Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Line Items] | |||
Entity Registrant Name | GREENLIGHT CAPITAL RE, LTD. | ||
Entity Central Index Key | 1,385,613 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 869,305,700 | ||
Common Class A | |||
Document and Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 30,829,333 | ||
Common Class B | |||
Document and Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 6,254,895 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments | ||
Debt instruments, trading, at fair value | $ 39,087 | $ 49,212 |
Equity securities, trading, at fair value | 905,994 | 1,266,175 |
Other investments, at fair value | 119,083 | 115,591 |
Total investments | 1,064,164 | 1,430,978 |
Cash and cash equivalents | 112,162 | 12,030 |
Restricted cash and cash equivalents | 1,236,589 | 1,296,914 |
Financial contracts receivable, at fair value | 13,215 | 47,171 |
Reinsurance balances receivable | 187,940 | 151,185 |
Loss and loss adjustment expenses recoverable | 3,368 | 11,523 |
Deferred acquisition costs, net | 59,823 | 34,420 |
Unearned premiums ceded | 3,251 | 4,027 |
Notes receivable | 25,146 | 1,566 |
Other assets | 6,864 | 5,478 |
Total assets | 2,712,522 | 2,995,292 |
Liabilities | ||
Securities sold, not yet purchased, at fair value | 882,906 | 1,090,731 |
Financial contracts payable, at fair value | 28,245 | 44,592 |
Due to prime brokers | 396,453 | 211,070 |
Loss and loss adjustment expense reserves | 305,997 | 264,243 |
Unearned premium reserves | 211,954 | 128,736 |
Reinsurance balances payable | 18,326 | 40,372 |
Funds withheld | 7,143 | 6,558 |
Other liabilities | 12,725 | 14,949 |
Total liabilities | 1,863,749 | 1,801,251 |
Equity | ||
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued) | 0 | 0 |
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,772,572 (2014: 31,129,648): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,895 (2014: 6,254,895)) | 3,703 | 3,738 |
Additional paid-in capital | 496,401 | 500,553 |
Retained earnings | 325,287 | 660,860 |
Shareholders’ equity attributable to shareholders | 825,391 | 1,165,151 |
Non-controlling interest in joint venture | 23,382 | 28,890 |
Total equity | 848,773 | 1,194,041 |
Total liabilities and equity | $ 2,712,522 | $ 2,995,292 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Shareholders' equity | ||
Preferred share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred share capital, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred share capital, issued (in shares) | 0 | 0 |
Common Class A | ||
Shareholders' equity | ||
Common Stock, Par or Stated Value Per Share | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 100,000,000 | 100,000,000 |
Ordinary share capital, issued (in shares) | 30,772,572 | 31,129,648 |
Ordinary share capital, outstanding (in shares) | 30,772,572 | 31,129,648 |
Common Class B | ||
Shareholders' equity | ||
Common Stock, Par or Stated Value Per Share | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 25,000,000 | 25,000,000 |
Ordinary share capital, issued (in shares) | 6,254,895 | 6,254,895 |
Ordinary share capital, outstanding (in shares) | 6,254,895 | 6,254,895 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||||||||||
Gross premiums written | $ 144,884 | $ 134,568 | $ 92,990 | $ 129,682 | $ 74,268 | $ 97,200 | $ 33,654 | $ 118,901 | $ 502,124 | $ 324,023 | $ 535,702 |
Gross premiums ceded | (3,219) | (2,288) | (1,868) | (1,626) | (2,088) | (2,706) | (2,759) | (5,940) | (9,001) | (13,493) | (2,780) |
Net premiums written | 141,665 | 132,280 | 91,122 | 128,056 | 72,180 | 94,494 | 30,895 | 112,961 | 493,123 | 310,530 | 532,922 |
Change in net unearned premium reserves | (21,750) | (30,286) | 563 | (33,263) | 3,025 | (15,003) | 56,960 | (1,272) | (84,736) | 43,710 | 14,977 |
Net premiums earned | 119,915 | 101,994 | 91,685 | 94,793 | 75,205 | 79,491 | 87,855 | 111,689 | 408,387 | 354,240 | 547,899 |
Net investment income (loss) | (45,468) | (191,322) | (20,305) | (24,829) | 72,820 | (54,027) | 113,932 | (10,150) | (281,924) | 122,575 | 218,140 |
Other income (expense), net | (699) | (542) | (3,760) | 1,588 | 1,542 | 2,663 | (1,400) | 182 | (3,413) | 2,987 | (1,710) |
Total revenues | 73,748 | (89,870) | 67,620 | 71,552 | 149,567 | 28,127 | 200,387 | 101,721 | 123,050 | 479,802 | 764,329 |
Expenses | |||||||||||
Loss and loss adjustment expenses incurred, net | 79,816 | 97,421 | 76,653 | 63,207 | 57,951 | 53,028 | 56,644 | 67,363 | 317,097 | 234,986 | 338,493 |
Acquisition costs, net | 33,281 | 32,146 | 23,939 | 26,841 | 21,821 | 22,478 | 25,570 | 37,796 | 116,207 | 107,665 | 171,872 |
General and administrative expenses | 4,998 | 5,382 | 6,894 | 6,160 | 6,729 | 6,012 | 5,559 | 6,200 | 23,434 | 24,500 | 20,958 |
Total expenses | 118,095 | 134,949 | 107,486 | 96,208 | 86,501 | 81,518 | 87,773 | 111,359 | 456,738 | 367,151 | 531,323 |
Income (loss) before income tax expense | (44,347) | (224,819) | (39,866) | (24,656) | 63,066 | (53,391) | 112,614 | (9,638) | (333,688) | 112,651 | 233,006 |
Income tax (expense) benefit | 361 | 1,233 | (54) | 215 | (204) | 254 | 14 | 560 | 1,755 | 624 | (538) |
Net income (loss) including non-controlling interest | (43,986) | (223,586) | (39,920) | (24,441) | 62,862 | (53,137) | 112,628 | (9,078) | (331,933) | 113,275 | 232,468 |
Loss (income) attributable to non-controlling interest in joint venture | 881 | 3,909 | 324 | 394 | (2,174) | 1,369 | (3,075) | 197 | 5,508 | (3,683) | (6,769) |
Net income (loss) | $ (43,105) | $ (219,677) | $ (39,596) | $ (24,047) | $ 60,688 | $ (51,768) | $ 109,553 | $ (8,881) | $ (326,425) | $ 109,592 | $ 225,699 |
Earnings (loss) per share | |||||||||||
Basic | $ (1.17) | $ (5.98) | $ (1.06) | $ (0.65) | $ 1.62 | $ (1.40) | $ 2.94 | $ (0.24) | $ (8.90) | $ 2.94 | $ 6.13 |
Diluted | $ (1.17) | $ (5.98) | $ (1.06) | $ (0.65) | $ 1.60 | $ (1.40) | $ 2.89 | $ (0.24) | $ (8.90) | $ 2.89 | $ 6.01 |
Weighted average number of ordinary shares used in the determination of earnings and loss per share | |||||||||||
Basic | 36,720,454 | 36,710,216 | 37,303,265 | 37,173,008 | 37,356,187 | 36,984,650 | 37,246,922 | 36,808,386 | 36,670,466 | 37,242,687 | 36,838,128 |
Diluted | 36,720,454 | 36,710,216 | 37,303,265 | 37,173,008 | 37,905,836 | 36,984,650 | 37,902,106 | 36,808,386 | 36,670,466 | 37,874,387 | 37,585,167 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Ordinary share capital | Additional paid-in capital | Retained earnings | Shareholders' equity attributable to shareholders | Non-controlling interest in joint venture |
Beginning balance at Dec. 31, 2012 | $ 860,410 | $ 3,670 | $ 492,469 | $ 325,569 | $ 821,708 | $ 38,702 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 527 | 35 | 492 | 0 | 527 | 0 |
Non-controlling interest contribution into (withdrawal from) joint venture, net | (10,762) | 0 | 0 | 0 | 0 | (10,762) |
Income (loss) attributable to non-controlling interest in joint venture | 6,769 | 0 | 0 | 0 | 0 | 6,769 |
Net income (loss) | 225,699 | 0 | 0 | 225,699 | 225,699 | 0 |
Share-based compensation expense, net of forfeitures | 3,661 | 0 | 3,661 | 0 | 3,661 | 0 |
Ending balance at Dec. 31, 2013 | 1,086,304 | 3,705 | 496,622 | 551,268 | 1,051,595 | 34,709 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 33 | 33 | 0 | 0 | 33 | 0 |
Non-controlling interest contribution into (withdrawal from) joint venture, net | (9,502) | 0 | 0 | 0 | 0 | (9,502) |
Income (loss) attributable to non-controlling interest in joint venture | 3,683 | 0 | 0 | 0 | 0 | 3,683 |
Net income (loss) | 109,592 | 0 | 0 | 109,592 | 109,592 | 0 |
Share-based compensation expense, net of forfeitures | 3,931 | 0 | 3,931 | 0 | 3,931 | 0 |
Ending balance at Dec. 31, 2014 | 1,194,041 | 3,738 | 500,553 | 660,860 | 1,165,151 | 28,890 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 26 | 26 | 0 | 0 | 26 | 0 |
Repurchase of Class A ordinary shares | (17,692) | (61) | (8,483) | (9,148) | (17,692) | 0 |
Short-swing sale profit from shareholder | 83 | 0 | 83 | 0 | 83 | 0 |
Non-controlling interest contribution into (withdrawal from) joint venture, net | 0 | 0 | 0 | 0 | 0 | 0 |
Income (loss) attributable to non-controlling interest in joint venture | (5,508) | 0 | 0 | 0 | 0 | (5,508) |
Net income (loss) | (326,425) | 0 | 0 | (326,425) | (326,425) | 0 |
Share-based compensation expense, net of forfeitures | 4,248 | 0 | 4,248 | 0 | 4,248 | 0 |
Ending balance at Dec. 31, 2015 | $ 848,773 | $ 3,703 | $ 496,401 | $ 325,287 | $ 825,391 | $ 23,382 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash provided by (used in) operating activities | |||
Net income (loss) | $ (326,425) | $ 109,592 | $ 225,699 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | |||
Net change in unrealized gains and losses on investments and financial contracts | 265,401 | 187,753 | (149,013) |
Net realized gains on investments and financial contracts | (22,227) | (352,133) | (122,568) |
Foreign exchange (gains) losses on investments | 3,725 | (14,797) | (44,492) |
Income (loss) attributable to non-controlling interest in joint venture | (5,508) | 3,683 | 6,769 |
Share-based compensation expense, net of forfeitures | 4,274 | 3,964 | 3,675 |
Depreciation expense | 405 | 436 | 325 |
Net change in | |||
Reinsurance balances receivable | (83,113) | 16,155 | 5,881 |
Loss and loss adjustment expenses recoverable | (916) | 5,306 | 17,622 |
Deferred acquisition costs, net | (25,403) | 17,377 | 7,380 |
Unearned premiums ceded | 776 | (854) | 443 |
Other assets | (1,791) | (1,349) | (291) |
Loss and loss adjustment expense reserves | 41,754 | (65,651) | (26,576) |
Unearned premium reserves | 83,218 | (44,321) | (15,128) |
Reinsurance balances payable | 7,524 | 1,583 | 3,497 |
Funds withheld | 585 | (3,568) | (7,289) |
Other liabilities | (2,224) | 3,092 | 1,369 |
Net cash (used in) provided by operating activities | (59,945) | (133,732) | (92,697) |
Investing activities | |||
Purchases of investments, trading | (1,252,969) | (1,603,856) | (931,036) |
Sales of investments, trading | 1,388,162 | 1,722,936 | 933,356 |
Purchases of financial contracts | (25,765) | (13,302) | (64,153) |
Dispositions of financial contracts | 7,002 | 113,011 | 90,282 |
Securities sold, not yet purchased | 892,085 | 934,769 | 940,486 |
Dispositions of securities sold, not yet purchased | (1,068,891) | (952,843) | (766,680) |
Change in due to prime brokers | 185,383 | (103,632) | (11,786) |
Change in restricted cash and cash equivalents, net | 50,400 | 35,476 | (107,932) |
Change in notes receivable, net | 2,279 | 18,983 | 3,281 |
Non-controlling interest withdrawal from joint venture, net | 0 | (9,502) | (10,762) |
Fixed assets additions | 0 | 0 | (1,040) |
Net cash (used in) provided by investing activities | 177,686 | 142,040 | 74,016 |
Financing activities | |||
Net proceeds from exercise of stock options | 0 | 0 | 513 |
Short-swing sale profit from shareholder | 83 | 0 | 0 |
Repurchase of Class A ordinary shares | (17,692) | 0 | 0 |
Net cash (used in) provided by financing activities | (17,609) | 0 | 513 |
Net increase (decrease) in cash and cash equivalents | 100,132 | 8,308 | (18,168) |
Cash and cash equivalents at beginning of the period | 12,030 | 3,722 | 21,890 |
Cash and cash equivalents at end of the period | 112,162 | 12,030 | 3,722 |
Supplementary information | |||
Interest paid in cash | 21,959 | 21,482 | 23,741 |
Income tax paid in cash | 0 | 0 | 531 |
Noncash Investing and Financing Activities - Transfer to Notes Receivable | $ 25,859 | $ 0 | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Greenlight Capital Re, Ltd. ("GLRE") was incorporated as an exempted company under the Companies Law of the Cayman Islands on July 13, 2004. GLRE’s principal wholly-owned subsidiary, Greenlight Reinsurance, Ltd. ("Greenlight Re"), provides global specialty property and casualty reinsurance. Greenlight Re has a Class D insurer license issued in accordance with the terms of The Insurance Law, 2010 and underlying regulations thereto (the "Law") and is subject to regulation by the Cayman Islands Monetary Authority ("CIMA"), in terms of the Law. Greenlight Re commenced underwriting in April 2006. Effective May 30, 2007, GLRE completed an initial public offering of 11,787,500 Class A ordinary shares at $19.00 per share. Concurrently, 2,631,579 Class B ordinary shares of GLRE were sold at $19.00 per share in a private placement offering. During 2008, Verdant Holding Company, Ltd. ("Verdant"), a wholly-owned subsidiary of GLRE, was incorporated in the state of Delaware. During 2010, GLRE established Greenlight Reinsurance Ireland, Designated Activity Company ("GRIL"), a wholly-owned reinsurance subsidiary based in Dublin, Ireland. GRIL is authorized as a non-life reinsurance undertaking in accordance with the provisions of the European Union (Insurance and Reinsurance) Regulations 2015 ("Irish Regulations"). GRIL provides multi-line property and casualty reinsurance capacity to the European broker market and provides GLRE with an additional platform to serve clients located in Europe and North America. As used herein, the "Company" refers collectively to GLRE and its consolidated subsidiaries. The Class A ordinary shares of GLRE are listed on Nasdaq Global Select Market under the symbol "GLRE". These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The consolidated financial statements include the accounts of GLRE and the consolidated financial statements of its wholly owned subsidiaries, Greenlight Re, GRIL and Verdant. All significant intercompany transactions and balances have been eliminated on consolidation. Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation. Prior to January 1, 2015, non-investment related foreign exchange gains and losses were recorded under general and administrative expenses in the condensed consolidated statements of income. Effective from January 1, 2015, the presentation has been modified and any non-investment related foreign exchange gains or losses are now recorded under “other income (expense), net” in the consolidated statements of income. As a result, foreign exchange gains (losses) of $2.6 million and $(0.8) million that were previously reported in general and administrative expenses for the years ended December 31, 2014 and 2013 , respectively, were reclassified as “other income (expense), net” to conform to the current year presentation. The reclassifications resulted in no changes to net income or retained earnings for any of the periods presented. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of consolidated 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 consolidated financial statements and the reported amounts of income and expenses during the period. Actual results could differ from these estimates. Cash and Cash Equivalents Cash and cash equivalents consist of cash and certain short-term, highly liquid investments with original maturity dates of three months or less. Restricted Cash and Cash Equivalents The Company is required to maintain certain cash in segregated accounts with prime brokers and derivative counterparties. The amount of restricted cash held by prime brokers is primarily used to support the liability created from securities sold, not yet purchased and derivatives. Additionally, restricted cash and cash equivalent balances are held to collateralize regulatory trusts and letters of credit issued to cedents (see Notes 4 and 6 ). The amount of cash encumbered varies depending on the market value of the securities sold, not yet purchased, and the collateral required by the cedents in the form of trust accounts and letters of credit. In addition, derivative counterparties require cash collateral to support the current value of any amounts that may be due to the counterparty based on the value of the underlying financial instrument. Premium Revenue Recognition The Company accounts for reinsurance contracts in accordance with U.S. GAAP. In the event that a reinsurance contract does not transfer sufficient risk, deposit accounting is used and the contract is reported as a deposit liability. The Company writes excess of loss contracts as well as quota share contracts. The Company estimates the ultimate premiums for the entire contract period. These estimates are based on information received from the ceding companies and estimates from actuarial pricing models used by the Company. For excess of loss contracts, the total ultimate estimated premiums are recorded as premiums written at the inception of the contract. For quota share contracts, the premiums are recorded as written based on cession statements from cedents which typically are received monthly or quarterly depending on terms specified in each contract. For any reporting lag, premiums written are estimated based on the portion of the ultimate estimated premiums relating to the risks underwritten during the lag period. Premium estimates are reviewed by management at least quarterly. Such review includes a comparison of actual reported premiums to expected ultimate premiums along with a review of the aging and collection of premium estimates. Based on management’s review, the appropriateness of the premium estimates is evaluated, and any adjustments to these estimates are recorded in the period in which they are determined. Changes in premium estimates, including premium receivable on both excess of loss and quota share contracts, are expected and may result in significant adjustments in any period. A significant portion of amounts included in reinsurance balances receivable represent estimated premiums written, net of commissions and brokerage, and are not currently due based on the terms of the underlying contracts. Certain contracts allow for reinstatement premiums in the event of a full limit loss prior to the expiry of a contract. A reinstatement premium is not due until there is a full limit loss event and therefore, in accordance with U.S. GAAP, the Company records a reinstatement premium as written only in the event that a client incurs a full limit loss on the contract and the contract allows for a reinstatement of coverage upon payment of an additional premium. For catastrophe contracts which contractually require the payment of a reinstatement premium equal to or greater than the original premium upon the occurrence of a full limit loss, the reinstatement premiums are earned over the original contract period. Reinstatement premiums that are contractually calculated on a pro-rata basis of the original premiums, are earned over the remaining coverage period. Certain contracts may provide for a penalty to be paid if the contract is terminated and canceled prior to its expiration term. Cancellation penalties are recognized in the period the notice of cancellation is received and are recorded in the consolidated statements of income under "other income (expense), net". Premiums written are generally recognized as earned over the contract period in proportion to the period of risk covered. Unearned premiums consist of the unexpired portion of reinsurance provided. Reinsurance Premiums Ceded The Company reduces the risk of future losses on business assumed by reinsuring certain risks and exposures with other reinsurers (retrocessionaires). The Company remains liable to the extent that any retrocessionaire fails to meet its obligations and to the extent the Company does not hold sufficient security for their unpaid obligations. Ceded premiums are written during the period in which the risks incept and are expensed over the contract period in proportion to the period of protection. Unearned premiums ceded consist of the unexpired portion of reinsurance obtained. Deferred Acquisition Costs Policy acquisition costs, such as commission and brokerage costs, relate directly to, and vary with, the writing of reinsurance contracts. Acquisition costs relating solely to bound contracts are deferred subject to ultimate recoverability and are amortized over the related contract term. The Company evaluates the recoverability of deferred acquisition costs by determining if the sum of future earned premiums and anticipated investment income is greater than the expected future claims and expenses. If a loss is probable on the unexpired portion of policies in force, a premium deficiency loss is recognized. At December 31, 2015 and 2014 , the deferred acquisition costs were considered fully recoverable and no premium deficiency loss was recorded. Acquisition costs also include profit commissions which are expensed when incurred. Profit commissions are calculated and accrued based on the expected loss experience for contracts and recorded when the current loss estimate indicates that a profit commission is probable under the contract terms. As of December 31, 2015 , $12.2 million ( 2014 : $11.0 million ) of profit commission reserves were included in reinsurance balances payable on the consolidated balance sheets. For the year ended December 31, 2015 , $7.5 million ( 2014 : $2.7 million and 2013 : $3.7 million , respectively) of net profit commission expense was included in acquisition costs on the consolidated statements of income. Funds Withheld Funds withheld include reinsurance balances retained from retrocessionaires as security for a period of time in accordance with the contract terms. Any interest expense that the Company incurs during the period these funds are withheld, are included under net investment income in the consolidated statements of income. Loss and Loss Adjustment Expense Reserves and Recoverable The Company establishes reserves for contracts based on estimates of the ultimate cost of all losses including losses incurred but not reported ("IBNR"). These estimated ultimate reserves are based on the Company’s own actuarial estimates derived from reports received from ceding companies, industry data and historical experience. These estimates are reviewed by the Company periodically on a contract by contract basis and adjusted as necessary. Since reserves are estimates, the final settlement of losses may vary from the reserves established and any adjustments to the estimates, which may be material, are recorded in the period they are determined. Loss and loss adjustment expenses recoverable include the amounts due from retrocessionaires for unpaid loss and loss adjustment expenses on retrocession agreements. Ceded losses incurred but not reported are estimated based on the Company’s actuarial estimates. These estimates are reviewed periodically and adjusted when deemed necessary. The Company may not be able to ultimately recover the loss and loss adjustment expense recoverable amounts due to the retrocessionaires’ inability to pay. The Company regularly evaluates the financial condition of its retrocessionaires and records provisions for uncollectible reinsurance expenses recoverable when recovery is no longer probable. Notes Receivable Notes receivable include promissory notes receivable from third party entities. These notes are recorded at cost along with accrued interest, if any, which approximates the fair value. Interest income and realized gains or losses on sale of notes receivable are included under net investment income (loss) in the consolidated statements of income. The Company regularly reviews all notes receivable individually for impairment and records valuation allowance provisions for uncollectible and non-performing notes. The Company places notes on non-accrual status when the recorded value of the note is not considered impaired but there is uncertainty as to the collection of interest based on the terms of the note. The Company resumes accrual of interest on a note when none of the principal or interest remains past due, and the Company expects to collect the remaining contractual principal and interest. Interest collected on notes that are placed on non-accrual status is treated on a cash-basis and recorded as interest income when collected, provided that the recorded value of the note is deemed to be fully collectible. Where doubt exists as to the collectability of the remaining recorded value of the notes placed on non-accrual status, any payments received are applied to reduce the recorded value of the notes. At December 31, 2015 , $23.0 million of notes receivable (net of any valuation allowance) were on non-accrual status ( 2014 : $0.0 million ) and any payments received were applied to reduce the recorded value of the notes. The increase in notes receivable during the year ended December 31, 2015 , related to a settlement agreement entered into with a ceding insurer during 2015 whereby certain amounts, previously classified under reinsurance balances receivable, were converted into a ten-year note receivable. At December 31, 2015 and 2014 , there was no accrued interest included in the notes receivable balance. Based on management’s assessment, the recorded values of the notes receivable, net of valuation allowance, at December 31, 2015 and 2014 , were expected to be fully collectible. Deposit Assets and Liabilities In accordance with U.S. GAAP, deposit accounting is used in the event that a reinsurance contract does not transfer sufficient insurance risk, or a contract provides retroactive reinsurance. Any losses on such contracts are charged to earnings immediately. Any gains relating to such contracts are deferred and amortized over the estimated remaining settlement period. All such deferred gains are included in reinsurance balances payable in the consolidated balance sheets. Amortized gains are recorded in the consolidated statements of income as other income. At December 31, 2015 and 2014 , there were no material deposit assets or deposit liabilities and no material gains or losses on deposit accounted contracts. Fixed Assets Fixed assets are included in other assets on the consolidated balance sheets and are recorded at cost when acquired. Fixed assets are comprised of computer software, furniture and fixtures and leasehold improvements and are depreciated, using the straight-line method, over their estimated useful lives, which are five years for both computer software, and furniture and fixtures. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or remaining lease term. The Company periodically reviews fixed assets that have finite lives, and that are not held for sale, for impairment by comparing the carrying value of the assets to their estimated future undiscounted cash flows. For the years ended December 31, 2015, 2014 and 2013 , there were no impairments in fixed assets. At December 31, 2015 , the cost, accumulated depreciation and net book values of the fixed assets were as follows: Cost Accumulated depreciation Net book value ($ in thousands) Computer software $ 556 $ (348 ) $ 208 Furniture and fixtures 620 (513 ) 107 Leasehold improvements 2,002 (1,229 ) 773 Total $ 3,178 $ (2,090 ) $ 1,088 At December 31, 2014 , the cost, accumulated depreciation and net book values of the fixed assets were as follows: Cost Accumulated depreciation Net book value ($ in thousands) Computer software $ 556 $ (277 ) $ 279 Furniture and fixtures 620 (442 ) 178 Leasehold improvements 2,002 (966 ) 1,036 Total $ 3,178 $ (1,685 ) $ 1,493 Financial Instruments Investments in Securities and Investments in Securities Sold, Not Yet Purchased The Company’s investments in debt instruments and equity securities that are classified as "trading securities" are carried at fair value. The fair values of the listed equity investments are derived based on quoted prices (unadjusted) in active markets for identical assets (Level 1 inputs). The fair values of listed equities that have restrictions on sale or transfer which expire within one year, are determined by adjusting the observed market price of the equity using a liquidity discount based on observable market inputs. The fair values of debt instruments are derived based on inputs that are observable, either directly or indirectly, such as market maker or broker quotes reflecting recent transactions (Level 2 inputs), and are generally derived based on the average of multiple market maker or broker quotes which are considered to be binding. Where quotes are not available, debt instruments are valued using cash flow models using assumptions and estimates that may be subjective and non-observable (Level 3 inputs). The Company’s "other investments" may include investments in private and unlisted equity securities, limited partnerships, and commodities, which are all carried at fair value. The fair values of commodities are determined based on quoted prices in active markets for identical assets (Level 1). The Company maximizes the use of observable direct or indirect inputs (Level 2 inputs) when deriving the fair values for "other investments". For limited partnerships and private and unlisted equity securities, where observable inputs are not available, the fair values are derived based on unobservable inputs (Level 3 inputs) such as management’s assumptions developed from available information using the services of the investment advisor, including the most recent net asset values obtained from the managers of those underlying investments. For securities classified as "trading securities", and "other investments", any realized and unrealized gains or losses are determined on the basis of the specific identification method (by reference to cost or amortized cost, as appropriate) and included in net investment income (loss) in the consolidated statements of income. Dividend income and expense are recorded on the ex-dividend date. The ex-dividend date is the date as of when the underlying security must have been traded to be eligible for the dividend declared. Interest income and interest expense are recorded on an accrual basis. Derivative Financial Instruments U.S. GAAP requires that an entity recognize all derivatives in the balance sheet at fair value. It also requires that unrealized gains and losses resulting from changes in fair value be included in income or comprehensive income, depending on whether the instrument qualifies as a hedge transaction, and if so, the type of hedge transaction. The Company’s derivative financial instrument assets are included in financial contracts receivable. Derivative financial instrument liabilities are generally included in financial contracts payable. The Company's derivatives do not qualify as hedges for financial reporting purposes and are recorded in the consolidated balance sheets on a gross basis and not offset against any collateral pledged or received. Pursuant to the International Swaps and Derivatives Association ("ISDA") master agreements, securities lending agreements and other agreements, the Company and its counterparties typically have the ability to net certain payments owed to each other in specified circumstances. In addition, in the event a party to one of the ISDA master agreements, securities lending agreements or other agreements defaults, or a transaction is otherwise subject to termination, the non-defaulting party generally has the right to set off against payments owed to the defaulting party or collateral held by the non-defaulting party. The Company may from time to time enter into underwriting contracts such as industry loss warranty contracts ("ILW") that are treated as derivatives for U.S GAAP purposes. Financial Contracts The Company enters into financial contracts with counterparties as part of its investment strategy. Financial contracts, which include total return swaps, credit default swaps ("CDS"), futures, options, currency forwards and other derivative instruments, are recorded at their fair value with any unrealized gains and losses included in net investment income (loss) in the consolidated statements of income. Financial contracts receivable represents derivative contracts whereby, based upon the contract's current fair value, the Company will be entitled to receive payments upon settlement of the contract. Financial contracts payable represents derivative contracts whereby, based upon each contract's current fair value, the Company will be obligated to make payments upon settlement of the contract. Total return swap agreements, included on the consolidated balance sheets as financial contracts receivable and financial contracts payable, are derivative financial instruments whereby the Company is either entitled to receive or obligated to pay the product of a notional amount multiplied by the movement in an underlying security, which the Company may not own, over a specified time frame. In addition, the Company may also be obligated to pay or receive other payments based on interest rates, dividend payments and receipts, or foreign exchange movements during a specified period. The Company measures its rights or obligations to the counterparty based on the fair value movements of the underlying security together with any other payments due. These contracts are carried at fair value, based on observable inputs (Level 2 inputs) with the resultant unrealized gains and losses reflected in net investment income (loss) in the consolidated statements of income. Additionally, any changes in the value of amounts received or paid on swap contracts are reported as a gain or loss in net investment income (loss) in the consolidated statements of income. Financial contracts may also include exchange traded futures or options contracts that are based on the movement of a particular index, equity security, commodity, currency or interest rate. Where such contracts are traded in an active market, the Company’s obligations or rights on these contracts are recorded at fair value based on the observable quoted prices of the same or similar financial contracts in an active market (Level 1) or on broker quotes which reflect market information based on actual transactions (Level 2). Amounts invested in exchange traded options and over the counter ("OTC") options are recorded either as an asset or liability at inception. Subsequent to initial recognition, unexpired exchange traded option contracts are recorded at fair value based on quoted prices in active markets (Level 1). For OTC options or exchange traded options where a quoted price in an active market is not available, fair values are derived based upon observable inputs (Level 2) such as multiple quotes from brokers and market makers, which are considered to be binding. The Company may purchase and sell CDS for strategic investment purposes. A CDS is a derivative instrument that provides protection against an investment loss due to specified credit or default events of a reference entity. The seller of a CDS guarantees to pay the buyer a specified amount if the reference entity defaults on its obligations or fails to perform. The buyer of a CDS pays a premium over time to the seller in exchange for obtaining this protection. A CDS trading in an active market is valued at fair value based on broker or market maker quotes for identical instruments in an active market (Level 2) or based on the current credit spreads on identical contracts (Level 2). Share-Based Compensation The Company has established a stock incentive plan for directors, employees and consultants. U.S. GAAP requires the Company to recognize share-based compensation transactions using the fair value at the grant date of the award. The Company measures compensation for restricted shares and restricted stock units ("RSUs") based on the price of the Company’s common shares at the grant date and the expense is recognized on a straight line basis over the vesting period. Determining the fair value of share purchase options at the grant date requires significant estimation and judgment. The Company uses an option-pricing model (Black-Scholes option pricing model) to assist in the calculation of fair value for share purchase options. The model requires estimation of various inputs such as estimated term, forfeiture and dividend rates and expected volatility. The Company uses the full life of the options, ten years, as the estimated term of the options, and has assumed no forfeitures and no dividends paid during the life of the options. Effective from 2014, the estimate of expected volatility is based on the daily historical trading data of the Company's Class A ordinary shares from the date that these shares commenced trading (May 24, 2007) to the grant date. Prior to 2014, the Company's share had not been publicly traded for a sufficient length of time to reasonably estimate the expected volatility. Therefore, for share purchase options granted prior to 2014, the Company determined the expected volatility based primarily on the historical volatility of similar entities. The Company considered factors such as an entity's industry, stage of life cycle, size and financial leverage when selecting similar entities. The Company used a sample peer group of companies in the reinsurance industry as well as the Company’s own historical volatility in determining the expected volatility. For share purchase options issued under the employee stock incentive plan, compensation cost is calculated and expensed over the vesting periods on a graded vesting basis (see Note 10 ). If actual results differ significantly from these estimates and assumptions, particularly in relation to the Company’s estimation of volatility which requires the most judgment, share-based compensation expense, primarily with respect to future share-based awards, could be materially impacted. Foreign Exchange The reporting and functional currency of the Company and all its subsidiaries is the U.S. dollar. Transactions in foreign currencies are recorded in U.S. dollars at the exchange rates in effect on the transaction date. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated at the exchange rate in effect at the balance sheet date and translation exchange gains and losses, if any, are included in "other income (expense), net" in the consolidated statements of income. Other Assets Other assets consist primarily of investment income receivable, prepaid expenses, fixed assets and deferred tax assets. Other Liabilities Other liabilities consist primarily of dividends payable on securities sold, not yet purchased, and employee bonus accruals. At December 31, 2015 , other liabilities included accrued bonus of $8.2 million ( 2014 : $7.6 million ). Under the Company's bonus program, each employee’s target bonus consists of two components: a discretionary component based on a qualitative assessment of each employee’s performance and a quantitative component based on the return on deployed equity (‘‘RODE”) for each underwriting year relating to reinsurance operations. The qualitative portion of an employee’s annual bonus is accrued at each employee's target amount, which may differ significantly from the actual amount approved and awarded annually by the Compensation Committee. The quantitative portion of each employee’s annual bonus is accrued based on the expected RODE for each underwriting year and adjusted for changes in the expected RODE and actual investment return each quarter until all losses are settled and the underwriting year is declared closed. The quantitative bonus is calculated and paid, with the approval of the Compensation Committee, in annual installments between two to five years from the end of the fiscal year in which the business was underwritten. Any further changes are incorporated into the following open underwriting year. The expected RODE calculation utilizes proprietary models which require significant estimation and judgment. Actual RODE may vary significantly from the expected RODE and any adjustments to the quantitative bonus estimates, which may be material, are recorded in the period in which they are determined. Also included in other liabilities are accruals for income taxes payable, professional fees and other general expenses. Non-controlling Interest Non-controlling interest in joint venture on the consolidated balance sheets represents DME Advisors, LLC’s (‘‘DME”) share of assets in the joint venture whereby DME is a participant in the joint venture as disclosed in Note 13 . DME’s share of investment income or loss is included in the consolidated statements of income as income attributable to non-controlling interest in joint venture. Comprehensive Income (Loss) The Company has no other comprehensive income or loss, other than the net income or loss disclosed in the consolidated statements of income. Earnings (Loss) Per Share Basic earnings per share are based on the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings per share includes the dilutive effect of restricted stock units ("RSU") and additional potential common shares issuable when stock options are exercised and are determined using the treasury stock method. The Company treats its unvested restricted stock as participating securities in accordance with U.S. GAAP, which requires that unvested stock awards which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (referred to as "participating securities"), be included in the number of shares outstanding for both basic and diluted earnings per share calculations. In the event of a net loss, all RSUs, stock options outstanding and participating securities are excluded from the calculation of both basic and diluted loss per share since their inclusion would be anti-dilutive. Year ended December 31 2015 2014 2013 Weighted average shares outstanding - basic 36,670,466 37,242,687 36,838,128 Effect of dilutive service provider share-based awards — 8,498 144,726 Effect of dilutive employee and director share-based awards — 623,202 602,313 Weighted average shares outstanding - diluted 36,670,466 37,874,387 37,585,167 Anti-dilutive stock options outstanding 211,821 — 218,197 Participating securities excluded from calculation of loss per share 307,013 — — Taxation Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes tax on profits, income, gains or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to GLRE, Greenlight Re nor their respective operations, or to the Class A or Class B ordinary shares or related obligations, until February 1, 2025. Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the U.S. Internal Revenue Service ("IRS"). Verdant’s taxable income is generally expected to be taxed at a rate of 35% . GRIL is incorporated in Ireland and therefore is subject to the Irish corporation tax rate of 12.5% on its trading income, and 25% on its non-trading income, if any. Any deferred tax asset is evaluated for recovery and a valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be realized in the future. The Company has not taken any income tax positions that are subject to significant uncertainty or that are reasonably likely to have a material impact on the Company. Segment Information Under U.S. GAAP, operating segments are based on the internal information that management uses for allocating resources and assessing performance as the source of the Company's reportable segments. The Company manages its business on the basis of one operating segment, Property and Casualty Reinsurance, in accordance with the qualitative and quantitative criteria established by U.S. GAAP. Recent Accounting Pronouncements In May 2015, the FASB issued Accounting Standards Update 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share or Its Equivalent" ("ASU 2015-07"). The amendments apply to reporting entities that elect to measure the fair value of an investment using the net asset value ("NAV") per share (or its equivalent) as a practical expedient. The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share as a practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share as a practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The amendments in ASU 2015-07 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Entities are required to apply the amendments in this update retrospectively to all periods presented. The Company will adopt ASU 2015-07 during the first quarter of 2016. As the Company measures certain investments in private equity funds using the NAV as a practicable expedient, upon adoption of ASU 2015-07, the fair value of these investments will be removed from the fair value hierarchy for all periods presented in the Company’s consolidated financial statements. The Company will continue to disclose information on these investments for which fair value is measured at NAV as a practical expedient. In May 2015, the FASB issued ASU 2015-09, "Financial Services - Insurance (Topic 944): Disclosures about Short-Duration Contracts" ("ASU 2015-09"). ASU 2015-09 requires additional disclosures for short-duration contracts including incurred and paid claims development information, claims duration information, quantitative claims frequency information (unless impracticable), and an explanation of significant changes in methodologies and assumptions used to calculate the loss and loss adjustment expense reserves. ASU 2015-09 is effective for public entities for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual reporting periods beginning after December 15, 2016 with early adoption permitted. The Company is evaluating the impact of the disclosure requirements of ASU 2015-09 and is preparing to disclose the additional information in its consolidated financial statements for the fiscal year ending December 31, 2016 and thereafter. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Financial Instruments [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS In the normal course of its business, the Company purchases and sells various financial instruments, which include listed and unlisted equities, corporate and sovereign debt, commodities, futures, put and call options, currency forwards, other derivatives and similar instruments sold, not yet purchased. The Company is exposed to credit risk in relation to counterparties that may default on their obligations to the Company. The amount of counterparty credit risk predominantly relates to the value of financial contracts receivable and assets held at counterparties. The Company mitigates its counterparty credit risk by using several counterparties which decreases the likelihood of any significant concentration of credit risk with any one counterparty. In addition, the Company is exposed to credit risk on corporate and sovereign debt instruments to the extent that the debtors may default on their debt obligations. The Company is exposed to market risk including interest rate and foreign exchange fluctuations on financial instruments that are valued at market prices. Market movements can be volatile and difficult to predict. This may affect the ultimate gains or losses realized upon the sale of its holdings as well as the amount of net investment income reported in the consolidated statements of income. Management utilizes the services of the Company's investment advisor to monitor the Company's positions to reduce the risk of potential loss due to changes in market values. Purchases and sales of investments are disclosed in the consolidated statements of cash flows. Net realized gains on the sale of investments, financial contracts, and investments sold, not yet purchased during 2015 were $22.2 million ( 2014 : $352.1 million gains , 2013 : $122.6 million gains ). Gross realized gains were $350.5 million ( 2014 : $596.6 million , 2013 : $312.3 million ) and gross realized losses were $328.3 million ( 2014 : $244.5 million , 2013 : $189.7 million ). For the year ended December 31, 2015 , included in net investment income in the consolidated statements of income were $265.4 million of net losses ( 2014 : $187.8 million of net losses , 2013 : $149.0 million of net gains ) relating to change in unrealized gains and losses on trading securities still held at the balance sheet date. As of December 31, 2015 , cash and investments with a fair value of $324.3 million ( 2014 : $302.6 million ) have been pledged as security against letters of credit issued, and $78.6 million ( 2014 : nil ) have been pledged as security relating to regulatory trusts. As of December 31, 2015 , the Company’s investments in gold and gold derivatives was the only investment in excess of 10% of the Company’s shareholders’ equity, with a fair value of $98.0 million , or 11.6% of shareholders' equity. As of December 31, 2014 , the Company’s investment in Micron Technology Inc. , was the only investment in excess of 10% of the Company’s shareholders’ equity, with fair values of $151.1 million , or 12.7% , of shareholders' equity. Fair Value Hierarchy The Company’s financial instruments are carried at fair value, and the net unrealized gains or losses are included in net investment income (loss) in the consolidated statements of income. The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2015 : Fair value measurements as of December 31, 2015 Description Quoted prices in Significant other Significant Total Assets: ($ in thousands) Debt instruments $ — $ 38,582 $ 505 $ 39,087 Listed equity securities 900,369 5,625 — 905,994 Commodities 98,046 — — 98,046 Private and unlisted equity securities — — 21,037 21,037 Financial contracts receivable 20 13,195 — 13,215 $ 998,435 $ 57,402 $ 21,542 $ 1,077,379 Liabilities: Listed equity securities, sold not yet purchased $ (808,481 ) $ — $ — $ (808,481 ) Debt instruments, sold not yet purchased — (74,425 ) — (74,425 ) Financial contracts payable (488 ) (27,757 ) — (28,245 ) $ (808,969 ) $ (102,182 ) $ — $ (911,151 ) The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2014 : Fair value measurements as of December 31, 2014 Description Quoted prices in Significant other Significant Total Assets: ($ in thousands) Debt instruments $ — $ 26,953 $ 22,259 $ 49,212 Listed equity securities 1,259,298 6,877 — 1,266,175 Commodities 96,872 — — 96,872 Private and unlisted equity securities — — 18,719 18,719 Financial contracts receivable 2,463 44,708 — 47,171 $ 1,358,633 $ 78,538 $ 40,978 $ 1,478,149 Liabilities: Listed equity securities, sold not yet purchased $ (834,228 ) $ — $ — $ (834,228 ) Debt instruments, sold not yet purchased — (256,503 ) — (256,503 ) Financial contracts payable — (44,592 ) — (44,592 ) $ (834,228 ) $ (301,095 ) $ — $ (1,135,323 ) The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2015 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Year ended December 31, 2015 Assets Liabilities Debt instruments Private and unlisted equity securities Financial contracts receivable Listed equity securities Total Financial contracts payable ($ in thousands) Beginning balance $ 22,259 $ 18,719 $ — $ — $ 40,978 $ — Purchases — 5,009 2,340 — 7,349 — Sales (21,561 ) (3,290 ) — — (24,851 ) — Total realized and unrealized gains (losses) and amortization included in earnings, net (193 ) 599 (3,027 ) (692 ) (3,313 ) 314 Transfers into Level 3 — — 2,536 5,189 7,725 8,835 Transfers out of Level 3 — — (1,849 ) (4,497 ) (6,346 ) (9,149 ) Ending balance $ 505 $ 21,037 $ — $ — $ 21,542 $ — During the year ended December 31, 2015 , $5.2 million of equity securities, listed on the Athens Stock Exchange (the "ASE"), were transferred from Level 1 to Level 3 securities due to trading being halted from June 26, 2015 to August 3, 2015 for all equity securities listed on the ASE. Since there was no active market with observable trading prices to determine the fair value of these securities, during this period these securities were valued based on the last trading price of these securities on the ASE and adjusted for the estimated decline in the fair value of American depository receipts of other comparable securities. When the ASE resumed trading on August 3, 2015, the fair values of the ASE listed equity securities were once again based on observable prices in an active market. Therefore, $4.5 million of listed equity securities trading on the ASE were transferred from Level 3 to Level 1 securities during the year ended December 31, 2015 . The fair values for derivatives for which the underlying securities traded on the ASE were also transferred to Level 3 securities during 2015 when the ASE halted trading, and were subsequently transferred out of Level 3 securities when the ASE resumed trading. Therefore, for the year ended December 31, 2015 , $2.5 million and $8.8 million of financial contracts receivable and financial contracts payable, respectively, were transfered from Level 2 to Level 3 due to the fair values being based on unobservable inputs during the period that the ASE had halted trading. During the year ended December 31, 2015 , $1.8 million of financial contracts receivable and $9.1 million of financial contracts payable, respectively, were transfered from Level 3 to Level 2 as fair values were based on observable inputs once the ASE resumed trading. There were no other transfers between Level 1, Level 2 or Level 3 during the year ended December 31, 2015 . The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2014 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Year ended December 31, 2014 Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 527 $ 46,323 $ 46,850 Purchases 21,561 3,958 25,519 Sales — (37,252 ) (37,252 ) Total realized and unrealized gains included in earnings, net 171 9,734 9,905 Transfers into Level 3 — — — Transfers out of Level 3 — (4,044 ) (4,044 ) Ending balance $ 22,259 $ 18,719 $ 40,978 During the year ended December 31, 2014 , $4.0 million of securities at fair value, based on the date of transfer, were transferred from Level 3 to Level 2 as these securities began actively trading on a listed exchange during the third quarter of 2014. However, due to lock-up period restrictions on those securities, they were classified as Level 2 upon transfer until the lock-up period expired. Additionally. during the year ended December 31, 2014 , $14.4 million of securities at fair value, based on the date of transfer, were transferred from Level 2 to Level 1 as the lock up period restrictions on those securities expired. There were no other transfers between Level 1, Level 2 or Level 3 during the year ended December 31, 2014 . As of December 31, 2015 , included in private and unlisted equity securities are investments in private equity funds with a fair value of $12.6 million (December 31, 2014 : $12.3 million ) determined based on unadjusted net asset values reported by the managers of these securities. Some of these values were reported from periods prior to December 31, 2015 . The private equity funds have varying lock-up periods and, as of December 31, 2015 , all of the funds had redemption restrictions, and therefore have been categorized within Level 3 of the fair value hierarchy. The redemption restrictions have been in place since inception of the investments and are not expected to lapse in the near future. As of December 31, 2015 , the Company had $6.1 million (December 31, 2014 : $8.9 million ) of unfunded commitments relating to private equity funds whose fair values are determined based on unadjusted net asset values reported by the managers of these securities. These commitments are included in the amounts presented in the schedule of commitments and contingencies in Note 14 of these consolidated financial statements. For the year ended December 31, 2015 , included in net investment loss in the consolidated statements of income were net realized losses relating to Level 3 securities of $1.4 million ( 2014 : net realized gains of $13.5 million ). In addition, for the year ended December 31, 2015 , amortization expense of $2.3 million ( 2014 : nil ) relating to financial contracts receivable, valued using unobservable inputs, was included in the consolidated statements of income as "other income (expense), net". For Level 3 securities still held as of the reporting date, the change in net unrealized gain for the year ended December 31, 2015 of $0.6 million ( 2014 : net unrealized gains $1.4 million ), were included in net investment income (loss) in the consolidated statements of income. Investments Debt instruments, trading At December 31, 2015 , the following investments were included in debt instruments: Cost/ amortized cost Unrealized gains Unrealized losses Fair value ($ in thousands) Corporate debt – U.S. $ 25,674 $ 155 $ (5,519 ) $ 20,310 Corporate debt – Non U.S. 2,109 — (1,795 ) 314 Sovereign debt – Non U.S. 17,688 1,225 (450 ) 18,463 Total debt instruments $ 45,471 $ 1,380 $ (7,764 ) $ 39,087 At December 31, 2014 , the following investments were included in debt instruments: Cost/ amortized cost Unrealized gains Unrealized losses Fair value ($ in thousands) Corporate debt – U.S. $ 23,677 $ 5 $ (1,423 ) $ 22,259 Corporate debt – Non U.S. 5,870 49 (1,405 ) 4,514 Municipal debt – U.S. 1,759 — (6 ) 1,753 Sovereign debt – Non U.S. 21,769 — (1,083 ) 20,686 Total debt instruments $ 53,075 $ 54 $ (3,917 ) $ 49,212 The maturity distribution for debt instruments held at December 31, 2015 and 2014 , was as follows: 2015 2014 Cost/ amortized cost Fair value Cost/ amortized cost Fair value ($ in thousands) Within one year $ — $ — $ — $ — From one to five years 4,202 4,129 21,922 21,923 From five to ten years 18,840 14,780 2,401 1,282 More than ten years 22,429 20,178 28,752 26,007 $ 45,471 $ 39,087 $ 53,075 $ 49,212 Equity securities, trading At December 31, 2015 , the following long positions were included in equity securities, trading: Cost Unrealized gains Unrealized losses Fair value ($ in thousands) Equities – listed $ 1,011,424 $ 67,114 $ (187,885 ) $ 890,653 Exchange traded funds 31,570 — (16,229 ) 15,341 Total equity securities $ 1,042,994 $ 67,114 $ (204,114 ) $ 905,994 At December 31, 2014 , the following long positions were included in equity securities, trading: Cost Unrealized gains Unrealized losses Fair value ($ in thousands) Equities – listed $ 1,079,955 $ 247,109 $ (80,637 ) $ 1,246,427 Exchange traded funds 42,126 — (22,378 ) 19,748 Total equity securities $ 1,122,081 $ 247,109 $ (103,015 ) $ 1,266,175 Other Investments "Other investments" include commodities and private and unlisted equity securities. As of December 31, 2015 and 2014 , commodities were comprised of gold bullion. At December 31, 2015 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 102,092 $ — $ (4,046 ) $ 98,046 Private and unlisted equity securities 18,720 3,491 (1,174 ) 21,037 $ 120,812 $ 3,491 $ (5,220 ) $ 119,083 At December 31, 2014 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 95,815 $ 1,057 $ — $ 96,872 Private and unlisted equity securities 17,238 3,451 (1,970 ) 18,719 $ 113,053 $ 4,508 $ (1,970 ) $ 115,591 Investments in Securities Sold, Not Yet Purchased Securities sold, not yet purchased are securities that the Company has sold, but does not own, in anticipation of a decline in the market value of the security. The Company’s risk is that the value of the security will increase rather than decline. Consequently, the settlement amount of the liability for securities sold, not yet purchased may exceed the amount recorded in the consolidated balance sheet as the Company is obligated to purchase the securities sold, not yet purchased in the market at prevailing prices to settle its obligations. To establish a position in security sold, not yet purchased, the Company needs to borrow the security for delivery to the buyer. On each day the transaction is open, the liability for the obligation to replace the borrowed security is marked-to-market and an unrealized gain or loss is recorded. At the time the transaction is closed, the Company realizes a gain or loss equal to the difference between the price at which the security was sold and the cost of replacing the borrowed security. While the transaction is open, the Company will also incur an expense for any dividends or interest which will be paid to the lender of the securities. At December 31, 2015 , the following securities were included in investments in securities sold, not yet purchased: Proceeds Unrealized gains Unrealized losses Fair value ($ in thousands) Equities – listed $ (803,842 ) $ 102,469 $ (94,681 ) $ (796,054 ) Exchange traded funds (9,572 ) — (2,855 ) (12,427 ) Sovereign debt – Non U.S. (77,443 ) 3,018 — (74,425 ) $ (890,857 ) $ 105,487 $ (97,536 ) $ (882,906 ) At December 31, 2014 , the following securities were included in investments in securities sold, not yet purchased: Proceeds Unrealized gains Unrealized losses Fair value ($ in thousands) Corporate debt – U.S. $ (7,066 ) $ 1,007 $ (5 ) $ (6,064 ) Equities – listed (813,365 ) 91,690 (101,715 ) (823,390 ) Exchange traded funds (9,180 ) — (1,658 ) (10,838 ) Sovereign debt – Non U.S. (246,589 ) 6,635 (10,485 ) (250,439 ) $ (1,076,200 ) $ 99,332 $ (113,863 ) $ (1,090,731 ) Financial Contracts As of December 31, 2015 and 2014 , the Company had entered into total return equity swaps, interest rate swaps, commodity swaps, CDS, options, warrants, rights, futures and forward contracts with various financial institutions to meet certain investment objectives. Under the terms of each of these financial contracts, the Company is either entitled to receive or is obligated to make payments, which are based on the product of a formula contained within each contract that includes the change in the fair value of the underlying or reference security. In addition, during the year ended December 31, 2015 , the Company had entered into an ILW with certain third-parties in order to purchase protection against worldwide wind and earthquake exposures from January 2015 to December 2015. In return for a fixed payment, the Company is entitled to receive a variable payment in the event of losses incurred by the insurance industry, as a whole, exceeding a specified threshold. Through December 31, 2015 , the Company was not aware of any industry loss event occurring that would have triggered a recovery under the ILW. At December 31, 2015 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing (1) Notional amount of Fair value of net assets ($ in thousands) Financial contracts receivable Call options (2) USD 47,259 $ 657 Put options (3) USD 147,326 8,790 Total return swaps – equities EUR/GBP/USD 50,205 3,748 Warrants and rights on listed equities EUR 59 20 Total financial contracts receivable, at fair value $ 13,215 Financial contracts payable Call options USD 2,601 $ (64 ) Commodity Swaps USD 42,160 (12,784 ) Forwards KRW 2,908 (22 ) Futures USD 21,195 (488 ) Total return swaps – equities EUR/GBP/HKD/RON/MXN/USD 71,874 (14,887 ) Total financial contracts payable, at fair value $ (28,245 ) (1) USD = US Dollar; EUR = Euro; GBP = British Pound; HKD = Hong Kong Dollar; KRW = Korean Won; MXN = Mexican Peso; RON = Romanian New Leu. (2) Includes options on interest rate futures relating to U.S. dollar LIBOR interest rates. (3) Includes options on the Japanese Yen and the Chinese Yuan, denominated in U.S. dollars. At December 31, 2014 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing currency (1) Notional amount of underlying instruments Fair value of net assets (obligations) on financial contracts ($ in thousands) Financial contracts receivable Futures USD 13,204 $ 3,461 Put options (2) USD 299,907 22,349 Total return swaps – equities EUR/GBP/HKD/USD 43,355 18,898 Warrants and rights on listed equities EUR 8,054 2,463 Total financial contracts receivable, at fair value $ 47,171 Financial contracts payable Credit default swaps, purchased – corporate debt USD 221,198 $ (1,305 ) Credit default swaps, purchased – sovereign debt USD 251,467 (1,714 ) Forwards KRW 20,563 (512 ) Futures USD 33,625 (867 ) Total return swaps – equities EUR/GBP/HKD/INR/RON/USD 122,667 (40,194 ) Total financial contracts payable, at fair value $ (44,592 ) (1) USD = US Dollar; EUR = Euro; GBP = British Pound; HKD = Hong Kong Dollar; KRW = Korean Won; RON = Romanian New Leu; INR = Indian Rupee. (2) Includes options on the Japanese Yen and the Chinese Yuan, denominated in U.S. dollars. Options are derivative financial instruments that give the buyer, in exchange for a premium payment, the right, but not the obligation, to either purchase from (call option) or sell to (put option) the writer, a specified underlying security at a specified price on or before a specified date. The Company enters into option contracts to meet certain investment objectives. For exchange traded option contracts, the exchange acts as the counterparty to specific transactions and therefore bears the risk of delivery to and from counterparties of specific positions. As of December 31, 2015 , the Company held $8.7 million OTC put options (long) ( December 31, 2014 : $22.4 million ). During the years ended December 31, 2015, 2014 and 2013 , the Company reported gains and losses on derivatives as follows: Derivatives not designated as hedging instruments Location of gains and losses on derivatives recognized in income Gain (loss) on derivatives recognized in income Year ended December 31 2015 2014 2013 ($ in thousands) Commodity swaps Net investment income (loss) $ (12,061 ) $ — $ — Credit default swaps, purchased – corporate debt Net investment income (loss) (156 ) (345 ) (3,552 ) Credit default swaps, purchased – sovereign debt Net investment income (loss) (90 ) (298 ) (1,087 ) Forwards Net investment income (loss) 1,009 (490 ) 11,209 Futures Net investment income (loss) (952 ) 16,721 12,504 Interest rate options Net investment income (loss) — (26 ) (82 ) Interest rate swaps Net investment income (loss) (706 ) — — Options, warrants, and rights Net investment income (loss) (13,955 ) 1,020 21,446 Total return swaps – equities Net investment income (loss) (12,590 ) 13,142 85,638 Weather derivative swap Other income (expense), net (2,340 ) — — Total $ (41,841 ) $ 29,724 $ 126,076 The Company generally does not enter into derivatives for risk management or hedging purposes. The volume of derivative activities varies from period to period depending on potential investment opportunities. For the year ended December 31, 2015 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2015 Year ended December 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Commodity swaps $ 103,358 $ 43,261 Credit default swaps (1) — — Forwards — 13,377 Futures 311,536 294,441 Interest rate swaps 9,139,000 7,213,000 Options, warrants and rights (1) 661,103 341,702 Total return swaps 67,844 185,128 Weather derivative swap 12,000 12,000 Total $ 10,294,841 $ 8,102,909 (1) Exited amount excludes derivatives which expired or were exercised during the period. For the year ended December 31, 2014 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2014 Year ended December 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Forwards $ — $ 82,688 Futures 308,178 356,216 Options, warrants and rights (1) 1,044,241 314,876 Total return swaps 121,125 160,065 Total $ 1,473,544 $ 913,845 (1) Exited amount excludes derivatives which expired or were exercised during the period. The Company does not offset its derivative instruments and presents all amounts in the consolidated balance sheets on a gross basis. The Company has pledged cash collateral to derivative counterparties to support the current value of amounts due to the counterparties based on the value of the underlying security. As of December 31, 2015 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: December 31, 2015 (i) (ii) (iii) = (i) - (ii) (iv) Gross amounts not offset in the balance sheet (v) = (iii) + (iv) Description Gross amounts of recognized assets (liabilities) Gross amounts offset in the balance sheet Net amounts of assets (liabilities) presented in the balance sheet Financial instruments available for offset Cash collateral (received) pledged Net amount of asset (liability) ($ in thousands) Financial contracts receivable $ 13,215 $ — $ 13,215 $ (8,937 ) $ (2,036 ) $ 2,242 Financial contracts payable (28,245 ) — (28,245 ) 8,937 19,308 — As of December 31, 2014 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: December 31, 2014 (i) (ii) (iii) = (i) - (ii) (iv) Gross amounts not offset in the balance sheet (v) = (iii) + (iv) Description Gross amounts of recognized assets (liabilities) Gross amounts offset in the balance sheet Net amounts of assets (liabilities) presented in the balance sheet Financial instruments available for offset Cash collateral (received) pledged Net amount of asset (liability) ($ in thousands) Financial contracts receivable $ 47,171 $ — $ 47,171 $ (24,265 ) $ (9,452 ) $ 13,454 Financial contracts payable (44,592 ) — (44,592 ) 24,265 20,327 — |
