiaries are subject to certain covenants, including the requirement to maintain sufficient collateral to cover obligations outstanding under the $750 Million Facility. In the event of default, Citibank Europe plc may exercise certain remedies, including the exercise of control over pledged collateral and the termination of the availability of the $750 Million Facility to any or all of the Participating Subsidiaries. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Legal Proceedings From time to time, the Company is subject to routine legal proceedings, including arbitrations, arising in the ordinary course of business. These legal proceedings generally relate to claims asserted by or against the Company in the ordinary course of insurance or reinsurance operations. Estimated amounts payable under such proceedings are included in the reserve for losses and loss expenses in the Consolidated Balance Sheets. The Company is not party to any material legal proceedings arising outside the ordinary course of business. Investments Refer to Note 3 - 'Investments' for information on the Company's unfunded investment commitments related to the Company's other investment portfolio. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE INCOME (LOSS) | The following table presents the tax effects allocated to each component of other comprehensive income (loss): 2018 2017 Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Three months ended September 30, Available for sale investments: Unrealized investment gains (losses) arising during the period $ (27,968 ) $ 1,907 $ (26,061 ) $ 64,431 $ (1,926 ) $ 62,505 Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income 26,896 (972 ) 25,924 (15,925 ) 2,639 (13,286 ) Unrealized investment gains (losses) arising during the period, net of reclassification adjustment (1) (1,072 ) 935 (137 ) 48,506 713 49,219 Non-credit portion of OTTI losses — — — — — — Foreign currency translation adjustment 994 — 994 8,088 — 8,088 Total other comprehensive income (loss), net of tax $ (78 ) $ 935 $ 857 $ 56,594 $ 713 $ 57,307 Nine months ended September 30, Available for sale investments: Unrealized investment gains (losses) arising during the period $ (266,117 ) $ 8,596 $ (257,521 ) $ 215,360 $ (8,899 ) $ 206,461 Adjustment for reclassification of net realized investment losses and OTTI losses recognized in net income 79,552 (2,363 ) 77,189 8,269 1,900 10,169 Unrealized investment gains (losses) arising during the period, net of reclassification adjustment (1) (186,565 ) 6,233 (180,332 ) 223,629 (6,999 ) 216,630 Non-credit portion of OTTI losses — — — — — — Foreign currency translation adjustment (6,864 ) — (6,864 ) 46,824 — 46,824 Total other comprehensive income (loss), net of tax $ (193,429 ) $ 6,233 $ (187,196 ) $ 270,453 $ (6,999 ) $ 263,454 (1) Effective January 1, 2018, the Company adopted ASU No. 2016-01. The adoption of this guidance resulted in a cumulative adjustment to reclassify unrealized investment gains on equity securities from accumulated other comprehensive income to retained earnings. As prescribed, the prior period has not been restated to conform to the current presentation. Refer to Item 1, Note 1 ' Basis of Presentation and Significant Accounting Policies ' to the Consolidated Financial Statements for additional information. The following table presents reclassifications from Accumulated Other Comprehensive Income ("AOCI") to net income available to common shareholders: Amount reclassified from AOCI (1) AOCI Components Consolidated Statement of Operations line item that includes reclassification Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Unrealized investment gains (losses) on available for sale investments Other investment gains (losses) $ (21,350 ) $ 21,337 $ (71,918 ) $ 5,224 OTTI losses (5,546 ) (5,412 ) (7,634 ) (13,493 ) Total before tax (26,896 ) 15,925 (79,552 ) (8,269 ) Income tax (expense) benefit 972 (2,639 ) 2,363 (1,900 ) Net of tax $ (25,924 ) $ 13,286 $ (77,189 ) $ (10,169 ) Foreign currency translation adjustment Foreign exchange loss $ — $ — $ — $ (24,149 ) Income tax (expense) benefit — — — — Net of tax $ — $ — $ — $ (24,149 ) (1) Amounts in parentheses are debits to net income (loss) available (attributable) to common shareholders. On March 27, 2017, as part of the wind down of our Australia operation, the Australia Prudential Regulation Authority revoked the authorization of AXIS Specialty Australia to carry on insurance business in Australia. As this resulted in the substantial liquidation of AXIS Specialty Australia, the Company released the cumulative translation adjustment related to AXIS Specialty Australia of $24 million from AOCI in the Consolidated Balance Sheet to foreign exchange losses in the Consolidated Statement of Operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | In October 2018, Hurricane Michael made landfall impacting the Gulf Coast and the southeastern U.S. The Company's preliminary pre-tax net loss estimate for this event is in the range of $100 million to $120 million . The impact of this event will be recognized by the Company in the three months ended December 31, 2018. The Company's loss estimate is based on a ground-up assessment of losses from individual contracts and treaties exposed to the affected regions, including preliminary information from clients, brokers and loss adjusters. Industry insured loss estimates, market share analyses and catastrophe modeling analyses were also taken into account where appropriate. Due to the nature of this event, including the complexity of loss assessment, factors contributing to the losses and the preliminary nature of the information available to prepare this estimate, the actual net ultimate amount of losses for this event may be materially different from this current estimate. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited Consolidated Financial Statements (the "financial statements") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the U.S. Securities and Exchange Commission's ("SEC") instructions to Form 10-Q and Article 10 of Regulation S-X and include AXIS Capital Holdings Limited ("AXIS Capital") and its subsidiaries (the "Company"). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. This Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and related notes included in AXIS Capital's Annual Report on Form 10-K for the year ended December 31, 2017 , as filed with the SEC. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company's financial position and results of operations for the periods presented. The results of operations for any interim period are not necessarily indicative of the results for a full year. All inter-company accounts and transactions have been eliminated. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year's presentation. These reclassifications did not impact results of operations, financial condition or liquidity. Tabular dollar and share amounts are in thousands, except per share amounts. All amounts are reported in U.S. dollars. |
New Accounting Standards | Significant Accounting Policies There was one notable change to the Company's significant accounting policies subsequent to its Annual Report on Form 10-K for the year ended December 31, 2017 . a) Investments Recognition and Measurement of Financial Assets and Financial Liabilities Fixed maturities and equity securities are reported at fair value at the balance sheet date (see Note 4 ' Fair Value Measurements '). Effective January 1, 2018, the Company adopted ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities," which: • requires equity investments (except those accounted for under the equity method of accounting, investments that are consolidated or those that meet a practicability exception) to be measured at fair value with changes in fair value recognized in net income, • simplifies the impairment assessment of equity investments without readily determinable values by requiring a qualitative assessment to identify impairment, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost, • requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes, • requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liabilities in accordance with the fair value option, • requires the separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and • clarifies that the reporting organization should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the organization’s other deferred tax assets. Upon adoption of this guidance, net unrealized investment gains on equity securities of $70 million , net of deferred income taxes of $13 million , were reclassified from accumulated other comprehensive income to retained earnings. As prescribed, the prior period has not been restated to conform to the current presentation. New Accounting Standards Adopted in 2018 Revenue From Contracts With Customers Effective January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09 "Revenue from Contracts with Customers (Topic 606)," using the modified retrospective transition approach. This guidance affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards, such as accounting for insurance contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company generated fee income of $31 million for the nine months ended September 30, 2018 which is within the scope of this ASU. These fees represent service fees earned by the Company's reinsurance segment related to services provided to strategic capital partners and are recognized when the related services have been performed. Given that the timing and measurement of revenue associated with impacted contracts did not change, the adoption of this guidance did not have a material impact on the Company's results of operations, financial condition and liquidity. Classification of Certain Cash Receipts and Cash Payments Effective January 1, 2018, the Company adopted ASU 2016-15, "Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments, " which addresses diversity in practice in how eight specific cash receipts and cash payments should be presented and classified on the statement of cash flows. The adoption of this guidance did not impact the Company's results of operations, financial condition and liquidity. Restricted Cash Effective January 1, 2018, the Company adopted ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash, " which addresses diversity in practice in the classification and presentation of changes in restricted cash on the statement of cash flows. This guidance requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. To facilitate comparison of the Company's Consolidated Statements of Cash Flows, the Company adopted this guidance utilizing the full retrospective approach for all periods presented in the Company's Consolidated Financial Statements. As a result, the Company's Consolidated Statements of Cash Flows now explains the change during the period in the total of cash, cash equivalents, and restricted cash. Therefore, restricted cash is now included with cash and cash equivalents in the reconciliation of the beginning of period and end of period total amounts shown on the statement of cash flows. The adoption of this guidance did not impact the Company's results of operations, financial condition and liquidity. Stock Compensation - Scope of Modification Accounting Effective January 1, 2018, the Company adopted ASU 2017-09 "Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting, " which provides clarity and reduces diversity in practice of applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance states that an entity should account for the effects of a modification unless all the following are met: 1. the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; 2. the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this Update. The adoption of this guidance did not impact the Company's results of operations, financial condition and liquidity. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income Effective January 1, 2018, the Company adopted ASU 2018-02 "Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income " which was a response to a financial reporting issue that arose as a consequence of the U.S. federal government tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 ("U.S. Tax Reform"), which was enacted on December 22, 2017. U.S. GAAP currently requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This guidance is applicable even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income rather than in income from continuing operations. As the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate is required to be included in income from continuing operations, the tax effects of items within accumulated other comprehensive income (referred to as stranded tax effects for purposes of this Update) do not reflect the appropriate tax rate. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. Tax Reform. Consequently, the amendments eliminate the stranded tax effects resulting from U.S. Tax Reform and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of U.S. Tax Reform, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. As a consequence of U.S. Tax Reform, the Company recognized a tax benefit of $2 million related to the revaluation of net deferred tax liabilities associated with the reduction in the U.S. corporate income tax rate from 35% to 21%, attributable to net unrealized investment gains associated with investments held by the Company's U.S. domiciled entities. Upon adoption of this guidance, the tax benefit of $2 million was reclassified from accumulated other comprehensive income into retained earnings. Recently Issued Accounting Standards Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" which provides a new comprehensive model for lease accounting. Topic 842 will require a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842) - Targeted Improvements " which provides an additional (and optional) transition method to adopt the new lease guidance. Under the new transition method, companies will initially apply the new guidance by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, a company's reporting for the comparative periods presented in the financial statements in which the company adopts the new lease guidance will continue to be in accordance with the current lease accounting standard (Topic 840). A company electing this additional (and optional) transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. However, these amendments do not change the existing disclosure requirements in Topic 840, in particular these amendments do not create interim disclosure requirements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt Topic 842 effective January 1, 2019, by electing the additional transition method provided in ASU 2018-11. The Company will also elect the package of practical expedients permitted under the transition guidance of Topic 842, which must be elected as a package and applied consistently to all leases. The package of practical expedients permits the Company not to reassess the following: 1. whether any expired or existing contracts are or contain leases; 2. the lease classification for any expired or existing leases; and 3. initial direct costs for any existing leases. In addition to electing the package of practical expedients, the Company will make an accounting policy election not to record leases with an initial term of 12 months or less (short-term) in the Company's Consolidated Balance Sheets. The Company will recognize expense for short-term lease payments on a straight-line basis over the lease term in the Company's Consolidated Statements of Operations. The Company continues to evaluate all potential impacts of this guidance and expects its adoption will result in a significant increase to assets and liabilities in the Company's Consolidated Balance Sheets related to existing office property and equipment leases. The adoption of this guidance will not impact the Company's results of operations and liquidity. Measurement of Credit Losses on Financial Instrument In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments " which replaces the "incurred loss" impairment methodology with an approach based on "expected losses" to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses. The guidance also provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. This guidance is effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted for interim and annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of this guidance on its results of operations, financial condition and liquidity. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment " that eliminates the requirement to calculate the implied fair value of goodwill (i.e. Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, an impairment charge will be based on the excess of a reporting unit's carrying amount over its fair value (i.e. measure the charge based on Step 1 of the current goodwill impairment test). This guidance is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019, with early adoption permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The guidance will be adopted on a prospective basis. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB issued ASU 2017-08 "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities" which shortens the amortization period for certain purchased callable debt securities held at a premium. This guidance is effective for interim and annual reporting periods, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its results of operations, financial condition and liquidity. Changes to Disclosures on Fair Value Measurement In August 2018, the FASB issued ASU 2018-13 "Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement " to improve the effectiveness of fair value measurement disclosures. This guidance is effective for interim and annual reporting periods, beginning after December 15, 2019, with early adoption permitted. As this guidance relates solely to financial statement disclosures, the adoption of ASU 2016-18, will not impact the Company's results of operations, financial condition and liquidity. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
