Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 20, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | VALIDUS HOLDINGS LTD | ||
Entity Central Index Key | 1348259 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 83,243,666 | ||
Entity Public Float | $2,647.40 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Fixed maturities, at fair value (amortized cost: 2014—$5,534,494; 2013—$5,522,853) | $5,532,731 | $5,542,258 |
Short-term investments, at fair value (amortized cost: 2014—$1,051,222; 2013—$787,670) | 1,051,074 | 787,714 |
Other investments, at fair value (cost: 2014—$879,176; 2013—$723,498) | 813,011 | 704,086 |
Cash and cash equivalents | 577,240 | 734,148 |
Restricted cash | 173,003 | 200,492 |
Total investments and cash | 8,147,059 | 7,968,698 |
Investments in affiliates | 261,483 | 141,243 |
Premiums receivable | 707,647 | 697,233 |
Deferred acquisition costs | 161,295 | 134,269 |
Prepaid reinsurance premiums | 81,983 | 103,251 |
Securities lending collateral | 470 | 3,392 |
Loss reserves recoverable | 377,466 | 370,154 |
Paid losses recoverable | 38,078 | 80,080 |
Deferred tax asset | 23,821 | 0 |
Intangible assets | 126,924 | 106,407 |
Goodwill | 195,897 | 20,393 |
Accrued investment income | 24,865 | 18,876 |
Other assets | 164,633 | 202,436 |
Total assets | 10,311,621 | 9,846,432 |
Liabilities | ||
Reserve for losses and loss expenses | 3,234,394 | 3,030,399 |
Unearned premiums | 990,564 | 824,496 |
Reinsurance balances payable | 127,128 | 154,874 |
Securities lending payable | 936 | 3,858 |
Deferred tax liability | 5,541 | 19,086 |
Net payable for investments purchased | 50,256 | 19,383 |
Accounts payable and accrued expenses | 318,245 | 278,187 |
Notes payable to operating affiliates | 671,465 | 439,272 |
Senior notes payable | 247,306 | 247,198 |
Debentures payable | 539,277 | 541,416 |
Total liabilities | 6,185,112 | 5,558,169 |
Commitments and contingent liabilities | ||
Redeemable noncontrolling interest | 79,956 | 86,512 |
Shareholders' equity | ||
Common shares, 571,428,571 authorized, par value $0.175 (Issued: 2014—155,554,224; 2013—154,488,497; Outstanding: 2014—83,869,845; 2013—96,044,312) | 27,222 | 27,036 |
Treasury shares (2014—71,684,379; 2013—58,444,185) | -12,545 | -10,228 |
Additional paid-in-capital | 1,207,493 | 1,677,894 |
Accumulated other comprehensive (loss) | -8,556 | -617 |
Retained earnings | 2,374,344 | 2,010,009 |
Total shareholders' equity available to Validus | 3,587,958 | 3,704,094 |
Noncontrolling interest | 458,595 | 497,657 |
Total shareholders' equity | 4,046,553 | 4,201,751 |
Total liabilities, noncontrolling interests and shareholders’ equity | $10,311,621 | $9,846,432 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, except Share data, unless otherwise specified | ||||
Assets | ||||
Fixed maturities, at amortized cost | $5,534,494 | $5,522,853 | ||
Short-term investments, at amortized cost | 1,051,222 | 787,670 | ||
Other investments, at amortized cost | $879,176 | $723,498 | ||
Shareholders' equity | ||||
Common shares, shares authorized | 571,428,571 | 571,428,571 | ||
Common shares, par value | $0.18 | $0.18 | ||
Common shares, shares issued | 155,554,224 | 154,488,497 | 152,698,191 | 134,503,065 |
Common shares, shares outstanding | 83,869,845 | 96,044,312 | 107,921,259 | |
Treasury stock, common shares | 71,684,379 | 58,444,185 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Revenues | ||||||
Gross premiums written | $2,363,286 | $2,401,106 | $2,166,440 | |||
Reinsurance premiums ceded | -309,233 | -372,585 | -307,506 | |||
Net premiums written | 2,054,053 | 2,028,521 | 1,858,934 | |||
Change in unearned premiums | -51,649 | 73,524 | 14,282 | |||
Net premiums earned | 2,002,404 | 2,102,045 | 1,873,216 | |||
Gain on bargain purchase, net of expenses | 0 | 0 | 17,701 | [1] | ||
Net investment income | 100,076 | 96,072 | 107,936 | |||
Net realized gains on investments | 23,095 | 3,258 | 18,233 | |||
Change in net unrealized (losses) gains on investments | -57,973 | [2] | -58,481 | [2] | 17,585 | [2] |
Income (loss) from investment affiliate | 8,411 | 4,790 | -964 | |||
Other insurance related income and other income | 19,739 | 8,343 | 22,396 | |||
Foreign exchange (losses) gains | -10,630 | 2,505 | 4,798 | |||
Total revenues | 2,085,122 | 2,158,532 | 2,060,901 | |||
Expenses | ||||||
Losses and loss expenses | 772,049 | [3] | 793,932 | [3] | 999,446 | [3] |
Policy acquisition costs | 340,556 | 360,310 | 334,698 | |||
General and administrative expenses | 329,792 | 315,265 | 263,652 | |||
Share compensation expenses | 33,073 | 27,630 | 26,709 | |||
Finance expenses | 63,854 | 64,177 | 53,857 | |||
Transaction expenses | 8,096 | [4] | 0 | 0 | ||
Total expenses | 1,547,420 | 1,561,314 | 1,678,362 | |||
Income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 537,702 | 597,218 | 382,539 | |||
Tax expense | -155 | -383 | -2,501 | |||
Income from operating affiliates | 17,723 | 14,289 | 12,580 | |||
(Income) attributable to operating affiliate investors | -109,399 | -68,763 | 0 | |||
Net income | 445,871 | 542,361 | 392,618 | |||
Net loss (income) attributable to noncontrolling interest | 35,464 | -9,695 | 15,820 | |||
Net income available to Validus | 481,335 | 532,666 | 408,438 | |||
Other comprehensive (loss) income | ||||||
Change in foreign currency translation adjustments | -7,501 | -1,954 | 3,648 | |||
Change in minimum pension liability, net of tax | -210 | 0 | 0 | |||
Change in fair value of cash flow hedge | -228 | 0 | 0 | |||
Other comprehensive (loss) income | -7,939 | -1,954 | 3,648 | |||
Comprehensive income available to Validus | $473,396 | $530,712 | $412,086 | |||
Weighted average number of common shares and common share equivalents outstanding | ||||||
Basic (shares) | 90,354,745 | 102,202,274 | 97,184,110 | |||
Diluted (shares) | 94,690,271 | 103,970,289 | 102,384,923 | |||
Basic earnings per share available to common shareholders | $5.26 | $5.02 | $4.13 | |||
Earnings per diluted share available to common shareholders | $5.08 | $4.94 | $3.99 | |||
Cash dividends declared per share | $1.20 | $3.20 | $1 | |||
[1] | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. | |||||
[2] | Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net loss (income) attributable to noncontrolling interest. | |||||
[3] | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||
[4] | The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services. |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders' Equity (USD $) | Total | Common shares | Treasury shares | Additional paid-in capital | Accumulated other comprehensive (loss) | Retained earnings |
In Thousands | ||||||
Balance - Beginning of period at Dec. 31, 2011 | $23,538 | ($6,131) | $1,893,890 | ($6,601) | $1,543,729 | |
Common shares issued, net | 3,184 | 498,136 | ||||
Repurchase of common shares | -1,705 | -258,257 | ||||
Share compensation expenses | 26,709 | |||||
Dividends | -107,751 | |||||
Net income | 392,618 | 392,618 | ||||
Net loss (income) attributable to noncontrolling interest | 15,820 | 15,820 | ||||
Amounts reclassified to retained earnings | 0 | 0 | ||||
Other comprehensive (loss) income | 3,648 | |||||
Noncontrolling interest | 434,280 | |||||
Total shareholders' equity | 4,455,107 | -2,953 | ||||
Balance - End of period at Dec. 31, 2012 | 4,020,827 | 26,722 | -7,836 | 2,160,478 | -2,953 | 1,844,416 |
Common shares issued, net | 314 | 898 | ||||
Repurchase of common shares | -2,392 | -511,112 | ||||
Share compensation expenses | 27,630 | |||||
Dividends | -362,783 | |||||
Net income | 542,361 | 542,361 | ||||
Net loss (income) attributable to noncontrolling interest | -9,695 | -9,695 | ||||
Amounts reclassified to retained earnings | 4,290 | -4,290 | ||||
Other comprehensive (loss) income | -1,954 | |||||
Noncontrolling interest | 497,657 | |||||
Total shareholders' equity | 4,201,751 | -617 | ||||
Balance - End of period at Dec. 31, 2013 | 3,704,094 | 27,036 | -10,228 | 1,677,894 | -617 | 2,010,009 |
Common shares issued, net | 186 | 5,161 | ||||
Repurchase of common shares | -2,317 | -508,635 | ||||
Share compensation expenses | 33,073 | |||||
Dividends | -117,000 | |||||
Net income | 445,871 | 445,871 | ||||
Net loss (income) attributable to noncontrolling interest | 35,464 | 35,464 | ||||
Amounts reclassified to retained earnings | 0 | 0 | ||||
Other comprehensive (loss) income | -7,939 | |||||
Noncontrolling interest | 458,595 | |||||
Total shareholders' equity | 4,046,553 | -8,556 | ||||
Balance - End of period at Dec. 31, 2014 | $3,587,958 | $27,222 | ($12,545) | $1,207,493 | ($8,556) | $2,374,344 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Cash flows provided by (used in) operating activities | ||||||
Net income | $445,871 | $542,361 | $392,618 | |||
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||||||
Share compensation expenses | 33,073 | 27,630 | 26,709 | |||
(Gain) loss on sale / deconsolidation of subsidiary | -2,081 | 3,237 | 0 | |||
Bargain purchase gain | 0 | 0 | -49,702 | |||
Amortization of discount on senior notes | 108 | 108 | 108 | |||
(Income) loss from investment affiliate | -8,411 | -4,790 | 964 | |||
Net realized (gains) on investments | -23,095 | -3,258 | -18,233 | |||
Change in net unrealized losses (gains) on investments | 57,973 | [1] | 58,481 | [1] | -17,585 | [1] |
Amortization of intangible assets | 4,538 | 4,162 | 10,159 | |||
(Income) from operating affiliates | -17,723 | -14,289 | -12,580 | |||
Foreign exchange losses (gains) included in net income | 23,591 | 1,912 | -16,123 | |||
Amortization of premium on fixed maturities | 19,107 | 19,093 | 24,289 | |||
Change in: | ||||||
Premiums receivable | 22,810 | 127,442 | 19,860 | |||
Deferred acquisition costs | -27,026 | 12,319 | -1,875 | |||
Prepaid reinsurance premiums | 34,370 | -3,658 | 3,116 | |||
Loss reserves recoverable | 81,824 | 69,910 | 40,708 | |||
Paid losses recoverable | 43,580 | -33,807 | 54,248 | |||
Income taxes recoverable | 0 | 0 | 522 | |||
Accrued investment income | 2,417 | 2,499 | 7,404 | |||
Other assets | 32,448 | -80,718 | -9,618 | |||
Reserve for losses and loss expenses | -395,499 | -472,883 | 116,902 | |||
Unearned premiums | 17,280 | -69,866 | -17,148 | |||
Reinsurance balances payable | -31,061 | -4,724 | -12,365 | |||
Deferred income taxes | -45,380 | -1,008 | 1,040 | |||
Accounts payable and accrued expenses | -26,933 | 85,121 | -253 | |||
Net cash provided by operating activities | 241,781 | 265,274 | 543,165 | |||
Cash flows provided by (used in) investing activities | ||||||
Proceeds on sales of investments | 4,756,555 | 4,370,548 | 3,393,740 | |||
Proceeds on maturities of investments | 554,619 | 490,459 | 548,226 | |||
Purchases of fixed maturities | -4,379,314 | -5,392,728 | -3,726,611 | |||
(Purchases) sales of short-term investments, net | -121,264 | 353,353 | 56,502 | |||
Purchases of other investments | -119,815 | -38,492 | -491,210 | |||
Decrease (increase) in securities lending collateral | 2,922 | -3,167 | 7,771 | |||
Redemption from operating affiliates | 77,544 | 86,657 | 0 | |||
Decrease (increase) in restricted cash | 27,489 | -172,962 | -3,493 | |||
Proceeds on sale of subsidiary, net of cash | 16,459 | 21,388 | 0 | |||
Purchase of subsidiary, net of cash acquired | -643,545 | 0 | 17,196 | |||
Net cash provided by (used in) investing activities | 121,582 | -321,436 | -302,214 | |||
Cash flows provided by (used in) financing activities | ||||||
Proceeds on issuance of notes payable to operating affiliates | 680,027 | 442,412 | 0 | |||
Repayments on notes payable to operating affiliates | -617,068 | -3,553 | 0 | |||
Issuance of common shares, net | 5,347 | 1,211 | 3,015 | |||
Purchases of common shares under share repurchase program | -510,952 | -513,504 | -259,962 | |||
Dividends paid | -117,043 | -360,071 | -110,037 | |||
(Decrease) increase in securities lending payable | -2,922 | 3,167 | -7,771 | |||
Third party investment in redeemable noncontrolling interest | 68,200 | 92,190 | 0 | |||
Third party redemption of redeemable noncontrolling interest | -10,496 | -19,400 | 0 | |||
Investment in third party noncontrolling interest | 0 | 58,500 | 450,100 | |||
Third party subscriptions received in advance | 15,400 | 35,000 | 19,400 | |||
Net cash (used in) provided by financing activities | -489,507 | -264,048 | 94,745 | |||
Effect of foreign currency rate changes on cash and cash equivalents | -30,764 | -6,364 | 17,540 | |||
Net (decrease) increase in cash | -156,908 | -326,574 | 353,236 | |||
Cash and cash equivalents - beginning of year | 734,148 | 1,060,722 | 707,486 | |||
Cash and cash equivalents - end of year | 577,240 | 734,148 | 1,060,722 | |||
Taxes paid during the year | 42,689 | 5,407 | 3,832 | |||
Interest paid during the year | 54,526 | 52,191 | 43,249 | |||
Operating Affiliates [Member] | ||||||
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||||||
(Income) from operating affiliates | -17,723 | -14,289 | ||||
Cash flows provided by (used in) investing activities | ||||||
Investments in affiliates | -37,600 | -22,000 | -91,500 | |||
Investment Affiliates [Member] | ||||||
Cash flows provided by (used in) investing activities | ||||||
Investments in affiliates | ($12,468) | ($14,492) | ($12,835) | |||
[1] | Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net loss (income) attributable to noncontrolling interest. |
Nature_of_the_business
Nature of the business | 12 Months Ended |
Dec. 31, 2014 | |
Nature Of Business [Abstract] | |
Nature of the business | Nature of the business |
Validus Holdings, Ltd. (together with its wholly and majority owned subsidiaries, the “Company”) was incorporated under the laws of Bermuda on October 19, 2005. The Company provides reinsurance coverage, insurance coverage and insurance linked securities management through four distinct global operating segments, Validus Re, AlphaCat, Talbot and Western World. Validus Re is a Bermuda-based reinsurance segment focused on short-tail lines of reinsurance. AlphaCat is a Bermuda-based investment adviser, managing capital from third parties and the Company in insurance linked securities and other investments in the property catastrophe reinsurance space. Talbot is a specialty insurance segment, primarily operating within the Lloyd's insurance market through Syndicate 1183. Western World is a U.S. based specialty excess and surplus lines insurance segment. | |
On November 30, 2012, pursuant to a merger agreement, the Company acquired all of the outstanding common shares of Flagstone Reinsurance Holdings, S.A. ("Flagstone") in exchange for 0.1935 Company common shares and $2.00 cash per Flagstone common share (the "Flagstone Acquisition"). For segmental reporting purposes, the results of Flagstone’s operations since the acquisition date have been included within the Validus Re segment in the Consolidated Financial Statements. Refer to Note 5 "Business combinations" for further information. | |
On October 9, 2013, the Company completed the sale of its wholly-owned Cyprus-domiciled subsidiary, Flagstone Alliance Insurance and Reinsurance plc for net cash proceeds of $21,400. | |
On October 2, 2014, the Company acquired all of the outstanding shares of Western World Insurance Group Inc. ("Western World"), a U.S. based specialty excess and surplus lines insurance company. The results of operations for Western World are consolidated from the date of acquisition. Refer to Note 5 "Business combinations" for further information. |
Basis_of_preparation_and_conso
Basis of preparation and consolidation | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of preparation and consolidation | Basis of preparation and consolidation |
These Consolidated Financial Statements include Validus Holdings, Ltd. and its wholly and majority owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain amounts with respect to cash and cash equivalents have been revised to correct certain prior period comparatives in these Consolidated Financial Statements. | |
The Consolidated Balance Sheet for the year ended December 31, 2013 includes revisions to reduce cash and cash equivalents by $322,198 and increase restricted cash, short-term investments and other investments by $200,492, $35,936 and $85,770, respectively. There is no change to the sub-total of total investments and cash, or the totals of total assets or total shareholders’ equity. | |
The Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012, includes revisions to (decrease) net cash provided by (used in) investing activities by ($163,541) and ($33,299), respectively. There are no changes to the sub-totals of net cash provided by (used in) operating activities or effect of foreign currency rate changes on cash and cash equivalents. These revisions resulted in a decrease in net (decrease) increase in cash of ($163,541) and ($33,299), for the years ended December 31, 2013 and 2012, respectively. | |
The effect of these revisions does not impact any per-share amounts or other components of equity or net assets in the statement of financial position in any of the prior periods presented. The Company does not believe these revisions are material to any prior periods. The Company has revised these prior period amounts to provide comparability with current period balances and cash flows. All significant intercompany accounts and transactions have been eliminated. | |
The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While management believes that the amounts included in the Consolidated Financial Statements reflect its best estimates and assumptions, actual results could differ from those estimates. The Company’s principal estimates include: | |
•reserve for losses and loss expenses; | |
•premium estimates for business written on a line slip or proportional basis; | |
•the valuation of goodwill and intangible assets; | |
•reinsurance recoverable balances including the provision for uncollectible amounts; and | |
•investment valuation of financial assets. | |
The term “ASC” used in these notes refers to Accounting Standard Codification issued by the United States Financial Accounting Standards Board (“FASB”). |
Significant_accounting_policie
Significant accounting policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Significant accounting policies | Significant accounting policies | |
The following is a summary of significant accounting policies adopted by the Company. | ||
(a) | Premiums | |
Insurance premiums written are recorded in accordance with the terms of underlying policies. Reinsurance premiums written are recorded at the inception of the policy and are estimated based on information received from brokers, ceding companies and reinsureds, and any subsequent differences arising on such estimates will be recorded in the periods in which they are determined. Premiums written are earned on a pro-rated basis over the term of the policy. For contracts and policies written on a losses occurring basis, the risk period is generally the same as the contract or policy terms. For contracts written on a policies attaching basis, the risk period is based on the terms of the underlying contracts and policies and is generally assumed to be 24 months. The portion of the premiums written applicable to the unexpired terms of the underlying contracts and policies in force is recorded as unearned premiums. | ||
Reinstatement premiums are recorded at the time a loss event occurs and coverage limits for the remaining life of the contract are reinstated under predefined contract terms. The accrual of reinstatement premiums is based on our estimate of losses and loss expenses, which reflects management’s judgment, as described in Note 3(c) "Reserve for losses and loss expenses" below. | ||
(b) | Policy acquisition costs | |
Policy acquisition costs are costs that vary with, and are directly related to, the successful production of new and renewal business, and consist principally of commissions and brokerage expenses. Acquisition costs are shown net of commissions earned on reinsurance ceded. These costs are deferred and amortized over the periods in which the related premiums are earned. Deferred acquisition costs are limited to their estimated realizable value based on the related unearned premiums and anticipated claims expenses. The realizable value of the Company’s deferred acquisition costs is determined without consideration of investment income. Policy acquisition costs also include profit commissions. Profit commissions are recognized on a basis consistent with our estimate of losses and loss expenses. | ||
(c) | Reserve for losses and loss expenses | |
The reserve for losses and loss expenses includes reserves for unpaid reported losses and for losses incurred but not reported (“IBNR”). The reserve for unpaid reported losses and loss expenses is established by management based on reports from brokers, ceding companies and insureds and represents the estimated ultimate cost of events or conditions that have been reported to, or specifically identified by, the Company. The reserve for incurred but not reported losses and loss expenses is established by management based on actuarially determined estimates of ultimate losses and loss expenses. Inherent in the estimate of ultimate losses and loss expenses are expected trends in claim severity and frequency and other factors which may vary significantly as claims are settled. Accordingly, ultimate losses and loss expenses may differ materially from the amounts recorded in the Consolidated Financial Statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, will be recorded in earnings in the period in which they become known. Prior period development arises from changes to these estimates recognized in the current year that relate to reserves for losses and loss expenses established in previous calendar years. | ||
(d) | Reinsurance | |
In the normal course of business, the Company seeks to reduce the potential amount of loss arising from claims events by reinsuring certain levels of risk assumed in various areas of exposure with other insurers or reinsurers. The accounting for reinsurance ceded depends on the method of reinsurance. If the policy is on a “losses occurring” basis, reinsurance premiums ceded are expensed (and any commissions thereon are earned) on a pro-rata basis over the period the reinsurance coverage is provided. If the policy is a “risks attaching” policy, reinsurance premiums ceded are expensed (and any commissions thereon are earned) in line with the earning of the gross premiums to which the risk attaching policy relates. Prepaid reinsurance premiums represent the portion of premiums ceded applicable to the unexpired term of policies in force. Mandatory reinstatement premiums ceded are recorded at the time the loss event occurs. Reinsurance recoverables are based on contracts in force at the time of the underlying loss event. The method for determining the reinsurance recoverable on unpaid losses and loss expenses involves the actuarial estimates of unpaid losses and loss expenses as well as a determination of the Company’s ability to cede unpaid losses and loss expenses under its reinsurance treaties. The use of different assumptions could have a material effect on the provision for uncollectible reinsurance. To the extent the creditworthiness of the Company’s reinsurers was to deteriorate due to adverse events affecting the reinsurance industry, such as a large number of major catastrophes, actual uncollectible amounts could be significantly greater than the Company’s provision. Amounts recoverable from reinsurers are estimated in a manner consistent with the underlying liabilities. | ||
(e) | Investments | |
All investments are carried at fair value with interest and dividend income and realized and unrealized gains and losses included in net income for the year. | ||
All investment transactions are recorded on a first-in-first-out basis and realized gains and losses on the sale of investments are determined on the basis of amortized cost. Interest on fixed maturity securities is recorded in net investment income when earned and is adjusted for any amortization of premium or accretion of discount. | ||
For mortgage-backed securities, and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the resultant change in effective yields and maturities are recognized retrospectively. Prepayment fees or call premiums that are only payable to the Company when a security is called prior to its maturity, are earned when received and reflected in net investment income. | ||
Short-term investments primarily comprise of investments with a remaining maturity of less than one year at time of purchase and money market funds held at the Company’s investment managers. Certain short-term investments relate to funds held in trust in support of collateralized reinsurance transactions. | ||
Restricted cash primarily relates to funds held in trust for support of collateralized reinsurance transactions. | ||
The fair value of other investments is generally recorded on the basis of the net asset valuation criteria established by the managers of the investments, normally based upon the governing documents of such investments. In addition, due to a lag in reporting, some of the fund managers, fund administrators, or both, are unable to provide final fund valuations as of the Company’s reporting date. In these circumstances, the Company estimates the fair value of these funds by starting with the prior month’s or prior quarter's fund valuation, adjusting these valuations for capital calls, redemptions or distributions and the impact of changes in foreign currency exchange rates, and then estimating the return for the current period. In circumstances in which the Company estimates the return for the current period, it uses all credible information available. This includes utilizing preliminary estimates reported by its fund managers, obtaining the valuation of underlying portfolio investments where such underlying investments are publicly traded and therefore have a readily observable price, using information that is available to the Company with respect to the underlying investments, reviewing various indices for similar investments or asset classes, as well as estimating returns based on the results of similar types of investments for which the Company has reported results, or other valuation methods, as necessary. Actual final fund valuations may differ, perhaps materially so, from the Company’s estimates and these differences are recorded in the period they become known as a change in estimate. | ||
(f) | Fair value of financial instruments | |
Fair value is defined as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting the highest and best use valuation concepts. The guidance for “Fair Value Measurement and Disclosure” provides a framework for measuring fair value by creating a hierarchy of fair value measurements that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The guidance further expands disclosures about such fair value measurements. The guidance applies broadly to most existing accounting pronouncements that require or permit fair value measurements (including both financial and non-financial assets and liabilities) but does not require any new fair value measurements. The Company has adopted all authoritative guidance in effect as of the balance sheet date regarding certain market conditions that allow for fair value measurements that incorporate unobservable inputs where active market transaction based measurements are unavailable. | ||
(g) | Derivative instruments | |
Fair Value Hedges | ||
The Company uses derivative instruments in the form of foreign currency forward exchange contracts to manage foreign currency risk. A foreign currency forward exchange contract involves an obligation to purchase or sell a specified amount of a specified currency at a future date at a price set at the time of the contract. Foreign currency forward exchange contracts will not eliminate fluctuations in the value of our assets and liabilities denominated in foreign currencies but rather allow the Company to establish a rate of exchange for a future point in time. The foreign currency forward exchange contracts are recorded as derivatives at fair value as either assets or liabilities, depending on their rights or obligations, with changes in fair value recorded as a net foreign exchange gain or loss in the Company’s Statements of Comprehensive Income. | ||
To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in value or cash flow of the hedged item. The Company formally documents all relationships between designated hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The documentation process includes linking derivatives to specific assets or liabilities on the balance sheet. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The Company assesses the effectiveness of its designated hedges on an individual currency basis. If the ratio obtained with this method is within the range of 80% to 125%, the Company considers the hedge effective. | ||
The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; the derivative is de-designated as a hedging instrument; or the derivative expires or is sold, terminated or exercised. To the extent that the Company discontinues hedge accounting, because, based on management’s assessment, the derivative no longer qualifies as an effective hedge, the derivative will continue to be carried in the Consolidated Balance Sheets at its fair value, with changes in its fair value recognized in current period net income through foreign exchange gains (losses). | ||
Cash Flow Hedges | ||
The Company uses derivative instruments in the form of interest rate swaps to manage the interest rate exposure associated with certain assets and liabilities. These derivatives are recorded at fair value. Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge are recorded in other comprehensive income (“OCI”) and are reclassified into earnings when the variability of the cash flow of the hedged item impacts earnings. Gains and losses on derivative contracts that are reclassified from OCI to current period earnings are included in the line item in the Consolidated Statements of Comprehensive Income in which the cash flows of the hedged item are recorded. Any hedge ineffectiveness is recorded immediately in current period earnings. | ||
To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in value or cash flow of the hedged item. The Company formally documents all relationships between designated hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The documentation process includes linking derivatives to specific assets or liabilities on the balance sheet. The Company also formally assesses, both at the hedge's inception and on an ongoing basis (when required), whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The Company assesses the effectiveness of its designated hedges on an individual contract basis. The Company currently applies the long haul method when assessing the hedge's effectiveness. | ||
The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; the derivative is de-designated as a hedging instrument; or the derivative expires or is sold, terminated or exercised. When hedge accounting is discontinued because the Company becomes aware that it is not probable that the forecasted transaction will occur, the derivative continues to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in OCI are recognized immediately in earnings. | ||
(h) | Cash and cash equivalents | |
The Company considers time deposits and money market funds with an original maturity of one month or less as equivalent to cash. | ||
(i) | Foreign exchange | |
The U.S. dollar is the functional currency of the Company and the majority of its subsidiaries. For these companies, monetary assets and liabilities denominated in foreign currencies are revalued at the exchange rates in effect at the balance sheet date and revenues and expenses denominated in foreign currencies are translated at the prevailing exchange rate on the transaction date with the resulting foreign exchange gains and losses included in earnings. Non-monetary assets and liabilities denominated in foreign currencies are revalued at the exchange rate in effect at the time of the underlying transaction. | ||
Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar are translated at prevailing year end exchange rates. Revenue and expenses of such foreign operations are translated at average exchange rates during the year. The net effect of translation differences between functional and reporting currencies in foreign operations, net of applicable deferred income taxes, is included in accumulated other comprehensive income ("AOCI"). | ||
(j) | Stock plans | |
The Company accounts for its stock plans in accordance with the U.S. GAAP fair value recognition provisions for “Stock Compensation.” Accordingly, the Company recognizes the compensation expense for stock option grants, restricted share grants and performance share awards based on the fair value of the award on the date of grant over the requisite service period. | ||
(k) | Warrants | |
The Company has accounted for certain warrant contracts issued to our sponsoring investors in conjunction with the capitalization of the Company, and which may be settled by the Company using either the physical settlement or net-share settlement methods, in accordance with U.S. GAAP guidance for “Derivatives and Hedging, Contracts in Entity’s Own Equity.” Accordingly, the fair value of these warrants has been recorded in equity as an addition to additional paid-in capital. | ||
(l) | Earnings per share | |
Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. Earnings per diluted common share are based on the weighted average number of common shares and share equivalents excluding any anti-dilutive effects of warrants, options and other awards under stock plans. | ||
(m) | Income taxes and uncertain tax provisions | |
Deferred tax assets and liabilities are recorded in accordance with U.S. GAAP “Income Taxes” guidance. Consistent with this guidance, the Company records deferred income taxes which reflect the tax effect of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. | ||
The Company and its Bermuda domiciled subsidiaries are not subject to any income, withholding or capital gains taxes under current Bermuda law. The Company has operations in subsidiary form in various other jurisdictions around the world, including but not limited to the U.K., U.S., Switzerland, Luxembourg and Canada that are subject to relevant taxes in those jurisdictions. | ||
The Company recognizes the tax benefits of uncertain tax positions only where the position is more likely than not to be sustained upon audit by tax authorities. The Company would recognize accruals for any interest and penalties related to uncertain tax positions in income tax expenses. | ||
(n) | Goodwill and other intangible assets | |
The Company accounts for goodwill and other intangible assets recognized in business combinations in accordance with ASC Topic 805 “Business Combinations.” | ||
A purchase price paid that is in excess of the fair value of the net assets (“goodwill”) arising from a business combination is recorded as an asset, and is not amortized. Where the total fair value of net assets acquired exceeds consideration paid (“negative goodwill”), the acquirer will record a gain as a result of the bargain purchase, to be recognized through the consolidated statements of comprehensive income at the close of the transaction. | ||
Intangible assets with a finite life are amortized over the estimated useful life of the asset. Intangible assets with an indefinite useful life are not amortized. Refer to Note 6 "Goodwill and other intangible assets" for further information. | ||
Goodwill and indefinite-lived intangible assets are tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. Such events or circumstances may include an economic downturn in a geographic market or change in the assessment of future operations. In performing this test, the Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350 “Intangibles—Goodwill and Other.” Similarly, the Company may first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment described in ASC Topic 350 "Intangibles - Goodwill and Other - General Intangibles Other than Goodwill." The factors assessed in making this determination included the overall insurance industry outlook, business strategy, premium rates, earnings sustainability, market capitalization and the regulatory and political environment. | ||
If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in the Consolidated Statements of Comprehensive Income. | ||
(o) | Investments in affiliates | |
Investments in which the Company has significant influence over the operating and financial policies of the investee are accounted for under the equity method of accounting. Under this method, the Company records its proportionate share of income or loss from such investments in its results for the period. | ||
(p) | Variable interest entities | |
The Company determines whether it has relationships with entities defined as variable interest entities (“VIEs”) in accordance with ASC Topic 810 "Consolidation." Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities. A VIE is consolidated by the variable interest holder that is determined to be the primary beneficiary. | ||
The primary beneficiary is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (i) the power to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. At inception of the VIE, as well as following an event that requires reassessment, the Company determines whether it is the primary beneficiary based on an analysis of the Company's level of involvement in the VIE, the contractual terms, and the overall structure of the VIE. Those VIEs that have all the attributes of an investment company are assessed under ASC Topic 810, excluding the changes that were as a result of the issuance of FASB Statement No. 167 "Amendments to FASB Interpretation No. 46(R)." | ||
The Company accounts for its investments in the AlphaCat Insurance Linked Securities (“ILS”) Funds and the BetaCat ILS Funds as variable interest entities. See Note 9 "Investments in affiliates" for further details. | ||
(q) | Noncontrolling interests | |
The Company accounts for its noncontrolling interests in accordance with ASC Topic 810 “Consolidation.” Redeemable noncontrolling interests are presented as a mezzanine item, between liabilities and shareholders' equity, in the Company's Consolidated Balance Sheet and the non-redeemable noncontrolling interests are presented within shareholders' equity in the Company's Consolidated Balance Sheets and Consolidated Statements of Shareholders' Equity. The net (income) loss attributable to noncontrolling interest is presented separately in the Company's Consolidated Statements of Comprehensive Income. Refer to Note 9 "Investments in affiliates" for further details. |
Recent_accounting_pronouncemen
Recent accounting pronouncements | 12 Months Ended | |
Dec. 31, 2014 | ||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||
Recent accounting pronouncements | Recent accounting pronouncements | |
(a) | Adoption of New Accounting Standards | |
Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity | ||
In March 2013, the FASB issued Accounting Standard Update No. 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity” (ASU 2013-05). The objective of this Update is to resolve the diversity in practice about whether Subtopic 810-10, Consolidation-Overall, or Subtopic 830-30, Foreign Currency Matters-Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary within a foreign entity. The amendments became effective for the Company on January 1, 2014. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. | ||
Financial Services - Investment Companies - Amendments to the Scope, Measurement, and Disclosure Requirements | ||
In June 2013, the FASB issued Accounting Standard Update No. 2013-08, “Financial Services - Investment Companies - Amendments to the Scope, Measurement, and Disclosure Requirements” (ASU 2013-08). The amendments in this Update change the assessment of whether an entity is an investment company by developing a new two-tiered approach for that assessment, which requires an entity to possess certain fundamental characteristics while allowing judgment in assessing other typical characteristics. The new approach requires an entity to assess all of the characteristics of an investment company and consider its purpose and determine whether it is an investment company. The amendments became effective for the Company on January 1, 2014. The Company performed an assessment and has concluded that the AlphaCat ILS funds meet the characteristics outlined in this Update and therefore will continue to be treated as investment companies. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. | ||
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists | ||
In July 2013, the FASB issued Accounting Standard Update No. 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (ASU 2013-11). This Update applies to all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. To the extent a net operating loss carryforward is not available to settle any additional income taxes that would result from the disallowance of a tax position at the reporting date, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments became effective for the Company on January 1, 2014. Adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements. | ||
(b) | Recently Issued Accounting Standards Not Yet Adopted | |
In May 2014, the FASB issued Accounting Standard Update No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09). The guidance in this Update 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 (for example, insurance contracts or lease 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 amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Earlier adoption is not permitted. The Company is currently evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. | ||
In June 2014, the FASB issued Accounting Standard Update No. 2014-12, “Compensation - Stock Compensation (Topic 718) - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (ASU 2014-12). The amendments in this Update apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. That is the case when an employee is eligible to retire or otherwise terminate employment before the end of the period in which a performance target (for example, an initial public offering or a profitability target) could be achieved and still be eligible to vest in the award if and when the performance target is achieved. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Earlier adoption is permitted. The Company is currently evaluating the impact of this guidance; however, it is not expected to have a material impact on the Company's Consolidated Financial Statements. | ||
In August 2014, the FASB issued Accounting Standard Update 2014-13, “Consolidation (Topic 810) - Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity” (ASU 2014-13). The fair value of the financial assets of a collateralized financing entity, as determined under GAAP, may differ from the fair value of its financial liabilities even when the financial liabilities have recourse only to the financial assets. The amendments in this Update provide an alternative to Topic 820 for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity to eliminate that difference. The amendments in this Update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted as of the beginning of an annual period. The Company is currently evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. | ||
In August 2014, the FASB issued Accounting Standard Update 2014-15, “Presentation of Financial Statements - Going Concern - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (ASU 2014-15). The amendments in this Update require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company has evaluated the impact of this guidance, it will not have a material impact on the Company's Consolidated Financial Statements. | ||
In February 2015, the FASB issued Accounting Standard Update 2015-02, “Consolidation (Topic 810) Amendments to the Consolidation Analysis” (ASU 2015-02). The amendments in this update modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities. The amendment also eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The amendment also provides a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this Update are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on the Company’s Consolidated Financial Statements. |
Business_combination
Business combination | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations [Abstract] | ||||||||
Business combination | Business combinations | |||||||
(a) | Western World Insurance Group, Inc. acquisition | |||||||
On October 2, 2014, Validus Specialty, Inc., wholly owned subsidiary of the Company acquired all of the issued and outstanding capital stock of Western World for an aggregate purchase price of $692,305 in cash. The Western World acquisition was undertaken to enhance the Company's access to the specialty U.S. commercial insurance market. Additional factors that added to the value of Western World included its State Licenses, Brand Name, Distribution Network and Technology. These factors resulted in a market value greater than the value of net tangible and intangible assets which resulted in the recognition of goodwill. This goodwill is reflective of the strategic benefits that a U.S. based insurer can provide to the Company. | ||||||||
For reporting purposes, the results of Western World’s operations have been included in the Consolidated Financial Statements as a separate segment from the acquisition date. | ||||||||
The estimates of fair values for tangible and intangible assets acquired and liabilities assumed were determined by management based on various market and income analyses. Significant judgment was required to arrive at these estimates of fair value and changes to assumptions used could have led to materially different results. | ||||||||
The fair value of net assets acquired, including pro forma GAAP adjustments, are summarized as follows: | ||||||||
Total purchase price | $ | 692,305 | ||||||
Assets acquired | ||||||||
Cash and cash equivalents | $ | 48,760 | ||||||
Investments | 1,126,185 | |||||||
Receivables | 37,848 | |||||||
Other assets | 19,418 | |||||||
Tangible assets acquired | 1,232,211 | |||||||
Intangible asset - State licenses | $ | 12,325 | ||||||
Intangible asset - Brand name | 5,756 | |||||||
Intangible asset - Distribution network | 4,651 | |||||||
Intangible asset - Technology | 2,323 | |||||||
Intangible assets acquired | $ | 25,055 | ||||||
Liabilities acquired | ||||||||
Net loss reserves and paid losses recoverable | $ | 523,315 | ||||||
Unearned premiums, net of expenses | 135,686 | |||||||
Other liabilities | 81,464 | |||||||
Liabilities acquired | 740,465 | |||||||
Excess purchase price (goodwill) | $ | 175,504 | ||||||
For details on the intangible assets acquired, refer to Note 6: "Goodwill and other intangible assets". | ||||||||
The Company also incurred transaction expenses related to the Western World acquisition. Transaction expenses included legal, financial advisory and audit related services. | ||||||||
Supplemental Pro Forma Information | ||||||||
Operating results of Western World have been included in the Consolidated Financial Statements from the October 2, 2014 acquisition date. The following selected unaudited pro forma financial information has been provided to present a summary of the combined results of the Company and Western World, assuming the transaction had been effected on January 1, 2013. | ||||||||
The unaudited pro forma data is for informational purposes only and does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed above. | ||||||||
Year ended | Year ended | |||||||
31-Dec-14 | 31-Dec-13 | |||||||
(unaudited) | (unaudited) | |||||||
Net premiums earned | $ | 2,216,349 | $ | 2,325,407 | ||||
Net operating income | $ | 481,179 | $ | 645,696 | ||||
Net income | $ | 448,071 | $ | 561,832 | ||||
The following selected audited information has been provided to present a summary of the results of Western World that have been included in the Consolidated Financial Statements for the year ended December 31, 2014. | ||||||||
From Acquisition Date to | ||||||||
31-Dec-14 | ||||||||
Net premiums written | $ | 58,807 | ||||||
Total revenue | 78,325 | |||||||
Total expenses | (66,882 | ) | ||||||
Net income | $ | 11,443 | ||||||
(b) | Flagstone Reinsurance Holdings S.A. acquisition | |||||||
On November 30, 2012, pursuant to a merger agreement, the Company acquired all of the outstanding common shares of Flagstone Reinsurance Holdings, S.A. ("Flagstone") in exchange for 0.1935 Company common shares and $2.00 cash per Flagstone common share (the "Flagstone Acquisition"). The Flagstone Acquisition was undertaken to enhance the Company's leadership position in the property catastrophe reinsurance industry and to create a company with greater size and economies of scale. | ||||||||
For segmental reporting purposes, the results of Flagstone’s operations since the acquisition date have been included within the Validus Re segment in the Consolidated Financial Statements. | ||||||||
The aggregate purchase price paid by the Company was $646,037 for adjusted tangible net assets acquired of $689,742. Reduced investment yields and lower returns on equity have led to many publicly traded reinsurance companies trading at discounts. This was the primary factor responsible for a purchase price less than the fair value of Flagstone's net assets, and the recognition of a bargain purchase gain on acquisition. | ||||||||
The estimates of fair values for tangible assets acquired and liabilities assumed were determined by management based on various market and income analyses and asset appraisals. Significant judgment was required to arrive at these estimates of fair value and changes to assumptions used could have led to materially different results. | ||||||||
In addition, at closing, the Company recorded a $2,595 intangible asset for the acquired Flagstone customer relationships. This intangible asset was related to the acquired broker distribution network and was fair valued using a variation of the income approach. Under this approach, the Company estimated the present value of expected future cash flows to an assumed hypothetical market participant resulting from the existing Flagstone customer relationships, considering attrition, and discounting at a weighted average cost of capital. In addition, the Company also recorded a $3,402 intangible asset for the acquired Flagstone brand name. | ||||||||
The composition of the purchase price and the fair value of net assets acquired is summarized as follows: | ||||||||
Total allocable purchase price | ||||||||
Flagstone shares outstanding at November 30, 2012 | 73,852,137 | |||||||
Exchange ratio | 0.1935 | |||||||
Validus common shares issued, gross of taxes withheld | 14,290,389 | |||||||
Validus share price at acquisition | $ | 34.87 | ||||||
Total value of Validus shares issued | $ | 498,306 | ||||||
Total cash consideration paid at $2.00 per Flagstone share | 147,731 | |||||||
Total allocable purchase price | 646,037 | |||||||
Tangible assets acquired | ||||||||
Cash and cash equivalents | $ | 159,339 | ||||||
Investments | 1,323,002 | |||||||
Receivables (a) | 171,620 | |||||||
Other assets | 129,245 | |||||||
Tangible assets acquired | $ | 1,783,206 | ||||||
Liabilities acquired | ||||||||
Net loss reserves and paid losses recoverable | $ | 639,641 | ||||||
Unearned premiums, net of expenses | 104,592 | |||||||
Debentures payable | 250,657 | |||||||
Other liabilities | 98,574 | |||||||
Liabilities acquired | $ | 1,093,464 | ||||||
Net tangible assets acquired, at fair value | 689,742 | |||||||
Bargain purchase gain before establishment of intangible assets | 43,705 | |||||||
Intangible asset—customer relationships and brand name | 5,997 | |||||||
Bargain purchase gain on acquisition of Flagstone | $ | 49,702 | ||||||
(a) | Premiums receivable of $171,620 were net of an allowance for doubtful accounts of $2,216. | |||||||
The Company also incurred transaction and termination expenses related to the Flagstone Acquisition. Transaction expenses included legal and financial advisory services. Termination expenses are primarily comprised of severance costs in connection with certain Flagstone employment contracts that have been terminated. Finally, the customer relationships and brand name intangible assets have been fully amortized at the acquisition date as it was not expected to significantly contribute to the Company’s future cash flows beyond December 31, 2012. The gain on bargain purchase, net of expenses has been presented as a separate line item in the Company’s Consolidated Statements of Comprehensive Income, and is composed of the following: | ||||||||
Year Ended | ||||||||
31-Dec-12 | ||||||||
Bargain purchase gain on acquisition of Flagstone | $ | 49,702 | ||||||
Transaction expenses | (5,760 | ) | ||||||
Termination expenses | (20,244 | ) | ||||||
Amortization of intangible asset—customer relationships and brand name | (5,997 | ) | ||||||
Gain on bargain purchase, net of expenses | $ | 17,701 | ||||||
Supplemental Pro Forma Information | ||||||||
Operating results of Flagstone have been included in the Consolidated Financial Statements from the November 30, 2012 acquisition date. The following selected unaudited pro forma financial information has been provided to present a summary of the combined results of the Company and Flagstone, assuming the transaction had been effected on January 1, 2011. The unaudited pro forma data is for informational purposes only and does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed above. | ||||||||
Year ended | Year ended | |||||||
31-Dec-12 | 31-Dec-11 | |||||||
(unaudited) | (unaudited) | |||||||
Revenues | ||||||||
Gross premiums written | $ | 2,536,535 | $ | 2,914,388 | ||||
Reinsurance premiums ceded | (397,008 | ) | (520,506 | ) | ||||
Net premiums written | 2,139,527 | 2,393,882 | ||||||
Change in unearned premiums | 86,935 | (20,261 | ) | |||||
Net premiums earned | 2,226,462 | 2,373,621 | ||||||
Net investment income | 126,140 | 143,472 | ||||||
Net realized gains on investments | 63,601 | 37,366 | ||||||
Net unrealized gains (losses) on investments | 5,654 | (47,101 | ) | |||||
(Loss) from investment affiliate | (964 | ) | — | |||||
Other income | 29,984 | 11,152 | ||||||
Foreign exchange gains (losses) | 1,363 | (26,605 | ) | |||||
Total revenues | 2,452,240 | 2,491,905 | ||||||
Expenses | ||||||||
Losses and loss expenses | 1,242,449 | 1,920,936 | ||||||
Policy acquisition costs | 413,579 | 429,509 | ||||||
General and administrative expenses | 323,061 | 282,183 | ||||||
Share compensation expenses | 30,750 | 35,427 | ||||||
Transaction expenses | — | 17,433 | ||||||
Finance expenses | 64,306 | 66,485 | ||||||
Total expenses | 2,074,145 | 2,751,973 | ||||||
Income before taxes and income from operating affiliates | 378,095 | (260,068 | ) | |||||
Tax (expense) | (3,385 | ) | (773 | ) | ||||
Income (loss) from operating affiliates | 12,868 | (922 | ) | |||||
Net income (loss) from continuing operations | $ | 387,578 | $ | (261,763 | ) | |||
Net income (loss) from discontinued operations, net of taxes | 19,366 | (21,662 | ) | |||||
Net income (loss) | $ | 406,944 | $ | (283,425 | ) | |||
Net loss (income) attributable to noncontrolling interest | 14,685 | (24,515 | ) | |||||
Net income (loss) available (attributable) to Validus | $ | 421,629 | $ | (307,940 | ) | |||
Basic earnings (loss) per share | $ | 3.73 | $ | (3.20 | ) | |||
Earnings (loss) per diluted share | $ | 3.62 | $ | (3.20 | ) | |||
The following selected audited information has been provided to present a summary of the results of Flagstone that have been included within the Validus Re segment in the Consolidated Financial Statements for the year ended December 31, 2012. | ||||||||
From Acquisition Date to | ||||||||
31-Dec-12 | ||||||||
Net premiums written | $ | 11,305 | ||||||
Total revenue | 26,778 | |||||||
Total expenses | (17,061 | ) | ||||||
Net income | $ | 9,717 | ||||||
Goodwill_and_other_intangible_
Goodwill and other intangible assets | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets | |||||||||||||||
Following the acquisition of Western World on October 2, 2014, the Company recorded intangible assets for State Licenses, Brand Name, Distribution Network and Technology (including certain amortization thereon) and goodwill. Brand Name and Distribution Network were estimated to have finite useful economic lives of 10 years on acquisition and are being amortized on a straight line basis over such period. Technology was estimated to have a finite useful economic life of 5 years on acquisition and is being amortized on a straight line basis over such period. Indefinite-lived intangible assets recognized in conjunction with the acquisition consist of State Licenses that provide a legal right to transact insurance business in those jurisdictions indefinitely. | ||||||||||||||||
Following the acquisition of Flagstone on November 30, 2012, the Company recorded intangible assets (including certain amortization thereon) and a gain on bargain purchase, net of expenses. Intangible assets of $5,997 were recognized in the Validus Re segment as a result of the Flagstone Acquisition (relating to customer relationships and brand name). As of December 31, 2012, the customer relationships and brand name intangible assets have been fully amortized as they were not expected to significantly contribute to the Company’s future cash flows beyond December 31, 2012. | ||||||||||||||||
Following the acquisition of Talbot Holdings Ltd. on July 2, 2007, the Company recorded intangible assets for Syndicate Capacity, Trademark and Distribution Network (including certain amortization thereon) and goodwill. Syndicate Capacity represents Talbot’s authorized premium income limit to write insurance business in the Lloyd’s market. Talbot has owned 100% of Syndicate 1183’s capacity since 2002 and there are no third party tenure rights. The capacity is renewed annually at no cost to Talbot, but may be freely purchased or sold, subject to Lloyd’s approval. The ability to write insurance business under the syndicate capacity is indefinite with the premium income limit being set yearly by Talbot, subject to Lloyd’s approval. Trademark and Distribution Network were estimated to have finite useful economic lives of 10 years on acquisition and are being amortized on a straight line basis over such periods. Syndicate Capacity and goodwill are estimated to have indefinite useful lives. Goodwill includes amounts related to the value of the workforce. | ||||||||||||||||
The following table shows an analysis of goodwill by segment: | ||||||||||||||||
Talbot | Western World | Total | ||||||||||||||
Goodwill at December 31, 2012 | $ | 20,393 | $ | — | $ | 20,393 | ||||||||||
Acquired during the year | — | — | — | |||||||||||||
Goodwill at December 31, 2013 | $ | 20,393 | $ | — | $ | 20,393 | ||||||||||
Acquired during the year | — | 175,504 | 175,504 | |||||||||||||
Goodwill at December 31, 2014 | $ | 20,393 | $ | 175,504 | $ | 195,897 | ||||||||||
There was no accumulated impairment loss at any of the dates indicated. | ||||||||||||||||
The gross carrying value and accumulated amortization of intangible assets by type at December 31, 2014 and 2013 are as follows: | ||||||||||||||||
As of December 31, 2014 | As of December 31, 2013 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Finite-lived intangible assets | ||||||||||||||||
Trade name and customer relationships | $ | 18,189 | $ | (10,971 | ) | $ | 12,433 | $ | (10,183 | ) | ||||||
Distribution network | 39,831 | (26,500 | ) | 35,180 | (22,866 | ) | ||||||||||
Technology | 2,323 | (116 | ) | — | — | |||||||||||
Total | $ | 60,343 | $ | (37,587 | ) | $ | 47,613 | $ | (33,049 | ) | ||||||
Indefinite-lived intangible assets | ||||||||||||||||
Syndicate capacity | $ | 91,843 | n/a | $ | 91,843 | n/a | ||||||||||
State licenses | 12,325 | n/a | — | n/a | ||||||||||||
Total | $ | 104,168 | $ | 91,843 | ||||||||||||
Amortization expense was $4,538, $4,162, and $10,159 for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||
The estimated remaining amortization expense for the finite-lived intangible assets is as follows: | ||||||||||||||||
Total | ||||||||||||||||
2015 | $ | 5,663 | ||||||||||||||
2016 | 5,663 | |||||||||||||||
2017 | 3,579 | |||||||||||||||
2018 | 1,501 | |||||||||||||||
2019 and thereafter | 6,350 | |||||||||||||||
$ | 22,756 | |||||||||||||||
As described in Note 3(n) "Goodwill and other intangible assets," the Company performed an assessment and it was determined that it was more likely than not that neither goodwill or the indefinite-lived intangible assets were impaired. The factors assessed in making this determination included the overall insurance industry outlook, business strategy, premium rates, earnings sustainability, market capitalization and the regulatory and political environment. |
Investments
Investments | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Investments [Abstract] | ||||||||||||||||
Investments | Investments | |||||||||||||||
(a) | Fixed maturity, short-term and other investments | |||||||||||||||
The Company's investments in fixed maturities, short-term investments and other investments are classified as trading and carried at fair value, with related net unrealized gains or losses included in earnings. | ||||||||||||||||
The amortized cost (or cost), gross unrealized gains and (losses) and estimated fair value of investments at December 31, 2014 were as follows: | ||||||||||||||||
Amortized Cost or Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
U.S. government and government agency | $ | 759,232 | $ | 1,755 | $ | (901 | ) | $ | 760,086 | |||||||
Non-U.S. government and government agency | 279,493 | 1,215 | (1,980 | ) | 278,728 | |||||||||||
U.S. states, municipalities and political subdivisions | 448,668 | 1,780 | (825 | ) | 449,623 | |||||||||||
Agency residential mortgage-backed securities | 520,685 | 9,697 | (1,151 | ) | 529,231 | |||||||||||
Non-agency residential mortgage-backed securities | 37,954 | 369 | (516 | ) | 37,807 | |||||||||||
U.S. corporate | 1,500,963 | 3,960 | (5,217 | ) | 1,499,706 | |||||||||||
Non-U.S. corporate | 564,386 | 2,765 | (3,989 | ) | 563,162 | |||||||||||
Bank loans | 457,537 | 200 | (8,733 | ) | 449,004 | |||||||||||
Catastrophe bonds | 75,822 | 768 | (926 | ) | 75,664 | |||||||||||
Asset-backed securities | 647,422 | 1,250 | (1,190 | ) | 647,482 | |||||||||||
Commercial mortgage-backed securities | 242,332 | 598 | (692 | ) | 242,238 | |||||||||||
Total fixed maturities | 5,534,494 | 24,357 | (26,120 | ) | 5,532,731 | |||||||||||
Total short-term investments (a) | 1,051,222 | 13 | (161 | ) | 1,051,074 | |||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | 2,570 | 125 | (920 | ) | 1,775 | |||||||||||
Preferred stock | 6,535 | — | (201 | ) | 6,334 | |||||||||||
Hedge funds (b) | 570,371 | 60,792 | (134,203 | ) | 496,960 | |||||||||||
Private equity investments | 48,995 | 4,987 | (611 | ) | 53,371 | |||||||||||
Investment funds | 244,506 | 437 | (111 | ) | 244,832 | |||||||||||
Mutual funds | 6,199 | 3,540 | — | 9,739 | ||||||||||||
Total other investments | 879,176 | 69,881 | (136,046 | ) | 813,011 | |||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 7,464,892 | $ | 94,251 | $ | (162,327 | ) | $ | 7,396,816 | |||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (732,782 | ) | $ | — | $ | — | $ | (732,782 | ) | ||||||
Catastrophe bonds | $ | (75,822 | ) | $ | (768 | ) | $ | 926 | $ | (75,664 | ) | |||||
Noncontrolling interest (b) | $ | (502,830 | ) | $ | (48,446 | ) | $ | 120,782 | $ | (430,494 | ) | |||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 6,153,458 | $ | 45,037 | $ | (40,619 | ) | $ | 6,157,876 | |||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
The amortized cost (or cost), gross unrealized gains and (losses) and estimated fair value of investments at December 31, 2013 were as follows: | ||||||||||||||||
Amortized Cost or Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
U.S. government and government agency | $ | 1,368,826 | $ | 2,589 | $ | (6,736 | ) | $ | 1,364,679 | |||||||
Non-U.S. government and government agency | 454,578 | 6,511 | (2,021 | ) | 459,068 | |||||||||||
U.S. states, municipalities and political subdivisions | 42,978 | 459 | (317 | ) | 43,120 | |||||||||||
Agency residential mortgage-backed securities | 305,450 | 8,310 | (2,261 | ) | 311,499 | |||||||||||
Non-agency residential mortgage-backed securities | 16,530 | 143 | (914 | ) | 15,759 | |||||||||||
U.S. corporate | 1,328,960 | 9,208 | (5,684 | ) | 1,332,484 | |||||||||||
Non-U.S. corporate | 711,581 | 5,917 | (3,173 | ) | 714,325 | |||||||||||
Bank loans | 712,859 | 5,659 | (1,402 | ) | 717,116 | |||||||||||
Catastrophe bonds | 72,000 | 2,551 | — | 74,551 | ||||||||||||
Asset-backed securities | 509,091 | 1,409 | (843 | ) | 509,657 | |||||||||||
Total fixed maturities | 5,522,853 | 42,756 | (23,351 | ) | 5,542,258 | |||||||||||
Total short-term investments (a) | 787,670 | 45 | (1 | ) | 787,714 | |||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | 3,141 | 83 | (921 | ) | 2,303 | |||||||||||
Hedge funds (b) | 584,518 | 71,641 | (95,076 | ) | 561,083 | |||||||||||
Private equity investments | 12,333 | 1,410 | (258 | ) | 13,485 | |||||||||||
Investment funds | 117,307 | 92 | — | 117,399 | ||||||||||||
Mutual funds | 6,199 | 3,617 | — | 9,816 | ||||||||||||
Total other investments | 723,498 | 76,843 | (96,255 | ) | 704,086 | |||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 7,034,021 | $ | 119,644 | $ | (119,607 | ) | $ | 7,034,058 | |||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (651,715 | ) | $ | — | $ | — | $ | (651,715 | ) | ||||||
Catastrophe bonds | $ | (53,000 | ) | $ | (2,544 | ) | $ | — | $ | (55,544 | ) | |||||
Noncontrolling interest (b) | $ | (512,121 | ) | $ | (62,850 | ) | $ | 85,569 | $ | (489,402 | ) | |||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 5,817,185 | $ | 54,250 | $ | (34,038 | ) | $ | 5,837,397 | |||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
As of June 30, 2014, the Company changed the methodology of assigning investment ratings to its fixed maturities portfolio. In prior periods, investment ratings were the lower of Moody’s or Standard & Poor’s rating for each investment security, presented in Standard & Poor’s equivalent rating. As of June 30, 2014, investment ratings are the median of Moody’s, Standard & Poor’s and Fitch, presented in Standard & Poor’s equivalent rating. For investments where only two ratings are available, the lower of the two ratings shall apply, presented in Standard & Poor’s equivalent rating. For investments where Moody’s and Standard & Poor’s ratings are not available, Fitch ratings are used and presented in Standard & Poor’s equivalent rating. The December 31, 2013 comparative data was restated as a result, to conform to current period presentation. | ||||||||||||||||
The following table sets forth information regarding the investment ratings of the Company’s fixed maturities portfolio as at December 31, 2014 and 2013. | ||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Estimated Fair Value | % of Total | Estimated Fair Value | % of Total | |||||||||||||
AAA | $ | 2,494,239 | 45.1 | % | $ | 2,510,781 | 45.3 | % | ||||||||
AA | 848,226 | 15.4 | % | 696,998 | 12.6 | % | ||||||||||
A | 1,086,091 | 19.6 | % | 1,233,716 | 22.3 | % | ||||||||||
BBB | 505,208 | 9.1 | % | 323,085 | 5.8 | % | ||||||||||
Total investment-grade fixed maturities | 4,933,764 | 89.2 | % | 4,764,580 | 86 | % | ||||||||||
BB | 362,972 | 6.6 | % | 354,992 | 6.4 | % | ||||||||||
B | 145,240 | 2.6 | % | 383,639 | 6.9 | % | ||||||||||
CCC | 12,733 | 0.2 | % | 2,453 | — | % | ||||||||||
CC | 3,926 | 0.1 | % | 2,496 | 0.1 | % | ||||||||||
C | 1,344 | — | % | 235 | — | % | ||||||||||
D/NR | 72,752 | 1.3 | % | 33,863 | 0.6 | % | ||||||||||
Total non-investment grade fixed maturities | 598,967 | 10.8 | % | 777,678 | 14 | % | ||||||||||
Total fixed maturities | $ | 5,532,731 | 100 | % | $ | 5,542,258 | 100 | % | ||||||||
The amortized cost and estimated fair value amounts for fixed maturity securities held at December 31, 2014 and 2013 are shown below by contractual maturity. Actual maturity may differ from contractual maturity because certain borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties. | ||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Due in one year or less | $ | 312,843 | $ | 313,248 | $ | 688,855 | $ | 692,768 | ||||||||
Due after one year through five years | 3,163,225 | 3,159,200 | 3,603,459 | 3,613,847 | ||||||||||||
Due after five years through ten years | 497,175 | 491,870 | 396,389 | 395,633 | ||||||||||||
Due after ten years | 112,858 | 111,655 | 3,079 | 3,095 | ||||||||||||
4,086,101 | 4,075,973 | 4,691,782 | 4,705,343 | |||||||||||||
Asset-backed and mortgage-backed securities | 1,448,393 | 1,456,758 | 831,071 | 836,915 | ||||||||||||
Total fixed maturities | $ | 5,534,494 | $ | 5,532,731 | $ | 5,522,853 | $ | 5,542,258 | ||||||||
(b) | Net investment income | |||||||||||||||
Net investment income was derived from the following sources: | ||||||||||||||||
Year Ended | ||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Fixed maturities and short-term investments | $ | 97,248 | $ | 99,216 | $ | 105,937 | ||||||||||
Other investments | 5,111 | — | 2,790 | |||||||||||||
Restricted cash and cash and cash equivalents | 5,178 | 4,713 | 7,259 | |||||||||||||
Securities lending income | 11 | 6 | 14 | |||||||||||||
Total gross investment income | 107,548 | 103,935 | 116,000 | |||||||||||||
Investment expenses | (7,472 | ) | (7,863 | ) | (8,064 | ) | ||||||||||
Total net investment income | $ | 100,076 | $ | 96,072 | $ | 107,936 | ||||||||||
Net investment income from other investments includes distributed and undistributed net income from certain investment funds. | ||||||||||||||||
(c) | Net realized gains (losses) and change in net unrealized (losses) gains on investments | |||||||||||||||
The following represents an analysis of net realized gains (losses) and the change in net unrealized (losses) gains on investments: | ||||||||||||||||
Year Ended | ||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Fixed maturities, short-term and other investments | ||||||||||||||||
Gross realized gains (a) | $ | 31,316 | $ | 31,402 | $ | 38,905 | ||||||||||
Gross realized (losses) | (8,221 | ) | (28,144 | ) | (20,672 | ) | ||||||||||
Net realized gains on investments | 23,095 | 3,258 | 18,233 | |||||||||||||
Change in net unrealized (losses) gains on investments (a) | (57,973 | ) | (58,481 | ) | 17,585 | |||||||||||
Total net realized and change in net unrealized (losses) gains on investments including assets held in trust, catastrophe bonds and noncontrolling interest | (34,878 | ) | (55,223 | ) | 35,818 | |||||||||||
Assets held in trust on behalf of operating affiliates | — | 88 | (88 | ) | ||||||||||||
Catastrophe bonds | 2,702 | (2,258 | ) | 416 | ||||||||||||
Noncontrolling interest (a) | 42,258 | 1,836 | 17,263 | |||||||||||||
Total net realized and change in net unrealized (losses) gains on investments excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 10,082 | $ | (55,557 | ) | $ | 53,409 | |||||||||
(a) | Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net loss (income) attributable to noncontrolling interest. | |||||||||||||||
(d) | Pledged investments | |||||||||||||||
The following tables outline investments pledged as collateral under the Company's credit and other facilities. For further details of the facilities, please refer to Note 19: “Debt and financing arrangements”: | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Description | Commitment | Issued and Outstanding | Investments pledged as collateral | |||||||||||||
$400,000 syndicated unsecured letter of credit facility | $ | 400,000 | $ | — | $ | — | ||||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 276,455 | 395,750 | |||||||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 15,649 | 35,645 | |||||||||||||
Talbot FAL facility | 25,000 | 25,000 | 31,048 | |||||||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||||||
AlphaCat Re secured letter of credit facility | 30,000 | 30,000 | 30,078 | |||||||||||||
IPC bi-lateral facility | 40,000 | 15,897 | 99,437 | |||||||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 198,389 | 430,782 | |||||||||||||
$ | 1,605,000 | $ | 561,684 | $ | 1,022,740 | |||||||||||
December 31, 2013 | ||||||||||||||||
Description | Commitment | Issued and Outstanding | Investments pledged as collateral | |||||||||||||
$400,000 syndicated unsecured letter of credit facility | $ | 400,000 | $ | — | $ | — | ||||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 358,567 | 507,620 | |||||||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 16,726 | 130,256 | |||||||||||||
Talbot FAL facility | 25,000 | 25,000 | 30,801 | |||||||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||||||
AlphaCat Re secured letter of credit facility | 24,800 | 24,800 | 24,806 | |||||||||||||
IPC bi-lateral facility | 40,000 | 20,177 | 98,465 | |||||||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 305,686 | 454,458 | |||||||||||||
$ | 1,599,800 | $ | 751,250 | $ | 1,246,406 | |||||||||||
In addition, $3,285,692 of cash and cash equivalents, restricted cash, short-term investments and fixed maturities were pledged during the normal course of business as at December 31, 2014 (2013: $2,991,322). Of those, $3,233,872 were held in trust (2013: $2,982,152). Pledged assets are generally for the benefit of the Company's cedants and policyholders, to support AlphaCat's fully collateralized reinsurance transactions and to facilitate the accreditation of Talbot as an alien insurer/reinsurer by certain regulators. | ||||||||||||||||
(e) | Securities lending | |||||||||||||||
The Company participates in a securities lending program whereby certain securities from its portfolio are loaned to third parties for short periods of time through a lending agent. The Company retains all economic interest in the securities it lends and receives a fee from the borrower for the temporary use of the securities. Collateral in the form of cash, government securities and letters of credit is required at a rate of 102% of the market value of the loaned securities and is held by a third party. |
Fair_value_measurements
Fair value measurements | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair value measurements | Fair value measurements | |||||||||||||||
(a) | Classification within the fair value hierarchy | |||||||||||||||
Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between market participants. Under U.S. GAAP, a company must determine the appropriate level in the fair value hierarchy for each fair value measurement. The fair value hierarchy prioritizes the inputs, which refer broadly to assumptions market participants would use in pricing an asset or liability, into three levels. It gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. | ||||||||||||||||
The three levels of the fair value hierarchy are described below: | ||||||||||||||||
Level 1 - Fair values are measured based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. | ||||||||||||||||
Level 2 - Fair values are measured 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 - Fair values are measured 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 where there is little, if any, market activity for that asset or liability 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 instrument. 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 our valuation technique (for example, from market to cash flow approach) or to use multiple valuation techniques to estimate the fair value of a financial instrument. These circumstances could cause an instrument to be reclassified between levels within the fair value hierarchy. | ||||||||||||||||
There have been no material changes in the Company's valuation techniques during the period, or periods, represented by these Consolidated Financial Statements. The following methods and assumptions were used in estimating the fair value of each class of financial instrument recorded in the Consolidated Balance Sheets. | ||||||||||||||||
At December 31, 2014, the Company’s investments were allocated between Levels 1, 2 and 3 as follows: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
U.S. government and government agency | $ | — | $ | 760,086 | $ | — | $ | 760,086 | ||||||||
Non-U.S. government and government agency | — | 278,728 | — | 278,728 | ||||||||||||
U.S. states, municipalities and political subdivisions | — | 449,623 | — | 449,623 | ||||||||||||
Agency residential mortgage-backed securities | — | 529,231 | — | 529,231 | ||||||||||||
Non-agency residential mortgage-backed securities | — | 37,807 | — | 37,807 | ||||||||||||
U.S. corporate | — | 1,499,706 | — | 1,499,706 | ||||||||||||
Non-U.S. corporate | — | 563,162 | — | 563,162 | ||||||||||||
Bank loans | — | 416,256 | 32,748 | 449,004 | ||||||||||||
Catastrophe bonds | — | 70,664 | 5,000 | 75,664 | ||||||||||||
Asset-backed securities | — | 647,482 | — | 647,482 | ||||||||||||
Commercial mortgage-backed securities | — | 242,238 | — | 242,238 | ||||||||||||
Total fixed maturities | — | 5,494,983 | 37,748 | 5,532,731 | ||||||||||||
Total short-term investments (a) | 942,716 | 108,358 | — | 1,051,074 | ||||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | — | — | 1,775 | 1,775 | ||||||||||||
Preferred stock | — | 6,334 | — | 6,334 | ||||||||||||
Hedge funds (b) | — | — | 496,960 | 496,960 | ||||||||||||
Private equity investments | — | — | 53,371 | 53,371 | ||||||||||||
Investment funds | — | 140,045 | 104,787 | 244,832 | ||||||||||||
Mutual funds | — | 9,739 | — | 9,739 | ||||||||||||
Total other investments | — | 156,118 | 656,893 | 813,011 | ||||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 942,716 | $ | 5,759,459 | $ | 694,641 | $ | 7,396,816 | ||||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (732,782 | ) | $ | — | $ | — | $ | (732,782 | ) | ||||||
Catastrophe bonds | $ | — | $ | (70,664 | ) | $ | (5,000 | ) | $ | (75,664 | ) | |||||