DUE TO PRIME BROKERS
DUE TO PRIME BROKERS | 12 Months Ended |
Dec. 31, 2015 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
DUE TO PRIME BROKERS | DUE TO PRIME BROKERS As of December 31, 2015 , the amount due to prime brokers is comprised of margin-borrowing from prime brokers relating to investments purchased on margin as well as the margin-borrowing for providing collateral to support some of the Company’s outstanding letters of credit (see Notes 6 and 14 ) and trust accounts. Under term margin agreements and certain letter of credit facility agreements, the Company pledges certain investment securities to borrow cash from the prime brokers. The borrowed cash is placed in a custodial account in the name of the Company and this custodial account provides collateral for any letters of credit issued. Since there is no legal right of offset, the Company’s liability for the cash borrowed from the prime brokers is included on the consolidated balance sheets as due to prime brokers while the cash held in the custodial account is included on the consolidated balance sheets as restricted cash and cash equivalents. At December 31, 2015 , the amounts due to prime brokers included $301.4 million ( 2014 : $135.0 million ) of cash borrowed under the term margin agreements to provide collateral in the form of letters of credit and trust accounts, and $95.0 million ( 2014 : $76.1 million ) of borrowing relating to investing activities. Greenlight Re's investment guidelines, among other stipulations in the guidelines, allow for up to 15% (GRIL: 5% ) net margin leverage for extended periods of time and up to 30% (GRIL: 20% ) net margin leverage relating to investing activities for periods of less than 30 days. |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents [Line Items] | |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS December 31, 2015 December 31, 2014 ($ in thousands) Cash at banks $ 44,133 $ 3,426 Cash held with brokers 68,029 8,604 Total cash and cash equivalents $ 112,162 $ 12,030 Due to the short term nature of cash and cash equivalents, management believes the above noted carrying values approximate their fair value. Cash at banks include cash held at non-U.S. financial institutions which are not insured by the FDIC or any other deposit insurance programs. |
RESTRICTED CASH AND CASH EQUIVA
RESTRICTED CASH AND CASH EQUIVALENTS | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Cash and Cash Equivalents | |
Restricted Cash and Cash Equivalents Items [Line Items] | |
RESTRICTED CASH AND CASH EQUIVALENTS | RESTRICTED CASH AND CASH EQUIVALENTS The Company is required to maintain certain cash in segregated accounts with prime brokers and swap counterparties. The amount of restricted cash held by prime brokers is primarily used to support the liability created from securities sold, not yet purchased and the amount of cash encumbered varies depending on the market value of the securities sold, not yet purchased. Swap counterparties also require cash collateral to support the current value of any amounts that may be due to the counterparty based on the value of the underlying security. Restricted cash and cash equivalents also include amounts held by the Company to provide collateral required by the cedents in the form of trust accounts and letters of credit (see Notes 4 and 14 ). As of December 31, 2015 and 2014 , the restricted cash and cash equivalents were comprised of the following: December 31, 2015 December 31, 2014 ($ in thousands) Cash held by prime brokers relating to securities sold, not yet purchased $ 882,906 $ 1,090,731 Cash collateral relating to letters of credit issued 222,852 134,981 Cash held as collateral in trust accounts 78,584 — Cash and cash equivalents held by swap counterparties 52,247 71,202 Total restricted cash and cash equivalents $ 1,236,589 $ 1,296,914 |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 12 Months Ended |
Dec. 31, 2015 | |
Insurance Loss Reserves [Abstract] | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES At December 31, 2015 and 2014 , loss and loss adjustment expense reserves were comprised of the following: 2015 2014 ($ in thousands) Case reserves $ 111,535 $ 117,049 IBNR 194,462 147,194 Total $ 305,997 $ 264,243 A summary of changes in outstanding loss and loss adjustment expense reserves is as follows: 2015 2014 2013 ($ in thousands) Gross balance at January 1 $ 264,243 $ 329,894 $ 356,470 Less: Losses recoverable (11,523 ) (16,829 ) (34,451 ) Net balance at January 1 252,720 313,065 322,019 Incurred losses related to: Current year 266,796 216,757 344,613 Prior years 50,301 18,229 (6,120 ) Total incurred 317,097 234,986 338,493 Paid losses related to: Current year (132,017 ) (163,139 ) (177,871 ) Prior years (132,846 ) (130,438 ) (170,018 ) Total paid (264,863 ) (293,577 ) (347,889 ) Foreign currency revaluation (2,325 ) (1,754 ) 442 Net balance at December 31 302,629 252,720 313,065 Add: Losses recoverable 3,368 11,523 16,829 Gross balance at December 31 $ 305,997 $ 264,243 $ 329,894 For the year ended December 31, 2015 , the net losses incurred included $50.3 million related to net adverse loss development on reserves relating to prior years. During the year ended December 31, 2015 , the loss development on prior year contracts primarily related to the following: ● $36.9 million of adverse loss development relating to a general liability contract originally written from 2008 to 2011. This contract contains underlying construction defect liability coverage predominantly on single family homes. During the third quarter of 2015, we completed an in-depth analysis, with the assistance of a third party expert, of the construction defect claims reported and the potential for claims not yet reported on this contract. Based on this assessment, we revised the actuarial methodology used for reserving the construction defect claims on this contract, which resulted in an increase in incurred but not reported losses; ● $14.7 million of adverse loss development relating to a general liability contract originally written in 2010. This contract contains underlying construction defect liability coverage. Based on updated data received from the insured, we conducted additional actuarial analysis and updated our actuarial input parameters based on consultation with external industry experts. As a result, the average estimated cost per claim was increased; ● $9.3 million of adverse loss development relating to our Florida homeowners' insurance contracts as a result of deterioration of sinkhole claims, higher than anticipated water damage claims from rainstorms and an increase in the practice of "assignment of benefits" whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters which led to increases in the frequency of claims reported as well as the severity of loss adjustment expenses . However, because some of these contracts included sliding scale ceding commission rates, the increase in loss reserves was partially offset by a $5.1 million decrease in ceding commissions and profit commissions recorded as acquisition costs; ● $2.4 million of net adverse loss development relating to our solicitors' professional indemnity contracts as a result of multiple large claims reported during the period and an increase in incurred losses; ● $5.1 million of favorable loss development relating to an excess of loss property contract resulting in elimination of loss reserve based on updated loss information received from the insured during the period indicating that no losses will breach into our layer of coverage. The decrease in loss reserve was more than offset by a reversal of $2.5 million of earned premiums and an accrual of $3.4 million of profit commission recorded as acquisition costs; ● $4.5 million of favorable loss development relating to private passenger motor contracts during the period. The decrease in loss reserve was partially offset by $3.3 million of additional ceding commissions recorded as acquisition costs; ● $2.3 million of favorable loss development relating to the employer medical stop-loss business as a result of better than expected claims frequency reported by the cedent; and ● $1.3 million of loss reserves released upon commutation of a private passenger motor contract during the period. The decrease in loss reserve was partially offset by $1.1 million of additional ceding commissions incurred as part of the commutation agreement. There were no other significant developments of prior period loss reserves during the year ended December 31, 2015 . For the year ended December 31, 2014 , the net losses incurred included $18.2 million related to net adverse loss development on reserves relating to prior years. During the year ended December 31, 2014 , the loss development on prior year contracts primarily related to the following: ● $7.8 million of adverse loss development, relating to a general liability contract currently in run-off. Loss reserves were increased on this contract after a detailed actuarial review of existing claims data received from the client, which reported an increase in the number of open claims. The loss reserves were also increased to take into account the corresponding claims handling fees expected to be incurred to settle the open claims; ● $7.1 million of adverse loss development, net of retrocession recoveries, relating to commercial motor claims on a multi-line quota share contract currently in run-off. Loss reserves were increased on this contract after a detailed actuarial review of existing claims data received from the client, which reported significant increases in incurred losses on some claims as well as an increase in the number of open claims; ● $4.0 million of adverse loss development relating to a solicitors' professional indemnity contract as a result of a combination of large claims reported and increases in case reserves on several smaller claims. Loss reserves were increased on this contract after a detailed review of existing claims data received from the client, audits of claim files at the third party claims administrator and actuarial analysis based on all available information. The contract terms included sliding scale ceding commission rates and profit commissions. As a result, the increase in loss reserves was offset by a $0.6 million decrease in ceding commissions and profit commissions which were recorded as decreases to acquisition costs; ● $3.0 million of adverse loss development relating to the employer medical stop-loss business. Loss reserves were increased on these contracts after a detailed review of existing claims data received from the clients, audits of claim files at the third party claims administrators and actuarial analysis based on all available information; and ● $3.8 million of favorable loss development relating to private passenger automobile business, primarily as a result of better than expected loss development noted on our private passenger automobile contracts after a detailed review of existing claims data received from the clients, audits of claim files and actuarial analysis based on all available information. Since these contracts included sliding scale ceding commission rates, the decrease in loss reserves was offset by a $2.2 million increase in ceding commissions recorded as acquisition costs. There were no other significant developments of prior period loss reserves during the year ended December 31, 2014 . For the year ended December 31, 2013 , the net losses incurred included $6.1 million related to net favorable loss development on reserves relating to prior years. During the year ended December 31, 2013 , the loss development on prior year contracts primarily related to the following: ● Elimination of $15.0 million of reserves relating to super-storm Sandy based on additional information received from the client which indicated that the losses would not exceed the threshold of coverage provided under the contract. As a result of the reversal of loss reserves, the Company also reversed reinstatement premiums earned of $2.6 million ; ● $4.0 million of favorable loss development relating to commercial automobile business due to better than expected loss development on open claims and settling of claims at lower amounts than expected. Loss reserves were decreased on these contracts after a detailed review of existing claims data received from the clients, audits of claim files at the third party claims administrators and actuarial analysis based on all available information; ● $3.0 million favorable loss development relating to a private passenger automobile contract as a result of final settlement of losses upon commutation of the contract at an amount lower than originally reserved. However, because this contract included a sliding scale ceding commission rate, the decrease in loss reserves was offset by a $2.3 million increase in ceding commissions recorded as acquisition costs; ● $2.4 million favorable loss development relating to Florida homeowners' insurance business due to better than expected development on sinkhole claims, primarily as a result of legislative changes implemented in the State of Florida during 2012; ● $17.7 million of adverse loss development, net of retrocession recoveries, relating to general liability business. Loss reserves were increased on these contracts after a detailed review of existing claims data received from the clients, audits of claim files at the third party claims administrators and actuarial analysis based on all available information; and ● $4.0 million of adverse loss development on a 2007 casualty clash contract based on updated claims and loss information received from the client. The new information indicated that ground up losses under the contract estimated by the client had increased resulting in additional losses attaching to the Company's layer. As a result of this increase in loss reserves, the Company recorded reinstatement premiums of $1.2 million . There were no other significant developments of prior period loss reserves during the year ended December 31, 2013 . |
RETROCESSION
RETROCESSION | 12 Months Ended |
Dec. 31, 2015 | |
Reinsurance Disclosures [Abstract] | |
RETROCESSION | RETROCESSION The Company, from time to time, purchases retrocessional coverage for one or more of the following reasons: to manage its overall exposure, to reduce its net liability on individual risks, to obtain additional underwriting capacity and to balance its underwriting portfolio. Additionally, retrocession can be used as a mechanism to share the risks and rewards of business written and therefore can be used as a tool to align the Company's interests with those of its counterparties. The Company currently has coverages that provide for recovery of a portion of loss and loss expenses incurred on certain contracts. Loss and loss adjustment expense recoverable from the retrocessionaires are recorded as assets. For the year ended December 31, 2015 , loss and loss adjustment expenses incurred of $317.1 million ( 2014 : $235.0 million and 2013 : $338.5 million ) reported on the consolidated statements of income are net of loss and loss expenses recovered and recoverable of $1.7 million ( 2014 : $4.4 million and 2013 : $(10.2) million ). The negative loss and loss adjustment expenses recovered for the year ended December 31, 2013, were due to reversal of loss reserves on retrocession contracts that were novated during 2013. Retrocession contracts do not relieve the Company from its obligations to the insureds. Failure of retrocessionaires to honor their obligations could result in losses to the Company. At December 31, 2015 , the Company had losses receivable and loss reserves recoverable of $3.1 million ( December 31, 2014 : $18.3 million ) from unrated retrocessionaires and $0.3 million ( December 31, 2014 : nil ) from a retrocessionaire rated A- by A.M. Best. During 2015, the Company reached a settlement to commute a retrocession contract with one of the unrated retrocessionaires, which commutation resulted in a decrease in the losses recoverable from unrated retrocessionaires. At December 31, 2015 and 2014 , $3.1 million and $2.8 million , respectively, of losses recoverable from unrated retrocessionaires were secured by cash collateral held by the Company. The Company regularly evaluates the financial condition of its retrocessionaires to assess the ability of the retrocessionaires to honor their respective obligations. At December 31, 2015 and 2014 , no provision for uncollectible losses recoverable was considered necessary. |
SHARE CAPITAL
SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
SHARE CAPITAL | SHARE CAPITAL The holders of all ordinary shares are entitled to share equally in dividends declared by the Board of Directors. In the event of a winding-up or dissolution of the Company, the ordinary shareholders share equally and ratably in the assets of the Company, after payment of all debts and liabilities of the Company and after liquidation of any issued and outstanding preferred shares. At December 31, 2015 , no preferred shares were issued or outstanding. The Board of Directors is authorized to establish the rights and restrictions for preferred shares as they deem appropriate. The Third Amended and Restated Memorandum and Articles of Association as revised by special resolution on July 10, 2008 (the "Articles"), provide that the holders of Class A ordinary shares generally are entitled to one vote per share. However, except upon unanimous consent of the Board of Directors, no Class A shareholder is permitted to vote an amount of shares which would cause any United States person to own (directly, indirectly or constructively under applicable United States tax attribution and constructive ownership rules) 9.9% or more of the total voting power of all issued and outstanding ordinary shares. The Articles further provide that the holders of Class B ordinary shares generally are entitled to ten votes per share. However, holders of Class B ordinary shares, together with their affiliates, are limited to voting that number of Class B ordinary shares equal to 9.5% of the total voting power of the total issued and outstanding ordinary shares. Pursuant to the Shareholders' Agreement, dated August 11, 2004, by and among the Company and certain of its shareholders (the “Shareholders’ Agreement”), the holders of at least 50% of the outstanding Registrable Securities (as defined in the Shareholders' Agreement), may, subject to certain conditions, request to have all or part of their Registrable Securities to become registered. The Shareholders' Agreement requires, among other things, that the Company use its commercially reasonable best efforts to have a registration statement covering such Registrable Securities to be declared effective. The registration rights granted pursuant to the Shareholders' Agreement are not deemed to be liabilities; therefore, there has been no recognition in the consolidated financial statements of the registration rights granted pursuant to the Shareholders' Agreement. As of December 31, 2015 , the Company has an effective Form S-3 registration statement, on file with the SEC, for an aggregate principal amount of $200.0 million in securities. Shares authorized for issuance are comprised of 300,000 ( 2014 : 300,000 ) Class A ordinary shares in relation to share purchase options granted to a service provider and 3,500,000 ( 2014 : 3,500,000 ) Class A ordinary shares authorized for the Company’s stock incentive plan for eligible employees, directors and consultants. As of December 31, 2015 and 2014 , there were no remaining Class A ordinary shares available for future issuance relating to share purchase options granted to the service provider, and 658,775 ( 2014 : 803,558 ) Class A ordinary shares remained available for future issuance under the Company's stock incentive plan. The stock incentive plan is administered by the Compensation Committee of the Board of Directors. The Board has adopted a share repurchase plan. Under the share repurchase plan, the Board authorized the Company to purchase up to 2.0 million of its Class A ordinary shares from time to time. Class A ordinary shares or securities convertible into Class A ordinary shares, may be purchased in the open market, through privately negotiated transactions or Rule 10b5-1 stock trading plans. The timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements. The share repurchase plan, which expires on June 30, 2016 , does not require the Company to repurchase any specific number of shares and may be modified, suspended or terminated at any time without prior notice. During the year ended December 31, 2015 , 613,540 Class A ordinary shares were repurchased by the Company. As of December 31, 2015 , 1,386,460 shares remained available for repurchase under the share repurchase plan. Under the Companies Law of the Cayman Islands, the Company cannot hold treasury shares; therefore, all ordinary shares repurchased are canceled immediately upon repurchase. The following table is a summary of voting ordinary shares issued and outstanding: 2015 2014 2013 Class A Class B Class A Class B Class A Class B Balance – beginning of year 31,129,648 6,254,895 30,791,865 6,254,949 30,447,179 6,254,949 Issue of ordinary shares, net of forfeitures 256,464 — 337,729 — 344,686 — Repurchase of ordinary shares (613,540 ) — — — — — Class B shares converted to Class A shares — — 54 (54 ) — — Balance – end of year 30,772,572 6,254,895 31,129,648 6,254,895 30,791,865 6,254,949 Greenlight Re is subject to the Cayman Islands' Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations, 2012 (the "Insurance Regulations"). The Insurance Regulations impose a Minimum Capital Requirement of US$50.0 million and a Prescribed Capital Requirement of $466.5 million on Greenlight Re as of December 31, 2015 ( 2014 : $443.5 million ). As of December 31, 2015 , Greenlight Re's statutory capital and surplus of $788.9 million exceeded the Minimum Capital Requirement as well as the Prescribed Capital Requirement. For the years ended December 31, 2015, 2014 and 2013 , Greenlight Re's net income (loss) was $(309.5) million , $113.3 million , and $229.8 million , respectively. Greenlight Re is not required to prepare separate statutory financial statements for filing with CIMA and there were no material differences between Greenlight Re's GAAP capital, surplus and net income, and its statutory capital, surplus and net income as of December 31, 2015 and 2014 . As of December 31, 2015 , $325.3 million of the Company's retained earnings were restricted from payment of dividends to the Company's shareholders. However, since most of the Company's capital and retained earnings are invested in its subsidiaries, a dividend from one or more of the Company's subsidiaries would likely be required in order to fund a dividend to the Company's shareholders. Any dividends declared and paid from Greenlight Re to the Company would require approval of CIMA. During the year ended December 31, 2015 , $5.0 million ( 2014 : nil , 2013 : nil ) of dividends were declared and paid by Greenlight Re to the Company. As of December 31, 2015 and 2014 , $322.4 million and $658.8 million , respectively, of Greenlight Re's capital and surplus was available for distribution as dividends. The amount of dividends that GRIL is permitted to distribute is limited to its retained earnings and the Central Bank of Ireland has powers to intervene if a dividend payment were to lead to a breach of regulatory capital requirements. As of December 31, 2015 and 2014 , none and $2.7 million , respectively, of GRIL's capital and surplus was available for distribution as dividends. GRIL is obligated to maintain a minimum level of capital (the "Required Minimum Margin"). As of December 31, 2015 and 2014 , GRIL met such requirements. As of December 31, 2015 and 2014 , GRIL's statutory capital and surplus was the same as its U.S. GAAP capital and surplus of $50.3 million and $42.9 million , respectively. The required solvency margin for GRIL as of December 31, 2015 and 2014 was $18.1 million and $13.6 million , respectively. GRIL's statutory net income (loss) was $(12.8) million , $(3.3) million and $3.6 million for the years ended December 31, 2015, 2014 and 2013 , respectively. Additional paid-in capital includes the premium per share paid by the subscribing shareholders for Class A and B ordinary shares which have a par value of $0.10 each. It also includes share-based awards earned not yet issued. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company has a stock incentive plan for directors, employees and consultants as detailed in Note 9 above. Service Provider Share Purchase Options On September 20, 2004, the Company had granted share purchase options to a service provider to purchase 400,000 Class A ordinary shares at an exercise price of $10.00 per share. During 2014, the remaining 20,000 share purchase options outstanding were exercised, resulting in the net issuance of 13,861 Class A ordinary shares (net of shares surrendered as a result of the cashless exercise of stock options). There were no service provider share purchase options outstanding as of December 31, 2015 and 2014. Employee and Director Restricted Shares As part of its stock incentive plan, the Company issues restricted shares for which the fair value is equal to the price of the Company’s Class A ordinary shares on the grant date. Compensation based on the grant date fair market value of the shares is expensed on a straight line basis over the applicable vesting period. For the year ended December 31, 2015 , 78,685 ( 2014 : 127,186 , 2013 : 111,231 ) restricted Class A ordinary shares were issued to employees pursuant to the Company’s stock incentive plan. These shares contain certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability. Each of these restricted shares cliff vest after three years from the date of issuance, subject to the grantee’s continued service with the Company. During the vesting period, the holder of the restricted shares retains voting rights and is entitled to any dividends declared by the Company. For the year ended December 31, 2015 , the Company issued an aggregate of 28,215 ( 2014 : 28,060 , 2013 : 36,374 ) restricted Class A ordinary shares to non-employee directors as part of their remuneration for services to the Company. Each of these restricted shares issued to non-employee directors contains similar restrictions to those issued to employees and will vest on the earlier of the first anniversary of the share issuance or the Company’s next annual general meeting, subject to the grantee’s continued service with the Company. For the year ended December 31, 2015 , 9,621 ( 2014 : 38,706 , 2013 : 16,826 ) restricted shares were forfeited by employees who left the Company prior to the expiration of the applicable vesting periods. For the year ended December 31, 2015 , in accordance with U.S. GAAP, $0.1 million of stock compensation expense ( 2014 : $0.4 million , 2013 : $0.2 million ) relating to the forfeited restricted shares was reversed. The Company recorded $3.6 million of share-based compensation expense, net of forfeitures, relating to restricted shares for the year ended December 31, 2015 ( 2014 : $3.3 million , 2013 : $3.2 million ). As of December 31, 2015 , there were $3.7 million ( 2014 : $4.2 million , 2013 : $3.5 million ) of unrecognized compensation costs related to non-vested restricted shares which are expected to be recognized over a weighted average period of 1.6 years ( 2014 : 1.8 years, 2013 : 1.7 years). For the year ended December 31, 2015 , the total fair value of restricted shares vested was $3.2 million ( 2014 : $2.9 million , 2013 : $2.8 million ). The restricted share award activity during the years ended December 31, 2015 and 2014 was as follows: Number of non-vested restricted shares Weighted average grant date fair value Balance at December 31, 2013 328,991 $ 24.74 Granted 155,246 32.58 Vested (115,444 ) 25.35 Forfeited (38,706 ) 27.43 Balance at December 31, 2014 330,087 27.90 Granted 106,900 31.56 Vested (120,353 ) 26.26 Forfeited (9,621 ) 30.49 Balance at December 31, 2015 307,013 $ 29.74 Employee and Director Stock Options For the year ended December 31, 2015 , 40,683 Class A ordinary share purchase options were granted to the Company's Chief Executive Officer, pursuant to his employment contract ( 2014 : 31,821 ). These options vest 25% on the date of the grant, and 25% each on the anniversary thereof in 2016, 2017 and 2018, and expire 10 years after the grant date. The grant date fair value of these options was $12.29 per share ( 2014 : $15.71 per share, 2013 : $13.09 ), based on the Black-Scholes option pricing model. The estimate of expected volatility for options granted during 2015 and 2014 was based on the daily historical trading data of the Company's Class A ordinary shares from the date that these shares commenced trading on May 24, 2007 to August 5, 2015 . For options granted prior to 2014, the Company had determined the expected volatility based primarily on the historical volatility of a peer group of companies in the reinsurance industry while also considering the Company’s own historical volatility. The Company uses the Black-Scholes option pricing model to determine the valuation of its options and has applied the assumptions set forth in the following table. 2015 2014 2013 Risk free rate 2.15 % 2.47 % 2.85 % Estimated volatility 32.8 % 34.3 % 35.0 % Expected term (in years) 10 10 10 Dividend yield 0 % 0 % 0 % Forfeiture rate 0 % 0 % 0 % At the present time, the Board of Directors does not anticipate that any dividends will be declared during the expected term of the options. The Company uses graded vesting for expensing employee stock options. The total compensation cost expensed for the year ended December 31, 2015 related to employee and director stock options was $0.5 million ( 2014 : $0.5 million , 2013 : $0.6 million ). At December 31, 2015 , the total compensation cost related to non-vested options not yet recognized was $0.4 million ( 2014 : $0.4 million , 2013 : $0.4 million ) to be recognized over a weighted average period of 1.5 years ( 2014 : 1.5 years, 2013 : 1.5 years) assuming the employees complete their service period for vesting of the options. For the year ended December 31, 2015 , 250,000 ( 2014 : 318,500 ) stock options were exercised by directors and employees resulting in 158,925 Class A ordinary shares issued, net of shares surrendered as a result of the cashless exercise of stock options ( 2014 : 207,328 ). When stock options are granted, the Company reduces the corresponding number from the shares authorized for issuance as part of the Company’s stock incentive plan. The intrinsic value of options exercised during the year ended December 31, 2015 was $4.8 million ( 2014 : $6.7 million , 2013 : $0.8 million ). Employee and director stock option activity during the years ended December 31, 2015 and 2014 was as follows: Number of options Weighted average exercise price Weighted average grant date fair value Balance at December 31, 2013 1,402,987 $ 15.82 $ 7.08 Granted 31,821 32.37 15.71 Exercised (318,500 ) 11.29 5.67 Forfeited — — — Expired — — — Balance at December 31, 2014 1,116,308 17.58 7.73 Granted 40,683 26.67 12.29 Exercised (250,000 ) 11.10 5.57 Forfeited — — — Expired — — — Balance at December 31, 2015 906,991 $ 19.78 $ 8.53 At December 31, 2015 , the weighted-average remaining contractual term for options outstanding was 2.9 years ( 2014 : 3.0 years). At December 31, 2015 , 851,020 ( 2014 : 1,062,022 ) stock options were exercisable. These options had a weighted-average exercise price of $19.22 ( 2014 : $17.02 ) and a weighted-average remaining contractual term of 2.6 years ( 2014 : 2.7 years). The weighted average grant date fair value of options granted during the year ended December 31, 2015 was $12.29 ( 2014 : $15.71 , 2013 : $13.09 ). The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2015 was $2.6 million and $2.6 million , respectively ( 2014 : $16.8 million and $16.6 million , respectively). During the year ended December 31, 2015 , 38,998 ( 2014 : 53,828 , 2013 : 45,871 ) options vested which had a weighted average grant date fair value of $12.82 ( 2014 : $11.76 , 2013 : $11.08 ). Employee Restricted Stock Units The Company issues restricted stock units ("RSUs") to certain employees as part of the stock incentive plan. The grant date fair value of the RSUs is equal to the price of the Company’s Class A ordinary shares on the grant date. Compensation cost based on the grant date fair market value of the RSUs is expensed on a straight line basis over the vesting period. For the year ended December 31, 2015 , 6,821 ( 2014 : 9,668 , 2013 : 5,941 ) RSUs were issued to employees pursuant to the Company’s stock incentive plan. These shares contain certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability. Each of these RSUs cliff vest after three years from the date of issuance, subject to the grantee’s continued service with the Company. On the vesting date, the Company converts each RSU into one Class A ordinary share and issues new Class A ordinary shares from the shares authorized for issuance as part of the Company’s stock incentive plan. The Company recorded $0.2 million of share-based compensation expense, net of forfeitures, relating to RSUs for the year ended December 31, 2015 ( 2014 : $0.1 million , 2013 : $0.03 million ). Employee RSU activity during the years ended December 31, 2015 and 2014 was as follows: Number of Weighted Balance at December 31, 2013 5,941 $ 24.41 Granted 9,668 32.60 Vested — — Forfeited — — Balance at December 31, 2014 15,609 29.72 Granted 6,821 32.21 Vested (260 ) 24.30 Forfeited — — Balance at December 31, 2015 22,170 $ 30.55 For the years ended December 31, 2015, 2014 and 2013 , the general and administrative expenses included stock compensation expense (net of forfeitures) of $4.3 million , $4.0 million and $3.8 million , respectively, for the expensing of the fair value of stock options, restricted stocks and RSUs granted to employees and directors. |