UNDERWRITING RESULTS OF REPORTABLE SEGMENTS | The following tables present the underwriting results of the Company's reportable segments, as well as the carrying values of allocated goodwill and intangible assets: 2018 2017 Three months ended and at September 30, Insurance Reinsurance Total Insurance Reinsurance Total Gross premiums written $ 969,364 $ 454,343 $ 1,423,707 $ 651,145 $ 534,429 $ 1,185,574 Net premiums written 602,070 317,868 919,938 407,054 425,689 832,743 Net premiums earned 614,795 609,280 1,224,075 420,775 596,356 1,017,131 Other insurance related income (losses) 1,526 6,949 8,475 302 (3,499 ) (3,197 ) Net losses and loss expenses (415,488 ) (379,471 ) (794,959 ) (576,688 ) (658,679 ) (1,235,367 ) Acquisition costs (111,888 ) (136,426 ) (248,314 ) (61,541 ) (133,183 ) (194,724 ) General and administrative expenses (100,656 ) (29,595 ) (130,251 ) (71,007 ) (25,689 ) (96,696 ) Underwriting income (loss) $ (11,711 ) $ 70,737 59,026 $ (288,159 ) $ (224,694 ) (512,853 ) Corporate expenses (24,643 ) (27,933 ) Net investment income 114,421 95,169 Net investment gains (losses) (17,628 ) 14,632 Foreign exchange losses (8,305 ) (32,510 ) Interest expense and financing costs (16,897 ) (12,835 ) Transaction and reorganization expenses (16,300 ) (5,970 ) Amortization of value of business acquired (39,018 ) — Amortization of intangible assets (1,753 ) — Income (loss) before income taxes and interest in income (loss) of equity method investments $ 48,903 $ (482,300 ) Net loss and loss expense ratio 67.6 % 62.3 % 64.9 % 137.1 % 110.5 % 121.5 % Acquisition cost ratio 18.2 % 22.4 % 20.3 % 14.6 % 22.3 % 19.1 % General and administrative expense ratio 16.4 % 4.8 % 12.7 % 16.9 % 4.3 % 12.3 % Combined ratio 102.2 % 89.5 % 97.9 % 168.6 % 137.1 % 152.9 % Total intangible assets $ 408,441 $ — $ 408,441 $ 87,206 $ — $ 87,206 2018 2017 Nine months ended and at September 30, Insurance Reinsurance Total Insurance Reinsurance Total Gross premiums written $ 2,876,856 $ 2,860,471 $ 5,737,327 $ 1,960,608 $ 2,499,164 $ 4,459,772 Net premiums written 1,748,142 2,158,122 3,906,264 1,259,999 2,037,719 3,297,718 Net premiums earned 1,772,126 1,804,900 3,577,026 1,230,279 1,706,986 2,937,265 Other insurance related income (losses) 3,359 15,452 18,811 853 (5,273 ) (4,420 ) Net losses and loss expenses (1,065,799 ) (1,097,146 ) (2,162,945 ) (1,093,237 ) (1,354,403 ) (2,447,640 ) Acquisition costs (290,082 ) (419,445 ) (709,527 ) (177,937 ) (410,942 ) (588,879 ) General and administrative expenses (305,394 ) (99,481 ) (404,875 ) (239,389 ) (96,393 ) (335,782 ) Underwriting income (loss) $ 114,210 $ 204,280 318,490 $ (279,431 ) $ (160,025 ) (439,456 ) Corporate expenses (85,069 ) (97,922 ) Net investment income 325,380 299,899 Net realized investment losses (77,551 ) (14,811 ) Foreign exchange losses (2,066 ) (90,093 ) Interest expense and financing costs (50,758 ) (38,377 ) Bargain purchase gain — 15,044 Transaction and reorganization expenses (48,125 ) (5,970 ) Amortization of value of business acquired (149,535 ) — Amortization of intangible assets (8,564 ) — Income (loss) before income taxes and interest in income (loss) of equity method investments $ 222,202 $ (371,686 ) Net loss and loss expense ratio 60.1 % 60.8 % 60.5 % 88.9 % 79.3 % 83.3 % Acquisition cost ratio 16.4 % 23.2 % 19.8 % 14.4 % 24.2 % 20.0 % General and administrative expense ratio 17.2 % 5.5 % 13.7 % 19.5 % 5.6 % 14.8 % Combined ratio 93.7 % 89.5 % 94.0 % 122.8 % 109.1 % 118.1 % Total intangible assets $ 408,441 $ — $ 408,441 $ 87,206 $ — $ 87,206 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
AMORTIZED COST/COST AND FAIR VALUES OF FIXED MATURITIES AND EQUITIES | The amortized cost and fair values of the Company's fixed maturities classified as available for sale were as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Non-credit OTTI in AOCI (5) At September 30, 2018 Fixed maturities U.S. government and agency $ 1,625,114 $ 414 $ (20,063 ) $ 1,605,465 $ — Non-U.S. government 558,862 3,013 (13,750 ) 548,125 — Corporate debt 5,144,747 23,714 (87,376 ) 5,081,085 — Agency RMBS (1) 1,688,977 2,140 (51,886 ) 1,639,231 — CMBS (2) 1,099,728 729 (23,502 ) 1,076,955 — Non-Agency RMBS 41,273 1,475 (962 ) 41,786 (868 ) ABS (3) 1,651,271 1,520 (6,980 ) 1,645,811 — Municipals (4) 131,583 557 (2,901 ) 129,239 — Total fixed maturities $ 11,941,555 $ 33,562 $ (207,420 ) $ 11,767,697 $ (868 ) At December 31, 2017 Fixed maturities U.S. government and agency $ 1,727,643 $ 1,735 $ (16,909 ) $ 1,712,469 $ — Non-U.S. government 798,582 17,240 (9,523 ) 806,299 — Corporate debt 5,265,795 61,922 (29,851 ) 5,297,866 — Agency RMBS (1) 2,414,720 8,132 (27,700 ) 2,395,152 — CMBS (2) 776,715 4,138 (3,125 ) 777,728 — Non-Agency RMBS 45,713 1,917 (799 ) 46,831 (853 ) ABS (3) 1,432,884 5,391 (1,994 ) 1,436,281 — Municipals (4) 149,167 1,185 (972 ) 149,380 — Total fixed maturities $ 12,611,219 $ 101,660 $ (90,873 ) $ 12,622,006 $ (853 ) (1) Residential mortgage-backed securities ("RMBS") originated by U.S. government-sponsored agencies. (2) Commercial mortgage-backed securities ("CMBS"). (3) Asset-backed securities (ABS) include debt tranched securities collateralized primarily by auto loans, student loans, credit card receivables, collateralized debt obligations ("CDOs") and collateralized loan obligations ("CLOs"). (4) Municipals include bonds issued by states, municipalities and political subdivisions. (5) Represents the non-credit component of the other-than-temporary impairment ("OTTI") losses, adjusted for subsequent sales, maturities and redemptions. It does not include the change in fair value subsequent to the impairment measurement date. |
EQUITY SECURITIES | The cost and fair values of the Company's equity securities were as follows: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value At September 30, 2018 Equity securities Common stocks $ 13,392 $ 1,345 $ (1,232 ) $ 13,505 Exchange-traded funds 211,940 63,543 (2,035 ) 273,448 Bond mutual funds 150,675 — (4,317 ) 146,358 Total equity securities $ 376,007 $ 64,888 $ (7,584 ) $ 433,311 At December 31, 2017 Equity securities Common stocks $ 22,836 $ 3,412 $ (590 ) $ 25,658 Exchange-traded funds 356,252 71,675 (294 ) 427,633 Bond mutual funds 173,779 9,440 (999 ) 182,220 Total equity securities $ 552,867 $ 84,527 $ (1,883 ) $ 635,511 |
CONTRACTUAL MATURITIES OF FIXED MATURITIES | Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The contractual maturities of fixed maturities are shown below: Amortized Cost Fair Value % of Total Fair Value At September 30, 2018 Maturity Due in one year or less $ 496,968 $ 492,752 4.1 % Due after one year through five years 4,926,538 4,881,185 41.5 % Due after five years through ten years 1,821,059 1,774,813 15.1 % Due after ten years 215,741 215,164 1.8 % 7,460,306 7,363,914 62.5 % Agency RMBS 1,688,977 1,639,231 13.9 % CMBS 1,099,728 1,076,955 9.2 % Non-Agency RMBS 41,273 41,786 0.4 % ABS 1,651,271 1,645,811 14.0 % Total $ 11,941,555 $ 11,767,697 100.0 % At December 31, 2017 Maturity Due in one year or less $ 486,659 $ 484,663 3.8 % Due after one year through five years 4,906,207 4,912,189 38.9 % Due after five years through ten years 2,338,964 2,350,433 18.6 % Due after ten years 209,357 218,729 1.7 % 7,941,187 7,966,014 63.0 % Agency RMBS 2,414,720 2,395,152 19.0 % CMBS 776,715 777,728 6.2 % Non-Agency RMBS 45,713 46,831 0.4 % ABS 1,432,884 1,436,281 11.4 % Total $ 12,611,219 $ 12,622,006 100.0 % |
FIXED MATURITIES AND EQUITIES IN AN UNREALIZED LOSS POSITION | The following table summarizes fixed maturities and equity securities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position: 12 months or greater Less than 12 months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses At September 30, 2018 (1) Fixed maturities U.S. government and agency $ 311,591 $ (10,619 ) $ 1,228,100 $ (9,444 ) $ 1,539,691 $ (20,063 ) Non-U.S. government 34,550 (2,086 ) 382,172 (11,664 ) 416,722 (13,750 ) Corporate debt 621,298 (28,190 ) 3,256,619 (59,186 ) 3,877,917 (87,376 ) Agency RMBS 722,287 (33,738 ) 780,730 (18,148 ) 1,503,017 (51,886 ) CMBS 105,887 (3,944 ) 832,183 (19,558 ) 938,070 (23,502 ) Non-Agency RMBS 10,821 (946 ) 6,067 (16 ) 16,888 (962 ) ABS 157,894 (2,115 ) 844,190 (4,865 ) 1,002,084 (6,980 ) Municipals 33,043 (1,327 ) 71,150 (1,574 ) 104,193 (2,901 ) Total fixed maturities $ 1,997,371 $ (82,965 ) $ 7,401,211 $ (124,455 ) $ 9,398,582 $ (207,420 ) At December 31, 2017 Fixed maturities U.S. government and agency $ 194,916 $ (5,963 ) $ 1,389,792 $ (10,946 ) $ 1,584,708 $ (16,909 ) Non-U.S. government 62,878 (6,806 ) 204,110 (2,717 ) 266,988 (9,523 ) Corporate debt 407,300 (11,800 ) 2,041,845 (18,051 ) 2,449,145 (29,851 ) Agency RMBS 759,255 (17,453 ) 1,172,313 (10,247 ) 1,931,568 (27,700 ) CMBS 31,607 (703 ) 348,943 (2,422 ) 380,550 (3,125 ) Non-Agency RMBS 8,029 (788 ) 4,197 (11 ) 12,226 (799 ) ABS 57,298 (570 ) 392,170 (1,424 ) 449,468 (1,994 ) Municipals 11,230 (269 ) 65,632 (703 ) 76,862 (972 ) Total fixed maturities $ 1,532,513 $ (44,352 ) $ 5,619,002 $ (46,521 ) $ 7,151,515 $ (90,873 ) Equity securities Common stocks $ — $ — $ 3,202 $ (590 ) $ 3,202 $ (590 ) Exchange-traded funds — — 12,323 (294 ) 12,323 (294 ) Bond mutual funds — — 12,184 (999 ) 12,184 (999 ) Total equity securities $ — $ — $ 27,709 $ (1,883 ) $ 27,709 $ (1,883 ) (1) Effective January 1, 2018, the Company adopted ASU No. 2016-01 which requires equity securities to be measured at fair value with changes in fair value recognized in net income therefore equity securities at fair value are excluded from the table above at September 30, 2018. |
MORTGAGE LOANS NET OF VALUATION ALLOWANCE | The following table provides details of the Company's mortgage loans held-for-investment: September 30, 2018 December 31, 2017 Carrying Value % of Total Carrying Value % of Total Mortgage Loans held-for-investment: Commercial $ 333,018 100 % $ 325,062 100 % Total Mortgage Loans held-for-investment $ 333,018 100 % $ 325,062 100 % |
PORTFOLIO OF OTHER INVESTMENTS | The following tables provide a summary of the Company's other investments, together with additional information relating to the liquidity of each category: Fair Value Redemption Frequency (if currently eligible) Redemption Notice Period At September 30, 2018 Long/short equity funds $ 28,593 3 % Annually 60 days Multi-strategy funds 185,255 22 % Quarterly, Semi-annually 60-95 days Event-driven funds 38,084 5 % Annually 45 days Direct lending funds 268,210 32 % n/a n/a Private equity funds 67,840 8 % n/a n/a Real estate funds 63,764 8 % n/a n/a CLO-Equities 24,264 3 % n/a n/a Other privately held investments 47,389 6 % n/a n/a Overseas deposits 110,164 13 % n/a n/a Total other investments $ 833,563 100 % At December 31, 2017 Long/short equity funds $ 38,470 4 % Annually 60 days Multi-strategy funds 286,164 28 % Quarterly, Semi-annually 60-95 days Event-driven funds 39,177 4 % Annually 45 days Direct lending funds 250,681 25 % n/a n/a Private equity funds 68,812 7 % n/a n/a Real estate funds 50,009 5 % n/a n/a CLO-Equities 31,413 2 % n/a n/a Other privately held investments 46,430 5 % n/a n/a Overseas deposits 198,217 20 % n/a n/a Total other investments $ 1,009,373 100 % n/a - not applicable |
NET INVESTMENT INCOME | Net investment income was derived from the following sources: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Fixed maturities $ 89,887 $ 74,978 $ 262,165 $ 230,603 Other investments 15,933 17,373 44,179 59,973 Equity securities 2,099 3,223 7,015 11,048 Mortgage loans 3,322 2,895 9,805 7,970 Cash and cash equivalents 6,992 3,111 16,770 9,640 Short-term investments 3,413 698 5,933 1,797 Gross investment income 121,646 102,278 345,867 321,031 Investment expenses (7,225 ) (7,109 ) (20,487 ) (21,132 ) Net investment income $ 114,421 $ 95,169 $ 325,380 $ 299,899 |
NET REALIZED INVESTMENT GAINS (LOSSES) | The following table provides an analysis of net investment gains (losses): Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Gross realized investment gains Fixed maturities and short-term investments $ 4,543 $ 19,297 $ 41,932 $ 57,524 Equity securities 15 17,980 18,675 33,794 Gross realized investment gains 4,558 37,277 60,607 91,318 Gross realized investment losses Fixed maturities and short-term investments (25,926 ) (15,893 ) (113,903 ) (83,183 ) Equity securities — (45 ) (1,231 ) (258 ) Gross realized investment losses (25,926 ) (15,938 ) (115,134 ) (83,441 ) Net OTTI recognized in net income (5,546 ) (5,412 ) (7,634 ) (13,493 ) Change in fair value of investment derivatives (1) 2,626 (1,295 ) 9,782 (9,195 ) Net unrealized gains (losses) on equity securities (2) 6,660 — (25,172 ) — Net investment gains (losses) $ (17,628 ) $ 14,632 $ (77,551 ) $ (14,811 ) (1) Refer to Note 5 ' Derivative Instruments'. (2) Effective January 1, 2018, the Company adopted ASU No. 2016-01. The change in fair value of equity securities is now recognized in net investment losses. |
OTTI RECOGNIZED IN EARNINGS BY ASSET CLASS | The following table summarizes the OTTI recognized in net income by asset class: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Fixed maturities: Non-U.S. government $ 4,426 $ 3,905 $ 4,448 $ 8,187 Corporate debt 1,079 1,507 3,145 5,306 CMBS 41 — 41 — Total OTTI recognized in net income $ 5,546 $ 5,412 $ 7,634 $ 13,493 |