Noncontrolling interest (b) | $ | — | $ | — | $ | (430,494 | ) | $ | (430,494 | ) | ||||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 209,934 | $ | 5,688,795 | $ | 259,147 | $ | 6,157,876 | ||||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
At December 31, 2013, the Company’s investments were allocated between Levels 1, 2 and 3 as follows: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
U.S. government and government agency | $ | — | $ | 1,364,679 | $ | — | $ | 1,364,679 | ||||||||
Non-U.S. government and government agency | — | 459,068 | — | 459,068 | ||||||||||||
U.S. states, municipalities and political subdivisions | — | 43,120 | — | 43,120 | ||||||||||||
Agency residential mortgage-backed securities | — | 311,499 | — | 311,499 | ||||||||||||
Non-agency residential mortgage-backed securities | — | 15,759 | — | 15,759 | ||||||||||||
U.S. corporate | — | 1,332,484 | — | 1,332,484 | ||||||||||||
Non-U.S. corporate | — | 714,325 | — | 714,325 | ||||||||||||
Bank loans | — | 717,116 | — | 717,116 | ||||||||||||
Catastrophe bonds | — | 74,551 | — | 74,551 | ||||||||||||
Asset-backed securities | — | 509,657 | — | 509,657 | ||||||||||||
Total fixed maturities | — | 5,542,258 | — | 5,542,258 | ||||||||||||
Total short-term investments (a) | 783,151 | 4,563 | — | 787,714 | ||||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | — | — | 2,303 | 2,303 | ||||||||||||
Hedge funds (b) | — | — | 561,083 | 561,083 | ||||||||||||
Private equity investments | — | — | 13,485 | 13,485 | ||||||||||||
Investment fund | — | 117,399 | — | 117,399 | ||||||||||||
Mutual funds | — | 9,816 | — | 9,816 | ||||||||||||
Total other investments | — | 127,215 | 576,871 | 704,086 | ||||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 783,151 | $ | 5,674,036 | $ | 576,871 | $ | 7,034,058 | ||||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (651,715 | ) | $ | — | $ | — | $ | (651,715 | ) | ||||||
Catastrophe bonds | $ | — | $ | (55,544 | ) | $ | — | $ | (55,544 | ) | ||||||
Noncontrolling interest (b) | $ | — | $ | — | $ | (489,402 | ) | $ | (489,402 | ) | ||||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 131,436 | $ | 5,618,492 | $ | 87,469 | $ | 5,837,397 | ||||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the Hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
At December 31, 2014, Level 3 investments excluding assets held in trust on behalf of operating affiliates, catastrophe bonds and noncontrolling interests totaled $259,147 (December 31, 2013: $87,469), representing 4.2% (December 31, 2013: 1.5%) of total investments, excluding assets held in trust on behalf of operating affiliates, catastrophe bonds and noncontrolling interests, measured at fair value on a recurring basis. | ||||||||||||||||
(b) | Level 1 assets measured at fair value | |||||||||||||||
Short term investments | ||||||||||||||||
Short term investments categorized as Level 1 consist primarily of highly liquid securities, all with maturities less than one year from the date of purchase. The fair value of the Company's portfolio of short term investments are generally determined using amortized cost which approximates fair value. The Company has determined that certain of its short-term investments, held in highly liquid money market-type funds, should be included in Level 1 as their fair values are based on quoted market prices in active markets. | ||||||||||||||||
(c) | Level 2 assets measured at fair value | |||||||||||||||
Fixed maturity investments | ||||||||||||||||
Fixed maturity investments included in Level 2 include U.S. government and government agency, non-U.S. government and government agency, U.S. states, municipalities and political subdivisions, agency residential mortgage-backed securities, non-agency residential mortgage-backed securities, U.S. corporate, non-U.S. corporate, bank loans, catastrophe bonds, asset-backed securities and commercial mortgage-backed securities. | ||||||||||||||||
In general, valuation of the Company's fixed maturity investment portfolios is provided by pricing services, such as index providers and pricing vendors, as well as broker quotations. The pricing vendors provide valuations for a high volume of liquid securities that are actively traded. For securities that do not trade on an exchange, the pricing services generally utilize market data and other observable inputs in matrix pricing models to determine month end prices. Prices are generally verified using third party data. Securities which are priced by an index provider are generally included in the index. | ||||||||||||||||
In general, broker-dealers value securities through their trading desks based on observable inputs. The methodologies include mapping securities based on trade data, bids or offers, observed spreads, and performance on newly issued securities. Broker-dealers also determine valuations by observing secondary trading of similar securities. Prices obtained from broker quotations are considered non-binding, however they are based on observable inputs and by observing secondary trading of similar securities obtained from active, non-distressed markets. | ||||||||||||||||
The Company considers these Level 2 inputs as they are corroborated with other market observable inputs. The techniques generally used to determine the fair value of the Company's fixed maturity investments are detailed below by asset class. | ||||||||||||||||
U.S. government and government agency | ||||||||||||||||
U.S. government and government agency securities consist primarily of debt securities 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. Fixed maturity investments included in U.S. government and government agency securities are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The fair value of each security is individually computed using analytical models which incorporate option adjusted spreads and other daily interest rate data. | ||||||||||||||||
Non-U.S. government and government agency | ||||||||||||||||
Non-U.S. government and government agency securities consist of debt securities issued by non-U.S. governments and their agencies along with supranational organizations (also known as sovereign debt securities). Securities held in these sectors are primarily priced by pricing services who employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap and high issuance credits. The pricing services then apply a credit spread for each security which is developed by in-depth and real time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets. | ||||||||||||||||
U.S. states, municipalities and political subdivisions | ||||||||||||||||
The Company's U.S. states, municipalities and political subdivisions portfolio contains debt securities issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services using the techniques described for U.S. government and government agency securities described above. | ||||||||||||||||
Agency residential mortgage-backed securities | ||||||||||||||||
The Company's agency residential mortgage-backed investments are primarily priced by pricing services using a mortgage pool specific model which utilizes daily inputs from the active to be announced ("TBA") market which is very liquid, as well as the U.S. treasury market. The model also utilizes additional information, such as the weighted average maturity, weighted average coupon and other available pool level data which is provided by the sponsoring agency. Valuations are also corroborated with daily active market quotes. | ||||||||||||||||
Non-agency residential mortgage-backed securities | ||||||||||||||||
The Company's non-agency mortgage-backed investments include non-agency prime residential mortgage-backed fixed maturity investments. The Company has no fixed maturity investments classified as sub-prime held in its fixed maturity investments portfolio. Securities held in these sectors are primarily priced by pricing services using an option adjusted spread model or other relevant models, which principally utilize inputs including benchmark yields, available trade information or broker quotes, and issuer spreads. The pricing services also review collateral prepayment speeds, loss severity and delinquencies among other collateral performance indicators for the securities valuation, when applicable. | ||||||||||||||||
U.S. corporate | ||||||||||||||||
Corporate debt securities consist primarily of investment-grade debt of a wide variety of U.S. corporate issuers and industries. The Company's corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features which may influence risk. In certain instances, securities are individually evaluated using a spread which is added to the U.S. treasury curve or a security specific swap curve as appropriate. | ||||||||||||||||
Non-U.S. corporate | ||||||||||||||||
Non-U.S. corporate debt securities consist primarily of investment-grade debt of a wide variety of non-U.S. corporate issuers and industries. The Company's non-U.S. corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features which may influence risk. | ||||||||||||||||
Bank loans | ||||||||||||||||
The Company's bank loan investments consist primarily of below-investment-grade debt of a wide variety of corporate issuers and industries. The Company's bank loans are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features which may influence risk. | ||||||||||||||||
Catastrophe bonds | ||||||||||||||||
Catastrophe bonds are based on broker or underwriter bid indications. To the extent that these indications are based on significant unobservable inputs, the relevant bonds will be classified as a Level 3 asset. | ||||||||||||||||
Asset-backed securities | ||||||||||||||||
Asset backed securities include mostly investment-grade debt securities backed by pools of loans with a variety of underlying collateral, including automobile loan receivables, student loans, credit card receivables, and collateralized loan obligations originated by a variety of financial institutions. Securities held in these sectors are primarily priced by pricing services. The pricing services apply dealer quotes and other available trade information such as bids and offers, prepayment speeds which may be adjusted for the underlying collateral or current price data, the U.S. treasury curve and swap curve as well as cash settlement. The pricing services determine the expected cash flows for each security held in this sector using historical prepayment and default projections for the underlying collateral and current market data. In addition, a spread is applied to the relevant benchmark and used to discount the cash flows noted above to determine the fair value of the securities held in this sector. | ||||||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||
Commercial mortgage backed securities are investment-grade debt primarily priced by pricing services. The pricing services apply dealer quotes and other available trade information such as bids and offers, prepayment speeds which may be adjusted for the underlying collateral or current price data, the U.S. treasury curve and swap curve as well as cash settlement. The pricing services determine the expected cash flows for each security held in this sector using historical prepayment and default projections for the underlying collateral and current market data. In addition, a spread is applied to the relevant benchmark and used to discount the cash flows noted above to determine the fair value of the securities held in this sector. | ||||||||||||||||
Short term investments | ||||||||||||||||
Short term investments consist primarily of highly liquid securities, all with maturities less than one year from the date of purchase. The fair value of the Company's portfolio of short term investments is generally determined using amortized cost which approximates fair value. The Company has determined that, other than highly liquid money market-type funds, the remaining securities are classified within Level 2 because these securities are typically not actively traded due to their approaching maturity and, as such, their amortized cost approximates fair value. | ||||||||||||||||
Preferred stock | ||||||||||||||||
The Company's preferred stock portfolio contains preferred term securities typically sold by non public financial services companies, through a collateralized debt obligation product and are classified as Level 2 assets. The fair value of these investments is determined based on quoted market prices in active markets. | ||||||||||||||||
Investment funds | ||||||||||||||||
Investment funds classified as Level 2 assets includes one pooled investment which is invested in fixed income securities with high credit ratings. The investment fund is only open to Lloyd’s Trust Fund participants. The fair value of units in the investment fund is based on the net asset value of the fund as reported by Lloyd’s Treasury & Investment Management. | ||||||||||||||||
Also included within investment funds is the Company's share of a portfolio of Lloyd's overseas deposits, which is also classified as a Level 2 asset. The underlying deposits are managed centrally by Lloyd's and invested according to local regulatory requirements. The composition of the portfolio varies and the deposits are made across the market. The fair value of the deposits is based on the portfolio level reporting that is provided by Lloyd's. | ||||||||||||||||
Mutual funds | ||||||||||||||||
Mutual funds consist of two investment funds which are invested in various quoted investments. The fair value of units in the mutual funds is based on the net asset value of the fund as reported by the fund manager. | ||||||||||||||||
(d) | Level 3 assets measured at fair value | |||||||||||||||
Level 3 includes financial instruments that are valued using market approach and income approach valuation techniques. These models incorporate both observable and unobservable inputs. The Company's hedge funds, a fund of hedge funds, private equity investments, certain bank loans, an investment fund and certain catastrophe bonds are the only financial instruments in this category as at December 31, 2014. For each respective hedge fund investment, the Company obtains and reviews the valuation methodology used by the fund administrators and investment managers to ensure that the hedge fund investments are following fair value principles consistent with U.S. GAAP in determining the net asset value (“NAV”). | ||||||||||||||||
Within the hedge fund industry, there is a general lack of transparency necessary to facilitate a detailed independent assessment of the values placed on the securities underlying the NAV provided by the fund manager or fund administrator. To address this, on a quarterly basis, we perform a number of monitoring procedures designed to assist us in the assessment of the quality of the information provided by managers and administrators. These procedures include, but are not limited to, regular review and discussion of each fund's performance with its manager and regular evaluation of fund performance against applicable benchmarks. | ||||||||||||||||
Bank loans | ||||||||||||||||
Included in the bank loans portfolio is a collection of loan participations held through an intermediary. These investments are classified as Level 3 assets. A third party pricing service provides monthly valuation reports for each loan and participation using a combination of quotations from loan pricing services, leveraged loan indices or market price quotes obtained directly from the intermediary. | ||||||||||||||||
Fund of hedge funds | ||||||||||||||||
The fund of hedge funds includes a side pocket. While a redemption request has been submitted, the timing of receipt of proceeds on the side pocket is unknown. The fund's administrator provides a monthly reported NAV with a one month delay in its valuation which was used as a basis for fair value measurement in the Company's December 31, 2014 Consolidated Balance Sheet. The fund manager has provided an estimate of the fund NAV at December 31, 2014 based on the estimated performance provided from the underlying funds. To determine the reasonableness of the estimated NAV, the Company compares the one month delayed fund administrator's NAV to the fund manager's estimated NAV that incorporates relevant valuation sources on a timely basis. Material variances are recorded in the current reporting period while immaterial variances are recorded in the following reporting period. As this valuation technique incorporates both observable and significant unobservable inputs, the fund of hedge funds is classified as a Level 3 asset. | ||||||||||||||||
Hedge funds | ||||||||||||||||
The hedge funds were valued at $496,960 at December 31, 2014 (2013: $561,083). The hedge funds consist of investments in five Paulson & Co. managed funds (the "Paulson hedge funds") and one hedge fund assumed in the acquisition of Flagstone Reinsurance Holdings, S.A. (the "Flagstone Acquisition") (the "Flagstone hedge fund"). | ||||||||||||||||
The Paulson hedge funds' administrator provides monthly reported NAVs with a one month delay in its valuation which was used as a partial basis for fair value measurement in the Company's December 31, 2014 Consolidated Balance Sheet. The fund manager provides an estimate of the NAV as at December 31, 2014 based on estimated performance. The Company adjusts fair value to the fund manager's estimated NAV that incorporates relevant valuation sources on a timely basis. To determine the reasonableness of the estimated NAV, the Company assesses the variance between the fund manager's estimated NAV and the fund administrator's NAV. Material variances are recorded in the current reporting period while immaterial variances are recorded in the following reporting period. Historically, the Company's valuation estimates have not materially differed from the subsequent NAVs. | ||||||||||||||||
The Flagstone hedge fund's administrator provides quarterly NAVs with a three-month delay in valuation which was used as a basis for fair value measurement in the Company's December 31, 2014 Consolidated Balance Sheet. | ||||||||||||||||
As these valuation techniques incorporate both observable and significant unobservable inputs, both the Paulson hedge funds and the Flagstone hedge fund are classified as Level 3 assets. The Paulson hedge funds are subject to quarterly liquidity. | ||||||||||||||||
Private equity investments | ||||||||||||||||
The private equity funds provide quarterly or semi-annual partnership capital statements with a three month or a six month delay which are used as a basis for valuation in the Company's December 31, 2014 Consolidated Balance Sheet. These private equity investments vary in investment strategies and are not actively traded in any open markets. As this valuation technique can incorporate significant unobservable inputs, the private equity investments are classified as Level 3 assets. | ||||||||||||||||
Investment funds | ||||||||||||||||
Investment funds classified as Level 3 assets consists of one structured securities fund that invests across asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. The fair value of units in the investment fund is based on the NAV of the fund as reported by the independent fund administrator. The fund's administrator provides a monthly reported NAV with a one-month delay in its valuation which was used as a basis for fair value measurement in the Company's December 31, 2014 Consolidated Balance Sheet. As this valuation technique incorporates both observable and significant unobservable inputs, the investment fund investment is classified as a Level 3 asset. | ||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using Level 3 inputs during the years ended December 31, 2014 and 2013: | ||||||||||||||||
Total Fair Market Value | ||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | |||||||||||||||
Level 3 investments—Beginning of year | $ | 576,871 | $ | 556,234 | ||||||||||||
Additions to level 3 investments due to Western World acquisition | 23,620 | — | ||||||||||||||
Purchases | 175,129 | 99,037 | ||||||||||||||
Sales | (52,351 | ) | (82,000 | ) | ||||||||||||
Issuances | — | — | ||||||||||||||
Settlements | (1,500 | ) | — | |||||||||||||
Realized gains | 8,216 | 6,132 | ||||||||||||||
Unrealized losses | (42,047 | ) | (2,532 | ) | ||||||||||||
Transfers into Level 3 during the year | 6,703 | — | ||||||||||||||
Level 3 investments—End of year | $ | 694,641 | $ | 576,871 | ||||||||||||
Catastrophe bonds | (5,000 | ) | — | |||||||||||||
Noncontrolling interest (a) | (430,494 | ) | (489,402 | ) | ||||||||||||
Level 3 investments excluding noncontrolling interest | $ | 259,147 | $ | 87,469 | ||||||||||||
(a) | Includes Level 3 investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
During the year ended December 31, 2014 there was a transfer of investments from Level 2 into Level 3 of the fair value hierarchy. This transfer was due to a reassessment of the extent of unobservable inputs used in establishing the fair value of certain catastrophe bonds. There were no transfers into or out of Level 3 during the year ended December 31, 2013. | ||||||||||||||||
(e) | Financial Instruments Not Carried at Fair Value | |||||||||||||||
U.S. GAAP guidance in relation to the fair value of financial instruments is also applicable to disclosures of financial instruments not carried at fair value, except for certain financial instruments, including insurance contracts and investments in affiliates. The carrying values of cash and cash equivalents (including restricted amounts), accrued investment income, other assets, net payable for investments purchased and accounts payable and accrued expenses approximated their fair values at December 31, 2014, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 2. |
Investments_in_affiliates
Investments in affiliates | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||
Investment in affiliates | Investments in affiliates | |||||||||||||||||||||||||||
The following table presents the Company's investments in affiliates as at December 31, 2014 and 2013: | ||||||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||||||
Investment affiliate | $ | 63,506 | $ | 34,500 | ||||||||||||||||||||||||
Operating affiliates | 197,977 | 106,743 | ||||||||||||||||||||||||||
Investments in affiliates | $ | 261,483 | $ | 141,243 | ||||||||||||||||||||||||
(a) | Investment affiliate | |||||||||||||||||||||||||||
Aquiline Financial Services Fund II L.P. | ||||||||||||||||||||||||||||
On December 20, 2011, the Company entered into an Assignment and Assumption Agreement (the "Agreement") with Aquiline Capital Partners LLC, a Delaware limited liability company (the "Assignor") and Aquiline Capital Partners II GP (Offshore) Ltd., a Cayman Islands company limited by shares (the "Aquiline II General Partner") pursuant to which the Company has assumed 100% of the Assignor's interest in Aquiline Financial Services Fund II L.P. (the "Aquiline II Partnership") representing a total capital commitment of $50,000 (the "Aquiline II Commitment"), as a limited partner in the Partnership (the "Transferred Interest"). The Transferred Interest is governed by the terms of an Amended and Restated Exempted Limited Partnership Agreement of the Fund dated January 9, 2013 (the "Aquiline II Limited Partnership Agreement"). | ||||||||||||||||||||||||||||
On October 2, 2014, the Company assumed an additional investment in the Aquiline II Partnership as part of the Western World acquisition representing a total capital commitment of $10,000. This interest is governed by the terms of the Aquiline II Limited Partnership Agreement. | ||||||||||||||||||||||||||||
The Partnership provides a quarterly capital account statement, with a three month delay in its valuation, which was used as the basis for calculating the Company's share of partnership income for the period. | ||||||||||||||||||||||||||||
Aquiline Financial Services Fund III L.P. | ||||||||||||||||||||||||||||
On November 7, 2014, the Company, entered into a Subscription Agreement (the "Subscription Agreement") with Aquiline Capital Partners III GP (Offshore) Ltd., a Cayman Islands company limited by shares (the "Aquiline III General Partner") pursuant to which the Company is committing and agreeing to purchase limited partnership or other comparable limited liability equity interests (the "Limited Partnership Interests") in Aquiline Financial Services Fund III L.P., a Cayman Islands exempted limited partnership (the "Aquiline III Partnership"), and/or one or more Alternative Investment Vehicles and Intermediate Entities (together with the Aquiline III Partnership, the "Fund" or the "Entities") with a capital commitment (the "Aquiline III Commitment") in an amount equal to $100,000, as a limited partner in the Aquiline III Partnership. The Limited Partnership Interests are governed by the terms of an Amended and Restated Exempted Limited Partnership Agreement dated as of November 7, 2014 (the “Aquiline III Limited Partnership Agreement”). | ||||||||||||||||||||||||||||
The Partnership provides a quarterly capital account statement, with a three month delay in its valuation, which was used as the basis for calculating the Company's share of partnership income for the period. | ||||||||||||||||||||||||||||
The following table presents a reconciliation of the beginning and ending investments in the Company’s investment affiliate balances for the years ended December 31, 2014 and 2013: | ||||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Investment in affiliate, beginning of year | $ | 34,500 | $ | 15,218 | ||||||||||||||||||||||||
Addition due to Western World acquisition | 8,127 | — | ||||||||||||||||||||||||||
Capital contributions | 12,468 | 14,492 | ||||||||||||||||||||||||||
Income from investment affiliate | 8,411 | 4,790 | ||||||||||||||||||||||||||
Investment in affiliate, end of year | $ | 63,506 | $ | 34,500 | ||||||||||||||||||||||||
The following table presents the Company’s investment in the Partnership as at December 31, 2014: | ||||||||||||||||||||||||||||
Investment at cost | Voting ownership % | Equity ownership % | Carrying value | |||||||||||||||||||||||||
Aquiline Financial Services Fund II L.P. | $ | 51,001 | — | % | 8.1 | % | $ | 63,506 | ||||||||||||||||||||
The following table presents the Company’s investment in the Partnership as at December 31, 2013: | ||||||||||||||||||||||||||||
Investment at cost | Voting ownership % | Equity ownership % | Carrying value | |||||||||||||||||||||||||
Aquiline Financial Services Fund II L.P. | $ | 32,110 | — | % | 6.7 | % | $ | 34,500 | ||||||||||||||||||||
(b) | Operating affiliates | |||||||||||||||||||||||||||
AlphaCat Re 2011 Ltd. | ||||||||||||||||||||||||||||
On May 25, 2011, the Company joined with other investors in capitalizing AlphaCat Re 2011 Ltd. ("AlphaCat Re 2011"), a special purpose reinsurer formed for the purpose of writing collateralized reinsurance and retrocessional reinsurance. AlphaCat Re 2011 was a market facing entity and the Company's investment in AlphaCat Re 2011 has been treated as an equity method investment. | ||||||||||||||||||||||||||||
AlphaCat Re 2011 is now considered "off-risk" as the risk periods for all reinsurance contracts written have expired. As a result, partial returns of investment have been made to the investors of AlphaCat Re 2011.The Company's portion of the returns made during the years ended December 31, 2014 and 2013 are included in the tables below. | ||||||||||||||||||||||||||||
AlphaCat Re 2012 Ltd. | ||||||||||||||||||||||||||||
On May 29, 2012, the Company joined with other investors in capitalizing AlphaCat Re 2012 Ltd. ("AlphaCat Re 2012"), a special purpose reinsurer formed for the purpose of writing collateralized reinsurance with a particular focus on windstorm risks for Florida domiciled insurance companies. AlphaCat Re 2012 was a market facing entity and the Company's investment in AlphaCat Re 2012 has been treated as an equity method investment. | ||||||||||||||||||||||||||||
AlphaCat Re 2012 is now considered "off-risk" as the risk periods for all reinsurance contracts written have expired. As a result, partial returns of investment have been made to the investors of AlphaCat Re 2012.The Company's portion of the returns made during the years ended December 31, 2014 and 2013 are included in the tables below. | ||||||||||||||||||||||||||||
AlphaCat 2013, Ltd. | ||||||||||||||||||||||||||||
On December 17, 2012, the Company joined with other investors in capitalizing AlphaCat 2013, Ltd. ("AlphaCat 2013"), an entity formed for the purpose of investing in collateralized reinsurance and retrocession on a worldwide basis. AlphaCat 2013 deployed its capital through transactions entered into by AlphaCat Reinsurance Ltd. ("AlphaCat Re") and the Company's investment in AlphaCat 2013 has been treated as an equity method investment. | ||||||||||||||||||||||||||||
AlphaCat 2013 is now considered "off-risk" as the risk periods for all risk-linked instruments have expired. As a result, partial returns of investment have been made to the investors of AlphaCat 2013. The Company's portion of the returns made during the years ended December 31, 2014 and 2013 are included in the tables below. | ||||||||||||||||||||||||||||
AlphaCat 2014, Ltd. | ||||||||||||||||||||||||||||
On December 20, 2013, the Company joined with other investors in capitalizing AlphaCat 2014, Ltd. ("AlphaCat 2014"), an entity formed for the purpose of investing in collateralized reinsurance and retrocessional contracts for the January 1, 2014 renewal season. AlphaCat 2014 deploys its capital through transactions entered into by AlphaCat Re and the Company's investment in AlphaCat 2014 has been treated as an equity method investment. | ||||||||||||||||||||||||||||
AlphaCat 2015, Ltd. | ||||||||||||||||||||||||||||
On December 29, 2014, the Company joined with other investors in capitalizing AlphaCat 2015, Ltd. ("AlphaCat 2015"), an entity formed for the purpose of investing in collateralized reinsurance and retrocessional contracts for the January 1, 2015 renewal season. AlphaCat 2015 deploys its capital through transactions entered into by AlphaCat Re and the Company's investment in AlphaCat 2015 has been treated as an equity method investment. | ||||||||||||||||||||||||||||
AlphaCat ILS funds | ||||||||||||||||||||||||||||
The AlphaCat ILS funds invest in instruments with returns linked to property catastrophe reinsurance, retrocession and insurance linked securities ("ILS") contracts. AlphaCat ILS funds primarily deploy their capital through the AlphaCat Master Fund Ltd. (the "AlphaCat Master Fund") and AlphaCat Re. All of the funds are variable interest entities, with one being consolidated by the Company as the primary beneficiary and the remaining funds being accounted for as equity method investments because the Company holds an equity interest of less than 50% and has significant influence. One of these funds had been consolidated by the Company as the primary beneficiary from its formation through to December 31, 2013. However, on January 1, 2014 the fund received $35,000 in additional third party subscriptions, resulting in a reduction of the Company’s equity interest below 50%. Since the Company retained significant influence, this fund was deconsolidated and accounted for as an equity method investment from January 1, 2014. The fair value of the retained interest, based on the fair value of the underlying instruments in AlphaCat Master Fund and AlphaCat Re, amounted to $113,455 as at January 1, 2014. The deconsolidation resulted in a gain of $1,372 which is included in the Consolidated Statements of Comprehensive Income as other insurance related income for the year ended December 31, 2014. The Company's maximum exposure to any of the funds is the amount of capital invested at any given time. | ||||||||||||||||||||||||||||
AlphaCat Master Fund Ltd. and AlphaCat Reinsurance Ltd. | ||||||||||||||||||||||||||||
The Company utilizes AlphaCat Master Fund and AlphaCat Re for the purpose of investing in capital market products and writing collateralized reinsurance, respectively, on behalf of certain entities within the AlphaCat operating segment. AlphaCat Master Fund and AlphaCat Re are market facing entities which enter into transactions on behalf of AlphaCat 2013, AlphaCat 2014, AlphaCat 2015 and the AlphaCat ILS funds. The Company owns all of the voting equity interest in AlphaCat Master Fund and AlphaCat Re and, as a result, their financial statements are included in the Consolidated Financial Statements of the Company. | ||||||||||||||||||||||||||||
BetaCat ILS funds | ||||||||||||||||||||||||||||
The BetaCat ILS funds invest exclusively in catastrophe bonds (principal-at-risk variable rate notes and other event-linked securities, being referred to collectively as “Cat Bonds”) focused on property and casualty risk issued under Rule 144A of the Securities Act of 1933, following a passive buy-and-hold investment strategy. One of the funds is a variable interest entity and is consolidated by the Company as the primary beneficiary. The remaining fund is consolidated by the Company as it owns all of the voting equity interest. The Company's maximum exposure to either of the funds is the amount of capital invested at any given time. As at December 31, 2014, no third party subscriptions had been received. | ||||||||||||||||||||||||||||
The following tables present a reconciliation of the beginning and ending investment in operating affiliates for the years ended December 31, 2014 and 2013: | ||||||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||||||
AlphaCat Re 2011 | AlphaCat Re 2012 | AlphaCat 2013 | AlphaCat 2014 | AlphaCat 2015 | AlphaCat ILS funds | Total | ||||||||||||||||||||||
As at December 31, 2013 | $ | 9,809 | $ | 1,313 | $ | 51,744 | $ | 21,982 | $ | — | $ | 21,895 | $ | 106,743 | ||||||||||||||
Purchase of shares | — | — | — | — | 25,600 | 12,000 | 37,600 | |||||||||||||||||||||
Gain on redemption of shares | — | — | — | — | — | (5,077 | ) | (5,077 | ) | |||||||||||||||||||
Return of investment | (5,825 | ) | (1,516 | ) | (52,762 | ) | — | — | (12,364 | ) | (72,467 | ) | ||||||||||||||||
Fair value of retained interest on deconsolidation of AlphaCat ILS fund | — | — | — | — | — | 113,455 | 113,455 | |||||||||||||||||||||
Income from operating affiliates | 622 | 938 | 2,086 | 6,103 | — | 7,974 | 17,723 | |||||||||||||||||||||
As at December 31, 2014 | $ | 4,606 | $ | 735 | $ | 1,068 | $ | 28,085 | $ | 25,600 | $ | 137,883 | $ | 197,977 | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
AlphaCat Re 2011 | AlphaCat Re 2012 | AlphaCat 2013 | AlphaCat 2014 | AlphaCat ILS fund | Total | |||||||||||||||||||||||
As at December 31, 2012 | $ | 62,792 | $ | 29,319 | $ | 45,000 | $ | — | $ | 20,000 | $ | 157,111 | ||||||||||||||||
Purchase of shares | — | — | — | 22,000 | — | 22,000 | ||||||||||||||||||||||
Return of investment | (54,914 | ) | (31,743 | ) | — | — | — | (86,657 | ) | |||||||||||||||||||
Income (loss) from operating affiliates | 1,931 | 3,737 | 6,744 | (18 | ) | 1,895 | 14,289 | |||||||||||||||||||||
As at December 31, 2013 | $ | 9,809 | $ | 1,313 | $ | 51,744 | $ | 21,982 | $ | 21,895 | $ | 106,743 | ||||||||||||||||
The following table presents the Company's investments in AlphaCat Re 2011, AlphaCat Re 2012, AlphaCat 2013, AlphaCat 2014, AlphaCat 2015 and the AlphaCat ILS funds in the Consolidated Financial Statements as at December 31, 2014: | ||||||||||||||||||||||||||||
Investment in operating affiliates | ||||||||||||||||||||||||||||
Cost | Voting ownership % | Equity ownership % | Carrying value | |||||||||||||||||||||||||
AlphaCat Re 2011 | $ | 4,606 | 43.7 | % | 22.3 | % | $ | 4,606 | ||||||||||||||||||||
AlphaCat Re 2012 | 735 | 49 | % | 37.9 | % | 735 | ||||||||||||||||||||||
AlphaCat 2013 | 1,068 | 40.9 | % | 19.7 | % | 1,068 | ||||||||||||||||||||||
AlphaCat 2014 | 22,000 | 42.3 | % | 19.6 | % | 28,085 | ||||||||||||||||||||||
AlphaCat 2015 | 25,600 | 40 | % | 20 | % | 25,600 | ||||||||||||||||||||||
AlphaCat ILS funds | 133,091 | n/a | (a) | 137,883 | ||||||||||||||||||||||||
Total | $ | 187,100 | $ | 197,977 | ||||||||||||||||||||||||
(a) | Equity ownership in the funds was 7.9%, 39.7% and 9.1%, respectively as at December 31, 2014. | |||||||||||||||||||||||||||
The following table presents the Company's investments in AlphaCat Re 2011, AlphaCat Re 2012, AlphaCat 2013, AlphaCat 2014 and the AlphaCat ILS fund in the Consolidated Financial Statements as at December 31, 2013: | ||||||||||||||||||||||||||||
Investment in operating affiliates | ||||||||||||||||||||||||||||
Investment at cost | Voting ownership % | Equity ownership % | Share of net asset value | |||||||||||||||||||||||||
AlphaCat Re 2011 | $ | 9,882 | 43.7 | % | 22.3 | % | $ | 9,809 | ||||||||||||||||||||
AlphaCat Re 2012 | 654 | 49 | % | 37.9 | % | 1,313 | ||||||||||||||||||||||
AlphaCat 2013 | 45,000 | 40.9 | % | 19.7 | % | 51,744 | ||||||||||||||||||||||
AlphaCat 2014 | 22,000 | 42.3 | % | 19.6 | % | 21,982 | ||||||||||||||||||||||
AlphaCat ILS fund | 20,000 | n/a | 9.1 | % | 21,895 | |||||||||||||||||||||||
Total | $ | 97,536 | $ | 106,743 | ||||||||||||||||||||||||
The following table presents certain summarized financial information of the AlphaCat entities as at December 31, 2014 and for the year then ended: | ||||||||||||||||||||||||||||
Combined investees summarized financial data | ||||||||||||||||||||||||||||
Total assets | Total liabilities | Total revenue | Net income | |||||||||||||||||||||||||
AlphaCat Re 2011 | $ | 20,469 | $ | 7,931 | $ | 3 | $ | 2,794 | ||||||||||||||||||||
AlphaCat Re 2012 | $ | 3,098 | $ | 1,136 | $ | — | $ | 2,477 | ||||||||||||||||||||
AlphaCat 2013 | $ | 5,490 | $ | 65 | $ | 14,221 | $ | 10,595 | ||||||||||||||||||||
AlphaCat 2014 | $ | 193,702 | $ | 4,102 | $ | 45,333 | $ | 31,070 | ||||||||||||||||||||
AlphaCat 2015 | $ | 142,843 | $ | — | $ | — | $ | — | ||||||||||||||||||||
AlphaCat ILS funds (a) | $ | 1,026,222 | $ | 175,376 | $ | 65,320 | $ | 54,421 | ||||||||||||||||||||
BetaCat ILS funds | 22,010 | 61 | 32 | (51 | ) | |||||||||||||||||||||||
(a) | AlphaCat ILS funds information includes all funds, including those where the Company is not the primary beneficiary. | |||||||||||||||||||||||||||
(c) | Notes payable and (income) attributable to operating affiliates | |||||||||||||||||||||||||||
Notes are issued during the course of a year by AlphaCat Master Fund and AlphaCat Re to AlphaCat 2013, AlphaCat 2014, AlphaCat 2015 and the AlphaCat ILS funds (collectively the "feeder funds") in order to fund the purchase of capital market products and to write collateralized reinsurance on their behalf. The underlying capital market products and collateralized reinsurance typically have at least a twelve month duration; however, they do not have a stated maturity date. Since repayment is dependent on the settlement of the underlying transactions, the notes are subsequently redeemed as the underlying transactions are settled. The Company’s investments in the feeder funds, together with investments made by third parties, are provided as consideration for these notes to AlphaCat Master Fund and AlphaCat Re, which are consolidated in the Company’s Consolidated Financial Statements. The effective economic interest in AlphaCat Master Fund and AlphaCat Re that results from these transactions is represented on the Consolidated Balance Sheet as notes payable to operating affiliates. The subsequent income or loss generated by the relevant capital market products or collateralized reinsurance is transferred to the operating affiliates as (income) loss attributable to operating affiliate investors in the Company’s Consolidated Statements of Comprehensive Income. The notes do not have any principal amount, since the final amount payable is dependent on the income or loss. To the extent that the (income) loss attributable to operating affiliate investors has not been returned to investors, it is included in accounts payable and accrued expenses in the Consolidated Balance Sheets. | ||||||||||||||||||||||||||||
The following tables present a reconciliation of the beginning and ending notes payable to operating affiliates for the year ended December 31, 2014 and 2013: | ||||||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||||||
AlphaCat 2013 | AlphaCat 2014 | AlphaCat ILS funds | Total | |||||||||||||||||||||||||
As at December 31, 2013 | $ | 223,809 | $ | — | $ | 215,463 | $ | 439,272 | ||||||||||||||||||||
Notes payable to operating affiliates recognized on deconsolidation of AlphaCat ILS fund | — | — | 178,837 | 178,837 | ||||||||||||||||||||||||
Issuance of notes payable to operating affiliates | — | 157,914 | 522,113 | 680,027 | ||||||||||||||||||||||||
Redemption of notes payable to operating affiliates | (223,512 | ) | — | (393,556 | ) | (617,068 | ) | |||||||||||||||||||||
Foreign exchange gains | (297 | ) | (530 | ) | (8,776 | ) | (9,603 | ) | ||||||||||||||||||||
As at December 31, 2014 | $ | — | $ | 157,384 | $ | 514,081 | $ | 671,465 | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
AlphaCat 2013 | AlphaCat ILS funds | Total | ||||||||||||||||||||||||||
As at December 31, 2012 | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Issuance of notes payable to operating affiliates | 223,082 | 218,044 | 441,126 | |||||||||||||||||||||||||
Redemption of notes payable to operating affiliates | — | (3,553 | ) | (3,553 | ) | |||||||||||||||||||||||
Foreign exchange losses | 727 | 972 | 1,699 | |||||||||||||||||||||||||
As at December 31, 2013 | $ | 223,809 | $ | 215,463 | $ | 439,272 | ||||||||||||||||||||||
The portion of notes payable to operating affiliates that were due to the Company, as an investor in the affiliates, and third party investors as at December 31, 2014 amounted to $148,264 and $523,201, respectively (December 31, 2013: $63,654 and $375,618). | ||||||||||||||||||||||||||||
The following table presents the (income) attributable to operating affiliate investors for the year ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
AlphaCat 2013 | $ | (14,577 | ) | $ | (47,329 | ) | $ | — | ||||||||||||||||||||
AlphaCat 2014 | (46,100 | ) | — | — | ||||||||||||||||||||||||
AlphaCat ILS funds | (48,722 | ) | (21,434 | ) | — | |||||||||||||||||||||||
(Income) attributable to operating affiliate investors | $ | (109,399 | ) | $ | (68,763 | ) | $ | — | ||||||||||||||||||||
The portion of income attributable to operating affiliate investors that was due to the Company, as an investor in the affiliates, and third party investors for the year ended December 31, 2014 amounted to $21,756 and $87,643, respectively (2013: $11,437 and $57,326). |
Noncontrolling_interest
Noncontrolling interest | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||
Noncontrolling interest | Noncontrolling interest | |||||||||||
On April 2, 2012, the Company joined with other investors in capitalizing PaCRe Ltd. ("PaCRe"), a Class 4 Bermuda reinsurer formed for the purpose of writing high excess property catastrophe reinsurance. The Company has an equity interest of 10% and the remaining 90% interest is held by third party investors. The Company has a majority voting equity interest in PaCRe and as a result, the financial statements of PaCRe are included in the Consolidated Financial Statements of the Company. The portion of PaCRe’s earnings attributable to third party investors is recorded in the Consolidated Statements of Comprehensive Income as net (income) loss attributable to noncontrolling interest. PaCRe's shareholder rights do not include redemption features within the control of the third party shareholders. The third party equity is recorded in the Company’s Consolidated Balance Sheets as noncontrolling interest. | ||||||||||||
The portion of earnings from the one consolidated AlphaCat ILS fund attributable to third party investors is recorded in the Consolidated Statements of Comprehensive Income as net (income) loss attributable to noncontrolling interest. The AlphaCat ILS funds have rights that enable shareholders, subject to certain limitations, to redeem their shares. The third party equity is therefore recorded in the Company’s Consolidated Balance Sheets as redeemable noncontrolling interest. When and if a redemption notice is received, the fair value of the redemption is reclassified to a liability. | ||||||||||||
The following table presents a reconciliation of the beginning and ending balances of redeemable noncontrolling interest and noncontrolling interest for the years ended December 31, 2014 and 2013: | ||||||||||||
Year Ended December 31, 2014 | ||||||||||||
Redeemable noncontrolling interest | Noncontrolling interest | Total | ||||||||||
As at December 31, 2013 | $ | 86,512 | $ | 497,657 | $ | 584,169 | ||||||
Issuance of shares | 68,200 | — | 68,200 | |||||||||
Income (loss) attributable to noncontrolling interest | 3,598 | (39,062 | ) | (35,464 | ) | |||||||
Adjustment to noncontrolling interest as a result of deconsolidation | (78,354 | ) | — | (78,354 | ) | |||||||
As at December 31, 2014 | $ | 79,956 | $ | 458,595 | $ | 538,551 | ||||||
Year Ended December 31, 2013 | ||||||||||||
Redeemable noncontrolling interest | Noncontrolling interest | Total | ||||||||||
As at December 31, 2012 | $ | — | $ | 434,280 | $ | 434,280 | ||||||
Issuance of shares | 92,190 | 58,500 | 150,690 | |||||||||
Income attributable to noncontrolling interest | 4,818 | 4,877 | 9,695 | |||||||||
Redemption of shares | (10,496 | ) | — | (10,496 | ) | |||||||
As at December 31, 2013 | $ | 86,512 | $ | 497,657 | $ | 584,169 | ||||||
Derivative_instruments
Derivative instruments | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||
Derivative instruments | Derivative instruments | ||||||||||||||||||||||||
The Company enters into derivative instruments for risk management purposes, specifically to hedge unmatched foreign currency exposures and interest rate exposures. As at December 31, 2014, the Company held foreign currency forward contracts to mitigate the risk of fluctuations in the U.S. dollar against a number of foreign currencies. As at December 31, 2014, the Company held two interest rate swaps to fix the payment of interest on the Company's 2006 and 2007 Junior Subordinated Deferrable Debentures, as well as three interest rate swaps and one cross-currency interest rate swap to fix the payment of interest and mitigate the foreign exchange rate impact on Flagstone's 2006 and 2007 Junior Subordinated Deferrable Debentures. | |||||||||||||||||||||||||
As at December 31, 2014, the Company held one foreign currency forward contract to mitigate the risk of fluctuations in the U.S. dollar against the Euro that was not designated as a hedging instrument. | |||||||||||||||||||||||||
The following table summarizes information on the classification and amount of the fair value of derivatives not designated as hedging instruments on the Consolidated Balance Sheets at December 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||
As at December 31, 2014 | As at December 31, 2013 | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | |||||||||||||||||||
Foreign currency forward contracts | $ | 26,755 | $ | 1,685 | $ | — | $ | — | $ | — | $ | — | |||||||||||||
(a) | Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses respectively on the Consolidated Balance Sheets. The total impact on earnings during the year ended December 31, 2014, recognized in income within other insurance related income and other income, relating to the foreign currency forward contract that was not designated as a hedging instrument was $1,685. | ||||||||||||||||||||||||
The following table summarizes information on the classification and amount of the fair value of derivatives designated as hedging instruments on the Consolidated Balance Sheets at December 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||
As at December 31, 2014 | As at December 31, 2013 | ||||||||||||||||||||||||
Derivatives designated as hedging instruments: | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | |||||||||||||||||||
Foreign currency forward contracts | $ | 189,026 | $ | 401 | $ | 3,136 | $ | 163,576 | $ | 1,167 | $ | 2,313 | |||||||||||||
Interest rate swap contracts | $ | 552,263 | $ | 25 | $ | 1,169 | $ | 552,263 | $ | — | $ | 911 | |||||||||||||
(a) | Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses respectively on the Consolidated Balance Sheets. | ||||||||||||||||||||||||
(a) | Classification within the fair value hierarchy | ||||||||||||||||||||||||
As described in Note 4: "Fair value measurements" under U.S. GAAP, a company must determine the appropriate level in the fair value hierarchy for each fair value measurement. The assumptions used within the valuation of the Company's derivative instruments are observable in the marketplace, can be derived from observable data or are supported by observable levels at which other similar transactions are executed in the marketplace. Accordingly, these derivatives were classified within Level 2 of the fair value hierarchy. | |||||||||||||||||||||||||
(b) | Derivative instruments designated as a fair value hedge | ||||||||||||||||||||||||
The Company designates its foreign currency derivative instruments as fair value hedges and formally and contemporaneously documents all relationships between the derivative instruments and hedged items and links the derivative instruments to specific assets and liabilities. The Company assesses the effectiveness of the hedges, both at inception and on an on-going basis and determines whether the hedges are highly effective in offsetting changes in fair value of the linked hedged items. | |||||||||||||||||||||||||
The following table provides the total impact on earnings, recognized in income within foreign exchange (losses) gains, relating to the derivative instruments formally designated as fair value hedges along with the impact of the related hedged items for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
Foreign currency forward contracts | December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Amount of (loss) gain recognized in income on derivative | $ | (11,789 | ) | $ | 1,947 | $ | 1,017 | ||||||||||||||||||
Amount of gain (loss) on hedged item recognized in income attributable to risk being hedged | $ | 11,789 | $ | (1,947 | ) | $ | (912 | ) | |||||||||||||||||
Amount of gain recognized in income on derivative (ineffective portion) | $ | — | $ | — | $ | 105 | |||||||||||||||||||
(c) | Derivative instruments designated as a cash flow hedge | ||||||||||||||||||||||||
The Company designates its interest rate derivative instruments as cash flow hedges and formally and contemporaneously documents all relationships between the hedging instruments and hedged items and links the derivative instruments to specific assets and liabilities. The Company assesses the effectiveness of the hedges, both at inception and on an on-going basis and determines whether the hedges are highly effective in offsetting changes in fair value of the linked hedged items. The Company currently applies the long haul method when assessing the hedge's effectiveness. | |||||||||||||||||||||||||
The following table provides the total impact on other comprehensive income (loss) and earnings relating to the derivative instruments formally designated as cash flow hedges along with the impact of the related hedged items for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
Interest rate swap contracts | December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Amount of effective portion recognized in other comprehensive income | $ | 13,302 | $ | 11,107 | $ | 1,588 | |||||||||||||||||||
Amount of effective portion subsequently reclassified to earnings | $ | (13,074 | ) | $ | (11,107 | ) | $ | (1,588 | ) | ||||||||||||||||
Amount of ineffective portion excluded from effectiveness testing | $ | 228 | $ | — | $ | — | |||||||||||||||||||
The above balances relate to interest payments and have therefore been classified as finance expenses in the Consolidated Statements of Comprehensive Income. | |||||||||||||||||||||||||
(d) | Balance sheet offsetting | ||||||||||||||||||||||||
There was no balance sheet offsetting activity as at December 31, 2014 or December 31, 2013. | |||||||||||||||||||||||||
The Company currently provides cash collateral as security for interest rate swap contracts. The Company does not provide cash collateral or financial instruments as security for foreign currency forward contracts. Our derivative instruments are generally traded under International Swaps and Derivatives Association master netting agreements, which establish terms that apply to all transactions. On a periodic basis, the amounts receivable from or payable to the counterparties are settled in cash. | |||||||||||||||||||||||||
The Company has not elected to settle multiple transactions with an individual counterparty on a net basis. |
Premiums_receivable
Premiums receivable | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Premiums Receivable Disclosure [Abstract] | ||||||||||||
Premiums receivable | Premiums receivable | |||||||||||
Premiums receivable are composed of premiums in the course of collection, net of commissions and brokerage, and premiums accrued but unbilled, net of commissions and brokerage. It is common practice in the insurance and reinsurance industry for premiums to be paid on an installment basis, therefore significant amounts will be considered unbilled and will not become due until a future date, which is typically no later than expiration of the underlying coverage period. The following is a breakdown of the components of premiums receivable at December 31, 2014 and 2013: | ||||||||||||
Premiums | Premiums | Total | ||||||||||
in course | accrued | |||||||||||
of collection | but unbilled | |||||||||||
Balance as at December 31, 2013 | $ | 73,702 | $ | 623,531 | $ | 697,233 | ||||||
Change during 2014 | 11,347 | (933 | ) | 10,414 | ||||||||
Balance as at December 31, 2014 | $ | 85,049 | $ | 622,598 | $ | 707,647 | ||||||
Balance as at December 31, 2012 | $ | 214,891 | $ | 587,268 | $ | 802,159 | ||||||
Change during 2013 | (141,189 | ) | 36,263 | (104,926 | ) | |||||||
Balance as at December 31, 2013 | $ | 73,702 | $ | 623,531 | $ | 697,233 | ||||||
Reserve_for_losses_and_loss_ex
Reserve for losses and loss expenses | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||||||||||||||||||||
Reserve for losses and loss expenses | Reserve for losses and loss expenses | |||||||||||||||||||
Reserves for losses and loss expenses are based in part upon the estimation of case reserves from broker, insured and ceding company reported data. The Company also uses statistical and actuarial methods to estimate ultimate expected losses and loss expenses, from which incurred but not reported losses can be calculated. The period of time from the occurrence of a loss to the reporting of a loss to the Company and to the settlement of the Company's liability may be several months or years. During this period, additional facts and trends may be revealed. As these factors become apparent, reserves will be adjusted, sometimes requiring an increase or decrease in the overall reserves of the Company, and at other times requiring a reallocation of incurred but not reported reserves to specific case reserves. These estimates are reviewed and adjusted regularly, and such adjustments, if any, are reflected in earnings in the period in which they become known. While management believes that it has made a reasonable estimate of ultimate losses, there can be no assurances that ultimate losses and loss expenses will not exceed this estimate. | ||||||||||||||||||||
The following table represents an analysis of paid and unpaid losses and loss expenses incurred and a reconciliation of the beginning and ending unpaid losses and loss expenses for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||
Years Ended | ||||||||||||||||||||
31-Dec-14 | December 31, | December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Reserve for losses and loss expenses, beginning of year | $ | 3,030,399 | $ | 3,517,573 | $ | 2,631,143 | ||||||||||||||
Losses and loss expenses recoverable | (370,154 | ) | (439,967 | ) | (372,485 | ) | ||||||||||||||
Net reserves for losses and loss expenses, beginning of year | 2,660,245 | 3,077,606 | 2,258,658 | |||||||||||||||||
Net reserves acquired (disposed) | 525,091 | (36,519 | ) | 639,641 | ||||||||||||||||
Increase (decrease) in net reserves for losses and loss expenses in respect of losses occurring in: | ||||||||||||||||||||
Current year | 1,024,256 | 999,380 | 1,174,415 | |||||||||||||||||
Prior years (a) | (252,207 | ) | (205,448 | ) | (174,969 | ) | ||||||||||||||
Total incurred losses and loss expenses (a) | 772,049 | 793,932 | 999,446 | |||||||||||||||||
Less net losses and loss expenses paid in respect of losses occurring in: | ||||||||||||||||||||
Current year | (245,084 | ) | (244,682 | ) | (182,146 | ) | ||||||||||||||
Prior years | (816,823 | ) | (916,796 | ) | (653,874 | ) | ||||||||||||||
Total net paid losses | (1,061,907 | ) | (1,161,478 | ) | (836,020 | ) | ||||||||||||||
Foreign exchange (gain) loss | (38,550 | ) | (13,296 | ) | 15,881 | |||||||||||||||
Net reserve for losses and loss expenses, end of year | 2,856,928 | 2,660,245 | 3,077,606 | |||||||||||||||||
Losses and loss expenses recoverable | 377,466 | 370,154 | 439,967 | |||||||||||||||||
Reserve for losses and loss expenses, end of year | $ | 3,234,394 | $ | 3,030,399 | $ | 3,517,573 | ||||||||||||||
(a) | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||||
Incurred losses and loss expenses comprise: | ||||||||||||||||||||
Years Ended | ||||||||||||||||||||
December 31, 2014 (a) | December 31, | December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Gross losses and loss expenses (a) | $ | 833,860 | $ | 924,986 | $ | 1,192,494 | ||||||||||||||
Reinsurance recoverable | (61,811 | ) | (131,054 | ) | (193,048 | ) | ||||||||||||||
Net incurred losses and loss expenses (a) | $ | 772,049 | $ | 793,932 | $ | 999,446 | ||||||||||||||
(a) | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||||
The December 31, 2014 and 2013 gross reserves balances comprise reserves for reported claims of $1,495,323 and $1,537,881, respectively, and reserves for claims incurred but not reported of $1,739,071 and $1,492,518, respectively. The net favorable development on prior years by segment and line of business is as follows: | ||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
Property | Marine | Specialty | Liability | Total | ||||||||||||||||
Validus Re | $ | (76,064 | ) | $ | (6,830 | ) | $ | (4,706 | ) | $ | — | $ | (87,600 | ) | ||||||
AlphaCat | (12,201 | ) | — | — | — | (12,201 | ) | |||||||||||||
Talbot | (53,779 | ) | (31,397 | ) | (55,990 | ) | — | (141,166 | ) | |||||||||||
Western World (a) | $ | 1,023 | $ | — | $ | — | $ | (12,263 | ) | $ | (11,240 | ) | ||||||||
Net favorable development (a) | $ | (141,021 | ) | $ | (38,227 | ) | $ | (60,696 | ) | $ | (12,263 | ) | $ | (252,207 | ) | |||||
(a) | Upon closing the acquisition, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||||
The Validus Re property lines experienced favorable development primarily due to lower claims emergence on attritional losses and favorable loss development on Hurricane Sandy. The Validus Re marine and specialty lines experienced favorable development primarily due to lower claims emergence on attritional losses. The AlphaCat property lines experienced favorable development primarily due to the release of reserves on one aggregate excess of loss contract. Talbot experienced favorable development across all lines, primarily due to lower than expected claims development on attritional losses. Western World experienced unfavorable development on the property lines and favorable development on the liability lines, primarily due to claims development on attritional losses. | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Property | Marine | Specialty | Total (a) | |||||||||||||||||
Validus Re | $ | (81,610 | ) | $ | 26,705 | $ | (4,353 | ) | $ | (59,258 | ) | |||||||||
Talbot | (45,692 | ) | (46,092 | ) | (54,406 | ) | (146,190 | ) | ||||||||||||
Net favorable development | $ | (127,302 | ) | $ | (19,387 | ) | $ | (58,759 | ) | $ | (205,448 | ) | ||||||||
(a) | AlphaCat has not had any development on prior accident years. | |||||||||||||||||||
The Validus Re property and specialty lines experienced favorable development primarily due to lower claims emergence on attritional losses, although the property lines experienced unfavorable development due to increased estimate of ultimate losses on the New Zealand earthquakes. The Validus Re marine lines experienced unfavorable development primarily due to an increased estimate of ultimate losses on Costa Concordia. Talbot experienced favorable development across all lines, primarily due to lower than expected claims development on attritional losses. | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Property | Marine | Specialty | Total (a) | |||||||||||||||||
Validus Re | $ | (45,733 | ) | $ | (11,298 | ) | $ | (15,530 | ) | $ | (72,561 | ) | ||||||||
Talbot | (26,263 | ) | (40,060 | ) | (36,085 | ) | (102,408 | ) | ||||||||||||
Net favorable development | $ | (71,996 | ) | $ | (51,358 | ) | $ | (51,615 | ) | $ | (174,969 | ) | ||||||||
(a) | AlphaCat has not had any development on prior accident years. | |||||||||||||||||||
The Validus Re property and marine lines experienced favorable development primarily due to a reduction in the loss estimates on attritional losses, partially offset by increases in loss estimates on notable loss events. The Validus Re specialty lines experienced favorable development primarily due to lower than expected claims development on attritional losses. Talbot experienced favorable development across all lines, primarily due to lower than expected development on attritional losses. |
Accounts_payable_and_accrued_e
Accounts payable and accrued expenses | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
Accounts payable and accrued expenses | Accounts payable and accrued expenses | |||||||
The following are the components of accounts payable and accrued expenses: | ||||||||
Years Ended | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued interest on debt | $ | 12,224 | $ | 10,686 | ||||
Subscriptions received in advance on AlphaCat ILS funds | 15,400 | 35,000 | ||||||
Accrued income attributable to operating affiliates | 109,399 | 68,763 | ||||||
Trade and compensation payables | 181,222 | 163,738 | ||||||
Total accounts payable and accrued expenses | $ | 318,245 | $ | 278,187 | ||||
Reinsurance
Reinsurance | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance | Reinsurance | |||||||||||||||||||||||||||||||||||||||||||||||
The Company enters into reinsurance and retrocession agreements in order to mitigate its accumulation of loss, reduce its liability on individual risks, enable it to underwrite policies with higher limits and increase its aggregate capacity. The cession of insurance and reinsurance does not legally discharge the Company from its primary liability for the full amount of the policies, and the Company is required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance or retrocession agreement. Amounts recoverable from reinsurers are estimated in a manner consistent with the underlying liabilities. | ||||||||||||||||||||||||||||||||||||||||||||||||
(a) | Effects of reinsurance on premiums written and earned | |||||||||||||||||||||||||||||||||||||||||||||||
The effects of reinsurance on premiums written and earned for the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Western World | Eliminations | Total | |||||||||||||||||||||||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | |||||||||||||||||||||||||||||||||||||
Direct | $ | — | $ | — | $ | — | $ | — | $ | 617,793 | $ | 576,136 | $ | 65,235 | $ | 80,838 | $ | — | $ | — | $ | 683,028 | $ | 656,974 | ||||||||||||||||||||||||
Assumed | 1,136,910 | 1,127,894 | 135,181 | 135,884 | 483,977 | 508,634 | — | — | (75,810 | ) | (83,168 | ) | 1,680,258 | 1,689,244 | ||||||||||||||||||||||||||||||||||
Ceded | (182,056 | ) | (210,610 | ) | (4,348 | ) | (3,534 | ) | (192,211 | ) | (204,996 | ) | (6,428 | ) | (7,842 | ) | 75,810 | 83,168 | (309,233 | ) | (343,814 | ) | ||||||||||||||||||||||||||
Total | $ | 954,854 | $ | 917,284 | $ | 130,833 | $ | 132,350 | $ | 909,559 | $ | 879,774 | $ | 58,807 | $ | 72,996 | $ | — | $ | — | $ | 2,054,053 | $ | 2,002,404 | ||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | ||||||||||||||||||||||||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | |||||||||||||||||||||||||||||||||||||||
Direct | $ | — | $ | — | $ | — | $ | — | $ | 544,722 | $ | 519,045 | $ | — | $ | — | $ | 544,722 | $ | 519,045 | ||||||||||||||||||||||||||||
Assumed | 1,242,522 | 1,360,735 | 147,009 | 137,939 | 547,168 | 532,069 | (80,315 | ) | (78,833 | ) | 1,856,384 | 1,951,910 | ||||||||||||||||||||||||||||||||||||
Ceded | (226,264 | ) | (226,798 | ) | (525 | ) | (525 | ) | (226,111 | ) | (220,420 | ) | 80,315 | 78,833 | (372,585 | ) | (368,910 | ) | ||||||||||||||||||||||||||||||
Total | $ | 1,016,258 | $ | 1,133,937 | $ | 146,484 | $ | 137,414 | $ | 865,779 | $ | 830,694 | $ | — | $ | — | $ | 2,028,521 | $ | 2,102,045 | ||||||||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | ||||||||||||||||||||||||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | |||||||||||||||||||||||||||||||||||||||
Direct | $ | 1,551 | $ | 364 | $ | — | $ | — | $ | 548,940 | $ | 535,508 | $ | — | $ | — | $ | 550,491 | $ | 535,872 | ||||||||||||||||||||||||||||
Assumed | 1,130,408 | 1,174,681 | 21,603 | 17,666 | 529,696 | 529,544 | (65,758 | ) | (73,934 | ) | 1,615,949 | 1,647,957 | ||||||||||||||||||||||||||||||||||||
Ceded | (144,578 | ) | (151,774 | ) | — | — | (228,686 | ) | (232,773 | ) | 65,758 | 73,934 | (307,506 | ) | (310,613 | ) | ||||||||||||||||||||||||||||||||
Total | $ | 987,381 | $ | 1,023,271 | $ | 21,603 | $ | 17,666 | $ | 849,950 | $ | 832,279 | $ | — | $ | — | $ | 1,858,934 | $ | 1,873,216 | ||||||||||||||||||||||||||||
(b) | Credit risk | |||||||||||||||||||||||||||||||||||||||||||||||
The Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk arising from its exposure to individual reinsurers. The reinsurance program is generally placed with reinsurers whose rating, at the time of placement, was A- or better as rated by Standard & Poor's or the equivalent with other rating agencies. Exposure to a single reinsurer is also controlled with restrictions dependent on rating. At December 31, 2014, 98.0% (December 31, 2013: 96.7%) of reinsurance recoverables (which includes loss reserves recoverable and recoverables on paid losses and $231,129 of total IBNR recoverable (December 31, 2013: $196,840)) were fully collateralized or from reinsurers rated A- or better. | ||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance recoverables by reinsurer are as follows: | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Recoverable | % of Total | Reinsurance Recoverable | % of Total | |||||||||||||||||||||||||||||||||||||||||||||
Top 10 reinsurers | $ | 312,205 | 75.1 | % | $ | 340,938 | 75.7 | % | ||||||||||||||||||||||||||||||||||||||||
Other reinsurers’ balances > $1 million | 94,247 | 22.7 | % | 100,784 | 22.4 | % | ||||||||||||||||||||||||||||||||||||||||||
Other reinsurers’ balances < $1 million | 9,092 | 2.2 | % | 8,512 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 415,544 | 100 | % | $ | 450,234 | 100 | % | ||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||
Top 10 Reinsurers | Rating | Reinsurance Recoverable | % of Total | |||||||||||||||||||||||||||||||||||||||||||||
Swiss Re | AA- | $ | 70,848 | 17 | % | |||||||||||||||||||||||||||||||||||||||||||
Lloyd's Syndicates | A+ | 62,318 | 15 | % | ||||||||||||||||||||||||||||||||||||||||||||
Everest Re | A+ | 51,425 | 12.4 | % | ||||||||||||||||||||||||||||||||||||||||||||
Hannover Re | AA- | 40,927 | 9.8 | % | ||||||||||||||||||||||||||||||||||||||||||||
Fully Collateralized | NR | 23,315 | 5.6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Munich Re | AA- | 19,384 | 4.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Transatlantic Re | A+ | 12,418 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
XL Re | A+ | 11,114 | 2.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Berkshire Hathaway Homestate | AA+ | 10,372 | 2.5 | % | ||||||||||||||||||||||||||||||||||||||||||||
Merrimack Mutual Fire Insurance | A+ | 10,084 | 2.4 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 312,205 | 75.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Top 10 Reinsurers | Rating | Reinsurance Recoverable | % of Total | |||||||||||||||||||||||||||||||||||||||||||||
Lloyd's Syndicates | A+ | $ | 73,398 | 16.3 | % | |||||||||||||||||||||||||||||||||||||||||||
National Indemnity | AA+ | 51,037 | 11.3 | % | ||||||||||||||||||||||||||||||||||||||||||||
Everest Re | A+ | 48,113 | 10.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Hannover Re | AA- | 41,483 | 9.2 | % | ||||||||||||||||||||||||||||||||||||||||||||
Fully Collateralized | NR | 36,683 | 8.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
Third Point Re | A- | 30,428 | 6.8 | % | ||||||||||||||||||||||||||||||||||||||||||||
Swiss Re | AA- | 20,022 | 4.5 | % | ||||||||||||||||||||||||||||||||||||||||||||
Transatlantic Re | A+ | 14,114 | 3.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
XL Re | A+ | 13,300 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
Munich Re | AA- | 12,360 | 2.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 340,938 | 75.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
NR: Not rated | ||||||||||||||||||||||||||||||||||||||||||||||||
At December 31, 2014 and December 31, 2013, the provision for uncollectible reinsurance relating to reinsurance recoverables was $4,755 and $5,794, respectively. To estimate the provision for uncollectible reinsurance, the reinsurance recoverable is first allocated to applicable reinsurers. This determination is based on a process rather than an estimate, although an element of judgment is applied, especially in relation to ceded IBNR. The Company then uses default factors to determine the portion of a reinsurer’s balance deemed to be uncollectible. Default factors require considerable judgment and are determined in part using the current rating, or rating equivalent, of each reinsurer as well as other key considerations and assumptions. |
Share_capital
Share capital | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||
Share capital | Share capital | |||||||||||
(a) | Authorized and issued | |||||||||||
The Company’s authorized share capital is 571,428,571 common shares with a par value of $0.175 per share. The holders of common shares are entitled to receive dividends. Holders of common shares are allocated one vote per share, provided that, if the controlled shares of any shareholder or group of related shareholders constitute more than 9.09 percent of the outstanding common shares of the Company, their voting power will be reduced to 9.09 percent. | ||||||||||||
The Company may from time to time repurchase its securities, including common shares, Junior Subordinated Deferrable Debentures and Senior Notes. On February 5, 2014, the Board of Directors of the Company approved an increase in the Company's common share repurchase authorization to $500,000. This amount was in addition to the $1,774,436 of common shares repurchased by the Company through February 5, 2014 under its previously authorized share repurchase programs. | ||||||||||||
The Company has repurchased approximately 70,045,504 common shares for an aggregate purchase price of $2,231,301 from the inception of its share repurchase program to December 31, 2014. The Company had $43,135 remaining under its authorized share repurchase program as of December 31, 2014. | ||||||||||||
The Company expects the purchases under its share repurchase program to be made from time to time in the open market or in privately negotiated transactions. The timing, form and amount of the share repurchases under the program will depend on a variety of factors, including market conditions, the Company’s capital position relative to internal and rating agency targets, legal requirements and other factors. The repurchase program may be modified, extended or terminated by the Board of Directors at any time. | ||||||||||||
On November 30, 2012, the Company acquired all of the outstanding shares of Flagstone from a group of institutional and other investors. Pursuant to a merger agreement, the Company acquired all of Flagstone's outstanding common shares in exchange for the Company's common shares and cash. The Company issued 14,202,664 common shares, net of 87,725 shares withheld for income taxes, valued at $34.87 per share as partial consideration for the acquisition. In addition, 1,638,875 common shares recorded in treasury are owned by Validus UPS, Ltd., a wholly-owned subsidiary of the Company. As part of the Flagstone Acquisition, warrants to acquire Flagstone shares were converted into 121,942 warrants to acquire the Company's common shares. In accordance with the merger agreement, these warrants had a $62.02 strike price and expired without being exercised. | ||||||||||||
The following table is a summary of the common shares issued and outstanding: | ||||||||||||
Common Shares | ||||||||||||
Common shares issued, December 31, 2013 | 154,488,497 | |||||||||||
Restricted share awards vested, net of shares withheld | 615,659 | |||||||||||
Restricted share units vested, net of shares withheld | 10,265 | |||||||||||
Options exercised | 412,656 | |||||||||||
Direct issuance of common stock | 1,380 | |||||||||||
Performance shares vested, net of shares withheld | 25,767 | |||||||||||
Common shares issued, December 31, 2014 | 155,554,224 | |||||||||||
Treasury shares, December 31, 2014 | (71,684,379 | ) | ||||||||||
Common shares outstanding, December 31, 2014 | 83,869,845 | |||||||||||
Common Shares | ||||||||||||
Common shares issued, December 31, 2012 | 152,698,191 | |||||||||||
Restricted share awards vested, net of shares withheld | 796,838 | |||||||||||
Restricted share units vested, net of shares withheld | 14,381 | |||||||||||
Options exercised | 351,509 | |||||||||||
Warrants exercised | 591,480 | |||||||||||
Direct issuance of common stock | 1,266 | |||||||||||
Performance shares vested, net of shares withheld | 31,897 | |||||||||||
Deferred share units vested, net of shares withheld | 2,935 | |||||||||||
Common shares issued, December 31, 2013 | 154,488,497 | |||||||||||
Treasury shares, December 31, 2013 | (58,444,185 | ) | ||||||||||
Common shares outstanding, December 31, 2013 | 96,044,312 | |||||||||||
Common Shares | ||||||||||||
Common shares issued, December 31, 2011 | 134,503,065 | |||||||||||
Restricted share awards vested, net of shares withheld | 1,572,634 | |||||||||||
Restricted share units vested, net of shares withheld | 15,173 | |||||||||||
Options exercised | 439,065 | |||||||||||
Warrants exercised | 326,715 | |||||||||||
Direct issuance of common stock | 15,841,539 | |||||||||||
Common shares issued, December 31, 2012 | 152,698,191 | |||||||||||
Treasury shares, December 31, 2012 | (44,776,932 | ) | ||||||||||
Common shares outstanding, December 31, 2012 | 107,921,259 | |||||||||||
(b) | Warrants | |||||||||||
The Company had total outstanding warrants as at December 31, 2014 of 5,174,114 (2013: 5,296,056), with each warrant providing the holder with the option to purchase a common share. No further warrants are anticipated to be issued. | ||||||||||||
The warrants may be settled using either the physical settlement or net-share settlement methods. The warrants have been classified as equity instruments, in accordance with U.S. GAAP guidance for “Derivatives and Hedging, Contracts in Entity’s own Equity.” The warrants were measured at fair value and recorded in additional paid-in capital. | ||||||||||||
The fair value of each warrant issued was estimated on the date of grant using the Black-Scholes option-pricing model. The volatility assumption used, of approximately 30.0%, was derived from the historical volatility of the share price of a range of publicly-traded Bermuda reinsurance companies of a similar business nature to the Company. No allowance was made for any potential illiquidity associated with the private trading of the Company’s shares. The other assumptions in the warrant-pricing model were as follows: | ||||||||||||
July 24, | February 3, | December 15, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
Issuance | Issuance | Issuance | ||||||||||
Warrants issued | 256,409 | 8,593 | 8,446,727 | |||||||||
Average strike price | $ | 20 | $ | 17.5 | $ | 17.5 | ||||||
Volatility | 30 | % | 30 | % | 30 | % | ||||||
Risk-free rate | 4.5 | % | 4.5 | % | 4.5 | % | ||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | ||||||
Expected term (years) | 8 | 10 | 10 | |||||||||
Calculated fair value per warrant | $ | 11.28 | $ | 8.89 | $ | 8.89 | ||||||
During the year ended December 31, 2014, no warrants were exercised, while 121,942 warrants related to the Flagstone Acquisition expired without being exercised. During the year ended December 31, 2013, 1,114,416 warrants were exercised which resulted in the issuance of 591,480 common shares. Holders of the outstanding warrants are entitled to exercise the warrant in whole or in part at any time until the expiration date. | ||||||||||||
(c) | Deferred share units | |||||||||||
Under the terms of the Company’s Director Stock Compensation Plan, non-management directors may elect to receive their director retainer fees in deferred share units rather than cash. The number of share units distributed in case of election under the plan is equal to the amount of the annual retainer fee otherwise payable to the director on such payment date divided by 100% of the fair market value of a share on such payment date. Additional deferred share units are issued in lieu of dividends that accrue on these deferred share units. There were no outstanding deferred share units at December 31, 2014 (2013: nil). | ||||||||||||
As of February 16, 2013, John Hendrickson became an employee director. As a result, his 5,039 deferred share units vested and 2,935 common shares were issued to him, net of shares withheld for taxes. | ||||||||||||