NET INVESTMENT INCOME
NET INVESTMENT INCOME | 12 Months Ended |
Dec. 31, 2015 | |
Net Investment Income [Abstract] | |
NET INVESTMENT INCOME | NET INVESTMENT INCOME A summary of net investment income for the years ended December 31, 2015, 2014 and 2013 is as follows: 2015 2014 2013 ($ in thousands) Realized gains (losses) $ 22,227 $ 352,133 $ 122,568 Change in unrealized gains and losses (265,401 ) (187,753 ) 149,012 Investment related foreign exchange gains (losses) (3,725 ) 14,797 44,492 Interest and dividend income, net of withholding taxes 15,313 31,423 22,265 Interest, dividend and other expenses (31,092 ) (38,892 ) (47,665 ) Investment advisor compensation (19,246 ) (49,133 ) (72,532 ) Net investment income (loss) $ (281,924 ) $ 122,575 $ 218,140 Interest and dividend income in the above table are net of any withholding taxes. Investment returns are calculated monthly and compounded to calculate the annual returns. The resulting actual investment income may vary depending on cash flows into or out of the investment account. For the year ended December 31, 2015 , investment income, net of all fees and expenses, resulted in a loss of 20.2% on the investment portfolio. This compares to a gain of 8.7% and a gain of 19.6% reported for the years ended December 31, 2014 and 2013 , respectively. The comparative 2014 and 2013 amounts presented for realized gains (losses), change in unrealized gain and losses and investment related foreign exchange gains (losses) have been reclassified to conform to the current period presentation. The reclassifications resulted in no changes to net investment income (loss), net income or retained earnings for any of the periods presented. |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
TAXATION | TAXATION The Company and Greenlight Re are each domiciled in the Cayman Islands and under current Cayman Islands law, no corporate entity, including the Company and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company and Greenlight Re each intend to conduct all of its operations in a manner that will not cause it to be treated as engaging in a trade or business within the United States and will not cause it to be subject to current U.S. federal income taxation on its net income. However, because there are no definitive standards provided by the Internal Revenue Code, regulations or court decisions as to the specific activities that constitute being engaged in the conduct of a trade or business within the United States, and as any such determination is essentially factual in nature, there can be no assurance that the IRS will not successfully assert that the Company or Greenlight Re is engaged in a trade or business within the U.S. Verdant is incorporated in Delaware, and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the IRS. Verdant’s taxable income is taxed at an effective tax rate of 35% . GRIL is incorporated in Ireland and, therefore, is subject to the Irish corporation tax. GRIL is taxed at a rate of 12.5% on its trading income. At December 31, 2015 , included in the consolidated balance sheet under other assets were taxes recoverable of $0.5 million relating to GRIL ( 2014 : $0.8 million relating to Verdant and GRIL), and a deferred tax asset of $1.76 million primarily relating to GRIL's net operating losses carried forward ( 2014 : $0.03 million ). At December 31, 2015 , GRIL had a net operating loss carryforward of $14.1 million which can be carried forward indefinitely. Based on the likelihood of GRIL generating sufficient taxable income to realize the future tax benefit, management believes it is more likely than not that the deferred tax asset and taxes recoverable will be fully realized in the future and therefore no valuation allowance has been recorded. At December 31, 2015 , Verdant had a net operating loss carryforward of $1.7 million which can be carried forward for a period of 20 years from the year the loss occurred and therefore will expire in 2033 . The following table sets forth our current and deferred income tax benefit (expense) on a consolidated basis for the years ended December 31, 2015, 2014 and 2013 : 2015 2014 2013 ($ in thousands) Current tax (expense) benefit $ 15 $ 638 $ (534 ) Deferred tax (expense) benefit 1,740 (14 ) (4 ) Income tax (expense) benefit $ 1,755 $ 624 $ (538 ) The Company has not taken any tax positions that are subject to uncertainty or that are reasonably likely to have a material impact to the Company, Greenlight Re, GRIL or Verdant. Federal Excise Taxes The United States also imposes an excise tax on reinsurance premiums paid to non-U.S. insurers or reinsurers with respect to risks located in the United States. The rate of tax, unless exempted or reduced by an applicable U.S. tax treaty, is 1.0% for all reinsurance premiums. The Company incurs federal excise taxes on certain of its reinsurance transactions, including amounts ceded through intercompany transactions. For the years ended 2015, 2014, and 2013, the Company incurred approximately $3.3 million , $2.2 million and $3.5 million , respectively, of federal excise taxes. These amounts are reflected as acquisition costs in the Company’s consolidated statements of income. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Investment Advisory Agreement Effective January 1, 2014, the Company and its reinsurance subsidiaries were party to a joint venture agreement with DME Advisors, LP ("DME Advisors") under which the Company, its reinsurance subsidiaries and DME Advisors LLC ("DME") are participants of a joint venture for the purpose of managing certain jointly held assets, as may be amended from time to time (the "venture agreement"). In addition, the Company, its reinsurance subsidiaries and DME have entered into a separate investment advisory agreement with DME Advisors, as may be amended from time to time (the "advisory agreement"). DME and DME Advisors are related to the Company and each is an affiliate of David Einhorn, Chairman of the Company’s Board of Directors. Pursuant to the venture agreement, performance allocation equal to 20% of the net investment income of the Company’s share of the account managed by DME Advisors is allocated, subject to a loss carry forward provision, to DME’s account. The loss carry forward provision requires DME to earn a reduced performance allocation of 10% on net investment income in any year subsequent to the year in which the investment account incurs a loss, until all the losses are recouped and an additional amount equal to 150% of the aggregate investment loss is earned. DME is not entitled to earn a performance allocation in a year in which the investment portfolio incurs a loss. For the year ended December 31, 2015 , no performance allocation ( 2014 : $28.5 million , 2013 : $54.2 million ) was netted against gross investment income due to a net investment loss reported for the year ended December 31, 2015. Pursuant to the advisory agreement, a monthly management fee, equal to 0.125% ( 1.5% on an annual basis) of the Company’s investment account managed by DME Advisors, is paid to DME Advisors. Included in the net investment income (loss) for the year ended December 31, 2015 were management fees of $19.2 million ( 2014 : $20.6 million , 2013 : $18.3 million ). The management fees have been fully paid as of December 31, 2015 . Pursuant to the venture and advisory agreements, the Company has agreed to indemnify DME and DME Advisors for any expense, loss, liability, or damage arising out of any claim asserted or threatened in connection with DME Advisors serving as the Company’s investment advisor. The Company will reimburse DME and DME Advisors for reasonable costs and expenses of investigating and/or defending such claims, provided such claims were not caused due to gross negligence, breach of contract or misrepresentation by DME or DME Advisors. For the year ended December 31, 2015 , there were no indemnification payments payable or paid by the Company. Green Brick Partners, Inc David Einhorn also serves as the Chairman of the Board of Directors of Green Brick Partners, Inc ("GRBK"), a publicly traded company. During the year ended December 31, 2014, the Company, along with certain affiliates of DME Advisors, provided debt financing to GRBK and acquired equity shares of GRBK. During the year ended December 31, 2015 , the Company's investment income included $1.0 million ( 2014 : $0.4 million ) of interest relating to this debt. During the third quarter of 2015, GRBK repaid the debt ( 2014 : $21.6 million ) in full along with all accrued interest and prepayment fees, and the Company purchased additional equity shares of GRBK. As of December 31, 2015 , $25.0 million ( 2014 : $18.4 million ) of GRBK listed equities were included on the balance sheet as "equity securities, trading, at fair value". The Company along with certain affiliates of DME Advisors, collectively own 49% of the issued and outstanding common shares of GRBK. Under applicable securities laws, DME Advisors may be limited at times in its ability to trade GRBK shares on behalf of the Company. Service Agreement The Company has entered into a service agreement with DME Advisors, pursuant to which DME Advisors provides certain investor relations services to the Company for compensation of five thousand dollars per month (plus expenses). The agreement is automatically renewed annually until terminated by either the Company or DME Advisors for any reason with 30 days prior written notice to the other party. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Letters of Credit At December 31, 2015 , the Company had the following letter of credit facilities, which automatically renew each year unless terminated by either party in accordance with the required notice period: Facility Termination Date Notice period required for termination ($ in thousands) Bank of America, N.A. $ 120,000 July 11, 2016 90 days prior to termination date Butterfield Bank (Cayman) Limited 100,000 June 30, 2016 90 days prior to termination date Citibank Europe plc 400,000 October 11, 2016 120 days prior to termination date JP Morgan Chase Bank N.A. 100,000 January 27, 2017 120 days prior to termination date $ 720,000 As of December 31, 2015 , an aggregate amount of $245.6 million ( 2014 : $273.7 million ) in letters of credit were issued under the above facilities. Under the facilities, the Company provides collateral that may consist of equity securities, restricted cash and cash and cash equivalents. As of December 31, 2015 , total equity securities, restricted cash, and cash and cash equivalents with a fair value in the aggregate of $324.3 million ( 2014 : $302.6 million ) were pledged as collateral against the letters of credit issued (also see Note 4 ). Each of the facilities contain customary events of default and restrictive covenants, including but not limited to, limitations on liens on collateral, transactions with affiliates, mergers and sales of assets, as well as solvency and maintenance of certain minimum pledged equity requirements, and restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, as defined in the letter of credit facilities, Greenlight Re will be prohibited from paying dividends to its parent company. The Company was in compliance with all the covenants of each of these facilities as of December 31, 2015 and 2014 . Operating Lease Obligations Greenlight Re has entered into lease agreements for office space in the Cayman Islands. Under the terms of the lease agreements, Greenlight Re is committed to annual rent payments ranging from $0.3 million at inception to $0.5 million at lease termination. The leases expire on June 30, 2018 and Greenlight Re has the option to renew the leases for a further five year term. Included in the schedule below are the minimum lease payment obligations relating to these leases as of December 31, 2015 . GRIL has entered into a lease agreement for office space in Dublin, Ireland. Under the terms of this lease agreement, GRIL is committed to minimum annual rent payments denominated in Euros approximating €0.1 million until May 2021, and adjusted to the prevailing market rates for each of the two subsequent five-year terms. GRIL has the option to terminate the lease agreement in 2021. Included in the schedule below are the net minimum lease payment obligations relating to this lease as of December 31, 2015 . The total rent expense related to leased office space for the year ended December 31, 2015 was $0.5 million , ( 2014 : $0.5 million , 2013 : $0.5 million ). Private Equity and Limited Partnerships From time to time, the Company makes investments in private equity vehicles. As part of the Company's participation in such private equity investments, the Company may make funding commitments. As of December 31, 2015 , the Company had commitments to invest an additional $6.1 million ( 2014 : $8.9 million ) in private equity investments. Included in the schedule below are the minimum payment obligations relating to these investments as of December 31, 2015 . Schedule of Commitments and Contingencies The following is a schedule of future minimum payments required under the above commitments: 2016 2017 2018 2019 2020 Thereafter Total ($ in thousands) Operating lease obligations $ 548 $ 548 $ 315 $ 82 $ 82 $ 31 $ 1,606 Private equity and limited partnerships (1) 6,107 — — — — — 6,107 $ 6,655 $ 548 $ 315 $ 82 $ 82 $ 31 $ 7,713 (1) Given the nature of these investments, the Company is unable to determine with any degree of accuracy when these commitments will be called. Therefore, for purposes of the above table, the Company has assumed that all commitments with no fixed payment schedules will be called during the year ending December 31, 2016 . Litigation From time to time in the normal course of business, the Company may be involved in formal and informal dispute resolution procedures, which may include arbitration or litigation, the outcomes of which determine the rights and obligations under the Company's reinsurance contracts and other contractual agreements. In some disputes, the Company may seek to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company may resist attempts by others to collect funds or enforce alleged rights. While the final outcome of legal disputes cannot be predicted with certainty, the Company does not believe that any existing dispute, when finally resolved, will have a material adverse effect on the Company's business, financial condition or operating results. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company manages its business on the basis of one operating segment, Property & Casualty Reinsurance. Substantially all of the business is sourced through reinsurance brokers. The following table sets forth the premiums sourced from brokers who each accounted for more than 10% of the Company's gross written premiums: Year ended December 31 2015 2014 2013 ($ in thousands) Largest broker $ 278,003 55.4 % $ 161,405 49.8 % $ 282,337 52.7 % 2nd largest broker 110,246 22.0 61,809 19.1 119,117 22.2 3rd largest broker — — 40,773 12.6 — — $ 388,249 77.4 % $ 263,987 81.5 % $ 401,454 74.9 % The following tables provide a breakdown of the Company's gross premiums written by line of business and by geographic area of risks insured for the periods indicated: Gross Premiums Written by Line of Business Year ended December 31 2015 2014 2013 ($ in thousands) Property Aviation $ 691 0.1 % $ 391 0.1 % $ 168 — % Commercial 16,667 3.3 11,529 3.6 9,999 1.9 Energy 2,009 0.4 2,131 0.6 659 0.1 Motor physical damage 34,529 6.9 24,008 7.4 57,952 10.8 Personal 57,495 11.5 64,479 19.9 145,807 27.2 Total Property 111,391 22.2 102,538 31.6 214,585 40.0 Casualty General liability (1) 28,355 5.6 11,639 3.6 (815 ) (0.2 ) Marine liability 9,283 1.8 5,120 1.6 1,956 0.4 Motor liability 203,624 40.6 127,858 39.5 253,698 47.4 Professional liability 72,217 14.4 27,009 8.4 29,901 5.6 Total Casualty 313,479 62.4 171,626 53.1 284,740 53.2 Specialty Financial 7,824 1.6 5,292 1.6 3,498 0.7 Health 56,784 11.3 43,837 13.5 37,094 6.9 Workers’ compensation (1) 12,646 2.5 730 0.2 (4,215 ) (0.8 ) Total Specialty 77,254 15.4 49,859 15.3 36,377 6.8 $ 502,124 100.0 % $ 324,023 100.0 % $ 535,702 100.0 % (1) The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premiums returned upon novation or commutation of contracts. Gross Premiums Written by Geographic Area of Risks Insured Year ended December 31 2015 2014 2013 ($ in thousands) U.S. and Caribbean $ 383,236 76.3 % $ 275,402 85.0 % $ 496,949 92.8 % Worldwide (1) 104,336 20.8 31,106 9.6 9,821 1.8 Europe 14,085 2.8 17,432 5.4 28,932 5.4 Asia 467 0.1 83 — — — $ 502,124 100.0 % $ 324,023 100.0 % $ 535,702 100.0 % (1) "Worldwide" is comprised of contracts that reinsure risks in more than one geographic area and do not specifically exclude the U.S. |
QUARTERLY FINANCIAL RESULTS (UN
QUARTERLY FINANCIAL RESULTS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL RESULTS (UNAUDITED) | QUARTERLY FINANCIAL RESULTS (UNAUDITED) The following table presents the quarterly financial results for each of the quarters ended during 2015 : 2015 Quarter ended ($ in thousands, except per share amounts) Revenues Gross premiums written $ 129,682 $ 92,990 $ 134,568 $ 144,884 Gross premiums ceded (1,626 ) (1,868 ) (2,288 ) (3,219 ) Net premiums written 128,056 91,122 132,280 141,665 Change in net unearned premium reserves (33,263 ) 563 (30,286 ) (21,750 ) Net premiums earned 94,793 91,685 101,994 119,915 Net investment income (loss) (24,829 ) (20,305 ) (191,322 ) (45,468 ) Other income (expense), net 1,588 (3,760 ) (542 ) (699 ) Total revenues 71,552 67,620 (89,870 ) 73,748 Expenses Loss and loss adjustment expenses incurred, net 63,207 76,653 97,421 79,816 Acquisition costs, net 26,841 23,939 32,146 33,281 General and administrative expenses 6,160 6,894 5,382 4,998 Total expenses 96,208 107,486 134,949 118,095 Income (loss) before income tax expense (24,656 ) (39,866 ) (224,819 ) (44,347 ) Income tax (expense) benefit 215 (54 ) 1,233 361 Net income (loss) including non-controlling interest (24,441 ) (39,920 ) (223,586 ) (43,986 ) Loss (income) attributable to non-controlling interest in joint venture 394 324 3,909 881 Net income (loss) $ (24,047 ) $ (39,596 ) $ (219,677 ) $ (43,105 ) Earnings (loss) per share Basic $ (0.65 ) $ (1.06 ) $ (5.98 ) $ (1.17 ) Diluted $ (0.65 ) $ (1.06 ) $ (5.98 ) $ (1.17 ) Weighted average number of ordinary shares used in the determination of earnings and loss per share Basic 37,173,008 37,303,265 36,710,216 36,720,454 Diluted 37,173,008 37,303,265 36,710,216 36,720,454 The following table presents the quarterly financial results for each of the quarters ended during 2014 : 2014 Quarter ended ($ in thousands) Revenues Gross premiums written $ 118,901 $ 33,654 $ 97,200 $ 74,268 Gross premiums ceded (5,940 ) (2,759 ) (2,706 ) (2,088 ) Net premiums written 112,961 30,895 94,494 72,180 Change in net unearned premium reserves (1,272 ) 56,960 (15,003 ) 3,025 Net premiums earned 111,689 87,855 79,491 75,205 Net investment income (loss) (10,150 ) 113,932 (54,027 ) 72,820 Other income (expense), net 182 (1,400 ) 2,663 1,542 Total revenues 101,721 200,387 28,127 149,567 Expenses Loss and loss adjustment expenses incurred, net 67,363 56,644 53,028 57,951 Acquisition costs, net 37,796 25,570 22,478 21,821 General and administrative expenses 6,200 5,559 6,012 6,729 Total expenses 111,359 87,773 81,518 86,501 Income (loss) before income tax expense (9,638 ) 112,614 (53,391 ) 63,066 Income tax (expense) benefit 560 14 254 (204 ) Net income (loss) including non-controlling interest (9,078 ) 112,628 (53,137 ) 62,862 Loss (income) attributable to non-controlling interest in joint venture 197 (3,075 ) 1,369 (2,174 ) Net income (loss) $ (8,881 ) $ 109,553 $ (51,768 ) $ 60,688 Earnings (loss) per share Basic $ (0.24 ) $ 2.94 $ (1.40 ) $ 1.62 Diluted $ (0.24 ) $ 2.89 $ (1.40 ) $ 1.60 Weighted average number of ordinary shares used in the determination of earnings and loss per share Basic 36,808,386 37,246,922 36,984,650 37,356,187 Diluted 36,808,386 37,902,106 36,984,650 37,905,836 |
SCHEDULE I
SCHEDULE I | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |
SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES | SCHEDULE I GREENLIGHT CAPITAL RE, LTD. SUMMARY OF INVESTMENTS — OTHER THAN INVESTMENTS IN RELATED PARTIES AS OF DECEMBER 31, 2015 (expressed in thousands of U.S. dollars) Type of Investment Cost Fair Value Balance ($ in thousands) Debt instruments, trading, at fair value $ 45,471 $ 39,087 $ 39,087 Equity securities, trading, at fair value Equities – listed 1,011,424 890,653 890,653 Exchange traded funds 31,570 15,341 15,341 Total equity securities, trading, at fair value 1,042,994 905,994 905,994 Total investments, trading $ 1,088,465 $ 945,081 $ 945,081 Other investments, at fair value Commodities $ 102,092 $ 98,046 $ 98,046 Private and unlisted equity securities 18,720 21,037 21,037 Total other investments, at fair value 120,812 119,083 119,083 Total investments $ 1,209,277 $ 1,064,164 $ 1,064,164 |
SCHEDULE II
SCHEDULE II | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | SCHEDULE II GREENLIGHT CAPITAL RE, LTD. CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS — PARENT COMPANY ONLY (expressed in thousands of U.S. dollars) December 31, 2015 December 31, 2014 ($ in thousands) Cash and cash equivalents $ 6 $ 1 Investment in subsidiaries 840,196 1,148,308 Note receivable 2,175 1,566 Due from subsidiaries — 15,276 Total assets $ 842,377 $ 1,165,151 Liabilities and shareholders’ equity Liabilities Due to subsidiaries $ 16,986 $ — Total liabilities 16,986 — Shareholders’ equity Share capital 3,703 3,738 Additional paid-in capital 496,401 500,553 Retained earnings 325,287 660,860 Total shareholders’ equity 825,391 1,165,151 Total liabilities and shareholders’ equity $ 842,377 $ 1,165,151 GREENLIGHT CAPITAL RE, LTD. CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF INCOME — PARENT COMPANY ONLY (expressed in thousands of U.S. dollars) Year ended December 31 2015 2014 2013 ($ in thousands) Revenue Investment income $ 5,962 $ 671 $ 1,100 Total revenues 5,962 671 1,100 Expenses General and administrative expenses 4,048 3,806 3,735 Net income (loss) before equity in earnings of consolidated subsidiaries 1,914 (3,135 ) (2,635 ) Equity in earnings of consolidated subsidiaries (328,339 ) 112,727 228,334 Consolidated net income (loss) $ (326,425 ) $ 109,592 $ 225,699 SCHEDULE II (continued) GREENLIGHT CAPITAL RE, LTD. CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS — PARENT COMPANY ONLY (expressed in thousands of U.S. dollars) Year Ended December 31 2015 2014 2013 ($ in thousands) Cash provided by (used in) operating activities Net income (loss) $ (326,425 ) $ 109,592 $ 225,699 Adjustments to reconcile net income (loss) to cash provided by operating activities Equity in earnings of consolidated subsidiaries 328,339 (112,727 ) (228,334 ) Share-based compensation expense 4,274 3,964 3,675 Change in Due from subsidiaries 15,276 971 (2,006 ) Due to subsidiaries 16,986 (3,808 ) 2,438 Net cash (used in) provided by operating activities 38,450 (2,008 ) 1,472 Investing activities Change in note receivable (609 ) 2,162 (2,053 ) Contributed surplus to subsidiaries, net (20,227 ) (158 ) 59 Net cash (used in) provided by investing activities (20,836 ) 2,004 (1,994 ) Financing activities Net proceeds from exercise of stock options — — 513 Short-swing sale profit from shareholder 83 — — Repurchase of Class A ordinary shares (17,692 ) — — Net cash (used in) provided by financing activities (17,609 ) — 513 Net increase (decrease) in cash and cash equivalents 5 (4 ) (9 ) Cash and cash equivalents at beginning of the year 1 5 14 Cash and cash equivalents at end of the year $ 6 $ 1 $ 5 |
SCHEDULE III
SCHEDULE III | 12 Months Ended |
Dec. 31, 2015 | |
Supplementary Insurance Information [Abstract] | |
SUPPLEMENTARY INSURANCE INFORMATION | SCHEDULE III GREENLIGHT CAPITAL RE, LTD. SUPPLEMENTARY INSURANCE INFORMATION AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013 (expressed in thousands of U.S. dollars) Year Segment Deferred Reserves Unearned Net Net Net losses, Amortization Other Gross 2015 Property & Casualty $ 59,823 $ 305,997 $ 211,954 $ 408,387 $ (281,924 ) $ 317,097 $ 116,207 $ 23,434 $ 502,124 2014 Property & Casualty $ 34,420 $ 264,243 $ 128,736 $ 354,240 $ 122,575 $ 234,986 $ 107,665 $ 24,500 $ 324,023 2013 Property & Casualty $ 51,797 $ 329,894 $ 173,057 $ 547,899 $ 218,140 $ 338,493 $ 171,872 $ 20,958 $ 535,702 |
SCHEDULE IV
SCHEDULE IV | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
SUPPLEMENTARY REINSURANCE INFORMATION | SCHEDULE IV GREENLIGHT CAPITAL RE, LTD. SUPPLEMENTARY REINSURANCE INFORMATION AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013 (expressed in thousands of U.S. dollars) Year Segment Direct gross Premiums Premiums Net written premiums Percentage of 2015 Property & Casualty $ — $ 9,001 $ 502,124 $ 493,123 102 % 2014 Property & Casualty $ — $ 13,493 $ 324,023 $ 310,530 104 % 2013 Property & Casualty $ — $ 2,780 $ 535,702 $ 532,922 101 % |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation. Prior to January 1, 2015, non-investment related foreign exchange gains and losses were recorded under general and administrative expenses in the condensed consolidated statements of income. Effective from January 1, 2015, the presentation has been modified and any non-investment related foreign exchange gains or losses are now recorded under “other income (expense), net” in the consolidated statements of income. As a result, foreign exchange gains (losses) of $2.6 million and $(0.8) million that were previously reported in general and administrative expenses for the years ended December 31, 2014 and 2013 , respectively, were reclassified as “other income (expense), net” to conform to the current year presentation. The reclassifications resulted in no changes to net income or retained earnings for any of the periods presented. |
Use of Estimates | Use of Estimates The preparation of consolidated 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 consolidated financial statements and the reported amounts of income and expenses during the period. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and certain short-term, highly liquid investments with original maturity dates of three months or less. |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents The Company is required to maintain certain cash in segregated accounts with prime brokers and derivative counterparties. The amount of restricted cash held by prime brokers is primarily used to support the liability created from securities sold, not yet purchased and derivatives. Additionally, restricted cash and cash equivalent balances are held to collateralize regulatory trusts and letters of credit issued to cedents (see Notes 4 and 6 ). The amount of cash encumbered varies depending on the market value of the securities sold, not yet purchased, and the collateral required by the cedents in the form of trust accounts and letters of credit. In addition, derivative counterparties require cash collateral to support the current value of any amounts that may be due to the counterparty based on the value of the underlying financial instrument. |
Premium Revenue Recognition | Premium Revenue Recognition The Company accounts for reinsurance contracts in accordance with U.S. GAAP. In the event that a reinsurance contract does not transfer sufficient risk, deposit accounting is used and the contract is reported as a deposit liability. The Company writes excess of loss contracts as well as quota share contracts. The Company estimates the ultimate premiums for the entire contract period. These estimates are based on information received from the ceding companies and estimates from actuarial pricing models used by the Company. For excess of loss contracts, the total ultimate estimated premiums are recorded as premiums written at the inception of the contract. For quota share contracts, the premiums are recorded as written based on cession statements from cedents which typically are received monthly or quarterly depending on terms specified in each contract. For any reporting lag, premiums written are estimated based on the portion of the ultimate estimated premiums relating to the risks underwritten during the lag period. Premium estimates are reviewed by management at least quarterly. Such review includes a comparison of actual reported premiums to expected ultimate premiums along with a review of the aging and collection of premium estimates. Based on management’s review, the appropriateness of the premium estimates is evaluated, and any adjustments to these estimates are recorded in the period in which they are determined. Changes in premium estimates, including premium receivable on both excess of loss and quota share contracts, are expected and may result in significant adjustments in any period. A significant portion of amounts included in reinsurance balances receivable represent estimated premiums written, net of commissions and brokerage, and are not currently due based on the terms of the underlying contracts. Certain contracts allow for reinstatement premiums in the event of a full limit loss prior to the expiry of a contract. A reinstatement premium is not due until there is a full limit loss event and therefore, in accordance with U.S. GAAP, the Company records a reinstatement premium as written only in the event that a client incurs a full limit loss on the contract and the contract allows for a reinstatement of coverage upon payment of an additional premium. For catastrophe contracts which contractually require the payment of a reinstatement premium equal to or greater than the original premium upon the occurrence of a full limit loss, the reinstatement premiums are earned over the original contract period. Reinstatement premiums that are contractually calculated on a pro-rata basis of the original premiums, are earned over the remaining coverage period. Certain contracts may provide for a penalty to be paid if the contract is terminated and canceled prior to its expiration term. Cancellation penalties are recognized in the period the notice of cancellation is received and are recorded in the consolidated statements of income under "other income (expense), net". Premiums written are generally recognized as earned over the contract period in proportion to the period of risk covered. Unearned premiums consist of the unexpired portion of reinsurance provided. |
Reinsurance Premiums Ceded | Reinsurance Premiums Ceded The Company reduces the risk of future losses on business assumed by reinsuring certain risks and exposures with other reinsurers (retrocessionaires). The Company remains liable to the extent that any retrocessionaire fails to meet its obligations and to the extent the Company does not hold sufficient security for their unpaid obligations. Ceded premiums are written during the period in which the risks incept and are expensed over the contract period in proportion to the period of protection. Unearned premiums ceded consist of the unexpired portion of reinsurance obtained. |
