Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
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-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Class A | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 31,283,898 | |
Common Class B | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,254,715 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investments | ||
Debt instruments, trading, at fair value | $ 19,350 | $ 7,180 |
Equity securities, trading, at fair value | 955,255 | 1,203,672 |
Other investments, at fair value | 70,127 | 152,132 |
Total investments | 1,044,732 | 1,362,984 |
Cash and cash equivalents | 37,454 | 27,285 |
Restricted cash and cash equivalents | 1,254,055 | 1,503,813 |
Financial contracts receivable, at fair value | 54,131 | 12,893 |
Reinsurance balances receivable | 326,256 | 301,762 |
Loss and loss adjustment expenses recoverable | 39,482 | 29,459 |
Deferred acquisition costs, net | 60,263 | 62,350 |
Unearned premiums ceded | 25,450 | 25,120 |
Notes receivable, net | 31,008 | 28,497 |
Other assets | 3,818 | 3,230 |
Total assets | 2,876,649 | 3,357,393 |
Liabilities | ||
Securities sold, not yet purchased, at fair value | 676,938 | 912,797 |
Financial contracts payable, at fair value | 15,397 | 22,222 |
Payables to Broker-Dealers and Clearing Organizations | 574,800 | 672,700 |
Loss and loss adjustment expense reserves | 484,599 | 464,380 |
Unearned premium reserves | 255,758 | 255,818 |
Reinsurance balances payable | 139,112 | 144,058 |
Funds withheld | 15,610 | 23,579 |
Other liabilities | 6,814 | 10,413 |
Total liabilities | 2,169,028 | 2,505,967 |
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests | 6,705 | 7,169 |
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, 31,295,933 (2017: 31,104,830): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,715 (2017: 6,254,715)) | 3,755 | 3,736 |
Additional paid-in capital | 504,570 | 503,316 |
Retained earnings | 181,520 | 324,272 |
Shareholders’ equity attributable to shareholders | 689,845 | 831,324 |
Non-controlling interest in related party joint venture | 11,071 | 12,933 |
Total equity | 700,916 | 844,257 |
Total liabilities, redeemable non-controlling interest and equity | $ 2,876,649 | $ 3,357,393 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Stockholders’ Equity: | ||
Preferred share capital, par value | $ 0.10 | $ 0.10 |
Preferred share capital, authorized | 50,000,000 | 50,000,000 |
Preferred share capital, issued | 0 | 0 |
Common Class A | ||
Stockholders’ Equity: | ||
Ordinary share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 100,000,000 | 100,000,000 |
Ordinary share capital, issued (in shares) | 31,295,933 | 31,104,830 |
Ordinary share capital, outstanding (in shares) | 31,295,933 | 31,104,830 |
Common Class B | ||
Stockholders’ Equity: | ||
Ordinary share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 25,000,000 | 25,000,000 |
Ordinary share capital, issued (in shares) | 6,254,715 | 6,254,715 |
Ordinary share capital, outstanding (in shares) | 6,254,715 | 6,254,715 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Gross premiums written | $ 175,125 | $ 197,214 |
Gross premiums ceded | (29,843) | (3,426) |
Net premiums written | 145,282 | 193,788 |
Change in net unearned premium reserves | 562 | (41,886) |
Net premiums earned | 145,844 | 151,902 |
Net investment income (loss) [net of related party expenses of $4,454 and $5,497] | (145,216) | 11,618 |
Other income (expense), net | (487) | (7) |
Total revenues | 141 | 163,513 |
Expenses | ||
Loss and loss adjustment expenses incurred, net | 95,824 | 104,812 |
Acquisition costs, net | 44,209 | 43,211 |
General and administrative expenses | 5,956 | 6,743 |
Total expenses | 145,989 | 154,766 |
Income (loss) before income tax | (145,848) | 8,747 |
Income tax (expense) benefit | 770 | (121) |
Net income (loss) including non-controlling interest | (145,078) | 8,626 |
Loss (income) attributable to non-controlling interest in related party joint venture | 2,326 | (252) |
Net income (loss) | $ (142,752) | $ 8,374 |
Earnings (loss) per share | ||
Basic | $ (3.85) | $ 0.22 |
Diluted | $ (3.85) | $ 0.22 |
Weighted average number of ordinary shares used in the determination of earnings and loss per share | ||
Basic | 37,087,169 | 37,341,338 |
Diluted | 37,087,169 | 37,376,649 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED 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 |
Balance at Dec. 31, 2016 | $ 885,803 | $ 3,737 | $ 500,337 | $ 370,168 | $ 874,242 | $ 11,561 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 7 | 7 | 0 | 0 | 7 | 0 |
Share-based compensation expense, net of forfeitures | 843 | 0 | 843 | 0 | 843 | 0 |
Change in non-controlling interest in related party joint venture | 328 | 0 | 0 | 0 | 0 | 328 |
Change in capital account allocation of non-controlling interest in related party joint venture | 252 | |||||
Net income (loss) | 8,374 | 0 | 0 | 8,374 | 8,374 | 0 |
Balance at Mar. 31, 2017 | 895,355 | 3,744 | 501,180 | 378,542 | 883,466 | 11,889 |
Balance at Dec. 31, 2017 | 844,257 | 3,736 | 503,316 | 324,272 | 831,324 | 12,933 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 19 | 19 | 0 | 0 | 19 | 0 |
Share-based compensation expense, net of forfeitures | 1,254 | 0 | 1,254 | 0 | 1,254 | 0 |
Change in non-controlling interest in related party joint venture | (1,862) | 0 | 0 | 0 | 0 | (1,862) |
Change in capital account allocation of non-controlling interest in related party joint venture | (2,326) | |||||
Net income (loss) | (142,752) | 0 | 0 | (142,752) | (142,752) | 0 |
Balance at Mar. 31, 2018 | $ 700,916 | $ 3,755 | $ 504,570 | $ 181,520 | $ 689,845 | $ 11,071 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 1,291,509 | $ 1,382,020 |
Net income (loss) | (142,752) | 8,374 |
Adjustments to reconcile net income or loss to net cash provided by (used in) operating activities | ||
Net change in unrealized gains and losses on investments and financial contracts | 3,695 | 23,378 |
Net realized (gains) losses on investments and financial contracts | 140,255 | (48,967) |
Foreign exchange (gains) losses on investments | 387 | 6,480 |
Income (loss) attributable to total non-controlling interest in related party joint venture | (2,326) | 252 |
Share-based compensation expense, net of forfeitures | 1,273 | 850 |
Depreciation expense | 92 | 92 |
Net change in | ||
Reinsurance balances receivable | (24,494) | (49,321) |
Loss and loss adjustment expenses recoverable | (10,023) | 122 |
Deferred acquisition costs, net | 2,087 | (12,448) |
Unearned premiums ceded | (330) | (778) |
Other assets | (680) | 494 |
Loss and loss adjustment expense reserves | (20,219) | (33,389) |
Unearned premium reserves | (60) | 42,741 |
Reinsurance balances payable | (4,946) | 10,834 |
Funds withheld | (7,969) | (351) |
Other liabilities | (3,599) | (888) |
Performance compensation payable to related party | 0 | 1,189 |
Net cash provided by (used in) operating activities | (29,171) | 15,442 |
Investing activities | ||
Purchases of investments, trading | (167,809) | (365,970) |
Sales of investments, trading | 431,737 | 239,048 |
Payments for financial contracts | (85,146) | (10,538) |
Proceeds from financial contracts | 18,665 | 47,295 |
Securities sold, not yet purchased | 139,683 | 323,273 |
Dispositions of securities sold, not yet purchased | (448,376) | (345,313) |
Change in due to prime brokers and other financial institutions | (97,900) | 238,968 |
Change in notes receivable, net | (2,511) | (1,502) |
Net cash provided by (used in) investing activities | (211,657) | 125,261 |
Financing activities | ||
Net cash provided by (used in) financing activities | 0 | 0 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 1,239 | (1,192) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (239,589) | 139,511 |
Cash, cash equivalents and restricted cash at beginning of the period (see Note 2) | 27,285 | |
Cash, cash equivalents and restricted cash at end of the period (see Note 2) | 37,454 | |
Supplementary information | ||
Interest paid in cash | 3,867 | 1,883 |
Income tax paid in cash | $ 0 | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2018 | |
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. 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 unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2017 . In the opinion of management, these unaudited condensed consolidated financial statements reflect all of the normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and results of operations as of the dates and for the periods presented. The results for the three months ended March 31, 2018 are not necessarily indicative of the results expected for the full calendar year. Reclassifications Prior to the year ended December 31, 2017, the Company presented the redeemable and non-redeemable portion of the non-controlling interest in the related party joint venture under the permanent equity section of the balance sheet. The United States Securities and Exchange Commission (“SEC”) guidance, which is applicable to SEC registrants, requires shares, that are not required to be accounted for in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic Distinguishing Liabilities from Equity , and having redemption features that are not solely within the control of the issuer, to be classified outside of the permanent equity section and instead presented in the mezzanine section of the consolidated balance sheets. Effective from the year ended December 31, 2017, the Company presented the redeemable non-controlling interest in the related party joint venture in the mezzanine section on the Company’s consolidated balance sheet in accordance with the SEC guidance noted above. The comparative condensed consolidated statement of shareholders’ equity for the three months ended March 31, 2017 has been reclassified to conform to the current period presentation of the redeemable non-controlling interest in the related party joint venture. The reclassification had no impact on shareholders’ equity attributable to shareholders or retained earnings. In addition, this change did not impact the condensed consolidated statements of income, earnings per share or condensed consolidated statement of cash flows. See Note 8 for additional information regarding the non-controlling interests in the related party joint venture. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of condensed 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 condensed consolidated financial statements and the reported amounts of income and expenses during the period. Actual results could differ from these estimates. 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 9 ). 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. The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows: March 31, 2018 December 31, 2017 ($ in thousands) Cash and cash equivalents $ 37,454 $ 27,285 Restricted cash and cash equivalents 1,254,055 1,503,813 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 1,291,509 $ 1,531,098 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. Similarly for ceded contracts that do not transfer sufficient risk, deposit accounting is used and the contract is reported as a deposit asset. 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 the 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 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 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 upon the occurrence of a 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 contract period, are earned over the remaining coverage period. For additional premiums which are due on a contract that has no remaining coverage period, the additional premiums are earned in full when due. 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 March 31, 2018 and December 31, 2017 , 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 March 31, 2018 , $19.3 million ( December 31, 2017 : $11.9 million ) of profit commission reserves were included in reinsurance balances payable on the condensed consolidated balance sheets. For the three months ended March 31, 2018 , $8.0 million ( 2017 : $2.7 million ) of net profit commission expense was included in acquisition costs in the condensed consolidated statements of income. Funds Withheld Funds withheld include reinsurance balances retained by the Company on retroceded contracts as collateral in accordance with the contract terms. Any interest expense that the Company incurs while these funds are withheld, are included under net investment income (loss) in the condensed 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 at least quarterly 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. Consideration paid by the Company for retroactive reinsurance that meets the conditions for reinsurance accounting (e.g. loss portfolio transfers) are reported as loss and loss adjustment expenses recoverable to the extent those amounts do not exceed the associated liabilities. If the amounts paid for retroactive reinsurance exceed the liabilities, the Company increases the related liabilities, at the time the reinsurance contract is effective, and the excess is charged to net income as losses incurred. If the liabilities exceed the amounts paid, the recoverable balance is increased to reflect the difference, and the resulting gain is deferred and amortized over the estimated loss payout period. Changes in the estimated amount of liabilities relating to the underlying reinsured contracts are recognized in net income in the period of the change. 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 condensed 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 in accordance with the terms of the note. For notes receivable placed on non-accrual status, the notes are recorded excluding any accrued interest amount. 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 March 31, 2018 , $12.9 million of notes receivable (net of any valuation allowance) were on non-accrual status ( December 31, 2017 : $14.4 million ) and any payments received were applied to reduce the recorded value of the notes. At March 31, 2018 and December 31, 2017 , $0.03 million and $0.1 million , respectively, of accrued interest was included in the notes receivable balance. Based on management’s assessment, the recorded values of the notes receivable, net of valuation allowance, at March 31, 2018 and December 31, 2017 , 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. The deposit method of accounting requires an asset or liability to be recognized based on the consideration paid or received. The deposit asset or liability balance is subsequently adjusted using the interest method with a corresponding income or expense recorded in the condensed consolidated statements of income as other income or expense. The Company’s deposit assets and liabilities are recorded in the condensed consolidated balance sheets under reinsurance balances receivable and reinsurance balances payable, respectively. At March 31, 2018 , deposit assets and deposit liabilities were $11.7 million and $36.9 million , respectively, ( December 31, 2017 : $19.4 million and $28.1 million , respectively). For the three months ended March 31, 2018 , interest expense and interest income on deposit accounted contracts were $0.1 million and $0.2 million , respectively. For the three months ended March 31, 2017 , there were no material interest expense or interest income on deposit accounted contracts. 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 certain private equity fund investments, the Company has elected to measure the fair value using the net asset value practical expedient allowed under U.S. GAAP, and, accordingly, these investments are not classified as Level 1, 2 or 3 in the fair value hierarchy. 