(d) | Dividends | |||||||||||
The Company announced four quarterly cash dividends of $0.30 per common share and $0.30 per common share equivalent for which each outstanding warrant is exercisable, during the year ended December 31, 2014 (2013: $0.30). These dividends were paid on March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014 to holders of record on March 14, 2014, June 13, 2014, September 15, 2014 and December 15, 2014, respectively. |
Retirement_and_pension_plans
Retirement and pension plans | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Compensation and Retirement Disclosure [Abstract] | |||||
Retirement and pension plans | Retirement and pension plans | ||||
(a) | Defined benefit plans | ||||
Senior executives and retired selected key employees of Western World participate in non-qualified, unfunded, defined benefit plans. Benefits for these plans are based on final average earnings, social security benefits earned at retirement date and years of service. | |||||
The assumptions used to determine net periodic pension expense for the year ended December 31, 2014 are as follows: | |||||
Year Ended December 31, 2014 | |||||
Discount rate | 3 | % | |||
Increase in compensation levels rate | 5 | % | |||
The assumptions used to determine benefit obligations as at December 31, 2014 are as follows: | |||||
As at December 31, 2014 | |||||
Discount rate | 2.75 | % | |||
Increase in compensation levels rate | 5 | % | |||
The following tables present a reconciliation of the beginning and ending funded status and the net amounts recognized for the defined benefit plans for the year ended December 31, 2014: | |||||
Year Ended December 31, 2014 (a) | |||||
Change in benefit obligation: | |||||
Projected benefit obligation as at October 2, 2014 | $ | 20,885 | |||
Service cost | 295 | ||||
Interest cost | 145 | ||||
Actuarial losses | 1 | ||||
Benefit payments | (24 | ) | |||
Settlements | (4,809 | ) | |||
Projected benefit obligation as at December 31, 2014 | $ | 16,493 | |||
Change in plan assets: | |||||
Fair value of plan assets as at October 2, 2014 | $ | — | |||
Employer contributions | 6,495 | ||||
Benefit payments | (24 | ) | |||
Settlements | (6,471 | ) | |||
Fair value of plan assets as at December 31, 2014 | — | ||||
Funded status as at December 31, 2014 | $ | (16,493 | ) | ||
Current liabilities | $ | (559 | ) | ||
Noncurrent liabilities | (15,934 | ) | |||
Net amount recognized | $ | (16,493 | ) | ||
Amounts recognized in accumulated other comprehensive (loss) income consist of: | |||||
Net loss | $ | 4,505 | |||
Prior service credit | (4 | ) | |||
Net amount recognized | $ | 4,501 | |||
As at December 31, 2014 | |||||
Projected benefit obligation | $ | 16,493 | |||
Accumulated benefit obligation | $ | 11,971 | |||
Fair value of plan assets | $ | — | |||
(a) | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | ||||
The components of net periodic pension expense for the year ended December 31, 2014 are as follows: | |||||
Year Ended December 31, 2014 | |||||
Service cost | $ | 295 | |||
Interest cost | 145 | ||||
Amortization of prior service cost | (1 | ) | |||
Amortization of net loss | 79 | ||||
Net periodic benefit cost | 518 | ||||
Settlement loss | 1,322 | ||||
Net periodic pension expense | $ | 1,840 | |||
Other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income are as follows for the year ended December 31, 2014: | |||||
Year Ended December 31, 2014 | |||||
Net loss | $ | 1,961 | |||
Amortization of loss | (317 | ) | |||
Amortization of prior service cost | 2 | ||||
Settlement loss | (1,322 | ) | |||
Total recognized in other comprehensive (loss) income | $ | 324 | |||
Total recognized in net pension expense and other comprehensive (loss) income (before tax effects) | $ | 2,164 | |||
The estimated amount of net loss and prior service cost expected to be amortized from accumulated other comprehensive (loss) income into net periodic pension expense over the next fiscal year is $2. | |||||
The employer benefit payments/settlements for the year ended December 31, 2014 were $4,834. As at December 31, 2014, the projected benefits are as follows: | |||||
2015 | $ | 559 | |||
2016 | 93 | ||||
2017 | 6,921 | ||||
2018 | 85 | ||||
2019 | 2,160 | ||||
2020-2024 | 5,228 | ||||
Total benefit payments required | $ | 15,046 | |||
(b) | Other pension plans | ||||
The Company provides pension benefits to eligible employees through various plans which are managed externally and sponsored by the Company. The Company’s contributions are expensed as incurred. The Company’s expenses for its defined contribution retirement plans for the years ended December 31, 2014, 2013 and 2012 were $10,606, $7,621 and $9,233, respectively. |
Stock_plans
Stock plans | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
Stock plans | Stock plans | ||||||||||||||||||
(a) | Long Term Incentive Plan and Short Term Incentive Plan | ||||||||||||||||||
The Company’s Amended and Restated 2005 Long Term Incentive Plan (“LTIP”) provides for grants to employees of options, stock appreciation rights (“SARs”), restricted shares, restricted share units, performance shares, dividend equivalents or other share-based awards. In addition, the Company may issue restricted share awards or restricted share units in connection with awards issued under its annual Short Term Incentive Program (“STIP”). The total number of shares reserved for issuance under the LTIP and STIP are 13,126,896 shares of which 903,292 shares are remaining. The LTIP and STIP are administered by the Compensation Committee of the Board of Directors. No SARs have been granted to date. Grant prices are established at the fair market value of the Company’s common shares at the date of grant. | |||||||||||||||||||
i. | Options | ||||||||||||||||||
Options may be exercised for voting common shares upon vesting. Options have a life of 10 years and vest either pro rata or at the end of the required service period from the date of grant. Fair value of the option awards at the date of grant is determined using the Black-Scholes option-pricing model. | |||||||||||||||||||
Expected volatility is based on stock price volatility of comparable publicly-traded companies. The Company used the simplified method consistent with U.S. GAAP authoritative guidance on stock compensation expenses to estimate expected lives for options granted during the period as historical exercise data was not available and the options met the requirement as set out in the guidance. | |||||||||||||||||||
The Company has not granted any stock option awards since September 4, 2009. | |||||||||||||||||||
Share compensation expenses in respect of options of $nil were recorded for the year ended December 31, 2014 (2013: $nil, 2012: $142). The expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period. | |||||||||||||||||||
A modification event was triggered as a result of a $2.00 per share special dividend declared and paid in 2013 (the "Special Dividend"). In accordance with the terms of the LTIP under which the options were issued, an adjustment was required to protect the holders of such stock options from changes in the value of the stock options following the declaration of the 2013 Special Dividend. The modification of the options included a decrease in the exercise price of each stock option and an increase in the number of shares underlying each stock option. The fair value of the options before and after the modification was unchanged. | |||||||||||||||||||
Activity with respect to options for the year ended December 31, 2014 was as follows: | |||||||||||||||||||
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | Total | Company Proceeds Received | |||||||||||||||
Intrinsic Value (a) | |||||||||||||||||||
Options outstanding and exercisable, December 31, 2013 | 1,572,713 | $ | 6.66 | $ | 18.88 | ||||||||||||||
Options exercised | (412,656 | ) | 5.36 | 22.07 | $ | 7,459 | $ | 9,107 | |||||||||||
Options outstanding and exercisable, December 31, 2014 | 1,160,057 | $ | 7.12 | $ | 17.74 | ||||||||||||||
Activity with respect to options for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | Total | Company Proceeds Received | |||||||||||||||
Intrinsic Value (a) | |||||||||||||||||||
Options outstanding and exercisable, December 31, 2012 | 1,823,947 | $ | 6.52 | $ | 20.69 | ||||||||||||||
Options regranted (modified) | 1,833,414 | 6.76 | 19.02 | ||||||||||||||||
Options exercised | (351,509 | ) | 5.94 | 22.91 | $ | 4,963 | $ | 8,052 | |||||||||||
Options cancelled (modified) | (1,733,139 | ) | 6.76 | 20.12 | |||||||||||||||
Options outstanding and exercisable, December 31, 2013 | 1,572,713 | $ | 6.66 | $ | 18.88 | ||||||||||||||
Activity with respect to options for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | Total | Company Proceeds Received | |||||||||||||||
Intrinsic Value (a) | |||||||||||||||||||
Options outstanding and exercisable, December 31, 2011 | 2,263,012 | $ | 6.69 | $ | 20.12 | ||||||||||||||
Options exercised | (439,065 | ) | 7.44 | 17.73 | $ | 6,574 | $ | 7,785 | |||||||||||
Options outstanding and exercisable, December 31, 2012 | 1,823,947 | $ | 6.52 | $ | 20.69 | ||||||||||||||
(a) | The total intrinsic value in the tables above represent the amount by which the market price of the Company's common stock is greater than the option strike price multiplied by the number of options exercised during the year. | ||||||||||||||||||
There were no unamortized share compensation expenses in respect of options since December 31, 2012. The aggregate intrinsic value of the options outstanding and exercisable at December 31, 2014 was $27,573. | |||||||||||||||||||
ii. | Restricted share awards | ||||||||||||||||||
Restricted shares granted under the LTIP and STIP vest either pro rata or at the end of the required service period and contain certain restrictions during the vesting period, relating to, among other things, forfeiture in the event of termination of employment and transferability. Share compensation expenses of $31,335 were recorded for the year ended December 31, 2014 (2013: $27,750; 2012: $25,145). The expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period. | |||||||||||||||||||
Activity with respect to unvested restricted share awards for the year ended December 31, 2014 was as follows: | |||||||||||||||||||
Restricted Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share awards outstanding, December 31, 2013 | 2,684,745 | $ | 33.74 | ||||||||||||||||
Restricted share awards granted | 1,051,348 | 37.81 | |||||||||||||||||
Restricted share awards vested | (797,446 | ) | 31.44 | ||||||||||||||||
Restricted share awards forfeited | (79,936 | ) | 36.09 | ||||||||||||||||
Restricted share awards outstanding, December 31, 2014 | 2,858,711 | $ | 35.81 | ||||||||||||||||
Activity with respect to unvested restricted share awards for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Restricted Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share awards outstanding, December 31, 2012 | 2,170,547 | $ | 29.24 | ||||||||||||||||
Restricted share awards granted | 1,594,672 | 36.07 | |||||||||||||||||
Restricted share awards vested | (969,562 | ) | 28.12 | ||||||||||||||||
Restricted share awards forfeited | (110,912 | ) | 28.34 | ||||||||||||||||
Restricted share awards outstanding, December 31, 2013 | 2,684,745 | $ | 33.74 | ||||||||||||||||
Activity with respect to unvested restricted share awards for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Restricted Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share awards outstanding, December 31, 2011 | 3,003,547 | $ | 25.77 | ||||||||||||||||
Restricted share awards granted | 921,506 | 31.47 | |||||||||||||||||
Restricted share awards vested | (1,719,855 | ) | 24.4 | ||||||||||||||||
Restricted share awards forfeited | (34,651 | ) | 27.85 | ||||||||||||||||
Restricted share awards outstanding, December 31, 2012 | 2,170,547 | $ | 29.24 | ||||||||||||||||
At December 31, 2014, there were $74,670 (2013: $69,219; 2012: $43,952) of total unrecognized share compensation expenses in respect of restricted share awards that are expected to be recognized over a weighted-average period of 2.7 years (2013: 3.2 years; 2012: 2.6 years). | |||||||||||||||||||
iii. | Restricted share units | ||||||||||||||||||
Restricted share units under the LTIP and STIP vest either ratably or at the end of the required service period and contain certain restrictions during the vesting period, relating to, among other things, forfeiture in the event of termination of employment and transferability. Share compensation expenses of $876 were recorded for the year ended December 31, 2014 (2013: $585; 2012: $499). The expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period. | |||||||||||||||||||
Activity with respect to unvested restricted share units for the year ended December 31, 2014 was as follows: | |||||||||||||||||||
Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share units outstanding, December 31, 2013 | 66,518 | $ | 33.74 | ||||||||||||||||
Restricted share units granted | 53,025 | 38.1 | |||||||||||||||||
Restricted share units vested | (18,325 | ) | 30.71 | ||||||||||||||||
Restricted share units issued in lieu of cash dividends | 2,266 | 35 | |||||||||||||||||
Restricted share units outstanding, December 31, 2014 | 103,484 | $ | 36.54 | ||||||||||||||||
Activity with respect to unvested restricted share units for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share units outstanding, December 31, 2012 | 47,238 | $ | 29.61 | ||||||||||||||||
Restricted share units granted | 36,635 | 36.11 | |||||||||||||||||
Restricted share units vested | (21,814 | ) | 28.17 | ||||||||||||||||
Restricted share units issued in lieu of cash dividends | 4,459 | 30.7 | |||||||||||||||||
Restricted share units outstanding, December 31, 2013 | 66,518 | $ | 33.74 | ||||||||||||||||
Activity with respect to unvested restricted share units for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share units outstanding, December 31, 2011 | 53,312 | $ | 27.6 | ||||||||||||||||
Restricted share units granted | 16,633 | 31.77 | |||||||||||||||||
Restricted share units vested | (22,818 | ) | 26.49 | ||||||||||||||||
Restricted share units issued in lieu of cash dividends | 1,504 | 28.66 | |||||||||||||||||
Restricted share units forfeited | (1,393 | ) | 28.57 | ||||||||||||||||
Restricted share units outstanding, December 31, 2012 | 47,238 | $ | 29.61 | ||||||||||||||||
At December 31, 2014, there were $2,774 (2013: $1,678; 2012: $978) of total unrecognized share compensation expenses in respect of restricted share units that are expected to be recognized over a weighted-average period of 3.1 years (2013: 3.4 years; 2012: 2.6 years). | |||||||||||||||||||
iv. | Performance share awards | ||||||||||||||||||
The performance share awards contain a performance based component. The performance component relates to the compounded growth in the Dividend Adjusted Book Value per Diluted Share (“DBVPS”) over a three year period. For performance share awards granted during the period, the grant date is based on the DBVPS at the end of the most recent financial reporting year. The Dividend Adjusted Performance Period End DBVPS will be the DBVPS three years after the grant date DBVPS. The fair value estimate earns over the requisite attribution period and the estimate will be reassessed at the end of each performance period which will reflect any adjustments in the consolidated statements of comprehensive income in the period in which they are determined. | |||||||||||||||||||
Share compensation expenses of $862 were recorded for the year ended December 31, 2014 (2013: ($705); 2012: $923). The share compensation expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period. The negative expense is due to a reversal of expenses on unvested performance share awards based on a review of current and projected performance criteria. | |||||||||||||||||||
Activity with respect to unvested performance share awards for the year ended December 31, 2014 was as follows: | |||||||||||||||||||
Performance Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Performance share awards outstanding, December 31, 2013 | 101,820 | $ | 33.56 | ||||||||||||||||
Performance share awards granted | 52,639 | 37.33 | |||||||||||||||||
Performance share awards vested | (32,746 | ) | 32.62 | ||||||||||||||||
Performance share awards conversion adjustment | (15,344 | ) | 31.38 | ||||||||||||||||
Performance share awards outstanding, December 31, 2014 | 106,369 | $ | 36.03 | ||||||||||||||||
Activity with respect to unvested performance share awards for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Performance Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Performance share awards outstanding, December 31, 2012 | 220,845 | $ | 31.81 | ||||||||||||||||
Performance share awards granted | 38,386 | 36.11 | |||||||||||||||||
Performance share awards vested | (39,094 | ) | 28.7 | ||||||||||||||||
Performance share awards forfeited | (18,701 | ) | 31.05 | ||||||||||||||||
Performance share awards conversion adjustment | (99,616 | ) | 33.05 | ||||||||||||||||
Performance share awards outstanding, December 31, 2013 | 101,820 | $ | 33.56 | ||||||||||||||||
Activity with respect to unvested performance share awards for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Performance Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Performance share awards outstanding, December 31, 2011 | 279,019 | $ | 30.77 | ||||||||||||||||
Performance share awards granted | 41,128 | 31.38 | |||||||||||||||||
Performance share awards forfeited | (99,302 | ) | 28.7 | ||||||||||||||||
Performance share awards outstanding, December 31, 2012 | 220,845 | $ | 31.81 | ||||||||||||||||
At December 31, 2014, there were $2,232 (2013: $1,642; 2012: $3,328) of total unrecognized share compensation expenses in respect of performance share awards that are expected to be recognized over a weighted-average period of 2.1 years (2013: 2.0 years; 2012: 1.7 years). | |||||||||||||||||||
(b) | Total share compensation expenses | ||||||||||||||||||
The breakdown of share compensation expenses by award type was as follows: | |||||||||||||||||||
Years Ended | |||||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, | |||||||||||||||||
2012 | |||||||||||||||||||
Options | $ | — | $ | — | $ | 142 | |||||||||||||
Restricted share awards | 31,335 | 27,750 | 25,145 | ||||||||||||||||
Restricted share units | 876 | 585 | 499 | ||||||||||||||||
Performance share awards | 862 | (705 | ) | 923 | |||||||||||||||
Total | $ | 33,073 | $ | 27,630 | $ | 26,709 | |||||||||||||
In addition, the Company recorded $1,610 of associated tax benefits for the year ended December 31, 2014 (2013: $1,423; 2012: $1,380). The Company also recognized $3,513 of net windfall taxes at December 31, 2014 for share vestings and option exercises from inception to date. |
Debt_and_financing_arrangement
Debt and financing arrangements | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Disclosure [Abstract] | ||||||||||||
Debt and financing arrangements | Debt and financing arrangements | |||||||||||
(a) | Financing structure | |||||||||||
The financing structure at December 31, 2014 was: | ||||||||||||
Commitment | Issued and outstanding (a) | Drawn | ||||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 150,000 | $ | 150,000 | $ | 150,000 | ||||||
2007 Junior Subordinated Deferrable Debentures | 200,000 | 139,800 | 139,800 | |||||||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | 135,727 | 135,727 | 135,727 | |||||||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 113,750 | 113,750 | 113,750 | |||||||||
Total debentures payable | 599,477 | 539,277 | 539,277 | |||||||||
2010 Senior Notes due 2040 | 250,000 | 250,000 | 247,306 | |||||||||
Total debentures and senior notes payable | 849,477 | 789,277 | 786,583 | |||||||||
$400,000 syndicated unsecured letter of credit facility | 400,000 | — | — | |||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 276,455 | — | |||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 15,649 | — | |||||||||
Talbot FAL facility | 25,000 | 25,000 | — | |||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||
AlphaCat Re secured letter of credit facility | 30,000 | 30,000 | — | |||||||||
IPC bi-lateral facility | 40,000 | 15,897 | — | |||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 198,389 | — | |||||||||
Total credit and other facilities | 1,605,000 | 561,684 | — | |||||||||
Total debt and financing arrangements | $ | 2,454,477 | $ | 1,350,961 | $ | 786,583 | ||||||
The financing structure at December 31, 2013 was: | ||||||||||||
Commitment | Issued and outstanding (a) | Drawn | ||||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 150,000 | $ | 150,000 | $ | 150,000 | ||||||
2007 Junior Subordinated Deferrable Debentures | 200,000 | 139,800 | 139,800 | |||||||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | 137,866 | 137,866 | 137,866 | |||||||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 113,750 | 113,750 | 113,750 | |||||||||
Total debentures payable | 601,616 | 541,416 | 541,416 | |||||||||
2010 Senior Notes due 2040 | 250,000 | 250,000 | 247,198 | |||||||||
Total debentures and senior notes payable | 851,616 | 791,416 | 788,614 | |||||||||
$400,000 syndicated unsecured letter of credit facility | 400,000 | — | — | |||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 358,567 | — | |||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 16,726 | — | |||||||||
Talbot FAL facility | 25,000 | 25,000 | — | |||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||
AlphaCat Re secured letter of credit facility | 24,800 | 24,800 | — | |||||||||
IPC bi-lateral facility | 40,000 | 20,177 | — | |||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 305,686 | — | |||||||||
Total credit and other facilities | 1,599,800 | 751,250 | — | |||||||||
Total debt and financing arrangements | $ | 2,451,416 | $ | 1,542,666 | $ | 788,614 | ||||||
(a) | Indicates utilization of commitment amount, not necessarily drawn borrowings. | |||||||||||
(b) | Senior notes and junior subordinated deferrable debentures | |||||||||||
The following table summarizes the key terms of the Company's senior notes and junior subordinated deferrable debentures as at the issuance date for each placement. | ||||||||||||
Description | Issuance date | Commitment | Maturity date | Fixed/Spread | Interest payments due | |||||||
2006 Junior Subordinated Deferrable Debentures | June 15, 2006 | $ | 150,000 | June 15, 2036 | 9.069 | % | (a) | Quarterly | ||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | August 23, 2006 | $ | 135,727 | September 15, 2036 | 3.54 | % | (b) | Quarterly | ||||
2007 Junior Subordinated Deferrable Debentures | June 21, 2007 | $ | 200,000 | June 15, 2037 | 8.48 | % | (a) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | June 8, 2007 | $ | 88,750 | July 30, 2037 | 3 | % | (b) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | September 20, 2007 | $ | 25,000 | September 15, 2037 | 3.1 | % | (b) | Quarterly | ||||
2010 Senior Notes due 2040 | January 26, 2010 | $ | 250,000 | January 26, 2040 | 8.875 | % | (a) | Semi-annually in arrears | ||||
(a) | Fixed interest rate. | |||||||||||
(b) | Variable interest rate is the three-month LIBOR, reset quarterly, plus spread as noted in the table. | |||||||||||
The following table summarizes the key terms of the Company's senior notes and junior subordinated deferrable debentures as at December 31, 2014: | ||||||||||||
Description | Issuance date | Commitment | Maturity date | Fixed/Spread | Interest payments due | |||||||
2006 Junior Subordinated Deferrable Debentures | June 15, 2006 | $ | 150,000 | June 15, 2036 | 5.831 | % | (b) | Quarterly | ||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | August 23, 2006 | $ | 135,727 | September 15, 2036 | 6.463 | % | (b) | Quarterly | ||||
2007 Junior Subordinated Deferrable Debentures | June 21, 2007 | $ | 200,000 | June 15, 2037 | 5.18 | % | (b) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 8-Jun-07 | $ | 88,750 | July 30, 2037 | 5.9 | % | (b) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 20-Sep-07 | $ | 25,000 | September 15, 2037 | 5.983 | % | (b) | Quarterly | ||||
2010 Senior Notes due 2040 | 26-Jan-10 | $ | 250,000 | January 26, 2040 | 8.875 | % | (a) | Semi-annually in arrears | ||||
(a) | Fixed interest rate. | |||||||||||
(b) | Interest rate has been fixed as a result of interest rate swap contracts entered into by the Company. | |||||||||||
Senior Notes | ||||||||||||
The Senior Notes due 2040 (the “2010 Senior Notes”) were part of a registered public offering. The 2010 Senior Notes mature on January 26, 2040. The Company may redeem the notes, in whole at any time, or in part from time to time, at the Company's option on not less than 30 nor more than 60 days’ notice, at a make-whole redemption price as described in “Description of the Notes - Optional Redemption” in the 2010 Senior Notes prospectus supplement. In addition, the Company may redeem the notes, in whole, but not in part, at any time upon the occurrence of certain tax events as described in “Description of the Notes - Redemption for Tax Purposes” in the prospectus supplement. | ||||||||||||
Debt issuance costs were deferred as an asset and are amortized over the life of the 2010 Senior Notes. There were no redemptions made during the years ended December 31, 2014 and 2013. | ||||||||||||
The 2010 Senior Notes are unsecured and unsubordinated obligations of the Company and rank equally in right of payment with all of the Company’s existing and future unsecured and unsubordinated indebtedness. The 2010 Senior Notes will be effectively junior to all of the Company’s future secured debt, to the extent of the value of the collateral securing such debt, and will rank senior to all our existing and future subordinated debt. The 2010 Senior Notes are structurally subordinated to all obligations of the Company’s subsidiaries. | ||||||||||||
Future payments of principal of $250,000 on the 2010 Senior Notes are all expected to be after 2019. | ||||||||||||
Junior subordinated deferrable debentures | ||||||||||||
The Company participated in private placements of junior subordinated deferrable interest debentures due 2036 and 2037 (respectively, the “2006 Junior Subordinated Deferrable Debentures” and “2007 Junior Subordinated Deferrable Debentures”). | ||||||||||||
Debt issuance costs for the 2006 and 2007 Junior Subordinated Deferrable Debentures were deferred as an asset and were amortized to income over the five year optional redemption periods. They are redeemable at the Company's option at par. There were no redemptions made during the years ended December 31, 2014 and 2013. | ||||||||||||
As part of the acquisition of Flagstone, the Company assumed junior subordinated deferrable debentures due 2036 and 2037 (respectively, the “Flagstone 2006 Junior Subordinated Deferrable Debentures” and “Flagstone 2007 Junior Subordinated Deferrable Debentures”). These debentures are redeemable quarterly at par. There were no redemptions made during the years ended December 31, 2014 and 2013. | ||||||||||||
Future payments of principal of $539,277 on the debentures discussed above are all expected to be after 2019. | ||||||||||||
(c) | Credit facilities | |||||||||||
i. | $400,000 syndicated unsecured letter of credit facility and $525,000 syndicated secured letter of credit facility | |||||||||||
On March 9, 2012, the Company entered into a $400,000 four-year unsecured credit facility with various counter parties as co-documentation agents and the lenders party thereto, which provides for letter of credit and revolving credit availability for the Company (the “Four Year Unsecured Facility”) (the full $400,000 of which is available for letters of credit and/or revolving loans). The Four Year Unsecured Facility was provided by a syndicate of commercial banks. Letters of credit under the Four Year Unsecured Facility are available to support obligations in connection with the insurance business of the Company and its subsidiaries. Loans under the Four Year Unsecured Facility are available for the general corporate and working capital purposes of the Company. The Company may request that existing lenders under the Four Year Unsecured Facility or prospective additional lenders agree to make available additional commitments from time to time so long as the aggregate commitments under the Four Year Unsecured Facility do not exceed $500,000. | ||||||||||||
Also on March 9, 2012, the Company entered into a $525,000 four-year secured credit facility, with the same parties, which provides for letter of credit availability for the Company (the “Four Year Secured Facility” and together with the Four Year Unsecured Facility, the “Credit Facilities”). The Four Year Secured Facility was also provided by a syndicate of commercial banks. Letters of credit under the Four Year Secured Facility will be available to support obligations in connection with the insurance business of the Company. The Company may request that existing lenders under the Four Year Secured Facility or prospective additional lenders agree to make available additional commitments from time to time so long as the aggregate commitments under the Four Year Secured Facility do not exceed $700,000. The obligations of the Company under the Four Year Secured Facility are secured by cash and securities deposited into cash collateral accounts from time to time with The Bank of New York Mellon. | ||||||||||||
As of December 31, 2014, there were $276,455 in outstanding letters of credit under the Four Year Secured Facility (December 31, 2013: $358,567) and $nil (2013: $nil) outstanding under the Four Year Unsecured Facility. | ||||||||||||
The Credit Facilities contain covenants that include, among other things (i) the requirement that the Company initially maintain a minimum level of consolidated net worth of at least $2,600,000 and, commencing with the end of the fiscal quarter ending March 31, 2012, to be increased quarterly by an amount equal to 50.0% of the Company’s consolidated net income (if positive) for such quarter plus 50.0% of the aggregate increases in the consolidated shareholders’ equity of the Company during such fiscal quarter by reason of the issuance and sale of common equity interests of the Company, including upon any conversion of debt securities of the Company into such equity interests, (ii) the requirement that the Company maintain at all times a consolidated total debt to consolidated total capital ratio not greater than 0.35:1.00, and (iii) the requirement that Validus Reinsurance, Ltd. and any other material insurance subsidiaries maintain a financial strength rating by A.M. Best of not less than “B++” (Fair). In addition, the Credit Facilities contain customary negative covenants applicable to the Company, including limitations on the ability to pay dividends and other payments in respect of equity interests at any time that the Company is otherwise in default with respect to certain provisions under the respective Credit Facilities, limitations on the ability to incur liens, sell assets, merge or consolidate with others, enter into transactions with affiliates, and limitations on the ability of its subsidiaries to incur indebtedness. The Credit Facilities also contain customary affirmative covenants, representations and warranties and events of default for credit facilities of its type. As of December 31, 2014, and throughout the reporting periods presented, the Company was in compliance with all covenants and restrictions under the Credit Facilities. | ||||||||||||
ii. | $25,000 Talbot FAL facility | |||||||||||
On November 19, 2013, Validus Holdings, Ltd. (“Validus Holdings”), as Guarantor, and its wholly-owned subsidiary, Talbot Holdings Ltd. (“Talbot Holdings”), as Borrower, entered into an Amendment and Restatement Agreement relating to its $25,000 Funds-at-Lloyd’s Standby Letter of Credit Facility (the “Facility”) which amends the Facility to support underwriting capacity provided to Talbot 2002 Underwriting Ltd through Syndicate 1183 at Lloyd’s of London for the 2014, 2015 and prior underwriting years of account (the “Restated Facility”). The Restated Facility was provided and arranged by Lloyds Bank plc and INGBank N.V., London Branch. The Restated Facility provides for the issuance of up to $25,000 (denominated in US Dollars or Pound Sterling) of secured letters of credit to be issued for the benefit of Lloyd’s of London. The existing $25,000 secured letter of credit will be extended to provide for an extended termination date covering the 2014, 2015 and prior underwriting years of account under the Restated Facility. | ||||||||||||
The Restated Facility contains affirmative covenants that include, among other things, (i) the requirement that Validus Holdings and its subsidiaries initially maintain a minimum level of consolidated net worth of at least $3,225,727, and commencing with the fiscal quarter ending September 30, 2013, to be increased quarterly by an amount equal to 50% of our consolidated net income (if positive) for such quarter plus 50% of the aggregate increases in our consolidated shareholder’s equity interests by reason of issuance and sale of Validus Holdings’ common equity interests including upon any conversion of Validus Holdings’ debt securities into equity interests during such quarter and (ii) the requirement that Validus Holdings and its subsidiaries maintain at all times a consolidated total debt to consolidated total capitalization ratio not greater than 0.35:1.00. The Restated Facility defines net worth to include preferred and preference securities and “hybrid” securities (which includes Validus Holdings’ and its Flagstone subsidiaries’ Junior Subordinated Deferrable Debentures). The Restated Facility also requires that Talbot Holdings maintain at least $300,000 of its own Funds at Lloyd’s, and to obtain a letter of comfort from Lloyd’s of London confirming that Lloyd’s of London will take into account a requested order of drawdown to drawdown Talbot Holdings’ own Funds at Lloyd’s ahead of letters of credit issued under the Facility. | ||||||||||||
The Restated Facility also contains restrictions on Validus Holdings’ ability to pay dividends and other payments in respect of equity interests at any time that it is otherwise in default under the Facility (with certain exceptions for dividends in respect of preferred securities and hybrid securities, which are only limited during the continuance of certain specified defaults), incur debt at its subsidiaries level, transact with affiliates, incur liens, sell assets and merge or consolidate with others and other restrictions customary for transactions of this type, in each case subject to agreed exceptions. | ||||||||||||
Secured letter of credit availability under the Restated Facility is subject to a borrowing base limitation comprised of (a) the aggregate amount of cash and eligible securities owned by Validus Reinsurance, Ltd. and placed in a collateral account subject to a customary account control agreement in favor of the lenders and agents under the Restated Facility multiplied by (b) an agreed upon advance rate applicable for each category of cash and eligible securities. Obligations in respect of secured letters of credit under the Restated Facility are secured by a first-priority security interest on the cash and eligible securities comprising the borrowing base in favor of the trustee under the Restated Facility. | ||||||||||||
The Restated Facility contains representations and warranties customary for facilities of this type. The Restated Facility also contains customary events of default including without limitation, with agreed grace periods and thresholds, failure to make payments due under the Restated Facility, material inaccuracy of representations and warranties, breach of covenants, cross defaults to material indebtedness, bankruptcy defaults, judgments defaults, and failure to maintain certain material insurance licenses. | ||||||||||||
As of December 31, 2014, the Company had $25,000 (December 31, 2013: $25,000) in outstanding letters of credit under the Talbot FAL facility. | ||||||||||||
As of December 31, 2014, and throughout the reporting periods presented, the Company was in compliance with all covenants and restrictions under the Talbot FAL facility. | ||||||||||||
iii. | $40,000 IPC bi-lateral facility | |||||||||||
The Company assumed an existing evergreen letter of credit facility through the acquisition of IPC Holdings, Ltd. (the “IPC bi-lateral facility”). As of December 31, 2014, there were $15,897 outstanding letters of credit issued under the IPC bi-lateral facility (December 31, 2013: $20,177). As of December 31, 2014, and throughout the reporting periods presented, the Company was in compliance with all covenants and restrictions under the IPC bi-lateral facility. | ||||||||||||
iv. | $200,000 secured bi-lateral letter of credit facility | |||||||||||
The Company is party to an evergreen secured bi-lateral letter of credit facility with Citibank Europe plc (the “Secured bi-lateral letter of credit facility”). As of December 31, 2014, $15,649 (December 31, 2013: $16,726) of letters of credit were outstanding under the Secured bi-lateral letter of credit facility. The Secured bi-lateral letter of credit facility has no fixed termination date and as of December 31, 2014, and throughout the reporting periods presented, the Company is in compliance with all terms and covenants thereof. | ||||||||||||
v. | $10,000 PaCRe senior secured letter of credit facility | |||||||||||
On May 11, 2012, PaCRe and its subsidiary, PaCRe Investments, Ltd. entered into a secured evergreen credit and letter of credit facility with JPMorgan Chase Bank, N.A. This facility provides for revolving borrowings by PaCRe and for letters of credit issued by PaCRe to be used to support its reinsurance obligations in aggregate amount of $10,000. As of December 31, 2014, $294 (December 31, 2013: $294) of letters of credit were outstanding under this facility. As of December 31, 2014, and throughout the reporting periods presented, PaCRe was in compliance with all covenants and restrictions thereof. | ||||||||||||
vi. | $30,000 AlphaCat Re secured letter of credit facility | |||||||||||
In 2013, AlphaCat Re entered into a secured evergreen letter of credit facility with Comerica Bank. This facility provided for letters of credit issued by AlphaCat Re to be used to support its reinsurance obligations in the aggregate amount of $24,800. During the period ended March 31, 2014 the size of the facility was increased to $30,000 from $24,800. As of December 31, 2014, $30,000 (December 31, 2013: $24,800) of letters of credit were outstanding under this facility. As of December 31, 2014, and throughout the reporting periods presented, AlphaCat Re was in compliance with all covenants and restrictions thereof. | ||||||||||||
vii. | $375,000 Flagstone bi-lateral facility | |||||||||||
As part of the Flagstone Acquisition, the Company assumed an evergreen Letters of Credit Master Agreement between Citibank Europe Plc and Flagstone Reassurance Suisse, S.A. (the “Flagstone Bi-Lateral Facility”). At December 31, 2014, the Flagstone Bi-Lateral Facility had $198,389 (December 31, 2013: $305,686) letters of credit issued and outstanding. As of December 31, 2014, and throughout the reporting periods presented, the Company was in compliance with all covenants and restrictions under the Flagstone Bi-Lateral Facility. | ||||||||||||
(d) | Finance expenses | |||||||||||
Finance expenses consist of interest on the junior subordinated deferrable debentures and senior notes, the amortization of debt offering costs, credit facilities fees, bank charges, AlphaCat financing fees and Talbot FAL costs as follows: | ||||||||||||
Year Ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 8,868 | $ | 8,868 | $ | 6,964 | ||||||
2007 Junior Subordinated Deferrable Debentures | 7,341 | 7,341 | 8,922 | |||||||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | 9,001 | 8,259 | 459 | |||||||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 7,129 | 6,222 | 327 | |||||||||
2010 Senior Notes due 2040 | 22,388 | 22,388 | 22,388 | |||||||||
Credit facilities | 5,516 | 6,544 | 11,999 | |||||||||
Bank charges | 427 | 507 | 269 | |||||||||
AlphaCat ILS funds fees (a) | 3,530 | 3,866 | 2,432 | |||||||||
Talbot FAL Facility | (346 | ) | 182 | 97 | ||||||||
Total finance expenses | $ | 63,854 | $ | 64,177 | $ | 53,857 | ||||||
(a) | Includes finance expenses incurred by AlphaCat Managers, Ltd. in relation to fund raising for the AlphaCat ILS funds, AlphaCat 2015, AlphaCat 2014 and AlphaCat 2013. |
Income_taxes
Income taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income taxes | Income taxes | |||||||||||
The Company provides for income taxes based upon amounts reported in the financial statements and the provisions of currently enacted tax laws. The Company is registered in Bermuda and is subject to Bermuda law with respect to taxation. Under current Bermuda law, the Company is not taxed on any Bermuda income or capital gains and has received an undertaking from the Bermuda Minister of Finance that, in the event of any Bermuda income or capital gains taxes being imposed, the Company will be exempt from such taxes until March 31, 2035. | ||||||||||||
The Company has subsidiaries and branches with operations in several jurisdictions outside Bermuda, including but not limited to the United Kingdom (U.K.), the United States (U.S.), Switzerland, Luxembourg and Canada that are subject to relevant taxes in those jurisdictions. Within Note 25 "Segment information" of these Consolidated Financial Statements, gross premiums written are allocated to the territory of coverage exposure and therefore do not correlate to pre-tax income generated in any of the territories identified. | ||||||||||||
The Company’s income (loss) before income tax for the years ended December 31, 2014, 2013 and 2012 was generated in the following jurisdictions: | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Income before tax—Bermuda | $ | 496,840 | $ | 601,583 | $ | 369,675 | ||||||
Income before tax—United Kingdom | 10,824 | 4,668 | 10,277 | |||||||||
(Loss) income before tax—United States | (11,752 | ) | (464 | ) | 3,075 | |||||||
Income (loss) before tax—Switzerland | 9,941 | (225 | ) | (3,381 | ) | |||||||
Income before tax—Canada | 2,773 | 57 | 391 | |||||||||
Income (loss) before tax—Other | 29,076 | (8,401 | ) | 2,502 | ||||||||
Income before tax—Total | $ | 537,702 | $ | 597,218 | $ | 382,539 | ||||||
Income tax expense (benefit) is comprised of current and deferred tax. Income tax expense (benefit) is as follows: | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Current income tax expense (benefit) | ||||||||||||
U.S. | $ | 21,257 | $ | — | $ | (54 | ) | |||||
Non-U.S. | 26,179 | 1,781 | 1,382 | |||||||||
Total current income tax expense | $ | 47,436 | $ | 1,781 | $ | 1,328 | ||||||
Deferred income tax (benefit) expense | ||||||||||||
U.S. | $ | (24,998 | ) | $ | 880 | $ | 134 | |||||
Non-U.S. | (22,283 | ) | (2,278 | ) | 1,039 | |||||||
Total deferred income tax (benefit) expense | $ | (47,281 | ) | $ | (1,398 | ) | $ | 1,173 | ||||
Total income tax expense (benefit) | ||||||||||||
U.S. | $ | (3,741 | ) | $ | 880 | $ | 80 | |||||
Non-U.S. | 3,896 | (497 | ) | 2,421 | ||||||||
Total income tax expense | $ | 155 | $ | 383 | $ | 2,501 | ||||||
The table below is a reconciliation of the actual income tax expense for the years ended December 31, 2014, 2013 and 2012 to the amount computed by applying the effective tax rate of 0% under Bermuda law to income before taxes: | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Expected tax expense at Bermuda statutory rate of 0% | $ | — | $ | — | $ | — | ||||||
Foreign tax rate differential | 7,993 | (2,399 | ) | 4,882 | ||||||||
Change in valuation allowance | (7,284 | ) | 4,967 | — | ||||||||
Tax exempt income and expenses not deductible | (6,055 | ) | (263 | ) | — | |||||||
Share compensation tax windfall | 3,513 | — | — | |||||||||
Impact of enacted changes in tax rates | 250 | (407 | ) | (1,611 | ) | |||||||
Prior years tax adjustments | 666 | (461 | ) | (770 | ) | |||||||
Other | 1,072 | (1,054 | ) | — | ||||||||
Actual income tax expense | $ | 155 | $ | 383 | $ | 2,501 | ||||||
Deferred tax assets and liabilities primarily represent the tax effect of temporary differences between the carrying value of assets and liabilities for financial statement purposes and such values as measured by tax laws and regulations in countries in which the operations are taxable. Deferred tax assets may also represent the tax effect of tax loss carryforwards | ||||||||||||
In assessing whether deferred tax assets can be realized, the Company considers whether it is more likely than not that the tax benefit of the deferred tax asset will be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income in the period during which those temporary differences and tax loss carryforwards become deductible. The Company considers the reversal of the deferred tax liabilities and projected future taxable income in making this assessment. The amount of the deferred tax asset considered realizable could be reduced in the future if estimates of future taxable income are reduced. | ||||||||||||
Significant components of the Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 were as follows: | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Deferred tax asset | ||||||||||||
Tax losses carried forward | $ | 158,789 | $ | 185,955 | ||||||||
Deferred compensation | 5,527 | 6,119 | ||||||||||
Tax credits carried forward | 4,016 | — | ||||||||||
Discounting of loss reserves | 13,721 | — | ||||||||||
Risk premium reserve | 3,842 | — | ||||||||||
Unearned premiums reserve | 8,505 | — | ||||||||||
Pension | 5,864 | — | ||||||||||
Other | 6,023 | 128 | ||||||||||
Deferred tax asset, gross of valuation allowance | 206,287 | 192,202 | ||||||||||
Valuation allowance | 158,099 | 177,656 | ||||||||||
Net deferred tax asset | $ | 48,188 | $ | 14,546 | ||||||||
Deferred tax liability | ||||||||||||
Lloyd's underwriting profit taxable in future periods | $ | 636 | $ | 28,945 | ||||||||
Deferred acquisition costs | 3,348 | — | ||||||||||
Intangibles | 8,638 | — | ||||||||||
Unrealized appreciation on investments | 9,101 | — | ||||||||||
Properties and fixed assets | 4,993 | 3,179 | ||||||||||
Other | 3,192 | 1,508 | ||||||||||
Deferred tax liability | 29,908 | 33,632 | ||||||||||
Net deferred tax asset (liability) | $ | 18,280 | $ | (19,086 | ) | |||||||
The Company has undistributed earnings in several foreign subsidiaries. If such earnings were to be distributed, as dividends or otherwise, they may be subject to income and withholding taxes. As a general rule, the Company will try to only distribute earnings that can be distributed in a tax free manner and indefinitely reinvest any other earnings. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable due to different possible methods for repatriating earnings. | ||||||||||||
As of December 31, 2014, the Company had net operating and capital loss carry forwards inclusive of cumulative currency translation adjustments as follows: | ||||||||||||
Tax Jurisdiction | Losses carried forward | Tax effect | Expiration | |||||||||
United Kingdom | 547 | 118 | None | |||||||||
United States | 6,634 | 2,322 | 2029 - 2033 | |||||||||
Switzerland | 267,420 | 56,426 | 2018 - 2020 | |||||||||
Luxembourg | 340,245 | 99,352 | None | |||||||||
Singapore | 5,723 | 572 | None | |||||||||
The valuation allowance as at December 31, 2014 of $158,099 (2013: $177,656), relates to tax loss carry forwards of subsidiaries in Switzerland, Luxembourg, and the United States. The Company believes it is necessary to establish a full valuation allowance against the tax assets primarily related to losses of its Swiss and Luxembourg operations due to uncertainty regarding the ability of these operations to generate sufficient future taxable income to utilize the loss carryforwards and realize the deferred tax assets. There was no change in the position taken during the years ended December 31, 2014, 2013 or 2012. | ||||||||||||
At December 31, 2014 and 2013, the Company has no accrued liabilities for tax, interest and penalties relating to uncertain tax positions. | ||||||||||||
The Company has open examinations by the U.K. HM Revenue and Customs for the tax year 2012 and by the New York State Department of Taxation and Finance for tax years 2011 to 2013. The Company believes that these examinations will be concluded within the next 36 months. The Company has open tax years that are potentially subject to examinations by local tax authorities, in the following major tax jurisdictions: the United Kingdom, 2013 and 2014; the United States, 2011 to 2014; Switzerland, 2010 to 2014; and Canada, 2010 to 2014. |
Accumulated_other_comprehensiv
Accumulated other comprehensive (loss) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | ||||||||||||||||
Accumulated other comprehensive (loss) | Accumulated other comprehensive (loss) | |||||||||||||||
The changes in accumulated other comprehensive loss, by component for the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||||
Foreign currency items | Decrease in minimum pension liability | Gains and losses on cash flow hedge | Total | |||||||||||||
Balance, net of tax December 31, 2011 | $ | (6,601 | ) | $ | — | $ | — | $ | (6,601 | ) | ||||||
Net current period other comprehensive income, net of tax | 3,648 | — | — | 3,648 | ||||||||||||
Balance, net of tax December 31, 2012 | $ | (2,953 | ) | $ | — | $ | — | $ | (2,953 | ) | ||||||
Amounts reclassified to retained earnings | 4,290 | — | — | 4,290 | ||||||||||||
Net current period other comprehensive loss, net of tax | (1,954 | ) | — | — | (1,954 | ) | ||||||||||
Balance, net of tax December 31, 2013 | $ | (617 | ) | $ | — | $ | — | $ | (617 | ) | ||||||
Net current period other comprehensive loss, net of tax | (7,501 | ) | (210 | ) | (228 | ) | (7,939 | ) | ||||||||
Balance, net of tax December 31, 2014 | $ | (8,118 | ) | $ | (210 | ) | $ | (228 | ) | $ | (8,556 | ) |
Commitments_and_contingencies
Commitments and contingencies | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
Commitments and contingencies | Commitments and contingencies | |||||||||||
(a) | Concentrations of credit risk | |||||||||||
The Company attempts to limit its credit exposure by purchasing high quality fixed income investments to maintain a minimum weighted-average portfolio credit rating of A+. In addition, the portfolio limits the amount of “risk assets,” such as non-investment grade debt and equity securities, to a maximum of 35% of shareholders’ equity. The Company also limits its exposure to any single issuer to 3.5% of its investment portfolio or less, excluding government and agency securities, depending on the credit rating of the issuer. With the exception of the Company's bank loan portfolio, which represents 6.1% of the Company's total investments as at December 31, 2014, and certain capital securities issued by investment grade corporations, the minimum credit rating of any security purchased is Baa3/BBB-. In total, investments in below investment grade securities are limited to no more than 10% of the Company's investment portfolio. Excluding bank loans, 2.8% of the portfolio had a split rating below Baa3/BBB- as at December 31, 2014. The Company did not have an aggregate exposure to any single issuer of more than 1.0% of its investment portfolio, other than with respect to government and agency securities as at December 31, 2014. | ||||||||||||
The Company underwrites a significant amount of its reinsurance business through three particular brokers as set out below. There is credit risk associated with payments of insurance and reinsurance balances to the Company if these brokers are unable to fulfill their contractual obligations. These companies are large, well established, and there are no indications they are financially distressed. There were no other brokers or parties insured or reinsured that accounted for more than 10% of gross premiums written for the periods mentioned. | ||||||||||||
The following table shows the percentage of gross premiums written by broker for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Marsh & McLennan | 28.5 | % | 21.8 | % | 30.1 | % | ||||||
Aon Benfield Group Ltd. | 20.1 | % | 27.7 | % | 24.2 | % | ||||||
Willis Group Holdings Ltd. | 18 | % | 19.4 | % | 16.4 | % | ||||||
(b) | Employment agreements | |||||||||||
The Company has entered into employment agreements with certain individuals that provide for executive benefits and severance payments under certain circumstances. | ||||||||||||
(c) | Operating leases | |||||||||||
The Company leases office space and office equipment under operating leases. Total rent expense with respect to these operating leases for the year ended December 31, 2014 was approximately $10,540 (2013: $10,214, 2012: $7,670). Future minimum lease commitments are as follows: | ||||||||||||
2015 | $ | 11,094 | ||||||||||
2016 | 8,616 | |||||||||||
2017 | 7,514 | |||||||||||
2018 | 7,350 | |||||||||||
2019 | 7,130 | |||||||||||
2020 and thereafter | 23,784 | |||||||||||
$ | 65,488 | |||||||||||
(d) | Funds at Lloyd’s | |||||||||||
The amounts provided under the Talbot FAL Facility would become a liability of the Company in the event of Syndicate 1183 declaring a loss at a level which would call on this arrangement. | ||||||||||||
Talbot operates in Lloyd’s through a corporate member, Talbot 2002 Underwriting Capital Ltd (“T02”), which is the sole participant in Syndicate 1183. Lloyd’s sets T02’s required capital annually based on Syndicate 1183’s business plan, rating environment and reserving environment together with input arising from Lloyd’s discussions with, inter alia, regulatory and rating agencies. Such capital, called Funds at Lloyd’s (“FAL”), comprises: cash, investments and undrawn letters of credit provided by various banks. | ||||||||||||
The amounts of cash, investments and letters of credit provided for each year of account as follows: | ||||||||||||
2015 Underwriting Year | 2014 Underwriting Year | 2013 Underwriting Year | ||||||||||
Talbot FAL facility | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||
Group funds | 570,100 | 450,000 | 403,700 | |||||||||
Total | $ | 595,100 | $ | 475,000 | $ | 428,700 | ||||||
The amounts which are provided as FAL are not available for distribution to the Company for the payment of dividends. Talbot’s corporate member may also be required to maintain funds under the control of Lloyd’s in excess of its capital requirement and such funds also may not be available for distribution to the Company for the payment of dividends. See Note 7 (d) for investments pledged as collateral. | ||||||||||||
(e) | Lloyd’s Central Fund | |||||||||||
Whenever a member of Lloyd’s is unable to pay its debts to policyholders, such debts may be payable by the Lloyd’s Central Fund. If Lloyd’s determines that the Central Fund needs to be increased, it has the power to assess premium levies on current Lloyd’s members up to 3% of a member’s underwriting capacity in any one year. The Company does not believe that any assessment is likely in the foreseeable future and has not provided any allowance for such an assessment. However, based on the Company’s 2015 estimated premium income at Lloyd’s of £625,000, the December 31, 2014 exchange rate of £1 equals $1.5578 and assuming the maximum 3% assessment, the maximum the Company could be assessed as a levy would be approximately $29,209. | ||||||||||||
(f) | Investment in affiliate commitments | |||||||||||
As discussed in Note 9 "Investments in affiliates," on December 20, 2011 the Company entered into an Assignment and Assumption Agreement with Aquiline Capital Partners LLC, pursuant to which it assumed total capital commitments of $50,000. This interest is governed by the terms of an Amended and Restated Exempted Limited Partnership Agreement dated as of January 9, 2013. The Company’s remaining commitment at December 31, 2014 was $7,500 (December 31, 2013: $17,890). | ||||||||||||
On October 2, 2014, the Company assumed an additional investment in Aquiline Capital Partners II GP (Offshore) Ltd. as part of the Western World acquisition representing a total capital commitment of $10,000. This interest is governed by the terms of an Amended and Restated Exempted Limited Partnership Agreement dated as of January 9, 2013. The Company's remaining capital commitment at December 31, 2014 was $1,499. | ||||||||||||
On November 7, 2014 the Company entered into a Subscription Agreement with Aquiline Capital Partners III GP (Offshore) Ltd., pursuant to which it assumed total capital commitments of $100,000 in respect of Limited Partnership Interests in Aquiline Financial Services Fund III L.P. (the "Fund"). The Limited Partnership Interests are governed by the terms of the Aquiline III Limited Partnership Agreement dated November 7, 2014. The Company’s remaining commitment at December 31, 2014 was $100,000. | ||||||||||||
On December 29, 2014, the Company entered into an agreement with AlphaCat 2015 pursuant to which it assumed total capital commitments of $28,000. The Company’s remaining commitment at December 31, 2014 was $2,400. | ||||||||||||
On December 29, 2014, the Company entered into an agreement with an AlphaCat ILS fund pursuant to which it assumed total capital commitments of $20,000. The Company’s remaining commitment at December 31, 2014 was $8,000. | ||||||||||||
(g) | Fixed maturity commitment | |||||||||||
As at December 31, 2014, the Company had an outstanding commitment to participate in certain revolver loan facilities through participation agreements with an established loan originator. The undrawn amount under the revolver facility participations as at December 31, 2014 was $7,539. | ||||||||||||
(h) | Other investment commitments | |||||||||||
At December 31, 2014, the Company had capital commitments in other investments of $153,000 (December 31, 2013: $30,000). The Company's remaining commitment to these investments at December 31, 2014 was $83,712 (December 31, 2013: $5,045). | ||||||||||||
(i) | Multi-Beneficiary Reinsurance Trusts | |||||||||||
In December 2014, the Company established a MBRT to collateralize its (re)insurance liabilities associated with and for the benefit of U.S. domiciled cedants, and was approved as a trusteed reinsurer in the State of New Jersey. As a result, cedants domiciled in that state will receive automatic credit in their regulatory filings for the reinsurance provided prospectively by the Company. | ||||||||||||
(j) | Structured settlements | |||||||||||
As at December 31, 2014, the Company is contingently liable for the present value of amounts not yet due under annuities purchased by Western World where the claimant is the payee for the amount of $3,412. | ||||||||||||
(k) | Income tax examinations | |||||||||||
The Company has open examinations by the U.K. HM Revenue and Customs for the tax year 2012 and by the New York State Department of Taxation and Finance for tax years 2011 to 2013. The Company believes that these examinations will be concluded within the next 36 months. For further details refer to Note 20 "Income taxes" to the Consolidated Financial Statements. |
Related_party_transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions |
The transactions listed below are classified as related party transactions as each counter party has either a direct or indirect shareholding in the Company. | |
Aquiline Capital Partners, LLC and its related companies ("Aquiline"), which own 523,180 shares in the Company, hold warrants to purchase 2,756,088 shares, and have two employees on the Company's Board of Directors who do not receive compensation from the Company, are shareholders of Group Ark Insurance Holdings Ltd. ("Group Ark"). Christopher E. Watson, a director of the Company, serves as a director of Group Ark. Pursuant to reinsurance agreements with a subsidiary of Group Ark, the Company recognized gross premiums written during the year ended December 31, 2014 of $2,073 (2013: $2,899, 2012: $7,582) respectively, with $335 included in premiums receivable at December 31, 2014 (December 31, 2013: $238). The Company also recognized reinsurance premiums ceded during the year ended December 31, 2014 of $126 (2013: $85, 2012: $90) and had reinsurance balances payable of $4 at December 31, 2014 (December 31, 2013: $4). The Company recorded $1,063 of loss reserves recoverable at December 31, 2014 (December 31, 2013: $3,698). Earned premium adjustments of $1,982 were recorded during the year ended December 31, 2014 (2013: $2,911, 2012: $7,625). | |
On November 24, 2009, the Company entered into an Investment Management Agreement with Conning, Inc. ("Conning") to manage a portion of the Company's investment portfolio. Aquiline acquired Conning on June 16, 2009. Jeffrey W. Greenberg, a director of the Company, serves as a director of Conning Holdings Corp., the parent company of Conning. Investment management fees earned by Conning for the year ended December 31, 2014 were $1,125 (2013: $500, 2012: $809), with $515 included in accounts payable and accrued expenses at December 31, 2014 (December 31, 2013: $283). | |
On December 20, 2011, the Company entered into an Assignment and Assumption Agreement (the "Agreement") with Aquiline Capital Partners LLC, a Delaware limited liability company (the "Assignor") and Aquiline Capital Partners II GP (Offshore) Ltd., a Cayman Islands company limited by shares (the "General Partner") pursuant to which the Company has assumed 100% of the Assignor's interest in Aquiline Financial Services Fund II L.P. (the "Aquiline II Partnership") representing a total capital commitment of $50,000 (the "Aquiline II Commitment"), as a limited partner in the Partnership (the "Transferred Interest"). On October 2, 2014, the Company assumed an additional investment in the Aquiline II Partnership as part of the Western World acquisition representing a total capital commitment of $10,000. Messrs. Greenberg and Watson, directors of the Company, serve as managing principal and senior principal, respectively, of Aquiline Capital Partners LLC. For the year ended December 31, 2014, the Company incurred $342 (2013: $1,236, 2012: $2,979) in partnership fees and made capital contributions of $12,468 (2013: $14,492, 2012: $14,365), with $nil included in accounts payable and accrued expenses at December 31, 2014 (December 31, 2013: $nil). | |
On November 7, 2014, the Company, entered into a Subscription Agreement (the "Subscription Agreement") with Aquiline Capital Partners III GP (Offshore) Ltd., a Cayman Islands company limited by shares (the "Aquiline III General Partner") pursuant to which the Company is committing and agreeing to purchase limited partnership or other comparable limited liability equity interests (the "Limited Partnership Interests") in Aquiline Financial Services Fund III L.P., a Cayman Islands exempted limited partnership (the "Aquiline III Partnership"), and/or one or more Alternative Investment Vehicles and Intermediate Entities (together with the Aquiline III Partnership, the "Fund" or the "Entities") with a capital commitment (the "Aquiline III Commitment") in an amount equal to $100,000, as a limited partner in the Aquiline Financial Services III Partnership. For the year ended December 31, 2014, the Company incurred no partnership fees and made no capital contributions. | |
Certain shareholders of the Company and their affiliates, as well as employers of entities associated with directors or officers have purchased insurance and/or reinsurance from the Company in the ordinary course of business. The Company believes these transactions were settled for arm's length consideration. |
Earnings_per_share
Earnings per share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings per share | Earnings per share | |||||||||||
The following table sets forth the computation of basic earnings per share and earnings per diluted share available to common shareholders for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Basic earnings per share | ||||||||||||
Net income | $ | 445,871 | $ | 542,361 | $ | 392,618 | ||||||
Loss (income) attributable to noncontrolling interest | 35,464 | (9,695 | ) | 15,820 | ||||||||
Net income available to Validus | $ | 481,335 | $ | 532,666 | $ | 408,438 | ||||||
Less: Dividends and distributions declared on outstanding warrants | (6,208 | ) | (19,214 | ) | (6,693 | ) | ||||||
Income available to common shareholders | $ | 475,127 | $ | 513,452 | $ | 401,745 | ||||||
Weighted average number of common shares outstanding | 90,354,745 | 102,202,274 | 97,184,110 | |||||||||
Basic earnings per share available to common shareholders | $ | 5.26 | $ | 5.02 | $ | 4.13 | ||||||
Earnings per diluted share | ||||||||||||
Net income | $ | 445,871 | $ | 542,361 | $ | 392,618 | ||||||
Loss (income) attributable to noncontrolling interest | 35,464 | (9,695 | ) | 15,820 | ||||||||
Net income available to Validus | $ | 481,335 | $ | 532,666 | $ | 408,438 | ||||||
Less: Dividends and distributions declared on outstanding warrants | — | (19,214 | ) | — | ||||||||
Income available to common shareholders | $ | 481,335 | $ | 513,452 | $ | 408,438 | ||||||
Weighted average number of common shares outstanding | 90,354,745 | 102,202,274 | 97,184,110 | |||||||||
Share equivalents: | ||||||||||||
Warrants | 2,789,032 | — | 3,137,956 | |||||||||
Stock options | 745,561 | 1,026,543 | 769,618 | |||||||||
Unvested restricted shares | 800,933 | 741,472 | 1,293,239 | |||||||||
Weighted average number of diluted common shares outstanding | 94,690,271 | 103,970,289 | 102,384,923 | |||||||||
Earnings per diluted share available to common shareholders | $ | 5.08 | $ | 4.94 | $ | 3.99 | ||||||
Share equivalents that would result in the issuance of common shares of 199,740, 366,821 and 199,446 were outstanding for the years ended December 31, 2014, 2013 and 2012, respectively but were not included in the computation of earnings per diluted share because the effect would be antidilutive. |
Segment_information
Segment information | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||
Segment information | Segment information | ||||||||||||||||||||||||||
The Company conducts its operations worldwide through four operating segments, which have been determined under U.S. GAAP segment reporting to be Validus Re, AlphaCat, Talbot and Western World. During the first quarter of 2012, to better align the Company’s operating and reporting structure with its current strategy, there was a change in the segment structure. This change included the AlphaCat group of companies as a separate operating segment. The AlphaCat segment currently includes the Company’s investments in AlphaCat Re 2011, AlphaCat Re 2012, AlphaCat 2013, AlphaCat 2014, AlphaCat 2015, PaCRe, the AlphaCat ILS funds and the BetaCat ILS funds. The Company’s operating segments are strategic business units that offer different products and services. They are managed and have capital allocated separately because each segment requires different strategies. | |||||||||||||||||||||||||||
Validus Re Segment | |||||||||||||||||||||||||||
The Validus Re segment is focused on short-tail lines of reinsurance. The primary lines in which the segment conducts business are property, marine and specialty which includes agriculture, aerospace and aviation, financial lines of business, nuclear, terrorism, life, accident & health, workers’ compensation, crisis management, contingency, motor, technical lines, composite and trade credit. | |||||||||||||||||||||||||||
AlphaCat Segment | |||||||||||||||||||||||||||
The AlphaCat segment manages strategic relationships that leverage the Company’s underwriting and investment expertise and earns management, performance and underwriting fees primarily from the Company’s operating affiliates, AlphaCat Re 2011, AlphaCat Re 2012, AlphaCat 2013, AlphaCat 2014 and AlphaCat 2015, as well as PaCRe, the AlphaCat ILS funds and the BetaCat ILS funds. | |||||||||||||||||||||||||||
Talbot Segment | |||||||||||||||||||||||||||
The Talbot segment focuses on a wide range of marine and energy, war, political violence, commercial property, financial institutions, contingency, accident & health and aviation classes of business on an insurance or facultative reinsurance basis and principally property, aerospace and marine classes of business on a treaty reinsurance basis. | |||||||||||||||||||||||||||
Western World Segment | |||||||||||||||||||||||||||
The Western World segment is focused on providing commercial insurance products on a surplus lines and specialty admitted basis. Western World specializes in underwriting classes of business that are not easily placed in the standard insurance market due to their complexity, high hazard, or unusual nature; including general liability, property and professional liability classes of business. | |||||||||||||||||||||||||||
Corporate and eliminations | |||||||||||||||||||||||||||
The Company has a corporate function ("Corporate"), which includes the activities of the parent company, and which carries out certain functions for the group. Corporate includes ‘non-core’ underwriting expenses, predominantly general and administrative and stock compensation expenses. Corporate also denotes the activities of certain key executives such as the Chief Executive Officer and Chief Financial Officer. For internal reporting purposes, corporate is reflected separately, however corporate is not considered an operating segment under these circumstances. Other reconciling items include, but are not limited to, the elimination of inter segment revenues and expenses and unusual items that are not allocated to segments. Corporate also includes the gain on bargain purchase, net of expenses in connection with the acquisition of Flagstone in 2012 and transaction expenses related to the Western World acquisition in 2014. | |||||||||||||||||||||||||||
The following tables summarize the results of our operating segments and "Corporate": | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Western World Segment (d) | Corporate & Eliminations | Total | |||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | $ | 1,136,910 | $ | 135,181 | $ | 1,101,770 | $ | 65,235 | $ | (75,810 | ) | $ | 2,363,286 | ||||||||||||||
Reinsurance premiums ceded | (182,056 | ) | (4,348 | ) | (192,211 | ) | (6,428 | ) | 75,810 | (309,233 | ) | ||||||||||||||||
Net premiums written | 954,854 | 130,833 | 909,559 | 58,807 | — | 2,054,053 | |||||||||||||||||||||
Change in unearned premiums | (37,570 | ) | 1,517 | (29,785 | ) | 14,189 | — | (51,649 | ) | ||||||||||||||||||
Net premiums earned | 917,284 | 132,350 | 879,774 | 72,996 | — | 2,002,404 | |||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 307,290 | (9,670 | ) | 423,394 | 51,035 | — | 772,049 | ||||||||||||||||||||
Policy acquisition costs | 141,670 | 12,673 | 187,162 | 3,169 | (4,118 | ) | 340,556 | ||||||||||||||||||||
General and administrative expenses | 74,739 | 19,590 | 150,828 | 11,121 | 73,514 | 329,792 | |||||||||||||||||||||
Share compensation expenses | 9,739 | 501 | 11,346 | 135 | 11,352 | 33,073 | |||||||||||||||||||||
Total underwriting deductions | 533,438 | 23,094 | 772,730 | 65,460 | 80,748 | 1,475,470 | |||||||||||||||||||||
Underwriting income (loss) | $ | 383,846 | $ | 109,256 | $ | 107,044 | $ | 7,536 | $ | (80,748 | ) | $ | 526,934 | ||||||||||||||
Net investment income | 74,599 | 4,276 | 20,575 | 4,523 | (3,897 | ) | 100,076 | ||||||||||||||||||||
Other insurance related income (loss) | 3,159 | 27,122 | 1,095 | 264 | (9,658 | ) | 21,982 | ||||||||||||||||||||
Finance expenses | (14,727 | ) | (3,545 | ) | 213 | — | (45,795 | ) | (63,854 | ) | |||||||||||||||||
Operating income (loss) before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 446,877 | 137,109 | 128,927 | 12,323 | (140,098 | ) | 585,138 | ||||||||||||||||||||
Tax benefit (expense) | 5,512 | — | (3,880 | ) | (1,422 | ) | (365 | ) | (155 | ) | |||||||||||||||||
Income from operating affiliates | — | 17,723 | — | — | — | 17,723 | |||||||||||||||||||||
(Income) attributable to operating affiliate investors | — | (109,399 | ) | — | — | — | (109,399 | ) | |||||||||||||||||||
Net operating income (loss) | $ | 452,389 | $ | 45,433 | $ | 125,047 | $ | 10,901 | $ | (140,463 | ) | $ | 493,307 | ||||||||||||||
Net realized gains on investments | 7,611 | 10,935 | 3,852 | 697 | — | 23,095 | |||||||||||||||||||||
Change in net unrealized gains (losses) on investments | 8,404 | (56,943 | ) | 1,685 | (155 | ) | (10,964 | ) | (57,973 | ) | |||||||||||||||||
Income from investment affiliate | 8,411 | — | — | — | — | 8,411 | |||||||||||||||||||||
Foreign exchange (losses) gains | (6,404 | ) | 70 | (5,961 | ) | — | 1,665 | (10,630 | ) | ||||||||||||||||||
Other (loss) | (2,243 | ) | — | — | — | — | (2,243 | ) | |||||||||||||||||||
Transaction expenses (a) | — | — | — | — | (8,096 | ) | (8,096 | ) | |||||||||||||||||||
Net income (loss) | $ | 468,168 | $ | (505 | ) | $ | 124,623 | $ | 11,443 | $ | (157,858 | ) | $ | 445,871 | |||||||||||||
Net loss attributable to noncontrolling interest | — | 35,464 | — | — | — | 35,464 | |||||||||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 468,168 | $ | 34,959 | $ | 124,623 | $ | 11,443 | $ | (157,858 | ) | $ | 481,335 | ||||||||||||||
Selected ratios (b): | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 84 | % | 96.8 | % | 82.6 | % | 90.1 | % | 86.9 | % | |||||||||||||||||
Losses and loss expenses | 33.5 | % | (7.3 | )% | 48.1 | % | 69.9 | % | 38.6 | % | |||||||||||||||||
Policy acquisition costs | 15.5 | % | 9.6 | % | 21.3 | % | 4.4 | % | 17 | % | |||||||||||||||||
General and administrative expenses (c) | 9.2 | % | 15.2 | % | 18.4 | % | 15.4 | % | 18.1 | % | |||||||||||||||||
Expense ratio | 24.7 | % | 24.8 | % | 39.7 | % | 19.8 | % | 35.1 | % | |||||||||||||||||
Combined ratio | 58.2 | % | 17.5 | % | 87.8 | % | 89.7 | % | 73.7 | % | |||||||||||||||||
Total assets | $ | 4,209,289 | $ | 1,656,326 | $ | 2,890,123 | $ | 1,492,179 | $ | 63,704 | $ | 10,311,621 | |||||||||||||||
(a) | The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services. | ||||||||||||||||||||||||||
(b) | Ratios are based on net premiums earned. | ||||||||||||||||||||||||||
(c) | The general and administrative expenses ratio includes share compensation expenses. | ||||||||||||||||||||||||||
(d) | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Corporate & Eliminations | Total | ||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | $ | 1,242,522 | $ | 147,009 | $ | 1,091,890 | $ | (80,315 | ) | $ | 2,401,106 | ||||||||||||||||
Reinsurance premiums ceded | (226,264 | ) | (525 | ) | (226,111 | ) | 80,315 | (372,585 | ) | ||||||||||||||||||
Net premiums written | 1,016,258 | 146,484 | 865,779 | — | 2,028,521 | ||||||||||||||||||||||
Change in unearned premiums | 117,679 | (9,070 | ) | (35,085 | ) | — | 73,524 | ||||||||||||||||||||
Net premiums earned | 1,133,937 | 137,414 | 830,694 | — | 2,102,045 | ||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 430,026 | 17,569 | 346,337 | — | 793,932 | ||||||||||||||||||||||
Policy acquisition costs | 180,779 | 13,853 | 170,738 | (5,060 | ) | 360,310 | |||||||||||||||||||||
General and administrative expenses | 91,260 | 18,765 | 136,458 | 68,782 | 315,265 | ||||||||||||||||||||||
Share compensation expenses | 7,668 | 468 | 9,613 | 9,881 | 27,630 | ||||||||||||||||||||||
Total underwriting deductions | 709,733 | 50,655 | 663,146 | 73,603 | 1,497,137 | ||||||||||||||||||||||
Underwriting income (loss) | $ | 424,204 | $ | 86,759 | $ | 167,548 | $ | (73,603 | ) | $ | 604,908 | ||||||||||||||||
Net investment income | 81,346 | 3,865 | 18,061 | (7,200 | ) | 96,072 | |||||||||||||||||||||
Other insurance related income (loss) | 19,222 | 26,424 | 1,819 | (28,345 | ) | 19,120 | |||||||||||||||||||||
Finance expenses | (16,111 | ) | (5,734 | ) | (259 | ) | (42,073 | ) | (64,177 | ) | |||||||||||||||||
Operating income (loss) before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 508,661 | 111,314 | 187,169 | (151,221 | ) | 655,923 | |||||||||||||||||||||
Tax benefit (expense) | 272 | — | (671 | ) | 16 | (383 | ) | ||||||||||||||||||||
Income from operating affiliates | — | 14,289 | — | — | 14,289 | ||||||||||||||||||||||
(Income) attributable to operating affiliate investors | — | (68,763 | ) | — | — | (68,763 | ) | ||||||||||||||||||||
Net operating income (loss) | $ | 508,933 | $ | 56,840 | $ | 186,498 | $ | (151,205 | ) | $ | 601,066 | ||||||||||||||||
Net realized (losses) gains on investments | (1,382 | ) | 4,084 | 556 | — | 3,258 | |||||||||||||||||||||
Change in net unrealized losses on investments | (41,388 | ) | (3,893 | ) | (13,200 | ) | — | (58,481 | ) | ||||||||||||||||||
Income from investment affiliate | 4,790 | — | — | — | 4,790 | ||||||||||||||||||||||
Foreign exchange gains (losses) | 7,394 | (816 | ) | (3,531 | ) | (542 | ) | 2,505 | |||||||||||||||||||
Other income | (10,777 | ) | — | — | — | (10,777 | ) | ||||||||||||||||||||
Net income (loss) | $ | 467,570 | $ | 56,215 | $ | 170,323 | $ | (151,747 | ) | $ | 542,361 | ||||||||||||||||
Net (income) attributable to noncontrolling interest | — | (9,695 | ) | — | — | (9,695 | ) | ||||||||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 467,570 | $ | 46,520 | $ | 170,323 | $ | (151,747 | ) | $ | 532,666 | ||||||||||||||||
Selected ratios (a): | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 81.8 | % | 99.6 | % | 79.3 | % | 84.5 | % | |||||||||||||||||||
Losses and loss expenses | 37.9 | % | 12.8 | % | 41.7 | % | 37.8 | % | |||||||||||||||||||
Policy acquisition costs | 16 | % | 10.1 | % | 20.5 | % | 17.1 | % | |||||||||||||||||||
General and administrative expenses (b) | 8.7 | % | 14 | % | 17.6 | % | 16.3 | % | |||||||||||||||||||
Expense ratio | 24.7 | % | 24.1 | % | 38.1 | % | 33.4 | % | |||||||||||||||||||
Combined ratio | 62.6 | % | 36.9 | % | 79.8 | % | 71.2 | % | |||||||||||||||||||
Total assets | $ | 5,326,076 | $ | 1,558,453 | $ | 2,891,682 | $ | 70,221 | $ | 9,846,432 | |||||||||||||||||
(a) | Ratios are based on net premiums earned. | ||||||||||||||||||||||||||
(b) | The general and administrative expenses ratio includes share compensation expenses. | ||||||||||||||||||||||||||