ROLL FORWARD OF CREDIT LOSSES FOR WHICH A PORTION OF OTTI RECOGNIZED IN AOCI | The following table provides a roll forward of the credit losses ("credit loss table") before income taxes, for which a portion of the OTTI was recognized in AOCI: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Balance at beginning of period $ 1,472 $ 1,481 $ 1,494 $ 1,493 Credit impairments recognized on securities not previously impaired — — — — Additional credit impairments recognized on securities previously impaired 8 2 8 2 Change in timing of future cash flows on securities previously impaired — — — — Intent to sell of securities previously impaired — — — — Securities sold/redeemed/matured — — (22 ) (12 ) Balance at end of period $ 1,480 $ 1,483 $ 1,480 $ 1,483 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS | The tables below present the financial instruments measured at fair value on a recurring basis for the periods indicated: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair value based on NAV practical expedient Total Fair Value At September 30, 2018 Assets Fixed maturities U.S. government and agency $ 1,579,758 $ 25,707 $ — $ — $ 1,605,465 Non-U.S. government — 548,125 — — 548,125 Corporate debt — 5,027,985 53,100 — 5,081,085 Agency RMBS — 1,639,231 — — 1,639,231 CMBS — 1,066,184 10,771 — 1,076,955 Non-Agency RMBS — 41,786 — — 41,786 ABS — 1,642,154 3,657 — 1,645,811 Municipals — 129,239 — — 129,239 1,579,758 10,120,411 67,528 — 11,767,697 Equity securities Common stocks 13,505 — — — 13,505 Exchange-traded funds 273,448 — — — 273,448 Bond mutual funds — 146,358 — — 146,358 286,953 146,358 — — 433,311 Other investments Hedge funds (1) — — — 251,932 251,932 Direct lending funds — — — 268,210 268,210 Private equity funds — — — 67,840 67,840 Real estate funds — — — 63,764 63,764 Other privately held investments — — 47,389 — 47,389 CLO-Equities — — 24,264 — 24,264 Overseas deposits — 110,164 — — 110,164 — 110,164 71,653 651,746 833,563 Short-term investments — 156,090 — — 156,090 Other assets Derivative instruments (see Note 5) — 3,383 — — 3,383 Total Assets $ 1,866,711 $ 10,536,406 $ 139,181 $ 651,746 $ 13,194,044 Liabilities Derivative instruments (see Note 5) $ — $ 4,908 $ 10,212 $ — $ 15,120 Cash settled awards (see Note 8) — 19,096 — — 19,096 Total Liabilities $ — $ 24,004 $ 10,212 $ — $ 34,216 (1) Includes Long/short equity, Multi-strategy and Event-driven funds. Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair value based on NAV practical expedient Total Fair Value At December 31, 2017 Assets Fixed maturities U.S. government and agency $ 1,658,622 $ 53,847 $ — $ — $ 1,712,469 Non-U.S. government — 806,299 — — 806,299 Corporate debt — 5,244,969 52,897 — 5,297,866 Agency RMBS — 2,395,152 — — 2,395,152 CMBS — 777,728 — — 777,728 Non-Agency RMBS — 46,831 — — 46,831 ABS — 1,436,281 — — 1,436,281 Municipals — 149,380 — — 149,380 1,658,622 10,910,487 52,897 — 12,622,006 Equity securities Common stocks 25,658 — — — 25,658 Exchange-traded funds 427,633 — — — 427,633 Bond mutual funds — 182,220 — — 182,220 453,291 182,220 — — 635,511 Other investments Hedge funds (1) — — — 363,811 363,811 Direct lending funds — — — 250,681 250,681 Private equity funds — — — 68,812 68,812 Real estate funds — — — 50,009 50,009 Other privately held investments — — 46,430 — 46,430 CLO-Equities — — 31,413 — 31,413 Overseas deposits — 198,217 — — 198,217 — 198,217 77,843 733,313 1,009,373 Short-term investments — 83,661 — — 83,661 Other assets Derivative instruments (see Note 5) — 5,125 — — 5,125 Insurance-linked securities — — 25,090 — 25,090 Total Assets $ 2,111,913 $ 11,379,710 $ 155,830 $ 733,313 $ 14,380,766 Liabilities Derivative instruments (see Note 5) $ — $ 2,876 $ 11,510 $ — $ 14,386 Cash settled awards (see Note 8) — 21,535 — — 21,535 Total Liabilities $ — $ 24,411 $ 11,510 $ — $ 35,921 (1) Includes Long/short equity, Multi-strategy and Event-driven funds. |
LEVEL 3 FAIR VALUE MEASUREMENT INPUTS | Except certain fixed maturities and insurance-linked securities priced using broker-dealer quotes (underlying inputs are not available), the following table quantifies the significant unobservable inputs used in estimating fair values at September 30, 2018 of investments classified as Level 3 in the fair value hierarchy. Fair Value Valuation Technique Unobservable Input Range Weighted Average Other investments - CLO-Equities $ 24,264 Discounted cash flow Default rates 3.0% 3.0% Loss severity rate 35.0% 35.0% Collateral spreads 3.0% 3.0% Estimated maturity dates 7 years 7 years Other investments - Other privately held investments $ 47,389 Discounted cash flow Discount rate 3.0% - 8.5% 7.2% Derivatives - Other underwriting-related derivatives $ (10,212 ) Discounted cash flow Discount rate 3.0% 3.0% |
CHANGES IN LEVEL 3 FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS, ASSETS | The following tables present changes in Level 3 for financial instruments measured at fair value on a recurring basis for the periods indicated: Opening Balance Transfers into Level 3 Transfers out of Level 3 Included in net income (1) Included in OCI (2) Purchases Sales Settlements/ Distributions Closing Balance Change in unrealized investment gains/(losses) (3) Three months ended September 30, 2018 Fixed maturities Corporate debt $ 42,553 $ 1,346 $ — $ (579 ) $ 4,962 $ 13,871 $ (3,960 ) $ (5,093 ) $ 53,100 $ — Non-Agency RMBS 903 — (790 ) — (1 ) — — (112 ) — — CMBS 18,149 3,160 (10,422 ) — (55 ) — — (61 ) 10,771 — ABS — 3,657 — — — — — — 3,657 — 61,605 8,163 (11,212 ) (579 ) 4,906 13,871 (3,960 ) (5,266 ) 67,528 — Other investments Other privately held investments 47,613 — — (224 ) — — — — 47,389 (224 ) CLO - Equities 26,153 — — 2,035 — — — (3,924 ) 24,264 2,035 73,766 — — 1,811 — — — (3,924 ) 71,653 1,811 Other assets Insurance-linked securities — — — — — — — — — — — — — — — — — — — — Total assets $ 135,371 $ 8,163 $ (11,212 ) $ 1,232 $ 4,906 $ 13,871 $ (3,960 ) $ (9,190 ) $ 139,181 $ 1,811 Other liabilities Derivative instruments $ 10,589 $ — $ — $ (377 ) $ — $ — $ — $ — $ 10,212 $ (377 ) Total liabilities $ 10,589 $ — $ — $ (377 ) $ — $ — $ — $ — $ 10,212 $ (377 ) Nine months ended September 30, 2018 Fixed maturities Corporate debt $ 52,897 $ 2,935 $ (4,279 ) $ (698 ) $ 5,977 $ 17,056 $ (9,714 ) $ (11,074 ) $ 53,100 $ — Non-Agency RMBS — — (789 ) — 1 900 — (112 ) — — CMBS — 5,096 (10,422 ) — (57 ) 16,215 — (61 ) 10,771 — ABS — 3,657 — — — — — — 3,657 — 52,897 11,688 (15,490 ) (698 ) 5,921 34,171 (9,714 ) (11,247 ) 67,528 — Other investments Other privately held investments 46,430 — — (652 ) — 3,111 (1,500 ) — 47,389 (652 ) CLO - Equities 31,413 — — 6,719 — — — (13,868 ) 24,264 6,719 77,843 — — 6,067 — 3,111 (1,500 ) (13,868 ) 71,653 6,067 Other assets Insurance-linked securities 25,090 — — (90 ) — — — (25,000 ) — — 25,090 — — (90 ) — — — (25,000 ) — — Total assets $ 155,830 $ 11,688 $ (15,490 ) $ 5,279 $ 5,921 $ 37,282 $ (11,214 ) $ (50,115 ) $ 139,181 $ 6,067 Other liabilities Derivative instruments $ 11,510 $ — $ — $ (1,298 ) $ — $ — $ — $ — $ 10,212 $ (1,298 ) Total liabilities $ 11,510 $ — $ — $ (1,298 ) $ — $ — $ — $ — $ 10,212 $ (1,298 ) Opening Balance Transfers into Level 3 Transfers out of Level 3 Included in net income (1) Included in OCI (2) Purchases Sales Settlements/ Distributions Closing Balance Change in unrealized investment gains/(losses) (3) Three months ended September 30, 2017 Fixed maturities Corporate debt $ 68,320 $ — $ (1,208 ) $ (835 ) $ (9 ) $ — $ (2,274 ) $ (2,978 ) $ 61,016 $ — CMBS — — — — — — — — — — ABS 5,999 — (6,001 ) — 10 24,007 — — 24,015 — 74,319 — (7,209 ) (835 ) 1 24,007 (2,274 ) (2,978 ) 85,031 — Other investments Other privately held investments 42,938 — — 460 — — — — 43,398 460 CLO - Equities 47,076 — — 1,402 — — — (11,696 ) 36,782 1,402 90,014 — — 1,862 — — — (11,696 ) 80,180 1,862 Other assets Derivative instruments — — — — — — — — — — Insurance-linked securities 25,047 — — (71 ) — — — — 24,976 (71 ) 25,047 — — (71 ) — — — — 24,976 (71 ) Total assets $ 189,380 $ — $ (7,209 ) $ 956 $ 1 $ 24,007 $ (2,274 ) $ (14,674 ) $ 190,187 $ 1,791 Other liabilities Derivative instruments $ 12,209 $ — $ — $ (291 ) $ — $ — $ — $ (74 ) $ 11,844 $ (291 ) Total liabilities $ 12,209 $ — $ — $ (291 ) $ — $ — $ — $ (74 ) $ 11,844 $ (291 ) Nine months ended September 30, 2017 Fixed maturities Corporate debt $ 75,875 $ 1,536 $ (3,112 ) $ (762 ) $ (392 ) $ 19,181 $ (21,475 ) $ (9,835 ) $ 61,016 $ — Non-Agency RMBS — — — — — — — — — — CMBS 3,061 — (9,418 ) — 17 9,400 — (3,060 ) — — ABS 17,464 — (24,949 ) — 1,493 30,007 — — 24,015 — 96,400 1,536 (37,479 ) (762 ) 1,118 58,588 (21,475 ) (12,895 ) 85,031 — Other investments Other privately held investments 42,142 — — 1,256 — — — — 43,398 1,256 CLO - Equities 60,700 — — 3,930 — — — (27,848 ) 36,782 3,930 102,842 — — 5,186 — — — (27,848 ) 80,180 5,186 Other assets Derivative instruments 2,532 — — 653 — — — (3,185 ) — — Insurance-linked securities 25,023 — — (47 ) — — — — 24,976 (47 ) 27,555 — — 606 — — — (3,185 ) 24,976 (47 ) Total assets $ 226,797 $ 1,536 $ (37,479 ) $ 5,030 $ 1,118 $ 58,588 $ (21,475 ) $ (43,928 ) $ 190,187 $ 5,139 Other liabilities Derivative instruments $ 6,500 $ — $ — $ 9,991 $ — $ 12,135 $ — $ (16,782 ) $ 11,844 $ (291 ) Total liabilities $ 6,500 $ — $ — $ 9,991 $ — $ 12,135 $ — $ (16,782 ) $ 11,844 $ (291 ) (1) Realized gains (losses) on fixed maturities, and realized and unrealized gains (losses) on other assets and other liabilities included in net income are included in net investment gains (losses). Realized and unrealized gains (losses) on other investments included in net income are included in net investment income. (2) Unrealized gains (losses) on fixed maturities are included in other comprehensive income ("OCI"). (3) Change in unrealized investment gains (losses) relating to assets held at the reporting date. |
CHANGES IN LEVEL 3 FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ON A RECURRING BASIS, LIABILITIES | The following tables present changes in Level 3 for financial instruments measured at fair value on a recurring basis for the periods indicated: Opening Balance Transfers into Level 3 Transfers out of Level 3 Included in net income (1) Included in OCI (2) Purchases Sales Settlements/ Distributions Closing Balance Change in unrealized investment gains/(losses) (3) Three months ended September 30, 2018 Fixed maturities Corporate debt $ 42,553 $ 1,346 $ — $ (579 ) $ 4,962 $ 13,871 $ (3,960 ) $ (5,093 ) $ 53,100 $ — Non-Agency RMBS 903 — (790 ) — (1 ) — — (112 ) — — CMBS 18,149 3,160 (10,422 ) — (55 ) — — (61 ) 10,771 — ABS — 3,657 — — — — — — 3,657 — 61,605 8,163 (11,212 ) (579 ) 4,906 13,871 (3,960 ) (5,266 ) 67,528 — Other investments Other privately held investments 47,613 — — (224 ) — — — — 47,389 (224 ) CLO - Equities 26,153 — — 2,035 — — — (3,924 ) 24,264 2,035 73,766 — — 1,811 — — — (3,924 ) 71,653 1,811 Other assets Insurance-linked securities — — — — — — — — — — — — — — — — — — — — Total assets $ 135,371 $ 8,163 $ (11,212 ) $ 1,232 $ 4,906 $ 13,871 $ (3,960 ) $ (9,190 ) $ 139,181 $ 1,811 Other liabilities Derivative instruments $ 10,589 $ — $ — $ (377 ) $ — $ — $ — $ — $ 10,212 $ (377 ) Total liabilities $ 10,589 $ — $ — $ (377 ) $ — $ — $ — $ — $ 10,212 $ (377 ) Nine months ended September 30, 2018 Fixed maturities Corporate debt $ 52,897 $ 2,935 $ (4,279 ) $ (698 ) $ 5,977 $ 17,056 $ (9,714 ) $ (11,074 ) $ 53,100 $ — Non-Agency RMBS — — (789 ) — 1 900 — (112 ) — — CMBS — 5,096 (10,422 ) — (57 ) 16,215 — (61 ) 10,771 — ABS — 3,657 — — — — — — 3,657 — 52,897 11,688 (15,490 ) (698 ) 5,921 34,171 (9,714 ) (11,247 ) 67,528 — Other investments Other privately held investments 46,430 — — (652 ) — 3,111 (1,500 ) — 47,389 (652 ) CLO - Equities 31,413 — — 6,719 — — — (13,868 ) 24,264 6,719 77,843 — — 6,067 — 3,111 (1,500 ) (13,868 ) 71,653 6,067 Other assets Insurance-linked securities 25,090 — — (90 ) — — — (25,000 ) — — 25,090 — — (90 ) — — — (25,000 ) — — Total assets $ 155,830 $ 11,688 $ (15,490 ) $ 5,279 $ 5,921 $ 37,282 $ (11,214 ) $ (50,115 ) $ 139,181 $ 6,067 Other liabilities Derivative instruments $ 11,510 $ — $ — $ (1,298 ) $ — $ — $ — $ — $ 10,212 $ (1,298 ) Total liabilities $ 11,510 $ — $ — $ (1,298 ) $ — $ — $ — $ — $ 10,212 $ (1,298 ) Opening Balance Transfers into Level 3 Transfers out of Level 3 Included in net income (1) Included in OCI (2) Purchases Sales Settlements/ Distributions Closing Balance Change in unrealized investment gains/(losses) (3) Three months ended September 30, 2017 Fixed maturities Corporate debt $ 68,320 $ — $ (1,208 ) $ (835 ) $ (9 ) $ — $ (2,274 ) $ (2,978 ) $ 61,016 $ — CMBS — — — — — — — — — — ABS 5,999 — (6,001 ) — 10 24,007 — — 24,015 — 74,319 — (7,209 ) (835 ) 1 24,007 (2,274 ) (2,978 ) 85,031 — Other investments Other privately held investments 42,938 — — 460 — — — — 43,398 460 CLO - Equities 47,076 — — 1,402 — — — (11,696 ) 36,782 1,402 90,014 — — 1,862 — — — (11,696 ) 80,180 1,862 Other assets Derivative instruments — — — — — — — — — — Insurance-linked securities 25,047 — — (71 ) — — — — 24,976 (71 ) 25,047 — — (71 ) — — — — 24,976 (71 ) Total assets $ 189,380 $ — $ (7,209 ) $ 956 $ 1 $ 24,007 $ (2,274 ) $ (14,674 ) $ 190,187 $ 1,791 Other liabilities Derivative instruments $ 12,209 $ — $ — $ (291 ) $ — $ — $ — $ (74 ) $ 11,844 $ (291 ) Total liabilities $ 12,209 $ — $ — $ (291 ) $ — $ — $ — $ (74 ) $ 11,844 $ (291 ) Nine months ended September 30, 2017 Fixed maturities Corporate debt $ 75,875 $ 1,536 $ (3,112 ) $ (762 ) $ (392 ) $ 19,181 $ (21,475 ) $ (9,835 ) $ 61,016 $ — Non-Agency RMBS — — — — — — — — — — CMBS 3,061 — (9,418 ) — 17 9,400 — (3,060 ) — — ABS 17,464 — (24,949 ) — 1,493 30,007 — — 24,015 — 96,400 1,536 (37,479 ) (762 ) 1,118 58,588 (21,475 ) (12,895 ) 85,031 — Other investments Other privately held investments 42,142 — — 1,256 — — — — 43,398 1,256 CLO - Equities 60,700 — — 3,930 — — — (27,848 ) 36,782 3,930 102,842 — — 5,186 — — — (27,848 ) 80,180 5,186 Other assets Derivative instruments 2,532 — — 653 — — — (3,185 ) — — Insurance-linked securities 25,023 — — (47 ) — — — — 24,976 (47 ) 27,555 — — 606 — — — (3,185 ) 24,976 (47 ) Total assets $ 226,797 $ 1,536 $ (37,479 ) $ 5,030 $ 1,118 $ 58,588 $ (21,475 ) $ (43,928 ) $ 190,187 $ 5,139 Other liabilities Derivative instruments $ 6,500 $ — $ — $ 9,991 $ — $ 12,135 $ — $ (16,782 ) $ 11,844 $ (291 ) Total liabilities $ 6,500 $ — $ — $ 9,991 $ — $ 12,135 $ — $ (16,782 ) $ 11,844 $ (291 ) (1) Realized gains (losses) on fixed maturities, and realized and unrealized gains (losses) on other assets and other liabilities included in net income are included in net investment gains (losses). Realized and unrealized gains (losses) on other investments included in net income are included in net investment income. (2) Unrealized gains (losses) on fixed maturities are included in other comprehensive income ("OCI"). (3) Change in unrealized investment gains (losses) relating to assets held at the reporting date. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
LOCATION AND AMOUNTS OF DERIVATIVE FAIR VALUES ON THE CONSOLIDATED BALANCE SHEET | The balance sheet classifications of derivatives recorded at fair value are shown in the following table. September 30, 2018 December 31, 2017 Derivative Notional Amount Derivative Asset Fair Value (1) Derivative Liability Fair Value (1) Derivative Notional Amount Derivative Asset Fair Value (1) Derivative Liability Fair Value (1) Relating to investment portfolio: Foreign exchange forward contracts $ 166,113 $ 437 $ 557 $ 137,422 $ 10 $ 619 Interest rate swaps 186,000 — 1,105 191,000 448 1,556 Relating to underwriting portfolio: Foreign exchange forward contracts 932,017 2,946 3,246 698,959 4,667 701 Other underwriting-related contracts 85,000 — 10,212 85,000 — 11,510 Total derivatives $ 3,383 $ 15,120 $ 5,125 $ 14,386 (1) Asset and liability derivatives are classified within other assets and other liabilities in the Consolidated Balance Sheets. |
RECONCILIATION OF GROSS DERIVATIVE ASSETS TO NET AMOUNTS PRESENTED IN BALANCE SHEETS | A reconciliation of gross derivative assets and liabilities to the net amounts presented in the Consolidated Balance Sheets, with the difference being attributable to the impact of master netting agreements, is shown in the following table. September 30, 2018 December 31, 2017 Gross Amounts Gross Amounts Offset Net Amounts (1) Gross Amounts Gross Amounts Offset Net Amounts (1) Derivative assets $ 9,313 $ (5,930 ) $ 3,383 $ 8,178 $ (3,053 ) $ 5,125 Derivative liabilities $ 21,050 $ (5,930 ) $ 15,120 $ 17,439 $ (3,053 ) $ 14,386 (1) Net asset and liability derivatives are classified within other assets and other liabilities in the Consolidated Balance Sheets. |