Deferred Acquisition Costs | Deferred Acquisition Costs Policy acquisition costs, such as commission and brokerage costs, relate directly to, and vary with, the writing of reinsurance contracts. Acquisition costs relating solely to bound contracts are deferred subject to ultimate recoverability and are amortized over the related contract term. The Company evaluates the recoverability of deferred acquisition costs by determining if the sum of future earned premiums and anticipated investment income is greater than the expected future claims and expenses. If a loss is probable on the unexpired portion of policies in force, a premium deficiency loss is recognized. At December 31, 2015 and 2014 , the deferred acquisition costs were considered fully recoverable and no premium deficiency loss was recorded. Acquisition costs also include profit commissions which are expensed when incurred. Profit commissions are calculated and accrued based on the expected loss experience for contracts and recorded when the current loss estimate indicates that a profit commission is probable under the contract terms. As of December 31, 2015 , $12.2 million ( 2014 : $11.0 million ) of profit commission reserves were included in reinsurance balances payable on the consolidated balance sheets. For the year ended December 31, 2015 , $7.5 million ( 2014 : $2.7 million and 2013 : $3.7 million , respectively) of net profit commission expense was included in acquisition costs on the consolidated statements of income. |
Funds Withheld | Funds Withheld Funds withheld include reinsurance balances retained from retrocessionaires as security for a period of time in accordance with the contract terms. Any interest expense that the Company incurs during the period these funds are withheld, are included under net investment income in the consolidated statements of income. |
Loss and Loss Adjustment Expense Reserves and Recoverable | Loss and Loss Adjustment Expense Reserves and Recoverable The Company establishes reserves for contracts based on estimates of the ultimate cost of all losses including losses incurred but not reported ("IBNR"). These estimated ultimate reserves are based on the Company’s own actuarial estimates derived from reports received from ceding companies, industry data and historical experience. These estimates are reviewed by the Company periodically on a contract by contract basis and adjusted as necessary. Since reserves are estimates, the final settlement of losses may vary from the reserves established and any adjustments to the estimates, which may be material, are recorded in the period they are determined. Loss and loss adjustment expenses recoverable include the amounts due from retrocessionaires for unpaid loss and loss adjustment expenses on retrocession agreements. Ceded losses incurred but not reported are estimated based on the Company’s actuarial estimates. These estimates are reviewed periodically and adjusted when deemed necessary. The Company may not be able to ultimately recover the loss and loss adjustment expense recoverable amounts due to the retrocessionaires’ inability to pay. The Company regularly evaluates the financial condition of its retrocessionaires and records provisions for uncollectible reinsurance expenses recoverable when recovery is no longer probable. |
Notes Receivable | Notes Receivable Notes receivable include promissory notes receivable from third party entities. These notes are recorded at cost along with accrued interest, if any, which approximates the fair value. Interest income and realized gains or losses on sale of notes receivable are included under net investment income (loss) in the consolidated statements of income. The Company regularly reviews all notes receivable individually for impairment and records valuation allowance provisions for uncollectible and non-performing notes. The Company places notes on non-accrual status when the recorded value of the note is not considered impaired but there is uncertainty as to the collection of interest based on the terms of the note. The Company resumes accrual of interest on a note when none of the principal or interest remains past due, and the Company expects to collect the remaining contractual principal and interest. Interest collected on notes that are placed on non-accrual status is treated on a cash-basis and recorded as interest income when collected, provided that the recorded value of the note is deemed to be fully collectible. Where doubt exists as to the collectability of the remaining recorded value of the notes placed on non-accrual status, any payments received are applied to reduce the recorded value of the notes. At December 31, 2015 , $23.0 million of notes receivable (net of any valuation allowance) were on non-accrual status ( 2014 : $0.0 million ) and any payments received were applied to reduce the recorded value of the notes. The increase in notes receivable during the year ended December 31, 2015 , related to a settlement agreement entered into with a ceding insurer during 2015 whereby certain amounts, previously classified under reinsurance balances receivable, were converted into a ten-year note receivable. At December 31, 2015 and 2014 , there was no accrued interest included in the notes receivable balance. Based on management’s assessment, the recorded values of the notes receivable, net of valuation allowance, at December 31, 2015 and 2014 , were expected to be fully collectible. |
Deposit Assets and Liabilities | Deposit Assets and Liabilities In accordance with U.S. GAAP, deposit accounting is used in the event that a reinsurance contract does not transfer sufficient insurance risk, or a contract provides retroactive reinsurance. Any losses on such contracts are charged to earnings immediately. Any gains relating to such contracts are deferred and amortized over the estimated remaining settlement period. All such deferred gains are included in reinsurance balances payable in the consolidated balance sheets. Amortized gains are recorded in the consolidated statements of income as other income. At December 31, 2015 and 2014 , there were no material deposit assets or deposit liabilities and no material gains or losses on deposit accounted contracts. |
Fixed Assets | Fixed Assets Fixed assets are included in other assets on the consolidated balance sheets and are recorded at cost when acquired. Fixed assets are comprised of computer software, furniture and fixtures and leasehold improvements and are depreciated, using the straight-line method, over their estimated useful lives, which are five years for both computer software, and furniture and fixtures. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or remaining lease term. The Company periodically reviews fixed assets that have finite lives, and that are not held for sale, for impairment by comparing the carrying value of the assets to their estimated future undiscounted cash flows. For the years ended December 31, 2015, 2014 and 2013 , there were no impairments in fixed assets. |
Financial Instruments | Financial Instruments Investments in Securities and Investments in Securities Sold, Not Yet Purchased The Company’s investments in debt instruments and equity securities that are classified as "trading securities" are carried at fair value. The fair values of the listed equity investments are derived based on quoted prices (unadjusted) in active markets for identical assets (Level 1 inputs). The fair values of listed equities that have restrictions on sale or transfer which expire within one year, are determined by adjusting the observed market price of the equity using a liquidity discount based on observable market inputs. The fair values of debt instruments are derived based on inputs that are observable, either directly or indirectly, such as market maker or broker quotes reflecting recent transactions (Level 2 inputs), and are generally derived based on the average of multiple market maker or broker quotes which are considered to be binding. Where quotes are not available, debt instruments are valued using cash flow models using assumptions and estimates that may be subjective and non-observable (Level 3 inputs). The Company’s "other investments" may include investments in private and unlisted equity securities, limited partnerships, and commodities, which are all carried at fair value. The fair values of commodities are determined based on quoted prices in active markets for identical assets (Level 1). The Company maximizes the use of observable direct or indirect inputs (Level 2 inputs) when deriving the fair values for "other investments". For limited partnerships and private and unlisted equity securities, where observable inputs are not available, the fair values are derived based on unobservable inputs (Level 3 inputs) such as management’s assumptions developed from available information using the services of the investment advisor, including the most recent net asset values obtained from the managers of those underlying investments. For securities classified as "trading securities", and "other investments", any realized and unrealized gains or losses are determined on the basis of the specific identification method (by reference to cost or amortized cost, as appropriate) and included in net investment income (loss) in the consolidated statements of income. Dividend income and expense are recorded on the ex-dividend date. The ex-dividend date is the date as of when the underlying security must have been traded to be eligible for the dividend declared. Interest income and interest expense are recorded on an accrual basis. |
Derivative Financial Instruments | Derivative Financial Instruments U.S. GAAP requires that an entity recognize all derivatives in the balance sheet at fair value. It also requires that unrealized gains and losses resulting from changes in fair value be included in income or comprehensive income, depending on whether the instrument qualifies as a hedge transaction, and if so, the type of hedge transaction. The Company’s derivative financial instrument assets are included in financial contracts receivable. Derivative financial instrument liabilities are generally included in financial contracts payable. The Company's derivatives do not qualify as hedges for financial reporting purposes and are recorded in the consolidated balance sheets on a gross basis and not offset against any collateral pledged or received. Pursuant to the International Swaps and Derivatives Association ("ISDA") master agreements, securities lending agreements and other agreements, the Company and its counterparties typically have the ability to net certain payments owed to each other in specified circumstances. In addition, in the event a party to one of the ISDA master agreements, securities lending agreements or other agreements defaults, or a transaction is otherwise subject to termination, the non-defaulting party generally has the right to set off against payments owed to the defaulting party or collateral held by the non-defaulting party. The Company may from time to time enter into underwriting contracts such as industry loss warranty contracts ("ILW") that are treated as derivatives for U.S GAAP purposes. Financial Contracts The Company enters into financial contracts with counterparties as part of its investment strategy. Financial contracts, which include total return swaps, credit default swaps ("CDS"), futures, options, currency forwards and other derivative instruments, are recorded at their fair value with any unrealized gains and losses included in net investment income (loss) in the consolidated statements of income. Financial contracts receivable represents derivative contracts whereby, based upon the contract's current fair value, the Company will be entitled to receive payments upon settlement of the contract. Financial contracts payable represents derivative contracts whereby, based upon each contract's current fair value, the Company will be obligated to make payments upon settlement of the contract. Total return swap agreements, included on the consolidated balance sheets as financial contracts receivable and financial contracts payable, are derivative financial instruments whereby the Company is either entitled to receive or obligated to pay the product of a notional amount multiplied by the movement in an underlying security, which the Company may not own, over a specified time frame. In addition, the Company may also be obligated to pay or receive other payments based on interest rates, dividend payments and receipts, or foreign exchange movements during a specified period. The Company measures its rights or obligations to the counterparty based on the fair value movements of the underlying security together with any other payments due. These contracts are carried at fair value, based on observable inputs (Level 2 inputs) with the resultant unrealized gains and losses reflected in net investment income (loss) in the consolidated statements of income. Additionally, any changes in the value of amounts received or paid on swap contracts are reported as a gain or loss in net investment income (loss) in the consolidated statements of income. Financial contracts may also include exchange traded futures or options contracts that are based on the movement of a particular index, equity security, commodity, currency or interest rate. Where such contracts are traded in an active market, the Company’s obligations or rights on these contracts are recorded at fair value based on the observable quoted prices of the same or similar financial contracts in an active market (Level 1) or on broker quotes which reflect market information based on actual transactions (Level 2). Amounts invested in exchange traded options and over the counter ("OTC") options are recorded either as an asset or liability at inception. Subsequent to initial recognition, unexpired exchange traded option contracts are recorded at fair value based on quoted prices in active markets (Level 1). For OTC options or exchange traded options where a quoted price in an active market is not available, fair values are derived based upon observable inputs (Level 2) such as multiple quotes from brokers and market makers, which are considered to be binding. The Company may purchase and sell CDS for strategic investment purposes. A CDS is a derivative instrument that provides protection against an investment loss due to specified credit or default events of a reference entity. The seller of a CDS guarantees to pay the buyer a specified amount if the reference entity defaults on its obligations or fails to perform. The buyer of a CDS pays a premium over time to the seller in exchange for obtaining this protection. A CDS trading in an active market is valued at fair value based on broker or market maker quotes for identical instruments in an active market (Level 2) or based on the current credit spreads on identical contracts (Level 2). |
Share-Based Compensation | Share-Based Compensation The Company has established a stock incentive plan for directors, employees and consultants. U.S. GAAP requires the Company to recognize share-based compensation transactions using the fair value at the grant date of the award. The Company measures compensation for restricted shares and restricted stock units ("RSUs") based on the price of the Company’s common shares at the grant date and the expense is recognized on a straight line basis over the vesting period. Determining the fair value of share purchase options at the grant date requires significant estimation and judgment. The Company uses an option-pricing model (Black-Scholes option pricing model) to assist in the calculation of fair value for share purchase options. The model requires estimation of various inputs such as estimated term, forfeiture and dividend rates and expected volatility. The Company uses the full life of the options, ten years, as the estimated term of the options, and has assumed no forfeitures and no dividends paid during the life of the options. Effective from 2014, the estimate of expected volatility is based on the daily historical trading data of the Company's Class A ordinary shares from the date that these shares commenced trading (May 24, 2007) to the grant date. Prior to 2014, the Company's share had not been publicly traded for a sufficient length of time to reasonably estimate the expected volatility. Therefore, for share purchase options granted prior to 2014, the Company determined the expected volatility based primarily on the historical volatility of similar entities. The Company considered factors such as an entity's industry, stage of life cycle, size and financial leverage when selecting similar entities. The Company used a sample peer group of companies in the reinsurance industry as well as the Company’s own historical volatility in determining the expected volatility. For share purchase options issued under the employee stock incentive plan, compensation cost is calculated and expensed over the vesting periods on a graded vesting basis (see Note 10 ). If actual results differ significantly from these estimates and assumptions, particularly in relation to the Company’s estimation of volatility which requires the most judgment, share-based compensation expense, primarily with respect to future share-based awards, could be materially impacted. |
Foreign Exchange | Foreign Exchange The reporting and functional currency of the Company and all its subsidiaries is the U.S. dollar. Transactions in foreign currencies are recorded in U.S. dollars at the exchange rates in effect on the transaction date. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated at the exchange rate in effect at the balance sheet date and translation exchange gains and losses, if any, are included in "other income (expense), net" in the consolidated statements of income. |
Other Assets | Other Assets Other assets consist primarily of investment income receivable, prepaid expenses, fixed assets and deferred tax assets. |
Other Liabilities | Other Liabilities Other liabilities consist primarily of dividends payable on securities sold, not yet purchased, and employee bonus accruals. At December 31, 2015 , other liabilities included accrued bonus of $8.2 million ( 2014 : $7.6 million ). Under the Company's bonus program, each employee’s target bonus consists of two components: a discretionary component based on a qualitative assessment of each employee’s performance and a quantitative component based on the return on deployed equity (‘‘RODE”) for each underwriting year relating to reinsurance operations. The qualitative portion of an employee’s annual bonus is accrued at each employee's target amount, which may differ significantly from the actual amount approved and awarded annually by the Compensation Committee. The quantitative portion of each employee’s annual bonus is accrued based on the expected RODE for each underwriting year and adjusted for changes in the expected RODE and actual investment return each quarter until all losses are settled and the underwriting year is declared closed. The quantitative bonus is calculated and paid, with the approval of the Compensation Committee, in annual installments between two to five years from the end of the fiscal year in which the business was underwritten. Any further changes are incorporated into the following open underwriting year. The expected RODE calculation utilizes proprietary models which require significant estimation and judgment. Actual RODE may vary significantly from the expected RODE and any adjustments to the quantitative bonus estimates, which may be material, are recorded in the period in which they are determined. Also included in other liabilities are accruals for income taxes payable, professional fees and other general expenses. |
Non-controlling Interest | Non-controlling Interest Non-controlling interest in joint venture on the consolidated balance sheets represents DME Advisors, LLC’s (‘‘DME”) share of assets in the joint venture whereby DME is a participant in the joint venture as disclosed in Note 13 . DME’s share of investment income or loss is included in the consolidated statements of income as income attributable to non-controlling interest in joint venture. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company has no other comprehensive income or loss, other than the net income or loss disclosed in the consolidated statements of income. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings per share are based on the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings per share includes the dilutive effect of restricted stock units ("RSU") and additional potential common shares issuable when stock options are exercised and are determined using the treasury stock method. The Company treats its unvested restricted stock as participating securities in accordance with U.S. GAAP, which requires that unvested stock awards which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (referred to as "participating securities"), be included in the number of shares outstanding for both basic and diluted earnings per share calculations. In the event of a net loss, all RSUs, stock options outstanding and participating securities are excluded from the calculation of both basic and diluted loss per share since their inclusion would be anti-dilutive. |
Taxation | Taxation Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes tax on profits, income, gains or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to GLRE, Greenlight Re nor their respective operations, or to the Class A or Class B ordinary shares or related obligations, until February 1, 2025. Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the U.S. Internal Revenue Service ("IRS"). Verdant’s taxable income is generally expected to be taxed at a rate of 35% . GRIL is incorporated in Ireland and therefore is subject to the Irish corporation tax rate of 12.5% on its trading income, and 25% on its non-trading income, if any. Any deferred tax asset is evaluated for recovery and a valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be realized in the future. The Company has not taken any income tax positions that are subject to significant uncertainty or that are reasonably likely to have a material impact on the Company. |
Segment Information | Segment Information Under U.S. GAAP, operating segments are based on the internal information that management uses for allocating resources and assessing performance as the source of the Company's reportable segments. The Company manages its business on the basis of one operating segment, Property and Casualty Reinsurance, in accordance with the qualitative and quantitative criteria established by U.S. GAAP. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2015, the FASB issued Accounting Standards Update 2015-07, "Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share or Its Equivalent" ("ASU 2015-07"). The amendments apply to reporting entities that elect to measure the fair value of an investment using the net asset value ("NAV") per share (or its equivalent) as a practical expedient. The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share as a practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share as a practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The amendments in ASU 2015-07 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Entities are required to apply the amendments in this update retrospectively to all periods presented. The Company will adopt ASU 2015-07 during the first quarter of 2016. As the Company measures certain investments in private equity funds using the NAV as a practicable expedient, upon adoption of ASU 2015-07, the fair value of these investments will be removed from the fair value hierarchy for all periods presented in the Company’s consolidated financial statements. The Company will continue to disclose information on these investments for which fair value is measured at NAV as a practical expedient. In May 2015, the FASB issued ASU 2015-09, "Financial Services - Insurance (Topic 944): Disclosures about Short-Duration Contracts" ("ASU 2015-09"). ASU 2015-09 requires additional disclosures for short-duration contracts including incurred and paid claims development information, claims duration information, quantitative claims frequency information (unless impracticable), and an explanation of significant changes in methodologies and assumptions used to calculate the loss and loss adjustment expense reserves. ASU 2015-09 is effective for public entities for annual reporting periods beginning after December 15, 2015, and interim reporting periods within annual reporting periods beginning after December 15, 2016 with early adoption permitted. The Company is evaluating the impact of the disclosure requirements of ASU 2015-09 and is preparing to disclose the additional information in its consolidated financial statements for the fiscal year ending December 31, 2016 and thereafter. |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Fixed Assets Table | At December 31, 2015 , the cost, accumulated depreciation and net book values of the fixed assets were as follows: Cost Accumulated depreciation Net book value ($ in thousands) Computer software $ 556 $ (348 ) $ 208 Furniture and fixtures 620 (513 ) 107 Leasehold improvements 2,002 (1,229 ) 773 Total $ 3,178 $ (2,090 ) $ 1,088 At December 31, 2014 , the cost, accumulated depreciation and net book values of the fixed assets were as follows: Cost Accumulated depreciation Net book value ($ in thousands) Computer software $ 556 $ (277 ) $ 279 Furniture and fixtures 620 (442 ) 178 Leasehold improvements 2,002 (966 ) 1,036 Total $ 3,178 $ (1,685 ) $ 1,493 |
Schedule of Weighted Average Number of Shares | Year ended December 31 2015 2014 2013 Weighted average shares outstanding - basic 36,670,466 37,242,687 36,838,128 Effect of dilutive service provider share-based awards — 8,498 144,726 Effect of dilutive employee and director share-based awards — 623,202 602,313 Weighted average shares outstanding - diluted 36,670,466 37,874,387 37,585,167 Anti-dilutive stock options outstanding 211,821 — 218,197 Participating securities excluded from calculation of loss per share 307,013 — — |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Fair Value Measurements, Recurring and Nonrecurring | The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2015 : Fair value measurements as of December 31, 2015 Description Quoted prices in Significant other Significant Total Assets: ($ in thousands) Debt instruments $ — $ 38,582 $ 505 $ 39,087 Listed equity securities 900,369 5,625 — 905,994 Commodities 98,046 — — 98,046 Private and unlisted equity securities — — 21,037 21,037 Financial contracts receivable 20 13,195 — 13,215 $ 998,435 $ 57,402 $ 21,542 $ 1,077,379 Liabilities: Listed equity securities, sold not yet purchased $ (808,481 ) $ — $ — $ (808,481 ) Debt instruments, sold not yet purchased — (74,425 ) — (74,425 ) Financial contracts payable (488 ) (27,757 ) — (28,245 ) $ (808,969 ) $ (102,182 ) $ — $ (911,151 ) The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2014 : Fair value measurements as of December 31, 2014 Description Quoted prices in Significant other Significant Total Assets: ($ in thousands) Debt instruments $ — $ 26,953 $ 22,259 $ 49,212 Listed equity securities 1,259,298 6,877 — 1,266,175 Commodities 96,872 — — 96,872 Private and unlisted equity securities — — 18,719 18,719 Financial contracts receivable 2,463 44,708 — 47,171 $ 1,358,633 $ 78,538 $ 40,978 $ 1,478,149 Liabilities: Listed equity securities, sold not yet purchased $ (834,228 ) $ — $ — $ (834,228 ) Debt instruments, sold not yet purchased — (256,503 ) — (256,503 ) Financial contracts payable — (44,592 ) — (44,592 ) $ (834,228 ) $ (301,095 ) $ — $ (1,135,323 ) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2015 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Year ended December 31, 2015 Assets Liabilities Debt instruments Private and unlisted equity securities Financial contracts receivable Listed equity securities Total Financial contracts payable ($ in thousands) Beginning balance $ 22,259 $ 18,719 $ — $ — $ 40,978 $ — Purchases — 5,009 2,340 — 7,349 — Sales (21,561 ) (3,290 ) — — (24,851 ) — Total realized and unrealized gains (losses) and amortization included in earnings, net (193 ) 599 (3,027 ) (692 ) (3,313 ) 314 Transfers into Level 3 — — 2,536 5,189 7,725 8,835 Transfers out of Level 3 — — (1,849 ) (4,497 ) (6,346 ) (9,149 ) Ending balance $ 505 $ 21,037 $ — $ — $ 21,542 $ — | The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2014 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Year ended December 31, 2014 Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 527 $ 46,323 $ 46,850 Purchases 21,561 3,958 25,519 Sales — (37,252 ) (37,252 ) Total realized and unrealized gains included in earnings, net 171 9,734 9,905 Transfers into Level 3 — — — Transfers out of Level 3 — (4,044 ) (4,044 ) Ending balance $ 22,259 $ 18,719 $ 40,978 |
Investments Classified by Contractual Maturity Date | The maturity distribution for debt instruments held at December 31, 2015 and 2014 , was as follows: 2015 2014 Cost/ amortized cost Fair value Cost/ amortized cost Fair value ($ in thousands) Within one year $ — $ — $ — $ — From one to five years 4,202 4,129 21,922 21,923 From five to ten years 18,840 14,780 2,401 1,282 More than ten years 22,429 20,178 28,752 26,007 $ 45,471 $ 39,087 $ 53,075 $ 49,212 | |
Investment Holdings, Other than Securities | At December 31, 2015 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 102,092 $ — $ (4,046 ) $ 98,046 Private and unlisted equity securities 18,720 3,491 (1,174 ) 21,037 $ 120,812 $ 3,491 $ (5,220 ) $ 119,083 At December 31, 2014 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 95,815 $ 1,057 $ — $ 96,872 Private and unlisted equity securities 17,238 3,451 (1,970 ) 18,719 $ 113,053 $ 4,508 $ (1,970 ) $ 115,591 | |
Investments Sold, Not yet Purchased | At December 31, 2015 , the following securities were included in investments in securities sold, not yet purchased: Proceeds Unrealized gains Unrealized losses Fair value ($ in thousands) Equities – listed $ (803,842 ) $ 102,469 $ (94,681 ) $ (796,054 ) Exchange traded funds (9,572 ) — (2,855 ) (12,427 ) Sovereign debt – Non U.S. (77,443 ) 3,018 — (74,425 ) $ (890,857 ) $ 105,487 $ (97,536 ) $ (882,906 ) At December 31, 2014 , the following securities were included in investments in securities sold, not yet purchased: Proceeds Unrealized gains Unrealized losses Fair value ($ in thousands) Corporate debt – U.S. $ (7,066 ) $ 1,007 $ (5 ) $ (6,064 ) Equities – listed (813,365 ) 91,690 (101,715 ) (823,390 ) Exchange traded funds (9,180 ) — (1,658 ) (10,838 ) Sovereign debt – Non U.S. (246,589 ) 6,635 (10,485 ) (250,439 ) $ (1,076,200 ) $ 99,332 $ (113,863 ) $ (1,090,731 ) | |
Fair Values of Financial Contracts Outstanding | At December 31, 2015 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing (1) Notional amount of Fair value of net assets ($ in thousands) Financial contracts receivable Call options (2) USD 47,259 $ 657 Put options (3) USD 147,326 8,790 Total return swaps – equities EUR/GBP/USD 50,205 3,748 Warrants and rights on listed equities EUR 59 20 Total financial contracts receivable, at fair value $ 13,215 Financial contracts payable Call options USD 2,601 $ (64 ) Commodity Swaps USD 42,160 (12,784 ) Forwards KRW 2,908 (22 ) Futures USD 21,195 (488 ) Total return swaps – equities EUR/GBP/HKD/RON/MXN/USD 71,874 (14,887 ) Total financial contracts payable, at fair value $ (28,245 ) | At December 31, 2014 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing currency (1) Notional amount of underlying instruments Fair value of net assets (obligations) on financial contracts ($ in thousands) Financial contracts receivable Futures USD 13,204 $ 3,461 Put options (2) USD 299,907 22,349 Total return swaps – equities EUR/GBP/HKD/USD 43,355 18,898 Warrants and rights on listed equities EUR 8,054 2,463 Total financial contracts receivable, at fair value $ 47,171 Financial contracts payable Credit default swaps, purchased – corporate debt USD 221,198 $ (1,305 ) Credit default swaps, purchased – sovereign debt USD 251,467 (1,714 ) Forwards KRW 20,563 (512 ) Futures USD 33,625 (867 ) Total return swaps – equities EUR/GBP/HKD/INR/RON/USD 122,667 (40,194 ) Total financial contracts payable, at fair value $ (44,592 ) |
Gains and losses on derivatives recognized in income | During the years ended December 31, 2015, 2014 and 2013 , the Company reported gains and losses on derivatives as follows: Derivatives not designated as hedging instruments Location of gains and losses on derivatives recognized in income Gain (loss) on derivatives recognized in income Year ended December 31 2015 2014 2013 ($ in thousands) Commodity swaps Net investment income (loss) $ (12,061 ) $ — $ — Credit default swaps, purchased – corporate debt Net investment income (loss) (156 ) (345 ) (3,552 ) Credit default swaps, purchased – sovereign debt Net investment income (loss) (90 ) (298 ) (1,087 ) Forwards Net investment income (loss) 1,009 (490 ) 11,209 Futures Net investment income (loss) (952 ) 16,721 12,504 Interest rate options Net investment income (loss) — (26 ) (82 ) Interest rate swaps Net investment income (loss) (706 ) — — Options, warrants, and rights Net investment income (loss) (13,955 ) 1,020 21,446 Total return swaps – equities Net investment income (loss) (12,590 ) 13,142 85,638 Weather derivative swap Other income (expense), net (2,340 ) — — Total $ (41,841 ) $ 29,724 $ 126,076 | |