Year Ended December 31, 2012 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Corporate & | Total | ||||||||||||||||||||||
Eliminations | |||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | $ | 1,131,959 | $ | 21,603 | $ | 1,078,636 | $ | (65,758 | ) | $ | 2,166,440 | ||||||||||||||||
Reinsurance premiums ceded | (144,578 | ) | — | (228,686 | ) | 65,758 | (307,506 | ) | |||||||||||||||||||
Net premiums written | 987,381 | 21,603 | 849,950 | — | 1,858,934 | ||||||||||||||||||||||
Change in unearned premiums | 35,890 | (3,937 | ) | (17,671 | ) | — | 14,282 | ||||||||||||||||||||
Net premiums earned | 1,023,271 | 17,666 | 832,279 | — | 1,873,216 | ||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 575,416 | — | 424,030 | — | 999,446 | ||||||||||||||||||||||
Policy acquisition costs | 154,362 | 1,774 | 183,926 | (5,364 | ) | 334,698 | |||||||||||||||||||||
General and administrative expenses | 63,048 | 7,532 | 133,281 | 59,791 | 263,652 | ||||||||||||||||||||||
Share compensation expenses | 7,763 | 279 | 7,789 | 10,878 | 26,709 | ||||||||||||||||||||||
Total underwriting deductions | 800,589 | 9,585 | 749,026 | 65,305 | 1,624,505 | ||||||||||||||||||||||
Underwriting income (loss) | $ | 222,682 | $ | 8,081 | $ | 83,253 | $ | (65,305 | ) | $ | 248,711 | ||||||||||||||||
Net investment income | 88,727 | 3,748 | 21,310 | (5,849 | ) | 107,936 | |||||||||||||||||||||
Other insurance related income (loss) | 5,000 | 23,229 | 2,033 | (7,951 | ) | 22,311 | |||||||||||||||||||||
Finance expenses | (8,943 | ) | (3,061 | ) | (162 | ) | (41,691 | ) | (53,857 | ) | |||||||||||||||||
Operating income (loss) before taxes and income from operating affiliates | 307,466 | 31,997 | 106,434 | (120,796 | ) | 325,101 | |||||||||||||||||||||
Tax (expense) | (168 | ) | — | (2,229 | ) | (104 | ) | (2,501 | ) | ||||||||||||||||||
Income from operating affiliates | — | 12,580 | — | — | 12,580 | ||||||||||||||||||||||
Net operating income (loss) | $ | 307,298 | $ | 44,577 | $ | 104,205 | $ | (120,900 | ) | $ | 335,180 | ||||||||||||||||
Gain on bargain purchase, net of expenses (a) | — | — | — | 17,701 | 17,701 | ||||||||||||||||||||||
Net realized gains on investments | 12,026 | 216 | 5,991 | — | 18,233 | ||||||||||||||||||||||
Net unrealized (losses) on investments | 35,033 | (19,509 | ) | 2,061 | — | 17,585 | |||||||||||||||||||||
Loss from investment affiliate | (964 | ) | — | — | — | (964 | ) | ||||||||||||||||||||
Foreign exchange (losses) gains | 2,664 | 44 | 2,527 | (437 | ) | 4,798 | |||||||||||||||||||||
Other income | 85 | — | — | — | 85 | ||||||||||||||||||||||
Net income (loss) | $ | 356,142 | $ | 25,328 | $ | 114,784 | $ | (103,636 | ) | $ | 392,618 | ||||||||||||||||
Net loss attributable to noncontrolling interest | — | 15,820 | — | — | 15,820 | ||||||||||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 356,142 | $ | 41,148 | $ | 114,784 | $ | (103,636 | ) | $ | 408,438 | ||||||||||||||||
Selected ratios: (b) | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 87.2 | % | 100 | % | 78.8 | % | 85.8 | % | |||||||||||||||||||
Losses and loss expenses | 56.2 | % | — | % | 50.9 | % | 53.4 | % | |||||||||||||||||||
Policy acquisition costs | 15.1 | % | 10 | % | 22.1 | % | 17.9 | % | |||||||||||||||||||
General and administrative expenses (c) | 6.9 | % | 44.2 | % | 16.9 | % | 15.5 | % | |||||||||||||||||||
Expense ratio | 22 | % | 54.2 | % | 39 | % | 33.4 | % | |||||||||||||||||||
Combined ratio | 78.2 | % | 54.2 | % | 89.9 | % | 86.8 | % | |||||||||||||||||||
Total assets | $ | 6,206,084 | $ | 805,513 | $ | 2,968,224 | $ | 40,443 | $ | 10,020,264 | |||||||||||||||||
(a) | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. | ||||||||||||||||||||||||||
(b) | Ratios are based on net premiums earned. | ||||||||||||||||||||||||||
(c) | The general and administrative expenses ratio includes share compensation expenses. | ||||||||||||||||||||||||||
The following table sets forth the gross premiums written by line of business for the periods indicated: | |||||||||||||||||||||||||||
Gross Premiums Written (a) | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||||||||||
Property | $ | 1,054,530 | $ | 1,164,687 | $ | 1,060,297 | |||||||||||||||||||||
Marine | 576,478 | 570,008 | 649,421 | ||||||||||||||||||||||||
Specialty | 677,026 | 666,411 | 456,722 | ||||||||||||||||||||||||
Liability | 55,252 | — | — | ||||||||||||||||||||||||
$ | 2,363,286 | $ | 2,401,106 | $ | 2,166,440 | ||||||||||||||||||||||
(a) | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | ||||||||||||||||||||||||||
The Company’s exposures are generally diversified across geographic zones. The following tables set forth the gross premiums written allocated to the territory of coverage exposure for the periods indicated: | |||||||||||||||||||||||||||
Gross Premiums Written | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Western World (d) | Eliminations | Total | % | |||||||||||||||||||||
United States | $ | 442,314 | $ | 30,987 | $ | 108,458 | $ | 65,235 | $ | (11,026 | ) | $ | 635,968 | 27 | % | ||||||||||||
Worldwide excluding United States (a) | 76,129 | 7,331 | 139,570 | — | (1,334 | ) | 221,696 | 9.4 | % | ||||||||||||||||||
Australia and New Zealand | 20,257 | 1,019 | 9,736 | — | — | 31,012 | 1.3 | % | |||||||||||||||||||
Europe | 58,236 | 3,005 | 45,615 | — | (2,305 | ) | 104,551 | 4.4 | % | ||||||||||||||||||
Latin America and Caribbean | 54,053 | — | 116,281 | — | (23,958 | ) | 146,376 | 6.2 | % | ||||||||||||||||||
Japan | 43,310 | 608 | 4,116 | — | (608 | ) | 47,426 | 2 | % | ||||||||||||||||||
Canada | 3,670 | 215 | 10,194 | — | (214 | ) | 13,865 | 0.6 | % | ||||||||||||||||||
Rest of the world (b) | 21,467 | — | 93,012 | — | — | 114,479 | 4.8 | % | |||||||||||||||||||
Sub-total, non United States | 277,122 | 12,178 | 418,524 | — | (28,419 | ) | 679,405 | 28.7 | % | ||||||||||||||||||
Worldwide including United States (a) | 179,564 | 92,016 | 96,187 | — | (22,463 | ) | 345,304 | 14.6 | % | ||||||||||||||||||
Other locations non-specific (c) | 237,910 | — | 478,601 | — | (13,902 | ) | 702,609 | 29.7 | % | ||||||||||||||||||
Total | $ | 1,136,910 | $ | 135,181 | $ | 1,101,770 | $ | 65,235 | $ | (75,810 | ) | $ | 2,363,286 | 100 | % | ||||||||||||
Gross Premiums Written | |||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | % | ||||||||||||||||||||||
United States | $ | 524,776 | $ | 50,848 | $ | 93,357 | $ | (6,565 | ) | $ | 662,416 | 27.7 | % | ||||||||||||||
Worldwide excluding United States (a) | 63,643 | 14,801 | 142,294 | (1,485 | ) | 219,253 | 9.1 | % | |||||||||||||||||||
Australia and New Zealand | 22,275 | 2,216 | 11,097 | — | 35,588 | 1.5 | % | ||||||||||||||||||||
Europe | 65,861 | 2,533 | 51,667 | (1,446 | ) | 118,615 | 4.9 | % | |||||||||||||||||||
Latin America and Caribbean | 50,522 | — | 155,798 | (52,267 | ) | 154,053 | 6.4 | % | |||||||||||||||||||
Japan | 42,729 | 653 | 5,971 | (653 | ) | 48,700 | 2 | % | |||||||||||||||||||
Canada | 3,688 | 818 | 10,768 | (818 | ) | 14,456 | 0.6 | % | |||||||||||||||||||
Rest of the world (b) | 24,337 | — | 92,652 | — | 116,989 | 4.9 | % | ||||||||||||||||||||
Sub-total, non United States | 273,055 | 21,021 | 470,247 | (56,669 | ) | 707,654 | 29.4 | % | |||||||||||||||||||
Worldwide including United States (a) | 177,539 | 75,140 | 80,538 | (8,996 | ) | 324,221 | 13.5 | % | |||||||||||||||||||
Other locations non-specific (c) | 267,152 | — | 447,748 | (8,085 | ) | 706,815 | 29.4 | % | |||||||||||||||||||
Total | $ | 1,242,522 | $ | 147,009 | $ | 1,091,890 | $ | (80,315 | ) | $ | 2,401,106 | 100 | % | ||||||||||||||
Gross Premiums Written | |||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | % | ||||||||||||||||||||||
United States | $ | 463,384 | $ | 12,638 | $ | 77,561 | $ | (1,942 | ) | $ | 551,641 | 25.4 | % | ||||||||||||||
Worldwide excluding United States (a) | 24,119 | 279 | 156,593 | — | 180,991 | 8.4 | % | ||||||||||||||||||||
Australia and New Zealand | — | 217 | 12,851 | — | 13,068 | 0.6 | % | ||||||||||||||||||||
Europe | 87,805 | 1,332 | 50,262 | — | 139,399 | 6.4 | % | ||||||||||||||||||||
Latin America and Caribbean | 80,432 | — | 149,091 | (53,565 | ) | 175,958 | 8.1 | % | |||||||||||||||||||
Japan | 30,386 | — | 6,630 | — | 37,016 | 1.7 | % | ||||||||||||||||||||
Canada | — | — | 12,243 | — | 12,243 | 0.6 | % | ||||||||||||||||||||
Rest of the world (b) | 68,754 | — | 91,130 | — | 159,884 | 7.4 | % | ||||||||||||||||||||
Sub-total, non United States | 291,496 | 1,828 | 478,800 | (53,565 | ) | 718,559 | 33.2 | % | |||||||||||||||||||
Worldwide including United States (a) | 102,080 | 7,137 | 65,084 | (4,038 | ) | 170,263 | 7.9 | % | |||||||||||||||||||
Other locations non-specific (c) | 274,999 | — | 457,191 | (6,213 | ) | 725,977 | 33.5 | % | |||||||||||||||||||
Total | $ | 1,131,959 | $ | 21,603 | $ | 1,078,636 | $ | (65,758 | ) | $ | 2,166,440 | 100 | % | ||||||||||||||
(a) | Represents risks in two or more geographic zones. | ||||||||||||||||||||||||||
(b) | Represents risks in one geographic zone. | ||||||||||||||||||||||||||
(c) | The Other locations non-specific category refers to business for which an analysis of exposure by geographic zone is not applicable, such as marine and aerospace risks, since these exposures can span multiple geographic areas and, in some instances, are not fixed locations. | ||||||||||||||||||||||||||
(d) | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. |
Statutory_and_regulatory_requi
Statutory and regulatory requirements | 12 Months Ended | |||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||||
Statutory and regulatory requirements [Abstract] | ||||||||||||||||||||||||||||||||||||
Statutory and regulatory requirements | Statutory and regulatory requirements | |||||||||||||||||||||||||||||||||||
Validus Holdings, Ltd. has operations which are subject to laws and regulations in the jurisdictions in which they operate, the most significant of which are Bermuda, the United Kingdom, the United States and Switzerland. | ||||||||||||||||||||||||||||||||||||
As a holding company, Validus Holdings, Ltd.’s principal sources of income are dividends or other sources of permitted distributions from its subsidiaries. These funds provide the cash flow required for dividend payments to the Company’s shareholders. The holding company has no material restrictions on its ability to make distributions to shareholders however, the ability of our (re)insurance subsidiaries to make distributions is limited by the applicable laws and regulations of the various countries in which we operate. The Company’s subsidiaries are required to maintain certain measures of solvency and liquidity which provide restrictions on declaring dividends and distributions. The statutory capital and surplus in certain of our most significant regulatory jurisdictions as at December 31, 2014 and 2013 was as follows: | ||||||||||||||||||||||||||||||||||||
Bermuda (a) | United States (b) | Switzerland (c) | ||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||
Required statutory capital and surplus | $ | 586,641 | $ | 1,390,179 | $ | 95,963 | $ | — | $ | 205,563 | $ | 312,563 | ||||||||||||||||||||||||
Actual statutory capital and surplus | 3,793,329 | 3,884,572 | 452,089 | — | 701,010 | 939,609 | ||||||||||||||||||||||||||||||
(a) | The Company's Bermuda based insurance subsidiaries are required to maintain minimum statutory capital and surplus equal to the greater of a minimum solvency margin ("MSM") and the Enhanced Capital Requirement ("ECR") where applicable. The ECR is equal to the higher of each insurer's MSM or the Bermuda Solvency Capital Requirement ("BSCR") model or approved internal capital model. The BSCR for the relevant insurers for the year ended December 31, 2014 will not be filed with the BMA until April 2015. As a result, the required statutory capital and surplus as at December 31, 2014 is based on the MSM of all relevant insurers, whereas the required statutory capital and surplus as at December 31, 2013 is based on the MSM and ECR where applicable for all relevant insurers. Required statutory capital and surplus includes Validus Reinsurance, Ltd., Validus Reinsurance (Switzerland) Ltd (Bermuda Branch), PaCRe, Ltd., IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. Actual statutory capital and surplus includes Validus Reinsurance, Ltd., AlphaCat Reinsurance, Ltd. and Talbot Insurance (Bermuda), Ltd. Validus Reinsurance, Ltd. is the parent company of the other five Bermuda based insurance subsidiaries. | |||||||||||||||||||||||||||||||||||
(b) | Required statutory capital and surplus is based on the Risk-Based Capital ("RBC") requirements and includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. Actual statutory capital and surplus includes Western World Insurance Company. Western World Insurance Company is the parent Company of the other two U.S. based insurance subsidiaries. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||||||||||||||||||||||||||||||||
(c) | Required statutory capital and surplus is based on the Target Capital ("TC") requirements calculated under the Swiss Solvency Test ("SST"). Required and actual statutory capital and surplus includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). | |||||||||||||||||||||||||||||||||||
During 2015, the Company's regulated subsidiaries have the ability to distribute up to $1,013,379 of unrestricted net assets as dividend payments and/or return of capital to Validus Holdings, Ltd. (2014: $516,854) without prior regulatory approval. During the year ended December 31, 2014, actual dividends and distributions to Validus Holdings, Ltd. from its subsidiaries were $773,966 (2013: $1,009,000). | ||||||||||||||||||||||||||||||||||||
Statutory net income for the years ended December 31, 2014, 2013 and 2012 was as follows: | ||||||||||||||||||||||||||||||||||||
Bermuda (a) | United States (b) | Switzerland (c) | ||||||||||||||||||||||||||||||||||
Year ended December 31, | Year ended December 31, | Year ended December 31, | ||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||
Statutory net income (loss) | $ | 509,559 | $ | 688,001 | $ | 496,227 | $ | 105,210 | $ | — | $ | — | $ | 60,308 | $ | (17,655 | ) | $ | (1,559 | ) | ||||||||||||||||
(a) | Statutory net income includes Validus Reinsurance, Ltd., PaCRe, Ltd. (at the Company's effective 10% equity interest), IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. | |||||||||||||||||||||||||||||||||||
(b) | Statutory net income includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||||||||||||||||||||||||||||||||
(c) | Statutory net income (loss) includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). The results of Validus Reinsurance (Switzerland) Ltd, a former Flagstone subsidiary, have been included in the Company's consolidated results from the November 30, 2012 date of acquisition. | |||||||||||||||||||||||||||||||||||
(a) | Bermuda | |||||||||||||||||||||||||||||||||||
The Company has eight Bermuda based insurance subsidiaries: Validus Reinsurance, Ltd., a Class 4 insurer; Validus Reinsurance (Switzerland) Ltd (Bermuda Branch) (formerly known as Flagstone Réassurance Suisse S.A. (Bermuda Branch)), a Class 4 insurer; PaCRe, Ltd., a Class 4 insurer; IPCRe Limited ("IPCRe") (formerly known as Validus Re Americas, Ltd.), a Class 3A insurer; Validus Re Americas, Ltd. (formerly known as Longhorn Re, Ltd.), a Class 3A insurer; Talbot Insurance (Bermuda), Ltd. ("TIBL"), a Class 3 insurer; AlphaCat Reinsurance, Ltd., a Class 3 insurer; and Mont Fort Re Ltd., a Class 3 insurer. The Company also has investments in two Bermuda based insurance affiliates, AlphaCat Re 2011, Ltd. and AlphaCat Re 2012, Ltd., each licensed as a Special Purpose Insurer (“SPI”) under the Insurance Act. Each of these Bermuda insurance subsidiaries and affiliates is registered under the Insurance Act. The Bermuda subsidiaries have to meet certain requirements for minimum solvency and liquidity ratios and all statutory filings are prepared in accordance with prescribed regulatory accounting practices required by The Insurance Act 1978. At December 31, 2014 and 2013, the actual statutory capital and surplus of the Bermuda based insurance subsidiaries exceeded the relevant regulatory requirements. | ||||||||||||||||||||||||||||||||||||
The ability of certain of these subsidiaries to pay dividends to us is limited under Bermuda law and regulations. The Insurance Act provides that each of the Class 4 Bermuda subsidiaries may not declare or pay, in any financial year, dividends of more than 25% of its total statutory capital and surplus (as shown on its statutory balance sheet in relation to the previous financial year) unless it files with the BMA at least seven days prior to the payment, an affidavit signed by at least two directors and such insurance subsidiary's principal representative, stating that in their opinion such subsidiary will continue to satisfy the required margins following declaration of those dividends, however, there is no additional requirement for BMA approval. In addition, before reducing its total statutory capital by 15% or more (as set out in its previous year's statutory financial statements) each of the Class 3A and Class 4 Bermuda insurance subsidiaries must make application to the BMA for permission to do so; such application shall consist of an affidavit signed by at least two directors and such insurance subsidiary's principal representative stating that in their opinion the proposed reduction in capital will not cause such subsidiaries to fail to meet its relevant margins, and such other information as the BMA may require. The Insurance Act permits each of the insurance subsidiaries to declare or pay any dividends during any financial year so long as it does not cause the insurance subsidiary to fail to meet its relevant margins subject to the restrictions set out herein and other than in respect of IPCRe. The Class 3 insurers, before reducing by 15% or more of its total statutory capital, as set out in its previous year's financial statements, shall apply to the BMA for its approval and shall provide such information as the BMA may require. The Company's primary restrictions on net assets of insurance subsidiaries consist of regulatory requirements placed upon the regulated insurance subsidiaries to hold minimum amounts of total statutory capital and surplus and other than the restriction on IPCRe noted above, there were no other material restrictions on net assets in place as of December 31, 2014. | ||||||||||||||||||||||||||||||||||||
The Company's principal operating subsidiary in Bermuda, Validus Reinsurance Ltd., maintains a branch office in Singapore. As the branch office is not considered a separate entity for regulatory purposes, the required and actual statutory capital and surplus amount includes amounts, as set out above, related to the applicable branch office. The branch office is subject to additional minimum capital or asset requirements in their country of domicile. At December 31, 2014 and 2013, the actual capital and assets for the branch exceeded the relevant local regulatory requirements. | ||||||||||||||||||||||||||||||||||||
(b) | United Kingdom | |||||||||||||||||||||||||||||||||||
As disclosed in Note 22 “Commitments and contingencies (d) Funds at Lloyd’s,” Syndicate 1183 and Talbot 2002 Underwriting Capital Ltd (“T02”) are subject to regulation by the Council of Lloyd’s. Syndicate 1183 and T02 are also subject to regulation by the U.K. Financial Conduct Authority (“FCA”) and Prudential Regulation Authority (“PRA”) under the Financial Services and Market Act 2000. | ||||||||||||||||||||||||||||||||||||
T02 is a corporate member of Lloyd’s. As a corporate member of Lloyd’s, T02 is bound by the rules of the Society of Lloyd’s, which are prescribed by Bye-laws and Requirements made by the Council of Lloyd’s under powers conferred by the Lloyd’s Act 1982. These rules (among other matters) prescribe T02’s membership subscription, the level of its contribution to the Lloyd’s central fund and the assets it must deposit with Lloyd’s in support of its underwriting. The Council of Lloyd’s has broad power to sanction breaches of its rules, including the power to restrict or prohibit a member’s participation on Lloyd’s syndicates. The capital required to support a Syndicate’s underwriting capacity, or “Funds at Lloyd’s”, is assessed annually and is determined by Lloyd’s in accordance with the rules of the Society of Lloyd’s. The capital to support the underwriting of Syndicate 1183 is provided in the form of a letter of credit and funds held at Lloyd’s. The amount provided as Funds at Lloyd’s is not available for distribution to the Company for the payment of dividends. | ||||||||||||||||||||||||||||||||||||
Each year, during the second quarter, the corporate member applies to Lloyd’s to release accumulated funds, whether syndicate profits, interest on Funds at Lloyd’s or other which are in excess of the agreed Funds at Lloyd’s amount. At December 31, 2014 and 2013, the actual capital and assets exceeded the relevant local regulatory requirements. The release for the year ended December 31, 2014 enabled a dividend payment of $100,000 (2013: $190,000) to the Company. For further details on Funds at Lloyd's refer to Note 22 (d) "Commitments and contingencies" to the Consolidated Financial Statements. | ||||||||||||||||||||||||||||||||||||
(c) | United States | |||||||||||||||||||||||||||||||||||
The Company has three U.S. based insurance subsidiaries domiciled in New Hampshire: Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. New Hampshire insurance laws limit the amount of dividends Western World may pay to the Company in a 12-month period without the approval of the New Hampshire State Insurance Department (Insurance Department). These limitations are based on the lesser of: a maximum of 10.0% of prior year end statutory surplus as determined under statutory accounting practices or the net income, not including realized capital gains, for the 12-month period ending December 31, next preceding, but shall not include pro rata distributions of any class of the insurer's own securities. In determining whether a dividend or distribution is extraordinary, an insurer may carry forward net income from the previous two calendar years that has not already been paid out as dividends. This carry-forward shall be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years. During 2015, the maximum dividend that may be paid to the Company by Western World without obtaining prior approval is $45,209. | ||||||||||||||||||||||||||||||||||||
The Company’s U.S. based insurance company subsidiaries are required to file financial statements prepared in accordance with accounting practices prescribed or permitted by the Insurance Department to which the insurance company subsidiaries are subject (statutory basis). Such accounting practices vary in certain respects from GAAP. | ||||||||||||||||||||||||||||||||||||
The Company’s U.S. based insurance company subsidiaries are subject to certain Risk-Based Capital ("RBC") requirements as specified by the National Association of Insurance Commissioners. Under those requirements, the minimum amount of capital and surplus required to be maintained by a property/casualty insurance company is based on various risk factors. At December 31, 2014, the Company’s U.S. based insurance company subsidiaries met the RBC requirements. | ||||||||||||||||||||||||||||||||||||
State insurance laws and regulations prescribe accounting practices for determining statutory net income and equity for insurance companies. In addition, state regulators may permit statutory accounting practices that differ from such prescribed practices. The Company’s insurance company subsidiaries did not use such permitted practices in 2014. | ||||||||||||||||||||||||||||||||||||
(d) | Switzerland | |||||||||||||||||||||||||||||||||||
Validus Reinsurance (Switzerland) Ltd ("Validus Re Swiss") (formerly Flagstone Réassurance Suisse SA), is a société anonyme headquartered in Zurich, Switzerland as of February 1, 2014. The conduct of reinsurance business by a company headquartered in Switzerland requires a license granted by the Swiss Financial Market Supervisory Authority ("FINMA"). | ||||||||||||||||||||||||||||||||||||
Validus Re Swiss is funded by equity in the form of paid in capital by shares and in share premium. Under Swiss corporate law as modified by insurance supervisory law, a non-life insurance company is obliged to contribute to statutory legal reserves a minimum of 20% of any annual profit up to 50% of statutory capital, being paid in share capital. Validus Re Swiss has been substantially funded by share premium. Share premium can be distributed to shareholders without being subject to withholding tax. However, the distribution of any special dividend to shareholders remains subject to the approval of FINMA which has regard to the maintenance of solvency and the interests of reinsureds and creditors. At December 31, 2014 and 2013, the actual capital and assets exceeded the relevant local regulatory requirements. |
Subsequent_events
Subsequent events | 12 Months Ended | |
Dec. 31, 2014 | ||
Subsequent Events [Abstract] | ||
Subsequent events | Subsequent events | |
(a) | Quarterly dividend | |
On February 3, 2015, the Company announced a quarterly cash dividend of $0.32 per common share and $0.32 per common share equivalent for which each outstanding warrant is exercisable, payable on March 31, 2015 to holders of record as of March 13, 2015. | ||
(b) | Share repurchase authorization | |
On February 3, 2015, the Board of Directors of the Company announced an increase in the Company's common share repurchase authorization to $750,000. This amount is in addition to the $2,274,401 of common shares repurchased by the Company through February 3, 2015 under its previously authorized share repurchase programs. The Company expects the repurchases to be made from time to time in the open market or in privately negotiated transactions. The timing, form and amount of the share repurchases under the program will depend on a variety of factors, including market conditions, the Company's capital position relative to internal and rating agency targets, legal requirements and other factors. The repurchase program may be modified, extended or terminated by the Board at any time. |
Condensed_unaudited_quarterly_
Condensed unaudited quarterly financial information | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Condensed unaudited quarterly financial information | Condensed unaudited quarterly financial data | |||||||||||||||
Quarters Ended | ||||||||||||||||
December 31, 2014 | September 30, 2014 | June 30, | March 31, | |||||||||||||
2014 | 2014 | |||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Underwriting income | ||||||||||||||||
Gross premiums written | $ | 336,647 | $ | 358,974 | $ | 655,674 | $ | 1,011,991 | ||||||||
Reinsurance premiums ceded | (33,623 | ) | (30,137 | ) | (50,565 | ) | (194,908 | ) | ||||||||
Net premiums written | 303,024 | 328,837 | 605,109 | 817,083 | ||||||||||||
Change in unearned premiums | 255,724 | 165,859 | (139,106 | ) | (334,126 | ) | ||||||||||
Net premiums earned | 558,748 | 494,696 | 466,003 | 482,957 | ||||||||||||
Underwriting deductions | ||||||||||||||||
Losses and loss expenses | 226,508 | 224,125 | 158,745 | 162,671 | ||||||||||||
Policy acquisition costs | 89,550 | 86,404 | 78,953 | 85,649 | ||||||||||||
General and administrative expenses | 98,186 | 83,319 | 73,842 | 74,445 | ||||||||||||
Share compensation expenses | 8,821 | 8,764 | 8,341 | 7,147 | ||||||||||||
Total underwriting deductions | 423,065 | 402,612 | 319,881 | 329,912 | ||||||||||||
Underwriting income | $ | 135,683 | $ | 92,084 | $ | 146,122 | $ | 153,045 | ||||||||
Net investment income | 30,167 | 25,261 | 21,286 | 23,362 | ||||||||||||
Other insurance related income | 5,524 | 3,610 | 4,811 | 8,037 | ||||||||||||
Finance expenses | (16,474 | ) | (15,354 | ) | (16,126 | ) | (15,900 | ) | ||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | $ | 154,900 | $ | 105,601 | $ | 156,093 | $ | 168,544 | ||||||||
Tax benefit (expense) | 243 | 953 | (1,391 | ) | 40 | |||||||||||
Income from operating affiliates | 4,143 | 3,761 | 4,892 | 4,927 | ||||||||||||
(Income) attributable to operating affiliate investors | (26,566 | ) | (25,807 | ) | (25,316 | ) | (31,710 | ) | ||||||||
Net operating income | $ | 132,720 | $ | 84,508 | $ | 134,278 | $ | 141,801 | ||||||||
Net realized gains on investments | 6,902 | 4,595 | 7,858 | 3,740 | ||||||||||||
Net unrealized (losses) gains on investments | (74,119 | ) | (84,974 | ) | 45,427 | 55,693 | ||||||||||
Income from investment affiliate | 530 | 1,754 | 779 | 5,348 | ||||||||||||
Foreign exchange gains (losses) | 4,131 | (11,441 | ) | 3,158 | (6,478 | ) | ||||||||||
Other (loss) income | (770 | ) | (7,690 | ) | 424 | 5,793 | ||||||||||
Transaction expenses | (4,695 | ) | (149 | ) | (3,252 | ) | — | |||||||||
Net income (loss) | $ | 64,699 | $ | (13,397 | ) | $ | 188,672 | $ | 205,897 | |||||||
Net loss (income) attributable to noncontrolling interest | 61,209 | 53,069 | (35,305 | ) | (43,509 | ) | ||||||||||
Net income available to Validus | $ | 125,908 | $ | 39,672 | $ | 153,367 | $ | 162,388 | ||||||||
Earnings per share | ||||||||||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||||||||||
Basic | 86,421,127 | 90,593,329 | 90,952,523 | 93,451,999 | ||||||||||||
Diluted | 90,948,156 | 91,939,610 | 95,276,836 | 97,799,519 | ||||||||||||
Basic earnings per share available to common shareholders | $ | 1.44 | $ | 0.42 | $ | 1.67 | $ | 1.72 | ||||||||
Earnings per diluted share available to common shareholders | $ | 1.38 | $ | 0.41 | $ | 1.61 | $ | 1.66 | ||||||||
Selected ratios: | ||||||||||||||||
Losses and loss expenses | 40.5 | % | 45.3 | % | 34.1 | % | 33.7 | % | ||||||||
Expense ratio | 35.2 | % | 36.1 | % | 34.5 | % | 34.6 | % | ||||||||
Combined ratio | 75.7 | % | 81.4 | % | 68.6 | % | 68.3 | % | ||||||||
Quarters Ended | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
2013 | 2013 | 2013 | 2013 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Underwriting income | ||||||||||||||||
Gross premiums written | $ | 237,273 | $ | 356,760 | $ | 702,313 | $ | 1,104,760 | ||||||||
Reinsurance premiums ceded | (24,558 | ) | (39,415 | ) | (121,396 | ) | (187,216 | ) | ||||||||
Net premiums written | 212,715 | 317,345 | 580,917 | 917,544 | ||||||||||||
Change in unearned premiums | 279,523 | 213,943 | (33,459 | ) | (386,483 | ) | ||||||||||
Net premiums earned | 492,238 | 531,288 | 547,458 | 531,061 | ||||||||||||
Underwriting deductions | ||||||||||||||||
Losses and loss expenses | 206,152 | 177,965 | 265,044 | 144,771 | ||||||||||||
Policy acquisition costs | 84,647 | 94,900 | 87,152 | 93,611 | ||||||||||||
General and administrative expenses | 82,930 | 81,089 | 70,967 | 80,279 | ||||||||||||
Share compensation expenses | 8,147 | 10,527 | 6,638 | 2,318 | ||||||||||||
Total underwriting deductions | 381,876 | 364,481 | 429,801 | 320,979 | ||||||||||||
Underwriting income | $ | 110,362 | $ | 166,807 | $ | 117,657 | $ | 210,082 | ||||||||
Net investment income | 24,204 | 20,009 | 26,210 | 25,649 | ||||||||||||
Other insurance related income | 7,743 | 943 | 5,512 | 4,922 | ||||||||||||
Finance expenses | (16,925 | ) | (15,317 | ) | (17,566 | ) | (14,369 | ) | ||||||||
Operating income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | $ | 125,384 | $ | 172,442 | $ | 131,813 | $ | 226,284 | ||||||||
Tax (expense) benefit | (603 | ) | (5 | ) | (93 | ) | 318 | |||||||||
Income from operating affiliates | 5,510 | 1,463 | 3,793 | 3,523 | ||||||||||||
(Income) attributable to operating affiliate investors (a) | (26,607 | ) | (11,815 | ) | (20,264 | ) | (10,077 | ) | ||||||||
Net operating income | $ | 103,684 | $ | 162,085 | $ | 115,249 | $ | 220,048 | ||||||||
Net realized gains (losses) on investments | 4,448 | (6,320 | ) | 3,409 | 1,721 | |||||||||||
Net unrealized gains (losses) on investments | 20,137 | 69,967 | (141,348 | ) | (7,237 | ) | ||||||||||
Income from investment affiliate | 516 | 1,044 | 1,753 | 1,477 | ||||||||||||
Foreign exchange (losses) gains | (2,230 | ) | 6,036 | (8,223 | ) | 6,922 | ||||||||||
Other loss | (3,697 | ) | (3,749 | ) | (1,094 | ) | (2,237 | ) | ||||||||
Net income (loss) | $ | 122,858 | $ | 229,063 | $ | (30,254 | ) | $ | 220,694 | |||||||
Net (income) loss (available) attributable to noncontrolling interest | (27,526 | ) | (45,694 | ) | 60,976 | 2,549 | ||||||||||
Net income available to Validus | $ | 95,332 | $ | 183,369 | $ | 30,722 | $ | 223,243 | ||||||||
Earnings per share | ||||||||||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||||||||||
Basic | 98,454,907 | 99,834,563 | 103,133,188 | 107,386,438 | ||||||||||||
Diluted | 102,928,482 | 103,613,766 | 104,734,643 | 110,052,999 | ||||||||||||
Basic earnings per share available to common shareholders | $ | 0.95 | $ | 1.82 | $ | 0.28 | $ | 1.94 | ||||||||
Earnings per diluted share available to common shareholders | $ | 0.93 | $ | 1.77 | $ | 0.28 | $ | 1.9 | ||||||||
Selected Ratios: | ||||||||||||||||
Losses and loss expenses | 41.9 | % | 33.5 | % | 48.4 | % | 27.3 | % | ||||||||
Expense ratio | 35.7 | % | 35.1 | % | 30.1 | % | 33.2 | % | ||||||||
Combined ratio | 77.6 | % | 68.6 | % | 78.5 | % | 60.5 | % | ||||||||
(a) | This amount had been shown within finance expenses for each of the three months ended March 31, June 30 and September 30, 2013. | |||||||||||||||
Quarters Ended | ||||||||||||||||
December 31, 2012 | September 30, 2012 | June 30, | March 31, | |||||||||||||
2012 | 2012 | |||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Underwriting income | ||||||||||||||||
Gross premiums written | $ | 311,847 | $ | 390,215 | $ | 627,089 | $ | 837,289 | ||||||||
Reinsurance premiums ceded | (35,659 | ) | (45,743 | ) | (119,052 | ) | (107,052 | ) | ||||||||
Net premiums written | 276,188 | 344,472 | 508,037 | 730,237 | ||||||||||||
Change in unearned premiums | 223,098 | 130,632 | (60,410 | ) | (279,038 | ) | ||||||||||
Net premiums earned | 499,286 | 475,104 | 447,627 | 451,199 | ||||||||||||
Underwriting deductions | ||||||||||||||||
Losses and loss expenses | 458,310 | 155,455 | 153,692 | 231,989 | ||||||||||||
Policy acquisition costs | 81,814 | 98,623 | 76,129 | 78,132 | ||||||||||||
General and administrative expenses | 65,095 | 70,547 | 61,635 | 66,375 | ||||||||||||
Share compensation expenses | 7,126 | 7,345 | 6,800 | 5,438 | ||||||||||||
Total underwriting deductions | 612,345 | 331,970 | 298,256 | 381,934 | ||||||||||||
Underwriting (loss) income | $ | (113,059 | ) | $ | 143,134 | $ | 149,371 | $ | 69,265 | |||||||
Net investment income | 28,802 | 25,489 | 25,885 | 27,760 | ||||||||||||
Other insurance related income | 144 | 7,324 | 6,606 | 8,237 | ||||||||||||
Finance expenses | (14,510 | ) | (9,362 | ) | (13,706 | ) | (16,279 | ) | ||||||||
Operating (loss) income before taxes and (loss) income from operating affiliates | $ | (98,623 | ) | $ | 166,585 | $ | 168,156 | $ | 88,983 | |||||||
Tax expense | (615 | ) | (1,343 | ) | (404 | ) | (139 | ) | ||||||||
(Loss) income from operating affiliates | $ | (614 | ) | $ | 6,235 | $ | 3,592 | $ | 3,367 | |||||||
Net operating (loss) income | $ | (99,852 | ) | $ | 171,477 | $ | 171,344 | $ | 92,211 | |||||||
Gain on bargain purchase, net of expenses (a) | 21,485 | (3,784 | ) | — | — | |||||||||||
Net realized (losses) gains on investments | (4,516 | ) | 9,063 | 6,154 | 7,532 | |||||||||||
Net unrealized (losses) gains on investments | (35,857 | ) | 86,345 | (53,574 | ) | 20,671 | ||||||||||
Loss from investment affiliate | (406 | ) | (160 | ) | (398 | ) | — | |||||||||
Foreign exchange gains (losses) | 1,181 | 1,103 | (652 | ) | 3,166 | |||||||||||
Other income (loss) | 43 | — | (612 | ) | 654 | |||||||||||
Net (loss) income | $ | (117,922 | ) | $ | 264,044 | $ | 122,262 | $ | 124,234 | |||||||
Net loss (income) attributable (available) to noncontrolling interest | 27,206 | (56,746 | ) | 45,360 | — | |||||||||||
Net (loss) income (attributable) available to Validus | $ | (90,716 | ) | $ | 207,298 | $ | 167,622 | $ | 124,234 | |||||||
Earnings per share | ||||||||||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||||||||||
Basic | 97,688,338 | 93,368,775 | 98,254,186 | 99,425,140 | ||||||||||||
Diluted | 97,688,338 | 98,236,490 | 103,667,967 | 105,096,090 | ||||||||||||
Basic (loss) earnings per share (attributable) available to common shareholders | $ | (0.94 | ) | $ | 2.2 | $ | 1.69 | $ | 1.23 | |||||||
(Loss) earnings per diluted share (attributable) available to common shareholders | $ | (0.94 | ) | $ | 2.11 | $ | 1.62 | $ | 1.18 | |||||||
Selected Ratios: | ||||||||||||||||
Losses and loss expenses | 91.8 | % | 32.7 | % | 34.3 | % | 51.4 | % | ||||||||
Expense ratio | 30.9 | % | 37.2 | % | 32.3 | % | 33.2 | % | ||||||||
Combined ratio | 122.7 | % | 69.9 | % | 66.6 | % | 84.6 | % | ||||||||
(a) | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. |
Schedule_I_Summary_of_investme
Schedule I - Summary of investments | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Summary of Investments, Other than Investments in Related Parties [Abstract] | ||||||||||||
Summary of Investments Other than Investments in Related Parties | SCHEDULE I | |||||||||||
VALIDUS HOLDINGS, LTD. | ||||||||||||
SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES | ||||||||||||
At December 31, 2014 | ||||||||||||
(Expressed in thousands of U.S. dollars) | ||||||||||||
Amortized | Fair | Amount | ||||||||||
cost | value | shown on the | ||||||||||
Balance Sheet | ||||||||||||
U.S. government and government agency | $ | 759,232 | $ | 760,086 | $ | 760,086 | ||||||
Non-U.S. government and government agency | 279,493 | 278,728 | 278,728 | |||||||||
U.S. states, municipalities and political subdivisions | 448,668 | 449,623 | 449,623 | |||||||||
Agency residential mortgage-backed securities | 520,685 | 529,231 | 529,231 | |||||||||
Non-agency residential mortgage-backed securities | 37,954 | 37,807 | 37,807 | |||||||||
U.S. corporate | 1,500,963 | 1,499,706 | 1,499,706 | |||||||||
Non-U.S. corporate | 564,386 | 563,162 | 563,162 | |||||||||
Bank loans | 457,537 | 449,004 | 449,004 | |||||||||
Catastrophe bonds | 75,822 | 75,664 | 75,664 | |||||||||
Asset-backed securities | 647,422 | 647,482 | 647,482 | |||||||||
Commercial mortgage-backed securities | 242,332 | 242,238 | 242,238 | |||||||||
Total fixed maturities | 5,534,494 | 5,532,731 | 5,532,731 | |||||||||
Total short-term investments | 1,051,222 | 1,051,074 | 1,051,074 | |||||||||
Total other investments | 879,176 | 813,011 | 813,011 | |||||||||
Total | $ | 7,464,892 | $ | 7,396,816 | $ | 7,396,816 | ||||||
Schedule_II_Condensed_financia
Schedule II - Condensed financial information of registrant | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||
Condensed Financial Information of Registrant | SCHEDULE II | |||||||||||
VALIDUS HOLDINGS, LTD. | ||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | ||||||||||||
BALANCE SHEETS | ||||||||||||
As at December 31, 2014 and 2013 | ||||||||||||
(Expressed in thousands of U.S. dollars, except share and per share information) | ||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 29,798 | $ | 20,385 | ||||||||
Investment in subsidiaries on an equity basis | 4,140,770 | 4,273,592 | ||||||||||
Balances due from subsidiaries | 41,078 | 29,048 | ||||||||||
Other assets | 3,239 | 3,767 | ||||||||||
Total assets | $ | 4,214,885 | $ | 4,326,792 | ||||||||
LIABILITIES | ||||||||||||
Accounts payable and accrued expenses | $ | 29,621 | $ | 25,500 | ||||||||
Senior notes payable | 247,306 | 247,198 | ||||||||||
Debentures payable | 350,000 | 350,000 | ||||||||||
Total liabilities | $ | 626,927 | $ | 622,698 | ||||||||
Commitments and contingent liabilities | ||||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||
Common shares, 571,428,571 authorized, par value $0.175 (Issued: 2014—155,554,224; 2013—154,488,497; Outstanding: 2014—83,869,845; 2013—96,044,312) | $ | 27,222 | $ | 27,036 | ||||||||
Treasury shares (2014—71,684,379; 2013—58,444,185) | (12,545 | ) | (10,228 | ) | ||||||||
Additional paid-in capital | 1,207,493 | 1,677,894 | ||||||||||
Accumulated other comprehensive loss | (8,556 | ) | (617 | ) | ||||||||
Retained earnings | 2,374,344 | 2,010,009 | ||||||||||
Total shareholders’ equity | $ | 3,587,958 | $ | 3,704,094 | ||||||||
Total liabilities and shareholders’ equity | $ | 4,214,885 | $ | 4,326,792 | ||||||||
VALIDUS HOLDINGS, LTD. | ||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued) | ||||||||||||
STATEMENTS OF OPERATIONS | ||||||||||||
For the years ended December 31, 2014, 2013 and 2012 | ||||||||||||
(Expressed in thousands of U.S. dollars) | ||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | ||||||||||
Revenues | ||||||||||||
Net investment income | $ | 14 | $ | 14 | $ | 3 | ||||||
Other income | — | 36 | — | |||||||||
Foreign exchange gains (losses) | 648 | (382 | ) | (469 | ) | |||||||
Total revenues | 662 | (332 | ) | (466 | ) | |||||||
Expenses | ||||||||||||
General and administrative expenses | 86,108 | 84,143 | 66,576 | |||||||||
Share compensation expenses | 6,424 | 6,329 | 8,503 | |||||||||
Finance expenses | 47,689 | 45,868 | 45,203 | |||||||||
Total expenses | 140,221 | 136,340 | 120,282 | |||||||||
(Loss) before equity in net earnings of subsidiaries | (139,559 | ) | (136,672 | ) | (120,748 | ) | ||||||
Equity in net earnings of subsidiaries | 620,894 | 669,338 | 529,186 | |||||||||
Net income | $ | 481,335 | $ | 532,666 | $ | 408,438 | ||||||
Other comprehensive (loss) income | ||||||||||||
Change in foreign currency translation adjustments | $ | (7,501 | ) | $ | (1,954 | ) | $ | 3,648 | ||||
Change in minimum pension liability, net of tax | (210 | ) | — | — | ||||||||
Change in fair value of cash flow hedge | (228 | ) | — | — | ||||||||
Other comprehensive (loss) income | (7,939 | ) | (1,954 | ) | 3,648 | |||||||
Comprehensive income | $ | 473,396 | $ | 530,712 | $ | 412,086 | ||||||
VALIDUS HOLDINGS, LTD. | ||||||||||||
CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued) | ||||||||||||
STATEMENTS OF CASH FLOWS | ||||||||||||
For the years ended December 31, 2014, 2013 and 2012 | ||||||||||||
(Expressed in thousands of U.S. dollars) | ||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | ||||||||||
Cash flows provided by (used in) operating activities | ||||||||||||
Net income | $ | 481,335 | $ | 532,666 | $ | 408,438 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in net earnings of subsidiaries | (620,894 | ) | (669,338 | ) | (529,186 | ) | ||||||
Dividends received from subsidiaries | 100,000 | 1,009,000 | 734,000 | |||||||||
Share compensation expenses | 6,424 | 6,329 | 8,503 | |||||||||
Amortization of discount on senior notes | 108 | 108 | 108 | |||||||||
Change in: | ||||||||||||
Other assets | 528 | 865 | 115 | |||||||||
Balances due from subsidiaries | (12,030 | ) | 4,329 | (35,522 | ) | |||||||
Balances due to subsidiaries | — | — | (45,808 | ) | ||||||||
Accounts payable and accrued expenses | 2,624 | (10,876 | ) | 7,640 | ||||||||
Net cash (used in) provided by operating activities | (41,905 | ) | 873,083 | 548,288 | ||||||||
Cash flows provided by (used in) investing activities | ||||||||||||
Return of capital from subsidiaries | 673,966 | — | — | |||||||||
Investment in subsidiaries | — | — | (166,582 | ) | ||||||||
Net cash provided by (used in) investing activities | 673,966 | — | (166,582 | ) | ||||||||
Cash flows provided by (used in) financing activities | ||||||||||||
Issuance of common shares, net | 5,347 | 1,211 | 3,015 | |||||||||
Purchases of common shares under repurchase program | (510,952 | ) | (513,504 | ) | (259,962 | ) | ||||||
Dividends paid | (117,043 | ) | (360,071 | ) | (110,037 | ) | ||||||
Net cash (used in) financing activities | (622,648 | ) | (872,364 | ) | (366,984 | ) | ||||||
Net increase in cash | 9,413 | 719 | 14,722 | |||||||||
Cash and cash equivalents—beginning of year | 20,385 | 19,666 | 4,944 | |||||||||
Cash and cash equivalents—end of year | $ | 29,798 | $ | 20,385 | $ | 19,666 | ||||||
Schedule_III_Supplementary_ins
Schedule III - Supplementary insurance information | 12 Months Ended | |||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||||
Supplementary Insurance Information [Abstract] | ||||||||||||||||||||||||||||||||||||
Supplementary Insurance Information | SCHEDULE III | |||||||||||||||||||||||||||||||||||
VALIDUS HOLDINGS, LTD. | ||||||||||||||||||||||||||||||||||||
SUPPLEMENTARY INSURANCE INFORMATION | ||||||||||||||||||||||||||||||||||||
As at and for the years ended December 31, 2014, 2013 and 2012 | ||||||||||||||||||||||||||||||||||||
(Expressed in thousands of U.S. dollars) | ||||||||||||||||||||||||||||||||||||
As at and for the year ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||
Deferred | Reserve | Unearned | Net | Net | Losses | Amortization | Other | Net | ||||||||||||||||||||||||||||
Acquisition | for Losses | Premiums | Premiums | Investment | and Loss | of Deferred | Operating | Premiums | ||||||||||||||||||||||||||||
Costs | and Loss | Earned | Income | Expenses | Acquisition | Expenses | Written | |||||||||||||||||||||||||||||
Expenses | Costs | |||||||||||||||||||||||||||||||||||
Validus Re | $ | 59,091 | $ | 1,333,878 | $ | 305,138 | $ | 917,284 | $ | 74,599 | $ | 307,290 | $ | 141,670 | $ | 84,478 | $ | 954,854 | ||||||||||||||||||
AlphaCat | 1,554 | 6,525 | 15,360 | 132,350 | 4,276 | (9,670 | ) | 12,673 | 20,091 | 130,833 | ||||||||||||||||||||||||||
Talbot | 95,246 | 1,352,056 | 552,660 | 879,774 | 20,575 | 423,394 | 187,162 | 162,174 | 909,559 | |||||||||||||||||||||||||||
Western World | 9,566 | 613,551 | 133,185 | 72,996 | 4,523 | 51,035 | 3,169 | 11,256 | 58,807 | |||||||||||||||||||||||||||
Corporate & Eliminations | (4,162 | ) | (71,616 | ) | (15,779 | ) | — | (3,897 | ) | — | (4,118 | ) | 84,866 | — | ||||||||||||||||||||||
Total | $ | 161,295 | $ | 3,234,394 | $ | 990,564 | $ | 2,002,404 | $ | 100,076 | $ | 772,049 | $ | 340,556 | $ | 362,865 | $ | 2,054,053 | ||||||||||||||||||
As at and for the year ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||
Deferred | Reserve | Unearned | Net | Net | Losses | Amortization | Other | Net | ||||||||||||||||||||||||||||
Acquisition | for Losses | Premiums | Premiums | Investment | and Loss | of Deferred | Operating | Premiums | ||||||||||||||||||||||||||||
Costs | and Loss | Earned | Income | Expenses | Acquisition | Expenses | Written | |||||||||||||||||||||||||||||
Expenses | Costs | |||||||||||||||||||||||||||||||||||
Validus Re | $ | 52,835 | $ | 1,723,465 | $ | 296,115 | $ | 1,133,937 | $ | 81,346 | $ | 430,026 | $ | 180,779 | $ | 98,928 | $ | 1,016,258 | ||||||||||||||||||
AlphaCat | 1,755 | 17,612 | 16,062 | 137,414 | 3,865 | 17,569 | 13,853 | 19,233 | 146,484 | |||||||||||||||||||||||||||
Talbot | 88,656 | 1,362,574 | 535,659 | 830,694 | 18,061 | 346,337 | 170,738 | 146,071 | 865,779 | |||||||||||||||||||||||||||
Corporate & Eliminations | (8,977 | ) | (73,252 | ) | (23,340 | ) | — | (7,200 | ) | — | (5,060 | ) | 78,663 | — | ||||||||||||||||||||||
Total | $ | 134,269 | $ | 3,030,399 | $ | 824,496 | $ | 2,102,045 | $ | 96,072 | $ | 793,932 | $ | 360,310 | $ | 342,895 | $ | 2,028,521 | ||||||||||||||||||
As at and for the year ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||
Deferred | Reserve | Unearned | Net | Net | Losses | Amortization | Other | Net | ||||||||||||||||||||||||||||
Acquisition | for Losses | Premiums | Premiums | Investment | and Loss | of Deferred | Operating | Premiums | ||||||||||||||||||||||||||||
Costs | and Loss | Earned | Income | Expenses | Acquisition | Expenses | Written | |||||||||||||||||||||||||||||
Expenses | Costs | |||||||||||||||||||||||||||||||||||
Validus Re | $ | 75,138 | $ | 2,122,895 | $ | 414,343 | $ | 1,023,271 | $ | 88,727 | $ | 575,416 | $ | 154,362 | $ | 70,811 | $ | 987,381 | ||||||||||||||||||
AlphaCat | 713 | 5,000 | 6,992 | 17,666 | 3,748 | — | 1,774 | 7,811 | 21,603 | |||||||||||||||||||||||||||
Talbot | 79,747 | 1,480,307 | 494,883 | 832,279 | 21,310 | 424,030 | 183,926 | 141,070 | 849,950 | |||||||||||||||||||||||||||
Corporate & Eliminations | (9,010 | ) | (90,629 | ) | (21,856 | ) | — | (5,849 | ) | — | (5,364 | ) | 70,669 | — | ||||||||||||||||||||||
Total | $ | 146,588 | $ | 3,517,573 | $ | 894,362 | $ | 1,873,216 | $ | 107,936 | $ | 999,446 | $ | 334,698 | $ | 290,361 | $ | 1,858,934 | ||||||||||||||||||
Schedule_IV_Reinsurance
Schedule IV - Reinsurance | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||||||||||||||||||
Reinsurance | SCHEDULE IV | ||||||||||||||||||
VALIDUS HOLDINGS, LTD. | |||||||||||||||||||
REINSURANCE | |||||||||||||||||||
As at and for the years ended December 31, 2014, 2013 and 2012 | |||||||||||||||||||
(Expressed in thousands of U.S. dollars) | |||||||||||||||||||
Direct gross | Ceded to | Assumed | Net amount | Percentage | |||||||||||||||
other companies | from other | of amount | |||||||||||||||||
companies | assumed to net | ||||||||||||||||||
Year Ended December 31, 2014 | $ | 683,028 | $ | 309,233 | $ | 1,680,258 | $ | 2,054,053 | 82 | % | |||||||||
Year Ended December 31, 2013 | 544,722 | 372,585 | 1,856,384 | 2,028,521 | 92 | % | |||||||||||||
Year Ended December 31, 2012 | 550,491 | 307,506 | 1,615,949 | 1,858,934 | 87 | % | |||||||||||||
Schedule_VI_Supplemental_infor
Schedule VI - Supplemental information for property-casualty underwriters | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||||||||||
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Information Concerning Property/Casualty Insurance Operations | SCHEDULE VI | ||||||||||||||||||||||||||||||||||||||||
VALIDUS HOLDINGS, LTD. | |||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION CONCERNING PROPERTY/CASUALTY | |||||||||||||||||||||||||||||||||||||||||
INSURANCE OPERATIONS | |||||||||||||||||||||||||||||||||||||||||
As at and for the years ended December 31, 2014, 2013 and 2012 | |||||||||||||||||||||||||||||||||||||||||
(Expressed in thousands of U.S. dollars) | |||||||||||||||||||||||||||||||||||||||||
Affiliation with | Deferred | Reserves for | Reserves for | Net | Net | Losses and loss | Net paid | Amortization of | Net | ||||||||||||||||||||||||||||||||
registrant | acquisition | losses | unearned | earned | investment | expenses | losses | deferred | premiums | ||||||||||||||||||||||||||||||||
costs | and loss | premiums | premiums | income | incurred related to | and loss | acquisition | written | |||||||||||||||||||||||||||||||||
expenses | Current | Prior | expenses | costs | |||||||||||||||||||||||||||||||||||||
year | year | ||||||||||||||||||||||||||||||||||||||||
Consolidated Subsidiaries | |||||||||||||||||||||||||||||||||||||||||
2014 | $ | 161,295 | $ | 3,234,394 | $ | 990,564 | $ | 2,002,404 | $ | 100,076 | $ | 1,024,256 | $ | (252,207 | ) | $ | 1,061,907 | $ | 340,556 | $ | 2,054,053 | ||||||||||||||||||||
2013 | 134,269 | 3,030,399 | 824,496 | 2,102,045 | 96,072 | 999,380 | (205,448 | ) | 1,161,478 | 360,310 | 2,028,521 | ||||||||||||||||||||||||||||||
2012 | 146,588 | 3,517,573 | 894,362 | 1,873,216 | 107,936 | 1,174,415 | (174,969 | ) | 836,020 | 334,698 | 1,858,934 | ||||||||||||||||||||||||||||||
Significant_accounting_policie1
Significant accounting policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Basis of preparation | These Consolidated Financial Statements include Validus Holdings, Ltd. and its wholly and majority owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain amounts with respect to cash and cash equivalents have been revised to correct certain prior period comparatives in these Consolidated Financial Statements. | |
All significant intercompany accounts and transactions have been eliminated. | ||
Use of estimates | The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While management believes that the amounts included in the Consolidated Financial Statements reflect its best estimates and assumptions, actual results could differ from those estimates. The Company’s principal estimates include: | |
•reserve for losses and loss expenses; | ||
•premium estimates for business written on a line slip or proportional basis; | ||
•the valuation of goodwill and intangible assets; | ||
•reinsurance recoverable balances including the provision for uncollectible amounts; and | ||
•investment valuation of financial assets. | ||
The term “ASC” used in these notes refers to Accounting Standard Codification issued by the United States Financial Accounting Standards Board (“FASB”). | ||
Premiums | Insurance premiums written are recorded in accordance with the terms of underlying policies. Reinsurance premiums written are recorded at the inception of the policy and are estimated based on information received from brokers, ceding companies and reinsureds, and any subsequent differences arising on such estimates will be recorded in the periods in which they are determined. Premiums written are earned on a pro-rated basis over the term of the policy. For contracts and policies written on a losses occurring basis, the risk period is generally the same as the contract or policy terms. For contracts written on a policies attaching basis, the risk period is based on the terms of the underlying contracts and policies and is generally assumed to be 24 months. The portion of the premiums written applicable to the unexpired terms of the underlying contracts and policies in force is recorded as unearned premiums. | |
Reinstatement premiums are recorded at the time a loss event occurs and coverage limits for the remaining life of the contract are reinstated under predefined contract terms. The accrual of reinstatement premiums is based on our estimate of losses and loss expenses, which reflects management’s judgment, as described in Note 3(c) "Reserve for losses and loss expenses" below. | ||
Policy acquisition costs | Policy acquisition costs are costs that vary with, and are directly related to, the successful production of new and renewal business, and consist principally of commissions and brokerage expenses. Acquisition costs are shown net of commissions earned on reinsurance ceded. These costs are deferred and amortized over the periods in which the related premiums are earned. Deferred acquisition costs are limited to their estimated realizable value based on the related unearned premiums and anticipated claims expenses. The realizable value of the Company’s deferred acquisition costs is determined without consideration of investment income. Policy acquisition costs also include profit commissions. Profit commissions are recognized on a basis consistent with our estimate of losses and loss expenses. | |
Reserves for losses and loss expenses | The reserve for losses and loss expenses includes reserves for unpaid reported losses and for losses incurred but not reported (“IBNR”). The reserve for unpaid reported losses and loss expenses is established by management based on reports from brokers, ceding companies and insureds and represents the estimated ultimate cost of events or conditions that have been reported to, or specifically identified by, the Company. The reserve for incurred but not reported losses and loss expenses is established by management based on actuarially determined estimates of ultimate losses and loss expenses. Inherent in the estimate of ultimate losses and loss expenses are expected trends in claim severity and frequency and other factors which may vary significantly as claims are settled. Accordingly, ultimate losses and loss expenses may differ materially from the amounts recorded in the Consolidated Financial Statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, will be recorded in earnings in the period in which they become known. Prior period development arises from changes to these estimates recognized in the current year that relate to reserves for losses and loss expenses established in previous calendar years. | |
Reinsurance | In the normal course of business, the Company seeks to reduce the potential amount of loss arising from claims events by reinsuring certain levels of risk assumed in various areas of exposure with other insurers or reinsurers. The accounting for reinsurance ceded depends on the method of reinsurance. If the policy is on a “losses occurring” basis, reinsurance premiums ceded are expensed (and any commissions thereon are earned) on a pro-rata basis over the period the reinsurance coverage is provided. If the policy is a “risks attaching” policy, reinsurance premiums ceded are expensed (and any commissions thereon are earned) in line with the earning of the gross premiums to which the risk attaching policy relates. Prepaid reinsurance premiums represent the portion of premiums ceded applicable to the unexpired term of policies in force. Mandatory reinstatement premiums ceded are recorded at the time the loss event occurs. Reinsurance recoverables are based on contracts in force at the time of the underlying loss event. The method for determining the reinsurance recoverable on unpaid losses and loss expenses involves the actuarial estimates of unpaid losses and loss expenses as well as a determination of the Company’s ability to cede unpaid losses and loss expenses under its reinsurance treaties. The use of different assumptions could have a material effect on the provision for uncollectible reinsurance. To the extent the creditworthiness of the Company’s reinsurers was to deteriorate due to adverse events affecting the reinsurance industry, such as a large number of major catastrophes, actual uncollectible amounts could be significantly greater than the Company’s provision. Amounts recoverable from reinsurers are estimated in a manner consistent with the underlying liabilities. | |
Investments | All investments are carried at fair value with interest and dividend income and realized and unrealized gains and losses included in net income for the year. | |
All investment transactions are recorded on a first-in-first-out basis and realized gains and losses on the sale of investments are determined on the basis of amortized cost. Interest on fixed maturity securities is recorded in net investment income when earned and is adjusted for any amortization of premium or accretion of discount. | ||
For mortgage-backed securities, and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the resultant change in effective yields and maturities are recognized retrospectively. Prepayment fees or call premiums that are only payable to the Company when a security is called prior to its maturity, are earned when received and reflected in net investment income. | ||
Short-term investments primarily comprise of investments with a remaining maturity of less than one year at time of purchase and money market funds held at the Company’s investment managers. Certain short-term investments relate to funds held in trust in support of collateralized reinsurance transactions. | ||
Other investments | The fair value of other investments is generally recorded on the basis of the net asset valuation criteria established by the managers of the investments, normally based upon the governing documents of such investments. In addition, due to a lag in reporting, some of the fund managers, fund administrators, or both, are unable to provide final fund valuations as of the Company’s reporting date. In these circumstances, the Company estimates the fair value of these funds by starting with the prior month’s or prior quarter's fund valuation, adjusting these valuations for capital calls, redemptions or distributions and the impact of changes in foreign currency exchange rates, and then estimating the return for the current period. In circumstances in which the Company estimates the return for the current period, it uses all credible information available. This includes utilizing preliminary estimates reported by its fund managers, obtaining the valuation of underlying portfolio investments where such underlying investments are publicly traded and therefore have a readily observable price, using information that is available to the Company with respect to the underlying investments, reviewing various indices for similar investments or asset classes, as well as estimating returns based on the results of similar types of investments for which the Company has reported results, or other valuation methods, as necessary. Actual final fund valuations may differ, perhaps materially so, from the Company’s estimates and these differences are recorded in the period they become known as a change in estimate. | |
Fair value of financial instruments | Fair value is defined as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting the highest and best use valuation concepts. The guidance for “Fair Value Measurement and Disclosure” provides a framework for measuring fair value by creating a hierarchy of fair value measurements that distinguishes market data between observable independent market inputs and unobservable market assumptions by the reporting entity. The guidance further expands disclosures about such fair value measurements. The guidance applies broadly to most existing accounting pronouncements that require or permit fair value measurements (including both financial and non-financial assets and liabilities) but does not require any new fair value measurements. The Company has adopted all authoritative guidance in effect as of the balance sheet date regarding certain market conditions that allow for fair value measurements that incorporate unobservable inputs where active market transaction based measurements are unavailable. | |
Derivative instruments | Fair Value Hedges | |
The Company uses derivative instruments in the form of foreign currency forward exchange contracts to manage foreign currency risk. A foreign currency forward exchange contract involves an obligation to purchase or sell a specified amount of a specified currency at a future date at a price set at the time of the contract. Foreign currency forward exchange contracts will not eliminate fluctuations in the value of our assets and liabilities denominated in foreign currencies but rather allow the Company to establish a rate of exchange for a future point in time. The foreign currency forward exchange contracts are recorded as derivatives at fair value as either assets or liabilities, depending on their rights or obligations, with changes in fair value recorded as a net foreign exchange gain or loss in the Company’s Statements of Comprehensive Income. | ||
To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in value or cash flow of the hedged item. The Company formally documents all relationships between designated hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The documentation process includes linking derivatives to specific assets or liabilities on the balance sheet. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The Company assesses the effectiveness of its designated hedges on an individual currency basis. If the ratio obtained with this method is within the range of 80% to 125%, the Company considers the hedge effective. | ||
The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; the derivative is de-designated as a hedging instrument; or the derivative expires or is sold, terminated or exercised. To the extent that the Company discontinues hedge accounting, because, based on management’s assessment, the derivative no longer qualifies as an effective hedge, the derivative will continue to be carried in the Consolidated Balance Sheets at its fair value, with changes in its fair value recognized in current period net income through foreign exchange gains (losses). | ||
Cash Flow Hedges | ||
The Company uses derivative instruments in the form of interest rate swaps to manage the interest rate exposure associated with certain assets and liabilities. These derivatives are recorded at fair value. Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge are recorded in other comprehensive income (“OCI”) and are reclassified into earnings when the variability of the cash flow of the hedged item impacts earnings. Gains and losses on derivative contracts that are reclassified from OCI to current period earnings are included in the line item in the Consolidated Statements of Comprehensive Income in which the cash flows of the hedged item are recorded. Any hedge ineffectiveness is recorded immediately in current period earnings. | ||
To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in value or cash flow of the hedged item. The Company formally documents all relationships between designated hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The documentation process includes linking derivatives to specific assets or liabilities on the balance sheet. The Company also formally assesses, both at the hedge's inception and on an ongoing basis (when required), whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The Company assesses the effectiveness of its designated hedges on an individual contract basis. The Company currently applies the long haul method when assessing the hedge's effectiveness. | ||
The Company discontinues hedge accounting prospectively when it is determined that the derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item; the derivative is de-designated as a hedging instrument; or the derivative expires or is sold, terminated or exercised. When hedge accounting is discontinued because the Company becomes aware that it is not probable that the forecasted transaction will occur, the derivative continues to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in OCI are recognized immediately in earnings. | ||
Cash and cash equivalents | The Company considers time deposits and money market funds with an original maturity of one month or less as equivalent to cash. | |
Foreign exchange | The U.S. dollar is the functional currency of the Company and the majority of its subsidiaries. For these companies, monetary assets and liabilities denominated in foreign currencies are revalued at the exchange rates in effect at the balance sheet date and revenues and expenses denominated in foreign currencies are translated at the prevailing exchange rate on the transaction date with the resulting foreign exchange gains and losses included in earnings. Non-monetary assets and liabilities denominated in foreign currencies are revalued at the exchange rate in effect at the time of the underlying transaction. | |
Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar are translated at prevailing year end exchange rates. Revenue and expenses of such foreign operations are translated at average exchange rates during the year. The net effect of translation differences between functional and reporting currencies in foreign operations, net of applicable deferred income taxes, is included in accumulated other comprehensive income ("AOCI"). | ||
Stock plans | The Company accounts for its stock plans in accordance with the U.S. GAAP fair value recognition provisions for “Stock Compensation.” Accordingly, the Company recognizes the compensation expense for stock option grants, restricted share grants and performance share awards based on the fair value of the award on the date of grant over the requisite service period. | |
Warrants | The Company has accounted for certain warrant contracts issued to our sponsoring investors in conjunction with the capitalization of the Company, and which may be settled by the Company using either the physical settlement or net-share settlement methods, in accordance with U.S. GAAP guidance for “Derivatives and Hedging, Contracts in Entity’s Own Equity.” Accordingly, the fair value of these warrants has been recorded in equity as an addition to additional paid-in capital. | |
Earnings per share | Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. Earnings per diluted common share are based on the weighted average number of common shares and share equivalents excluding any anti-dilutive effects of warrants, options and other awards under stock plans. | |
Income taxes and uncertain tax provisions | Deferred tax assets and liabilities are recorded in accordance with U.S. GAAP “Income Taxes” guidance. Consistent with this guidance, the Company records deferred income taxes which reflect the tax effect of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. | |
The Company and its Bermuda domiciled subsidiaries are not subject to any income, withholding or capital gains taxes under current Bermuda law. The Company has operations in subsidiary form in various other jurisdictions around the world, including but not limited to the U.K., U.S., Switzerland, Luxembourg and Canada that are subject to relevant taxes in those jurisdictions. | ||
The Company recognizes the tax benefits of uncertain tax positions only where the position is more likely than not to be sustained upon audit by tax authorities. The Company would recognize accruals for any interest and penalties related to uncertain tax positions in income tax expenses. | ||
Goodwill and intangible assets | The Company accounts for goodwill and other intangible assets recognized in business combinations in accordance with ASC Topic 805 “Business Combinations.” | |
A purchase price paid that is in excess of the fair value of the net assets (“goodwill”) arising from a business combination is recorded as an asset, and is not amortized. Where the total fair value of net assets acquired exceeds consideration paid (“negative goodwill”), the acquirer will record a gain as a result of the bargain purchase, to be recognized through the consolidated statements of comprehensive income at the close of the transaction. | ||
Intangible assets with a finite life are amortized over the estimated useful life of the asset. Intangible assets with an indefinite useful life are not amortized. Refer to Note 6 "Goodwill and other intangible assets" for further information. | ||
Goodwill and indefinite-lived intangible assets are tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. Such events or circumstances may include an economic downturn in a geographic market or change in the assessment of future operations. In performing this test, the Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350 “Intangibles—Goodwill and Other.” Similarly, the Company may first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment described in ASC Topic 350 "Intangibles - Goodwill and Other - General Intangibles Other than Goodwill." The factors assessed in making this determination included the overall insurance industry outlook, business strategy, premium rates, earnings sustainability, market capitalization and the regulatory and political environment. | ||
If the goodwill or intangible asset is impaired, it is written down to its realizable value with a corresponding expense reflected in the Consolidated Statements of Comprehensive Income. | ||
Investments in affiliates | Investments in which the Company has significant influence over the operating and financial policies of the investee are accounted for under the equity method of accounting. Under this method, the Company records its proportionate share of income or loss from such investments in its results for the period. | |
Variable interest entities | The Company determines whether it has relationships with entities defined as variable interest entities (“VIEs”) in accordance with ASC Topic 810 "Consolidation." Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities. A VIE is consolidated by the variable interest holder that is determined to be the primary beneficiary. | |
The primary beneficiary is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (i) the power to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. At inception of the VIE, as well as following an event that requires reassessment, the Company determines whether it is the primary beneficiary based on an analysis of the Company's level of involvement in the VIE, the contractual terms, and the overall structure of the VIE. Those VIEs that have all the attributes of an investment company are assessed under ASC Topic 810, excluding the changes that were as a result of the issuance of FASB Statement No. 167 "Amendments to FASB Interpretation No. 46(R)." | ||
The Company accounts for its investments in the AlphaCat Insurance Linked Securities (“ILS”) Funds and the BetaCat ILS Funds as variable interest entities. See Note 9 "Investments in affiliates" for further details. | ||
Noncontrolling interest | The Company accounts for its noncontrolling interests in accordance with ASC Topic 810 “Consolidation.” Redeemable noncontrolling interests are presented as a mezzanine item, between liabilities and shareholders' equity, in the Company's Consolidated Balance Sheet and the non-redeemable noncontrolling interests are presented within shareholders' equity in the Company's Consolidated Balance Sheets and Consolidated Statements of Shareholders' Equity. The net (income) loss attributable to noncontrolling interest is presented separately in the Company's Consolidated Statements of Comprehensive Income. Refer to Note 9 "Investments in affiliates" for further details. |
Business_combination_Tables
Business combination (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Western World Insurance Group, Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Composition of purchase price and fair value of net assets acquired | The fair value of net assets acquired, including pro forma GAAP adjustments, are summarized as follows: | |||||||
Total purchase price | $ | 692,305 | ||||||
Assets acquired | ||||||||
Cash and cash equivalents | $ | 48,760 | ||||||
Investments | 1,126,185 | |||||||
Receivables | 37,848 | |||||||
Other assets | 19,418 | |||||||
Tangible assets acquired | 1,232,211 | |||||||
Intangible asset - State licenses | $ | 12,325 | ||||||
Intangible asset - Brand name | 5,756 | |||||||
Intangible asset - Distribution network | 4,651 | |||||||
Intangible asset - Technology | 2,323 | |||||||
Intangible assets acquired | $ | 25,055 | ||||||
Liabilities acquired | ||||||||
Net loss reserves and paid losses recoverable | $ | 523,315 | ||||||
Unearned premiums, net of expenses | 135,686 | |||||||
Other liabilities | 81,464 | |||||||
Liabilities acquired | 740,465 | |||||||
Excess purchase price (goodwill) | $ | 175,504 | ||||||
Pro forma information | The unaudited pro forma data is for informational purposes only and does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed above. | |||||||
Year ended | Year ended | |||||||
31-Dec-14 | 31-Dec-13 | |||||||
(unaudited) | (unaudited) | |||||||
Net premiums earned | $ | 2,216,349 | $ | 2,325,407 | ||||
Net operating income | $ | 481,179 | $ | 645,696 | ||||
Net income | $ | 448,071 | $ | 561,832 | ||||
Summary of results of acquired company since acquisition | The following selected audited information has been provided to present a summary of the results of Western World that have been included in the Consolidated Financial Statements for the year ended December 31, 2014. | |||||||
From Acquisition Date to | ||||||||
31-Dec-14 | ||||||||
Net premiums written | $ | 58,807 | ||||||
Total revenue | 78,325 | |||||||
Total expenses | (66,882 | ) | ||||||
Net income | $ | 11,443 | ||||||
Flagstone Reinsurance Holdings Sa | ||||||||
Business Acquisition [Line Items] | ||||||||
Composition of purchase price and fair value of net assets acquired | The composition of the purchase price and the fair value of net assets acquired is summarized as follows: | |||||||
Total allocable purchase price | ||||||||
Flagstone shares outstanding at November 30, 2012 | 73,852,137 | |||||||
Exchange ratio | 0.1935 | |||||||
Validus common shares issued, gross of taxes withheld | 14,290,389 | |||||||
Validus share price at acquisition | $ | 34.87 | ||||||
Total value of Validus shares issued | $ | 498,306 | ||||||
Total cash consideration paid at $2.00 per Flagstone share | 147,731 | |||||||
Total allocable purchase price | 646,037 | |||||||
Tangible assets acquired | ||||||||
Cash and cash equivalents | $ | 159,339 | ||||||
Investments | 1,323,002 | |||||||
Receivables (a) | 171,620 | |||||||
Other assets | 129,245 | |||||||
Tangible assets acquired | $ | 1,783,206 | ||||||
Liabilities acquired | ||||||||
Net loss reserves and paid losses recoverable | $ | 639,641 | ||||||
Unearned premiums, net of expenses | 104,592 | |||||||
Debentures payable | 250,657 | |||||||
Other liabilities | 98,574 | |||||||
Liabilities acquired | $ | 1,093,464 | ||||||
Net tangible assets acquired, at fair value | 689,742 | |||||||
Bargain purchase gain before establishment of intangible assets | 43,705 | |||||||
Intangible asset—customer relationships and brand name | 5,997 | |||||||
Bargain purchase gain on acquisition of Flagstone | $ | 49,702 | ||||||
(a) | Premiums receivable of $171,620 were net of an allowance for doubtful accounts of $2,216. | |||||||
Components of gain on bargain purchase | The gain on bargain purchase, net of expenses has been presented as a separate line item in the Company’s Consolidated Statements of Comprehensive Income, and is composed of the following: | |||||||
Year Ended | ||||||||
31-Dec-12 | ||||||||
Bargain purchase gain on acquisition of Flagstone | $ | 49,702 | ||||||
Transaction expenses | (5,760 | ) | ||||||
Termination expenses | (20,244 | ) | ||||||
Amortization of intangible asset—customer relationships and brand name | (5,997 | ) | ||||||
Gain on bargain purchase, net of expenses | $ | 17,701 | ||||||
Pro forma information | The following selected unaudited pro forma financial information has been provided to present a summary of the combined results of the Company and Flagstone, assuming the transaction had been effected on January 1, 2011. The unaudited pro forma data is for informational purposes only and does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed above. | |||||||
Year ended | Year ended | |||||||
31-Dec-12 | 31-Dec-11 | |||||||
(unaudited) | (unaudited) | |||||||
Revenues | ||||||||
Gross premiums written | $ | 2,536,535 | $ | 2,914,388 | ||||
Reinsurance premiums ceded | (397,008 | ) | (520,506 | ) | ||||
Net premiums written | 2,139,527 | 2,393,882 | ||||||
Change in unearned premiums | 86,935 | (20,261 | ) | |||||
Net premiums earned | 2,226,462 | 2,373,621 | ||||||
Net investment income | 126,140 | 143,472 | ||||||
Net realized gains on investments | 63,601 | 37,366 | ||||||
Net unrealized gains (losses) on investments | 5,654 | (47,101 | ) | |||||