RECONCILIATION OF GROSS DERIVATIVE LIABILITIES TO NET AMOUNTS PRESENTED IN BALANCE SHEETS | A reconciliation of gross derivative assets and liabilities to the net amounts presented in the Consolidated Balance Sheets, with the difference being attributable to the impact of master netting agreements, is shown in the following table. September 30, 2018 December 31, 2017 Gross Amounts Gross Amounts Offset Net Amounts (1) Gross Amounts Gross Amounts Offset Net Amounts (1) Derivative assets $ 9,313 $ (5,930 ) $ 3,383 $ 8,178 $ (3,053 ) $ 5,125 Derivative liabilities $ 21,050 $ (5,930 ) $ 15,120 $ 17,439 $ (3,053 ) $ 14,386 (1) Net asset and liability derivatives are classified within other assets and other liabilities in the Consolidated Balance Sheets. |
TOTAL UNREALIZED AND REALIZED GAINS (LOSSES) ON DERIVATIVES NOT DESIGNATED AS HEDGES RECORDED IN EARNINGS | The total unrealized and realized gains (losses) recognized in net income for derivatives not designated as hedges are shown in the following table: Location of Gain (Loss) Recognized in Net Income Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Relating to investment portfolio: Foreign exchange forward contracts Net investment gains (losses) $ 766 $ (1,815 ) $ 2,090 $ (6,534 ) Interest rate swaps Net investment gains (losses) 1,859 520 7,692 (2,661 ) Relating to underwriting portfolio: Foreign exchange forward contracts Foreign exchange (losses) gains (3,965 ) 12,367 (4,103 ) 26,182 Weather-related contracts Other insurance related income (losses) — — — (9,629 ) Other underwriting-related contracts Other insurance related income (losses) 677 514 2,225 852 Total $ (663 ) $ 11,586 $ 7,904 $ 8,210 |
RESERVE FOR LOSSES AND LOSS E_2
RESERVE FOR LOSSES AND LOSS EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Insurance Loss Reserves [Abstract] | |
RECONCILIATION OF BEGINNING AND ENDING GROSS RESERVE FOR LOSSES AND LOSS EXPENSES AND NET RESERVE FOR UNPAID LOSSES AND LOSS EXPENSES | The following table presents a reconciliation of the Company's beginning and ending gross reserve for losses and loss expenses and net reserve for unpaid losses and loss expenses for the periods indicated: Nine months ended September 30, 2018 2017 Gross reserve for losses and loss expenses, beginning of period $ 12,997,553 $ 9,697,827 Less reinsurance recoverable on unpaid losses, beginning of period (3,159,514 ) (2,276,109 ) Net reserve for unpaid losses and loss expenses, beginning of period 9,838,039 7,421,718 Net incurred losses and loss expenses related to: Current year 2,323,028 2,591,135 Prior years (160,083 ) (143,495 ) 2,162,945 2,447,640 Net paid losses and loss expenses related to: Current year (381,158 ) (328,751 ) Prior years (1,770,667 ) (1,384,510 ) (2,151,825 ) (1,713,261 ) Foreign exchange and other (1,040,999 ) 333,456 Net reserve for unpaid losses and loss expenses, end of period 8,808,160 8,489,553 Reinsurance recoverable on unpaid losses, end of period 3,217,787 2,298,022 Gross reserve for losses and loss expenses, end of period $ 12,025,947 $ 10,787,575 |
NET PRIOR YEAR RESERVE DEVELOPMENT BY SEGMENT | Prior year reserve development arises from changes to loss and loss expense estimates related to loss events that occurred in previous calendar years. The following table presents prior year reserve development by segment: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Insurance $ 13,478 $ 7,926 $ 60,547 $ 35,579 Reinsurance 32,182 39,842 99,536 107,916 Total $ 45,660 $ 47,768 $ 160,083 $ 143,495 |
SCHEDULE OF THE LINE OF BUSINESS CATEGORIES AND THE EXPECTED CLAIM TAILS | The following tables reconcile reserve classes to the lines of business categories and the expected claim tails: Insurance Segment Reported Lines of Business Reserve Classes Tail Property Marine Terrorism Aviation Credit and Political Risk Professional Lines Liability Accident and Health Discontinued lines - Novae Property and Other Short X X X X Marine Short X Aviation Short X Credit and Political Risk Medium X Professional Lines Medium X X Liability Long X X Reinsurance Segment Reported Lines of Business Reserve Classes Tail Catastrophe Property Credit and Surety Professional Lines Motor Liability Engineering Agriculture Marine and Other Accident and Health Discontinued lines - Novae Property and Other Short X X X X X X Credit and Surety Medium X Professional Lines Medium X Motor Long X X Liability Long X X |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED EARNINGS PER COMMON SHARE | The following table presents a comparison of basic and diluted earnings per common share: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Basic earnings (loss) per common share Net income (loss) $ 54,095 $ (457,084 ) $ 230,812 $ (341,541 ) Less: preferred share dividends 10,656 10,656 31,969 36,154 Net income (loss) available to common shareholders 43,439 (467,740 ) 198,843 (377,695 ) Weighted average common shares outstanding - basic 83,558 83,305 83,474 84,479 Basic earnings (loss) per common share $ 0.52 $ (5.61 ) $ 2.38 $ (4.47 ) Earnings (loss) per diluted common share Net income (loss) available to common shareholders $ 43,439 $ (467,740 ) $ 198,843 $ (377,695 ) Weighted average common shares outstanding - basic 83,558 83,305 83,474 84,479 Share-based compensation plans (1) 549 — 465 — Weighted average common shares outstanding - diluted 84,107 83,305 83,939 84,479 Earnings (loss) per diluted common share $ 0.52 $ (5.61 ) $ 2.37 $ (4.47 ) Weighted average anti-dilutive shares excluded from the dilutive computation 8 425 325 712 (1) Due to the net loss incurred in the three and nine months ended September 30, 2017, all the share equivalents were anti-dilutive. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
RECONCILIATIONS OF BEGINNING AND ENDING BALANCE OF NONVESTED RESTRICTED STOCK (INCLUDING RSUS) TO BE SETTLED IN SHARES AND CASH | The following table provides a summary of nonvested cash-settled restricted stock units for the nine months ended September 30, 2018 : Cash-Settled Performance Vesting Restricted Stock Units Cash-Settled Service Based Restricted Stock Units Number of Restricted Stock Units Number of Restricted Stock Units Nonvested restricted stock units - beginning of period 42 988 Granted — 468 Vested (12 ) (379 ) Forfeited — (70 ) Nonvested restricted stock units - end of period 30 1,007 The following table provides a summary of nonvested share-settled restricted stock units for the nine months ended September 30, 2018 : Share-Settled Performance Vesting Restricted Stock Units Share-Settled Service Based Restricted Stock Units Number of Restricted Stock Units Weighted Average Grant Date Fair Value (1) Number of Restricted Stock Units Weighted Average Grant Date Fair Value (1) Nonvested restricted stock units - beginning of period 230 $ 57.08 1,355 $ 57.09 Granted 104 48.89 732 49.30 Vested (87 ) 54.71 (486 ) 54.39 Forfeited — — (70 ) 56.07 Nonvested restricted stock units - end of period 247 $ 54.49 1,531 $ 54.19 (1) Fair value is based on the closing price of common shares on the grant date. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
COMMON SHARES ISSUED AND OUTSTANDING | The following table presents common shares issued and outstanding: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Shares issued, balance at beginning of period 176,580 176,580 176,580 176,580 Shares issued — — — — Total shares issued at end of period 176,580 176,580 176,580 176,580 Treasury shares, balance at beginning of period (93,024 ) (93,377 ) (93,419 ) (90,139 ) Shares repurchased — (51 ) (175 ) (4,284 ) Shares reissued 1 5 571 1,000 Total treasury shares at end of period (93,023 ) (93,423 ) (93,023 ) (93,423 ) Total shares outstanding 83,557 83,157 83,557 83,157 |
SHARE REPURCHASES | The following table presents share repurchases: Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 In the open market: Total shares — 49 — 3,932 Total cost $ — $ 3,237 $ — $ 261,180 Average price per share (1) $ — $ 65.80 $ — $ 66.43 From employees: (2) Total shares — 2 175 352 Total cost $ — $ 110 $ 8,699 $ 24,479 Average price per share (1) $ — $ 64.04 $ 49.57 $ 69.53 Total shares repurchased: Total shares — 51 175 4,284 Total cost $ — $ 3,347 $ 8,699 $ 285,659 Average price per share (1) $ — $ 65.74 $ 49.57 $ 66.68 (1) Calculated using whole numbers. (2) Shares are repurchased from employees to satisfy withholding tax liabilities related to the vesting of restricted stock units. |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
TAX EFFECTS ALLOCATED TO EACH COMPONENT OF OTHER COMPREHENSIVE INCOME | The following table presents the tax effects allocated to each component of other comprehensive income (loss): 2018 2017 Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Three months ended September 30, Available for sale investments: Unrealized investment gains (losses) arising during the period $ (27,968 ) $ 1,907 $ (26,061 ) $ 64,431 $ (1,926 ) $ 62,505 Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income 26,896 (972 ) 25,924 (15,925 ) 2,639 (13,286 ) Unrealized investment gains (losses) arising during the period, net of reclassification adjustment (1) (1,072 ) 935 (137 ) 48,506 713 49,219 Non-credit portion of OTTI losses — — — — — — Foreign currency translation adjustment 994 — 994 8,088 — 8,088 Total other comprehensive income (loss), net of tax $ (78 ) $ 935 $ 857 $ 56,594 $ 713 $ 57,307 Nine months ended September 30, Available for sale investments: Unrealized investment gains (losses) arising during the period $ (266,117 ) $ 8,596 $ (257,521 ) $ 215,360 $ (8,899 ) $ 206,461 Adjustment for reclassification of net realized investment losses and OTTI losses recognized in net income 79,552 (2,363 ) 77,189 8,269 1,900 10,169 Unrealized investment gains (losses) arising during the period, net of reclassification adjustment (1) (186,565 ) 6,233 (180,332 ) 223,629 (6,999 ) 216,630 Non-credit portion of OTTI losses — — — — — — Foreign currency translation adjustment (6,864 ) — (6,864 ) 46,824 — 46,824 Total other comprehensive income (loss), net of tax $ (193,429 ) $ 6,233 $ (187,196 ) $ 270,453 $ (6,999 ) $ 263,454 (1) Effective January 1, 2018, the Company adopted ASU No. 2016-01. The adoption of this guidance resulted in a cumulative adjustment to reclassify unrealized investment gains on equity securities from accumulated other comprehensive income to retained earnings. As prescribed, the prior period has not been restated to conform to the current presentation. Refer to Item 1, Note 1 ' Basis of Presentation and Significant Accounting Policies ' to the Consolidated Financial Statements for additional information. |
RECLASSIFICATIONS OUT OF AOCI INTO NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | The following table presents reclassifications from Accumulated Other Comprehensive Income ("AOCI") to net income available to common shareholders: Amount reclassified from AOCI (1) AOCI Components Consolidated Statement of Operations line item that includes reclassification Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Unrealized investment gains (losses) on available for sale investments Other investment gains (losses) $ (21,350 ) $ 21,337 $ (71,918 ) $ 5,224 OTTI losses (5,546 ) (5,412 ) (7,634 ) (13,493 ) Total before tax (26,896 ) 15,925 (79,552 ) (8,269 ) Income tax (expense) benefit 972 (2,639 ) 2,363 (1,900 ) Net of tax $ (25,924 ) $ 13,286 $ (77,189 ) $ (10,169 ) Foreign currency translation adjustment Foreign exchange loss $ — $ — $ — $ (24,149 ) Income tax (expense) benefit — — — — Net of tax $ — $ — $ — $ (24,149 ) (1) Amounts in parentheses are debits to net income (loss) available (attributable) to common shareholders. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net unrealized gains on equity securities | $ (6,660) | $ 0 | $ 25,172 | $ 0 | ||
Fee income | 31,000 | |||||
Accounting Standards Update 2016-01 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Net unrealized gains on equity securities | 70,000 | |||||
Deferred income taxes | 13,000 | |||||
Accounting Standards Update 2016-01 | Retained earnings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative effect of adoption of ASU | $ (69,604) | $ 0 | ||||
Accounting Standards Update 2018-02 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Tax benefit related to the revaluation of net deferred tax liabilities | $ (2,000) | |||||
Accounting Standards Update 2018-02 | Retained earnings | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Cumulative effect of adoption of ASU | $ 2,106 | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)reportable_segment | Sep. 30, 2017USD ($) | |
Segment Information [Line Items] | ||||
Number of reportable segments | reportable_segment | 2 | |||
Net premiums earned | $ 1,224,075 | $ 1,017,131 | $ 3,577,026 | $ 2,937,265 |
Other insurance related income (losses) | 8,475 | (3,197) | 18,811 | (4,420) |
Net losses and loss expenses | (794,959) | (1,235,367) | (2,162,945) | (2,447,640) |
Acquisition costs | (248,314) | (194,724) | (709,527) | (588,879) |
Expenses | (154,894) | (124,629) | (489,944) | (433,704) |
Net investment income | 114,421 | 95,169 | 325,380 | 299,899 |
Net investment gains (losses) | (17,628) | 14,632 | (77,551) | (14,811) |
Foreign exchange losses | (8,305) | (32,510) | (2,066) | (90,093) |
Interest expense and financing costs | (16,897) | (12,835) | (50,758) | (38,377) |
Bargain purchase gain | 0 | 0 | 0 | 15,044 |
Transaction and reorganization expenses | (16,300) | (5,970) | (48,125) | (5,970) |
Amortization of value of business acquired | (39,018) | 0 | (149,535) | 0 |
Amortization of intangible assets | (1,753) | 0 | (8,564) | 0 |
Income (loss) before income taxes and interest in income (loss) of equity method investments | $ 48,903 | $ (482,300) | $ 222,202 | $ (371,686) |
Net loss and loss expense ratio | 64.90% | 121.50% | 60.50% | 83.30% |
Acquisition cost ratio | 20.30% | 19.10% | 19.80% | 20.00% |
General and administrative expense ratio | 12.70% | 12.30% | 13.70% | 14.80% |
Combined ratio | 97.90% | 152.90% | 94.00% | 118.10% |
Total intangible assets | $ 408,441 | $ 87,206 | $ 408,441 | $ 87,206 |
Operating Segments | ||||
Segment Information [Line Items] | ||||
Gross premiums written | 1,423,707 | 1,185,574 | 5,737,327 | 4,459,772 |
Net premiums written | 919,938 | 832,743 | 3,906,264 | 3,297,718 |
Net premiums earned | 1,224,075 | 1,017,131 | 3,577,026 | 2,937,265 |
Other insurance related income (losses) | 8,475 | (3,197) | 18,811 | (4,420) |
Net losses and loss expenses | (794,959) | (1,235,367) | (2,162,945) | (2,447,640) |
Acquisition costs | (248,314) | (194,724) | (709,527) | (588,879) |
Expenses | (130,251) | (96,696) | (404,875) | (335,782) |
Underwriting income (loss) | 59,026 | (512,853) | 318,490 | (439,456) |
Operating Segments | Insurance | ||||
Segment Information [Line Items] | ||||
Gross premiums written | 969,364 | 651,145 | 2,876,856 | 1,960,608 |
Net premiums written | 602,070 | 407,054 | 1,748,142 | 1,259,999 |
Net premiums earned | 614,795 | 420,775 | 1,772,126 | 1,230,279 |
Other insurance related income (losses) | 1,526 | 302 | 3,359 | 853 |
Net losses and loss expenses | (415,488) | (576,688) | (1,065,799) | (1,093,237) |
Acquisition costs | (111,888) | (61,541) | (290,082) | (177,937) |
Expenses | (100,656) | (71,007) | (305,394) | (239,389) |
Underwriting income (loss) | $ (11,711) | $ (288,159) | $ 114,210 | $ (279,431) |
Net loss and loss expense ratio | 67.60% | 137.10% | 60.10% | 88.90% |
Acquisition cost ratio | 18.20% | 14.60% | 16.40% | 14.40% |
General and administrative expense ratio | 16.40% | 16.90% | 17.20% | 19.50% |
Combined ratio | 102.20% | 168.60% | 93.70% | 122.80% |
Total intangible assets | $ 408,441 | $ 87,206 | $ 408,441 | $ 87,206 |
Operating Segments | Reinsurance | ||||
Segment Information [Line Items] | ||||
Gross premiums written | 454,343 | 534,429 | 2,860,471 | 2,499,164 |
Net premiums written | 317,868 | 425,689 | 2,158,122 | 2,037,719 |
Net premiums earned | 609,280 | 596,356 | 1,804,900 | 1,706,986 |
Other insurance related income (losses) | 6,949 | (3,499) | 15,452 | (5,273) |
Net losses and loss expenses | (379,471) | (658,679) | (1,097,146) | (1,354,403) |