Derivatives volume of activities based on notional amounts | For the year ended December 31, 2015 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2015 Year ended December 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Commodity swaps $ 103,358 $ 43,261 Credit default swaps (1) — — Forwards — 13,377 Futures 311,536 294,441 Interest rate swaps 9,139,000 7,213,000 Options, warrants and rights (1) 661,103 341,702 Total return swaps 67,844 185,128 Weather derivative swap 12,000 12,000 Total $ 10,294,841 $ 8,102,909 | For the year ended December 31, 2014 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2014 Year ended December 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Forwards $ — $ 82,688 Futures 308,178 356,216 Options, warrants and rights (1) 1,044,241 314,876 Total return swaps 121,125 160,065 Total $ 1,473,544 $ 913,845 |
Offsetting derivative assets and liabilities | As of December 31, 2015 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: December 31, 2015 (i) (ii) (iii) = (i) - (ii) (iv) Gross amounts not offset in the balance sheet (v) = (iii) + (iv) Description Gross amounts of recognized assets (liabilities) Gross amounts offset in the balance sheet Net amounts of assets (liabilities) presented in the balance sheet Financial instruments available for offset Cash collateral (received) pledged Net amount of asset (liability) ($ in thousands) Financial contracts receivable $ 13,215 $ — $ 13,215 $ (8,937 ) $ (2,036 ) $ 2,242 Financial contracts payable (28,245 ) — (28,245 ) 8,937 19,308 — As of December 31, 2014 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: December 31, 2014 (i) (ii) (iii) = (i) - (ii) (iv) Gross amounts not offset in the balance sheet (v) = (iii) + (iv) Description Gross amounts of recognized assets (liabilities) Gross amounts offset in the balance sheet Net amounts of assets (liabilities) presented in the balance sheet Financial instruments available for offset Cash collateral (received) pledged Net amount of asset (liability) ($ in thousands) Financial contracts receivable $ 47,171 $ — $ 47,171 $ (24,265 ) $ (9,452 ) $ 13,454 Financial contracts payable (44,592 ) — (44,592 ) 24,265 20,327 — | |
Equities – listed | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities (and Certain Trading Assets) | At December 31, 2015 , the following long positions were included in equity securities, trading: Cost Unrealized gains Unrealized losses Fair value ($ in thousands) Equities – listed $ 1,011,424 $ 67,114 $ (187,885 ) $ 890,653 Exchange traded funds 31,570 — (16,229 ) 15,341 Total equity securities $ 1,042,994 $ 67,114 $ (204,114 ) $ 905,994 At December 31, 2014 , the following long positions were included in equity securities, trading: Cost Unrealized gains Unrealized losses Fair value ($ in thousands) Equities – listed $ 1,079,955 $ 247,109 $ (80,637 ) $ 1,246,427 Exchange traded funds 42,126 — (22,378 ) 19,748 Total equity securities $ 1,122,081 $ 247,109 $ (103,015 ) $ 1,266,175 | |
Debt instruments | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities (and Certain Trading Assets) | At December 31, 2015 , the following investments were included in debt instruments: Cost/ amortized cost Unrealized gains Unrealized losses Fair value ($ in thousands) Corporate debt – U.S. $ 25,674 $ 155 $ (5,519 ) $ 20,310 Corporate debt – Non U.S. 2,109 — (1,795 ) 314 Sovereign debt – Non U.S. 17,688 1,225 (450 ) 18,463 Total debt instruments $ 45,471 $ 1,380 $ (7,764 ) $ 39,087 At December 31, 2014 , the following investments were included in debt instruments: Cost/ amortized cost Unrealized gains Unrealized losses Fair value ($ in thousands) Corporate debt – U.S. $ 23,677 $ 5 $ (1,423 ) $ 22,259 Corporate debt – Non U.S. 5,870 49 (1,405 ) 4,514 Municipal debt – U.S. 1,759 — (6 ) 1,753 Sovereign debt – Non U.S. 21,769 — (1,083 ) 20,686 Total debt instruments $ 53,075 $ 54 $ (3,917 ) $ 49,212 |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | December 31, 2015 December 31, 2014 ($ in thousands) Cash at banks $ 44,133 $ 3,426 Cash held with brokers 68,029 8,604 Total cash and cash equivalents $ 112,162 $ 12,030 |
RESTRICTED CASH AND CASH EQUI31
RESTRICTED CASH AND CASH EQUIVALENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents | December 31, 2015 December 31, 2014 ($ in thousands) Cash held by prime brokers relating to securities sold, not yet purchased $ 882,906 $ 1,090,731 Cash collateral relating to letters of credit issued 222,852 134,981 Cash held as collateral in trust accounts 78,584 — Cash and cash equivalents held by swap counterparties 52,247 71,202 Total restricted cash and cash equivalents $ 1,236,589 $ 1,296,914 |
LOSS AND LOSS ADJUSTMENT EXPE32
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block] | For the year ended December 31, 2015 , the net losses incurred included $50.3 million related to net adverse loss development on reserves relating to prior years. During the year ended December 31, 2015 , the loss development on prior year contracts primarily related to the following: ● $36.9 million of adverse loss development relating to a general liability contract originally written from 2008 to 2011. This contract contains underlying construction defect liability coverage predominantly on single family homes. During the third quarter of 2015, we completed an in-depth analysis, with the assistance of a third party expert, of the construction defect claims reported and the potential for claims not yet reported on this contract. Based on this assessment, we revised the actuarial methodology used for reserving the construction defect claims on this contract, which resulted in an increase in incurred but not reported losses; ● $14.7 million of adverse loss development relating to a general liability contract originally written in 2010. This contract contains underlying construction defect liability coverage. Based on updated data received from the insured, we conducted additional actuarial analysis and updated our actuarial input parameters based on consultation with external industry experts. As a result, the average estimated cost per claim was increased; ● $9.3 million of adverse loss development relating to our Florida homeowners' insurance contracts as a result of deterioration of sinkhole claims, higher than anticipated water damage claims from rainstorms and an increase in the practice of "assignment of benefits" whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters which led to increases in the frequency of claims reported as well as the severity of loss adjustment expenses . However, because some of these contracts included sliding scale ceding commission rates, the increase in loss reserves was partially offset by a $5.1 million decrease in ceding commissions and profit commissions recorded as acquisition costs; ● $2.4 million of net adverse loss development relating to our solicitors' professional indemnity contracts as a result of multiple large claims reported during the period and an increase in incurred losses; ● $5.1 million of favorable loss development relating to an excess of loss property contract resulting in elimination of loss reserve based on updated loss information received from the insured during the period indicating that no losses will breach into our layer of coverage. The decrease in loss reserve was more than offset by a reversal of $2.5 million of earned premiums and an accrual of $3.4 million of profit commission recorded as acquisition costs; ● $4.5 million of favorable loss development relating to private passenger motor contracts during the period. The decrease in loss reserve was partially offset by $3.3 million of additional ceding commissions recorded as acquisition costs; ● $2.3 million of favorable loss development relating to the employer medical stop-loss business as a result of better than expected claims frequency reported by the cedent; and ● $1.3 million of loss reserves released upon commutation of a private passenger motor contract during the period. The decrease in loss reserve was partially offset by $1.1 million of additional ceding commissions incurred as part of the commutation agreement. There were no other significant developments of prior period loss reserves during the year ended December 31, 2015 . For the year ended December 31, 2014 , the net losses incurred included $18.2 million related to net adverse loss development on reserves relating to prior years. During the year ended December 31, 2014 , the loss development on prior year contracts primarily related to the following: ● $7.8 million of adverse loss development, relating to a general liability contract currently in run-off. Loss reserves were increased on this contract after a detailed actuarial review of existing claims data received from the client, which reported an increase in the number of open claims. The loss reserves were also increased to take into account the corresponding claims handling fees expected to be incurred to settle the open claims; ● $7.1 million of adverse loss development, net of retrocession recoveries, relating to commercial motor claims on a multi-line quota share contract currently in run-off. Loss reserves were increased on this contract after a detailed actuarial review of existing claims data received from the client, which reported significant increases in incurred losses on some claims as well as an increase in the number of open claims; ● $4.0 million of adverse loss development relating to a solicitors' professional indemnity contract as a result of a combination of large claims reported and increases in case reserves on several smaller claims. Loss reserves were increased on this contract after a detailed review of existing claims data received from the client, audits of claim files at the third party claims administrator and actuarial analysis based on all available information. The contract terms included sliding scale ceding commission rates and profit commissions. As a result, the increase in loss reserves was offset by a $0.6 million decrease in ceding commissions and profit commissions which were recorded as decreases to acquisition costs; ● $3.0 million of adverse loss development relating to the employer medical stop-loss business. Loss reserves were increased on these contracts after a detailed review of existing claims data received from the clients, audits of claim files at the third party claims administrators and actuarial analysis based on all available information; and ● $3.8 million of favorable loss development relating to private passenger automobile business, primarily as a result of better than expected loss development noted on our private passenger automobile contracts after a detailed review of existing claims data received from the clients, audits of claim files and actuarial analysis based on all available information. Since these contracts included sliding scale ceding commission rates, the decrease in loss reserves was offset by a $2.2 million increase in ceding commissions recorded as acquisition costs. There were no other significant developments of prior period loss reserves during the year ended December 31, 2014 . For the year ended December 31, 2013 , the net losses incurred included $6.1 million related to net favorable loss development on reserves relating to prior years. During the year ended December 31, 2013 , the loss development on prior year contracts primarily related to the following: ● Elimination of $15.0 million of reserves relating to super-storm Sandy based on additional information received from the client which indicated that the losses would not exceed the threshold of coverage provided under the contract. As a result of the reversal of loss reserves, the Company also reversed reinstatement premiums earned of $2.6 million ; ● $4.0 million of favorable loss development relating to commercial automobile business due to better than expected loss development on open claims and settling of claims at lower amounts than expected. Loss reserves were decreased on these contracts after a detailed review of existing claims data received from the clients, audits of claim files at the third party claims administrators and actuarial analysis based on all available information; ● $3.0 million favorable loss development relating to a private passenger automobile contract as a result of final settlement of losses upon commutation of the contract at an amount lower than originally reserved. However, because this contract included a sliding scale ceding commission rate, the decrease in loss reserves was offset by a $2.3 million increase in ceding commissions recorded as acquisition costs; ● $2.4 million favorable loss development relating to Florida homeowners' insurance business due to better than expected development on sinkhole claims, primarily as a result of legislative changes implemented in the State of Florida during 2012; ● $17.7 million of adverse loss development, net of retrocession recoveries, relating to general liability business. Loss reserves were increased on these contracts after a detailed review of existing claims data received from the clients, audits of claim files at the third party claims administrators and actuarial analysis based on all available information; and ● $4.0 million of adverse loss development on a 2007 casualty clash contract based on updated claims and loss information received from the client. The new information indicated that ground up losses under the contract estimated by the client had increased resulting in additional losses attaching to the Company's layer. As a result of this increase in loss reserves, the Company recorded reinstatement premiums of $1.2 million . There were no other significant developments of prior period loss reserves during the year ended December 31, 2013 . |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding Roll Forward | The following table is a summary of voting ordinary shares issued and outstanding: 2015 2014 2013 Class A Class B Class A Class B Class A Class B Balance – beginning of year 31,129,648 6,254,895 30,791,865 6,254,949 30,447,179 6,254,949 Issue of ordinary shares, net of forfeitures 256,464 — 337,729 — 344,686 — Repurchase of ordinary shares (613,540 ) — — — — — Class B shares converted to Class A shares — — 54 (54 ) — — Balance – end of year 30,772,572 6,254,895 31,129,648 6,254,895 30,791,865 6,254,949 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company uses the Black-Scholes option pricing model to determine the valuation of its options and has applied the assumptions set forth in the following table. 2015 2014 2013 Risk free rate 2.15 % 2.47 % 2.85 % Estimated volatility 32.8 % 34.3 % 35.0 % Expected term (in years) 10 10 10 Dividend yield 0 % 0 % 0 % Forfeiture rate 0 % 0 % 0 % |
Schedule of Share-based Compensation, Stock Options, Activity | Employee and director stock option activity during the years ended December 31, 2015 and 2014 was as follows: Number of options Weighted average exercise price Weighted average grant date fair value Balance at December 31, 2013 1,402,987 $ 15.82 $ 7.08 Granted 31,821 32.37 15.71 Exercised (318,500 ) 11.29 5.67 Forfeited — — — Expired — — — Balance at December 31, 2014 1,116,308 17.58 7.73 Granted 40,683 26.67 12.29 Exercised (250,000 ) 11.10 5.57 Forfeited — — — Expired — — — Balance at December 31, 2015 906,991 $ 19.78 $ 8.53 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The restricted share award activity during the years ended December 31, 2015 and 2014 was as follows: Number of non-vested restricted shares Weighted average grant date fair value Balance at December 31, 2013 328,991 $ 24.74 Granted 155,246 32.58 Vested (115,444 ) 25.35 Forfeited (38,706 ) 27.43 Balance at December 31, 2014 330,087 27.90 Granted 106,900 31.56 Vested (120,353 ) 26.26 Forfeited (9,621 ) 30.49 Balance at December 31, 2015 307,013 $ 29.74 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Number of Weighted Balance at December 31, 2013 5,941 $ 24.41 Granted 9,668 32.60 Vested — — Forfeited — — Balance at December 31, 2014 15,609 29.72 Granted 6,821 32.21 Vested (260 ) 24.30 Forfeited — — Balance at December 31, 2015 22,170 $ 30.55 |
NET INVESTMENT INCOME (Tables)
NET INVESTMENT INCOME (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Investment Income [Abstract] | |
Net Investment Income (Loss) | A summary of net investment income for the years ended December 31, 2015, 2014 and 2013 is as follows: 2015 2014 2013 ($ in thousands) Realized gains (losses) $ 22,227 $ 352,133 $ 122,568 Change in unrealized gains and losses (265,401 ) (187,753 ) 149,012 Investment related foreign exchange gains (losses) (3,725 ) 14,797 44,492 Interest and dividend income, net of withholding taxes 15,313 31,423 22,265 Interest, dividend and other expenses (31,092 ) (38,892 ) (47,665 ) Investment advisor compensation (19,246 ) (49,133 ) (72,532 ) Net investment income (loss) $ (281,924 ) $ 122,575 $ 218,140 |
TAXATION (Tables)
TAXATION (Tables) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||||||||
Schedule of Components of Income Tax Benefit (Expense) | The following table sets forth our current and deferred income tax benefit (expense) on a consolidated basis for the years ended December 31, 2015, 2014 and 2013 : 2015 2014 2013 ($ in thousands) Current tax (expense) benefit $ 15 $ 638 $ (534 ) Deferred tax (expense) benefit 1,740 (14 ) (4 ) Income tax (expense) benefit $ 1,755 $ 624 $ (538 ) | ||||||||||
Current tax (expense) benefit | $ 15 | $ 638 | $ (534) | ||||||||
Deferred tax (expense) benefit | 1,740 | (14) | (4) | ||||||||
Income tax (expense) benefit | $ 361 | $ 1,233 | $ (54) | $ 215 | $ (204) | $ 254 | $ 14 | $ 560 | $ 1,755 | $ 624 | $ (538) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | At December 31, 2015 , the Company had the following letter of credit facilities, which automatically renew each year unless terminated by either party in accordance with the required notice period: Facility Termination Date Notice period required for termination ($ in thousands) Bank of America, N.A. $ 120,000 July 11, 2016 90 days prior to termination date Butterfield Bank (Cayman) Limited 100,000 June 30, 2016 90 days prior to termination date Citibank Europe plc 400,000 October 11, 2016 120 days prior to termination date JP Morgan Chase Bank N.A. 100,000 January 27, 2017 120 days prior to termination date $ 720,000 |
Contractual Obligation, Fiscal Year Maturity Schedule | The following is a schedule of future minimum payments required under the above commitments: 2016 2017 2018 2019 2020 Thereafter Total ($ in thousands) Operating lease obligations $ 548 $ 548 $ 315 $ 82 $ 82 $ 31 $ 1,606 Private equity and limited partnerships (1) 6,107 — — — — — 6,107 $ 6,655 $ 548 $ 315 $ 82 $ 82 $ 31 $ 7,713 (1) Given the nature of these investments, the Company is unable to determine with any degree of accuracy when these commitments will be called. Therefore, for purposes of the above table, the Company has assumed that all commitments with no fixed payment schedules will be called during the year ending December 31, 2016 . |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Gross premiums written by brokers greater than 10% of premiums | The following table sets forth the premiums sourced from brokers who each accounted for more than 10% of the Company's gross written premiums: Year ended December 31 2015 2014 2013 ($ in thousands) Largest broker $ 278,003 55.4 % $ 161,405 49.8 % $ 282,337 52.7 % 2nd largest broker 110,246 22.0 61,809 19.1 119,117 22.2 3rd largest broker — — 40,773 12.6 — — $ 388,249 77.4 % $ 263,987 81.5 % $ 401,454 74.9 % |
Gross Premiums Written by Line of Business | The following tables provide a breakdown of the Company's gross premiums written by line of business and by geographic area of risks insured for the periods indicated: Gross Premiums Written by Line of Business Year ended December 31 2015 2014 2013 ($ in thousands) Property Aviation $ 691 0.1 % $ 391 0.1 % $ 168 — % Commercial 16,667 3.3 11,529 3.6 9,999 1.9 Energy 2,009 0.4 2,131 0.6 659 0.1 Motor physical damage 34,529 6.9 24,008 7.4 57,952 10.8 Personal 57,495 11.5 64,479 19.9 145,807 27.2 Total Property 111,391 22.2 102,538 31.6 214,585 40.0 Casualty General liability (1) 28,355 5.6 11,639 3.6 (815 ) (0.2 ) Marine liability 9,283 1.8 5,120 1.6 1,956 0.4 Motor liability 203,624 40.6 127,858 39.5 253,698 47.4 Professional liability 72,217 14.4 27,009 8.4 29,901 5.6 Total Casualty 313,479 62.4 171,626 53.1 284,740 53.2 Specialty Financial 7,824 1.6 5,292 1.6 3,498 0.7 Health 56,784 11.3 43,837 13.5 37,094 6.9 Workers’ compensation (1) 12,646 2.5 730 0.2 (4,215 ) (0.8 ) Total Specialty 77,254 15.4 49,859 15.3 36,377 6.8 $ 502,124 100.0 % $ 324,023 100.0 % $ 535,702 100.0 % (1) The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premiums returned upon novation or commutation of contracts. |
Gross Premiums Written by Geographic Area of Risks Insured | Year ended December 31 2015 2014 2013 ($ in thousands) U.S. and Caribbean $ 383,236 76.3 % $ 275,402 85.0 % $ 496,949 92.8 % Worldwide (1) 104,336 20.8 31,106 9.6 9,821 1.8 Europe 14,085 2.8 17,432 5.4 28,932 5.4 Asia 467 0.1 83 — — — $ 502,124 100.0 % $ 324,023 100.0 % $ 535,702 100.0 % (1) "Worldwide" is comprised of contracts that reinsure risks in more than one geographic area and do not specifically exclude the U.S. |
QUARTERLY FINANCIAL RESULTS (39
QUARTERLY FINANCIAL RESULTS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table presents the quarterly financial results for each of the quarters ended during 2015 : 2015 Quarter ended ($ in thousands, except per share amounts) Revenues Gross premiums written $ 129,682 $ 92,990 $ 134,568 $ 144,884 Gross premiums ceded (1,626 ) (1,868 ) (2,288 ) (3,219 ) Net premiums written 128,056 91,122 132,280 141,665 Change in net unearned premium reserves (33,263 ) 563 (30,286 ) (21,750 ) Net premiums earned 94,793 91,685 101,994 119,915 Net investment income (loss) (24,829 ) (20,305 ) (191,322 ) (45,468 ) Other income (expense), net 1,588 (3,760 ) (542 ) (699 ) Total revenues 71,552 67,620 (89,870 ) 73,748 Expenses Loss and loss adjustment expenses incurred, net 63,207 76,653 97,421 79,816 Acquisition costs, net 26,841 23,939 32,146 33,281 General and administrative expenses 6,160 6,894 5,382 4,998 Total expenses 96,208 107,486 134,949 118,095 Income (loss) before income tax expense (24,656 ) (39,866 ) (224,819 ) (44,347 ) Income tax (expense) benefit 215 (54 ) 1,233 361 Net income (loss) including non-controlling interest (24,441 ) (39,920 ) (223,586 ) (43,986 ) Loss (income) attributable to non-controlling interest in joint venture 394 324 3,909 881 Net income (loss) $ (24,047 ) $ (39,596 ) $ (219,677 ) $ (43,105 ) Earnings (loss) per share Basic $ (0.65 ) $ (1.06 ) $ (5.98 ) $ (1.17 ) Diluted $ (0.65 ) $ (1.06 ) $ (5.98 ) $ (1.17 ) Weighted average number of ordinary shares used in the determination of earnings and loss per share Basic 37,173,008 37,303,265 36,710,216 36,720,454 Diluted 37,173,008 37,303,265 36,710,216 36,720,454 The following table presents the quarterly financial results for each of the quarters ended during 2014 : 2014 Quarter ended ($ in thousands) Revenues Gross premiums written $ 118,901 $ 33,654 $ 97,200 $ 74,268 Gross premiums ceded (5,940 ) (2,759 ) (2,706 ) (2,088 ) Net premiums written 112,961 30,895 94,494 72,180 Change in net unearned premium reserves (1,272 ) 56,960 (15,003 ) 3,025 Net premiums earned 111,689 87,855 79,491 75,205 Net investment income (loss) (10,150 ) 113,932 (54,027 ) 72,820 Other income (expense), net 182 (1,400 ) 2,663 1,542 Total revenues 101,721 200,387 28,127 149,567 Expenses Loss and loss adjustment expenses incurred, net 67,363 56,644 53,028 57,951 Acquisition costs, net 37,796 25,570 22,478 21,821 General and administrative expenses 6,200 5,559 6,012 6,729 Total expenses 111,359 87,773 81,518 86,501 Income (loss) before income tax expense (9,638 ) 112,614 (53,391 ) 63,066 Income tax (expense) benefit 560 14 254 (204 ) Net income (loss) including non-controlling interest (9,078 ) 112,628 (53,137 ) 62,862 Loss (income) attributable to non-controlling interest in joint venture 197 (3,075 ) 1,369 (2,174 ) Net income (loss) $ (8,881 ) $ 109,553 $ (51,768 ) $ 60,688 Earnings (loss) per share Basic $ (0.24 ) $ 2.94 $ (1.40 ) $ 1.62 Diluted $ (0.24 ) $ 2.89 $ (1.40 ) $ 1.60 Weighted average number of ordinary shares used in the determination of earnings and loss per share Basic 36,808,386 37,246,922 36,984,650 37,356,187 Diluted 36,808,386 37,902,106 36,984,650 37,905,836 |
SCHEDULE II (Tables)
SCHEDULE II (Tables) - Parent Company | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |
Schedule of Condensed Balance Sheet | GREENLIGHT CAPITAL RE, LTD. CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS — PARENT COMPANY ONLY (expressed in thousands of U.S. dollars) December 31, 2015 December 31, 2014 ($ in thousands) Cash and cash equivalents $ 6 $ 1 Investment in subsidiaries 840,196 1,148,308 Note receivable 2,175 1,566 Due from subsidiaries — 15,276 Total assets $ 842,377 $ 1,165,151 Liabilities and shareholders’ equity Liabilities Due to subsidiaries $ 16,986 $ — Total liabilities 16,986 — Shareholders’ equity Share capital 3,703 3,738 Additional paid-in capital 496,401 500,553 Retained earnings 325,287 660,860 Total shareholders’ equity 825,391 1,165,151 Total liabilities and shareholders’ equity $ 842,377 $ 1,165,151 |
Schedule of Condensed Income Statement | GREENLIGHT CAPITAL RE, LTD. CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF INCOME — PARENT COMPANY ONLY (expressed in thousands of U.S. dollars) Year ended December 31 2015 2014 2013 ($ in thousands) Revenue Investment income $ 5,962 $ 671 $ 1,100 Total revenues 5,962 671 1,100 Expenses General and administrative expenses 4,048 3,806 3,735 Net income (loss) before equity in earnings of consolidated subsidiaries 1,914 (3,135 ) (2,635 ) Equity in earnings of consolidated subsidiaries (328,339 ) 112,727 228,334 Consolidated net income (loss) $ (326,425 ) $ 109,592 $ 225,699 |
Schedule of Condensed Cash Flow Statement | GREENLIGHT CAPITAL RE, LTD. CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS — PARENT COMPANY ONLY (expressed in thousands of U.S. dollars) Year Ended December 31 2015 2014 2013 ($ in thousands) Cash provided by (used in) operating activities Net income (loss) $ (326,425 ) $ 109,592 $ 225,699 Adjustments to reconcile net income (loss) to cash provided by operating activities Equity in earnings of consolidated subsidiaries 328,339 (112,727 ) (228,334 ) Share-based compensation expense 4,274 3,964 3,675 Change in Due from subsidiaries 15,276 971 (2,006 ) Due to subsidiaries 16,986 (3,808 ) 2,438 Net cash (used in) provided by operating activities 38,450 (2,008 ) 1,472 Investing activities Change in note receivable (609 ) 2,162 (2,053 ) Contributed surplus to subsidiaries, net (20,227 ) (158 ) 59 Net cash (used in) provided by investing activities (20,836 ) 2,004 (1,994 ) Financing activities Net proceeds from exercise of stock options — — 513 Short-swing sale profit from shareholder 83 — — Repurchase of Class A ordinary shares (17,692 ) — — Net cash (used in) provided by financing activities (17,609 ) — 513 Net increase (decrease) in cash and cash equivalents 5 (4 ) (9 ) Cash and cash equivalents at beginning of the year 1 5 14 Cash and cash equivalents at end of the year $ 6 $ 1 $ 5 |
ORGANIZATION AND BASIS OF PRE41
ORGANIZATION AND BASIS OF PRESENTATION (Details) | May. 30, 2007$ / sharesshares |
Common Class A [Member] | |
Class of Stock [Line Items] | |
Shares issued from initial public offering | shares | 11,787,500 |
Price per share of shares issued from initial public offering | $ / shares | $ 19 |
Common Class B | |
Class of Stock [Line Items] | |
Shares issued from initial public offering | shares | 2,631,579 |
Price per share of shares issued from initial public offering | $ / shares | $ 19 |
SIGNIFICANT ACCOUNTING POLICI42
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Line Items] | |||
Prior Period Reclassification Adjustment | $ (2,600,000) | $ 800,000 | |
Premium deficiency loss | $ 0 | 0 | |
Profit commission reserves | 12,200,000 | 11,000,000 | |
Profit commission expense, net | 7,500,000 | 2,700,000 | 3,700,000 |
Amount of notes receivable placed on non-accrual status | 23,000,000 | 0 | |
Impairment charge relating to accrued interest and principal on the note placed on non-accrual status | 0 | ||
Accrued interest | 0 | 0 | |
Provision for uncollectible notes | 0 | 0 | |
Gain on deposit accounted contracts | 0 | $ 0 | |
Other Liabilities | |||
Accounting Policies [Line Items] | |||
Accrued bonuses | $ 8,200,000 | $ 7,600,000 | |
Minimum | |||
Accounting Policies [Line Items] | |||
Annual installment period to pay quantitative bonus | 2 years | ||
Maximum | |||
Accounting Policies [Line Items] | |||
Annual installment period to pay quantitative bonus | 5 years |
SIGNIFICANT ACCOUNTING POLICI43
SIGNIFICANT ACCOUNTING POLICIES Fixed Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 3,178,000 | $ 3,178,000 |
Accumulated depreciation | (2,090,000) | (1,685,000) |
Net book value | 1,088,000 | 1,493,000 |
Impairment of fixed assets | 0 | 0 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 556,000 | 556,000 |
Accumulated depreciation | (348,000) | (277,000) |
Net book value | $ 208,000 | 279,000 |
Fixed asset estimated useful lives | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 620,000 | 620,000 |
Accumulated depreciation | (513,000) | (442,000) |
Net book value | $ 107,000 | 178,000 |
Fixed asset estimated useful lives | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 2,002,000 | 2,002,000 |
Accumulated depreciation | (1,229,000) | (966,000) |
Net book value | $ 773,000 | $ 1,036,000 |
SIGNIFICANT ACCOUNTING POLICI44
SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share Reconciliation (Details) - shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Weighted average shares outstanding - basic | 36,720,454 | 36,710,216 | 37,303,265 | 37,173,008 | 37,356,187 | 36,984,650 | 37,246,922 | 36,808,386 | 36,670,466 | 37,242,687 | 36,838,128 |
Effect of dilutive service provider share-based awards | 0 | 8,498 | 144,726 | ||||||||
Effect of dilutive employee and director share-based awards | 0 | 623,202 | 602,313 | ||||||||
Weighted average shares outstanding - diluted | 36,720,454 | 36,710,216 | 37,303,265 | 37,173,008 | 37,905,836 | 36,984,650 | 37,902,106 | 36,808,386 | 36,670,466 | 37,874,387 | 37,585,167 |
Stock Options | |||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Anti-dilutive outstanding | 211,821 | 0 | 218,197 | ||||||||
Restricted Stock | |||||||||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Anti-dilutive outstanding | 307,013 | 0 | 0 |
SIGNIFICANT ACCOUNTING POLICI45
SIGNIFICANT ACCOUNTING POLICIES Income taxes (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Verdant | |
Income Taxes [Line Items] | |
Tax rate for taxable income | 35.00% |
Ireland | GRIL | |
Income Taxes [Line Items] | |
Tax rate for trading income | 12.50% |
Tax rate for non-trading income | 25.00% |
FINANCIAL INSTRUMENTS Financial
FINANCIAL INSTRUMENTS Financial Instruments Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Realized gains | $ 22.2 | $ 352.1 | $ 122.6 |
Gross realized gains | 350.5 | 596.6 | 312.3 |
Gross realized losses | 328.3 | 244.5 | 189.7 |
Fair value of cash and investments that have been pledged as security against letters of credit issued | 324.3 | 302.6 | |
Restricted cash pledged as security relating to regulatory trusts | 78.6 | 0 | |
Net investment income (loss) | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Change in unrealized gains and losses on trading securities | (265.4) | (187.8) | $ 149 |
Micron Technology Inc. | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Fair value of investments in excess of 10% of stockholders' equity | $ 151.1 | ||
Commodities | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Fair value of investments in excess of 10% of stockholders' equity | $ 98 | ||
Percent of Stockholders' Equity, Total | Percent Investment Concentration Risk | Micron Technology Inc. | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Concentration risk, percentage | 12.70% | ||
Percent of Stockholders' Equity, Total | Percent Investment Concentration Risk | Commodities | |||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |||
Concentration risk, percentage | 11.60% |
FINANCIAL INSTRUMENTS Schedule
FINANCIAL INSTRUMENTS Schedule of Investments Categorized by the Level of Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | $ 39,087 | $ 49,212 |
Listed equity securities | 905,994 | 1,266,175 |
Commodities | 98,046 | 96,872 |
Private and unlisted equity securities | 21,037 | 18,719 |
Financial contracts receivable, at fair value | 13,215 | 47,171 |
Total investment assets | 1,077,379 | 1,478,149 |