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 condensed 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 condensed 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 outstanding balances due from the defaulting party 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 condensed 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 condensed 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 condensed 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 condensed 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. For restricted shares and RSUs with both service and performance vesting conditions, the expense is recognized based on management’s estimate of the probability of the performance conditions being achieved based on historical results and expectations of future results. If the performance conditions is expected to be met, the expense is attributed to the period for which the requisite service has been rendered. For restricted shares and RSUs with only service vesting conditions, the expense is recognized on a straight line basis over the vesting period, net of any estimated or expected forfeitures. The forfeiture rate is estimated based on the Company’s historical actual forfeitures relating to restricted shares and RSUs granted to employees. The forfeiture rate is reviewed annually and adjusted as necessary. No forfeiture rate is used for restricted shares granted to directors which vest over a twelve-month 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. In determining the grant date fair value, 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. 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. For share purchase options issued under the employee stock incentive plan, the compensation cost is calculated and expensed over the vesting periods on a graded vesting basis (see Note 7 ). 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 condensed consolidated statements of income. Comprehensive Income (Loss) The Company has no comprehensive income or loss, other than the net income or loss disclosed in the condensed 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. Three months ended March 31 2018 2017 Weighted average shares outstanding - basic 37,087,169 37,341,338 Effect of dilutive employee and director share-based awards — 35,311 Weighted average shares outstanding - diluted 37,087,169 37,376,649 Anti-dilutive stock options outstanding 1,015,627 335,991 Participating securities excluded from calculation of loss per share 460,155 — 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 marginal rate of 21% . Verdant’s tax years 2014 and beyond, remain open and subject to examination by the IRS. 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. Recent Accounting Pronouncements In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) . The new guidance is intended to improve the recognition and measurement of financial instruments. ASU 2016-01, among other things, requires equity investments to be measured at fair value with changes in fair value recognized in net income or loss, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. ASU 2016-01 affects public and private companies, not-for-profit organizations, and employee benefit plans that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2016-01 during the first quarter of fiscal year 2018 and the adoption of this guidance did not have any significant impact on the Company’s net income or loss or retained earnings. since the Company’s investments are classified as “trading” and the unrealized gains and losses are recognized in net income or loss. The Company has implemented the new disclosures required under ASU 2016-01 commencing from the first quarter of 2018. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for any organization in any interim or annual period. The Company currently has two operating leases for its office spaces as disclosed in Note 9 of the condensed consolidated financial statements which will be recognized as right-of-use asset upon adoption of ASU 2016-02. The Company is in the process of evaluating the impact of adopting ASU 2016-02 on the Company’s consolidated financial statements and anticipates implementing ASU 2016-02 during the first quarter of fiscal year 2019. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”) . ASU 2016-13 amends the guidance on reporting credits losses and affects loans, debt securities, trade receivables, reinsurance recoverables and other financial assets that have the contractual right to receive cash. The amendments are effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any organization for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is in the process of evaluating the impact of the requirements of ASU 2016-13 on the Company’s consolidated financial statements and anticipates implementing ASU 2016-13 during the first quarter of fiscal year 2020. In November 2016, the FASB issued ASU 2016-18, “Statements of Cash Flows - Restricted Cash (Topic 230)” (“ASU 2016-18”). ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents in the statement of cash flows and disclose the nature of the restrictions on cash and cash equivalents. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption was permitted. The Company adopted ASU 2016-18 during the first quarter of fiscal year 2018 and amended the presentation in the statement of cash flows to include the restricted cash and cash equivalents with cash and cash equivalents in the condensed consolidated statements of cash flows and retrospectively reclassified comparative periods presented. The adoption had no impact on the Company’s net income or loss or retained earnings. The FASB has issued ASU No. 2014-09, “Revenue from Contracts with Customers”, and related amendments, ASU 2015-14, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-05 and ASU 2017-13, (collectively, “Topic 606”). Topic 606 creates a new comprehensive revenue recognition standard that will serve as a single source of revenue guidance for all companies that either |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2018 | |
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. 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 condensed consolidated statements of income. The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of March 31, 2018 : Fair value measurements as of March 31, 2018 Description Quoted prices in Significant other Significant Total ($ in thousands) Assets: Debt instruments $ — $ 18,465 $ 885 $ 19,350 Listed equity securities 943,121 12,134 — 955,255 Commodities 38,382 — — 38,382 Private and unlisted equity securities — — 6,135 6,135 $ 981,503 $ 30,599 $ 7,020 $ 1,019,122 Unlisted equity funds measured at net asset value (1) 25,610 Total investments $ 1,044,732 Financial contracts receivable $ 1,074 $ 53,057 $ — $ 54,131 Liabilities: Listed equity securities, sold not yet purchased $ (567,950 ) $ — $ — $ (567,950 ) Debt instruments, sold not yet purchased — (108,988 ) — (108,988 ) Total securities sold, not yet purchased $ (567,950 ) $ (108,988 ) $ — $ (676,938 ) Financial contracts payable $ — $ (15,397 ) $ — $ (15,397 ) (1) Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2017 : Fair value measurements as of December 31, 2017 Description Quoted prices in Significant other Significant Total ($ in thousands) Assets: Debt instruments $ — $ 6,300 $ 880 $ 7,180 Listed equity securities 1,181,150 22,522 — 1,203,672 Commodities 121,502 — — 121,502 Private and unlisted equity securities — — 6,108 6,108 $ 1,302,652 $ 28,822 $ 6,988 $ 1,338,462 Unlisted equity funds measured at net asset value (1) 24,522 Total investments $ 1,362,984 Financial contracts receivable $ 22 $ 12,871 $ — $ 12,893 Liabilities: Listed equity securities, sold not yet purchased $ (812,652 ) $ — $ — $ (812,652 ) Debt instruments, sold not yet purchased — (100,145 ) — (100,145 ) Total securities sold, not yet purchased $ (812,652 ) $ (100,145 ) $ — $ (912,797 ) Financial contracts payable $ — $ (22,222 ) $ — $ (22,222 ) (1) Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2018 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended March 31, 2018 Assets Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 880 $ 6,108 $ 6,988 Purchases — — — Sales — — — Issuances — — — Settlements — — — Total realized and unrealized gains (losses) and amortization included in earnings, net 5 27 32 Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance $ 885 $ 6,135 $ 7,020 There were no transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2018 . The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2017 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended March 31, 2017 Assets Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 654 $ 6,109 $ 6,763 Purchases — 1,750 1,750 Sales — — — Issuances — — — Settlements — — — Total realized and unrealized gains (losses) and amortization included in earnings, net 50 (15 ) 35 Transfers into Level 3 — — — Transfers out of Level 3 — (1,768 ) (1,768 ) Ending balance $ 704 $ 6,076 $ 6,780 During the three months ended March 31, 2017 , 1.8 million of the private equity securities were transferred from Level 3 to Level 2 as these securities commenced trading on a listed exchange. However, due to lock-up period restrictions on those securities, they were classified as Level 2 upon transfer until the lock-up period expires. As of March 31, 2017 , the fair value of these securities was based on the last traded price on an active market, adjusted for an estimated discount due to the lock-up restriction. There were no other transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2017 . As of March 31, 2018 , the Company held investments in unlisted equity funds of $25.6 million (December 31, 2017 : $24.5 million ) with fair values measured using the unadjusted net asset values and performance estimates as reported by the managers of these funds as a practical expedient. Some of these net asset values were reported from periods prior to March 31, 2018 . The unlisted equity funds have varying lock-up periods and, as of March 31, 2018 , all of the funds had redemption restrictions. The redemption restrictions have been in place since inception of the investments. One of the unlisted equity funds may be redeemed after December 31, 2018 while the redemption restrictions for the other funds are not expected to lapse in the near future. As of March 31, 2018 , the Company had $7.1 million (December 31, 2017 : $6.5 million ) of unfunded commitments relating to unlisted equity funds whose fair values are determined based on unadjusted net asset values reported by the managers of these funds. These commitments are included in the amounts presented in the schedule of commitments and contingencies in Note 9 of these condensed consolidated financial statements. For the three months ended March 31, 2018 and 2017 , there were no net realized gains or losses included in net investment loss in the condensed consolidated statements of income relating to Level 3 securities. For Level 3 securities still held as of the reporting date, the change in net unrealized gains for the three months ended March 31, 2018 of $0.03 million ( December 31, 2017 : net unrealized gains $0.2 million ), were included in net investment income (loss) in the condensed consolidated statements of income. Investments Debt instruments, trading At March 31, 2018 , the following investments were included in debt instruments: Cost/amortized cost Unrealized gains Unrealized losses Fair ($ in thousands) Corporate debt – U.S. $ 3,437 $ — $ (2,464 ) $ 973 Corporate debt – Non U.S. 2,109 — (2,082 ) 27 Municipal debt – U.S. 10,397 7,953 — 18,350 Total debt instruments $ 15,943 $ 7,953 $ (4,546 ) $ 19,350 At December 31, 2017 , the following investments were included in debt instruments: Cost/amortized cost Unrealized gains Unrealized losses Fair ($ in thousands) Corporate debt – U.S. $ 8,508 $ — $ (7,186 ) $ 1,322 Corporate debt – Non U.S. 2,109 — (2,057 ) 52 Municipal debt – U.S. 5,831 — (25 ) 5,806 Total debt instruments $ 16,448 $ — $ (9,268 ) $ 7,180 The maturity distribution for debt instruments held at March 31, 2018 and December 31, 2017 was as follows: March 31, 2018 December 31, 2017 Cost/ Fair Cost/ Fair ($ in thousands) Within one year $ 1,551 $ 243 $ 7,557 $ 441 From one to five years 1,143 236 — — From five to ten years 2,859 1,425 2,109 52 More than ten years 10,390 17,446 6,782 6,687 $ 15,943 $ 19,350 $ 16,448 $ 7,180 Equity securities, trading At March 31, 2018 , the following long positions were included in equity securities, trading: Cost Unrealized Unrealized Fair ($ in thousands) Equities – listed $ 863,334 $ 126,207 $ (34,286 ) $ 955,255 Total equity securities $ 863,334 $ 126,207 $ (34,286 ) $ 955,255 At December 31, 2017 , the following long positions were included in equity securities, trading: Cost Unrealized Unrealized Fair ($ in thousands) Equities – listed $ 1,014,426 $ 208,350 $ (19,104 ) $ 1,203,672 Total equity securities $ 1,014,426 $ 208,350 $ (19,104 ) $ 1,203,672 Other Investments “Other investments” include commodities and private securities and unlisted funds. As of March 31, 2018 and December 31, 2017 , all commodities were comprised of gold bullion. At March 31, 2018 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 29,493 $ 8,889 $ — $ 38,382 Private and unlisted equity funds 25,374 6,371 — 31,745 $ 54,867 $ 15,260 $ — $ 70,127 At December 31, 2017 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 101,184 $ 20,318 $ — $ 121,502 Private and unlisted equity funds 25,316 5,314 — 30,630 $ 126,500 $ 25,632 $ — $ 152,132 Private and unlisted equity funds include private equity securities that did not have readily determinable fair values. At March 31, 2018 the carrying value of the private equity securities was $4.0 million (December 31, 2017 : $3.9 million). The carrying values of the private equity securities are determined based on the original cost and any subsequent changes in the valuation based on periodic third party valuations or recent observable transactions of those securities. There were no meaningful upward or downward adjustments to the carrying values of the private equity securities for the three months ended March 31, 2018 . Investments in Securities Sold, Not Yet Purchased Securities sold, not yet purchased, are securities that the Company has sold, but does not own, in anticipation of a decline in the market value of the security. The Company’s risk is that the value of the security will increase rather than decline. Consequently, the settlement amount of the liability for securities sold, not yet purchased, may exceed the amount recorded in the condensed consolidated balance sheet as the Company is obligated to purchase the securities sold, not yet purchased, in the market at prevailing prices to settle its obligations. To establish a position in a security sold, not yet purchased, the Company needs to borrow the security for delivery to the buyer. On each day the transaction is open, the liability for the obligation to replace the borrowed security is marked-to-market and an unrealized gain or loss is recorded. At the time the transaction is closed, the Company realizes a gain or loss equal to the difference between the price at which the security was sold and the cost of replacing the borrowed security. While the transaction is open, the Company will also incur an expense for any dividends or interest which will be paid to the lender of the securities. At March 31, 2018 , the following securities were included in investments in securities sold, not yet purchased: Proceeds Unrealized gains Unrealized losses Fair value ($ in thousands) Corporate debt – U.S. $ (3,086 ) $ — $ (7 ) $ (3,093 ) Equities – listed (470,844 ) $ 16,131 (108,062 ) (562,775 ) Exchange traded funds (5,872 ) 696 — (5,176 ) Sovereign debt – Non U.S. (96,230 ) — (9,664 ) (105,894 ) $ (576,032 ) $ 16,827 $ (117,733 ) $ (676,938 ) At December 31, 2017 , 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. $ — $ — $ — $ — Equities – listed (643,148 ) 17,541 (187,045 ) (812,652 ) Exchange traded funds — — — — Sovereign debt – Non U.S. (96,231 ) — (3,914 ) (100,145 ) $ (739,379 ) $ 17,541 $ (190,959 ) $ (912,797 ) Financial Contracts As of March 31, 2018 and December 31, 2017 , the Company had entered into total return equity swaps, interest rate swaps, commodity swaps, 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. At March 31, 2018 , 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 Futures USD 84,852 $ 1,074 Interest rate options USD 1,104,000 923 Interest rate swaps JPY 22,565 148 Put options USD 112,568 47,301 Total return swaps – equities EUR/KRW/RON/USD 93,723 4,685 Warrants and rights on listed equities USD 2 — Total financial contracts receivable, at fair value $ 54,131 Financial contracts payable Call options USD 470 $ (112 ) Commodity Swaps USD 19,487 (141 ) Forwards KRW 63,293 (192 ) Put options USD 29,278 (13,069 ) Total return swaps – equities EUR/USD 33,311 (1,883 ) Total financial contracts payable, at fair value $ (15,397 ) (1) USD = US Dollar; EUR = Euro; JPY = Japanese Yen; KRW = Korean Won; RON = Romanian New Leu. At December 31, 2017 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing currency (1) Notional amount of Fair value of net assets ($ in thousands) Financial contracts receivable Call options USD 2,656 $ 91 Commodity Swaps USD 17,833 2,142 Forwards KRW 41,379 801 Futures USD 5,874 12 Interest rate swaps JPY 21,269 479 Put options (2) USD 155 1 Total return swaps – equities EUR/GBP/USD 34,965 9,357 Warrants and rights on listed equities EUR/USD 29 10 Total financial contracts receivable, at fair value $ 12,893 Financial contracts payable Commodity Swaps USD 26,795 $ (353 ) Put options USD 130 (14 ) Total return swaps – equities EUR/GBP/KRW/RON/USD 60,663 (21,855 ) Total financial contracts payable, at fair value $ (22,222 ) (1) USD = US Dollar; EUR = Euro; GBP = British Pound; JPY = Japanese Yen; KRW = Korean Won; RON = Romanian New Leu. (2) Includes options on 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 March 31, 2018 , the Company held $47.3 million OTC put options (long) ( December 31, 2017 : nil ) and $13.0 million OTC put options (short) ( December 31, 2017 : nil ). During the three months ended March 31, 2018 and 2017 , the Company reported gains and losses on derivatives as follows: Derivatives not designated as hedging instruments Location of gains and losses on derivatives recognized in income Gain (loss) on derivatives recognized in income Three months ended March 31 2018 2017 ($ in thousands) Forwards Net investment income (loss) $ (123 ) $ 623 Futures Net investment income (loss) (1,949 ) (513 ) Interest rate options Net investment income (loss) (637 ) — Interest rate swaps Net investment income (loss) (331 ) 105 Options, warrants, and rights Net investment income (loss) 1,087 (7,528 ) Commodity swaps Net investment income (loss) 1,848 (6,959 ) Total return swaps – equities Net investment income (loss) (19,031 ) 10,311 Total $ (19,136 ) $ (3,961 ) 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 three months ended March 31, 2018 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2018 Three months ended March 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Forwards $ 54,372 $ 33,328 Futures 335,241 257,912 Interest rate options (1) 1,104,000 — Options, warrants and rights (1) 172,580 17,366 Commodity swaps — 28,975 Total return swaps 8,637 19,136 Total $ 1,674,830 $ 356,717 (1) Exited amount excludes derivatives which expired or were exercised during the period. For the three months ended March 31, 2017 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2017 Three months ended March 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Forwards $ 3,476 $ — Futures 29,510 24,069 Options, warrants and rights (1) 347,918 110,102 Commodity swaps — 8,182 Total return swaps 232,118 60,607 Total $ 613,022 $ 202,960 (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 condensed 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 on its derivative instruments. As of March 31, 2018 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: March 31, 2018 (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 $ 54,131 $ — $ 54,131 $ (15,397 ) $ (23,290 ) $ 15,444 Financial contracts payable (15,397 ) — (15,397 ) 15,397 — — As of December 31, 2017 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: December 31, 2017 (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 $ 12,893 $ — $ 12,893 $ (5,128 ) $ (1,336 ) $ 6,429 Financial contracts payable (22,222 ) — (22,222 ) 5,128 17,094 — |
DUE TO PRIME BROKERS
DUE TO PRIME BROKERS | 3 Months Ended |
Mar. 31, 2018 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
DUE TO PRIME BROKERS | DUE TO PRIME BROKERS AND OTHER FINANCIAL INSTITUTIONS As of March 31, 2018 , the amount due to prime brokers is comprised of margin-borrowing from prime brokers and custodians relating to investments purchased on margin as well as margin-borrowing for providing collateral to support some of the Company’s outstanding letters of credit and trust accounts (see Note 9 ). Under term margin agreements with prime brokers and revolving credit facilities with custodians and certain letter of credit facility agreements, the Company pledges certain investment securities to borrow cash. The cash borrowed under letter of credit facility agreements is placed in a custodial account in the name of the Company and this custodial account provides collateral for any letters of credit issued. Similarly for the trust accounts, the Company may borrow cash from prime brokers or custodians which is placed in a trust account for the benefit of the cedent. Since there is no legal right of offset, the Company’s liability for the cash borrowed from the prime brokers and custodians is included on the condensed consolidated balance sheets as due to prime brokers and other financial institutions while the cash held in the custodial account and trust accounts are included on the condensed consolidated balance sheets as restricted cash and cash equivalents. March 31, 2018 December 31, 2017 ($ in thousands) Due to Prime Brokers $ 544,800 $ 647,700 Due to Other Financial Institutions 30,000 25,000 $ 574,800 $ 672,700 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. |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Insurance Loss Reserves [Abstract] | |
Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block] | LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES There were no significant changes in the actuarial methodology or assumptions relating to the Company’s loss and loss adjustment expense reserves for the three months ended March 31, 2018 . At March 31, 2018 and December 31, 2017 , loss and loss adjustment expense reserves were comprised of the following: Consolidated March 31, 2018 December 31, 2017 ($ in thousands) Case reserves $ 183,013 $ 178,088 IBNR 301,586 286,292 Total $ 484,599 $ 464,380 At March 31, 2018 and December 31, 2017 , the loss and loss adjustment expense reserves relating to health were $23.9 million and $22.2 million , respectively. A summary of changes in outstanding loss and loss adjustment expense reserves for the three months ended March 31, 2018 and 2017 is as follows: Consolidated 2018 2017 ($ in thousands) Gross balance at January 1 $ 464,380 $ 306,641 Less: Losses recoverable (29,459 ) (2,704 ) Net balance at January 1 434,921 303,937 Incurred losses related to: Current year 98,558 99,807 Prior years (2,734 ) 5,005 Total incurred 95,824 104,812 Paid losses related to: Current year (17,161 ) (15,930 ) Prior years (69,703 ) (55,920 ) Total paid (86,864 ) (71,850 ) Loss portfolio transfer — — Foreign currency revaluation 1,236 549 Net balance at March 31 445,117 337,448 Add: Losses recoverable 39,482 2,582 Gross balance at March 31 $ 484,599 $ 340,030 The changes in the outstanding loss and loss adjustment expense reserves for health claims for the three months ended March 31, 2018 and 2017 are as follows: Health 2018 2017 ($ in thousands) Gross balance at January 1 $ 22,181 $ 18,993 Less: Losses recoverable — — Net balance at January 1 22,181 18,993 Incurred losses related to: Current year 11,992 10,015 Prior years 830 (261 ) Total incurred 12,822 9,754 Paid losses related to: Current year (1,872 ) (2,123 ) Prior years (9,231 ) (9,416 ) Total paid (11,103 ) (11,539 ) Foreign currency revaluation — — Net balance at March 31 23,900 17,208 Add: Losses recoverable — — Gross balance at March 31 $ 23,900 $ 17,208 For the three months ended March 31, 2018 , the net losses incurred relating to prior accident years decreased by $2.7 million , which primarily related to the following: • $6.1 million of favorable loss development, net of retrocession recoveries, relating to 2017 hurricanes resulting from updated reporting received from cedents. • $3.5 million of favorable loss development on prior period mortgage insurance contracts resulting from continued favorable claims experience. • $3.2 million of adverse loss development on solicitors professional indemnity contracts resulting from adverse reporting of claims in excess of expected claims during the quarter. • $1.9 million of adverse loss development on general liabilities contracts across two accounts, spread over treaty years 2012-2017, resulting from deteriorations in claims experience. • $1.2 million of adverse loss development on surety contracts, net of retrocession recoveries, due to deteriorations in circumstances on several previously reported claims for a single legacy contract. • The remaining $0.6 million of adverse loss development was due to development across various other property, casualty and other contracts. For the three months ended March 31, 2017 , the net loss reserves on prior accident years increased by $5.0 million , primarily related to the adverse loss development on Florida homeowners’ insurance contracts relating to the practice of “assignment of benefits” and two large claims reported on a surety contract. There were no other significant developments of prior period reserves during the three months ended March 31, 2017 . |
RETROCESSION
RETROCESSION | 3 Months Ended |
Mar. 31, 2018 | |
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 coverage that provides 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 three months ended March 31, 2018 , loss and loss adjustment expenses incurred of $95.8 million ( 2017 : $104.8 million ), reported on the condensed consolidated statements of income, are net of loss and loss expenses recovered and recoverable of $19.4 million ( 2017 : $0.1 million ). 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 March 31, 2018 , the Company had losses receivable and loss reserves recoverable of $33.8 million ( December 31, 2017 : $26.3 million ) from unrated retrocessionaires which were secured by cash and collateral held in trust accounts for the benefit of the Company. At March 31, 2018 , $5.7 million ( December 31, 2017 : $3.1 million ) of losses recoverable were from retrocessionaires rated A- or above by A.M. Best. The Company regularly evaluates the financial condition of its retrocessionaires to assess the ability of the retrocessionaires to honor their respective obligations. At March 31, 2018 and December 31, 2017 , no provision for uncollectible losses recoverable was considered necessary. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2018 | |
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 that is administered by the Compensation Committee of the Board of Directors. The Company’s shares authorized for issuance pursuant to the stock incentive plan include 5,000,000 ( December 31, 2017 : 5,000,000 ) Class A ordinary shares. As of March 31, 2018 , 1,056,451 ( December 31, 2017 : 1,271,154 ) Class A ordinary shares remained available for future issuance under the Company’s stock incentive plan. 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, net of any estimated forfeitures. For the three months ended March 31, 2018 , 189,329 ( 2017 : 113,955 ) Class A ordinary shares were issued to employees pursuant to the Company’s stock incentive plan. The majority of these shares contain certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability. The 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 three months ended March 31, 2018 , 30,660 of the restricted shares granted contained service and performance conditions. These restricted shares will cliff vest 5.5 years from the date of issuance, subject to the satisfaction of both the service and performance conditions. For the three months ended March 31, 2018 , 2,279 ( 2017 : 46,319 ) restricted shares were forfeited by employees who left the Company prior to the expiration of the applicable vesting periods. For the three months ended March 31, 2018 , in accordance with U.S. GAAP, $0.02 million stock compensation expense ( 2017 : nil ) relating to the forfeited restricted shares was reversed. The restricted shares forfeited during the three months ended March 31, 2017 related to the Company’s former Chief Executive Officer (the “former CEO”) who resigned from the Company prior to the expiration of the applicable vesting periods. For the three months ended March 31, 2017, no stock compensation expense was reversed relating to the former CEO’s forfeited shares since the stock compensation relating to those restricted shares was reversed during the fourth quarter of 2016, when it was deemed likely that these restricted shares would be forfeited. The following table summarizes the activity for unvested outstanding restricted share awards during the three months ended March 31, 2018 : Number of Weighted Balance at December 31, 2017 331,510 $ 23.45 Granted 189,329 15.90 Vested (58,405 ) 32.21 Forfeited (2,279 ) 21.61 Balance at March 31, 2018 460,155 $ 19.24 Employee and Director Stock Options For the three months ended March 31, 2018 and 2017, no Class A ordinary share purchase options were granted. For the three months ended March 31, 2018 and 2017, no stock options were exercised by directors or employees resulting in no Class A ordinary shares issued. 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. For the three months ended March 31, 2018 , no stock options vested. For the three months ended March 31, 2017 , 71,335 stock options vested, relating to the resignation of the former CEO, which had a weighted average grant date fair value of $10.51 per share, pursuant to the former CEO’s deed of settlement and release. At March 31 , 2017 there was no remaining compensation cost to be recognized in future periods relating to the former CEO’s stock options as the expense was recognized in full as of December 31, 2016 when it was deemed likely that the stock options would vest. Employee and director stock option activity during the three months ended March 31, 2018 was as follows: Number of Weighted Weighted Intrinsic value ($ in millions) Weighted average remaining contractual term Balance at December 31, 2017 1,015,627 $ 23.55 $ 9.89 $ — 6.9 years Granted — — — Exercised — — — Balance at March 31, 2018 1,015,627 $ 23.55 $ 9.89 $ — 6.7 years 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 three months ended March 31, 2018 , 28,301 ( 2017 : 11,559 ) 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. For the three months ended March 31, 2018 , 648 ( 2017 : nil ) RSUs were forfeited by employees, resulting in an immaterial reversal ( 2017 : nil ) of stock compensation expense. Employee RSU activity during the three months ended March 31, 2018 was as follows: Number of Weighted Balance at December 31, 2017 22,798 $ 23.50 Granted 28,301 15.90 Vested (4,053 ) 32.21 Forfeited (648 ) 21.65 Balance at March 31, 2018 46,398 $ 18.13 For the three months ended March 31, 2018 and 2017 , the general and administrative expenses included stock compensation expense (net of forfeitures) of $1.3 million and $0.9 million , respectively, for the expensing of the fair value of stock options, restricted stock and RSUs granted to employees and directors, net of forfeitures. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Investment Advisory Agreement The Company and its reinsurance subsidiaries are 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”). Effective January 1, 2017, the venture agreement and the advisory agreements were amended and restated to replace the previous agreements dated January 1, 2014, and will expire on December 31, 2019 and renew automatically for successive three-year periods. 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 three months ended March 31, 2018 , no performance allocation was deducted due to the investment loss ( 2017 : $1.2 million ). 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 three months ended March 31, 2018 were management fees of $4.5 million ( 2017 : $4.3 million ). The management fees have been fully paid as of March 31, 2018 . 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 three months ended March 31, 2018 , there were no indemnification payments payable or paid by the Company. Non-controlling Interest in Related Party Joint Venture Non-controlling interests in related party joint venture represents DME’s share of the jointly held assets under the venture agreement. The joint venture created through the venture agreement has been consolidated in accordance with ASC 810, Consolidation (ASC 810). The Company has recorded DME’s minority interests as redeemable non-controlling interests in related party and non-controlling interests in related party in the condensed consolidated balance sheets. A portion of the non-controlling interest is subject to contractual withdrawal rights whereby DME, at its sole discretion, can withdraw its interest above the minimum capital required to be maintained in its capital accounts. This additional capital is therefore recorded on the Company’s condensed consolidated balance sheets within the mezzanine section as redeemable non-controlling interest in related party joint venture whereas the required minimum capital is recorded as non-controlling interests in related party joint venture within the equity section on the Company’s condensed consolidated balance sheet since it does not have withdrawal rights. The following table is a reconciliation of the beginning and ending carrying amounts of redeemable non-controlling interests in related party, non-controlling interests in related party and total non-controlling interests in related party for the three months ended March 31, 2018 and 2017 (see Note 1 for additional information on changes in the presentation of non-controlling interests): Redeemable non-controlling interest in related party joint venture Non-controlling interest in related party joint venture Total non-controlling interest in related party joint venture Three months ended March 31 Three months ended March 31 Three months ended March 31 2018 2017 2018 2017 2018 2017 Opening balance $ 7,169 $ 5,884 — $ 12,933 $ 11,561 — $ 20,102 $ 17,445 Income (loss) attributed to non-controlling interest (853 ) (76 ) — (1,473 ) 328 — (2,326 ) 252 Net contribution into (withdrawal from) non-controlling interest 389 — — (389 ) — — — — Ending balance $ 6,705 $ 5,808 $ 11,071 $ 11,889 $ 17,776 $ 17,697 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. As of March 31, 2018 , $37.8 million ( December 31, 2017 : $39.2 million ) of GRBK listed equities were included on the balance sheet as “equity securities, trading, at fair value”. The Company, along with certain affiliates of DME Advisors, collectively own 49% of the issued and outstanding common shares of GRBK. Under applicable securities laws, DME Advisors may be limited at times in its ability to trade GRBK shares on behalf of the Company. Service Agreement The Company has entered into a service agreement with DME Advisors, pursuant to which DME Advisors provides certain investor relations services to the Company for compensation of five thousand dollars per month (plus expenses). The agreement is automatically renewed annually until terminated by either the Company or DME Advisors for any reason with 30 days prior written notice to the other party. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Letters of Credit and Trusts At March 31, 2018 , the Company had the following letter of credit facilities, which automatically renew each year unless terminated by either party in accordance with the applicable required notice period: Facility Termination Date Notice period required for termination ($ in thousands) Butterfield Bank (Cayman) Limited $ 50,000 June 30, 2018 90 days prior to termination date Citibank Europe plc 400,000 October 11, 2018 120 days prior to termination date $ 450,000 On March 28, 2018, the Butterfield Bank facility was decreased from $100.0 million to $50.0 million As of March 31, 2018 , an aggregate amount of $193.8 million ( December 31, 2017 : $188.5 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 March 31, 2018 , total equity securities, restricted cash, and cash and cash equivalents with a fair value in the aggregate of $198.7 million ( December 31, 2017 : $200.4 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 March 31, 2018 and December 31, 2017 . In addition to the letters of credit, the Company has established regulatory trust arrangements for certain cedents. As of March 31, 2018 , collateral of $363.0 million ( December 31, 2017 : $377.9 million ) was provided to cedents in the form of regulatory trust accounts. Revolving Credit Facility The Company has entered into a secured revolving credit facility with The Bank of Nova Scotia (the “credit facility”), to provide funding for its investment activities. At March 31, 2018 , the Company had the ability to borrow $50.0 million (the “commitment”) under the credit facility and had borrowed $30.0 million ( December 31, 2017 : $25.0 million ). At March 31, 2018 , the interest rate on the credit facility was 2.87% ( December 31, 2017 : 2.47% ) and the Company had pledged $38.4 million ( December 31, 2017 : $37.7 million ) of its physical gold holdings as collateral against the borrowed funds. For the three months ended March 31, 2018 , interest expense pursuant to the credit facility was $0.2 million ( 2017 : nil ) and was included in net investment loss in the condensed consolidated statements of income. The credit facility matures on November 8, 2018 and can be extended for one year by the Company upon providing 120 days’ notice to the lender. The Company may terminate or reduce the commitment by giving 10-days’ notice prior to the effective date of termination or reduction and prepaying the applicable principal obligation and all interest accrued thereon. The credit facility contains 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 and restricts issuance of any debt without the consent of the credit facility provider. The Company was in compliance with all the covenants of each of these facilities as of March 31, 2018 . 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 March 31, 2018 . 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 March 31, 2018 . The total rent expense related to leased office space for the three months ended March 31, 2018 was $0.2 million ( 2017 : $0.2 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 March 31, 2018 , the Company had commitments to invest an additional $7.1 million ( December 31, 2017 : $6.5 million ) in private equity investments. Included in the schedule below are the minimum payment obligations relating to these investments as of March 31, 2018 . Schedule of Commitments and Contingencies The following is a schedule of future minimum payments required under the above commitments: 2018 2019 2020 2021 2022 Thereafter Total ($ in thousands) Operating lease obligations $ 233 $ 155 $ 155 $ 57 $ — $ — $ 600 Private equity and limited partnerships (1) 7,075 — — — — — 7,075 $ 7,308 $ 155 $ 155 $ 57 $ — $ — $ 7,675 (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, 2018 . 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 | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company manages its business on the basis of one operating segment, Property & Casualty Reinsurance. 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 Three months ended March 31 2018 2017 ($ in thousands) Property Commercial $ 3,896 2.3 % $ 5,170 2.6 % Motor 23,013 13.1 15,744 8.0 Personal 2,464 1.4 21,573 10.9 Total Property 29,373 16.8 42,487 21.5 Casualty General Liability 5,584 3.2 9,499 4.8 Motor Liability 84,625 48.3 78,341 39.7 Professional Liability 5,395 3.1 14,553 7.4 Workers' Compensation 7,380 4.2 10,536 5.4 Total Casualty 102,984 58.8 112,929 57.3 Other Accident & Health 28,738 16.4 23,739 12.1 Financial 11,447 6.5 12,056 6.1 Marine 1,095 0.6 2,223 1.1 Other Specialty 1,488 0.9 3,780 1.9 Total Other 42,768 24.4 41,798 21.2 $ 175,125 100.0 % $ 197,214 100.0 % Gross Premiums Written by Geographic Area of Risks Insured Three months ended March 31 2018 2017 ($ in thousands) U.S. and Caribbean $ 157,707 90.1 % $ 171,758 87.1 % Worldwide (1) 17,278 9.8 25,294 12.8 Europe 186 0.1 146 0.1 Asia (2) (46 ) — 16 — $ 175,125 100.0 % $ 197,214 100.0 % (1) “Worldwide” is comprised of contracts that reinsure risks in more than one geographic area and do not specifically exclude the U.S. (2) The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premium returned upon novation or commutation of contracts. |
SIGNIFICANT ACCOUNTING POLICI17
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Funds Withheld [Policy Text Block] | Funds Withheld Funds withheld include reinsurance balances retained by the Company on retroceded contracts as collateral in accordance with the contract terms. Any interest expense that the Company incurs while these funds are withheld, are included under net investment income (loss) in the condensed consolidated statements of income. |
Use of Estimates | Use of Estimates The preparation of condensed 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 condensed consolidated financial statements and the reported amounts of income and expenses during the period. Actual results could differ from these estimates. |
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 9 ). 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. Similarly for ceded contracts that do not transfer sufficient risk, deposit accounting is used and the contract is reported as a deposit asset. 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 the 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 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 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 upon the occurrence of a 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 contract period, are earned over the remaining coverage period. For additional premiums which are due on a contract that has no remaining coverage period, the additional premiums are earned in full when due. 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 Accounting Policy [Policy Text Block] | 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 March 31, 2018 and December 31, 2017 , 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. 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. The deposit method of accounting requires an asset or liability to be recognized based on the consideration paid or received. The deposit asset or liability balance is subsequently adjusted using the interest method with a corresponding income or expense recorded in the condensed consolidated statements of income as other income or expense. The Company’s deposit assets and liabilities are recorded in the condensed consolidated balance sheets under reinsurance balances receivable and reinsurance balances payable, respectively. At March 31, 2018 , deposit assets and deposit liabilities were $11.7 million and $36.9 million , respectively, ( December 31, 2017 : $19.4 million and $28.1 million , respectively). For the three months ended March 31, 2018 , interest expense and interest income on deposit accounted contracts were $0.1 million and $0.2 million , respectively. For the three months ended March 31, 2017 , there were no material interest expense or interest income on deposit accounted contracts. |
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 at least quarterly 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. Consideration paid by the Company for retroactive reinsurance that meets the conditions for reinsurance accounting (e.g. loss portfolio transfers) are reported as loss and loss adjustment expenses recoverable to the extent those amounts do not exceed the associated liabilities. If the amounts paid for retroactive reinsurance exceed the liabilities, the Company increases the related liabilities, at the time the reinsurance contract is effective, and the excess is charged to net income as losses incurred. If the liabilities exceed the amounts paid, the recoverable balance is increased to reflect the difference, and the resulting gain is deferred and amortized over the estimated loss payout period. Changes in the estimated amount of liabilities relating to the underlying reinsured contracts are recognized in net income in the period of the change. |
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 condensed 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 in accordance with the terms of the note. For notes receivable placed on non-accrual status, the notes are recorded excluding any accrued interest amount. 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. |