(Loss) from investment affiliate | (964 | ) | — | |||||
Other income | 29,984 | 11,152 | ||||||
Foreign exchange gains (losses) | 1,363 | (26,605 | ) | |||||
Total revenues | 2,452,240 | 2,491,905 | ||||||
Expenses | ||||||||
Losses and loss expenses | 1,242,449 | 1,920,936 | ||||||
Policy acquisition costs | 413,579 | 429,509 | ||||||
General and administrative expenses | 323,061 | 282,183 | ||||||
Share compensation expenses | 30,750 | 35,427 | ||||||
Transaction expenses | — | 17,433 | ||||||
Finance expenses | 64,306 | 66,485 | ||||||
Total expenses | 2,074,145 | 2,751,973 | ||||||
Income before taxes and income from operating affiliates | 378,095 | (260,068 | ) | |||||
Tax (expense) | (3,385 | ) | (773 | ) | ||||
Income (loss) from operating affiliates | 12,868 | (922 | ) | |||||
Net income (loss) from continuing operations | $ | 387,578 | $ | (261,763 | ) | |||
Net income (loss) from discontinued operations, net of taxes | 19,366 | (21,662 | ) | |||||
Net income (loss) | $ | 406,944 | $ | (283,425 | ) | |||
Net loss (income) attributable to noncontrolling interest | 14,685 | (24,515 | ) | |||||
Net income (loss) available (attributable) to Validus | $ | 421,629 | $ | (307,940 | ) | |||
Basic earnings (loss) per share | $ | 3.73 | $ | (3.20 | ) | |||
Earnings (loss) per diluted share | $ | 3.62 | $ | (3.20 | ) | |||
Summary of results of acquired company since acquisition | The following selected audited information has been provided to present a summary of the results of Flagstone that have been included within the Validus Re segment in the Consolidated Financial Statements for the year ended December 31, 2012. | |||||||
From Acquisition Date to | ||||||||
31-Dec-12 | ||||||||
Net premiums written | $ | 11,305 | ||||||
Total revenue | 26,778 | |||||||
Total expenses | (17,061 | ) | ||||||
Net income | $ | 9,717 | ||||||
Goodwill_and_other_intangible_1
Goodwill and other intangible assets (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Analysis of goodwill by segment | The following table shows an analysis of goodwill by segment: | |||||||||||||||
Talbot | Western World | Total | ||||||||||||||
Goodwill at December 31, 2012 | $ | 20,393 | $ | — | $ | 20,393 | ||||||||||
Acquired during the year | — | — | — | |||||||||||||
Goodwill at December 31, 2013 | $ | 20,393 | $ | — | $ | 20,393 | ||||||||||
Acquired during the year | — | 175,504 | 175,504 | |||||||||||||
Goodwill at December 31, 2014 | $ | 20,393 | $ | 175,504 | $ | 195,897 | ||||||||||
Analysis of carrying value and accumulated amortization of intangible assets by type | The gross carrying value and accumulated amortization of intangible assets by type at December 31, 2014 and 2013 are as follows: | |||||||||||||||
As of December 31, 2014 | As of December 31, 2013 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Finite-lived intangible assets | ||||||||||||||||
Trade name and customer relationships | $ | 18,189 | $ | (10,971 | ) | $ | 12,433 | $ | (10,183 | ) | ||||||
Distribution network | 39,831 | (26,500 | ) | 35,180 | (22,866 | ) | ||||||||||
Technology | 2,323 | (116 | ) | — | — | |||||||||||
Total | $ | 60,343 | $ | (37,587 | ) | $ | 47,613 | $ | (33,049 | ) | ||||||
Indefinite-lived intangible assets | ||||||||||||||||
Syndicate capacity | $ | 91,843 | n/a | $ | 91,843 | n/a | ||||||||||
State licenses | 12,325 | n/a | — | n/a | ||||||||||||
Total | $ | 104,168 | $ | 91,843 | ||||||||||||
Estimated remaining amortization expense | The estimated remaining amortization expense for the finite-lived intangible assets is as follows: | |||||||||||||||
Total | ||||||||||||||||
2015 | $ | 5,663 | ||||||||||||||
2016 | 5,663 | |||||||||||||||
2017 | 3,579 | |||||||||||||||
2018 | 1,501 | |||||||||||||||
2019 and thereafter | 6,350 | |||||||||||||||
$ | 22,756 | |||||||||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Investments [Abstract] | ||||||||||||||||
Amortized cost (or cost), gross unrealized gains and (losses) and estimated fair value of investments | The amortized cost (or cost), gross unrealized gains and (losses) and estimated fair value of investments at December 31, 2014 were as follows: | |||||||||||||||
Amortized Cost or Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
U.S. government and government agency | $ | 759,232 | $ | 1,755 | $ | (901 | ) | $ | 760,086 | |||||||
Non-U.S. government and government agency | 279,493 | 1,215 | (1,980 | ) | 278,728 | |||||||||||
U.S. states, municipalities and political subdivisions | 448,668 | 1,780 | (825 | ) | 449,623 | |||||||||||
Agency residential mortgage-backed securities | 520,685 | 9,697 | (1,151 | ) | 529,231 | |||||||||||
Non-agency residential mortgage-backed securities | 37,954 | 369 | (516 | ) | 37,807 | |||||||||||
U.S. corporate | 1,500,963 | 3,960 | (5,217 | ) | 1,499,706 | |||||||||||
Non-U.S. corporate | 564,386 | 2,765 | (3,989 | ) | 563,162 | |||||||||||
Bank loans | 457,537 | 200 | (8,733 | ) | 449,004 | |||||||||||
Catastrophe bonds | 75,822 | 768 | (926 | ) | 75,664 | |||||||||||
Asset-backed securities | 647,422 | 1,250 | (1,190 | ) | 647,482 | |||||||||||
Commercial mortgage-backed securities | 242,332 | 598 | (692 | ) | 242,238 | |||||||||||
Total fixed maturities | 5,534,494 | 24,357 | (26,120 | ) | 5,532,731 | |||||||||||
Total short-term investments (a) | 1,051,222 | 13 | (161 | ) | 1,051,074 | |||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | 2,570 | 125 | (920 | ) | 1,775 | |||||||||||
Preferred stock | 6,535 | — | (201 | ) | 6,334 | |||||||||||
Hedge funds (b) | 570,371 | 60,792 | (134,203 | ) | 496,960 | |||||||||||
Private equity investments | 48,995 | 4,987 | (611 | ) | 53,371 | |||||||||||
Investment funds | 244,506 | 437 | (111 | ) | 244,832 | |||||||||||
Mutual funds | 6,199 | 3,540 | — | 9,739 | ||||||||||||
Total other investments | 879,176 | 69,881 | (136,046 | ) | 813,011 | |||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 7,464,892 | $ | 94,251 | $ | (162,327 | ) | $ | 7,396,816 | |||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (732,782 | ) | $ | — | $ | — | $ | (732,782 | ) | ||||||
Catastrophe bonds | $ | (75,822 | ) | $ | (768 | ) | $ | 926 | $ | (75,664 | ) | |||||
Noncontrolling interest (b) | $ | (502,830 | ) | $ | (48,446 | ) | $ | 120,782 | $ | (430,494 | ) | |||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 6,153,458 | $ | 45,037 | $ | (40,619 | ) | $ | 6,157,876 | |||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
The amortized cost (or cost), gross unrealized gains and (losses) and estimated fair value of investments at December 31, 2013 were as follows: | ||||||||||||||||
Amortized Cost or Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
U.S. government and government agency | $ | 1,368,826 | $ | 2,589 | $ | (6,736 | ) | $ | 1,364,679 | |||||||
Non-U.S. government and government agency | 454,578 | 6,511 | (2,021 | ) | 459,068 | |||||||||||
U.S. states, municipalities and political subdivisions | 42,978 | 459 | (317 | ) | 43,120 | |||||||||||
Agency residential mortgage-backed securities | 305,450 | 8,310 | (2,261 | ) | 311,499 | |||||||||||
Non-agency residential mortgage-backed securities | 16,530 | 143 | (914 | ) | 15,759 | |||||||||||
U.S. corporate | 1,328,960 | 9,208 | (5,684 | ) | 1,332,484 | |||||||||||
Non-U.S. corporate | 711,581 | 5,917 | (3,173 | ) | 714,325 | |||||||||||
Bank loans | 712,859 | 5,659 | (1,402 | ) | 717,116 | |||||||||||
Catastrophe bonds | 72,000 | 2,551 | — | 74,551 | ||||||||||||
Asset-backed securities | 509,091 | 1,409 | (843 | ) | 509,657 | |||||||||||
Total fixed maturities | 5,522,853 | 42,756 | (23,351 | ) | 5,542,258 | |||||||||||
Total short-term investments (a) | 787,670 | 45 | (1 | ) | 787,714 | |||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | 3,141 | 83 | (921 | ) | 2,303 | |||||||||||
Hedge funds (b) | 584,518 | 71,641 | (95,076 | ) | 561,083 | |||||||||||
Private equity investments | 12,333 | 1,410 | (258 | ) | 13,485 | |||||||||||
Investment funds | 117,307 | 92 | — | 117,399 | ||||||||||||
Mutual funds | 6,199 | 3,617 | — | 9,816 | ||||||||||||
Total other investments | 723,498 | 76,843 | (96,255 | ) | 704,086 | |||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 7,034,021 | $ | 119,644 | $ | (119,607 | ) | $ | 7,034,058 | |||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (651,715 | ) | $ | — | $ | — | $ | (651,715 | ) | ||||||
Catastrophe bonds | $ | (53,000 | ) | $ | (2,544 | ) | $ | — | $ | (55,544 | ) | |||||
Noncontrolling interest (b) | $ | (512,121 | ) | $ | (62,850 | ) | $ | 85,569 | $ | (489,402 | ) | |||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 5,817,185 | $ | 54,250 | $ | (34,038 | ) | $ | 5,837,397 | |||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
Investment ratings on fixed maturities | The following table sets forth information regarding the investment ratings of the Company’s fixed maturities portfolio as at December 31, 2014 and 2013. | |||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Estimated Fair Value | % of Total | Estimated Fair Value | % of Total | |||||||||||||
AAA | $ | 2,494,239 | 45.1 | % | $ | 2,510,781 | 45.3 | % | ||||||||
AA | 848,226 | 15.4 | % | 696,998 | 12.6 | % | ||||||||||
A | 1,086,091 | 19.6 | % | 1,233,716 | 22.3 | % | ||||||||||
BBB | 505,208 | 9.1 | % | 323,085 | 5.8 | % | ||||||||||
Total investment-grade fixed maturities | 4,933,764 | 89.2 | % | 4,764,580 | 86 | % | ||||||||||
BB | 362,972 | 6.6 | % | 354,992 | 6.4 | % | ||||||||||
B | 145,240 | 2.6 | % | 383,639 | 6.9 | % | ||||||||||
CCC | 12,733 | 0.2 | % | 2,453 | — | % | ||||||||||
CC | 3,926 | 0.1 | % | 2,496 | 0.1 | % | ||||||||||
C | 1,344 | — | % | 235 | — | % | ||||||||||
D/NR | 72,752 | 1.3 | % | 33,863 | 0.6 | % | ||||||||||
Total non-investment grade fixed maturities | 598,967 | 10.8 | % | 777,678 | 14 | % | ||||||||||
Total fixed maturities | $ | 5,532,731 | 100 | % | $ | 5,542,258 | 100 | % | ||||||||
Fixed maturities investments by contractual maturity | The amortized cost and estimated fair value amounts for fixed maturity securities held at December 31, 2014 and 2013 are shown below by contractual maturity. Actual maturity may differ from contractual maturity because certain borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties. | |||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||
Due in one year or less | $ | 312,843 | $ | 313,248 | $ | 688,855 | $ | 692,768 | ||||||||
Due after one year through five years | 3,163,225 | 3,159,200 | 3,603,459 | 3,613,847 | ||||||||||||
Due after five years through ten years | 497,175 | 491,870 | 396,389 | 395,633 | ||||||||||||
Due after ten years | 112,858 | 111,655 | 3,079 | 3,095 | ||||||||||||
4,086,101 | 4,075,973 | 4,691,782 | 4,705,343 | |||||||||||||
Asset-backed and mortgage-backed securities | 1,448,393 | 1,456,758 | 831,071 | 836,915 | ||||||||||||
Total fixed maturities | $ | 5,534,494 | $ | 5,532,731 | $ | 5,522,853 | $ | 5,542,258 | ||||||||
Net investment income | Net investment income was derived from the following sources: | |||||||||||||||
Year Ended | ||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Fixed maturities and short-term investments | $ | 97,248 | $ | 99,216 | $ | 105,937 | ||||||||||
Other investments | 5,111 | — | 2,790 | |||||||||||||
Restricted cash and cash and cash equivalents | 5,178 | 4,713 | 7,259 | |||||||||||||
Securities lending income | 11 | 6 | 14 | |||||||||||||
Total gross investment income | 107,548 | 103,935 | 116,000 | |||||||||||||
Investment expenses | (7,472 | ) | (7,863 | ) | (8,064 | ) | ||||||||||
Total net investment income | $ | 100,076 | $ | 96,072 | $ | 107,936 | ||||||||||
Analysis of net realized gains (losses) and the change in net unrealized (losses) gains on investments | The following represents an analysis of net realized gains (losses) and the change in net unrealized (losses) gains on investments: | |||||||||||||||
Year Ended | ||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||
Fixed maturities, short-term and other investments | ||||||||||||||||
Gross realized gains (a) | $ | 31,316 | $ | 31,402 | $ | 38,905 | ||||||||||
Gross realized (losses) | (8,221 | ) | (28,144 | ) | (20,672 | ) | ||||||||||
Net realized gains on investments | 23,095 | 3,258 | 18,233 | |||||||||||||
Change in net unrealized (losses) gains on investments (a) | (57,973 | ) | (58,481 | ) | 17,585 | |||||||||||
Total net realized and change in net unrealized (losses) gains on investments including assets held in trust, catastrophe bonds and noncontrolling interest | (34,878 | ) | (55,223 | ) | 35,818 | |||||||||||
Assets held in trust on behalf of operating affiliates | — | 88 | (88 | ) | ||||||||||||
Catastrophe bonds | 2,702 | (2,258 | ) | 416 | ||||||||||||
Noncontrolling interest (a) | 42,258 | 1,836 | 17,263 | |||||||||||||
Total net realized and change in net unrealized (losses) gains on investments excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 10,082 | $ | (55,557 | ) | $ | 53,409 | |||||||||
(a) | Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net loss (income) attributable to noncontrolling interest. | |||||||||||||||
Investments pledged as collateral under credit facilities | The following tables outline investments pledged as collateral under the Company's credit and other facilities. For further details of the facilities, please refer to Note 19: “Debt and financing arrangements”: | |||||||||||||||
December 31, 2014 | ||||||||||||||||
Description | Commitment | Issued and Outstanding | Investments pledged as collateral | |||||||||||||
$400,000 syndicated unsecured letter of credit facility | $ | 400,000 | $ | — | $ | — | ||||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 276,455 | 395,750 | |||||||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 15,649 | 35,645 | |||||||||||||
Talbot FAL facility | 25,000 | 25,000 | 31,048 | |||||||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||||||
AlphaCat Re secured letter of credit facility | 30,000 | 30,000 | 30,078 | |||||||||||||
IPC bi-lateral facility | 40,000 | 15,897 | 99,437 | |||||||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 198,389 | 430,782 | |||||||||||||
$ | 1,605,000 | $ | 561,684 | $ | 1,022,740 | |||||||||||
December 31, 2013 | ||||||||||||||||
Description | Commitment | Issued and Outstanding | Investments pledged as collateral | |||||||||||||
$400,000 syndicated unsecured letter of credit facility | $ | 400,000 | $ | — | $ | — | ||||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 358,567 | 507,620 | |||||||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 16,726 | 130,256 | |||||||||||||
Talbot FAL facility | 25,000 | 25,000 | 30,801 | |||||||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||||||
AlphaCat Re secured letter of credit facility | 24,800 | 24,800 | 24,806 | |||||||||||||
IPC bi-lateral facility | 40,000 | 20,177 | 98,465 | |||||||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 305,686 | 454,458 | |||||||||||||
$ | 1,599,800 | $ | 751,250 | $ | 1,246,406 | |||||||||||
Fair_value_measurements_Tables
Fair value measurements (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair value hierarchy - allocation of investments | At December 31, 2014, the Company’s investments were allocated between Levels 1, 2 and 3 as follows: | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
U.S. government and government agency | $ | — | $ | 760,086 | $ | — | $ | 760,086 | ||||||||
Non-U.S. government and government agency | — | 278,728 | — | 278,728 | ||||||||||||
U.S. states, municipalities and political subdivisions | — | 449,623 | — | 449,623 | ||||||||||||
Agency residential mortgage-backed securities | — | 529,231 | — | 529,231 | ||||||||||||
Non-agency residential mortgage-backed securities | — | 37,807 | — | 37,807 | ||||||||||||
U.S. corporate | — | 1,499,706 | — | 1,499,706 | ||||||||||||
Non-U.S. corporate | — | 563,162 | — | 563,162 | ||||||||||||
Bank loans | — | 416,256 | 32,748 | 449,004 | ||||||||||||
Catastrophe bonds | — | 70,664 | 5,000 | 75,664 | ||||||||||||
Asset-backed securities | — | 647,482 | — | 647,482 | ||||||||||||
Commercial mortgage-backed securities | — | 242,238 | — | 242,238 | ||||||||||||
Total fixed maturities | — | 5,494,983 | 37,748 | 5,532,731 | ||||||||||||
Total short-term investments (a) | 942,716 | 108,358 | — | 1,051,074 | ||||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | — | — | 1,775 | 1,775 | ||||||||||||
Preferred stock | — | 6,334 | — | 6,334 | ||||||||||||
Hedge funds (b) | — | — | 496,960 | 496,960 | ||||||||||||
Private equity investments | — | — | 53,371 | 53,371 | ||||||||||||
Investment funds | — | 140,045 | 104,787 | 244,832 | ||||||||||||
Mutual funds | — | 9,739 | — | 9,739 | ||||||||||||
Total other investments | — | 156,118 | 656,893 | 813,011 | ||||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 942,716 | $ | 5,759,459 | $ | 694,641 | $ | 7,396,816 | ||||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (732,782 | ) | $ | — | $ | — | $ | (732,782 | ) | ||||||
Catastrophe bonds | $ | — | $ | (70,664 | ) | $ | (5,000 | ) | $ | (75,664 | ) | |||||
Noncontrolling interest (b) | $ | — | $ | — | $ | (430,494 | ) | $ | (430,494 | ) | ||||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 209,934 | $ | 5,688,795 | $ | 259,147 | $ | 6,157,876 | ||||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
At December 31, 2013, the Company’s investments were allocated between Levels 1, 2 and 3 as follows: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
U.S. government and government agency | $ | — | $ | 1,364,679 | $ | — | $ | 1,364,679 | ||||||||
Non-U.S. government and government agency | — | 459,068 | — | 459,068 | ||||||||||||
U.S. states, municipalities and political subdivisions | — | 43,120 | — | 43,120 | ||||||||||||
Agency residential mortgage-backed securities | — | 311,499 | — | 311,499 | ||||||||||||
Non-agency residential mortgage-backed securities | — | 15,759 | — | 15,759 | ||||||||||||
U.S. corporate | — | 1,332,484 | — | 1,332,484 | ||||||||||||
Non-U.S. corporate | — | 714,325 | — | 714,325 | ||||||||||||
Bank loans | — | 717,116 | — | 717,116 | ||||||||||||
Catastrophe bonds | — | 74,551 | — | 74,551 | ||||||||||||
Asset-backed securities | — | 509,657 | — | 509,657 | ||||||||||||
Total fixed maturities | — | 5,542,258 | — | 5,542,258 | ||||||||||||
Total short-term investments (a) | 783,151 | 4,563 | — | 787,714 | ||||||||||||
Other investments | ||||||||||||||||
Fund of hedge funds | — | — | 2,303 | 2,303 | ||||||||||||
Hedge funds (b) | — | — | 561,083 | 561,083 | ||||||||||||
Private equity investments | — | — | 13,485 | 13,485 | ||||||||||||
Investment fund | — | 117,399 | — | 117,399 | ||||||||||||
Mutual funds | — | 9,816 | — | 9,816 | ||||||||||||
Total other investments | — | 127,215 | 576,871 | 704,086 | ||||||||||||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | $ | 783,151 | $ | 5,674,036 | $ | 576,871 | $ | 7,034,058 | ||||||||
Assets held in trust on behalf of operating affiliates (a) | $ | (651,715 | ) | $ | — | $ | — | $ | (651,715 | ) | ||||||
Catastrophe bonds | $ | — | $ | (55,544 | ) | $ | — | $ | (55,544 | ) | ||||||
Noncontrolling interest (b) | $ | — | $ | — | $ | (489,402 | ) | $ | (489,402 | ) | ||||||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | $ | 131,436 | $ | 5,618,492 | $ | 87,469 | $ | 5,837,397 | ||||||||
(a) | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||||||||||||||
(b) | Included in the Hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||||||||||||||
Reconciliation of investments measured at fair value on a recurring basis using Level 3 inputs | The following table presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using Level 3 inputs during the years ended December 31, 2014 and 2013: | |||||||||||||||
Total Fair Market Value | ||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | |||||||||||||||
Level 3 investments—Beginning of year | $ | 576,871 | $ | 556,234 | ||||||||||||
Additions to level 3 investments due to Western World acquisition | 23,620 | — | ||||||||||||||
Purchases | 175,129 | 99,037 | ||||||||||||||
Sales | (52,351 | ) | (82,000 | ) | ||||||||||||
Issuances | — | — | ||||||||||||||
Settlements | (1,500 | ) | — | |||||||||||||
Realized gains | 8,216 | 6,132 | ||||||||||||||
Unrealized losses | (42,047 | ) | (2,532 | ) | ||||||||||||
Transfers into Level 3 during the year | 6,703 | — | ||||||||||||||
Level 3 investments—End of year | $ | 694,641 | $ | 576,871 | ||||||||||||
Catastrophe bonds | (5,000 | ) | — | |||||||||||||
Noncontrolling interest (a) | (430,494 | ) | (489,402 | ) | ||||||||||||
Level 3 investments excluding noncontrolling interest | $ | 259,147 | $ | 87,469 | ||||||||||||
(a) | Includes Level 3 investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. |
Investments_in_affiliates_Tabl
Investments in affiliates (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||||||||
Information about the Company's investments in affiliates, including summarized financial information | The following table presents the Company's investments in affiliates as at December 31, 2014 and 2013: | |||||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||||||
Investment affiliate | $ | 63,506 | $ | 34,500 | ||||||||||||||||||||||||
Operating affiliates | 197,977 | 106,743 | ||||||||||||||||||||||||||
Investments in affiliates | $ | 261,483 | $ | 141,243 | ||||||||||||||||||||||||
Summary of notes payable to AlphaCat entities | The following tables present a reconciliation of the beginning and ending notes payable to operating affiliates for the year ended December 31, 2014 and 2013: | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||||||
AlphaCat 2013 | AlphaCat 2014 | AlphaCat ILS funds | Total | |||||||||||||||||||||||||
As at December 31, 2013 | $ | 223,809 | $ | — | $ | 215,463 | $ | 439,272 | ||||||||||||||||||||
Notes payable to operating affiliates recognized on deconsolidation of AlphaCat ILS fund | — | — | 178,837 | 178,837 | ||||||||||||||||||||||||
Issuance of notes payable to operating affiliates | — | 157,914 | 522,113 | 680,027 | ||||||||||||||||||||||||
Redemption of notes payable to operating affiliates | (223,512 | ) | — | (393,556 | ) | (617,068 | ) | |||||||||||||||||||||
Foreign exchange gains | (297 | ) | (530 | ) | (8,776 | ) | (9,603 | ) | ||||||||||||||||||||
As at December 31, 2014 | $ | — | $ | 157,384 | $ | 514,081 | $ | 671,465 | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
AlphaCat 2013 | AlphaCat ILS funds | Total | ||||||||||||||||||||||||||
As at December 31, 2012 | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Issuance of notes payable to operating affiliates | 223,082 | 218,044 | 441,126 | |||||||||||||||||||||||||
Redemption of notes payable to operating affiliates | — | (3,553 | ) | (3,553 | ) | |||||||||||||||||||||||
Foreign exchange losses | 727 | 972 | 1,699 | |||||||||||||||||||||||||
As at December 31, 2013 | $ | 223,809 | $ | 215,463 | $ | 439,272 | ||||||||||||||||||||||
Schedule of income attributable to operating affiliate investors | The following table presents the (income) attributable to operating affiliate investors for the year ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||||||||
Years Ended | ||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||
AlphaCat 2013 | $ | (14,577 | ) | $ | (47,329 | ) | $ | — | ||||||||||||||||||||
AlphaCat 2014 | (46,100 | ) | — | — | ||||||||||||||||||||||||
AlphaCat ILS funds | (48,722 | ) | (21,434 | ) | — | |||||||||||||||||||||||
(Income) attributable to operating affiliate investors | $ | (109,399 | ) | $ | (68,763 | ) | $ | — | ||||||||||||||||||||
Investment Affiliates [Member] | ||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||||||||
Reconciliation of beginning and ending investment in affiliate balances | The following table presents a reconciliation of the beginning and ending investments in the Company’s investment affiliate balances for the years ended December 31, 2014 and 2013: | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Investment in affiliate, beginning of year | $ | 34,500 | $ | 15,218 | ||||||||||||||||||||||||
Addition due to Western World acquisition | 8,127 | — | ||||||||||||||||||||||||||
Capital contributions | 12,468 | 14,492 | ||||||||||||||||||||||||||
Income from investment affiliate | 8,411 | 4,790 | ||||||||||||||||||||||||||
Investment in affiliate, end of year | $ | 63,506 | $ | 34,500 | ||||||||||||||||||||||||
Information about the Company's investments in affiliates, including summarized financial information | The following table presents the Company’s investment in the Partnership as at December 31, 2014: | |||||||||||||||||||||||||||
Investment at cost | Voting ownership % | Equity ownership % | Carrying value | |||||||||||||||||||||||||
Aquiline Financial Services Fund II L.P. | $ | 51,001 | — | % | 8.1 | % | $ | 63,506 | ||||||||||||||||||||
The following table presents the Company’s investment in the Partnership as at December 31, 2013: | ||||||||||||||||||||||||||||
Investment at cost | Voting ownership % | Equity ownership % | Carrying value | |||||||||||||||||||||||||
Aquiline Financial Services Fund II L.P. | $ | 32,110 | — | % | 6.7 | % | $ | 34,500 | ||||||||||||||||||||
Operating Affiliates [Member] | ||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||||||||||||||||||
Reconciliation of beginning and ending investment in affiliate balances | The following tables present a reconciliation of the beginning and ending investment in operating affiliates for the years ended December 31, 2014 and 2013: | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||||||
AlphaCat Re 2011 | AlphaCat Re 2012 | AlphaCat 2013 | AlphaCat 2014 | AlphaCat 2015 | AlphaCat ILS funds | Total | ||||||||||||||||||||||
As at December 31, 2013 | $ | 9,809 | $ | 1,313 | $ | 51,744 | $ | 21,982 | $ | — | $ | 21,895 | $ | 106,743 | ||||||||||||||
Purchase of shares | — | — | — | — | 25,600 | 12,000 | 37,600 | |||||||||||||||||||||
Gain on redemption of shares | — | — | — | — | — | (5,077 | ) | (5,077 | ) | |||||||||||||||||||
Return of investment | (5,825 | ) | (1,516 | ) | (52,762 | ) | — | — | (12,364 | ) | (72,467 | ) | ||||||||||||||||
Fair value of retained interest on deconsolidation of AlphaCat ILS fund | — | — | — | — | — | 113,455 | 113,455 | |||||||||||||||||||||
Income from operating affiliates | 622 | 938 | 2,086 | 6,103 | — | 7,974 | 17,723 | |||||||||||||||||||||
As at December 31, 2014 | $ | 4,606 | $ | 735 | $ | 1,068 | $ | 28,085 | $ | 25,600 | $ | 137,883 | $ | 197,977 | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||
AlphaCat Re 2011 | AlphaCat Re 2012 | AlphaCat 2013 | AlphaCat 2014 | AlphaCat ILS fund | Total | |||||||||||||||||||||||
As at December 31, 2012 | $ | 62,792 | $ | 29,319 | $ | 45,000 | $ | — | $ | 20,000 | $ | 157,111 | ||||||||||||||||
Purchase of shares | — | — | — | 22,000 | — | 22,000 | ||||||||||||||||||||||
Return of investment | (54,914 | ) | (31,743 | ) | — | — | — | (86,657 | ) | |||||||||||||||||||
Income (loss) from operating affiliates | 1,931 | 3,737 | 6,744 | (18 | ) | 1,895 | 14,289 | |||||||||||||||||||||
As at December 31, 2013 | $ | 9,809 | $ | 1,313 | $ | 51,744 | $ | 21,982 | $ | 21,895 | $ | 106,743 | ||||||||||||||||
Information about the Company's investments in affiliates, including summarized financial information | The following table presents the Company's investments in AlphaCat Re 2011, AlphaCat Re 2012, AlphaCat 2013, AlphaCat 2014, AlphaCat 2015 and the AlphaCat ILS funds in the Consolidated Financial Statements as at December 31, 2014: | |||||||||||||||||||||||||||
Investment in operating affiliates | ||||||||||||||||||||||||||||
Cost | Voting ownership % | Equity ownership % | Carrying value | |||||||||||||||||||||||||
AlphaCat Re 2011 | $ | 4,606 | 43.7 | % | 22.3 | % | $ | 4,606 | ||||||||||||||||||||
AlphaCat Re 2012 | 735 | 49 | % | 37.9 | % | 735 | ||||||||||||||||||||||
AlphaCat 2013 | 1,068 | 40.9 | % | 19.7 | % | 1,068 | ||||||||||||||||||||||
AlphaCat 2014 | 22,000 | 42.3 | % | 19.6 | % | 28,085 | ||||||||||||||||||||||
AlphaCat 2015 | 25,600 | 40 | % | 20 | % | 25,600 | ||||||||||||||||||||||
AlphaCat ILS funds | 133,091 | n/a | (a) | 137,883 | ||||||||||||||||||||||||
Total | $ | 187,100 | $ | 197,977 | ||||||||||||||||||||||||
(a) | Equity ownership in the funds was 7.9%, 39.7% and 9.1%, respectively as at December 31, 2014. | |||||||||||||||||||||||||||
The following table presents the Company's investments in AlphaCat Re 2011, AlphaCat Re 2012, AlphaCat 2013, AlphaCat 2014 and the AlphaCat ILS fund in the Consolidated Financial Statements as at December 31, 2013: | ||||||||||||||||||||||||||||
Investment in operating affiliates | ||||||||||||||||||||||||||||
Investment at cost | Voting ownership % | Equity ownership % | Share of net asset value | |||||||||||||||||||||||||
AlphaCat Re 2011 | $ | 9,882 | 43.7 | % | 22.3 | % | $ | 9,809 | ||||||||||||||||||||
AlphaCat Re 2012 | 654 | 49 | % | 37.9 | % | 1,313 | ||||||||||||||||||||||
AlphaCat 2013 | 45,000 | 40.9 | % | 19.7 | % | 51,744 | ||||||||||||||||||||||
AlphaCat 2014 | 22,000 | 42.3 | % | 19.6 | % | 21,982 | ||||||||||||||||||||||
AlphaCat ILS fund | 20,000 | n/a | 9.1 | % | 21,895 | |||||||||||||||||||||||
Total | $ | 97,536 | $ | 106,743 | ||||||||||||||||||||||||
The following table presents certain summarized financial information of the AlphaCat entities as at December 31, 2014 and for the year then ended: | ||||||||||||||||||||||||||||
Combined investees summarized financial data | ||||||||||||||||||||||||||||
Total assets | Total liabilities | Total revenue | Net income | |||||||||||||||||||||||||
AlphaCat Re 2011 | $ | 20,469 | $ | 7,931 | $ | 3 | $ | 2,794 | ||||||||||||||||||||
AlphaCat Re 2012 | $ | 3,098 | $ | 1,136 | $ | — | $ | 2,477 | ||||||||||||||||||||
AlphaCat 2013 | $ | 5,490 | $ | 65 | $ | 14,221 | $ | 10,595 | ||||||||||||||||||||
AlphaCat 2014 | $ | 193,702 | $ | 4,102 | $ | 45,333 | $ | 31,070 | ||||||||||||||||||||
AlphaCat 2015 | $ | 142,843 | $ | — | $ | — | $ | — | ||||||||||||||||||||
AlphaCat ILS funds (a) | $ | 1,026,222 | $ | 175,376 | $ | 65,320 | $ | 54,421 | ||||||||||||||||||||
BetaCat ILS funds | 22,010 | 61 | 32 | (51 | ) | |||||||||||||||||||||||
(a) | AlphaCat ILS funds information includes all funds, including those where the Company is not the primary beneficiary. |
Noncontrolling_interest_Tables
Noncontrolling interest (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||
Recondiliation of beginning and ending balances of noncontrolling interest and redeemable noncontrolling interest | The following table presents a reconciliation of the beginning and ending balances of redeemable noncontrolling interest and noncontrolling interest for the years ended December 31, 2014 and 2013: | |||||||||||
Year Ended December 31, 2014 | ||||||||||||
Redeemable noncontrolling interest | Noncontrolling interest | Total | ||||||||||
As at December 31, 2013 | $ | 86,512 | $ | 497,657 | $ | 584,169 | ||||||
Issuance of shares | 68,200 | — | 68,200 | |||||||||
Income (loss) attributable to noncontrolling interest | 3,598 | (39,062 | ) | (35,464 | ) | |||||||
Adjustment to noncontrolling interest as a result of deconsolidation | (78,354 | ) | — | (78,354 | ) | |||||||
As at December 31, 2014 | $ | 79,956 | $ | 458,595 | $ | 538,551 | ||||||
Year Ended December 31, 2013 | ||||||||||||
Redeemable noncontrolling interest | Noncontrolling interest | Total | ||||||||||
As at December 31, 2012 | $ | — | $ | 434,280 | $ | 434,280 | ||||||
Issuance of shares | 92,190 | 58,500 | 150,690 | |||||||||
Income attributable to noncontrolling interest | 4,818 | 4,877 | 9,695 | |||||||||
Redemption of shares | (10,496 | ) | — | (10,496 | ) | |||||||
As at December 31, 2013 | $ | 86,512 | $ | 497,657 | $ | 584,169 | ||||||
Derivative_instruments_Tables
Derivative instruments (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||
Location and fair value amount of derivative instruments reported on the balance sheet | The following table summarizes information on the classification and amount of the fair value of derivatives not designated as hedging instruments on the Consolidated Balance Sheets at December 31, 2014 and December 31, 2013: | ||||||||||||||||||||||||
As at December 31, 2014 | As at December 31, 2013 | ||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | |||||||||||||||||||
Foreign currency forward contracts | $ | 26,755 | $ | 1,685 | $ | — | $ | — | $ | — | $ | — | |||||||||||||
(a) | Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses respectively on the Consolidated Balance Sheets. The total impact on earnings during the year ended December 31, 2014, recognized in income within other insurance related income and other income, relating to the foreign currency forward contract that was not designated as a hedging instrument was $1,685. | ||||||||||||||||||||||||
The following table summarizes information on the classification and amount of the fair value of derivatives designated as hedging instruments on the Consolidated Balance Sheets at December 31, 2014 and December 31, 2013: | |||||||||||||||||||||||||
As at December 31, 2014 | As at December 31, 2013 | ||||||||||||||||||||||||
Derivatives designated as hedging instruments: | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | Net Notional Exposure | Asset Derivative at Fair Value (a) | Liability Derivative at Fair Value (a) | |||||||||||||||||||
Foreign currency forward contracts | $ | 189,026 | $ | 401 | $ | 3,136 | $ | 163,576 | $ | 1,167 | $ | 2,313 | |||||||||||||
Interest rate swap contracts | $ | 552,263 | $ | 25 | $ | 1,169 | $ | 552,263 | $ | — | $ | 911 | |||||||||||||
(a) | Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses respectively on the Consolidated Balance Sheets. | ||||||||||||||||||||||||
Location and amount of gains and losses related to derivative instruments reported on in the income statement | The following table provides the total impact on earnings, recognized in income within foreign exchange (losses) gains, relating to the derivative instruments formally designated as fair value hedges along with the impact of the related hedged items for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
Foreign currency forward contracts | December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Amount of (loss) gain recognized in income on derivative | $ | (11,789 | ) | $ | 1,947 | $ | 1,017 | ||||||||||||||||||
Amount of gain (loss) on hedged item recognized in income attributable to risk being hedged | $ | 11,789 | $ | (1,947 | ) | $ | (912 | ) | |||||||||||||||||
Amount of gain recognized in income on derivative (ineffective portion) | $ | — | $ | — | $ | 105 | |||||||||||||||||||
Location and amount of gains and losses related to derivative instruments reported on in the comprehensive income and earnings | The following table provides the total impact on other comprehensive income (loss) and earnings relating to the derivative instruments formally designated as cash flow hedges along with the impact of the related hedged items for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||||
Interest rate swap contracts | December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Amount of effective portion recognized in other comprehensive income | $ | 13,302 | $ | 11,107 | $ | 1,588 | |||||||||||||||||||
Amount of effective portion subsequently reclassified to earnings | $ | (13,074 | ) | $ | (11,107 | ) | $ | (1,588 | ) | ||||||||||||||||
Amount of ineffective portion excluded from effectiveness testing | $ | 228 | $ | — | $ | — | |||||||||||||||||||
Premiums_receivable_Tables
Premiums receivable (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Premiums Receivable Disclosure [Abstract] | ||||||||||||
Components of premiums receivable | The following is a breakdown of the components of premiums receivable at December 31, 2014 and 2013: | |||||||||||
Premiums | Premiums | Total | ||||||||||
in course | accrued | |||||||||||
of collection | but unbilled | |||||||||||
Balance as at December 31, 2013 | $ | 73,702 | $ | 623,531 | $ | 697,233 | ||||||
Change during 2014 | 11,347 | (933 | ) | 10,414 | ||||||||
Balance as at December 31, 2014 | $ | 85,049 | $ | 622,598 | $ | 707,647 | ||||||
Balance as at December 31, 2012 | $ | 214,891 | $ | 587,268 | $ | 802,159 | ||||||
Change during 2013 | (141,189 | ) | 36,263 | (104,926 | ) | |||||||
Balance as at December 31, 2013 | $ | 73,702 | $ | 623,531 | $ | 697,233 | ||||||
Reserve_for_losses_and_loss_ex1
Reserve for losses and loss expenses (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||||||||||||||||||||
Reserve for losses and loss expenses | The following table represents an analysis of paid and unpaid losses and loss expenses incurred and a reconciliation of the beginning and ending unpaid losses and loss expenses for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||
Years Ended | ||||||||||||||||||||
31-Dec-14 | December 31, | December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Reserve for losses and loss expenses, beginning of year | $ | 3,030,399 | $ | 3,517,573 | $ | 2,631,143 | ||||||||||||||
Losses and loss expenses recoverable | (370,154 | ) | (439,967 | ) | (372,485 | ) | ||||||||||||||
Net reserves for losses and loss expenses, beginning of year | 2,660,245 | 3,077,606 | 2,258,658 | |||||||||||||||||
Net reserves acquired (disposed) | 525,091 | (36,519 | ) | 639,641 | ||||||||||||||||
Increase (decrease) in net reserves for losses and loss expenses in respect of losses occurring in: | ||||||||||||||||||||
Current year | 1,024,256 | 999,380 | 1,174,415 | |||||||||||||||||
Prior years (a) | (252,207 | ) | (205,448 | ) | (174,969 | ) | ||||||||||||||
Total incurred losses and loss expenses (a) | 772,049 | 793,932 | 999,446 | |||||||||||||||||
Less net losses and loss expenses paid in respect of losses occurring in: | ||||||||||||||||||||
Current year | (245,084 | ) | (244,682 | ) | (182,146 | ) | ||||||||||||||
Prior years | (816,823 | ) | (916,796 | ) | (653,874 | ) | ||||||||||||||
Total net paid losses | (1,061,907 | ) | (1,161,478 | ) | (836,020 | ) | ||||||||||||||
Foreign exchange (gain) loss | (38,550 | ) | (13,296 | ) | 15,881 | |||||||||||||||
Net reserve for losses and loss expenses, end of year | 2,856,928 | 2,660,245 | 3,077,606 | |||||||||||||||||
Losses and loss expenses recoverable | 377,466 | 370,154 | 439,967 | |||||||||||||||||
Reserve for losses and loss expenses, end of year | $ | 3,234,394 | $ | 3,030,399 | $ | 3,517,573 | ||||||||||||||
(a) | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||||
Incurred losses and loss expenses comprise: | ||||||||||||||||||||
Years Ended | ||||||||||||||||||||
December 31, 2014 (a) | December 31, | December 31, | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Gross losses and loss expenses (a) | $ | 833,860 | $ | 924,986 | $ | 1,192,494 | ||||||||||||||
Reinsurance recoverable | (61,811 | ) | (131,054 | ) | (193,048 | ) | ||||||||||||||
Net incurred losses and loss expenses (a) | $ | 772,049 | $ | 793,932 | $ | 999,446 | ||||||||||||||
(a) | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||||
Prior year development by segment and line of business | The net favorable development on prior years by segment and line of business is as follows: | |||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
Property | Marine | Specialty | Liability | Total | ||||||||||||||||
Validus Re | $ | (76,064 | ) | $ | (6,830 | ) | $ | (4,706 | ) | $ | — | $ | (87,600 | ) | ||||||
AlphaCat | (12,201 | ) | — | — | — | (12,201 | ) | |||||||||||||
Talbot | (53,779 | ) | (31,397 | ) | (55,990 | ) | — | (141,166 | ) | |||||||||||
Western World (a) | $ | 1,023 | $ | — | $ | — | $ | (12,263 | ) | $ | (11,240 | ) | ||||||||
Net favorable development (a) | $ | (141,021 | ) | $ | (38,227 | ) | $ | (60,696 | ) | $ | (12,263 | ) | $ | (252,207 | ) | |||||
(a) | Upon closing the acquisition, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||||
The Validus Re property lines experienced favorable development primarily due to lower claims emergence on attritional losses and favorable loss development on Hurricane Sandy. The Validus Re marine and specialty lines experienced favorable development primarily due to lower claims emergence on attritional losses. The AlphaCat property lines experienced favorable development primarily due to the release of reserves on one aggregate excess of loss contract. Talbot experienced favorable development across all lines, primarily due to lower than expected claims development on attritional losses. Western World experienced unfavorable development on the property lines and favorable development on the liability lines, primarily due to claims development on attritional losses. | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Property | Marine | Specialty | Total (a) | |||||||||||||||||
Validus Re | $ | (81,610 | ) | $ | 26,705 | $ | (4,353 | ) | $ | (59,258 | ) | |||||||||
Talbot | (45,692 | ) | (46,092 | ) | (54,406 | ) | (146,190 | ) | ||||||||||||
Net favorable development | $ | (127,302 | ) | $ | (19,387 | ) | $ | (58,759 | ) | $ | (205,448 | ) | ||||||||
(a) | AlphaCat has not had any development on prior accident years. | |||||||||||||||||||
The Validus Re property and specialty lines experienced favorable development primarily due to lower claims emergence on attritional losses, although the property lines experienced unfavorable development due to increased estimate of ultimate losses on the New Zealand earthquakes. The Validus Re marine lines experienced unfavorable development primarily due to an increased estimate of ultimate losses on Costa Concordia. Talbot experienced favorable development across all lines, primarily due to lower than expected claims development on attritional losses. | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Property | Marine | Specialty | Total (a) | |||||||||||||||||
Validus Re | $ | (45,733 | ) | $ | (11,298 | ) | $ | (15,530 | ) | $ | (72,561 | ) | ||||||||
Talbot | (26,263 | ) | (40,060 | ) | (36,085 | ) | (102,408 | ) | ||||||||||||
Net favorable development | $ | (71,996 | ) | $ | (51,358 | ) | $ | (51,615 | ) | $ | (174,969 | ) | ||||||||
(a) | AlphaCat has not had any development on prior accident years. | |||||||||||||||||||
The Validus Re property and marine lines experienced favorable development primarily due to a reduction in the loss estimates on attritional losses, partially offset by increases in loss estimates on notable loss events. The Validus Re specialty lines experienced favorable development primarily due to lower than expected claims development on attritional losses. Talbot experienced favorable development across all lines, primarily due to lower than expected development on attritional losses. |
Accounts_payable_and_accrued_e1
Accounts payable and accrued expenses (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
Components of accounts payable and accrued expenses | The following are the components of accounts payable and accrued expenses: | |||||||
Years Ended | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued interest on debt | $ | 12,224 | $ | 10,686 | ||||
Subscriptions received in advance on AlphaCat ILS funds | 15,400 | 35,000 | ||||||
Accrued income attributable to operating affiliates | 109,399 | 68,763 | ||||||
Trade and compensation payables | 181,222 | 163,738 | ||||||
Total accounts payable and accrued expenses | $ | 318,245 | $ | 278,187 | ||||
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Effects of reinsurance on premiums written and earned | The effects of reinsurance on premiums written and earned for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Western World | Eliminations | Total | |||||||||||||||||||||||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | |||||||||||||||||||||||||||||||||||||
Direct | $ | — | $ | — | $ | — | $ | — | $ | 617,793 | $ | 576,136 | $ | 65,235 | $ | 80,838 | $ | — | $ | — | $ | 683,028 | $ | 656,974 | ||||||||||||||||||||||||
Assumed | 1,136,910 | 1,127,894 | 135,181 | 135,884 | 483,977 | 508,634 | — | — | (75,810 | ) | (83,168 | ) | 1,680,258 | 1,689,244 | ||||||||||||||||||||||||||||||||||
Ceded | (182,056 | ) | (210,610 | ) | (4,348 | ) | (3,534 | ) | (192,211 | ) | (204,996 | ) | (6,428 | ) | (7,842 | ) | 75,810 | 83,168 | (309,233 | ) | (343,814 | ) | ||||||||||||||||||||||||||
Total | $ | 954,854 | $ | 917,284 | $ | 130,833 | $ | 132,350 | $ | 909,559 | $ | 879,774 | $ | 58,807 | $ | 72,996 | $ | — | $ | — | $ | 2,054,053 | $ | 2,002,404 | ||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | ||||||||||||||||||||||||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | |||||||||||||||||||||||||||||||||||||||
Direct | $ | — | $ | — | $ | — | $ | — | $ | 544,722 | $ | 519,045 | $ | — | $ | — | $ | 544,722 | $ | 519,045 | ||||||||||||||||||||||||||||
Assumed | 1,242,522 | 1,360,735 | 147,009 | 137,939 | 547,168 | 532,069 | (80,315 | ) | (78,833 | ) | 1,856,384 | 1,951,910 | ||||||||||||||||||||||||||||||||||||
Ceded | (226,264 | ) | (226,798 | ) | (525 | ) | (525 | ) | (226,111 | ) | (220,420 | ) | 80,315 | 78,833 | (372,585 | ) | (368,910 | ) | ||||||||||||||||||||||||||||||
Total | $ | 1,016,258 | $ | 1,133,937 | $ | 146,484 | $ | 137,414 | $ | 865,779 | $ | 830,694 | $ | — | $ | — | $ | 2,028,521 | $ | 2,102,045 | ||||||||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | ||||||||||||||||||||||||||||||||||||||||||||
Written | Earned | Written | Earned | Written | Earned | Written | Earned | Written | Earned | |||||||||||||||||||||||||||||||||||||||
Direct | $ | 1,551 | $ | 364 | $ | — | $ | — | $ | 548,940 | $ | 535,508 | $ | — | $ | — | $ | 550,491 | $ | 535,872 | ||||||||||||||||||||||||||||
Assumed | 1,130,408 | 1,174,681 | 21,603 | 17,666 | 529,696 | 529,544 | (65,758 | ) | (73,934 | ) | 1,615,949 | 1,647,957 | ||||||||||||||||||||||||||||||||||||
Ceded | (144,578 | ) | (151,774 | ) | — | — | (228,686 | ) | (232,773 | ) | 65,758 | 73,934 | (307,506 | ) | (310,613 | ) | ||||||||||||||||||||||||||||||||
Total | $ | 987,381 | $ | 1,023,271 | $ | 21,603 | $ | 17,666 | $ | 849,950 | $ | 832,279 | $ | — | $ | — | $ | 1,858,934 | $ | 1,873,216 | ||||||||||||||||||||||||||||
Reinsurance recoverables by reinsurer | Reinsurance recoverables by reinsurer are as follows: | |||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Recoverable | % of Total | Reinsurance Recoverable | % of Total | |||||||||||||||||||||||||||||||||||||||||||||
Top 10 reinsurers | $ | 312,205 | 75.1 | % | $ | 340,938 | 75.7 | % | ||||||||||||||||||||||||||||||||||||||||
Other reinsurers’ balances > $1 million | 94,247 | 22.7 | % | 100,784 | 22.4 | % | ||||||||||||||||||||||||||||||||||||||||||
Other reinsurers’ balances < $1 million | 9,092 | 2.2 | % | 8,512 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||||||
Total | $ | 415,544 | 100 | % | $ | 450,234 | 100 | % | ||||||||||||||||||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||
Top 10 Reinsurers | Rating | Reinsurance Recoverable | % of Total | |||||||||||||||||||||||||||||||||||||||||||||
Swiss Re | AA- | $ | 70,848 | 17 | % | |||||||||||||||||||||||||||||||||||||||||||
Lloyd's Syndicates | A+ | 62,318 | 15 | % | ||||||||||||||||||||||||||||||||||||||||||||
Everest Re | A+ | 51,425 | 12.4 | % | ||||||||||||||||||||||||||||||||||||||||||||
Hannover Re | AA- | 40,927 | 9.8 | % | ||||||||||||||||||||||||||||||||||||||||||||
Fully Collateralized | NR | 23,315 | 5.6 | % | ||||||||||||||||||||||||||||||||||||||||||||
Munich Re | AA- | 19,384 | 4.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Transatlantic Re | A+ | 12,418 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
XL Re | A+ | 11,114 | 2.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Berkshire Hathaway Homestate | AA+ | 10,372 | 2.5 | % | ||||||||||||||||||||||||||||||||||||||||||||
Merrimack Mutual Fire Insurance | A+ | 10,084 | 2.4 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 312,205 | 75.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||
Top 10 Reinsurers | Rating | Reinsurance Recoverable | % of Total | |||||||||||||||||||||||||||||||||||||||||||||
Lloyd's Syndicates | A+ | $ | 73,398 | 16.3 | % | |||||||||||||||||||||||||||||||||||||||||||
National Indemnity | AA+ | 51,037 | 11.3 | % | ||||||||||||||||||||||||||||||||||||||||||||
Everest Re | A+ | 48,113 | 10.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Hannover Re | AA- | 41,483 | 9.2 | % | ||||||||||||||||||||||||||||||||||||||||||||
Fully Collateralized | NR | 36,683 | 8.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
Third Point Re | A- | 30,428 | 6.8 | % | ||||||||||||||||||||||||||||||||||||||||||||
Swiss Re | AA- | 20,022 | 4.5 | % | ||||||||||||||||||||||||||||||||||||||||||||
Transatlantic Re | A+ | 14,114 | 3.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
XL Re | A+ | 13,300 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
Munich Re | AA- | 12,360 | 2.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 340,938 | 75.7 | % | ||||||||||||||||||||||||||||||||||||||||||||
NR: Not rated |
Share_capital_Tables
Share capital (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||
Summary of common shares issued and outstanding | The following table is a summary of the common shares issued and outstanding: | |||||||||||
Common Shares | ||||||||||||
Common shares issued, December 31, 2013 | 154,488,497 | |||||||||||
Restricted share awards vested, net of shares withheld | 615,659 | |||||||||||
Restricted share units vested, net of shares withheld | 10,265 | |||||||||||
Options exercised | 412,656 | |||||||||||
Direct issuance of common stock | 1,380 | |||||||||||
Performance shares vested, net of shares withheld | 25,767 | |||||||||||
Common shares issued, December 31, 2014 | 155,554,224 | |||||||||||
Treasury shares, December 31, 2014 | (71,684,379 | ) | ||||||||||
Common shares outstanding, December 31, 2014 | 83,869,845 | |||||||||||
Common Shares | ||||||||||||
Common shares issued, December 31, 2012 | 152,698,191 | |||||||||||
Restricted share awards vested, net of shares withheld | 796,838 | |||||||||||
Restricted share units vested, net of shares withheld | 14,381 | |||||||||||
Options exercised | 351,509 | |||||||||||
Warrants exercised | 591,480 | |||||||||||
Direct issuance of common stock | 1,266 | |||||||||||
Performance shares vested, net of shares withheld | 31,897 | |||||||||||
Deferred share units vested, net of shares withheld | 2,935 | |||||||||||
Common shares issued, December 31, 2013 | 154,488,497 | |||||||||||
Treasury shares, December 31, 2013 | (58,444,185 | ) | ||||||||||
Common shares outstanding, December 31, 2013 | 96,044,312 | |||||||||||
Common Shares | ||||||||||||
Common shares issued, December 31, 2011 | 134,503,065 | |||||||||||
Restricted share awards vested, net of shares withheld | 1,572,634 | |||||||||||
Restricted share units vested, net of shares withheld | 15,173 | |||||||||||
Options exercised | 439,065 | |||||||||||
Warrants exercised | 326,715 | |||||||||||
Direct issuance of common stock | 15,841,539 | |||||||||||
Common shares issued, December 31, 2012 | 152,698,191 | |||||||||||
Treasury shares, December 31, 2012 | (44,776,932 | ) | ||||||||||
Common shares outstanding, December 31, 2012 | 107,921,259 | |||||||||||
Assumptions used in warrant-pricing model | The other assumptions in the warrant-pricing model were as follows: | |||||||||||
July 24, | February 3, | December 15, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
Issuance | Issuance | Issuance | ||||||||||
Warrants issued | 256,409 | 8,593 | 8,446,727 | |||||||||
Average strike price | $ | 20 | $ | 17.5 | $ | 17.5 | ||||||
Volatility | 30 | % | 30 | % | 30 | % | ||||||
Risk-free rate | 4.5 | % | 4.5 | % | 4.5 | % | ||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | ||||||
Expected term (years) | 8 | 10 | 10 | |||||||||
Calculated fair value per warrant | $ | 11.28 | $ | 8.89 | $ | 8.89 | ||||||
Retirement_and_pension_plans_T
Retirement and pension plans (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Compensation and Retirement Disclosure [Abstract] | |||||
Summary of assumptions used to determine net periodic pension expense and benefit obligations | The assumptions used to determine net periodic pension expense for the year ended December 31, 2014 are as follows: | ||||
Year Ended December 31, 2014 | |||||
Discount rate | 3 | % | |||
Increase in compensation levels rate | 5 | % | |||
The assumptions used to determine benefit obligations as at December 31, 2014 are as follows: | |||||
As at December 31, 2014 | |||||
Discount rate | 2.75 | % | |||
Increase in compensation levels rate | 5 | % | |||
Analysis of the funded status and amounts recognized for defined benefit plans | The following tables present a reconciliation of the beginning and ending funded status and the net amounts recognized for the defined benefit plans for the year ended December 31, 2014: | ||||
Year Ended December 31, 2014 (a) | |||||
Change in benefit obligation: | |||||
Projected benefit obligation as at October 2, 2014 | $ | 20,885 | |||
Service cost | 295 | ||||
Interest cost | 145 | ||||
Actuarial losses | 1 | ||||
Benefit payments | (24 | ) | |||
Settlements | (4,809 | ) | |||
Projected benefit obligation as at December 31, 2014 | $ | 16,493 | |||
Change in plan assets: | |||||
Fair value of plan assets as at October 2, 2014 | $ | — | |||
Employer contributions | 6,495 | ||||
Benefit payments | (24 | ) | |||
Settlements | (6,471 | ) | |||
Fair value of plan assets as at December 31, 2014 | — | ||||
Funded status as at December 31, 2014 | $ | (16,493 | ) | ||
Current liabilities | $ | (559 | ) | ||
Noncurrent liabilities | (15,934 | ) | |||
Net amount recognized | $ | (16,493 | ) | ||
Amounts recognized in accumulated other comprehensive (loss) income consist of: | |||||
Net loss | $ | 4,505 | |||
Prior service credit | (4 | ) | |||
Net amount recognized | $ | 4,501 | |||
As at December 31, 2014 | |||||
Projected benefit obligation | $ | 16,493 | |||
Accumulated benefit obligation | $ | 11,971 | |||
Fair value of plan assets | $ | — | |||
Components of net periodic pension expense | The components of net periodic pension expense for the year ended December 31, 2014 are as follows: | ||||
Year Ended December 31, 2014 | |||||
Service cost | $ | 295 | |||
Interest cost | 145 | ||||
Amortization of prior service cost | (1 | ) | |||
Amortization of net loss | 79 | ||||
Net periodic benefit cost | 518 | ||||
Settlement loss | 1,322 | ||||
Net periodic pension expense | $ | 1,840 | |||
Summary of other changes in plan assets and benefit obligations recognized in other comprehensive income | Other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income are as follows for the year ended December 31, 2014: | ||||
Year Ended December 31, 2014 | |||||
Net loss | $ | 1,961 | |||
Amortization of loss | (317 | ) | |||
Amortization of prior service cost | 2 | ||||
Settlement loss | (1,322 | ) | |||
Total recognized in other comprehensive (loss) income | $ | 324 | |||
Total recognized in net pension expense and other comprehensive (loss) income (before tax effects) | $ | 2,164 | |||
Summary of expected benefit payments | As at December 31, 2014, the projected benefits are as follows: | ||||
2015 | $ | 559 | |||
2016 | 93 | ||||
2017 | 6,921 | ||||
2018 | 85 | ||||
2019 | 2,160 | ||||
2020-2024 | 5,228 | ||||
Total benefit payments required | $ | 15,046 | |||
Stock_plans_Tables
Stock plans (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||
Options, activity during the period | Activity with respect to options for the year ended December 31, 2014 was as follows: | ||||||||||||||||||
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | Total | Company Proceeds Received | |||||||||||||||
Intrinsic Value (a) | |||||||||||||||||||
Options outstanding and exercisable, December 31, 2013 | 1,572,713 | $ | 6.66 | $ | 18.88 | ||||||||||||||
Options exercised | (412,656 | ) | 5.36 | 22.07 | $ | 7,459 | $ | 9,107 | |||||||||||
Options outstanding and exercisable, December 31, 2014 | 1,160,057 | $ | 7.12 | $ | 17.74 | ||||||||||||||
Activity with respect to options for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | Total | Company Proceeds Received | |||||||||||||||
Intrinsic Value (a) | |||||||||||||||||||
Options outstanding and exercisable, December 31, 2012 | 1,823,947 | $ | 6.52 | $ | 20.69 | ||||||||||||||
Options regranted (modified) | 1,833,414 | 6.76 | 19.02 | ||||||||||||||||
Options exercised | (351,509 | ) | 5.94 | 22.91 | $ | 4,963 | $ | 8,052 | |||||||||||
Options cancelled (modified) | (1,733,139 | ) | 6.76 | 20.12 | |||||||||||||||
Options outstanding and exercisable, December 31, 2013 | 1,572,713 | $ | 6.66 | $ | 18.88 | ||||||||||||||
Activity with respect to options for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | Total | Company Proceeds Received | |||||||||||||||
Intrinsic Value (a) | |||||||||||||||||||
Options outstanding and exercisable, December 31, 2011 | 2,263,012 | $ | 6.69 | $ | 20.12 | ||||||||||||||
Options exercised | (439,065 | ) | 7.44 | 17.73 | $ | 6,574 | $ | 7,785 | |||||||||||
Options outstanding and exercisable, December 31, 2012 | 1,823,947 | $ | 6.52 | $ | 20.69 | ||||||||||||||
(a) | The total intrinsic value in the tables above represent the amount by which the market price of the Company's common stock is greater than the option strike price multiplied by the number of options exercised during the year. | ||||||||||||||||||
Restricted share awards, activity during the period | Activity with respect to unvested restricted share awards for the year ended December 31, 2014 was as follows: | ||||||||||||||||||
Restricted Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share awards outstanding, December 31, 2013 | 2,684,745 | $ | 33.74 | ||||||||||||||||
Restricted share awards granted | 1,051,348 | 37.81 | |||||||||||||||||
Restricted share awards vested | (797,446 | ) | 31.44 | ||||||||||||||||
Restricted share awards forfeited | (79,936 | ) | 36.09 | ||||||||||||||||
Restricted share awards outstanding, December 31, 2014 | 2,858,711 | $ | 35.81 | ||||||||||||||||
Activity with respect to unvested restricted share awards for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Restricted Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share awards outstanding, December 31, 2012 | 2,170,547 | $ | 29.24 | ||||||||||||||||
Restricted share awards granted | 1,594,672 | 36.07 | |||||||||||||||||
Restricted share awards vested | (969,562 | ) | 28.12 | ||||||||||||||||
Restricted share awards forfeited | (110,912 | ) | 28.34 | ||||||||||||||||
Restricted share awards outstanding, December 31, 2013 | 2,684,745 | $ | 33.74 | ||||||||||||||||
Activity with respect to unvested restricted share awards for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Restricted Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share awards outstanding, December 31, 2011 | 3,003,547 | $ | 25.77 | ||||||||||||||||
Restricted share awards granted | 921,506 | 31.47 | |||||||||||||||||
Restricted share awards vested | (1,719,855 | ) | 24.4 | ||||||||||||||||
Restricted share awards forfeited | (34,651 | ) | 27.85 | ||||||||||||||||
Restricted share awards outstanding, December 31, 2012 | 2,170,547 | $ | 29.24 | ||||||||||||||||
Restricted share unit awards, activity during the period | Activity with respect to unvested restricted share units for the year ended December 31, 2014 was as follows: | ||||||||||||||||||
Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share units outstanding, December 31, 2013 | 66,518 | $ | 33.74 | ||||||||||||||||
Restricted share units granted | 53,025 | 38.1 | |||||||||||||||||
Restricted share units vested | (18,325 | ) | 30.71 | ||||||||||||||||
Restricted share units issued in lieu of cash dividends | 2,266 | 35 | |||||||||||||||||
Restricted share units outstanding, December 31, 2014 | 103,484 | $ | 36.54 | ||||||||||||||||
Activity with respect to unvested restricted share units for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share units outstanding, December 31, 2012 | 47,238 | $ | 29.61 | ||||||||||||||||
Restricted share units granted | 36,635 | 36.11 | |||||||||||||||||
Restricted share units vested | (21,814 | ) | 28.17 | ||||||||||||||||
Restricted share units issued in lieu of cash dividends | 4,459 | 30.7 | |||||||||||||||||
Restricted share units outstanding, December 31, 2013 | 66,518 | $ | 33.74 | ||||||||||||||||
Activity with respect to unvested restricted share units for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Restricted Share Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Restricted share units outstanding, December 31, 2011 | 53,312 | $ | 27.6 | ||||||||||||||||
Restricted share units granted | 16,633 | 31.77 | |||||||||||||||||
Restricted share units vested | (22,818 | ) | 26.49 | ||||||||||||||||
Restricted share units issued in lieu of cash dividends | 1,504 | 28.66 | |||||||||||||||||
Restricted share units forfeited | (1,393 | ) | 28.57 | ||||||||||||||||
Restricted share units outstanding, December 31, 2012 | 47,238 | $ | 29.61 | ||||||||||||||||
Performance share awards, activity during the period | Activity with respect to unvested performance share awards for the year ended December 31, 2014 was as follows: | ||||||||||||||||||
Performance Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Performance share awards outstanding, December 31, 2013 | 101,820 | $ | 33.56 | ||||||||||||||||
Performance share awards granted | 52,639 | 37.33 | |||||||||||||||||
Performance share awards vested | (32,746 | ) | 32.62 | ||||||||||||||||
Performance share awards conversion adjustment | (15,344 | ) | 31.38 | ||||||||||||||||
Performance share awards outstanding, December 31, 2014 | 106,369 | $ | 36.03 | ||||||||||||||||
Activity with respect to unvested performance share awards for the year ended December 31, 2013 was as follows: | |||||||||||||||||||
Performance Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Performance share awards outstanding, December 31, 2012 | 220,845 | $ | 31.81 | ||||||||||||||||
Performance share awards granted | 38,386 | 36.11 | |||||||||||||||||
Performance share awards vested | (39,094 | ) | 28.7 | ||||||||||||||||
Performance share awards forfeited | (18,701 | ) | 31.05 | ||||||||||||||||
Performance share awards conversion adjustment | (99,616 | ) | 33.05 | ||||||||||||||||
Performance share awards outstanding, December 31, 2013 | 101,820 | $ | 33.56 | ||||||||||||||||
Activity with respect to unvested performance share awards for the year ended December 31, 2012 was as follows: | |||||||||||||||||||
Performance Share Awards | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Performance share awards outstanding, December 31, 2011 | 279,019 | $ | 30.77 | ||||||||||||||||
Performance share awards granted | 41,128 | 31.38 | |||||||||||||||||
Performance share awards forfeited | (99,302 | ) | 28.7 | ||||||||||||||||
Performance share awards outstanding, December 31, 2012 | 220,845 | $ | 31.81 | ||||||||||||||||
Total share compensation expenses | The breakdown of share compensation expenses by award type was as follows: | ||||||||||||||||||
Years Ended | |||||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, | |||||||||||||||||
2012 | |||||||||||||||||||
Options | $ | — | $ | — | $ | 142 | |||||||||||||
Restricted share awards | 31,335 | 27,750 | 25,145 | ||||||||||||||||
Restricted share units | 876 | 585 | 499 | ||||||||||||||||
Performance share awards | 862 | (705 | ) | 923 | |||||||||||||||
Total | $ | 33,073 | $ | 27,630 | $ | 26,709 | |||||||||||||
Debt_and_financing_arrangement1
Debt and financing arrangements (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Schedule of financing structure | The financing structure at December 31, 2014 was: | |||||||||||
Commitment | Issued and outstanding (a) | Drawn | ||||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 150,000 | $ | 150,000 | $ | 150,000 | ||||||
2007 Junior Subordinated Deferrable Debentures | 200,000 | 139,800 | 139,800 | |||||||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | 135,727 | 135,727 | 135,727 | |||||||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 113,750 | 113,750 | 113,750 | |||||||||
Total debentures payable | 599,477 | 539,277 | 539,277 | |||||||||
2010 Senior Notes due 2040 | 250,000 | 250,000 | 247,306 | |||||||||
Total debentures and senior notes payable | 849,477 | 789,277 | 786,583 | |||||||||
$400,000 syndicated unsecured letter of credit facility | 400,000 | — | — | |||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 276,455 | — | |||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 15,649 | — | |||||||||
Talbot FAL facility | 25,000 | 25,000 | — | |||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||
AlphaCat Re secured letter of credit facility | 30,000 | 30,000 | — | |||||||||
IPC bi-lateral facility | 40,000 | 15,897 | — | |||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 198,389 | — | |||||||||
Total credit and other facilities | 1,605,000 | 561,684 | — | |||||||||
Total debt and financing arrangements | $ | 2,454,477 | $ | 1,350,961 | $ | 786,583 | ||||||
The financing structure at December 31, 2013 was: | ||||||||||||
Commitment | Issued and outstanding (a) | Drawn | ||||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 150,000 | $ | 150,000 | $ | 150,000 | ||||||
2007 Junior Subordinated Deferrable Debentures | 200,000 | 139,800 | 139,800 | |||||||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | 137,866 | 137,866 | 137,866 | |||||||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 113,750 | 113,750 | 113,750 | |||||||||
Total debentures payable | 601,616 | 541,416 | 541,416 | |||||||||
2010 Senior Notes due 2040 | 250,000 | 250,000 | 247,198 | |||||||||
Total debentures and senior notes payable | 851,616 | 791,416 | 788,614 | |||||||||
$400,000 syndicated unsecured letter of credit facility | 400,000 | — | — | |||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 358,567 | — | |||||||||
$200,000 secured bi-lateral letter of credit facility | 200,000 | 16,726 | — | |||||||||
Talbot FAL facility | 25,000 | 25,000 | — | |||||||||
PaCRe senior secured letter of credit facility | 10,000 | 294 | — | |||||||||
AlphaCat Re secured letter of credit facility | 24,800 | 24,800 | — | |||||||||
IPC bi-lateral facility | 40,000 | 20,177 | — | |||||||||
$375,000 Flagstone bi-lateral facility | 375,000 | 305,686 | — | |||||||||
Total credit and other facilities | 1,599,800 | 751,250 | — | |||||||||
Total debt and financing arrangements | $ | 2,451,416 | $ | 1,542,666 | $ | 788,614 | ||||||
(a) | Indicates utilization of commitment amount, not necessarily drawn borrowings. | |||||||||||
Components of finance expenses | Finance expenses consist of interest on the junior subordinated deferrable debentures and senior notes, the amortization of debt offering costs, credit facilities fees, bank charges, AlphaCat financing fees and Talbot FAL costs as follows: | |||||||||||
Year Ended | ||||||||||||
December 31, | December 31, | December 31, | ||||||||||
2014 | 2013 | 2012 | ||||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 8,868 | $ | 8,868 | $ | 6,964 | ||||||
2007 Junior Subordinated Deferrable Debentures | 7,341 | 7,341 | 8,922 | |||||||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | 9,001 | 8,259 | 459 | |||||||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 7,129 | 6,222 | 327 | |||||||||
2010 Senior Notes due 2040 | 22,388 | 22,388 | 22,388 | |||||||||
Credit facilities | 5,516 | 6,544 | 11,999 | |||||||||
Bank charges | 427 | 507 | 269 | |||||||||
AlphaCat ILS funds fees (a) | 3,530 | 3,866 | 2,432 | |||||||||
Talbot FAL Facility | (346 | ) | 182 | 97 | ||||||||
Total finance expenses | $ | 63,854 | $ | 64,177 | $ | 53,857 | ||||||
(a) | Includes finance expenses incurred by AlphaCat Managers, Ltd. in relation to fund raising for the AlphaCat ILS funds, AlphaCat 2015, AlphaCat 2014 and AlphaCat 2013. | |||||||||||
Debt Information At Issuance [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Summary of key terms of debt instruments | The following table summarizes the key terms of the Company's senior notes and junior subordinated deferrable debentures as at the issuance date for each placement. | |||||||||||
Description | Issuance date | Commitment | Maturity date | Fixed/Spread | Interest payments due | |||||||
2006 Junior Subordinated Deferrable Debentures | June 15, 2006 | $ | 150,000 | June 15, 2036 | 9.069 | % | (a) | Quarterly | ||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | August 23, 2006 | $ | 135,727 | September 15, 2036 | 3.54 | % | (b) | Quarterly | ||||
2007 Junior Subordinated Deferrable Debentures | June 21, 2007 | $ | 200,000 | June 15, 2037 | 8.48 | % | (a) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | June 8, 2007 | $ | 88,750 | July 30, 2037 | 3 | % | (b) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | September 20, 2007 | $ | 25,000 | September 15, 2037 | 3.1 | % | (b) | Quarterly | ||||
2010 Senior Notes due 2040 | January 26, 2010 | $ | 250,000 | January 26, 2040 | 8.875 | % | (a) | Semi-annually in arrears | ||||
(a) | Fixed interest rate. | |||||||||||
(b) | Variable interest rate is the three-month LIBOR, reset quarterly, plus spread as noted in the table. | |||||||||||
Debt Outstanding [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Summary of key terms of debt instruments | The following table summarizes the key terms of the Company's senior notes and junior subordinated deferrable debentures as at December 31, 2014: | |||||||||||
Description | Issuance date | Commitment | Maturity date | Fixed/Spread | Interest payments due | |||||||
2006 Junior Subordinated Deferrable Debentures | June 15, 2006 | $ | 150,000 | June 15, 2036 | 5.831 | % | (b) | Quarterly | ||||
Flagstone 2006 Junior Subordinated Deferrable Debentures | August 23, 2006 | $ | 135,727 | September 15, 2036 | 6.463 | % | (b) | Quarterly | ||||
2007 Junior Subordinated Deferrable Debentures | June 21, 2007 | $ | 200,000 | June 15, 2037 | 5.18 | % | (b) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 8-Jun-07 | $ | 88,750 | July 30, 2037 | 5.9 | % | (b) | Quarterly | ||||
Flagstone 2007 Junior Subordinated Deferrable Debentures | 20-Sep-07 | $ | 25,000 | September 15, 2037 | 5.983 | % | (b) | Quarterly | ||||
2010 Senior Notes due 2040 | 26-Jan-10 | $ | 250,000 | January 26, 2040 | 8.875 | % | (a) | Semi-annually in arrears | ||||
(a) | Fixed interest rate. | |||||||||||
(b) | Interest rate has been fixed as a result of interest rate swap contracts entered into by the Company. |
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | The Company’s income (loss) before income tax for the years ended December 31, 2014, 2013 and 2012 was generated in the following jurisdictions: | |||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Income before tax—Bermuda | $ | 496,840 | $ | 601,583 | $ | 369,675 | ||||||
Income before tax—United Kingdom | 10,824 | 4,668 | 10,277 | |||||||||
(Loss) income before tax—United States | (11,752 | ) | (464 | ) | 3,075 | |||||||
Income (loss) before tax—Switzerland | 9,941 | (225 | ) | (3,381 | ) | |||||||
Income before tax—Canada | 2,773 | 57 | 391 | |||||||||
Income (loss) before tax—Other | 29,076 | (8,401 | ) | 2,502 | ||||||||
Income before tax—Total | $ | 537,702 | $ | 597,218 | $ | 382,539 | ||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax expense (benefit) is comprised of current and deferred tax. Income tax expense (benefit) is as follows: | |||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Current income tax expense (benefit) | ||||||||||||
U.S. | $ | 21,257 | $ | — | $ | (54 | ) | |||||
Non-U.S. | 26,179 | 1,781 | 1,382 | |||||||||
Total current income tax expense | $ | 47,436 | $ | 1,781 | $ | 1,328 | ||||||
Deferred income tax (benefit) expense | ||||||||||||
U.S. | $ | (24,998 | ) | $ | 880 | $ | 134 | |||||
Non-U.S. | (22,283 | ) | (2,278 | ) | 1,039 | |||||||
Total deferred income tax (benefit) expense | $ | (47,281 | ) | $ | (1,398 | ) | $ | 1,173 | ||||
Total income tax expense (benefit) | ||||||||||||
U.S. | $ | (3,741 | ) | $ | 880 | $ | 80 | |||||
Non-U.S. | 3,896 | (497 | ) | 2,421 | ||||||||
Total income tax expense | $ | 155 | $ | 383 | $ | 2,501 | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The table below is a reconciliation of the actual income tax expense for the years ended December 31, 2014, 2013 and 2012 to the amount computed by applying the effective tax rate of 0% under Bermuda law to income before taxes: | |||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Expected tax expense at Bermuda statutory rate of 0% | $ | — | $ | — | $ | — | ||||||
Foreign tax rate differential | 7,993 | (2,399 | ) | 4,882 | ||||||||
Change in valuation allowance | (7,284 | ) | 4,967 | — | ||||||||
Tax exempt income and expenses not deductible | (6,055 | ) | (263 | ) | — | |||||||
Share compensation tax windfall | 3,513 | — | — | |||||||||
Impact of enacted changes in tax rates | 250 | (407 | ) | (1,611 | ) | |||||||
Prior years tax adjustments | 666 | (461 | ) | (770 | ) | |||||||
Other | 1,072 | (1,054 | ) | — | ||||||||
Actual income tax expense | $ | 155 | $ | 383 | $ | 2,501 | ||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Significant components of the Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 were as follows: | |||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Deferred tax asset | ||||||||||||
Tax losses carried forward | $ | 158,789 | $ | 185,955 | ||||||||
Deferred compensation | 5,527 | 6,119 | ||||||||||
Tax credits carried forward | 4,016 | — | ||||||||||
Discounting of loss reserves | 13,721 | — | ||||||||||
Risk premium reserve | 3,842 | — | ||||||||||
Unearned premiums reserve | 8,505 | — | ||||||||||
Pension | 5,864 | — | ||||||||||
Other | 6,023 | 128 | ||||||||||
Deferred tax asset, gross of valuation allowance | 206,287 | 192,202 | ||||||||||
Valuation allowance | 158,099 | 177,656 | ||||||||||
Net deferred tax asset | $ | 48,188 | $ | 14,546 | ||||||||
Deferred tax liability | ||||||||||||
Lloyd's underwriting profit taxable in future periods | $ | 636 | $ | 28,945 | ||||||||
Deferred acquisition costs | 3,348 | — | ||||||||||
Intangibles | 8,638 | — | ||||||||||
Unrealized appreciation on investments | 9,101 | — | ||||||||||
Properties and fixed assets | 4,993 | 3,179 | ||||||||||
Other | 3,192 | 1,508 | ||||||||||
Deferred tax liability | 29,908 | 33,632 | ||||||||||
Net deferred tax asset (liability) | $ | 18,280 | $ | (19,086 | ) | |||||||
Schedule of Net Operating Loss and Capital Loss Carryforwards [Table Text Block] | As of December 31, 2014, the Company had net operating and capital loss carry forwards inclusive of cumulative currency translation adjustments as follows: | |||||||||||
Tax Jurisdiction | Losses carried forward | Tax effect | Expiration | |||||||||
United Kingdom | 547 | 118 | None | |||||||||
United States | 6,634 | 2,322 | 2029 - 2033 | |||||||||
Switzerland | 267,420 | 56,426 | 2018 - 2020 | |||||||||
Luxembourg | 340,245 | 99,352 | None | |||||||||
Singapore | 5,723 | 572 | None | |||||||||
Accumulated_other_comprehensiv1
Accumulated other comprehensive (loss) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Abstract] | ||||||||||||||||
Schedule of changes in AOCI | The changes in accumulated other comprehensive loss, by component for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||||
Foreign currency items | Decrease in minimum pension liability | Gains and losses on cash flow hedge | Total | |||||||||||||
Balance, net of tax December 31, 2011 | $ | (6,601 | ) | $ | — | $ | — | $ | (6,601 | ) | ||||||
Net current period other comprehensive income, net of tax | 3,648 | — | — | 3,648 | ||||||||||||
Balance, net of tax December 31, 2012 | $ | (2,953 | ) | $ | — | $ | — | $ | (2,953 | ) | ||||||
Amounts reclassified to retained earnings | 4,290 | — | — | 4,290 | ||||||||||||
Net current period other comprehensive loss, net of tax | (1,954 | ) | — | — | (1,954 | ) | ||||||||||
Balance, net of tax December 31, 2013 | $ | (617 | ) | $ | — | $ | — | $ | (617 | ) | ||||||
Net current period other comprehensive loss, net of tax | (7,501 | ) | (210 | ) | (228 | ) | (7,939 | ) | ||||||||
Balance, net of tax December 31, 2014 | $ | (8,118 | ) | $ | (210 | ) | $ | (228 | ) | $ | (8,556 | ) |
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||
Percentage of gross premiums written by broker | The following table shows the percentage of gross premiums written by broker for the years ended December 31, 2014, 2013 and 2012: | |||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Marsh & McLennan | 28.5 | % | 21.8 | % | 30.1 | % | ||||||
Aon Benfield Group Ltd. | 20.1 | % | 27.7 | % | 24.2 | % | ||||||
Willis Group Holdings Ltd. | 18 | % | 19.4 | % | 16.4 | % | ||||||
Future minimum lease commitments | Future minimum lease commitments are as follows: | |||||||||||
2015 | $ | 11,094 | ||||||||||
2016 | 8,616 | |||||||||||
2017 | 7,514 | |||||||||||
2018 | 7,350 | |||||||||||
2019 | 7,130 | |||||||||||
2020 and thereafter | 23,784 | |||||||||||
$ | 65,488 | |||||||||||
Components of required capital | The amounts of cash, investments and letters of credit provided for each year of account as follows: | |||||||||||
2015 Underwriting Year | 2014 Underwriting Year | 2013 Underwriting Year | ||||||||||
Talbot FAL facility | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||
Group funds | 570,100 | 450,000 | 403,700 | |||||||||
Total | $ | 595,100 | $ | 475,000 | $ | 428,700 | ||||||
Earnings_per_share_Tables
Earnings per share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic earnings per share and earnings per diluted share available to common shareholders for the years ended December 31, 2014, 2013 and 2012: | |||||||||||
Years Ended | ||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | ||||||||||
Basic earnings per share | ||||||||||||
Net income | $ | 445,871 | $ | 542,361 | $ | 392,618 | ||||||
Loss (income) attributable to noncontrolling interest | 35,464 | (9,695 | ) | 15,820 | ||||||||
Net income available to Validus | $ | 481,335 | $ | 532,666 | $ | 408,438 | ||||||
Less: Dividends and distributions declared on outstanding warrants | (6,208 | ) | (19,214 | ) | (6,693 | ) | ||||||
Income available to common shareholders | $ | 475,127 | $ | 513,452 | $ | 401,745 | ||||||
Weighted average number of common shares outstanding | 90,354,745 | 102,202,274 | 97,184,110 | |||||||||
Basic earnings per share available to common shareholders | $ | 5.26 | $ | 5.02 | $ | 4.13 | ||||||
Earnings per diluted share | ||||||||||||
Net income | $ | 445,871 | $ | 542,361 | $ | 392,618 | ||||||