Acquisition costs | (136,426) | (133,183) | (419,445) | (410,942) |
Expenses | (29,595) | (25,689) | (99,481) | (96,393) |
Underwriting income (loss) | $ 70,737 | $ (224,694) | $ 204,280 | $ (160,025) |
Net loss and loss expense ratio | 62.30% | 110.50% | 60.80% | 79.30% |
Acquisition cost ratio | 22.40% | 22.30% | 23.20% | 24.20% |
General and administrative expense ratio | 4.80% | 4.30% | 5.50% | 5.60% |
Combined ratio | 89.50% | 137.10% | 89.50% | 109.10% |
Total intangible assets | $ 0 | $ 0 | $ 0 | $ 0 |
Corporate, Non-Segment | ||||
Segment Information [Line Items] | ||||
Expenses | (24,643) | (27,933) | (85,069) | (97,922) |
Significant Reconciling Items | ||||
Segment Information [Line Items] | ||||
Net investment income | 114,421 | 95,169 | 325,380 | 299,899 |
Net investment gains (losses) | (17,628) | 14,632 | (77,551) | (14,811) |
Foreign exchange losses | (8,305) | (32,510) | (2,066) | (90,093) |
Interest expense and financing costs | (16,897) | (12,835) | (50,758) | (38,377) |
Bargain purchase gain | 0 | 15,044 | ||
Transaction and reorganization expenses | (16,300) | (5,970) | (48,125) | (5,970) |
Amortization of value of business acquired | (39,018) | 0 | (149,535) | 0 |
Amortization of intangible assets | $ (1,753) | $ 0 | $ (8,564) | $ 0 |
INVESTMENTS (Fixed Maturities)
INVESTMENTS (Fixed Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fixed maturities | ||
Amortized Cost | $ 11,941,555 | $ 12,611,219 |
Gross Unrealized Gains | 33,562 | 101,660 |
Gross Unrealized Losses | (207,420) | (90,873) |
Fair Value | 11,767,697 | 12,622,006 |
Non-credit OTTI in AOCI | (868) | (853) |
U.S. government and agency | ||
Fixed maturities | ||
Amortized Cost | 1,625,114 | 1,727,643 |
Gross Unrealized Gains | 414 | 1,735 |
Gross Unrealized Losses | (20,063) | (16,909) |
Fair Value | 1,605,465 | 1,712,469 |
Non-credit OTTI in AOCI | 0 | 0 |
Non-U.S. government | ||
Fixed maturities | ||
Amortized Cost | 558,862 | 798,582 |
Gross Unrealized Gains | 3,013 | 17,240 |
Gross Unrealized Losses | (13,750) | (9,523) |
Fair Value | 548,125 | 806,299 |
Non-credit OTTI in AOCI | 0 | 0 |
Corporate debt | ||
Fixed maturities | ||
Amortized Cost | 5,144,747 | 5,265,795 |
Gross Unrealized Gains | 23,714 | 61,922 |
Gross Unrealized Losses | (87,376) | (29,851) |
Fair Value | 5,081,085 | 5,297,866 |
Non-credit OTTI in AOCI | 0 | 0 |
Agency RMBS | ||
Fixed maturities | ||
Amortized Cost | 1,688,977 | 2,414,720 |
Gross Unrealized Gains | 2,140 | 8,132 |
Gross Unrealized Losses | (51,886) | (27,700) |
Fair Value | 1,639,231 | 2,395,152 |
Non-credit OTTI in AOCI | 0 | 0 |
CMBS | ||
Fixed maturities | ||
Amortized Cost | 1,099,728 | 776,715 |
Gross Unrealized Gains | 729 | 4,138 |
Gross Unrealized Losses | (23,502) | (3,125) |
Fair Value | 1,076,955 | 777,728 |
Non-credit OTTI in AOCI | 0 | 0 |
Non-Agency RMBS | ||
Fixed maturities | ||
Amortized Cost | 41,273 | 45,713 |
Gross Unrealized Gains | 1,475 | 1,917 |
Gross Unrealized Losses | (962) | (799) |
Fair Value | 41,786 | 46,831 |
Non-credit OTTI in AOCI | (868) | (853) |
ABS | ||
Fixed maturities | ||
Amortized Cost | 1,651,271 | 1,432,884 |
Gross Unrealized Gains | 1,520 | 5,391 |
Gross Unrealized Losses | (6,980) | (1,994) |
Fair Value | 1,645,811 | 1,436,281 |
Non-credit OTTI in AOCI | 0 | 0 |
Municipals | ||
Fixed maturities | ||
Amortized Cost | 131,583 | 149,167 |
Gross Unrealized Gains | 557 | 1,185 |
Gross Unrealized Losses | (2,901) | (972) |
Fair Value | 129,239 | 149,380 |
Non-credit OTTI in AOCI | $ 0 | $ 0 |
INVESTMENTS (Equity Securities)
INVESTMENTS (Equity Securities) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Investment [Line Items] | ||
Cost | $ 376,007 | $ 552,867 |
Gross Unrealized Gains | 64,888 | 84,527 |
Gross Unrealized Losses | (7,584) | (1,883) |
Fair Value | 433,311 | 635,511 |
Common stocks | ||
Investment [Line Items] | ||
Cost | 13,392 | 22,836 |
Gross Unrealized Gains | 1,345 | 3,412 |
Gross Unrealized Losses | (1,232) | (590) |
Fair Value | 13,505 | 25,658 |
Exchange-traded funds | ||
Investment [Line Items] | ||
Cost | 211,940 | 356,252 |
Gross Unrealized Gains | 63,543 | 71,675 |
Gross Unrealized Losses | (2,035) | (294) |
Fair Value | 273,448 | 427,633 |
Bond mutual funds | ||
Investment [Line Items] | ||
Cost | 150,675 | 173,779 |
Gross Unrealized Gains | 0 | 9,440 |
Gross Unrealized Losses | (4,317) | (999) |
Fair Value | $ 146,358 | $ 182,220 |
INVESTMENTS (Contractual Maturi
INVESTMENTS (Contractual Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule Of Available For Sale Securities [Line Items] | ||
Due in one year or less (amortized cost) | $ 496,968 | $ 486,659 |
Due after one year through five years (amortized cost) | 4,926,538 | 4,906,207 |
Due after five years through ten years (amortized cost) | 1,821,059 | 2,338,964 |
Due after ten years (amortized cost) | 215,741 | 209,357 |
Total fixed maturities with a single maturity date (amortized cost) | 7,460,306 | 7,941,187 |
Amortized Cost | 11,941,555 | 12,611,219 |
Due in one year or less (fair value) | 492,752 | 484,663 |
Due after one year through five years (fair value) | 4,881,185 | 4,912,189 |
Due after five years through ten years (fair value) | 1,774,813 | 2,350,433 |
Due after ten years (fair value) | 215,164 | 218,729 |
Total fixed maturities with a single maturity date (fair value) | 7,363,914 | 7,966,014 |
Fair Value | $ 11,767,697 | $ 12,622,006 |
Due in one year or less (% of total fair value) | 4.10% | 3.80% |
Due after one year through five years (% of total fair value) | 41.50% | 38.90% |
Due after five years through ten years (% of total fair value) | 15.10% | 18.60% |
Due after ten years (% of total fair value) | 1.80% | 1.70% |
Fixed maturities with a single maturity date (% of total fair value) | 62.50% | 63.00% |
Total | 100.00% | 100.00% |
Agency RMBS | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fixed maturities without a single maturity date (amortized cost) | $ 1,688,977 | $ 2,414,720 |
Amortized Cost | 1,688,977 | 2,414,720 |
Fixed maturities without a single maturity date (fair value) | 1,639,231 | 2,395,152 |
Fair Value | $ 1,639,231 | $ 2,395,152 |
Fixed maturities without a single maturity date (% of total fair value) | 13.90% | 19.00% |
CMBS | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fixed maturities without a single maturity date (amortized cost) | $ 1,099,728 | $ 776,715 |
Amortized Cost | 1,099,728 | 776,715 |
Fixed maturities without a single maturity date (fair value) | 1,076,955 | 777,728 |
Fair Value | $ 1,076,955 | $ 777,728 |
Fixed maturities without a single maturity date (% of total fair value) | 9.20% | 6.20% |
Non-Agency RMBS | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fixed maturities without a single maturity date (amortized cost) | $ 41,273 | $ 45,713 |
Amortized Cost | 41,273 | 45,713 |
Fixed maturities without a single maturity date (fair value) | 41,786 | 46,831 |
Fair Value | $ 41,786 | $ 46,831 |
Fixed maturities without a single maturity date (% of total fair value) | 0.40% | 0.40% |
ABS | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fixed maturities without a single maturity date (amortized cost) | $ 1,651,271 | $ 1,432,884 |
Amortized Cost | 1,651,271 | 1,432,884 |
Fixed maturities without a single maturity date (fair value) | 1,645,811 | 1,436,281 |
Fair Value | $ 1,645,811 | $ 1,436,281 |
Fixed maturities without a single maturity date (% of total fair value) | 14.00% | 11.40% |
INVESTMENTS (Gross Unrealized L
INVESTMENTS (Gross Unrealized Losses) (Details) $ in Thousands | Sep. 30, 2018USD ($)security | Dec. 31, 2017USD ($)security |
U.S. government and agency | ||
Fixed maturities | ||
Fair Value - 12 months or greater | $ 311,591 | $ 194,916 |
Unrealized Losses - 12 months or greater | (10,619) | (5,963) |
Fair Value - Less than 12 months | 1,228,100 | 1,389,792 |
Unrealized Losses - Less than 12 months | (9,444) | (10,946) |
Total Fair Value of Securities in Unrealized Loss Position | 1,539,691 | 1,584,708 |
Total Unrealized Losses | (20,063) | (16,909) |
Non-U.S. government | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 34,550 | 62,878 |
Unrealized Losses - 12 months or greater | (2,086) | (6,806) |
Fair Value - Less than 12 months | 382,172 | 204,110 |
Unrealized Losses - Less than 12 months | (11,664) | (2,717) |
Total Fair Value of Securities in Unrealized Loss Position | 416,722 | 266,988 |
Total Unrealized Losses | (13,750) | (9,523) |
Corporate debt | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 621,298 | 407,300 |
Unrealized Losses - 12 months or greater | (28,190) | (11,800) |
Fair Value - Less than 12 months | 3,256,619 | 2,041,845 |
Unrealized Losses - Less than 12 months | (59,186) | (18,051) |
Total Fair Value of Securities in Unrealized Loss Position | 3,877,917 | 2,449,145 |
Total Unrealized Losses | (87,376) | (29,851) |
Agency RMBS | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 722,287 | 759,255 |
Unrealized Losses - 12 months or greater | (33,738) | (17,453) |
Fair Value - Less than 12 months | 780,730 | 1,172,313 |
Unrealized Losses - Less than 12 months | (18,148) | (10,247) |
Total Fair Value of Securities in Unrealized Loss Position | 1,503,017 | 1,931,568 |
Total Unrealized Losses | (51,886) | (27,700) |
CMBS | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 105,887 | 31,607 |
Unrealized Losses - 12 months or greater | (3,944) | (703) |
Fair Value - Less than 12 months | 832,183 | 348,943 |
Unrealized Losses - Less than 12 months | (19,558) | (2,422) |
Total Fair Value of Securities in Unrealized Loss Position | 938,070 | 380,550 |
Total Unrealized Losses | (23,502) | (3,125) |
Non-Agency RMBS | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 10,821 | 8,029 |
Unrealized Losses - 12 months or greater | (946) | (788) |
Fair Value - Less than 12 months | 6,067 | 4,197 |
Unrealized Losses - Less than 12 months | (16) | (11) |
Total Fair Value of Securities in Unrealized Loss Position | 16,888 | 12,226 |
Total Unrealized Losses | (962) | (799) |
ABS | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 157,894 | 57,298 |
Unrealized Losses - 12 months or greater | (2,115) | (570) |
Fair Value - Less than 12 months | 844,190 | 392,170 |
Unrealized Losses - Less than 12 months | (4,865) | (1,424) |
Total Fair Value of Securities in Unrealized Loss Position | 1,002,084 | 449,468 |
Total Unrealized Losses | (6,980) | (1,994) |
Municipals | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 33,043 | 11,230 |
Unrealized Losses - 12 months or greater | (1,327) | (269) |
Fair Value - Less than 12 months | 71,150 | 65,632 |
Unrealized Losses - Less than 12 months | (1,574) | (703) |
Total Fair Value of Securities in Unrealized Loss Position | 104,193 | 76,862 |
Total Unrealized Losses | (2,901) | (972) |
Fixed maturities | ||
Fixed maturities | ||
Fair Value - 12 months or greater | 1,997,371 | 1,532,513 |
Unrealized Losses - 12 months or greater | (82,965) | (44,352) |
Fair Value - Less than 12 months | 7,401,211 | 5,619,002 |
Unrealized Losses - Less than 12 months | (124,455) | (46,521) |
Total Fair Value of Securities in Unrealized Loss Position | 9,398,582 | 7,151,515 |
Total Unrealized Losses | $ (207,420) | $ (90,873) |
Equity securities | ||
Number of available for sale securities in unrealized loss positions | security | 3,444 | 2,424 |
Number of available for sale securities in unrealized loss positions for 12 months or greater | security | 940 | 627 |
Fixed maturities | Below Investment Grade or Not Rated | ||
Fixed maturities | ||
Total Unrealized Losses | $ (13,000) | $ (7,000) |
Common stocks | ||
Equity securities | ||
Fair Value - 12 months or greater | 0 | |
Unrealized Losses - 12 months or greater | 0 | |
Fair Value - Less than 12 months | 3,202 | |
Unrealized Losses - Less than 12 months | (590) | |
Total Fair Value of Securities in Unrealized Loss Position | 3,202 | |
Total Unrealized Losses | (590) | |
Exchange-traded funds | ||
Equity securities | ||
Fair Value - 12 months or greater | 0 | |
Unrealized Losses - 12 months or greater | 0 | |
Fair Value - Less than 12 months | 12,323 | |
Unrealized Losses - Less than 12 months | (294) | |
Total Fair Value of Securities in Unrealized Loss Position | 12,323 | |
Total Unrealized Losses | (294) | |
Bond mutual funds | ||
Equity securities | ||
Fair Value - 12 months or greater | 0 | |
Unrealized Losses - 12 months or greater | 0 | |
Fair Value - Less than 12 months | 12,184 | |
Unrealized Losses - Less than 12 months | (999) | |
Total Fair Value of Securities in Unrealized Loss Position | 12,184 | |
Total Unrealized Losses | (999) | |
Equity securities | ||
Equity securities | ||
Fair Value - 12 months or greater | 0 | |
Unrealized Losses - 12 months or greater | 0 | |
Fair Value - Less than 12 months | 27,709 | |
Unrealized Losses - Less than 12 months | (1,883) | |
Total Fair Value of Securities in Unrealized Loss Position | 27,709 | |
Total Unrealized Losses | $ (1,883) |
INVESTMENTS (Mortgage Loans) (D
INVESTMENTS (Mortgage Loans) (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Mortgage Loans held-for-investment, net [Abstract] | ||
Commercial | $ 333,018,000 | $ 325,062,000 |
Commercial, Percent | 100.00% | 100.00% |
Total Mortgage Loans held-for-investment | $ 333,018,000 | $ 325,062,000 |
Total Mortgage Loans held-for investment, Percent | 100.00% | 100.00% |
Weighted average debt service coverage ratios | 2.6 | |
Weighted average loan-to-value ratios (less than) | 60.00% | |
Credit losses associated with commercial mortgage loans | $ 0 |
INVESTMENTS (Other Investments)
INVESTMENTS (Other Investments) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | |
Other Investments [Line Items] | |||
Other investments, at fair value | $ 833,563 | $ 1,009,373 | |
Percentage of total fair value | 100.00% | 100.00% | |
Long/short equity funds | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 28,593 | $ 38,470 | |
Percentage of total fair value | 3.00% | 4.00% | |
Redemption notice period | 60 days | 60 days | |
Multi-strategy funds | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 185,255 | $ 286,164 | |
Percentage of total fair value | 22.00% | 28.00% | |
Multi-strategy funds | Other Redemption Restriction | |||
Other Investments [Line Items] | |||
Unfunded commitments related to other investments | $ 53,000 | $ 16,000 | |
Multi-strategy funds | Minimum | |||
Other Investments [Line Items] | |||
Redemption notice period | 60 days | 60 days | |
Multi-strategy funds | Minimum | Other Redemption Restriction | |||
Other Investments [Line Items] | |||
Investment term | 2 years | ||
Multi-strategy funds | Maximum | |||
Other Investments [Line Items] | |||
Redemption notice period | 95 days | 95 days | |
Event-driven funds | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 38,084 | $ 39,177 | |
Percentage of total fair value | 5.00% | 4.00% | |
Redemption notice period | 45 days | 45 days | |
Direct lending funds | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 268,210 | $ 250,681 | |
Percentage of total fair value | 32.00% | 25.00% | |
Direct lending funds | Other Redemption Restriction | |||
Other Investments [Line Items] | |||
Unfunded commitments related to other investments | $ 199,000 | $ 137,000 | |
Optional extension of investment term | 3 years | ||
Direct lending funds | Minimum | Other Redemption Restriction | |||
Other Investments [Line Items] | |||
Investment term | 5 years | ||
Direct lending funds | Maximum | Other Redemption Restriction | |||
Other Investments [Line Items] | |||
Investment term | 10 years | ||
Private equity funds | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 67,840 | $ 68,812 | |
Percentage of total fair value | 8.00% | 7.00% | |
Unfunded commitments related to other investments | $ 18,000 | $ 21,000 | |
Investment term | 10 years | ||
Real estate funds | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 63,764 | $ 50,009 | |
Percentage of total fair value | 8.00% | 5.00% | |
Real estate funds | Other Redemption Restriction | |||
Other Investments [Line Items] | |||
Unfunded commitments related to other investments | $ 169,000 | $ 115,000 | |