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 certain private equity fund investments, the Company has elected to measure the fair value using the net asset value practical expedient allowed under U.S. GAAP, and, accordingly, these investments are not classified as Level 1, 2 or 3 in the fair value hierarchy. 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 condensed 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 condensed 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 outstanding balances due from the defaulting party 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 condensed 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 condensed 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 condensed 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 condensed 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). |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company has no comprehensive income or loss, other than the net income or loss disclosed in the condensed 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 marginal rate of 21% . Verdant’s tax years 2014 and beyond, remain open and subject to examination by the IRS. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) . The new guidance is intended to improve the recognition and measurement of financial instruments. ASU 2016-01, among other things, requires equity investments to be measured at fair value with changes in fair value recognized in net income or loss, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. ASU 2016-01 affects public and private companies, not-for-profit organizations, and employee benefit plans that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2016-01 during the first quarter of fiscal year 2018 and the adoption of this guidance did not have any significant impact on the Company’s net income or loss or retained earnings. since the Company’s investments are classified as “trading” and the unrealized gains and losses are recognized in net income or loss. The Company has implemented the new disclosures required under ASU 2016-01 commencing from the first quarter of 2018. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for any organization in any interim or annual period. The Company currently has two operating leases for its office spaces as disclosed in Note 9 of the condensed consolidated financial statements which will be recognized as right-of-use asset upon adoption of ASU 2016-02. The Company is in the process of evaluating the impact of adopting ASU 2016-02 on the Company’s consolidated financial statements and anticipates implementing ASU 2016-02 during the first quarter of fiscal year 2019. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”) . ASU 2016-13 amends the guidance on reporting credits losses and affects loans, debt securities, trade receivables, reinsurance recoverables and other financial assets that have the contractual right to receive cash. The amendments are effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any organization for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is in the process of evaluating the impact of the requirements of ASU 2016-13 on the Company’s consolidated financial statements and anticipates implementing ASU 2016-13 during the first quarter of fiscal year 2020. In November 2016, the FASB issued ASU 2016-18, “Statements of Cash Flows - Restricted Cash (Topic 230)” (“ASU 2016-18”). ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents in the statement of cash flows and disclose the nature of the restrictions on cash and cash equivalents. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption was permitted. The Company adopted ASU 2016-18 during the first quarter of fiscal year 2018 and amended the presentation in the statement of cash flows to include the restricted cash and cash equivalents with cash and cash equivalents in the condensed consolidated statements of cash flows and retrospectively reclassified comparative periods presented. The adoption had no impact on the Company’s net income or loss or retained earnings. The FASB has issued ASU No. 2014-09, “Revenue from Contracts with Customers”, and related amendments, ASU 2015-14, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-05 and ASU 2017-13, (collectively, “Topic 606”). Topic 606 creates a new comprehensive revenue recognition standard that will serve as a single source of revenue guidance for all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other standards, such as insurance contracts. Topic 606 becomes effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted Topic 606 during the first quarter of the fiscal year 2018 and since all of the Company’s revenues relate to reinsurance contracts and investment income, the adoption of Topic 606 did not have a material impact on the Company’s revenues and related disclosures. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | 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. For restricted shares and RSUs with both service and performance vesting conditions, the expense is recognized based on management’s estimate of the probability of the performance conditions being achieved based on historical results and expectations of future results. If the performance conditions is expected to be met, the expense is attributed to the period for which the requisite service has been rendered. For restricted shares and RSUs with only service vesting conditions, the expense is recognized on a straight line basis over the vesting period, net of any estimated or expected forfeitures. The forfeiture rate is estimated based on the Company’s historical actual forfeitures relating to restricted shares and RSUs granted to employees. The forfeiture rate is reviewed annually and adjusted as necessary. No forfeiture rate is used for restricted shares granted to directors which vest over a twelve-month 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. In determining the grant date fair value, 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. 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. For share purchase options issued under the employee stock incentive plan, the compensation cost is calculated and expensed over the vesting periods on a graded vesting basis (see Note 7 ). 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 Currency Transactions and Translations Policy [Policy Text Block] | 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 condensed consolidated statements of income. |
SIGNIFICANT ACCOUNTING POLICI18
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Weighted Average Number of Shares | Three months ended March 31 2018 2017 Weighted average shares outstanding - basic 37,087,169 37,341,338 Effect of dilutive employee and director share-based awards — 35,311 Weighted average shares outstanding - diluted 37,087,169 37,376,649 Anti-dilutive stock options outstanding 1,015,627 335,991 Participating securities excluded from calculation of loss per share 460,155 — |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Fair Value Hierarchy | The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of March 31, 2018 : Fair value measurements as of March 31, 2018 Description Quoted prices in Significant other Significant Total ($ in thousands) Assets: Debt instruments $ — $ 18,465 $ 885 $ 19,350 Listed equity securities 943,121 12,134 — 955,255 Commodities 38,382 — — 38,382 Private and unlisted equity securities — — 6,135 6,135 $ 981,503 $ 30,599 $ 7,020 $ 1,019,122 Unlisted equity funds measured at net asset value (1) 25,610 Total investments $ 1,044,732 Financial contracts receivable $ 1,074 $ 53,057 $ — $ 54,131 Liabilities: Listed equity securities, sold not yet purchased $ (567,950 ) $ — $ — $ (567,950 ) Debt instruments, sold not yet purchased — (108,988 ) — (108,988 ) Total securities sold, not yet purchased $ (567,950 ) $ (108,988 ) $ — $ (676,938 ) Financial contracts payable $ — $ (15,397 ) $ — $ (15,397 ) (1) Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2017 : Fair value measurements as of December 31, 2017 Description Quoted prices in Significant other Significant Total ($ in thousands) Assets: Debt instruments $ — $ 6,300 $ 880 $ 7,180 Listed equity securities 1,181,150 22,522 — 1,203,672 Commodities 121,502 — — 121,502 Private and unlisted equity securities — — 6,108 6,108 $ 1,302,652 $ 28,822 $ 6,988 $ 1,338,462 Unlisted equity funds measured at net asset value (1) 24,522 Total investments $ 1,362,984 Financial contracts receivable $ 22 $ 12,871 $ — $ 12,893 Liabilities: Listed equity securities, sold not yet purchased $ (812,652 ) $ — $ — $ (812,652 ) Debt instruments, sold not yet purchased — (100,145 ) — (100,145 ) Total securities sold, not yet purchased $ (812,652 ) $ (100,145 ) $ — $ (912,797 ) Financial contracts payable $ — $ (22,222 ) $ — $ (22,222 ) (1) Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. | |
Fair Value Measurements Using Significant Unobservable Inputs | The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2018 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended March 31, 2018 Assets Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 880 $ 6,108 $ 6,988 Purchases — — — Sales — — — Issuances — — — Settlements — — — Total realized and unrealized gains (losses) and amortization included in earnings, net 5 27 32 Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance $ 885 $ 6,135 $ 7,020 | The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2017 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended March 31, 2017 Assets Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 654 $ 6,109 $ 6,763 Purchases — 1,750 1,750 Sales — — — Issuances — — — Settlements — — — Total realized and unrealized gains (losses) and amortization included in earnings, net 50 (15 ) 35 Transfers into Level 3 — — — Transfers out of Level 3 — (1,768 ) (1,768 ) Ending balance $ 704 $ 6,076 $ 6,780 |
Maturity Distribution for Debt Instruments | The maturity distribution for debt instruments held at March 31, 2018 and December 31, 2017 was as follows: March 31, 2018 December 31, 2017 Cost/ Fair Cost/ Fair ($ in thousands) Within one year $ 1,551 $ 243 $ 7,557 $ 441 From one to five years 1,143 236 — — From five to ten years 2,859 1,425 2,109 52 More than ten years 10,390 17,446 6,782 6,687 $ 15,943 $ 19,350 $ 16,448 $ 7,180 | |
Other Investments | At March 31, 2018 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 29,493 $ 8,889 $ — $ 38,382 Private and unlisted equity funds 25,374 6,371 — 31,745 $ 54,867 $ 15,260 $ — $ 70,127 At December 31, 2017 , the following securities were included in other investments: Cost Unrealized Unrealized Fair ($ in thousands) Commodities $ 101,184 $ 20,318 $ — $ 121,502 Private and unlisted equity funds 25,316 5,314 — 30,630 $ 126,500 $ 25,632 $ — $ 152,132 | |
Investments in Securities Sold, Not Yet Purchased | 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 condensed 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 a 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 March 31, 2018 , 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. $ (3,086 ) $ — $ (7 ) $ (3,093 ) Equities – listed (470,844 ) $ 16,131 (108,062 ) (562,775 ) Exchange traded funds (5,872 ) 696 — (5,176 ) Sovereign debt – Non U.S. (96,230 ) — (9,664 ) (105,894 ) $ (576,032 ) $ 16,827 $ (117,733 ) $ (676,938 ) At December 31, 2017 , 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. $ — $ — $ — $ — Equities – listed (643,148 ) 17,541 (187,045 ) (812,652 ) Exchange traded funds — — — — Sovereign debt – Non U.S. (96,231 ) — (3,914 ) (100,145 ) $ (739,379 ) $ 17,541 $ (190,959 ) $ (912,797 ) | |
Fair values of Financial Contracts Outstanding | At March 31, 2018 , 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 Futures USD 84,852 $ 1,074 Interest rate options USD 1,104,000 923 Interest rate swaps JPY 22,565 148 Put options USD 112,568 47,301 Total return swaps – equities EUR/KRW/RON/USD 93,723 4,685 Warrants and rights on listed equities USD 2 — Total financial contracts receivable, at fair value $ 54,131 Financial contracts payable Call options USD 470 $ (112 ) Commodity Swaps USD 19,487 (141 ) Forwards KRW 63,293 (192 ) Put options USD 29,278 (13,069 ) Total return swaps – equities EUR/USD 33,311 (1,883 ) Total financial contracts payable, at fair value $ (15,397 ) (1) USD = US Dollar; EUR = Euro; JPY = Japanese Yen; KRW = Korean Won; RON = Romanian New Leu. At December 31, 2017 , the fair values of financial contracts outstanding were as follows: Financial Contracts Listing currency (1) Notional amount of Fair value of net assets ($ in thousands) Financial contracts receivable Call options USD 2,656 $ 91 Commodity Swaps USD 17,833 2,142 Forwards KRW 41,379 801 Futures USD 5,874 12 Interest rate swaps JPY 21,269 479 Put options (2) USD 155 1 Total return swaps – equities EUR/GBP/USD 34,965 9,357 Warrants and rights on listed equities EUR/USD 29 10 Total financial contracts receivable, at fair value $ 12,893 Financial contracts payable Commodity Swaps USD 26,795 $ (353 ) Put options USD 130 (14 ) Total return swaps – equities EUR/GBP/KRW/RON/USD 60,663 (21,855 ) Total financial contracts payable, at fair value $ (22,222 ) (1) USD = US Dollar; EUR = Euro; GBP = British Pound; JPY = Japanese Yen; KRW = Korean Won; RON = Romanian New Leu. (2) Includes options on the Chinese Yuan, denominated in U.S. dollars. | |
Gain (Loss) on derivatives recognized in income | During the three months ended March 31, 2018 and 2017 , 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 Three months ended March 31 2018 2017 ($ in thousands) Forwards Net investment income (loss) $ (123 ) $ 623 Futures Net investment income (loss) (1,949 ) (513 ) Interest rate options Net investment income (loss) (637 ) — Interest rate swaps Net investment income (loss) (331 ) 105 Options, warrants, and rights Net investment income (loss) 1,087 (7,528 ) Commodity swaps Net investment income (loss) 1,848 (6,959 ) Total return swaps – equities Net investment income (loss) (19,031 ) 10,311 Total $ (19,136 ) $ (3,961 ) | |
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | For the three months ended March 31, 2018 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2018 Three months ended March 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Forwards $ 54,372 $ 33,328 Futures 335,241 257,912 Interest rate options (1) 1,104,000 — Options, warrants and rights (1) 172,580 17,366 Commodity swaps — 28,975 Total return swaps 8,637 19,136 Total $ 1,674,830 $ 356,717 (1) Exited amount excludes derivatives which expired or were exercised during the period. For the three months ended March 31, 2017 , the Company’s volume of derivative activities (based on notional amounts) was as follows: 2017 Three months ended March 31 Derivatives not designated as hedging instruments (notional amounts) Entered Exited ($ in thousands) Forwards $ 3,476 $ — Futures 29,510 24,069 Options, warrants and rights (1) 347,918 110,102 Commodity swaps — 8,182 Total return swaps 232,118 60,607 Total $ 613,022 $ 202,960 (1) Exited amount excludes derivatives which expired or were exercised during the period. | |
Offsetting assets and liabilities | As of March 31, 2018 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: March 31, 2018 (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 $ 54,131 $ — $ 54,131 $ (15,397 ) $ (23,290 ) $ 15,444 Financial contracts payable (15,397 ) — (15,397 ) 15,397 — — As of December 31, 2017 , the gross and net amounts of derivative instruments and the cash collateral applicable to derivative instruments were as follows: December 31, 2017 (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 $ 12,893 $ — $ 12,893 $ (5,128 ) $ (1,336 ) $ 6,429 Financial contracts payable (22,222 ) — (22,222 ) 5,128 17,094 — | |
Debt instruments | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities, Debt and Equities | Debt instruments, trading At March 31, 2018 , the following investments were included in debt instruments: Cost/amortized cost Unrealized gains Unrealized losses Fair ($ in thousands) Corporate debt – U.S. $ 3,437 $ — $ (2,464 ) $ 973 Corporate debt – Non U.S. 2,109 — (2,082 ) 27 Municipal debt – U.S. 10,397 7,953 — 18,350 Total debt instruments $ 15,943 $ 7,953 $ (4,546 ) $ 19,350 At December 31, 2017 , the following investments were included in debt instruments: Cost/amortized cost Unrealized gains Unrealized losses Fair ($ in thousands) Corporate debt – U.S. $ 8,508 $ — $ (7,186 ) $ 1,322 Corporate debt – Non U.S. 2,109 — (2,057 ) 52 Municipal debt – U.S. 5,831 — (25 ) 5,806 Total debt instruments $ 16,448 $ — $ (9,268 ) $ 7,180 | |
Total equity securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading securities, Debt and Equities | At March 31, 2018 , the following long positions were included in equity securities, trading: Cost Unrealized Unrealized Fair ($ in thousands) Equities – listed $ 863,334 $ 126,207 $ (34,286 ) $ 955,255 Total equity securities $ 863,334 $ 126,207 $ (34,286 ) $ 955,255 At December 31, 2017 , the following long positions were included in equity securities, trading: Cost Unrealized Unrealized Fair ($ in thousands) Equities – listed $ 1,014,426 $ 208,350 $ (19,104 ) $ 1,203,672 Total equity securities $ 1,014,426 $ 208,350 $ (19,104 ) $ 1,203,672 |
LOSS AND LOSS ADJUSTMENT EXPE20