Loss (income) attributable to noncontrolling interest | 35,464 | (9,695 | ) | 15,820 | ||||||||
Net income available to Validus | $ | 481,335 | $ | 532,666 | $ | 408,438 | ||||||
Less: Dividends and distributions declared on outstanding warrants | — | (19,214 | ) | — | ||||||||
Income available to common shareholders | $ | 481,335 | $ | 513,452 | $ | 408,438 | ||||||
Weighted average number of common shares outstanding | 90,354,745 | 102,202,274 | 97,184,110 | |||||||||
Share equivalents: | ||||||||||||
Warrants | 2,789,032 | — | 3,137,956 | |||||||||
Stock options | 745,561 | 1,026,543 | 769,618 | |||||||||
Unvested restricted shares | 800,933 | 741,472 | 1,293,239 | |||||||||
Weighted average number of diluted common shares outstanding | 94,690,271 | 103,970,289 | 102,384,923 | |||||||||
Earnings per diluted share available to common shareholders | $ | 5.08 | $ | 4.94 | $ | 3.99 | ||||||
Segment_information_Tables
Segment information (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||
Results of operating segments and corporate segment | The following tables summarize the results of our operating segments and "Corporate": | ||||||||||||||||||||||||||
Year Ended December 31, 2014 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Western World Segment (d) | Corporate & Eliminations | Total | |||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | $ | 1,136,910 | $ | 135,181 | $ | 1,101,770 | $ | 65,235 | $ | (75,810 | ) | $ | 2,363,286 | ||||||||||||||
Reinsurance premiums ceded | (182,056 | ) | (4,348 | ) | (192,211 | ) | (6,428 | ) | 75,810 | (309,233 | ) | ||||||||||||||||
Net premiums written | 954,854 | 130,833 | 909,559 | 58,807 | — | 2,054,053 | |||||||||||||||||||||
Change in unearned premiums | (37,570 | ) | 1,517 | (29,785 | ) | 14,189 | — | (51,649 | ) | ||||||||||||||||||
Net premiums earned | 917,284 | 132,350 | 879,774 | 72,996 | — | 2,002,404 | |||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 307,290 | (9,670 | ) | 423,394 | 51,035 | — | 772,049 | ||||||||||||||||||||
Policy acquisition costs | 141,670 | 12,673 | 187,162 | 3,169 | (4,118 | ) | 340,556 | ||||||||||||||||||||
General and administrative expenses | 74,739 | 19,590 | 150,828 | 11,121 | 73,514 | 329,792 | |||||||||||||||||||||
Share compensation expenses | 9,739 | 501 | 11,346 | 135 | 11,352 | 33,073 | |||||||||||||||||||||
Total underwriting deductions | 533,438 | 23,094 | 772,730 | 65,460 | 80,748 | 1,475,470 | |||||||||||||||||||||
Underwriting income (loss) | $ | 383,846 | $ | 109,256 | $ | 107,044 | $ | 7,536 | $ | (80,748 | ) | $ | 526,934 | ||||||||||||||
Net investment income | 74,599 | 4,276 | 20,575 | 4,523 | (3,897 | ) | 100,076 | ||||||||||||||||||||
Other insurance related income (loss) | 3,159 | 27,122 | 1,095 | 264 | (9,658 | ) | 21,982 | ||||||||||||||||||||
Finance expenses | (14,727 | ) | (3,545 | ) | 213 | — | (45,795 | ) | (63,854 | ) | |||||||||||||||||
Operating income (loss) before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 446,877 | 137,109 | 128,927 | 12,323 | (140,098 | ) | 585,138 | ||||||||||||||||||||
Tax benefit (expense) | 5,512 | — | (3,880 | ) | (1,422 | ) | (365 | ) | (155 | ) | |||||||||||||||||
Income from operating affiliates | — | 17,723 | — | — | — | 17,723 | |||||||||||||||||||||
(Income) attributable to operating affiliate investors | — | (109,399 | ) | — | — | — | (109,399 | ) | |||||||||||||||||||
Net operating income (loss) | $ | 452,389 | $ | 45,433 | $ | 125,047 | $ | 10,901 | $ | (140,463 | ) | $ | 493,307 | ||||||||||||||
Net realized gains on investments | 7,611 | 10,935 | 3,852 | 697 | — | 23,095 | |||||||||||||||||||||
Change in net unrealized gains (losses) on investments | 8,404 | (56,943 | ) | 1,685 | (155 | ) | (10,964 | ) | (57,973 | ) | |||||||||||||||||
Income from investment affiliate | 8,411 | — | — | — | — | 8,411 | |||||||||||||||||||||
Foreign exchange (losses) gains | (6,404 | ) | 70 | (5,961 | ) | — | 1,665 | (10,630 | ) | ||||||||||||||||||
Other (loss) | (2,243 | ) | — | — | — | — | (2,243 | ) | |||||||||||||||||||
Transaction expenses (a) | — | — | — | — | (8,096 | ) | (8,096 | ) | |||||||||||||||||||
Net income (loss) | $ | 468,168 | $ | (505 | ) | $ | 124,623 | $ | 11,443 | $ | (157,858 | ) | $ | 445,871 | |||||||||||||
Net loss attributable to noncontrolling interest | — | 35,464 | — | — | — | 35,464 | |||||||||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 468,168 | $ | 34,959 | $ | 124,623 | $ | 11,443 | $ | (157,858 | ) | $ | 481,335 | ||||||||||||||
Selected ratios (b): | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 84 | % | 96.8 | % | 82.6 | % | 90.1 | % | 86.9 | % | |||||||||||||||||
Losses and loss expenses | 33.5 | % | (7.3 | )% | 48.1 | % | 69.9 | % | 38.6 | % | |||||||||||||||||
Policy acquisition costs | 15.5 | % | 9.6 | % | 21.3 | % | 4.4 | % | 17 | % | |||||||||||||||||
General and administrative expenses (c) | 9.2 | % | 15.2 | % | 18.4 | % | 15.4 | % | 18.1 | % | |||||||||||||||||
Expense ratio | 24.7 | % | 24.8 | % | 39.7 | % | 19.8 | % | 35.1 | % | |||||||||||||||||
Combined ratio | 58.2 | % | 17.5 | % | 87.8 | % | 89.7 | % | 73.7 | % | |||||||||||||||||
Total assets | $ | 4,209,289 | $ | 1,656,326 | $ | 2,890,123 | $ | 1,492,179 | $ | 63,704 | $ | 10,311,621 | |||||||||||||||
(a) | The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services. | ||||||||||||||||||||||||||
(b) | Ratios are based on net premiums earned. | ||||||||||||||||||||||||||
(c) | The general and administrative expenses ratio includes share compensation expenses. | ||||||||||||||||||||||||||
(d) | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | ||||||||||||||||||||||||||
Year Ended December 31, 2013 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Corporate & Eliminations | Total | ||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | $ | 1,242,522 | $ | 147,009 | $ | 1,091,890 | $ | (80,315 | ) | $ | 2,401,106 | ||||||||||||||||
Reinsurance premiums ceded | (226,264 | ) | (525 | ) | (226,111 | ) | 80,315 | (372,585 | ) | ||||||||||||||||||
Net premiums written | 1,016,258 | 146,484 | 865,779 | — | 2,028,521 | ||||||||||||||||||||||
Change in unearned premiums | 117,679 | (9,070 | ) | (35,085 | ) | — | 73,524 | ||||||||||||||||||||
Net premiums earned | 1,133,937 | 137,414 | 830,694 | — | 2,102,045 | ||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 430,026 | 17,569 | 346,337 | — | 793,932 | ||||||||||||||||||||||
Policy acquisition costs | 180,779 | 13,853 | 170,738 | (5,060 | ) | 360,310 | |||||||||||||||||||||
General and administrative expenses | 91,260 | 18,765 | 136,458 | 68,782 | 315,265 | ||||||||||||||||||||||
Share compensation expenses | 7,668 | 468 | 9,613 | 9,881 | 27,630 | ||||||||||||||||||||||
Total underwriting deductions | 709,733 | 50,655 | 663,146 | 73,603 | 1,497,137 | ||||||||||||||||||||||
Underwriting income (loss) | $ | 424,204 | $ | 86,759 | $ | 167,548 | $ | (73,603 | ) | $ | 604,908 | ||||||||||||||||
Net investment income | 81,346 | 3,865 | 18,061 | (7,200 | ) | 96,072 | |||||||||||||||||||||
Other insurance related income (loss) | 19,222 | 26,424 | 1,819 | (28,345 | ) | 19,120 | |||||||||||||||||||||
Finance expenses | (16,111 | ) | (5,734 | ) | (259 | ) | (42,073 | ) | (64,177 | ) | |||||||||||||||||
Operating income (loss) before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 508,661 | 111,314 | 187,169 | (151,221 | ) | 655,923 | |||||||||||||||||||||
Tax benefit (expense) | 272 | — | (671 | ) | 16 | (383 | ) | ||||||||||||||||||||
Income from operating affiliates | — | 14,289 | — | — | 14,289 | ||||||||||||||||||||||
(Income) attributable to operating affiliate investors | — | (68,763 | ) | — | — | (68,763 | ) | ||||||||||||||||||||
Net operating income (loss) | $ | 508,933 | $ | 56,840 | $ | 186,498 | $ | (151,205 | ) | $ | 601,066 | ||||||||||||||||
Net realized (losses) gains on investments | (1,382 | ) | 4,084 | 556 | — | 3,258 | |||||||||||||||||||||
Change in net unrealized losses on investments | (41,388 | ) | (3,893 | ) | (13,200 | ) | — | (58,481 | ) | ||||||||||||||||||
Income from investment affiliate | 4,790 | — | — | — | 4,790 | ||||||||||||||||||||||
Foreign exchange gains (losses) | 7,394 | (816 | ) | (3,531 | ) | (542 | ) | 2,505 | |||||||||||||||||||
Other income | (10,777 | ) | — | — | — | (10,777 | ) | ||||||||||||||||||||
Net income (loss) | $ | 467,570 | $ | 56,215 | $ | 170,323 | $ | (151,747 | ) | $ | 542,361 | ||||||||||||||||
Net (income) attributable to noncontrolling interest | — | (9,695 | ) | — | — | (9,695 | ) | ||||||||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 467,570 | $ | 46,520 | $ | 170,323 | $ | (151,747 | ) | $ | 532,666 | ||||||||||||||||
Selected ratios (a): | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 81.8 | % | 99.6 | % | 79.3 | % | 84.5 | % | |||||||||||||||||||
Losses and loss expenses | 37.9 | % | 12.8 | % | 41.7 | % | 37.8 | % | |||||||||||||||||||
Policy acquisition costs | 16 | % | 10.1 | % | 20.5 | % | 17.1 | % | |||||||||||||||||||
General and administrative expenses (b) | 8.7 | % | 14 | % | 17.6 | % | 16.3 | % | |||||||||||||||||||
Expense ratio | 24.7 | % | 24.1 | % | 38.1 | % | 33.4 | % | |||||||||||||||||||
Combined ratio | 62.6 | % | 36.9 | % | 79.8 | % | 71.2 | % | |||||||||||||||||||
Total assets | $ | 5,326,076 | $ | 1,558,453 | $ | 2,891,682 | $ | 70,221 | $ | 9,846,432 | |||||||||||||||||
(a) | Ratios are based on net premiums earned. | ||||||||||||||||||||||||||
(b) | The general and administrative expenses ratio includes share compensation expenses. | ||||||||||||||||||||||||||
Year Ended December 31, 2012 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Corporate & | Total | ||||||||||||||||||||||
Eliminations | |||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | $ | 1,131,959 | $ | 21,603 | $ | 1,078,636 | $ | (65,758 | ) | $ | 2,166,440 | ||||||||||||||||
Reinsurance premiums ceded | (144,578 | ) | — | (228,686 | ) | 65,758 | (307,506 | ) | |||||||||||||||||||
Net premiums written | 987,381 | 21,603 | 849,950 | — | 1,858,934 | ||||||||||||||||||||||
Change in unearned premiums | 35,890 | (3,937 | ) | (17,671 | ) | — | 14,282 | ||||||||||||||||||||
Net premiums earned | 1,023,271 | 17,666 | 832,279 | — | 1,873,216 | ||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 575,416 | — | 424,030 | — | 999,446 | ||||||||||||||||||||||
Policy acquisition costs | 154,362 | 1,774 | 183,926 | (5,364 | ) | 334,698 | |||||||||||||||||||||
General and administrative expenses | 63,048 | 7,532 | 133,281 | 59,791 | 263,652 | ||||||||||||||||||||||
Share compensation expenses | 7,763 | 279 | 7,789 | 10,878 | 26,709 | ||||||||||||||||||||||
Total underwriting deductions | 800,589 | 9,585 | 749,026 | 65,305 | 1,624,505 | ||||||||||||||||||||||
Underwriting income (loss) | $ | 222,682 | $ | 8,081 | $ | 83,253 | $ | (65,305 | ) | $ | 248,711 | ||||||||||||||||
Net investment income | 88,727 | 3,748 | 21,310 | (5,849 | ) | 107,936 | |||||||||||||||||||||
Other insurance related income (loss) | 5,000 | 23,229 | 2,033 | (7,951 | ) | 22,311 | |||||||||||||||||||||
Finance expenses | (8,943 | ) | (3,061 | ) | (162 | ) | (41,691 | ) | (53,857 | ) | |||||||||||||||||
Operating income (loss) before taxes and income from operating affiliates | 307,466 | 31,997 | 106,434 | (120,796 | ) | 325,101 | |||||||||||||||||||||
Tax (expense) | (168 | ) | — | (2,229 | ) | (104 | ) | (2,501 | ) | ||||||||||||||||||
Income from operating affiliates | — | 12,580 | — | — | 12,580 | ||||||||||||||||||||||
Net operating income (loss) | $ | 307,298 | $ | 44,577 | $ | 104,205 | $ | (120,900 | ) | $ | 335,180 | ||||||||||||||||
Gain on bargain purchase, net of expenses (a) | — | — | — | 17,701 | 17,701 | ||||||||||||||||||||||
Net realized gains on investments | 12,026 | 216 | 5,991 | — | 18,233 | ||||||||||||||||||||||
Net unrealized (losses) on investments | 35,033 | (19,509 | ) | 2,061 | — | 17,585 | |||||||||||||||||||||
Loss from investment affiliate | (964 | ) | — | — | — | (964 | ) | ||||||||||||||||||||
Foreign exchange (losses) gains | 2,664 | 44 | 2,527 | (437 | ) | 4,798 | |||||||||||||||||||||
Other income | 85 | — | — | — | 85 | ||||||||||||||||||||||
Net income (loss) | $ | 356,142 | $ | 25,328 | $ | 114,784 | $ | (103,636 | ) | $ | 392,618 | ||||||||||||||||
Net loss attributable to noncontrolling interest | — | 15,820 | — | — | 15,820 | ||||||||||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 356,142 | $ | 41,148 | $ | 114,784 | $ | (103,636 | ) | $ | 408,438 | ||||||||||||||||
Selected ratios: (b) | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 87.2 | % | 100 | % | 78.8 | % | 85.8 | % | |||||||||||||||||||
Losses and loss expenses | 56.2 | % | — | % | 50.9 | % | 53.4 | % | |||||||||||||||||||
Policy acquisition costs | 15.1 | % | 10 | % | 22.1 | % | 17.9 | % | |||||||||||||||||||
General and administrative expenses (c) | 6.9 | % | 44.2 | % | 16.9 | % | 15.5 | % | |||||||||||||||||||
Expense ratio | 22 | % | 54.2 | % | 39 | % | 33.4 | % | |||||||||||||||||||
Combined ratio | 78.2 | % | 54.2 | % | 89.9 | % | 86.8 | % | |||||||||||||||||||
Total assets | $ | 6,206,084 | $ | 805,513 | $ | 2,968,224 | $ | 40,443 | $ | 10,020,264 | |||||||||||||||||
(a) | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. | ||||||||||||||||||||||||||
(b) | Ratios are based on net premiums earned. | ||||||||||||||||||||||||||
(c) | The general and administrative expenses ratio includes share compensation expenses. | ||||||||||||||||||||||||||
Gross premiums written by line of business | The following table sets forth the gross premiums written by line of business for the periods indicated: | ||||||||||||||||||||||||||
Gross Premiums Written (a) | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | Year Ended December 31, 2013 | Year Ended December 31, 2012 | |||||||||||||||||||||||||
Property | $ | 1,054,530 | $ | 1,164,687 | $ | 1,060,297 | |||||||||||||||||||||
Marine | 576,478 | 570,008 | 649,421 | ||||||||||||||||||||||||
Specialty | 677,026 | 666,411 | 456,722 | ||||||||||||||||||||||||
Liability | 55,252 | — | — | ||||||||||||||||||||||||
$ | 2,363,286 | $ | 2,401,106 | $ | 2,166,440 | ||||||||||||||||||||||
(a) | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | ||||||||||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | The following tables set forth the gross premiums written allocated to the territory of coverage exposure for the periods indicated: | ||||||||||||||||||||||||||
Gross Premiums Written | |||||||||||||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Western World (d) | Eliminations | Total | % | |||||||||||||||||||||
United States | $ | 442,314 | $ | 30,987 | $ | 108,458 | $ | 65,235 | $ | (11,026 | ) | $ | 635,968 | 27 | % | ||||||||||||
Worldwide excluding United States (a) | 76,129 | 7,331 | 139,570 | — | (1,334 | ) | 221,696 | 9.4 | % | ||||||||||||||||||
Australia and New Zealand | 20,257 | 1,019 | 9,736 | — | — | 31,012 | 1.3 | % | |||||||||||||||||||
Europe | 58,236 | 3,005 | 45,615 | — | (2,305 | ) | 104,551 | 4.4 | % | ||||||||||||||||||
Latin America and Caribbean | 54,053 | — | 116,281 | — | (23,958 | ) | 146,376 | 6.2 | % | ||||||||||||||||||
Japan | 43,310 | 608 | 4,116 | — | (608 | ) | 47,426 | 2 | % | ||||||||||||||||||
Canada | 3,670 | 215 | 10,194 | — | (214 | ) | 13,865 | 0.6 | % | ||||||||||||||||||
Rest of the world (b) | 21,467 | — | 93,012 | — | — | 114,479 | 4.8 | % | |||||||||||||||||||
Sub-total, non United States | 277,122 | 12,178 | 418,524 | — | (28,419 | ) | 679,405 | 28.7 | % | ||||||||||||||||||
Worldwide including United States (a) | 179,564 | 92,016 | 96,187 | — | (22,463 | ) | 345,304 | 14.6 | % | ||||||||||||||||||
Other locations non-specific (c) | 237,910 | — | 478,601 | — | (13,902 | ) | 702,609 | 29.7 | % | ||||||||||||||||||
Total | $ | 1,136,910 | $ | 135,181 | $ | 1,101,770 | $ | 65,235 | $ | (75,810 | ) | $ | 2,363,286 | 100 | % | ||||||||||||
Gross Premiums Written | |||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | % | ||||||||||||||||||||||
United States | $ | 524,776 | $ | 50,848 | $ | 93,357 | $ | (6,565 | ) | $ | 662,416 | 27.7 | % | ||||||||||||||
Worldwide excluding United States (a) | 63,643 | 14,801 | 142,294 | (1,485 | ) | 219,253 | 9.1 | % | |||||||||||||||||||
Australia and New Zealand | 22,275 | 2,216 | 11,097 | — | 35,588 | 1.5 | % | ||||||||||||||||||||
Europe | 65,861 | 2,533 | 51,667 | (1,446 | ) | 118,615 | 4.9 | % | |||||||||||||||||||
Latin America and Caribbean | 50,522 | — | 155,798 | (52,267 | ) | 154,053 | 6.4 | % | |||||||||||||||||||
Japan | 42,729 | 653 | 5,971 | (653 | ) | 48,700 | 2 | % | |||||||||||||||||||
Canada | 3,688 | 818 | 10,768 | (818 | ) | 14,456 | 0.6 | % | |||||||||||||||||||
Rest of the world (b) | 24,337 | — | 92,652 | — | 116,989 | 4.9 | % | ||||||||||||||||||||
Sub-total, non United States | 273,055 | 21,021 | 470,247 | (56,669 | ) | 707,654 | 29.4 | % | |||||||||||||||||||
Worldwide including United States (a) | 177,539 | 75,140 | 80,538 | (8,996 | ) | 324,221 | 13.5 | % | |||||||||||||||||||
Other locations non-specific (c) | 267,152 | — | 447,748 | (8,085 | ) | 706,815 | 29.4 | % | |||||||||||||||||||
Total | $ | 1,242,522 | $ | 147,009 | $ | 1,091,890 | $ | (80,315 | ) | $ | 2,401,106 | 100 | % | ||||||||||||||
Gross Premiums Written | |||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | % | ||||||||||||||||||||||
United States | $ | 463,384 | $ | 12,638 | $ | 77,561 | $ | (1,942 | ) | $ | 551,641 | 25.4 | % | ||||||||||||||
Worldwide excluding United States (a) | 24,119 | 279 | 156,593 | — | 180,991 | 8.4 | % | ||||||||||||||||||||
Australia and New Zealand | — | 217 | 12,851 | — | 13,068 | 0.6 | % | ||||||||||||||||||||
Europe | 87,805 | 1,332 | 50,262 | — | 139,399 | 6.4 | % | ||||||||||||||||||||
Latin America and Caribbean | 80,432 | — | 149,091 | (53,565 | ) | 175,958 | 8.1 | % | |||||||||||||||||||
Japan | 30,386 | — | 6,630 | — | 37,016 | 1.7 | % | ||||||||||||||||||||
Canada | — | — | 12,243 | — | 12,243 | 0.6 | % | ||||||||||||||||||||
Rest of the world (b) | 68,754 | — | 91,130 | — | 159,884 | 7.4 | % | ||||||||||||||||||||
Sub-total, non United States | 291,496 | 1,828 | 478,800 | (53,565 | ) | 718,559 | 33.2 | % | |||||||||||||||||||
Worldwide including United States (a) | 102,080 | 7,137 | 65,084 | (4,038 | ) | 170,263 | 7.9 | % | |||||||||||||||||||
Other locations non-specific (c) | 274,999 | — | 457,191 | (6,213 | ) | 725,977 | 33.5 | % | |||||||||||||||||||
Total | $ | 1,131,959 | $ | 21,603 | $ | 1,078,636 | $ | (65,758 | ) | $ | 2,166,440 | 100 | % | ||||||||||||||
(a) | Represents risks in two or more geographic zones. | ||||||||||||||||||||||||||
(b) | Represents risks in one geographic zone. | ||||||||||||||||||||||||||
(c) | The Other locations non-specific category refers to business for which an analysis of exposure by geographic zone is not applicable, such as marine and aerospace risks, since these exposures can span multiple geographic areas and, in some instances, are not fixed locations. | ||||||||||||||||||||||||||
(d) |
Statutory_and_regulatory_requi1
Statutory and regulatory requirements (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||||
Statutory and regulatory requirements [Abstract] | ||||||||||||||||||||||||||||||||||||
Statutory amounts based on regulatory requirements | The statutory capital and surplus in certain of our most significant regulatory jurisdictions as at December 31, 2014 and 2013 was as follows: | |||||||||||||||||||||||||||||||||||
Bermuda (a) | United States (b) | Switzerland (c) | ||||||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||
Required statutory capital and surplus | $ | 586,641 | $ | 1,390,179 | $ | 95,963 | $ | — | $ | 205,563 | $ | 312,563 | ||||||||||||||||||||||||
Actual statutory capital and surplus | 3,793,329 | 3,884,572 | 452,089 | — | 701,010 | 939,609 | ||||||||||||||||||||||||||||||
(a) | The Company's Bermuda based insurance subsidiaries are required to maintain minimum statutory capital and surplus equal to the greater of a minimum solvency margin ("MSM") and the Enhanced Capital Requirement ("ECR") where applicable. The ECR is equal to the higher of each insurer's MSM or the Bermuda Solvency Capital Requirement ("BSCR") model or approved internal capital model. The BSCR for the relevant insurers for the year ended December 31, 2014 will not be filed with the BMA until April 2015. As a result, the required statutory capital and surplus as at December 31, 2014 is based on the MSM of all relevant insurers, whereas the required statutory capital and surplus as at December 31, 2013 is based on the MSM and ECR where applicable for all relevant insurers. Required statutory capital and surplus includes Validus Reinsurance, Ltd., Validus Reinsurance (Switzerland) Ltd (Bermuda Branch), PaCRe, Ltd., IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. Actual statutory capital and surplus includes Validus Reinsurance, Ltd., AlphaCat Reinsurance, Ltd. and Talbot Insurance (Bermuda), Ltd. Validus Reinsurance, Ltd. is the parent company of the other five Bermuda based insurance subsidiaries. | |||||||||||||||||||||||||||||||||||
(b) | Required statutory capital and surplus is based on the Risk-Based Capital ("RBC") requirements and includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. Actual statutory capital and surplus includes Western World Insurance Company. Western World Insurance Company is the parent Company of the other two U.S. based insurance subsidiaries. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||||||||||||||||||||||||||||||||
(c) | Required statutory capital and surplus is based on the Target Capital ("TC") requirements calculated under the Swiss Solvency Test ("SST"). Required and actual statutory capital and surplus includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). | |||||||||||||||||||||||||||||||||||
During 2015, the Company's regulated subsidiaries have the ability to distribute up to $1,013,379 of unrestricted net assets as dividend payments and/or return of capital to Validus Holdings, Ltd. (2014: $516,854) without prior regulatory approval. During the year ended December 31, 2014, actual dividends and distributions to Validus Holdings, Ltd. from its subsidiaries were $773,966 (2013: $1,009,000). | ||||||||||||||||||||||||||||||||||||
Statutory net income for the years ended December 31, 2014, 2013 and 2012 was as follows: | ||||||||||||||||||||||||||||||||||||
Bermuda (a) | United States (b) | Switzerland (c) | ||||||||||||||||||||||||||||||||||
Year ended December 31, | Year ended December 31, | Year ended December 31, | ||||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||
Statutory net income (loss) | $ | 509,559 | $ | 688,001 | $ | 496,227 | $ | 105,210 | $ | — | $ | — | $ | 60,308 | $ | (17,655 | ) | $ | (1,559 | ) | ||||||||||||||||
(a) | Statutory net income includes Validus Reinsurance, Ltd., PaCRe, Ltd. (at the Company's effective 10% equity interest), IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. | |||||||||||||||||||||||||||||||||||
(b) | Statutory net income includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||||||||||||||||||||||||||||||||
(c) | Statutory net income (loss) includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). The results of Validus Reinsurance (Switzerland) Ltd, a former Flagstone subsidiary, have been included in the Company's consolidated results from the November 30, 2012 date of acquisition. |
Condensed_unaudited_quarterly_1
Condensed unaudited quarterly financial information (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Schedule Of Condensed Quarterly Financial Information [Table Text Block] | ||||||||||||||||
Quarters Ended | ||||||||||||||||
December 31, 2014 | September 30, 2014 | June 30, | March 31, | |||||||||||||
2014 | 2014 | |||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Underwriting income | ||||||||||||||||
Gross premiums written | $ | 336,647 | $ | 358,974 | $ | 655,674 | $ | 1,011,991 | ||||||||
Reinsurance premiums ceded | (33,623 | ) | (30,137 | ) | (50,565 | ) | (194,908 | ) | ||||||||
Net premiums written | 303,024 | 328,837 | 605,109 | 817,083 | ||||||||||||
Change in unearned premiums | 255,724 | 165,859 | (139,106 | ) | (334,126 | ) | ||||||||||
Net premiums earned | 558,748 | 494,696 | 466,003 | 482,957 | ||||||||||||
Underwriting deductions | ||||||||||||||||
Losses and loss expenses | 226,508 | 224,125 | 158,745 | 162,671 | ||||||||||||
Policy acquisition costs | 89,550 | 86,404 | 78,953 | 85,649 | ||||||||||||
General and administrative expenses | 98,186 | 83,319 | 73,842 | 74,445 | ||||||||||||
Share compensation expenses | 8,821 | 8,764 | 8,341 | 7,147 | ||||||||||||
Total underwriting deductions | 423,065 | 402,612 | 319,881 | 329,912 | ||||||||||||
Underwriting income | $ | 135,683 | $ | 92,084 | $ | 146,122 | $ | 153,045 | ||||||||
Net investment income | 30,167 | 25,261 | 21,286 | 23,362 | ||||||||||||
Other insurance related income | 5,524 | 3,610 | 4,811 | 8,037 | ||||||||||||
Finance expenses | (16,474 | ) | (15,354 | ) | (16,126 | ) | (15,900 | ) | ||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | $ | 154,900 | $ | 105,601 | $ | 156,093 | $ | 168,544 | ||||||||
Tax benefit (expense) | 243 | 953 | (1,391 | ) | 40 | |||||||||||
Income from operating affiliates | 4,143 | 3,761 | 4,892 | 4,927 | ||||||||||||
(Income) attributable to operating affiliate investors | (26,566 | ) | (25,807 | ) | (25,316 | ) | (31,710 | ) | ||||||||
Net operating income | $ | 132,720 | $ | 84,508 | $ | 134,278 | $ | 141,801 | ||||||||
Net realized gains on investments | 6,902 | 4,595 | 7,858 | 3,740 | ||||||||||||
Net unrealized (losses) gains on investments | (74,119 | ) | (84,974 | ) | 45,427 | 55,693 | ||||||||||
Income from investment affiliate | 530 | 1,754 | 779 | 5,348 | ||||||||||||
Foreign exchange gains (losses) | 4,131 | (11,441 | ) | 3,158 | (6,478 | ) | ||||||||||
Other (loss) income | (770 | ) | (7,690 | ) | 424 | 5,793 | ||||||||||
Transaction expenses | (4,695 | ) | (149 | ) | (3,252 | ) | — | |||||||||
Net income (loss) | $ | 64,699 | $ | (13,397 | ) | $ | 188,672 | $ | 205,897 | |||||||
Net loss (income) attributable to noncontrolling interest | 61,209 | 53,069 | (35,305 | ) | (43,509 | ) | ||||||||||
Net income available to Validus | $ | 125,908 | $ | 39,672 | $ | 153,367 | $ | 162,388 | ||||||||
Earnings per share | ||||||||||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||||||||||
Basic | 86,421,127 | 90,593,329 | 90,952,523 | 93,451,999 | ||||||||||||
Diluted | 90,948,156 | 91,939,610 | 95,276,836 | 97,799,519 | ||||||||||||
Basic earnings per share available to common shareholders | $ | 1.44 | $ | 0.42 | $ | 1.67 | $ | 1.72 | ||||||||
Earnings per diluted share available to common shareholders | $ | 1.38 | $ | 0.41 | $ | 1.61 | $ | 1.66 | ||||||||
Selected ratios: | ||||||||||||||||
Losses and loss expenses | 40.5 | % | 45.3 | % | 34.1 | % | 33.7 | % | ||||||||
Expense ratio | 35.2 | % | 36.1 | % | 34.5 | % | 34.6 | % | ||||||||
Combined ratio | 75.7 | % | 81.4 | % | 68.6 | % | 68.3 | % | ||||||||
Quarters Ended | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
2013 | 2013 | 2013 | 2013 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Underwriting income | ||||||||||||||||
Gross premiums written | $ | 237,273 | $ | 356,760 | $ | 702,313 | $ | 1,104,760 | ||||||||
Reinsurance premiums ceded | (24,558 | ) | (39,415 | ) | (121,396 | ) | (187,216 | ) | ||||||||
Net premiums written | 212,715 | 317,345 | 580,917 | 917,544 | ||||||||||||
Change in unearned premiums | 279,523 | 213,943 | (33,459 | ) | (386,483 | ) | ||||||||||
Net premiums earned | 492,238 | 531,288 | 547,458 | 531,061 | ||||||||||||
Underwriting deductions | ||||||||||||||||
Losses and loss expenses | 206,152 | 177,965 | 265,044 | 144,771 | ||||||||||||
Policy acquisition costs | 84,647 | 94,900 | 87,152 | 93,611 | ||||||||||||
General and administrative expenses | 82,930 | 81,089 | 70,967 | 80,279 | ||||||||||||
Share compensation expenses | 8,147 | 10,527 | 6,638 | 2,318 | ||||||||||||
Total underwriting deductions | 381,876 | 364,481 | 429,801 | 320,979 | ||||||||||||
Underwriting income | $ | 110,362 | $ | 166,807 | $ | 117,657 | $ | 210,082 | ||||||||
Net investment income | 24,204 | 20,009 | 26,210 | 25,649 | ||||||||||||
Other insurance related income | 7,743 | 943 | 5,512 | 4,922 | ||||||||||||
Finance expenses | (16,925 | ) | (15,317 | ) | (17,566 | ) | (14,369 | ) | ||||||||
Operating income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | $ | 125,384 | $ | 172,442 | $ | 131,813 | $ | 226,284 | ||||||||
Tax (expense) benefit | (603 | ) | (5 | ) | (93 | ) | 318 | |||||||||
Income from operating affiliates | 5,510 | 1,463 | 3,793 | 3,523 | ||||||||||||
(Income) attributable to operating affiliate investors (a) | (26,607 | ) | (11,815 | ) | (20,264 | ) | (10,077 | ) | ||||||||
Net operating income | $ | 103,684 | $ | 162,085 | $ | 115,249 | $ | 220,048 | ||||||||
Net realized gains (losses) on investments | 4,448 | (6,320 | ) | 3,409 | 1,721 | |||||||||||
Net unrealized gains (losses) on investments | 20,137 | 69,967 | (141,348 | ) | (7,237 | ) | ||||||||||
Income from investment affiliate | 516 | 1,044 | 1,753 | 1,477 | ||||||||||||
Foreign exchange (losses) gains | (2,230 | ) | 6,036 | (8,223 | ) | 6,922 | ||||||||||
Other loss | (3,697 | ) | (3,749 | ) | (1,094 | ) | (2,237 | ) | ||||||||
Net income (loss) | $ | 122,858 | $ | 229,063 | $ | (30,254 | ) | $ | 220,694 | |||||||
Net (income) loss (available) attributable to noncontrolling interest | (27,526 | ) | (45,694 | ) | 60,976 | 2,549 | ||||||||||
Net income available to Validus | $ | 95,332 | $ | 183,369 | $ | 30,722 | $ | 223,243 | ||||||||
Earnings per share | ||||||||||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||||||||||
Basic | 98,454,907 | 99,834,563 | 103,133,188 | 107,386,438 | ||||||||||||
Diluted | 102,928,482 | 103,613,766 | 104,734,643 | 110,052,999 | ||||||||||||
Basic earnings per share available to common shareholders | $ | 0.95 | $ | 1.82 | $ | 0.28 | $ | 1.94 | ||||||||
Earnings per diluted share available to common shareholders | $ | 0.93 | $ | 1.77 | $ | 0.28 | $ | 1.9 | ||||||||
Selected Ratios: | ||||||||||||||||
Losses and loss expenses | 41.9 | % | 33.5 | % | 48.4 | % | 27.3 | % | ||||||||
Expense ratio | 35.7 | % | 35.1 | % | 30.1 | % | 33.2 | % | ||||||||
Combined ratio | 77.6 | % | 68.6 | % | 78.5 | % | 60.5 | % | ||||||||
(a) | This amount had been shown within finance expenses for each of the three months ended March 31, June 30 and September 30, 2013. | |||||||||||||||
Quarters Ended | ||||||||||||||||
December 31, 2012 | September 30, 2012 | June 30, | March 31, | |||||||||||||
2012 | 2012 | |||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Underwriting income | ||||||||||||||||
Gross premiums written | $ | 311,847 | $ | 390,215 | $ | 627,089 | $ | 837,289 | ||||||||
Reinsurance premiums ceded | (35,659 | ) | (45,743 | ) | (119,052 | ) | (107,052 | ) | ||||||||
Net premiums written | 276,188 | 344,472 | 508,037 | 730,237 | ||||||||||||
Change in unearned premiums | 223,098 | 130,632 | (60,410 | ) | (279,038 | ) | ||||||||||
Net premiums earned | 499,286 | 475,104 | 447,627 | 451,199 | ||||||||||||
Underwriting deductions | ||||||||||||||||
Losses and loss expenses | 458,310 | 155,455 | 153,692 | 231,989 | ||||||||||||
Policy acquisition costs | 81,814 | 98,623 | 76,129 | 78,132 | ||||||||||||
General and administrative expenses | 65,095 | 70,547 | 61,635 | 66,375 | ||||||||||||
Share compensation expenses | 7,126 | 7,345 | 6,800 | 5,438 | ||||||||||||
Total underwriting deductions | 612,345 | 331,970 | 298,256 | 381,934 | ||||||||||||
Underwriting (loss) income | $ | (113,059 | ) | $ | 143,134 | $ | 149,371 | $ | 69,265 | |||||||
Net investment income | 28,802 | 25,489 | 25,885 | 27,760 | ||||||||||||
Other insurance related income | 144 | 7,324 | 6,606 | 8,237 | ||||||||||||
Finance expenses | (14,510 | ) | (9,362 | ) | (13,706 | ) | (16,279 | ) | ||||||||
Operating (loss) income before taxes and (loss) income from operating affiliates | $ | (98,623 | ) | $ | 166,585 | $ | 168,156 | $ | 88,983 | |||||||
Tax expense | (615 | ) | (1,343 | ) | (404 | ) | (139 | ) | ||||||||
(Loss) income from operating affiliates | $ | (614 | ) | $ | 6,235 | $ | 3,592 | $ | 3,367 | |||||||
Net operating (loss) income | $ | (99,852 | ) | $ | 171,477 | $ | 171,344 | $ | 92,211 | |||||||
Gain on bargain purchase, net of expenses (a) | 21,485 | (3,784 | ) | — | — | |||||||||||
Net realized (losses) gains on investments | (4,516 | ) | 9,063 | 6,154 | 7,532 | |||||||||||
Net unrealized (losses) gains on investments | (35,857 | ) | 86,345 | (53,574 | ) | 20,671 | ||||||||||
Loss from investment affiliate | (406 | ) | (160 | ) | (398 | ) | — | |||||||||
Foreign exchange gains (losses) | 1,181 | 1,103 | (652 | ) | 3,166 | |||||||||||
Other income (loss) | 43 | — | (612 | ) | 654 | |||||||||||
Net (loss) income | $ | (117,922 | ) | $ | 264,044 | $ | 122,262 | $ | 124,234 | |||||||
Net loss (income) attributable (available) to noncontrolling interest | 27,206 | (56,746 | ) | 45,360 | — | |||||||||||
Net (loss) income (attributable) available to Validus | $ | (90,716 | ) | $ | 207,298 | $ | 167,622 | $ | 124,234 | |||||||
Earnings per share | ||||||||||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||||||||||
Basic | 97,688,338 | 93,368,775 | 98,254,186 | 99,425,140 | ||||||||||||
Diluted | 97,688,338 | 98,236,490 | 103,667,967 | 105,096,090 | ||||||||||||
Basic (loss) earnings per share (attributable) available to common shareholders | $ | (0.94 | ) | $ | 2.2 | $ | 1.69 | $ | 1.23 | |||||||
(Loss) earnings per diluted share (attributable) available to common shareholders | $ | (0.94 | ) | $ | 2.11 | $ | 1.62 | $ | 1.18 | |||||||
Selected Ratios: | ||||||||||||||||
Losses and loss expenses | 91.8 | % | 32.7 | % | 34.3 | % | 51.4 | % | ||||||||
Expense ratio | 30.9 | % | 37.2 | % | 32.3 | % | 33.2 | % | ||||||||
Combined ratio | 122.7 | % | 69.9 | % | 66.6 | % | 84.6 | % | ||||||||
(a) | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. |
Nature_of_the_business_Details
Nature of the business (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Nov. 30, 2012 | Oct. 31, 2013 |
segments | |||
Nature Of Business [Line Items] | |||
Number of operating segments | 4 | ||
Flagstone Reinsurance Holdings Sa | |||
Nature Of Business [Line Items] | |||
Exchange ratio | 0.1935 | ||
Per share price paid by Company to acquire FSR common shares | 2 | ||
Flagstone Alliance Insurance and Reinsurance Plc [Member] | |||
Nature Of Business [Line Items] | |||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | $21,400 |
Basis_of_preparation_and_conso1
Basis of preparation and consolidation (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification to reduce cash and cash equivalents | ||
Significant Accounting Policies [Line Items] | ||
Prior period reclassification adjustment | $322,198 | |
Reclassification from cash and cash equivalents to restricted cash | ||
Significant Accounting Policies [Line Items] | ||
Prior period reclassification adjustment | -200,492 | |
Reclassification from cash and cash equivalents to short-term investments | ||
Significant Accounting Policies [Line Items] | ||
Prior period reclassification adjustment | -35,936 | |
Reclassification from cash and cash equivalents to other investments | ||
Significant Accounting Policies [Line Items] | ||
Prior period reclassification adjustment | -85,770 | |
Increase (decrease) net cash (used in) investing activities | ||
Significant Accounting Policies [Line Items] | ||
Prior period reclassification adjustment | 163,541 | 33,299 |
Net (decrease) in cash | ||
Significant Accounting Policies [Line Items] | ||
Prior period reclassification adjustment | ($163,541) | ($33,299) |
Significant_accounting_policie2
Significant accounting policies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Premiums | |
Significant Accounting Policies [Line Items] | |
Assumed risk period, in months | 24 months |
Derivative | Maximum | |
Significant Accounting Policies [Line Items] | |
Hedge effectiveness criteria, percent | 125.00% |
Derivative | Minimum | |
Significant Accounting Policies [Line Items] | |
Hedge effectiveness criteria, percent | 80.00% |
Cash and cash equivalents | |
Significant Accounting Policies [Line Items] | |
Time period for recognition, as shown | 1 month |
Business_combination_Acquisiti
Business combination (Acquisition details) (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 02, 2014 | Nov. 30, 2012 | |
Liabilities acquired | ||||||
Bargain purchase gain on acquisition of Flagstone | $0 | $0 | $49,702 | |||
Goodwill | 195,897 | 20,393 | 20,393 | |||
Western World Insurance Group, Inc | ||||||
Total allocable purchase price | ||||||
Total allocable purchase price | 692,305 | |||||
Tangible assets acquired | ||||||
Cash and cash equivalents | 48,760 | |||||
Investments | 1,126,185 | |||||
Receivables | 37,848 | |||||
Other assets | 19,418 | |||||
Tangible assets acquired | 1,232,211 | |||||
Intangible assets acquired | ||||||
Intangible assets acquired | 25,055 | |||||
Liabilities acquired | ||||||
Net loss reserves and paid losses recoverable | 523,315 | |||||
Unearned premiums, net of expenses | 135,686 | |||||
Other liabilities | 81,464 | |||||
Liabilities acquired | 740,465 | |||||
Goodwill | 175,504 | |||||
Flagstone Reinsurance Holdings Sa | ||||||
Total allocable purchase price | ||||||
Flagstone shares outstanding at November 30, 2012 | 73,852,137 | |||||
Exchange ratio | 0.1935 | |||||
Validus common shares issued, gross of taxes withheld | 14,290,389 | |||||
Validus closing share price at acquisition | $34.87 | |||||
Total value of Validus shares issued | 498,306 | |||||
Total cash consideration paid at $2.00 per Flagstone share | 147,731 | |||||
Total allocable purchase price | 646,037 | |||||
Tangible assets acquired | ||||||
Cash and cash equivalents | 159,339 | |||||
Investments | 1,323,002 | |||||
Receivables | 171,620 | [1] | ||||
Other assets | 129,245 | |||||
Tangible assets acquired | 1,783,206 | |||||
Liabilities acquired | ||||||
Net loss reserves and paid losses recoverable | 639,641 | |||||
Unearned premiums, net of expenses | 104,592 | |||||
Debentures payable | 250,657 | |||||
Other liabilities | 98,574 | |||||
Liabilities acquired | 1,093,464 | |||||
Net tangible assets acquired, at fair value | 689,742 | |||||
Bargain purchase gain before establishment of intangible assets | 43,705 | |||||
Intangible asset - customer relationships and brand name | 5,997 | |||||
Bargain purchase gain on acquisition of Flagstone | 49,702 | 49,702 | ||||
State licenses | Western World Insurance Group, Inc | ||||||
Intangible assets acquired | ||||||
Intangible asset - indefinite-lived | 12,325 | |||||
Brand names | Western World Insurance Group, Inc | ||||||
Intangible assets acquired | ||||||
Intangible asset - finite-lived | 5,756 | |||||
Brand names | Flagstone Reinsurance Holdings Sa | ||||||
Liabilities acquired | ||||||
Intangible asset - customer relationships and brand name | 3,402 | |||||
Distribution network | Western World Insurance Group, Inc | ||||||
Intangible assets acquired | ||||||
Intangible asset - finite-lived | 4,651 | |||||
Technology | Western World Insurance Group, Inc | ||||||
Intangible assets acquired | ||||||
Intangible asset - finite-lived | $2,323 | |||||
[1] | Premiums receivable of $171,620 were net of an allowance for doubtful accounts of $2,216. |
Business_combination_Component
Business combination (Components of gain on bargain purchase) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2012 | ||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Bargain purchase gain on acquisition of Flagstone | $0 | $0 | $49,702 | |||||||||||||||
Transaction expenses | -4,695 | -149 | -3,252 | 0 | -8,096 | [1] | 0 | 0 | ||||||||||
Amortization of intangible asset—customer relationships and brand name | -4,538 | -4,162 | -10,159 | |||||||||||||||
Gain on bargain purchase, net of expenses | 21,485 | [2] | -3,784 | [2] | 0 | [2] | 0 | [2] | 0 | 0 | 17,701 | [2] | ||||||
Flagstone Reinsurance Holdings Sa | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Bargain purchase gain on acquisition of Flagstone | 49,702 | 49,702 | ||||||||||||||||
Transaction expenses | -5,760 | |||||||||||||||||
Termination expenses | -20,244 | |||||||||||||||||
Amortization of intangible asset—customer relationships and brand name | -5,997 | |||||||||||||||||
Gain on bargain purchase, net of expenses | $17,701 | |||||||||||||||||
[1] | The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services. | |||||||||||||||||
[2] | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. |
Business_combination_Pro_forma
Business combination (Pro forma information) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues | ||||||||||||||||
Income (loss) from investment affiliate | $530 | $1,754 | $779 | $5,348 | $516 | $1,044 | $1,753 | $1,477 | ($406) | ($160) | ($398) | $0 | $8,411 | $4,790 | ($964) | |
Expenses | ||||||||||||||||
Income from operating affiliates | 4,143 | 3,761 | 4,892 | 4,927 | 5,510 | 1,463 | 3,793 | 3,523 | -614 | 6,235 | 3,592 | 3,367 | 17,723 | 14,289 | 12,580 | |
Western World Insurance Group, Inc | ||||||||||||||||
Revenues | ||||||||||||||||
Net premiums earned | 2,216,349 | 2,325,407 | ||||||||||||||
Expenses | ||||||||||||||||
Net income (loss) from continuing operations | 481,179 | 645,696 | ||||||||||||||
Net income (loss) available (attributable) to Validus | 448,071 | 561,832 | ||||||||||||||
Flagstone Reinsurance Holdings Sa | ||||||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | 2,536,535 | 2,914,388 | ||||||||||||||
Reinsurance premiums ceded | -397,008 | -520,506 | ||||||||||||||
Net premiums written | 2,139,527 | 2,393,882 | ||||||||||||||
Change in unearned premiums | 86,935 | -20,261 | ||||||||||||||
Net premiums earned | 2,226,462 | 2,373,621 | ||||||||||||||
Net investment income | 126,140 | 143,472 | ||||||||||||||
Net realized gains on investments | 63,601 | 37,366 | ||||||||||||||
Net unrealized gains (losses) on investments | 5,654 | -47,101 | ||||||||||||||
Income (loss) from investment affiliate | -964 | 0 | ||||||||||||||
Other income | 29,984 | 11,152 | ||||||||||||||
Foreign exchange gains (losses) | 1,363 | -26,605 | ||||||||||||||
Total revenues | 2,452,240 | 2,491,905 | ||||||||||||||
Expenses | ||||||||||||||||
Losses and loss expenses | 1,242,449 | 1,920,936 | ||||||||||||||
Policy acquisition costs | 413,579 | 429,509 | ||||||||||||||
General and administrative expenses | 323,061 | 282,183 | ||||||||||||||
Share compensation expenses | 30,750 | 35,427 | ||||||||||||||
Transaction expenses | 0 | 17,433 | ||||||||||||||
Finance expenses | 64,306 | 66,485 | ||||||||||||||
Total expenses | 2,074,145 | 2,751,973 | ||||||||||||||
Net income before taxes | 378,095 | -260,068 | ||||||||||||||
Tax (expense) | -3,385 | -773 | ||||||||||||||
Income from operating affiliates | 12,868 | -922 | ||||||||||||||
Net income (loss) from continuing operations | 387,578 | -261,763 | ||||||||||||||
Net income (loss) from discontinued operations, net of taxes | 19,366 | -21,662 | ||||||||||||||
Net income (loss) | 406,944 | -283,425 | ||||||||||||||
Net (loss) income attributable to noncontrolling interest | 14,685 | -24,515 | ||||||||||||||
Net income (loss) available (attributable) to Validus | $421,629 | ($307,940) | ||||||||||||||
Basic earnings per share | $3.73 | ($3.20) | ||||||||||||||
Diluted earnings per share | $3.62 | ($3.20) |
Business_combination_Results_s
Business combination (Results since acquisition) (Details) (USD $) | 3 Months Ended | 1 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2012 |
Western World Insurance Group, Inc | ||
Business Acquisition [Line Items] | ||
Net premiums written | $58,807 | |
Total revenue | 78,325 | |
Total expenses | -66,882 | |
Net income | 11,443 | |
Flagstone Reinsurance Holdings Sa | ||
Business Acquisition [Line Items] | ||
Net premiums written | 11,305 | |
Total revenue | 26,778 | |
Total expenses | -17,061 | |
Net income | $9,717 |
Business_combination_Narrative
Business combination (Narrative) (Details) (USD $) | 0 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Oct. 02, 2014 | Nov. 30, 2012 | |
Western World Insurance Group, Inc | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price | $692,305 | ||
Acquired premiums receivable | 37,848 | ||
Flagstone Reinsurance Holdings Sa | |||
Business Acquisition [Line Items] | |||
Exchange ratio | 0.1935 | ||
Per share price paid by Company to acquire FSR common shares | $2 | ||
Aggregate purchase price | 646,037 | ||
Net tangible assets acquired, at fair value | 689,742 | ||
Intangible asset - customer relationships and brand name | 5,997 | ||
Acquired premiums receivable | 171,620 | [1] | |
Allowance for doubtful accounts on premiums receivable | 2,216 | ||
Flagstone Reinsurance Holdings Sa | Customer relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible asset - customer relationships and brand name | 2,595 | ||
Flagstone Reinsurance Holdings Sa | Brand names | |||
Business Acquisition [Line Items] | |||
Intangible asset - customer relationships and brand name | $3,402 | ||
[1] | Premiums receivable of $171,620 were net of an allowance for doubtful accounts of $2,216. |
Goodwill_and_other_intangible_2
Goodwill and other intangible assets (Analysis of goodwill) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Line Items] | ||
Goodwill, beginning of year | $20,393 | $20,393 |
Acquired during the year | 175,504 | 0 |
Goodwill, end of year | 195,897 | 20,393 |
Talbot | ||
Goodwill [Line Items] | ||
Goodwill, beginning of year | 20,393 | 20,393 |
Acquired during the year | 0 | 0 |
Goodwill, end of year | 20,393 | 20,393 |
Western World | ||
Goodwill [Line Items] | ||
Goodwill, beginning of year | 0 | 0 |
Acquired during the year | 175,504 | 0 |
Goodwill, end of year | $175,504 | $0 |
Goodwill_and_other_intangible_3
Goodwill and other intangible assets (Analysis of carrying value and accumulated amortization of intangible assets) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | $60,343 | $47,613 |
Finite-lived intangible assets, accumulated amortization | -37,587 | -33,049 |
Indefinite-lived intangible assets | 104,168 | 91,843 |
Trade name and customer relationships | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 18,189 | 12,433 |
Finite-lived intangible assets, accumulated amortization | -10,971 | -10,183 |
Distribution network | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 39,831 | 35,180 |
Finite-lived intangible assets, accumulated amortization | -26,500 | -22,866 |
Technology | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying amount | 2,323 | 0 |
Finite-lived intangible assets, accumulated amortization | -116 | 0 |
Syndicate capacity | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 91,843 | 91,843 |
State licenses | ||
Goodwill And Other Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $12,325 | $0 |
Goodwill_and_other_intangible_4
Goodwill and other intangible assets (Future amortization expense) (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2015 | $5,663 |
2016 | 5,663 |
2017 | 3,579 |
2018 | 1,501 |
2019 and thereafter | 6,350 |
Intangible assets with a finite life, net | $22,756 |
Goodwill_and_other_intangible_5
Goodwill and other intangible assets (Narrative) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2012 |
Business Acquisition [Line Items] | ||||
Amortization of intangible assets | $4,538 | $4,162 | $10,159 | |
Flagstone Reinsurance Holdings Sa | ||||
Business Acquisition [Line Items] | ||||
Amortization of intangible assets | 5,997 | |||
Intangible asset - customer relationships and brand name | 5,997 | |||
Talbot | ||||
Business Acquisition [Line Items] | ||||
Percentage ownership of syndicated capacity | 100.00% | |||
Brand names | Western World Insurance Group, Inc | ||||
Business Acquisition [Line Items] | ||||
Useful lives of acquired intangible assets | 10 years | |||
Brand names | Flagstone Reinsurance Holdings Sa | ||||
Business Acquisition [Line Items] | ||||
Intangible asset - customer relationships and brand name | $3,402 | |||
Technology | Western World Insurance Group, Inc | ||||
Business Acquisition [Line Items] | ||||
Useful lives of acquired intangible assets | 5 years | |||
Distribution network | Western World Insurance Group, Inc | ||||
Business Acquisition [Line Items] | ||||
Useful lives of acquired intangible assets | 10 years | |||
Distribution network | Talbot | ||||
Business Acquisition [Line Items] | ||||
Useful lives of acquired intangible assets | 10 years | |||
Trademark | Talbot | ||||
Business Acquisition [Line Items] | ||||
Useful lives of acquired intangible assets | 10 years |
Investments_Gross_unrealized_g
Investments (Gross unrealized gains and losses on fixed maturities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | $5,534,494 | $5,522,853 | ||
Short-term investments, at amortized cost | 1,051,222 | 787,670 | ||
Other investments, at amortized cost | 879,176 | 723,498 | ||
Amortized cost | 7,464,892 | 7,034,021 | ||
Catastrophe bonds, cost | -75,822 | -53,000 | ||
Noncontrolling interest, cost or amortized cost | -502,830 | [1] | -512,121 | [1] |
Total investments excluding non-controlling interest, cost or amortized cost | 6,153,458 | 5,817,185 | ||
Fixed maturities, gross unrealized gains | 24,357 | 42,756 | ||
Short term investments, gross unrealized gains | 13 | [2] | 45 | [3] |
Other investments, gross unrealized gains | 69,881 | 76,843 | ||
Gross unrealized gains | 94,251 | 119,644 | ||
Unrealized gains on catastrophe bonds | -768 | -2,544 | ||
Noncontrolling interest share of unrealized gains other investments | -48,446 | [1] | -62,850 | [1] |
Total investments excluding non-controlling interest, unrealized gains | 45,037 | 54,250 | ||
Fixed maturities, gross unrealized losses | -26,120 | -23,351 | ||
Short term investments, gross unrealized losses | -161 | [2] | -1 | [3] |
Other investments, gross unrealized losses | -136,046 | -96,255 | ||
Gross unrealized losses | -162,327 | -119,607 | ||
Unrealized losses on catastrophe bonds | 926 | 0 | ||
Noncontrolling interest share of unrealized losses | 120,782 | [1] | 85,569 | [1] |
Total investments excluding non-controlling interest, unrealized losses | -40,619 | -34,038 | ||
Total fixed maturities | 5,532,731 | 5,542,258 | ||
Short term investments at fair value | 1,051,074 | 787,714 | ||
Other investments | 813,011 | 704,086 | ||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | 7,396,816 | 7,034,058 | ||
Assets held in trust on behalf of operating affiliates | -732,782 | [2] | -651,715 | [3] |
Catastrophe bonds, fair value | -75,664 | -55,544 | ||
Noncontrolling interest | -430,494 | [1] | -489,402 | [1] |
Total investments excluding noncontrolling interest | 6,157,876 | 5,837,397 | ||
U.S. government and government agency | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 759,232 | 1,368,826 | ||
Fixed maturities, gross unrealized gains | 1,755 | 2,589 | ||
Fixed maturities, gross unrealized losses | -901 | -6,736 | ||
Total fixed maturities | 760,086 | 1,364,679 | ||
Non-U.S. government and government agency | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 279,493 | 454,578 | ||
Fixed maturities, gross unrealized gains | 1,215 | 6,511 | ||
Fixed maturities, gross unrealized losses | -1,980 | -2,021 | ||
Total fixed maturities | 278,728 | 459,068 | ||
U.S. states, municipalities and political subdivisions | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 448,668 | 42,978 | ||
Fixed maturities, gross unrealized gains | 1,780 | 459 | ||
Fixed maturities, gross unrealized losses | -825 | -317 | ||
Total fixed maturities | 449,623 | 43,120 | ||
Agency residential mortgage-backed securities | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 520,685 | 305,450 | ||
Fixed maturities, gross unrealized gains | 9,697 | 8,310 | ||
Fixed maturities, gross unrealized losses | -1,151 | -2,261 | ||
Total fixed maturities | 529,231 | 311,499 | ||
Non-agency residential mortgage-backed securities | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 37,954 | 16,530 | ||
Fixed maturities, gross unrealized gains | 369 | 143 | ||
Fixed maturities, gross unrealized losses | -516 | -914 | ||
Total fixed maturities | 37,807 | 15,759 | ||
U.S. corporate | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 1,500,963 | 1,328,960 | ||
Fixed maturities, gross unrealized gains | 3,960 | 9,208 | ||
Fixed maturities, gross unrealized losses | -5,217 | -5,684 | ||
Total fixed maturities | 1,499,706 | 1,332,484 | ||
Non-U.S. corporate | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 564,386 | 711,581 | ||
Fixed maturities, gross unrealized gains | 2,765 | 5,917 | ||
Fixed maturities, gross unrealized losses | -3,989 | -3,173 | ||
Total fixed maturities | 563,162 | 714,325 | ||
Bank loans | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 457,537 | 712,859 | ||
Fixed maturities, gross unrealized gains | 200 | 5,659 | ||
Fixed maturities, gross unrealized losses | -8,733 | -1,402 | ||
Total fixed maturities | 449,004 | 717,116 | ||
Catastrophe bonds | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 75,822 | 72,000 | ||
Fixed maturities, gross unrealized gains | 768 | 2,551 | ||
Fixed maturities, gross unrealized losses | -926 | 0 | ||
Total fixed maturities | 75,664 | 74,551 | ||
Asset-backed securities | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 647,422 | 509,091 | ||
Fixed maturities, gross unrealized gains | 1,250 | 1,409 | ||
Fixed maturities, gross unrealized losses | -1,190 | -843 | ||
Total fixed maturities | 647,482 | 509,657 | ||
Commercial mortgage backed securities | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Fixed maturities, at amortized cost | 242,332 | |||
Fixed maturities, gross unrealized gains | 598 | |||
Fixed maturities, gross unrealized losses | -692 | |||
Total fixed maturities | 242,238 | |||
Fund of hedge funds | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Other investments, at amortized cost | 2,570 | 3,141 | ||
Other investments, gross unrealized gains | 125 | 83 | ||
Other investments, gross unrealized losses | -920 | -921 | ||
Other investments | 1,775 | 2,303 | ||
Preferred stock | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Other investments, at amortized cost | 6,535 | |||
Other investments, gross unrealized gains | 0 | |||
Other investments, gross unrealized losses | -201 | |||
Other investments | 6,334 | |||
Hedge funds | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Other investments, at amortized cost | 570,371 | [1] | 584,518 | [1] |
Other investments, gross unrealized gains | 60,792 | [1] | 71,641 | [1] |
Other investments, gross unrealized losses | -134,203 | [1] | -95,076 | [1] |
Other investments | 496,960 | [1] | 561,083 | [1] |
Private equity investments | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Other investments, at amortized cost | 48,995 | 12,333 | ||
Other investments, gross unrealized gains | 4,987 | 1,410 | ||
Other investments, gross unrealized losses | -611 | -258 | ||
Other investments | 53,371 | 13,485 | ||
Investment funds | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Other investments, at amortized cost | 244,506 | 117,307 | ||
Other investments, gross unrealized gains | 437 | 92 | ||
Other investments, gross unrealized losses | -111 | 0 | ||
Other investments | 244,832 | 117,399 | ||
Mutual funds | ||||
Amortized cost, gross unrealized gains and (losses) and estimated fair value of investments | ||||
Other investments, at amortized cost | 6,199 | 6,199 | ||
Other investments, gross unrealized gains | 3,540 | 3,617 | ||
Other investments, gross unrealized losses | 0 | 0 | ||
Other investments | $9,739 | $9,816 | ||
PaCRe Funds | ||||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||||
Company's equity interest in PacRe (percent) | 10.00% | 10.00% | ||
Noncontrolling interest, equity in PacRe (percent) | 90.00% | 90.00% | ||
[1] | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. | |||
[2] | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||
[3] | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. |
Investments_Fixed_maturities_b
Investments (Fixed maturities by investment rating) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fixed Maturities | ||
Estimated fair value | $5,532,731 | $5,542,258 |
Percentage of total | 100.00% | 100.00% |
Investment Grade [Member] | ||
Fixed Maturities | ||
Estimated fair value | 4,933,764 | 4,764,580 |
Percentage of total | 89.20% | 86.00% |
Investment Grade [Member] | AAA [Member] | ||
Fixed Maturities | ||
Estimated fair value | 2,494,239 | 2,510,781 |
Percentage of total | 45.10% | 45.30% |
Investment Grade [Member] | AA [Member] | ||
Fixed Maturities | ||
Estimated fair value | 848,226 | 696,998 |
Percentage of total | 15.40% | 12.60% |
Investment Grade [Member] | A [Member] | ||
Fixed Maturities | ||
Estimated fair value | 1,086,091 | 1,233,716 |
Percentage of total | 19.60% | 22.30% |
Investment Grade [Member] | BBB [Member] | ||
Fixed Maturities | ||
Estimated fair value | 505,208 | 323,085 |
Percentage of total | 9.10% | 5.80% |
Non-Investment Grade [Member] | ||
Fixed Maturities | ||
Estimated fair value | 598,967 | 777,678 |
Percentage of total | 10.80% | 14.00% |
Non-Investment Grade [Member] | BB [Member] | ||
Fixed Maturities | ||
Estimated fair value | 362,972 | 354,992 |
Percentage of total | 6.60% | 6.40% |
Non-Investment Grade [Member] | B [Member] | ||
Fixed Maturities | ||
Estimated fair value | 145,240 | 383,639 |
Percentage of total | 2.60% | 6.90% |
Non-Investment Grade [Member] | CCC [Member] | ||
Fixed Maturities | ||
Estimated fair value | 12,733 | 2,453 |
Percentage of total | 0.20% | 0.00% |
Non-Investment Grade [Member] | CC [Member] | ||
Fixed Maturities | ||
Estimated fair value | 3,926 | 2,496 |
Percentage of total | 0.10% | 0.10% |
Non-Investment Grade [Member] | Standard & Poor's, C Rating [Member] | ||
Fixed Maturities | ||
Estimated fair value | 1,344 | 235 |
Percentage of total | 0.00% | 0.00% |
Non-Investment Grade [Member] | D/NR [Member] | ||
Fixed Maturities | ||
Estimated fair value | $72,752 | $33,863 |
Percentage of total | 1.30% | 0.60% |
Investments_Maturity_profile_o
Investments (Maturity profile of fixed maturity investments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Maturity profile | ||
Amortized cost | $5,534,494 | $5,522,853 |
Estimated fair value | 5,532,731 | 5,542,258 |
Fixed maturities trading securities allocated to contractual maturity [Member] | ||
Maturity profile | ||
Amortized cost | 4,086,101 | 4,691,782 |
Estimated fair value | 4,075,973 | 4,705,343 |
Due in one year or less [Member] | Fixed maturities trading securities allocated to contractual maturity [Member] | ||
Maturity profile | ||
Amortized cost | 312,843 | 688,855 |
Estimated fair value | 313,248 | 692,768 |
Due after one year through five years [Member] | Fixed maturities trading securities allocated to contractual maturity [Member] | ||
Maturity profile | ||
Amortized cost | 3,163,225 | 3,603,459 |
Estimated fair value | 3,159,200 | 3,613,847 |
Due after five years through ten years [Member] | Fixed maturities trading securities allocated to contractual maturity [Member] | ||
Maturity profile | ||
Amortized cost | 497,175 | 396,389 |
Estimated fair value | 491,870 | 395,633 |
Due after ten years [Member] | Fixed maturities trading securities allocated to contractual maturity [Member] | ||
Maturity profile | ||
Amortized cost | 112,858 | 3,079 |
Estimated fair value | 111,655 | 3,095 |
Asset backed and mortgaged backed securities [Member] | No single maturity date [Member] | ||
Maturity profile | ||
Amortized cost | 1,448,393 | 831,071 |
Estimated fair value | $1,456,758 | $836,915 |
Investments_Components_of_net_
Investments (Components of net investment income) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net investment income | |||||||||||||||
Total gross investment income | $107,548 | $103,935 | $116,000 | ||||||||||||
Investment expenses | -7,472 | -7,863 | -8,064 | ||||||||||||
Net investment income | 30,167 | 25,261 | 21,286 | 23,362 | 24,204 | 20,009 | 26,210 | 25,649 | 28,802 | 25,489 | 25,885 | 27,760 | 100,076 | 96,072 | 107,936 |
Fixed Maturities And Short Term Investments [Member] | |||||||||||||||
Net investment income | |||||||||||||||
Total gross investment income | 97,248 | 99,216 | 105,937 | ||||||||||||
Other investments [Member] | |||||||||||||||
Net investment income | |||||||||||||||
Total gross investment income | 5,111 | 0 | 2,790 | ||||||||||||
Restricted cash and cash and cash equivalents [Member] | |||||||||||||||
Net investment income | |||||||||||||||
Total gross investment income | 5,178 | 4,713 | 7,259 | ||||||||||||
Securities lending income [Member] | |||||||||||||||
Net investment income | |||||||||||||||
Total gross investment income | $11 | $6 | $14 |
Investments_Realized_and_unrea
Investments (Realized and unrealized gains) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Fixed maturities, short-term and other investments and cash equivalents | ||||||||||||||||||
Gross realized gains | $31,316 | [1] | $31,402 | [1] | $38,905 | [1] | ||||||||||||
Gross realized (losses) | -8,221 | -28,144 | -20,672 | |||||||||||||||
Net realized gains on investments | 6,902 | 4,595 | 7,858 | 3,740 | 4,448 | -6,320 | 3,409 | 1,721 | -4,516 | 9,063 | 6,154 | 7,532 | 23,095 | 3,258 | 18,233 | |||
Net unrealized (losses) on investments | -74,119 | -84,974 | 45,427 | 55,693 | 20,137 | 69,967 | -141,348 | -7,237 | -35,857 | 86,345 | -53,574 | 20,671 | -57,973 | [1] | -58,481 | [1] | 17,585 | [1] |
Total net realized gains and change in net unrealized gains (losses) gains on investments | -34,878 | -55,223 | 35,818 | |||||||||||||||
Net Realized and Change in Unrealized Gains Losses on Assets Held In Trust on Behalf of Operating Affiliates | 0 | 88 | -88 | |||||||||||||||
Net Realized and Change In Unrealized Gains Losses on Catastrophe Bonds | 2,702 | -2,258 | 416 | |||||||||||||||
Noncontrolling interest | 42,258 | [1] | 1,836 | [1] | 17,263 | [1] | ||||||||||||
Total net realized gains and change in net unrealized gains (losses) gains on investments excluding non-controlling interest | $10,082 | ($55,557) | $53,409 | |||||||||||||||
[1] | Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net loss (income) attributable to noncontrolling interest. |
Investments_Pledged_investment
Investments (Pledged investments) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | $1,605,000 | $1,599,800 | ||
Letters of credit issued and outstanding | 561,684 | 751,250 | ||
Investments pledged as collateral | 1,022,740 | 1,246,406 | ||
$400,000 syndicated unsecured letter of credit facility | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 400,000 | 400,000 | ||
Letters of credit issued and outstanding | 0 | 0 | ||
Investments pledged as collateral | 0 | 0 | ||
$525,000 Four-year syndicated secured credit facility [Member] | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 525,000 | 525,000 | ||
Letters of credit issued and outstanding | 276,455 | [1] | 358,567 | [1] |
Investments pledged as collateral | 395,750 | 507,620 | ||
$200,000 secured bi-lateral letter of credit facility | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 200,000 | 200,000 | ||
Letters of credit issued and outstanding | 15,649 | [1] | 16,726 | [1] |
Investments pledged as collateral | 35,645 | 130,256 | ||
Talbot FAL Facility | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 25,000 | 25,000 | ||
Letters of credit issued and outstanding | 25,000 | [1] | 25,000 | [1] |
Investments pledged as collateral | 31,048 | 30,801 | ||
PaCRe Senior secured letter of credit facility | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 10,000 | 10,000 | ||
Letters of credit issued and outstanding | 294 | [1] | 294 | [1] |
Investments pledged as collateral | 0 | 0 | ||
AlphaCat Re secured letter of credit facility | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 30,000 | 24,800 | ||
Letters of credit issued and outstanding | 30,000 | [1] | 24,800 | [1] |
Investments pledged as collateral | 30,078 | 24,806 | ||
IPC bi-lateral facility | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 40,000 | 40,000 | ||
Letters of credit issued and outstanding | 15,897 | [1] | 20,177 | [1] |
Investments pledged as collateral | 99,437 | 98,465 | ||
$375,000 Flagstone bi-lateral facility | ||||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||||
Credit facility, commitment | 375,000 | 375,000 | ||
Letters of credit issued and outstanding | 198,389 | [1] | 305,686 | [1] |
Investments pledged as collateral | $430,782 | $454,458 | ||
[1] | Indicates utilization of commitment amount, not necessarily drawn borrowings |
Investments_Narrative_Details
Investments (Narrative) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Securities lending - Percent of market value required in collateral | 102.00% | |
Cash, cash equivalents and investments pledged as collateral | $3,285,692 | $2,991,322 |
Investments held in trust | $3,233,872 | $2,982,152 |
AlphaCat ILS Funds | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Number of funds | 1 | 2 |
Fair_value_measurements_Detail
Fair value measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | $5,532,731 | $5,542,258 | ||
Short-term investments | 1,051,074 | 787,714 | ||
Other investments | 813,011 | 704,086 | ||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | 7,396,816 | 7,034,058 | ||
Assets held in trust on behalf of operating affiliates | -732,782 | [1] | -651,715 | [2] |
Catastrophe bonds | -75,664 | -55,544 | ||
Noncontrolling interest | -430,494 | [3] | -489,402 | [3] |
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 6,157,876 | 5,837,397 | ||
U.S. government and government agency | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 760,086 | 1,364,679 | ||
Non-U.S. government and government agency | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 278,728 | 459,068 | ||
U.S. states, municipalities and political subdivisions | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 449,623 | 43,120 | ||
Agency residential mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 529,231 | 311,499 | ||
Non-agency residential mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 37,807 | 15,759 | ||
U.S. corporate | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 1,499,706 | 1,332,484 | ||
Non-U.S. corporate | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 563,162 | 714,325 | ||
Bank loans | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 449,004 | 717,116 | ||
Catastrophe bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 75,664 | 74,551 | ||
Asset-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 647,482 | 509,657 | ||
Commercial mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 242,238 | |||
Fund of hedge funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 1,775 | 2,303 | ||
Preferred stock | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 6,334 | |||
Hedge funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 496,960 | [3] | 561,083 | [3] |
Private equity investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 53,371 | 13,485 | ||
Investment funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 244,832 | 117,399 | ||
Mutual funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 9,739 | 9,816 | ||
Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 5,532,731 | 5,542,258 | ||
Short-term investments | 1,051,074 | 787,714 | ||
Other investments | 813,011 | 704,086 | ||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | 7,396,816 | 7,034,058 | ||
Assets held in trust on behalf of operating affiliates | -732,782 | [1] | -651,715 | [2] |
Catastrophe bonds | -75,664 | -55,544 | ||
Noncontrolling interest | -430,494 | [3] | -489,402 | [3] |
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 6,157,876 | 5,837,397 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Short-term investments | 942,716 | [1] | 783,151 | [2] |
Other investments | 0 | 0 | ||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | 942,716 | 783,151 | ||
Assets held in trust on behalf of operating affiliates | -732,782 | [1] | -651,715 | [2] |
Catastrophe bonds | 0 | 0 | ||
Noncontrolling interest | 0 | [3] | 0 | [3] |
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 209,934 | 131,436 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 5,494,983 | 5,542,258 | ||
Short-term investments | 108,358 | [1] | 4,563 | [2] |
Other investments | 156,118 | 127,215 | ||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | 5,759,459 | 5,674,036 | ||
Assets held in trust on behalf of operating affiliates | 0 | [1] | 0 | [2] |
Catastrophe bonds | -70,664 | -55,544 | ||
Noncontrolling interest | 0 | [3] | 0 | [3] |
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 5,688,795 | 5,618,492 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 37,748 | 0 | ||
Short-term investments | 0 | [1] | 0 | [2] |
Other investments | 656,893 | 576,871 | ||
Total investments including assets held in trust, catastrophe bonds and noncontrolling interest | 694,641 | 576,871 | ||
Assets held in trust on behalf of operating affiliates | 0 | [1] | 0 | [2] |
Catastrophe bonds | -5,000 | 0 | ||
Noncontrolling interest | -430,494 | [3] | -489,402 | [3] |
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 259,147 | 87,469 | ||
Fair Value, Measurements, Recurring [Member] | U.S. government and government agency | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 760,086 | 1,364,679 | ||
Fair Value, Measurements, Recurring [Member] | U.S. government and government agency | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | U.S. government and government agency | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 760,086 | 1,364,679 | ||
Fair Value, Measurements, Recurring [Member] | U.S. government and government agency | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. government and government agency | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 278,728 | 459,068 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. government and government agency | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. government and government agency | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 278,728 | 459,068 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. government and government agency | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | U.S. states, municipalities and political subdivisions | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 449,623 | 43,120 | ||
Fair Value, Measurements, Recurring [Member] | U.S. states, municipalities and political subdivisions | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | U.S. states, municipalities and political subdivisions | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 449,623 | 43,120 | ||
Fair Value, Measurements, Recurring [Member] | U.S. states, municipalities and political subdivisions | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Agency residential mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 529,231 | 311,499 | ||
Fair Value, Measurements, Recurring [Member] | Agency residential mortgage-backed securities | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Agency residential mortgage-backed securities | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 529,231 | 311,499 | ||
Fair Value, Measurements, Recurring [Member] | Agency residential mortgage-backed securities | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Non-agency residential mortgage-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 37,807 | 15,759 | ||
Fair Value, Measurements, Recurring [Member] | Non-agency residential mortgage-backed securities | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Non-agency residential mortgage-backed securities | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 37,807 | 15,759 | ||
Fair Value, Measurements, Recurring [Member] | Non-agency residential mortgage-backed securities | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | U.S. corporate | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 1,499,706 | 1,332,484 | ||
Fair Value, Measurements, Recurring [Member] | U.S. corporate | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | U.S. corporate | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 1,499,706 | 1,332,484 | ||
Fair Value, Measurements, Recurring [Member] | U.S. corporate | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. corporate | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 563,162 | 714,325 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. corporate | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. corporate | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 563,162 | 714,325 | ||
Fair Value, Measurements, Recurring [Member] | Non-U.S. corporate | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Bank loans | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 449,004 | 717,116 | ||
Fair Value, Measurements, Recurring [Member] | Bank loans | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Bank loans | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 416,256 | 717,116 | ||
Fair Value, Measurements, Recurring [Member] | Bank loans | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 32,748 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Catastrophe bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 75,664 | 74,551 | ||
Fair Value, Measurements, Recurring [Member] | Catastrophe bonds | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Catastrophe bonds | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 70,664 | 74,551 | ||
Fair Value, Measurements, Recurring [Member] | Catastrophe bonds | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 5,000 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Asset-backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 647,482 | 509,657 | ||
Fair Value, Measurements, Recurring [Member] | Asset-backed securities | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Asset-backed securities | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 647,482 | 509,657 | ||
Fair Value, Measurements, Recurring [Member] | Asset-backed securities | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Commercial mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 242,238 | |||
Fair Value, Measurements, Recurring [Member] | Commercial mortgage backed securities | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | |||
Fair Value, Measurements, Recurring [Member] | Commercial mortgage backed securities | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 242,238 | |||
Fair Value, Measurements, Recurring [Member] | Commercial mortgage backed securities | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed maturities | 0 | |||
Fair Value, Measurements, Recurring [Member] | Fund of hedge funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 1,775 | 2,303 | ||
Fair Value, Measurements, Recurring [Member] | Fund of hedge funds | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Fund of hedge funds | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Fund of hedge funds | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 1,775 | 2,303 | ||
Fair Value, Measurements, Recurring [Member] | Preferred stock | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 6,334 | |||
Fair Value, Measurements, Recurring [Member] | Preferred stock | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | |||
Fair Value, Measurements, Recurring [Member] | Preferred stock | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 6,334 | |||
Fair Value, Measurements, Recurring [Member] | Preferred stock | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | |||
Fair Value, Measurements, Recurring [Member] | Hedge funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 496,960 | [3] | 561,083 | [3] |
Fair Value, Measurements, Recurring [Member] | Hedge funds | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | [3] | 0 | [3] |
Fair Value, Measurements, Recurring [Member] | Hedge funds | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | [3] | 0 | [3] |
Fair Value, Measurements, Recurring [Member] | Hedge funds | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 496,960 | [3] | 561,083 | [3] |
Fair Value, Measurements, Recurring [Member] | Private equity investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 53,371 | 13,485 | ||
Fair Value, Measurements, Recurring [Member] | Private equity investments | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Private equity investments | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Private equity investments | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 53,371 | 13,485 | ||
Fair Value, Measurements, Recurring [Member] | Investment funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 244,832 | 117,399 | ||
Fair Value, Measurements, Recurring [Member] | Investment funds | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Investment funds | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 140,045 | 117,399 | ||
Fair Value, Measurements, Recurring [Member] | Investment funds | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 104,787 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Mutual funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 9,739 | 9,816 | ||
Fair Value, Measurements, Recurring [Member] | Mutual funds | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Mutual funds | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 9,739 | 9,816 | ||
Fair Value, Measurements, Recurring [Member] | Mutual funds | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | $0 | $0 | ||
[1] | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||
[2] | Included in the short-term investments balance are assets held in trust to support AlphaCat's fully collateralized reinsurance transactions. Also, included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest. | |||
[3] | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. |
Fair_value_measurements_Level_
Fair value measurements (Level 3 rollforward) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Catastrophe bonds | ($75,664) | ($55,544) | ||
Noncontrolling interest | -430,494 | [1] | -489,402 | [1] |
Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Catastrophe bonds | -75,664 | -55,544 | ||
Noncontrolling interest | -430,494 | [1] | -489,402 | [1] |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Level 3, beginning of year | 576,871 | 556,234 | ||
Additions to level 3 investments due to Western World acquisition | 23,620 | 0 | ||