Investment term | 7 years | ||
CLO-Equities | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 24,264 | $ 31,413 | |
Percentage of total fair value | 3.00% | 2.00% | |
Other privately held investments | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 47,389 | $ 46,430 | |
Percentage of total fair value | 6.00% | 5.00% | |
Overseas deposits | |||
Other Investments [Line Items] | |||
Other investments, at fair value | $ 110,164 | $ 198,217 | |
Percentage of total fair value | 13.00% | 20.00% | |
Hedge funds | Lockup Redemption Restriction | |||
Other Investments [Line Items] | |||
Fair value of other investments subject to redemption restrictions | $ 42,000 | $ 38,000 | |
Percentage of fair value of other investments subject to redemption restrictions | 17.00% | 11.00% | |
Bank Revolver Opportunity Funds | |||
Other Investments [Line Items] | |||
Unfunded commitments related to other investments | $ 50,000 | ||
Investment term | 7 years | ||
Optional extension of investment term | 2 years |
INVESTMENTS (Equity Method Inve
INVESTMENTS (Equity Method Investments) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
Payments to acquire equity method investments | $ 0 | $ 1,000,000 | ||
Equity method investments | $ 112,155,000 | $ 108,597,000 | ||
Harrington Reinsurance Holdings Limited | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Payments to acquire equity method investments | $ 108,000,000 | |||
Equity method investment, ownership percentage | 19.00% | |||
Equity method investment, difference between carrying amount and underlying equity | $ 5,000,000 | |||
United States | Other Equity Method Investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Impairment charge | 9,000,000 | |||
Equity method investments | $ 0 |
INVESTMENTS (Net Investment Inc
INVESTMENTS (Net Investment Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Investment Income [Line Items] | ||||
Gross investment income | $ 121,646 | $ 102,278 | $ 345,867 | $ 321,031 |
Investment expenses | (7,225) | (7,109) | (20,487) | (21,132) |
Net investment income | 114,421 | 95,169 | 325,380 | 299,899 |
Fixed maturities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 89,887 | 74,978 | 262,165 | 230,603 |
Other investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 15,933 | 17,373 | 44,179 | 59,973 |
Equity securities | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 2,099 | 3,223 | 7,015 | 11,048 |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 3,322 | 2,895 | 9,805 | 7,970 |
Cash and cash equivalents | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | 6,992 | 3,111 | 16,770 | 9,640 |
Short-term investments | ||||
Net Investment Income [Line Items] | ||||
Gross investment income | $ 3,413 | $ 698 | $ 5,933 | $ 1,797 |
INVESTMENTS (Net Investment Los
INVESTMENTS (Net Investment Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Fixed maturities and short-term investments | $ 4,543 | $ 19,297 | $ 41,932 | $ 57,524 |
Equity securities | 15 | 17,980 | 18,675 | 33,794 |
Gross realized investment gains | 4,558 | 37,277 | 60,607 | 91,318 |
Fixed maturities and short-term investments | (25,926) | (15,893) | (113,903) | (83,183) |
Equity securities | 0 | (45) | (1,231) | (258) |
Gross realized investment losses | (25,926) | (15,938) | (115,134) | (83,441) |
Net OTTI recognized in net income | (5,546) | (5,412) | (7,634) | (13,493) |
Change in fair value of investment derivatives | 2,626 | (1,295) | 9,782 | (9,195) |
Net unrealized gains (losses) on equities | 6,660 | 0 | (25,172) | 0 |
Total net investment gains (losses) | $ (17,628) | $ 14,632 | $ (77,551) | $ (14,811) |
INVESTMENTS (OTTI Recognized in
INVESTMENTS (OTTI Recognized in Earnings by Asset Class) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Than Temporary Impairment Losses Investments Portion Recognized In Earnings Net [Line Items] | ||||
Total OTTI recognized in net income | $ 5,546 | $ 5,412 | $ 7,634 | $ 13,493 |
Non-U.S. government | ||||
Other Than Temporary Impairment Losses Investments Portion Recognized In Earnings Net [Line Items] | ||||
Total OTTI recognized in net income | 4,426 | 3,905 | 4,448 | 8,187 |
Corporate debt | ||||
Other Than Temporary Impairment Losses Investments Portion Recognized In Earnings Net [Line Items] | ||||
Total OTTI recognized in net income | 1,079 | 1,507 | 3,145 | 5,306 |
CMBS | ||||
Other Than Temporary Impairment Losses Investments Portion Recognized In Earnings Net [Line Items] | ||||
Total OTTI recognized in net income | $ 41 | $ 0 | $ 41 | $ 0 |
INVESTMENTS (OTTI Recognized _2
INVESTMENTS (OTTI Recognized in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Credit Losses For Which a Portion of OTTI Was Recognized in AOCI [Roll Forward] | ||||
Balance at beginning of period | $ 1,472 | $ 1,481 | $ 1,494 | $ 1,493 |
Credit impairments recognized on securities not previously impaired | 0 | 0 | 0 | 0 |
Additional credit impairments recognized on securities previously impaired | 8 | 2 | 8 | 2 |
Change in timing of future cash flows on securities previously impaired | 0 | 0 | 0 | 0 |
Intent to sell of securities previously impaired | 0 | 0 | 0 | 0 |
Securities sold/redeemed/matured | 0 | 0 | (22) | (12) |
Balance at end of period | $ 1,480 | $ 1,483 | $ 1,480 | $ 1,483 |
INVESTMENTS (Reverse Repurchase
INVESTMENTS (Reverse Repurchase Agreements) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Value of reverse repurchase agreements | $ 167 | $ 37 |
Minimum required collateral for reverse repurchase agreements, expressed as a percentage of loan principal | 102.00% |
FAIR VALUE MEASUREMENTS (Financ
FAIR VALUE MEASUREMENTS (Financial Instruments Measured at Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | $ 11,767,697 | $ 12,622,006 |
Other investments, at fair value | 833,563 | 1,009,373 |
Short-term investments | 156,090 | 83,661 |
Derivative instruments (see Note 5) | 3,383 | 5,125 |
Derivative instruments (see Note 5) | 15,120 | 14,386 |
U.S. government and agency | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,605,465 | 1,712,469 |
Non-U.S. government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 548,125 | 806,299 |
Corporate debt | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 5,081,085 | 5,297,866 |
Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,639,231 | 2,395,152 |
CMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,076,955 | 777,728 |
Non-Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 41,786 | 46,831 |
ABS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,645,811 | 1,436,281 |
Municipals | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 129,239 | 149,380 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative instruments (see Note 5) | 10,212 | |
Fair Value Measurements Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 11,767,697 | 12,622,006 |
Equity securities | 433,311 | 635,511 |
Other investments, at fair value | 833,563 | 1,009,373 |
Short-term investments | 156,090 | 83,661 |
Derivative instruments (see Note 5) | 3,383 | 5,125 |
Insurance-linked securities | 25,090 | |
Total Assets | 13,194,044 | 14,380,766 |
Derivative instruments (see Note 5) | 15,120 | 14,386 |
Cash settled awards (see Note 8) | 19,096 | 21,535 |
Total Liabilities | 34,216 | 35,921 |
Fair Value Measurements Recurring | U.S. government and agency | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,605,465 | 1,712,469 |
Fair Value Measurements Recurring | Non-U.S. government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 548,125 | 806,299 |
Fair Value Measurements Recurring | Corporate debt | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 5,081,085 | 5,297,866 |
Fair Value Measurements Recurring | Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,639,231 | 2,395,152 |
Fair Value Measurements Recurring | CMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,076,955 | 777,728 |
Fair Value Measurements Recurring | Non-Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 41,786 | 46,831 |
Fair Value Measurements Recurring | ABS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,645,811 | 1,436,281 |
Fair Value Measurements Recurring | Municipals | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 129,239 | 149,380 |
Fair Value Measurements Recurring | Common stocks | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 13,505 | 25,658 |
Fair Value Measurements Recurring | Exchange-traded funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 273,448 | 427,633 |
Fair Value Measurements Recurring | Bond mutual funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 146,358 | 182,220 |
Fair Value Measurements Recurring | Hedge funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 251,932 | 363,811 |
Fair Value Measurements Recurring | Direct lending funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 268,210 | 250,681 |
Fair Value Measurements Recurring | Private equity funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 67,840 | 68,812 |
Fair Value Measurements Recurring | Real estate funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 63,764 | 50,009 |
Fair Value Measurements Recurring | Other privately held investments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 47,389 | 46,430 |
Fair Value Measurements Recurring | CLO-Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 24,264 | 31,413 |
Fair Value Measurements Recurring | Overseas deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 110,164 | 198,217 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,579,758 | 1,658,622 |
Equity securities | 286,953 | 453,291 |
Other investments, at fair value | 0 | 0 |
Short-term investments | 0 | 0 |
Derivative instruments (see Note 5) | 0 | 0 |
Insurance-linked securities | 0 | |
Total Assets | 1,866,711 | 2,111,913 |
Derivative instruments (see Note 5) | 0 | 0 |
Cash settled awards (see Note 8) | 0 | 0 |
Total Liabilities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government and agency | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,579,758 | 1,658,622 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-U.S. government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | CMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ABS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipals | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Common stocks | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 13,505 | 25,658 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Exchange-traded funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 273,448 | 427,633 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Bond mutual funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Hedge funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Direct lending funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Private equity funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Real estate funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other privately held investments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | CLO-Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Overseas deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 10,120,411 | 10,910,487 |
Equity securities | 146,358 | 182,220 |
Other investments, at fair value | 110,164 | 198,217 |
Short-term investments | 156,090 | 83,661 |
Derivative instruments (see Note 5) | 3,383 | 5,125 |
Insurance-linked securities | 0 | |
Total Assets | 10,536,406 | 11,379,710 |
Derivative instruments (see Note 5) | 4,908 | 2,876 |
Cash settled awards (see Note 8) | 19,096 | 21,535 |
Total Liabilities | 24,004 | 24,411 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | U.S. government and agency | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 25,707 | 53,847 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Non-U.S. government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 548,125 | 806,299 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 5,027,985 | 5,244,969 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,639,231 | 2,395,152 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | CMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,066,184 | 777,728 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Non-Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 41,786 | 46,831 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | ABS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 1,642,154 | 1,436,281 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Municipals | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 129,239 | 149,380 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Common stocks | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Exchange-traded funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Bond mutual funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 146,358 | 182,220 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Hedge funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Direct lending funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Private equity funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Real estate funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Other privately held investments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | CLO-Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Other Observable Inputs (Level 2) | Overseas deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 110,164 | 198,217 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 67,528 | 52,897 |
Equity securities | 0 | 0 |
Other investments, at fair value | 71,653 | 77,843 |
Short-term investments | 0 | 0 |
Derivative instruments (see Note 5) | 0 | 0 |
Insurance-linked securities | 25,090 | |
Total Assets | 139,181 | 155,830 |
Derivative instruments (see Note 5) | 10,212 | 11,510 |
Cash settled awards (see Note 8) | 0 | 0 |
Total Liabilities | 10,212 | 11,510 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | U.S. government and agency | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Non-U.S. government | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 53,100 | 52,897 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | CMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 10,771 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Non-Agency RMBS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | ABS | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 3,657 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Municipals | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fixed maturities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Common stocks | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Exchange-traded funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Bond mutual funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity securities | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Hedge funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Direct lending funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Private equity funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Real estate funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Other privately held investments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 47,389 | 46,430 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | CLO-Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 24,264 | 31,413 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Overseas deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 651,746 | 733,313 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | Hedge funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 251,932 | 363,811 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | Direct lending funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 268,210 | 250,681 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | Private equity funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 67,840 | 68,812 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | Real estate funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 63,764 | 50,009 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | Other privately held investments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | CLO-Equities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | 0 | 0 |