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block] | At March 31, 2018 and December 31, 2017 , loss and loss adjustment expense reserves were comprised of the following: Consolidated March 31, 2018 December 31, 2017 ($ in thousands) Case reserves $ 183,013 $ 178,088 IBNR 301,586 286,292 Total $ 484,599 $ 464,380 At March 31, 2018 and December 31, 2017 , the loss and loss adjustment expense reserves relating to health were $23.9 million and $22.2 million , respectively. A summary of changes in outstanding loss and loss adjustment expense reserves for the three months ended March 31, 2018 and 2017 is as follows: Consolidated 2018 2017 ($ in thousands) Gross balance at January 1 $ 464,380 $ 306,641 Less: Losses recoverable (29,459 ) (2,704 ) Net balance at January 1 434,921 303,937 Incurred losses related to: Current year 98,558 99,807 Prior years (2,734 ) 5,005 Total incurred 95,824 104,812 Paid losses related to: Current year (17,161 ) (15,930 ) Prior years (69,703 ) (55,920 ) Total paid (86,864 ) (71,850 ) Loss portfolio transfer — — Foreign currency revaluation 1,236 549 Net balance at March 31 445,117 337,448 Add: Losses recoverable 39,482 2,582 Gross balance at March 31 $ 484,599 $ 340,030 The changes in the outstanding loss and loss adjustment expense reserves for health claims for the three months ended March 31, 2018 and 2017 are as follows: Health 2018 2017 ($ in thousands) Gross balance at January 1 $ 22,181 $ 18,993 Less: Losses recoverable — — Net balance at January 1 22,181 18,993 Incurred losses related to: Current year 11,992 10,015 Prior years 830 (261 ) Total incurred 12,822 9,754 Paid losses related to: Current year (1,872 ) (2,123 ) Prior years (9,231 ) (9,416 ) Total paid (11,103 ) (11,539 ) Foreign currency revaluation — — Net balance at March 31 23,900 17,208 Add: Losses recoverable — — Gross balance at March 31 $ 23,900 $ 17,208 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Stock Options, Activity | Employee and director stock option activity during the three months ended March 31, 2018 was as follows: Number of Weighted Weighted Intrinsic value ($ in millions) Weighted average remaining contractual term Balance at December 31, 2017 1,015,627 $ 23.55 $ 9.89 $ — 6.9 years Granted — — — Exercised — — — Balance at March 31, 2018 1,015,627 $ 23.55 $ 9.89 $ — 6.7 years |
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 | Number of Weighted Balance at December 31, 2017 331,510 $ 23.45 Granted 189,329 15.90 Vested (58,405 ) 32.21 Forfeited (2,279 ) 21.61 Balance at March 31, 2018 460,155 $ 19.24 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Employee RSU activity during the three months ended March 31, 2018 was as follows: Number of Weighted Balance at December 31, 2017 22,798 $ 23.50 Granted 28,301 15.90 Vested (4,053 ) 32.21 Forfeited (648 ) 21.65 Balance at March 31, 2018 46,398 $ 18.13 |
RELATED PARTY TRANSACTIONS Nonc
RELATED PARTY TRANSACTIONS Noncontolling Interest (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest Disclosure [Text Block] | Redeemable non-controlling interest in related party joint venture Non-controlling interest in related party joint venture Total non-controlling interest in related party joint venture Three months ended March 31 Three months ended March 31 Three months ended March 31 2018 2017 2018 2017 2018 2017 Opening balance $ 7,169 $ 5,884 — $ 12,933 $ 11,561 — $ 20,102 $ 17,445 Income (loss) attributed to non-controlling interest (853 ) (76 ) — (1,473 ) 328 — (2,326 ) 252 Net contribution into (withdrawal from) non-controlling interest 389 — — (389 ) — — — — Ending balance $ 6,705 $ 5,808 $ 11,071 $ 11,889 $ 17,776 $ 17,697 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Letters of Credit Facilities | At March 31, 2018 , the Company had the following letter of credit facilities, which automatically renew each year unless terminated by either party in accordance with the applicable required notice period: Facility Termination Date Notice period required for termination ($ in thousands) Butterfield Bank (Cayman) Limited $ 50,000 June 30, 2018 90 days prior to termination date Citibank Europe plc 400,000 October 11, 2018 120 days prior to termination date $ 450,000 |
Schedule of Commitments and Contingencies, Fiscal Year Maturity Schedule | Schedule of Commitments and Contingencies The following is a schedule of future minimum payments required under the above commitments: 2018 2019 2020 2021 2022 Thereafter Total ($ in thousands) Operating lease obligations $ 233 $ 155 $ 155 $ 57 $ — $ — $ 600 Private equity and limited partnerships (1) 7,075 — — — — — 7,075 $ 7,308 $ 155 $ 155 $ 57 $ — $ — $ 7,675 (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, 2018 . |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
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 Three months ended March 31 2018 2017 ($ in thousands) Property Commercial $ 3,896 2.3 % $ 5,170 2.6 % Motor 23,013 13.1 15,744 8.0 Personal 2,464 1.4 21,573 10.9 Total Property 29,373 16.8 42,487 21.5 Casualty General Liability 5,584 3.2 9,499 4.8 Motor Liability 84,625 48.3 78,341 39.7 Professional Liability 5,395 3.1 14,553 7.4 Workers' Compensation 7,380 4.2 10,536 5.4 Total Casualty 102,984 58.8 112,929 57.3 Other Accident & Health 28,738 16.4 23,739 12.1 Financial 11,447 6.5 12,056 6.1 Marine 1,095 0.6 2,223 1.1 Other Specialty 1,488 0.9 3,780 1.9 Total Other 42,768 24.4 41,798 21.2 $ 175,125 100.0 % $ 197,214 100.0 % |
Gross Premiums Written by Geographic Area of Risks Insured | Gross Premiums Written by Geographic Area of Risks Insured Three months ended March 31 2018 2017 ($ in thousands) U.S. and Caribbean $ 157,707 90.1 % $ 171,758 87.1 % Worldwide (1) 17,278 9.8 25,294 12.8 Europe 186 0.1 146 0.1 Asia (2) (46 ) — 16 — $ 175,125 100.0 % $ 197,214 100.0 % (1) “Worldwide” is comprised of contracts that reinsure risks in more than one geographic area and do not specifically exclude the U.S. (2) The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premium returned upon novation or commutation of contracts. |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES Cash Flow, Supplemental cash equivalents reconciliation (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Cash, cash equivalents and restricted cash supplemental [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | March 31, 2018 December 31, 2017 ($ in thousands) Cash and cash equivalents $ 37,454 $ 27,285 Restricted cash and cash equivalents 1,254,055 1,503,813 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 1,291,509 $ 1,531,098 |
SIGNIFICANT ACCOUNTING POLICI26
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Line Items] | ||||
Cash and cash equivalents | $ 37,454 | $ 27,285 | ||
Premium deficiency loss | 0 | 0 | ||
Profit commission reserves | 19,300 | 11,900 | ||
Profit commission expense | 8,000 | $ 2,700 | ||
Notes receivable balance related to note placed on non-accrual status | 12,900 | 14,400 | ||
Accrued interest | 0 | 100 | ||
Deposit Contracts, Assets | 11,700 | 19,400 | ||
Deposit Contracts, Liabilities | 36,900 | 28,100 | ||
Interest Expense, Other | 100 | |||
Interest Income, Other | 200 | |||
Restricted cash and cash equivalents | 1,254,055 | 1,503,813 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 1,291,509 | $ 1,382,020 | $ 1,531,098 | $ 1,242,509 |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share Reconciliation (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Weighted average shares outstanding - basic | 37,087,169 | 37,341,338 |
Effect of dilutive employee and director share-based awards | 0 | 35,311 |
Weighted average shares outstanding - diluted | 37,087,169 | 37,376,649 |
Stock Options | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Anti-dilutive stock options outstanding | 1,015,627 | 335,991 |
Restricted stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Anti-dilutive stock options outstanding | 460,155 | 0 |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES Income taxes (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Verdant | |
Income Taxes [Line Items] | |
Income tax rate | 21.00% |
GRIL | Ireland | |
Income Taxes [Line Items] | |
Tax rate on trading income | 12.50% |
Tax rate on non-trading income | 25.00% |
FINANCIAL INSTRUMENTS Schedule
FINANCIAL INSTRUMENTS Schedule of Investments Categorized by Level of Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets: | $ 1,019,122 | $ 1,338,462 | |
Debt instruments | 19,350 | 7,180 | |
Listed equity securities | 955,255 | 1,203,672 | |
Commodities | 38,382 | 121,502 | |
Private and unlisted equity securities | 6,135 | 6,108 | |
Unlisted equity funds measured at net asset value (1) | [1] | 25,610 | 24,522 |
Total investments | 1,044,732 | 1,362,984 | |
Financial contracts receivable | 54,131 | 12,893 | |
Listed equity securities, sold not yet purchased | (567,950) | (812,652) | |
Debt instruments, sold not yet purchased | (108,988) | (100,145) | |
Total securities sold, not yet purchased | (676,938) | (912,797) | |
Financial contracts payable | (15,397) | (22,222) | |
Quoted prices in active markets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets: | 981,503 | 1,302,652 | |
Debt instruments | 0 | 0 | |
Listed equity securities | 943,121 | 1,181,150 | |
Commodities | 38,382 | 121,502 | |
Private and unlisted equity securities | 0 | 0 | |
Financial contracts receivable | 1,074 | 22 | |
Listed equity securities, sold not yet purchased | (567,950) | (812,652) | |
Debt instruments, sold not yet purchased | 0 | 0 | |
Total securities sold, not yet purchased | (567,950) | (812,652) | |
Financial contracts payable | 0 | 0 | |
Significant other observable inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets: | 30,599 | 28,822 | |
Debt instruments | 18,465 | 6,300 | |
Listed equity securities | 12,134 | 22,522 | |
Commodities | 0 | 0 | |
Private and unlisted equity securities | 0 | 0 | |
Financial contracts receivable | 53,057 | 12,871 | |
Listed equity securities, sold not yet purchased | 0 | 0 | |
Debt instruments, sold not yet purchased | (108,988) | (100,145) | |
Total securities sold, not yet purchased | (108,988) | (100,145) | |
Financial contracts payable | (15,397) | (22,222) | |
Significant unobservable inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets: | 7,020 | 6,988 | |
Debt instruments | 885 | 880 | |
Listed equity securities | 0 | 0 | |
Commodities | 0 | 0 | |
Private and unlisted equity securities | 6,135 | 6,108 | |
Financial contracts receivable | 0 | 0 | |
Listed equity securities, sold not yet purchased | 0 | 0 | |
Debt instruments, sold not yet purchased | 0 | 0 | |
Total securities sold, not yet purchased | 0 | 0 | |
Financial contracts payable | $ 0 | $ 0 | |
[1] | Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. |
FINANCIAL INSTRUMENTS Fair Valu
FINANCIAL INSTRUMENTS Fair Value Hierarchy- Additional Information (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | $ 7,020,000 | $ 6,780,000 | $ 6,988,000 | $ 6,763,000 | |
Unlisted equity funds measured at net asset value (1) | [1] | 25,610,000 | 24,522,000 | ||
Transfers out of Level 3 | 0 | (1,768,000) | |||
Transfers from Level 2 to Level 1 due to lock-up period restriction expiration | 0 | 0 | |||
Total realized and unrealized gains (losses) and amortization included in earnings, net | 35,000 | ||||
Transfers into Level 3 | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | 1,750,000 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Issuances | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Settlements | 0 | 0 | |||
Quoted prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers out of Level 3 | 0 | ||||
Net investment income (loss) | |||||
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 | 0 | 0 | |||
Change in unrealized gains | 0 | 200,000 | |||
Debt instruments | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 885,000 | 704,000 | 880,000 | 654,000 | |
Transfers out of Level 3 | 0 | 0 | |||
Total realized and unrealized gains (losses) and amortization included in earnings, net | 5,000 | 50,000 | |||
Transfers into Level 3 | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Issuances | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Settlements | 0 | 0 | |||
Private equity and limited partnerships (1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | 6,135,000 | 6,076,000 | $ 6,108,000 | $ 6,109,000 | |
Transfers out of Level 3 | 0 | (1,768,000) | |||
Total realized and unrealized gains (losses) and amortization included in earnings, net | 27,000 | (15,000) | |||
Transfers into Level 3 | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | 0 | 1,750,000 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Sales | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Issuances | 0 | 0 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Settlements | 0 | 0 | |||
Private equity and limited partnerships (1) | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers out of Level 3 | 0 | ||||
Equity Securities [Member] | Quoted prices in active markets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers out of Level 3 | 0 | ||||
Transfers into Level 3 | 0 | 0 | |||
Equity Securities [Member] | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers out of Level 3 | 1,768,000 | ||||
Financial contracts receivable | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers out of Level 3 | 0 | 0 | |||
Transfers into Level 3 | 0 | 0 | |||
Financial contracts payable | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | 32,000 | ||||
Financial contracts payable | Significant other observable inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers out of Level 3 | 0 | ||||
Transfers into Level 3 | $ 0 | $ 0 | |||
[1] | Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. |
FINANCIAL INSTRUMENTS Level 3 r
FINANCIAL INSTRUMENTS Level 3 reconciliation (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Estimate of Fair Value Measurement [Member] | Equity Funds [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Unlisted equity funds measured at net asset value (1) | $ 25.6 | $ 24.5 |
FINANCIAL INSTRUMENTS Schedul32
FINANCIAL INSTRUMENTS Schedule of Investments Included in Debt Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Cost/amortized cost | $ 15,943 | $ 16,448 | |
Debt instruments | 19,350 | 7,180 | |
Corporate debt – U.S. | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Cost/amortized cost | 3,437 | 8,508 | |
Unrealized gains | 0 | $ 0 | |
Unrealized losses | (2,464) | (7,186) | |
Debt instruments | 973 | 1,322 | |
Corporate debt – Non U.S. | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Cost/amortized cost | 2,109 | 2,109 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (2,082) | (2,057) | |
Debt instruments | 27 | 52 | |
Municipal debt – U.S. | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Cost/amortized cost | 10,397 | 5,831 | |
Unrealized gains | 7,953 | 0 | |
Unrealized losses | 0 | (25) | |
Debt instruments | 18,350 | 5,806 | |
Total debt instruments | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Cost/amortized cost | 15,943 | $ 16,448 | |
Unrealized gains | 7,953 | 0 | |
Unrealized losses | $ (4,546) | $ (9,268) |
FINANCIAL INSTRUMENTS Schedul33
FINANCIAL INSTRUMENTS Schedule of Maturity of Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financial Instruments [Abstract] | ||
Debt instruments, trading, within one year, cost | $ 1,551 | $ 7,557 |
Debt instruments, trading, within one year, fair value | 243 | 441 |
Debt instruments, trading, from one to five years, cost | 1,143 | 0 |
Debt instruments, trading, from one to five years, fair value | 236 | 0 |
Debt instruments, trading, from five to ten years, cost | 2,859 | 2,109 |
Debt instruments, trading, from five to ten years, fair value | 1,425 | 52 |
Debt instruments, trading, more than ten years, cost | 10,390 | 6,782 |
Debt instruments, trading, more than ten years, fair value | 17,446 | 6,687 |
Cost/ amortized cost | 15,943 | 16,448 |
Debt instruments | $ 19,350 | $ 7,180 |
FINANCIAL INSTRUMENTS Schedul34