Purchases | 175,129 | 99,037 | ||
Sales | -52,351 | -82,000 | ||
Issuances | 0 | 0 | ||
Settlements | -1,500 | 0 | ||
Realized gains | 8,216 | 6,132 | ||
Unrealized (losses) | -42,047 | -2,532 | ||
Transfers from Level 3 during the year | 6,703 | 0 | ||
Level 3, end of year | 694,641 | 576,871 | ||
Catastrophe bonds | -5,000 | 0 | ||
Noncontrolling interest | -430,494 | [1] | -489,402 | [1] |
Level 3 investments excluding noncontrolling interest | $259,147 | $87,469 | ||
[1] | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. |
Fair_value_measurements_Narrat
Fair value measurements (Narrative) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | ||
funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 704,086 | 813,011 | ||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 5,837,397 | 6,157,876 | ||
Long-term Debt, Gross | 788,614 | 786,583 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Number of funds | 1 | |||
Investment time lag reporting | 1 month | |||
Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 704,086 | 813,011 | ||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 5,837,397 | 6,157,876 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 576,871 | 656,893 | ||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 87,469 | 259,147 | ||
Ratio of Level 3 investments to total investments (percent) | 1.50% | 4.20% | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 127,215 | 156,118 | ||
Total investments, excluding assets held in trust, catastrophe bonds and noncontrolling interest | 5,618,492 | 5,688,795 | ||
Mutual funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 9,816 | 9,739 | ||
Mutual funds | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Number of funds | 2 | |||
Mutual funds | Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 9,816 | 9,739 | ||
Mutual funds | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Mutual funds | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 9,816 | 9,739 | ||
Hedge funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 561,083 | [1] | 496,960 | [1] |
Hedge funds | Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 561,083 | [1] | 496,960 | [1] |
Hedge funds | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 561,083 | [1] | 496,960 | [1] |
Hedge funds | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | [1] | 0 | [1] |
AlphaCat ILS Funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Company's equity interest in PacRe (percent) | 10.00% | 10.00% | ||
Noncontrolling interest, equity in PacRe (percent) | 90.00% | 90.00% | ||
Number of funds | 5 | |||
Investment funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 117,399 | 244,832 | ||
Investment funds | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Number of funds | 1 | |||
Investment funds | Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 117,399 | 244,832 | ||
Investment funds | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 104,787 | ||
Investment funds | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 117,399 | 140,045 | ||
Private equity investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 13,485 | 53,371 | ||
Private equity investments | Fair Value, Measurements, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 13,485 | 53,371 | ||
Private equity investments | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 13,485 | 53,371 | ||
Private equity investments | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other investments | 0 | 0 | ||
Investments Assumed In Flagstone Acquisition [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Number of funds | 1 | |||
Hedge fund side pocket [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment time lag reporting | 1 month | |||
AlphaCat ILS Funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Number of funds | 2 | 1 | ||
Minimum | Hedge funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment time lag reporting | 1 month | |||
Minimum | Private equity investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment time lag reporting | 3 months | |||
Maximum | Hedge funds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment time lag reporting | 3 months | |||
Maximum | Private equity investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment time lag reporting | 6 months | |||
[1] | Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest. |
Investments_in_affiliates_Summ
Investments in affiliates (Summary of investments in affiliates) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliates | $261,483 | $141,243 |
Investment Affiliates [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliates | 63,506 | 34,500 |
Operating Affiliates [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in affiliates | $197,977 | $106,743 |
Investments_in_affiliates_Inve
Investments in affiliates (Investment affiliate) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Income (loss) from investment affiliate | $530 | $1,754 | $779 | $5,348 | $516 | $1,044 | $1,753 | $1,477 | ($406) | ($160) | ($398) | $0 | $8,411 | $4,790 | ($964) |
Investment Affiliates [Member] | Aquiline Financial Services Fund II LP [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 34,500 | 15,218 | 34,500 | 15,218 | |||||||||||
Addition due to Western World acquisition | 8,127 | 0 | |||||||||||||
Capital contributions | 12,468 | 14,492 | |||||||||||||
Income (loss) from investment affiliate | 8,411 | 4,790 | |||||||||||||
Balance, end of period | 63,506 | 34,500 | 63,506 | 34,500 | |||||||||||
Investment in Aquiline - other details | |||||||||||||||
Investment at cost | 51,001 | 32,110 | 51,001 | 32,110 | |||||||||||
Voting ownership % | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||
Equity ownership % | 8.10% | 6.70% | 8.10% | 6.70% | |||||||||||
Carrying value | $63,506 | $34,500 | $63,506 | $34,500 |
Investments_in_affiliates_Oper
Investments in affiliates (Operating affiliates rollforward) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Income from operating affiliates | $4,143 | $3,761 | $4,892 | $4,927 | $5,510 | $1,463 | $3,793 | $3,523 | ($614) | $6,235 | $3,592 | $3,367 | $17,723 | $14,289 | $12,580 |
Operating Affiliates [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 106,743 | 157,111 | 106,743 | 157,111 | |||||||||||
Purchase of shares | 37,600 | 22,000 | |||||||||||||
Gain on redemption of shares | -5,077 | ||||||||||||||
Return of investment | -72,467 | -86,657 | |||||||||||||
Fair value of retained interest on deconsolidation of AlphaCat ILS fund | 113,455 | ||||||||||||||
Income from operating affiliates | 17,723 | 14,289 | |||||||||||||
Balance, end of period | 197,977 | 106,743 | 197,977 | 106,743 | |||||||||||
Operating Affiliates [Member] | AlphaCat Re 2011 [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 9,809 | 62,792 | 9,809 | 62,792 | |||||||||||
Purchase of shares | 0 | 0 | |||||||||||||
Gain on redemption of shares | 0 | ||||||||||||||
Return of investment | -5,825 | -54,914 | |||||||||||||
Income from operating affiliates | 622 | 1,931 | |||||||||||||
Balance, end of period | 4,606 | 9,809 | 4,606 | 9,809 | |||||||||||
Operating Affiliates [Member] | AlphaCat Re 2012 [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 1,313 | 29,319 | 1,313 | 29,319 | |||||||||||
Purchase of shares | 0 | 0 | |||||||||||||
Gain on redemption of shares | 0 | ||||||||||||||
Return of investment | -1,516 | -31,743 | |||||||||||||
Income from operating affiliates | 938 | 3,737 | |||||||||||||
Balance, end of period | 735 | 1,313 | 735 | 1,313 | |||||||||||
Operating Affiliates [Member] | AlphaCat 2013 [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 51,744 | 45,000 | 51,744 | 45,000 | |||||||||||
Purchase of shares | 0 | 0 | |||||||||||||
Gain on redemption of shares | 0 | ||||||||||||||
Return of investment | -52,762 | 0 | |||||||||||||
Income from operating affiliates | 2,086 | 6,744 | |||||||||||||
Balance, end of period | 1,068 | 51,744 | 1,068 | 51,744 | |||||||||||
Operating Affiliates [Member] | AlphaCat 2014 [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 21,982 | 0 | 21,982 | 0 | |||||||||||
Purchase of shares | 22,000 | ||||||||||||||
Gain on redemption of shares | 0 | ||||||||||||||
Return of investment | 0 | 0 | |||||||||||||
Income from operating affiliates | 6,103 | -18 | |||||||||||||
Balance, end of period | 28,085 | 21,982 | 28,085 | 21,982 | |||||||||||
Operating Affiliates [Member] | AlphaCat 2015 [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 0 | 0 | |||||||||||||
Purchase of shares | 25,600 | ||||||||||||||
Gain on redemption of shares | 0 | ||||||||||||||
Return of investment | 0 | ||||||||||||||
Income from operating affiliates | 0 | ||||||||||||||
Balance, end of period | 25,600 | 25,600 | |||||||||||||
Operating Affiliates [Member] | AlphaCat ILS Funds | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Balance, beginning of period | 21,895 | 20,000 | 21,895 | 20,000 | |||||||||||
Purchase of shares | 12,000 | 0 | |||||||||||||
Gain on redemption of shares | -5,077 | ||||||||||||||
Return of investment | -12,364 | 0 | |||||||||||||
Fair value of retained interest on deconsolidation of AlphaCat ILS fund | 113,455 | ||||||||||||||
Income from operating affiliates | 7,974 | 1,895 | |||||||||||||
Balance, end of period | $137,883 | $21,895 | $137,883 | $21,895 |
Investments_in_affiliates_Oper1
Investments in affiliates (Operating affiliates - other details) (Details) (Operating Affiliates [Member], USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Equity Method Investments [Line Items] | ||||
Investment at cost | $187,100 | $97,536 | ||
Carrying value | 197,977 | 106,743 | 157,111 | |
AlphaCat Re 2011 [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment at cost | 4,606 | 9,882 | ||
Voting ownership % | 43.70% | 43.70% | ||
Equity ownership % | 22.30% | 22.30% | ||
Carrying value | 4,606 | 9,809 | 62,792 | |
Summarized Financial Information of Investees [Abstract] | ||||
Total assets | 20,469 | |||
Total liabilities | 7,931 | |||
Total revenue | 3 | |||
Net income | 2,794 | |||
AlphaCat Re 2012 [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment at cost | 735 | 654 | ||
Voting ownership % | 49.00% | 49.00% | ||
Equity ownership % | 37.90% | 37.90% | ||
Carrying value | 735 | 1,313 | 29,319 | |
Summarized Financial Information of Investees [Abstract] | ||||
Total assets | 3,098 | |||
Total liabilities | 1,136 | |||
Total revenue | 0 | |||
Net income | 2,477 | |||
AlphaCat 2013 [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment at cost | 1,068 | 45,000 | ||
Voting ownership % | 40.90% | 40.90% | ||
Equity ownership % | 19.70% | 19.70% | ||
Carrying value | 1,068 | 51,744 | 45,000 | |
Summarized Financial Information of Investees [Abstract] | ||||
Total assets | 5,490 | |||
Total liabilities | 65 | |||
Total revenue | 14,221 | |||
Net income | 10,595 | |||
AlphaCat 2014 [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment at cost | 22,000 | 22,000 | ||
Voting ownership % | 42.30% | 42.30% | ||
Equity ownership % | 19.60% | 19.60% | ||
Carrying value | 28,085 | 21,982 | 0 | |
Summarized Financial Information of Investees [Abstract] | ||||
Total assets | 193,702 | |||
Total liabilities | 4,102 | |||
Total revenue | 45,333 | |||
Net income | 31,070 | |||
AlphaCat 2015 [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment at cost | 25,600 | |||
Voting ownership % | 40.00% | |||
Equity ownership % | 20.00% | |||
Carrying value | 25,600 | 0 | ||
Summarized Financial Information of Investees [Abstract] | ||||
Total assets | 142,843 | |||
Total liabilities | 0 | |||
Total revenue | 0 | |||
Net income | 0 | |||
AlphaCat ILS Funds | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment at cost | 133,091 | 20,000 | ||
Equity ownership % | 9.10% | |||
Carrying value | 137,883 | 21,895 | 20,000 | |
Summarized Financial Information of Investees [Abstract] | ||||
Total assets | 1,026,222 | [1] | ||
Total liabilities | 175,376 | [1] | ||
Total revenue | 65,320 | [1] | ||
Net income | 54,421 | [1] | ||
BetaCat ILS Funds [Member] | ||||
Summarized Financial Information of Investees [Abstract] | ||||
Total assets | 22,010 | |||
Total liabilities | 61 | |||
Total revenue | 32 | |||
Net income | ($51) | |||
[1] | AlphaCat ILS funds information includes all funds, including those where the Company is not the primary beneficiary. |
Investments_in_affiliates_Note
Investments in affiliates (Notes payable and (income) attributable to operating affiliates) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Notes payable to operating affiliates, beginning of year | $439,272 | $439,272 | |||||||||||||
Notes payable to operating affiliates, end of year | 671,465 | 439,272 | 671,465 | 439,272 | |||||||||||
(Income) attributable to operating affiliate investors | -26,566 | -25,807 | -25,316 | -31,710 | -26,607 | [1] | -11,815 | [1] | -20,264 | [1] | -10,077 | [1] | -109,399 | -68,763 | 0 |
Variable Interest Entity, Not Primary Beneficiary [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Notes payable to operating affiliates, beginning of year | 439,272 | 0 | 439,272 | 0 | |||||||||||
Notes payable to operating affiliates recognized on deconsolidation of AlphaCat ILS fund | 178,837 | ||||||||||||||
Issuance of notes payable to operating affiliates | 680,027 | 441,126 | |||||||||||||
Redemption of notes payable to operating affiliates | -617,068 | -3,553 | |||||||||||||
Foreign exchange gain (loss) | -9,603 | 1,699 | |||||||||||||
Notes payable to operating affiliates, end of year | 671,465 | 439,272 | 671,465 | 439,272 | |||||||||||
Variable Interest Entity, Not Primary Beneficiary [Member] | AlphaCat 2013 [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Notes payable to operating affiliates, beginning of year | 223,809 | 0 | 223,809 | 0 | |||||||||||
Notes payable to operating affiliates recognized on deconsolidation of AlphaCat ILS fund | 0 | ||||||||||||||
Issuance of notes payable to operating affiliates | 0 | 223,082 | |||||||||||||
Redemption of notes payable to operating affiliates | -223,512 | 0 | |||||||||||||
Foreign exchange gain (loss) | -297 | 727 | |||||||||||||
Notes payable to operating affiliates, end of year | 0 | 223,809 | 0 | 223,809 | 0 | ||||||||||
(Income) attributable to operating affiliate investors | -14,577 | -47,329 | 0 | ||||||||||||
Variable Interest Entity, Not Primary Beneficiary [Member] | AlphaCat 2014 [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Notes payable to operating affiliates, beginning of year | 0 | 0 | |||||||||||||
Notes payable to operating affiliates recognized on deconsolidation of AlphaCat ILS fund | 0 | ||||||||||||||
Issuance of notes payable to operating affiliates | 157,914 | ||||||||||||||
Redemption of notes payable to operating affiliates | 0 | ||||||||||||||
Foreign exchange gain (loss) | -530 | ||||||||||||||
Notes payable to operating affiliates, end of year | 157,384 | 0 | 157,384 | 0 | |||||||||||
(Income) attributable to operating affiliate investors | -46,100 | 0 | 0 | ||||||||||||
Variable Interest Entity, Not Primary Beneficiary [Member] | AlphaCat ILS Funds | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Notes payable to operating affiliates, beginning of year | 215,463 | 0 | 215,463 | 0 | |||||||||||
Notes payable to operating affiliates recognized on deconsolidation of AlphaCat ILS fund | 178,837 | ||||||||||||||
Issuance of notes payable to operating affiliates | 522,113 | 218,044 | |||||||||||||
Redemption of notes payable to operating affiliates | -393,556 | -3,553 | |||||||||||||
Foreign exchange gain (loss) | -8,776 | 972 | |||||||||||||
Notes payable to operating affiliates, end of year | 514,081 | 215,463 | 514,081 | 215,463 | 0 | ||||||||||
(Income) attributable to operating affiliate investors | ($48,722) | ($21,434) | $0 | ||||||||||||
[1] | This amount had been shown within finance expenses for each of the three months ended March 31, June 30 and September 30, 2013. |
Investments_in_affiliates_Narr
Investments in affiliates (Narrative) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 29, 2014 | Oct. 02, 2014 | Dec. 20, 2011 | Nov. 07, 2014 | Dec. 31, 2013 |
funds | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of Consolidated Funds | 1 | |||||
Variable Funding Notes, Typical Minimum Duration | 12 months | |||||
AlphaCat ILS Funds | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Related Party Transaction Capital Commitment | $20,000 | |||||
AlphaCat ILS fund D | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Third party subscriptions | 35,000 | |||||
Aquiline Financial Services Fund II LP [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage of interest assumed | 100.00% | |||||
Related Party Transaction Capital Commitment | 10,000 | 50,000 | ||||
Investment time lag reporting | 3 months | |||||
Aquiline Financial Services Fund III LP [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Related Party Transaction Capital Commitment | 100,000 | |||||
Operating Affiliates [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Fair value of retained interest on deconsolidation of AlphaCat ILS fund | 113,455 | |||||
Notes Payable Of Operating Affiliates Portion Due to Company | 148,264 | 63,654 | ||||
Income Attributable To Operating Affiliates Portion Due to Company | 21,756 | 11,437 | ||||
Operating Affiliates [Member] | AlphaCat ILS Funds | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Fair value of retained interest on deconsolidation of AlphaCat ILS fund | 113,455 | |||||
Deconsolidation, Gain (Loss), Amount | 1,372 | |||||
Equity ownership % | 9.10% | |||||
As Investor In Third Party Economic Interests [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Notes Payable Of Operating Affiliates Portion Due to Company | 523,201 | 375,618 | ||||
Income Attributable To Operating Affiliates Portion Due to Company | 87,643 | $57,326 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | AlphaCat ILS fund D | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of Consolidated Funds | 1 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | BetaCat ILS Funds [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of Consolidated Funds | 1 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | Operating Affiliates [Member] | AlphaCat ILS fund A | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity ownership % | 7.90% | |||||
Variable Interest Entity, Primary Beneficiary [Member] | Operating Affiliates [Member] | AlphaCat ILS fund B | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity ownership % | 39.70% | |||||
Variable Interest Entity, Primary Beneficiary [Member] | Operating Affiliates [Member] | AlphaCat ILS fund C | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity ownership % | 9.10% |
Noncontrolling_interest_Detail
Noncontrolling interest (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
funds | funds | ||||||||||||||
Noncontrolling Interest [Line Items] | |||||||||||||||
Number of Consolidated Funds | 1 | 1 | |||||||||||||
Total, beginning of period | $584,169 | $434,280 | $584,169 | $434,280 | |||||||||||
Issuance of shares | 68,200 | 150,690 | |||||||||||||
Income (loss) attributable to third parties | -61,209 | -53,069 | 35,305 | 43,509 | 27,526 | 45,694 | -60,976 | -2,549 | -27,206 | 56,746 | -45,360 | 0 | -35,464 | 9,695 | -15,820 |
Adjustment to noncontrolling interest as a result of deconsolidation | -78,354 | ||||||||||||||
Redemption of shares | -10,496 | ||||||||||||||
Total, end of period | 538,551 | 584,169 | 434,280 | 538,551 | 584,169 | 434,280 | |||||||||
Redeemable Noncontrolling Interest | |||||||||||||||
Noncontrolling Interest [Line Items] | |||||||||||||||
Total, beginning of period | 86,512 | 0 | 86,512 | 0 | |||||||||||
Issuance of shares | 68,200 | 92,190 | |||||||||||||
Income (loss) attributable to third parties | 3,598 | 4,818 | |||||||||||||
Adjustment to noncontrolling interest as a result of deconsolidation | -78,354 | ||||||||||||||
Redemption of shares | -10,496 | ||||||||||||||
Total, end of period | 79,956 | 86,512 | 79,956 | 86,512 | |||||||||||
Noncontrolling Interest | |||||||||||||||
Noncontrolling Interest [Line Items] | |||||||||||||||
Total, beginning of period | 497,657 | 434,280 | 497,657 | 434,280 | |||||||||||
Issuance of shares | 0 | 58,500 | |||||||||||||
Income (loss) attributable to third parties | -39,062 | 4,877 | |||||||||||||
Adjustment to noncontrolling interest as a result of deconsolidation | 0 | ||||||||||||||
Redemption of shares | 0 | ||||||||||||||
Total, end of period | $458,595 | $497,657 | $458,595 | $497,657 | |||||||||||
PaCRe Funds | |||||||||||||||
Noncontrolling Interest [Line Items] | |||||||||||||||
Company's equity interest in PacRe (percent) | 10.00% | 10.00% | 10.00% | 10.00% | |||||||||||
Noncontrolling interest, equity in PacRe (percent) | 90.00% | 90.00% | 90.00% | 90.00% |
Derivative_instruments_Amount_
Derivative instruments (Amount and balance sheet location) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Foreign currency forward contracts | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Derivative, Number of Instruments Held | 1 | |||
Not designated as hedging instruments | Foreign currency forward contracts | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Notional amount | $26,755 | $0 | ||
Not designated as hedging instruments | Foreign currency forward contracts | Other assets | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Fair value, derivative assets | 1,685 | [1] | 0 | [1] |
Not designated as hedging instruments | Foreign currency forward contracts | Accounts payable and accrued expenses | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Fair value, derivative liabilities | 0 | [1] | 0 | [1] |
Designated as hedging instruments | Foreign currency forward contracts | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Notional amount | 189,026 | 163,576 | ||
Designated as hedging instruments | Foreign currency forward contracts | Other assets | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Fair value, derivative assets | 401 | [1] | 1,167 | [1] |
Designated as hedging instruments | Foreign currency forward contracts | Accounts payable and accrued expenses | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Fair value, derivative liabilities | 3,136 | [1] | 2,313 | [1] |
Designated as hedging instruments | Interest rate swap contracts | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Notional amount | 552,263 | 552,263 | ||
Designated as hedging instruments | Interest rate swap contracts | Other assets | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Fair value, derivative assets | 25 | [1] | 0 | [1] |
Designated as hedging instruments | Interest rate swap contracts | Accounts payable and accrued expenses | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Fair value, derivative liabilities | $1,169 | [1] | $911 | [1] |
Junior Subordinated Deferrable Debentures [Member] | Interest rate swap contracts | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Derivative, Number of Instruments Held | 2 | |||
Flagstone Junior Subordinated Deferrable Debentures [Member] | Interest rate swap contracts | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Derivative, Number of Instruments Held | 3 | |||
Flagstone Junior Subordinated Deferrable Debentures [Member] | Cross-currency interest rate swap | ||||
Summary of amount of derivatives designated as hedging instruments | ||||
Derivative, Number of Instruments Held | 1 | |||
[1] | Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses respectively on the Consolidated Balance Sheets. The total impact on earnings during the year ended December 31, 2014, recognized in income within other insurance related income and other income, relating to the foreign currency forward contract that was not designated as a hedging instrument was $1,685. |
Derivative_instruments_Amount_1
Derivative instruments (Amount included in statement of operations) (Details) (Designated as hedging instruments, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Fair value hedge | Foreign currency forward contracts | Foreign exchange gain (loss) | |||
Derivatives designated as fair value hedges and related hedged item | |||
Amount of gain (loss) recognized in income on derivative | ($11,789) | $1,947 | $1,017 |
Amount of gain (loss) on hedged item recognized in income attributable to risk being hedged | 11,789 | -1,947 | -912 |
Amount of gain (loss) recognized in income on derivative (ineffective portion) | 0 | 0 | 105 |
Cash flow hedge | Interest rate swap contracts | |||
Derivative Instruments designated as a cash flow hedge | |||
Amount of ineffective portion excluded from effectiveness testing | 228 | 0 | 0 |
Cash flow hedge | Interest rate swap contracts | Other comprehensive income | |||
Derivative Instruments designated as a cash flow hedge | |||
Amount of effective portion recognized in other comprehensive income | 13,302 | 11,107 | 1,588 |
Cash flow hedge | Interest rate swap contracts | Finance expenses | |||
Derivative Instruments designated as a cash flow hedge | |||
Amount of effective portion subsequently reclassified to earnings | ($13,074) | ($11,107) | ($1,588) |
Premiums_receivable_Details
Premiums receivable (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Premiums Receivable Reconciliation [Line Items] | ||
Balance at beginning of period | $697,233 | $802,159 |
Change during period | 10,414 | -104,926 |
Balance at end of period | 707,647 | 697,233 |
Premiums in course of collection | ||
Premiums Receivable Reconciliation [Line Items] | ||
Balance at beginning of period | 73,702 | 214,891 |
Change during period | 11,347 | -141,189 |
Balance at end of period | 85,049 | 73,702 |
Premiums accrued but unbilled | ||
Premiums Receivable Reconciliation [Line Items] | ||
Balance at beginning of period | 623,531 | 587,268 |
Change during period | -933 | 36,263 |
Balance at end of period | $622,598 | $623,531 |
Reserve_for_losses_and_loss_ex2
Reserve for losses and loss expenses (Analysis of paid and unpaid losses and reconciliation of beginning and ending unpaid losses and loss expenses) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||||||||||||||
Reserve for losses and loss expenses, beginning of year | $3,030,399 | $3,517,573 | $2,631,143 | $3,030,399 | $3,517,573 | $2,631,143 | ||||||||||||
Losses and loss expenses recoverable, beginning of year | -370,154 | -439,967 | -372,485 | -370,154 | -439,967 | -372,485 | ||||||||||||
Net reserve for losses and loss expenses, beginning of year | 2,660,245 | 3,077,606 | 2,258,658 | 2,660,245 | 3,077,606 | 2,258,658 | ||||||||||||
Net reserves acquired (disposed) | 525,091 | -36,519 | 639,641 | |||||||||||||||
Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in: | ||||||||||||||||||
Current year | 1,024,256 | 999,380 | 1,174,415 | |||||||||||||||
Prior years | -252,207 | [1],[2] | -205,448 | [1],[2] | -174,969 | [1],[2] | ||||||||||||
Total incurred losses and loss expenses | 772,049 | [1] | 793,932 | [1] | 999,446 | [1] | ||||||||||||
Less net losses and loss expenses paid in respect of losses occurring in: | ||||||||||||||||||
Current year | -245,084 | -244,682 | -182,146 | |||||||||||||||
Prior years | -816,823 | -916,796 | -653,874 | |||||||||||||||
Total net paid losses | -1,061,907 | -1,161,478 | -836,020 | |||||||||||||||
Foreign exchange | -38,550 | -13,296 | 15,881 | |||||||||||||||
Net reserve for losses and loss expenses, end of year | 2,856,928 | 2,660,245 | 3,077,606 | 2,856,928 | 2,660,245 | 3,077,606 | ||||||||||||
Losses and loss expenses recoverable, end of year | 377,466 | 370,154 | 439,967 | 377,466 | 370,154 | 439,967 | ||||||||||||
Reserve for losses and loss expenses, end of year | 3,234,394 | 3,030,399 | 3,517,573 | 3,234,394 | 3,030,399 | 3,517,573 | ||||||||||||
Incurred losses and loss adjustment expenses comprise: | ||||||||||||||||||
Gross losses and loss adjustment expenses | 833,860 | [1] | 924,986 | [1] | 1,192,494 | [1] | ||||||||||||
Reinsurance recoverable | -61,811 | -131,054 | -193,048 | |||||||||||||||
Total incurred losses and loss expenses | 226,508 | 224,125 | 158,745 | 162,671 | 206,152 | 177,965 | 265,044 | 144,771 | 458,310 | 155,455 | 153,692 | 231,989 | 772,049 | [1] | 793,932 | [1] | 999,446 | [1] |
Liability for unpaid losses and loss expenses by type | ||||||||||||||||||
Reserves, reported claims | 1,495,323 | 1,537,881 | 1,495,323 | 1,537,881 | ||||||||||||||
Reserves, incurred but not reported claims | $1,739,071 | $1,492,518 | $1,739,071 | $1,492,518 | ||||||||||||||
[1] | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||
[2] | AlphaCat has not had any development on prior accident years. |
Reserve_for_losses_and_loss_ex3
Reserve for losses and loss expenses (Prior year development) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | ($252,207) | [1],[2] | ($205,448) | [1],[2] | ($174,969) | [1],[2] |
Validus Re | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -87,600 | [2] | -59,258 | [2] | -72,561 | [2] |
AlphaCat | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -12,201 | [2] | ||||
Talbot | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -141,166 | [2] | -146,190 | [2] | -102,408 | [2] |
Western World | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -11,240 | [2] | ||||
Property | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -141,021 | -127,302 | -71,996 | |||
Property | Validus Re | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -76,064 | -81,610 | -45,733 | |||
Property | AlphaCat | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -12,201 | |||||
Property | Talbot | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -53,779 | -45,692 | -26,263 | |||
Property | Western World | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 1,023 | [1] | ||||
Marine | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -38,227 | -19,387 | -51,358 | |||
Marine | Validus Re | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -6,830 | 26,705 | -11,298 | |||
Marine | AlphaCat | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 0 | |||||
Marine | Talbot | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -31,397 | -46,092 | -40,060 | |||
Marine | Western World | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 0 | [1] | ||||
Specialty | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -60,696 | -58,759 | -51,615 | |||
Specialty | Validus Re | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -4,706 | -4,353 | -15,530 | |||
Specialty | AlphaCat | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 0 | |||||
Specialty | Talbot | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -55,990 | -54,406 | -36,085 | |||
Specialty | Western World | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 0 | [1] | ||||
Liability | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | -12,263 | |||||
Liability | Validus Re | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 0 | |||||
Liability | AlphaCat | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 0 | |||||
Liability | Talbot | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | 0 | |||||
Liability | Western World | ||||||
Prior Year Development By Segment And Line Of Business [Line Items] | ||||||
Net favorable development on prior years | ($12,263) | [1] | ||||
[1] | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||
[2] | AlphaCat has not had any development on prior accident years. |
Reserve_for_losses_and_loss_ex4
Reserve for losses and loss expenses (Narrative) (Details) (Western World, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Western World | |
Prior Year Development By Segment And Line Of Business [Line Items] | |
Fair value adjustment to net reserves | $15,586 |
Amortized to income during the period | $4,607 |
Accounts_payable_and_accrued_e2
Accounts payable and accrued expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accrued interest on debt | $12,224 | $10,686 |
Subscriptions received in advance on AlphaCat ILS funds | 15,400 | 35,000 |
Accrued income attributable to operating affiliates | 109,399 | 68,763 |
Trade and compensation payables | 181,222 | 163,738 |
Total | $318,245 | $278,187 |
Reinsurance_Effect_on_premiums
Reinsurance (Effect on premiums written and earned) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Written: | ||||||||||||||||
Direct | $683,028 | $544,722 | $550,491 | |||||||||||||
Assumed | 1,680,258 | 1,856,384 | 1,615,949 | |||||||||||||
Ceded | -33,623 | -30,137 | -50,565 | -194,908 | -24,558 | -39,415 | -121,396 | -187,216 | -35,659 | -45,743 | -119,052 | -107,052 | -309,233 | -372,585 | -307,506 | |
Net premiums written | 303,024 | 328,837 | 605,109 | 817,083 | 212,715 | 317,345 | 580,917 | 917,544 | 276,188 | 344,472 | 508,037 | 730,237 | 2,054,053 | 2,028,521 | 1,858,934 | |
Earned: | ||||||||||||||||
Direct | 656,974 | 519,045 | 535,872 | |||||||||||||
Assumed | 1,689,244 | 1,951,910 | 1,647,957 | |||||||||||||
Ceded | -343,814 | -368,910 | -310,613 | |||||||||||||
Net premiums earned | 558,748 | 494,696 | 466,003 | 482,957 | 492,238 | 531,288 | 547,458 | 531,061 | 499,286 | 475,104 | 447,627 | 451,199 | 2,002,404 | 2,102,045 | 1,873,216 | |
Eliminations [Member] | ||||||||||||||||
Written: | ||||||||||||||||
Direct | 0 | 0 | 0 | |||||||||||||
Assumed | -75,810 | -80,315 | -65,758 | |||||||||||||
Ceded | 75,810 | 80,315 | 65,758 | |||||||||||||
Net premiums written | 0 | 0 | 0 | |||||||||||||
Earned: | ||||||||||||||||
Direct | 0 | 0 | 0 | |||||||||||||
Assumed | -83,168 | -78,833 | -73,934 | |||||||||||||
Ceded | 83,168 | 78,833 | 73,934 | |||||||||||||
Net premiums earned | 0 | 0 | 0 | |||||||||||||
Operating Segments | Validus Re | ||||||||||||||||
Written: | ||||||||||||||||
Direct | 0 | 0 | 1,551 | |||||||||||||
Assumed | 1,136,910 | 1,242,522 | 1,130,408 | |||||||||||||
Ceded | -182,056 | -226,264 | -144,578 | |||||||||||||
Net premiums written | 954,854 | 1,016,258 | 987,381 | |||||||||||||
Earned: | ||||||||||||||||
Direct | 0 | 0 | 364 | |||||||||||||
Assumed | 1,127,894 | 1,360,735 | 1,174,681 | |||||||||||||
Ceded | -210,610 | -226,798 | -151,774 | |||||||||||||
Net premiums earned | 917,284 | 1,133,937 | 1,023,271 | |||||||||||||
Operating Segments | AlphaCat | ||||||||||||||||
Written: | ||||||||||||||||
Direct | 0 | 0 | 0 | |||||||||||||
Assumed | 135,181 | 147,009 | 21,603 | |||||||||||||
Ceded | -4,348 | -525 | 0 | |||||||||||||
Net premiums written | 130,833 | 146,484 | 21,603 | |||||||||||||
Earned: | ||||||||||||||||
Direct | 0 | 0 | 0 | |||||||||||||
Assumed | 135,884 | 137,939 | 17,666 | |||||||||||||
Ceded | -3,534 | -525 | 0 | |||||||||||||
Net premiums earned | 132,350 | 137,414 | 17,666 | |||||||||||||
Operating Segments | Talbot | ||||||||||||||||
Written: | ||||||||||||||||
Direct | 617,793 | 544,722 | 548,940 | |||||||||||||
Assumed | 483,977 | 547,168 | 529,696 | |||||||||||||
Ceded | -192,211 | -226,111 | -228,686 | |||||||||||||
Net premiums written | 909,559 | 865,779 | 849,950 | |||||||||||||
Earned: | ||||||||||||||||
Direct | 576,136 | 519,045 | 535,508 | |||||||||||||
Assumed | 508,634 | 532,069 | 529,544 | |||||||||||||
Ceded | -204,996 | -220,420 | -232,773 | |||||||||||||
Net premiums earned | 879,774 | 830,694 | 832,279 | |||||||||||||
Operating Segments | Western World | ||||||||||||||||
Written: | ||||||||||||||||
Direct | 65,235 | |||||||||||||||
Assumed | 0 | |||||||||||||||
Ceded | -6,428 | [1] | ||||||||||||||
Net premiums written | 58,807 | [1] | ||||||||||||||
Earned: | ||||||||||||||||
Direct | 80,838 | |||||||||||||||
Assumed | 0 | |||||||||||||||
Ceded | -7,842 | |||||||||||||||
Net premiums earned | $72,996 | [1] | ||||||||||||||
[1] | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. |
Reinsurance_Reinsurance_recove
Reinsurance (Reinsurance recoverables by reinsurer) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | $415,544 | $450,234 |
Percentage of total reinsurance recoverable | 100.00% | 100.00% |
Reinsurance (Textuals) [Abstract] | ||
Incurred but not reported recoverable | 231,129 | 196,840 |
Reinsurance Recoverables, Allowance | 4,755 | 5,794 |
A Minus Or Better Rating [Member] | ||
Reinsurance recoverables by reinsurer | ||
Percentage of total reinsurance recoverable | 98.00% | 96.70% |
Top 10 reinsurers [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 312,205 | 340,938 |
Percentage of total reinsurance recoverable | 75.10% | 75.70% |
Top 10 reinsurers [Member] | Swiss Re [Member] | AA- [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 70,848 | 20,022 |
Percentage of total reinsurance recoverable | 17.00% | 4.50% |
Top 10 reinsurers [Member] | Lloyds Syndicates [Member] | A (plus) [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 62,318 | 73,398 |
Percentage of total reinsurance recoverable | 15.00% | 16.30% |
Top 10 reinsurers [Member] | Everest Re [Member] | A (plus) [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 51,425 | 48,113 |
Percentage of total reinsurance recoverable | 12.40% | 10.70% |
Top 10 reinsurers [Member] | Hannover Re [Member] | AA- [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 40,927 | 41,483 |
Percentage of total reinsurance recoverable | 9.80% | 9.20% |
Top 10 reinsurers [Member] | Fully Collateralized Reinsurers [Member] | NR [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 23,315 | 36,683 |
Percentage of total reinsurance recoverable | 5.60% | 8.10% |
Top 10 reinsurers [Member] | Munich Re [Member] | AA- [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 19,384 | 12,360 |
Percentage of total reinsurance recoverable | 4.70% | 2.70% |
Top 10 reinsurers [Member] | Transatlantic Re [Member] | A (plus) [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 12,418 | 14,114 |
Percentage of total reinsurance recoverable | 3.00% | 3.10% |
Top 10 reinsurers [Member] | XL Re [Member] | A (plus) [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 11,114 | 13,300 |
Percentage of total reinsurance recoverable | 2.70% | 3.00% |
Top 10 reinsurers [Member] | Berkshire Hathaway Homestate [Member] | AA (plus) [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 10,372 | |
Percentage of total reinsurance recoverable | 2.50% | |
Top 10 reinsurers [Member] | Merrimack Mutual Fire Insurance [Member] | A (plus) [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 10,084 | |
Percentage of total reinsurance recoverable | 2.40% | |
Top 10 reinsurers [Member] | National Indemnity [Member] | AA (plus) [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 51,037 | |
Percentage of total reinsurance recoverable | 11.30% | |
Top 10 reinsurers [Member] | Third Point Re [Member] | A- Rating [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 30,428 | |
Percentage of total reinsurance recoverable | 6.80% | |
Other Reinsurers Balances Greater Than One Million Dollars [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 94,247 | 100,784 |
Percentage of total reinsurance recoverable | 22.70% | 22.40% |
Other Reinsurers Balances Less Than One Million Dollars [Member] | ||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | $9,092 | $8,512 |
Percentage of total reinsurance recoverable | 2.20% | 1.90% |
Share_capital_Summary_of_commo
Share capital (Summary of common shares issued and outstanding) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of common shares issued and outstanding | |||
Common shares issued, beginning balance | 154,488,497 | 152,698,191 | 134,503,065 |
Options exercised | 412,656 | 351,509 | 439,065 |
Warrants exercised | 591,480 | 326,715 | |
Direct issuance of common stock | 1,380 | 1,266 | 15,841,539 |
Common shares issued, ending balance | 155,554,224 | 154,488,497 | 152,698,191 |
Treasury shares, ending balance | -71,684,379 | -58,444,185 | -44,776,932 |
Common shares outstanding, ending balance | 83,869,845 | 96,044,312 | 107,921,259 |
Restricted Stock [Member] | |||
Summary of common shares issued and outstanding | |||
Vested, net of shares withheld | 615,659 | 796,838 | 1,572,634 |
Restricted share units [Member] | |||
Summary of common shares issued and outstanding | |||
Vested, net of shares withheld | 10,265 | 14,381 | 15,173 |
Performance Shares [Member] | |||
Summary of common shares issued and outstanding | |||
Vested, net of shares withheld | 25,767 | 31,897 | |
Deferred share units [Member] | |||
Summary of common shares issued and outstanding | |||
Vested, net of shares withheld | 2,935 |
Share_capital_Information_on_w
Share capital (Information on warrants) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Warrant [Member] | |
Warrant valuation assumptions: | |
Volatility | 30.00% |
July 24, 2007 Issuance | |
Warrant valuation assumptions: | |
Warrants issued | 256,409 |
Average strike price | 20 |
Volatility | 30.00% |
Risk-free rate | 4.50% |
Expected dividend yield | 0.00% |
Expected term (years) | 8 years |
Calculated fair value per warrant | 11.28 |
February 3, 2006 Issuance | |
Warrant valuation assumptions: | |
Warrants issued | 8,593 |
Average strike price | 17.5 |
Volatility | 30.00% |
Risk-free rate | 4.50% |
Expected dividend yield | 0.00% |
Expected term (years) | 10 years |
Calculated fair value per warrant | 8.89 |
December 15, 2005 Issuance | |
Warrant valuation assumptions: | |
Warrants issued | 8,446,727 |
Average strike price | 17.5 |
Volatility | 30.00% |
Risk-free rate | 4.50% |
Expected dividend yield | 0.00% |
Expected term (years) | 10 years |
Calculated fair value per warrant | 8.89 |
Share_capital_Narrative_Detail
Share capital (Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Feb. 05, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Nov. 30, 2012 |
Schedule of Common Stock Issued and Outstanding [Line Items] | |||||||||
Common Stock, Shares Authorized | 571,428,571 | 571,428,571 | 571,428,571 | ||||||
Common shares, par value | $0.18 | $0.18 | $0.18 | ||||||
Common Stock, Voting Rights | one vote per share | ||||||||
Maximum Percent Of Outstanding Common Shares Controlled Contingent Under Voting Rights | 9.09% | ||||||||
Stock repurchase program, authorized amount | $500,000 | ||||||||
Share repurchase program cumulative aggregrate purchase value | 1,774,436 | 2,231,301 | |||||||
Share repurchase program, cumulative shares repurchased | 70,045,504 | ||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $43,135 | $43,135 | |||||||
Treasury Stock, Shares | 71,684,379 | 58,444,185 | 71,684,379 | ||||||
Class of Warrant or Right, Outstanding | 5,174,114 | 5,296,056 | 5,174,114 | ||||||
Number of warrants exercised during period | 0 | 1,114,416 | |||||||
Warrants exercised | 591,480 | 326,715 | |||||||
Percent Of Fair Market Value Per Share On Date Of Payment Of Deferred Share Units | 100.00% | ||||||||
Share Based Compensation Non Employee Directors Stock Compensation Plan Deferred Share Units Outstanding | 0 | 0 | 0 | ||||||
Deferred share units [Member] | |||||||||
Schedule of Common Stock Issued and Outstanding [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 5,039 | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested In Period Net Of Shares Withheld For Taxes | 2,935 | ||||||||
Flagstone Reinsurance Holdings Sa | |||||||||
Schedule of Common Stock Issued and Outstanding [Line Items] | |||||||||
Business Acquisition Equity Interests Issued Or Issuable Number Of Shares Issued Net Of Shares Withheld | 14,202,664 | ||||||||
Business Acquisition, Cost of Acquired Entity, Equity Interests Withheld For Income Taxes | 87,725 | ||||||||
Validus closing share price at acquisition | $34.87 | ||||||||
Business Combination Acquired Warrants | 121,942 | ||||||||
Warrant strike price | $62.02 | ||||||||
Common shares | |||||||||
Schedule of Common Stock Issued and Outstanding [Line Items] | |||||||||
Common Stock, Dividends, Per Share, Cash Paid | $0.30 | $0.30 | $0.30 | $0.30 | |||||
Common share equivalents | |||||||||
Schedule of Common Stock Issued and Outstanding [Line Items] | |||||||||
Common Stock, Dividends, Per Share, Cash Paid | $0.30 | $0.30 | $0.30 | $0.30 | |||||
Warrant [Member] | |||||||||
Schedule of Common Stock Issued and Outstanding [Line Items] | |||||||||
Volatility | 30.00% | ||||||||
Validus UPS Ltd [Member] | Flagstone Reinsurance Holdings Sa | |||||||||
Schedule of Common Stock Issued and Outstanding [Line Items] | |||||||||
Treasury Stock, Shares | 1,638,875 |
Retirement_and_pension_plans_S
Retirement and pension plans (Summary of assumptions used in calculations) (Details) (Defined benefit plans) | 12 Months Ended |
Dec. 31, 2014 | |
Defined benefit plans | |
Assumptions used to determine net periodic pension expense: | |
Discount rate | 3.00% |
Increase in compensation levels rate | 5.00% |
Assumptions used to determine benefit obligations: | |
Discount rate | 2.75% |
Increase in compensation levels rate | 5.00% |
Retirement_and_pension_plans_C
Retirement and pension plans (Change in projected benefit obligation, plan assets, and funded status of plan) (Details) (Defined benefit plans, USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 |
Defined benefit plans | ||
Change in benefit obligation: | ||
Projected benefit obligation, beginning of period | $20,885 | |
Service cost | 295 | 295 |
Interest cost | 145 | 145 |
Actuarial losses | 1 | |
Benefit payments | -24 | |
Settlements | -4,809 | |
Projected benefit obligation, end of period | 16,493 | 16,493 |
Change in plan assets: | ||
Fair value of plan assets, beginning of period | 0 | |
Employer contributions | 6,495 | |
Benefit payments | -24 | |
Settlements | -6,471 | |
Fair value of plan assets, end of period | 0 | 0 |
Funded status, end of period | -16,493 | -16,493 |
Amounts recognized in the balance sheet: | ||
Current liabilities | -559 | -559 |
Noncurrent liabilities | -15,934 | -15,934 |
Net amount recognized | -16,493 | -16,493 |
Amounts recognized in accumulated other comprehensive (loss) income consist of: | ||
Net loss | 4,505 | 4,505 |
Prior service credit | -4 | -4 |
Net amount recognized | 4,501 | 4,501 |
Summary of projected benefit obligation, accumulated benefit obligation and fair value of plan assets: | ||
Projected benefit obligation | 16,493 | 16,493 |
Accumulated benefit obligation | 11,971 | 11,971 |
Fair value of plan assets | $0 | $0 |
Retirement_and_pension_plans_C1
Retirement and pension plans (Components of net periodic pension expense) (Details) (Defined benefit plans, USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 |
Defined benefit plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $295 | $295 |
Interest cost | 145 | 145 |
Amortization of prior service cost | -1 | |
Amortization of net loss | 79 | |
Net periodic benefit cost | 518 | |
Settlement loss | 1,322 | |
Net periodic pension expense | $1,840 |
Retirement_and_pension_plans_O
Retirement and pension plans (Other changes recognized in other comprehensive income) (Details) (Defined benefit plans, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Defined benefit plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Net loss | $1,961 |
Amortization of loss | -317 |
Amortization of prior service cost | 2 |
Settlement loss | -1,322 |
Total recognized in other comprehensive (loss) income | 324 |
Total recognized in net pension expense and other comprehensive (loss) income (before tax effects) | $2,164 |
Retirement_and_pension_plans_E
Retirement and pension plans (Estimated future benefit payments, fiscal year maturity) (Details) (Defined benefit plans, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Defined benefit plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2015 | $559 |
2016 | 93 |
2017 | 6,921 |
2018 | 85 |
2019 | 2,160 |
2020-2024 | 5,228 |
Total benefit payments required | 15,046 |
Employer benefit payments/settlements for current year | $4,834 |
Retirement_and_pension_plans_D
Retirement and pension plans (Defined contribution plans) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined contribution plan | |||
Defined contribution retirement plan expense | $10,606 | $7,621 | $9,233 |
Stock_plans_Options_activity_D
Stock plans (Options activity) (Details) (USD $) | 12 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Options Activities | |||||||
Options outstanding, beginning balance | 1,572,713 | 1,823,947 | 2,263,012 | ||||
Options regranted (modified) | 1,833,414 | ||||||
Options exercised | -412,656 | -351,509 | -439,065 | ||||
Options cancelled (modified) | -1,733,139 | ||||||
Options outstanding, ending balance | 1,160,057 | 1,572,713 | 1,823,947 | ||||
Options exercisable | 1,160,057 | 1,572,713 | 1,823,947 | 2,263,012 | |||
Weighted Average Grant Date Fair Value | |||||||
Weighted average grant date fair value, beginning balance | $6.66 | $6.52 | $6.69 | ||||
Weighted average grant date fair value, options regranted (modified) | $6.76 | ||||||
Weighted average grant date fair value, options exercised | $5.36 | $5.94 | $7.44 | ||||
Weighted average grant date fair value, options cancelled (modified) | $6.76 | ||||||
Weighted average grant date fair value, ending balance | $7.12 | $6.66 | $6.52 | ||||
Weighted average grant date fair value, options exercisable | $7.12 | $6.66 | $6.52 | $6.69 | |||
Weighted Average Grant Date Exercise Price | |||||||
Weighted average grant date exercise price, beginning balance | $18.88 | $20.69 | $20.12 | ||||
Weighted average grant date exercise price, options regranted (modified) | $19.02 | ||||||
Weighted average grant date exercise price, options exercised | $22.07 | $22.91 | $17.73 | ||||
Weighted average grant date exercise price, options cancelled (modified) | $20.12 | ||||||
Weighted average grant date exercise price, ending balance | $17.74 | $18.88 | $20.69 | ||||
Weighted average grant date exercise price, options exercisable | $17.74 | $18.88 | $20.69 | $20.12 | |||
Total intrinsic value | $7,459 | [1] | $4,963 | [1] | $6,574 | [1] | |
Company proceeds received | $9,107 | $8,052 | $7,785 | ||||
[1] | The total intrinsic value in the tables above represent the amount by which the market price of the Company's common stock is greater than the option strike price multiplied by the number of options exercised during the year. |
Stock_plans_Other_awards_activ
Stock plans (Other awards activity) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock [Member] | |||
Activities | |||
Beginning balance | 2,684,745 | 2,170,547 | 3,003,547 |
Granted | 1,051,348 | 1,594,672 | 921,506 |
Vested | -797,446 | -969,562 | -1,719,855 |
Forfeited | -79,936 | -110,912 | -34,651 |
Ending balance | 2,858,711 | 2,684,745 | 2,170,547 |
Share Based Payment Award Other Than Options Nonvested Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, beginning balance | $33.74 | $29.24 | $25.77 |
Weighted average grant date fair value, granted | $37.81 | $36.07 | $31.47 |
Weighted average grant date fair value, vested | $31.44 | $28.12 | $24.40 |
Weighted average grant date fair value, forfeited | $36.09 | $28.34 | $27.85 |
Weighted average grant date fair value, ending balance | $35.81 | $33.74 | $29.24 |
Restricted share units [Member] | |||
Activities | |||
Beginning balance | 66,518 | 47,238 | 53,312 |
Granted | 53,025 | 36,635 | 16,633 |
Vested | -18,325 | -21,814 | -22,818 |
Issued in lieu of cash dividends | 2,266 | 4,459 | 1,504 |
Forfeited | -1,393 | ||
Ending balance | 103,484 | 66,518 | 47,238 |
Share Based Payment Award Other Than Options Nonvested Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, beginning balance | $33.74 | $29.61 | $27.60 |
Weighted average grant date fair value, granted | $38.10 | $36.11 | $31.77 |
Weighted average grant date fair value, vested | $30.71 | $28.17 | $26.49 |
Weighted average grant date fair value, issued in lieu of cash dividends | $35 | $30.70 | $28.66 |
Weighted average grant date fair value, forfeited | $28.57 | ||
Weighted average grant date fair value, ending balance | $36.54 | $33.74 | $29.61 |
Performance Shares [Member] | |||
Activities | |||
Beginning balance | 101,820 | 220,845 | 279,019 |
Granted | 52,639 | 38,386 | 41,128 |
Vested | -32,746 | -39,094 | |
Forfeited | -18,701 | -99,302 | |
Conversion adjustment | -15,344 | -99,616 | |
Ending balance | 106,369 | 101,820 | 220,845 |
Share Based Payment Award Other Than Options Nonvested Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, beginning balance | $33.56 | $31.81 | $30.77 |
Weighted average grant date fair value, granted | $37.33 | $36.11 | $31.38 |
Weighted average grant date fair value, vested | $32.62 | $28.70 | |
Weighted average grant date fair value, forfeited | $31.05 | $28.70 | |
Weighted average grant date fair value, conversion adjustment | $31.38 | $33.05 | |
Weighted average grant date fair value, ending balance | $36.03 | $33.56 | $31.81 |
Stock_plans_Components_of_shar
Stock plans (Components of share compensation expenses) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Total share compensation expenses | |||||||||||||||
Share compensation expenses | $8,821 | $8,764 | $8,341 | $7,147 | $8,147 | $10,527 | $6,638 | $2,318 | $7,126 | $7,345 | $6,800 | $5,438 | $33,073 | $27,630 | $26,709 |
Options [Member] | |||||||||||||||
Total share compensation expenses | |||||||||||||||
Share compensation expenses | 0 | 0 | 142 | ||||||||||||
Restricted share awards [Member] | |||||||||||||||
Total share compensation expenses | |||||||||||||||
Share compensation expenses | 31,335 | 27,750 | 25,145 | ||||||||||||
Restricted share units [Member] | |||||||||||||||
Total share compensation expenses | |||||||||||||||
Share compensation expenses | 876 | 585 | 499 | ||||||||||||
Performance Shares [Member] | |||||||||||||||
Total share compensation expenses | |||||||||||||||
Share compensation expenses | $862 | ($705) | $923 |
Stock_plans_Narrative_Details
Stock plans (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock plans (other details) | |||||||||||||||
Number of shares reserved for issuance under the LTIP and STIP | 13,126,896 | 13,126,896 | |||||||||||||
Remaining number of shares reserved for issuance | 903,292 | 903,292 | |||||||||||||
Share compensation expenses | $8,821 | $8,764 | $8,341 | $7,147 | $8,147 | $10,527 | $6,638 | $2,318 | $7,126 | $7,345 | $6,800 | $5,438 | $33,073 | $27,630 | $26,709 |
Intrinsic value of options outstanding | 27,573 | 27,573 | |||||||||||||
Intrinsic value of options exercisable | 27,573 | 27,573 | |||||||||||||
Tax benefit from share compensation expenses | 1,610 | 1,423 | 1,380 | ||||||||||||
Net windfall taxes on exercise of stock options | 3,513 | ||||||||||||||
Options [Member] | |||||||||||||||
Stock plans (other details) | |||||||||||||||
Life of options | 10 years | ||||||||||||||
Share compensation expenses | 0 | 0 | 142 | ||||||||||||
Restricted share awards [Member] | |||||||||||||||
Stock plans (other details) | |||||||||||||||
Share compensation expenses | 31,335 | 27,750 | 25,145 | ||||||||||||
Unrecognized share compensation expenses | 74,670 | 69,219 | 43,952 | 74,670 | 69,219 | 43,952 | |||||||||
Weighted average period of recognizing share based compensation expenses | 2 years 8 months 12 days | 3 years 2 months 12 days | 2 years 7 months 6 days | ||||||||||||
Restricted share units [Member] | |||||||||||||||
Stock plans (other details) | |||||||||||||||
Share compensation expenses | 876 | 585 | 499 | ||||||||||||
Unrecognized share compensation expenses | 2,774 | 1,678 | 978 | 2,774 | 1,678 | 978 | |||||||||
Weighted average period of recognizing share based compensation expenses | 3 years 1 month 6 days | 3 years 4 months 24 days | 2 years 7 months 6 days | ||||||||||||
Performance Shares [Member] | |||||||||||||||
Stock plans (other details) | |||||||||||||||
Share compensation expenses | 862 | -705 | 923 | ||||||||||||
Unrecognized share compensation expenses | $2,232 | $1,642 | $3,328 | $2,232 | $1,642 | $3,328 | |||||||||
Weighted average period of recognizing share based compensation expenses | 2 years 1 month 6 days | 2 years 0 months 4 days | 1 year 8 months 12 days | ||||||||||||
Performance Share Awards Performance Period | P3Y | ||||||||||||||
Special dividend declared and paid [Member] | |||||||||||||||
Stock plans (other details) | |||||||||||||||
Common Stock, Dividends, Per Share, Cash Paid | $2 |
Debt_and_financing_arrangement2
Debt and financing arrangements (Schedule of finance structure) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Schedule of financing structure and finance expenses | ||||
Debt instrument, commitment | $849,477 | $851,616 | ||
Debt instrument, issued and outstanding | 789,277 | 791,416 | ||
Debt instrument, drawn | 786,583 | 788,614 | ||
Credit facility, commitment | 1,605,000 | 1,599,800 | ||
Letters of credit issued and outstanding | 561,684 | 751,250 | ||
Debt instrument and line of credit facility amount committed, total | 2,454,477 | 2,451,416 | ||
Debt instrument and line of credit facility outstanding, total | 1,350,961 | 1,542,666 | ||
$400,000 Four-year unsecured credit facility [Member] | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 400,000 | 400,000 | ||
Letters of credit issued and outstanding | 0 | [1] | 0 | [1] |
$525,000 Four-year syndicated secured credit facility [Member] | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 525,000 | 525,000 | ||
Letters of credit issued and outstanding | 276,455 | [1] | 358,567 | [1] |
$200,000 secured bi-lateral letter of credit facility | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 200,000 | 200,000 | ||
Letters of credit issued and outstanding | 15,649 | [1] | 16,726 | [1] |
Talbot FAL Facility | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 25,000 | 25,000 | ||
Letters of credit issued and outstanding | 25,000 | [1] | 25,000 | [1] |
PaCRe Senior secured letter of credit facility | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 10,000 | 10,000 | ||
Letters of credit issued and outstanding | 294 | [1] | 294 | [1] |
AlphaCat Re secured letter of credit facility | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 30,000 | 24,800 | ||
Letters of credit issued and outstanding | 30,000 | [1] | 24,800 | [1] |
IPC bi-lateral facility | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 40,000 | 40,000 | ||
Letters of credit issued and outstanding | 15,897 | [1] | 20,177 | [1] |
$375,000 Flagstone bi-lateral facility | ||||
Schedule of financing structure and finance expenses | ||||
Credit facility, commitment | 375,000 | 375,000 | ||
Letters of credit issued and outstanding | 198,389 | [1] | 305,686 | [1] |
2010 Senior Notes due 2040 [Member] | ||||
Schedule of financing structure and finance expenses | ||||
Debt instrument, commitment | 250,000 | 250,000 | ||
Debt instrument, issued and outstanding | 250,000 | [1] | 250,000 | [1] |
Debt instrument, drawn | 247,306 | 247,198 | ||
Junior Subordinated Deferrable Debentures[Member] | ||||
Schedule of financing structure and finance expenses | ||||
Debt instrument, commitment | 599,477 | 601,616 | ||
Debt instrument, issued and outstanding | 539,277 | [1] | 541,416 | [1] |
Debt instrument, drawn | 539,277 | 541,416 | ||
2006 Junior Subordinated Deferrable Debentures [Member] | ||||
Schedule of financing structure and finance expenses | ||||
Debt instrument, commitment | 150,000 | 150,000 | ||
Debt instrument, issued and outstanding | 150,000 | [1] | 150,000 | [1] |
Debt instrument, drawn | 150,000 | 150,000 | ||
2007 Junior Subordinated Deferrable Debentures [Member] | ||||
Schedule of financing structure and finance expenses | ||||
Debt instrument, commitment | 200,000 | 200,000 | ||
Debt instrument, issued and outstanding | 139,800 | [1] | 139,800 | [1] |
Debt instrument, drawn | 139,800 | 139,800 | ||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes [Member] | ||||
Schedule of financing structure and finance expenses | ||||
Debt instrument, commitment | 135,727 | 137,866 | ||
Debt instrument, issued and outstanding | 135,727 | [1] | 137,866 | [1] |
Debt instrument, drawn | 135,727 | 137,866 | ||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes [Member] | ||||
Schedule of financing structure and finance expenses | ||||
Debt instrument, commitment | 113,750 | 113,750 | ||
Debt instrument, issued and outstanding | 113,750 | [1] | 113,750 | [1] |
Debt instrument, drawn | $113,750 | $113,750 | ||
[1] | Indicates utilization of commitment amount, not necessarily drawn borrowings |
Debt_and_financing_arrangement3
Debt and financing arrangements (Summary of notes and debentures) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $849,477 | $851,616 | |
2006 Junior Subordinated Deferrable Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 150,000 | 150,000 | |
Flagstone 2006 Junior Subordinated Deferrable Interest Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 135,727 | 137,866 | |
2007 Junior Subordinated Deferrable Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 200,000 | 200,000 | |
2010 Senior Notes due 2040 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 250,000 | 250,000 | |
Debt Information At Issuance [Member] | 2006 Junior Subordinated Deferrable Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 15-Jun-06 | ||
Debt Instrument, Face Amount | 150,000 | ||
Debt Instrument, Maturity Date | 15-Jun-36 | ||
Debt Instrument, Interest Rate, Stated Percentage | 9.07% | [1] | |
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Information At Issuance [Member] | Flagstone 2006 Junior Subordinated Deferrable Interest Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 23-Aug-06 | ||
Debt Instrument, Face Amount | 135,727 | ||
Debt Instrument, Maturity Date | 15-Sep-36 | ||
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Information At Issuance [Member] | Flagstone 2006 Junior Subordinated Deferrable Interest Notes [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.54% | [2] | |
Debt Information At Issuance [Member] | 2007 Junior Subordinated Deferrable Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 21-Jun-07 | ||
Debt Instrument, Face Amount | 200,000 | ||
Debt Instrument, Maturity Date | 15-Jun-37 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.48% | [1] | |
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Information At Issuance [Member] | Flagstone 2007 Due July 30 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 8-Jun-07 | ||
Debt Instrument, Face Amount | 88,750 | ||
Debt Instrument, Maturity Date | 30-Jul-37 | ||
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Information At Issuance [Member] | Flagstone 2007 Due July 30 2037 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.00% | [2] | |
Debt Information At Issuance [Member] | Flagstone 2007 Debt Due September 15 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 20-Sep-07 | ||
Debt Instrument, Face Amount | 25,000 | ||
Debt Instrument, Maturity Date | 15-Sep-37 | ||
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Information At Issuance [Member] | Flagstone 2007 Debt Due September 15 2037 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.10% | [2] | |
Debt Information At Issuance [Member] | 2010 Senior Notes due 2040 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 26-Jan-10 | ||
Debt Instrument, Face Amount | 250,000 | ||
Debt Instrument, Maturity Date | 26-Jan-40 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.88% | [1] | |
Debt Instrument, Frequency of Periodic Payment | Semi-annually in arrears | ||
Debt Outstanding [Member] | 2006 Junior Subordinated Deferrable Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 15-Jun-06 | ||
Debt Instrument, Face Amount | 150,000 | ||
Debt Instrument, Maturity Date | 15-Jun-36 | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.83% | [3] | |
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Outstanding [Member] | Flagstone 2006 Junior Subordinated Deferrable Interest Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 23-Aug-06 | ||
Debt Instrument, Maturity Date | 15-Sep-36 | ||
Debt Instrument, Interest Rate, Effective Percentage | 6.46% | [3] | |
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Outstanding [Member] | 2007 Junior Subordinated Deferrable Debentures [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 21-Jun-07 | ||
Debt Instrument, Face Amount | 200,000 | ||
Debt Instrument, Maturity Date | 15-Jun-37 | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.18% | [3] | |
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Outstanding [Member] | Flagstone 2007 Due July 30 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 8-Jun-07 | ||
Debt Instrument, Face Amount | 88,750 | ||
Debt Instrument, Maturity Date | 30-Jul-37 | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.90% | [3] | |
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Outstanding [Member] | Flagstone 2007 Debt Due September 15 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 20-Sep-07 | ||
Debt Instrument, Face Amount | 25,000 | ||
Debt Instrument, Maturity Date | 15-Sep-37 | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.98% | [3] | |
Debt Instrument, Frequency of Periodic Payment | Quarterly | ||
Debt Outstanding [Member] | 2010 Senior Notes due 2040 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Issuance Date | 26-Jan-10 | ||
Debt Instrument, Face Amount | $250,000 | ||
Debt Instrument, Maturity Date | 26-Jan-40 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.88% | [1] | |
Debt Instrument, Frequency of Periodic Payment | Semi-annually in arrears | ||
[1] | Fixed interest rate. | ||
[2] | Variable interest rate is the three-month LIBOR, reset quarterly, plus spread as noted in the table. | ||
[3] | Interest rate has been fixed as a result of interest rate swap contracts entered into by the Company. |
Debt_and_financing_arrangement4
Debt and financing arrangements (Components of finance expenses) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Components of financial expenses | ||||||||||||||||||
Finance expenses | $16,474 | $15,354 | $16,126 | $15,900 | $16,925 | $15,317 | $17,566 | $14,369 | $14,510 | $9,362 | $13,706 | $16,279 | $63,854 | $64,177 | $53,857 | |||
Credit Facilities [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | 5,516 | 6,544 | 11,999 | |||||||||||||||
Bank charges [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | 427 | 507 | 269 | |||||||||||||||
AlphaCat ILS Fund Fees [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | 3,530 | [1] | 3,866 | [1] | 2,432 | [1] | ||||||||||||
Talbot FAL Facility | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | -346 | 182 | 97 | |||||||||||||||
2006 Junior Subordinated Deferrable Debentures [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | 8,868 | 8,868 | 6,964 | |||||||||||||||
2007 Junior Subordinated Deferrable Debentures [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | 7,341 | 7,341 | 8,922 | |||||||||||||||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | 9,001 | 8,259 | 459 | |||||||||||||||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | 7,129 | 6,222 | 327 | |||||||||||||||
2010 Senior Notes due 2040 [Member] | ||||||||||||||||||
Components of financial expenses | ||||||||||||||||||
Finance expenses | $22,388 | $22,388 | $22,388 | |||||||||||||||
[1] | Includes finance expenses incurred by AlphaCat Managers, Ltd. in relation to fund raising for the AlphaCat ILS funds, AlphaCat 2015, AlphaCat 2014 and AlphaCat 2013. |
Debt_and_financing_arrangement5
Debt and financing arrangements (Narrative) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Debt and financing arrangements [Line Items] | ||||
Future repayments of debt | $789,277 | $791,416 | ||
Credit Facilities | ||||
Credit facility, commitment | 1,605,000 | 1,599,800 | ||
Letters of credit issued and outstanding | 561,684 | 751,250 | ||
Debentures payable | 539,277 | 541,416 | ||
Credit Facilities | ||||
Credit Facilities | ||||
Percent of consolidated net income quarterly increase under covenant | 50.00% | |||
Percent of any net proceeds from issuance of common shares | 50.00% | |||
Ratio consolidated total debt to net worth under covenant | 0.35:1.00 | |||
Minimum level of consolidated net worth | 2,600,000 | |||
Four-year unsecured credit facility [Member] | ||||
Credit Facilities | ||||
Letter of credit facility period | 4 years | |||
Line of credit facility initiation date | 9-Mar-12 | |||
Credit facility, commitment | 400,000 | 400,000 | ||
Letters of credit issued and outstanding | 0 | [1] | 0 | [1] |
Aggregate commitments, maximum | 500,000 | |||
Four-year syndicated secured credit facility [Member] | ||||
Credit Facilities | ||||
Letter of credit facility period | 4 years | |||
Line of credit facility initiation date | 9-Mar-12 | |||
Credit facility, commitment | 525,000 | 525,000 | ||
Letters of credit issued and outstanding | 276,455 | [1] | 358,567 | [1] |
Aggregate commitments, maximum | 700,000 | |||
Talbot FAL Facility | ||||
Credit Facilities | ||||
Credit facility, commitment | 25,000 | 25,000 | ||
Letters of credit issued and outstanding | 25,000 | [1] | 25,000 | [1] |
Percent of consolidated net income quarterly increase under covenant | 50.00% | |||
Percent of any net proceeds from issuance of common shares | 50.00% | |||
Ratio consolidated total debt to net worth under covenant | 0.35:1.00 | |||
Minimum Level of Funds at Lloyds | 300,000 | |||
Minimum level of consolidated net worth | 3,225,727 | |||
IPC bi-lateral facility | ||||
Credit Facilities | ||||
Credit facility, commitment | 40,000 | 40,000 | ||
Letters of credit issued and outstanding | 15,897 | [1] | 20,177 | [1] |
$200,000 secured bi-lateral letter of credit facility | ||||
Credit Facilities | ||||
Credit facility, commitment | 200,000 | 200,000 | ||
Letters of credit issued and outstanding | 15,649 | [1] | 16,726 | [1] |
PaCRe Senior secured letter of credit facility | ||||
Credit Facilities | ||||
Credit facility, commitment | 10,000 | 10,000 | ||
Letters of credit issued and outstanding | 294 | [1] | 294 | [1] |
AlphaCat Re secured letter of credit facility | ||||
Credit Facilities | ||||
Credit facility, commitment | 30,000 | 24,800 | ||
Letters of credit issued and outstanding | 30,000 | [1] | 24,800 | [1] |
$375,000 Flagstone bi-lateral facility | ||||
Credit Facilities | ||||
Credit facility, commitment | 375,000 | 375,000 | ||
Letters of credit issued and outstanding | 198,389 | [1] | 305,686 | [1] |
2010 Senior Notes due 2040 [Member] | ||||
Debt and financing arrangements [Line Items] | ||||
Future repayments of debt | 250,000 | [1] | 250,000 | [1] |
Credit Facilities | ||||
Debentures payable | 250,000 | |||
Junior Subordinated Deferrable Debentures[Member] | ||||
Debt and financing arrangements [Line Items] | ||||
Future repayments of debt | 539,277 | [1] | 541,416 | [1] |
Credit Facilities | ||||
Debentures payable | $539,277 | |||
Debt Instrument Redemption Period Duration | 5 years | |||
Minimum | 2010 Senior Notes due 2040 [Member] | ||||
Debt and financing arrangements [Line Items] | ||||
Debt Instrument Redemption Required Notice Period | 30 days | |||
Maximum | 2010 Senior Notes due 2040 [Member] | ||||
Debt and financing arrangements [Line Items] | ||||
Debt Instrument Redemption Required Notice Period | 60 days | |||
[1] | Indicates utilization of commitment amount, not necessarily drawn borrowings |
Income_taxes_Components_of_tax
Income taxes (Components of tax expense) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosures [Line Items] | |||||||||||||||
Net income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | $537,702 | $597,218 | $382,539 | ||||||||||||
Components of income tax expense: | |||||||||||||||
U.S. | 21,257 | 0 | -54 | ||||||||||||
Non-U.S. | 26,179 | 1,781 | 1,382 | ||||||||||||
Total current income tax expense | 47,436 | 1,781 | 1,328 | ||||||||||||
U.S. | -24,998 | 880 | 134 | ||||||||||||
Non-U.S. | -22,283 | -2,278 | 1,039 | ||||||||||||
Total deferred income tax (benefit) expense | -47,281 | -1,398 | 1,173 | ||||||||||||
U.S. | -3,741 | 880 | 80 | ||||||||||||
Non-U.S. | 3,896 | -497 | 2,421 | ||||||||||||
Total income tax expense | -243 | -953 | 1,391 | -40 | 603 | 5 | 93 | -318 | 615 | 1,343 | 404 | 139 | 155 | 383 | 2,501 |
Bermuda | |||||||||||||||
Income Tax Disclosures [Line Items] | |||||||||||||||
Net income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 496,840 | 601,583 | 369,675 | ||||||||||||
United Kingdom | |||||||||||||||
Income Tax Disclosures [Line Items] | |||||||||||||||
Net income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 10,824 | 4,668 | 10,277 | ||||||||||||
United States | |||||||||||||||
Income Tax Disclosures [Line Items] | |||||||||||||||
Net income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | -11,752 | -464 | 3,075 | ||||||||||||
Switzerland | |||||||||||||||
Income Tax Disclosures [Line Items] | |||||||||||||||
Net income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 9,941 | -225 | -3,381 | ||||||||||||
Canada | |||||||||||||||
Income Tax Disclosures [Line Items] | |||||||||||||||
Net income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | 2,773 | 57 | 391 | ||||||||||||
Other tax jurisdictions | |||||||||||||||
Income Tax Disclosures [Line Items] | |||||||||||||||
Net income before taxes, income from operating affiliates and (income) attributable to operating affiliate investors | $29,076 | ($8,401) | $2,502 |
Income_taxes_Reconciliation_of
Income taxes (Reconciliation of effective tax rate) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||||||||||||||
Bermuda tax rate | 0.00% | 0.00% | 0.00% | ||||||||||||
Tax charge by jurisdiction | |||||||||||||||
Expected tax expense at Bermuda statutory rate of 0% | $0 | $0 | $0 | ||||||||||||
Foreign tax rate differential | 7,993 | -2,399 | 4,882 | ||||||||||||
Change in valuation allowance | -7,284 | 4,967 | 0 | ||||||||||||
Tax exempt income and expenses not deductible | -6,055 | -263 | 0 | ||||||||||||
Share compensation tax windfall | 3,513 | 0 | 0 | ||||||||||||
Impact of enacted changes in tax rates | 250 | -407 | -1,611 | ||||||||||||
Prior years tax adjustments | 666 | -461 | -770 | ||||||||||||
Other | 1,072 | -1,054 | 0 | ||||||||||||
Total income tax expense | ($243) | ($953) | $1,391 | ($40) | $603 | $5 | $93 | ($318) | $615 | $1,343 | $404 | $139 | $155 | $383 | $2,501 |
Income_taxes_Components_of_net
Income taxes (Components of net deferred tax liability) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax asset | ||
Tax losses carried forward | $158,789 | $185,955 |
Deferred compensation | 5,527 | 6,119 |
Tax credits carried forward | 4,016 | 0 |
Discounting of loss reserves | 13,721 | 0 |
Risk premium reserve | 3,842 | 0 |
Unearned premiums reserve | 8,505 | 0 |
Pension | 5,864 | 0 |
Other | 6,023 | 128 |
Deferred tax asset, gross of valuation allowance | 206,287 | 192,202 |
Valuation allowance | 158,099 | 177,656 |
Net deferred tax asset | 48,188 | 14,546 |
Deferred tax liability | ||
Underwriting profit taxable in future periods | 636 | 28,945 |
Deferred acquisition costs | 3,348 | 0 |
Intangibles | 8,638 | 0 |
Unrealized appreciation on investments | 9,101 | 0 |
Properties and fixed assets | 4,993 | 3,179 |
Other | 3,192 | 1,508 |
Deferred tax liability | 29,908 | 33,632 |
Net deferred tax asset (liability) | $18,280 | ($19,086) |
Income_taxes_Loss_carryforward
Income taxes (Loss carryforwards) (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Operating and Capital Loss Carryforwards [Line Items] | |
Estimated Period For Completion of Income Tax Examinations | 36 months |
United Kingdom | |
Operating and Capital Loss Carryforwards [Line Items] | |
Loss Carryforwards | 547 |
Loss Carryforwards, Tax Effect | 118 |
United States | |
Operating and Capital Loss Carryforwards [Line Items] | |
Loss Carryforwards | 6,634 |
Loss Carryforwards, Tax Effect | 2,322 |
Switzerland | |
Operating and Capital Loss Carryforwards [Line Items] | |
Loss Carryforwards | 267,420 |
Loss Carryforwards, Tax Effect | 56,426 |
Luxembourg Tax Jurisdiction [Member] | |
Operating and Capital Loss Carryforwards [Line Items] | |
Loss Carryforwards | 340,245 |
Loss Carryforwards, Tax Effect | 99,352 |
Singapore Tax Jurisdiction [Member] | |
Operating and Capital Loss Carryforwards [Line Items] | |
Loss Carryforwards | 5,723 |
Loss Carryforwards, Tax Effect | 572 |
Accumulated_other_comprehensiv2
Accumulated other comprehensive (loss) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, net of tax, at end of year | $4,046,553 | $4,201,751 | $4,455,107 |
Accumulated other comprehensive (loss) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, net of tax, at beginning of year | -617 | -2,953 | -6,601 |
Amounts reclassified to retained earnings | 0 | 4,290 | 0 |
Net current period other comprehensive income (loss), net of tax | -7,939 | -1,954 | 3,648 |
Balance, net of tax, at end of year | -8,556 | -617 | -2,953 |
Foreign currency items | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, net of tax, at beginning of year | -617 | -2,953 | -6,601 |
Amounts reclassified to retained earnings | 4,290 | ||
Net current period other comprehensive income (loss), net of tax | -7,501 | -1,954 | 3,648 |
Balance, net of tax, at end of year | -8,118 | -617 | -2,953 |
Decrease in minimum pension liability | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, net of tax, at beginning of year | 0 | 0 | 0 |
Amounts reclassified to retained earnings | 0 | ||
Net current period other comprehensive income (loss), net of tax | -210 | 0 | 0 |
Balance, net of tax, at end of year | -210 | 0 | 0 |
Gains and losses on cash flow hedge | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, net of tax, at beginning of year | 0 | 0 | 0 |
Amounts reclassified to retained earnings | 0 | ||
Net current period other comprehensive income (loss), net of tax | -228 | 0 | 0 |
Balance, net of tax, at end of year | ($228) | $0 | $0 |
Commitments_and_contingencies_1
Commitments and contingencies (Investment portfolio) (Details) (Concentrations of credit risk [Member]) | 12 Months Ended |
Dec. 31, 2014 | |
Investment portfolio excluding government and agency securities [Member] | |
Concentrations Of Credit Risk [Abstract] | |
Maximum aggregate exposure to single issuer, allowed | 3.50% |
Aggregate exposure to single issuer, actual | 1.00% |
Bank Loan Portfolio [Member] | |
Concentrations Of Credit Risk [Abstract] | |
Ratio of Level 3 investments to total investments (percent) | 6.10% |
Investment portfolio excluding bank loans [Member] | |
Concentrations Of Credit Risk [Abstract] | |
Allowable percentage holding in downgraded investments | 35.00% |
Holding in aggregate market value permitted with written pre-authorization | 10.00% |
Percent of investment portfolio with a credit rating below the minimum required credit rating of Baa3/BBB- | 2.80% |
Commitments_and_contingencies_2