Fair Value Measurements Recurring | Fair value based on NAV practical expedient | Overseas deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Other investments, at fair value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Signif
FAIR VALUE MEASUREMENTS (Significant Unobservable Inputs) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Other investments, at fair value | $ 833,563 | $ 1,009,373 |
Derivatives - Other underwriting-related derivatives | (15,120) | $ (14,386) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Derivatives - Other underwriting-related derivatives | (10,212) | |
Significant Unobservable Inputs (Level 3) | Other privately held investments | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Other investments, at fair value | 47,389 | |
Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Other investments, at fair value | $ 24,264 | |
Estimated maturity dates | 7 years | |
Weighted Average | Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Estimated maturity dates | 7 years | |
Default rates | Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.030 | |
Default rates | Weighted Average | Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.030 | |
Loss severity rate | Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.350 | |
Loss severity rate | Weighted Average | Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.350 | |
Collateral spreads | Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.030 | |
Collateral spreads | Weighted Average | Discounted cash flow | Significant Unobservable Inputs (Level 3) | Other investments - CLO-Equities | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.030 | |
Discount rate | Significant Unobservable Inputs (Level 3) | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Discount rate | 0.030 | |
Discount rate | Minimum | Significant Unobservable Inputs (Level 3) | Other privately held investments | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.030 | |
Discount rate | Maximum | Significant Unobservable Inputs (Level 3) | Other privately held investments | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.085 | |
Discount rate | Weighted Average | Significant Unobservable Inputs (Level 3) | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Discount rate | 0.030 | |
Discount rate | Weighted Average | Significant Unobservable Inputs (Level 3) | Other privately held investments | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Unobservable Input | 0.072 |
FAIR VALUE MEASUREMENTS (Change
FAIR VALUE MEASUREMENTS (Changes in Level 3 for Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total liabilities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | $ 10,589 | $ 12,209 | $ 11,510 | $ 6,500 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Included in earnings | (377) | (291) | (1,298) | 9,991 |
Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 12,135 |
Sales | 0 | 0 | 0 | 0 |
Settlements/ Distributions | 0 | (74) | 0 | (16,782) |
Closing Balance | 10,212 | 11,844 | 10,212 | 11,844 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | (377) | (291) | (1,298) | (291) |
Fixed maturities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 61,605 | 74,319 | 52,897 | 96,400 |
Transfers into Level 3 | 8,163 | 0 | 11,688 | 1,536 |
Transfers out of Level 3 | (11,212) | (7,209) | (15,490) | (37,479) |
Included in net income | (579) | (835) | (698) | (762) |
Included in OCI | 4,906 | 1 | 5,921 | 1,118 |
Purchases | 13,871 | 24,007 | 34,171 | 58,588 |
Sales | (3,960) | (2,274) | (9,714) | (21,475) |
Settlements/ Distributions | (5,266) | (2,978) | (11,247) | (12,895) |
Closing Balance | 67,528 | 85,031 | 67,528 | 85,031 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 0 | 0 | 0 | 0 |
Other investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 73,766 | 90,014 | 77,843 | 102,842 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Included in net income | 1,811 | 1,862 | 6,067 | 5,186 |
Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 3,111 | 0 |
Sales | 0 | 0 | (1,500) | 0 |
Settlements/ Distributions | (3,924) | (11,696) | (13,868) | (27,848) |
Closing Balance | 71,653 | 80,180 | 71,653 | 80,180 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 1,811 | 1,862 | 6,067 | 5,186 |
Other assets | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 0 | 25,047 | 25,090 | 27,555 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Included in net income | 0 | (71) | (90) | 606 |
Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements/ Distributions | 0 | 0 | (25,000) | (3,185) |
Closing Balance | 0 | 24,976 | 0 | 24,976 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 0 | (71) | 0 | (47) |
Total assets | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 135,371 | 189,380 | 155,830 | 226,797 |
Transfers into Level 3 | 8,163 | 0 | 11,688 | 1,536 |
Transfers out of Level 3 | (11,212) | (7,209) | (15,490) | (37,479) |
Included in net income | 1,232 | 956 | 5,279 | 5,030 |
Included in OCI | 4,906 | 1 | 5,921 | 1,118 |
Purchases | 13,871 | 24,007 | 37,282 | 58,588 |
Sales | (3,960) | (2,274) | (11,214) | (21,475) |
Settlements/ Distributions | (9,190) | (14,674) | (50,115) | (43,928) |
Closing Balance | 139,181 | 190,187 | 139,181 | 190,187 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 1,811 | 1,791 | 6,067 | 5,139 |
Corporate debt | Fixed maturities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 42,553 | 68,320 | 52,897 | 75,875 |
Transfers into Level 3 | 1,346 | 0 | 2,935 | 1,536 |
Transfers out of Level 3 | 0 | (1,208) | (4,279) | (3,112) |
Included in net income | (579) | (835) | (698) | (762) |
Included in OCI | 4,962 | (9) | 5,977 | (392) |
Purchases | 13,871 | 0 | 17,056 | 19,181 |
Sales | (3,960) | (2,274) | (9,714) | (21,475) |
Settlements/ Distributions | (5,093) | (2,978) | (11,074) | (9,835) |
Closing Balance | 53,100 | 61,016 | 53,100 | 61,016 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 0 | 0 | 0 | 0 |
Non-Agency RMBS | Fixed maturities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 903 | 0 | 0 | |
Transfers into Level 3 | 0 | 0 | 0 | |
Transfers out of Level 3 | (790) | (789) | 0 | |
Included in net income | 0 | 0 | 0 | |
Included in OCI | (1) | 1 | 0 | |
Purchases | 0 | 900 | 0 | |
Sales | 0 | 0 | 0 | |
Settlements/ Distributions | (112) | (112) | 0 | |
Closing Balance | 0 | 0 | 0 | 0 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 0 | 0 | 0 | |
CMBS | Fixed maturities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 18,149 | 0 | 0 | 3,061 |
Transfers into Level 3 | 3,160 | 0 | 5,096 | 0 |
Transfers out of Level 3 | (10,422) | 0 | (10,422) | (9,418) |
Included in net income | 0 | 0 | 0 | 0 |
Included in OCI | (55) | 0 | (57) | 17 |
Purchases | 0 | 0 | 16,215 | 9,400 |
Sales | 0 | 0 | 0 | 0 |
Settlements/ Distributions | (61) | 0 | (61) | (3,060) |
Closing Balance | 10,771 | 0 | 10,771 | 0 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 0 | 0 | 0 | 0 |
ABS | Fixed maturities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 0 | 5,999 | 0 | 17,464 |
Transfers into Level 3 | 3,657 | 0 | 3,657 | 0 |
Transfers out of Level 3 | 0 | (6,001) | 0 | (24,949) |
Included in net income | 0 | 0 | 0 | 0 |
Included in OCI | 0 | 10 | 0 | 1,493 |
Purchases | 0 | 24,007 | 0 | 30,007 |
Sales | 0 | 0 | 0 | 0 |
Settlements/ Distributions | 0 | 0 | 0 | 0 |
Closing Balance | 3,657 | 24,015 | 3,657 | 24,015 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 0 | 0 | 0 | 0 |
Other privately held investments | Other investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 47,613 | 42,938 | 46,430 | 42,142 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Included in net income | (224) | 460 | (652) | 1,256 |
Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 3,111 | 0 |
Sales | 0 | 0 | (1,500) | 0 |
Settlements/ Distributions | 0 | 0 | 0 | 0 |
Closing Balance | 47,389 | 43,398 | 47,389 | 43,398 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | (224) | 460 | (652) | 1,256 |
CLO-Equities | Other investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 26,153 | 47,076 | 31,413 | 60,700 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Included in net income | 2,035 | 1,402 | 6,719 | 3,930 |
Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements/ Distributions | (3,924) | (11,696) | (13,868) | (27,848) |
Closing Balance | 24,264 | 36,782 | 24,264 | 36,782 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | 2,035 | 1,402 | 6,719 | 3,930 |
Derivative instruments | Other liabilities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 10,589 | 12,209 | 11,510 | 6,500 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Included in earnings | (377) | (291) | (1,298) | 9,991 |
Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 12,135 |
Sales | 0 | 0 | 0 | 0 |
Settlements/ Distributions | 0 | (74) | 0 | (16,782) |
Closing Balance | 10,212 | 11,844 | 10,212 | 11,844 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | (377) | (291) | (1,298) | (291) |
Derivative instruments | Other assets | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 0 | 2,532 | ||
Transfers into Level 3 | 0 | 0 | ||
Transfers out of Level 3 | 0 | 0 | ||
Included in net income | 0 | 653 | ||
Included in OCI | 0 | 0 | ||
Purchases | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements/ Distributions | 0 | (3,185) | ||
Closing Balance | 0 | 0 | ||
Change in unrealized investment gain/loss relating to assets held at the reporting date | 0 | 0 | ||
Insurance-linked securities | Other assets | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Opening Balance | 0 | 25,047 | 25,090 | 25,023 |
Transfers into Level 3 | 0 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Included in net income | 0 | (71) | (90) | (47) |
Included in OCI | 0 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements/ Distributions | 0 | 0 | (25,000) | 0 |
Closing Balance | 0 | 24,976 | 0 | 24,976 |
Change in unrealized investment gain/loss relating to assets held at the reporting date | $ 0 | $ (71) | $ 0 | $ (47) |
FAIR VALUE MEASUREMENTS (Other
FAIR VALUE MEASUREMENTS (Other Fair Value Narrative) (Details) $ in Millions | Sep. 30, 2018USD ($)hedge_fund | Dec. 31, 2017USD ($) |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Number of hedge funds with reporting lag | hedge_fund | 2 | |
Entities that calculate net asset value per share, reporting lag, percent other investments | 55.00% | 44.00% |
Senior notes | $ 1,342 | $ 1,341 |
Notes payable | 36 | |
Estimate of fair value measurement | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior notes | 1,345 | $ 1,412 |
Notes payable | $ 36 |
DERIVATIVE INSTRUMENTS (Schedul
DERIVATIVE INSTRUMENTS (Schedule of Derivative Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Asset Fair Value | $ 3,383 | $ 5,125 |
Derivative Liability Fair Value | 15,120 | 14,386 |
Other assets | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Asset Fair Value | 3,383 | 5,125 |
Other liabilities | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Liability Fair Value | 15,120 | 14,386 |
Investment Portfolio | Foreign exchange forward contracts | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Notional Amount | 166,113 | 137,422 |
Investment Portfolio | Foreign exchange forward contracts | Other assets | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Asset Fair Value | 437 | 10 |
Investment Portfolio | Foreign exchange forward contracts | Other liabilities | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Liability Fair Value | 557 | 619 |
Investment Portfolio | Interest rate swaps | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Notional Amount | 186,000 | 191,000 |
Investment Portfolio | Interest rate swaps | Other assets | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Asset Fair Value | 0 | 448 |
Investment Portfolio | Interest rate swaps | Other liabilities | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Liability Fair Value | 1,105 | 1,556 |
Underwriting Portfolio | Foreign exchange forward contracts | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Notional Amount | 932,017 | 698,959 |
Underwriting Portfolio | Foreign exchange forward contracts | Other assets | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Asset Fair Value | 2,946 | 4,667 |
Underwriting Portfolio | Foreign exchange forward contracts | Other liabilities | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Liability Fair Value | 3,246 | 701 |
Underwriting Portfolio | Other underwriting-related contracts | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Notional Amount | 85,000 | 85,000 |
Underwriting Portfolio | Other underwriting-related contracts | Other assets | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Asset Fair Value | 0 | 0 |
Underwriting Portfolio | Other underwriting-related contracts | Other liabilities | Not Designated as Hedging Instruments | ||
Derivative Fair Values on Consolidated Balance Sheet [Line Items] | ||
Derivative Liability Fair Value | $ 10,212 | $ 11,510 |
DERIVATIVE INSTRUMENTS (Offsett
DERIVATIVE INSTRUMENTS (Offsetting Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative assets - gross amounts | $ 9,313 | $ 8,178 |
Derivative assets - gross amounts offset | (5,930) | (3,053) |
Derivative assets- net amounts | 3,383 | 5,125 |
Derivative liabilities - gross amounts | 21,050 | 17,439 |
Derivative liabilities - gross amounts offset | (5,930) | (3,053) |
Derivative liabilities- net amounts | $ 15,120 | $ 14,386 |
DERIVATIVE INSTRUMENTS (Other U
DERIVATIVE INSTRUMENTS (Other Underwriting-related Risks) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Unrealized and Realized Gains (Losses) Recognized in Earnings for Derivatives Not Designated As Hedges [Line Items] | ||||
Unrealized and realized gains (losses) recognized in earnings for derivatives not designated as hedges | $ (663) | $ 11,586 | $ 7,904 | $ 8,210 |
Investment Portfolio | Foreign exchange forward contracts | Net investment gains (losses) | ||||
Unrealized and Realized Gains (Losses) Recognized in Earnings for Derivatives Not Designated As Hedges [Line Items] | ||||
Unrealized and realized gains (losses) recognized in earnings for derivatives not designated as hedges | 766 | (1,815) | 2,090 | (6,534) |
Investment Portfolio | Interest rate swaps | Net investment gains (losses) | ||||
Unrealized and Realized Gains (Losses) Recognized in Earnings for Derivatives Not Designated As Hedges [Line Items] | ||||
Unrealized and realized gains (losses) recognized in earnings for derivatives not designated as hedges | 1,859 | 520 | 7,692 | (2,661) |
Underwriting Portfolio | Foreign exchange forward contracts | Foreign exchange (losses) gains | ||||
Unrealized and Realized Gains (Losses) Recognized in Earnings for Derivatives Not Designated As Hedges [Line Items] | ||||
Unrealized and realized gains (losses) recognized in earnings for derivatives not designated as hedges | (3,965) | 12,367 | (4,103) | 26,182 |
Underwriting Portfolio | Weather-related contracts | Other insurance related income (losses) | ||||
Unrealized and Realized Gains (Losses) Recognized in Earnings for Derivatives Not Designated As Hedges [Line Items] | ||||
Unrealized and realized gains (losses) recognized in earnings for derivatives not designated as hedges | 0 | 0 | 0 | (9,629) |
Underwriting Portfolio | Other underwriting-related contracts | Other insurance related income (losses) | ||||
Unrealized and Realized Gains (Losses) Recognized in Earnings for Derivatives Not Designated As Hedges [Line Items] | ||||
Unrealized and realized gains (losses) recognized in earnings for derivatives not designated as hedges | $ 677 | $ 514 | $ 2,225 | $ 852 |
RESERVE FOR LOSSES AND LOSS E_3
RESERVE FOR LOSSES AND LOSS EXPENSES (Reserve Roll-Forward) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of Beginning and Ending Gross Unpaid Losses and Loss Expenses | ||||
Gross reserve for losses and loss expenses, beginning of period | $ 12,997,553 | $ 9,697,827 | ||