Listed equity securities, sold not yet purchased | (808,481) | (834,228) |
Debt instruments, sold not yet purchased | 74,425 | 256,503 |
Financial contracts payable | (28,245) | (44,592) |
Total investment liabilities | (911,151) | (1,135,323) |
Quoted prices in active markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | 0 | 0 |
Listed equity securities | 900,369 | 1,259,298 |
Commodities | 98,046 | 96,872 |
Private and unlisted equity securities | 0 | 0 |
Financial contracts receivable, at fair value | 20 | 2,463 |
Total investment assets | 998,435 | 1,358,633 |
Listed equity securities, sold not yet purchased | (808,481) | (834,228) |
Debt instruments, sold not yet purchased | 0 | 0 |
Financial contracts payable | (488) | 0 |
Total investment liabilities | (808,969) | (834,228) |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | 38,582 | 26,953 |
Listed equity securities | 5,625 | 6,877 |
Commodities | 0 | 0 |
Private and unlisted equity securities | 0 | 0 |
Financial contracts receivable, at fair value | 13,195 | 44,708 |
Total investment assets | 57,402 | 78,538 |
Listed equity securities, sold not yet purchased | 0 | 0 |
Debt instruments, sold not yet purchased | 74,425 | 256,503 |
Financial contracts payable | (27,757) | (44,592) |
Total investment liabilities | (102,182) | (301,095) |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt instruments | 505 | 22,259 |
Listed equity securities | 0 | 0 |
Commodities | 0 | 0 |
Private and unlisted equity securities | 21,037 | 18,719 |
Financial contracts receivable, at fair value | 0 | 0 |
Total investment assets | 21,542 | 40,978 |
Listed equity securities, sold not yet purchased | 0 | 0 |
Debt instruments, sold not yet purchased | 0 | 0 |
Financial contracts payable | 0 | 0 |
Total investment liabilities | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS Fair Valu
FINANCIAL INSTRUMENTS Fair Value Hierarchy Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers into Level 3 | $ 7,725 | $ 0 |
Transfers out of Level 3 | 6,346 | 4,044 |
Amount transferred from Level 2 to Level 1 due to lock-up period restriction expiration | 14,400 | |
Total realized and unrealized gains (losses)included in earnings, net | 3,313 | 9,905 |
Net investment income (loss) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total realized and unrealized gains (losses)included in earnings, net | (1,400) | 13,500 |
Change in unrealized (losses) gains | 600 | 1,400 |
Other income (expense), net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total realized and unrealized gains (losses) and amortization included in earnings, net | 2,300 | 0 |
Listed equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers into Level 3 | 5,189 | |
Transfers out of Level 3 | 4,497 | |
Total realized and unrealized gains (losses)included in earnings, net | (692) | |
Listed equity securities | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers out of Level 3 | $ 4,000 | |
Listed equity securities | Quoted prices in active markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers into Level 3 | 5,200 | |
Transfers out of Level 3 | 4,500 | |
Financial contracts receivable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers into Level 3 | 2,536 | |
Transfers out of Level 3 | 1,849 | |
Total realized and unrealized gains (losses) and amortization included in earnings, net | 3,027 | |
Financial contracts receivable | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Transfers into Level 3 | 2,500 | |
Transfers out of Level 3 | 1,800 | |
Financial contracts payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial contracts payable, Transfers Into Level 3 | 8,835 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers out of Level 3 | 9,149 | |
Financial contracts payable | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial contracts payable, Transfers Into Level 3 | 8,800 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers out of Level 3 | $ 9,100 |
FINANCIAL INSTRUMENTS Level 3 r
FINANCIAL INSTRUMENTS Level 3 reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ 40,978 | $ 46,850 | |
Purchases | 7,349 | 25,519 | |
Sales | (24,851) | (37,252) | |
Total realized and unrealized gains (losses) and amortization included in earnings, net | 3,313 | 9,905 | |
Transfers into Level 3 | 7,725 | 0 | |
Transfers out of Level 3 | (6,346) | (4,044) | |
Ending balance | 21,542 | 40,978 | |
Debt instruments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 22,259 | 527 | |
Purchases | 0 | 21,561 | |
Sales | (21,561) | 0 | |
Total realized and unrealized gains (losses) and amortization included in earnings, net | 193 | 171 | |
Transfers into Level 3 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | |
Ending balance | 505 | 22,259 | |
Private and unlisted equity securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 18,719 | 46,323 | |
Purchases | 5,009 | 3,958 | |
Sales | (3,290) | (37,252) | |
Total realized and unrealized gains (losses) and amortization included in earnings, net | 599 | 9,734 | |
Transfers into Level 3 | 0 | 0 | |
Transfers out of Level 3 | 0 | (4,044) | |
Ending balance | 21,037 | 18,719 | |
Financial contracts receivable | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 0 | ||
Purchases | 2,340 | ||
Sales | 0 | ||
Total realized and unrealized gains (losses) and amortization included in earnings, net | 3,027 | ||
Transfers into Level 3 | 2,536 | ||
Transfers out of Level 3 | (1,849) | ||
Ending balance | 0 | 0 | |
Equities – listed | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 0 | ||
Purchases | 0 | ||
Sales | 0 | ||
Total realized and unrealized gains (losses) and amortization included in earnings, net | (692) | ||
Transfers into Level 3 | 5,189 | ||
Transfers out of Level 3 | (4,497) | ||
Ending balance | 0 | 0 | |
Financial contracts payable | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance, Liabilities | 0 | ||
Purchases, Liability | 0 | ||
Sales, Liability | 0 | ||
Total realized and unrealized gains (losses) Included in earnings, Liabilities | 314 | ||
Transfers Into Level 3, Liabilities | 8,835 | ||
Transfers out of Level 3, Liabilities | (9,149) | ||
Ending balance, Liabilities | $ 0 | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS Schedul50
FINANCIAL INSTRUMENTS Schedule of Investments Included in Debt Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | $ 45,471 | $ 53,075 |
Debt instruments, trading, at fair value | 39,087 | 49,212 |
Corporate debt – U.S. | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 25,674 | 23,677 |
Unrealized gains | 155 | 5 |
Unrealized losses | (5,519) | (1,423) |
Debt instruments, trading, at fair value | 20,310 | 22,259 |
Corporate debt – Non U.S. | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 2,109 | 5,870 |
Unrealized gains | 0 | 49 |
Unrealized losses | (1,795) | (1,405) |
Debt instruments, trading, at fair value | 314 | 4,514 |
Municipal debt – U.S. | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 1,759 | |
Unrealized gains | 0 | |
Unrealized losses | (6) | |
Debt instruments, trading, at fair value | 1,753 | |
Sovereign debt – Non U.S. | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 17,688 | 21,769 |
Unrealized gains | 1,225 | 0 |
Unrealized losses | (450) | (1,083) |
Debt instruments, trading, at fair value | 18,463 | 20,686 |
Debt instruments | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 45,471 | 53,075 |
Unrealized gains | 1,380 | 54 |
Unrealized losses | $ (7,764) | $ (3,917) |
FINANCIAL INSTRUMENTS Schedul51
FINANCIAL INSTRUMENTS Schedule of Maturity Distribution of Debt Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financial Instruments [Abstract] | ||
Trading, debt maturities, within one year, cost | $ 0 | $ 0 |
Trading, debt maturities, within one year, fair value | 0 | 0 |
Trading, debt maturities, 1 to 5 years, Cost | 4,202 | 21,922 |
Trading, debt maturities, 1 to 5 years, fair value | 4,129 | 21,923 |
Trading, debt maturities, 5 to 10 years, Cost | 18,840 | 2,401 |
Trading, debt maturities, 5 to 10 years, fair value | 14,780 | 1,282 |
Trading, debt maturities, after 10 years, Cost | 22,429 | 28,752 |
Trading, debt maturities, after 10 years, fair value | 20,178 | 26,007 |
Cost/ amortized cost | 45,471 | 53,075 |
Debt instruments, trading, at fair value | $ 39,087 | $ 49,212 |
FINANCIAL INSTRUMENTS Schedul52
FINANCIAL INSTRUMENTS Schedule of Investments in Equity Securities, Trading (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | $ 45,471 | $ 53,075 |
Equity securities, trading, at fair value | 905,994 | 1,266,175 |
Equities – listed | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 1,011,424 | 1,079,955 |
Unrealized gains | 67,114 | 247,109 |
Unrealized losses | (187,885) | (80,637) |
Equity securities, trading, at fair value | 890,653 | 1,246,427 |
Exchange traded funds | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 31,570 | 42,126 |
Unrealized gains | 0 | 0 |
Unrealized losses | (16,229) | (22,378) |
Equity securities, trading, at fair value | 15,341 | 19,748 |
Equities – listed | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/ amortized cost | 1,042,994 | 1,122,081 |
Unrealized gains | 67,114 | 247,109 |
Unrealized losses | $ (204,114) | $ (103,015) |
FINANCIAL INSTRUMENTS Schedul53
FINANCIAL INSTRUMENTS Schedule of Other Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost | $ 120,812 | $ 113,053 |
Unrealized gains | 3,491 | 4,508 |
Unrealized losses | (5,220) | (1,970) |
Fair value | 119,083 | 115,591 |
Commodities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost | 102,092 | 95,815 |
Unrealized gains | 0 | 1,057 |
Unrealized losses | (4,046) | 0 |
Fair value | 98,046 | 96,872 |
Private and unlisted equity securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost | 18,720 | 17,238 |
Unrealized gains | 3,491 | 3,451 |
Unrealized losses | (1,174) | (1,970) |
Fair value | $ 21,037 | $ 18,719 |
FINANCIAL INSTRUMENTS NAV Instr
FINANCIAL INSTRUMENTS NAV Instruments (Details) - Private and unlisted equity securities - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amount of unfunded commitments relating to private equity funds | $ 6.1 | $ 8.9 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Fair Value of investments in private equity funds | $ 12.6 | $ 12.3 |
Percentage of funds that have redemption restrictions | 100.00% |
FINANCIAL INSTRUMENTS Schedul55
FINANCIAL INSTRUMENTS Schedule of Investments in Securities Sold, Not Yet Purchased (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Equities – listed | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Unrealized gains | $ 67,114 | $ 247,109 |
Unrealized losses | (204,114) | (103,015) |
Exchange traded funds | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Unrealized gains | 0 | 0 |
Unrealized losses | (16,229) | (22,378) |
Corporate debt – U.S. | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Unrealized gains | 155 | 5 |
Unrealized losses | (5,519) | (1,423) |
Sovereign debt – Non U.S. | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Unrealized gains | 1,225 | 0 |
Unrealized losses | (450) | (1,083) |
Securities Sold, Not yet Purchased | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Proceeds | (890,857) | (1,076,200) |
Unrealized gains | 105,487 | 99,332 |
Unrealized losses | (97,536) | (113,863) |
Fair value | (882,906) | (1,090,731) |
Securities Sold, Not yet Purchased | Equities – listed | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Proceeds | (803,842) | (813,365) |
Unrealized gains | 102,469 | 91,690 |
Unrealized losses | (94,681) | (101,715) |
Fair value | (796,054) | (823,390) |
Securities Sold, Not yet Purchased | Exchange traded funds | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Proceeds | (9,572) | (9,180) |
Unrealized gains | 0 | 0 |
Unrealized losses | (2,855) | (1,658) |
Fair value | (12,427) | (10,838) |
Securities Sold, Not yet Purchased | Corporate debt – U.S. | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Proceeds | (7,066) | |
Unrealized gains | 1,007 | |
Unrealized losses | (5) | |
Fair value | (6,064) | |
Securities Sold, Not yet Purchased | Sovereign debt – Non U.S. | ||
Investments Sold, Not yet Purchased [Line Items] | ||
Proceeds | (77,443) | (246,589) |
Unrealized gains | 3,018 | 6,635 |
Unrealized losses | 0 | (10,485) |
Fair value | $ (74,425) | $ (250,439) |
FINANCIAL INSTRUMENTS Financi56
FINANCIAL INSTRUMENTS Financial Contracts Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Financial contracts receivable, Gross amounts of recognized assets (liabilities) | $ 13,215 | $ 47,171 |
OTC options | Financial contracts receivable | Put options (3) | ||
Derivative [Line Items] | ||
Financial contracts receivable, Gross amounts of recognized assets (liabilities) | $ 8,700 | $ 22,400 |
FINANCIAL INSTRUMENTS Schedul57
FINANCIAL INSTRUMENTS Schedule of Fair Values of Financial Contracts Outstanding (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Derivative [Line Items] | |||
Schedule of Derivative Instruments | At December 31, 2015 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing (1) Notional amount of Fair value of net assets ($ in thousands) Financial contracts receivable Call options (2) USD 47,259 $ 657 Put options (3) USD 147,326 8,790 Total return swaps – equities EUR/GBP/USD 50,205 3,748 Warrants and rights on listed equities EUR 59 20 Total financial contracts receivable, at fair value $ 13,215 Financial contracts payable Call options USD 2,601 $ (64 ) Commodity Swaps USD 42,160 (12,784 ) Forwards KRW 2,908 (22 ) Futures USD 21,195 (488 ) Total return swaps – equities EUR/GBP/HKD/RON/MXN/USD 71,874 (14,887 ) Total financial contracts payable, at fair value $ (28,245 ) | At December 31, 2014 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing currency (1) Notional amount of underlying instruments Fair value of net assets (obligations) on financial contracts ($ in thousands) Financial contracts receivable Futures USD 13,204 $ 3,461 Put options (2) USD 299,907 22,349 Total return swaps – equities EUR/GBP/HKD/USD 43,355 18,898 Warrants and rights on listed equities EUR 8,054 2,463 Total financial contracts receivable, at fair value $ 47,171 Financial contracts payable Credit default swaps, purchased – corporate debt USD 221,198 $ (1,305 ) Credit default swaps, purchased – sovereign debt USD 251,467 (1,714 ) Forwards KRW 20,563 (512 ) Futures USD 33,625 (867 ) Total return swaps – equities EUR/GBP/HKD/INR/RON/USD 122,667 (40,194 ) Total financial contracts payable, at fair value $ (44,592 ) | |
Financial contracts receivable, Fair value of net assets (obligations) on financial contracts | $ 13,215 | $ 47,171 | |
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | (28,245) | (44,592) | |
Financial contracts receivable | |||
Derivative [Line Items] | |||
Financial contracts receivable, Fair value of net assets (obligations) on financial contracts | 13,215 | 47,171 | |
Financial contracts receivable | Call options | |||
Derivative [Line Items] | |||
Financial contracts receivable, Notional amount of underlying instruments | [1] | 47,259 | |
Financial contracts receivable, Fair value of net assets (obligations) on financial contracts | [1] | 657 | |
Financial contracts receivable | Futures | |||
Derivative [Line Items] | |||
Financial contracts receivable, Notional amount of underlying instruments | 13,204 | ||
Financial contracts receivable, Fair value of net assets (obligations) on financial contracts | 3,461 | ||
Financial contracts receivable | Put options (3) | |||
Derivative [Line Items] | |||
Financial contracts receivable, Notional amount of underlying instruments | [2] | 147,326 | 299,907 |
Financial contracts receivable, Fair value of net assets (obligations) on financial contracts | [2] | 8,790 | 22,349 |
Financial contracts receivable | Total return swaps – equities | |||
Derivative [Line Items] | |||
Financial contracts receivable, Notional amount of underlying instruments | 50,205 | 43,355 | |
Financial contracts receivable, Fair value of net assets (obligations) on financial contracts | 3,748 | 18,898 | |
Financial contracts receivable | Warrants and rights on listed equities | |||
Derivative [Line Items] | |||
Financial contracts receivable, Notional amount of underlying instruments | 59 | 8,054 | |
Financial contracts receivable, Fair value of net assets (obligations) on financial contracts | 20 | 2,463 | |
Financial contracts payable | |||
Derivative [Line Items] | |||
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | (28,245) | (44,592) | |
Financial contracts payable | Call options | |||
Derivative [Line Items] | |||
Financial contracts payable, Notional amount of underlying instruments | 2,601 | ||
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | (64) | ||
Financial contracts payable | Commodity Contract [Member] | |||
Derivative [Line Items] | |||
Financial contracts payable, Notional amount of underlying instruments | 42,160 | ||
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | (12,784) | ||
Financial contracts payable | Forwards | |||
Derivative [Line Items] | |||
Financial contracts payable, Notional amount of underlying instruments | 2,908 | 20,563 | |
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | (22) | (512) | |
Financial contracts payable | Futures | |||
Derivative [Line Items] | |||
Financial contracts payable, Notional amount of underlying instruments | 21,195 | 33,625 | |
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | (488) | (867) | |
Financial contracts payable | Total return swaps – equities | |||
Derivative [Line Items] | |||
Financial contracts payable, Notional amount of underlying instruments | 71,874 | 122,667 | |
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | $ (14,887) | (40,194) | |
Financial contracts payable | Credit default swaps, purchased | Corporate Debt | |||
Derivative [Line Items] | |||
Financial contracts payable, Notional amount of underlying instruments | 221,198 | ||
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | (1,305) | ||
Financial contracts payable | Credit default swaps, purchased | Sovereign debt – Non U.S. | |||
Derivative [Line Items] | |||
Financial contracts payable, Notional amount of underlying instruments | 251,467 | ||
Financial contracts payable, Fair value of net assets (obligations) on financial contracts | $ (1,714) | ||
[1] | (2) Includes options on interest rate futures relating to U.S. dollar LIBOR interest rates. | ||
[2] | (3) Includes options on the Japanese Yen and the Chinese Yuan, denominated in U.S. dollars. |
FINANCIAL INSTRUMENTS Schedul58
FINANCIAL INSTRUMENTS Schedule of Reported Gains and Losses on Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | $ (41,841) | $ 29,724 | $ 126,076 | |
Commodity Contract [Member] | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (12,061) | 0 | 0 | |
Credit default swaps, purchased | Corporate Debt | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (156) | (345) | (3,552) | |
Credit default swaps, purchased | Sovereign debt – Non U.S. | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (90) | (298) | (1,087) | |
Forwards | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | 1,009 | (490) | 11,209 | |
Futures | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (952) | 16,721 | 12,504 | |
Interest rate options | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | 0 | (26) | (82) | |
Interest rate swaps | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (706) | 0 | 0 | |
Options, warrants, and rights | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (13,955) | 1,020 | 21,446 | |
Total return swaps – equities | Net investment income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (12,590) | 13,142 | 85,638 | |
Weather derivative swap | Other income (expense), net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized in income | (2,340) | 0 | $ 0 | |
Derivatives not designated as hedging instruments (notional amounts) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 10,294,841 | 1,473,544 | ||
Exited | 8,102,909 | 913,845 | ||
Derivatives not designated as hedging instruments (notional amounts) | Commodity Contract [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 103,358 | |||
Exited | 43,261 | |||
Derivatives not designated as hedging instruments (notional amounts) | Credit default swaps, purchased | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 0 | |||
Exited | [1] | 0 | ||
Derivatives not designated as hedging instruments (notional amounts) | Forwards | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 0 | 0 | ||
Exited | 13,377 | 82,688 | ||
Derivatives not designated as hedging instruments (notional amounts) | Futures | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 311,536 | 308,178 | ||
Exited | 294,441 | 356,216 | ||
Derivatives not designated as hedging instruments (notional amounts) | Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 9,139,000 | |||
Exited | 7,213,000 | |||
Derivatives not designated as hedging instruments (notional amounts) | Total return swaps – equities | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 67,844 | 121,125 | ||
Exited | 185,128 | $ 160,065 | ||
Derivatives not designated as hedging instruments (notional amounts) | Weather derivative swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Entered | 12,000 | |||
Exited | $ 12,000 | |||
[1] | (1) Exited amount excludes derivatives which expired or were exercised during the period. |
FINANCIAL INSTRUMENTS Schedul59
FINANCIAL INSTRUMENTS Schedule of Volume of Derivative Activities (Details) - Derivatives not designated as hedging instruments (notional amounts) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | ||||
Derivative [Line Items] | |||||
Entered | $ 10,294,841 | $ 1,473,544 | |||
Exited | 8,102,909 | 913,845 | |||
Credit default swaps (1) | |||||
Derivative [Line Items] | |||||
Entered | 0 | ||||
Exited | [1] | 0 | |||
Forwards | |||||
Derivative [Line Items] | |||||
Entered | 0 | 0 | |||
Exited | 13,377 | 82,688 | |||
Futures | |||||
Derivative [Line Items] | |||||
Entered | 311,536 | 308,178 | |||
Exited | 294,441 | 356,216 | |||
Options, warrants, and rights | |||||
Derivative [Line Items] | |||||
Entered | 661,103 | 1,044,241 | |||
Exited | 341,702 | [1] | 314,876 | [2] | |
Total return swaps | |||||
Derivative [Line Items] | |||||
Entered | 67,844 | 121,125 | |||
Exited | 185,128 | $ 160,065 | |||
Weather derivative swap | |||||
Derivative [Line Items] | |||||
Entered | 12,000 | ||||
Exited | $ 12,000 | ||||
[1] | (1) Exited amount excludes derivatives which expired or were exercised during the period. | ||||
[2] | Exited amount excludes derivatives which expired or were exercised during the period. |
FINANCIAL INSTRUMENTS Schedul60
FINANCIAL INSTRUMENTS Schedule of Gross and Net Amounts of Derivative Instruments and Cash Collateral (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financial Instruments [Abstract] | ||
Financial contracts receivable, Gross amounts of recognized assets (liabilities) | $ 13,215 | $ 47,171 |
Financial contracts receivable, Gross amounts offset in the balance sheet | 0 | 0 |
Financial contracts receivable, Net amounts of assets (liabilities) presented in the balance sheet | 13,215 | 47,171 |
Financial contracts receivable, financial instruments available for offset | 8,937 | 24,265 |
Financial contracts receivable, Cash collateral (received) pledged | 2,036 | 9,452 |
Financial contracts receivable, Net amount of asset (liability) | 2,242 | 13,454 |
Financial contracts payable, Gross amounts of recognized assets (liabilities) | (28,245) | (44,592) |
Financial contracts payable, Gross amounts offset in the balance sheet | 0 | 0 |
Financial contracts payable, Net amounts of assets (liabilities) presented in the balance sheet | (28,245) | (44,592) |
Financial contracts payable, financial instruments available for offset | 8,937 | 24,265 |
Financial contracts payable, Cash collateral (received) pledged | 19,308 | 20,327 |
Financial contracts payable, Net amount of asset (liability) | $ 0 | $ 0 |
DUE TO PRIME BROKERS (Details)
DUE TO PRIME BROKERS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Due to Prime Broker [Line Items] | ||
Amounts due to prime brokers | $ 396,453 | $ 211,070 |
Collateral for LOCs issued | ||
Due to Prime Broker [Line Items] | ||
Amounts due to prime brokers | 301,400 | 135,000 |
Bank Overdrafts | ||
Due to Prime Broker [Line Items] | ||
Amounts due to prime brokers | $ 95,000 | $ 76,100 |
GLRE | ||
Due to Prime Broker [Line Items] | ||
Maximum temporary leverage | 30.00% | |
Maximum long-term leverage | 15.00% | |
Greenlight Reinsurance Ireland, Ltd. [Member] | ||
Due to Prime Broker [Line Items] | ||
Maximum temporary leverage | 20.00% | |
Maximum long-term leverage | 5.00% |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | $ 112,162 | $ 12,030 | $ 3,722 | $ 21,890 |
Cash at banks | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | 44,133 | 3,426 | ||
Cash held with brokers | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | $ 68,029 | $ 8,604 |
RESTRICTED CASH AND CASH EQUI63
RESTRICTED CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and Cash Equivalents [Line Items] | ||
Total restricted cash and cash equivalents | $ 1,236,589 | $ 1,296,914 |
Cash held by prime brokers relating to securities sold, not yet purchased | ||
Cash and Cash Equivalents [Line Items] | ||
Total restricted cash and cash equivalents | 882,906 | 1,090,731 |
Cash collateral relating to letters of credit issued | ||
Cash and Cash Equivalents [Line Items] | ||
Total restricted cash and cash equivalents | 222,852 | 134,981 |
Trust Accounts [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Total restricted cash and cash equivalents | 78,584 | 0 |
Cash and cash equivalents held by swap counterparties | ||
Cash and Cash Equivalents [Line Items] | ||
Total restricted cash and cash equivalents | $ 52,247 | $ 71,202 |
LOSS AND LOSS ADJUSTMENT EXPE64
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES Liabilities for loss reserves (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Case reserves | $ 111,535 | $ 117,049 | ||
IBNR | 194,462 | 147,194 | ||
Total | $ 305,997 | $ 264,243 | $ 329,894 | $ 356,470 |
LOSS AND LOSS ADJUSTMENT EXPE65
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | $ 50,300 | $ 18,200 | $ (6,100) | |
Profit commission expense | $ 7,500 | 2,700 | 3,700 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | ||||
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | At December 31, 2015 and 2014 , loss and loss adjustment expense reserves were comprised of the following: 2015 2014 ($ in thousands) Case reserves $ 111,535 $ 117,049 IBNR 194,462 147,194 Total $ 305,997 $ 264,243 A summary of changes in outstanding loss and loss adjustment expense reserves is as follows: 2015 2014 2013 ($ in thousands) Gross balance at January 1 $ 264,243 $ 329,894 $ 356,470 Less: Losses recoverable (11,523 ) (16,829 ) (34,451 ) Net balance at January 1 252,720 313,065 322,019 Incurred losses related to: Current year 266,796 216,757 344,613 Prior years 50,301 18,229 (6,120 ) Total incurred 317,097 234,986 338,493 Paid losses related to: Current year (132,017 ) (163,139 ) (177,871 ) Prior years (132,846 ) (130,438 ) (170,018 ) Total paid (264,863 ) (293,577 ) (347,889 ) Foreign currency revaluation (2,325 ) (1,754 ) 442 Net balance at December 31 302,629 252,720 313,065 Add: Losses recoverable 3,368 11,523 16,829 Gross balance at December 31 $ 305,997 $ 264,243 $ 329,894 | |||
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Gross balance at January 1 | $ 264,243 | 329,894 | 356,470 | |
Less: Losses recoverable | (11,523) | (16,829) | (34,451) | |
Net balance at January 1 | 252,720 | 313,065 | 322,019 | |
Incurred losses related to Current year | 266,796 | 216,757 | 344,613 | |
Incurred losses related to Prior years | 50,301 | 18,229 | (6,120) | |
Incurred losses related to Total incurred | 317,097 | 234,986 | 338,493 | |
Paid losses related to Current year | (132,017) | (163,139) | (177,871) | |
Paid losses related to Prior years | (132,846) | (130,438) | (170,018) | |
Paid losses related to Total paid | (264,863) | (293,577) | (347,889) | |
Foreign currency revaluation | (2,325) | (1,754) | 442 | |
Net balance at December 31 | 252,720 | 313,065 | 322,019 | $ 302,629 |
Add: Losses recoverable | (3,368) | (11,523) | (16,829) | |
Gross balance at December 31 | 305,997 | 264,243 | 329,894 | |
Hurricane | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (15,000) | |||
Reinstatement (reversal) of premiums earned | (2,600) | |||
General liability (1) | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 7,800 | 17,700 | ||
General liability (1) | Construction Defects - Single Family Homes [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 36,900 | |||
General liability (1) | Construction Defects - Other [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 14,700 | |||
Commercial Automobile Business | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (4,000) | |||
Private Passenger Automobile Business | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (4,500) | (3,800) | (3,000) | |
Ceding commissions | 3,300 | 2,200 | 2,300 | |
Private Passenger Automobile Business | Commutation of contract [Member] | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (1,300) | |||
Ceding commissions | 1,100 | |||
Casualty Clash Contract | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 4,000 | |||
Reinstatement (reversal) of premiums earned | 1,200 | |||
Commercial motor related to multi-line contracts | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 7,100 | |||
Professional liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 2,400 | 4,000 | ||
Ceding commissions | (600) | |||
Total Property | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (5,100) | |||
Reinstatement (reversal) of premiums earned | (2,500) | |||
Profit commission expense | 3,400 | |||
Homeowners' property contracts | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 9,300 | $ (2,400) | ||
Ceding commissions | (5,100) | |||
Health | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | $ (2,300) | $ 3,000 |
RETROCESSION (Details)
RETROCESSION (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Ceded Credit Risk [Line Items] | ||||||||||||
Loss and loss adjustment expenses incurred, net | $ 79,816,000 | $ 97,421,000 | $ 76,653,000 | $ 63,207,000 | $ 57,951,000 | $ 53,028,000 | $ 56,644,000 | $ 67,363,000 | $ 317,097,000 | $ 234,986,000 | $ 338,493,000 | |
Loss and loss expenses recovered and recoverable | 1,700,000 | 4,400,000 | (10,200,000) | |||||||||
Loss and loss adjustment expenses recoverable | 3,368,000 | 11,523,000 | 3,368,000 | 11,523,000 | $ 16,829,000 | $ 34,451,000 | ||||||
Funds withheld from unrated retrocessionaires | 7,143,000 | 6,558,000 | 7,143,000 | 6,558,000 | ||||||||
Provision for uncollectible losses recoverable | 0 | 0 | 0 | 0 | ||||||||
Ceded Credit Risk, Secured | ||||||||||||
Ceded Credit Risk [Line Items] | ||||||||||||
Funds withheld from unrated retrocessionaires | 3,100,000 | 2,800,000 | 3,100,000 | 2,800,000 | ||||||||
AM Best, A- Rating [Member] | ||||||||||||
Ceded Credit Risk [Line Items] | ||||||||||||
Loss and loss adjustment expenses recoverable | 300,000 | 0 | 300,000 | 0 | ||||||||
Unrated [Member] | ||||||||||||
Ceded Credit Risk [Line Items] | ||||||||||||
Loss and loss adjustment expenses recoverable | $ 3,100,000 | $ 18,300,000 | $ 3,100,000 | $ 18,300,000 |
SHARE CAPITAL (Details)
SHARE CAPITAL (Details) - USD ($) | Sep. 21, 2004 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ||||
Preferred shares issued | 0 | 0 | ||
Preferred shares outstanding | 0 | |||
Registration rights | 50.00% | |||
Aggregate principal amount of securities | $ 200,000,000 | |||
Stock Repurchase Program Expiration Date | Jun. 30, 2016 | |||
Increase (Decrease) in Common Stock [Roll Forward] | ||||
Amount of retained earnings restricted from payment of dividends | $ 325,287,000 | |||
Common Class A | ||||
Class of Stock [Line Items] | ||||
Number of entitled votes per share | $ 1 | |||
Percentage of total voting power of all issued and outstanding ordinary shares | 9.90% | |||
Shares authorized to purchase under the share repurchase plan | 2,000,000 | |||
Number of shares available under share repurchase plan | 1,386,460 | |||
Increase (Decrease) in Common Stock [Roll Forward] | ||||
Balance – beginning of year | 31,129,648 | 30,791,865 | 30,447,179 | |
Issue of ordinary shares, net of forfeitures | 256,464 | 337,729 | 344,686 | |
Repurchase of ordinary shares | (613,540) | 0 | 0 | |
Class B shares converted to Class A shares | 0 | 54 | 0 | |
Balance – end of year | 30,772,572 | 31,129,648 | 30,791,865 | |
Par value per share | $ 0.10 | $ 0.10 | ||
Common Class B | ||||
Class of Stock [Line Items] | ||||
Number of entitled votes per share | $ 10 | |||
Percentage of total voting power of all issued and outstanding ordinary shares | 9.50% | |||
Increase (Decrease) in Common Stock [Roll Forward] | ||||
Balance – beginning of year | 6,254,895 | 6,254,949 | 6,254,949 | |
Issue of ordinary shares, net of forfeitures | 0 | 0 | 0 | |
Repurchase of ordinary shares | 0 | 0 | 0 | |
Class B shares converted to Class A shares | 0 | 54 | 0 | |
Balance – end of year | 6,254,895 | 6,254,895 | 6,254,949 | |
Par value per share | $ 0.10 | $ 0.10 | ||
Service Provider | Common Class A | ||||
Class of Stock [Line Items] | ||||