Commitments and contingencies (Significant brokers) (Details) (Customer Concentration Risk [Member], Gross Premiums Written [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Aon Benfield Group Ltd [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 20.10% | 27.70% | 24.20% |
Marsh & McLennan [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 28.50% | 21.80% | 30.10% |
Willis Group Holdings Ltd [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 18.00% | 19.40% | 16.40% |
Commitments_and_contingencies_3
Commitments and contingencies (Future minimum lease payments) (Details) (Office Space And Office Equipment [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Office Space And Office Equipment [Member] | |||
Future minimum lease commitments are as follows: | |||
2015 | $11,094 | ||
2016 | 8,616 | ||
2017 | 7,514 | ||
2018 | 7,350 | ||
2019 | 7,130 | ||
2020 and thereafter | 23,784 | ||
Total future minimume lease payments | 65,488 | ||
Total rent expense with respect to operating leases: | |||
Rent expense | $10,540 | $10,214 | $7,670 |
Commitments_and_contingencies_4
Commitments and contingencies (Lloyd's syndicate) (Details) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | USD ($) | USD ($) | Lloyd's Syndicate 1183 [Member] | Lloyd's Syndicate 1183 [Member] | 2015 underwriting year | 2014 underwriting year | 2013 underwriting year |
USD ($) | GBP (£) | Lloyd's Syndicate 1183 [Member] | Lloyd's Syndicate 1183 [Member] | Lloyd's Syndicate 1183 [Member] | |||
USD ($) | USD ($) | USD ($) | |||||
Funds at Lloyd's and Lloyd's Central Fund | |||||||
Maximum premium levies assessable, percent | 3.00% | 3.00% | |||||
Estimated underwriting capacity | £ 625,000 | ||||||
Exchange rate | £1 equals $1.5578 | £1 equals $1.5578 | |||||
Maximum premium levies assessable, amount | 29,209 | ||||||
Components Of Required Capital [Abstract] | |||||||
Talbot FAL facility | 1,605,000 | 1,599,800 | 25,000 | 25,000 | 25,000 | ||
Group funds | 570,100 | 450,000 | 403,700 | ||||
Cash, investments and letters of credit amount | $595,100 | $475,000 | $428,700 |
Commitments_and_contingencies_5
Commitments and contingencies (Investment commitments) (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Nov. 07, 2014 | Dec. 29, 2014 | Oct. 02, 2014 | Dec. 31, 2013 |
Aquiline Capital Partners II GP Offshore Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction Capital Commitment | $50,000 | ||||
Related Party Transaction Remaining Commitment | 7,500 | 17,890 | |||
Fixed maturities commitment [Member] | |||||
Related Party Transaction [Line Items] | |||||
Other Commitment | 7,539 | ||||
Investment commitment [Member] | |||||
Related Party Transaction [Line Items] | |||||
Contractual Obligation | 153,000 | 30,000 | |||
Other Commitment | 83,712 | 5,045 | |||
Aquiline Financial Services Fund III LP [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction Capital Commitment | 100,000 | ||||
Related Party Transaction Remaining Commitment | 100,000 | ||||
AlphaCat 2015 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction Capital Commitment | 28,000 | ||||
Related Party Transaction Remaining Commitment | 2,400 | ||||
AlphaCat ILS Funds | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction Capital Commitment | 20,000 | ||||
Related Party Transaction Remaining Commitment | 8,000 | ||||
Western World Insurance Group, Inc | Aquiline Capital Partners II GP Offshore Ltd [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction Capital Commitment | 10,000 | ||||
Related Party Transaction Remaining Commitment | $1,499 |
Commitments_and_contingencies_6
Commitments and contingencies (Other details) (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Loss Contingencies [Line Items] | |
Estimated Period For Completion of Income Tax Examinations | 36 months |
Western World Insurance Group, Inc | |
Loss Contingencies [Line Items] | |
Loss Contingency, Estimate of Possible Loss | 3,412 |
Related_party_transactions_Det
Related party transactions (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 02, 2014 | Dec. 20, 2011 | Nov. 07, 2014 | |
Employee | ||||||
Aquiline Capital Partners LLC [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Shares owned by related party | 523,180 | |||||
Warrants to purchase shares | 2,756,088 | |||||
Related Parties Number Of Employees | 2 | |||||
Group Ark Insurance Holdings Ltd [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Gross premiums written | 2,073,000 | $2,899,000 | $7,582,000 | |||
Premiums receivable | 335,000 | 238,000 | ||||
Reinsurance premiums ceded | 126,000 | 85,000 | 90,000 | |||
Related Party Transaction Reinsurance Balances Payable | 4,000 | 4,000 | ||||
Related Party Transaction Loss Reserves Recoverable | 1,063,000 | 3,698,000 | ||||
Earned premium adjustments | 1,982,000 | 2,911,000 | 7,625,000 | |||
Conning Inc [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts payable and accrued expenses | 515,000 | 283,000 | ||||
Investment management fees | 1,125,000 | 500,000 | 809,000 | |||
Aquiline Capital Partners II GP Offshore Ltd [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts payable and accrued expenses | 0 | 0 | ||||
Percentage of interest assumed | 100.00% | |||||
Related Party Transaction Capital Commitment | 50,000,000 | |||||
Partnership fees incurred | 342,000 | 1,236,000 | 2,979,000 | |||
Capital contributions | 12,468,000 | 14,492,000 | 14,365,000 | |||
Related Party Transaction Remaining Commitment | 7,500,000 | 17,890,000 | ||||
Aquiline Financial Services Fund II LP [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of interest assumed | 100.00% | |||||
Related Party Transaction Capital Commitment | 10,000,000 | 50,000,000 | ||||
Aquiline Financial Services Fund III LP [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction Capital Commitment | 100,000,000 | |||||
Partnership fees incurred | 0 | |||||
Capital contributions | 0 | |||||
Related Party Transaction Remaining Commitment | 100,000,000 |
Earnings_per_share_Details
Earnings per share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Basic earnings per share | |||||||||||||||
Net income | $64,699 | ($13,397) | $188,672 | $205,897 | $122,858 | $229,063 | ($30,254) | $220,694 | ($117,922) | $264,044 | $122,262 | $124,234 | $445,871 | $542,361 | $392,618 |
Net loss (income) attributable to noncontrolling interest | 61,209 | 53,069 | -35,305 | -43,509 | -27,526 | -45,694 | 60,976 | 2,549 | 27,206 | -56,746 | 45,360 | 0 | 35,464 | -9,695 | 15,820 |
Net income (loss) available (attributable) to Validus | 125,908 | 39,672 | 153,367 | 162,388 | 95,332 | 183,369 | 30,722 | 223,243 | -90,716 | 207,298 | 167,622 | 124,234 | 481,335 | 532,666 | 408,438 |
less: Dividends and distributions declared on outstanding warrants | -6,208 | -19,214 | -6,693 | ||||||||||||
Income available to common shareholders | 475,127 | 513,452 | 401,745 | ||||||||||||
Weighted average number of common shares outstanding | 86,421,127 | 90,593,329 | 90,952,523 | 93,451,999 | 98,454,907 | 99,834,563 | 103,133,188 | 107,386,438 | 97,688,338 | 93,368,775 | 98,254,186 | 99,425,140 | 90,354,745 | 102,202,274 | 97,184,110 |
Basic earnings per share available to common shareholders | $1.44 | $0.42 | $1.67 | $1.72 | $0.95 | $1.82 | $0.28 | $1.94 | ($0.94) | $2.20 | $1.69 | $1.23 | $5.26 | $5.02 | $4.13 |
Diluted earnings per share | |||||||||||||||
Net income | 64,699 | -13,397 | 188,672 | 205,897 | 122,858 | 229,063 | -30,254 | 220,694 | -117,922 | 264,044 | 122,262 | 124,234 | 445,871 | 542,361 | 392,618 |
Net loss (income) attributable to noncontrolling interest | 61,209 | 53,069 | -35,305 | -43,509 | -27,526 | -45,694 | 60,976 | 2,549 | 27,206 | -56,746 | 45,360 | 0 | 35,464 | -9,695 | 15,820 |
Net income (loss) available (attributable) to Validus | 125,908 | 39,672 | 153,367 | 162,388 | 95,332 | 183,369 | 30,722 | 223,243 | -90,716 | 207,298 | 167,622 | 124,234 | 481,335 | 532,666 | 408,438 |
less: Dividends and distributions declared on outstanding warrants | 0 | -19,214 | 0 | ||||||||||||
Income (loss) available (attributable) to common shareholders | $481,335 | $513,452 | $408,438 | ||||||||||||
Weighted average number of common shares outstanding | 86,421,127 | 90,593,329 | 90,952,523 | 93,451,999 | 98,454,907 | 99,834,563 | 103,133,188 | 107,386,438 | 97,688,338 | 93,368,775 | 98,254,186 | 99,425,140 | 90,354,745 | 102,202,274 | 97,184,110 |
Weighted average number of common shares outstanding, diluted | 90,948,156 | 91,939,610 | 95,276,836 | 97,799,519 | 102,928,482 | 103,613,766 | 104,734,643 | 110,052,999 | 97,688,338 | 98,236,490 | 103,667,967 | 105,096,090 | 94,690,271 | 103,970,289 | 102,384,923 |
Earnings per diluted share available to common shareholders | $1.38 | $0.41 | $1.61 | $1.66 | $0.93 | $1.77 | $0.28 | $1.90 | ($0.94) | $2.11 | $1.62 | $1.18 | $5.08 | $4.94 | $3.99 |
Earnings per share (Textuals) [Abstract] | |||||||||||||||
Anti-dilutive securities excluded from the calculation of diluted earnings per share | 199,740 | 366,821 | 199,446 | ||||||||||||
Warrants [Member] | |||||||||||||||
Diluted earnings per share | |||||||||||||||
Weighted average number diluted shares outstanding adjustment | 2,789,032 | 0 | 3,137,956 | ||||||||||||
Options [Member] | |||||||||||||||
Diluted earnings per share | |||||||||||||||
Weighted average number diluted shares outstanding adjustment | 745,561 | 1,026,543 | 769,618 | ||||||||||||
Unvested restricted shares [Member] | |||||||||||||||
Diluted earnings per share | |||||||||||||||
Weighted average number diluted shares outstanding adjustment | 800,933 | 741,472 | 1,293,239 |
Segment_information_Details
Segment information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||
segments | |||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||
Number of operating segments | 4 | ||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | $336,647 | $358,974 | $655,674 | $1,011,991 | $237,273 | $356,760 | $702,313 | $1,104,760 | $311,847 | $390,215 | $627,089 | $837,289 | $2,363,286 | $2,401,106 | $2,166,440 | ||||||||||||
Reinsurance premiums ceded | -33,623 | -30,137 | -50,565 | -194,908 | -24,558 | -39,415 | -121,396 | -187,216 | -35,659 | -45,743 | -119,052 | -107,052 | -309,233 | -372,585 | -307,506 | ||||||||||||
Net premiums written | 303,024 | 328,837 | 605,109 | 817,083 | 212,715 | 317,345 | 580,917 | 917,544 | 276,188 | 344,472 | 508,037 | 730,237 | 2,054,053 | 2,028,521 | 1,858,934 | ||||||||||||
Change in unearned premiums | 255,724 | 165,859 | -139,106 | -334,126 | 279,523 | 213,943 | -33,459 | -386,483 | 223,098 | 130,632 | -60,410 | -279,038 | -51,649 | 73,524 | 14,282 | ||||||||||||
Net premiums earned | 558,748 | 494,696 | 466,003 | 482,957 | 492,238 | 531,288 | 547,458 | 531,061 | 499,286 | 475,104 | 447,627 | 451,199 | 2,002,404 | 2,102,045 | 1,873,216 | ||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 226,508 | 224,125 | 158,745 | 162,671 | 206,152 | 177,965 | 265,044 | 144,771 | 458,310 | 155,455 | 153,692 | 231,989 | 772,049 | [1] | 793,932 | [1] | 999,446 | [1] | |||||||||
Policy acquisition costs | 89,550 | 86,404 | 78,953 | 85,649 | 84,647 | 94,900 | 87,152 | 93,611 | 81,814 | 98,623 | 76,129 | 78,132 | 340,556 | 360,310 | 334,698 | ||||||||||||
General and administrative expenses | 98,186 | 83,319 | 73,842 | 74,445 | 82,930 | 81,089 | 70,967 | 80,279 | 65,095 | 70,547 | 61,635 | 66,375 | 329,792 | 315,265 | 263,652 | ||||||||||||
Share compensation expenses | 8,821 | 8,764 | 8,341 | 7,147 | 8,147 | 10,527 | 6,638 | 2,318 | 7,126 | 7,345 | 6,800 | 5,438 | 33,073 | 27,630 | 26,709 | ||||||||||||
Total underwriting deductions | 423,065 | 402,612 | 319,881 | 329,912 | 381,876 | 364,481 | 429,801 | 320,979 | 612,345 | 331,970 | 298,256 | 381,934 | 1,475,470 | 1,497,137 | 1,624,505 | ||||||||||||
Underwriting income (loss) | 135,683 | 92,084 | 146,122 | 153,045 | 110,362 | 166,807 | 117,657 | 210,082 | -113,059 | 143,134 | 149,371 | 69,265 | 526,934 | 604,908 | 248,711 | ||||||||||||
Net investment income | 30,167 | 25,261 | 21,286 | 23,362 | 24,204 | 20,009 | 26,210 | 25,649 | 28,802 | 25,489 | 25,885 | 27,760 | 100,076 | 96,072 | 107,936 | ||||||||||||
Other insurance related income | 5,524 | 3,610 | 4,811 | 8,037 | 7,743 | 943 | 5,512 | 4,922 | 144 | 7,324 | 6,606 | 8,237 | 21,982 | 19,120 | 22,311 | ||||||||||||
Finance expenses | -16,474 | -15,354 | -16,126 | -15,900 | -16,925 | -15,317 | -17,566 | -14,369 | -14,510 | -9,362 | -13,706 | -16,279 | -63,854 | -64,177 | -53,857 | ||||||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | 154,900 | 105,601 | 156,093 | 168,544 | 125,384 | 172,442 | 131,813 | 226,284 | -98,623 | 166,585 | 168,156 | 88,983 | 585,138 | 655,923 | 325,101 | ||||||||||||
Tax benefit (expense) | 243 | 953 | -1,391 | 40 | -603 | -5 | -93 | 318 | -615 | -1,343 | -404 | -139 | -155 | -383 | -2,501 | ||||||||||||
Income from operating affiliates | 4,143 | 3,761 | 4,892 | 4,927 | 5,510 | 1,463 | 3,793 | 3,523 | -614 | 6,235 | 3,592 | 3,367 | 17,723 | 14,289 | 12,580 | ||||||||||||
(Income) attributable to operating affiliate investors | -26,566 | -25,807 | -25,316 | -31,710 | -26,607 | [2] | -11,815 | [2] | -20,264 | [2] | -10,077 | [2] | -109,399 | -68,763 | 0 | ||||||||||||
Net operating income (loss) | 132,720 | 84,508 | 134,278 | 141,801 | 103,684 | 162,085 | 115,249 | 220,048 | -99,852 | 171,477 | 171,344 | 92,211 | 493,307 | 601,066 | 335,180 | ||||||||||||
Gain on bargain purchase, net of expenses | 21,485 | [3] | -3,784 | [3] | 0 | [3] | 0 | [3] | 0 | 0 | 17,701 | [3] | |||||||||||||||
Net realized gains on investments | 6,902 | 4,595 | 7,858 | 3,740 | 4,448 | -6,320 | 3,409 | 1,721 | -4,516 | 9,063 | 6,154 | 7,532 | 23,095 | 3,258 | 18,233 | ||||||||||||
Net unrealized (losses) on investments | -74,119 | -84,974 | 45,427 | 55,693 | 20,137 | 69,967 | -141,348 | -7,237 | -35,857 | 86,345 | -53,574 | 20,671 | -57,973 | [4] | -58,481 | [4] | 17,585 | [4] | |||||||||
Income (loss) from investment affiliate | 530 | 1,754 | 779 | 5,348 | 516 | 1,044 | 1,753 | 1,477 | -406 | -160 | -398 | 0 | 8,411 | 4,790 | -964 | ||||||||||||
Foreign exchange (losses) gains | 4,131 | -11,441 | 3,158 | -6,478 | -2,230 | 6,036 | -8,223 | 6,922 | 1,181 | 1,103 | -652 | 3,166 | -10,630 | 2,505 | 4,798 | ||||||||||||
Other income (loss) | -770 | -7,690 | 424 | 5,793 | -3,697 | -3,749 | -1,094 | -2,237 | 43 | 0 | -612 | 654 | -2,243 | -10,777 | 85 | ||||||||||||
Transaction expenses | -4,695 | -149 | -3,252 | 0 | -8,096 | [5] | 0 | 0 | |||||||||||||||||||
Net income | 64,699 | -13,397 | 188,672 | 205,897 | 122,858 | 229,063 | -30,254 | 220,694 | -117,922 | 264,044 | 122,262 | 124,234 | 445,871 | 542,361 | 392,618 | ||||||||||||
Net loss (income) attributable to noncontrolling interest | 61,209 | 53,069 | -35,305 | -43,509 | -27,526 | -45,694 | 60,976 | 2,549 | 27,206 | -56,746 | 45,360 | 0 | 35,464 | -9,695 | 15,820 | ||||||||||||
Net income (loss) available (attributable) to Validus | 125,908 | 39,672 | 153,367 | 162,388 | 95,332 | 183,369 | 30,722 | 223,243 | -90,716 | 207,298 | 167,622 | 124,234 | 481,335 | 532,666 | 408,438 | ||||||||||||
Selected ratios: | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 86.90% | [6] | 84.50% | [6] | 85.80% | [6] | |||||||||||||||||||||
Losses and loss expenses | 40.50% | 45.30% | 34.10% | 33.70% | 41.90% | 33.50% | 48.40% | 27.30% | 91.80% | 32.70% | 34.30% | 51.40% | 38.60% | [6] | 37.80% | [6] | 53.40% | [6] | |||||||||
Policy acquisition costs | 17.00% | [6] | 17.10% | [6] | 17.90% | [6] | |||||||||||||||||||||
General and administrative expenses | 18.10% | [6],[7] | 16.30% | [6],[7] | 15.50% | [6],[7] | |||||||||||||||||||||
Expense ratio | 35.20% | 36.10% | 34.50% | 34.60% | 35.70% | 35.10% | 30.10% | 33.20% | 30.90% | 37.20% | 32.30% | 33.20% | 35.10% | [6] | 33.40% | [6] | 33.40% | [6] | |||||||||
Combined ratio | 75.70% | 81.40% | 68.60% | 68.30% | 77.60% | 68.60% | 78.50% | 60.50% | 122.70% | 69.90% | 66.60% | 84.60% | 73.70% | [6] | 71.20% | [6] | 86.80% | [6] | |||||||||
Total assets | 10,311,621 | 9,846,432 | 10,020,264 | 10,311,621 | 9,846,432 | 10,020,264 | |||||||||||||||||||||
Operating Segments | Validus Re | |||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | 1,136,910 | 1,242,522 | 1,131,959 | ||||||||||||||||||||||||
Reinsurance premiums ceded | -182,056 | -226,264 | -144,578 | ||||||||||||||||||||||||
Net premiums written | 954,854 | 1,016,258 | 987,381 | ||||||||||||||||||||||||
Change in unearned premiums | -37,570 | 117,679 | 35,890 | ||||||||||||||||||||||||
Net premiums earned | 917,284 | 1,133,937 | 1,023,271 | ||||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 307,290 | 430,026 | 575,416 | ||||||||||||||||||||||||
Policy acquisition costs | 141,670 | 180,779 | 154,362 | ||||||||||||||||||||||||
General and administrative expenses | 74,739 | 91,260 | 63,048 | ||||||||||||||||||||||||
Share compensation expenses | 9,739 | 7,668 | 7,763 | ||||||||||||||||||||||||
Total underwriting deductions | 533,438 | 709,733 | 800,589 | ||||||||||||||||||||||||
Underwriting income (loss) | 383,846 | 424,204 | 222,682 | ||||||||||||||||||||||||
Net investment income | 74,599 | 81,346 | 88,727 | ||||||||||||||||||||||||
Other insurance related income | 3,159 | 19,222 | 5,000 | ||||||||||||||||||||||||
Finance expenses | -14,727 | -16,111 | -8,943 | ||||||||||||||||||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | 446,877 | 508,661 | 307,466 | ||||||||||||||||||||||||
Tax benefit (expense) | 5,512 | 272 | -168 | ||||||||||||||||||||||||
Income from operating affiliates | 0 | 0 | 0 | ||||||||||||||||||||||||
(Income) attributable to operating affiliate investors | 0 | 0 | |||||||||||||||||||||||||
Net operating income (loss) | 452,389 | 508,933 | 307,298 | ||||||||||||||||||||||||
Gain on bargain purchase, net of expenses | 0 | [3] | |||||||||||||||||||||||||
Net realized gains on investments | 7,611 | -1,382 | 12,026 | ||||||||||||||||||||||||
Net unrealized (losses) on investments | 8,404 | -41,388 | 35,033 | ||||||||||||||||||||||||
Income (loss) from investment affiliate | 8,411 | 4,790 | -964 | ||||||||||||||||||||||||
Foreign exchange (losses) gains | -6,404 | 7,394 | 2,664 | ||||||||||||||||||||||||
Other income (loss) | -2,243 | -10,777 | 85 | ||||||||||||||||||||||||
Transaction expenses | 0 | [5] | |||||||||||||||||||||||||
Net income | 468,168 | 467,570 | 356,142 | ||||||||||||||||||||||||
Net loss (income) attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||||||||||||||||||
Net income (loss) available (attributable) to Validus | 468,168 | 467,570 | 356,142 | ||||||||||||||||||||||||
Selected ratios: | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 84.00% | [6] | 81.80% | [6] | 87.20% | [6] | |||||||||||||||||||||
Losses and loss expenses | 33.50% | [6] | 37.90% | [6] | 56.20% | [6] | |||||||||||||||||||||
Policy acquisition costs | 15.50% | [6] | 16.00% | [6] | 15.10% | [6] | |||||||||||||||||||||
General and administrative expenses | 9.20% | [6],[7] | 8.70% | [6],[7] | 6.90% | [6],[7] | |||||||||||||||||||||
Expense ratio | 24.70% | [6] | 24.70% | [6] | 22.00% | [6] | |||||||||||||||||||||
Combined ratio | 58.20% | [6] | 62.60% | [6] | 78.20% | [6] | |||||||||||||||||||||
Total assets | 4,209,289 | 5,326,076 | 6,206,084 | 4,209,289 | 5,326,076 | 6,206,084 | |||||||||||||||||||||
Operating Segments | AlphaCat | |||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | 135,181 | 147,009 | 21,603 | ||||||||||||||||||||||||
Reinsurance premiums ceded | -4,348 | -525 | 0 | ||||||||||||||||||||||||
Net premiums written | 130,833 | 146,484 | 21,603 | ||||||||||||||||||||||||
Change in unearned premiums | 1,517 | -9,070 | -3,937 | ||||||||||||||||||||||||
Net premiums earned | 132,350 | 137,414 | 17,666 | ||||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | -9,670 | 17,569 | 0 | ||||||||||||||||||||||||
Policy acquisition costs | 12,673 | 13,853 | 1,774 | ||||||||||||||||||||||||
General and administrative expenses | 19,590 | 18,765 | 7,532 | ||||||||||||||||||||||||
Share compensation expenses | 501 | 468 | 279 | ||||||||||||||||||||||||
Total underwriting deductions | 23,094 | 50,655 | 9,585 | ||||||||||||||||||||||||
Underwriting income (loss) | 109,256 | 86,759 | 8,081 | ||||||||||||||||||||||||
Net investment income | 4,276 | 3,865 | 3,748 | ||||||||||||||||||||||||
Other insurance related income | 27,122 | 26,424 | 23,229 | ||||||||||||||||||||||||
Finance expenses | -3,545 | -5,734 | -3,061 | ||||||||||||||||||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | 137,109 | 111,314 | 31,997 | ||||||||||||||||||||||||
Tax benefit (expense) | 0 | 0 | 0 | ||||||||||||||||||||||||
Income from operating affiliates | 17,723 | 14,289 | 12,580 | ||||||||||||||||||||||||
(Income) attributable to operating affiliate investors | -109,399 | -68,763 | |||||||||||||||||||||||||
Net operating income (loss) | 45,433 | 56,840 | 44,577 | ||||||||||||||||||||||||
Gain on bargain purchase, net of expenses | 0 | [3] | |||||||||||||||||||||||||
Net realized gains on investments | 10,935 | 4,084 | 216 | ||||||||||||||||||||||||
Net unrealized (losses) on investments | -56,943 | -3,893 | -19,509 | ||||||||||||||||||||||||
Income (loss) from investment affiliate | 0 | 0 | 0 | ||||||||||||||||||||||||
Foreign exchange (losses) gains | 70 | -816 | 44 | ||||||||||||||||||||||||
Other income (loss) | 0 | 0 | 0 | ||||||||||||||||||||||||
Transaction expenses | 0 | [5] | |||||||||||||||||||||||||
Net income | -505 | 56,215 | 25,328 | ||||||||||||||||||||||||
Net loss (income) attributable to noncontrolling interest | 35,464 | -9,695 | 15,820 | ||||||||||||||||||||||||
Net income (loss) available (attributable) to Validus | 34,959 | 46,520 | 41,148 | ||||||||||||||||||||||||
Selected ratios: | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 96.80% | [6] | 99.60% | [6] | 100.00% | [6] | |||||||||||||||||||||
Losses and loss expenses | -7.30% | [6] | 12.80% | [6] | 0.00% | [6] | |||||||||||||||||||||
Policy acquisition costs | 9.60% | [6] | 10.10% | [6] | 10.00% | [6] | |||||||||||||||||||||
General and administrative expenses | 15.20% | [6],[7] | 14.00% | [6],[7] | 44.20% | [6],[7] | |||||||||||||||||||||
Expense ratio | 24.80% | [6] | 24.10% | [6] | 54.20% | [6] | |||||||||||||||||||||
Combined ratio | 17.50% | [6] | 36.90% | [6] | 54.20% | [6] | |||||||||||||||||||||
Total assets | 1,656,326 | 1,558,453 | 805,513 | 1,656,326 | 1,558,453 | 805,513 | |||||||||||||||||||||
Operating Segments | Talbot | |||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | 1,101,770 | 1,091,890 | 1,078,636 | ||||||||||||||||||||||||
Reinsurance premiums ceded | -192,211 | -226,111 | -228,686 | ||||||||||||||||||||||||
Net premiums written | 909,559 | 865,779 | 849,950 | ||||||||||||||||||||||||
Change in unearned premiums | -29,785 | -35,085 | -17,671 | ||||||||||||||||||||||||
Net premiums earned | 879,774 | 830,694 | 832,279 | ||||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 423,394 | 346,337 | 424,030 | ||||||||||||||||||||||||
Policy acquisition costs | 187,162 | 170,738 | 183,926 | ||||||||||||||||||||||||
General and administrative expenses | 150,828 | 136,458 | 133,281 | ||||||||||||||||||||||||
Share compensation expenses | 11,346 | 9,613 | 7,789 | ||||||||||||||||||||||||
Total underwriting deductions | 772,730 | 663,146 | 749,026 | ||||||||||||||||||||||||
Underwriting income (loss) | 107,044 | 167,548 | 83,253 | ||||||||||||||||||||||||
Net investment income | 20,575 | 18,061 | 21,310 | ||||||||||||||||||||||||
Other insurance related income | 1,095 | 1,819 | 2,033 | ||||||||||||||||||||||||
Finance expenses | 213 | -259 | -162 | ||||||||||||||||||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | 128,927 | 187,169 | 106,434 | ||||||||||||||||||||||||
Tax benefit (expense) | -3,880 | -671 | -2,229 | ||||||||||||||||||||||||
Income from operating affiliates | 0 | 0 | 0 | ||||||||||||||||||||||||
(Income) attributable to operating affiliate investors | 0 | 0 | |||||||||||||||||||||||||
Net operating income (loss) | 125,047 | 186,498 | 104,205 | ||||||||||||||||||||||||
Gain on bargain purchase, net of expenses | 0 | [3] | |||||||||||||||||||||||||
Net realized gains on investments | 3,852 | 556 | 5,991 | ||||||||||||||||||||||||
Net unrealized (losses) on investments | 1,685 | -13,200 | 2,061 | ||||||||||||||||||||||||
Income (loss) from investment affiliate | 0 | 0 | 0 | ||||||||||||||||||||||||
Foreign exchange (losses) gains | -5,961 | -3,531 | 2,527 | ||||||||||||||||||||||||
Other income (loss) | 0 | 0 | 0 | ||||||||||||||||||||||||
Transaction expenses | 0 | [5] | |||||||||||||||||||||||||
Net income | 124,623 | 170,323 | 114,784 | ||||||||||||||||||||||||
Net loss (income) attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||||||||||||||||||
Net income (loss) available (attributable) to Validus | 124,623 | 170,323 | 114,784 | ||||||||||||||||||||||||
Selected ratios: | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 82.60% | [6] | 79.30% | [6] | 78.80% | [6] | |||||||||||||||||||||
Losses and loss expenses | 48.10% | [6] | 41.70% | [6] | 50.90% | [6] | |||||||||||||||||||||
Policy acquisition costs | 21.30% | [6] | 20.50% | [6] | 22.10% | [6] | |||||||||||||||||||||
General and administrative expenses | 18.40% | [6],[7] | 17.60% | [6],[7] | 16.90% | [6],[7] | |||||||||||||||||||||
Expense ratio | 39.70% | [6] | 38.10% | [6] | 39.00% | [6] | |||||||||||||||||||||
Combined ratio | 87.80% | [6] | 79.80% | [6] | 89.90% | [6] | |||||||||||||||||||||
Total assets | 2,890,123 | 2,891,682 | 2,968,224 | 2,890,123 | 2,891,682 | 2,968,224 | |||||||||||||||||||||
Operating Segments | Western World | |||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | 65,235 | [8] | |||||||||||||||||||||||||
Reinsurance premiums ceded | -6,428 | [8] | |||||||||||||||||||||||||
Net premiums written | 58,807 | [8] | |||||||||||||||||||||||||
Change in unearned premiums | 14,189 | [8] | |||||||||||||||||||||||||
Net premiums earned | 72,996 | [8] | |||||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 51,035 | [8] | |||||||||||||||||||||||||
Policy acquisition costs | 3,169 | [8] | |||||||||||||||||||||||||
General and administrative expenses | 11,121 | [8] | |||||||||||||||||||||||||
Share compensation expenses | 135 | [8] | |||||||||||||||||||||||||
Total underwriting deductions | 65,460 | [8] | |||||||||||||||||||||||||
Underwriting income (loss) | 7,536 | [8] | |||||||||||||||||||||||||
Net investment income | 4,523 | [8] | |||||||||||||||||||||||||
Other insurance related income | 264 | [8] | |||||||||||||||||||||||||
Finance expenses | 0 | [8] | |||||||||||||||||||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | 12,323 | [8] | |||||||||||||||||||||||||
Tax benefit (expense) | -1,422 | [8] | |||||||||||||||||||||||||
Income from operating affiliates | 0 | [8] | |||||||||||||||||||||||||
(Income) attributable to operating affiliate investors | 0 | [8] | |||||||||||||||||||||||||
Net operating income (loss) | 10,901 | [8] | |||||||||||||||||||||||||
Net realized gains on investments | 697 | [8] | |||||||||||||||||||||||||
Net unrealized (losses) on investments | -155 | [8] | |||||||||||||||||||||||||
Income (loss) from investment affiliate | 0 | [8] | |||||||||||||||||||||||||
Foreign exchange (losses) gains | 0 | [8] | |||||||||||||||||||||||||
Other income (loss) | 0 | [8] | |||||||||||||||||||||||||
Transaction expenses | 0 | [5],[8] | |||||||||||||||||||||||||
Net income | 11,443 | [8] | |||||||||||||||||||||||||
Net loss (income) attributable to noncontrolling interest | 0 | [8] | |||||||||||||||||||||||||
Net income (loss) available (attributable) to Validus | 11,443 | [8] | |||||||||||||||||||||||||
Selected ratios: | |||||||||||||||||||||||||||
Net premiums written / Gross premiums written | 90.10% | [6],[8] | |||||||||||||||||||||||||
Losses and loss expenses | 69.90% | [6],[8] | |||||||||||||||||||||||||
Policy acquisition costs | 4.40% | [6],[8] | |||||||||||||||||||||||||
General and administrative expenses | 15.40% | [6],[7],[8] | |||||||||||||||||||||||||
Expense ratio | 19.80% | [6],[8] | |||||||||||||||||||||||||
Combined ratio | 89.70% | [6],[8] | |||||||||||||||||||||||||
Total assets | 1,492,179 | [8] | 1,492,179 | [8] | |||||||||||||||||||||||
Corporate & Eliminations | |||||||||||||||||||||||||||
Underwriting income | |||||||||||||||||||||||||||
Gross premiums written | -75,810 | -80,315 | -65,758 | ||||||||||||||||||||||||
Reinsurance premiums ceded | 75,810 | 80,315 | 65,758 | ||||||||||||||||||||||||
Net premiums written | 0 | 0 | 0 | ||||||||||||||||||||||||
Change in unearned premiums | 0 | 0 | 0 | ||||||||||||||||||||||||
Net premiums earned | 0 | 0 | 0 | ||||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||
Losses and loss expenses | 0 | 0 | 0 | ||||||||||||||||||||||||
Policy acquisition costs | -4,118 | -5,060 | -5,364 | ||||||||||||||||||||||||
General and administrative expenses | 73,514 | 68,782 | 59,791 | ||||||||||||||||||||||||
Share compensation expenses | 11,352 | 9,881 | 10,878 | ||||||||||||||||||||||||
Total underwriting deductions | 80,748 | 73,603 | 65,305 | ||||||||||||||||||||||||
Underwriting income (loss) | -80,748 | -73,603 | -65,305 | ||||||||||||||||||||||||
Net investment income | -3,897 | -7,200 | -5,849 | ||||||||||||||||||||||||
Other insurance related income | -9,658 | -28,345 | -7,951 | ||||||||||||||||||||||||
Finance expenses | -45,795 | -42,073 | -41,691 | ||||||||||||||||||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | -140,098 | -151,221 | -120,796 | ||||||||||||||||||||||||
Tax benefit (expense) | -365 | 16 | -104 | ||||||||||||||||||||||||
Income from operating affiliates | 0 | 0 | 0 | ||||||||||||||||||||||||
(Income) attributable to operating affiliate investors | 0 | 0 | |||||||||||||||||||||||||
Net operating income (loss) | -140,463 | -151,205 | -120,900 | ||||||||||||||||||||||||
Gain on bargain purchase, net of expenses | 17,701 | [3] | |||||||||||||||||||||||||
Net realized gains on investments | 0 | 0 | 0 | ||||||||||||||||||||||||
Net unrealized (losses) on investments | -10,964 | 0 | 0 | ||||||||||||||||||||||||
Income (loss) from investment affiliate | 0 | 0 | 0 | ||||||||||||||||||||||||
Foreign exchange (losses) gains | 1,665 | -542 | -437 | ||||||||||||||||||||||||
Other income (loss) | 0 | 0 | 0 | ||||||||||||||||||||||||
Transaction expenses | -8,096 | [5] | |||||||||||||||||||||||||
Net income | -157,858 | -151,747 | -103,636 | ||||||||||||||||||||||||
Net loss (income) attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||||||||||||||||||
Net income (loss) available (attributable) to Validus | -157,858 | -151,747 | -103,636 | ||||||||||||||||||||||||
Selected ratios: | |||||||||||||||||||||||||||
Total assets | $63,704 | $70,221 | $40,443 | $63,704 | $70,221 | $40,443 | |||||||||||||||||||||
[1] | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | ||||||||||||||||||||||||||
[2] | This amount had been shown within finance expenses for each of the three months ended March 31, June 30 and September 30, 2013. | ||||||||||||||||||||||||||
[3] | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. | ||||||||||||||||||||||||||
[4] | Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net loss (income) attributable to noncontrolling interest. | ||||||||||||||||||||||||||
[5] | The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services. | ||||||||||||||||||||||||||
[6] | Ratios are based on net premiums earned. | ||||||||||||||||||||||||||
[7] | The general and administrative expenses ratio includes share compensation expenses. | ||||||||||||||||||||||||||
[8] | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. |
Segment_information_Gross_writ
Segment information (Gross written premiums by line of business) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue from External Customer [Line Items] | |||||||||||||||
Gross premiums written | $336,647 | $358,974 | $655,674 | $1,011,991 | $237,273 | $356,760 | $702,313 | $1,104,760 | $311,847 | $390,215 | $627,089 | $837,289 | $2,363,286 | $2,401,106 | $2,166,440 |
Property | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Gross premiums written | 1,054,530 | 1,164,687 | 1,060,297 | ||||||||||||
Marine | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Gross premiums written | 576,478 | 570,008 | 649,421 | ||||||||||||
Specialty | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Gross premiums written | 677,026 | 666,411 | 456,722 | ||||||||||||
Liability | |||||||||||||||
Revenue from External Customer [Line Items] | |||||||||||||||
Gross premiums written | $55,252 | $0 | $0 |
Segment_information_Segment_ge
Segment information (Segment geographic) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | $336,647 | $358,974 | $655,674 | $1,011,991 | $237,273 | $356,760 | $702,313 | $1,104,760 | $311,847 | $390,215 | $627,089 | $837,289 | $2,363,286 | $2,401,106 | $2,166,440 | |||
Percent of gross premiums written | 100.00% | 100.00% | 100.00% | |||||||||||||||
United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 635,968 | 662,416 | 551,641 | |||||||||||||||
Percent of gross premiums written | 27.00% | 27.70% | 25.40% | |||||||||||||||
Worldwide excluding United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 221,696 | [1] | 219,253 | 180,991 | [1] | |||||||||||||
Percent of gross premiums written | 9.40% | [1] | 9.10% | [1] | 8.40% | [1] | ||||||||||||
Australia and New Zealand | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 31,012 | 35,588 | 13,068 | |||||||||||||||
Percent of gross premiums written | 1.30% | 1.50% | 0.60% | |||||||||||||||
Europe | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 104,551 | 118,615 | 139,399 | |||||||||||||||
Percent of gross premiums written | 4.40% | 4.90% | 6.40% | |||||||||||||||
Latin America and Caribbean | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 146,376 | 154,053 | 175,958 | |||||||||||||||
Percent of gross premiums written | 6.20% | 6.40% | 8.10% | |||||||||||||||
Japan | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 47,426 | 48,700 | 37,016 | |||||||||||||||
Percent of gross premiums written | 2.00% | 2.00% | 1.70% | |||||||||||||||
Canada | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 13,865 | 14,456 | 12,243 | |||||||||||||||
Percent of gross premiums written | 0.60% | 0.60% | 0.60% | |||||||||||||||
Rest of world | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 114,479 | [2] | 116,989 | [2] | 159,884 | [2] | ||||||||||||
Percent of gross premiums written | 4.80% | [2] | 4.90% | [2] | 7.40% | [2] | ||||||||||||
Sub-total, non United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 679,405 | 707,654 | 718,559 | |||||||||||||||
Percent of gross premiums written | 28.70% | 29.40% | 33.20% | |||||||||||||||
Worldwide including United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 345,304 | [1] | 324,221 | [1] | 170,263 | [1] | ||||||||||||
Percent of gross premiums written | 14.60% | [1] | 13.50% | [1] | 7.90% | [1] | ||||||||||||
Other location non-specific | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 702,609 | [3] | 706,815 | [3] | 725,977 | [3] | ||||||||||||
Percent of gross premiums written | 29.70% | [3] | 29.40% | [3] | 33.50% | [3] | ||||||||||||
Operating Segments | Validus Re | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 1,136,910 | 1,242,522 | 1,131,959 | |||||||||||||||
Operating Segments | Validus Re | United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 442,314 | 524,776 | 463,384 | |||||||||||||||
Operating Segments | Validus Re | Worldwide excluding United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 76,129 | [1] | 63,643 | [1] | 24,119 | [1] | ||||||||||||
Operating Segments | Validus Re | Australia and New Zealand | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 20,257 | 22,275 | 0 | |||||||||||||||
Operating Segments | Validus Re | Europe | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 58,236 | 65,861 | 87,805 | |||||||||||||||
Operating Segments | Validus Re | Latin America and Caribbean | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 54,053 | 50,522 | 80,432 | |||||||||||||||
Operating Segments | Validus Re | Japan | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 43,310 | 42,729 | 30,386 | |||||||||||||||
Operating Segments | Validus Re | Canada | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 3,670 | 3,688 | 0 | |||||||||||||||
Operating Segments | Validus Re | Rest of world | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 21,467 | [2] | 24,337 | [2] | 68,754 | [2] | ||||||||||||
Operating Segments | Validus Re | Sub-total, non United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 277,122 | 273,055 | 291,496 | |||||||||||||||
Operating Segments | Validus Re | Worldwide including United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 179,564 | [1] | 177,539 | [1] | 102,080 | [1] | ||||||||||||
Operating Segments | Validus Re | Other location non-specific | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 237,910 | [3] | 267,152 | [3] | 274,999 | [3] | ||||||||||||
Operating Segments | AlphaCat | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 135,181 | 147,009 | 21,603 | |||||||||||||||
Operating Segments | AlphaCat | United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 30,987 | 50,848 | 12,638 | |||||||||||||||
Operating Segments | AlphaCat | Worldwide excluding United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 7,331 | [1] | 14,801 | [1] | 279 | [1] | ||||||||||||
Operating Segments | AlphaCat | Australia and New Zealand | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 1,019 | 2,216 | 217 | |||||||||||||||
Operating Segments | AlphaCat | Europe | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 3,005 | 2,533 | 1,332 | |||||||||||||||
Operating Segments | AlphaCat | Latin America and Caribbean | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | 0 | 0 | |||||||||||||||
Operating Segments | AlphaCat | Japan | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 608 | 653 | 0 | |||||||||||||||
Operating Segments | AlphaCat | Canada | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 215 | 818 | 0 | |||||||||||||||
Operating Segments | AlphaCat | Rest of world | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | [2] | 0 | [2] | 0 | [2] | ||||||||||||
Operating Segments | AlphaCat | Sub-total, non United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 12,178 | 21,021 | 1,828 | |||||||||||||||
Operating Segments | AlphaCat | Worldwide including United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 92,016 | [1] | 75,140 | [1] | 7,137 | [1] | ||||||||||||
Operating Segments | AlphaCat | Other location non-specific | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | [3] | 0 | [3] | 0 | [3] | ||||||||||||
Operating Segments | Talbot | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 1,101,770 | 1,091,890 | 1,078,636 | |||||||||||||||
Operating Segments | Talbot | United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 108,458 | 93,357 | 77,561 | |||||||||||||||
Operating Segments | Talbot | Worldwide excluding United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 139,570 | [1] | 142,294 | [1] | 156,593 | [1] | ||||||||||||
Operating Segments | Talbot | Australia and New Zealand | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 9,736 | 11,097 | 12,851 | |||||||||||||||
Operating Segments | Talbot | Europe | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 45,615 | 51,667 | 50,262 | |||||||||||||||
Operating Segments | Talbot | Latin America and Caribbean | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 116,281 | 155,798 | 149,091 | |||||||||||||||
Operating Segments | Talbot | Japan | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 4,116 | 5,971 | 6,630 | |||||||||||||||
Operating Segments | Talbot | Canada | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 10,194 | 10,768 | 12,243 | |||||||||||||||
Operating Segments | Talbot | Rest of world | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 93,012 | [2] | 92,652 | [2] | 91,130 | [2] | ||||||||||||
Operating Segments | Talbot | Sub-total, non United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 418,524 | 470,247 | 478,800 | |||||||||||||||
Operating Segments | Talbot | Worldwide including United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 96,187 | [1] | 80,538 | [1] | 65,084 | [1] | ||||||||||||
Operating Segments | Talbot | Other location non-specific | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 478,601 | [3] | 447,748 | [3] | 457,191 | [3] | ||||||||||||
Operating Segments | Western World | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 65,235 | [4] | ||||||||||||||||
Operating Segments | Western World | United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 65,235 | |||||||||||||||||
Operating Segments | Western World | Worldwide excluding United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | [1] | ||||||||||||||||
Operating Segments | Western World | Australia and New Zealand | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | |||||||||||||||||
Operating Segments | Western World | Europe | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | |||||||||||||||||
Operating Segments | Western World | Latin America and Caribbean | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | |||||||||||||||||
Operating Segments | Western World | Japan | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | |||||||||||||||||
Operating Segments | Western World | Canada | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | |||||||||||||||||
Operating Segments | Western World | Rest of world | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | [2] | ||||||||||||||||
Operating Segments | Western World | Sub-total, non United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | |||||||||||||||||
Operating Segments | Western World | Worldwide including United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | [1] | ||||||||||||||||
Operating Segments | Western World | Other location non-specific | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | [3] | ||||||||||||||||
Corporate & Eliminations | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -75,810 | -80,315 | -65,758 | |||||||||||||||
Corporate & Eliminations | United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -11,026 | -6,565 | -1,942 | |||||||||||||||
Corporate & Eliminations | Worldwide excluding United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -1,334 | [1] | -1,485 | [1] | 0 | [1] | ||||||||||||
Corporate & Eliminations | Australia and New Zealand | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | 0 | 0 | |||||||||||||||
Corporate & Eliminations | Europe | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -2,305 | -1,446 | 0 | |||||||||||||||
Corporate & Eliminations | Latin America and Caribbean | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -23,958 | -52,267 | -53,565 | |||||||||||||||
Corporate & Eliminations | Japan | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -608 | -653 | 0 | |||||||||||||||
Corporate & Eliminations | Canada | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -214 | -818 | 0 | |||||||||||||||
Corporate & Eliminations | Rest of world | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | 0 | [2] | 0 | [2] | 0 | [2] | ||||||||||||
Corporate & Eliminations | Sub-total, non United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -28,419 | -56,669 | -53,565 | |||||||||||||||
Corporate & Eliminations | Worldwide including United States | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | -22,463 | [1] | -8,996 | [1] | -4,038 | [1] | ||||||||||||
Corporate & Eliminations | Other location non-specific | ||||||||||||||||||
Gross premiums written allocated to the territory of coverage exposure | ||||||||||||||||||
Gross premiums written | ($13,902) | [3] | ($8,085) | [3] | ($6,213) | [3] | ||||||||||||
[1] | Represents risks in two or more geographic zones | |||||||||||||||||
[2] | Represents risks in one geographic zone | |||||||||||||||||
[3] | The Other locations non-specific category refers to business for which an analysis of exposure by geographic zone is not applicable, such as marine and aerospace risks, since these exposures can span multiple geographic areas and, in some instances, are not fixed locations | |||||||||||||||||
[4] | The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. |
Statutory_and_regulatory_requi2
Statutory and regulatory requirements (Statutory capital and surplus and statutory net income) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Bermuda | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Required statutory capital and surplus | $586,641 | [1] | $1,390,179 | [1] | ||
Actual statutory capital and surplus | 3,793,329 | [1] | 3,884,572 | [1] | ||
Statutory net income (loss) | 509,559 | [2] | 688,001 | [2] | 496,227 | [2] |
United States | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Required statutory capital and surplus | 95,963 | [3] | 0 | [3] | ||
Actual statutory capital and surplus | 452,089 | [3] | 0 | [3] | ||
Statutory net income (loss) | 105,210 | [4] | 0 | [4] | 0 | [4] |
Switzerland | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Required statutory capital and surplus | 205,563 | [5] | 312,563 | [5] | ||
Actual statutory capital and surplus | 701,010 | [5] | 939,609 | [5] | ||
Statutory net income (loss) | $60,308 | [6] | ($17,655) | [6] | ($1,559) | [6] |
[1] | The Company's Bermuda based insurance subsidiaries are required to maintain minimum statutory capital and surplus equal to the greater of a minimum solvency margin ("MSM") and the Enhanced Capital Requirement ("ECR") where applicable. The ECR is equal to the higher of each insurer's MSM or the Bermuda Solvency Capital Requirement ("BSCR") model or approved internal capital model. The BSCR for the relevant insurers for the year ended December 31, 2014 will not be filed with the BMA until April 2015. As a result, the required statutory capital and surplus as at December 31, 2014 is based on the MSM of all relevant insurers, whereas the required statutory capital and surplus as at December 31, 2013 is based on the MSM and ECR where applicable for all relevant insurers. Required statutory capital and surplus includes Validus Reinsurance, Ltd., Validus Reinsurance (Switzerland) Ltd (Bermuda Branch), PaCRe, Ltd., IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. Actual statutory capital and surplus includes Validus Reinsurance, Ltd., AlphaCat Reinsurance, Ltd. and Talbot Insurance (Bermuda), Ltd. Validus Reinsurance, Ltd. is the parent company of the other five Bermuda based insurance subsidiaries. | |||||
[2] | Statutory net income includes Validus Reinsurance, Ltd., PaCRe, Ltd. (at the Company's effective 10% equity interest), IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. | |||||
[3] | Required statutory capital and surplus is based on the Risk-Based Capital ("RBC") requirements and includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. Actual statutory capital and surplus includes Western World Insurance Company. Western World Insurance Company is the parent Company of the other two U.S. based insurance subsidiaries. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||
[4] | Statutory net income includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||
[5] | Required statutory capital and surplus is based on the Target Capital ("TC") requirements calculated under the Swiss Solvency Test ("SST"). Required and actual statutory capital and surplus includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). | |||||
[6] | Statutory net income (loss) includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). The results of Validus Reinsurance (Switzerland) Ltd, a former Flagstone subsidiary, have been included in the Company's consolidated results from the November 30, 2012 date of acquisition. |
Statutory_and_regulatory_requi3
Statutory and regulatory requirements (Narrative) (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
affiliates | ||||||
subsidiaries | ||||||
director | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Unrestricted net assets available for dividend payments or return of capital | $1,013,379 | $516,854 | ||||
Actual dividends received from subsidiaries | 773,966 | 1,009,000 | ||||
Bermuda | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Actual statutory capital and surplus | 3,793,329 | [1] | 3,884,572 | [1] | ||
Statutory net income (loss) | 509,559 | [2] | 688,001 | [2] | 496,227 | [2] |
Number of wholly owned subsidiaries | 8 | |||||
Number of affiliates | 2 | |||||
Percentage Of Total Statutory Capital And Surplus Limit | 25.00% | |||||
Payment Of Dividends Notification Period Required | 7 days | |||||
Number Of Directors Required For Affidavit | 2 | |||||
Percentage Of Total Statutory Capital Limit | 15.00% | |||||
United Kingdom | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Cash Dividends Payable to Parent Company by Consolidated Subsidiaries | 100,000 | 190,000 | ||||
United States | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Actual statutory capital and surplus | 452,089 | [3] | 0 | [3] | ||
Statutory net income (loss) | 105,210 | [4] | 0 | [4] | 0 | [4] |
Number of wholly owned subsidiaries | 3 | |||||
Switzerland | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Actual statutory capital and surplus | 701,010 | [5] | 939,609 | [5] | ||
Statutory net income (loss) | 60,308 | [6] | -17,655 | [6] | -1,559 | [6] |
Maximum Permitted Dividends Percentage Annual Profit | 20.00% | |||||
Maximum Permitted Dividends Percentage Statutory Capital | 50.00% | |||||
Western World Insurance Group, Inc | United States | ||||||
Statutory Accounting Practices [Line Items] | ||||||
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments without Regulatory Approval | $45,209 | |||||
Maximum Permitted Dividends Percentage Statutory Capital | 10.00% | |||||
[1] | The Company's Bermuda based insurance subsidiaries are required to maintain minimum statutory capital and surplus equal to the greater of a minimum solvency margin ("MSM") and the Enhanced Capital Requirement ("ECR") where applicable. The ECR is equal to the higher of each insurer's MSM or the Bermuda Solvency Capital Requirement ("BSCR") model or approved internal capital model. The BSCR for the relevant insurers for the year ended December 31, 2014 will not be filed with the BMA until April 2015. As a result, the required statutory capital and surplus as at December 31, 2014 is based on the MSM of all relevant insurers, whereas the required statutory capital and surplus as at December 31, 2013 is based on the MSM and ECR where applicable for all relevant insurers. Required statutory capital and surplus includes Validus Reinsurance, Ltd., Validus Reinsurance (Switzerland) Ltd (Bermuda Branch), PaCRe, Ltd., IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. Actual statutory capital and surplus includes Validus Reinsurance, Ltd., AlphaCat Reinsurance, Ltd. and Talbot Insurance (Bermuda), Ltd. Validus Reinsurance, Ltd. is the parent company of the other five Bermuda based insurance subsidiaries. | |||||
[2] | Statutory net income includes Validus Reinsurance, Ltd., PaCRe, Ltd. (at the Company's effective 10% equity interest), IPCRe Limited, Validus Re Americas, Ltd., Talbot Insurance (Bermuda), Ltd., AlphaCat Reinsurance, Ltd. and Mont Fort Re Ltd. | |||||
[3] | Required statutory capital and surplus is based on the Risk-Based Capital ("RBC") requirements and includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. Actual statutory capital and surplus includes Western World Insurance Company. Western World Insurance Company is the parent Company of the other two U.S. based insurance subsidiaries. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||
[4] | Statutory net income includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition. | |||||
[5] | Required statutory capital and surplus is based on the Target Capital ("TC") requirements calculated under the Swiss Solvency Test ("SST"). Required and actual statutory capital and surplus includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). | |||||
[6] | Statutory net income (loss) includes Validus Reinsurance (Switzerland) Ltd (formerly Flagstone Réassurance Suisse SA). The results of Validus Reinsurance (Switzerland) Ltd, a former Flagstone subsidiary, have been included in the Company's consolidated results from the November 30, 2012 date of acquisition. |
Subsequent_events_Details
Subsequent events (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 05, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 03, 2015 |
Subsequent events (Textuals) [Abstract] | |||||
Cash dividends declared per share | $1.20 | $3.20 | $1 | ||
Stock repurchase program, authorized amount | $500,000 | ||||
Share repurchase program cumulative aggregrate purchase value | 1,774,436 | 2,231,301 | |||
Common shares | |||||
Subsequent events (Textuals) [Abstract] | |||||
Cash dividends declared per share | $0.30 | $0.30 | |||
Common share equivalents | |||||
Subsequent events (Textuals) [Abstract] | |||||
Cash dividends declared per share | $0.30 | ||||
Subsequent event | |||||
Subsequent events (Textuals) [Abstract] | |||||
Stock repurchase program, authorized amount | 750,000 | ||||
Share repurchase program cumulative aggregrate purchase value | $2,274,401 | ||||
Subsequent event | Common shares | |||||
Subsequent events (Textuals) [Abstract] | |||||
Cash dividends declared per share | $0.32 | ||||
Subsequent event | Common share equivalents | |||||
Subsequent events (Textuals) [Abstract] | |||||
Cash dividends declared per share | $0.32 |
Condensed_unaudited_quarterly_2
Condensed unaudited quarterly financial information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||||||||
Underwriting income | ||||||||||||||||||||||||||
Gross premiums written | $336,647 | $358,974 | $655,674 | $1,011,991 | $237,273 | $356,760 | $702,313 | $1,104,760 | $311,847 | $390,215 | $627,089 | $837,289 | $2,363,286 | $2,401,106 | $2,166,440 | |||||||||||
Reinsurance premiums ceded | -33,623 | -30,137 | -50,565 | -194,908 | -24,558 | -39,415 | -121,396 | -187,216 | -35,659 | -45,743 | -119,052 | -107,052 | -309,233 | -372,585 | -307,506 | |||||||||||
Net premiums written | 303,024 | 328,837 | 605,109 | 817,083 | 212,715 | 317,345 | 580,917 | 917,544 | 276,188 | 344,472 | 508,037 | 730,237 | 2,054,053 | 2,028,521 | 1,858,934 | |||||||||||
Change in unearned premiums | 255,724 | 165,859 | -139,106 | -334,126 | 279,523 | 213,943 | -33,459 | -386,483 | 223,098 | 130,632 | -60,410 | -279,038 | -51,649 | 73,524 | 14,282 | |||||||||||
Net premiums earned | 558,748 | 494,696 | 466,003 | 482,957 | 492,238 | 531,288 | 547,458 | 531,061 | 499,286 | 475,104 | 447,627 | 451,199 | 2,002,404 | 2,102,045 | 1,873,216 | |||||||||||
Underwriting deductions | ||||||||||||||||||||||||||
Losses and loss expenses | 226,508 | 224,125 | 158,745 | 162,671 | 206,152 | 177,965 | 265,044 | 144,771 | 458,310 | 155,455 | 153,692 | 231,989 | 772,049 | [1] | 793,932 | [1] | 999,446 | [1] | ||||||||
Policy acquisition costs | 89,550 | 86,404 | 78,953 | 85,649 | 84,647 | 94,900 | 87,152 | 93,611 | 81,814 | 98,623 | 76,129 | 78,132 | 340,556 | 360,310 | 334,698 | |||||||||||
General and administrative expenses | 98,186 | 83,319 | 73,842 | 74,445 | 82,930 | 81,089 | 70,967 | 80,279 | 65,095 | 70,547 | 61,635 | 66,375 | 329,792 | 315,265 | 263,652 | |||||||||||
Share compensation expenses | 8,821 | 8,764 | 8,341 | 7,147 | 8,147 | 10,527 | 6,638 | 2,318 | 7,126 | 7,345 | 6,800 | 5,438 | 33,073 | 27,630 | 26,709 | |||||||||||
Total underwriting deductions | 423,065 | 402,612 | 319,881 | 329,912 | 381,876 | 364,481 | 429,801 | 320,979 | 612,345 | 331,970 | 298,256 | 381,934 | 1,475,470 | 1,497,137 | 1,624,505 | |||||||||||
Underwriting income (loss) | 135,683 | 92,084 | 146,122 | 153,045 | 110,362 | 166,807 | 117,657 | 210,082 | -113,059 | 143,134 | 149,371 | 69,265 | 526,934 | 604,908 | 248,711 | |||||||||||
Net investment income | 30,167 | 25,261 | 21,286 | 23,362 | 24,204 | 20,009 | 26,210 | 25,649 | 28,802 | 25,489 | 25,885 | 27,760 | 100,076 | 96,072 | 107,936 | |||||||||||
Other insurance related income | 5,524 | 3,610 | 4,811 | 8,037 | 7,743 | 943 | 5,512 | 4,922 | 144 | 7,324 | 6,606 | 8,237 | 21,982 | 19,120 | 22,311 | |||||||||||
Finance expenses | -16,474 | -15,354 | -16,126 | -15,900 | -16,925 | -15,317 | -17,566 | -14,369 | -14,510 | -9,362 | -13,706 | -16,279 | -63,854 | -64,177 | -53,857 | |||||||||||
Operating income before taxes, (income) from operating affiliates and (income) loss attributable to operating affiliate investors | 154,900 | 105,601 | 156,093 | 168,544 | 125,384 | 172,442 | 131,813 | 226,284 | -98,623 | 166,585 | 168,156 | 88,983 | 585,138 | 655,923 | 325,101 | |||||||||||
Tax benefit (expense) | 243 | 953 | -1,391 | 40 | -603 | -5 | -93 | 318 | -615 | -1,343 | -404 | -139 | -155 | -383 | -2,501 | |||||||||||
Income from operating affiliates | 4,143 | 3,761 | 4,892 | 4,927 | 5,510 | 1,463 | 3,793 | 3,523 | -614 | 6,235 | 3,592 | 3,367 | 17,723 | 14,289 | 12,580 | |||||||||||
(Income) attributable to operating affiliate investors | -26,566 | -25,807 | -25,316 | -31,710 | -26,607 | [2] | -11,815 | [2] | -20,264 | [2] | -10,077 | [2] | -109,399 | -68,763 | 0 | |||||||||||
Net operating income (loss) | 132,720 | 84,508 | 134,278 | 141,801 | 103,684 | 162,085 | 115,249 | 220,048 | -99,852 | 171,477 | 171,344 | 92,211 | 493,307 | 601,066 | 335,180 | |||||||||||
Gain on bargain purchase, net of expenses | 21,485 | [3] | -3,784 | [3] | 0 | [3] | 0 | [3] | 0 | 0 | 17,701 | [3] | ||||||||||||||
Net realized gains on investments | 6,902 | 4,595 | 7,858 | 3,740 | 4,448 | -6,320 | 3,409 | 1,721 | -4,516 | 9,063 | 6,154 | 7,532 | 23,095 | 3,258 | 18,233 | |||||||||||
Net unrealized (losses) on investments | -74,119 | -84,974 | 45,427 | 55,693 | 20,137 | 69,967 | -141,348 | -7,237 | -35,857 | 86,345 | -53,574 | 20,671 | -57,973 | [4] | -58,481 | [4] | 17,585 | [4] | ||||||||
Income (loss) from investment affiliate | 530 | 1,754 | 779 | 5,348 | 516 | 1,044 | 1,753 | 1,477 | -406 | -160 | -398 | 0 | 8,411 | 4,790 | -964 | |||||||||||
Foreign exchange (losses) gains | 4,131 | -11,441 | 3,158 | -6,478 | -2,230 | 6,036 | -8,223 | 6,922 | 1,181 | 1,103 | -652 | 3,166 | -10,630 | 2,505 | 4,798 | |||||||||||
Other income (loss) | -770 | -7,690 | 424 | 5,793 | -3,697 | -3,749 | -1,094 | -2,237 | 43 | 0 | -612 | 654 | -2,243 | -10,777 | 85 | |||||||||||
Transaction expenses | -4,695 | -149 | -3,252 | 0 | -8,096 | [5] | 0 | 0 | ||||||||||||||||||
Net income (loss) | 64,699 | -13,397 | 188,672 | 205,897 | 122,858 | 229,063 | -30,254 | 220,694 | -117,922 | 264,044 | 122,262 | 124,234 | 445,871 | 542,361 | 392,618 | |||||||||||
Net loss (income) attributable to noncontrolling interest | 61,209 | 53,069 | -35,305 | -43,509 | -27,526 | -45,694 | 60,976 | 2,549 | 27,206 | -56,746 | 45,360 | 0 | 35,464 | -9,695 | 15,820 | |||||||||||
Net income (loss) available (attributable) to Validus | $125,908 | $39,672 | $153,367 | $162,388 | $95,332 | $183,369 | $30,722 | $223,243 | ($90,716) | $207,298 | $167,622 | $124,234 | $481,335 | $532,666 | $408,438 | |||||||||||
Earnings per share | ||||||||||||||||||||||||||
Basic (shares) | 86,421,127 | 90,593,329 | 90,952,523 | 93,451,999 | 98,454,907 | 99,834,563 | 103,133,188 | 107,386,438 | 97,688,338 | 93,368,775 | 98,254,186 | 99,425,140 | 90,354,745 | 102,202,274 | 97,184,110 | |||||||||||
Diluted (shares) | 90,948,156 | 91,939,610 | 95,276,836 | 97,799,519 | 102,928,482 | 103,613,766 | 104,734,643 | 110,052,999 | 97,688,338 | 98,236,490 | 103,667,967 | 105,096,090 | 94,690,271 | 103,970,289 | 102,384,923 | |||||||||||
Basic earnings per share available to common shareholders | $1.44 | $0.42 | $1.67 | $1.72 | $0.95 | $1.82 | $0.28 | $1.94 | ($0.94) | $2.20 | $1.69 | $1.23 | $5.26 | $5.02 | $4.13 | |||||||||||
Earnings per diluted share available to common shareholders | $1.38 | $0.41 | $1.61 | $1.66 | $0.93 | $1.77 | $0.28 | $1.90 | ($0.94) | $2.11 | $1.62 | $1.18 | $5.08 | $4.94 | $3.99 | |||||||||||
Selected ratios: | ||||||||||||||||||||||||||
Losses and loss expenses | 40.50% | 45.30% | 34.10% | 33.70% | 41.90% | 33.50% | 48.40% | 27.30% | 91.80% | 32.70% | 34.30% | 51.40% | 38.60% | [6] | 37.80% | [6] | 53.40% | [6] | ||||||||
Expense ratio | 35.20% | 36.10% | 34.50% | 34.60% | 35.70% | 35.10% | 30.10% | 33.20% | 30.90% | 37.20% | 32.30% | 33.20% | 35.10% | [6] | 33.40% | [6] | 33.40% | [6] | ||||||||
Combined ratio | 75.70% | 81.40% | 68.60% | 68.30% | 77.60% | 68.60% | 78.50% | 60.50% | 122.70% | 69.90% | 66.60% | 84.60% | 73.70% | [6] | 71.20% | [6] | 86.80% | [6] | ||||||||
[1] | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||||||||||||||||||||||
[2] | This amount had been shown within finance expenses for each of the three months ended March 31, June 30 and September 30, 2013. | |||||||||||||||||||||||||
[3] | The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone Reinsurance Holdings S.A. on November 30, 2012 and is net of transaction related expenses which included legal, financial advisory, audit related services and termination expenses. | |||||||||||||||||||||||||
[4] | Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net loss (income) attributable to noncontrolling interest. | |||||||||||||||||||||||||
[5] | The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services. | |||||||||||||||||||||||||
[6] | Ratios are based on net premiums earned. |
Schedule_I_Summary_of_investme1
Schedule I - Summary of investments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | $7,464,892 |
Fair value | 7,396,816 |
Amount at which shown on the Balance Sheet | 7,396,816 |
Total fixed maturities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 5,534,494 |
Fair value | 5,532,731 |
Amount at which shown on the Balance Sheet | 5,532,731 |
U.S. government and government agency | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 759,232 |
Fair value | 760,086 |
Amount at which shown on the Balance Sheet | 760,086 |
Non-U.S. government and government agency | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 279,493 |
Fair value | 278,728 |
Amount at which shown on the Balance Sheet | 278,728 |
U.S. states, municipalities and political subdivisions | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 448,668 |
Fair value | 449,623 |
Amount at which shown on the Balance Sheet | 449,623 |
Agency residential mortgage-backed securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 520,685 |
Fair value | 529,231 |
Amount at which shown on the Balance Sheet | 529,231 |
Non-agency residential mortgage-backed securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 37,954 |
Fair value | 37,807 |
Amount at which shown on the Balance Sheet | 37,807 |
U.S. corporate | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 1,500,963 |
Fair value | 1,499,706 |
Amount at which shown on the Balance Sheet | 1,499,706 |
Non-U.S. corporate | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 564,386 |
Fair value | 563,162 |
Amount at which shown on the Balance Sheet | 563,162 |
Bank loans | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 457,537 |
Fair value | 449,004 |
Amount at which shown on the Balance Sheet | 449,004 |
Catastrophe bonds | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 75,822 |
Fair value | 75,664 |
Amount at which shown on the Balance Sheet | 75,664 |
Asset-backed securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 647,422 |
Fair value | 647,482 |
Amount at which shown on the Balance Sheet | 647,482 |
Commercial mortgage backed securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 242,332 |
Fair value | 242,238 |
Amount at which shown on the Balance Sheet | 242,238 |
Total short-term investments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 1,051,222 |
Fair value | 1,051,074 |
Amount at which shown on the Balance Sheet | 1,051,074 |
Total other investments | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Amortized cost | 879,176 |
Fair value | 813,011 |
Amount at which shown on the Balance Sheet | $813,011 |
Schedule_II_Condensed_financia1
Schedule II - Condensed financial information of registrant (Balance Sheet) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, except Share data, unless otherwise specified | ||||
ASSETS | ||||
Cash and cash equivalents | $577,240 | $734,148 | $1,060,722 | $707,486 |
Other assets | 164,633 | 202,436 | ||
Total assets | 10,311,621 | 9,846,432 | 10,020,264 | |
LIABILITIES | ||||
Accounts payable and accrued expenses | 318,245 | 278,187 | ||
Senior notes payable | 247,306 | 247,198 | ||
Debentures payable | 539,277 | 541,416 | ||
Total liabilities | 6,185,112 | 5,558,169 | ||
Commitments and contingent liabilities | ||||
SHAREHOLDERS’ EQUITY | ||||
Common shares, 571,428,571 authorized, par value $0.175 (Issued: 2014—155,554,224; 2013—154,488,497; Outstanding: 2014—83,869,845; 2013—96,044,312) | 27,222 | 27,036 | ||
Treasury shares (2014—71,684,379; 2013—58,444,185) | -12,545 | -10,228 | ||
Additional paid-in capital | 1,207,493 | 1,677,894 | ||
Accumulated other comprehensive (loss) | -8,556 | -617 | ||
Retained earnings | 2,374,344 | 2,010,009 | ||
Total shareholders' equity | 4,046,553 | 4,201,751 | 4,455,107 | |
Total liabilities and shareholders’ equity | 10,311,621 | 9,846,432 | ||
Condensed Financial Information Balance Sheet Parenthetical Data [Abstract] | ||||
Common Stock, Shares Authorized | 571,428,571 | 571,428,571 | ||
Common shares, par value | $0.18 | $0.18 | ||
Common Stock, Shares, Issued | 155,554,224 | 154,488,497 | 152,698,191 | 134,503,065 |
Common Stock, Shares, Outstanding | 83,869,845 | 96,044,312 | 107,921,259 | |
Treasury Stock, Shares | 71,684,379 | 58,444,185 | ||
Parent Company | ||||
ASSETS | ||||
Cash and cash equivalents | 29,798 | 20,385 | 19,666 | 4,944 |
Investment in subsidiaries on an equity basis | 4,140,770 | 4,273,592 | ||
Balances due from subsidiaries | 41,078 | 29,048 | ||
Other assets | 3,239 | 3,767 | ||
Total assets | 4,214,885 | 4,326,792 | ||
LIABILITIES | ||||
Accounts payable and accrued expenses | 29,621 | 25,500 | ||
Senior notes payable | 247,306 | 247,198 | ||
Debentures payable | 350,000 | 350,000 | ||
Total liabilities | 626,927 | 622,698 | ||
Commitments and contingent liabilities | ||||
SHAREHOLDERS’ EQUITY | ||||
Common shares, 571,428,571 authorized, par value $0.175 (Issued: 2014—155,554,224; 2013—154,488,497; Outstanding: 2014—83,869,845; 2013—96,044,312) | 27,222 | 27,036 | ||
Treasury shares (2014—71,684,379; 2013—58,444,185) | -12,545 | -10,228 | ||
Additional paid-in capital | 1,207,493 | 1,677,894 | ||
Accumulated other comprehensive (loss) | -8,556 | -617 | ||
Retained earnings | 2,374,344 | 2,010,009 | ||
Total shareholders' equity | 3,587,958 | 3,704,094 | ||
Total liabilities and shareholders’ equity | $4,214,885 | $4,326,792 |
Schedule_II_Condensed_financia2
Schedule II - Condensed financial information of registrant (Income Statement) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues | |||||||||||||||
Net investment income | $30,167 | $25,261 | $21,286 | $23,362 | $24,204 | $20,009 | $26,210 | $25,649 | $28,802 | $25,489 | $25,885 | $27,760 | $100,076 | $96,072 | $107,936 |
Other income | 19,739 | 8,343 | 22,396 | ||||||||||||
Foreign exchange (losses) gains | 4,131 | -11,441 | 3,158 | -6,478 | -2,230 | 6,036 | -8,223 | 6,922 | 1,181 | 1,103 | -652 | 3,166 | -10,630 | 2,505 | 4,798 |
Total revenues | 2,085,122 | 2,158,532 | 2,060,901 | ||||||||||||
Expenses | |||||||||||||||
General and administrative expenses | 98,186 | 83,319 | 73,842 | 74,445 | 82,930 | 81,089 | 70,967 | 80,279 | 65,095 | 70,547 | 61,635 | 66,375 | 329,792 | 315,265 | 263,652 |
Share compensation expenses | 8,821 | 8,764 | 8,341 | 7,147 | 8,147 | 10,527 | 6,638 | 2,318 | 7,126 | 7,345 | 6,800 | 5,438 | 33,073 | 27,630 | 26,709 |
Finance expenses | 16,474 | 15,354 | 16,126 | 15,900 | 16,925 | 15,317 | 17,566 | 14,369 | 14,510 | 9,362 | 13,706 | 16,279 | 63,854 | 64,177 | 53,857 |
Net income available to Validus | 125,908 | 39,672 | 153,367 | 162,388 | 95,332 | 183,369 | 30,722 | 223,243 | -90,716 | 207,298 | 167,622 | 124,234 | 481,335 | 532,666 | 408,438 |
Change in foreign currency translation adjustments | -7,501 | -1,954 | 3,648 | ||||||||||||
Change in minimum pension liability, net of tax | -210 | 0 | 0 | ||||||||||||
Change in fair value of cash flow hedge | -228 | 0 | 0 | ||||||||||||
Other comprehensive (loss) income | -7,939 | -1,954 | 3,648 | ||||||||||||
Comprehensive income | 473,396 | 530,712 | 412,086 | ||||||||||||
Parent Company | |||||||||||||||
Revenues | |||||||||||||||
Net investment income | 14 | 14 | 3 | ||||||||||||
Other income | 0 | 36 | 0 | ||||||||||||
Foreign exchange (losses) gains | 648 | -382 | -469 | ||||||||||||
Total revenues | 662 | -332 | -466 | ||||||||||||
Expenses | |||||||||||||||
General and administrative expenses | 86,108 | 84,143 | 66,576 | ||||||||||||
Share compensation expenses | 6,424 | 6,329 | 8,503 | ||||||||||||
Finance expenses | 47,689 | 45,868 | 45,203 | ||||||||||||
Total expenses | 140,221 | 136,340 | 120,282 | ||||||||||||
(Loss) before equity in net earnings of subsidiaries | -139,559 | -136,672 | -120,748 | ||||||||||||
Equity in net earnings of subsidiaries | 620,894 | 669,338 | 529,186 | ||||||||||||
Net income available to Validus | 481,335 | 532,666 | 408,438 | ||||||||||||
Change in foreign currency translation adjustments | -7,501 | -1,954 | 3,648 | ||||||||||||
Change in minimum pension liability, net of tax | -210 | 0 | 0 | ||||||||||||
Change in fair value of cash flow hedge | -228 | 0 | 0 | ||||||||||||
Other comprehensive (loss) income | -7,939 | -1,954 | 3,648 | ||||||||||||
Comprehensive income | $473,396 | $530,712 | $412,086 |
Schedule_II_Condensed_financia3
Schedule II - Condensed financial information of registrant (Cash flow) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows provided by (used in) operating activities | |||||||||||||||
Net income (loss) available (attributable) to Validus | $125,908 | $39,672 | $153,367 | $162,388 | $95,332 | $183,369 | $30,722 | $223,243 | ($90,716) | $207,298 | $167,622 | $124,234 | $481,335 | $532,666 | $408,438 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Dividends received from subsidiaries | 773,966 | 1,009,000 | |||||||||||||
Amortization of discount on senior notes | 108 | 108 | 108 | ||||||||||||
Change in: | |||||||||||||||
Other assets | 32,448 | -80,718 | -9,618 | ||||||||||||
Accounts payable and accrued expenses | -26,933 | 85,121 | -253 | ||||||||||||
Net cash provided by operating activities | 241,781 | 265,274 | 543,165 | ||||||||||||
Cash flows (used in) investing activities | |||||||||||||||
Net cash (used in) investing activities | 121,582 | -321,436 | -302,214 | ||||||||||||
Cash flows provided by (used in) financing activities | |||||||||||||||
Issuance of common shares, net | 5,347 | 1,211 | 3,015 | ||||||||||||
Purchases of common shares under repurchase program | -510,952 | -513,504 | -259,962 | ||||||||||||
Dividends paid | -117,043 | -360,071 | -110,037 | ||||||||||||
Net cash (used in) provided by financing activities | -489,507 | -264,048 | 94,745 | ||||||||||||
Net increase in cash | -156,908 | -326,574 | 353,236 | ||||||||||||
Cash and cash equivalents - beginning of year | 734,148 | 1,060,722 | 707,486 | 734,148 | 1,060,722 | 707,486 | |||||||||
Cash and cash equivalents - end of year | 577,240 | 734,148 | 1,060,722 | 577,240 | 734,148 | 1,060,722 | |||||||||
Parent Company | |||||||||||||||
Cash flows provided by (used in) operating activities | |||||||||||||||
Net income (loss) available (attributable) to Validus | 481,335 | 532,666 | 408,438 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Equity in net earnings of subsidiary | -620,894 | -669,338 | -529,186 | ||||||||||||
Dividends received from subsidiaries | 100,000 | 1,009,000 | 734,000 | ||||||||||||
Share compensation expenses | 6,424 | 6,329 | 8,503 | ||||||||||||
Amortization of discount on senior notes | 108 | 108 | 108 | ||||||||||||
Change in: | |||||||||||||||
Other assets | 528 | 865 | 115 | ||||||||||||
Balances due from subsidiaries | -12,030 | 4,329 | -35,522 | ||||||||||||
Balances due to subsidiaries | 0 | 0 | -45,808 | ||||||||||||
Accounts payable and accrued expenses | 2,624 | -10,876 | 7,640 | ||||||||||||
Net cash provided by operating activities | -41,905 | 873,083 | 548,288 | ||||||||||||
Cash flows (used in) investing activities | |||||||||||||||
Return of capital from subsidiaries | 673,966 | 0 | 0 | ||||||||||||
Investment in subsidiaries | 0 | 0 | -166,582 | ||||||||||||
Net cash (used in) investing activities | 673,966 | 0 | -166,582 | ||||||||||||
Cash flows provided by (used in) financing activities | |||||||||||||||
Issuance of common shares, net | 5,347 | 1,211 | 3,015 | ||||||||||||
Purchases of common shares under repurchase program | -510,952 | -513,504 | -259,962 | ||||||||||||
Dividends paid | -117,043 | -360,071 | -110,037 | ||||||||||||
Net cash (used in) provided by financing activities | -622,648 | -872,364 | -366,984 | ||||||||||||
Net increase in cash | 9,413 | 719 | 14,722 | ||||||||||||
Cash and cash equivalents - beginning of year | 20,385 | 19,666 | 4,944 | 20,385 | 19,666 | 4,944 | |||||||||
Cash and cash equivalents - end of year | $29,798 | $20,385 | $19,666 | $29,798 | $20,385 | $19,666 |
Schedule_III_Supplementary_ins1
Schedule III - Supplementary insurance information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | $161,295 | $134,269 | $146,588 |
Reserve for losses and loss expenses | 3,234,394 | 3,030,399 | 3,517,573 |
Unearned premiums | 990,564 | 824,496 | 894,362 |
Net premiums earned | 2,002,404 | 2,102,045 | 1,873,216 |
Net investment income | 100,076 | 96,072 | 107,936 |
Losses and loss expenses | 772,049 | 793,932 | 999,446 |
Amortization of deferred acquisition costs | 340,556 | 360,310 | 334,698 |
Other operating expenses | 362,865 | 342,895 | 290,361 |
Net premiums written | 2,054,053 | 2,028,521 | 1,858,934 |
Validus Re | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | 59,091 | 52,835 | 75,138 |
Reserve for losses and loss expenses | 1,333,878 | 1,723,465 | 2,122,895 |
Unearned premiums | 305,138 | 296,115 | 414,343 |
Net premiums earned | 917,284 | 1,133,937 | 1,023,271 |
Net investment income | 74,599 | 81,346 | 88,727 |
Losses and loss expenses | 307,290 | 430,026 | 575,416 |
Amortization of deferred acquisition costs | 141,670 | 180,779 | 154,362 |
Other operating expenses | 84,478 | 98,928 | 70,811 |
Net premiums written | 954,854 | 1,016,258 | 987,381 |
AlphaCat | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | 1,554 | 1,755 | 713 |
Reserve for losses and loss expenses | 6,525 | 17,612 | 5,000 |
Unearned premiums | 15,360 | 16,062 | 6,992 |
Net premiums earned | 132,350 | 137,414 | 17,666 |
Net investment income | 4,276 | 3,865 | 3,748 |
Losses and loss expenses | -9,670 | 17,569 | 0 |
Amortization of deferred acquisition costs | 12,673 | 13,853 | 1,774 |
Other operating expenses | 20,091 | 19,233 | 7,811 |
Net premiums written | 130,833 | 146,484 | 21,603 |
Talbot | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | 95,246 | 88,656 | 79,747 |
Reserve for losses and loss expenses | 1,352,056 | 1,362,574 | 1,480,307 |
Unearned premiums | 552,660 | 535,659 | 494,883 |
Net premiums earned | 879,774 | 830,694 | 832,279 |
Net investment income | 20,575 | 18,061 | 21,310 |
Losses and loss expenses | 423,394 | 346,337 | 424,030 |
Amortization of deferred acquisition costs | 187,162 | 170,738 | 183,926 |
Other operating expenses | 162,174 | 146,071 | 141,070 |
Net premiums written | 909,559 | 865,779 | 849,950 |
Western World | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | 9,566 | ||
Reserve for losses and loss expenses | 613,551 | ||
Unearned premiums | 133,185 | ||
Net premiums earned | 72,996 | ||
Net investment income | 4,523 | ||
Losses and loss expenses | 51,035 | ||
Amortization of deferred acquisition costs | 3,169 | ||
Other operating expenses | 11,256 | ||
Net premiums written | 58,807 | ||
Corporate & Eliminations | |||
Supplementary Insurance Information, by Segment [Line Items] | |||
Deferred acquisition costs | -4,162 | -8,977 | -9,010 |
Reserve for losses and loss expenses | -71,616 | -73,252 | -90,629 |
Unearned premiums | -15,779 | -23,340 | -21,856 |
Net premiums earned | 0 | 0 | 0 |
Net investment income | -3,897 | -7,200 | -5,849 |
Losses and loss expenses | 0 | 0 | 0 |
Amortization of deferred acquisition costs | -4,118 | -5,060 | -5,364 |
Other operating expenses | 84,866 | 78,663 | 70,669 |
Net premiums written | $0 | $0 | $0 |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||||||||||||||
Direct gross | $683,028 | $544,722 | $550,491 | ||||||||||||
Ceded to other companies | 33,623 | 30,137 | 50,565 | 194,908 | 24,558 | 39,415 | 121,396 | 187,216 | 35,659 | 45,743 | 119,052 | 107,052 | 309,233 | 372,585 | 307,506 |
Assumed from other companies | 1,680,258 | 1,856,384 | 1,615,949 | ||||||||||||
Net amount | $303,024 | $328,837 | $605,109 | $817,083 | $212,715 | $317,345 | $580,917 | $917,544 | $276,188 | $344,472 | $508,037 | $730,237 | $2,054,053 | $2,028,521 | $1,858,934 |
Percentage of amount assumed to net | 82.00% | 92.00% | 87.00% |
Schedule_VI_Supplemental_infor1
Schedule VI - Supplemental information for property-casualty underwriters (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||||
Losses and loss expenses incurred related to current year | $1,024,256 | $999,380 | $1,174,415 | |||
Losses and loss expenses incurred related to prior year | -252,207 | [1],[2] | -205,448 | [1],[2] | -174,969 | [1],[2] |
Property and casualty insurance company subsidiaries | ||||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | ||||||
Deferred acquisition costs | 161,295 | 134,269 | 146,588 | |||
Reserves for losses and loss expenses | 3,234,394 | 3,030,399 | 3,517,573 | |||
Reserves for unearned premiums | 990,564 | 824,496 | 894,362 | |||
Net earned premiums | 2,002,404 | 2,102,045 | 1,873,216 | |||
Net investment income | 100,076 | 96,072 | 107,936 | |||
Losses and loss expenses incurred related to current year | 1,024,256 | 999,380 | 1,174,415 | |||
Losses and loss expenses incurred related to prior year | -252,207 | -205,448 | -174,969 | |||
Net paid losses and loss expenses | 1,061,907 | 1,161,478 | 836,020 | |||
Amortization of deferred acquisition costs | 340,556 | 360,310 | 334,698 | |||
Net premiums written | $2,054,053 | $2,028,521 | $1,858,934 | |||
[1] | Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $4,607 during the year ended December 31, 2014. The remaining fair value adjustment will be amortized in 2015. | |||||
[2] | AlphaCat has not had any development on prior accident years. |