FINANCIAL INSTRUMENTS Schedule of Investments in Equity Securities Trading (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/amortized cost | $ 15,943 | $ 16,448 |
Equity securities, trading, at fair value | 955,255 | 1,203,672 |
Equities – listed | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/amortized cost | 863,334 | 1,014,426 |
Unrealized gains | 126,207 | 208,350 |
Unrealized losses | (34,286) | (19,104) |
Equity securities, trading, at fair value | 955,255 | 1,203,672 |
Total equity securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost/amortized cost | 863,334 | 1,014,426 |
Unrealized gains | 126,207 | 208,350 |
Unrealized losses | $ (34,286) | $ (19,104) |
FINANCIAL INSTRUMENTS Schedul35
FINANCIAL INSTRUMENTS Schedule of Other Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Securities Owned Not Readily Marketable | $ 4,000 | $ 3,900 |
Cost | 54,867 | 126,500 |
Unrealized gains | 15,260 | 25,632 |
Unrealized losses | 0 | 0 |
Fair value | 70,127 | 152,132 |
Equity Funds [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments | 7,100 | 6,500 |
Commodities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost | 29,493 | 101,184 |
Unrealized gains | 8,889 | 20,318 |
Unrealized losses | 0 | 0 |
Fair value | 38,382 | 121,502 |
Private and unlisted equity securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost | 25,374 | 25,316 |
Unrealized gains | 6,371 | 5,314 |
Unrealized losses | 0 | 0 |
Fair value | $ 31,745 | $ 30,630 |
FINANCIAL INSTRUMENTS NAV Instr
FINANCIAL INSTRUMENTS NAV Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Unlisted equity funds measured at net asset value (1) | [1] | $ 25,610 | $ 24,522 |
Percentage of funds that have investment restrictions | 100.00% | ||
[1] | Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. |
FINANCIAL INSTRUMENTS Investmen
FINANCIAL INSTRUMENTS Investments in Securities Sold, Not Yet Purchased (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Corporate debt – U.S. | |||
Investments Sold, Not yet Purchased [Line Items] | |||
Unrealized gains | $ 0 | $ 0 | |
Unrealized losses | (2,464) | $ (7,186) | |
Total equity securities | |||
Investments Sold, Not yet Purchased [Line Items] | |||
Unrealized gains | 126,207 | $ 208,350 | |
Unrealized losses | (34,286) | (19,104) | |
Securities Sold, Not yet Purchased | |||
Investments Sold, Not yet Purchased [Line Items] | |||
Proceeds | (576,032) | (739,379) | |
Unrealized gains | 16,827 | 17,541 | |
Unrealized losses | (117,733) | (190,959) | |
Fair value | (676,938) | (912,797) | |
Securities Sold, Not yet Purchased | Corporate debt – U.S. | |||
Investments Sold, Not yet Purchased [Line Items] | |||
Proceeds | (3,086) | 0 | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (7) | 0 | |
Fair value | (3,093) | ||
Securities Sold, Not yet Purchased | Total equity securities | |||
Investments Sold, Not yet Purchased [Line Items] | |||
Proceeds | (470,844) | (643,148) | |
Unrealized gains | 16,131 | 17,541 | |
Unrealized losses | (108,062) | (187,045) | |
Fair value | (562,775) | (812,652) | |
Securities Sold, Not yet Purchased | Exchange traded funds | |||
Investments Sold, Not yet Purchased [Line Items] | |||
Proceeds | (5,872) | 0 | |
Unrealized gains | 696 | 0 | |
Unrealized losses | 0 | 0 | |
Fair value | (5,176) | 0 | |
Securities Sold, Not yet Purchased | Sovereign debt – Non U.S. | |||
Investments Sold, Not yet Purchased [Line Items] | |||
Proceeds | (96,230) | (96,231) | |
Unrealized gains | 0 | 0 | |
Unrealized losses | (9,664) | (3,914) | |
Fair value | $ (105,894) | $ (100,145) |
FINANCIAL INSTRUMENTS Schedul38
FINANCIAL INSTRUMENTS Schedule of Fair Value of Financial Contracts Outstanding (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Financial contracts receivable | $ 54,131 | $ 12,893 |
Financial contracts payable | (15,397) | (22,222) |
Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable | 54,131 | 12,893 |
Financial contracts payable | ||
Derivative [Line Items] | ||
Financial contracts payable | (15,397) | (22,222) |
Call options | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 1,104,000 | 2,656 |
Financial contracts receivable | 923 | 91 |
Call options | Financial contracts payable | ||
Derivative [Line Items] | ||
Financial contracts payable, Notional amount of underlying instruments | 470 | |
Financial contracts payable | (112) | |
Commodity Swaps | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 17,833 | |
Financial contracts receivable | 2,142 | |
Commodity Swaps | Financial contracts payable | ||
Derivative [Line Items] | ||
Financial contracts payable, Notional amount of underlying instruments | 19,487 | 26,795 |
Financial contracts payable | (141) | (353) |
Interest rate swaps | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 22,565 | 21,269 |
Financial contracts receivable | 148 | 479 |
Forwards | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 41,379 | |
Financial contracts receivable | 801 | |
Forwards | Financial contracts payable | ||
Derivative [Line Items] | ||
Financial contracts payable, Notional amount of underlying instruments | 63,293 | |
Financial contracts payable | (192) | |
Futures | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 84,852 | 5,874 |
Financial contracts receivable | 1,074 | 12 |
Put options | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 112,568 | 155 |
Financial contracts receivable | 47,301 | 1 |
Put options | Financial contracts payable | ||
Derivative [Line Items] | ||
Financial contracts payable, Notional amount of underlying instruments | 29,278 | 130 |
Financial contracts payable | (13,069) | (14) |
Total return swaps – equities | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 93,723 | 34,965 |
Financial contracts receivable | 4,685 | 9,357 |
Total return swaps – equities | Financial contracts payable | ||
Derivative [Line Items] | ||
Financial contracts payable, Notional amount of underlying instruments | 33,311 | 60,663 |
Financial contracts payable | (1,883) | (21,855) |
Warrants and rights on listed equities | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable, Notional amount of underlying instruments | 2 | 29 |
Financial contracts receivable | 0 | 10 |
NO MARKET (E.G. UNLISTED) [Member] | Put options | Financial contracts receivable | ||
Derivative [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 47,300 | 0 |
NO MARKET (E.G. UNLISTED) [Member] | Put options | Financial contracts payable | ||
Derivative [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | $ 13,000 | $ 0 |
FINANCIAL INSTRUMENTS Schedul39
FINANCIAL INSTRUMENTS Schedule of Reported Gains and Losses on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | $ (19,136) | $ (3,961) |
Commodity Swaps | Net investment income (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | 1,848 | (6,959) |
Forwards | Net investment income (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | (123) | 623 |
Futures | Net investment income (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | (1,949) | (513) |
Interest rate swaps | Net investment income (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | (637) | 0 |
Interest Rate Swaps | Net investment income (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | (331) | 105 |
Options, warrants, and rights | Net investment income (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | 1,087 | (7,528) |
Total return swaps – equities | Net investment income (loss) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives recognized in income | $ (19,031) | $ 10,311 |
FINANCIAL INSTRUMENTS Schedul40
FINANCIAL INSTRUMENTS Schedule of Volumes of Derivative Activities (Details) - Derivatives not designated as hedging instruments (notional amounts) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
Derivative [Line Items] | ||||
Entered | $ 1,674,830 | $ 613,022 | ||
Exited | 356,717 | 202,960 | ||
Forwards | ||||
Derivative [Line Items] | ||||
Entered | 54,372 | 3,476 | ||
Exited | 33,328 | 0 | ||
Futures | ||||
Derivative [Line Items] | ||||
Entered | 335,241 | 29,510 | ||
Exited | 257,912 | 24,069 | ||
Interest rate swaps | ||||
Derivative [Line Items] | ||||
Entered | 1,104,000 | |||
Exited | 0 | |||
Options, warrants and rights (1) | ||||
Derivative [Line Items] | ||||
Entered | 172,580 | 347,918 | ||
Exited | 17,366 | [1] | 110,102 | [2] |
Commodity Swaps | ||||
Derivative [Line Items] | ||||
Entered | 0 | 0 | ||
Exited | 28,975 | 8,182 | ||
Total return swaps – equities | ||||
Derivative [Line Items] | ||||
Entered | 8,637 | 232,118 | ||
Exited | $ 19,136 | $ 60,607 | ||
[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 Schedul41
FINANCIAL INSTRUMENTS Schedule of Gross and Net Amounts of Financial Instruments and Cash Collateral (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Financial contracts receivable, Gross amounts of recognized assets | $ 54,131 | $ 12,893 |
Financial contracts receivable, Gross amounts offset in the balance sheet | 0 | 0 |
Financial contracts receivable | 54,131 | 12,893 |
Financial contracts receivable, Financial instruments available for offset | (15,397) | (5,128) |
Financial contracts receivable, Cash collateral (received) pledged | (23,290) | (1,336) |
Financial contracts receivable, Net amount of asset (liability) | 15,444 | 6,429 |
Financial contracts payable, Gross amounts of recognized assets (liabilities) | (15,397) | (22,222) |
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 | (15,397) | (22,222) |
Financial contracts payable, Financial instruments available for offset | 15,397 | 5,128 |
Financial contracts payable, Cash collateral (received) pledged | 0 | 17,094 |
Financial contracts payable, Net amount of asset (liability) | 0 | 0 |
Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable | 54,131 | 12,893 |
Put Option [Member] | Financial contracts receivable | ||
Derivative [Line Items] | ||
Financial contracts receivable | 47,301 | 1 |
Put Option [Member] | NO MARKET (E.G. UNLISTED) [Member] | Financial contracts receivable | ||
Derivative [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 47,300 | $ 0 |
DUE TO PRIME BROKERS (Details)
DUE TO PRIME BROKERS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Due to Prime Brokers [Line Items] | ||
Amounts due to prime brokers | $ 544,800 | $ 647,700 |
Payables to Broker-Dealers and Clearing Organizations | $ 574,800 | 672,700 |
GLRE | ||
Due to Prime Brokers [Line Items] | ||
Maximum temporary leverage | 30.00% | |
Maximum long-term leverage | 15.00% | |
GRIL | ||
Due to Prime Brokers [Line Items] | ||
Maximum temporary leverage | 20.00% | |
Maximum long-term leverage | 5.00% | |
Line of Credit [Member] | ||
Due to Prime Brokers [Line Items] | ||
Other Short-term Borrowings | $ 30,000 | $ 25,000 |
LOSS AND LOSS ADJUSTMENT EXPE43
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Case reserves | $ 183,013,000 | $ 178,088,000 | ||
IBNR | 301,586,000 | 286,292,000 | ||
Gross balance at January 1 | 464,380,000 | $ 306,641,000 | ||
Less: Losses recoverable | 39,482,000 | 2,582,000 | 29,459,000 | $ 2,704,000 |
Net balance at January 1 | 434,921,000 | 303,937,000 | ||
Current year | 98,558,000 | 99,807,000 | ||
Prior years | (2,734,000) | (5,005,000) | ||
Total incurred | 95,824,000 | 104,812,000 | ||
Current year | (17,161,000) | (15,930,000) | ||
Prior years | (69,703,000) | (55,920,000) | ||
Total paid | 86,864,000 | 71,850,000 | ||
Liability for Unpaid Claims and Claims Adjustment Expense, Adjustments | 0 | 0 | ||
Foreign currency revaluation | (1,236,000) | (549,000) | ||
Net balance at March 31 | 445,117,000 | 337,448,000 | ||
Gross balance at March 31 | 484,599,000 | 340,030,000 | ||
Hurricane [Member] | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (6,100,000) | |||
Homeowners' property contracts [Member] | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (5,000,000) | |||
Surety Product Line [Member] | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (1,200,000) | |||
Professional Liability | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (3,200,000) | |||
Mortgages [Member] | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (3,500,000) | |||
General Liability | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | (1,900,000) | |||
Accident & Health | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Gross balance at January 1 | 22,181,000 | 18,993,000 | ||
Less: Losses recoverable | 0 | 0 | $ 0 | $ 0 |
Net balance at January 1 | 22,181,000 | 18,993,000 | ||
Current year | 11,992,000 | 10,015,000 | ||
Prior years | (830,000) | (261,000) | ||
Total incurred | 12,822,000 | 9,754,000 | ||
Current year | (1,872,000) | (2,123,000) | ||
Prior years | (9,231,000) | (9,416,000) | ||
Total paid | 11,103,000 | 11,539,000 | ||
Foreign currency revaluation | 0 | 0 | ||
Net balance at March 31 | 23,900,000 | 17,208,000 | ||
Gross balance at March 31 | 23,900,000 | $ 17,208,000 | ||
Other Specialty | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | $ (600,000) |
RETROCESSION (Details)
RETROCESSION (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses incurred, net | $ 95,824,000 | $ 104,812,000 | ||
Loss and loss expenses recovered and recoverable | 19,400,000 | 100,000 | ||
Loss and loss adjustment expenses recoverable | 39,482,000 | $ 2,582,000 | $ 29,459,000 | $ 2,704,000 |
Funds withheld | 15,610,000 | 23,579,000 | ||
Collateral Held in Trust | 363,000,000 | 377,900,000 | ||
Provision for uncollectible losses recoverable | 0 | 0 | ||
Unrated [Member] | ||||
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses recoverable | 33,800,000 | 26,300,000 | ||
AM Best, A- Rating [Member] | ||||
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses recoverable | $ 5,700,000 | $ 3,100,000 |
SHARE-BASED COMPENSATION Narrat
SHARE-BASED COMPENSATION Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 0 | 71,335 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 10 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0 | ||
Number of stock options exercised | 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 10.51 | ||
General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation expense | $ 1.3 | $ 0.9 | |
Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued from the exercise of stock options | 0 | ||
Stock options | Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares authorized for stock incentive plan | 5,000,000 | 5,000,000 | |
Shares available for future issuance relating to share purchase options granted to service provider | 1,056,451 | 1,271,154 | |
Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Number of RSUs issued to employees | 189,329 | ||
Stock Granted, Value, Share-based Compensation, Forfeited | $ 0 | $ 0 | |
Restricted stock | Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 189,329 | 113,955 | |
Number of restricted shares forfeited | 2,279 | 46,319 | |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years 6 months | ||
Performance Shares [Member] | Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of restricted shares forfeited | 30,660 | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Stock compensation expense reversed due to forfeitures | $ 0 | ||
Number of RSUs issued to employees | 28,301 | 11,559 | |
Grant Date [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | 0.00% | |
Vesting In Year One [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Vesting In Year Two [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Vesting In Year Three [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Chief Executive Officer [Member] | Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | ||