Less reinsurance recoverable on unpaid losses, beginning of period | (3,159,514) | (2,276,109) | ||
Net reserve for unpaid losses and loss expenses, beginning of period | 9,838,039 | 7,421,718 | ||
Net incurred losses and loss expenses related to: | ||||
Current year | 2,323,028 | 2,591,135 | ||
Prior years | $ (45,660) | $ (47,768) | (160,083) | (143,495) |
Net incurred losses and loss expenses | 2,162,945 | 2,447,640 | ||
Net paid losses and loss expenses related to: | ||||
Current year | (381,158) | (328,751) | ||
Prior years | (1,770,667) | (1,384,510) | ||
Net paid losses and loss expenses | (2,151,825) | (1,713,261) | ||
Foreign exchange and other | (1,040,999) | 333,456 | ||
Net reserve for unpaid losses and loss expenses, end of period | 8,808,160 | 8,489,553 | 8,808,160 | 8,489,553 |
Reinsurance recoverable on unpaid losses, end of period | 3,217,787 | 2,298,022 | 3,217,787 | 2,298,022 |
Gross reserve for losses and loss expenses, end of period | $ 12,025,947 | $ 10,787,575 | $ 12,025,947 | $ 10,787,575 |
RESERVE FOR LOSSES AND LOSS E_4
RESERVE FOR LOSSES AND LOSS EXPENSES (Prior year development) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Net favorable (adverse) prior year reserve development | $ 45,660 | $ 47,768 | $ 160,083 | $ 143,495 |
Insurance | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Net favorable (adverse) prior year reserve development | 13,478 | 7,926 | 60,547 | 35,579 |
Reinsurance | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Net favorable (adverse) prior year reserve development | $ 32,182 | $ 39,842 | $ 99,536 | $ 107,916 |
RESERVE FOR LOSSES AND LOSS E_5
RESERVE FOR LOSSES AND LOSS EXPENSES (Narrative) (Details) - USD ($) $ in Thousands | Feb. 13, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 16, 2018 | Dec. 31, 2017 | Apr. 01, 2017 | Mar. 20, 2017 | Mar. 19, 2017 | Dec. 31, 2016 |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Current year | $ 2,323,028 | $ 2,591,135 | |||||||||
Reinsurance recoverable on unpaid losses | $ 3,217,787 | $ 2,298,022 | 3,217,787 | 2,298,022 | $ 108,000 | $ 3,159,514 | $ 2,276,109 | ||||
Reinsurance recoverable on unpaid and paid losses | 3,439,080 | 3,439,080 | $ 3,338,840 | ||||||||
Net favorable (adverse) prior year reserve development | 45,660 | 47,768 | 160,083 | 143,495 | |||||||
Short Tail Reserving Class Insurance And Reinsurance Business | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 12,000 | 5,000 | 92,000 | 41,000 | |||||||
Reinsurance Credit and Surety | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 6,000 | 17,000 | 21,000 | 18,000 | |||||||
Liability Reinsurance Business | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 11,000 | 19,000 | 40,000 | ||||||||
Motor Reinsurance Business | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 7,000 | 16,000 | 15,000 | (4,000) | |||||||
Catastrophe and Weather-related Events | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Current year | 162,000 | 702,000 | |||||||||
Discontinued Operations, Disposed of by Means Other than Sale | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Liability for unpaid claims and claims adjustment expense | $ 223,000 | ||||||||||
Reduction in reinsurance recoverables on unpaid and paid loses by | $ 223,000 | ||||||||||
Motor Reserve Class | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Ogden rate | (0.75%) | 2.50% | |||||||||
Reinsurance | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 32,182 | 39,842 | 99,536 | 107,916 | |||||||
Reinsurance | Professional Lines | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 10,000 | 9,000 | 18,000 | 36,000 | |||||||
Insurance | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 13,478 | 7,926 | 60,547 | 35,579 | |||||||
Insurance | Professional Lines | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | 10,000 | 12,000 | 18,000 | ||||||||
Insurance | Liability Insurance Business | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Net favorable (adverse) prior year reserve development | $ (11,000) | (18,000) | (6,000) | ||||||||
Syndicate 2,007 | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Policyholder benefits and claims incurred, assumed and ceded | $ 819,000 | ||||||||||
Aviabel | |||||||||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||||||||
Interests acquired | 100.00% | ||||||||||
Reserves of businesses acquired | 79,000 | 79,000 | |||||||||
Reinsurance recoverable on unpaid and paid losses | $ 5,000 | $ 5,000 |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic earnings (loss) per common share | ||||
Net income (loss) | $ 54,095 | $ (457,084) | $ 230,812 | $ (341,541) |
Less: preferred share dividends | 10,656 | 10,656 | 31,969 | 36,154 |
Net income (loss) available to common shareholders | $ 43,439 | $ (467,740) | $ 198,843 | $ (377,695) |
Weighted average common shares outstanding - basic (in shares) | 83,558 | 83,305 | 83,474 | 84,479 |
Basic earnings (loss) per common share (in usd per share) | $ 0.52 | $ (5.61) | $ 2.38 | $ (4.47) |
Earnings (loss) per diluted common share | ||||
Net income (loss) available to common shareholders | $ 43,439 | $ (467,740) | $ 198,843 | $ (377,695) |
Weighted average common shares outstanding - basic (in shares) | 83,558 | 83,305 | 83,474 | 84,479 |
Share-based compensation plans (in shares) | 549 | 0 | 465 | 0 |
Weighted average common shares outstanding - diluted (in shares) | 84,107 | 83,305 | 83,939 | 84,479 |
Diluted earnings (loss) per common share (in usd per share) | $ 0.52 | $ (5.61) | $ 2.37 | $ (4.47) |
Weighted average anti-dilutive shares excluded from the dilutive computation (in shares) | 8 | 425 | 325 | 712 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Line Items] | ||||
Tax benefit related to share-based compensation costs | $ 6 | $ 20 | ||
Restricted Stock Units (RSUs) | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Line Items] | ||||
Share based compensation costs incurred | $ 15 | $ 13 | 45 | 57 |
Tax benefit related to share-based compensation costs | 3 | 3 | 7 | |
Fair value - vested during period | 47 | 125 | ||
Unrecognized compensation costs | 106 | 99 | $ 106 | 99 |
Unrecognized compensation costs - weighted average period expected to be recognized | 2 years 7 months | |||
Restricted Stock Units (RSUs) | Cash Settled | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Abstract] | ||||
Liability for cash-settled restricted stock units | $ 19 | $ 18 | $ 19 | $ 18 |
Performance Vesting Restricted Stock Units | Share Settled | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Roll Forward] | ||||
Nonvested restricted stock units - beginning of period (in shares) | 230 | |||
Granted (in shares) | 104 | |||
Vested (in shares) | (87) | |||
Forfeited (in shares) | 0 | |||
Nonvested restricted stock units - end of period (in shares) | 247 | 247 | ||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Abstract] | ||||
Weighted average grant date fair value - beginning of period (in usd per share) | $ 57.08 | |||
Weighted average grant date fair value - granted (in usd per share) | 48.89 | |||
Weighted average grant date fair value - vested (in usd per share) | 54.71 | |||
Weighted average grant date fair value - forfeited (in usd per share) | 0 | |||
Weighted average grant date fair value - end of period (in usd per share) | $ 54.49 | $ 54.49 | ||
Performance Vesting Restricted Stock Units | Cash Settled | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Roll Forward] | ||||
Nonvested restricted stock units - beginning of period (in shares) | 42 | |||
Granted (in shares) | 0 | |||
Vested (in shares) | (12) | |||
Forfeited (in shares) | 0 | |||
Nonvested restricted stock units - end of period (in shares) | 30 | 30 | ||
Service Based Restricted Stock Units | Share Settled | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Roll Forward] | ||||
Nonvested restricted stock units - beginning of period (in shares) | 1,355 | |||
Granted (in shares) | 732 | |||
Vested (in shares) | (486) | |||
Forfeited (in shares) | (70) | |||
Nonvested restricted stock units - end of period (in shares) | 1,531 | 1,531 | ||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Abstract] | ||||
Weighted average grant date fair value - beginning of period (in usd per share) | $ 57.09 | |||
Weighted average grant date fair value - granted (in usd per share) | 49.30 | |||
Weighted average grant date fair value - vested (in usd per share) | 54.39 | |||
Weighted average grant date fair value - forfeited (in usd per share) | 56.07 | |||
Weighted average grant date fair value - end of period (in usd per share) | $ 54.19 | $ 54.19 | ||
Service Based Restricted Stock Units | Cash Settled | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Roll Forward] | ||||
Nonvested restricted stock units - beginning of period (in shares) | 988 | |||
Granted (in shares) | 468 | |||
Vested (in shares) | (379) | |||
Forfeited (in shares) | (70) | |||
Nonvested restricted stock units - end of period (in shares) | 1,007 | 1,007 | ||
2014 Long Term Equity Compensation Plan | Restricted Stock Units (RSUs) | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Line Items] | ||||
Fair value - vested during period | $ 44 | |||
Cliff Vesting | 2014 Long Term Equity Compensation Plan | Restricted Stock Units (RSUs) | ||||
Reconcilation of Beginning and Ending Balance of Nonvested Restricted Stock (including RSUs) [Line Items] | ||||
Award vesting period | 3 years |
SHAREHOLDERS' EQUITY (Common Sh
SHAREHOLDERS' EQUITY (Common Shares Issued and Outstanding) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued, balance at beginning of period | 176,580 | ||||
Total shares issued at end of period | 176,580 | 176,580 | |||
Treasury shares, balance at beginning of period | (93,419) | ||||
Total treasury shares at end of period | (93,023) | (93,023) | |||
Total shares outstanding | 83,557 | 83,557 | 83,161 | ||
Common stocks | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued, balance at beginning of period | 176,580 | 176,580 | 176,580 | 176,580 | |
Shares issued | 0 | 0 | 0 | 0 | |
Total shares issued at end of period | 176,580 | 176,580 | 176,580 | 176,580 | |
Treasury shares, balance at beginning of period | (93,024) | (93,377) | (93,419) | (90,139) | |
Shares repurchased | 0 | (51) | (175) | (4,284) | |
Shares reissued | 1 | 5 | 571 | 1,000 | |
Total treasury shares at end of period | (93,023) | (93,423) | (93,023) | (93,423) | |
Total shares outstanding | 83,557 | 83,157 | 83,557 | 83,157 |
SHAREHOLDERS' EQUITY (Treasury
SHAREHOLDERS' EQUITY (Treasury Shares) (Details) - Common stocks - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Treasury Shares [Line Items] | ||||
Total shares (in shares) | 0 | 51 | 175 | 4,284 |
Total cost | $ 0 | $ 3,347 | $ 8,699 | $ 285,659 |
Average price per share (in usd per share) | $ 0 | $ 65.74 | $ 49.57 | $ 66.68 |
In the Open Market | ||||
Treasury Shares [Line Items] | ||||
Total shares (in shares) | 0 | 49 | 0 | 3,932 |
Total cost | $ 0 | $ 3,237 | $ 0 | $ 261,180 |
Average price per share (in usd per share) | $ 0 | $ 65.80 | $ 0 | $ 66.43 |
From Employees | ||||
Treasury Shares [Line Items] | ||||
Total shares (in shares) | 0 | 2 | 175 | 352 |
Total cost | $ 0 | $ 110 | $ 8,699 | $ 24,479 |
Average price per share (in usd per share) | $ 0 | $ 64.04 | $ 49.57 | $ 69.53 |
DEBT AND FINANCING ARRANGEMEN_2
DEBT AND FINANCING ARRANGEMENTS (Details) - Letter of Credit | Mar. 28, 2018USD ($) |
LOC Facility | |
Line of Credit Facility [Line Items] | |
Line of credit facility | $ 750,000,000 |
LOC Facility Two | |
Line of Credit Facility [Line Items] | |
Line of credit facility | 250,000,000 |
LOC Facility Three | |
Line of Credit Facility [Line Items] | |
Line of credit facility | $ 500,000,000 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) (Tax Effects of Other Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Before Tax Amount | ||||
Total other comprehensive income (loss), net of tax | $ (78) | $ 56,594 | $ (193,429) | $ 270,453 |
Tax (Expense) Benefit | ||||
Total other comprehensive income (loss), net of tax | 935 | 713 | 6,233 | (6,999) |
Net of Tax Amount | ||||
Total other comprehensive income (loss), net of tax | 857 | 57,307 | (187,196) | 263,454 |
Available for sale investments | ||||
Before Tax Amount | ||||
Unrealized investment gains (losses) arising during the period | (27,968) | 64,431 | (266,117) | 215,360 |
Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income | 26,896 | (15,925) | 79,552 | 8,269 |
Total other comprehensive income (loss), net of tax | (1,072) | 48,506 | (186,565) | 223,629 |
Tax (Expense) Benefit | ||||
Unrealized investment gains (losses) arising during the period | 1,907 | (1,926) | 8,596 | (8,899) |
Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income | (972) | 2,639 | (2,363) | 1,900 |
Total other comprehensive income (loss), net of tax | 935 | 713 | 6,233 | (6,999) |
Net of Tax Amount | ||||
Unrealized investment gains (losses) arising during the period | (26,061) | 62,505 | (257,521) | 206,461 |
Adjustment for reclassification of net realized investment (gains) losses and OTTI losses recognized in net income | 25,924 | (13,286) | 77,189 | 10,169 |
Total other comprehensive income (loss), net of tax | (137) | 49,219 | (180,332) | 216,630 |
Non-credit portion of OTTI losses | ||||
Before Tax Amount | ||||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 |
Tax (Expense) Benefit | ||||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 |
Net of Tax Amount | ||||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 |
Foreign currency translation adjustment | ||||
Before Tax Amount | ||||
Total other comprehensive income (loss), net of tax | 994 | 8,088 | (6,864) | 46,824 |
Tax (Expense) Benefit | ||||
Total other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 |
Net of Tax Amount | ||||
Total other comprehensive income (loss), net of tax | $ 994 | $ 8,088 | $ (6,864) | $ 46,824 |
OTHER COMPREHENSIVE INCOME (L_4
OTHER COMPREHENSIVE INCOME (LOSS) (Reclassifications Out of AOCI Into Net Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Reclassification out of accumulated comprehensive income into net income available to common shareholders [Line Items] | |||||
Other investment gains (losses) | $ (12,082) | $ 20,044 | $ (69,917) | $ (1,318) | |
OTTI losses | (5,546) | (5,412) | (7,634) | (13,493) | |
Total before tax | 48,903 | (482,300) | 222,202 | (371,686) | |
Foreign exchange loss | (8,305) | (32,510) | (2,066) | (90,093) | |
Income tax (expense) benefit | 3,525 | 25,877 | 3,565 | 38,547 | |
Net income (loss) available (attributable) to common shareholders | 43,439 | (467,740) | 198,843 | (377,695) | |
Cumulative translation adjustment related to AXIS Specialty Australia | 0 | 24,149 | $ 24,000 | ||
Unrealized investment gains (losses) on available for sale investments | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification out of accumulated comprehensive income into net income available to common shareholders [Line Items] | |||||
Other investment gains (losses) | (21,350) | 21,337 | (71,918) | 5,224 | |
OTTI losses | (5,546) | (5,412) | (7,634) | (13,493) | |
Total before tax | (26,896) | 15,925 | (79,552) | (8,269) | |
Income tax (expense) benefit | 972 | (2,639) | 2,363 | (1,900) | |
Net income (loss) available (attributable) to common shareholders | (25,924) | 13,286 | (77,189) | (10,169) | |
Foreign currency translation adjustment | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification out of accumulated comprehensive income into net income available to common shareholders [Line Items] | |||||
Foreign exchange loss | 0 | 0 | 0 | (24,149) | |
Income tax (expense) benefit | 0 | 0 | 0 | 0 | |
Net income (loss) available (attributable) to common shareholders | $ 0 | $ 0 | $ 0 | $ (24,149) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Hurricane Michael - Subsequent Event $ in Millions | Oct. 31, 2018USD ($) |
Minimum | |
Subsequent Event [Line Items] | |
Estimate of possible loss | $ 100 |
Maximum | |
Subsequent Event [Line Items] | |
Estimate of possible loss | $ 120 |