Shares authorized for issuance in relation to share purchase options granted to service provider | 400,000 | 300,000 | 300,000 | |
Shares available for future issuance | 0 | 0 | ||
Stock Compensation Plan | Common Class A | ||||
Class of Stock [Line Items] | ||||
Shares authorized for the company's stock incentive plan | 3,500,000 | 3,500,000 | ||
Shares available for future issuance | 658,775 | 803,558 | ||
GLRE | ||||
Increase (Decrease) in Common Stock [Roll Forward] | ||||
Cash Dividends Paid to Parent Company by Consolidated Subsidiaries | $ 5,000,000 | $ 0 | $ 0 | |
GLRE | Cayman Islands | ||||
Increase (Decrease) in Common Stock [Roll Forward] | ||||
Minimum net worth requirement | 466,529,000 | 443,500,000 | ||
Insurance Regulations Minimum Capital Requirement | 50,000,000 | |||
Statutory capital and surplus | 788,900,000 | |||
Net income | (309,500,000) | 113,300,000 | 229,800,000 | |
Amount of capital and surplus available for distribution as dividends | 322,400,000 | 658,800,000 | ||
GRIL | Ireland | ||||
Increase (Decrease) in Common Stock [Roll Forward] | ||||
Minimum net worth requirement | 18,100,000 | 13,600,000 | ||
Statutory capital and surplus | 50,300,000 | 42,900,000 | ||
Net income | (12,800,000) | (3,300,000) | $ 3,600,000 | |
Amount of capital and surplus available for distribution as dividends | $ 0 | $ 2,700,000 |
SHARE-BASED COMPENSATION Narrat
SHARE-BASED COMPENSATION Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 21, 2004 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 20, 2004 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 19.78 | $ 17.58 | $ 15.82 | $ 10 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 906,991 | 1,116,308 | 1,402,987 | ||
Share purchase options granted | 40,683 | 31,821 | |||
Expiration period after the grant date | 10 years | 10 years | 10 years | ||
Grant date fair value of the options | $ 12.290 | $ 15.71 | $ 13.09 | ||
Total compensation cost related to non-vested options not yet recognized | $ 400 | $ 400 | $ 400 | ||
Number of stock options exercised | 250,000 | 318,500 | |||
Intrinsic value of options exercised | $ 4,800 | $ 6,700 | $ 800 | ||
Weighted average remaining contractual term for options outstanding | 2 years 11 months | 3 years | |||
Number of stock options exercisable | 851,020 | 1,062,022 | |||
Weighted-average exercise price | $ 19.22 | $ 17.02 | |||
Weighted-average remaining contractual term | 2 years 7 months | 2 years 8 months | |||
Aggregate intrinsic value of options outstanding | $ 2,600 | $ 16,800 | |||
Aggregate intrinsic value of options exercisable | $ 2,600 | $ 16,600 | |||
Number of options vested | 38,998 | 53,828 | 45,871 | ||
Weighted average grant date fair value of options vested | $ 12.82 | $ 11.76 | $ 11.08 | ||
General and Administrative Expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 4,300 | $ 4,000 | $ 3,800 | ||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 500 | $ 500 | $ 600 | ||
Weighted average period for recognition | 1 year 6 months | 1 year 6 months | 1 year 6 months | ||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cliff vesting period after date of issuance | 3 years | ||||
Stock compensation expense relating to forfeited restricted shares reversed | $ 100 | $ 400 | $ 200 | ||
Share-based compensation expense | 3,600 | 3,300 | 3,200 | ||
Unrecognized compensation costs related to non-vested restricted shares | $ 3,700 | $ 4,200 | $ 3,500 | ||
Weighted average period for recognition | 1 year 7 months | 1 year 9 months | 1 year 8 months | ||
Total fair value of restricted shares vested | $ 3,200 | $ 2,900 | $ 2,800 | ||
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cliff vesting period after date of issuance | 3 years | ||||
Share-based compensation expense | $ 200 | $ 100 | $ 30 | ||
Vesting on Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | 25.00% | |||
Vesting In Year 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | 25.00% | |||
Vesting In Year 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | 25.00% | |||
Vesting In Year 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | 25.00% | |||
Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cliff vesting period after date of issuance | 1 year | ||||
Common Class A [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share purchase options granted | 40,683 | 31,821 | |||
Issuance of shares as a result of stock options exercised | 158,925 | 207,328 | |||
Common Class A [Member] | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted shares issued pursuant to stock incentive plan | 78,685 | 127,186 | 111,231 | ||
Restricted shares forfeited by employees who left the Company prior to the vesting period | 9,621 | 38,706 | 16,826 | ||
Common Class A [Member] | Director | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted shares issued pursuant to stock incentive plan | 28,215 | 28,060 | 36,374 | ||
Service Provider | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | 0 | |||
Number of stock options exercised | 20,000 | ||||
Service Provider | Common Class A [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share purchase options granted to service provider (shares) | 400,000 | 300,000 | 300,000 | ||
Share-based Goods and Nonemployee Services Transaction, Quantity of Securities Issued | 13,861 |
SHARE-BASED COMPENSATION Restri
SHARE-BASED COMPENSATION Restricted Shares (Details) - Restricted Stock - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Number of non-vested shares, Balance at beginning | 330,087 | 328,991 |
Number of non-vested restricted shares, Granted | 106,900 | 155,246 |
Number of non-vested restricted shares, Vested | (120,353) | (115,444) |
Number of non-vested restricted shares, Forfeited | (9,621) | (38,706) |
Number of non-vested shares, Balance at end | 307,013 | 330,087 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted average grant date fair value, Balance at beginning | $ 27.90 | $ 24.74 |
Weighted average grant date fair value, Granted | 31.56 | 32.58 |
Weighted average grant date fair value, Vested | 26.26 | 25.35 |
Weighted average grant date fair value, Forfeited | 30.49 | 27.43 |
Weighted average grant date fair value, Balance at end | $ 29.74 | $ 27.90 |
SHARE-BASED COMPENSATION Black
SHARE-BASED COMPENSATION Black Scholes option pricing model assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Risk free rate | 2.15% | 2.47% | 2.85% |
Estimated volatility | 32.80% | 34.30% | 35.00% |
Expected term (in years) | 10 years | 10 years | 10 years |
Dividend yield | 0.00% | 0.00% | 0.00% |
Forfeiture rate | 0.00% | 0.00% | 0.00% |
SHARE-BASED COMPENSATION Share
SHARE-BASED COMPENSATION Share Based Compensation Options Rollfoward (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of options, Balance at beginning of period | 1,116,308 | 1,402,987 | |
Number of options, Granted | 40,683 | 31,821 | |
Number of options, Exercised | (250,000) | (318,500) | |
Number of options, Forfeited | 0 | 0 | |
Number of options, Expired | 0 | 0 | |
Number of options, Balance at end of period | 906,991 | 1,116,308 | 1,402,987 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Weighted average exercise price, Balance at beginning of period | $ 17.58 | $ 15.82 | |
Weighted average exercise price, Granted | 26.67 | 32.37 | |
Weighted average exercise price, Exercised | 11.10 | 11.29 | |
Weighted average exercise price, Forfeited | 0 | 0 | |
Weighted average exercise price, Expired | 0 | 0 | |
Weighted average exercise price, Balance at end of period | 19.78 | 17.58 | $ 15.82 |
Share-based compensation arrangement by share-based payment award, Options, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Weighted average grant date fair value, Balance at beginning of period | 7.73 | 7.08 | |
Weighted average grant date fair value, Granted | 12.290 | 15.71 | 13.09 |
Weighted average grant date fair value, Exercised | 5.57 | 5.67 | |
Weighted average grant date fair value, Forfeited | 0 | 0 | |
Weighted average grant date fair value, Expired | 0 | 0 | |
Weighted average grant date fair value, Balance at end of period | $ 8.53 | $ 7.73 | $ 7.08 |
SHARE-BASED COMPENSATION Rest72
SHARE-BASED COMPENSATION Restricted Units (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 200 | $ 100 | $ 30 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Number of non-vested shares, Balance at beginning | 15,609 | 5,941 | |
Number of non-vested restricted shares, Granted | 6,821 | 9,668 | 5,941 |
Number of non-vested restricted shares, Vested | (260) | 0 | |
Number of non-vested restricted shares, Forfeited | 0 | 0 | |
Number of non-vested shares, Balance at end | 22,170 | 15,609 | 5,941 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, Balance at beginning | $ 29.72 | $ 24.41 | |
Weighted average grant date fair value, Granted | 32.21 | 32.60 | |
Weighted average grant date fair value, Vested | (24.30) | 0 | |
Weighted average grant date fair value, Forfeited | 0 | 0 | |
Weighted average grant date fair value, Balance at end | $ 30.55 | $ 29.72 | $ 24.41 |
NET INVESTMENT INCOME (Details)
NET INVESTMENT INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Investment Income [Abstract] | |||||||||||
Realized gains (losses) | $ 22,227 | $ 352,133 | $ 122,568 | ||||||||
Change in unrealized gains and losses | (265,401) | (187,753) | 149,012 | ||||||||
Investment related foreign exchange gains (losses) | (3,725) | 14,797 | 44,492 | ||||||||
Interest and dividend income, net of withholding taxes | 15,313 | 31,423 | 22,265 | ||||||||
Interest, dividend and other expenses | (31,092) | (38,892) | (47,665) | ||||||||
Investment advisor compensation | (19,246) | (49,133) | (72,532) | ||||||||
Net investment income (loss) | $ (45,468) | $ (191,322) | $ (20,305) | $ (24,829) | $ 72,820 | $ (54,027) | $ 113,932 | $ (10,150) | $ (281,924) | $ 122,575 | $ 218,140 |
Net investment return (loss) (percentage) | (20.20%) | 8.70% | 19.60% |
TAXATION (Details)
TAXATION (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | |||||||||||
Deferred tax (expense) benefit | $ (1,740,000) | $ 14,000 | $ 4,000 | ||||||||
Current tax (expense) benefit | (15,000) | (638,000) | 534,000 | ||||||||
Income tax (expense) benefit | $ (361,000) | $ (1,233,000) | $ 54,000 | $ (215,000) | $ 204,000 | $ (254,000) | $ (14,000) | $ (560,000) | (1,755,000) | (624,000) | 538,000 |
Valuation allowance | 0 | 0 | $ 0 | 0 | |||||||
Federal Excise Tax rate | 1.00% | ||||||||||
Federal Excise Taxes Incurred | $ 3,300,000 | 2,200,000 | $ 3,500,000 | ||||||||
Other Assets | |||||||||||
Income Taxes [Line Items] | |||||||||||
Income Taxes Receivable | 500,000 | 800,000 | 500,000 | 800,000 | |||||||
Deferred tax asset | 1,760,000 | $ 30,000 | $ 1,760,000 | $ 30,000 | |||||||
Verdant | |||||||||||
Income Taxes [Line Items] | |||||||||||
Tax rate for taxable income | 35.00% | ||||||||||
Operating Loss Carryforwards | 1,700,000 | $ 1,700,000 | |||||||||
Operating Loss Carryforwards, Expiration Date | Dec. 31, 2033 | ||||||||||
GRIL | |||||||||||
Income Taxes [Line Items] | |||||||||||
Operating Loss Carryforwards | $ 14,100,000 | $ 14,100,000 | |||||||||
GRIL | Ireland | |||||||||||
Income Taxes [Line Items] | |||||||||||
Tax rate for trading income | 12.50% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
Debt instruments, trading, at fair value | $ 39,087,000 | $ 49,212,000 | |
Listed equity securities | $ 905,994,000 | 1,266,175,000 | |
Board of Directors Chairman | Investment Advisory Agreement | |||
Related Party Transaction [Line Items] | |||
Performance compensation full rate | 20.00% | ||
Performance compensation reduced rate | 10.00% | ||
Loss carry forward recoupment required | 150.00% | ||
Performance compensation expense | $ 0 | 28,500,000 | $ 54,200,000 |
Investment management fee rate - monthly | 0.125% | ||
Investment management fee rate - annual | 1.50% | ||
Investment management fee expense | $ 19,200,000 | 20,600,000 | $ 18,300,000 |
Board of Directors Chairman | Debt instruments | |||
Related Party Transaction [Line Items] | |||
Debt instruments, trading, at fair value | 21,600,000 | ||
Listed equity securities | 25,000,000 | 18,400,000 | |
Interest Income, Related Party | 1,000,000 | $ 400,000 | |
Board of Directors Chairman | Service Agreement | |||
Related Party Transaction [Line Items] | |||
Investor relations fee monthly | $ 5,000 |
COMMITMENTS AND CONTINGENCIES L
COMMITMENTS AND CONTINGENCIES Letters of Credit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | ||
Aggregate amount of letters of credit issued | $ 245,600 | $ 273,700 |
Total equity securities, restricted cash, and cash and cash equivalents fair value pledged as security against the letters of credit | 324,300 | $ 302,600 |
Financial Standby Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Facility | 720,000 | |
Financial Standby Letter of Credit | Bank of America, N.A. | ||
Line of Credit Facility [Line Items] | ||
Facility | $ 120,000 | |
Notice period required for termination | 90 days | |
Financial Standby Letter of Credit | Butterfield Bank (Cayman) Limited | ||
Line of Credit Facility [Line Items] | ||
Facility | $ 100,000 | |
Notice period required for termination | 90 days | |
Financial Standby Letter of Credit | Citibank Europe plc | ||
Line of Credit Facility [Line Items] | ||
Facility | $ 400,000 | |
Notice period required for termination | 120 days | |
Financial Standby Letter of Credit | JP Morgan Chase Bank N.A. | ||
Line of Credit Facility [Line Items] | ||
Facility | $ 100,000 | |
Notice period required for termination | 120 days |
COMMITMENTS AND CONTINGENCIES77
COMMITMENTS AND CONTINGENCIES Lease and commitments (Details) $ in Thousands, € in Millions | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | ||
Future commitments [Line Items] | |||||
Operating Leases, Rent Expense | $ 500 | $ 500 | $ 500 | ||
Operating lease renewal option | 5 years | 5 years | |||
Operating Lease obligations, 2016 | $ 548 | ||||
Operating lease obligations, 2017 | 548 | ||||
Operating lease obligations, 2018 | 315 | ||||
Operating lease obligations, 2019 | 82 | ||||
Operating lease obligations, 2020 | 82 | ||||
Operating lease obligations, Thereafter | 31 | ||||
Operating lease obligations, Total | 1,606 | ||||
2,016 | 6,655 | ||||
2,017 | 548 | ||||
2,018 | 315 | ||||
2,019 | 82 | ||||
2,020 | 82 | ||||
Thereafter | 31 | ||||
Total | 7,713 | ||||
Private and unlisted equity securities | |||||
Future commitments [Line Items] | |||||
Private equity and limited partnerships, 2016 | [1] | 6,107 | $ 8,900 | ||
Private equity and limited partnerships, 2017 | [1] | 0 | |||
Private equity and limited partnerships, 2018 | [1] | 0 | |||
Private equity and limited partnerships, 2019 | [1] | 0 | |||
Private equity and limited partnerships, 2020 | [1] | 0 | |||
Private equity and limited partnerships, Thereafter | [1] | 0 | |||
Private equity and limited partnerships, Total | [1] | 6,107 | |||
GLRE | Minimum | |||||
Future commitments [Line Items] | |||||
Annual rent payments | 300 | ||||
GLRE | Maximum | |||||
Future commitments [Line Items] | |||||
Annual rent payments | $ 500 | ||||
GRIL | |||||
Future commitments [Line Items] | |||||
Annual rent payments | € | € 0.1 | ||||
[1] | Given the nature of these investments, the Company is unable to determine with any degree of accuracy when these commitments will be called. Therefore, for purposes of the above table, the Company has assumed that all commitments with no fixed payment schedules will be called during the year ending December 31, 2016. |
SEGMENT REPORTING Schedule of R
SEGMENT REPORTING Schedule of Revenue by Major Customers (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)Segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Revenue, Major Customer [Line Items] | |||||||||||
Number of operating segments | Segment | 1 | ||||||||||
Largest broker | $ 73,748 | $ (89,870) | $ 67,620 | $ 71,552 | $ 149,567 | $ 28,127 | $ 200,387 | $ 101,721 | $ 123,050 | $ 479,802 | $ 764,329 |
Broker Concentration Risk | Gross Premiums Written | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Largest broker | $ 388,249 | $ 263,987 | $ 401,454 | ||||||||
Concentration risk, percentage | 77.40% | 81.50% | 74.90% | ||||||||
Broker Concentration Risk | Gross Premiums Written | Largest broker | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Largest broker | $ 278,003 | $ 161,405 | $ 282,337 | ||||||||
Concentration risk, percentage | 55.40% | 49.80% | 52.70% | ||||||||
Broker Concentration Risk | Gross Premiums Written | 2nd largest broker | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Largest broker | $ 110,246 | $ 61,809 | $ 119,117 | ||||||||
Concentration risk, percentage | 22.00% | 19.10% | 22.20% | ||||||||
Broker Concentration Risk | Gross Premiums Written | 3rd largest broker | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Largest broker | $ 0 | $ 40,773 | $ 0 | ||||||||
Concentration risk, percentage | 0.00% | 12.60% | 0.00% |
SEGMENT REPORTING Schedule of G
SEGMENT REPORTING Schedule of Gross Premiums Written by Line of Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 144,884 | $ 134,568 | $ 92,990 | $ 129,682 | $ 74,268 | $ 97,200 | $ 33,654 | $ 118,901 | $ 502,124 | $ 324,023 | $ 535,702 | |
Gross premiums by line of business as a percentage of total gross premiums | 100.00% | 100.00% | 100.00% | |||||||||
Total Property | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 111,391 | $ 102,538 | $ 214,585 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 22.20% | 31.60% | 40.00% | |||||||||
Aviation | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 691 | $ 391 | $ 168 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 0.10% | 0.10% | 0.00% | |||||||||
Commercial | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 16,667 | $ 11,529 | $ 9,999 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 3.30% | 3.60% | 1.90% | |||||||||
Energy | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 2,009 | $ 2,131 | $ 659 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 0.40% | 0.60% | 0.10% | |||||||||
Motor physical damage | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 34,529 | $ 24,008 | $ 57,952 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 6.90% | 7.40% | 10.80% | |||||||||
Personal | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 57,495 | $ 64,479 | $ 145,807 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 11.50% | 19.90% | 27.20% | |||||||||
Total Casualty | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 313,479 | $ 171,626 | $ 284,740 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 62.40% | 53.10% | 53.20% | |||||||||
General liability (1) | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 28,355 | $ 11,639 | $ (815) | [1] | ||||||||
Gross premiums by line of business as a percentage of total gross premiums | 5.60% | 3.60% | (0.20%) | [1] | ||||||||
Marine liability | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 9,283 | $ 5,120 | $ 1,956 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 1.80% | 1.60% | 0.40% | |||||||||
Motor liability | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 203,624 | $ 127,858 | $ 253,698 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 40.60% | 39.50% | 47.40% | |||||||||
Professional liability | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 72,217 | $ 27,009 | $ 29,901 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 14.40% | 8.40% | 5.60% | |||||||||
Total Specialty | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 77,254 | $ 49,859 | $ 36,377 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 15.40% | 15.30% | 6.80% | |||||||||
Financial | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 7,824 | $ 5,292 | $ 3,498 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 1.60% | 1.60% | 0.70% | |||||||||
Health | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 56,784 | $ 43,837 | $ 37,094 | |||||||||
Gross premiums by line of business as a percentage of total gross premiums | 11.30% | 13.50% | 6.90% | |||||||||
Workers’ compensation (1) | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Gross premiums written | $ 12,646 | $ 730 | $ (4,215) | [1] | ||||||||
Gross premiums by line of business as a percentage of total gross premiums | 2.50% | 0.20% | (0.80%) | [1] | ||||||||
[1] | The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premiums returned upon novation or commutation of contracts. |
SEGMENT REPORTING Geographic in
SEGMENT REPORTING Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenue from External Customer [Line Items] | ||||||||||||
Gross premiums written | $ 144,884 | $ 134,568 | $ 92,990 | $ 129,682 | $ 74,268 | $ 97,200 | $ 33,654 | $ 118,901 | $ 502,124 | $ 324,023 | $ 535,702 | |
Gross premiums by geographical area as a percentage of total gross premiums | 100.00% | 100.00% | 100.00% | |||||||||
U.S. and Caribbean | ||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||
Gross premiums written | $ 383,236 | $ 275,402 | $ 496,949 | |||||||||
Gross premiums by geographical area as a percentage of total gross premiums | 76.30% | 85.00% | 92.80% | |||||||||
Worldwide (1) | ||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||
Gross premiums written | [1] | $ 104,336 | $ 31,106 | $ 9,821 | ||||||||
Gross premiums by geographical area as a percentage of total gross premiums | [1] | 20.80% | 9.60% | 1.80% | ||||||||
Europe | ||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||
Gross premiums written | $ 14,085 | $ 17,432 | $ 28,932 | |||||||||
Gross premiums by geographical area as a percentage of total gross premiums | 2.80% | 5.40% | 5.40% | |||||||||
Asia | ||||||||||||
Revenue from External Customer [Line Items] | ||||||||||||
Gross premiums written | $ 467 | $ 83 | $ 0 | |||||||||
Gross premiums by geographical area as a percentage of total gross premiums | 0.10% | 0.00% | 0.00% | |||||||||
[1] | "Worldwide" is comprised of contracts that reinsure risks in more than one geographic area and do not specifically exclude the U.S. |
QUARTERLY FINANCIAL RESULTS (81
QUARTERLY FINANCIAL RESULTS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||||||||||
Gross premiums written | $ 144,884 | $ 134,568 | $ 92,990 | $ 129,682 | $ 74,268 | $ 97,200 | $ 33,654 | $ 118,901 | $ 502,124 | $ 324,023 | $ 535,702 |
Gross premiums ceded | (3,219) | (2,288) | (1,868) | (1,626) | (2,088) | (2,706) | (2,759) | (5,940) | (9,001) | (13,493) | (2,780) |
Net premiums written | 141,665 | 132,280 | 91,122 | 128,056 | 72,180 | 94,494 | 30,895 | 112,961 | 493,123 | 310,530 | 532,922 |
Change in net unearned premium reserves | (21,750) | (30,286) | 563 | (33,263) | 3,025 | (15,003) | 56,960 | (1,272) | (84,736) | 43,710 | 14,977 |
Net premiums earned | 119,915 | 101,994 | 91,685 | 94,793 | 75,205 | 79,491 | 87,855 | 111,689 | 408,387 | 354,240 | 547,899 |
Net investment income (loss) | (45,468) | (191,322) | (20,305) | (24,829) | 72,820 | (54,027) | 113,932 | (10,150) | (281,924) | 122,575 | 218,140 |
Other income (expense), net | (699) | (542) | (3,760) | 1,588 | 1,542 | 2,663 | (1,400) | 182 | (3,413) | 2,987 | (1,710) |
Total revenues | 73,748 | (89,870) | 67,620 | 71,552 | 149,567 | 28,127 | 200,387 | 101,721 | 123,050 | 479,802 | 764,329 |
Expenses | |||||||||||
Loss and loss adjustment expenses incurred, net | 79,816 | 97,421 | 76,653 | 63,207 | 57,951 | 53,028 | 56,644 | 67,363 | 317,097 | 234,986 | 338,493 |
Acquisition costs, net | 33,281 | 32,146 | 23,939 | 26,841 | 21,821 | 22,478 | 25,570 | 37,796 | 116,207 | 107,665 | 171,872 |
General and administrative expenses | 4,998 | 5,382 | 6,894 | 6,160 | 6,729 | 6,012 | 5,559 | 6,200 | 23,434 | 24,500 | 20,958 |
Total expenses | 118,095 | 134,949 | 107,486 | 96,208 | 86,501 | 81,518 | 87,773 | 111,359 | 456,738 | 367,151 | 531,323 |
Income (loss) before income tax expense | (44,347) | (224,819) | (39,866) | (24,656) | 63,066 | (53,391) | 112,614 | (9,638) | (333,688) | 112,651 | 233,006 |
Income tax (expense) benefit | 361 | 1,233 | (54) | 215 | (204) | 254 | 14 | 560 | 1,755 | 624 | (538) |
Net income (loss) including non-controlling interest | (43,986) | (223,586) | (39,920) | (24,441) | 62,862 | (53,137) | 112,628 | (9,078) | (331,933) | 113,275 | 232,468 |
Loss (income) attributable to non-controlling interest in joint venture | 881 | 3,909 | 324 | 394 | (2,174) | 1,369 | (3,075) | 197 | 5,508 | (3,683) | (6,769) |
Net income (loss) | $ (43,105) | $ (219,677) | $ (39,596) | $ (24,047) | $ 60,688 | $ (51,768) | $ 109,553 | $ (8,881) | $ (326,425) | $ 109,592 | $ 225,699 |
Earnings (loss) per share | |||||||||||
Basic | $ (1.17) | $ (5.98) | $ (1.06) | $ (0.65) | $ 1.62 | $ (1.40) | $ 2.94 | $ (0.24) | $ (8.90) | $ 2.94 | $ 6.13 |
Diluted | $ (1.17) | $ (5.98) | $ (1.06) | $ (0.65) | $ 1.60 | $ (1.40) | $ 2.89 | $ (0.24) | $ (8.90) | $ 2.89 | $ 6.01 |
Weighted average number of ordinary shares used in the determination of earnings and loss per share | |||||||||||
Weighted average shares outstanding - basic | 36,720,454 | 36,710,216 | 37,303,265 | 37,173,008 | 37,356,187 | 36,984,650 | 37,246,922 | 36,808,386 | 36,670,466 | 37,242,687 | 36,838,128 |
Weighted Average Number of Shares Outstanding, Diluted | 36,720,454 | 36,710,216 | 37,303,265 | 37,173,008 | 37,905,836 | 36,984,650 | 37,902,106 | 36,808,386 | 36,670,466 | 37,874,387 | 37,585,167 |
SCHEDULE I (Details)
SCHEDULE I (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | $ 1,209,277 |
Fair Value | 1,064,164 |
Balance Sheet Value | 1,064,164 |
Debt instruments, trading, at fair value | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 45,471 |
Fair Value | 39,087 |
Balance Sheet Value | 39,087 |
Equities – listed | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,011,424 |
Fair Value | 890,653 |
Balance Sheet Value | 890,653 |
Exchange traded funds | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 31,570 |
Fair Value | 15,341 |
Balance Sheet Value | 15,341 |
Listed equity securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,042,994 |
Fair Value | 905,994 |
Balance Sheet Value | 905,994 |
Total investments, trading | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 1,088,465 |
Fair Value | 945,081 |
Balance Sheet Value | 945,081 |
Commodities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 102,092 |
Fair Value | 98,046 |
Balance Sheet Value | 98,046 |
Private and unlisted equity securities | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 18,720 |
Fair Value | 21,037 |
Balance Sheet Value | 21,037 |
Total other investments, at fair value | |
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | |
Cost | 120,812 |
Fair Value | 119,083 |
Balance Sheet Value | $ 119,083 |
SCHEDULE II Condensed Balance S
SCHEDULE II Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | ||||
Cash and cash equivalents | $ 112,162 | $ 12,030 | $ 3,722 | $ 21,890 |
Notes receivable | 25,146 | 1,566 | ||
Total assets | 2,712,522 | 2,995,292 | ||
Liabilities | ||||
Total liabilities | 1,863,749 | 1,801,251 | ||
Equity | ||||
Share capital | 3,703 | 3,738 | ||
Additional paid-in capital | 496,401 | 500,553 | ||
Retained earnings | 325,287 | 660,860 | ||
Shareholders’ equity attributable to shareholders | 825,391 | 1,165,151 | ||
Total liabilities and equity | 2,712,522 | 2,995,292 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 6 | 1 | $ 5 | $ 14 |
Investment in subsidiaries | 840,196 | 1,148,308 | ||
Notes receivable | 2,175 | 1,566 | ||
Due from subsidiaries | 0 | 15,276 | ||
Total assets | 842,377 | 1,165,151 | ||
Liabilities | ||||
Due to subsidiaries | 16,986 | 0 | ||
Total liabilities | 16,986 | 0 | ||
Equity | ||||
Share capital | 3,703 | 3,738 | ||
Additional paid-in capital | 496,401 | 500,553 | ||
Retained earnings | 325,287 | 660,860 | ||
Shareholders’ equity attributable to shareholders | 825,391 | 1,165,151 | ||
Total liabilities and equity | $ 842,377 | $ 1,165,151 |
SCHEDULE II Condensed Statement
SCHEDULE II Condensed Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||||||||||
Total revenues | $ 73,748 | $ (89,870) | $ 67,620 | $ 71,552 | $ 149,567 | $ 28,127 | $ 200,387 | $ 101,721 | $ 123,050 | $ 479,802 | $ 764,329 |
Expenses | |||||||||||
General and administrative expenses | 4,998 | 5,382 | 6,894 | 6,160 | 6,729 | 6,012 | 5,559 | 6,200 | 23,434 | 24,500 | 20,958 |
Net income (loss) before equity in earnings of consolidated subsidiaries | (44,347) | (224,819) | (39,866) | (24,656) | 63,066 | (53,391) | 112,614 | (9,638) | (333,688) | 112,651 | 233,006 |
Net income (loss) | $ (43,105) | $ (219,677) | $ (39,596) | $ (24,047) | $ 60,688 | $ (51,768) | $ 109,553 | $ (8,881) | (326,425) | 109,592 | 225,699 |
Parent Company | |||||||||||
Revenues | |||||||||||
Investment income | 5,962 | 671 | 1,100 | ||||||||
Total revenues | 5,962 | 671 | 1,100 | ||||||||
Expenses | |||||||||||
General and administrative expenses | 4,048 | 3,806 | 3,735 | ||||||||
Net income (loss) before equity in earnings of consolidated subsidiaries | 1,914 | (3,135) | (2,635) | ||||||||
Equity in earnings of consolidated subsidiaries | (328,339) | 112,727 | 228,334 | ||||||||
Net income (loss) | $ (326,425) | $ 109,592 | $ 225,699 |
SCHEDULE II Condensed Stateme85
SCHEDULE II Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash provided by (used in) operating activities | |||||||||||
Net income (loss) | $ (43,105) | $ (219,677) | $ (39,596) | $ (24,047) | $ 60,688 | $ (51,768) | $ 109,553 | $ (8,881) | $ (326,425) | $ 109,592 | $ 225,699 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities | |||||||||||
Share-based compensation expense, net of forfeitures | 4,274 | 3,964 | 3,675 | ||||||||
Net change in | |||||||||||
Net cash (used in) provided by operating activities | (59,945) | (133,732) | (92,697) | ||||||||
Investing activities | |||||||||||
Change in notes receivable, net | 2,279 | 18,983 | 3,281 | ||||||||
Net cash (used in) provided by investing activities | 177,686 | 142,040 | 74,016 | ||||||||
Financing activities | |||||||||||
Net proceeds from exercise of stock options | 0 | 0 | 513 | ||||||||
Short-swing sale profit from shareholder | 83 | 0 | 0 | ||||||||
Repurchase of Class A ordinary shares | (17,692) | 0 | 0 | ||||||||
Net cash (used in) provided by financing activities | (17,609) | 0 | 513 | ||||||||
Net increase (decrease) in cash and cash equivalents | 100,132 | 8,308 | (18,168) | ||||||||
Cash and cash equivalents at beginning of the period | 12,030 | 3,722 | 12,030 | 3,722 | 21,890 | ||||||
Cash and cash equivalents at end of the period | 112,162 | 12,030 | 112,162 | 12,030 | 3,722 | ||||||
Parent Company | |||||||||||
Cash provided by (used in) operating activities | |||||||||||
Net income (loss) | (326,425) | 109,592 | 225,699 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities | |||||||||||
Equity in earnings of consolidated subsidiaries | 328,339 | (112,727) | (228,334) | ||||||||
Share-based compensation expense, net of forfeitures | 4,274 | 3,964 | 3,675 | ||||||||
Net change in | |||||||||||
Due from subsidiaries | 15,276 | 971 | (2,006) | ||||||||
Due to subsidiaries | 16,986 | (3,808) | 2,438 | ||||||||
Net cash (used in) provided by operating activities | 38,450 | (2,008) | 1,472 | ||||||||
Investing activities | |||||||||||
Change in notes receivable, net | (609) | 2,162 | (2,053) | ||||||||
Contributed surplus to subsidiaries, net | 20,227 | 158 | (59) | ||||||||
Net cash (used in) provided by investing activities | (20,836) | 2,004 | (1,994) | ||||||||
Financing activities | |||||||||||
Net proceeds from exercise of stock options | 0 | 0 | 513 | ||||||||
Short-swing sale profit from shareholder | 83 | 0 | 0 | ||||||||
Net cash (used in) provided by financing activities | (17,609) | 0 | 513 | ||||||||
Net increase (decrease) in cash and cash equivalents | 5 | (4) | (9) | ||||||||
Cash and cash equivalents at beginning of the period | $ 1 | $ 5 | 1 | 5 | 14 | ||||||
Cash and cash equivalents at end of the period | $ 6 | $ 1 | 6 | 1 | 5 | ||||||
Common Class A [Member] | Parent Company | |||||||||||
Financing activities | |||||||||||
Repurchase of Class A ordinary shares | $ (17,692) | $ 0 | $ 0 |
SCHEDULE III (Details)
SCHEDULE III (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplementary Insurance Information [Abstract] | |||
Deferred acquisition costs, net | $ 59,823 | $ 34,420 | $ 51,797 |
Reserves for losses and loss adjustment expenses – gross | 305,997 | 264,243 | 329,894 |
Unearned premiums – gross | 211,954 | 128,736 | 173,057 |
Net premiums earned | 408,387 | 354,240 | 547,899 |
Net investment income (loss) | (281,924) | (122,575) | (218,140) |
Net losses, and loss adjustment expenses | 317,097 | 234,986 | 338,493 |
Amortization of deferred acquisition costs | 116,207 | 107,665 | 171,872 |
Other operating expenses | 23,434 | 24,500 | 20,958 |
Gross premiums written | $ 502,124 | $ 324,023 | $ 535,702 |
SCHEDULE IV (Details)
SCHEDULE IV (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Net premiums earned | $ 119,915 | $ 101,994 | $ 91,685 | $ 94,793 | $ 75,205 | $ 79,491 | $ 87,855 | $ 111,689 | $ 408,387 | $ 354,240 | $ 547,899 |
Property & Casualty | |||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | |||||||||||
Direct gross premiums | 0 | 0 | 0 | ||||||||
Premiums ceded to other companies | 9,001 | 13,493 | 2,780 | ||||||||
Premiums assumed from other companies | 502,124 | 324,023 | 535,702 | ||||||||
Net premiums earned | $ 493,123 | $ 310,530 | $ 532,922 | ||||||||
Percentage of amount assumed to net | 102.00% | 104.00% | 101.00% |