Chief Executive Officer [Member] | Vesting In Year One [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Chief Executive Officer [Member] | Vesting In Year Two [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Chief Executive Officer [Member] | Vesting In Year Three [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Chief Executive Officer [Member] | Vesting In Year Four [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Chief Executive Officer [Member] | Vesting In Year Five [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Chief Executive Officer [Member] | Vesting in Year Six [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | ||
Former Chief Executive Officer [Member] | Restricted stock | Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Granted, Value, Share-based Compensation, Forfeited | $ 0 |
SHARE-BASED COMPENSATION Restri
SHARE-BASED COMPENSATION Restricted Shares (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Expected Forfeiture Rate | 6.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Number of non-vested restricted shares, Balance | 22,798 | |
Number of non-vested restricted shares, Granted | 28,301 | 11,559 |
Number of non-vested restricted shares, Vested | (4,053) | |
Number of non-vested restricted shares, Forfeited | (648) | 0 |
Number of non-vested restricted shares, Balance | 46,398 | |
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 | $ 23.50 | |
Weighted average grant date fair value, Granted | 15.90 | |
Weighted average grant date fair value, Vested | 32.21 | |
Weighted average grant date fair value, Forfeited | 21.65 | |
Weighted average grant date fair value, Balance | $ 18.13 | |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Number of non-vested restricted shares, Balance | 331,510 | |
Number of non-vested restricted shares, Granted | 189,329 | |
Number of non-vested restricted shares, Vested | (58,405) | |
Number of non-vested restricted shares, Forfeited | (2,279) | |
Number of non-vested restricted shares, Balance | 460,155 | |
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 | $ 23.45 | |
Weighted average grant date fair value, Granted | 15.90 | |
Weighted average grant date fair value, Vested | 32.21 | |
Weighted average grant date fair value, Forfeited | 21.61 | |
Weighted average grant date fair value, Balance | $ 19.24 | |
Stock Granted, Value, Share-based Compensation, Forfeited | $ 0 | $ 0 |
Common Class A [Member] | Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 189,329 | 113,955 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Number of restricted shares forfeited | (2,279) | (46,319) |
SHARE-BASED COMPENSATION Rest47
SHARE-BASED COMPENSATION Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Number of non-vested restricted shares, Balance | 331,510 | |
Number of non-vested restricted shares, Granted | 189,329 | |
Number of non-vested restricted shares, Vested | (58,405) | |
Number of non-vested restricted shares, Forfeited | (2,279) | |
Number of non-vested restricted shares, Balance | 460,155 | |
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 | $ 23.45 | |
Weighted average grant date fair value, Granted | 15.90 | |
Weighted average grant date fair value, Vested | 32.21 | |
Weighted average grant date fair value, Forfeited | 21.61 | |
Weighted average grant date fair value, Balance | $ 19.24 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Expected Forfeiture Rate | 6.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Number of non-vested restricted shares, Balance | 22,798 | |
Number of non-vested restricted shares, Granted | 28,301 | 11,559 |
Number of non-vested restricted shares, Vested | (4,053) | |
Number of non-vested restricted shares, Forfeited | (648) | 0 |
Number of non-vested restricted shares, Balance | 46,398 | |
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 | $ 23.50 | |
Weighted average grant date fair value, Granted | 15.90 | |
Weighted average grant date fair value, Vested | 32.21 | |
Weighted average grant date fair value, Forfeited | 21.65 | |
Weighted average grant date fair value, Balance | $ 18.13 | |
Stock Issued During Period, Value, Restricted Stock Award, Forfeitures | $ 0 |
SHARE-BASED COMPENSATION Share
SHARE-BASED COMPENSATION Share Based Compensation Options Rollfoward (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value | $ 10.51 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 8 months | 6 years 11 months |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of options, Balance | 1,015,627 | |
Number of options, Granted | 0 | |
Number of options, Exercised | 0 | |
Number of options, Balance | 1,015,627 | 1,015,627 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted average exercise price, Balance | $ 23.55 | |
Weighted average exercise price, Granted | 0 | |
Weighted average exercise price, Exercised | 0 | |
Weighted average exercise price, Balance | 23.55 | $ 23.55 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Weighted average grant date fair value, Balance | 9.89 | |
Weighted average grant date fair value, Granted | 0 | |
Weighted average grant date fair value, Exercised | 0 | |
Weighted average grant date fair value, Balance | $ 9.89 | $ 9.89 |
SHARE-BASED COMPENSATION Black
SHARE-BASED COMPENSATION Black Scholes option pricing model assumptions (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |
Expected term (in years) | 10 years | |
Grant Date [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% | 0.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |||
Related Party Transaction [Line Items] | |||||
Investment Income | $ 145,216,000 | $ (11,618,000) | |||
Debt instruments | 19,350,000 | $ 7,180,000 | |||
Listed equity securities | $ 955,255,000 | 1,203,672,000 | |||
Investment Advisory Agreement | Board of Directors Chairman | |||||
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 | 1,200,000 | |||
Investment management fee rate - monthly | 0.125% | ||||
Investment management fee rate - annual | 1.50% | ||||
Management fees | $ 4,500,000 | $ 4,300,000 | |||
Equity Securities [Member] | Board of Directors Chairman | |||||
Related Party Transaction [Line Items] | |||||
Listed equity securities | 37,800,000 | 39,200,000 | |||
Service Agreement [Member] | Board of Directors Chairman | |||||
Related Party Transaction [Line Items] | |||||
Investor relations monthly fee | 5,000 | ||||
Private Equity Funds [Member] | |||||
Related Party Transaction [Line Items] | |||||
Unrecorded Unconditional Purchase Obligation, Due in Next Twelve Months | 7,075,000 | [1] | $ 6,500,000 | ||
Unrecorded Unconditional Purchase Obligation, Due within Two Years | [1] | 0 | |||
Unrecorded Unconditional Purchase Obligation, Due within Three Years | [1] | 0 | |||
Unrecorded Unconditional Purchase Obligation, Due within Four Years | [1] | 0 | |||
Unrecorded Unconditional Purchase Obligation, Due within Five Years | [1] | 0 | |||
Unrecorded Unconditional Purchase Obligation, Due after Five Years | [1] | 0 | |||
Unrecorded Unconditional Purchase Obligation | [1] | $ 7,075,000 | |||
[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, 2018 |
RELATED PARTY TRANSACTIONS No51
RELATED PARTY TRANSACTIONS Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Noncontrolling Interest [Line Items] | ||||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests | $ 6,705 | $ 5,808 | $ 7,169 | $ 5,884 |
Nonredeemable Noncontrolling Interest | 11,071 | 11,889 | 12,933 | 11,561 |
Noncontrolling Interest in Joint Ventures | 17,776 | 17,697 | 20,102 | $ 17,445 |
Non-controlling interest in related party joint venture | 11,071 | $ 12,933 | ||
Change in capital account allocation of non-controlling interest in related party joint venture | (2,326) | 252 | ||
Net Income (Loss) Attributable to Noncontrolling Interest | (2,326) | 252 | ||
Change in non-controlling interest in related party joint venture | (1,862) | 328 | ||
Non-controlling interest in joint venture | ||||
Noncontrolling Interest [Line Items] | ||||
Temporary Equity, Net Income | (853) | (76) | ||
Temporary Equity, Carrying Amount, Period Increase (Decrease) | (389) | 0 | ||
Change in non-controlling interest in related party joint venture | (1,862) | 328 | ||
Nonredeemable Noncontrolling Interest [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Change in capital account allocation of non-controlling interest in related party joint venture | (1,473) | 328 | ||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | 389 | 0 | ||
Non-controlling interest in joint venture | ||||
Noncontrolling Interest [Line Items] | ||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES52
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Mar. 28, 2018 | |
Letters of Credit Facilities [Line Items] | ||||
Contractual Obligation, Future Minimum Payments Due, Remainder of Fiscal Year | $ 7,308,000 | |||
Amount of letters of credit issued | 193,800,000 | $ 188,500,000 | ||
Total equity securities, restricted cash, and cash and cash equivalents fair value pledged as security against the letters of credit | 198,700,000 | 200,400,000 | ||
Facility | ||||
Letters of Credit Facilities [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 450,000,000 | |||
Facility | Butterfield Bank (Cayman) Limited [Member] | ||||
Letters of Credit Facilities [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | $ 100,000,000 | ||
Notice period required for termination | 90 days | |||
Facility | Citibank Europe plc | ||||
Letters of Credit Facilities [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000,000 | |||
Notice period required for termination | 120 days | |||
Facility | JP Morgan Chase Bank N.A. | ||||
Letters of Credit Facilities [Line Items] | ||||
Notice period required for termination | 120 days | |||
Revolving Credit Facility [Member] | Bank of Nova Scotia [Member] | ||||
Letters of Credit Facilities [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | |||
Line of Credit, Current | $ 30,000,000 | $ 25,000,000 | ||
Line of Credit Facility, Interest Rate at Period End | 2.87% | 2.47% | ||
Line of Credit Facility, Collateral | 38,400 | 37,700 | ||
Interest Expense | $ 200,000 | $ 0 |
COMMITMENTS AND CONTINGENCIES L
COMMITMENTS AND CONTINGENCIES Lease (Details) $ in Thousands, € in Millions | 3 Months Ended | |||||
Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |||
Operating Leased Assets [Line Items] | ||||||
Total rent expense related to leased office space | $ 200 | $ 200 | ||||
Operating Lease obligations, 2017 | 233 | |||||
Operating lease obligations, 2018 | 155 | |||||
Operating lease obligations, 2019 | 155 | |||||
Operating lease obligations, 2020 | 57 | |||||
Operating lease obligations, 2021 | 0 | |||||
Operating lease obligations, Thereafter | 0 | |||||
Operating lease obligations, Total | 600 | |||||
Contractual Obligations Total 2017 | 7,308 | |||||
Contractual Obligations Total 2018 | 155 | |||||
Contractual Obligations Total 2019 | 155 | |||||
Contractual Obligations Total 2020 | 57 | |||||
Contractual Obligations Total 2021 | 0 | |||||
Contractual Obligations Total, Thereafter | 0 | |||||
Contractual Obligations Total | $ 7,675 | |||||
GLRE | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating lease renewal option | 5 years | 5 years | ||||
GLRE | Minimum | ||||||
Operating Leased Assets [Line Items] | ||||||
Annual rent payments | $ 300 | |||||
GLRE | Maximum | ||||||
Operating Leased Assets [Line Items] | ||||||
Annual rent payments | 500 | |||||
GRIL | ||||||
Operating Leased Assets [Line Items] | ||||||
Annual rent payments | € | € 0.1 | |||||
Private equity and limited partnerships (1) | ||||||
Operating Leased Assets [Line Items] | ||||||
Unrecorded Unconditional Purchase Obligation, Due in Next Twelve Months | 7,075 | [1] | $ 6,500 | |||
Unrecorded Unconditional Purchase Obligation, Due within Two Years | [1] | 0 | ||||
Unrecorded Unconditional Purchase Obligation, Due within Three Years | [1] | 0 | ||||
Unrecorded Unconditional Purchase Obligation, Due within Four Years | [1] | 0 | ||||
Unrecorded Unconditional Purchase Obligation, Due within Five Years | [1] | 0 | ||||
Unrecorded Unconditional Purchase Obligation, Due after Five Years | [1] | 0 | ||||
Unrecorded Unconditional Purchase Obligation | [1] | $ 7,075 | ||||
[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, 2018 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | 1 | |
Gross premiums written | $ 175,125 | $ 197,214 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 100.00% | 100.00% |
Total Property | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 29,373 | $ 42,487 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 16.80% | 21.50% |
Commercial | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 3,896 | $ 5,170 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 2.30% | 2.60% |
Motor | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 23,013 | $ 15,744 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 13.10% | 8.00% |
Personal | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 2,464 | $ 21,573 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 1.40% | 10.90% |
Total Casualty | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 102,984 | $ 112,929 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 58.80% | 57.30% |
General Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 5,584 | $ 9,499 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 3.20% | 4.80% |
Motor Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 84,625 | $ 78,341 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 48.30% | 39.70% |
Professional Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 5,395 | $ 14,553 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 3.10% | 7.40% |
Workers' Compensation | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 7,380 | $ 10,536 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 4.20% | 5.40% |
Total Other | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 42,768 | $ 41,798 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 24.40% | 21.20% |
Accident & Health | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 28,738 | $ 23,739 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 16.40% | 12.10% |
Financial | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 11,447 | $ 12,056 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 6.50% | 6.10% |
Marine | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 1,095 | $ 2,223 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 0.60% | 1.10% |
Other Specialty | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 1,488 | $ 3,780 |
Premiums Written, Gross as a percentage of Total Gross Premiums Written | 0.90% | 1.90% |
SEGMENT REPORTING Geographic in
SEGMENT REPORTING Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | |||
Revenue from External Customer [Line Items] | ||||
Gross premiums written | $ (175,125) | $ (197,214) | ||
Gross premiums by geographical area as a percentage of total gross premiums | 100.00% | 100.00% | ||
U.S. and Caribbean | ||||
Revenue from External Customer [Line Items] | ||||
Gross premiums written | $ (157,707) | $ (171,758) | ||
Gross premiums by geographical area as a percentage of total gross premiums | 90.10% | 87.10% | ||
Worldwide (1) | ||||
Revenue from External Customer [Line Items] | ||||
Gross premiums written | [1] | $ (17,278) | $ (25,294) | |
Gross premiums by geographical area as a percentage of total gross premiums | [1] | 9.80% | 12.80% | |
Europe | ||||
Revenue from External Customer [Line Items] | ||||
Gross premiums written | $ (186) | $ (146) | ||
Gross premiums by geographical area as a percentage of total gross premiums | 0.10% | 0.10% | ||
Asia (2) | ||||
Revenue from External Customer [Line Items] | ||||
Gross premiums written | $ 46 | [2] | $ (16) | |
Gross premiums by geographical area as a percentage of total gross premiums | 0.00% | [2] | 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. | |||
[2] | The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premium returned upon novation or commutation of contracts. |